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IN THE ______________ COURT OF ______________ COUNTY
STATE OF ________________
)
)
)
Petitioner/Plaintiff, )
)
) NO.
Vs. )
)
)
Respondent/Defendant )
)
COMPLAINT FOR INJUNCTION AND OTHER RELIEF
Comes now Plaintiff, ____________ (hereinafter "____________"), by and through its counsel, and
files this complaint against defendant, ____________ (hereinafter "____________") for a
temporary and permanent injunction and other relief for defendant's breach of contract. In
support thereof ____________ would show as follows: 1. ____________ is a corporation qualified to do business in the State of and
____________ in ____________, . It is engaged in the business of providing business services to
customers in ____________, and ____________, ____________.
2. ____________, the Defendant, is an adult resident citizen of __________ County.
3. ____________ was formed _________, 20____. ____________ was an original
holder and owned one-half of ____________.
4. ____________ and ____________ entered into an employment contract on
___________, 20____ and since that time, ____________ has served as an officer and member of
the Board of Directors of ____________.
5. ____________ desired to sell all of his interest in ____________, that being 34.8%
of the outstanding shares of ____________ stock, to the ____________ Employee Stock Ownership
Plan and Trust. Said sale took place on ___________, 20____. ____________ was paid $475,000
for his stock.
6. The parties desired to terminate their employment
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agreement and entered into a termination agreement on _________, 20___ with the effective date of
termination being ________, 20___. The termination agreement also included a covenant not to
compete. A copy of the agreement entitled "Covenant Not to Compete and Termi nation Agreement"
is attached hereto as Exhibit A.
7. In consideration of the covenant not to compete, ____________ paid to
____________ monies totaling $255,80b. One hundred twenty-five thousand dollars ($125,000.00)
of this amount was cash and $130,800 was a promissory note. This promissory note has bee n paid
in full. ____________ undertook other obligations and paid other non-cash assets in consideration
for the termination and covenant not to compete. These valuable obligations are delineated in
Paragraph 3 of Exhibit A.
8. Pursuant to Paragraph (d) of the agreement, ____________ agreed that for a period
of two years from the date of his termination (________, 20____ through _______, 20____) he
would not engage in any business or perform any service, directly or indirectly, in compet ition with
the business of the corporation within 100 miles of the city limits of the Ci ty of ____________, , or
with 100 miles of the city limits of the City of ____________, ____________. He also agreed not
to have any interest, in any enterprise or entity that engages in such business.
9. ____________ agreed that if he were to violate the restrictive covenant, & would be
entitled to preliminary and permanent injunctive relief and to monetary damages from
____________.
10. ____________'s employment with ____________ ended on ________, 20_____. In
_____________ of 20_____, ____________ began competing against ____________. Upon
information and belief, Plaintiff alleges ____________ may have competed against ____________
even sooner.
11. ____________ began selling color work to his customers and clients in direct
competition and in violation of the covenant not to compete and termination agreement.
12. ____________ has breached the contract entered into with ____________; therefore
____________ is entitled to injunctive relief and monetary damages.
CLAIMS FOR RELIEFINJUNCTION
13. ____________ asks the Court for an order enjoining ____________ from further
violation of his covenant not to compete against ____________ in the relevant area.
14. ____________ would show that the harm being done to its business by
____________'s conduct is irreparable and continuous and ____________ is without an adequate
remedy at law to protect its legitimate business interests.
15. The granting of an injunction would give to ____________ that to which it is legally
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and contractually entitled and the injunction would have no adverse impact on the public interest.16. Alternatively, ____________ would show that in Paragraph 6(d) of the Covenant
not to Compete and Termination Agreement, ____________ agreed that "[if any court shall
determine [5] that the duration or the geographical limits of any restriction conta ined in Paragraph
6(d) are unenforceable, it is the intention of the parties to this agreement tha t the restrictive
covenants set forth herein shall not be terminated, but shall be deemed amende d to the extent
required to render it valid and enforceable C.] " ____________ also agreed that
the restrictions contained in the agreement were reasonable and that any viol ations of the restrictive
covenants would cause
substantial injury to ____________.
17. ____________ would not have entered in this agreement with ____________
without receiving the additional consideration of ____________'s agreeing to these restrictions.
DAMAGES
Under the terms of the agreement, ____________ is entitled to monetary damages from
____________.
WHEREFORE, ____________ requests an order from this Court enjoining ____________
from further violation of his covenant not to compete, awarding monetary damages to
____________ and other general relief this Court deems appropriate.
This the ____________ day of ____________, 20___. Respectfully submitted, ____________________________________
By: ____________________________________
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COVENANT NOT TO COMPETE AND TERMINATION AGREEMENT
This Agreement is entered into by and between ____________, a corporation (the
"Corporation") and ____________ ("____________). The Corporation and ____________ are
referred to collectively herein as the "Parties."
WHEREAS, the Corporation is engaged in the business of
providing prepress services to customers from its ____________, and ____________,
____________ locations (such business engaged in or authorized to be engaged in as of the date
hereof being referred to as the "Business")
WHEREAS, ____________ and the Corporation entered into an
Employment Agreement on the ________ day of ___________, 20_____ (the
"Employment Agreement"), and ____________ has been an employee, officer and member of the
board of directors of the Corporation.
WHEREAS, the Parties desire to terminate the Employment
Agreement effective ________,20__.
WHEREAS, the Parties agree that the covenants herein are not oppressive t o ____________
because such restricted covenants allow ____________ to carry on his business except for t he
restrictions as related to the Business in the limited geographical a rea for a limited period of time as
set forth herein.
WHEREAS, ____________ acknowledges and understands that the Corporation would
not be willing to pay the price it has agreed to herein unless ____________ had agreed to the
covenants herein.
WHEREAS, ____________ and the Corporation agree that the covenants of each are
reasonably necessary to protect the Corporation's legitimate business interest.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants herein contained,
the Parties agree as follows:
1. Definitions.
"Adverse Consequences" means all charges, complaints, actions, suits, procee dings,
hearings, investigations, claims, demands, judgments, orders, decrees, stipulations, injunctions,
damages, dues, penalties, fines, costs, amounts paid in settlement, liabi lities, obligations, taxes,
liens, losses, expenses and fees, including all attorneys' fees and court cost s. "Code means the
Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the businesses and affairs of
the Corporation not generally known in the business that is disclosed to ____________ or known by
him as a consequence of his employment by the Corporation, whether or not pursuant to thi s
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Agreement."Corporation Share" means any share of the Common Stock, par
value $1 per share, of the Corporation.
"Employee Stock Ownership Plan" means the ____________ Employee Stock Ownership
Plan and Trust, dated ________, 20_____.
"____________" means any federal, state or local tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
2. Termination of Employment. The Parties mutually agree to hereby terminate t he
Employment Agreement effective __________, 20____. ____________ has tendered his
resignation as an employee and officer effective _________, 20_____ and as a member of the board
of directors of the Corporation effective as of the Closing Date.
3. Payments.
(a) Cash and Notes. It is the intention of the Corporation and ____________ that the
covenant not to compete, contained in Section 6(e) of this Agreement be conside red as materially
significant and essential to the closing of any and all transactions relat ed to the termination of the
relationship between the Corporation and ____________. In consideration of such covenant,
____________ shall receive a principal amount equal to $255,800.00. The Corporation shall pay
said amount by delivery to ____________ at the Closing of (i) its promissory note (the "Promis sory
Note") in the form of Exhibit "A" attached hereto in the aggregate principal a mount of $130,800.00;
and (ii) cash payable by check drawn on Phelps Dunbar's trust account in the amount of $125,000.
The Promissory Note shall be deemed in default if payment is not received by ____________ on or
before the 45th day after the payment under said Promissory Note is due or in the eve nt the
Corporation files for bankruptcy protection.
(b) Other Obligations of Corporation. The Corporation agrees to the following
additional obligations to commence at the Closing. Provided, however, that the Corpora tion
expressly disavows any responsibility for the Tax consequences resulting from the sa tisfaction of
any of the obligations listed below:
(i) the Corporation agrees to convey to ____________ at Closing the Lincoln
Continental currently owned by the Corporation previously used by ____________ in connection
with his employment with the Corporation;
(ii) the Corporation agrees to pay on behalf of ____________ the health and dental
insurance premiums for coverage for ____________ and ____________'s family for the period
ending on ___________, 20____. The foregoing obligation shall in no way extend beyond
____________, 20_____, despite the obligation of the Corporation to extend COBRA continuation
coverage to ____________ during any
period after __________, 20_____.
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(iii) the Corporation agrees to convey to ____________ at a mutually agreeable time after
Closing all office furnishings located in ____________'s office at ____________ in ____________,
excluding Confidential Information or proprietary information of the Corporation;
(iv) the Corporation agrees to convey to ____________ at the Closing the mobile telephone
previously used by ____________ in connection with ____________'s employment with the
Corporation;
(v) ____________ shall be entitled to his regular monthly salary of $5,200 through
___________, 20_____, the effective date of the termination of ____________'s employment with
the Corporation. The Corporation agrees to pay to ____________ severance benefits of $5,200 per
month from __________, 20_____ until the earlier of the Closing or ____________, 20_____;
(vi) the Corporation has paid on behalf of ____________ monthly rent on ____________'s
trailer ending with payment for the month of _________, 20____; and the Corporation assumes no
obligation for such payments after that date; and
(vii) the Corporation agrees to pay on behalf of ____________ an amount not to exceed
$2500 for attorneys fees incurred by ____________ associated with this Agreement or the purchase
of his Corporation Shares by the Employee Stock Ownership Plan; ____________ acknowledges
payment has been made prior to Closing by the Corporation to ____________ in the amount of
$1010.00 in partial settlement of this obligation.
It is the intention of the Corporation and ____________ that none of the amounts payable by
the Corporation under this Section 3(b) be construed as a payment for the Corporation Shares held
by ____________ or for the goodwill of the Corporation, as that term has been defined in
conjunction with Section 167(a)(l) of the Code.
(c) The Corporation and ____________ agree to report all of the payments under this
Section 3 on their income tax returns in accordance with this Agreement.
(d) The Closing Simultaneously with execution of this
Agreement, ____________ has entered an agreement with the Employee Stock Ownership Pla n
("Stock Purchase Agreement") for the purchase of the corporation Shares owned by
____________. The closing of the transaction contemplated by the Stock Purchase Agreement
(the"Closing") shall take place at the offices of ____________, ____________, in ____________,
commencing at _______ p.m. on _________, 20_____ or such other date as may be mutually
determine by the parties to the Stock Purchase Agreement (the "Closing Date").
(e) Deliveries at the Closing At the Closing, (i) ____________ will deliver to the
Corporation the various certificates, instruments and documents referred to in Sect ion 7(a) below,
(ii) the Corporation will deliver to ____________ the various certificates, instruments a nd
documents referred to in Section 7(b) below, and (iii) the Corporation will deliver t o ____________
the consideration specified in Section 3 above.
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4. Transaction - Representations and Warranties(a) Representations and Warranties of ____________. ____________ represents and
warrants to the Corporation that the statements contained in this Section 4(a) are correct and
complete as of the date of this Agreement and will be correct and complete as of the Closing
Date with respect to himself.
(i) Authorization of Transaction. ____________ has full power and authority to execute
and deliver this Agreement and to perform his obligations hereunder. This Agreement c onstitutes
the valid and legally binding obligation of ____________, enforceable in accordance with its t erms
and conditions.
(b) Representations and Warranties of the Corporation The Corporation represents and
warrants to ____________ that the statements contained in this Section 4(b) are corre ct and
complete as of the date of this Agreement and will be correct and complete as of the Closing Date .
(i) Organization of the Corporation. The Corporation is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of .
(ii) Authorization of Transaction The Corporation has full power and authority
(including full corporate power and authority) to execute and deliver this Agreement and to perform
its obligations hereunder. This Agreement constitutes the valid and legally bi nding obligation of
the Corporation, enforceable in accordance with its terms and conditions.
(iii) Personal Guaranty. The Corporation represents that the five largest shareholde rs of
the corporation, excluding the Employee Stock Ownership Plan, have agreed to personally
guarantee the amount of debt reflected by the Promissory Note. These guarantees w ill be
subordinate to the guarantees of these shareholders to __________________ National Bank with
respect to its loans to the Corporation represented by notes numbered ____________,
____________ and ____________, including any extensions or renewals thereof.
(iv) Partnership Interests. The Corporation represents that the partners of ____________
Partnership and the partners of ____________ have agreed to pledge their interest in the
partnerships as collateral for the Promissory Note.
(v) Stock Purchase Agreement. The Corporation represents that all of the stockholders
to the Stock Purchase Agreement dated ________, 20____ have agreed to waive the terms a nd
provisions of said Stock Purchase Agreement.
(vi) Release from Debts. The Corporation represents that on or before the Closing Da te,
____________ shall be released from all debts of the Corporation, except for the Continuing
Guaranty of ____________ to ____________ National Bank of ____________ (now Premier
Bank) dated _________, 20____ in the amount of $150,000.00.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the period
between the execution of this Agreement and
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the Closing:(a) General. Each of the Parties will use his or its reasonable best e fforts to take all
action and to do all things necessary, proper, or advisable to consummate and make effective
the transactions contemplated by this Agreement (including satisfying the clos ing conditions set
forth in Section 7 below).
(b) Operation of Business. ____________ will vote his Corporation Shares on all
matters on which a shareholder vote is required in accordance with the majorit y vote of all
Corporate Shares other than the Corporate Shares held by ____________.
(c) Notice of Developments. Each Party will give prompt written notice to t he other of
any material development affecting the ability of the Parties to consummate the transacti ons
contemplated by this Agreement. No disclosure by any Party pursuant to this Sect ion 5(c),
however, shall be deemed to prevent or cure any misrepresentation, breach of warranty, or breach
of covenant.
(d) Exclusivity. ____________ will not (i) solicit, initiate, or encourage the submission
of any proposal or offer from any person ____________________________________ the
Employee Stock Ownership Plan, have agreed to personally guarantee the amount of debt reflected
by the Promissory Note. These guarantees will be subordinate to the guarantees of these
shareholders to Deposit Guaranty National Bank with respect to its loans t o the Corporation
represented by notes numbered ____________, ____________ and ____________, including any
extensions or renewals thereof.
6. Post-Closing Covenants. The Parties agree as follows with respect to the period
following the Closing.
(a) General. In case at any time after the Closing any further action is ne cessary or
desirable to carry out the purposes of this Agreement, each of the Parties will take such further
action (including the execution and delivery of such further instruments and documents) a s the
other Party reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under Section 8 below).
(b) Transition. ____________ will not take any action that primarily is designed or
intended to have the effect of discouraging any lessor, licensor, customer, supplier, or ot her
business associate of the Corporation' from maintaining the same business rel ationships with the
Corporation after the Closing as it maintained with the Corporation prior to the Closing.
____________ will refer all customer inquiries relating to the business of the Corporati on to the
Corporation from and after the Closing. This Section 6(b) is limited in duration to two (2) years
from Closing Date.
(c) Confidentiality. ____________ will treat and hold as such all of the Confidential
Information, refrain from using any of the Confidential Information except in connection with t his
Agreement, and deliver promptly to the Corporation or destroy, at the request and option of the
Corporation, all tangible embodiments (and all copies) of the Confidential Information which
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are in his possession. ____________ acknowledges that the list of Corporation's customers as it
may exist from time to time is a valuable, special and unique asset of the Corporation.
____________ will not disclose the list of the Corporation's customers, any part thereof or any
Confidential Information to any person, firm, corporation, association or other entity for any
reason or purpose whatsoever. All of the lists and other Confidential Information shal l belong to the
Corporation. In the event that ____________ is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory, subpoena, civil investigati ve
demand, or similar process) to disclose any Confidential Information, ____________ will
notify the Corporation promptly of the request or requirement so that the Corporation may se ek an
appropriate protective order or waive compliance with the provisions of this Secti on 6(c). If, in
the absence of a protective order or the receipt of a waiver hereunder, ____________ is, on the
advice of counsel, compelled to disclose any Confidential Information to any tribunal or else
stand liable for contempt, ____________ may disclose the Confidential Information to the tri bunal;
provided. however, that ____________ shall use his reasonable best efforts to obtain, at the
reasonable request of the Corporation, an order or other assurance that confidential trea tment will
be accorded to such portion of the Confidential Information required
to be disclosed as the Corporation shall designate. The foregoing provisions shall not apply to any
Confidential Information which is generally available to the public immediate ly prior to the time of
disclosure. This Section 6(c) is limited in duration to two (2) years from closing Date.
(d) Covenant Not to Compete. ____________ agrees that he will not, for a period of 2
years after the termination of his employment with the Corporation (________, 20____ through
________, 20_____), within 100 miles of the city limits of the City of ____________, , and within
100 miles of the city limits of the City of ____________, ____________, engage in any business or
perform any service, directly or indirectly, in competition with the Business of t he Corporation or
have any interest, whether as a proprietor, partner, employee, stockholder, principal, agent ,
consultant, director, officer, or in any other capacity or manner whatsoever, in any ente rprise or
entity that shall so engage. The Corporation has no objection to ____________ working for a
printer provided ____________'s services for the printer are not in competition with the
Corporation. It is the intention of the Corporation that this covenant is not to prevent ____________
from working in a service industry similar to the Corporation's but only to restrict ____________'s
employment so that ____________ may not be in competition with the Corporation. If
____________ violates this restrictive covenant and the Corporation brings legal action for
injunctive or other relief, the Corporation shall not, as a result of the time i nvolved in obtaining
such relief, be deprived of the benefit of the full period of the restrictive covenant. Accordingly, the
restrictive covenant shall be deemed to have the duration specified above, com puted from the date
such relief is granted, but reduced by the time expired by the date the period of the restriction began
to run and the date of the first violation of the covenant by ____________. If any court shall
determine that the duration or the geographical limits of any restriction contai ned in this
paragraph are unenforceable, it is the intention of the Parties to this Agreeme nt that the restrictive
covenant set forth herein shall not thereby be terminated, but shall be deemed amended to the extent
required to render it valid and enforceable, such amendment to apply only with respect to the
operation of this paragraph in the jurisdiction of the court which has made such adjudi cation.
____________ agrees that the restrictions contained in this paragraph are reasonable and ne cessary
for the protection of the legitimate interests of the Corporation that any violat ion of, these restrictive
covenants would cause substantial injury to the Corporation and that the Corporation w ould
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not have entered into this Agreement with ____________ without receiving the additional
consideration of ____________ signing himself to these restrictions. Therefore ____________
hereby agrees that in addition to preliminary and permanent injunctive relief, the Corporation shall
be entitled to monetary damages from ____________. Said monetary damages shall not exce ed the
amount paid by the Corporation for this covenant.
(e) Delivery of Financial Statements The Corporation will deliver to ____________,
on a monthly basis, the monthly financial statements of the Corporation during the t erm of the
Promissory Note. The foregoing financial statements will be read by the Corporat ion to
____________ by the end of the month following the month for which the financial statements a re
prepared.
(f) The Corporation agrees to indemnify and hold ____________ harmless with respect
to any claim, action, demand, damages, loss or expense (including reasonable attorne y fees
incurred in defending or enforcing this indemnity) incurred by ____________ as a result of any
personal guaranty by ____________ (except for the Continuing Guaranty of ____________ to
____________ National Bank of ____________ (now Premier Bank) dated _________, 20_____ in
the amount of $150,000.00) of any indebtedness or other contractual obligation of the Corporation.
7. Conditions to Obligations.
(a) Conditions to Obligations of the Corporation. The obligations of the Corporation
under this Agreement are subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4(a) and Section 5 a bove shall
be true and correct in all material respects at and as of the Closing Date;
(ii) ____________ shall have performed and complied with all of his covenants
hereunder in all material respects through the Closing;
(iii) ____________ shall have delivered to the Corporation a certificate (without
qualification as to knowledge or materiality or otherwise) to the effect t hat each of the conditions
specified above in Section 7(a)(i)-(ii) is satisfied in all respects;
(iv) the Corporation shall have received the resignation, effective as of ________, 20_____,
of ____________ in his capacity as an employee and officer of the Corporation, and effective as of
the Closing Date as a member of the board of directors of the Corporation;
(v) ____________ shall have delivered to the Corporation all credit cards of the
Corporation or ____________ which are in the possession of ____________ or which
____________ may have had possession of at any time prior to the Closing;
(vi) the Corporation shall have obtained on terms and conditions reasonably satisfact ory to it
all of the financing it needs in order to consummate the transactions contemplated
hereby and fund the working capital requirements of the Corporation after the Closing; and
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(vii) all actions to be taken by ____________ in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments, a nd other documents
required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to the Corporation.
(a) The Corporation may waive any condition specified in this Section 7(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligations of ____________. The obligations of ____________
under this Agreement are subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 4(b) and Section 5 above shall be true and correct in all material re spects at and as of the
Closing Date.
(ii) the Corporation shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;
(iii) the Corporation shall have delivered to ____________ a certificate (without
qualification as to Knowledge or materiality or otherwise) to the effect tha t each of the conditions
specified above in Section 7(b)(i)-(ii) is satisfied in all respects;
(iv) ____________ shall have received from counsel to the Corporation an opinion with
respect to the matters regarding ____________'s election under Section 1042 of the Code wit h
regard to the sale of his Corporation Shares to the Employee Stock Ownership Pla n; and the
Corporation agrees that it is responsible for the payment of counsel's fees incurre d in preparing
said opinion in an amount not to exceed $2,000 and ____________ acknowledges that he has
received said opinion and is
satisfied therewith;
(v) the Corporation shall have entered into lease agreements for the ____________
Drive and Jones Creek offices, in the form of Exhibit "B" and Exhibit "C", respec tively, attached
hereto, for a period of 3 years. Said agreements to include a 3 year option to renew e xercisable
by the Corporation; and
(vi) all actions to be taken by the Corporation in connection with consummation of t he
transactions contemplated hereby and all certificates, opinions, instruments, a nd other documents
required to effect the transactions contemplated hereby will be reasonably sa tisfactory in form and
substance to ____________.
____________ may waive any condition specified in this Section 7(b) if he executes a w riting so
stating at or prior to the Closing.
8. Remedies for Breaches of this Agreement.
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(a) Survival. Except as otherwise provided herein, all of the representations, warranties,
and covenants of the Parties contained in this Agreement shall survive the C losing hereunder (even
if the damaged Party knew or had reason to know of any misrepresentation or breach of w arranty or
covenant at the time of Closing) and continue in full force and effect for a period of four (4) years
from the Closing Date.
(b) Indemnification Provisions for Benefit of the Corporation. In the event
____________ breaches any of his representations, warranties, and covenants contained herein,
and provided that the particular representation, warranty, or covenant survives the Closi ng and that
the Corporation makes a written claim for indemnification against ____________ pursuant to
Section 8(d) below within the applicable survival period, then ____________ agrees to indemnify
the Corporation from and against the entirety of any Adverse Consequences the Corporation may
suffer through and after the date of the claim for indemnification (including any Adverse
Consequences the Corporation may suffer after the end of the applicable survival period) resulting
from, arising out of, relating to, in the nature of, or caused by the breach.
(c) Indemnification Provisions for Benefit of ____________. In the event the
Corporation breaches any of its representations, warranties, and covenants contained herein, and
provided that the particular representation, warranty, or covenant survives the Closing a nd that
____________ makes a written claim for indemnification against the Corporation pursuant t o I 8(d)
below within the applicable survival period, then the Corporation agrees to indemnify
____________ from and against the entirety of any Adverse.
