EXECUTION COPY
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made and
entered into as of July 30, 1999 by and between GERALD STEVENS, INC., a Delaware
corporation (the "Company"), and Ruth M. Owades, an individual ("Owades").
RECITALS
A. On the date hereof, pursuant to an Agreement and Plan of
Merger ("Merger Agreement") by and among the Company, Calyx & Corolla, Inc., a
California corporation ("Calyx"), and Calcor Acquisition, a California
corporation ("Calcor"), the Company has acquired by merger all of the issued and
outstanding capital stock of Calyx, including shares of capital stock held by
Owades and the goodwill associated therewith (the "Shares").
B. Each of the Company and Calyx is engaged in internet and
catalog sales of flowers and plants (the "Business").
C. Owades has considerable experience and knowledge with
respect to the operation of the Business. Owades knows or has access to
confidential information which is competitively valuable and/or trade secrets
associated with the operation of the Business.
D. Section 3.1(b) of the Merger Agreement provides that Owades
will execute and deliver this Agreement to the Company. If the Company is to
receive the full value of the Shares, the Company must have full and enforceable
assurances from Owades that Owades will preserve and protect, and that she will
not use, the aforementioned confidential information and trade secrets. Without
such assurances, the Company would not have acquired the Shares.
E. Further, if the Company is to receive the full value of the
Shares, the Company must have the agreement of Owades that she will not compete
with the business of the Company and Calyx. Without such an agreement, the
Company would not have acquired the Shares.
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NOW, THEREFORE, in order to induce the Company to consummate
the transactions contemplated by the Merger Agreement and in consideration of
the mutual covenants and agreements set forth in this Agreement and in the
Merger Agreement, the parties hereto agree as follows:
1. Agreement Not To Compete
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1.1 Covenant Not To Compete
In consideration of the Company's acquisition of the Shares
pursuant to the Merger Agreement, Owades agrees that for a period of five (5)
years immediately following the date of this Agreement (the "Restricted
Period"), Owades shall not, in any state in the United States of America or
other geographic area in which the Company, Calyx, its existing subsidiaries and
successors are then engaged in business (except as a stockholder in a publicly
held corporation in which it does not own more than 1% of any class of stock),
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any activity
which is the same as, similar to, or competitive in any manner whatsoever with
the Business without the express, prior written consent of the Company. The
Company and Owades intend that the covenant contained in the preceding portion
of this Paragraph No. 1.1 shall be construed as a series of separate covenants,
one for each of the separate geographical areas listed above. Except for the
geographical coverage, the terms of each such separate covenant shall be deemed
identical to the terms of the covenant described above.
Owades warrants, represents and agrees that her experience,
skills, expertise and capabilities are such that she can obtain entirely
suitable employment while remaining in full and complete compliance with each
and every paragraph, term, provision and/or covenant of this Agreement and that
the enforcement of any remedy pursuant to this Agreement by way of restraining
order, injunction and all other relief will not prevent Owades from earning a
reasonable livelihood.
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1.2 Non-Solicitation. During the Restricted Period, Owades
will not, directly or indirectly, either for herself or any other person, (A)
induce or attempt to induce any employee of the Company or Calyx to leave the
employ of Company or Calyx, (B) in any way interfere with the relationship
between the Company or Calyx and any employee of the Company or Calyx (including
without limitation inducing or attempting to induce such person to refuse an
offer of employment from the Company or Calyx), (C) induce or attempt to induce
any customer, supplier, licensee, or business relation of the Company or Calyx
to cease doing business with the Company or Calyx, or in any way interfere with
the relationship between any customer, supplier, licensee or business relation
of the Company or Calyx. In addition, during the Restricted Period, Owades will
not, directly or indirectly, either for herself or any other person, solicit the
business of any person known to Owades to be a customer of the Company or Calyx,
whether or not Owades had personal contact with such person, with respect to
products or activities which compete in whole or in part with the products or
activities of the Company or Calyx.
1.3 Injunctive Relief
Owades hereby stipulates and agrees that any breach or any
threatened breach of any paragraph, term, provision and/or covenant of this
Agreement would cause irreparable injury to the Company which could not be
adequately compensable in monetary damages and that the remedy at law for any
such breach would be entirely insufficient and inadequate to protect the
Company's legitimate interests. Therefore, Owades specifically stipulates and
agrees that, for any such breach or threatened breach, the Company shall at any
and all times be and remain fully entitled to seek and obtain from any court of
competent jurisdiction immediate temporary, preliminary and permanent injunctive
relief, without the posting of any bond, against Owades and against each and
every other person, corporation, partnership, firm, company, joint venture
and/or other entity concerned with and/or acting in concert with Owades, and in
addition, the Company shall be and remain fully entitled to seek and obtain from
Owades and from each and every other such person, corporation, partnership,
firm, company, joint venture and/or other entity any and all other relief,
damages and/or other remedies available to the Company at law, in equity or
otherwise. Owades expressly and knowingly waives any claim or defense that any
adequate remedy at law might exist for any such breach or threatened breach.
Owades agrees that any damage for which such party is liable by reason of any
breach or threatened breach of all or any part of this Agreement, may, at the
sole option of the Company, in addition to any and all other legal remedies, be
offset against any amounts owed by the Company to Owades pursuant to any
obligation or liability of the Company to Owades, including, without limitation,
any amounts owed by the Company to Owades as compensation pursuant to any
employment agreement between the Company and Owades.
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2. General
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2.1 Successors and Assigns
The provisions of this Agreement shall inure to the benefit of
and be binding upon the Company, Owades, and each and all of their respective
heirs, legal representatives, successors, and assigns. The obligations of Owades
under this Agreement shall be personal and not assignable or delegable by Owades
in any manner whatsoever to any person, corporation, partnership, firm, company,
joint venture or other entity. Owades may not assign, transfer, convey,
mortgage, pledge, or in any other manner encumber any rights which such party
may have pursuant to the terms and provisions of this Agreement, and Owades may
not delegate any of such party's duties, responsibilities, or obligations
pursuant to this Agreement. The Company retains the unrestricted right to assign
its obligations and rights under this Agreement.
2.2 Waiver
No waiver of any breach of any paragraph, term, provision
and/or covenant of this Agreement shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other paragraph, term,
provision and/or covenant of this Agreement. No extension of the time for the
performance of any obligation or other act required or permitted by this
Agreement shall be deemed to be an extension of the time for the performance of
any other obligation or any other act required or permitted by this Agreement.
2.3 Entire Agreement
This Agreement, the Merger Agreement and each of the other
agreements referred to therein are the complete and entire contract, agreement,
and understanding between the Company and Owades concerning the covenant not to
compete by Owades. Such agreements supersede any and all prior contracts,
agreements, correspondence, letters of intent, understandings, and/or
negotiations, whether oral or written, concerning the covenant not to compete by
Owades. Nothing in this Agreement shall be construed to the contrary of any of
the provisions of any employment agreement between Owades and the Company.
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2.4 Amendments
This Agreement becomes effective only when executed and
delivered by both the Company and Owades, and no amendment, modification,
waiver, or consent relating to this Agreement will be effective unless and until
it is embodied in a written document signed by the Company and by Owades.
2.4 Notices
All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed given (a) if delivered
personally or sent by facsimile transmission (confirmed electronically), on the
date given, (b) if delivered by a courier express delivery service, on the date
of delivery, or (c) if by certified or registered mail, postage prepaid, return
receipt requested, seven (7) days after mailing, to the parties, their
successors in interest or their assignees at the following addresses or at such
other addresses as the parties may designate by written notice in the manner
aforesaid:
If to the Company:
Gerald Stevens, Inc.
301 E. Las Olas Blvd., Suite 300
Fort Lauderdale, FL 33301
Attn: Adam D. Phillips
Fax: (954)713-5030
e-mail: aphillips@geraldstevens.com
with a copy to:
James M. Rene, Esq.
Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street
48th Floor
Los Angeles, CA 90071-1448
Fax: (213)620-1398
e-mail: jrene@smrh.com
If to Owades:
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with a copy to:
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Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, CA 94025
Attention: Carla Newell, Esq.
Fax: (650) 321-2400
e-mail: cnewell@gunder.com
2.5 Legal Expense
In any legal action, lawsuit, or other proceeding to enforce
any paragraph, term, or provision of this Agreement or to procure adjudication
or determination of the rights of Owades or the Company, the prevailing party
shall be entitled to recover from the other party each and all of the prevailing
party's actual attorney's fees, costs, and expenses in connection with such
proceeding.
2.6 Originals
This Agreement shall be dated and executed by the Company and
by Owades in two or more counterparts, each of which shall be deemed an
original.
2.7 Headings
Each and all of the headings contained in this Agreement are
for reference purposes only and shall not in any manner whatsoever affect the
construction or interpretation of this Agreement or be deemed a part of this
Agreement for any purpose whatsoever.
2.8 Savings Provision
To the extent that any one (1) or more paragraphs, terms,
provisions and/or covenants of this Agreement shall be found to be illegal or
unenforceable for any reason, each and every such paragraph, term, provision
and/or covenant shall be deemed modified or deleted in such a manner as to make
this Agreement, as so modified, legal and enforceable under the internal laws of
the State of Florida, and, as so modified, each and every such paragraph, term,
provision and/or covenant shall continue in full force and effect as part of
this Agreement.
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Anything in the preceding Paragraph of this Paragraph 2.9 to
the contrary notwithstanding, Owades and the Company each recognizes,
acknowledges and agrees that each and all of the agreements and covenants
contained in this Agreement are fair, reasonable and necessary for the
protection of the Company's legitimate business needs and interests in light of
all of the facts and circumstances of the relationship between Owades and the
Company, including, without limitation, the Company's acquisition of the Shares.
Therefore, in the event that any court, agency or other authority ever declines
to enforce all or any part of any paragraph, term, provision and/or covenant of
this Agreement, each and every such paragraph, term, provision and/or covenant
enforcement of which is denied shall be deemed to be modified to (1) restrict
Owades's rights, activity and conduct to the absolute maximum extent and
duration that such authority may find enforceable under the internal laws of the
State of Florida; and (2) permit and not restrict the Company's rights, activity
and conduct to the absolute maximum extent and duration that such authority may
find enforceable under the internal laws of the State of Florida.
2.9 Applicable Law
This Agreement and each and every portion of this Agreement
shall be interpreted pursuant to the laws of the State of Florida without regard
to any conflicts of laws principles.
2.11 Jurisdiction. Each of the parties hereto hereby (i)
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Northern District of California or the Southern District of
Florida or in any California state court sitting in San Francisco County or any
Florida state court sitting in Miami-Dade or Broward counties for any actions,
suits or proceedings arising out of or related to this Agreement, any of the
other agreements executed in connection with this Agreement and the transactions
contemplated hereby or thereby, (ii) irrevocably waives, to the fullest extent
permitted by law, any objection which they may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum, and (iii) agrees that service
of any process, summons, notice or document in any such action, suit or
proceeding in the manner set forth in Section 2.5 shall be effective service of
process for any such action, suit or proceeding brought in any such court.
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2.12 Construction
The language of this Agreement and each and every paragraph,
term, and/or provision of this Agreement shall, in all cases, for any and all
purpose, and in any and all circumstances whatsoever be construed as a whole,
according to its fair meaning, not strictly for or against Owades or the
Company, and with no regard whatsoever to the identity or status of any person
or persons who drafted all or any portion of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement in one or
more counterparts which, taken together, shall constitute one Agreement. This
Agreement shall be effective as of the date first above written.
THE COMPANY:
GERALD STEVENS, INC.
By: __________________________
Name: ________________________
Title: _______________________
Owades:
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Ruth M. Owades
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