NON-COMPETE AGREEMENT
This Non-Compete Agreement (this "Agreement") is made this day of ,
1997, by and between Utilase, Inc., a Michigan corporation ("Utilase"), and DCT,
Inc., a Michigan corporation ("DCT").
Background
A. DCT was the majority shareholder of Utilase.
B. This Agreement is executed and delivered in connection with
the consummation of the transactions contemplated by that
certain Stock Purchase Agreement among Noble International,
Ltd., a Michigan corporation ("Noble"), Utilase, and the
shareholders of Utilase (the "Shareholders"), dated April 7,
1997 (the "Purchase Agreement").
NOW, THEREFORE, in consideration of the transactions contemplated by
the Purchase Agreement and the mutual covenants set forth in this Agreement,
receipt of which is hereby acknowledged, the parties to this Agreement agree as
follows.
Agreement
1. Covenant Not to Compete.
(a) DCT shall not, during the period of this Agreement,
directly or indirectly, enter into any arrangement or understanding, engage in,
be connected with, or have any interest in, as owner, partner, shareholder or
advisor, of any entity which is engaged in the Utilase Business, as defined
below, in any geographic area in which the products or services of Utilase are
now, have been or, during the term of this Agreement, will be produced, sold,
distributed or provided. Excluded from this Section is DCT's ownership of not
more than five percent of the outstanding stock of any corporation whose stock
is held of record by more than 500 shareholders and is publicly traded.
(b) "Utilase Business" shall mean the design or manufacture of
"tailor blank welding systems" for use or resale, the design and assembly of
systems to manufacture "tailor welded blanks" and the manufacturing or
processing of materials into "tailor welded blanks."
(c) Notwithstanding anything to the contrary in this
Agreement, (i) DCT shall not be prohibited from soliciting customers or
suppliers of Utilase for purposes unrelated to the Utilase Business, and (ii)
neither Utilase Systems, Inc. ("Systems") nor DCT, on behalf of Systems, shall
be prohibited from conducting any activities, or from using the name "Utilase
Systems, Inc.," so long as Systems does not engage in the Utilase Business.
2. Term of Agreement. This Agreement shall commence on the date hereof,
and shall terminate on the earlier of seven years from the date hereof,
provided, however, that this Agreement shall terminate on the 60th day following
an Event of Default (as defined in the Notes delivered to the Shareholders
pursuant to the Purchase Agreement), unless such Event of Default is cured prior
to such date.
3. Confidential Information. (a) "Confidential Information" means:
(i) the identity of, or any material information concerning,
any client or prospective client of Utilase;
(ii) the terms and conditions of any business transaction that
Utilase has performed or has offered to perform with any client or
prospective client of Utilase;
(iii) proprietary manufacturing systems, processes,
engineering, die edge preparation, nesting, trade secrets, and
methods of operation of Utilase;
(iv) any forms, business plans, manuals, procedures and
policies of Utilase;
(v) any other facts or data that are treated as confidential
and proprietary by Utilase; and
(vi) any documents, electronic or print, that relate to, refer
to, are involved with, summarize, embody or constitute the
Confidential Information defined in this paragraph (a).
(b) DCT understands and agrees that the Confidential
Information used in the Utilase Business is a valuable, special and unique asset
of Utilase and shall be and remain the sole and exclusive property of Utilase
Accordingly, DCT agrees that it will not take from Utilase's premises, or,
directly or indirectly, reproduce in any form, use, disclose or reveal any
Confidential Information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, except as required by law or under
court order or as authorized in advance in writing by Utilase.
Notwithstanding the foregoing, Confidential Information shall
only include information relating solely to the Utilase Business and shall not
include information or material that (i) is publicly available or becomes
publicly available through no action or fault of DCT, (ii) was already in DCT's
possession or known to DCT prior to being disclosed or provided to DCT by or on
behalf of Utilase, or (iii) was or is obtained by DCT from a third party,
provided, that, such third party was not bound by a contractual, legal or
fiduciary obligation of confidentiality to Utilase, Utilase or any other party
with respect to such information or material.
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4. Business Relationships. DCT understands and agrees that establishing
business relationships with representatives of the organizations served in the
Utilase Business is a demanding and difficult procedure requiring a great deal
of time, effort and money, and requires the building of confidence and goodwill,
and that Utilase should have the right to hold such established business
relationships as its own.
DCT therefore agrees that during the period of this Agreement, it will
not, directly or indirectly, without the consent of Noble, (i) request or advise
any customer or prospective customer of Utilase to withhold, curtail or cancel
their business with Utilase, or (ii) call on or solicit any client or
prospective client of Utilase for any purpose related to the Utilase Business.
5. Remedies. In the event of a breach or threatened breach by DCT of
the provisions of this Agreement, Utilase shall be entitled, upon the posting of
any applicable bond, to an injunction and restraining order to prevent such
breach or continued breach by DCT without having to prove damages, it being
agreed that any such violation will cause Utilase irreparable damages for which
Utilase shall have no adequate remedy other than by injunction and restraining
order. Nothing in this Agreement shall be construed as prohibiting Utilase from
pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of damages from DCT. If the scope of any
restriction of this Agreement is too broad to permit enforcement of such
restriction to its full extent, then such restriction shall be enforced to the
maximum extent permitted by law, and DCT hereby consents and agrees that such
scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
6. Amendments and Waivers. No change or modification of any part of
this Agreement, including this Section, shall be valid unless such change or
modification is made in writing and signed by both the President of Utilase and
the President of DCT. No waiver of any provision of this Agreement shall be
valid unless in writing and signed by the party alleged to have waived its right
under the Agreement.
7. Notice. Any notice given pursuant to this Agreement shall be deemed
given when sent by registered or certified mail, postage prepaid and return
receipt requests, addressed to the appropriate party:
if to Utilase, to be sent to:
Noble International, Ltd.
00 Xxxxxxxxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
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with a copy to:
Jaffe, Raitt, Heuer & Xxxxx, Professional Corporation
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Sugar
or to such other person or at such other place as Utilase shall furnish to DCT
in writing; and
if to DCT to:
DCT, Inc.
0000 Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx Xxxxxxxxx III
with a copy to:
Xxxxxx Xxxxxxx PLLC
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement, and
supersedes all prior and contemporaneous negotiations, commitments, writings or
other agreements, either oral or written, between DCT and Utilase with respect
to the subject matter of this Agreement.
9. Assignment. Neither this Agreement nor DCT's rights under this
Agreement may be assigned by DCT. Utilase may assign this Agreement upon
receiving the prior consent of DCT.
11. Governing Law. This Agreement shall be governed by the laws of the
State of Michigan, without regard to conflict of laws provisions.
12. Severability; Survival In the event any provision or portion of
this Agreement is determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall nevertheless
be binding upon the parties with the same effect as though the invalid or
unenforceable part had been severed and deleted.
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13. Arbitration. Subject to the provision of Section 5 hereof, in the
event that Utilase and DCT cannot agree as to any disputes arising out of this
Agreement, the unresolved matter shall be resolved by arbitration if a request
for arbitration, as provided herein, is given. Arbitration shall be initiated by
either party making a written demand on the other party and simultaneously
filing copies of the demand, together with the required fees, with the Detroit
Regional Office of the American Arbitration Association ("AAA"). Within fifteen
(15) days after receipt of such demand, each party shall designate one
arbitrator. These two arbitrators shall, within fifteen (15) days after their
appointment, select a third arbitrator, who shall be experienced in the subject
matter of the claim for which indemnification is being sought. In the event that
the first two arbitrators are unable to agree upon the third arbitrator, then
the arbitrators shall apply to the AAA to designate and appoint a person who
meets these criteria as the third arbitrator. In the event the party upon whom
the original arbitration demand was served shall fail to designate its
arbitrator, the arbitrator designated by the party requesting arbitration shall
act as the sole arbitrator and shall be deemed to be the single, mutually
approved arbitrator to resolve the matter. Final arbitration of the dispute
shall occur within six (6) months of the giving of the notice of arbitration.
The place of arbitration shall be Troy, Michigan. Arbitration shall be conducted
under the auspices of the AAA, and the AAA Rules shall govern all proceedings
unless otherwise provided herein. In the case of conflict between the AAA Rules
and this Agreement, the provisions of this Agreement shall govern. The
arbitrators' sole power shall be to interpret the provisions of this Agreement,
and they shall have no power to change or modify any provision of this
Agreement. The parties shall have the right to discovery in accordance with the
Federal Rules of Civil Procedure except that discovery may commence immediately
upon the service of the demand for arbitration and except that discovery shall
be limited to document requests and depositions of not more than two (2) people
per party, and must occur within three (3) months of the date of such service of
notice of the complaining party. A party's unreasonable refusal to cooperate in
discovery shall be deemed to be a refusal to proceed with arbitration, and,
until the arbitration panel is complete, the parties may enforce their rights
(including the right of discovery) in the circuit courts of the State of
Michigan. Such enforcement in the courts shall not constitute a waiver of a
party's right to arbitration. Upon the completion of the appointment of the
arbitration panel, the arbitrators shall have the power to enforce the parties'
discovery rights. It is expressly agreed that material subject to discovery
shall include written documents that must be created from information that
currently exists only in machine-readable form.
The parties expressly covenant and agree to be bound by the decision of
the arbitration panel and accept any such decision as the final determination of
the matter in dispute. A judgment of any Michigan Circuit Court may be rendered
upon any award made pursuant to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
UTILASE, INC.
By:_________________________________
Its:________________________________
DCT, INC.
By:_________________________________
Xxxxx Xxxxxx Xxxxxxxxx III, Chairman
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