Exhibit 10.3

 
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
 

THIS NON-COMPETITION AND NON-SOLICITATION AGREEMENT (the “Agreement”) is made by
and between Broadpoint Securities Group, Inc., a New York corporation and its
successors (“Broadpoint”), and the undersigned prospective stockholder (the
“Stakeholder”) in Broadpoint.
 
WHEREAS, an Agreement and Plan of Merger by and among Broadpoint, Magnolia
Advisory LLC, Gleacher Partners Inc., certain of the stockholders of Gleacher
Partners Inc., and each of the holders of interests in Gleacher Holdings, LLC,
dated as of March 2, 2009 (the “Merger Agreement”) will be entered into
concurrently with the execution of this Agreement, pursuant to which Gleacher
Partners Inc. will be merged with and into Magnolia Advisory LLC (the “Merger”);
 
WHEREAS, in connection with the Merger, Stakeholder shall receive significant
consideration pursuant to the terms of the Merger Agreement;
 
WHEREAS, as a condition to the Merger, the Merger Agreement contemplates, among
other things, that Stakeholder shall enter into this Agreement; and
 
WHEREAS, as a condition to the Merger, the Merger Agreement also contemplates
Stakeholder and Broadpoint Capital, Inc. (“Company”) shall enter into an
Employment Agreement concurrently with the execution of this Agreement (the
“Employment Agreement”).
 
NOW, THEREFORE, in consideration of the mutual promises made herein, Broadpoint
and the Stakeholder hereby agree as follows:
 
1.           Covenant Not to Compete or Solicit.
 
(a)           Non-Competition.  Until the third anniversary of the Closing Date,
as defined in the Merger Agreement (the “Term”), the Stakeholder shall not
(other than on behalf of Broadpoint and Company), without the prior written
consent of Broadpoint, directly or indirectly, either on his own behalf or on
behalf of any other person, (i) engage in a Competitive Business Activity (as
defined below) anywhere in the Restricted Territory (as defined below), or (ii)
induce, persuade or attempt to induce or persuade any customer, supplier or
other person having business dealings with Broadpoint, Company or any of their
affiliates to restrict its business relationship or dealings with Broadpoint,
Company or any such affiliate, or (iii) make any statement or other
communication that impugns or attacks the reputation or character of Broadpoint,
Company or any of their affiliates, or damages the goodwill of any of
them.  During the Term, none of Broadpoint, Company or any of their affiliates
shall make any statement or other communications that impugns or attacks the
reputation or character of the Stakeholder, or damages the goodwill of the
Stakeholder and Broadpoint, Company and their affiliates shall instruct their
respective directors and executive officers not to make
 
 
 

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any such statements.  Upon termination of the Merger Agreement without the prior
occurrence of the Closing Date, this Agreement shall automatically terminate and
be of no further force or effect.  For all purposes of this Agreement,
“affiliate” shall mean a controlled affiliate.
 
For all purposes hereof, the term “Competitive Business Activity” shall
mean:  (i) engaging in, or managing or directing persons engaged in any business
in competition with the business of Broadpoint, Company or any of their
affiliates; (ii) acquiring or having an ownership interest in any entity that
derives revenues from any business in competition with the business of
Broadpoint, Company or any of their affiliates (except for passive ownership of
five percent (5%) or less of any entity whose securities are publicly traded on
a national securities exchange or market or five percent (5%) or less of any
entity whose securities are not publicly traded on a national securities
exchange or market); or (iii) participating in the operation, management or
control of any firm, partnership, corporation, entity or business (each, an
“Entity”) described in clause (ii) of this sentence.  Notwithstanding anything
contained herein to the contrary, the Stakeholder’s ownership interest in and/or
continued provision of services to Gleacher Mezzanine Funds and/or Gleacher Fund
Advisors shall in no event be deemed a Competitive Business Activity or give
rise to a breach of this Agreement; provided that Stakeholder does not devote
more than ten hours to the provision of such services during any month during
the term of the Employment Agreement.
 
For all purposes hereof, the term “Restricted Territory” shall mean each and
every country, province, state, city or other political subdivision of North
America, Central America, South America, Asia, Australia and Europe in which
Broadpoint, Company or any of their affiliates is currently engaged in business
or otherwise distributes, licenses or sells its products.
 
(b)           Non-Solicitation.  During the Term, the Stakeholder shall not
solicit, encourage or take any other action which is intended to induce or
encourage, or could reasonably be expected to have the effect of inducing or
encouraging, any employee of Broadpoint or any of its subsidiaries to terminate
his employment with Broadpoint or any such subsidiary.
 
(c)           The covenants contained in Section 1(a) hereof shall be construed
as a series of separate covenants, one for each country, province, state, city
or other political subdivision of the Restricted Territory.  Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms to the covenant contained in Section 1(a) hereof.  If, in any judicial
proceeding, a court refuses to enforce any of such separate covenants (or any
part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced.  In the event that the
provisions of this Section 1 are deemed to exceed the time, geographic or scope
limitations permitted by applicable law of a country, province, state, city or
other political subdivision of the Restricted Territory, then such provisions
shall be reformed to the maximum time, geographic or scope limitations, as the
case may be, permitted by applicable laws or the relevant jurisdiction.
 
 
 
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(d)           The Stakeholder acknowledges that (i) the goodwill associated with
Gleacher Partners Inc. prior to the Merger is an integral component of the value
of Broadpoint and Company following the Merger and is reflected in the
consideration to be received by the Stakeholder, and (ii) the Stakeholder’s
agreement as set forth herein is necessary to preserve the value of Broadpoint
and Company following the Merger.  The Stakeholder also acknowledges that the
limitations of time, geography and scope of activity agreed to in this Agreement
are reasonable because, among other things, (A) Broadpoint and Company are
engaged in a highly competitive industry, (B) the Stakeholder has unique access
to, and will continue to have access to, the trade secrets and know-how relating
to Broadpoint and Company, including, without limitation, the plans and strategy
(and, in particular, the competitive strategy) relating to Broadpoint and
Company, (C) if the Stakeholder becomes an employee of Broadpoint, Company or
any of their affiliates during the Term, the Stakeholder is accepting such
employment on favorable terms in connection with the Merger, (D) in the event
the Stakeholder’s employment with Broadpoint, Company or any such affiliate
ended, the Stakeholder would be able to obtain suitable and satisfactory
employment without violation of this Agreement, and (E) this Agreement provides
no more protection than is necessary to protect Broadpoint’s interests in its
and in Company’s and Magnolia Advisory LLC’s goodwill, trade secrets and
confidential information.
 
2.  
Confidentiality.

 
The Stakeholder recognizes and acknowledges that the Proprietary Information (as
hereinafter defined) is a valuable, special and unique asset of Broadpoint.  As
a result, except (i) as required in order to perform his obligations under this
Agreement or the Employment Agreement, (ii) as may otherwise be required by law
or any legal or regulatory (including self-regulatory) process, or (iii) as is
necessary in connection with any adversarial proceeding against Broadpoint,
Company or any of their affiliates (in which case the Stakeholder shall use his
reasonable best efforts in cooperating with Broadpoint, Company and any such
affiliate in obtaining a protective order against disclosure by a court of
competent jurisdiction), the Stakeholder shall not, without the express prior
written consent of Broadpoint, for any reason either directly or indirectly
divulge to any third-party or use for his own benefit, or for any purpose other
than the exclusive benefit of Broadpoint, Company and their affiliates, any
confidential, proprietary, business and technical information or trade secrets
of Broadpoint, Company or any of their affiliates, including, without
limitation, Magnolia Advisory LLC (the “Proprietary Information”) revealed,
obtained or developed in the course of his employment with Broadpoint, Company
or any such affiliate.  Proprietary Information shall include any confidential
or proprietary information or trade secrets relating to any patents or other
intellectual property assigned by the Stakeholder to Broadpoint, Company or any
of their affiliates.  Proprietary Information also shall include, but shall not
be limited to intangible personal property; technical information, including
research design, results, techniques and processes; apparatus and equipment
design; computer software; technical management information, including project
proposals, research plans, status reports, performance objectives and criteria,
and analyses of areas for business development; and business information,
including project, financial, accounting and personnel information, business
strategies, plans and forecasts, customer lists, customer
 
 
 
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information and sales and marketing plans, efforts, information and data.  In
addition, “Proprietary Information” shall include all information and materials
received by the Stakeholder, Broadpoint, Company or any of their affiliates from
a third party subject to an obligation of confidentiality and/or
non-disclosure.  Furthermore, nothing contained herein shall restrict the
Stakeholder from divulging or using for his own benefit or for any other purpose
any Proprietary Information that is readily available to the general public so
long as such information did not become available to the general public as a
direct or indirect result of the Stakeholder’s breach of this Section
2.  Failure by Broadpoint, Company or any of their affiliates to mark any of the
Proprietary Information as confidential or proprietary shall not affect its
status as Proprietary Information under the terms of this Agreement.
 
3.  
Property.

 
 
(a)    Removal and Distribution.  All right, title and interest in and to
Proprietary Information shall be and remain the sole and exclusive property of
Broadpoint.  During the Term, the Stakeholder shall not remove from the offices
or premises of Broadpoint or Company, as applicable, any documents, records,
notebooks, files, correspondence, reports, memoranda or similar materials of or
containing Proprietary Information, or other materials or property of any kind
belonging to Broadpoint, Company or any of their affiliates unless necessary or
appropriate in accordance with the duties and responsibilities required by or
appropriate for employment and, in the event that such materials or property are
removed, all of the foregoing shall be returned to their proper files or places
of safekeeping as promptly as possible after the removal shall serve its
specific purpose.  The Stakeholder shall not make, retain, remove and/or
distribute any copies of any of the foregoing for any reason whatsoever, except
as may be necessary in the discharge of the assigned duties and shall not
divulge to any third person the nature of and/or contents of any of the
foregoing or of any other oral or written information to which he may have
access or with which for any reason he may become familiar, except as disclosure
shall be necessary in the performance of the duties; and upon the termination of
his employment with Broadpoint, Company and all of their affiliates, the
Stakeholder shall return to Broadpoint or Company, as applicable, all originals
and copies of the foregoing then in his possession or under his control, whether
prepared by the Stakeholder or by others.
 
 
(b)     Developments.  The Stakeholder acknowledges that all right, title and
interest in and to any and all writings, documents, inventions, discoveries,
ideas, developments, information, computer programs or instructions (whether in
source code, object code, or any other form), algorithms, formulae, plans,
memoranda, tests, research, designs, innovations, systems, analyses,
specifications, models, data, diagrams, flow charts, and/or techniques (whether
patentable or non-patentable or whether reduced to written or electronic form or
otherwise) that the Stakeholder creates, makes, conceives, discovers or
develops, either solely or jointly with any other person, at any time during
employment or service with Broadpoint, Company or any of their affiliates,
whether during working hours or at any facility of Broadpoint, Company or any of
their affiliates or at any other time or location, and whether upon the request
or suggestion of Broadpoint, Company  or otherwise, (collectively, “Intellectual
Work Product”) shall be
 
 
 
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the sole and exclusive property of Broadpoint.  The Stakeholder shall promptly
disclose to Broadpoint all Intellectual Work Product, and the Stakeholder shall
have no claim for additional compensation for the Intellectual Work Product,
except for any excluded Intellectual Work Product that is wholly unrelated to
the business of Broadpoint, Company or any of their affiliates, in the broadest
sense, provided that such Intellectual Work Product is not conceived, discovered
or developed, either solely or jointly with any other person during working
hours or at any facility of Broadpoint, Company or any of their affiliates or
using any other Broadpoint related resource.
 
 
(1) The Stakeholder acknowledges that all the Intellectual Work Product that is
copyrightable shall be considered a work made for hire under United States
Copyright Law.  To the extent that any copyrightable Intellectual Work Product
may not be considered a work made for hire under the applicable provisions of
the United States Copyright Law, or to the extent that, notwithstanding the
foregoing provisions, the Stakeholder may retain an interest in any Intellectual
Work Product, the Stakeholder hereby irrevocably assigns and transfers to
Broadpoint any and all right, title, or interest that the Stakeholder may have
in the Intellectual Work Product under copyright, patent, trade secret and
trademark law, in perpetuity or for the longest period otherwise permitted by
law, without the necessity of further consideration.  Broadpoint shall be
entitled to obtain and hold in its own name all copyrights, patents, trade
secrets, and trademarks with respect thereto.
 
 
(2) The Stakeholder shall reveal promptly all information relating to any such
Intellectual Property to the Board of Directors, and, at Broadpoint’s expense,
shall cooperate with Broadpoint and execute such documents as may be necessary
or appropriate (i) in the event that Broadpoint desires to seek copyright,
patent or trademark protection, or other analogous protection, thereafter
relating to the Intellectual Work Product, and when such protection is obtained,
renew and restore the same, or (ii) to defend any opposition proceedings in
respect of obtaining and maintaining such copyright, patent or trademark
protection, or other analogous protection.
 
 
(3) In the event Broadpoint is unable after reasonable effort to secure the
Stakeholder’s signature on any of the documents referenced in Section 3(b)(2)
hereof, whether because of the Stakeholder’s physical or mental incapacity or
for any other reason whatsoever, the Stakeholder hereby irrevocably designates
and appoints Broadpoint and its duly authorized officers and agents as the
Stakeholder’s agent and attorney-in-fact, to act for and on the behalf and stead
to execute and file any such documents and to do all other lawfully permitted
acts to further the prosecution and issuance of any such copyright, patent or
trademark protection, or other analogous protection, with the same legal force
and effect as if executed by the Stakeholder.
 
 
 
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4.           Miscellaneous.
 
(a)           Governing Law; Consent to Personal Jurisdiction.  This Agreement
shall be governed by the laws of the State of New York without reference to
rules of conflicts of law.  The Stakeholder hereby consents to the personal
jurisdiction of the state and federal courts located in New York, New York, for
any action or proceeding arising from or relating to this Agreement or relating
to any arbitration in which the parties are participants.
 
(b)           Specific Performance; Injunctive Relief.  The parties acknowledge
that (i) Broadpoint will be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or agreements of
the Stakeholder set forth herein, (ii) the nature of the business of Broadpoint,
Company and their affiliates is such that it could be conducted anywhere in the
world and that it is not limited to a geographic scope or region, (iii) the
provisions of this Agreement are reasonable and necessary for the protection of
the business of Broadpoint, Company and their affiliates, (iv) the Stakeholder
will not be unreasonably precluded from earning a living following his
termination of employment if the provisions of this Agreement are fully
enforced, and (v) Broadpoint would not have entered into this Agreement, and
Company  would not have entered into the Employment Agreement, unless Executive
agreed to be bound by the terms of Sections 1, 2 and 3 of this
Agreement.  Therefore, it is agreed that, in addition to any other remedies that
may be available to Broadpoint upon any such violation, Broadpoint shall have
the right to seek enforcement of such covenants and agreements by specific
performance, injunctive relief or by any other means available to Broadpoint at
law or in equity.
 
(c)           Severability.  If any portion of this Agreement is held by an
arbitrator or a court of competent jurisdiction to conflict with any federal,
state or local law, or to be otherwise invalid or unenforceable, such portion of
this Agreement shall be of no force or effect and this Agreement shall otherwise
remain in full force and effect and be construed as if such portion had not been
included in this Agreement.
 
(d)           No Assignment.  Because the nature of the Agreement is specific to
the actions of the Stakeholder, the Stakeholder may not assign this
Agreement.  This Agreement shall inure to the benefit of Broadpoint and its
successors and assigns.
 
(e)           Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
messenger or courier service, or mailed by registered or certified mail (return
receipt requested) or sent via facsimile (with acknowledgment of complete
transmission) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice); provided, however,
that notices sent by mail will not be deemed given until received:
 
 
 
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(i)           if to Broadpoint, to:
 
    Broadpoint Securities Group, Inc.
    12 East 49th Street, 31st Floor
    New York, New York 10017
    Attn:  General Counsel
    Telephone No.:  212-273-7178
    Facsimile No.:  212-273-7320
 
(ii)           if to the Stakeholder, at the address last set forth on the
records of Company.
 
(f)           Entire Agreement.  This Agreement and the Employment Agreement
contain the entire agreement and understanding of the parties and supersedes all
prior discussions, agreements and understandings relating to the subject matter
hereof.  This Agreement may not be changed or modified, except by an agreement
in writing executed by Broadpoint and the Stakeholder.
 
(g)           Waiver of Breach.  The waiver of a breach of any term or provision
of this Agreement, which must be in writing, shall not operate as or be
construed to be a waiver of any other previous or subsequent breach of this
Agreement.
 
(h)           Headings.  All captions and section headings used in this
Agreement are for convenience only and do not form a part of this Agreement.
 
(i)           Counterparts.  This Agreement may be executed in counterparts, and
each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
 
(j)           The Stakeholder’s obligations under this Agreement shall remain in
effect regardless of the Stakeholder’s employment status with Broadpoint or any
of its affiliates.
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the 2nd day
of March, 2009.
 
 
BROADPOINT SECURITIES GROUP, INC.:
 

 
By:   /s/ Lee Fensterstock                    
 
Name:  Lee Fensterstock
 
Title:  Chairman and Chief Executive Officer
 

 
STAKEHOLDER:
 

 
By:   /s/ Eric
Gleacher                                                                   
 
Name:  Eric Gleacher
 

 
 
 
 
 
[Signature page of Eric Gleacher to Non-Compete Agreement
by and between Broadpoint Securities Group, Inc. and Eric Gleacher]
 

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