EXHIBIT 10(i)(6)
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made and entered into as
of May 14, 1997, by and among CB COMMERCIAL REAL ESTATE SERVICES GROUP, INC., a
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Delaware corporation ("CBC"), XXXX REAL ESTATE SERVICES, a Delaware corporation
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("KRES") and Xxxxxxx X. Xxxxx, residing at 00 Xxxxxxx Xxx, Xxxxxx Xxxxx,
Xxxxxxxxxx 00000 ("Seller"). Capitalized terms not expressly defined in this
Agreement shall have the meanings ascribed to them in the Agreement and Plan of
Reorganization dated as of May 14, 1997 by and among CBC, CBC Acquisition
Corporation, a Delaware corporation, KRES and certain shareholders of KRES (the
"Merger Agreement").
RECITALS
A. Seller is the direct owner of 5,000 shares of the issued and
outstanding capital stock of KRES and the indirect owner of an additional
672,000 shares of such stock.
B. CBC has agreed to acquire the entire equity interests in KRES of
Seller and all other KRES shareholders in accordance with the terms of the
Merger Agreement, pursuant to which CBC will issue shares of common stock of CBC
and warrants exercisable into shares of common stock of CBC in exchange for such
equity interests.
C. In consideration of CBC's agreeing to acquire the equity interest of
Seller and that of all other shareholders in KRES, Seller has agreed, in
accordance with the terms of this Agreement, not to compete with CBC, KRES or
any subsidiary or affiliate of CBC and/or KRES for an eighteen (18) month period
commencing on the Effective Time (as defined in the Merger Agreement).
D. The execution of this Agreement by Seller is a material inducement for
CBC's execution and performance of the Merger Agreement and CBC would not enter
into the Merger Agreement absent the execution and delivery of this Agreement by
Seller.
NOW, THEREFORE, in consideration of the premises and of the mutual
provisions, agreements and covenants contained herein and in the Merger
Agreement and to protect the value of the business and goodwill of KRES, the
parties agree as follows:
1. ACKNOWLEDGMENTS BY SELLER
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Seller acknowledges that (a) Seller has occupied a position of trust and
confidence with KRES and its Subsidiaries (the "Acquired Companies") prior to
the date hereof and has acquired and become familiar with the following, any and
all of which constitute confidential information of the Acquired Companies of
substantial value to each of the Acquired Companies and CBC, (collectively the
"Confidential Information"): (i) any and all trade secrets concerning the
business and affairs of the Acquired Companies, including product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current and planned research and development, current and planned distribution
methods and processes, customer base and preferences and contact persons,
customer lists, current customer requirements, price lists, market studies
prepared for or on behalf of the Acquired Companies, business plans and
strategies, marketing strategies and methods, computer software and programs
(including object code and source code), computer software and database
technologies, systems, structures and architectures (and related processes,
formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information of the Acquired
Companies and any other information, however documented, of the Acquired
Companies that is a trade secret; (ii) any and all confidential information
concerning the business and affairs of the Acquired Companies (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans and the roles of key
personnel), however documented; and (iii) any and all notes, analyses,
compilations, studies, summaries, and other material prepared by or for the
Acquired Companies containing or based, in whole or in part, on any information
included in the foregoing, provided, however, Confidential Information shall not
include information that is or becomes publicly known through lawful means, was
rightfully in Seller's possession or part of his general knowledge prior to
being employed by KRES or any predecessor or Affiliate of KRES or is
subsequently disclosed to Seller by a third party without the breach by such
third party of any agreement or any restriction on its use; (b) the business of
the Acquired Companies is international in scope, (c) the Acquired Companies
compete with other businesses that are or could be located in any part of the
United States and Asia (d) the Covenants by Seller set forth in Sections 2, 3, 4
and 5 of this Agreement are conditions to CBC's purchase of the shares of
capital stock of KRES beneficially owned directly or indirectly by Seller; (e)
the provisions of Sections 2, 3, 4 and 5 of this Agreement are reasonable and
necessary to protect and preserve the business and the value of the goodwill of
the Acquired Companies which CBC is purchasing as part of its acquisition of
KRES and to protect the confidentiality of the trade secrets and other
Confidential Information concerning the Acquired Companies and (f) CBC and the
Acquired Companies would be irreparably damaged if Seller were to breach the
covenants set forth in Sections 2, 3, 4 and 5 of this Agreement.
2. CONFIDENTIAL INFORMATION
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Seller acknowledges and agrees that all Confidential Information known or
obtained by Seller, whether before or after the date hereof, is the property of
the Acquired Companies or their successors and has been developed at great
effort, time and expense. Therefore, Seller agrees to regard and preserve the
Confidential Information as confidential. Seller will not, at any time,
disclose or publish to any unauthorized persons or use (or copy or duplicate in
any way) for his own account or for the benefit of any Person other than CBC or
KRES any Confidential Information, whether Seller has such information in
Seller's memory or embodied in writing or other physical form, without CBC's
prior written consent, except as required by applicable law or legal process.
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3. NONCOMPETITION
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As an inducement for CBC to enter into the Merger Agreement and as
additional consideration for the consideration to be paid to Seller under the
Merger Agreement, Seller agrees that:
a. For a period of eighteen (18) months after the Effective Time,
Seller will not and will use his reasonable best efforts to cause his
Affiliates not to, directly or indirectly, whether or not for compensation,
engage or invest in, own, manage, operate, finance, lend money to, control,
or participate in the ownership, management, operation, financing, or
control of, be employed by, associated with, or in any manner connected
with, lend Seller's name or any similar name to, lend Seller's credit to,
have an economic or ownership interest in or render services or advice to,
any business or Person, (whether as an employee, shareholder, member,
partner, investor, proprietor, officer, director, principal, agent,
security holder, trustee, beneficiary, consultant, creditor or otherwise,
alone or in association with any other business or Person) whose products
or activities are the same as, similar to or compete in whole or in part
with the products or activities of the Acquired Companies as of the
Effective Time, except for passive investments in public companies
constituting less than five percent of the voting power thereof. For
purposes of this Agreement, a business or Person whose products or
activities are the same as, similar to or compete in whole or in part with
the products or activities of the Acquired Companies shall be deemed to be
any business or activity in the real estate services field that provides
brokerage or property or facilities management services (the "Relevant
Business"). Such restrictions shall apply in the specific geographic and
customer markets served by the Acquired Companies as of the commencement of
the noncompetition period (which shall include but not be limited to the
California counties listed on Schedule A). As used herein, "Affiliate"
means with respect to a specified Person, a Person that directly, or
indirectly through one or more intermediaries, controls or is controlled by
or is under common control with the Person specified. "Person" means any
individual, corporation, (including any non-profit corporation), firm,
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union or other entity.
Seller agrees that this covenant is reasonable with respect to its
duration, geographical area, and scope.
b. In the event of a breach by Seller of any covenant set forth in
Subsection 3(a) of this Agreement, the term of such covenant will be
extended by the period of the duration of such breach; and
c. Seller will, for a period of eighteen (18) months after the
Effective Time, within ten days after accepting any employment with any
entity other than CBC or a subsidiary of CBC, advise CBC of the identity of
any employer of Seller. CBC, KRES or any of their Subsidiaries may serve
notice upon each such employer that Seller is bound by this Agreement and
furnish each such employer with a copy of this Agreement or relevant
portions thereof.
d. Notwithstanding anything to the contrary contained in this
Agreement, nothing shall prohibit Seller from being employed by, or serving
as a consultant to, any business or person during the 18-month period after
the Effective Time or thereafter
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provided that Seller does not utilize Confidential Information and is not
directly or indirectly personally engaged in (i) providing or marketing
property management, facilities management or brokerage services, (ii)
soliciting any business or relationship with any person or entity that is a
capital market client of KRES or its Affiliates (including individual
partners in partnerships in which KRES or a KRES Affiliate is a partner or
with which it has an agreement) or (iii) marketing or selling any capital
market products of KRES or its Affiliates.
4. NON-SOLICITATION
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As an inducement for CBC to enter into the Merger Agreement and as
additional consideration for the consideration to be paid to Seller under the
Merger Agreement, Seller agrees that for a period of eighteen (18) months after
the Effective Xxxx Xxxxxx will not and will use his reasonable efforts to cause
his Affiliates not to, directly or indirectly, either for himself or any other
Person, (A) induce or attempt to induce any employee of CBC, KRES or any
Affiliate or Subsidiary of CBC or KRES, to leave the employ of CBC, KRES or any
Affiliate or Subsidiary of CBC or KRES, or (B) induce or attempt to induce any
customer, supplier, licensee, or business relation of CBC, KRES or any Affiliate
or Subsidiary of CBC or KRES to cease doing business with CBC, KRES or any
Affiliate or Subsidary of CBC or KRES.
5. NO DISPARAGEMENT
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Seller and his Affiliates will not, at any time during the eighteen (18)
month period following the Effective Time, disparage CBC or KRES or their
respective Affiliates or Subsidiaries, or any of their shareholders, directors,
officers, employees, or agents.
6. REMEDIES
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The parties hereto recognize and agree that (i) because of the nature of
the businesses in which the Acquired Companies and their Affiliates are engaged
and because of the nature of the Confidential Information Seller has with
respect to the businesses of the Acquired Companies and their Affiliates and
successors, it would be impracticable and excessively difficult to determine the
actual damages of CBC or the Acquired Companies and their Affiliates and
successors in the event that Seller breaches any of the covenants contained in
Sections 2, 3, 4 and 5 above, and (ii) in any event, damages in an action at law
would not constitute reasonable or adequate compensation to CBC and any of its
direct or indirect Subsidiaries or Affiliates in the event that Seller breaches
any of such covenants. Accordingly, if Seller commits any breach of such
covenants or threatens to commit any such breach, then CBC or KRES and any of
the direct or indirect Subsidiaries or Affiliates of CBC or KRES shall have the
right to have the covenants contained in Sections 2, 3, 4 and 5 above
specifically enforced by any court having equity jurisdiction it being
acknowledged and agreed by the parties hereto that any such breach or threatened
breach would cause irreparable and continuing injury to CBC or KRES and the
direct or indirect Subsidiaries or Affiliates of CBC and KRES and that an
appropriate injunctive relief (temporary restraining order, preliminary
injunction or permanent injunction) may be issued against Seller. The rights
described in this Section 6 shall be in addition to, and not in lieu of, any
rights or remedies available to CBC, KRES or any direct or indirect Subsidiary
or Affiliate of CBC or KRES under law or in equity.
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7. SUCCESSORS AND ASSIGNS
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Seller shall not delegate or otherwise transfer any obligation hereunder
without the prior written consent of CBC, and any purported delegation or other
assignment without the prior written consent of CBC shall be void. This
Agreement will be binding upon and inure to the benefit of CBC and its
Affiliates, successors and assigns, KRES and its Affiliates, successors and
assigns and Seller and Seller's assigns, heirs and legal representatives.
8. WAIVER; AMENDMENT
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The rights and remedies of the parties to this Agreement are cumulative and
not alternative. Neither the failure nor any delay by any party in exercising
any right, power, or privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further exercise of such
right, power, or privilege or the exercise of any other right, power, or
privilege. No waiver that may be given by a party will be applicable except in
the specific instance for which it is given and no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement. This Agreement may not be
amended, changed, modified, released, discharged, waived or abandoned in whole
or in part, except by an instrument in writing signed by all parties hereto.
9. GOVERNING LAW
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This Agreement will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
10. JURISDICTION; SERVICE OF PROCESS
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Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of California, County of Los Angeles, or, if
it has or can acquire jurisdiction, in the United States District Court for the
Central District of California, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
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11. SEVERABILITY
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It is the intention of the parties hereto that the scope and effect of
Sections 3, 4 and 5 hereof be as broad in time, scope and geography as permitted
pursuant to applicable law. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if any
provision or term of this Agreement is held to be prohibited by or invalid, then
such provision or term will be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions
or terms of this Agreement. If any of the covenants set forth in this Agreement
are held to be unreasonable, arbitrary, or against public policy, such covenants
will be considered divisible with respect to scope, time, and geographic area,
and in such lesser scope, time and geographic area, will be effective, binding
and enforceable against Seller. If any of the covenants contained in this
Agreement are determined to be wholly unenforceable by the courts of any
domestic or foreign jurisdiction, then the determination shall not bar or in any
way affect rights to relief in the courts of any other jurisdiction. Such
covenants, as they relate to each jurisdiction, shall be severable into
independent covenants.
12. COUNTERPARTS
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This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, taken
together, will be deemed to constitute one and the same agreement.
13. SECTION HEADINGS, CONSTRUCTION
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The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require.
14. NOTICES
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All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Seller:
Xxxxxxx X. Xxxxx
00 Xxxxxxx Xxx
Xxxxxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
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with a copy to:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
CBC:
CB Commercial Real Estate Services Group, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
General Counsel
Facsimile No.: (000) 000-0000
with a copy to:
Pillsbury Madison & Sutro LLP
000 Xx. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
KRES:
Xxxx Real Estate Services
0000 Xxx Xxxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to each of:
Xxxxxxx & XxXxxxxx
000 X. Xxxxx Xxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.
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Battle Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
15. ENTIRE AGREEMENT
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This Agreement and the Merger Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede all prior written and oral agreements and understandings among CBC,
KRES and Seller with respect to the subject matter of this Agreement.
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IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement, in the case of CBC by its duly authorized officer and in the case of
KRES by its duly authorized officer, as of the date first above written.
CB COMMERCIAL REAL ESTATE
SERVICES GROUP, INC.
By: _________________________________
Title: ________________________________
XXXX REAL ESTATE SERVICES
By: __________________________________
Title: _________________________________
SELLER
______________________________________
Xxxxxxx X. Xxxxx
SCHEDULE A
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Alameda County Orange County
Alpine County Placer County
Xxxxxx County Plumas County
Butte Xxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx San Xxxxxx County
Contra Costa County San Bernardino County
Del Norte County San Diego Xxxxxx
Xx Xxxxxx Xxxxxx Xxx Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxxx San Xxxxxxx County
Xxxxx County San Xxxx Obispo County
Humboldt County San Mateo County
Imperial County Santa Xxxxxxx County
Inyo County Santa Xxxxx County
Xxxx County Santa Xxxx County
Kings County Shasta County
Lake County Sierra County
Lassen County Siskiyou County
Los Angeles County Xxxxxx County
Madera County Sonoma County
Marin County Stanislaus County
Mariposa County Xxxxxx County
Mendocino County Tehama County
Merced County Trinity County
Modoc County Tulare County
Mono County Tuolumne County
Monterey County Ventura County
Napa County Yolo County
Nevada County Yuba County
