NON-COMPETITION AND NON-SOLICITATION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as
of the 18th day of December, 1998 (the "Effective Date"), by and
between COSI Acquisition Corp. (the "Company"), a Delaware corporation
and a wholly-owned subsidiary of Computer Outsourcing Services, Inc.
("Parent"), and Xxxxxx X. Xxxxxx (the "Stockholder").
W I T N E S S E T H :
WHEREAS, the Company, Parent, Enterprise Technology Group,
Incorporated, a New Jersey corporation ("ETG"), and each
stockholder of ETG are parties to an Asset Purchase Agreement
(the "Asset Purchase Agreement"), dated December 16, 1998, which
provides for, among other things, the sale of assets by ETG to
the Company; and
WHEREAS, in order to induce the Company to enter into the
Asset Purchase Agreement and consummate the transactions
contemplated thereby, the Stockholder is entering into this
Agreement.
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the adequacy and receipt of which are hereby
acknowledged, the parties agree as follows:
1. Consideration. The Stockholder acknowledges that he
is entering into this Agreement in order to induce the Company to
enter into the Asset Purchase Agreement.
2. Non-Competition; Non-Solicitation.
2.1 The Stockholder agrees that for a period commencing on
the Effective Date and concluding on the second anniversary of
the earlier of (x) the date the Third-Post Closing Adjustment (as
defined in the Asset Purchase Agreement), if any, is paid to the
Stockholders and (y) January 31, 2002, the Stockholder shall not
(except on behalf of the Company or any of its affiliates as an
employee or consultant), directly or indirectly, either alone or
with others, as principal, manager, agent, consultant, officer,
director, partner, investor, lender, sublessor, guarantor or
employee, or in any other capacity, carry on, be engaged in, be
employed by, or have any interest or otherwise be connected or
affiliated or associated with any corporation, partnership,
limited liability company or partnership, proprietorship, firm,
association or other entity, now or at such time, which is
engaged in any manner or otherwise with any business activity
competitive with the business of the Company as currently
conducted or any of its affiliates with respect to the Business
(individually, a "Company Affiliate" and collectively, the
"Company Affiliates"). For purposes of this Section 2, a person
or entity which is "in competition with the business of the
Company or any Company Affiliate with respect to the Business"
shall mean an entity which conducts the business of information
services consulting as currently conducted by ETG or as conducted
at any time while Xxxxxx Xxxxxx is employed by the Company.
2.2 The Stockholder agrees that for a period commencing on
the Effective Date and concluding on the second anniversary of
the earlier of (x) the date the Third-Post Closing Adjustment, if
any, is paid to the Stockholders and (y) January 31, 2002, the
Stockholder shall not on his behalf or on behalf of any person
(other than Xxxxxxxxx Xxxxx) or entity directly or indirectly,
solicit, place or recruit (x) any employee who has been employed
by the Company or any Company Affiliate, at any time, (y) any
person or entity who is a client, customer or potential customer
of the Company, any Company Affiliate or ETG (other than
customers currently doing business with Unclaimed Property
Recovery Reporting) or (z) any supplier, lender, lessor or any
other person or entity which has a business relationship with the
Company or any Company Affiliate, with a view to influencing or
inducing such employee, client or customer to terminate or
materially lessen his, her or its relationship with the Company
or any Company Affiliate, or to develop relationships with the
Stockholder or any person that would have the same effect.
2.3 Anything to the contrary herein notwithstanding, the
provisions of this Section 2 shall not be deemed violated by the
purchase and/or ownership by the Stockholder of shares of any
class of equity securities (or options, warrants or rights to
acquire such securities, or any securities convertible into such
securities) representing (together with any securities which
would be acquired upon the exercise of any such options, warrants
or rights or upon the conversion of any other security
convertible into such securities) three percent (3%) or less of
the outstanding shares of any such class of equity securities of
any issuer, which is engaged in any business activity competitive
with the business of the Company or any Company Affiliate, whose
securities are traded on a national securities exchange or listed
by the Nasdaq Stock Market, the National Quotation Bureau
Incorporated or any similar organization; provided, however, that
the Stockholder shall not be otherwise connected with or active
in the business of such issuers.
2.4 The Stockholder and the Company agree that the
provisions of this Section 2 (i) are independent of any and all
other covenants or agreements between the Stockholder and the
Company and (ii) shall remain enforceable regardless of any claim
or determination with respect to, or breach of, any other
agreement between the Stockholder and the Company.
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3. Remedy For Breach. The Stockholder hereby acknowledges
that in the event of any breach or threatened breach by him of
any of the provisions of this Agreement, the Company and the
Company Affiliates would have no adequate remedy at law and would
suffer substantial and irreparable damage. Accordingly, the
Stockholder hereby agrees that, in such event, the Company and
the Company Affiliates shall be entitled, without the necessity
of proving damages or posting bond, and notwithstanding any
election by the Company and such Company Affiliates to claim
damages, to obtain a temporary and/or permanent injunction
(without proving a breach therefor) to restrain any such breach
or threatened breach or to obtain specific performance of any
such provisions, all without prejudice to any and all other
remedies which the Company and the Company Affiliates may have at
law or in equity.
4. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of
the terms and provisions of this Agreement in any other
jurisdiction. The Stockholder and the Company agree that the
provisions set forth herein are reasonable under the
circumstances, and further agree that if in the opinion of any
court of competent jurisdiction any provision herein is
determined to be excessively broad as to duration, activity,
subject or otherwise incompatible with applicable law, said court
is authorized and requested to modify such provision so as to
cause it to be not excessively broad or incompatible with
applicable law, and to enforce such provision as modified.
5. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
given if delivered personally or sent by facsimile transmission,
overnight courier, or certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission (provided
that a confirmation copy is sent by overnight courier), one day
after deposit with an overnight courier, or if mailed, five (5)
days after the date of deposit in the United States mails, as
follows:
If to the Company, to:
COSI Acquisition Corp.
0 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Fax No.: (000) 000-0000
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If to the Stockholder, to:
Xx. Xxxxxx X. Xxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
6. Entire Agreement. This Agreement contains the entire
agreement between the parties hereto with respect to the subject
matter contained herein and supersedes all prior agreements or
understandings with respect to the subject matter hereof;
provided, however that to the extent restrictive covenants
similar to those set forth in this Agreement are contained in
another agreement, each such provision shall be given independent
effect and the provisions of this Agreement related to such
subject matter shall not invalidate or supersede any provision
set forth in any other agreement but all provisions shall be read
together and shall be enforceable to the fullest extent of the
law.
7. Binding Effect; Third Party Beneficiaries. Except as
otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of the Company and its successors and
assigns and upon the Stockholder. "Successors and assigns" shall
mean, in the case of the Company, any successor pursuant to a
merger, consolidation, or sale, or other transfer of all or
substantially all of the assets of the Company. The parties
hereto agree that the Company Affiliates are third party
beneficiaries of the obligations of the Stockholder contained in
this Agreement and shall be entitled to enforce the provisions
thereof as if each were a party to this Agreement.
8. Assignment. Other than as provided in Section 7
hereof, this Agreement shall not be assignable or otherwise
transferable.
9. Amendment or Modification; Waiver. No provision of
this Agreement may be amended or waived unless such amendment or
waiver is agreed to in writing, signed by the Stockholder and by
an officer of the Company thereunto duly authorized. Except as
otherwise specifically provided in this Agreement, no waiver by
either party hereto of any breach by the other party hereto of
any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or at any prior or
subsequent time.
9. Governing Law; Forum; Process. This Agreement shall be
construed in accordance with, and governed by, the laws of the
State of New York as applied to contracts made and to be
performed entirely in the State of New York without regard to
principles of conflicts of law. Each of the parties hereto
hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any court of the State of New Jersey or any
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federal court sitting in the State of New Jersey for purposes of
any suit, action or other proceeding arising out of this
Agreement (and agrees not to commence any action, suit or
proceedings relating hereto except in such courts). Each of the
parties hereto agrees that service of any process, summons,
notice or document by U.S. registered mail at its address set
forth herein shall be effective service of process for any
action, suit or proceeding brought against it in any such court.
Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement, which is brought by
or against it, in the courts of the State of New Jersey or any
federal court sitting in the State of New Jersey and hereby
further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum.
10. Titles. Titles to the Sections and subsections in this
Agreement are intended solely for convenience and no provision of
this Agreement is to be construed by reference to the title of
any Section.
11. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original,
but all of which, when taken together, shall constitute one and
the same agreement. It shall not be necessary for each party to
sign each counterpart so long as each party has signed at least
one counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
COSI ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
President
/s/ Xxxxxx X. Xxxxx
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Stockholder
