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NONCOMPETITION, NONSOLICITATION
AND NONDISCLOSURE AGREEMENT
This Agreement made as of this 28th day of March, 1996, by and among
MASADA SECURITY, INC., a Delaware corporation ("Masada"), and XXXXXX SENDER, AS
TRUSTEE ("Trustee") for the bankruptcy estates of InterCap Funds Joint Venture,
a Colorado general partnership ("Venture"), Security Data Group of California,
Inc., a California corporation ("SDG"), IMIF IV-C Service Corp., a Colorado
corporation ("Service") (the bankruptcy estates of Venture, SDG, and Service
are collectively referred to as "Sellers").
STATEMENT OF FACTS
A. Masada is purchasing certain security monitoring accounts (the
"Accounts") from the Sellers pursuant to the Asset Purchase and Sale Agreement
dated on or about March 27, 1996 (the "Asset Purchase Agreement"). This
Agreement applies to the customer who is the Account, as well as the Account's
location.
B. In consideration of the execution and delivery of the Asset
Purchase and Sale Agreement and other valuable consideration, 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. The Sellers agree that
they will not, directly or indirectly through affiliates, 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"), during a period from the date hereof to a date which is the
earlier of (i) substantial consummation of any confirmed plan of reorganization
in the Bankruptcy Proceeding (as defined in the Asset Purchase Agreement), or
(ii) three years following the date hereof, but in no event shall such period
expire prior to six months following the date hereof. If contacted by the
Accounts, the Sellers will inform them that the Sellers can no longer provide
the Services to the Accounts. The Sellers agree to do so in a polite manner,
and to refer the Accounts to Masada with a positive recommendation.
2. Noncompetition. The Sellers also agree that for a period of
three (3) 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;
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(c) furnish consultation or advice to any business except
for Masada providing any of the Services to the Accounts;
(d) permit their names to be used in connection with any
business providing any of the Services to the Accounts; or
(e) sell or rent any equipment ancillary or necessary to
any business providing any of the Services to the Accounts.
3. Nondisclosure.
(a) The Sellers acknowledge that they possess certain
confidential, proprietary and trade secret information, materials and business
concepts with respect to the Accounts, including information regarding sales,
maintenance, service and marketing, customer lists and files, accounting data
and methods, operating procedures, pricing policies, strategic plans,
intellectual property, contracts and manufacturer's warranties (collectively,
the "Proprietary Information"). In fact, the Sellers acknowledge that the
Accounts information included on the Schedule 1.1(a) to the Asset Purchase
Agreement (preliminary and final versions) and the Acquired Accounts
Information (as defined in the Asset Purchase Agreement) constitutes
proprietary information. Without limiting the generality of the foregoing,
Sellers acknowledge and agree for themselves and their affiliates that all of
the Proprietary Information is a trade secret and derives independent economic
value, actual or potential, from not being known to the public or other
individuals, corporations, partnerships, limited liability companies, trusts,
associations and other entities who or which can obtain economic value from its
disclosure or use, and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy, the applicable provisions of this
Agreement being an example of such efforts.
(b) The Sellers agree (i) never to publish, copy,
disclose, allow to be disclosed, or use for their own benefit or for the
benefit of any other person, firm, corporation or entity the Proprietary
Information and (ii) to maintain strictly the confidentiality of the
Proprietary Information at all times. The Sellers agree to take all necessary
precautions to protect the Proprietary Information from unauthorized disclosure
or use.
(c) In addition, the Sellers agree to deliver to Masada
on the date of this Agreement all of the Proprietary Information in their
possession.
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 the Sellers, without which such transactions will not close;
(c) the scope of this Agreement regarding duration and
the level of activities restricted is reasonable;
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(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 48 times the RMR (as defined in the
Asset Purchase Agreement) 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, without the need to post a bond or other security to
restrain any such failure or refusal. 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 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 hereby irrevocably consent and submit to the jurisdiction and venue
of any of the courts of the State of Colorado or of any federal court located
in Colorado. 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:
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IF TO MASADA AT: WITH COPY TO:
Masada Security, Inc. Xxxx & Xxxxxx
000 00xx Xxxxxx Xxxxx, Xxxxx 000 000 Xxxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000 Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx Attention: W. Xxx Xxxxxxx, Esq.
FACSIMILE: 0-000-000-0000 FACSIMILE: (000) 000-0000
IF TO SELLERS AT: WITH COPY TO:
Xxxxxx Sender, Trustee Holland & Xxxx, LLP
Katch, Sender & Xxxxxxxxx, P.C. 000 00xx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxx, Xxxxx 0000 Xxxxxx, Xxxxxxxx 00000-0000
Xxxxxx, Xxxxxxxx 00000 Attention: Xxxx Xxxxx Xxxxxxx, Esq.
FACSIMILE: (000) 000-0000 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.
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 successors and assigns of the Sellers.
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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 Colorado 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 this event Masada must go to court to enforce 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.
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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Its: Vice President
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/s/ Xxxxxx Sender
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XXXXXX SENDER, AS TRUSTEE for the Bankruptcy
Estates of (i) InterCap Funds Joint Venture,
(ii) Security Data Group of California, Inc.
and (iii) IMIF IV-C Service Corp.
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