Exhibit 10.3

 

NON-COMPETITION AGREEMENT

 

This Non-Competition Agreement (this “Agreement”) is made and entered into as of
January 11, 2017 by and among Global Partner Acquisition Corp., a Delaware
corporation (“Parent”), and John F. Ripley, an individual and beneficial
equityholder (the “Restricted Person”) of Sequel Youth and Family Services, LLC,
an Iowa limited liability company (the “Company”), and the Company. Capitalized
terms not otherwise defined in this Agreement shall have the meanings set forth
in the Merger Agreement (as defined below).

 

WHEREAS, pursuant to the terms of that certain Agreement and Plan of Merger,
dated as of the date hereof (the “Merger Agreement”), by and among Parent,
Global Partner Sponsor I LLC, a Delaware limited liability company and a
stockholder of Parent (“Sponsor”), Sequel Acquisition, LLC, a Delaware limited
liability company and a wholly owned subsidiary of Parent (“Sub”), the Company,
the Key Equityholders identified therein, and the Restricted Person, who will
serve as the representative of the Company’s Legacy Equityholders, Sub,
following the Conversion, shall be merged with and into the Company (the
“Merger”), at the effective time of the Merger (“Effective Time”);

 

WHEREAS, the Restricted Person is a significant equityholder of the Company, and
as a result of the transactions to be effected by or pursuant to the Merger
Agreement, the Restricted Person shall directly receive significant
consideration from Parent, as well as the additional consideration set forth in
this Agreement;

 

WHEREAS, Parent and the Company intend to maintain and operate and be engaged,
directly or indirectly, in the business of the Company and its Subsidiaries
after the Effective Time;

 

WHEREAS, the execution and delivery of this Agreement by the Restricted Person
is a condition precedent to the transactions contemplated in the Merger
Agreement, and Parent would not enter into the Merger Agreement absent this
Agreement; and

 

WHEREAS, the restrictions on competitive activity set forth in this Agreement
are included to secure to Parent the benefits of the Merger Agreement and to
protect the value of the business of the Company and its Subsidiaries after
completion of the transactions contemplated by the Merger Agreement, including
goodwill.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained in this Agreement and the Merger Agreement and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

1.            Definitions. The following terms shall have the following
meanings:

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly Controls, is Controlled by or is under common Control with such
Person.

 

 

 

 

“Business” shall mean the businesses of the Company and the Company Subsidiaries
of owning, operating or developing: (i) programs for individuals with
behavioral, emotional and physical challenges; (ii) facilities that offer
counselling, mentoring and outpatient therapies and monitoring services to
minors and their families in office, group home, in-home, and foster-care home
settings; (iii) educational and academic institutions that provide academic and
therapeutic support for students; (iv) staff-secure and secure residential
educational facilities that provide academic training, medication management,
individual, group and family counseling, long-term and short-term residential
treatment, sexual offender treatment, therapeutic group homes, alternative day
schools and shelter care facilities; and (v) psychiatric residential treatment
facilities and facilities or programs involving neurodevelopmental treatment,
occupational speech, and physical therapy.

 

“Competition” shall mean when a Person (including, without limitation, the
Restricted Person) engages (alone or in concert with any other Person) in, or
provides assistance to any Person that conducts, operates, carries out or
engages in the Business in the United States of America. “Compete” and
“Competitor” shall have correlative meanings.

 

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including,
without limitation, any supra-national bodies such as the European Union or the
European Central Bank).

 

“Person” shall mean any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Restricted Period” shall mean the period beginning at the Effective Time and
shall continue through the tenth anniversary of the Effective Time.

 

2.           Non-Interference with Business Relationships. During the Restricted
Period, the Restricted Person will not, directly or indirectly, on behalf of
himself or any other Person:

 

(a)       make any statements or perform any acts intended to interfere with or
harm any interest of the Company and its Subsidiaries in their relationships and
dealings with payors, customers or patients, including any statements or acts
that cause or could cause such existing or potential payors, customers or
patients to stop or materially reduce doing any business with the Company or any
of its Subsidiaries; or

 

(b)       engage in Competition with, or own any interest in, perform any
services for, participate in or be connected with any business, organization or
other Person which engages in Competition with the Company and its Subsidiaries
in the United States of America; provided, however, that the provisions of this
Section 2(b) shall not be deemed to prohibit ownership of not more than 5% of
the total shares of all classes of stock outstanding of any publicly held
company in which the Restricted Person has no participation in the management or
direction.

 

3.           Non-Solicitation. During the Restricted Period, the Restricted
Person will not directly or indirectly, as a director, equity holder, officer,
employee, employer, principal, agent, manager, consultant, independent
contractor, advisor or otherwise knowingly hire or solicit for employment, or
advise or recommend to any other Person that they employ or solicit for
employment, or otherwise materially assist any other Person in employing or
soliciting for employment, any employee of the Company and its Subsidiaries.

 

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4.           Additional Consideration.

 

(a)       In addition to the proceeds received by the Restricted Person in
relation to the Merger Agreement and subject to the conditions set forth in this
Section 4, the Company shall provide additional consideration to the Restricted
Person in the annual amount of $1,900,000.00 during each year of the Restricted
Period (the “Additional Consideration”).

 

(b)       The Company shall pay the Additional Consideration to the Restricted
Person in equal monthly installments (each, an “Additional Consideration
Payment”) during the Restricted Period, in arrears on the fifteenth (15th) day
of each month (as applicable, the “Payment Date”), subject to the Restricted
Person’s compliance with the terms of this Agreement.

 

(c)       The Company’s obligation to make the Additional Consideration Payments
shall cease in the event of the Restricted Person’s death during the Restricted
Period. The Company’s obligation to make an Additional Consideration Payment
shall be conditioned on the Company being Solvent at the time of and assuming
payment of an applicable Additional Consideration Payment. For purposes hereof,
“Solvent” means, with respect to the Company and its Subsidiaries taken as a
whole, on the applicable Payment Date: (i) the present fair saleable value of
the assets taken as a whole (i.e., the price a third party buyer is willing to
pay for such assets in an arm’s length transaction) of such Person will exceed
the amount that will be required to pay the probable liability on the existing
debts (whether matured or unmatured, liquidated or unliquidated, absolute, fixed
or contingent) of such Person as they become absolute and matured; (ii) the sum
of the debts (whether matured or unmatured, liquidated or unliquidated,
absolute, fixed or contingent) of such Person will not exceed all of the
property of such Person at a fair valuation; (iii) the assets of such Person do
not constitute unreasonably small capital for such Person to carry on its
businesses as now conducted or proposed to be conducted; and (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature. For purposes of the preceding sentence, the amount of contingent
obligations outstanding at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that is reasonably expected to become an actual or matured liability.

 

To the extent that the Company is not or would not be Solvent at such time, the
Company shall not be obligated to pay such Additional Consideration Payment on
its Payment Date. If Parent or Company asserts hereunder that the Company is not
Solvent, Parent shall provide to Restricted Person (from time to time upon
Restricted Person’s request) (x) a certification by Parent’s Board of Directors
that the Company is not Solvent, and (y) all information and data, and copies of
applicable books and records, to reasonably support such certification. Such
Additional Consideration Payment (together with interest at an annual rate of
LIBOR plus 500 basis points) shall be paid on the Payment Date in the next
calendar month in which the Company is Solvent and would be Solvent following
payment of such Additional Consideration Payment and the Additional
Consideration Payment otherwise due on such Payment Date; provided, however,
that payment of such Additional Consideration Payment must nevertheless be made
by the Company on March 15 of the succeeding year after the year of the
applicable deferral of payment of such Additional Consideration Payment, unless,
on such date and assuming payment of such applicable Additional Consideration
Payment, (i) the Company is not or would not be Solvent and (ii) delay of the
payment of such Additional Consideration Payment is permitted under Treasury
Regulation 1.409A-3(d) (together, the “Delay Conditions”). Any Additional
Consideration Payment not made on such March 15 date shall be paid (together
with interest at an annual rate of LIBOR plus 500 basis points) on the Payment
Date in the next calendar month in which the second Delay Condition set forth
above is no longer applicable.

 

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(d)       If either (i) any Additional Consideration Payment is not paid in full
by the Company within ninety (90) days after the Payment Date thereof (subject
to Section 4(c) hereof), or (ii) Parent and/or Sponsor breaches any of its
respective obligations to (or for the benefit of) Restricted Person set forth in
that certain Board Agreement executed by the Restricted Person, and such breach
is not cured (to the reasonable satisfaction of Restricted Person) within ninety
(90) days after Restricted Person notifies Parent and/or Sponsor of such breach
(each event set forth in clause (i) or clause (ii) hereof, an “ACP Default”),
the Restricted Person’s obligations set forth in Sections 2 and 3 hereof (and
the Restricted Period) shall terminate and be of no further force or affect
automatically and without any further action by (or on behalf of) the Restricted
Person. Parent and the Company acknowledge and agree that the remedies of the
Restricted Person set forth in this Section 4(d) are not exclusive, and shall be
in addition to any and all other rights and remedies that Restricted Person may
have at law or in equity in connection with an ACP Default.

 

(e)       Restricted Person hereby grants an option to the Company to purchase
Restricted Person’s undivided one-half interest in the option to purchase
furniture, unattached fixtures, livestock, equipment and real property owned by
Mingus Mountain Estate Residential Center, Inc. (“MMERCI”) under paragraphs 7
and 8 of Section 6.0 of that certain First Amended and Restated Management
Service Agreement dated July 1, 2014, between Sequel Youth Services of Arizona,
L.L.C. and MMERCI (the “Option”) at a purchase price of One Dollar ($1.00) upon
the payment in full of all amounts payable by the Company to Restricted Person
under the terms of this Agreement. The option granted by Restricted Person to
Company hereunder shall terminate in the event of an ACP Default by the Company
and shall expire if not exercised within one hundred eighty (180) days of
satisfaction of the entire amount of the Company’s payment obligations of the
Additional Consideration hereunder. In no event shall the Restricted Person
cause or permit to occur any transfer, conveyance, assignment or other
disposition of such Option, or any lien or encumbrance to be placed on such
Option, or any termination, waiver or amendment of such Option or any term or
condition with respect thereto, until such time that the Company’s option to
purchase the Option is terminated or expires. In addition, Restricted Person
hereby grants a power of attorney to the Company to exercise all rights of
Restricted Person under the Option until such time that the option granted to
the Company hereunder terminates or expires; provided, however, that upon an
exercise of the Option by the Company pursuant to this power of attorney, the
Restricted Person shall hold the property subject to the Option in trust for the
benefit of the Company until such time that the Company’s option to purchase the
Option is terminated or expires or the option to purchase the Option is
exercised in accordance with the terms hereof upon full payment of all
Additional Consideration due to the Restricted Person hereunder, in which case
the Restricted Person shall transfer the property subject to the Option upon
exercise of the option granted hereunder by the Company. Such power of attorney
is irrevocable and the parties hereto agree that the grant of such power of
attorney is coupled with an interest. For the avoidance of doubt, in the event
that the Company exercises the Option pursuant to the power of attorney granted
hereunder and there is a subsequent ACP Default, the Company shall thereupon
transfer the property subject to the Option purchased by virtue of the exercise
of the Option to the Restricted Person.

 

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5.           Acknowledgements. In furtherance of the Restricted Person’s
obligations hereunder, the Restricted Person acknowledges and agrees that:

 

(a)       the Company is currently engaged in the highly competitive Business;

 

(b)       this Agreement is intended to protect the Parent’s investment in the
Company and the goodwill of the Business and is being entered into in
consideration for the various rights being granted under, and ancillary to, the
Merger Agreement;

 

(c)       the Restricted Person has carefully read and considered this Agreement
and understands the terms and conditions hereof and agrees that they are
necessary for the reasonable and proper protection of Parent’s investment in the
Company and the goodwill of the Business;

 

(d)       the restrictions herein are reasonable in duration, geographic area
and scope and subject matter and are properly required for the adequate
protection of the businesses of Parent, the Company and each of their respective
Subsidiaries;

 

(e)       the Restricted Person is not now subject to any covenant against
competition or similar covenants or any governmental order or legal requirement
that would affect Restricted Person’s performance of the obligations of this
Agreement; and

 

(f)       the Restricted Person has had the opportunity to review this Agreement
with legal counsel of his choosing and has not relied on any statements made by
Parent, the Company or its legal counsel as to the meaning of any term or
condition contained herein or in deciding whether to enter into this Agreement,
and is entering into this Agreement knowingly and voluntarily.

 

6.           Enforcement. The Restricted Person acknowledges that if the
Restricted Person were to breach any of the terms and conditions of this
Agreement the damage to the Company and its Subsidiaries would be irreparable.
The Restricted Person therefore agrees that Parent and the Company shall, in
addition to any other remedies available to each of them, be entitled to seek
preliminary and permanent injunctive relief against any breach or threatened
breach by the Restricted Person of any of the terms and conditions of this
Agreement. Accordingly, the Restricted Person agrees to waive the claim or
defense that there is an adequate remedy at law and agrees in any such action or
proceeding not to (a) interpose the claim or defense that such remedy exists at
law, or (b) require Parent, the Company or any of its Subsidiaries to show that
monetary damages cannot be measured. The Restricted Person also acknowledges
that the remedies afforded Parent, the Company and its Subsidiaries pursuant to
this Section 6 are not exclusive.

 

7.           Severability. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Agreement is invalid or
unenforceable, the parties hereto agree that the court making the determination
will have the power to reduce the scope, duration, or geographic area of the
term or provision, to delete specific words or phrases, or to modify or replace
any invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement will be
enforceable as so modified. The parties further agree that if any part of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced in whole or in part by reason of any rule of law or
public policy, and cannot be modified in accordance with this Section 7, such
part shall be deemed to be severed from the remainder of this Agreement for the
purpose only of the particular legal proceedings in question, and such holding
shall not affect the validity of the remainder of this Agreement.

 

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8.           Waiver. The failure of any party hereto at any time to require the
performance by any other party hereto of any provision hereof shall in no way
affect the full right to require such performance at any time thereafter, nor
shall the waiver by any party hereto of a breach of any provision hereof be
taken or held to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself or a waiver of any other provision of this
Agreement.

 

9.           Entire Agreement; Modifications. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements between the parties
with respect to the subject matter hereof. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the Restricted Person
and a duly authorized officer of the Company.

 

10.         Relevant Law. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Delaware without regard to the
conflict of laws principles thereof. The parties hereto (a) all agree that any
action, proceeding, claim or dispute arising out of, or relating in any way to,
this Agreement shall be brought and enforced in the Court of Chancery of the
State of Delaware (or, if the Court of Chancery of the State of Delaware lacks
jurisdiction, then in the applicable Delaware state court), or if under
applicable Law exclusive jurisdiction of such action is vested in the federal
courts, then the United States District Court for the District of Delaware, and
irrevocably submits to such jurisdiction and venue, which jurisdiction and venue
shall be exclusive, and (b) waive any objection to such exclusive jurisdiction
and venue or that such courts represent an inconvenient forum. THE PARTIES
HEREBY WAIVE TRIAL BY JURY IN REGARD TO CLAIMS UNDER THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE,
VALIDITY, OR ENFORCEABILITY OF THIS AGREEMENT.

 

11.         Counterparts. This Agreement may be executed by facsimile, portable
document format (PDF), and electronic transmission and in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.

 

12.         Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written consent of
the other party.

 

13.         Agreement Contingent Upon Closing. This Agreement shall terminate at
such time, if any, that the Merger Agreement is terminated in accordance with
its terms.

 

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IN WITNESS WHEREOF, Parent, the Company and the Restricted Person have duly
executed and delivered this Agreement as of the day and year first above
written.

 

  GLOBAL PARTNER ACQUISITION CORP.         By: /s/ Paul Zepf   Name: Paul Zepf  
Title: Chief Executive Officer

 

Signature Page to Non-Competition Agreement

 

 

 

  

IN WITNESS WHEREOF, Parent, the Company and the Restricted Person have duly
executed and delivered this Agreement as of the day and year first above
written.

 

  RESTRICTED PERSON:         By: /s/ John F. Ripley   Name: John F. Ripley

 

Signature Page to Non-Competition Agreement

 

 

 

 

IN WITNESS WHEREOF, Parent, the Company and the Restricted Person have duly
executed and delivered this Agreement as of the day and year first above
written.

 

  SEQUEL YOUTH AND FAMILY SERVICES, LLC         By: /s/ John F. Ripley   Name:
John F. Ripley   Title: Chairman and Manager

 

Signature Page to Non-Competition Agreement