EXHIBIT 10.3
COVENANT NOT TO COMPETE AGREEMENT
(XXXXXX XXXXXXX)
This Covenant Not to Compete Agreement dated September 9, 1997, (this
"Agreement"), is by and between CORNELL CORRECTIONS, INC., a Delaware
corporation (the "Purchaser"), and XXXXXX XXXXXXX ("XXXXXXX").
1. ACKNOWLEDGMENTS AND AGREEMENTS BY XXXXXXX. Xxxxxxx hereby acknowledges
and agrees that:
(a) The Purchaser would not have purchased the assets pursuant to
the Asset Purchase Agreement dated August 14, 1997 by and among the
Purchaser and the Abraxas Group of companies named therein (collectively,
the "SELLER") if Xxxxxxx had not executed and delivered this Agreement to
the Purchaser;
(b) Xxxxxxx has had, and throughout the term of Xxxxxxx'x employment
with the Purchaser will continue to have, access to information that is
confidential to the Purchaser, that constitutes a valuable, special and
unique asset of the Purchaser, and with respect to which the Purchaser is
entitled to the protections afforded by this Agreement and to the remedies
for enforcement of this Agreement provided by law or in equity (including,
without limitation, those remedies the availability of which may be within
the discretion of the court in which any action for enforcement of this
Agreement is brought); and
(c) In consideration of Xxxxxxx'x non-competition and non-disclosure
agreements set forth herein, the Purchaser will pay Xxxxxxx 10 annual
installments of $60,000 each payable on the second day of January
commencing on January 2, 1998. No interest will accrue on any installment.
Payments under this Agreement may be accelerated upon the mutual agreement
of the parties.
2. NON-COMPETITION COVENANTS.
(a) During the period of time that ends on the 20th anniversary of
the date hereof (the "COVENANT PERIOD"), Xxxxxxx agrees that she will not,
directly or indirectly, acting alone or as a member of a partnership, as a
holder or owner of any security, as an agent, advisor, consultant to or
representative of any Person, or through any Affiliate:
(i) engage in any business in competition with the Business or
any other business operation of Purchaser or its Affiliates in the
adult or juvenile prison, substance abuse/chemical dependency or
halfway-house construction or management field in the United States;
or
(ii) request that any present or future customer or supplier
of the Purchaser or any of its Affiliates curtail or cancel its
business with Purchaser or any such Affiliate; or
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(iii) induce or attempt to influence any employee of the
Purchaser or any of its Affiliates to terminate his or her
employment with the Purchaser or any such Affiliate, or hire or
retain the services of any such employee, whether as an employee,
consultant, independent contractor or otherwise.
(b) Upon termination of Xxxxxxx'x employment with Purchaser and its
Affiliates, Xxxxxxx may act as an advisor for state and local governmental
mental health and drug and alcohol abuse programs, provided that Xxxxxxx
(i) continues to comply with the provisions of this Agreement, including
but not limited to this SECTION 2, (ii) does not direct or advise such
programs to use the services of any competitor of the Purchaser or its
Affiliates, and (iii) does not advise such programs in the development of
facilities or departments which directly or indirectly compete, or will
compete, with Purchaser or its Affiliates.
(c) For purposes of this Agreement:
(i) AFFILIATE: with respect to any Person, shall mean any
Person directly or indirectly controlling, controlled by or under
common control with such Person, and any natural Person who is an
officer, director or partner of such Person. A Person shall be
deemed to control another Person if such Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise.
(ii) BUSINESS: shall mean the businesses engaged in by Seller,
consisting primarily of owning and operating juvenile correction and
detention facilities.
(iii) PERSON: shall mean any individual, partnership, joint
venture, corporation, limited liability company, association, trust,
unincorporated organization, government or agency or subdivision
thereof or any other entity.
3. CONFIDENTIAL INFORMATION. During the Covenant Period and thereafter,
Xxxxxxx shall hold in strict confidence, and shall not disclose to any person
(other than officers, directors, employees, agents and consultants of the
Purchaser) any confidential information of the Purchaser and its Affiliates. For
purposes of this Section 3, the term "CONFIDENTIAL INFORMATION" shall include,
without limitation, trade secrets, client and customer lists, client or
consultant contracts and the details thereof, pricing policies, operational
methods, marketing plans or strategies, business acquisition and expansion
plans, personnel acquisition plans and all other information pertaining to the
business of the Purchaser and its Affiliates that is not publicly available,
including but not limited to confidential information relating to the Business.
Xxxxxxx shall not use such confidential information except for the sole benefit
of the Purchaser.
4. PROPERTY OF THE COMPANY AND THE PURCHASER. Promptly upon the
termination of the employment of Xxxxxxx with the Purchaser or any Affiliate of
the Purchaser, as the case may be, Xxxxxxx shall surrender to the Purchaser all
written materials (and all copies thereof), and all information stored in
computer memories or on microfiche, magnetic tape or diskette, that are at the
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time in her possession or control and that pertain to the business or affairs of
the Purchaser or its Affiliates.
5. REMEDIES.
(a) The parties hereto hereby agree that if Xxxxxxx violates or
threatens to violate any of the provisions of this Agreement, it would be
difficult to determine the entire cost, damage or injury which the
Purchaser and its Affiliates would sustain; accordingly, the Purchaser and
its Affiliates shall have the right to withhold payment of all or any part
of the consideration to be paid to Xxxxxxx pursuant to Section 1(c).
Notwithstanding the above, Xxxxxxx acknowledges that if she violates or
threatens to violate any of the provisions of this Agreement, the
Purchaser and its Affiliates may have no adequate remedy at law. In that
event, the Purchaser and its Affiliates shall have the right, in addition
to any other rights that may be available to them, to obtain in any court
of competent jurisdiction injunctive relief to restrain any violation or
threatened violation by Xxxxxxx of any provision of this Agreement or to
compel specific performance by Xxxxxxx of one or more of her obligations
under this Agreement (any requirements for posting of bonds for injunction
are hereby expressly waived). The seeking or obtaining by the Purchaser or
its Affiliates of such injunctive relief shall not foreclose or in any way
limit the right of the Purchaser or its Affiliates to obtain a money
judgment against Xxxxxxx for any damage to the Purchaser or its Affiliates
that may result from any breach by Xxxxxxx of any provision of this
Agreement.
6. REFORMATION OF COVENANTS. Xxxxxxx acknowledges that the covenants
contained in Sections 2 and 3 are reasonable in geographical and temporal scope
and in all other respects. If any court determines that any of such covenants,
or any part thereof, are unenforceable, then (a) the remainder of such covenants
shall not be affected by such determination and (b) those of such covenants that
are determined to be unenforceable because of the duration or scope thereof
shall be reformed by the court to reduce their duration or scope so as to render
the same enforceable against Xxxxxxx.
7. MISCELLANEOUS.
(a) SEVERABILITY AND BREACH. The unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement. A material breach of the
contemporaneous Employment Agreement by Abraxas Group, Inc. and/or
Purchaser shall constitute a breach of this Agreement.
(b) WAIVERS. No delay or omission by the Purchaser in exercising any
right of the Purchaser under this Agreement shall operate as a waiver of
that or any other right. A waiver by the Purchaser on any one occasion of
any particular right shall be effective only in that particular instance
and shall not be construed as a waiver of that or any other right on any
other occasion.
(c) AMENDMENT OF THIS AGREEMENT. This Agreement may be amended only
by an amendment hereto in writing that is executed by the Purchaser and
Xxxxxxx.
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(d) HEADINGS FOR CONVENIENCE ONLY. The headings contained in this
Agreement are intended solely for the convenience of the parties to this
Agreement and shall not affect their rights.
(e) NOTICES. All notices and other communications required or
permitted to be delivered pursuant to any provision of this Agreement
shall be in writing and addressed as follows:
(i) If to the Purchaser:
Cornell Corrections, Inc.
0000 Xxxxxxx, Xxxxx 000X
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
With copies (which shall not constitute notice) to:
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
(ii) If to Xxxxxxx, to her at:
000 X. Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Telecopy No.:__________
With copies (which shall not constitute notice) to:
Obermayer Xxxxxx Xxxxxxx & Hippel, L.L.P.
USX Tower, Suite 4440
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy No.: (000) 000 0000
The address of either party set forth above may be changed by such
party by delivering notice of such change to the other party to this
Agreement. Any notice mailed shall be deemed to have been given and
received on the third business day following the day of deposit in
the United States mail.
(f) ASSIGNMENTS. The rights and obligations of the parties under
this Agreement may not be assigned, except that the Purchaser may, at its
option, assign one or more of this rights or obligations under this
Agreement to any of its Affiliates or in connection with a
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transfer of all or substantially all of the assets or stock of Purchaser
or a merger or consolidation of Purchaser with and into another
corporation or other entity; provided, however, any such assignment shall
not relieve Purchaser of its obligations hereunder.
(g) GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Texas.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
CORNELL CORRECTIONS, INC.
By: /s/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer,
Secretary and Treasurer
/s/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
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