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Exhibit 2
NONCOMPETITION AGREEMENT
AGREEMENT dated as of November 19, 1998 by and among Xxxxxx X. Xxxx, an
individual with an address at 00 Xxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx
11746("Levy"), Xxxxxx Xxxxxxx, an individual with an address at 0 Xxxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("Xxxxxxx") (Xxxx and Xxxxxxx shall be referred to
herein collectively as the "Sellers" and individually as a "Seller") and Xxxxxx
& Ciocia, 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 Purchase
Agreement dated November 19, 1998, (the "Stock Purchase Agreement") pursuant to
which G&C shall purchase the stock of both North Shore Capital Management Corp.
and North Ridge Securities Corp. (collectively, the "Acquired Companies") for
cash, as described in the Stock Purchase Agreement; and
WHEREAS, in order to preserve for G&C the goodwill of the Acquired
Companies to be acquired by G&C from the Sellers pursuant to the Stock Purchase
Agreement, the Sellers have agreed not to compete with G&C or the Acquired
Companies, 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
processes, designs and/or systems used by the Acquired Companies and (ii)
relating to the customers (including, without limitation, customer lists, call
lists, prices and all data about customers) and employees, consultants,
independent contractors, service providers and suppliers which shall not include
product providers of the Acquired Companies, which together constitutes the
substantial portion of the goodwill of the Acquired Companies acquired by G&C
under the Stock Purchase Agreement. The parties hereto further confirm that it
is reasonably necessary to protect and maintain the goodwill of the Acquired
Companies, which G&C acquired pursuant to the Stock Purchase Agreement, and to
prevent the usurpation by the Sellers (or any Person (hereinafter defined)
employing the Sellers at a later date) of all or any portion of such goodwill,
which was acquired by G&C, that the Sellers agree, and accordingly each Seller
does agree, that he will not directly or indirectly, for
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or on behalf of himself 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 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 G&C or either of the Acquired
Companies; or
(ii) solicit any Person who was a customer of G&C or either of the
Acquired Companies at any time during the two years prior to the date
hereof for the purpose of supplying to such Person any product or
service that was supplied or shall hereafter have been supplied by G&C
or either of the Acquired Companies, or for such Person to reduce, or
cease to receive, the level of products or services that such customer
had been or shall have been receiving from G&C or either of the
Acquired Companies, except in the case of Levy, the clients of Levy as
listed on Schedule B, and except in the case of Xxxxxxx, the clients of
Xxxxxxx as listed on Schedule A, and in the case that Levy and Xxxxxxx
both cease to be employed or retained by the Company, the clients on
Schedules A and B jointly.
As used herein, the term "Person" means any person, corporation, limited
liability company, partnership, trust or other entity.
(b) The Sellers acknowledge that they have been informed that
it is the policy of the Company to maintain as secret and confidential all
information (i) relating to the products, processes, designs and/or systems used
by the Company and (ii) relating to the customers (including, without
limitation, customer lists, call lists, prices and all data about customers) and
employees, consultants, independent contractors, service providers and suppliers
of G&C not including product providers of either of the Acquired Companies (all
such information hereafter referred to as "Confidential Information"). The
Sellers further acknowledge that such Confidential Information has been acquired
pursuant to the Stock Purchase Agreement or assembled by G&C or the Acquired
Companies at great cost to such party, through the expenditure of extensive
resources of such entity over a long period and is of great value to G&C. The
parties hereto recognize that the services to be performed by the Sellers are
special and unique, and that by reason of Levy's employment and Xxxxxxx'x
engagement by the Company and their rendering services to G&C and the Acquired
Companies, they have and will acquire Confidential Information as aforesaid. The
parties hereto confirm that it is reasonably necessary to protect G&C's goodwill
that the Sellers agree, and accordingly each Seller does agree, that he will
not, directly or
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indirectly (except where authorized by the Board of Directors of G&C, for the
benefit of either of such parties), for or on behalf of himself or any Person,
at any time for a period of five years from the date hereof: (i) divulge to any
Person other than the Company (hereinafter referred to collectively as a "third
party"), or use or cause to authorize any third parties to use, any such
Confidential Information except in the case of Levy, information regarding the
clients listed on Schedule B, and except in the case of Xxxxxxx, information
regarding the clients listed on Schedule A, and in the case that Levy and
Xxxxxxx both cease to be employed or retained by the Company, information
regarding the clients on Schedules A and B jointly) or any other information
regarded as confidential and valuable by G&C or either of the Acquired Companies
that he knows or should know is regarded as confidential and valuable by such
party (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 of any provision of this Agreement will,
because of the unique nature of the transaction which will take place pursuant
to the Stock Purchase Agreement, cause irreparable harm to G&C and the Acquired
Companies and leave G&C without any adequate remedy at law and shall entitle
G&C, in addition to any other legal remedies available to it, including offset
for damages of any amounts owing from G&C to 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 any bond.
Section 3. ACKNOWLEDGMENT OF REASONABLENESS. Each Seller and the
Company each acknowledges that the type and periods of restriction imposed
herein are fair and reasonable and are reasonably required for the protection of
G&C and the Acquired Companies and the goodwill associated with the business of
each of the Acquired Companies and are given as an integral part of the
acquisition by G&C of the business and goodwill of the Acquired Companies.
Section 4. SEVERABILITY. The parties hereto understand and intend that:
(a) each restriction agreed to by 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
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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 Stock 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. 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 Stock Purchase
Agreement.
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 Company 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
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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.
IN WITNESS WHEREOF, the undersigned corporation has caused this
Agreement to be executed by its duly authorized officer, and Levy has executed
this Agreement, as of the date first above written.
XXXXXX & XXXXXX, INC.
By: \s\ Xxxxx Xxxxxx \s\ Xxxxxx X. Xxxx
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Name: Xxxxx Xxxxxx XXXXXX X. XXXX
Title: President
\s\ Xxxxxx Xxxxxxx
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XXXXXX XXXXXXX
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