NON-COMPETITION, NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT
Exhibit 10.3
This Non-Competition, Non-Disclosure and Non-Solicitation Agreement (this “Agreement”)
is dated as of the 31st day of March, 2006, and is made between Xxxxx Xxxxxx (“Xxxxxx”) and
Electric City Corp., a Delaware corporation (the “Company”).
W I T N E S S E T H:
WHEREAS, Xxxxxx, Xxxxxx Xxxxxxx (“Xxxxxxx”) and the Company are parties to that
certain Stock Purchase Agreement dated as of March 31, 2006 providing for the sale by the Company
to Xxxxxxx and Xxxxxx of all of the issued and outstanding capital stock of Great Lakes Controlled
Energy Corporation, a Delaware corporation (“Great Lakes”) in return for the consideration
to be paid by Xxxxxxx and Xxxxxx specified in such Stock Purchase Agreement; and
WHEREAS, at all times prior to the date hereof while Great Lakes was a subsidiary of the
Company, Xxxxxx has been employed by the Company and by Great Lakes, and accordingly, Xxxxxx has
had access to and gained knowledge of certain information that the Company and Xxxxxx agree is
proprietary and confidential to the Company and is not generally available to the public or to
competitors of the Company; and
WHEREAS, the execution and delivery of this Agreement is a condition precedent to the
Company’s obligations to close the sale of Great Lakes under such Stock Purchase Agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:
“Business” shall mean the ballasted lighting power reduction business that the
Company and its subsidiaries are currently engaged in.
“Confidential Information” shall mean information (in any form or media)
regarding the Company’s technology, products, customers, prospective customers (including
lists of customers and prospective customers) methods of operation, billing rates, billing
procedures, suppliers, business methods, finances, management, employees, employee
compensation, or any other business information relating to the Business (whether
constituting a trade secret or proprietary or otherwise) which has value to the Company and
is generally treated by the Company as being confidential; provided,
however, that Confidential Information shall not include any information that (i)
has been voluntarily disclosed to the public by the Company (except where such public
disclosure has been made without authorization), or (ii) has been independently developed
and disclosed by others, or (iii) otherwise enters the public domain through lawful means,
or
- 1 -
(iv) relates to Great Lakes’ building automation and controls business and not to the
Business.
“Energy Saver” shall mean the energy saving device which the Company sells
under the name and trademark Energy Saver®, which device permits the user to reduce the
electric power used by lighting systems.
“Energy Saver Business” shall mean the Company’s business of making, marketing,
selling and installing Energy Savers.
“Person” shall mean any individual, partnership, joint venture, corporation,
trust, limited liability company, unincorporated organization, or other entity (including a
governmental agency or authority); provided, however, that the term “Person”
shall not include the Company or any subsidiary of the Company (excluding Great Lakes during
the period when it was a subsidiary of the Company).
“Restricted Business” shall mean the Energy Saver Business.
“Territory” shall mean North America.
2. Covenants of Xxxxxx. Xxxxxx covenants and agrees that he will not, directly or
indirectly, either alone or jointly, with or on behalf of others, expressly or impliedly, whether
as principal, partner, agent, shareholder, director, employee, consultant or otherwise during the
period commencing on the date hereof and ending five (5) years hereafter:
(a) engage in the Restricted Business in the Territory, or own, manage, operate, join,
control, assist, participate in, or be connected with, directly or indirectly (and including
as an officer, director, member, manager, partner, proprietor, consultant, independent
contractor, or lender), any Person who is, directly or indirectly, engaged in the Restricted
Business in the Territory;
(b) disclose to any Person, or use or otherwise exploit for his own benefit or for the
benefit of any such Person, any Confidential Information; or
(c) request, solicit, or induce any employee of the Company or any of its subsidiaries
to terminate his employment with the Company or such subsidiary and accept employment with
Great Lakes (excluding persons employed by Great Lakes as of the date hereof).
Xxxxxx acknowledges that (i) the Company’s Confidential Information is confidential and
proprietary to the Company; (ii) the Company takes reasonable steps to safeguard the
confidentiality of its Confidential Information and to prevent the disclosure of such information
to competitors or other third parties, including the execution of agreements such as this; (iii)
the Confidential Information has and derives independent economic value and is not generally known
to competitors or others who would be able to derive economic value from it, and (iv) the
- 2 -
Company
does not disseminate the Confidential Information to the public. Xxxxxx further acknowledges and
agrees that:
(x) the prohibitions against disclosure of Confidential Information provided in this
Agreement are in addition to, and not in lieu of, any rights or remedies which the Company
may have available pursuant to the laws of any jurisdiction or at common law to prevent the
disclosure of trade secrets or proprietary information, and the enforcement by the Company
of its rights and remedies pursuant to this Agreement shall not be construed as a waiver of
any other rights or available remedies which it may possess in law or equity absent this
Agreement, and
(y) Xxxxxx’x breach of any covenant contained in this Agreement will result in
irreparable injury to the Company and that the Company’s remedy at law for such a breach
will be inadequate and will be extremely difficult to calculate or determine.
Accordingly, Xxxxxx agrees and consents that, upon any such breach, the Company shall, in addition
to all other remedies available to it at law or in equity, be entitled to both preliminary and
permanent injunctions (without bond) to prevent or halt any such breach or threatened breach.
3. GENERAL PROVISIONS.
(a) Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and shall be given (and
deemed to have been duly given) in accordance with the Stock Purchase Agreement.
(b) Expenses. Each party hereto shall pay its own expenses in connection with this
Agreement and the consummation of the transactions contemplated hereby, whether or not such
transactions shall be consummated.
(c) Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns.
(d) Amendment; Waivers, Etc. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly
executed by the party against whom enforcement of the amendment, modification, discharge or waiver
is sought. Any such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by either of the parties hereto of a
breach of or a default under any of the provisions of this Agreement, nor the failure by any of the
parties, on one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or privileges
hereunder.
- 3 -
(e) Entire Agreement. This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
(f) Severability. If any provision, including any phrase, sentence, clause, section
or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such
circumstances shall not have the effect of rendering such provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or of rendering any other provision
herein contained invalid, inoperative or unenforceable to any extent whatsoever; provided that the
material economic terms of the transaction are not materially modified by such circumstances.
(g) Headings. The headings contained in this Agreement are for the convenience of the
parties only and shall not affect the meaning or interpretation of this Agreement.
(h) Counterparts; Facsimile. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which shall together constitute one and the same
instrument. The reproduction of signatures by means of telecopying device shall be treated as
though such reproductions are executed originals.
(i) Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Illinois, without giving effect to the principles of
conflicts of laws thereof.
[Balance of page intentionally left blank; signature page follows.]
- 4 -
IN WITNESS WHEREOF, the parties hereto have duly executed this Non-Competition, Non-Disclosure
and Non-Solicitation Agreement as of the date first above written.
| /s/ Xxxxx Xxxxxx | ||||
| Xxxxx Xxxxxx | ||||
| ELECTRIC CITY CORP. |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Chief Financial Officer & Treasurer | |||
- 5 -
