NON-COMPETE AGREEMENT
NON-COMPETE AGREEMENT dated as of December 23, 1996, between Pioneer
Commercial Funding Corp. (the "Company"), a New York corporation having an
office at 0000 Xxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx 00000, and Xxxxxxx Xxxxxxx,
having an office at 0000 Xxxxx Xxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 (the
"Stockholder").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Company is acquiring (the "Acquisition") a 50% common stock
ownership interest in Trans Lending Corporation, a Delaware corporation ("Trans
Lending"); and
WHEREAS, the Acquisition is being made pursuant to the Stock Purchase
Agreement dated as of December 23, 1996, between the Company and Trans Lending
(the "Stock Purchase Agreement"); and
WHEREAS, immediately prior to the Acquisition, the Stockholder will own
a 50% common stock ownership interest in Trans Lending, and immediately after
the Acquisition, the Stockholder will own a 25% common stock ownership interest
in Trans Lending; and
WHEREAS, this Agreement is being entered into pursuant to the Stock
Purchase Agreement in connection with the Acquisition, and the execution and
delivery of this Agreement is a condition precedent to the consummation of the
Acquisition,
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound, the parties hereto agree as follows:
1. Covenant Not to Compete.
(a) In order to induce the Company to consummate the Acquisition,
and in consideration therefor, the Stockholder hereby covenants and agrees that,
subject to the time limitations set forth in paragraph 1(b) below, the
Stockholder, will not, directly or indirectly, during the term of this
Agreement, for himself, or as agent of or on behalf of, or in conjunction with,
any person, firm, corporation or other entity (other than on behalf of Trans
Lending), (i) engage or participate in or become employed by or render advisory
or other services, directly or indirectly, to or for any person, firm,
corporation, partnership, joint venture or other entity which is principally
engaged in the businesses of purchasing purchasing used vehicle loans made to,
or used vehicle leases made with, individuals who are deemed to be
relatively high credit risks ("non-prime credit individuals") by the new and/or
used vehicle dealerships (the "Suppliers") who make such loans and leases
available for purchase by Trans Lending or its Customers (as such term is
hereinafter defined), and/or representing in any capacity any of the customers
of Trans Lending, i.e., the banks, insurance companies, stock brokerage firms
and other financial institutions and other entities (all of whom are
collectively referred to as "Customers") in connection with such Customers'
purchases of used vehicle loans made to, or used vehicle leases made with,
non-prime credit individuals (any of the above-described activities being
hereinafter referred to as a "Competitive Business"), (ii) invest or otherwise
have an interest in or become interested in, as a principal, partner, officer,
director, Stockholder, agent, joint venturer, creditor, guarantor, surety,
investor or otherwise, any such person, firm, corporation, partnership, joint
venture or other entity principally engaged in a Competitive Business, or (iii)
take any action with respect to the Customers who purchase used vehicle loans
made to, or used vehicle leases made with, non-prime credit individuals, and the
Suppliers who provide such loans and leases to Trans Lending which can
reasonably be expected to adversely affect the relationship of Trans Lending
with any of such Customers or Suppliers.
(b) The provisions of paragraph 1(a) above shall be subject to
the following time limitations:
(i) In the event of a Termination for Cause (as defined in
the Employment Agreement dated as of December 23, 1996, between
Trans Lending and the Stockholder (the "Employment Agreement")),
for a three (3) year period commencing on the date of termination
of the Stockholder's employment with Trans Lending (the
"Termination Date");
(ii) In the event of a Voluntary Termination (as defined
in the Employment Agreement), for a three (3) year period
commencing on the Termination Date;
(iii) In the event of a Termination Without Cause (as
defined in the Employment Agreement) (as used herein, such term
shall not include the non-renewal or expiration of the Employment
Agreement), for a two (2) year period commencing on the
Termination Date; or
(iv) In the event of the non-renewal or expiration of the
Employment Agreement, for a one (1) year period commencing on the
expiration of the Employment Agreement;
provided, however, the provisions of paragraph 1(a) hereof shall not be
enforceable
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against the Stockholder unless the Company or Trans Lending shall continue to
pay the Stockholder the the Stockholder's Gross Compensation(1) during whichever
of the foregoing periods of time may be applicable.
(c) The limitations imposed upon the Stockholder pursuant to
paragraph 1(a) hereof shall be applicable in Dade and Broward Counties in the
State of Florida, New York County in the State of New York, Los Angeles County
in the State of California, and at the specific street addresses located
elsewhere in the United States whereat Trans Lending's Customers and Suppliers
are located.
(d) Notwithstanding anything to the contrary contained herein,
the Stockholder may own up to 1% of the capital stock of any entity engaged in
any Competitive Business that is publicly traded on a U.S. national stock
exchange or quotation system (provided that the Stockholder does not control,
directly or indirectly, through one or more entities or groups (whether formal
or informal), the voting or disposition of greater than 1% of the aggregate
beneficial ownership interest of any such entity).
(e) The Stockholder understands that the foregoing restrictions
may limit his ability to earn a livelihood in a business similar to the business
of Trans Lending, but he nevertheless believes that he has received and will
receive sufficient consideration and other benefits pursuant to this Agreement
and the Stock Purchase Agreement and the agreements executed in connection
therewith to clearly justify such restrictions which, in any event (given his
education, skills and ability), the Stockholder does not believe would prevent
him from earning a living.
2. Non-Solicitation. For a period commencing on the date hereof through
and including the third anniversary of the termination or expiration of the
Stockholder's employment with Trans Lending (the "Non-Solicitation Period"), the
Stockholder shall not:
(a) directly or indirectly, in one or a series of transactions,
recruit, solicit or otherwise induce or influence any corporation, partnership,
joint venture or other entity or enterprise, proprietor, partner, Stockholder,
lender, director, officer, employee, consultant, sales agent, joint venturer,
investor, lessor, client (including any prospective client), customer, supplier,
agent, representative or any
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1 Gross Compensation shall mean the aggregate of (i) the annual base
salary which was being paid to the Stockholder immediately prior to the
termination of his employment; and (ii) all bonuses which had accrued to
the Stockholder (whether paid or unpaid) between January 1 of the year in
which his employment shall have terminated and the date immediately preceding
such termination.
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other person which has a business relationship with Trans Lending at any time
during the Non-Solicitation Period, to discontinue, reduce or modify such
employment, agency or business relationship with Trans Lending; or
(b) employ or seek to employ or cause any business to employ any
person who at any time during the Non-Solicitation Period is or was employed or
retained by Trans Lending.
3. Confidential Information. The Stockholder acknowledges that Trans
Lending would be irreparably damaged if any confidential or proprietary
information relating to Trans Lending or the Company or any of their respective
business activities were disclosed to or utilized on behalf of others in a
Competitive Business. Accordingly, except as required by law or in any
litigation or similar proceeding (in which event, the Stockholder shall provide
the Company with prompt notice of such requirement prior to making any such
disclosure, so that the Company may seek an appropriate protective order, or
otherwise cooperate with the Company in making such disclosure), the Stockholder
shall not disclose and shall keep confidential any non-public or proprietary
information relating to Trans Lending or the Company or any of their respective
businesses to any person or entity, nor shall he make use of any such
confidential or proprietary information for the benefit of any person or entity
involved in a Competitive Business. For the purpose of this Section, the term
"confidential or proprietary information" means all information which is known
to the Stockholder and relates to Trans Lending or the Company or any of their
respective businesses and their respective trade secrets, books and records,
financial information and condition, suppliers, customers, marketing and pricing
information, and all other non-public information relating to Trans Lending or
the Company or any of their respective businesses.
4. Severability; Extraordinary Relief: Damages.
(a) It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to reduce the scope of the portion thus adjudicated to
be invalid or unenforceable or delete such portion from such provision, such
reduction or deletion to apply only with respect to the operation of such
provision of this Agreement in the particular jurisdiction in which such
adjudication is made and enforced thereafter.
(b) The Stockholder acknowledges and understands that the
provisions of this Agreement are of a special and unique nature, the loss of
which cannot adequately be compensated for in damages by an action at law and
that the breach of the provisions of this Agreement would cause Trans Lending or
the
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Company irreparable harm. In the event of a breach or threatened breach by
the Stockholder of any provision of this Agreement, Trans Lending or the Company
shall be entitled to an injunction restraining him from such actual or
threatened breach. Nothing contained herein shall be construed as prohibiting
Trans Lending or the Company from pursuing any other remedies (including,
without limitation, an action for damages) available for such actual or
threatened breach of this Agreement, and the pursuit of an injunction or any
other remedy shall not be deemed to be an exclusive election of such remedy. The
Stockholder shall reimburse Trans Lending or the Company for all costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred in connection with the enforcement of this Agreement.
5. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter contained in this
Agreement and supersede all prior agreements or understandings with respect
thereto.
6. Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7. Notices. All notices, claims, requests, demands and other
communication hereunder shall be in writing and sent by facsimile transmission
or by a nationally-recognized overnight courier, delivered personally, or mailed
(by registered or certified mail, return receipt requested and postage prepaid)
as follows:
if to the Stockholder, to:
Xxxxxxx Xxxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax. No. 561-[ ]
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Fax No. 000-000-0000
if to the Company, to:
Pioneer Commercial Funding Corp.
0000 Xxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
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Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Hall Xxxxxxx Xxxx Xxxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. Any such
notice or communication shall be deemed to have been received (a), in the case
of personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of international overnight courier, upon receipt of
confirmation of delivery, (d) in the case of telecopy transmission, when
received and (e) in the case of mailing, on the third business day following
posting.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York, without giving effect to
principles governing conflicts of laws.
9. Benefits of Agreement: Assignment. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties and its
heirs, personal representatives, executors, successors and permitted assigns.
This Agreement shall not be assignable by the Stockholder without the consent of
the Company. The provisions of this Agreement shall inure to the benefit of each
affiliate and subsidiary of the Company and each successor of the Company,
whether by merger, consolidation, transfer of all or substantially all of its
assets or otherwise.
10. Modification. This Agreement shall not be altered or otherwise
amended except pursuant to an instrument in writing signed by each party.
11. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be an original instrument, but all
such counterparts together shall constitute but one agreement.
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12. Waivers. The waiver by any party of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the
date first written above.
PIONEER COMMERCIAL FUNDING CORP.
By:_______________________________________
Xxxxxx X. Xxxxxxxx,
Chairman and Chief Executive
________________________________________
Xxxxxxx Xxxxxxx
