Exhibit 10(aj)
NON-COMPETE AGREEMENT
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AGREEMENT, dated as of February 26, 1999, by and between WALLS
INDUSTRIES, INC., CLEBURNE, TEXAS, a Delaware corporation (the "Buyer"), and S.
XXXXX XXXXXXXX (the "Shareholder").
WHEREAS, (a) the Shareholder is presently a direct significant
shareholder of Big Xxxxx Brands, Inc., a Delaware corporation (the "Seller") and
an officer of the Seller and (b) pursuant to an asset purchase agreement
executed as of the date hereof (the "Asset Purchase Agreement"), the Buyer is
acquiring certain of the assets of the Seller (the "Assets");
WHEREAS, it is a condition precedent to the execution of the
Asset Purchase Agreement that the Shareholder enter into this Agreement and a
condition of closing to the Asset Purchase Agreement that this Agreement remain
in full force and effect;
WHEREAS, the Shareholder acknowledges that the Seller has been
involved in the business (the "Business") of manufacturing, distributing and
selling apparel defined as Workwear Products by the trademark license agreement
executed as of the date hereof; and
WHEREAS, the Shareholder acknowledges that his position as a
significant shareholder of the Seller and an officer of the Seller has brought
him into close contact with many confidential affairs of the Seller not readily
available to the public, and plans for future developments.
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NOW, THEREFORE, the parties hereto agree as follows:
1. Restrictive Covenants.
(a) Non-Compete. For a period (the "Restricted Period")
commencing on the Closing Date (as defined in the Asset Purchase Agreement) and
terminating on the tenth anniversary of the Closing Date, the Shareholder shall
not anywhere in the world (the "Territory"), directly or indirectly, (i) engage
in the Business (or any material facet thereof) for the Shareholder's own
account or (ii) enter the employ of, render any services to, or become
interested in, any person, partnership, firm or corporation in material direct
competition with the Buyer or any of its affiliates with respect to the
Business, including, without limitation, as an individual, partner, shareholder,
director, officer, principal, agent, employee, trustee or consultant; provided,
however, that the Shareholder may own, directly or indirectly, but solely as a
passive investment, less than 5% of any class of equity securities of any
corporation that is publicly traded. The Shareholder agrees that the geographic
scope of the covenants set forth in this Section 1(a) is necessary in order to
secure for the Buyer the benefits it has contracted for and is reasonable.
(b) Confidential Information; Personal Relationships.
During and after the Restricted Period, the Shareholder shall keep secret and
retain in strictest confidence, and shall not use for the benefit of himself or
others, all confidential information relating to the Business or the Assets,
including, without limitation, "know-how", trade secrets, customer lists,
details of client or consultant contracts, pricing
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policies, operational methods, marketing plans or strategies, product
development techniques or plans, business acquisition plans, new personnel
processes, designs and design projects, inventions and research projects
relating to the Business or the Assets and shall not disclose them to anyone
outside of the Buyer, except with the Buyer's express written consent.
(c) Employees of the Buyer. During the Restricted
Period, the Shareholder shall not, directly or indirectly, hire or solicit (i)
any person then employed by the Buyer or any of its affiliates or (ii) any
person employed by the Seller who, within one year of the Closing Date, has been
offered employment by the Buyer, or encourage any such employee as described in
clause (i) or (ii) to leave or decline such employment.
(d) Consultants of the Buyer Group. During the
Restricted Period, the Shareholder shall not, directly or indirectly, hire or
solicit any consultant then under exclusive contract with the Buyer or any of
its affiliates or encourage any such consultant to terminate such relationship.
2. Consideration. The Shareholder acknowledges that the Buyer is not
obligated, and would not otherwise agree, to close its purchase under the Asset
Purchase Agreement without the Shareholder's execution and delivery of this
Agreement. As consideration to induce the Buyer to purchase the Assets from the
Seller, and as a condition precedent for entering into the Asset Purchase
Agreement,
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the Shareholder agrees to be bound by the representations, warranties, covenants
and agreements contained in this Agreement.
3. Rights and Remedies Upon Breach. If the Shareholder breaches,
or threatens to commit a breach of, any of the provisions of Section 1 (the
"Restrictive Covenants"), the Buyer shall have, in addition to, and not in lieu
of, any other rights and remedies available to the Buyer under law or in equity,
the right and remedy to have the Restrictive Covenants specifically enforced by
any court of competent jurisdiction, it being agreed that any breach or
threatened breach of the Restrictive Covenants would cause irreparable injury to
the Buyer and that money damages would not provide an adequate remedy to the
Buyer.
4. Severability of Covenants. The Shareholder acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in geographic and
temporal scope and in all other respects. If any court determines that any of
the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
then the remainder of the Restrictive Covenants shall not thereby be affected
and shall be given full effect without regard to the invalid portions. In
addition, such court shall have the power to reduce the duration or scope of a
temporal or geographic provision, as the case may be, it finds unenforceable as
written, and, in its reduced form, such provision shall then be enforceable.
5. Enforceability in Jurisdictions. The Buyer and the Shareholder
intend to and hereby confer jurisdiction to enforce the Restrictive Covenants
upon the
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courts of any jurisdiction within the Territory. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
Buyer and the Shareholder that such determination not bar or in any way affect
the Buyer's right to the relief provided above in the courts of any other
jurisdiction within the Territory, as to breaches of such Restrictive Covenants
in such other respective jurisdictions, such Restrictive Covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse and
independent covenants.
6. Successors and Assigns. The Agreement is binding upon and
shall inure to the benefit of the parties hereto and any successors to the
Buyer. This Agreement and all of the Shareholder's rights, duties and
obligations hereunder are personal in nature and shall not be assignable by the
Shareholder. Any purported assignment shall not be valid or binding on the
Buyer.
7. Waiver, Modification or Amendment. No waiver of any provision
of this Agreement or modification or amendment of the same shall be effective,
binding or enforceable unless in writing and signed by the party to be charged
therewith.
8. Applicable Law. This Agreement shall be governed by and
administered in accordance with the laws of the State of New York applicable to
agreements made and to be entirely performed therein.
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9. Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the subject matter hereof. No representation,
promise or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
10. Termination. This Agreement shall be terminated and become
null and void and have no further force or effect upon termination of the Asset
Purchase Agreement.
11. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
12. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
WALLS INDUSTRIES, INC.,
CLEBURNE, TEXAS
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President
/s/ S. Xxxxx Xxxxxxxx
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S. Xxxxx Xxxxxxxx
