NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement"),
dated as of March 6, is between Xxxx Xxxxxx, an
individual (the "Individual"), and L&S AUTOMOTIVE PRODUCTS CO., a
Delaware corporation (the "Company").
RECITALS:
(A) Whereas, the Company entered an Asset Purchase and Sale
Agreement dated November ____, 1999 by and between the Company
and The Xxxxxx Corporation (the "Purchase Agreement") pursuant to
which the Company is purchasing substantially all of the assets
of The Xxxxxx Corporation;
(B) Whereas, The Xxxxxx Corporation was, prior to the date
hereof, engaged in the manufacture and sale of u-joints (journal
cross repair kits) (the "Business");
(C) Whereas, the Individual was a shareholder and employee of
The Xxxxxx Corporation; and
(D) Whereas, the Company wishes to secure a contract with the
Individual to ensure that that said Individual will refrain from
competing with the Company in the Business.
NOW, THEREFORE, in consideration of the premises and
mutual agreements hereinafter set forth, and upon the terms and
subject to the conditions contained herein, the Individual and
the Company agree as follows:
Section 1. 1.1 Period and Conduct.
(a) During the period commencing on the date of this
Agreement and ending on the date that is the ten (10) year
anniversary of said commencement (the "Term"), the Individual
shall not, directly, indirectly, for his own account or for that
of any other person or company and whether as a shareholder,
partner or investor in any person or company or as principal,
agent, representative, consultant, proprietor or in any other
capacity:
(i) canvas, solicit or accept orders or business
of any kind relating to marketing, sale or distribution
of any products of the Business sold by The Xxxxxx
Corporation prior to the date hereof or any other
business activity that is the same as the Business
(each, a "Competitive Activity"), or
(ii) enter or engage in any business engaged in a Competitive
Activity.
Notwithstanding the foregoing, nothing in this
Agreement shall restrict the Individual from making and retaining
investments in not more than one percent of the equity of any
entity engaged in a Competitive Activity, if such equity is
listed on a national securities exchange or regularly traded in
an over-the-counter market.
(b) During the Term, the Individual shall not, directly or
indirectly, for his own account or for that of any other person
or company and whether as a shareholder, partner or investor in
any person or company or as principal, agent, representative,
consultant, proprietor or in any other capacity:
(i) request or advise any individual or company that is a
customer of the Company ("Customer") to withdraw, curtail or
cancel any such Customer's business with the Company; or
(ii) induce, directly or indirectly, any Customer or vendor of
the Company, or any third party, to patronize or create any
business engaging in a Competitive Activity.
(c) During the Term, the Individual shall refrain from making
any statements to any person or organization, including, but not
limited to, members of the press and media, and other members of
the public, which would disparage the Company, its officers,
directors or affiliates.
1.2 Solicitation of Employees. During the Term, the Individual
shall not, and shall cause each of his Affiliates not to,
directly or indirectly, for his own account or for that of any
other person or company and whether as a shareholder, partner or
investor in any person or company or as principal, agent,
representative, consultant, proprietor or in any other capacity,
solicit or induce or attempt to solicit or induce any employee,
sales representative, agent or consultant of the Company to
terminate his or her employment, representation or other
association with the Company.
1.3 Territory. The Individual shall refrain from engaging in
the activities described in Section 1.1 and 1.2 during the Term
within the Restricted Territory (defined below). Restricted
Territory means the geographic area within the continental United
Stated and Canada.
1.4 Compensation. During the Term, as compensation for the
obligations undertaken by the Individual hereunder, the
Individual is entitled to an annual payment of $118,750. The
first annual payment shall be made as of the date hereof and
subsequent payments shall be made on each anniversary hereof. If
the Individual dies during the Term, the Company shall make the
annual payment to the Individual's estate or beneficiaries.
1.5 Remedies. Inasmuch as any breach for failure to comply with
Section 1 of this Agreement will cause serious and substantial
damage to the Company if the Individual should in any way breach
or fail to comply with the terms of this Section 1 generally, the
Company will be entitled to an injunction restraining the
Individual from such breach or failure. All remedies expressly
provided for herein are cumulative of any and all other remedies
now existing at law or in equity. The Company is, in addition to
the remedies herein provided, entitled to avail itself of all
such other remedies as may now or hereafter exist at law or in
equity for compensation, and for the specific enforcement of the
overall covenants contained herein. Resort to any remedy
provided for hereunder or provided for by law will not prevent
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the concurrent or subsequent exercise of any other appropriate
remedy or remedies, or preclude the recovery by the Company of
monetary damages.
Section 2. Non-Disclosure. The Individual shall keep in strict confidence,
and shall not, directly or indirectly, at any time, disclose, furnish,
disseminate, make available or use any trade secrets or
confidential business and technical information of the Company or
its customers or vendors, without limitation as to when or how
the Individual may have acquired such information. Such
confidential information includes, without limitation, the
Company's unique selling, manufacturing and servicing methods and
business techniques, training, service and business manuals,
promotional materials, vendor and product information, customer
and prospective customer lists, other customer and prospective
customer information, financial information and technical
information; provided, however, the Individual shall not be
subject to the restrictions set forth in this Section 2 with
respect to information which: (i) becomes generally available to
the public other than as a result of disclosure by the Individual
or his agents or representatives, (ii) becomes available to the
Individual on a non-confidential basis from a source other than
the Company or its agents, provided that such source lawfully
obtained such information and is not bound by a confidentiality
obligation not to disclose such information, or (iii) is required
to be disclosed by law or pursuant to an order of a court of
competent jurisdiction. The Individual specifically acknowledges
and agrees that this confidential and proprietary trade secret
information, whether reduced to writing, maintained on any form
of electronic media or maintained in the mind or memory of the
Individual and whether compiled by the Company and/or the
Individual, derives independent economic value from not being
readily known to or ascertainable by proper means by others who
can obtain economic value from their disclosure or use, that
reasonable efforts have been put forth by the Company to maintain
the secrecy of such information, that such information is and
will remain the sole property of the Company and that any
retention and use of such information will constitute a
misappropriation of the Company's trade secrets. The Individual
shall not remove from the premises of the Company or retain any
of the materials described in this Section 2 except with the
prior written consent of the Company, and the Individual promptly
shall deliver to the Company all such materials in the
Individual's possession.
Section 3. Miscellaneous
3.1 Amendment. This Agreement may be amended only by a writing
executed by the parties hereto.
3.2 Entire Agreement. This Agreement and the other agreements
referred to herein set forth the entire understanding of the
parties hereto regarding the subject matter hereof and supersede
all prior contracts, agreements, arrangements, communications,
discussions representations and warranties, whether oral or
written, between the parties regarding the subject matter hereof.
3.3 Notices. All notices and other communications required or
permitted hereunder will be in writing and will be deemed to have
been duly given when delivered in person or when dispatched by
telegram or electronic facsimile transfer (confirmed in writing
by mail simultaneously dispatched) or one business day after
having been dispatched by a nationally recognized overnight
courier service to the appropriate party at the address specified
below:
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If to the Company: L&S Automotive Products Co.
0 Xxxxx Xxxxxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: President
with a copy to: L&S Automotive Products Co.
0 Xxxxx Xxxxxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: General Counsel
If to the Individual: Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, XX 00000
with a copy to: Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: R. Xxxxxx Xxxxxxx
3.4 Assignment. This Agreement is binding upon and inures to
the benefit of the heirs, successors, representatives and assigns
of each party hereto, but no rights, obligations or liabilities
of the Individual hereunder will be assignable without the prior
written consent of the Company.
3.5 Governing Law. This Agreement will in all respects be
governed by, and construed in accordance with the laws of the
State of Ohio.
3.6 Severability. Each section and subsection of this Agreement
constitutes a separate and distinct provision hereof. It is the
intent of the parties hereto that the provisions of this
Agreement be enforced to the fullest extent permissible under the
laws and public policies applicable in each jurisdiction to be
invalid, ineffective or unenforceable, the remaining provisions
will not be affected thereby. The invalid, ineffective or
unenforceable provision will, without further action by the
parties, be automatically amended to effect the original purpose
and intent of the invalid, ineffective, unenforceable provisions;
provided, however, that such amendment will apply only with
respect to the operation of such provision in the particular
jurisdiction with respect to which such adjudication is made.
3.7 Waivers. None of the terms of this Agreement will be deemed
to be waived or amended by either party unless such a waiver or
amendment specifically references this Agreement and is in
writing signed by an authorized representative of the party to be
bound. Any such signed waiver will be effective only in the
specific instance and for the specific purpose for which it was
made or given.
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3.8 Headings. The headings in this Agreement are solely for
convenience of reference and are not to be given any effect in
the construction or interpretation of this Agreement.
3.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed to be an original,
and all of which together will constitute one and the same
instrument.
3.10 Third Parties. Nothing expressed or implied in this
Agreement is intended, or may be construed, to confer upon or
give any person or entity other than the Company and the
Individual any rights or remedies under, or by reason of, this
Agreement.
3.11 Income Tax Reporting. The Individual shall report the all
payments made to the Individual pursuant to Section 1 hereof as
ordinary income for federal, state and local income tax purposes.
3.12 Disclosure. During the Term the Individual shall
communicate the contents of Section 2 of this Agreement to any
person, firm, association, partnership, corporation or other
entity that he intends to be employed by, associated with or
represent and that is engaged in a business that is competitive
to the business of the Company.
3.13 Future Guarantee. It is anticipated by the Company
that the Company will be transferred to a third party purchaser
holding company by or around December 31, 1999. Upon such
transfer, the Company shall cause such third purchaser holding
company to execute a guarantee of the obligations of the Company
hereunder.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be duly executed and delivered by its duly
authorized officer, and the Individual has duly executed and
delivered this Agreement, as of the date first written above.
/s/ Xxxx X. Xxxxxx
____________________________________
Xxxx Xxxxxx
L&S AUTOMOTIVE PRODUCTS CO.
By: /s/ Xxxxxx Xxxxxxxxx
__________________________________
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