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EXHIBIT 10.9
TERMINATION AND NON-COMPETITION
AGREEMENT
This TERMINATION AND NON-COMPETITION AGREEMENT (the "Agreement") is
made this 7th day of August, 1998 by and among Cendant Corporation ("Cendant"),
Xxxxxxx X. Xxxx Xx. ("Xx. Xxxx"), Xxxxxxx X. Xxxxx ("Xx. Xxxxx") and Private
Business, Inc. (the "Company"). All references to "Cendant" or the "Company"
herein shall include all entities directly or indirectly controlled by such
party through an ownership of fifty percent (50%) or more of the voting
interests of such controlled entity.
WHEREAS, the parties to this Agreement have entered into a Stock
Purchase Agreement, dated as of July 24, 1998 (the "Purchase Agreement"), by and
among the Company, the Selling Stockholders named therein and the Investors
named therein; and
WHEREAS, the execution of this Agreement is an inducement and a
condition precedent to the consummation of the transactions contemplated by the
Purchase Agreement.
NOW, THEREFORE, in consideration of the premises, as an inducement to
the consummation of the transactions contemplated by the Purchase Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Termination. The right of first refusal conferred to Cendant in Exhibit B to
the Agreement dated as of January 10, 1995 (the "Right of Refusal Agreement") by
and among Cendant and Xx. Xxxx with respect to securities of the Company
regardless of the holder thereof is hereby terminated in its entirety and shall
have no further force or effect from and as of the date hereof. Any such
securities are hereby expressly released from such right of first refusal and
any other restrictions resulting from the Right of Refusal Agreement.
2. Non-Compete Covenants by Cendant. Cendant hereby agrees that during the
period commencing on the date hereof and ending on the date which is the third
anniversary of the date hereof (the "Non-Compete Period"), it will not, without
the express written consent of the Company, directly or indirectly, engage in
the business of offering services or products related to the purchase or
financing of merchant receivables similar to those services or products
currently offered by the Company; provided that the provisions of this Section 2
shall not prohibit Cendant from having legal or equitable ownership of not more
than five percent (5%) of any class of debt or equity security in a company
(other than Banking Solutions, Inc. and Towne Services, Inc.) (i) that has
revenues attributable to such competitive business that constitute less than
twenty-five (25%) of the total revenues of such company and (ii) with respect to
which Cendant does not have the contractual right to nominate or appoint a
member or members of the board of directors or consult with or advise
management.
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3. Non-Compete Covenants by Xx. Xxxxx. Xx. Xxxxx, for so long as he shall remain
an employee or director of, or paid consultant to, Cendant, hereby agrees that
during the Non-Compete Period, he will not, without the express written consent
of the Company, directly or indirectly, engage in the business of offering
services or products related to the purchase or financing of merchant
receivables similar to those services or products currently offered by the
Company. Xx. Xxxxx hereby further agrees that the Non-Competition Agreement
attached hereto as Exhibit A shall become effective at such time as he is no
longer an employee or director of, or paid consultant to, Cendant.
4. Non-Compete Covenants by the Company. The Company hereby agrees that during
the Non-Compete Period, it will not, without the express written consent of
Cendant, directly or indirectly, engage in the business of (i) offering services
or products similar to the checking account packages for individual checking
account holders offered by the FISI*Madison Financial subsidiary of Cendant or
(ii) offering services or products related to the sale to individual consumers
of accidental death and dismemberment (AD&D) insurance coverage; provided that
the provisions of this Section 4 shall not prohibit the Company from having
legal or equitable ownership of not more than five percent (5%) of any class of
debt or equity security in a company (i) that has revenues attributable to such
competitive business that constitute less than twenty-five (25%) of the total
revenues of such company and (ii) with respect to which the Company does not
have the contractual right to nominate or appoint a member or members of the
board of directors or consult with or advise management.
5. Confidentiality.
a. Restricted Use: Maintenance of Confidentiality. Cendant shall use all
Confidential Information (as defined below) solely for the purpose of
monitoring its investment in the Company as described in the Purchase
Agreement, and for no other purpose. Cendant shall keep all
Confidential Information secret and confidential and shall not
disclose it to anyone except to a limited group of its own employees,
directors and outside professional advisors who agree to be bound by
this Agreement. Each person to whom such Confidential Information is
disclosed shall be advised of its confidential nature and of the terms
of this Agreement and, unless already bound by obligations of
confidentiality sufficient to protect the interests of the Company as
contemplated hereby, must agree to abide by the terms hereof. In any
event, Cendant agrees to be responsible for any damage, loss, cost or
liability (including legal fees) arising out of any breach of this
Agreement by Cendant or its employees, agents and representatives and
will take all reasonable measures to prevent its employees, agents and
representatives from prohibited or unauthorized use or disclosure of
Confidential Information.
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b. Confidential Information. "Confidential Information" shall include
financial, marketing, organizational, technical, business process,
client and other information related to the Company which is provided
to Cendant by the Company in written form or transferred orally,
visually, electronically or by any other means, as well as any
compilations, interpretations, analyses and summaries thereof that
Cendant or its employees, agents and advisors may prepare. Neither
Cendant nor any of its directors, employees, agents or representatives
will use any of the Confidential Information with respect to, or in
furtherance of, its business, any of their respective businesses, or
in the business of anyone else. Confidential Information shall not be
deemed to include any information which Cendant can demonstrate was
publicly available prior to its receipt thereof or thereafter became
publicly available other than from Cendant's disclosure. Information
shall be deemed "publicly available" if it becomes a matter of public
knowledge or is contained in materials available to the public or is
obtained from any source other than the Company (or its directors,
officers, employees or outside advisors); provided that such source
(i) has not entered into a confidentiality agreement with the Company
with respect to such information, (ii) is not otherwise prohibited
from transferring the information to Cendant by a contractual, legal
or fiduciary obligation, and (iii) has not obtained the information
from all entity or person having such a confidentiality obligation.
C. Compelled Disclosure. In the event that Cendant or any other person
who received Confidential Information from Cendant in accordance with
this Agreement becomes legally compelled to disclose any of the
Confidential Information, Cendant will provide the Company with prompt
notice so that the Company may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. In the event that the Company is unable to obtain a
protective order or other appropriate remedy, Cendant will furnish
only that portion of the Confidential Information which it is advised
by counsel is legally required and Cendant will exercise its
reasonable efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded to the
Confidential Information so disclosed.
6. Third Party Beneficiaries. Each of the parties hereby acknowledges and
agrees that (i) the Xxxxxxx X. Xxxx Xx. Annuity Trust, the Xxxxxxx X. Xxxxxxx
Annuity Trust, Xxxxxxx X. Xxxxxxx and any other transferee of Xx. Xxxx and
(ii) TA Associates, Inc. and Summit Partners, LLC and their respective
affiliates, successors and assigns are intended third party beneficiaries of
Section 1 of this Agreement.
7. Scope of Agreement. The parties acknowledge that the time, scope and other
provisions of this Agreement have been specifically negotiated by sophisticated
commercial parties and agree that (a) all such provisions are reasonable under
the circumstances of the
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transactions contemplated hereby, (b) are given as an integral and essential
part of the transactions contemplated hereby and (c) but for the covenants of
contained in this Agreement, the Investors would not have entered into or
consummated the transactions contemplated under the Purchase Agreement. Each of
the parties hereto has independently consulted with its or his counsel and has
been advised in all respects concerning the reasonableness and proprietary of
the covenants contained herein and represents that the Agreement is intended to
be, and shall be, fully enforceable and effective in accordance with its terms.
8. Certain Remedies; Severability. Each of the parties understands and agrees
that monetary damages would not be a sufficient remedy for any breach of this
Agreement by any party hereto, and that the non-breaching party and its agents
and representatives shall be entitled to specific performance and/or injunctive
relief as a remedy for any such breach. Such remedy shall not be deemed to be
the exclusive remedy for any such breach of this Agreement but shall be in
addition to all other remedies available at law or in equity. Each of the
parties further agrees that no failure or delay by any party in exercising any
right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
under this Agreement. In the event that any covenant contained in this Agreement
shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its extending for too great a period of time or by reason of its
being too extensive in any other respect, it shall be interpreted to extend only
over the maximum period of time for which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. The existence of any claim or cause of
action which a party may have against any other party (or beneficiaries) hereto
shall not constitute a defense or bar to the enforcement of any of the
provisions of this Agreement.
9. Jurisdiction. The parties hereby irrevocably submit to the non-exclusive
jurisdiction of the courts of the State of Tennessee to construe and enforce
the covenants contained in this Agreement. In the event that the courts of any
state shall hold such covenants unenforceable (in whole or in part) by reason of
the breadth of such scope or otherwise, it is the intention of the parties
hereto that such determination shall not bar or in any way affect the right of a
party to the relief provided for herein in the courts of any other state within
the geographic scope of such covenants, as to breaches of such covenants in
such other respective states, the above covenants as they relate to each state
being, for this purpose, severable into diverse and independent covenants.
10. Notices. All notices, requests, demands and other communications hereunder
shall be deemed to have been duly given, delivered and received if delivered or
sent in accordance with Section 10.6 of the Purchase Agreement.
11. Miscellaneous. This Agreement shall be governed by and construed under the
laws of the State of Tennessee, and shall not he modified or discharged in whole
or in part except by an agreement in writing signed by the parties hereto. The
prevailing party in any controversy
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hereunder shall be entitled to reasonable attorneys' fees and expenses. The
failure of any of the parties to require the performance of a term or obligation
or to exercise any right under this Agreement or the waiver of any breach
hereunder shall not prevent subsequent enforcement of such term or obligation or
exercise of such right or the enforcement at any time of any other right
hereunder or be deemed a waiver of any subsequent breach of the provision so
breached, or of any other breach hereunder. This Agreement shall inure to the
benefit of, and be binding upon, successors of the Company and Cendant by way of
merger, consolidation, sale of stock or transfer of substantially all of the
assets of the Company or Cendant, respectively. This Agreement supersedes all
prior understandings and agreements between the parties relating to the subject
matter hereof (including, without limitation, the provisions of the
Confidentiality and Nonsolicitation Agreement dated as of April 15, 1998 between
the Company and Cendant).
12. Headings. The headings used or contained in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
13. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signing parties had signed the
same document. All counterparts shall be construed together and shall constitute
the same instrument.
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IN WITNESS WHEREOF, the parties to this Agreement have caused their
respective names to be hereunto subscribed by their respective officer thereunto
duty authorized as of the date first above written.
PRIVATE BUSINESS, INC.
By: /s/ Xxxxx Cover
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Name: Xxxxx Cover
Title: President
CENDANT CORPORATION
By: /s/
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Name:
Title: Executive Vice President
/s/ Xxxxxxx X. Xxxx Xx.
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Xxxxxxx X. Xxxx Xx.
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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