This NonSolicitation Agreement involves
Title: NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Governing Law: New York Date: 1/13/2016
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “ Agreement ”) is being executed and delivered as of [●], 2016 by [_____________], a business company incorporated in the British Virgin Islands with limited liability (“ Seller ”) [and ______________, an individual that is a shareholder of Seller or otherwise serving as officer, director, manager or employee of Seller and serving as a shareholder, director, officer, manager or employee of the Company (as defined below) or any of its Subsidiaries (including China Lending and its Subsidiaries) (“ Manager ” and, together with Seller, the “ Subject Parties ”)], 1 in favor of and for the benefit of DT Asia Investments Limited , a business company incorporated in the British Virgin Islands with limited liability, which will be known after the consummation of the transactions contemplated by the Share Exchange Agreement (as defined below) as “China Direct Lending Corporation” (“ Purchaser ”), Adrie Global Holdings Limited , a business company incorporated in the British Virgin Islands with limited liability (the “ Company ”), and each of Purchaser’s and/or the Company’s respective present and future Affiliates, successors and direct and indirect Subsidiaries (collectively, the “ Covered Parties ”). Any capitalized term used, but not defined in this Agreement will have the meaning ascribed to such term in the Share Exchange Agreement.
WHEREAS, on January 11, 2016, Purchaser, the Company and the Seller entered into that certain Share Exchange Agreement (as amended from time to time in accordance with the terms thereof, the “ Share Exchange Agreement ”), by and among Purchaser, DeTiger Holdings Limited, in its capacity as the DT Representative thereunder (including any successor DT Representative appointed pursuant to and in accordance with Section 12.14 of the Share Exchange Agreement, the “ DT Representative ”), the Company, the shareholders of the Company named therein, including Seller (the “ Company Shareholders ”), and Li Jingping, in the capacity as the Seller Representative thereunder, pursuant to which, subject to the terms and conditions thereof, Purchaser will acquire from the Company Shareholders all of the issued and outstanding equity interests of the Company in exchange for 20,000,000 Purchaser Ordinary Shares;
WHEREAS, the Company, indirectly through its Subsidiaries (including China Lending and the WFOEs), is engaged in the business of providing non-bank micro-credit and small and mid-size business lending in China (the “ Business ”);
WHEREAS, in connection with, and as a condition to the consummation of the transactions contemplated by the Share Exchange Agreement (the “ Transactions ”), and to enable Purchaser to secure more fully the benefits of the Transactions, including the protection and maintenance of the goodwill and confidential information of the Company and its Subsidiaries, Purchaser has required that the Subject Parties enter into this Agreement;
WHEREAS, the Subject Parties are entering into this Agreement in order to induce Purchaser to consummate the Transactions, pursuant to which each Subject Party will directly or indirectly receive a material benefit; and
WHEREAS, Seller, as a former owner of the Company, and Manager, as a former shareholder, director, officer or employee of the Company or its Subsidiaries, have contributed to the value of the Company and have obtained extensive and valuable knowledge and confidential information concerning the business of the Company and its Subsidiaries.
1 This will apply for Sellers where they have shareholders or other associated individuals who are associated with the management of China Lending.
NOW, THEREFORE, in order to induce Purchaser to consummate the Transactions, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Subject Party hereby agrees as follows:
1. Restriction on Competition.
(a) Restriction . Each Subject Party hereby agrees that during the period from the Closing until the later of (i) the four (4) year anniversary of the Closing Date and (ii) the date on which the Subject Parties, their respective Affiliates or any of their respective officers, directors or employees are no longer directors, officers, managers or employees of the Company or any of its Subsidiaries (the later of such date in this clause (ii) or the Closing Date, the “ Termination Date ”, and such period from the Closing until the later of clauses (i) and (ii), the “ Restricted Period ”), such Subject Party will not, and will cause its Affiliates not to, without the prior written consent of Purchaser (which may be withheld in its sole discretion), anywhere in the Peoples’ Republic of China (the “ Territory ”), directly or indirectly engage in the Business (other than through a Covered Party) or own, manage, finance or control, or participate in the ownership, management, financing or control of, or become engaged or serve as an officer, director, member, partner, employee, agent, consultant, advisor or representative of, a business or entity (other than a Covered Party) that engages in the Business (a “ Competitor ”). Notwithstanding the foregoing, (i) the Subject Parties and their respective Affiliates may own passive portfolio company investments in a Competitor, so long as the Subject Parties and their Affiliates and their respective shareholders, directors, officer, managers and employees who were involved with the business of the Company and its Subsidiaries are not involved in the management or control of such Competitor (“ Permitted Ownership ”), and (ii) for the avoidance of doubt, certain family members and associates of the Subject Parties as set forth on Exhibit 1 hereto may continue to manage the businesses set forth next to their respective names on Exhibit 1 hereto consistent with past practice prior to the date hereof, even if such businesses are Competitors, so long as the Subject Parties are not involved in the management or control of such Competitors.
(b) Acknowledgment . Each Subject Party acknowledges and agrees, based upon the advice of legal counsel and/or such Subject Party’s own education, experience and training, that (i) such Subject Party possesses knowledge of confidential information of the Company and its Subsidiaries and the Business, (ii) such Subject Party’s execution of this Agreement is a material inducement to Purchaser to consummate the Transactions and to realize the goodwill of the Company and its Subsidiaries, for which such Subject Party will receive a substantial direct or indirect financial benefit, and that Purchaser would not have entered into the Share Exchange Agreement or consummated the Transactions but for the Subject Parties’ agreements set forth in this Agreement; (iii) it would impair the goodwill of the Company and its Subsidiaries and reduce the value of the assets of the Company and its Subsidiaries and cause serious and irreparable injury if such Subject Party were to use its ability and knowledge by engaging in the Business in competition with a Covered Party, and/or to otherwise breach the obligations contained herein and that the Covered Parties would not have an adequate remedy at law because of the unique nature of the Business, (iv) such Subject Party has no intention of engaging in the Business during the Restricted Period other than Permitted Ownership, (v) the relevant public policy aspects of restrictive covenants, covenants not to compete and non-solicitation provisions have been discussed, and every effort has been made to limit the restrictions placed upon such Subject Party to those that are reasonable and necessary to protect the Covered Parties’ legitimate interests, (vi) the Covered Parties conduct and intend to conduct the Business everywhere in the Territory and compete with other businesses that are or could be located in any part of the Territory, (vii) the foregoing restrictions on competition are fair and reasonable in type of prohibited activity, geographic area covered, scope and duration, (viii) the consideration provided to such Subject Party under this Agreement and the Share Exchange Agreement is not illusory, and (ix) such provisions do not impose a greater restraint than is necessary to protect the goodwill or other business interests of the Covered Parties.
2. No Solicitation; No Disparagement.
(a) No Solicitation of Employees and Consultants . Each Subject Party agrees that, during the Restricted Period, such Subject Party will not, without the prior written consent of Purchaser (which may be withheld in its sole discretion), either on its own behalf or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of such Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) hire or engage as an employee, independent contractor, consultant or otherwise any Covered Personnel (as defined below); (ii) solicit, induce, encourage or otherwise cause (or attempt to do any of the foregoing) any Covered Personnel to leave the service (whether as an employee, consultant or independent contractor) of any Covered Party; or (iii) in any way interfere with or attempt to interfere with the relationship between any Covered Personnel and any Covered Party; provided , however , no Subject Party will be deemed to have violated this Section 2(a) if any Covered Personnel voluntarily and independently solicits an offer of employment from such Subject Party (or other Person whom such Subject Party is acting on behalf of) by responding to a general advertisement or solicitation program conducted by or on behalf of such Subject Party (or such other Person whom such Subject Party is acting on behalf of) that is not targeted at such Covered Personnel or Covered Personnel generally, so long as such Covered Personnel is not hired. For purposes of this Agreement, “ Covered Personnel ” shall mean any Person who is or was an employee, consultant or independent contractor of the Covered Parties, (A) if the relevant time of determination is before the Termination Date, as of such date of determination or during the one (1) year period preceding such date and, (B) if the relevant time of determination is after the Termination Date, as of the Termination Date or during the one (1) year period preceding the Termination Date.
(b) Non-Solicitation of Customers and Suppliers . Each Subject Party agrees that, during the Restricted Period, such Subject Party will not, without the prior written consent of Purchaser (which may be withheld in its sole discretion), individually or on behalf of any other Person (other than, if applicable, a Covered Party in the performance of such Subject Party’s duties on behalf of the Covered Parties), directly or indirectly: (i) solicit, induce, encourage or otherwise cause (or attempt to do any of the foregoing) any Covered Customer (as defined below) to (A) cease being, or not become, a client or customer of any Covered Party with respect to the Business or (B) reduce the amount of business of such Covered Customer with any Covered Party, or otherwise alter such business relationship in a manner adverse to any Covered Party, in either case, with respect to or relating to the Business; (ii) interfere with or disrupt (or attempt to interfere with or disrupt) the contractual relationship between any Covered Party and any Covered Customer; (iii) divert any business with any Covered Customer relating to the Business from a Covered Party; (iv) solicit for business, provide services to, engage in or do business with, any Covered Customer for products or services that are part of the Business; or (v) interfere with or disrupt (or attempt to interfere with or disrupt), any Person that was a vendor, supplier, distributor, agent or other service provider of a Covered Party at the time of such interference or disruption, for a purpose competitive with a Covered Party as it relates to the Business. For purposes of this Agreement, a “ Covered Customer ” shall mean any Person who is or was an actual customer or client (or prospective customer or client with whom a Covered Party actively marketed or made or taken specific action to make a proposal) of a Covered Party, (A) if the relevant time of determination is before the Termination Date, as of such date of determination or during the one (1) year period preceding such date and, (B) if the relevant time of determination is after the Termination Date, as of the Termination Date or during the one (1) year period preceding the Termination Date.
(c) Non-Disparagement . Each Subject Party agrees that from and after the Closing Date such Subject Party will not directly or indirectly engage in any conduct that involves the making or publishing (including through electronic mail distribution or online social media) of any written or oral statements or remarks (including the repetition or distribution of derogatory rumors, allegations, negative reports or comments) that are disparaging, deleterious or damaging to the integrity, reputation or good will of one or more Covered Parties or their respective management, officers, employees, independent contractors or consultants. Notwithstanding the foregoing, subject to Section 3 below, the provisions of this Section 2(c) shall not restrict any Subject Party from providing truthful testimony or information in response to a subpoena or investigation by a Governmental Authority or in connection with any legal action by such Subject Party against any Covered Party under this Agreement, the Share Exchange Agreement or any other Ancillary Document that is asserted by such Subject Party in good faith.
3. Confidentiality. From and after the Closing Date, each Subject Party will, and will cause its Representatives to, keep confidential and not (except, if applicable, in the performance of such Subject Party’s duties on behalf of the Covered Parties) directly or indirectly use, disclose, reveal, publish, transfer or provide access to, any and all Covered Party Information without the prior written consent of Purchaser (which may be withheld in its sole discretion). As used in this Agreement, “ Covered Party Information ” means all material and information relating to the business, affairs and assets of any Covered Party, including material and information that concerns or relates to such Covered Party’s bidding and proposal, technical, computer hardware or software, administrative, management, operational, data processing, financial, marketing, sales, human resources, business development, planning and/or other business activities, regardless of whether such material and information is maintained in physical, electronic, or other form, that is: (A) gathered, compiled, generated, produced or maintained by such Covered Party through its Representatives, or provided to such Covered Party by its suppliers, service providers or customers; and (B) intended and maintained by such Covered Party or its Representatives, suppliers, service providers or customers to be kept in confidence. The obligations set forth in this Section 3 will not apply to any Covered Party Information where a Subject Party can prove that such material or information: (i) is known or available through other lawful sources not bound by a confidentiality agreement with, or other confidentiality obligation to, any Covered Party; (ii) is or becomes publicly known through no violation of this Agreement or other non-disclosure obligation of such Subject Party or any of its Representatives; (iii) is already in the possession of such Subject Party at the time of disclosure through lawful sources not bound by a confidentiality agreement or other confidentiality obligation as evidenced by the Subject Party’s documents and records; or (iv) is required to be disclosed pursuant to an order of any administrative body or court of competent jurisdiction (provided that (A) the applicable Covered Party is given reasonable prior written notice, (B) such Subject Party cooperates (and causes its Representatives to cooperate) with any reasonable request of any Covered Party to seek to prevent or narrow such disclosure and (C) if after compliance with clauses (A) and (B) such disclosure is still required, such Subject Party and its Representatives only disclose such portion of the Covered Party Information that is expressly required by such order, as it may be subsequently narrowed).