Non compete and wholesaling

[Tim T.]

Does anyone see anything that would make them hesitate to sign an agreement co tonight the following. I would be working as a salary plus commission a Acquisition agent. He want me to sign off on this non compete with liquidation damages. I’m pretty hesitant:

XI. Non-Compete.

a.) During Term of Employment. During the term of employment, the Employee understands that he or she will be subject to learning proprietary information, including trade secrets, the Employer’s systems, software, processes, etc., which could be applied to competitors of the Employer. Therefore, in order to protect the fiduciary interests of the Employer, the Employee agrees not to be employed, concerned, undertake any other related dealings, or otherwise financially interested (including engaging in a business as an owner, partner, or agent, or any other financial interest), either directly or indirectly, in the same or a similar business (i.e., the wholesaling real estate) as that conducted by the Employer, and which competes with the Employer, except with the express prior written consent of the Employer.

b.) After Term of Employment. This non-compete (Section XI) shall (1) come into effect four months after the date of this agreement, automatically, (2) be in effect for one year following the date of Employee’s termination, whether voluntary or voluntary, with or without cause, (3) apply to the Employee engaging, directly or indirectly, in any competitive business activities and (4) apply to all geographic areas where the Employer is conducting its business at the time of termination, and as of the date of this agreement, that includes all of the State of Ohio. With regards to Section XI(b)(3), these competitive business activities include, but are not limited to:

i. Communicating with related business owners, partners, members, officers, or agents;

ii. Being employed by or consulting any related business;

iii. Being self-employed in a related business;

iiii. Soliciting any customer, client, affiliate, vendor, or any other relationship of the Employer;

v. Requesting any customers of any business then being conducted by the Employer to curtail or cancel their business with the Employer;

vi. Soliciting, canvassing or accepting any business or transaction for any other person, firm or corporation or business similar to the business of the Employer, from any past or existing customers of the Employer;

vii. Inducing, or attempting to influence, any employee of the Employer to terminate employment with the Employer or to enter into any employment or other business relationship with any other person (including the Employee), firm or corporation; or

viii. Acting or conducting himself in any manner which is contrary to the best interests of the Employer.

Notwithstanding the above, this Section XI(b) shall be subject to this sub-section, and shall not apply to the Employee’s:

i. acquisition of rental properties (including for a business);

ii. purchase of properties, with the sole purpose to rehabilitate them (including for a business);

iii. undertaking the role of a real estate agent,

so long as activities (i)-(iii) above do not (1) include marketing to off-market properties, and/or (2) the primary purpose of these activities is not to (a) acquire an interest in such properties, with the primary purpose of selling such interests (e.g., via assignment of rights) shortly thereafter for a profit, or (b) acquire title to such properties, with the primary purpose of selling such property shortly thereafter without a material change (e.g., rehabilitation) to its condition.

The Employee recognizes that immediate and irreparable damage will result to the Employer if the Employee breaches any of the terms and conditions of this Section XI and, accordingly, the Employee hereby consents to the entry by any court of competent jurisdiction of an injunction against him to restrain any such breach, in addition to any other remedies or claims for money or damages which the Employer may seek. The Employee represents and warrants to the Employer his experience and capabilities are such that he can obtain employment in business without breaching the terms and conditions of this Section XI, and that his obligations under the provisions of this Section XI (and the enforcement thereof by injunction or otherwise) will not prevent him from earning a livelihood. The Employee agrees to pay any and all reasonable attorney fees sustained by the Employer in connection with any breach of this Agreement.

XII. Liquidated Damages. The parties acknowledge and agree that significant damages will be caused by a breach of any of the clauses of this Agreement, but that those damages will be difficult to quantify. Therefore, the Parties agree that, in addition to any other remedies available by law or otherwise under this Agreement, the Employer shall be entitled to $15,000 in liquidated damages for each instance of any “deal” (including any potential options, leads, referrals, contracts, or interests) “sold” (including any deals sold, exchanged, or gifted for any gain, payment-in-kind, value, promise of payment, or other consideration) by the Employee in breach of Sections X or XI of this Agreement. The parties agree that this is a reasonable estimate of damages that the non-breaching party will likely sustain in the event of such a breach, and that it is not intended as a penalty.