NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT
NON-DISCLOSURE
AND
NON-SOLICITATION
AGREEMENT
THIS
NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT
(“Agreement”), dated as of April 3, 2008 (the "Effective Date"), by and between
Xxxxxxx Xxxxxx (the “Seller”) and National Investment Managers Inc., a Florida
corporation (“NIM”).
RECITALS
A. Pursuant
to that certain Stock Purchase Agreement, dated as of April 3, 2008, by and
among NIM, California
Investment Annuity Sales, Inc. (the “Company”), Xxxxxxx
X. Xxxxxx and Xxxx X. Xxxxxx Inter Vivos Trust Agreement dated 1/29/97 as
amended and restated 1/10/03 and Xxxxxxx Xxxxxxx (the “Purchase Agreement”), the
Company is being acquired by NIM. Capitalized terms not otherwise defined
herein
shall have the meanings ascribed to such terms in the Purchase
Agreement.
B. Seller
has been a principal shareholder and officer, director and employee of the
Company for many years, and was previously a shareholder of VEBA
Administrators, Inc. doing
business as Benefit Planning, Inc., a California corporation ("BPI"), which
is
currently owned by Company, and has developed and received special, unique
and
extraordinary knowledge, information and goodwill in connection
therewith.
C. It
is a
condition precedent to the consummation of the transactions contemplated
by the
Purchase Agreement, and an inducement to NIM to enter into the Purchase
Agreement and effect the purchase of the Company and its respective businesses
thereunder and the goodwill represented thereby, that the parties hereto
execute
and deliver this Agreement.
NOW,
THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the
parties hereto agree as follows:
1 Non-Solicitation.
Commencing on the date hereof and ending on the last day of the Restricted
Period (as defined below), Seller covenants and agrees that Seller will not,
without NIM’s prior written consent, directly or indirectly, either on behalf of
Seller or on behalf of any business venture, as an employee, consultant,
partner, principal, stockholder, officer, director, trustee, agent, or otherwise
(other than on behalf of the Company or BPI):
(A) solicit
or divert any existing business or any existing customer from NIM, the Company,
BPI or its Affiliates or assist any person, firm, corporation or other entity
in
doing so or attempting to do so; or
(B) cause
or
seek to cause any person, firm or corporation that is doing business with
NIM or
its Affiliates to refrain from doing business with NIM or its Affiliates
or
assist any person, firm, corporation or other entity in doing so;
or
(C) hire,
solicit or divert from NIM or its Affiliates any of their respective employees,
consultants or agents who have, at any time during the immediately preceding
one
(1) year period from the date hereof, been engaged by NIM
or its
Affiliates,
nor
assist any person, firm, corporation or other entity in doing so.
As
used
in this Agreement, the
term
“Affiliates” shall mean any
entity controlling, controlled by or under the common control of NIM. For
the
purpose of this Agreement, “control” shall mean the direct or indirect ownership
of fifty (50%) percent or more of the outstanding shares or other voting
rights
of an entity or possession, directly or indirectly, of the power to direct
or
cause the direction of management and policies of an entity.
As
used
in this Agreement, “Restricted Period” means the period commencing on the date
hereof and ending two (2) years from the date of Seller’s termination of
employment or consulting period with the Company or BPI for any reason.
2 Nondisclosure.
Seller
understands and agrees that the business of the Company and its Affiliates
is
based upon specialized work and Confidential Information (as hereinafter
defined). Seller agrees that following the termination of Seller’s employment or
consulting period with BPI and for two (2) years thereafter, Seller shall
keep
secret all such Confidential Information and that Seller will not, directly
or
indirectly, use for Seller’s own benefit or for the benefit of others nor
Disclose (as hereinafter defined), without the prior written consent of NIM,
any
Confidential Information. At any time upon NIM’s request, Seller shall turn over
to NIM all books, notes, memoranda, manuals, notebooks, records and other
documents made, compiled by, delivered to, or in the possession or control
of
Seller containing or concerning any Confidential Information, including all
copies thereof, in any form or format, and shall delete all such Confidential
Information from any computer hard disks under Seller's control, wherever
located, containing any such information, it being agreed that the same and
all
information contained therein are at all times the exclusive property of
the
Company or BPI.
As
used
in this Agreement, the term “Confidential Information” means any information or
compilation of information not generally known to the public or the industry,
that is proprietary or confidential to the Company or BPI and/or those doing
business with the Company or BPI, including but not limited to know-how,
process, techniques, methods, plans, specifications, trade secrets, patents,
copyrights, supplier lists, customer lists, mailing lists, financial
information, business plans and/or policies, methods of operation, sales
and
marketing plans and any other information acquired or developed by Seller
in the
course of his past, present and future (while employed or retained as a
consultant by the Company or BPI) dealings with the Company or BPI, which
is not
available to the public.
2
“Confidential
Information” does not
include any information, datum or fact: (a) currently available to the public
as
of the date hereof; (b) after it becomes available to the public other than
as a
result of a breach hereof or other wrongful conduct by Seller; (c) after
it
becomes available to Seller on a nonconfidential basis from a source other
than
the Company or BPI or their affiliates or a person or entity breaching his
or
its confidentiality agreement or other relationship of confidence with the
Company or BPI; or (d) developed independently by Seller without any reference
to or use whatsoever of any Confidential Information of the Company or
BPI.
As
used
in this Agreement, the term “Disclose” means to reveal, deliver, divulge,
disclose, publish, copy, communicate, show, allow or permit access to, or
otherwise make known or available to any third party, any of the Confidential
Information.
3 Blue
Pencil Doctrine.
In the
event that the restrictive covenants contained in Section 1
and/or
Section 2
of this
Agreement shall be found by a court of competent jurisdiction to be unreasonable
by reason of such restrictive covenants extending for too great a period
of time
or over too great a geographic area or by reason of such restrictive covenants
being too extensive in any other respect, then such restrictive covenant
shall
be deemed modified to the minimum extent necessary to make such restrictive
covenant reasonable and enforceable under the circumstances.
4 Injunctive
Relief.
If
Seller
shall breach or threaten to breach any of the provisions of
Section 1
and/or
Section 2,
in
addition to and without limiting any other remedies available to NIM at law
or
in equity, NIM shall be entitled to seek immediate injunctive relief in any
court to restrain any such breach or threatened breach and to enforce the
provisions of Section 1
and/or
Section 2,
as the
case may be. Seller acknowledges and agrees that there is no adequate remedy
at
law for any such breach or threatened breach and, in the event that any
proceeding is brought seeking injunctive relief, Seller shall not use as
a
defense thereto that there is an adequate remedy at law.
5 Reasonableness
of Covenants.
Seller
acknowledges and agrees that the restrictive covenants contained in this
Agreement are a necessary inducement to Purchaser purchasing Seller’s ownership
interests in the Company and its subsidiaries, and that the scope (geographic
and otherwise) and period of duration of the restrictive covenants contained
in
this Agreement are both fair and reasonable and that the interests sought
to be
protected by NIM are legitimate business interests entitled to be protected.
Seller further acknowledges and agrees that NIM would not have purchased
Seller’s ownership interests in the Company and its subsidiaries pursuant to the
Purchase Agreement unless Seller entered into this Agreement.
6 General
Provisions.
(A) Entire
Agreement.
This
Agreement, together with the Purchase Agreement and any other agreements
contemplated thereby, contain the entire agreement of the parties hereto
with
respect to the subject matter hereof, and supersede all prior or contemporaneous
agreements and understandings, oral or written, among the parties hereto
and
thereto with respect to the subject matter hereof and thereof.
3
(B) Amendment;
Waiver.
No
amendment or waiver of any provision of this Agreement shall be effective
unless
the same shall be in writing and signed by all of the parties and then such
waiver shall only be effective in the specific instance and for the specific
purpose for which it was given.
(C) Notices.
All
notices and other communica-tions under this Agreement shall be in writing
and
shall be given in accordance with the notice provisions of the Purchase
Agreement.
(D) Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representative(s), successors and permitted
assigns. This Agreement may be assigned to, and thereupon shall inure to
the
benefit of, any organization which succeeds to substantially all of the business
or assets of NIM, whether by means of merger, consolidation, acquisition
of all
or substantially all of the assets of NIM or otherwise, including, without
limitation, by operation of law.
(E) Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws
of the
State of California applicable to agreements made and to be performed in
that
state, without regard to any of its principles of conflicts of laws or other
laws that would result in the application of the laws of another jurisdiction.
This Agreement shall be construed and interpreted without regard to any
presumption against the party causing this Agreement to be drafted. Each
of the
parties hereby unconditionally and irrevocably waives the right to a trial
by
jury in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. Each of the parties
unconditionally and irrevocably consents to the exclusive jurisdiction of
the
courts of the State of California located in the County of Los Angeles and
the
Federal court in the Central District of California with respect to any suit,
action or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby, and each of the parties hereby unconditionally
and irrevocably waives any objection to venue in any such court.
(F) Recovery
of Attorneys’ Fees and Costs.
If any
action for breach of or to enforce the provisions of this Agreement is
commenced, the court in such action shall award to the party in whose favor
a
judgment is entered, a reasonable sum as attorneys' fees and costs. Such
attorneys' fees and costs shall be paid by the non-prevailing party in such
action.
(G) Headings.
The
headings to the paragraphs of this Agreement are intended for the convenience
of
the parties only and shall in no way be held to explain, modify, amplify
or aid
in the interpretation of the provisions hereof.
(H) Severability.
The
provisions of this Agreement shall be deemed severable and if any portion
hereof
shall be held invalid, illegal or unenforceable for any reason by a court
of
competent jurisdiction, the remainder shall not thereby be invalidated but
shall
remain in full force and effect.
4
(I) Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed
an
original but all of which together shall constitute one and the same agreement.
In addition, the parties may execute multiple original copies of this Agreement,
each of which shall be considered an original, but all of which shall be
considered the same Agreement.
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IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as of the date first set forth
above.
| NATIONAL INVESTMENT MANAGERS INC. | ||
| |
|
|
| By: | /s/ Xxxxxx Xxxx | |
| Name: | Xxxxxx Xxxx | |
| Title: | CEO | |
| /s/ Xxxxxxx Xxxxxx | ||
| Xxxxxxx Xxxxxx | ||
[SIGNATURE
PAGE -
NON-DISCLOSURE
AND
NON-SOLICITATION
AGREEMENT]
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