NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Exhibit
10.13
THIS
NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “Agreement”)
is
dated as of December 17, 2007 among United Benefits & Pension Services,
Inc., a Delaware corporation (“Parent”),
and
[____________________] (the “Stockholder”).
RECITALS
WHEREAS
Parent,
UBPS Acquisition Sub, Inc. (“Merger
Sub”),
Associated Third Party Administrators (the “Company”)
and
Xxxx Xxxxxxx, Xxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxxxxxxx, Xxxxxx Xxxxx, Xxxxx
Xxxxxxxx, Xxxxx Xxxxxx and Xxxxxxx XxXxxxxxx have entered into a certain
Agreement and Plan of Merger (the “Merger
Agreement”),
pursuant to which the Merger Sub will merge with and into the Company, with
the
Company as the surviving entity;
WHEREAS,
from
and after the Effective Time, the Company will be a wholly-owned subsidiary
of
Parent;
WHEREAS
prior
to
the Effective Time, the Stockholder was a stockholder of the Company and was
therefore an indirect owner of the Company’s goodwill; and
WHEREAS
the
execution and delivery of this Agreement by Stockholder is a material inducement
for Parent and Merger Sub to enter into the Merger Agreement and consummate
the
Merger (pursuant to which the Stockholder will receive a portion of the Merger
Consideration (as defined in the Merger Agreement)).
NOW,
THEREFORE,
in
consideration of the foregoing, the mutual promises and covenants set forth
below and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereby agree as follows:
(a) Certain
Definitions.
As used
herein, “Restricted
Period”
means
the period commencing at the Effective Time and ending on the earlier to occur
of (i) the fourth anniversary of the Effective Time or, (ii) in the event that
Stockholder’s employment with the Company is terminated by the Company other
than for Cause (as defined in the Employment Agreement, of even date herewith,
between the Company and Stockholder), the date of such termination.
Capitalized
terms used but not otherwise defined herein shall have the meanings attributed
to them in the Merger Agreement.
2. Acknowledgements,
Representations and Warranties by Stockholder
Stockholder
acknowledges that (i) pursuant to the Merger Agreement, Parent is acquiring
all of the outstanding Company Common Stock, and therefore all of the goodwill
of the Company (ii) the goodwill of the Company is reflected in the Merger
Consideration, including the portion thereof allocable to the Company Common
Stock owned by the Stockholder; (iii) to enable Parent to reap the benefits
of
the Merger, Parent reasonably expects that the Stockholder should refrain from
carrying on certain activities as set forth in this Agreement and the
restrictive covenants and the other agreements contained herein are an essential
part of this Agreement and the Merger Agreement; (iv) the terms and conditions
of this Agreement are fair and reasonable to the Stockholder in scope, content
and in all other respects and are necessary for the protection of legitimate
business interests of the Company, Parent and their respective Affiliates;
and
(v) Stockholder has been given a reasonable period of time to deliberate upon
the full implications of the Merger Agreement and this Agreement, including
the
restrictive covenants herein, and has done so with his attorneys, and
Stockholder fully understands such implications.
3. Covenant
not to Compete
(a) As
an
inducement to Parent and Merger Sub to enter into the Merger Agreement, in
order
to preserve the goodwill of the Company being acquired by Parent (through its
wholly-owned subsidiary, Merger Sub) pursuant to the Merger Agreement and upon
acquisition of Stockholder’s shares of Company Common Stock, and in
consideration for the payments to Stockholder under the Merger Agreement,
Stockholder hereby covenants and agrees that, during the Restricted Period,
the
Stockholder shall not, without the prior written consent of the
Parent:
(i) directly
or indirectly, own, manage, operate, join, control, promote or finance (in
whole
or in part) or be connected as an officer, director, employee, stockholder,
Affiliate, promoter, manager, partner, principal, licensor, sublicensor,
licensee, sublicensor, agent, representative, advisor (whether paid or not)
or
consultant of, for or to, any Person engaged directly or indirectly in any
activity in the United States that is engaged in the administration of pension
and/or benefit plans as presently or at any time during the term of this
Agreement conducted or proposed to be conducted by the Company (the
“Restricted
Business”);
provided,
however,
that
the Stockholder shall not be deemed to be in contravention of the provisions
of
Section 3 if the Stockholder owns shares as a passive investor in a publicly
traded entity engaged in a Restricted Business, provided that the number of
shares of such entity’s capital stock that are owned beneficially or of record
by the Stockholder and/or the Stockholder’s Affiliates collectively represent
less than three percent (3%) of the total number of shares of such entity’s
outstanding capital stock; provided further
that the
Stockholder shall not be deemed to be in contravention of the provisions of
this
Section 3 by virtue of Stockholder’s enrollment (or continued enrollment) solely
as a plan participant in a pension or benefit plan available to the Stockholder
in his capacity as an employee of the Company, Parent or any other entity by
which the Stockholder may be employed; or
(ii) disparage
the Company or Parent or intentionally cause the Company or Parent to be viewed
in a negative light by any client or prospective client or in its industry
generally, or take any action that is designed or intended to cause any current
or prospective client of the Company to terminate its business relationship
with
the Company.
4. Non-Solicitation;
Non-Interference.
During
the Restricted Period, the Stockholder shall not, directly or indirectly,
without the prior written consent of the Parent:
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(a) solicit,
attempt to solicit, induce or attempt to induce (on the Stockholder’s own behalf
or on behalf of any other Person) any current employee, consultant, agent or
representative of the Company, Parent or any of their respective Affiliates,
or
any person who was, during the one-year period prior to such action, an
employee, consultant, agent or representative, to terminate his employment
or
other relationship with the Company or any of its Affiliates.
(b) call
on,
attempt to call on, solicit, attempt to solicit, take away or attempt to take
away (on the Stockholder’s own behalf or on behalf of any other Person), the
business of any Person that is then an actual or prospective client of the
Company or any of its Affiliates.
5. Injunctive
Relief.
Stockholder acknowledges that breach by him of any of the provisions of this
Agreement could cause irreparable injury to Parent, the Company and their
Affiliates, which by its nature would be continuing and substantial but not
capable of precise measurements, and for which no adequate remedy at law exists.
Accordingly, in the event of any actual or threatened breach of any of the
covenants set forth in this Agreement, the parties agree that each of Parent
and
the Company, on behalf of itself, one or more of its Affiliates or both, shall
be entitled to equitable relief without the necessity of posting bond, including
without limitation, entry of preliminary, temporary and permanent injunctions
and orders of specific performance. Such remedies shall, however, be cumulative
and not exclusive, and shall be in addition to any other legal or equitable
remedy or remedies which Parent, the Company or one or more of their Affiliates
may have, including an accounting for profits or the recovery of damages.
6. Notices.
All
notices or other communications required or permitted hereunder shall be in
writing and shall be deemed given or delivered (i) when delivered personally
or
by private courier, (ii) when actually delivered by registered or certified
United States mail, return receipt requested, or (iii) when sent by facsimile
transmission (provided, that it is confirmed by a means specified in clause
(i)
or (ii)), addressed as follows: if to the Parent or the Company, to United
Benefits & Pension Services, Inc., 000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000, Attention: Xxxxxxx Xxxxxxxxx, (Facsimile (000) 000-0000);
if to the Stockholder, to the address set forth below the Stockholder’s name on
the signature page hereto
7. Construction.
The
parties have jointly participated in the negotiation and drafting of this
Agreement. In the event of an ambiguity or if a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumptions or burdens of proof shall arise favoring
any
party by virtue of the authorship of any of the provisions of this
Agreement.
8. Waiver
of Breach.
A
waiver by any party of a breach of any provision of this Agreement shall not
operate or be construed as a waiver or estoppel of any subsequent breach. No
waiver shall be valid unless in writing and signed by Stockholder or an
authorized officer of Parent, as the case may be.
9. Assignment.
Stockholder acknowledges that the services to be rendered by him are unique
and
personal. Accordingly, Stockholder may not assign any of his rights or delegate
any of his duties or obligations under this Agreement. The rights and
obligations of the Company or Parent under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company
and Parent.
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10. Entire
Agreement.
This
Agreement, together with the other agreements referred to herein, set forth
the
entire and final agreement and understanding of the parties and contains all
of
the agreements made between the parties with respect to the subject matter
hereof and thereof. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto, with respect to the
subject matter hereof and thereof. No change or modification of this Agreement
shall be valid unless in writing and signed by all of the parties
hereto.
11. Severability.
It is
the intent and desire of the parties that the provisions of this Agreement
be
enforced to the fullest extent permissible under the laws and public policies
as
applied in each jurisdiction in which enforcement of the provisions of this
Agreement are sought. If any particular provision of this Agreement shall be
adjudicated by a court of competent jurisdiction to be invalid or unenforceable,
such provision shall be amended, without any action on the part of either party
hereto, to delete therefrom the portion so adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of
such
provision in the particular jurisdiction in which such adjudication is made.
If
any provision of this Agreement is adjudicated by a court of competent
jurisdiction to be invalid or unenforceable in its entirety, this Agreement
shall be amended to delete such provision therefrom as applicable in such
jurisdiction and without such deletion in all other jurisdictions.
12. Headings.
The
captions and headings herein are inserted only as a matter of convenience and
for reference, and in no way define, limit or describe the scope of this
Agreement or the intent of any provision thereof.
13. Counterparts.
This
Agreement may be executed in one of more counterparts, each of which shall
be
deemed an original but all of which together will constitute one and the same
instrument.
14. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California, without giving effect to conflicts of laws
principles. Each of the parties hereto hereby irrevocably consents to the
exclusive jurisdiction of the courts of the State of California and the United
States District Court for the Northern District of California in any action
or
proceeding with respect to this Agreement.
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IN
WITNESS WHEREOF,
the
parties have duly executed this Agreement as of the date first above
written.
PARENT:
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UNITED
BENEFITS & PENSION SERVICES, INC.
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By:
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Name:
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Xxxxxxx
X. Xxxxxxxxx
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Title:
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President
& CEO
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THE
COMPANY:
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ASSOCIATED
THIRD PARTY ADMINISTRATORS
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By:
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Name:
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Title:
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STOCKHOLDER:
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Name:
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Address:
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[Signature
page to Non-competition and Non-solicitation Agreement]
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