Exhibit 99.1
NONCOMPETITION AGREEMENT
THIS
NONCOMPETITION AGREEMENT (this "Agreement") is dated July 15,
2005,
and is between SPECTRUM PMI, INC. (the
"Buyer"), A-MARK PRECIOUS METALS, INC., a
New York corporation ("PMI") and STEVEN C.
MARKOFF, an individual ("Mr.
Markoff").
Simultaneously with execution and delivery of this Agreement, the
Buyer
and Mr. Markoff are consummating the
transactions contemplated by the Stock
Purchase Agreement dated as of the date
hereof, between the Buyer, on the one
hand, and Mr. Markoff and A-Mark Holding,
Inc. on the other hand (the "Purchase
Agreement"), pursuant to which the Buyer is
acquiring one hundred percent (100%)
of all of the issued and outstanding shares
of PMI.
Execution
and delivery of this Agreement is a condition to the Buyer's
obligation to consummate the transactions
contemplated by the Purchase
Agreement, and the Buyer would not do so
without Mr. Markoff entering into this
Agreement.
In order
to induce the Buyer to consummate the transactions contemplated
by the Purchase Agreement, and in
recognition and acknowledgement of the need to
protect the goodwill and other business
interests being acquired, the parties
therefore agree as follows:
1.
Payment. As consideration for this Agreement, the Buyer shall pay
to
Mr. Markoff the sum of Two Million Dollars
($2,000,000.00) in cash via wire
transfer of readily available funds to such
account as Mr. Markoff may designate
in writing.
2. No
Competition.
(a) From the date of this Agreement until the sooner of (1) the
fourth (4th) anniversary of the date of
this Agreement, and (2) the date that
none of the Buyer, PMI and their Affiliates
is any longer engaged in the
business of the purchase and sale of
precious metals on a wholesale basis (that
period, the "Agreement Term"), Mr. Markoff
may not, and shall cause his
Affiliates not to, in the Territory,
directly or indirectly own, manage,
operate, join, control, participate in,
invest in or otherwise provide
assistance, in any manner, including,
without limitation, as an officer,
director, employee, independent contractor,
partner, manager, member, principal,
consultant, advisor, agent, proprietor,
trustee or investor, any Competing
Business, except that ownership of Five
percent (5%) or less of the stock or
other securities of a corporation, the
stock of which is listed on a national
securities exchange or is quoted on the
Nasdaq National Market will not
constitute a breach of this Section 1, so
long as Mr. Markoff does not in fact
have the power to control, or direct the
management of, or is not otherwise an
active, direct or indirect participant in
the business of such entity,
including, without limitation, as an
officer, director, employee, independent
contractor, partner, manager, member,
principal, consultant, advisor, agent,
proprietor or trustee, and provides no
services nor gives any business advice to
such entity.
(b)
For purpose of this Agreement, the following terms have the
following meanings:
Noncompetition Agreement - Page 1
<PAGE>
(1) "Affiliate" means, with respect to any given Person, (1)
any other Person at the time directly or
indirectly controlling, controlled by
or under common control with that Person,
(2) any other Person of which that
Person at the time owns or has the right to
acquire, directly or indirectly, ten
percent (10%) or more on a consolidated
basis of any class of the capital stock
or other ownership interest, or (3) any
other Person which at the time owns or
has the right to acquire, directly or
indirectly, ten percent (10%) or more of
any class of the capital stock or other
ownership interest of that Person. For
purposes of this definition, "control"
means the possession, directly or
indirectly, of the power to direct or cause
the direction of the management and
policies of a Person, whether through
ownership of voting securities, by
contract or otherwise;
(2) "Competing Business" means any Person engaged directly or
indirectly, in the Territory, in any
business engaged in by PMI as of the date
hereof, which is the purchase and sale of
precious metals on a wholesale basis
and related services;
(3) "Person" means any individual, corporation, association,
partnership (general or limited), joint
venture, trust, estate, limited
liability company or other entity or
organization; and
(4) "Territory" means the United States of America, Austria,
Belgium, Denmark, France, Germany, Italy,
Luxembourg, Norway, Switzerland, the
Netherlands, and the United Kingdom.
3. No
Solicitation of Employment. During the Agreement Term, Mr.
Markoff
shall not, directly or indirectly, and
shall cause his Affiliates not to
directly or indirectly (i) solicit or
encourage any employee or agent of PMI or
the Buyer to terminate his or her
employment with PMI or the Buyer, or to seek
or accept employment or any other
affiliation with any other Person, or (ii)
divert, employ or hire away or attempt to
divert, employ or hire away any
employee or agent of PMI or the Buyer, nor
assist a Competing Business or any
other Person in doing any of the foregoing,
provided, however, that this
restriction shall not apply to general
employment solicitations made through
newspapers or periodicals of general
circulation, or to the hiring of any former
employee of PMI who, after such employee's
termination of employment with PMI
(without breaching any employment
agreement, if any), independently seeks
employment with Mr. Markoff or any of his
Affiliates without being solicited by
Mr. Markoff or any of his Affiliates.
4. No
Solicitation of Customers and Suppliers. During the Agreement
Term,
Mr. Markoff shall not, directly or
indirectly, and shall cause his Affiliates
not to directly or indirectly, (i) solicit,
divert or appropriate to or for a
Competing Business any Person that is a
customer or supplier of PMI as of the
date hereof or was a customer or supplier
of PMI at any time during the twelve
(12) month period prior to the date hereof
(each a "PMI Customer or Supplier"),
(ii) attempt to influence, persuade or
induce any PMI Customer or Supplier to
cease doing business with, or to reduce the
amount of business customarily done
with, or not to commence a business
relationship with, PMI, or (iii) otherwise
interfere in any manner in the relationship
of PMI with any PMI Customer or
Supplier, in each case whether or not the
relationship between PMI and such PMI
Customer or Supplier was originally
established in whole or in party through the
efforts of Mr. Markoff.
Noncompetition Agreement - Page 2
<PAGE>
5.
Exception for Certain Businesses. Notwithstanding any other
provision
in this Agreement, this Agreement shall not
limit Mr. Markoff's right to have an
ownership or other interest (whether as
principal, shareholder, member, partner,
director, officer, agent, employee,
consultant or otherwise) in or provide
assistance to the legal entities and
businesses involving precious metals in
which Mr. Markoff has a direct or indirect
interest as of the date hereof (a
list of which is attached hereto as
Schedule 1), which Mr. Markoff represents
and warrants, except as described on
Schedule 1, do not presently conduct and
will not conduct in the future a Competing
Business; provided, however, that in
the event that any of the entities or
businesses set forth on Schedule 1 hereto
shall at any time during the Agreement Term
change the scope or magnitude of any
of their existing business that constitutes
a Competing Business, or in fact
begin to conduct a Competing Business, Mr.
Markoff's interest in such entity or
business (whether direct or indirect) shall
be deemed a breach by Mr. Markoff of
the terms of Section 2 above. The parties
to this Agreement further acknowledge
and agree that: (A) (1) Mr. Markoff is a
director, creditor and shareholder of
Goldline Holdings, Inc., (2) Goldline
Holdings, Inc. is the parent company of
Goldline International, Inc., (3) Mr.
Markoff is a director of Goldline
International, Inc., and (4) Mr. Markoff is
a minority shareholder and does not
control Goldline Holdings, Inc. or Goldline
International, Inc. in Goldline
Holdings, Inc, and (B) Mr. Markoff holds a
minority interest in and does not
control Aurumet Trading, LLC. Provided Mr.
Markoff is not in breach of his
obligations under Section 6 below and
recuses himself from any dis
