EXHIBIT 10.9
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT, made as of April 27, 2001, by and among
First Data Corporation, a Delaware corporation ("PURCHASER"), J. Xxxxxx Xxxxxxx
("SELLER"), and PaySys International, Inc., a Florida corporation (the "COMPANY"
and, collectively with its subsidiaries, the "ACQUIRED COMPANIES").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Purchaser is acquiring the Company and its subsidiaries from Seller
and the other shareholders thereof pursuant to the terms and conditions of an
Agreement and Plan of Merger dated as of March 17, 2001, (the "ACQUISITION
AGREEMENT"); and
WHEREAS, Section 4.6 of the Acquisition Agreement requires that
noncompetition agreements be executed and delivered by each of Seller, Xxxxxxx
X. Xxxxx, and Xxxxx X. Black as a condition to the acquisition of the Company
and its subsidiaries by Purchaser;
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have
the meanings ascribed to them in the Acquisition Agreement.
2. ACKNOWLEDGMENTS BY SELLER
Seller acknowledges that (a) Seller has occupied a position of trust
and confidence with the Acquired Companies prior to the date hereof and may have
become familiar with some or all of the following, any and all of which
constitute confidential information of the Acquired Companies (collectively the
"CONFIDENTIAL INFORMATION"): (i) any and all trade secrets concerning the
business and affairs of the Acquired Companies, product specifications, data,
know-how, formulae, compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current and planned
research and development, current and planned manufacturing and distribution
methods and processes, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, computer software and
programs (including object code and source code), computer software and database
technologies, systems, structures and architectures (and related processes,
formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information), of the Acquired
Companies and any other information, however documented, of the Acquired
Companies that is a trade secret within the
meaning of Florida law; (ii) any and all information concerning the business and
affairs of the Acquired Companies (which includes historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Acquired Companies containing or based, in whole
or in part, on any information included in the foregoing, (b) the business of
the Acquired Companies is international in scope, (c) its products and services
are marketed throughout the world; (d) Purchaser has required that Seller make
the covenants set forth in SECTIONS 4 and 5 of this Agreement as a condition to
the Purchaser's acquisition of the Company from Seller and the other
shareholders of the Company; (e) the provisions of SECTIONS 4 and 5 of this
Agreement are reasonable and necessary to protect and preserve the Acquired
Companies' business, and (f) the Acquired Companies would be irreparably damaged
if Seller were to breach the covenants set forth in SECTIONS 4 and 5 of this
Agreement.
3. ACKNOWLEDGEMENTS BY PURCHASER
Purchaser acknowledges that in no event shall any provision of this
Agreement be deemed to apply to, or restrict in any manner, Intelligent Systems
Corporation (or any successor, subsidiary, or affiliate thereof) or any
activities of Seller taken through such company as a director, officer,
employee, shareholder, member, or limited partner of any other entity.
4. CONFIDENTIAL INFORMATION
Except to the extent conveyed to dBB-2 Corp. in accordance with the dBB
Agreement, Seller acknowledges and agrees that all Confidential Information
known or obtained by Seller, whether before or after the date hereof, is the
property of the Acquired Companies. Therefore, Seller agrees that Seller will
not, at any time, disclose or cause to be disclosed to any unauthorized Persons
or use for his own account or for the benefit of any third party, including
Intelligent Systems Corporation (or any successor, subsidiary, or affiliate
thereof), any Confidential Information, without Purchaser's written consent,
unless and to the extent that the Confidential Information is or becomes
generally known to and available for use by the public other than as a result of
Seller's fault or the fault of any other Person bound by a duty of
confidentiality to Purchaser or the Acquired Companies.
5. NONCOMPETITION
As an inducement for Purchaser to enter into the Acquisition Agreement
and as additional consideration for the consideration to be paid to Seller under
the Acquisition Agreement, Seller agrees that:
(a) For a period of 2 years after the Closing:
(i) Seller will not, directly or indirectly, own a
controlling interest in, serve as an executive officer of, operate, or
control any business whose products or activities
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compete in whole or in part with the products or activities of the
Acquired Companies, anywhere in the world; provided, however, that this
provision shall not prevent Seller from purchasing or otherwise
acquiring up to (but not more than) forty-nine percent of any class of
securities of any enterprise (but without otherwise controlling the
operations of such enterprise);
(ii) Except as contemplated by the Acquisition Agreement
(including with respect to the dBB-2 Corp.), Seller will not, directly
or indirectly, either for himself or any other Person, (A) induce or
attempt to induce any employee of an Acquired Company to leave the
employ of such Acquired Company, (B) in any way interfere with the
relationship between an Acquired Company and any employee of such
Acquired Company, (C) employ, or otherwise engage as an employee, any
employee of an Acquired Company, or (D) induce or attempt to induce any
customer, supplier, licensee, or business relation of an Acquired
Company to cease doing business with such Acquired Company, or in any
way interfere with the relationship between any customer, supplier,
licensee, or business relation of an Acquired Company;
(iii) Seller will not, directly or indirectly, either for
himself or any other Person, solicit the business of any Person known
to Seller to be a customer of an Acquired Company, whether or not
Seller had personal contact with such Person, with respect to products
or activities which compete in whole or in part with the products or
activities of an Acquired Company; and
(b) In the event of a breach by Seller of any covenant set forth
in Subsection 4(a) of this Agreement, the term of such covenant will be extended
by the period of the duration of such breach.
6. REMEDIES
If Seller breaches the covenants set forth in SECTIONS 4 or 5 of this
Agreement, Purchaser and the Acquired Companies will be entitled to the
following remedies:
(a) Damages from Seller;
(b) In addition to its right to damages and any other rights it
may have, to obtain injunctive or other equitable relief to restrain any breach
or threatened breach or otherwise to specifically enforce the provisions of
SECTIONS 4 and 5 of this Agreement, it being agreed that money damages alone
would be an inadequate remedy for such breach.
The rights and remedies of the parties to this Agreement are cumulative and not
alternative.
7. SUCCESSORS AND ASSIGNS
The obligations of Seller under this Agreement may not be assigned by
Seller. Purchaser may assign its rights hereunder to the affiliates of Purchaser
and any such assignee of Purchaser
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shall be entitled to all of the provisions of this Agreement. This Agreement
will be binding upon Purchaser, the Acquired Companies and Seller and will inure
to the benefit of Purchaser and the Acquired Companies and their Affiliates,
successors and assigns and Seller and Seller's assigns, heirs and legal
representatives.
8. WAIVER
Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement.
9. GOVERNING LAW
This Agreement will be governed by the laws of the State of Georgia
without regard to conflicts of laws principles.
10. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Georgia, County of Gwinnett, or, if it has
or can acquire jurisdiction, in the United States District Court for the
Northern District of the Eleventh Circuit, and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
11. SEVERABILITY
Whenever possible each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited by or invalid, then such provision or
terms will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth in SECTIONS 4 or 5 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Seller.
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12. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
13. SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
14. NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(when written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
SELLER: J. Xxxxxx Xxxxxxx
Intelligent Systems Corporation
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
PURCHASER: First Data Corporation
00000 Xxxxxx Xxxxx, X-00
Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
First Data Corporation
Suite 1400
0000 Xxx Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
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with a copy to: Sidley & Austin
Bank One Plaza
00 X. Xxxxxxxx Xx.
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Facsimile No.: (312) 853- 7036
COMPANY: PaySys International, Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxxxxxx Xxxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Fascimile No.: (000) 000-0000
15. ENTIRE AGREEMENT
This Agreement and the Acquisition Agreement constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior written and oral agreements and understandings
between Purchaser and Seller with respect to the subject matter of this
Agreement. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
PURCHASER: J. XXXXXX XXXXXXX:
By:
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Name:
Title:
COMPANY:
By:
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Name:
Title:
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