NON-COMPETITION AGREEMENT
EXHIBIT
10.17
EXECUTION
COPY
THIS
NON-COMPETITION AGREEMENT
(this
“Agreement”) is made, entered into and effective as of this 29th
day of
December, 2005 by and among TIB
BANK,
a bank
chartered under the laws of the State of Florida (the “Bank”), TIB
FINANCIAL CORP.,
a
Florida corporation and the sole shareholder of the Bank (“Parent”), and
NOVA
INFORMATION SYSTEMS, INC.,
a
Georgia corporation (“NOVA”).
BACKGROUND
AND PURPOSE
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(A)
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The
Bank and NOVA are in the business of providing point of sale based
credit
card, debit card, and other card-based transaction processing services
and
electronic payment and settlement services (including the sale or
lease of
products and services related thereto) to merchants, financial
institutions (including associate banks), independent sales organizations,
and other similar customers (the “Merchant Bankcard
Business”).
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(B)
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The
Bank is a party to certain “Merchant Agreements” in connection with the
Merchant Bankcard Business.
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(C)
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The
Bank has sold to NOVA, and NOVA has purchased from the Bank, all
of the
Bank's assets relating to the Bank's Merchant Bankcard Business,
including
but not limited to Merchant Agreements, pursuant to the Merchant
Asset
Purchase Agreement among NOVA, Parent and the Bank dated as of even
date
herewith (the “Purchase
Agreement”).
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(D)
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In
connection with the Purchase Agreement, NOVA has assumed certain
obligations of the Bank.
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(E)
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In
connection with and as a fundamental part of the Purchase Agreement,
the
Bank, Parent and NOVA have entered into the Marketing and Sales Alliance
Agreement dated as of even date herewith (the "Marketing
Agreement").
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(F)
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NOVA engages
in the Merchant Bankcard Business in the United States of America,
and
NOVA and its assigns will continue to develop and expand its Merchant
Bankcard Business throughout the United States of
America.
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(G)
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As
a condition precedent to the entering into of the Purchase Agreement
and
the Marketing Agreement, and in order to protect the goodwill and
other
value of the Assets Sold (as defined in the Purchase Agreement) and
to
protect the legitimate business interests of NOVA, NOVA has required
the
Bank and Parent to enter into this
Agreement.
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THE
AGREEMENT
NOW,
THEREFORE,
for and
in consideration of the premises and the mutual covenants and agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree
as follows:
ARTICLE
I
DEFINITIONS
1.1 Definitions.
The
following capitalized terms, when used in this Agreement, shall have the
following definitions:
“Assets
Sold” shall
have the meaning given to it in the Purchase Agreement.
"Knowledge" shall
have the meaning given to it in the Purchase Agreement
"Merchant" shall
have the meaning given to it in the Purchase Agreement
"Merchant
Bankcard Business" shall
have the meaning given to it in Recital A of this Agreement.
"Merchant
Services" shall
have the meaning given to it in the Marketing Agreement
"Payment
Network"
shall
have the meaning given to it in the Marketing Agreement.
"Person" means
any
of a natural person, corporation, partnership, firm, association, limited
liability company, trust, estate or other entity of any kind.
“Referred
Merchant" shall
have the meaning given to it in the Marketing Agreement
"Restricted
Party" means
the
Bank, Parent and their respective subsidiaries and affiliates in existence
from
time to time.
ARTICLE
II
RESTRICTIVE
COVENANTS OF THE BANK AND PARENT
2.1 Non-Solicitation.
During
the term of this Agreement (including any extensions or renewals hereof) and
for
two (2) years thereafter, no Restricted Party shall, directly or indirectly,
whether individually, in partnership, jointly, or in conjunction with, or on
behalf of, any person, firm, partnership, corporation, or unincorporated
association or entity of any kind:
(a) solicit
or contact any Merchant or Referred Merchant, for the purpose of directly or
indirectly providing or receiving Merchant Services anywhere in the United
States.
(b) employ
or
engage, or seek to employ or engage, any person who is or was at any time during
the term of this Agreement an employee of NOVA, unless such person voluntarily
resigns from employment with NOVA without any direct or indirect solicitation,
promise, arrangement, agreement or inducement from or on behalf of any
Restricted Party; or
(c) either
orally or in writing, take any action which disparages NOVA (including its
management, directors or officers) or its practices or which materially disrupts
or impairs its normal operations, or, unless required by law, voluntarily
provide assistance or information to any person or entity pursuing any claim,
charge, or complaint against NOVA or to any other person or entity which, to
the
Knowledge of such Restricted Party, is adverse to NOVA.
2.2 Non-Competition.
During
the term of this Agreement (including any extensions or renewals hereof),
subject to earlier termination as provided in Section 3.1 below, no Restricted
Party shall, directly or indirectly, whether individually, in partnership,
jointly, or in conjunction with, or on behalf of any person, firm, partnership,
corporation, or unincorporated association or entity of any kind:
(a) engage
or
participate, directly or indirectly, in the Merchant Bankcard Business anywhere
in the United States, except for the benefit of NOVA as specifically provided
in, and in strict compliance with the terms of, the Marketing Agreement (and
subject to the provisions of Article III thereof); or
(b) provide
Merchant Services in the United States to any person or entity, or facilitate,
refer, solicit, or otherwise participate or engage in the provision of Merchant
Services anywhere in the United States to any person or entity, directly or
indirectly, including by sponsoring any Person into or with any Credit Card
Association or EFT Network, except for the benefit of NOVA as specifically
provided in, and in strict compliance with the terms of, the Marketing Agreement
(and subject to the provisions of Article III thereof).
2.3 No
Branding or Use of Name or Marks.
Except
for the benefit of NOVA as specifically provided in, and in compliance with
terms of, the Marketing Agreement (including Section 2.5 thereof), and without
limiting the generality of the covenants set forth in Section 2.1 and 2.2
hereof, no party shall use or be allowed to use any of the Bank's trade names,
trademarks, or service marks, or otherwise publicize in any manner any
affiliation with, or sponsorship or endorsement by, the Bank or any of its
affiliates in connection with the Merchant Bankcard Business.
2.4 Acknowledgments.
Each of
Parent and the Bank acknowledges and agrees that the restrictions set forth
in
Sections 2.1, 2.2 and 2.3 hereof are reasonable and necessary to protect the
legitimate business interests of NOVA, and are reasonable and necessary to
protect the goodwill and other value of the Assets Sold, the Merchant Bankcard
Business of NOVA, and the benefits bargained for by NOVA under the Purchase
Agreement and the Marketing Agreement. Each of Parent and the Bank further
acknowledges and agrees that the restrictions set forth in Sections 2.1, 2.2
and
2.3 hereof are narrowly drawn, are fair and reasonable in time and territory,
and place no greater restraint upon Parent and the Bank than is reasonably
necessary to secure the goodwill and other value of the Assets Sold, the
Merchant Bankcard. Business of NOVA, and the benefits bargained for by NOVA
under the Purchase Agreement and the Marketing Agreement.
2.5 Remedies.
Each of
the Bank and Parent acknowledges that a breach of the restrictions contained
in
Sections 2.1, 2.2 or 2.3 hereof will cause irreparable damage to NOVA, the
exact
amount of which will be difficult to ascertain, and that the remedies at law
for
any such breach will be inadequate. Accordingly, each of the Bank and Parent
agrees that if it breaches the restrictions contained in Sections 2.1, 2.2
or
2.3 hereof, then NOVA shall be entitled to equitable relief, including but
not
limited to, injunctive relief, without posting bond or other security unless
otherwise required by applicable law, as well as money damages
insofar as
they
can be determined.
ARTICLE
III
RESTRICTIVE
COVENANTS OF NOVA
3.1 Facilitation
of Solicitation by U.S. Bank, N.A.
During
the term of this Agreement (including any extensions or renewals hereof) NOVA
shall not directly or indirectly facilitate the solicitation of Merchants or
Referred Merchants by U.S. Bank, N.A. ("U.S. Bank"), for banking services (other
than Merchant Bankcard Services) similar to the banking services provided by
the
Bank or Parent as of the date hereof, whether through information sharing,
advertising, statement imprinting or otherwise; provided,
however,
that
nothing in this Section 3.1 shall prevent NOVA from identifying U.S. Bank as
the
sponsoring member on materials provided to Merchants or Referred
Merchants.
3.2 Remedies.
NOVA
acknowledges that a breach of the restrictions contained in Section 3.1 hereof
will cause irreparable damage to the Bank, the exact amount of which will be
difficult to ascertain, and that the remedies at law for any such breach will
be
inadequate. Accordingly, NOVA agrees that if it breaches the restrictions
contained in Section 3.1 hereof, then the Bank shall be entitled to equitable
relief, including but not limited to, injunctive relief, without posting bond
or
other security unless otherwise required by applicable law, as well as money
damages insofar as they can be determined.
ARTICLE
IV
TERM
4.1 Term.
The
term of this Agreement shall extend for an initial term of ten (l0) years from
the date hereof (the "Initial Term"); provided,
however,
that
the parties hereto acknowledge and agree that the provisions of Section 2.2
hereof shall remain in full force and effect only so long as the Marketing
Agreement is in effect and that, upon the effective date of the termination
of
the Marketing Agreement, the provisions of Section 2.2 hereof shall be of no
further force or effect.
4.2 Automatic
Extension.
In the
event the Marketing Agreement is extend renewed or otherwise in effect for
a
period extending beyond the Initial Term of this Agreement, this Agreement
shall
be in effect until such time thereafter as the Marketing Agreement is
terminated.
ARTICLE
V
MISCELLANEOUS
5.1 Notices.
Except
as otherwise specified herein, all notices, demands and other communications
hereunder shall be in writing and shall be delivered (i) in person, or (ii)
by
United States mail, certified or registered, with return receipt requested,
or
(iii) by national overnight courier service, as follows:
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If
to the Bank:
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TIB
Bank
00000
Xxxxxxxx Xxxxxxx
Xxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx
X. Xxxxxxx,
Executive
Vice President and COO
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If
to Parent:
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000
0xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxx 00000
Attention:
Xxxxxx
X. Xxxx
CEO
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with
a copy to:
(which
shall not constitute notice)
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Xxxx
X. Xxxxxx & Associates
0000
Xxxxxxx Xxxx
Xxxxxx,
Xxxxxxx 00000
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If
to NOVA:
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NOVA
Information Systems, Inc.
Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxx
X. Xxxxxx, Esq
General
Counsel
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with
a copy to:
(which
shall not constitute notice)
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NOVA
Information Systems, Inc.
Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxxx
X. X’Xxxx
Senior
Vice President
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with
a copy to:
(which
shall not constitute notice)
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XxXxxxx
Xxxx & Xxxxxxxx XXX
XxxXxxxx
Xxxxx, Xxxxx 0000
000
Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx,
Xxxxxxx 00000
Attention: Xxxxxxx
X. Balloon, Esq.
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The
persons or addresses to which mailings or deliveries shall be made may be
changed from time to time by notice given pursuant to the provisions of this
Section 5.1. Any notice, demand or other communication given pursuant to the
provisions of this Section 5.1 shall be deemed to have been given on the date
actually delivered against proof of receipt therefor.
5.2 Third-Party
Beneficiaries.
The
parties to this Agreement do not intend this Agreement to benefit or create
any
right or cause of action in or on behalf of any person other than Parent, the
Bank, and NOVA.
5.3 Successors
and Assigns.
All
terms and provisions of this Agreement shall be binding upon and shall inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement and the rights, privileges, duties and obligations
of
the parties hereto may not be assigned or delegated by any party without the
prior written consent of the other party; provided, however, that such consent
shall not be required (a) for the assignment by any party of its rights and
privileges hereunder to a person or entity controlling, controlled by or under
common control with such party (it being understood that no such assignment
shall relieve the assigning party of its duties or obligations hereunder),
or
(b) for the assignment and delegation by any party of its rights, privileges,
duties and obligations hereunder to any person into or with which the assigning
party shall merge or consolidate or to which the assigning party shall sell
all
or substantially all of its assets, provided that upon the request of the
non-assigning party the assignee shall formally agree in writing to assume
all
the rights and obligations of the assigning party created hereby.
5.4 Amendments
and Waivers.
This
Agreement, any of the instruments referred to herein and any of the provisions
hereof or thereof shall not be amended, modified or waived in any fashion except
by an instrument in writing signed by the parties hereto. The waiver by a party
of any breach of this Agreement by another party shall not operate or be
construed as the waiver of the same or another breach on a subsequent occasion,
nor shall any delay in exercising any right, power or privilege hereunder
constitute a waiver thereof.
5.5 Severability
of Provisions.
If any
provision of this Agreement, or the application of any such provision to any
person or circumstance, is invalid or unenforceable, the remainder of this
Agreement, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected by such invalidity or unenforceability, and the parties hereto
expressly authorize any court of competent jurisdiction to modify any such
provision in order that such provision shall be enforced by such court to the
fullest extent permitted by applicable law.
5.6 Counterparts;
Delivery.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one instrument. The parties acknowledge that delivery
of executed counterparts of this Agreement maybe effected by a facsimile
transmission or other comparable means, with an original document to be
delivered promptly thereafter via overnight courier.
5.7 Governing
Law.
This
Agreement is made and entered into under the laws of the State of Georgia and
the laws of that State applicable to agreements made and to be performed
entirely thereunder (without giving effect to the principles of conflicts of
laws thereof) shall govern the validity and interpretation hereof and the
performance by the parties hereto of their respective duties and
obligations.
5.8 Section
Headings.
The
headings of Sections contained in this Agreement are for convenience of
reference only and do not form a part of this Agreement.
5.9 Entire
Agreement. The
making, execution and delivery of this Agreement by the parties hereto have
been
induced by no representations, statements, warranties or agreements other than
those herein expressed and expressed in the Purchase Agreement and the Marketing
Agreement. This Agreement, the Purchase Agreement the Marketing Agreement,
and
the other written instruments specifically referred to herein and therein,
embody the entire understanding of the parties and supersede in their entirety
all prior communication, correspondence, and instruments, and there are no
further or other agreements or understandings, written or oral, in effect
between the parties relating to the subject matter hereof.
5.10 Publicity.
The
timing and content of any and all public statements, announcements other
publicity concerning the transactions contemplated herein shall be mutually
agreed upon by Bank and NOVA, which agreement shall not be unreasonably
withheld.
5.11 Dispute
Resolution. With
the
exception of an action by NOVA to enforce
the covenants of Article II hereof, which may be brought in any court of
competent jurisdiction, any controversy, dispute or claim arising out of, or
in
connection with, this Agreement must be settled by final and binding arbitration
to be held in Atlanta, Georgia in accordance with the then current Commercial
Arbitration Rules of the American Arbitration Association ("AAA") as may be
amended from time to time
(the
"AAA Rules"). Judgment upon an award rendered by the arbitrators may be entered
in any court: (i) having jurisdiction thereof, (ii) having jurisdiction over
the
party against whom enforcement thereof is sought, or (iii) having jurisdiction
over any such party's assets. The award shall be rendered by a panel of three
(3) arbitrators, who shall be selected in accordance with the AAA
Rules.
5.12 Survival.
The
provisions of Sections 2.1, 2.4 and 2.5 and Article V shall survive the
termination of this Agreement.
(Signatures
begin on
next
page)
EXECUTION
COPY
IN
WITNESS WHEREOF,
the
parties hereto have duly executed and delivered this Non-Competition Agreement
as of the date first written above.
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“Bank”
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“Parent”
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TIB
BANK
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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“NOVA”
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NOVA
INFORMATION SYSTEM, INC.
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By:
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Name:
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Title:
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