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NONCOMPETITION, NONSOLICITATION
AND NONDISCLOSURE AGREEMENT
This Agreement made as of this 10th day of October, 1995, by and among
MASADA SECURITY, INC., a Delaware corporation ("Masada"), and LAFAYETTE
SECURITY ELECTRONICS SYSTEMS, INC., a Louisiana corporation ("Lafayette"), and
XXXXX X. XXXXXXX, an individual ("Xxxxxxx"). (Lafayette and Xxxxxxx and their
affiliates are collectively called the "Sellers").
STATEMENT OF FACTS
A. Masada is purchasing certain security monitoring accounts
located in (i) Xxxxxxxxx Xxxxxx, Orleans Parish, St. Tammany Parish and St.
Xxxxxxx Xxxxxx, State of Louisiana; (ii) Gulf Breeze and Pensacola, State of
Florida; (iii) Fort Xxxxx, State of Arkansas; and (iv) Xxxxxxx, Picayune,
Hattiesburg, Xxxxxxx, Vicksburg, Brookhaven, Clinton, Cleveland, Columbia,
Greenville, McComb and Bay St. Louis, State of Mississippi, listed on Schedules
1(a)(i) and 1(a)(ii) and 1(c) of the Asset Purchase Agreement entered into
between Masada and Lafayette which is incorporated herein by this reference
(collectively referred to as the "Accounts") from Lafayette. This Agreement
applies to the customer who is the Account, as well as the Account's location.
X. Xxxxxxx is the sole shareholder and principal of Lafayette and
will derive financial benefit from Lafayette selling the Accounts to Masada.
C. Masada understands that Lafayette and Xxxxxxx intend on
continuing in the business of providing security monitoring services to others
aside from the Accounts.
D. In consideration of the payment of $741,554.25 to Lafayette at
the closing of Masada's purchase of the Accounts from Lafayette, the Sellers
are willing to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, receipt of which is acknowledged, the parties,
intending to be legally bound, covenant and agree as follows:
1. Nonsolicitation and Nonacceptance. Notwithstanding that
Lafayette and Xxxxxxx intend on continuing in the business of providing
security monitoring services, the Sellers agree that following the date of this
Agreement for a period of two (2) years, they will not solicit nor accept (if
the Accounts contact them) any business from any of the Accounts, including
business for the purpose of providing electronic security, intercom, central
vacuum, home automation, audio systems or related services (collectively, the
"Services"). If contacted by the Accounts, the Sellers will inform them that
the Seller can no longer provide the Services to the Accounts.
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The Sellers agree to do so in a polite manner, and to refer the Accounts to
Masada with a positive recommendation.
2. Noncompetition. Notwithstanding that Lafayette and Xxxxxxx
intend on continuing in the business of providing security monitoring services,
the Sellers also agree that, for a period of two (2) years following the date
of this Agreement, they will not, directly or indirectly through affiliates,
take any action in competition with Masada in connection with the Accounts.
Without limiting the generality of the foregoing, the Sellers will not,
directly or indirectly through affiliates:
(a) manage, operate, join, control, participate or become
interested in or be connected with, as an employee, partner, officer, director,
stockholder, investor or otherwise, any business providing any of the Services
to the Accounts;
(b) lend their credit or money for the purpose of
establishing or operating any business providing any of the Services to the
Accounts;
(c) furnish consultation or advice to any business except
for Masada providing any of the Services to the Accounts; or
(d) permit their names to be used in connection with any
business providing any of the Services to the Accounts.
;provided, however, that Xxxxxxx may become an employee (but not a partner,
member, officer, director, stockholder or investor) of another organization
engaged generally in security monitoring services after one year following the
date of this Agreement, but in no manner shall Xxxxxxx provide any of the
aforementioned services related, directly or indirectly, to the Accounts for
the balance of the period mentioned in this Section 2.
3. Nondisclosure.
(a) The Sellers acknowledge that prior to the execution
of this Agreement, they possess certain information, materials, and business
concerns, with respect to the Accounts which is confidential, proprietary, and
trade secret. This information, materials, and business concerns may include
information regarding sales, maintenance, service and marketing, customer lists
and files, accounting data and methods, operating procedures, pricing policies,
strategic plans, listing of accounts, contracts, and manufacturers' warranties
(collectively, the "Proprietary Information.")
(b) The Sellers agree to deliver to Masada on the date of
this Agreement all of the Proprietary Information in their possession, without
retaining any copies in any format or any summaries of the Proprietary
Information.
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(c) The Sellers agree (i) not to recreate, publish, copy,
reveal, tender, assign, transfer any Proprietary Information, to any other
person, firm, corporation, or entity, and (ii) to maintain strictly the
confidentiality of all Proprietary Information, for a period of five years.
The Sellers agree to take all reasonable precautions to protect the Proprietary
Information transferred by Sellers.
4. Acknowledgment. The Sellers acknowledge and recognize that:
(a) this Agreement is necessary for the protection of the
legitimate business interests of Masada in purchasing the Accounts;
(b) the execution and delivery of this Agreement is a
mandatory condition precedent to Masada's closing its purchase of the Accounts
from Lafayette, without which such transactions will not close;
(c) the scope of this Agreement regarding duration and
the level of activities restricted is reasonable;
(d) none of the Sellers, individually or jointly, has any
intention of violating this Agreement during the time period set forth above;
and
(e) the breach of this Agreement will be such that Masada
will not have an adequate remedy at law because of the unique nature of the
assets being conveyed and the confusion to the Accounts that a breach would
create.
5. Remedy. The Sellers and Masada agree that the amount of
damages resulting to Masada from the breach of this Agreement by the Sellers is
difficult to ascertain. In the event that Masada in its sole discretion,
elects to pursue a damage award the Sellers agree that Masada is entitled to
liquidated damages from the Sellers of 36 times the monthly recurring revenue
from the affected Accounts. The Sellers acknowledge and agree that the rights
of Masada under this Agreement are of a specialized and unique character and
that immediate and irreparable damage will result to Masada if the Sellers fail
to or refuse to perform their obligations under this Agreement and,
notwithstanding any election by Masada to claim damages from the Sellers as a
result of any such failure or refusal, Masada may, in addition to any other
remedies and damages available, seek an injunction in a court of competent
jurisdiction to restrain any such failure or refusal. The Sellers represent
and warrant that their expertise and capabilities are such that their
obligations under this Agreement (and the enforcement thereof by injunction or
otherwise) will not prevent them from earning a livelihood. The Sellers also
agree that Masada's remedy for a breach by the Sellers of this Agreement will
not be limited to the payment made from Masada to the Sellers.
6. Severability. If any provisions of this Agreement as applied
to any part or to any circumstances will be adjudged by a court to be invalid
or unenforceable, the same will in no way affect any other provision of this
Agreement, the application of such provision in any other
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circumstances, or the validity or enforceability of this Agreement. Masada,
and the Sellers intend this Agreement to be enforced as written. If any
provision or any part thereof is held to be invalid or unenforceable because of
the duration thereof or the level of restrictions, all parties agree that the
court making such determination will have the power to reduce the duration
and/or restrictions of such provision, and/or to delete specific words or
phrases and in its modified form such provision will then be enforceable.
7. Consent to Jurisdiction, Service and Venue. For the purpose
of any suit, action or proceeding arising out of or relating to this Agreement,
the Sellers and Purchaser hereby irrevocably consent and submit to the
jurisdiction and venue of the United States Bankruptcy Court, Eastern District
of the State of Louisiana. The Sellers appoint and constitute Xxxxx X. Xxxxxxx
as their agent to accept and acknowledge on their behalf all service of process
in connection with any such matter, copies of which process will be immediately
mailed or delivered to the Sellers. The Sellers hereby irrevocably waive any
objection which they may now or hereafter have to the venue of any such suit,
action or proceeding brought in such court and any claim that such suit, action
or proceeding brought in such court has been brought in an inconvenient forum
and agree that service of process in accordance with the foregoing sentence
will be deemed in every respect effective and valid personal service of process
upon the Sellers. The provisions of this Section will not limit or otherwise
affect the right of Masada to institute and conduct an action in any other
appropriate manner, jurisdiction or court.
8. WAIVER OF JURY TRIAL. MASADA AND THE SELLERS WAIVE ALL RIGHT
TO A TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT.
9. Notices. Any notice required or permitted to be delivered
pursuant to the terms of this Agreement shall be considered to have been
sufficiently delivered within five days after posting, if mailed by U.S. Mail,
certified or registered, return receipt requested, postage prepaid or, upon
receipt by overnight courier maintaining records of receipt by addressee or if
delivered by hand or telecopied with the original notice being mailed the same
day by one of the foregoing methods and addressed as follows:
IF TO MASADA AT:
Masada Security, Inc.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
FACSIMILE: 0-000-000-0000
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WITH COPY TO:
Xxxx & Xxxxxx
3100 SouthTrust Tower
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: W. Xxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000
IF TO SELLERS AT:
Lafayette Security and Electronics Systems, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
FACSIMILE: 000-000-0000
WITH COPY TO:
Turner, Young, Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Xx., Esq.
FACSIMILE: (000) 000-0000
or at such address as the party may designate by ten days advance written
notice to the other party. Notice shall be effective when delivered to a
responsible person at the address of the addressee.
10. Entire Agreement. This Agreement is an integrated document,
contains the entire agreement between the parties, and wholly cancels,
terminates and supersedes any and all previous and/or contemporaneous oral
agreements, negotiations, commitments and writings between Masada and the
Sellers with respect to such subject matter. No change, modification,
extension, termination, discharge, abandonment or waiver of this Agreement or
any of its provisions, nor any representation, promise or condition relating to
this Agreement, will be binding upon the parties unless made in writing and
signed by the parties.
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11. Interpretation. The descriptive headings of the Sections are
for ease of reference only and will in no way affect or be used to construe or
interpret this Agreement. All references to Sections and subsections contained
in this Agreement are references to the Sections and subsections of this
Agreement. The terms and conditions of this Agreement will not be construed
against this drafter. The word "including" means "including without
limitation."
12. Remedies Cumulative. It is agreed that the rights and
remedies herein provided in case of any default or breach by the Sellers of
this Agreement are cumulative and will not affect in any manner any other
remedies that Masada may have by reason of such default or breach by the
Sellers. The exercise of any right or remedy will be without prejudice to the
right to exercise any other right or remedy provided herein, by law or by
equity.
13. Waiver. No waiver of any right or remedy allowed hereunder
will be implied by the failure to enforce any such right or remedy. No express
waiver will affect any such right or remedy other than that to which the waiver
is applicable and only for that occurrence.
14. Parties in Interest. This Agreement is binding upon and
inures to the benefit of Masada and its successors and assigns and the
permitted heirs, successors and assigns of the Sellers.
15. Assignment. Masada has the right to assign this Agreement to
any third party without the consent of the Sellers. The Sellers have no right
to assign this Agreement.
16. Governing Law. This Agreement and the rights and the
obligations of the parties are governed by and construed and enforced in
accordance with the laws of the State of Louisiana without regard to its
conflicts of law provisions.
17. Joint and Several Obligations. The Sellers acknowledge that
all of their agreements and covenants contained in this Agreement are made on a
joint and several basis.
18. Expenses. Masada and the Sellers each agree to pay all of
their respective costs and expenses incident to the negotiation and preparation
of this Agreement and to the performance and compliance with all agreements and
conditions contained herein on their part to be performed or complied with,
including the fees and costs of their counsel and accountants; provided,
however, that the Sellers agree to pay all of Masada's reasonable legal fees
and costs in the event Seller is found to be in violation of this Agreement and
Masada agrees to pay all of Seller's reasonable legal fees and costs if Seller
is not found to be in violation of this Agreement.
19. Counterparts; Telecopy. This Agreement may be executed in one
or more counterparts, each of which when taken together all comprise one
instrument. Delivery of executed signature pages hereof by facsimile
transmission will constitute effective and binding execution and delivery.
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20. Consultation. The Sellers acknowledge that they have: (a)
carefully read and fully understand all of the provisions of this Agreement,
and (b) had an opportunity to consult with their respective attorneys prior to
executing this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
MASADA SECURITY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Vice President of Acquisitions
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LAFAYETTE SECURITY ELECTRONICS
SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxx
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Title: President
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/s/ Xxxxx Xxxxxxx
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Xxxxx X. Xxxxxxx, an individual
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