NON-COMPETITION AGREEMENT
-------------------------
This Non-Competition Agreement made and entered into as of this 21st day
of December, 1998 by and between Xxxxxxx Xxxxx ("Xxxxx"), of 00 Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx and Foilmark, Inc., ("Foilmark"), a Delaware
corporation, with its principal lace of business in 0 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxxxxx, XX.
RECITALS
On March 17, 1992, Franklin Manufacturing Corporation ("Franklin") and
Xxxxx entered into an Employment Agreement (the acquired Franklin and assumed
its obligations under the Employment Agreement. In 1997, Foilmark elected to
sell its hot stamping foil machine products lines. It is unclear whether
Foilmark has breached or terminated the Employment Agreement. In any case,
Foilmark and Xxxxx are now desirous of terminating the Employment Agreement
without cause. However, for all intents and purposes, the non-competition
provisions contained in Paragraph 17 of the Employment Agreement expire upon
the termination of the Employment Agreement, and Foilmark, desires that Xxxxx
agree to an extension of the non-competition provisions of the Employment
Agreement.
NOW THEREFORE, in consideration of the promises and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency whereof is hereby acknowledged, Foilmark and Xxxxx agree as
follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT. Effective upon the date hereof
and except as hereinafter specifically provided in paragraph 2 hereof, the
Employment Agreement is terminated, except that Foilmark shall continue to
pay Xxxxx until December 31, 1998 compensation in accordance with the
Employment Agreement.
2. NON-COMPETITION. Xxxxx and Foilmark agree that the Employment
Agreement shall be null and void except that Paragraph 15 and 16 of the
Employment Agreement shall survive and be deemed part of this Agreement.
Xxxxx further agrees that during the term of this Agreement, Xxxxx will not
directly or indirectly, alone or as a member of a partnership or as an
officer, director, stockholder, agent or employee of another corporation (a)
intentionally do any act or thing likely or intended to impair the business
or goodwill of Foilmark or its affiliates, (b) intentionally do any act or
thing which is likely or intended to deprive Foilmark or its affiliates of
the goodwill
of its suppliers, customers, employees and other having business relations
with it, (c) solicit the employment of or otherwise induce any person who is
currently employed by Foilmark or its affiliates to leave Foilmark, (d)
solicit sales or products of the type manufactured or sold by Foilmark and
its affiliates from any present or former customers of Foilmark or its
affiliates, or (e) engage in any competition with the business of Foilmark
or its affiliates; provided, however, that nothing in this Agreement or the
Employment Agreement shall prohibit Xxxxx from participating or being engaged
in any business involved in the manufacture and sale of hot stamp foil
machines of any type.
3. TERMINATION DATE. Except as otherwise provided herein, this
Agreement shall terminate on December 1, 2003.
4. CONSIDERATION. In consideration of Xxxxx'x agreement not to compete
as provided in Paragraph 2 of this Agreement, Foilmark agrees to (a) pay
Xxxxx on the first of each month (i) the sum of $14,886.50. (Fourteen
Thousand Eight Hundred Eighty Six Dollars and 50 Cents) in eighteen (18)
equal installments commencing on January 1, 1999 and (ii) one last
installment of $5,762.52 payable on July 1, 2000. Foilmark shall also pay
Xxxxx $4,167 per month in sixty (60) equal installments commencing on January
1, 1999 and ending on December 1, 2003. The payments of $14,886.50 set forth
in this paragraph shall be increased effective as of January 1 of each year
commencing January 1, 1999 by a percentage equal to the increase, if any,
during the preceding calendar year in the Consumer Price Index-Wage Earners
for Boston, Massachusetts, as announced by the United States Bureau of Labor
Statistics (base year 1967=100) or, if no such index exists, the index most
comparable; (b) pay Xxxxx the sum of $20,000.00 (Twenty Thousand Dollars) on
or before December 31, 1999; (c) (i) continue to pay the lease and all
maintenance, insurance, operating, and other expenses with respect to Xxxxx'x
present automobile (or a comparable automobile) until the current lease for
said automobile expires and (ii) thereafter allow Xxxxx to purchase said
vehicle at the lease option purchase price and (whether Xxxxx purchases such
vehicle or not) provide Xxxxx, until July 12, 2000, with a car allowance
equal to the cost of the lease, insurance, maintenance, operating, and other
expenses being paid by Foilmark on Xxxxx'x behalf as of said expiration; (d)
provide Xxxxx and pay the expenses associated with his car phone in an
amount not to exceed $170 (One Hundred Seventy and 00/100 Dollars) per month
until July 12, 2000; (e) (i) until July 12, 2000, make available to Xxxxx and
his spouse the medical and dental coverage currently provided to them
pursuant to Foilmark's medical and dental plan and (ii) until July 12, 2000,
contribute to the plan on Xxxxx'x and his spouses's behalf as will ensure
that Xxxxx and his spouse shall not be required to contribute an amount or
amounts to the plan in excess of that which they
2
currently contribute; (3) after July 12, 2000, make available for so long as
Xxxxx or his wife so desire the same health and dental coverage currently
provided to Xxxxx and his spouse provided that Xxxxx or his spouse make all
contributions with respect to such coverage (or reimburse Foilmark such
amount or amounts as it contributes on behalf of Xxxxx and his spouse). Xxxxx
shall be entitled to no other benefits from Foilmark. In the event that Xxxxx
should die before all of the payments required to be made by Foilmark
pursuant to this paragraph 4(a), (b), (c), and (d) have been made, Foilmark
shall continue to make such payments to Xxxxx'x estate. In the event that
Xxxxx should die before all of the commitments required of Foilmark by this
paragraph 4(d) and (e) have been fulfilled, Foilmark shall continue to
fulfill such commitments insofar as they relate to Xxxxx'x spouse. To
illustrate, should Xxxxx die prior to July 12, 2000, Foilmark shall continue
to make available to his spouse until July 12, 2000, the medical and dental
coverage currently provided to her and contribute until July 12, 2000, on her
behalf such amount or amounts as are necessary to continue such coverage.
Similarly, in the event Xxxxx die after July 12, 2000, Foilmark shall
continue to make such coverage available to Xxxxx'x spouse provided that she
contributes (or reimburses Foilmark for) such amount or amounts as are
necessary to continue such coverage. Foilmark shall make no withholdings
whatsoever from any payment to be made pursuant to this paragraph 4.
5. INDEMNIFICATION AGREEMENT. Xxxxx agrees to waive any claim he may
have for back pay due to him from Foilmark. In return, Foilmark agrees that
the Indemnification Agreement between Xxxxx, Kensol/Foilmark, Inc. a Delaware
corporation, and others dates February 21, 1992, shall be null and void.
6. INJUNCTIVE RELIEF. Xxxxx agrees and acknowledges that any breach of
Paragraph 2 of this Agreement or paragraphs 15 and 16 of the Employment
Agreement by Xxxxx shall not be adequately compensated by damages at law and,
therefore, Foilmark shall be entitled to, in addition to any other remedies
that may be available to it, equitable relief in a court or equity by
injunction or otherwise without the necessity of proving actual damage to
Foilmark for any breach.
7. STOCK REDEMPTION. The parties recognize that Xxxxx and the Xxxxxxx
X. Xxxxx and Xxxx Xxxxx Charitable Remainder Trust (the "Trust") own
substantial stock in Foilmark. Foilmark agrees as further consideration of
the promises of Xxxxx set forth herein, that in the event it redeems at any
time the stock of any stockholder other than Xxxxx or the Trust, it shall
offer to redeem Xxxxx'x and the Trust's stock upon the same terms and
conditions and in the same proportion as the amount of stock to be redeemed
of the other stockholder bears to the total amount of
3
stock owned by that stockholder. In other words, if the other stockholder
owns 10 shares of Foilmark stock and Foilmark intends to redeem 5 shares, it
shall offer to redeem half of Xxxxx'x stock on the same terms and conditions
it proposes to redeem the other stockholder's stock. This obligation shall
continue until Xxxxx, the Trust, his estate, or heirs no longer own any
Foilmark stock.
8. "PIGGYBACK" RIGHTS. Foilmark also agrees and recognizes that it
conferred upon Xxxxx certain "demand" and "piggyback" registration rights
with regard to Xxxxx'x Foilmark stock pursuant to a Registration Agreement
between Foilmark and Xxxxx dated March 17, 1992. Foilmark acknowledges that
Xxxxx transferred some of his Foilmark stock to the Trust in 1995 and that it
agreed that said piggyback and demand rights attached to such stock after it
was transferred to the Trust. Foilmark agrees that should Xxxxx transfer
additional Foilmark stock to the Trust, the same piggyback and demand
registration rights shall attach to such stock after such transfer.
9. WAIVER. Failure by either party to require performance of any term
or obligation of this Agreement and the waiver by either party of any breach
of this Agreement, shall not be deemed a waiver of such term or obligation
and shall not foreclose subsequent enforcement of such term or obligation,
nor be deemed a waiver of any subsequent breach.
10. RELEASES AND INDEMNIFICATION. (a) In further consideration of the
obligations of Xxxxx set forth in this Agreement, Foilmark, on behalf of its
predecessors, successors, assigns, subsidiaries, officers, directors,
shareholders, employees, agents and representatives (hereinafter the
"RELEASORS"), hereby releases and forever discharges Xxxxx, his
representatives, agents, heirs, successors, assigns, and estate, (hereinafter
the "RELEASEES") and agrees to indemnify him and them and hold him and them
harmless from any and all actions or causes of action, suits, claims,
complaints, contracts, liabilities, agreements, promises, debts and damages,
whether existing or contingent, known or unknown, which the RELEASORS or any
other person or entity has, had, or ever had against any of the RELEASEES or
any of them, including without limitation any action taken or not taken by
Xxxxx as a director, officer, stockholder or employee of Foilmark, Franklin,
or Kensol Olsenmark, Inc. from the beginning of this world to the present,
and any obligation arising out of the closing documentation relating to the
sale of Xxxxxxxx, Xxxxxxxx Pacific Machine and Manufacturing Company, Inc.,
and various machinery to Foilmark or its predecessor on or about February 21,
1992. (b) In consideration of the promises and agreements of Foilmark herein
contained, Xxxxx, on behalf of himself, his heirs, administrators
4
and assigns, hereby releases and forever discharges Foilmark, its officers,
directors, subsidiaries, successors and assigns from any and all actions,
causes of action, suits, claims, complaints, contracts, liabilities,
agreements, promises, debts, damages, whether existing or contingent, known
or unknown, which Xxxxx has had or ever had against Foilmark or any of the
foregoing persons arising out of or relating to his Employment Agreement.
Nothing in this paragraph 10 shall be deemed to release Foilmark from its
obligations under this Non-Competition Agreement.
11. RESIGNATION FROM BOARD OF DIRECTORS. In return for the
consideration from Foilmark set forth herein, Xxxxx agrees to resign
forthwith from the Board of Directors of Foilmark, and effective upon the
date hereof, that certain voting agreement between Xxxxx and certain other
stockholders of Foilmark dated November 17, 1994, copy attached hereto as
Exhibit A, is hereby terminated insofar as Xxxxx is concerned.
12. BREACH. In the event that Foilmark fails to make any payment or
otherwise breaches any provision of paragraph 4 of this Agreement, all sums
due thereunder shall become immediately due and payable together with interest
at 1-1/2% per month, and the costs of collection, including any attorneys'
fees incurred by Xxxxx, his estate, or heirs as a result of such breach.
13. SUCCESSORS. This Agreement shall be binding upon and shall inure
to the benefit of Foilmark, Xxxxx and any of their respective successors,
affiliates, heirs, executors, administrators, legal representatives and
assigns.
14. MODIFICATION. No provisions of this Agreement shall be changed or
modified nor shall this Agreement be discharged in whole or part except by an
agreement in writing signed by both parties.
15. NOTICES. Any and all notices under this Agreement shall be in
writing, and if to Foilmark shall be duly given if mailed to Foilmark at the
address set forth above or such other address as Foilmark may hereafter
designate in writing for this purpose, and if to Xxxxx shall be duly given if
mailed to the address set forth above or such other address as Xxxxx may
hereafter designate in writing for this purpose.
16. SEVERABILITY. In the event that any one or more provisions of this
Agreement shall be held invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not effect any other
portion of this Agreement, and this Agreement shall be construed as if such
provisions had never been contained herein.
5
17. COMPLETE AGREEMENT. This Agreement represents the complete agreement
of the parties with respect to the subject matter contained herein. All prior
agreements of the parties with respect to the subject matter of this
Agreement are hereby terminated, except as herein provided.
18. GOVERNING LAW. This Agreement shall be deemed made under the laws of
the Commonwealth of Massachusetts and for all purposes shall be construed and
enforced in accordance with said laws.
FOILMARK, INC.
By: /s/ Xxxxx Xxxxx, Xx.
-----------------------------------------
/s/ Xxxxxxx Xxxxx
-----------------------------------------
XXXXXXX XXXXX
The undersigned being parties to that certain Voting Agreement with
Xxxxxxx Xxxxx, dated November 17, 1994, Exhibit A, hereby release Xxxxx from
any further obligations thereunder.
/s/ Xxxxxx X. Xxxxx /s/ Xxxxx Xxxxx, Xx.
------------------------------- -----------------------------------------
Xxxxxx X. Xxxxx Xxxxx Xxxxx, Xx.
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
------------------------------- -----------------------------------------
Xxxxxxxx X. Xxxxx Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
-------------------------------
Executive for Xxxxxxxx X. Xxxxx
6
EXHIBIT
A
VOTING AGREEMENT BETWEEN
CERTAIN SHAREHOLDERS OF
FOILMARK, INC.
THIS AGREEMENT is made this 17th day of November, 1994, by and among
Xxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xx., Xxxxx X. Xxxxx and
Xxxxxxx X. Xxxxx (collectively, the "Shareholders") and Xxxxxx Xxxxxxxx
("Xxxxxxxx").
WITNESSETH:
WHEREAS, the Shareholders own as of the date of this Agreement an
aggregate number of shares in excess of 40% of the issued and outstanding
shares of the capital stock of Foilmark, Inc. ("Foilmark")'
WHEREAS, Foilmark is entering into an Agreement of Exchange ("Exchange
Agreement") with West Foils, Inc. ("West Foils") and Xxxxxxxx, pursuant to
which, Xxxxxxxx, as the sole shareholder of all the issued and outstanding
common stock of West Foils, shall exchange all of his shares in West Foils
for common stock in Foilmark and $750,000;
WHEREAS, the Shareholders now wish to agree to vote on and after the
consummation of the Exchange Agreement for the election of Xxxxxx Xxxxxxxx as
director of Foilmark; and
WHEREAS, Xxxxxxxx now wishes to agree to vote on and after the
consummation of the Exchange Agreement for the election of the Shareholders
as directors of Foilmark.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree:
1. DIRECTOR VOTE. On and after the consummation of the Exchange Agreement
for the term of this Agreement, the Shareholders and Xxxxxxxx agree that they
shall each vote their shares of Common Stock of Foilmark for the election as
directors of Foilmark each of the above-named Shareholders who is, at the
time of such election, (a) the owner of issued and outstanding Common Stock
of Foilmark, and (b) an officer or employee of the Corporation or any of its
subsidiaries or affiliates; and (ii) the Shareholders agree that they shall
each vote their shares of Foilmark Common Stock for the election of Xxxxxxxx
as a director of Foilmark provided that at the time of such election Xxxxxxxx
is (a) an owner of Foilmark Common Stock and (b) an officer or employee of
Foilmark or any of its subsidiaries or affiliates, including, without
limitation, West Foils.
2. TERM. The Term of this Agreement is 10 years unless the parties agree
otherwise.
3. VALIDITY. If any term or provision of this Agreement, with the
application thereof to any person or circumstance, shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or application to
other persons and circumstances shall not be affected thereby, and each term
and provision hereof shall be enforced to the fullest extent permitted by law.
4. NOTICE. All notices hereunder shall be in writing, and shall be duly
given, by personal delivery, by registered or certified mail, return-receipt
requested, by telecopier or by a nationally recognized overnight courier
service, to the following addresses:
If to the Stockholders: With Copy to:
-----------------------
c/o Foilmark, Inc. Xxxxx X. Xxxxxxx, Esq.
00 Xxxxxxxx Xxxx Xxxx Xxxxxxx & Xxxxx
Xxxxxxxx, XX 00000 0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
If to Xxxxxxxx: With Copy to:
---------------
Xxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx, Esq.
West Foils, Inc. Xxxxxx, Xxxxx & Xxxxxxx
0000 Xxxxxx Xxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000 Xxx Xxxxxxx, XX 00000-0000
All notices shall be deemed to have been given or made when personally
delivered; or if mailed as aforesaid upon the earlier of receipt or three
business days after being deposited in the mail; or if telecopied as
aforesaid upon dispatch; or if by courier service, the business day following
dispatch.
5. WAIVER. The provisions of this Agreement may be waived only by an
instrument in writing signed by Xxxxxxxx and all of the Shareholders, or
their transferees, as the case may be. No failure or delay by any party in
exercising any right or remedy hereunder shall operate as a waiver thereof,
and a waiver of a particular right or remedy on one occasion shall not be
deemed a waiver of any other right or remedy, or a waiver on any subsequent
occasion.
6. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and shall be governed by, the laws of the State of Delaware.
7. COUNTERPARTS. This Agreement may be executed in several counterparts
which, when executed and delivered by all parties hereto, shall be binding on
all parties hereto and shall constitute one agreement, notwithstanding that
all parties have not signed the same counterpart.
8. DISPUTE RESOLUTION. If a dispute arises under this Agreement that is
not settled promptly in the ordinary course of business, the parties shall
seek to resolve any such dispute between them, first, by negotiating promptly
with each other in good faith in face-to-face negotiations. If the parties
are unable to resolve the dispute between them within twenty (20) business
days (or such period as the parties shall otherwise agree), then such dispute
shall be submitted to binding arbitration in accordance with the General
Commercial Rules of the American Arbitration Association in Suffolk County,
New York. Arbitration shall apply the laws of Delaware. The decision and
award of the arbitrator shall be final and binding and may be entered into
any court of competent jurisdiction for enforcement, as necessary.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
/s/ Xxxxxx Xxxxxxxx
-----------------------------
Xxxxxx Xxxxxxxx
SHAREHOLDERS
/s/ Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx, Xx.
-----------------------------
Xxxxx X. Xxxxx, Xx.
/s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
-----------------------------
Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
-----------------------------
Xxxxxxx X. Xxxxx
