NONCOMPETITION AGREEMENT
W I T N E S S E T H:
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made and entered
into as of the 18th day of February 1998, by and between OutSource
International of America, Inc., a Florida corporation ("OutSource"), and L.M.
Investors, Inc., an Illinois corporation ("Covenantor").
W I T N E S S E T H:
WHEREAS, Covenantor is a corporation duly organized and authorized
under the laws of the State of Illinois;
WHEREAS, pursuant to the terms of Franchise Agreements dated November
1, 1994 between LM ("Seller"), Matthew Schubert, Louis J. Morelli, and OutSource
Franchising, Inc. ("OutSource Franchising"), an affiliate of OutSource (as
assigned from Labor World of America, Inc.) (the "Franchise Agreements"), the
Seller operates a "Labor World" Business (as such term is defined in the
Franchise Agreements) in and around Joliet and Aurora, Illinois areas and
including Chicago and the greater Chicago metropolitan marketplace and
WHEREAS, Sellers are selling substantially all of their assets,
including all goodwill, to OutSource pursuant to the Asset Purchase Agreement
among OutSource, Covenantor, and Sellers of even date herewith (the "Asset
Purchase Agreement"); and
WHEREAS, this Agreement is required to be executed and delivered by
Covenantor pursuant to Section 2 of the Asset Purchase Agreement; and
WHEREAS, all terms in this Agreement which are not otherwise defined
herein are used herein with the meanings assigned to them in the Asset Purchase
Agreement;
NOW, THEREFORE, in consideration of the consummation of the
transactions contemplated by the Asset Purchase Agreement, the parties hereto
agree as follows:
1. NONCOMPETITION AGREEMENT. Covenantor agrees that from the date of
this Agreement through and including February 16, 2003, without the prior
written consent of OutSource, Covenantor shall not:
1.1 engage in a Competitive Business (as hereafter defined) or
perform services, directly or indirectly, on behalf of itself or in
connection with any other entity or person, or as a proprietor, owner,
partner, associate, shareholder, agent, contractor, subcontractor,
employer, consultant, or otherwise, of any entity within the State of
Illinois ("the Territory")
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1.2 have any direct or indirect interest, as a disclosed or
beneficial owner, in any Competitive Business within the Territory;
1.3 perform services as a director, officer, manager,
employee, consultant, representative, agent, independent contractor,
subcontractor or otherwise for any Competitive Business within the
Territory;
1.4 have any direct or indirect interest in any entity which
is granted or is granting franchises or licenses to others to operate a
Competitive Business within the Territory;
1.5 solicit, recruit or hire any employee of OutSource, its
affiliates or franchise associates; and/or
1.6 directly or indirectly, on behalf of itself or any other
person, or as an proprietor, consultant, agent, contractor,
subcontractor, employer, affiliate, partner, owner, associate, or
shareholder of any other person or entity, or in any other capacity,
solicit, divert, take away or interfere with any of the business,
customers, clients, contractors, trade or patronage of OutSource, its
affiliates or franchise associates.
In the event that any provisions of this Section 1 should be deemed to exceed
the time or geographic limitations permitted under any applicable law, then such
provision shall be, and hereby is, reformed to the maximum time or geographic
limitations permitted under such applicable law.
2. COMPETITIVE BUSINESS. "Competitive Business" means any business
operating, or granting franchises or licenses to others to operate, any
temporary personnel business, or any other business that provides the same or
similar services as are customarily offered by Labor World Businesses.
3. MATERIALITY. Covenantor recognizes and hereby agrees that the
purchase price paid by OutSource for Seller's business exceeds the fair market
value of Seller's business. This difference in value represents the approximate
value that the parties have attributed to the execution and delivery of this
Agreement by Covenantor and related agreements by certain other individuals.
Covenantor further recognizes and agrees that the execution and delivery of this
Agreement by Covenantor and the representations, warranties, covenants and
agreements of Covenantor set forth in Section 1 hereof are material and
substantial parts of the transactions contemplated by the Asset Purchase
Agreement.
4. PAYMENT. In consideration of the noncompetition agreement set forth
in Section 1 hereof, upon execution of this Agreement, OutSource will deliver or
cause to be delivered to the Seller the amount set forth in Section 1 of the
Asset Purchase Agreement pursuant to the terms of the Asset Purchase Agreement.
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5. SEVERABILITY. If for any reason any provision of this Agreement
shall be held invalid, such invalidity shall not affect any other provision of
this Agreement not so held invalid, and all other such provisions shall to the
full extent consistent with law continue in full force and effect. If any such
provisions shall be held invalid in part, such invalidity shall in no way affect
the rest of such provision which, together with all other provisions of this
Agreement, shall likewise to the full extent consistent with law continue in
full force and effect.
6. SUCCESSORS AND ASSIGNS. The obligations of the Covenantor under this
Agreement are personal and may not be assigned or delegated to any other person.
The rights and obligations of Covenantor under this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of
OutSource.
7. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing and is signed by the parties hereto. No waiver by any other party
hereto at any time of any breach by any other party hereto of, or compliance
with, any provision of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions at the same or at any
prior or subsequent time.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois. The sole venue for any action
arising hereunder shall be Kane County, Illinois.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall constitute an original and all of which
together shall constitute one and the same Agreement. Facsimile signatures shall
have the same effect as original signatures.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first written above.
OUTSOURCE:
Witness:
OutSource International of America, Inc.
/s/ Anita M. Dazzo
- ------------------------------ /s/ David Sparkman
By:------------------------------------
Zone Vice President
Title: ------------------------------
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COVENANTOR:
Witness:
L.M. Investors, Inc.
/s/ Anita M. Dazzo
- ------------------------------- /s/ Matthew Schubert
By:------------------------------------
Vice President
Title:---------------------------------
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