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EXHIBIT 10.1
NON-COMPETITION AGREEMENT
This NON-COMPETITION AGREEMENT (the "Agreement") is entered
into as of December 10, 1998 (the "Effective Date") by and among Rent-Way, Inc.,
a Pennsylvania corporation (the "Surviving Corporation"), and Xxxxxx X. Xxxxxxx,
an individual residing at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxx Xxxxxxxx
00000 (the "Executive").
RECITALS
A. Home Choice Holdings Inc., a Delaware corporation (the
"Company") and the Surviving Corporation have entered into a certain Agreement
and Plan of Merger dated as of September 1, 1998 (the "Merger Agreement"),
pursuant to which the Company will merge with and into the Surviving Corporation
(the "Merger"). Capitalized terms not defined herein shall have the meanings
ascribed to them in the Merger Agreement.
B. The Executive is a major stockholder of the Company and has
had extensive experience in the rental purchase industry as a director,
stockholder and executive of the Company and its predecessors and subsidiaries.
C. It is a condition to the Surviving Corporation's
obligations to consummate the transactions contemplated by the Merger Agreement
that the Executive enter into this Non-Competition Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and in the Merger Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and affirmed, the parties hereto, intending to be legally bound,
hereby agree as follows:
AGREEMENT
1. NON-COMPETITION. As material consideration for the
Surviving Corporation's performance of its obligations under and as provided for
in the Merger Agreement, for all benefits to be conferred on the Executive and
his affiliates pursuant to and in connection with the transactions contemplated
by the Merger Agreement, and in order to protect the confidential information of
the Company and the Surviving Corporation, Executive covenants and agrees, for
the benefit of the Surviving Corporation and each subsidiary of the Surviving
Corporation, that for three years after the Effective Date the Executive shall
not, directly or indirectly, do any of the following:
(a) engage in any rental purchase, rental or rent-to-own
business or any related business activities that are competitive with the
current rental purchase, rental, rent-to-own and related business of the Company
or of the Surviving Corporation in the states, or otherwise within a twenty-
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five mile radius of any store location, at which the Surviving Corporation
conducts or at which, immediately prior to the Merger, the Company conducted its
rental purchase, rental, rent-to-own and related business all of which states
and locations are set forth on Exhibit A attached hereto [TO BE ATTACHED AT
SIGNING]. As used herein, the term "engage in any business" shall mean and be
deemed to include, but not be limited to: (i) directly engaging in a business;
or (ii) carrying on a business through: (a) a general or limited or partnership
in which Executive is a general or limited partner; (b) any joint venture in
which Executive is an owner; or (c) any corporation in which Executive is an
officer, director, employee, shareholder, option holder or consultant.
Notwithstanding the foregoing, the Executive shall be entitled (A) to own
Rent-Way Common Stock, including RWI Shares received in connection with the
Merger and (B) to purchase or own, solely as a passive investment, up to two
percent (2%) of the issued and outstanding shares of any securities of any
corporation the shares of common stock of which are traded on a national
securities exchange or on the Nasdaq National Market which is engaged in
business that is competitive to that of the Surviving Corporation; provided that
Executive renders no advice of any kind to management of such corporation and
does not actively participate in or control, directly or indirectly, any
investment or other decision with respect to such corporation or other entity
without the express prior written consent of Surviving Corporation exercisable
in its sole discretion;
(b) solicit any employee of the Surviving Corporation with
whom the Executive has had contact or any subsidiary of the Surviving
Corporation with whom the Executive has had contact to terminate his or her
employment with the Surviving Corporation or such subsidiary of the Surviving
Corporation; or
(c) intentionally cause, by word or deed, any person, firm,
corporation or other entity having a business relationship with the Surviving
Corporation or any subsidiary of the Surviving Corporation to sever such
relationship with, or commit any act inimical to, the Surviving Corporation or
such subsidiary of the Surviving Corporation.
2. CONFIDENTIALITY. As material consideration for the
Surviving Corporation's performance of its obligations under and as provided for
in the Merger Agreement, for all benefits to be conferred on Executive and his
affiliates pursuant to and in connection with the consummation of the
transactions contemplated by the Merger Agreement, and in order to protect the
confidential information of the Company and the Surviving Corporation and their
subsidiaries, Executive covenants and agrees, for the benefit of the Surviving
Corporation and each subsidiary of the Surviving Corporation, that the Executive
shall not for a period of three years after the Effective Date use for his
personal benefit, or disclose, communicate, or divulge to, or use for the direct
or indirect benefit of any person, firm, association, or company other than the
Surviving Corporation or any subsidiary of the Surviving Corporation, any
Confidential Information. "Confidential Information" means information relating
to the products, services, customers, or operations of the Company, the
Surviving Corporation or any subsidiary of the Surviving Corporation, that (a)
is not generally known, (b) is or was proprietary to the Company, the Surviving
Corporation or any subsidiary of the Surviving Corporation, and (c) is made
known to Executive or learned or acquired by Executive while serving
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the Company, or any subsidiary or predecessor thereof, in any capacity. However,
Confidential Information shall not include under any circumstances any
information with respect to the foregoing matters that becomes publicly
available through no fault of Executive.
3. REMEDIES; RESOLUTION OF DISPUTES. The parties hereto
acknowledge that the Surviving Corporation and each subsidiary of the Surviving
Corporation would be irreparably harmed by a breach of this Agreement by
Executive and that it would not be possible to estimate damages resulting from
such a breach and, consequently, the parties hereto agree that the Surviving
Corporation and each subsidiary of the Surviving Corporation (each of which may
act alone to enforce the provisions of this Agreement) shall be entitled to
injunctive or other equitable relief to prevent a breach or continuing breach of
this Agreement, or any part hereof, and to secure the enforcement of this
Agreement, in addition to any other remedy which may be available to the
Surviving Corporation or each subsidiary of the Surviving Corporation at law or
in equity, and shall be entitled to recover from Executive reasonable attorneys'
fees and all costs and expenses incurred in connection with any such action.
4. AMENDMENT; WAIVER. This Agreement may not be amended or
modified except by a writing signed by each of Executive and the Surviving
Corporation. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provisions, whether or not
similar, nor shall any waiver of any other provision constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
5. ENTIRE AGREEMENT. This Agreement supersedes any other
agreement, whether written or oral, that may have been made or entered into by
the Company or Surviving Corporation (or by any director, officer or
representative of the Surviving Corporation or Company) or by Executive with
respect to the subject matter hereof. This Agreement constitutes the entire
agreement by and between the parties hereto with respect to the subject matter
hereof.
6. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given on the earlier
of (a) the date actually received by the party in question, by whatever means
and however addressed, or (b) the date sent if sent by telecopy (answerback
received), or on the date of personal delivery if delivered by hand, or on the
date signed for if sent by an overnight delivery service, to the following
addresses, or to such other address for a party as shall be specified by like
notice:
To Executive:
Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopier: (000) 000-0000
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With a copy to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxx, Xx.
Telecopy: (000) 000-0000
To Surviving Corporation:
Rent-Way, Inc.
Xxx Xxxx-Xxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President
With a copy to:
Xxxxxxx, Xxxx, Xxxxxxx, Xxxxx & Goodyear, LLP
0000 Xxx X&X Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Xx.
Telecopy: (000) 000-0000
The failure of any party to deliver any notice to any of the
above persons specified to receive copies of notices, demands or requests shall
not limit the effectiveness of any notice given in accordance herewith to either
Executive or Surviving Corporation. The foregoing shall not preclude the
effectiveness of actual written notice actually received by any party delivered
by any means other than those specified above.
7. ASSIGNMENT; SUCCESSORS; BENEFITS. This Agreement shall not
be assignable by the parties hereto, except that Surviving Corporation may
assign its rights and obligations hereunder to any affiliate of Surviving
Corporation that directly or indirectly acquires all or substantially all of the
assets of Surviving Corporation whether by sale, merger, consolidation,
reorganization or otherwise. The parties hereto acknowledge and agree that each
subsidiary of the Surviving Corporation shall be a third party beneficiary of
this Agreement. Nothing herein, expressed or implied, is intended to or shall
confer on any person other than the parties hereto (and each subsidiary of the
Surviving Corporation) and their respective successors and permitted assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
8. CONSTRUCTION; SEVERABILITY. (a) It is the agreement of the
parties hereto that the maximum protection available under the law shall be
provided to the Surviving Corporation and
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each subsidiary of the Surviving Corporation by this Agreement, to protect the
Company's, the Surviving Corporation's and each such subsidiary's interest in
the assets and business acquired under the terms of the Merger Agreement and
that, if the restrictions hereby imposed are held by a court to be unreasonably
broad in time, territory or scope, this Agreement shall be construed to impose
such restrictions in this regard as are not unreasonable as to time, territory
or scope, as the case may be.
(b) In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions hereof and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein and, in lieu and reformation of each such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible to cause such illegal, invalid and
unenforceable provision to be legal, valid and enforceable.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which
taken together will constitute one and the same instrument.
10. HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
11. FURTHER ASSURANCES. After the date hereof, each party
shall from time to time, at the request of the other party and without further
cost or expense to such party, execute and deliver such other instruments and
take such other actions as may reasonably be requested in order to more
effectively consummate the transactions contemplated hereby.
12. GOVERNING LAW. This Agreement, including, without
limitation, the interpretation, construction, validity and enforceability
hereof, shall be governed by the internal laws of the State of Delaware without
regard to the principles of conflict of laws thereof.
13. SUBMISSION TO JURISDICTION. (a) Any legal action or
proceeding with respect to this Agreement, the Shares or any document related
thereto may be brought in the courts of the State of Delaware or of the United
States of America for the Western District of Delaware, and, by execution and
delivery of this Agreement, each party hereby accepts generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
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(b) Each party irrevocably consents to the service of process
of any of the aforesaid courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to such
party, respectively, at its address provided herein.
(c) Nothing contained in this Section 13 shall affect the
right of any party hereto to serve process in any other manner permitted by law.
14. WAIVER OF JURY TRIAL. Each of the parties hereto waives
any right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any course of
conduct, course of dealing, verbal or written statement or action of any party
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Non-Competition Agreement as of the date first above written.
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
RENT-WAY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxxx
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Title: President
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