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EXHIBIT 2.8
NONCOMPETITION, CONFIDENTIALITY, AND
NONSOLICITATION AGREEMENT
This Noncompetition, Confidentiality, and Nonsolicitation Agreement
("Noncompetition Agreement"), is made this 2nd day of December, 1998, by and
between Children's Comprehensive Services of California, Inc., a California
corporation, ("Purchaser") and Xxxxxxx X. Xxxxx, an individual resident of
California ("Bosic").
RECITALS
A. Pursuant to that certain Stock Purchase Agreement, dated
concurrently herewith, (the "Stock Purchase Agreement"), Purchaser
has, on the date hereof, purchased from Xxxxx, Xxxxxx X. Xxxxx,
and Xxxxxx X. XxXxx all of the issued and outstanding capital
stock of Somerset, Incorporated, a California corporation (the
"Company").
B. Prior to the consummation of such transactions, Bosic was a
shareholder, Director, Officer, and employee of Company, and in
such capacity, had access to proprietary and confidential
information relating to financial and business operations of
Company.
C. Sections 6.2(j) and 6.3(e) of the Stock Purchase Agreement provide
that, as a condition to the consummation of the transactions
contemplated therein, Bosic execute a Noncompetition,
Confidentiality, and Nonsolicitation Agreement providing for
certain obligations of Bosic to refrain from competing with
Purchaser, its parent corporation and affiliates, including but
not limited to Purchaser or Company (collectively, the
"Companies"), within a certain geographical area, soliciting
employees or clients of the Companies, or disclosing confidential
information relating to the Companies.
X. Xxxxx recognizes that in connection with the closing of the
transactions contemplated in the Stock Purchase Agreement that
it is in Purchaser's interests to restrict Bosic's ability to
compete with, solicit employees or clients from and disclose
confidential information regarding the Companies.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and of the
mutual covenants hereinafter set forth and in the Stock Purchase Agreement, the
parties hereto agree as follows:
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1. Covenant Not to Compete and Engage in Solicitation. Bosic agrees that for a
period of five (5) years following the later of (x) the date hereof and (y) the
last date of employment of Bosic by any of the Companies, he shall not, directly
or indirectly:
A. own, manage, operate, join, have an interest in, control or
participate in the ownership, management, operation or control of, be employed
by, assist in, act as a consultant to, or be connected with, directly or
indirectly, as an officer, director, shareholder, member, partner, proprietor,
employee, agent, independent contractor, or otherwise be connected in any manner
with, or have any direct or indirect financial interest, including, without
limitation, an interest as a creditor, in any form of business activity which is
directly or indirectly in competition with the business activity conducted by or
on behalf of any of the Companies (the "Business") throughout the State of
California (the "Territory");
B. hire, or promote to others, the hiring of any of the Companies'
employees, during and for a period of one (1) year following termination of the
respective employee's employment with any of the Companies; or
C. solicit, or promote to others, the solicitation of clients or
customers of any of the Companies.
Notwithstanding the foregoing, Bosic shall not be in violation of the
foregoing covenant not to compete and engage in solicitation with respect to any
of the activities prohibited by subparagraphs A (in its entirety) and B (but not
to include the promotion to others) to the extent (i) such activities are
conducted by or on behalf of Children's Therapeutic Communities, a California
nonprofit corporation ("CTC"), and (ii) Bosic is, at each such time, either a
director, officer, or employee of CTC.
2. Covenant Not to Disclose Confidential Information. At any time following the
date hereof, Bosic will not, directly or indirectly, disclose or use or
otherwise exploit for his own benefit, or the benefit of any other person, any
Confidential Information (as defined below). For purposes of this Noncompetition
Agreement, the term "Confidential Information" shall mean any business or
financial information relating to any of the Companies or to the Business of the
Companies (whether or not constituting a trade secret), which is not in the
public domain. Without limiting the generality of the foregoing, so long as such
information is not generally known in the Business or ascertainable by proper
means and is treated by any of the Companies as proprietary and confidential,
Confidential Information shall include, but shall not be limited to, the
following information regarding any of the Companies:
A. any patent, patent application, copyright, trademark, trade
name, service xxxx, service name, "know-how" or trade secrets;
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B. customer lists and information relating to (i) any client of
any Company or (ii) any client of the operations of any other person or entity
for which operations any Company provides management services;
C. supplier lists, pricing policies, consulting contracts and
competitive bid information;
D. company records, operational methods and company policies and
procedures, including manuals and forms;
E. marketing data, plans and strategies;
F. business acquisition, development, expansion or capital
investment plan or activities;
G. software and any other confidential technical programs;
H. personnel information, employee payroll and benefits data;
I. accounts receivable and accounts payable;
J. other financial information, including financial statements,
budgets, projections, earnings and any unpublished financial information; and
K. company correspondence and communications with outside parties.
As used in this Section 2, the term "person" shall mean an individual,
a partnership, an association, a corporation, a trust, an unincorporated
organization, a limited liability company, a registered limited liability
partnership or any other business entity or enterprise. Notwithstanding the
provisions of this Section 2 to the contrary, Bosic shall not be prohibited
hereunder from making any disclosure required by law.
3. Injunctive Relief; Invalidity of Any Provision. Bosic acknowledges that (a)
his ownership of and positions as a shareholder, a director, an officer and an
employee of Company afforded his access to Confidential Information regarding
the Business of Company, (b) he will benefit from the consummation of the
transactions contemplated by the Stock Purchase Agreement, including but not
limited to by reason of the consideration received by him thereby, (c) the
nature and periods of restrictions imposed by the covenants contained in
Sections 1 and 2 hereof are fair, reasonable and necessary to protect the
Companies, (d) the Companies would sustain irreparable loss and damage if Bosic
were to breach any of such covenants, (e) the Companies actively conduct the
Business and are actively expanding the Business throughout the Territory, and
(f) the Companies' remedy at law for such a breach will be inadequate.
Accordingly, Bosic agrees and consents that the Companies, in addition to all
other remedies available to any of them, at law or in equity, shall be entitled
to:
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A. seek both preliminary and permanent injunctions to prevent or
halt a breach or threatened breach by Bosic of any covenant contained in either
Sections 1 or 2 hereof; and
B. set-off the entire amount of any Damages arising by such
breach or threatened breach against the amounts, if any, then due under the Real
Estate Note.
If any provision of either of Sections 1 or 2 of this Noncompetition
Agreement is determined by a court of competent jurisdiction to be invalid in
whole or in part, it shall be deemed to have been amended, whether as to time,
area covered or otherwise, as and to the extent required for its validity by
such court, and as so amended, shall be enforceable. The parties further agree
to execute all documents necessary to evidence such amendment.
4. Notices. All notices, requests, demands and other communications required or
permitted to be given or made under this Noncompetition Agreement shall be in
writing and shall be given to Purchaser or to Bosic in accordance with the
provisions of Section 11.8 of the Stock Purchase Agreement.
5. Construction of Agreement.
5.1 Written Changes Only. This Noncompetition Agreement may not be changed or
terminated orally, and no modification, termination or attempted waiver shall be
valid unless in writing and signed by the party against whom enforcement is
sought (other than as provided in the last sentence of Section 4 hereof).
5.2 Tense; Captions. In construing this Noncompetition Agreement, whenever
appropriate, the singular tense shall also be deemed to mean the plural, and
vice versa, and the captions contained in this Noncompetition Agreement shall be
ignored.
5.3 Governing Law and Severability. This Noncompetition Agreement shall be
governed by, construed and enforced in accordance with, the laws of the State of
California. If any court holds any provision of this Noncompetition Agreement or
the application of the provision to any person or circumstance invalid, the
remaining provisions of this Noncompetition Agreement, and the application of
the provision to persons or circumstances other than those to which it is held
invalid, shall not be affected.
5.4 Assignment Prohibited. Bosic's obligations hereunder shall not be
assignable to any other person or entity.
5.5 Binding Effect; Benefit. Except as otherwise specifically provided
herein, this Noncompetition Agreement shall be binding upon, and shall inure to
the benefit of, the Companies and their respective successors and assigns.
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5.6 Integrated Agreement. This Noncompetition Agreement constitutes the
entire agreement between the parties by which they agreed to be bound and
supersede all prior and contemporaneous agreements, correspondence, arrangements
and understanding (whether written or oral) relating to its subject matter and
the transactions contemplated by it.
5.7 Execution in Counterparts. This Noncompetition Agreement may be executed
in multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
5.8 Third Party Beneficiaries. With respect to the provisions of Sections 1
and 2 hereof, the parent corporation of Purchaser, the Company and all current
and any future direct or indirect Affiliates (as defined below) of such parent
corporation, are hereby made third-party beneficiaries of this Noncompetition
Agreement. As used herein, the term "Affiliates" refers to any corporation or
entity that controls, is controlled by or is under common control with either
Purchaser or any successor or assignee of such parent corporation.
5.9 Recovery of Attorneys' Fees. If either party brings an action against
the other to enforce any condition or covenant of this Noncompetition Agreement,
the prevailing party in such action shall be entitled to recover its court costs
and reasonable attorneys' fees in the judgment rendered through such action.
IN WITNESS WHEREOF, the parties have executed this Noncompetition Agreement
as of the date first written above.
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XXXXXXX X. XXXXX
CHILDREN'S COMPREHENSIVE SERVICES OF
CALIFORNIA, INC., A CALIFORNIA CORPORATION
By:
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Name:
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Title:
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