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Exhibit 10.14
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (this "Agreement") is made as of
October 27, 1997 among UBICS, INC., a Delaware corporation ("UBICS"), XXXXX
XXXXXX, an individual ("Xxxxxx"), and UB INTERNATIONAL LIMITED, a corporation
organized under the laws of the United Kingdom ("UB International" or the
"Company").
PREAMBLE
UBICS is engaged in the business of providing information technology
services and personnel to business organizations (the "IT Services Business").
Xxxxxx owns a Controlling interest in or otherwise Controls (as those terms are
defined in Section 4) each of the companies comprising the UB Group
(collectively, the "UB Group Companies"). Certain of the UB Group Companies,
including UB Information and Consultancy Services Ltd. ("UB Services"), have
engaged in the IT Services Business from time to time or employ individuals who
formerly were employed in the IT Services Business.
Because of the experience of UB Services and other UB Group Companies
in the IT Services Business, Xxxxxx and the UB Group Companies, including their
Affiliates (as defined in Section 4 below) have the ability to engage, directly
or indirectly, in competition with UBICS and thereby to adversely affect its
business. Accordingly, the parties, intending to be legally bound and in
consideration of their mutual promises set forth hereto, do hereby agree as
follows.
1. CONFIDENTIAL INFORMATION. Xxxxxx and the Company each acknowledge
that in the course of their conduct of the IT Services Business they or their
Affiliates may have acquired or been a party to certain Confidential
Information relating to UBICS's IT Services Business (the "UBICS Business").
"Confidential Information" shall mean all information about the UBICS Business
and its products, methods, business, policies, practices, personnel, customers,
suppliers, distributors and sales representatives which is not in the public
domain, including without limitation all trade secrets, inventions,
discoveries, ideas, designs and know-how. Each of Xxxxxx and the Company
agrees, and shall cause each of their affiliates, to (a) return to UBICS any
Confidential Information relating to the conduct by UBICS of the UBICS Business
in tangible form which is in their possession or control without retaining any
copies or extracts thereof, and (b) not, without the prior written consent of
UBICS, use for their own benefit or reveal to any third party any Confidential
Information (except to the extent required for performance by an Affiliate (as
defined in Section 4) of services for UBICS under a service or similar
agreement with UBICS.
2. NON-COMPETITION. From and after the date hereof until the date
which is the earlier of the fifth anniversary of the date hereof or the date of
occurrence of a Change in Control (as defined in Section 4 below) of UBICS,
neither Xxxxxx nor the Company nor any of their respective Affiliates (as
defined in Section 4 below) shall, as proprietor, director, officer, partner,
shareholder, employee, consultant, agent, independent contractor or otherwise,
for itself or on behalf of any other person or entity, (a) engage in or carry
on, directly or indirectly, in any part of the world (the "Territory"), any
business similar to the UBICS Business (a "Competing Business"), (b) have any
direct or indirect interest in, or be affiliated with, or render any services
for, any person or entity engaged in or carrying on, directly or indirectly,
any Competing Business in the Territory, (c) induce or attempt to induce any
customer or supplier of the UBICS Business to reduce the business done by such
supplier or customer with the UBICS Business, (d) solicit any employee of the
UBICS Business to leave the employ of the UBICS Business or (e) engage in any
practice the purpose or result of which is to evade the provisions of this
Agreement or to commit any act that is detrimental to the successful
continuation by UBICS of the UBICS Business. Notwithstanding the foregoing,
Xxxxxx together with his Affiliates (as defined in Section 4 below) may own in
the
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aggregate up to 5% of the outstanding capital stock of a publicly traded
company which engages in a Competing Business without violating this Section 2.
3. INJUNCTIVE RELIEF. Each of Xxxxxx and the Company acknowledges and
agrees that the covenants and agreements set forth in Sections 1 and 2 are
necessary to protect the legitimate business interests of UBICS and that any
breach of such covenants and agreements will cause immediate and irreparable
harm to UBICS. Each of Xxxxxx and the Company acknowledges that damages for the
violation of any such covenant or agreement will not give full and sufficient
relief to UBICS and agrees that, in the event of any violation of any such
covenant or agreement, UBICS shall be entitled to injunctive relief with
respect to any such breach, which remedy shall be in addition to any other
remedy which UBICS may have on account of such breach.
4. CERTAIN DEFINITIONS. As used herein, the following definitions
shall apply:
(a) An "Affiliate" of a person or entity shall have the meaning
ascribed to such term for purposes of Rule 405 under the Securities Act of
1933, as amended (the "Securities Act"), and includes any person or entity that
directly or indirectly through one or more intermediaries, Controls or is
Controlled by, or is under common Control with, the person or entity specified.
(b) "Change in Control" shall mean any of the following events:
(i) consummation of an agreement by UBICS to consolidate or
merge with any other entity that is not an Affiliate pursuant to which
UBICS will not be the continuing or surviving corporation or pursuant
to which shares of the common stock of UBICS would be converted into
cash, securities or other property, other than a merger of UBICS in
which holders of the common stock of the surviving corporation
immediately prior to the merger would have the same proportion of
ownership of common stock of the surviving corporation immediately
after the merger;
(ii) consummation of an agreement of UBICS to sell, lease,
exchange or otherwise transfer to a third party that is not an
Affiliate in one transaction or a series of related transactions
substantially all the assets of UBICS; or
(iii) consummation of an agreement by Xxxxxx (together with
his Affiliates) to sell more than 50% of the outstanding voting
securities of UBICS to a third party that is not an Affiliate in one
or a series of related transactions other than an initial public
offering of voting securities registered with the Securities and
Exchange Commission.
(c) The term "Control" (including the terms "Controlling, "Controlled
by" and "under common Control with") shall have the meaning ascribed to such
term for purposes of Rule 405 under the Securities Act, and includes the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a person or entity, whether through the
ownership of voting securities, by contract, or otherwise.
5. Xxxxxx and the Company agree to use, and to cause each of their
respective Affiliates to use, their best efforts to cause each entity which he
or it Controls, including the UB Group Companies, to comply with the covenants
set forth in this Agreement.
6. AGREEMENTS OF UB SERVICES. Pursuant to a separate Noncompetition
Agreement dated the date hereof with UBICS (the "UB Services Agreement"), UB
Services acknowledges that it has
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ceased all business activities relating to the IT Services Business and agrees
that it shall cease all active business operations within 90 days after the
date hereof or as soon as practicable thereafter. Xxxxxx and the Company shall
take all action, and shall cause each of his or its Affiliates which Control UB
Services to take all action, as may be required to cause UB Services to comply
with each of its covenants set forth in the UB Services Agreement.
7. MISCELLANEOUS.
(a) NOTICES. All notices or other communications which may be given
hereunder shall be in writing and shall be given to the addresses set forth
below:
If to UBICS:
UBICS, Inc.
000 Xxxxxx Xxxxxx Xxxxx
0000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: President
If to Xxxxxx or the Company:
c/o Xxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
(b) SUCCESSORS AND ASSIGNS. This Agreement and all rights and powers
granted hereby shall bind and inure to the benefit of the parties hereto and
their respective successors and assigns.
(c) GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania.
(d) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(e) AMENDMENT. To be effective, any amendment or waiver to this
Agreement must be in writing and be signed by the party against whom
enforcement of the same is sought.
(f) SEVERABILITY. If any portion of this Agreement shall for any
reason be held by a court of competent jurisdiction to be invalid and
unenforceable, the valid and enforceable provisions will continue to be given
effect and bind the parties hereto. In addition, the covenants set forth in
Sections 1 and 2 are intended to be separate covenants for each county and
district and each country, state, province or other political subdivision
comprising a part of the Territory, and the invalidity of such clauses as to
any country, county, state or political subdivision shall not affect their
validity as to any other country, county, state or political subdivision
comprising a part of the Territory.
(g) ENTIRE AGREEMENT. This Agreement sets forth all of the promises,
covenants, agreements, conditions and undertakings between the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date and year first written above.
UBICS, INC.
By: /s/ XXXXXXX X. XXXX
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President
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
UB INTERNATIONAL LIMITED
By: /s/ XXXXX XXXXXX
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Authorized Officer
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