NONCOMPETE AGREEMENT
Exhibit 10.4
This
Noncompete Agreement (this "Agreement")
is entered into as of March 21, 2008, by and among TL ACQUISITION GROUP LLC, a
Delaware limited liability company ("Buyer"),
AMERICAN LEISURE EQUITIES CORPORATION D/B/A TRAVELEADERS, INC., a Florida
corporation (the "Seller"),
and AMERICAN LEISURE HOLDINGS, INC., a Nevada corporation, being the sole
shareholder of the Seller ("Shareholder")
(each a "Party"
and, collectively, the "Parties").
RECITALS
WHEREAS,
concurrent with the execution of this Agreement, the Buyer, Seller and
Shareholder are consummating the transaction contemplated by that certain Asset
Purchase Agreement (the "Purchase
Agreement"), dated as of the date hereof, pursuant to which the Buyer is
acquiring substantially all of the non-cash assets of the
Seller. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Purchase Agreement;
WHEREAS,
the "Business"
means the business of operating travel agencies, as conducted by the Seller on
the Closing Date;
WHEREAS,
the Buyer will be engaged in the Business; and
WHEREAS,
as an essential inducement for the Buyer to enter into the Purchase Agreement,
and in consideration of the transactions contemplated by the Purchase Agreement,
the Seller and Shareholder have agreed to the provisions of this Agreement and
to abide by the restrictive covenants contained herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing recitals and the covenants and
agreements in the Purchase Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Seller and Shareholder hereby covenant and agree as follows:
1. Noncompetition and
Nonsolicitation.
(a) The
Seller acknowledges and agrees with the Buyer that its services are, and were,
unique in nature with respect to the Business and that the Buyer and its
Affiliates would be irreparably damaged if the Seller, Shareholder or any of
their Affiliates were to provide similar services to any Person (as defined
below) competing with the Buyer and its Affiliates or engaged in a similar
business. During the Noncompete Period (as defined below), none of
the Seller, Shareholder or any of their Affiliates, shall directly or
indirectly, either for itself or for any other Person, permit their name to be
used by or participate in any business or enterprise (including, without
limitation, any division, group or franchise of a larger organization) that
engages or proposes to engage in the Business in the Restricted Territory (as
defined below). For purposes of this Agreement, the term “participate
in” shall include, without limitation, having
any direct or indirect interest in any Person, whether as a sole proprietor,
owner, stockholder, partner, member, joint venturer, creditor or otherwise, or
rendering any direct or indirect service or assistance to any Person (whether as
a director, officer, supervisor, employee, agent, consultant or
otherwise). Nothing herein will prohibit the Seller, Shareholder or
any of their Affiliates from (i) engaging or participating in any activity that
Seller, Shareholder, any of their Affiliates, including, but not limited to,
Hickory Travel Systems, Inc. (“Hickory”)
engages or participates in as of the Closing Date with respect to the business
of Hickory, or any other activity incidental or reasonably related thereto; (ii)
engaging or participating in any activity relating to (or contracting with third
parties to provide any product or service relating to) the marketing, promotion,
booking, ownership or management of any resort property or other destination or
providing services to clients and customers of such properties or destinations;
(iii) providing services at welcome centers in which Seller, Shareholder or
any of their Affiliates now or hereafter holds any direct or indirect interest
or to which it now or hereafter provides management services; (iv) providing
travel services in relation to the sale of, or to holders of, any vacation club
ownership interest, fractional ownership interest, timeshare interest, or
similar interest; or (v) mere passive ownership of not more than five percent
(5%) of the outstanding stock of any class of a publicly held corporation whose
stock is traded on a national securities exchange or in the over-the-counter
market. As used herein, the phrase “mere passive ownership” shall
include voting or otherwise granting any consents or approvals required to be
obtained from such Person as an owner of stock or other ownership interests in
any entity pursuant to the charter or other organizational documents of such
entity, but shall not include, without limitation, any involvement in the
day-to-day operations of such entity.
(b) During
the Nonsolicitation Period (as defined below), none of the Seller, Shareholder
and their Affiliates will not directly or indirectly through another Person: (i)
induce or attempt to induce any Customer (as defined below), supplier, licensee,
or other business relation to cease doing business or reduce its level of
business with the Buyer or any of its Affiliates; or (ii) induce or attempt to
induce any (A) Hired Active Employee, (B) individual performing services as an
independent contractor of the Seller on the Closing Date that is retained on the
Closing Date by the Buyer (a “Retained
Contractor”), or (C) employee or individual performing services as an
independent contractor of the Buyer employed or engaged subsequent to the
Closing Date to terminate their employment or performance of services with the
Buyer or any of its Affiliates; provided, however, that the
foregoing limitation shall not apply to the recruitment, solicitation or hiring
of any employee or independent contractor if the employment or provision of
services to the Seller, Shareholder or any of their Affiliates could not be
reasonably expected to materially interfere with the services provided to the
Buyer by such employee or independent contractor or the hiring of any employee
who responds to a general solicitation of employment not specifically directed
toward the Buyer's or any of its Affiliates' employees; or (iv) in any way
intentionally interfere with the relationship between any such Customer,
supplier, licensee, employee, independent contractor or business relation of the
Buyer or any of its Affiliates, including, without limitation, willfully making
any intentionally disparaging statements or communications concerning the Buyer
or any of its Affiliates.
(c) Certain
capitalized terms as used in this Agreement have the following
definitions:
“Affiliate”
means, with respect to any Person, a Person which, directly or indirectly,
controls, is controlled by or is under common control with such
Person. As used in this definition, "control" means possession,
direct or indirect, of the power to direct or cause the direction of management
and policies of a Person, whether through ownership of voting interests, by
contract or otherwise.
“Customer”
means, any Person (a) which was a customer of the Seller, at any time during the
12-month period ending on the Closing Date or (b) to whom there existed an
outstanding bid by the Seller on the Closing Date.
“Noncompete
Period” means the period commencing on the Closing Date and ending on the
date which is five (5) years thereafter.
“Nonsolicitation
Period” means the period commencing on the Closing Date and ending on the
date which is five (5) years thereafter.
“Person”
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or the United States of America any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
“Restricted
Territory” means each state within the United States of
America.
2. Stay of
Time. In the event a court of competent jurisdiction or other
entity or person mutually selected by the parties to resolve any dispute
(collectively a “Court”)
has determined that the Seller, Shareholder, ALG or any of their Affiliates have
violated the provisions of this Agreement, the running of the time period of
such provisions so violated shall be automatically suspended as of the date of
such violation and shall be extended for the period of time from the date such
violation commenced through the date that the Court determines that such
violation has permanently ceased.
3. Enforcement.
(a) Without
limitation, the Parties agree and intend that the covenants contained in this
Agreement shall be deemed to be a series of separate covenants and agreements,
one for each and every county or political subdivision of each applicable state
of the United States with respect to the Restricted Territory. It is
the desire and intent of the Parties hereto that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies of each jurisdiction in which enforcement is
sought. Accordingly, if, at the time of enforcement of Section
1, a Court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the Parties agree that, to the extent
permitted by applicable law, the maximum period, scope or geographical area
reasonable under such circumstances will be substituted for the Noncompete
Period, Nonsolicitation Period, scope or Restricted
Territory. Furthermore, such substitution will apply only with
respect to the operation of such provision in the particular jurisdiction in
which such adjudication is made.
(b) Because
the Parties agree that money damages would be an inadequate remedy for any
breach of Section
1, in the event of a breach or threatened breach of Section
1 the Buyer or any of its Subsidiaries or any of their respective
successors or assigns may, in addition to other rights and remedies existing in
their favor, apply to any Court for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
hereof (without posting a bond or other security). The Parties hereby
acknowledge and agree that (i) performance of the services of the Seller and
Shareholder hereunder may occur in jurisdictions other than the jurisdiction
whose law the Parties have agreed shall govern the construction, validity and
interpretation of this Agreement, (ii) the law of the State of Florida shall
govern construction, validity and interpretation of this Agreement to the
fullest extent possible, and (iii) Section
1 shall restrict the Seller and Shareholder only to the extent permitted
by applicable law. The Seller and Shareholder expressly agree and
acknowledge that the covenants of the Seller and Shareholder contained in Section
1 shall restrict the Seller and Shareholder only to the extent permitted
by applicable law and are (A) reasonably necessary for the protection of the
Buyer's interests, (B) made in consideration of the benefits derived or to be
derived, directly or indirectly, by the Seller and Shareholder under the
Purchase Agreement, and (C) not unduly restrictive upon the Seller or
Shareholder.
4. Notices. Any
notice provided for in this Agreement must be in writing and must be either
personally delivered or sent by reputable overnight courier service (charges
prepaid) to the recipient at the address below indicated:
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If
to the Buyer:
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TL
Acquisition Group LLC
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0000
Xxxx Xxxx Xxxxxxx
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Xxxxxxxxxxx,
XX 00000
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Attn:
Chief Financial Officer
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Attn:
General Counsel
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| Facsimile Number: (000) 000-0000 | |
| With a copy to: | Xxxxxxxxx X. Xxxxxx, Esq. |
| Xxxxxxx X. Xxxxxx, Esq. | |
| Xxxxxxx Xxxx & Xxxxxxxxx LLP | |
| 000 Xxxx Xxxxxxxxx Xxxxxx | |
| Xxxxxxxxx, XX 00000-0000 | |
| Facsimile Number: (000) 000-0000 | |
| If to the Seller and/or the Shareholder: | American Leisure Holdings, Inc. |
| 0000 Xxxx Xxxx Xxxx | |
| Xxxxxxx, XX 00000 | |
| Attention: Xxxx Xxxxxx | |
| Facsimile Number: (000) 000-0000 | |
| With a copy to: | Xxxxx & Xxxxxxx LLP |
| 000 X. Xxxxx Xx., Xxxxx 0000 | |
| Xxxxx, XX 00000 | |
| Attention: Xxxx X. Xxxxxx, Esq. | |
| Facsimile Number: (000) 000-0000 |
or such
other address or to the attention of such other person as the recipient Party
will have specified by prior written notice to the sending Party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent.
5. Severability. Whenever
possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law. If, however, any
provision of this Agreement is deemed or held to be illegal, invalid or
unenforceable by any court of competent jurisdiction, this Agreement shall be
considered divisible and inoperative as to such provision to the extent it is
deemed to be illegal, invalid or unenforceable, and in all other respects this
Agreement shall remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal, invalid or
unenforceable by any court of competent jurisdiction, such illegal, invalid or
unenforceable provision shall be replaced with a provision that is legal, valid
and enforceable and that will achieve, to the greatest extent possible, the
economic, business and other purposes of such invalid or unenforceable
provision. Further, should any provision contained in this Agreement
ever be reformed or rewritten by any judicial body of competent jurisdiction,
such provision as so reformed or rewritten shall be binding upon all parties
hereto.
6. Successors and
Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by the Parties and their respective heirs,
successors and assigns. No Party may assign its respective rights or
delegate its obligations hereunder without the prior written consent of all of
the other Parties.
7. Choice of
Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in accordance
with the domestic laws of the State of Florida without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
8. Remedies. Each
Party will be entitled to enforce its rights under this Agreement specifically,
to recover damages and costs caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its
favor. Nothing herein shall prohibit any arbitrator or judicial
authority from awarding attorneys’ fees or costs to a prevailing Party in any
arbitration or other proceeding to the extent that such arbitrator or authority
may lawfully do so. The Parties agree and acknowledge that money
damages may not be an adequate remedy for any breach of Section
1 of this Agreement and that any Party may in its sole discretion apply
to any court of law or equity of competent jurisdiction (without posting any
bond or deposit) for specific performance and/or other injunctive relief in
order to enforce or prevent any violations of the provisions of this
Agreement.
9. Amendment and
Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of each of the Parties hereto, and no
course of conduct or
failure or delay in enforcing the provisions of this Agreement will affect the
validity, binding effect or enforceability of this
Agreement.
10. Construction. The
language of this Agreement will be construed simply and according to its fair
meaning, and will not be construed for or against any Party hereto as a result
of the source of its draftsmanship.
11. Third Party
Beneficiaries. This Agreement will not confer any rights or
remedies upon any Person other than the Parties hereto and their respective
successors and permitted assigns.
12. Seller's and Shareholder’s
Representations. The Seller and the Shareholder hereby
represent and warrant to the Buyer that (a) the execution, delivery and
performance of this Agreement by the Seller and the Shareholder do not and shall
not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which the Seller or the
Shareholder are a party or by which they are bound, (b) the Seller and the
Shareholder are not parties to, or bound by, any employment agreement,
noncompete agreement or confidentiality agreement with any other Person that
shall conflict with, breach or violate the terms of this Agreement, and (c) upon
the execution and delivery of this Agreement by the Parties and assuming due
execution and delivery of this Agreement by the Buyer, this Agreement shall be
the valid and binding obligation of the Seller and the Shareholder, enforceable
in accordance with its terms, except as such enforcement may be limited by or
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and general equitable principles (whether considered
in a proceeding in equity or at law).
13. Facsimiles and
Counterparts. Facsimile transmission of any signed original
document and/or retransmission of any signed facsimile transmission will be
deemed the same as delivery of an original. This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.
[Signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
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TL
ACQUISITION GROUP LLC
By: /s/ Xxxxxxxx X. Xxxxx,
Xx.
Name: Xxxxxxxx
X. Xxxxx, Xx.
Title: Secretary
and Treasurer
AMERICAN
LEISURE EQUITIES CORPORATION d/b/a TRAVELEADERS, INC.
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Chief
Executive Officer
By: Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Chief
Executive Officer
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