NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Exhibit
10.3
THIS
NON-COMPETITION AND NON-SOLICITATION AGREEMENT (the “Agreement”) is made by and
between Broadpoint Securities Group, Inc., a New York corporation and its
successors (“Broadpoint”), and the undersigned prospective stockholder (the
“Stakeholder”) in Broadpoint.
WHEREAS,
an Agreement and Plan of Merger by and among Broadpoint, Magnolia Advisory LLC,
Gleacher Partners Inc., certain of the stockholders of Gleacher Partners Inc.,
and each of the holders of interests in Gleacher Holdings, LLC, dated as of
March 2, 2009 (the “Merger Agreement”) will be entered into concurrently with
the execution of this Agreement, pursuant to which Gleacher Partners Inc. will
be merged with and into Magnolia Advisory LLC (the “Merger”);
WHEREAS,
in connection with the Merger, Stakeholder shall receive significant
consideration pursuant to the terms of the Merger Agreement;
WHEREAS,
as a condition to the Merger, the Merger Agreement contemplates, among other
things, that Stakeholder shall enter into this Agreement; and
WHEREAS,
as a condition to the Merger, the Merger Agreement also contemplates Stakeholder
and Broadpoint Capital, Inc. (“Company”) shall enter into an Employment
Agreement concurrently with the execution of this Agreement (the “Employment
Agreement”).
NOW,
THEREFORE, in consideration of the mutual promises made herein, Broadpoint and
the Stakeholder hereby agree as follows:
1. Covenant
Not to Compete or Solicit.
(a) Non-Competition. Until
the third anniversary of the Closing Date, as defined in the Merger Agreement
(the “Term”), the Stakeholder shall not (other than on behalf of Broadpoint and
Company), without the prior written consent of Broadpoint, directly or
indirectly, either on his own behalf or on behalf of any other person, (i)
engage in a Competitive Business Activity (as defined below) anywhere in the
Restricted Territory (as defined below), or (ii) induce, persuade or attempt to
induce or persuade any customer, supplier or other person having business
dealings with Broadpoint, Company or any of their affiliates to restrict its
business relationship or dealings with Broadpoint, Company or any such
affiliate, or (iii) make any statement or other communication that impugns or
attacks the reputation or character of Broadpoint, Company or any of their
affiliates, or damages the goodwill of any of them. During the Term,
none of Broadpoint, Company or any of their affiliates shall make any statement
or other communications that impugns or attacks the reputation or character of
the Stakeholder, or damages the goodwill of the Stakeholder and Broadpoint,
Company and their affiliates shall instruct their respective directors and
executive officers not to make
any such
statements. Upon termination of the Merger Agreement without the
prior occurrence of the Closing Date, this Agreement shall automatically
terminate and be of no further force or effect. For all purposes of
this Agreement, “affiliate” shall mean a controlled affiliate.
For all purposes hereof, the term
“Competitive Business Activity” shall mean: (i) engaging in, or
managing or directing persons engaged in any business in competition with the
business of Broadpoint, Company or any of their affiliates; (ii) acquiring or
having an ownership interest in any entity that derives revenues from any
business in competition with the business of Broadpoint, Company or any of their
affiliates (except for passive ownership of five percent (5%) or less of any
entity whose securities are publicly traded on a national securities exchange or
market or five percent (5%) or less of any entity whose securities are not
publicly traded on a national securities exchange or market); or (iii)
participating in the operation, management or control of any firm, partnership,
corporation, entity or business (each, an “Entity”) described in clause (ii) of
this sentence. Notwithstanding anything contained herein to the
contrary, the Stakeholder’s ownership interest in and/or continued provision of
services to Gleacher Mezzanine Funds and/or Gleacher Fund Advisors shall in no
event be deemed a Competitive Business Activity or give rise to a breach of this
Agreement; provided that Stakeholder does not devote more than ten hours to the
provision of such services during any month during the term of the Employment
Agreement.
For all purposes hereof, the term
“Restricted Territory” shall mean each and every country, province, state, city
or other political subdivision of North America, Central America, South America,
Asia, Australia and Europe in which Broadpoint, Company or any of their
affiliates is currently engaged in business or otherwise distributes, licenses
or sells its products.
(b) Non-Solicitation. During
the Term, the Stakeholder shall not solicit, encourage or take any other action
which is intended to induce or encourage, or could reasonably be expected to
have the effect of inducing or encouraging, any employee of Broadpoint or any of
its subsidiaries to terminate his employment with Broadpoint or any such
subsidiary.
(c) The
covenants contained in Section 1(a) hereof shall be construed as a series of
separate covenants, one for each country, province, state, city or other
political subdivision of the Restricted Territory. Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms to the covenant contained in Section 1(a) hereof. If, in any
judicial proceeding, a court refuses to enforce any of such separate covenants
(or any part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. In the event
that the provisions of this Section 1 are deemed to exceed the time, geographic
or scope limitations permitted by applicable law of a country, province, state,
city or other political subdivision of the Restricted Territory, then such
provisions shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, permitted by applicable laws or the relevant
jurisdiction.
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(d) The
Stakeholder acknowledges that (i) the goodwill associated with Gleacher Partners
Inc. prior to the Merger is an integral component of the value of Broadpoint and
Company following the Merger and is reflected in the consideration to be
received by the Stakeholder, and (ii) the Stakeholder’s agreement as set forth
herein is necessary to preserve the value of Broadpoint and Company following
the Merger. The Stakeholder also acknowledges that the limitations of
time, geography and scope of activity agreed to in this Agreement are reasonable
because, among other things, (A) Broadpoint and Company are engaged in a highly
competitive industry, (B) the Stakeholder has unique access to, and will
continue to have access to, the trade secrets and know-how relating to
Broadpoint and Company, including, without limitation, the plans and strategy
(and, in particular, the competitive strategy) relating to Broadpoint and
Company, (C) if the Stakeholder becomes an employee of Broadpoint, Company or
any of their affiliates during the Term, the Stakeholder is accepting such
employment on favorable terms in connection with the Merger, (D) in the event
the Stakeholder’s employment with Broadpoint, Company or any such affiliate
ended, the Stakeholder would be able to obtain suitable and satisfactory
employment without violation of this Agreement, and (E) this Agreement provides
no more protection than is necessary to protect Broadpoint’s interests in its
and in Company’s and Magnolia Advisory LLC’s goodwill, trade secrets and
confidential information.
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2.
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Confidentiality.
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The Stakeholder recognizes and
acknowledges that the Proprietary Information (as hereinafter defined) is a
valuable, special and unique asset of Broadpoint. As a result, except
(i) as required in order to perform his obligations under this Agreement or the
Employment Agreement, (ii) as may otherwise be required by law or any legal or
regulatory (including self-regulatory) process, or (iii) as is necessary in
connection with any adversarial proceeding against Broadpoint, Company or any of
their affiliates (in which case the Stakeholder shall use his reasonable best
efforts in cooperating with Broadpoint, Company and any such affiliate in
obtaining a protective order against disclosure by a court of competent
jurisdiction), the Stakeholder shall not, without the express prior written
consent of Broadpoint, for any reason either directly or indirectly divulge to
any third-party or use for his own benefit, or for any purpose other than the
exclusive benefit of Broadpoint, Company and their affiliates, any confidential,
proprietary, business and technical information or trade secrets of Broadpoint,
Company or any of their affiliates, including, without limitation, Magnolia
Advisory LLC (the “Proprietary
Information”) revealed, obtained or developed in the course of his
employment with Broadpoint, Company or any such
affiliate. Proprietary Information shall include any confidential or
proprietary information or trade secrets relating to any patents or other
intellectual property assigned by the Stakeholder to Broadpoint, Company or any
of their affiliates. Proprietary Information also shall include, but
shall not be limited to intangible personal property; technical information,
including research design, results, techniques and processes; apparatus and
equipment design; computer software; technical management information, including
project proposals, research plans, status reports, performance objectives and
criteria, and analyses of areas for business development; and business
information, including project, financial, accounting and personnel information,
business strategies, plans and forecasts, customer lists, customer
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information
and sales and marketing plans, efforts, information and data. In
addition, “Proprietary
Information” shall include all information and materials received by the
Stakeholder, Broadpoint, Company or any of their affiliates from a third party
subject to an obligation of confidentiality and/or
non-disclosure. Furthermore, nothing contained herein shall restrict
the Stakeholder from divulging or using for his own benefit or for any other
purpose any Proprietary Information that is readily available to the general
public so long as such information did not become available to the general
public as a direct or indirect result of the Stakeholder’s breach of this
Section 2. Failure by Broadpoint, Company or any of their affiliates
to xxxx any of the Proprietary Information as confidential or proprietary shall
not affect its status as Proprietary Information under the terms of this
Agreement.
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3.
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Property.
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(a) Removal and
Distribution. All right, title and interest in and to
Proprietary Information shall be and remain the sole and exclusive property of
Broadpoint. During the Term, the Stakeholder shall not remove from
the offices or premises of Broadpoint or Company, as applicable, any documents,
records, notebooks, files, correspondence, reports, memoranda or similar
materials of or containing Proprietary Information, or other materials or
property of any kind belonging to Broadpoint, Company or any of their affiliates
unless necessary or appropriate in accordance with the duties and
responsibilities required by or appropriate for employment and, in the event
that such materials or property are removed, all of the foregoing shall be
returned to their proper files or places of safekeeping as promptly as possible
after the removal shall serve its specific purpose. The Stakeholder
shall not make, retain, remove and/or distribute any copies of any of the
foregoing for any reason whatsoever, except as may be necessary in the discharge
of the assigned duties and shall not divulge to any third person the nature of
and/or contents of any of the foregoing or of any other oral or written
information to which he may have access or with which for any reason he may
become familiar, except as disclosure shall be necessary in the performance of
the duties; and upon the termination of his employment with Broadpoint, Company
and all of their affiliates, the Stakeholder shall return to Broadpoint or
Company, as applicable, all originals and copies of the foregoing then in his
possession or under his control, whether prepared by the Stakeholder or by
others.
(b) Developments. The
Stakeholder acknowledges that all right, title and interest in and to any and
all writings, documents, inventions, discoveries, ideas, developments,
information, computer programs or instructions (whether in source code, object
code, or any other form), algorithms, formulae, plans, memoranda, tests,
research, designs, innovations, systems, analyses, specifications, models, data,
diagrams, flow charts, and/or techniques (whether patentable or non-patentable
or whether reduced to written or electronic form or otherwise) that the
Stakeholder creates, makes, conceives, discovers or develops, either solely or
jointly with any other person, at any time during employment or service with
Broadpoint, Company or any of their affiliates, whether during working hours or
at any facility of Broadpoint, Company or any of their affiliates or at any
other time or location, and whether upon the request or suggestion of
Broadpoint, Company or otherwise, (collectively, “Intellectual Work
Product”) shall be
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the sole
and exclusive property of Broadpoint. The Stakeholder shall promptly
disclose to Broadpoint all Intellectual Work Product, and the Stakeholder shall
have no claim for additional compensation for the Intellectual Work Product,
except for any excluded Intellectual Work Product that is wholly unrelated to
the business of Broadpoint, Company or any of their affiliates, in the broadest
sense, provided that such Intellectual Work Product is not conceived, discovered
or developed, either solely or jointly with any other person during working
hours or at any facility of Broadpoint, Company or any of their affiliates or
using any other Broadpoint related resource.
(1) The
Stakeholder acknowledges that all the Intellectual Work Product that is
copyrightable shall be considered a work made for hire under United States
Copyright Law. To the extent that any copyrightable Intellectual Work
Product may not be considered a work made for hire under the applicable
provisions of the United States Copyright Law, or to the extent that,
notwithstanding the foregoing provisions, the Stakeholder may retain an interest
in any Intellectual Work Product, the Stakeholder hereby irrevocably assigns and
transfers to Broadpoint any and all right, title, or interest that the
Stakeholder may have in the Intellectual Work Product under copyright, patent,
trade secret and trademark law, in perpetuity or for the longest period
otherwise permitted by law, without the necessity of further
consideration. Broadpoint shall be entitled to obtain and hold in its
own name all copyrights, patents, trade secrets, and trademarks with respect
thereto.
(2) The
Stakeholder shall reveal promptly all information relating to any such
Intellectual Property to the Board of Directors, and, at Broadpoint’s expense,
shall cooperate with Broadpoint and execute such documents as may be necessary
or appropriate (i) in the event that Broadpoint desires to seek copyright,
patent or trademark protection, or other analogous protection, thereafter
relating to the Intellectual Work Product, and when such protection is
obtained, renew and restore the same, or (ii) to defend any opposition
proceedings in respect of obtaining and maintaining such copyright, patent or
trademark protection, or other analogous protection.
(3) In the
event Broadpoint is unable after reasonable effort to secure the Stakeholder’s
signature on any of the documents referenced in Section 3(b)(2) hereof, whether
because of the Stakeholder’s physical or mental incapacity or for any other
reason whatsoever, the Stakeholder hereby irrevocably designates and appoints
Broadpoint and its duly authorized officers and agents as the Stakeholder’s
agent and attorney-in-fact, to act for and on the behalf and stead to execute
and file any such documents and to do all other lawfully permitted acts to
further the prosecution and issuance of any such copyright, patent or trademark
protection, or other analogous protection, with the same legal force and effect
as if executed by the Stakeholder.
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4. Miscellaneous.
(a) Governing
Law; Consent to Personal Jurisdiction. This Agreement shall be
governed by the laws of the State of New York without reference to rules of
conflicts of law. The Stakeholder hereby consents to the personal
jurisdiction of the state and federal courts located in New York, New York, for
any action or proceeding arising from or relating to this Agreement or relating
to any arbitration in which the parties are participants.
(b) Specific
Performance; Injunctive Relief. The parties acknowledge that (i)
Broadpoint will be irreparably harmed and that there will be no adequate remedy
at law for a violation of any of the covenants or agreements of the Stakeholder
set forth herein, (ii) the nature of the business of Broadpoint, Company and
their affiliates is such that it could be conducted anywhere in the world and
that it is not limited to a geographic scope or region, (iii) the provisions of
this Agreement are reasonable and necessary for the protection of the business
of Broadpoint, Company and their affiliates, (iv) the Stakeholder will not be
unreasonably precluded from earning a living following his termination of
employment if the provisions of this Agreement are fully enforced, and (v)
Broadpoint would not have entered into this Agreement, and
Company would not have entered into the Employment Agreement, unless
Executive agreed to be bound by the terms of Sections 1, 2 and 3 of this
Agreement. Therefore, it is agreed that, in addition to any other
remedies that may be available to Broadpoint upon any such violation, Broadpoint
shall have the right to seek enforcement of such covenants and agreements by
specific performance, injunctive relief or by any other means available to
Broadpoint at law or in equity.
(c) Severability. If
any portion of this Agreement is held by an arbitrator or a court of competent
jurisdiction to conflict with any federal, state or local law, or to be
otherwise invalid or unenforceable, such portion of this Agreement shall be of
no force or effect and this Agreement shall otherwise remain in full force and
effect and be construed as if such portion had not been included in this
Agreement.
(d) No
Assignment. Because the nature of the Agreement is specific to the
actions of the Stakeholder, the Stakeholder may not assign this
Agreement. This Agreement shall inure to the benefit of Broadpoint
and its successors and assigns.
(e) Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial messenger or courier
service, or mailed by registered or certified mail (return receipt requested) or
sent via facsimile (with acknowledgment of complete transmission) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice); provided, however, that notices sent by mail will not
be deemed given until received:
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(i) if
to Broadpoint, to:
00 Xxxx 00xx Xxxxxx,
00xx
Xxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attn: General
Counsel
Telephone
No.: 000-000-0000
Facsimile
No.: 000-000-0000
(ii) if
to the Stakeholder, at the address last set forth on the records of
Company.
(f) Entire
Agreement. This Agreement and the Employment Agreement contain the
entire agreement and understanding of the parties and supersedes all prior
discussions, agreements and understandings relating to the subject matter
hereof. This Agreement may not be changed or modified, except by an
agreement in writing executed by Broadpoint and the Stakeholder.
(g) Waiver
of Breach. The waiver of a breach of any term or provision of this
Agreement, which must be in writing, shall not operate as or be construed to be
a waiver of any other previous or subsequent breach of this
Agreement.
(h) Headings. All
captions and section headings used in this Agreement are for convenience only
and do not form a part of this Agreement.
(i) Counterparts. This
Agreement may be executed in counterparts, and each counterpart shall have the
same force and effect as an original and shall constitute an effective, binding
agreement on the part of each of the undersigned.
(j) The
Stakeholder’s obligations under this Agreement shall remain in effect regardless
of the Stakeholder’s employment status with Broadpoint or any of its
affiliates.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the 2nd day of
March, 2009.
By: /s/ Xxx Xxxxxxxxxxxx
Name: Xxx
Xxxxxxxxxxxx
Title: Chairman and Chief
Executive Officer
STAKEHOLDER:
By: /s/ Xxxx
Xxxxxxxx
Name: Xxxx
Xxxxxxxx
[Signature page of Xxxx Xxxxxxxx
to Non-Compete Agreement
by and between Broadpoint Securities Group, Inc. and Xxxx Xxxxxxxx]
by and between Broadpoint Securities Group, Inc. and Xxxx Xxxxxxxx]
