NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this 16th
day of July, 2007, by and between HENRY CULP, JR. ("Culp"), an individual,
SECURITY NATIONAL FINANCIAL CORPORATION ("Security National"), a Utah
corporation, and C & J FINANCIAL, LLC ("C & J Financial"), an Alabama limited
liability company.
WITNESSETH:
WHEREAS, contemporaneously with the execution and delivery hereof, Security
National is acquiring the business of C & J Financial, pursuant to a Unit
Purchase Agreement dated July 16, 2007, to which Security National, C & J
Financial, Henry Culp, Jr., Culp and the Unitholder of C & J Financial are
parties (the "Purchase Agreement"); and
WHEREAS, execution by Culp of this Agreement is a closing condition under
the Purchase Agreement; and
WHEREAS, prior to the consummation of such purchase, Culp was an owner and
unitholder of C & J Financial; and
WHEREAS, competition by Culp with C & J Financial or use or disclosure by
Culp of confidential and proprietary information of C & J Financial will result
directly in damage to C & J Financial and its business properties, assets and
goodwill and will cause the loss by Security National of the benefit of its
bargain with C & J Financial;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
Section 1 - Covenant Not to Compete
1.1 Culp hereby covenants and agrees that for a period of five (5)
years (the "Term") from the date of this Agreement that he will
not directly or indirectly own, manage, operate, join, control,
or participate in the ownership, management, operation or control
of, or be connected with (as director, officer, employee, agent,
independent contractor of otherwise) in any other manner with any
business which is the same or substantially similar in nature to
the business engaged in by C & J Financial, which is the
operation of a factoring business with the principal purpose of
providing financing for funeral homes and mortuaries, in the
State of Alabama and each of the other states in the United
States in which C & J Financial is now engaged or becomes engaged
during the Term of this Agreement (whether directly or indirectly
through subsidiaries, affiliates, franchisees, licensees,
representatives, agents or otherwise) for a period of five (5)
years from the date of this Agreement.
1.2 Culp shall not, directly or indirectly, employ, solicit for
employment, or advise or recommend to any other person that they
employ or solicit for employment, any employee of C & J
Financial, for a period of five (5) years from the date of this
Agreement; provided however, that this Section shall not preclude
Culp from giving an employment reference at the request of any
employee of C & J Financial or at the request of a prospective
employer of such employee.
1.3 Culp shall not, during the Term of this Agreement, engage in any
employment, occupation, consulting or other business activity
directly related to the business in which C & J Financial is now
involved or becomes involved during the Term of this Agreement,
nor will Culp engage in any other activities that conflict with
Culp's obligations to C & J Financial.
1.4 Culp understands and acknowledges irreparable injury would befall
C & J Financial should Culp serve a competitor of, or compete
with C & J Financial.
1.5 Culp covenants and agrees that C & J Financial's remedy at law
for any breach or violation of the provisions of this Section 1
are inadequate and that, in the event of any such breach or
violation, C & J Financial shall be entitled to injunctive relief
in addition to any other remedy, at law or in equity, to which it
may be entitled.
1.6 Culp specifically acknowledges and agrees that the limitation for
five (5) years from the date of this Agreement upon Culp's
activities as specified above, together with the geographical
limitations set forth above, are reasonable limitations as to
time and place upon Culp's activities and that the restrictions
are necessary to preserve, promote and protect the business,
accounts and goodwill of C & J Financial and impose no greater
restraint than is reasonably necessary to secure such protection.
1.7 In the event that any provision of this Section 1 shall be held
invalid or unenforceable by a court of competent jurisdiction by
reason of the geographic or business scope or the duration
thereof, such invalidity or unenforceability shall attach only to
the scope or duration of such provision and shall not affect or
render invalid or unenforceable any other provision of this
Section 1 and, to the fullest extent permitted by law, this
Section 1 shall be construed as if the geographic or business
scope or the duration of such provision had been more narrowly
drafted so as not to be invalid or unenforceable but rather to
provide the broadest protection to C & J Financial permitted by
law.
Section 2 - Confidential Information Agreement.
2.1 Culp agrees that he will keep confidential and will not, during
or after the Term of this Agreement, disclose, divulge, furnish
or make accessible to any person, firm, corporation or other
business entity, any information, trade secrets, customer
information, marketing information, sales information, cost
information, technical data, know-how, secret processes,
discoveries, methods, patentable or unpatentable ideas, formulae,
processing techniques or technical operations relating to the
business, business practices, methods, products, processes,
equipment or any confidential or secret aspect of the business of
C & J Financial (collectively, the "Confidential Information")
without the prior written consent of C & J Financial. Upon the
termination of this Agreement for any reason, and at any time
prior thereto upon request by C & J Financial, Culp shall return
to C & J Financial all written records of any Confidential
Information, together with any and all copies of such records, in
Culp's possession. Any Confidential Information which Culp may
conceive of or make during the Term of this Agreement shall be
and remain the property of C & J Financial. Culp agrees promptly
to communicate and disclose all such Confidential Information to
C & J Financial and to execute and deliver to C & J Financial any
instruments deemed necessary by C & J Financial to effect
disclosure and assignment thereof to it.
Section 3 - Warranties and Representations
3.1 Each party represents to the other party and warrants that such
party has all of the requisite power and authority to enter into
this Agreement and to perform each and every term, provision, and
obligation of this Agreement and that neither the execution nor
delivery of this Agreement shall conflict with or result in a
breach of the terms, provisions, or obligations of, or constitute
a default under, any other agreement or instrument under which
such party is obligated.
Section 4 - Assignment
4.1 This Agreement is personal to Culp and Culp shall not have the
right to assign or otherwise transfer in whole or in part his
duties under this Agreement.
4.2 C & J Financial shall have the right to assign or transfer in
whole or in part its rights and obligations under this Agreement,
provided that no assignment or transfer by C & J Financial shall
be deemed effective unless and until such assignee or transferee
has agreed in writing to be bound by the terms and provisions of
this Agreement; in such event, the term "C & J Financial" as used
herein shall include such assignee or transferee.
Section 5 - Notices
5.1 All notices, demands, and other communications under this
Agreement shall be in writing and shall be transmitted by United
States certified or registered mail, postage prepaid, or by
reputable private express courier, or by telex or telegram or by
facsimile transmission to the parties at the following locations
or facsimile numbers:
(a) In the case of C & J Financial:
C & J Financial, LLC
5300 South 360 West, Suite 250
Salt Lake City, Utah 84123
Facsimile Number: (801) 287-8378
With a copy to:
Mackey Price Thompson & Ostler
350 American Plaza II
57 West 200 South
Salt Lake City, Utah 84107
Attn: Randall A. Mackey, Esq.
Facsimile Number: (801) 575-5006
(b) In the case of Culp:
Culp Industries, Incorporated
170 Jester Parkway
Rainbow City, Alabama 35906
Attn: Henry Culp, Jr., President
Facsimile Number: (256) 442-0107
With a copy to:
Henslee, Robertson, Straum & Sullivan, LLC
754 Chestnut Street
P.O. Box 246 Gadsden, Alabama 35902 Attn: R. Kent
Henslee, Esq. Facsimile Number: (256) 442-0107
The parties hereto may give written notice of change of address and, after
such notice has been received, any notice or request shall thereafter be given
to such party at the changed address.
Section 6 - Applicable Law
6.1 The validity and interpretation of this Agreement shall be
governed by and enforced and interpreted under and in accordance
with the laws of Alabama as such law shall from time to time be
in effect.
Section 7 - Attorney's Fees
7.1 In the event there is a default under this Agreement and it
becomes reasonably necessary for any party to employ the services
of an attorney, either to enforce or terminate this Agreement,
with or without litigation, the losing party or parties to the
controversy arising out of the default shall pay to the
successful party or parties reasonable attorney's fees and, in
addition, such costs and expenses as are incurred in enforcing or
in terminating this Agreement.
Section 8 - General Provisions
8.1 The parties hereto have read this Agreement and agree to be bound
by all its terms. The parties further agree that this Agreement
shall constitute the complete and exclusive statement of the
Agreement between them and supercedes all proposals, oral or
written, and all other communications between them.
8.2 No agreement changing, modifying, amending, extending,
superceding, or discharging this Agreement or any provisions
hereof shall be valid unless it is in writing and is signed by a
duly authorized representative of the party or parties to this
Agreement.
8.3 The provisions of this Agreement are severable, and in the event
that any provision of this Agreement shall be held to be invalid,
illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
8.4 The failure of any of the parties hereto to enforce any of the
provisions of this Agreement or any rights with respect thereto
or the failure to exercise any election provided for herein,
shall in no way be considered a waiver of such provisions, rights
or elections or in any way affect the validity of this Agreement.
No term or provision hereof shall be deemed waived and no breach
excused, unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented. The
failure by any of the parties hereto to enforce any of said
provisions, rights, or elections shall not preclude or prejudice
such party from either enforcing or exercising the same or any
other provisions, rights, or elections which such party may have
under this agreement. Any consent by any party to, or waiver of,
a breach of this Agreement by the other party (whether expressed
or implied) shall not constitute a consent to, a waiver of, or
excuse of different or substitute breach. All remedies herein
conferred upon any party shall be cumulative and no one shall be
exclusive of any other remedy conferred herein by law or equity.
8.5 This Agreement shall be binding not only upon the parties hereto,
but also upon, without limitation thereto, their successors,
heirs, devises, divisions, subsidiaries, officers, directors,
employees, agents, representatives, and any and all persons or
entities in privity with them or having notice of this Agreement.
8.6 Headings used in the Agreement are for reference purposes only
and shall not be deemed a part of this Agreement.
8.7 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, all of which constitute one
and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first mentioned above.
/s/ Henry Culp, Jr.
Henry Culp, Jr.
SECURITY NATIONAL FINANCIAL CORPORATION
By: /s/ Scott M. Quist
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Scott M. Quist, President
C & J FINANCIAL, LLC
By: /s/ Scott M. Quist
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Scott M. Quist, President and Manager