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Exhibit 10.4
EXECUTION COPY
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NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "AGREEMENT") is made as of April 3,
1998, by and between Xxxxxx, Xxxxxxxx & Assoc., Inc., an Ohio corporation
("CCAI"), and Xxxxxxx X. Xxxxx, residing at 000 Xxxxxxx Xxx, Xxxxx, Xxxxxxxx
00000 ("XXXXX").
RECITALS
Concurrently with the execution and delivery of this Agreement, CCAi is
purchasing from Xxxxx and certain other individuals all of the outstanding
shares (the "SHARES") of common stock, no par value per share, of Xxxxx-Xxxxx &
Associates ("KLA" and together with CCAi, the "COMPANY") pursuant to the terms
and conditions of a stock purchase agreement made as of April 3, 1998 (the
"STOCK PURCHASE AGREEMENT"). Section 3.2(i) of the Stock Purchase Agreement
requires that a noncompetition agreement be executed and delivered by Xxxxx as a
condition to the purchase of the Shares by CCAi.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have
the meanings ascribed to them in the Stock Purchase Agreement.
2. ACKNOWLEDGMENTS BY XXXXX
Xxxxx acknowledges that (a) Xxxxx has occupied a position of trust and
confidence with KLA prior to the date hereof and has become familiar with the
following, any and all of which constitute confidential information of the
Company (collectively the "CONFIDENTIAL INFORMATION"): (i) any and all trade
secrets concerning the business and affairs of the Company, product
specifications, data, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas, past, current and
planned research and development, in each case solely as it relates to the SAP
business of the Company; (ii) customer lists, current and anticipated customer
requirements, price lists, market studies, business plans, computer software and
programs (including object code and source code); (iii) any and all information
concerning the SAP business and affairs of the Company (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and techniques and materials,
however documented; and (iv) any and all notes, analysis, compilations, studies,
summaries, and other material prepared by or for the
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Company containing or based, in whole or in part, on any information included in
the foregoing; (b) the business of the Company is international in scope; (c)
its products and services are marketed throughout the United States and parts of
Europe; (d) CCAi has required that Xxxxx make the covenants set forth in
Sections 3 and 4 of this Agreement as a condition to CCAi's purchase of the
Shares owned by Xxxxx; (e) the provisions of Sections 3 and 4 of this Agreement
are reasonable and necessary to protect and preserve the Company's business; and
(f) the Company would be irreparably damaged if Xxxxx were to breach the
covenants set forth in Sections 3 and 4 of this Agreement.
3. CONFIDENTIAL INFORMATION
Xxxxx acknowledges and agrees that all Confidential Information known
or obtained by Xxxxx, before the date hereof, is the property of the Company.
Therefore, except as otherwise provided herein (including paragraph 12), Xxxxx
agrees that Xxxxx will not, at any time, disclose to any unauthorized Persons or
use for his own account or for the benefit of any third party any Confidential
Information, whether Xxxxx has such information in Kelly's memory or embodied in
writing or other physical form, without CCAi's written consent, unless and to
the extent that the Confidential Information is or becomes generally known to
and available for use by the public other than as a result of Kelly's fault or
the fault of any other Person bound by a duty of confidentiality to CCAi or the
Company. Xxxxx agrees to deliver to CCAi at the time of execution of this
Agreement all documents, memoranda, notes, plans, records, reports, and other
documentation, models, components, devices, or computer software, whether
embodied in a disk or in other form (and all copies of all of the foregoing),
relating to the businesses, operations, or affairs of the Company and any other
Confidential Information of the Company that Xxxxx may then possess or have
under Kelly's control.
4. NONCOMPETITION
As an inducement for CCAi to enter into the Stock Purchase Agreement
and as additional consideration for the consideration to be paid to Xxxxx under
the Stock Purchase Agreement, Xxxxx agrees that:
(a) For a period of three years after the Closing, except as
otherwise provided herein (including paragraph 12):
(i) Xxxxx will not, directly or indirectly, engage or
invest in, own, manage, operate, finance, control, consult
with or participate in the ownership, management, operation,
financing, or control of, be employed by, associated with, or
in any manner connected with, lend Kelly's name or any similar
name to, lend Kelly's credit to, or render services or advice
to, any business (A) that is a member of the SAP Alliance
Partners listed on EXHIBIT A hereto, or (B) that is involved
in any manner with the marketing, licensing, sales,
installation or any other activity regarding SAP products;
provided, however, that (i) Xxxxx may purchase or otherwise
acquire up to (but not more than) one percent of any class of
securities of any enterprise (but without otherwise
participating in the activities of such enterprise) if such
securities are listed
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on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act
of 1934, (ii) Xxxxx may acquire, hold and exercise the
Warrants (as defined in the Stock Purchase Agreement), and
(iii) Xxxxx may be employed by an SAP Alliance Partner if
Xxxxx is in no way involved in the marketing, licensing,
sales, installation or other activities regarding SAP
products. Xxxxx agrees that this covenant is reasonable with
respect to its duration, geographic area and scope.
(ii) Xxxxx will not, directly or indirectly, either
for himself or any other Person, (A) induce or attempt to
induce any employee of the Company to leave the employ of the
Company, (B) in any way interfere with the relationship
between the Company and any employee of the Company, (C)
employ, or otherwise engage as an employee, independent
contractor, or otherwise, any employee of the Company, or (D)
induce or attempt to induce any customer, supplier, licensee,
or business relation of the Company to cease doing business
with the Company, or in any way interfere with the
relationship between any customer of the Company; provided,
however, Xxxxx may solicit the administrative personnel of the
Company listed on Exhibit B; provided, further, Xxxxx may sell
products and/or service other than SAP products or services to
a customer or supplier of CCAi.
(iii) Xxxxx will not, directly or indirectly, either
for himself or any other Person, solicit the business of any
Person known to Xxxxx to be a customer of KLA as of the date
hereof which is listed on EXHIBIT C, whether or not Xxxxx had
personal contact with such Person.
(b) In the event of a breach by Xxxxx of any covenant set
forth in Subsection 4(a) of this Agreement, the term of such covenant
will be extended by the period of the duration of such breach.
(c) Xxxxx will not, at any time during or after the three year
period, disparage CCAi or the Company, or any of their shareholders,
directors, officers, employees, or agents.
(d) Xxxxx will, for a period of three years after the Closing,
within ten days after accepting any employment, advise CCAi of the
identity of any employer of Xxxxx. Company may serve notice upon each
such employer that Xxxxx is bound by this Agreement and furnish each
such employer with a copy of this Agreement or relevant portions
thereof.
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5. REMEDIES
If Xxxxx breaches any of the covenants set forth in Sections 3 or 4 of
this Agreement and such breach continues for a period of five (5) days after the
receipt by Xxxxx of written notice, the Company will be entitled to the
following remedies:
(a) damages from Xxxxx;
(b) to offset against any and all future amounts owing to
Xxxxx under the Stock Purchase Agreement and all amounts which the
Company claims under Subsection 5(a) of this Agreement; and
(c) in addition to its right to damages and any other rights
it may have, to obtain injunctive or other equitable relief to restrain
any breach or threatened breach or otherwise to specifically enforce
the provisions of Sections 3 and 4 of this Agreement, it being agreed
that money damages alone would be inadequate to compensate the Company
and would be an inadequate remedy for such breach.
6. SAP CONSULTING BOOK
The Company acknowledges that Xxxxx co-authored an SAP consulting book.
The Company will use its best efforts to cause Kelly's name to appear no less
than second in order in any place where the authors' names are listed in the
book, and the Company will consult with Xxxxx with respect to any updates and/or
modifications to the book. Furthermore, notwithstanding anything to the contrary
in this Agreement, the Company agrees that Xxxxx, at his own expense, has the
right to market and promote the book.
7. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon the Company and Xxxxx and will
inure to the benefit of the Company and its affiliates, successors and assigns
and Xxxxx and Kelly's assigns, heirs and legal representatives.
8. WAIVER
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,
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or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) 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.
9. GOVERNING LAW
This Agreement will be governed by the laws of the State of Ohio
without regard to conflicts of laws principles.
10. JURISDICTION; SERVICE OF PROCESS
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 Ohio, County of Cuyahoga, or, if it has or
can acquire jurisdiction, in the United States District Court for the Northern
District of Ohio, 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.
11. SEVERABILITY
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 Section 4 of 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 Xxxxx.
12. ACKNOWLEDGEMENT
CCAi and the Company acknowledge that Xxxxx intends to seek employment
or create a new business entity in the computer software marketing, licensing,
installation and sale of products which may be directly or indirectly
competitive with the SAP products sold, licensed, installed, etc. by CCAi. CCAi
and the Company further acknowledge and agree that such activities (including
employment with SAP Alliance Partners and competitors of CCAi and the Company)
by Xxxxx shall
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not be considered a breach of Kelly's obligations hereunder; provided, however,
that such activities comply in all respects with all of the terms and conditions
of this Agreement.
13. COUNTERPARTS
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,
when taken together, will be deemed to constitute one and the same agreement.
14. SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
15. NOTICES
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 written notice to the other parties):
Xxxxx:
Xx. Xxxxxxx X. Xxxxx
000 Xxxxxxx Xxx
Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx, Xxxxxxxxx & XxXxxxx, P.L.L.
Xxxxxx Xxxx Park
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxx, Esq.
Facsimile No.: (000) 000-0000
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CCAi:
Xxxxxx, Xxxxxxxx & Assoc., Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Attention: Xx. Xxxxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxx, Xx., Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Facsimile No.: (000) 000-0000
16. ENTIRE AGREEMENT
This Agreement, the Stock Purchase Agreement and the Ancillary
Agreements (as such term is defined in the Stock Purchase 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 between CCAi and Xxxxx with respect to the subject matter of this
Agreement. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement in Cleveland, Ohio, as of the date first above written.
XXXXXX, XXXXXXXX & ASSOC., INC. XXXXXXX X. XXXXX
By: /s/ Xxxxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Title: Chairman & CEO
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EXHIBIT A
SAP ALLIANCE PARTNERS
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EXHIBIT B
Xxxx Xxxxxxx
Xxxxxxxx XxXxxxxxx
Xxx Xxxxxxxx
Xxxx Xxxx
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EXHIBIT C
X. Xxxxxx
Beltone
Xxxxxxxxx
Xxxxxxx Engines
Xxxxxxx Pan
Getrag
General Motors - (GMO, SIIP, GMAC, GME)
Hercules
X.X. Xxxxxx
Kenna Metal
Kraft Foods - Chicago
Trans Link
U.S. Engineering
Acme Metal - Chicago
AMACO - Chicago
EDS - SBU's
- Automotive/GM
- Acme
- A/X - Xxxxxxx
- Corporate (HR)
- Xxxxx
Rubbermaid
SAP
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