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Exhibit 10.24
COVENANT NOT TO COMPETE
This Covenant Not To Compete (the "Agreement"), dated as of May 12,
1998, by and between ZAI*NET SOFTWARE, L.P., a Delaware limited partnership
(the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Covenantor"), is to evidence the
following agreements and understandings. Capitalized terms used herein have
the respective meanings in the Purchase Agreement (as hereinafter defined)
unless otherwise specified herein.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Assignment and Assumption Agreement
dated as of the date hereof (the "Assignment Agreement"), and that certain
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
among the Company, GFI Caminus LLC, a Delaware limited liability company ("GFI
Caminus"), ZAI*NET Software, Inc., a Delaware corporation ("ZAI*NET"), and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and the transactions related thereto and contemplated thereby
(collectively the "Purchase"), (a) ZAI*NET transferred substantially all of its
assets (including goodwill) to the Company, and (b) GFI Caminus has purchased a
seventy-one percent (71%) ownership interest (the "Ownership Interest") in the
Company;
WHEREAS, in connection with the Purchase, Covenantor is, in effect,
selling and transferring all of his right, title and interest in the
intellectual property and goodwill of ZAI*NET to the Company for substantial
consideration;
WHEREAS, by agreeing to enter into the Purchase Agreement and
consummate the transactions contemplated therein, GFI Caminus desires and is
seeking to acquire an equity ownership interest in the intellectual property,
goodwill and going concern value of the Company and if Covenantor were able to
compete with Company in any manner or engage in any other activities that are
hereinafter proscribed, then GFI Caminus would be deprived of a substantial
portion of the value sought to be obtained through the Purchase;
WHEREAS, the Company is in the business of developing, licensing,
installing and maintaining commodities trading and risk management software and
providing consulting and support services substantially related to such
software activities to the foreign exchange, natural gas, crude oil, refined
products and electric power industries (collectively, the "Company Business");
WHEREAS, the Covenantor is one of the founders of the Company and
ZAI*NET and has substantial knowledge of, and access and exposure to the
Company Business, including but not limited to intellectual property,
confidential and proprietary information of the Company;
WHEREAS, Covenantor must enter into this Agreement and the Employment
Agreement, dated as of even date herewith (the "Employment Agreement"), as a
condition precedent to GFI Caminus's execution of the Purchase Agreement;
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NOW, THEREFORE, in consideration of the mutual promises, covenants,
agreements, representations and warranties hereinafter set forth and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
is hereby acknowledged, all subject to the completion of the closing of the
Purchase, the parties hereto agree as follows:
1. Agreement Not to Compete.
1.1 Noncompetition. As a condition to the transactions
being completed pursuant to the Purchase Agreement, and as a means reasonably
designed to protect the intellectual property, confidential and proprietary
information of the Company, for a period consisting of the greater of (i) three
and one-half (3-1/2) years from the date hereof or (ii) two (2) years from the
conclusion of Covenantor's employment with the Company as a result of the
termination of the Employment Agreement or otherwise (such greater period the
"Term"), Covenantor will not, without the prior written consent of the Company
based upon approval from the Management Committee of the Company (or any
similar successor management body of the Company or any successor entity of the
Company), in the Geographical Area, directly or indirectly, engage in, assist
(financially or otherwise), associate with, or perform services (other than on
behalf of the Company or any of its Affiliates) in the Company Business,
including, without limitation, whether such engagement, assistance, association
or performance is as an individual, principal, officer, director, proprietor,
employee, partner, stockholder or other investor (other than as a holder of
less than five percent (5%) of the outstanding capital stock of a publicly
traded corporation), creditor, guarantor, consultant, advisor, agent, sales
representative or other participant, or otherwise permit his name to be used or
employed with any such Company Business. For purposes of this Agreement, (i)
"Affiliate" shall mean any person, partnership, limited liability company,
joint venture, trust, corporation or other entity, directly or indirectly,
controlling, controlled by or under common control with such person,
partnership, limited liability company, joint venture, trust, corporation or
other entity; and (ii) "Geographical Area" shall mean the world.
1.2 Reasonable Restrictions. Covenantor hereby
represents and acknowledges that: the restrictions stated herein on the
activities in which Covenantor may engage upon termination of his employment
with the Company are reasonable and that, despite such restrictions, Covenantor
will be able to earn his livelihood and engage in his profession following said
termination; the worldwide restriction is reasonable because the Company
presently does business or did business, or has a bona fide plan of doing
business during the Term, throughout the world; and the period of time
designated above is reasonable in relation to the nature of the Company's
business.
2. Non-Interference. During the Term, Covenantor will not,
without the prior written consent of the Company, directly, indirectly or as an
agent on behalf of or in conjunction with any person, firm, partnership,
corporation or other entity, (a) hire, solicit, encourage the resignation of,
or in any other manner seek to engage or employ any person (other than ▇▇▇▇▇▇▇
▇▇▇▇▇) who is then, or within the prior twelve (12) months had been, an
employee of the Company or its Affiliates, whether or not for compensation and
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whether as an officer, covenantor, consultant, adviser, independent sales
representative, independent contractor or participant, or (b) except as may be
appropriate to perform Covenantor's duties under the Employment Agreement,
contact, solicit, service or otherwise have any dealings related to Company
Business with any person or entity with whom the Company or its Affiliates has
a former, current or prospective business relationship or who is or was at any
time during his employment with the Company (including any predecessor or
successor entity) a customer or client of the Company or its Affiliates, or a
prospective customer or client to which the Company or its Affiliates has made
a written or oral business proposal.
3. Future Employment. Nothing contained herein shall prevent
Covenantor from, during the Term seeking employment with or, after the
termination of Covenantor's employment with the Company becoming employed by a
utility, financial services company or other firm, provided that Covenantor's
responsibilities in connection with such employment do not involve, directly or
indirectly, activities related to any aspect of the Company Business.
4. Confidentiality. Covenantor agrees not to disclose, use,
transfer or sell any intellectual property, confidential or proprietary
information of the Company, whether Covenantor has such information in his
memory or embodied in writing or other physical form, unless such activities
are on behalf of and expressly authorized by the Company. For purposes of this
Agreement, the phrase "intellectual property, confidential or proprietary
information of the Company" means all information which is known or intended to
be known only to employees of the Company or others in a confidential
relationship with any of them, including, without limitation, that which
relates to marketing or brand recognition matters, such as logos, tradenames,
service names, and trademarks, or to technical matters, such as patents,
programs, components, devices, formulae, testing procedures, processes,
computer software and graphics products of the Company or any Affiliate, or to
business matters such as the identity of clients, customers or business
partners or terms of business relationships with clients, customers or business
partners. Notwithstanding the foregoing, the term "intellectual property,
confidential or proprietary information" of the Company shall not include
information which (i) is, at the time of the disclosure, a part of the public
domain through no act or omission by Covenantor, (ii) known to the Covenantor
prior to the time of disclosure by the Covenantor, provided that the
information was not obtained by the Covenantor in the course of rendering
services to the Company or any predecessor entity or (iii) is hereafter
disclosed to Covenantor by a third party who or which did not acquire the
information under an obligation of confidentiality to or through the Company or
any predecessor entity. Covenantor agrees not to remove from the premises of
the Company, any intellectual property, confidential or proprietary information
of the Company, except as permitted by the Company and except for Covenantor's
personal rolodex and other personal belongings and files that do not contain
intellectual property, confidential or proprietary information related to the
Company Business. Covenantor recognizes that all such intellectual property,
confidential or proprietary information of the Company, are the exclusive
property of the Company. Covenantor agrees to return to the Company all
written materials in his possession containing or reflecting intellectual
property, confidential or proprietary information of the Company promptly
following the cessation
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of any service relationship with the Company, except for Covenantor's personal
rolodex and other personal belongings and files that do not contain
intellectual property, confidential or proprietary information related to the
Company Business. Covenantor agrees that the restrictions contained in this
Section 4 shall continue to apply without time or geographic restrictions, so
long as any information remains intellectual property, confidential or
proprietary information of the Company.
5. Consideration. Covenantor agrees and acknowledges that the
value to be derived by him from the transactions contemplated by the Purchase
Agreement and the consideration payable to him pursuant to the Employment
Agreement constitute substantial value and shall serve as exclusive
consideration for his agreements set forth in this Agreement, and that no
additional consideration is payable or necessary in connection therewith.
6. Miscellaneous.
6.1 Entire Agreement; Amendments. This Agreement and any
document referred to herein sets forth the entire understanding of the parties
relating to the subject matter hereof and supersedes all agreements,
representations, warranties, statements, promises and understandings, with
respect to the subject matter hereof. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Company and Employee. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior os subsequent such
occurrence.
6.2 Arbitration. Subject to Section 6.4 hereof, and
except as otherwise required by law, any claim or controversy arising out of or
relating to the performance of this Agreement shall be settled by arbitration
in New York City, New York in accordance with the Commercial Arbitration Rules
of the American Arbitration Association then in effect. Such claim or
controversy shall be resolved by a three (3) arbitrator panel selected as
follows: one arbitrator selected by the Company, one arbitrator selected by
the Covenantor and one arbitrator selected by each of the arbitrators selected
by each of the Company and the Covenantor. Judgment upon the arbitration award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. All discovery shall be governed by the Federal Rules of Civil
Procedure. Either party may apply to any court having jurisdiction hereof and
seek injunctive relief so as to maintain the status quo of the parties until
such time as the arbitration award is rendered or the claim or controversy
otherwise resolved. The prevailing party in any such matter shall recover all
of its costs and expenses, including reasonable attorneys' fees.
6.3 Notices. All notices under this Agreement will be in
writing and will be delivered by personal service or telegram, telecopy or
certified mail (if such service is not available, then by first class mail),
postage prepaid, Federal Express (or other reputable overnight courier) to such
address as may be designated from time to time by the relevant party, and which
will initially be as set forth below. Any notice sent by
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certified mail will be deemed to have been given three (3) days after the date
on which it is mailed. Notices sent by personal delivery shall be deemed
effective on the date delivered, notices sent by Federal Express (or other
reputable overnight courier) shall be deemed effective on the third business
day following the sending thereof and notices sent by telecopy shall be deemed
effective on the date delivered. No objection may be made to the manner of
delivery of any notice actually received in writing by an authorized agent of a
party. Notices will be addressed as follows or to such other address as the
party to whom the same is directed will have specified in conformity with the
foregoing:
If to Company:
ZAI*NET Software, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Covenantor:
▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o ZAI*NET Software, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇ & Brandeis, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
6.4 Equitable Relief; Accounting. Covenantor
acknowledges that the covenants contained in Sections 1, 2 and 4 hereof are
reasonable and necessary to protect the legitimate interests of the Company,
that any breach or threatened breach of such covenants will result in
irreparable injury to the Company and that the remedy at law for such breach or
threatened breach would be inadequate. Accordingly, in the event of the breach
by Covenantor of any of the provisions of this Agreement, the Company, in
addition and as a supplement to such other rights and remedies as may exist in
their favor, may apply to any court of law or equity having jurisdiction to
enforce this Agreement, and/or may apply for injunctive relief against any act
that would violate any of the provisions of this Agreement (without being
required to post a bond). Covenantor further understands that monetary damages
will not be sufficient to avoid or compensate for a
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breach of the covenants contained in Sections 1, 2 and 4 hereof and that
injunctive relief would be appropriate to prevent any such breach or threatened
breach. Such right to obtain injunctive relief may be exercised, at the option
of the Company, concurrently with, prior to, after, or in lieu of, the exercise
of any other rights or remedies that the Company may have as a result of any
such breach or threatened breach. In addition, Covenantor shall account for
and pay over to the Company all compensation, profits and other benefits
inuring to Covenantor's benefit that are derived or received by Covenantor
thereof resulting from any action or transaction constituting a breach of the
covenants contained in Sections 1, 2 and 4 hereof.
6.5 Third-Party Benefits. None of the provisions of this
Agreement will be for the benefit of, or enforceable by, any third-party
beneficiary, except that GFI Caminus LLC is intended as a third-party
beneficiary of all rights of the Company hereunder.
6.6 Successors and Assigns. This Agreement will be
binding upon and inure to the benefit of the parties, their respective
successors and permitted assigns. None of the parties hereto may assign any of
their rights or obligations under this Agreement without the prior written
consent of all other parties hereto, except that this Agreement may be assigned
by the Company to any corporation or other business entity that succeeds to all
or substantially all of the business of the Company through merger,
consolidation, corporate reorganization or by acquisition of all or
substantially all of the assets or capital stock of the Company.
6.7 Governing Law. All questions with respect to this
Agreement and the rights and liabilities of the parties shall be governed by
the laws of the State of New York, regardless of the choice of law provisions
of that state or any other jurisdiction.
6.8 Headings and Gender. The section headings contained
in this Agreement are inserted for convenience only and shall not affect in any
way the meaning or interpretation of this Agreement. All words shall be
construed to be of such gender and number as the circumstances require.
6.9 Severability. The validity, legality or
enforceability of the remainder of this Agreement will not be affected even if
one or more of the provisions of this Agreement are held to be invalid, illegal
or unenforceable in any respect. Further, if the period of time, the extent of
the geographic area, or the scope of the prescribed activities covered by this
Agreement should be deemed unenforceable, then this Agreement shall be
construed to cover the maximum period of time, geographic area and scope of
prescribed activities (not to exceed the maximum time, geographic area or scope
set forth herein) as may be valid under applicable law. The parties
specifically intend that any court determining the extent of the enforceability
of this Agreement shall, if it determines that the Agreement is not fully
enforceable in accordance with its terms, modify the period of time, geographic
area or scope of prescribed activities provided for herein to the minimum
extent necessary such that the provisions hereof as so modified are
enforceable.
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6.10 Attorneys' Fees. Subject to Section 6.2 hereof, if
any action or proceeding is brought to enforce or interpret any provision of
this Agreement, the prevailing party shall be entitled to recover as an element
of its costs, and not its damages, reasonable attorneys' fees and costs
incurred in connection with such action or proceeding.
6.11 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
6.12 Remedies Not Exclusive. No remedy conferred by any
of the specific provisions of this Agreement is intended to be exclusive of any
other remedy, and each and every remedy will be cumulative and will be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise. The election of any one or more
remedies will not constitute a waiver of the right to pursue other available
remedies.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the first date set forth above.
ZAI*NET SOFTWARE, L.P., a Delaware limited COVENANTOR
partnership
By: GFI Caminus LLC,
Its: General Partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
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