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I purchased a business in 2011 and received both in the purchase agreement and then separately a non compete agreement from the previous owners of the business. Three of the owners continued to work for me; then one owner quit and went to work for our main supplier. At the same time his wife, best friend and child (all former employees of the business) started a Competing Business. The competing business began calling on my clients and clients that were specifically handled by the previous Owner who left the business. We sent them a cease and desist letter but they continue to compete. They have taken several Clients from us resulting in about $200,000k in lost revenue. The owner received about $350k at closing and signed the non compete. I still have a note to him for about $60k. This is in Texas and in Texas the wife and husband own half of what each other owns. What are my chances of suing and winning this? The Non-Compete is for 5 years, and is limited to the San Antonio area and adjoining counties.
Ok, For Clarity. The former owner does not own the business his wife does. His wife, best friend and daughter all used to work for me and they do not have a non compete. He leaves my business, becomes a sales rep for a major supplier of mine. At the same time his wife opens the new business. We have an email from one of our clients stating that (1) his wife called on them and mentioned that her husband was no longer with my company and that they could beat our price. (2) we have another client who stated that the former owner specifically called on her and tried to sell an item for his wifes new business. We also have evidence on the clients website showing were the former owner made a donation and listed himself as a member of his wifes business. I am concerned since this is not "his" business that he has effectively gotten around the non-compete and that since this is not his business i will not have a case.
Here is the non-compete agreement, please let me know if you feel it is still strong enough to pursue action.
NONCOMPETITION AND NONSOLICITATION AGREEMENT
5 Injunctive Relief. The Parties agree that irreparable harm shall be presumed in the event of any breach of this Agreement, and further agrees that in connection with any such breach, damages would be difficult if not impossible to ascertain, and the faithful observance of all terms of this Agreement is an essential. In light of these considerations, the Parties agree that any court of competent jurisdiction may immediately enjoin any breach of this Agreement, upon the request of Buyer, specifically releases Buyer from the requirement of posting any bond in connection with temporary or interlocutory injunctive relief, to the extent permitted by law.
6. Modification of Agreement by Court. The Parties agrees that if any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of the Agreement are declared to be severable. The Parties further agree that if any court or tribunal refuses to enforce the restrictive covenants contained herein, neither this Agreement nor any part thereof, shall be void, and that the particular restriction deemed to be unreasonable or unenforceable shall be reduced or otherwise modified by such court or tribunal, but only to the extent necessary to permit its enforcement and only in such court's jurisdiction. The Parties further agree that if any provision cannot be reduced or modified to make it reasonable and/or permit its enforcement, that provision shall then be severed from this Agreement and the remaining provisions
shall be interpreted in such a way as to give maximum validity and enforceability to this
and enforceability to this Agreement
7. Modification of Agreement by the Parties. This Agreement may not be changed,
modified, released, discharged, abandoned, or otherwise terminated, in whole or in part
except by written instrument executed by both parties.
8. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of Texas without regard to choice-of-law principles thereof.
9. Forum Selection. The Parties agree that any judicial proceeding related in any way to
this Agreement, shall be brought exclusively in the state or federal courts of the State of Texas.
10. Headings. The paragraph headings in this Agreement are for purposes of convenience only and shall not limit or otherwise affect any of the terms hereof.
11. Attorneys' Fees and Costs. The Parties agree that in the event of a dispute arising under
or related in any way to this Agreement, the non-prevailing party shall pay all costs and
expenses, including reasonable attorneys' fees, that may arise or accrue from enforcing this Agreement, obtaining an interpretation of any provision of this Agreement, or in pursuing any remedy provided by applicable law whether such remedy is pursued or interpretation is sought by mediation, arbitration, the filing of a lawsuit, an appeal, and/or otherwise.
12. Entire Agreement. This Agreement constitutes the entire agreement between Buyer and Sellers and supersedes all prior agreements and understandings, whether written or oral, between them.
13. Voluntary Agreement. The parties acknowledge that each has had an opportunity to consult with an attorney or other counselor concerning the meaning, import, and legal significance of this Agreement, and each has read this Agreement, as signified by their respective signatures hereto, and each is voluntarily executing the same after, if sought, advice of counsel for the purposes and consideration herein expressed.
14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement.
15. The terms used herein shall have the same definitions as set forth in the Offer to Purchase Agreement between Seller and Purchasers dated December 28, 2010.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first above written.
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