BUSINESS DEVELOPMENT AND NON-COMPETITION AGREEMENT
THIS BUSINESS DEVELOPMENT AND NON-COMPETITION AGREEMENT (the
"Agreement") is made as of the 7th day of March, 1997 by and among REGENCY
RETAIL PARTNERSHIP L.P., a Delaware limited partnership (the "Partnership"),
REGENCY REALTY GROUP II, INC., a Florida corporation (the "New Management
Company"), and J. ALEXANDER BRANCH III, an individual ("Branch"), under the
following circumstances:
A. Pursuant to the terms and conditions of that certain Contribution
Agreement and Plan of Reorganization, dated February 10, 1997 (the "Contribution
Agreement"), by and among Branch Properties, L.P., a Georgia limited partnership
("Branch Partnership") and Regency Realty Corporation, a Florida corporation
("Regency"), Branch Partnership has formed the Partnership, to which a wholly
owned subsidiary of Regency is making certain cash contributions in exchange for
the general partner interest, Branch Partnership is contributing shopping center
properties and other assets used in its real estate business, and Branch
Partnership is transferring its third party property management for transfer to
the New Management Company (collectively, the "Assets").
B. Branch is an equity holder in Branch Partnership as well as an
executive officer of Branch Partnership and is receiving limited partnership
interests in the Partnership which Branch Partnership (i) is receiving in
exchange for the Assets and (ii) is distributing to its partners.
C. To induce Regency and the Partnership to enter into the Contribution
Agreement and as a condition to closing the transfer of Assets and other
transactions contemplated thereby, Branch has agreed to enter into this
Agreement.
D. Branch will not be employed by the Partnership or New Management
Company, and the parties wish to delineate certain covenants not to compete on
the part of Branch and also to describe the terms of certain business dealings
between Branch, on the one hand, and the Partnership and the New Management
Company, on the other hand.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1: DEFINITIONS
1.1 "Affiliate" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by or under common control with such
Person.
1.2 "Branch Principals" means J. Alexander Branch III, Nicholas B. Telesca,
Warren R. Hall and Richard H. Lee.
1.3 "Business" means the direct or indirect acquisition, ownership,
operation, control or development of Properties.
1.4 "Employee" means an individual who works at least an average of 35
hours per week as an employee, or who performs substantially the same functions
as such an employee, whether as a direct or indirect owner, partner, director,
officer, agent, consultant, independent contractor or otherwise.
1.5 "First Refusal Notice" means the written notice to be mailed to the
Partnership by Branch which shall (i) in the case of Branch's opportunity to
acquire or develop a Property, describe in adequate detail the Property
(including, without limitation, the street address, legal description, anchor
tenants and the seller's asking price) to the extent such information is known
by Branch or (ii) in the case of Branch's opportunity to arrange for the sale to
a Person other than the Partnership, also will describe in adequate detail the
terms and conditions upon which the Property will be offered to such Person
(including, without limitation, the price and capitalization rate).
1.6 "Immediate Family" means a Person's spouse, parents, lineal
ascendants or descendants and their spouses, and trusts for the benefit of any
of the foregoing.
1.7 "In Conjunction with Another Branch Principal" means with (i) any
other Branch Principal or a member of his Immediate Family or (ii) an entity
which is an Affiliate of a Branch Principal or Principals or of any member of
his or their Immediate Family, or (iii) any combination of the foregoing.
1.8 "Indirectly" means through (i) any member of Branch's Immediate
Family or (ii) an entity in which Branch or any member of his Immediate Family
has any material direct or indirect equity interest.
1.9 "NonCompete Period" means a period of one year from the date
of this Agreement.
1.10 "Noninterference Period" means a period of three years from
the date of this Agreement.
1.11 "Person" means an individual or a corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association or other form of business or legal entity.
1.12 "Property" means a grocery-anchored shopping center or a
free-standing drugstore located in the Territory, provided a Property shall not
be deemed to include either (i) any grocery-anchored shopping center having
150,000 square feet or more of net leasable area or (ii) any portfolio of
properties if the square footage of net leasable area contained in the
grocery-anchored shopping centers included in such portfolio, each of which
would otherwise
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be a "Property", constitutes less than fifty percent (50%) of the total square
footage of net leasable area contained in all of the properties included in such
portfolio. In addition, none of the real properties scheduled on Exhibit A,
attached hereto and incorporated herein by this reference (the "Excluded
Properties"), shall be deemed to be a "Property" for the purposes of this
Agreement.
1.13 "Territory" means Georgia.
1.14 "Third Party Business" means acting as leasing agent for and/or
managing Properties that are owned by third parties.
ARTICLE 2: BUSINESS DEVELOPMENT
2.1 New Third Party Contracts. During the Noninterference Period,
Branch agrees that he will use reasonable best efforts to facilitate new
management and leasing contracts between any Branch Partnership client or any
new client of Branch with respect to any Property located within the Territory
acquired by such client during the Noninterference Period.
2.2 Existing Relationships. To facilitate a smooth transition during
and after the transfer of the Assets to the Partnership and the New Management
Company, during the Noninterference Period, Branch agrees that he will assist
the Partnership and the New Management Company by recommending to (i) former
employees of Branch Partnership hired as employees of the Partnership and/or the
New Management Company that they remain employees of the Partnership and/or the
New Management Company, as the case may be, and (ii) former clients of Branch
Partnership having management or other contracts with the New Management Company
on or after the date of this Agreement that they remain as clients of New
Management Company and not terminate any such contracts.
2.3 Office Space. For up to twelve months following the date of this
Agreement, Branch shall be entitled to office space and secretarial assistance
at the Partnership's principal offices in Atlanta, Georgia, at no charge to
Branch (other than reimbursement at the Partnership's actual cost for postage,
long distance telephone charges, courier charges and similar third party
out-of-pocket expenses, unrelated to the Partnership or the New Management
Company or to the conduct of the business of Regency in excess of an aggregate
of $250 per month).
2.4 Director. Branch agrees to fill the newly created vacancy on
Regency's Board of Directors and to stand for re-election as a director at
Regency's 1997 annual meeting of shareholders.
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ARTICLE 3: RIGHT OF FIRST REFUSAL
3.1 Right of First Refusal for Acquisition and Development of
Properties. If at any time during the NonCompete Period Branch has the
opportunity, directly or Indirectly, to (i) acquire or develop a Property or
(ii) arrange for the sale to any Person other than the Partnership, whether as a
broker, co-investor, developer or otherwise, of a Property, whether in a
purchase of assets or stock, merger, consolidation, exchange or similar
transaction, Branch shall give the Partnership the First Refusal Notice offering
such Property to the Partnership for purchase or development. If the
Partnership, within 10 days after the date of receipt of the First Refusal
Notice, does not express an interest, in writing, to Branch in purchasing or
developing the Property, or if the Partnership fails either to purchase or enter
into a definitive purchase and sale agreement for the Property within the time
period set forth in Section 3.2, then for a period of 90 days thereafter, Branch
may purchase, enter into a purchase and sale agreement for or arrange for the
sale of, as the case may be, the Property (or in the case of a Property to be
developed, the land therefor), provided that the terms and conditions of the
purchase, purchase and sale agreement or sale are not substantially more
favorable to Branch or the buyer than those set forth in the First Refusal
Notice. In the event that (i) Branch has not purchased, entered into a
definitive purchase and sale agreement for or arranged for the sale of the
Property within such 90 day period or (ii) the terms and conditions of a
purchase, purchase and sale agreement or sale are substantially more favorable
to Branch or the buyer than those set forth in the First Refusal Notice, then
the Property shall again become restricted as though it had never been offered
to the Partnership in accordance with the terms of this Agreement.
3.2 Exercise of Right of First Refusal. If the Partnership expresses an
interest in purchasing or developing the Property within the 10 day first
refusal period provided for in Section , the Partnership must purchase or enter
into a definitive purchase and sale agreement for the Property within 30 days
after the date of receipt of the First Refusal Notice. In such event, the
Partnership shall pay to Branch or his designee at the closing of the purchase
of the Property an acquisition fee at applicable market rates in an amount as
reasonably agreed to by the Partnership and Branch at the time of execution by
the Partnership of a definitive purchase and sale agreement. In the event the
Partnership does not purchase or enter into a purchase and sale agreement within
such relevant period, then for a period of 90 days thereafter, Branch may
purchase, enter into a purchase and sale agreement for or arrange for the sale
of, as the case may be, the Property, provided that the terms and conditions of
the purchase, purchase and sale agreement or sale are not substantially more
favorable to Branch or the buyer than those set forth in the First Refusal
Notice. In the event that (i) Branch has not purchased, entered into a
definitive purchase and sale agreement or arranged for the sale of the Property
within such 90 day period or (ii) the terms and conditions of a purchase,
purchase and sale agreement or sale are substantially more favorable to Branch
or the buyer than those set forth in the First Refusal Notice, then the Property
shall again become restricted as though it had never been offered to the
Partnership in accordance with the terms of this Agreement.
3.3 Confidentiality Covenant. The Partnership agrees that it will enter
into a confidentiality agreement on customary terms, as reasonably approved by
the Partnership and
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Branch, with respect to any information about a Property provided to the
Partnership by Branch pursuant to this Article .
ARTICLE 4: COVENANTS NOT TO COMPETE
AND NOT TO SOLICIT
4.1 Employment Relationships. During the Noncompete Period, Branch shall
not become an Employee of any Person which is engaged as a material part of its
business in the Business in the Territory.
4.2 Duration and Geographic Scope. Except as set forth in Section ,
during the Noncompete Period, Branch hereby agrees not to directly or Indirectly
engage in the Third Party Business in the Territory, and except as set forth
below, Branch agrees that Branch shall not, in any other way, directly or
Indirectly compete, or give aid or advice to others in competing, with the New
Management Company in the conduct of Third Party Business in the Territory,
whether as a direct or indirect owner, partner, director, officer, employee,
agent, consultant, independent contractor or otherwise.
4.3 Limitations. The obligations described in Section shall not
preclude Branch from owning publicly-traded securities for investment purposes
of any entity engaged in the Third Party Business in the Territory, in an amount
not exceeding five percent of the total number of outstanding securities of the
same class.
4.4 No Solicitation. During the Noninterference Period, Branch shall
not solicit, attempt to solicit, induce, attempt to induce or assist others in
attempting to solicit (i) any employee of the Partnership, any Affiliate of the
Partnership, the New Management Company or any Affiliate of the New Management
Company for the purpose of persuading such employee to leave as an employee of
the Partnership or such Affiliate and/or the New Management Company and/or its
Affiliates or (ii) any client of the New Management Company or an Affiliate of
the Management Company for the purpose of persuading such client to leave as a
client of the Management Company or its Affiliate or terminate any management or
other contract with the New Management Company or its Affiliate..
4.5 Remedies. The parties hereby declare and agree that any breach by
Branch of this Article will cause the Partnership and/or its Affiliates and/or
the New Management Company and/or its Affiliates irreparable injury and damage,
and further agree that it would be difficult, if not impossible, to calculate
the monetary damages that might accrue to the Partnership and/or its Affiliates
and/or the New Management Company and/or its Affiliates as a result of such
breach. Accordingly, Branch agrees that in the event of any breach or
anticipated breach of the terms or provisions of this Article the Partnership
and/or its Affiliates and/or the New Management Company and/or its Affiliates
shall be entitled to injunctive or similar equitable relief to prevent a breach
of this Article, and Branch waives the claim or defense that the Partnership
and/or such Affiliates and/or the New Management Company and/or its Affiliates
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have an adequate remedy at law. Notwithstanding the foregoing, the Partnership
and/or its Affiliates and/or the New Management Company and/or its Affiliates
also shall be entitled to obtain monetary damages to the extent calculable as a
result of the breach by Branch of the terms and provisions of this Article.
4.6 Blue Pencil. If any court of competent jurisdiction shall hold that
any restriction contained in this Article is unreasonable in duration or
geographic scope, such restriction shall be reduced to the extent necessary in
the opinion of such court to make it reasonable, the intention of the parties
being that the Partnership, the New Management Company, and their respective
Affiliates be given the broadest protection allowed by law or equity with
respect to such provision in connection with their acquisition of the Assets.
ARTICLE 5: MISCELLANEOUS
5.1 Headings. The headings contained in this Agreement are for
reference purposes only and are in no way intended to describe, interpret,
define or limit the scope, extent or intent of this Agreement or any provision
hereof.
5.2 Pronouns and Plurals. Whenever required by the context, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
5.3 Costs of Litigation. The parties agree that the prevailing party in
any action brought with respect to or to enforce any right or remedy under this
Agreement shall be entitled to recover from the other party or parties all
reasonable costs and expenses of any nature whatsoever actually incurred by the
prevailing party in connection with such action, including, without limitation,
attorneys' fees (whether incurred before or at trial or on appeal) and
prejudgment interest.
5.4 Remedies Cumulative. The remedies provided in this Agreement shall
be cumulative and, except as otherwise expressly provided shall not preclude the
assertion or exercise of any other rights or remedies available by law, in
equity or otherwise.
5.5 Amendment and Modification. No amendment, modification or discharge
of, or supplement to, this Agreement shall be valid or binding unless set forth
in writing and duly executed and delivered by the party against whom enforcement
of the amendment, modification, or discharge is sought.
5.6 Notices. All notices, demands, requests, and other communications
which may be or are required to be given, served, or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified U.S. mail, return receipt requested and postage prepaid, or
transmitted by facsimile, telegram, telecopy or telex, addressed as follows:
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(i) If to the Partnership: ii) If to Branch:
c/o Regency Realty Corporation c/o Branch Properties, L.P.
121 W. Forsyth Street, Stuite 200 400 Colony Square, Suite 1600
Jacksonville, FL 32202 1201 Peachtree Street
Attn: Bruce M. Johnson Atlanta, GA 30361
Telephone: (904) 356-7000 Telephone: (404) 892-8900
Facsimile: (904) 634-3428 Facsimile: (404) 892-8898
or to such other person or address as a party shall furnish to the other parties
in writing.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted, such communication shall be
deemed delivered the next business day after transmission (and sender shall bear
the burden of proof of delivery); if sent by overnight courier, such
communication shall be deemed delivered upon receipt; and if sent by U.S. mail,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this Section .
5.7 Waivers. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
documents furnished in connection with or pursuant to this Agreement shall
impair any such right, power or privilege or be construed as a waiver of any
default or any acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such right,
power or privilege, or the exercise of any other right, power or privilege. No
waiver shall be valid against any party hereto unless made in writing and signed
by the party against whom enforcement of such waiver is sought and then only to
the extent expressly specified therein.
5.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.9 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claim or disputes relating thereto, shall be governed by
and construed and enforced in accordance with the laws and judicial decisions of
the State of Georgia, without regard to conflict of law principles and excluding
the choice of law rules thereof.
5.10 Assignment; Parties in Interest.
5.10.1 No party hereto shall assign its rights and/or
obligations under this Agreement, in whole or in part, whether by
operation of law or otherwise, without the prior written consent of the
other parties hereto; provided, that either the Partnership or
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the New Management Company, without the consent of Branch, may assign
its rights and/or obligations under this Agreement, in whole or in
part, to Regency or any of its Affiliates.
5.10.2 Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
heirs, executors, administrators, successors, legal representatives and
permitted assigns of the parties hereto. Nothing contained herein shall
be deemed to confer upon any other person any right or remedy under or
by reason of this Agreement.
5.11 Severability. Every provision of this Agreement is intended to be
severable. If any provision or term of this Agreement, or the application of a
provision or term to any person or circumstance, shall be held invalid, illegal
or unenforceable, the validity, legality or enforceability of the other
provisions and terms hereof, or the application of such provision of such
provision or term to persons or circumstances other than those to which it is
held invalid, illegal or enforceable, shall not be affected thereby, and there
shall be deemed substituted for the provision or term at issue a valid, legal
and enforceable provision as similar as possible to the provision or term at
issue.
5.12 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT. THE PROVISIONS OF THIS SECTION SHALL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.
5.13 Entire Agreement. This Agreement, including the exhibits and other
documents referred to herein or furnished pursuant hereto, constitutes the
entire understanding and agreement among the parties hereto with respect to the
transactions contemplated herein, and supersedes all prior oral or written
agreements, commitments or understandings with respect to the matters provided
for herein.
5.14 Excluded Properties and Entities. Notwithstanding anything to the
contrary contained herein, the subject matter of this Agreement and Branch's
covenants and obligations contained herein (other than Sections and hereof)
shall not be applicable to any of the Excluded Properties, nor shall Branch be
deemed to have breached any term or provision of this Agreement, including,
without limitation, Sections and hereof (even though such action otherwise would
have constituted such a breach), to the extent Branch takes any action or fails
to take any action, directly or through an Affiliate, in order to discharge the
fiduciary obligations of Branch or of any of Branch's Affiliates in the exercise
of the authority of any general partner of any of the entities identified on
Exhibit B, attached hereto and incorporated herein by this reference, as
reasonably and in good faith determined by Branch.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have executed this Agreement on the date first written above.
REGENCY RETAIL PARTNERSHIP, L.P. /s/ J. Alexander Branch III
J. ALEXANDER BRANCH III
By: Regency Atlanta, Inc.,
Its General Partner REGENCY REALTY GROUP II, INC.
By: /s/ Bruce M. Johnson By: /s/ Bruce M. Johnson
Its: Executive Vice President Its: Executive Vice President
\DOCS\SOFT\4364.3|03/05/97 10:18AM|JAXC18|GRD:dbi
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EXHIBIT A
EXCLUDED PROPERTIES
EXHIBIT B
ENTITIES