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NONCOMPETITION AGREEMENT
AGREEMENT dated as of April 5, 1999, by and among Xxxxxxx Xxxx, an
individual, having an address at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000
("Xxxx"), Xxxxx Xxxxxxx, an individual, having an address at 00 Xxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000 ("Xxxxxxx"), and Prime Financial Services, Inc., a New
York corporation with a principal office at 00 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX
00000 ("PFSI"), (Ryan, Porpora, and PFSI shall be referred to collectively
herein as the "Sellers"), and Xxxxxx & Xxxxxx, Inc., a Delaware corporation with
a principal office at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxx, XX 00000 ("G&C").
W I T N E S S E T H :
WHEREAS, G&C and the Sellers have entered into a Stock and Asset
Purchase Agreement dated April 5, 1999 (the "Purchase Agreement"), pursuant to
which G&C will acquire from the Sellers all of the outstanding capital stock of
Prime Capital Services, Inc., a New York corporation ("PCSI"), and Asset and
Financial Planning, Ltd., a New York corporation ("AFPL") (collectively, PCSI
and AFPL shall be referred to collectively herein as the "Company") in exchange
for common stock of G&C, as described in the Purchase Agreement (G&C and the
Company, together with other corporate affiliates, shall be referred to
collectively herein as the "G&C Companies");
WHEREAS, in order to preserve for G&C the goodwill of the Company to be
acquired by G&C pursuant to the Purchase Agreement, the Sellers have agreed not
to compete with the G&C, as described more fully herein,
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the adequacy and sufficiency of which are hereby
acknowledged, the parties hereto agree hereby as follows:
SECTION 1. RESTRICTIONS. (a) The parties hereto confirm that the
Sellers are each aware of important business information (i) relating to the
products, processes, designs and/or systems used by Company and (ii) relating to
the customers (including, without limitation, customer lists, call lists and all
data about customers) and employees, consultants, independent contractors and
suppliers of Company, which together constitutes the substantial portion of the
goodwill of Company acquired by G&C under the Purchase Agreement. The parties
hereto further confirm that it is reasonably necessary to protect and maintain
Company's goodwill, which G&C acquired pursuant to the Purchase Agreement, and
to prevent the usurpation by any of the Sellers (or any Person (hereinafter
defined) employing any of the Sellers at a later date) of all or any portion of
such goodwill, which was purchased by G&C, that Sellers each agree, and
accordingly each of the Sellers does agree, that he or it will not directly or
indirectly, for or on behalf of himself or itself or any Person (hereinafter
defined) at any time for a period of five years from the date hereof:
(i) employ or otherwise obtain services from, or solicit or
otherwise attempt to employ or otherwise obtain services from, or
assist any Person in employing or otherwise obtaining
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services from or attempting to employ or otherwise obtain services
from, any person who is then, or at any time during the preceding
twelve months shall have been, in the employ of or otherwise retained
by the G&C Companies; or
(ii) solicit any individual who was a customer or client of
the G&C Companies at any time during the two years prior to the date
hereof to supply any product or service that was supplied by the G&C
Companies or shall hereafter have been supplied by the G&C Companies,
or to reduce, or cease to receive, the level of products or services
that such customer or client had been receiving from Company or that
such customer or client shall have been receiving from the G&C
Companies; or
(iii) [omitted]
(iv) [omitted]
(v) at any time negotiate for or enter into an agreement,
understanding or arrangement, or otherwise cause or authorize any
Person, to take any of the actions prohibited by clauses (i) through
(iv) above.
As used herein, the term "Person" means any person, corporation, limited
liability company, partnership or other entity. G&C acknowledges that PFSI's
current business operations involving real estate, and lending are not in
competition with G&C or any corporate affiliate.
(b) Each of Sellers acknowledges that he or it has been
informed that it is the policy of the G&C Companies to maintain as secret and
confidential all information (i) relating to the products, processes, designs
and/or systems used by the G&C Companies and (ii) relating to the customers
(including, without limitation, customer lists, call lists and all data about
customers) and employees, consultants, independent contractors and suppliers of
the G&C Companies (all such information hereafter referred to as "Confidential
Information"). Each of the Sellers further acknowledges that such Confidential
Information has been acquired pursuant to the Purchase Agreement or assembled by
the G&C Companies at great cost to the G&C Companies, through the expenditure of
extensive resources of the G&C Companies over a long period and is of great
value to the G&C Companies. The parties hereto recognize that the services to be
performed by Xxxx and Xxxxxxx under employment agreements dated as of the date
hereof are special and unique, and that by reason of their involvement in
Company and their rendering services to the G&C Companies, each has and will
acquire Confidential Information as aforesaid. The parties hereto confirm that
it is reasonably necessary to protect the G&C Companies' goodwill that each of
the Sellers agree, and accordingly each of the Sellers does agree, that he or it
will not, directly or indirectly (except where authorized by either of the Board
of Directors of the G&C Companies, for the benefit of either of the G&C
Companies), for or on behalf of any of the Sellers or any Person, at any time:
(i) divulge to any Person other than the G&C Companies (hereinafter referred to
collectively as a "third party"), or use or cause to authorize any third parties
to use, any such Confidential Information, or any other information regarded as
confidential and valuable by the G&C Companies that he or it knows or should
know is regarded as confidential and valuable by the G&C
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Companies (whether or not any of the foregoing information is actually novel or
unique or is actually known to others and whether or not the Confidential
Information is labeled as confidential or secret); or (ii) negotiate for or
enter into any arrangement, contract or commitment to do any of the foregoing
prohibited acts.
SECTION 2. INJUNCTIVE RELIEF. Each of the Sellers acknowledges that any
breach or threatened breach by him or it of any provision of this Agreement
will, because of the unique nature of the transaction which will take place
pursuant to the Purchase Agreement, cause irreparable harm to the G&C Companies
and leave the G&C Companies without any adequate remedy at law and shall entitle
the G&C Companies, in addition to any other legal remedies available to the G&C
Companies, including offset for damages of any amounts owing from the G&C
Companies to any of the Sellers, to apply to any court of competent jurisdiction
to enjoin such breach or threatened breach without the need to specifically
prove irreparable harm or the inadequacy of legal remedies or to post a bond in
connection therewith.
SECTION 3. ACKNOWLEDGEMENT OF REASONABLENESS. The Sellers and the G&C
Companies each acknowledges that the type and periods of restriction imposed
herein are fair and reasonable and are reasonably required for the protection of
the G&C Companies and the goodwill associated with the business of Company and
are given as an integral part of the acquisition by the G&C Companies of the
business and goodwill of Company.
SECTION 4. SEVERABILITY. The parties hereto understand and intend that:
(a) each restriction agreed to by each of the Sellers hereinabove shall be
construed as separable and divisible from every other restriction; (b) the
unenforceability, in whole or in part, of any such restriction in any one or
more jurisdictions, shall not affect the enforceability of the remaining
restrictions in such jurisdiction or jurisdictions or the enforceability of any
restriction in other jurisdictions and this Agreement shall be construed in such
jurisdiction in all respects as if such invalid or unenforceable provisions were
omitted; and (c) one or more or all of such restrictions may be enforced in
whole or in part as the circumstances warrant.
SECTION 5. ENTIRE AGREEMENT. This Agreement, together with the
documents referred to herein and in the Purchase Agreement, contains the entire
agreement among the parties hereto and supersedes all prior arrangements or
understandings.
SECTION 6. CONSTRUCTION. The descriptive headings of this Agreement are
for convenience only and shall not control or affect the meaning or construction
of any provision of this Agreement. Each of the parties to this Agreement
participated in the drafting of this Agreement and the interpretation of any
ambiguity contained in this Agreement will not be affected by the claim that a
particular party drafted any provision hereof. Any pronoun herein shall include
all genders and/or the plural or singular as appropriate from the context.
SECTION 7. NOTICES. All notices or other communications that are
required or permitted hereunder shall be in writing and sufficient when
delivered in accordance with the notice provisions under the Purchase Agreement.
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SECTION 8. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts entered into, executed and to be performed wholly in such state.
SECTION 9. ASSIGNABILITY. This Agreement shall not be assignable
otherwise than by operation of law by any party hereto without the prior written
consent of the other parties, and any purported assignment without such prior
written consent shall be void, except that the G&C Companies may assign this
Agreement to an affiliate or an entity purchasing all, or substantially all, of
its assets.
SECTION 10. WAIVERS AND AMENDMENTS. Any waiver of any term or condition
of this Agreement, or any amendment or supplementation of this Agreement, shall
be effective only if in writing executed by the party against whom such waiver,
amendment or supplementation is sought to be charged. A waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement shall not in
any way affect, limit or waive a party's rights hereunder at any time to enforce
strict compliance thereafter with every term or condition of this Agreement.
SECTION 11. ILLEGALITIES. In the event that any provision contained in
this Agreement shall be determined to be invalid, illegal or unenforceable in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and the remaining provisions of this
Agreement shall not, at the election of the party for whose benefit the
provision exists, be in any way impaired, and in lieu of such provision
determined to be invalid, illegal or unenforceable a new provision shall be
automatically and without further action of the parties hereto substituted that
is as similar as possible to such invalid, illegal or unenforceable provision to
accomplish the intent and purpose thereof and still be valid, legal and
enforceable. More particularly, if any provision hereof is determined by any
court or other tribunal having jurisdiction thereof to be unenforceable because
of the duration or scope thereof, then the duration or scope of such provision
shall be automatically and without further action of the parties hereto reduced
to the extent that in the judgment of such court or other tribunal would be
necessary to render it enforceable.
SECTION 12. COUNTERPARTS. This Agreement may be executed in multiple
counterparts all of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, each of the undersigned corporations has caused
this Agreement to be executed by its duly authorized officer, and each of Xxxx
and Xxxxxxx has executed this Agreement as of the date first above written.
XXXXXX & CIOCIA, INC. PRIME FINANCIAL SERVICES, INC.,
a New York corporation
By:/s/ Xxxxxx Xxxxxxxxx By:/s/ Xxxxxxx Xxxx
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Name: Xxxxxx Xxxxxxxxx Name: Xxxxxxx Xxxx
Title: Chief Operating Officer Title: President
/s/ Xxxxxxx Xxxx /s/ Xxxxx Xxxxxxx
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XXXXXXX XXXX XXXXX XXXXXXX
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