NON-COMPETITION AND MARKETING AGREEMENT
THIS AGREEMENT is made and entered into as of the 31st day of May, 1997, by,
among and between each of Sidney D. Wolk, Nathan T. Wolk, Jeffrey C. Wolk,
Howard L. Wolk, Robin A. Wolk, and Michael D. Wolk (each a Seller and
collectively "Sellers"), Cross Country Motor Club, Inc., a Massachusetts
corporation, Cross Country Motor Club of California, a California corporation
(such two entities being sometimes hereafter collectively referred to as the
"Motor Club"), and First Notice Systems Company, a Massachusetts business
trust (the "Old FNS"), and FNSI Acquisition Corp., a Massachusetts
corporation ("New FNS"), and CRA Managed Care, Inc., of Boston, Massachusetts
(collectively with New FNS, "CRA").
W I T N E S S E T H: _
_ _ _ _ _ _ _ _ _
WHEREAS, CRA, through New FNS, its wholly-owned subsidiary, has purchased
substantially all of the assets and liabilities (the "Purchase") of the
Company from the Sellers on the date hereof;
WHEREAS, Sellers and CRA have benefited from such Purchase;
WHEREAS, CRA shall have the benefit of Sellers' and Cross Country's
representations and agreements herein contained;
WHEREAS, the Sellers, directly or indirectly, in the aggregate are
controlling stockholders of the Motor Club, Cross Country Service Corp., a
Massachusetts corporation, Cross Country Home Assistance Services, Inc., a
Massachusetts corporation, and HAC, Inc., a Florida corporation which is the
acquiring company of Homeowners Group, Inc., a publicly-owned Florida
corporation (all of such entities collectively referred to herein as "Cross
Country");
WHEREAS, Cross Country and CRA desire to cooperate in continuing to
provide integrated services to common customers of CRA and Cross Country and
to market to each of their respective customers, and jointly to new prospects
and potential customers, services and programs provided by the other, in
their respective business areas, as more fully described below; and
WHEREAS, each of Cross Country and CRA desire to endorse the use of
certain services of the other as part of a cooperative marketing effort;
NOW, THEREFORE, in connection with the purchase of the assets of Old FNS
by CRA and in consideration of the mutual promises herein exchanged, and for
One Dollar and other for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. For purposes of this Agreement:
(a) "Acquired Business" shall mean the business of Old FNS (without
limiting the manner of conducting such business in the future, except as
otherwise specified herein), of providing initial property and casualty
loss claim reports, whether by telephone, computer line, mail or otherwise,
to third party property and casualty insurance providers (including,
without limitation, workers' compensation), and to entities for their
self-insurance purposes in the areas of property and casualty losses (other
than to entities involved in the vehicle industry activities described in
(f)(2) below), which reports include the type of information set forth in a
standard ACORD or similar form, or comparable documented report. Acquired
Business shall also include the insurance sales and policy upgrade, call
center services currently proposed (in writing) to be provided to
Continental Casualty Company. Except for the businesses described above,
in all cases, Acquired Business shall exclude the Cross Country Reserved
Businesses (as defined herein); provided, however that in the conduct of
the Acquired Business, CRA shall be entitled to provide referral services
to auto body repair, and rental, property repair and medical providers
contained on lists supplied to CRA by its clients (or with respect to
medical providers, as also may be contained on lists compiled by CRA) with
respect to loss notice services provided to such client.
(b) "Affiliate" shall mean any person or entity which is the direct or
indirect owner of greater than 20% of the total outstanding voting stock or
similar equity interests (the "Interest") of another entity, or whose
voting stock is so owned by such other person or entity. An entity shall
cease to be an Affiliate when the Interest drops below 20%.
(c) "CRA Business" means the business of providing worker's compensation
field case management and specialized cost containment services, short-term
and long-term disability services (as such terms are customarily understood
in the insurance industry) and related services and products in the
worker's compensation field, and bodily injury managed care services in the
automobile insurance industry.
(d) "CRA Services" shall mean services rendered, or programs offered, by
CRA or its Affiliates from time to time in the areas of the CRA Business
or the Acquired Business.
(e) "Competitive Business" means any company, venture, enterprise,
endeavor, or business organization, engaged in the CRA Business or the
Acquired Business, on the one hand, or in the Cross Country Reserved
Businesses, on the other.
(f) "Cross Country Services" and "Cross Country Reserved Businesses"
shall mean services rendered, or programs offered, by Cross Country, or
Affiliates of Cross Country or the Sellers, in the areas of (x) towing,
lockout, and jump start dispatch, roadside assistance inquiry handling,
auto repair network management and referral service, in-vehicle security
and event monitoring, global positioning system devices sales and/or
monitoring or other similar systems, and other consumer travel
assistance and monitoring activities, including injury, property or
casualty loss reporting coincident to, or related to, the provision of
such service assistance and monitoring with respect to the same incident
of inquiry or dispatch
("Roadside Assistance Services"), (y) home mechanical systems and
appliance, repair and repair dispatch services, home warranty services,
structural damage and property repair services, loss reports and similar
services arising out of homeowner insurance and/or warranty programs
("Homeowner Repair Services"), and (z) reports, management, sales, and
services regarding, or for companies engaged in the businesses of, the
rental, leasing, sale, transportation, processing, resale or servicing
of motor vehicles of any kind (the "Automotive Industry Services").
(g) "Confidential Information" means and includes, without limitation
by reason of specification, identities of employees or clients of a
party; vendor and customer lists; pricing policies and agreements;
dispatch procedures technology; training materials; sources; and other
similar information which is not generally known or available to the
public, except as the result of unauthorized disclosure by or
information supplied by a third party, or which gives any party or an
Affiliate an opportunity or the possibility of obtaining an advantage
over competitors who may not know or use such information or who are not
lawfully permitted to use the same.
(h) "Restricted Territory" means the United States and Canada.
2. Non-Disclosure of Confidential Information. Each party hereto
recognizes that they have, and will in the future, acquire Confidential
Information concerning the operation of the businesses of the other party
hereto, the use or disclosure of which could cause the other party
substantial loss and damages which could not be readily calculated and for
which no remedy at law would be adequate. Accordingly, each party hereto
covenants and agrees that they will not directly or indirectly, disclose or
in any way use, any Confidential Information of any other party hereto in a
way which could reasonably be foreseen as assisting any other person in
pursuit of the CRA Business or the Acquired Business in competition with CRA,
or in pursuit of Cross Country Reserved Businesses in competition with Cross
Country, the Sellers or their Affiliates.
3. Non-Competition. Subject to the last paragraph of this Section 3,
Sellers agree with respect to the Acquired Business and the CRA Business, and
CRA agrees, with respect to the Cross Country Reserved Businesses, that for
an uninterrupted period of five (5) years from the date hereof, they will
not, individually, or as a group, nor will they permit any of their
Affiliates to, without the prior written consent of the other party, directly
or indirectly:
(a) as joint venturer, employee, partner, officer, consultant or in any
other operating or management capacity whatsoever, participate in, or lend
his or its name, counsel or provide management assistance, or financing,
to the operation of any business activity which is engaged in the
Acquired Business or the CRA Business on the one hand, or the Cross
Country Reserved Businesses, on the other;
(b) recruit, solicit, or induce, or attempt to induce, any employees of
the other party hereto to terminate their employment with, or otherwise
cease their relationship with, such party or hire or attempt to hire any
employees of such other party.
The parties hereto acknowledge and agree that the failure of any person or
entity restricted pursuant to this Agreement to comply with these
restrictions (regardless of whether that person or entity actually has
executed this Agreement) shall constitute a breach of this Agreement;
provided, however, that with respect to NorCross Inc., the Sellers' sole
responsibility hereunder shall be that, so long as NorCross Inc. is an
Affiliate of Sellers, the Sellers, as Stockholders of NorCross, will not,
directly or indirectly, give permission (or waive any prohibition) under the
Stockholders Agreement among Norell Corporation, The Cross Country Group,
LLC, and NorCross, Inc., dated August 15, 1996 (as in effect on such date),
which would permit NorCross to engage in, and will exercise any rights they
have to prohibit Norcross from engaging in, the Acquired Business.
4. Cooperative Sales and Marketing Efforts. (a) During the Term
hereof, and subject to the provisions of this Agreement, Sellers, and their
Affiliates shall utilize CRA and its Affiliates as their exclusive third
party provider of CRA Services, and CRA and its Affiliates shall utilize
Cross Country and its and Sellers' Affiliates as its exclusive third party
provider of Cross Country Services, in each case whether for existing
customers, prospects or any future customers or prospects.
(b) In furtherance of such marketing efforts, the parties hereto agree
that each shall have the right to use the other's name and logos in any
written materials used in connection with the offering of the other party's
services and shall have the right to use the name and logo of the other in
its endorsements, its marketing efforts and in customer materials. Each
party hereto agrees to submit to the other, for its prior approval, the forms
of such written materials, and all telemarketing scripts to be used by one
party in connection with the marketing of the other party's services. In
each case, such submission shall be made a reasonable time in advance of such
use. Consent to such use shall be deemed to have been given if the other
party shall fail to disapprove, in writing, any request for approval within
five (5) business days after a receipt of a written request reasonably
describing such use.
(c) The parties hereto agree and acknowledge that their intention is to
act for their respective benefit by cross selling the Cross Country Services
and Acquired Business to their customers of the other, and to current or new
joint customers, including, if possible, as an integrated package of claim
reporting, cost containment and service assistance programs. The parties
further acknowledge that the nature of integration of such services, the
extent of such services, and the profitability and cost of rendering such
services, are matters which are in development, and will continue to be in
development, by and between the parties and that nothing herein shall be
deemed to obligate either of the parties to provide their respective services
for any specified cost, formula price or profit rate, to provide such
services in a minimum amount or on a minimum schedule, or to provide them on
any favored or most favored pricing or other basis; provided, however, that
each party hereto shall be required to honor any program service commitments
and pricing set forth in any proposals, bids, agreements or programs accepted
by a customer, so long as such proposal, bid, agreement or program was
properly authorized by the entity whose services are being offered to such
customer.
(d) Nothing herein shall be deemed to create a joint venture,
partnership or formal or informal joint business of any kind including any
arrangement or relationship giving rise to fiduciary
or other duties from one to the other, and each party hereto remains fully
entitled to make its decision to render the services described herein, to go
into new business areas, to expand other business areas, enter into other
strategic or business arrangements, agreements or alliances not inconsistent
with the provisions hereof, to exit an area of business, terminate an offered
service (including a service provided on the date hereof), or to not render
the services described herein, in whole or in part, based upon its own
financial, strategic or other self interest.
(e) During the term in this Agreement, each party hereto agrees not to
endorse, or make its customer list available to, or utilize the services of
any person or entity competing with the other party hereto in the rendering
of the CRA Services or the Cross Country Services, as the case may be, unless
such customer or business opportunity has been declined by the other party
hereto. From time to time, each party hereto agrees to provide to the other,
at such other person's request and expense, customer, prospect, client and
similar lists based upon criteria selected by the requesting party reasonably
related to the marketing effort of services pursuant to this Agreement, and
the requesting party shall have the right to use such lists during the term
of this Agreement for the sole purpose of marketing hereunder.
(f) The parties hereto shall from time to time, agree upon sales
commission and other related sales compensation and incentive arrangements
applicable to the cross-selling of the services described herein as may be
agreed from time to time.
5. Remedy at Law Inadequate\Specific Enforcement. The parties hereto
specifically acknowledge and agree that the restrictions set forth in
paragraphs 2 and 3 hereof are reasonable and necessary to protect the
legitimate interest of the other, that restricting the ownership and/or
operation of a Competitive Business will not impose undue hardship on the
restricted party, and that the restrictions are reasonable and necessary to
the development of each of their respective businesses. Each party hereto
further acknowledges and agrees that any violation of the provisions hereof
will result in irreparable injury to the other and that therefore:
(a) All parties hereto agree that the remedy which the non-breaching
party may have at law for any breach or threat of breach of the
provisions of this Agreement is inadequate, and in the event of breach or
threat of breach of the provisions thereof by any person intended to be
bound thereby, the non-breaching party shall be entitled to seek and
obtain injunctive relief or other equitable relief from any court of
competent jurisdiction, without the necessity of posting a bond or other
surety or proving actual damages , restraining the party intended to be
bound thereby from such a breach, and that if such a breach has occurred,
then the term of the restrictions contained herein, hereof and of such
injunctive relief shall be for a period of five years commencing on the
date that the last of such breach(es) ceased.
(b) Each party agrees that the provisions contained in this Agreement
shall remain in full force and effect notwithstanding the breach or claimed
breach of any other provision hereof by one party hereto to the other.
6. Term. The term of this Agreement shall end five years from the date
hereof.
7. Records. Each party hereto shall maintain and preserve its books
and records, as they relate to the subjects of this Agreement, and the other
party hereto shall have the right to inspect that portion of such books and
records from time to time, during regular business hours, in order to verify
the customers and business for which payments are to be made hereunder.
8. Indemnification. Each party shall indemnify and save the other
harmless from all loss, cost and expense, including reasonable attorneys'
fees, arising out of or in connection with any claim that use or display of
the other's trademark in connection with marketing of services hereunder
infringes upon or violates any trade name, trademark or copyright of any
person, firm or entity, provided, however, that each party has first obtained
the prior written approval of the other in accordance herewith with respect
to each specific use of its trademark, logo, or trade name.
9. Enforcement. (a) The failure of either party to enforce at any
time, or for any period, any provision of this Agreement shall not be
construed as a waiver of such provision or of the right of such party
thereafter to enforce each and every such provision. No claim or right
arising out of the breach or default of this Agreement can be discharged in
whole or in part by a waiver or renunciation of the claim or right unless the
waiver or renunciation is in writing and signed by the aggrieved party. If
any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which it may be entitled. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
In the event that any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, or to violate any
applicable law, it shall be deemed null and void solely to the extent
thereof, without affecting the balance of this Agreement.
In any case where either party hereto is required to do any act (other
than make a payment of money to the other) the time for performance by such
party shall be extended for delays caused by or resulting from Act of God,
war, civil commotion, fire or other casualty, labor difficulties, general
shortages of labor materials or equipment, government regulations or other
causes beyond such party's reasonable control.
(b) The parties further acknowledge and agree that the restrictive
covenants contained in this Agreement are severable and separate from each
other. If at any time any of the foregoing restrictive covenants in this
Agreement shall be deemed invalid or unenforceable by the laws of the
jurisdiction wherein it is to be enforced, by reason of being vague or
unreasonable as to duration, or geographic scope, or scope of activities
restricted, or for any other reason, such agreements or covenants shall be
considered divisible as to such portion, and such agreements or covenants
shall become and be immediately amended or reformed to include only such
agreements or covenants as are deemed reasonable and enforceable by the court
or other body having jurisdiction of this Agreement, to the full duration,
geographic scope and scope of restricted activities deemed reasonable and
thus enforceable by said court or body; and the parties agree that such
agreements or covenants, as so amended and reformed, shall be valid and
binding as though the invalid or unenforceable portion had not been included
therein.
10. Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective successors of entities, if any, and
representatives. This Agreement may not be assigned.
11. Representations. The parties hereto represent and warrant that
neither the execution and delivery of this Agreement nor the performance of
its duties hereunder violates the provisions of any other agreement to which
they are a party or by which they are bound.
12. Notices. Any notice or other communications under this Agreement
shall be in writing, signed by the party making the same, and shall be
delivered personally or sent by certified or registered mail, postage
prepaid, by any nationally recognized overnight courier service or by
facsimile against a printed confirmation, as follows:
If to Buyer, to: CRA Managed Care, Inc.
312 Union Wharf
Boston, MA 02109
Facsimile: (617) 367-8519
With a copy to: Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, MA 02110
Attn: James Westra, Esq.
Facsimile: (617) 951-1295
If to Sellers, to: Sidney D. Wolk
c/o Cross Country Motor Club, Inc.
4040 Mystic Valley Parkway
Medford, MA 02155
Facsimile: (617) 395-6706
With a copy to: Lane Altman & Owens LLP
101 Federal Street
Boston, MA 02110
Attn: Joseph F. Mazzella, Esq.
Facsimile: (617) 345-0400
or to such other address as may hereafter be designated by either party
hereto. All such notices shall be deemed given on the date personally
delivered or mailed.
13. Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
14. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
one or more of the provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability for any such provisions in every
other respect and of the remaining provisions of this Agreement shall not be
in any way impaired.
15. Entire Agreement. This Agreement contains the entire agreement of
the parties hereto with respect to the subject matter contained herein.
There are no restrictions, promises, covenants, or undertakings, other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
subject matter. This Agreement may not be changed except by a writing
executed by the parties.
16. Attorney Fees and Venue. Any party breaching the terms of this
Agreement agrees to pay the non-breaching party reasonable attorney fees in
enforcing the terms of this Agreement. The parties agree by the execution of
this Agreement to submit themselves to the exclusive jurisdiction and venue
of the courts of the Commonwealth of Massachusetts for the interpretation of
the terms and conditions and performance of this Agreement.
17. Sale of Cross Country. The parties hereto agree that in the event
that the Motor Club is sold to a third party, whether through stock sale,
merger or asset sale (a "Motor Club Sale"), then, as part of such sale, the
purchaser shall be required to agree that the purchaser shall not use the
assets of the Motor Club in the operation of any business activity which is
engaged in the Acquired Business or the CRA Business for a period of at least
one (1) year following such third party's acquisition (or such shorter period
as expires on the fifth anniversary of the date of this Agreement) (the
"Continuation Period"). Nothing in this paragraph 17 shall relieve the
Sellers from their obligations under paragraphs 3 and 4, notwithstanding any
Motor Club sale. Upon expiration of the Continuation Period, CRA shall be
released from its obligations set forth in paragraphs 3 and 4 with respect to
any of the activities included within Cross Country Reserved Businesses as
may be transferred to the acquiror in the Motor Club Sale.
THIS SPACE LEFT INTENTIONALLY BLANK
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year first above written.
CRA MANAGED CARE, INC. FIRST NOTICE SYSTEMS COMPANY
By: /s/ Jeffrey C. Wolk
-------------------------------
By: /s/ Donald J. Larson
---------------------------------
Title: President
---------------------------
FNSI ACQUISITION CORP. SELLERS:
By: /s/ Donald J. Larson /s/ Sidney D. Wolk
--------------------------------- ----------------------------
Sidney D. Wolk
/s/ Nathan T. Wolk
----------------------------
Nathan T. Wolk
CROSS COUNTRY MOTOR CLUB, INC.
By: /s/ Nathan T. Wolk /s/ Jeffrey C. Wolk
--------------------------------- ----------------------------
Title: Vice President Jeffrey C. Wolk
-----------------------------
CROSS COUNTRY MOTOR CLUB
OF CALIFORNIA, INC.
/s/ Howard L. Wolk
By: /s/ Nathan T. Wolk ----------------------------
--------------------------------- Howard L. Wolk
Title: Vice President
-----------------------------
/s/ Robin A. Wolk
----------------------------
Robin A. Wolk
/s/ Michael D. Wolk
----------------------------
Michael D. Wolk