THIS NON-COMPETITION AGREEMENT
is made as of the 19th day of November, 1996.
BETWEEN:
RH MORTUARY CORPORATION f/k/a ROSES, INC., a corporation
incorporated under the laws of the State of California, or its
nominee,
(the "Covenantee")
OF THE FIRST PART
AND:
XXXXX X. XXXXX, an individual residing at
000 Xxxxx Xxxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxxxx
(the "Covenantor")
OF THE SECOND PART
WHEREAS:
A. The Covenantee has completed a merger transaction with RH
Mortuary Corporation, a Delaware corporation ("Mortuary"), pursuant to an
Agreement and Plan of Merger dated September 19, 1996, as amended (the "Merger
Agreement"), among Roses, Inc, its stockholders and Mortuary, as assignee of all
right, title and interest of Rose Hills Acquisition Corp. f/k/a Tudor
Acquisition Corp. under the Merger Agreement; and
B. As a condition of the Merger Agreement, the Covenantor has
agreed to grant to the Covenantee a covenant not to compete with the Covenantee
("Covenant") in accordance with the terms of this Agreement.
IN CONSIDERATION of the premises and of the mutual covenants,
agreements, representations, warranties, benefits and obligations contained in
this Agreement, and of other good and valuable consideration (the receipt and
sufficiency of which being hereby acknowledged), the parties hereto agree as
follows in accordance with Section 1160 of the California Business and
Professional Code:
1. The Covenantor hereby covenants with the Covenantee that from
the date hereof until five (5) years from the closing date as more particularly
described in the Merger Agreement ("Closing Date"), the Covenantor shall not
(except as otherwise specifically permitted herein), directly or indirectly, for
the Covenantor's own account, or as a partner, member, employee, advisor or
agent of any partnership or joint venture, or as a trustee, officer, director,
shareholder, employee, advisor or agent of any corporation, trust, or other
business organization or entity, own, manage, join, participate in, encourage,
support, finance, be engaged in, have an interest in, give financial assistance
or advice to, permit the
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Covenantor's name to be used in connection with or be concerned in any way in
the ownership, management, operation or control of, or be connected in any
manner with any business which is or may be in the funeral, mortuary, crematory,
cemetery, ambulance, burial or funeral or cemetery insurance business (including
pre-arrangement or pre-need), or any business related to any of the foregoing,
within a 50 mile air radius of the present location of Rose Hills Memorial Park
in Whittier, California.
2. As consideration for the Covenant, the Covenantee will pay to
the Covenantor the aggregate sum of USD $766,000. Such amount shall be paid in
quarterly installments, each due and payable on the last day of each calendar
quarter commencing March 31, 1997 and ending December 31, 1999, as follows:
1997 1998 1999
------------------ ------------------ ------------------
Quarterly installment payment
due on each of March 31, June
30, Sept. 30 and Dec. 31............................... $65,000 $77,500 $49,000
x 4 x 4 x 4
------------------ ------------------ ------------------
$260,000 $310,000 $196,000
Total Payments ($260,000 + $310,000 + $196,000) = $766,000
========
3. In the event the Covenantee believes the Covenantor has
breached or threatened to breach the Covenant, the Covenantee shall provide the
Covenantor with written notice detailing what it believes to be the breach. In
the event that the Covenantor's breach of the Covenant is, in the reasonable
judgment of the Covenantee, not material (the "Incidental Breach") and is, in
the reasonable judgment of the Covenantee, capable of being remedied, the
Covenantee shall provide Covenantor with written notice detailing the
Incidental Breach and permitting Covenantor to cure such breach within five
days of receipt of notice. If the breach is cured to the reasonable
satisfaction of the Covenantee within five days thereafter, and the Covenantee
receives reasonable assurances from Covenantor that no other breaches of the
Covenant are likely to occur, such breach by Covenantor shall be deemed cured.
4. The parties agree that the remedy of the Covenantee at law
for any actual or threatened breach of this Agreement by the Covenantor would
be inadequate and that, in the event of such actual or threatened breach, in
addition to any other remedy available to it, the Covenantee shall be entitled
to specific performance hereof, injunctive relief, or both, by temporary or
permanent injunction or other appropriate judicial remedy, writ or order.
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5. In the event that the Covenantor breaches the Covenant in any
material respect set forth herein or if the Covenantor fails to cure an
Incidental Breach of the Covenant, in addition to any other remedy available to
it, the Covenantee may claim for a return of a portion of any amount previously
paid for the Covenant pursuant to Section 1 hereof.
6. The remedies provided for in this Agreement are non-exclusive
and are in addition to each other and to any other remedy available elsewhere
in this Agreement or available generally at law or in equity.
7. The Covenantor acknowledges that the Covenantee is entering
into this Agreement and the related Merger Agreement in reliance upon this
Covenant. The Covenantor further acknowledges and agrees that the Covenant is
necessary and fundamental to the business of the Covenantee in the State of
California, is not contrary to the public interest, and may be assigned by the
Covenantee in the event that the Covenantee sells or otherwise disposes of its
business, or mergers with or is acquired by another entity. All defenses to the
strict enforcement of such restrictions are waived by the Covenantor.
8. If any portion of this Covenant is held to be unreasonable,
arbitrary or against public policy, the provisions of this Agreement shall be
considered divisible both as to time and as to geographical areas; and each
month of each year of the specified period shall be deemed to be a separate
period of time. In the event any court determines the specified time period or
geographical area to be unreasonable, arbitrary or against public policy, the
lesser time period or geographical area which is determined to be reasonable,
non-arbitrary and not against public policy may be enforced. Notwithstanding
the foregoing, the Covenantor agrees to honor the terms of this Covenant for
the time periods and areas specified herein and not to contest the
enforceability of such periods or areas.
9. Notwithstanding any language to the contrary contained in
this Agreement, it shall be permissible for the Covenantor to own stock or
securities of any company which may be deemed competitive with the Covenantee
providing such shares or securities held by the Covenantor are issued by a
company listed on a national securities exchange or the NASDAQ Automated
Quotation System and Covenantor owns less than a one (1%) percent interest
thereof.
10. If any of the covenants, capacities, activities, periods or
areas specified in this Covenant are considered unreasonable by a Court of
competent jurisdiction, the parties agree that the Court will have authority to
limit such covenants, capacities, activities, periods or areas to that which
the Court deems proper in the circumstances.
11. This Agreement will be deemed to be a contract made under
the laws of the State of California, and for all purposes will be
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governed by and interpreted in accordance with the laws prevailing in the State
of California, without regard to principles of conflict of laws.
12. This Agreement will enure to the benefit of and be
binding upon the parties and their respective heirs, executors,
administrators, successors and assigns.
13. This Agreement is subject to the due completion of the
Merger Agreement. In the event such closing does not occur, this
Agreement shall be void.
14. The Covenantee shall be permitted, without notice or
consent of the Covenantor, to assign all of its rights, duties and
obligations under this Agreement.
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EXECUTED as of the day and year first above written.
RH MORTUARY CORPORATION,
a California corporation
BY:
__________________________________
SIGNED by the Covenantor )
in the presence of: )
)
______________________________)
Signature )
) __________________________
______________________________)
Name )
)
______________________________)
Address )
)
______________________________)
)
______________________________)
)
Occupation )
