NONCOMPETITION AGREEMENT
EXHIBIT 10.2
THIS NONCOMPETITION AGREEMENT (as hereinafter defined, this “Agreement”), is made
as of this 11th day of October, 2006, by and among SOUTHERN SAW SERVICE, L.P., a Georgia limited
partnership (“Southern Saw”), SOUTHERN SAW HOLDINGS, INC., a Georgia corporation
(“Holdings” and together with Southern Saw, the “Sellers”) and SOUTHERN SAW
ACQUISITION CORPORATION, a Delaware corporation having its headquarters and principal place of
business in Lake Mary, Florida (“Buyer”).
W I T N E S S E T H:
WHEREAS, capitalized terms used in these recitals and not otherwise defined shall have the
meanings set forth in Section 1 of this Agreement; and
WHEREAS, concurrently with the execution and delivery of this Agreement, Buyer is purchasing
substantially all of the assets of both Sellers pursuant to that certain Asset Purchase Agreement
dated as of October 11, 2006 (as hereinafter defined, the “Asset Purchase Agreement”); and
WHEREAS, Kasco Corporation, a Delaware corporation (“Kasco” and together with Buyer,
the “Buyer Parties”), is the parent company of the Buyer and Kasco shall be an intended
third party beneficiary of this Agreement; and
WHEREAS, the Asset Purchase Agreement calls for the execution and delivery of a Noncompetition
Agreement by Sellers for the benefit of the Buyer Parties, and this is the Noncompetition Agreement
contemplated by the Asset Purchase Agreement; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth and
other good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, it is hereby agreed as follows:
1. Definitions. Capitalized terms used in this Agreement and not otherwise defined
shall have the respective meanings ascribed to such terms in the Asset Purchase Agreement. In
addition, the following capitalized terms shall have the respective meanings as follows:
“Affiliate” shall mean, with respect to any Person, any other Person controlling
controlled by, or under common control with the first Person; provided, however, that
“Affiliate” shall not include any employee of Holdings or any individual participant in the
Holdings ESOP.
“Agreed Courts” shall have the meaning set forth in Section 8 of this Agreement.
“Agreement” shall mean this Noncompetition Agreement and all written amendments hereto
that hereafter shall be executed and delivered by the parties.
“Asset Purchase Agreement” shall mean that certain Asset Purchase Agreement dated as
of October 11, 2006 between the Buyer and Sellers, together with any written amendment thereto that
heretofore has been executed and delivered by the parties.
“Confidential Information” shall mean all of the following information pertaining to
the Restricted Business or the Buyer Parties: (a) data or trade secrets, including secret
processes, formulas or other technical data; (b) production methods; (c) customer lists; (d)
personnel lists; (e) proprietary information; (f) financial or corporate records; (g) operational,
sales, promotional and marketing methods and techniques; (h) computer programs, including source
codes and/or object codes and other proprietary, competition-sensitive, or technical information or
secrets developed with or without the help of either Seller; (i) all technologies, patents,
formulas, bills of materials and processes used by Sellers; and (j) all customer and vendor lists
and other related information. Confidential Information shall not include any information that: (1)
at the time of disclosure is
5
within the public domain; (2) after disclosure becomes a part of the public domain or
generally known within the industry through no fault, act or failure to act, error, effort or
breach of this Agreement by either Seller; (3) is required by order, statute or regulation, of any
governmental authority to be disclosed to any federal or state agency, court, or other body, or (4)
information received by either Seller from a source other than the business sold by the Sellers
which is not known by either Seller to be under an obligation of confidentiality.
“Employee” shall mean any full-time or part-time employee and any independent
contractor performing services similar to those performed by employees.
“Geographic Area” shall mean all locations in the world.
“Buyer” shall mean Southern Saw Acquisition Corporation, a Delaware corporation.
“Buyer Parties” shall mean Buyer and Kasco.
“Noncompetition Period” shall mean the period beginning on the date of this Agreement
and ending on the fifth (5th) anniversary of this Agreement.
“Person” shall mean any individual, proprietorship, corporation, partnership, limited
liability company, joint venture, association, trust, venture, or other organization or legal
entity.
“Restricted Business” shall mean any or all of (a) the business of producing, storing,
transporting, sharpening, selling, or leasing sharp edge blade products for the meat business, the
bakery business, the wood pallet business, and for other commercial businesses, and (b) the
business of providing repair services for any equipment or products located in retail grocery
stores, butcher shops, bakeries, restaurants, meat packing houses, meat processing houses, or meat
xxxxxxxxx houses.
“Sellers” shall mean Southern Saw and Holdings.
2. Acknowledgements by Sellers. Sellers acknowledge that:
(a) This Agreement is ancillary to the main business purpose of the Asset Purchase Agreement
and is executed by Sellers to protect the legitimate interests of the Buyer Parties with respect to
Buyer’s acquisition of the assets of the Sellers.
(b) This Agreement has been duly authorized, executed and delivered by the Sellers and is a
valid and binding obligation of each Seller enforceable against each Seller in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, and
similar laws affecting creditors’ rights generally.
3. Noncompetition. As an inducement for the Buyer to enter into the Asset Purchase
Agreement and for Kasco to support the Buyer in closing the transactions contemplated by the Asset
Purchase Agreement, and as additional consideration for the Purchase Price to be paid to Sellers
under the Asset Purchase Agreement, the Sellers specifically agree that during the Noncompetition
Period, no Seller shall, without the prior written consent of the Buyer, either directly or
indirectly:
(a) compete with the Buyer Parties in, or otherwise engage in, any aspect of the Restricted
Business; or
(b) solicit, hire, or induce to refuse employment by the Buyer Parties or to leave the employ
of the Buyer Parties any person who as of either the date of this Agreement was an Employee of
Holdings working in the Restricted Business to whom Buyer shall have made an offer of employment.
In the event of a breach by either Seller of any covenant set forth in this Section 3, the term of
such covenant will be extended for both Sellers by the period of the duration of such breach.
4. Exception and Exclusion. Nothing in this Agreement shall be deemed to prevent
or limit the right of either Seller to be a passive owner of capital stock or other securities of
any Person if such securities are regularly traded on any national securities exchange or have been
registered under Section 12(g) of the
6
Securities Exchange Act of 1934; provided, however, that such passive
ownership interest of both Sellers together shall not exceed, Directly or Indirectly, one percent
(1%) of the issuer’s outstanding securities of that class.
5. Confidential Information. During the Noncompetition Period, each Seller shall,
except as required by law or by order of any court or government agency, keep and retain in
strictest confidence and shall not divulge, communicate, use to the detriment of the Buyer Parties,
or for the benefit of any other Person, or otherwise misuse, any Confidential Information. Nothing
herein shall be construed to preclude the Sellers from using any Confidential Information in
connection with their own Tax Returns or those of any employee or Affiliate.
6. Equitable Remedies and Remedies at Law. The parties recognize that because of the
nature of the subject matter of this Agreement it would be extremely difficult or impossible to
determine the actual damages suffered and to be suffered by the Buyer Parties as a consequence of a
breach of this Agreement by either Seller. Sellers therefore specifically agree that if either
Seller commits a breach or threatens to commit a breach of any of the provisions of this Agreement,
the Buyer Parties shall be entitled to all available legal and equitable remedies, including
without limitation, injunctive relief, both preliminary and permanent, without any need on the part
of the Buyer Parties to post a surety bond in connection therewith. In addition to such equitable
relief, the Buyer Parties shall be entitled to seek all other lawful remedies upon either Seller’s
breach of this Agreement, including money damages in appropriate cases. The rights and remedies of
the parties to this Agreement are cumulative and not alternative.
7. Severability.
(a) Separate Covenants. The parties intend that the covenants set forth in Section 3
and in Section 5 of this Agreement be construed as a series of separate covenants. It is the
desire and intent of the parties that the covenants be enforced to the fullest extent possible
under the laws and public policies applied in each jurisdiction in which enforcement is sought. If
any particular covenant set forth in Section 3 or in Section 5 shall be held to be invalid or
unenforceable in whole or in part, such adjudication shall apply only with respect to the operation
of this Agreement in the particular jurisdiction in which such adjudication is made and then only
to the extent such provision is adjudicated to be invalid or unenforceable. If any particular
covenant set forth in Section 3 of this Agreement shall be held to be invalid or unenforceable in
whole or in part because of the scope of this Agreement or the Restricted Business, or the duration
of the Noncompetition Period, the court making such determination (which shall be an Agreed Court
as specified in Section 8 of this Agreement) shall have the power to reform the provisions of this
Agreement to the maximum scope, time and/or geographic limitations permitted by applicable law.
(b) Enforcement. The covenants of the Sellers under this Agreement shall be
independent of any other contractual relationship between either Seller, on the one hand, and the
Buyer Parties or the Sellers, on the other hand. Consequently, the existence of any claim or cause
of action that either of the Sellers may have against the Buyer Parties shall not constitute a
defense to the enforcement of this Agreement by the Buyer Parties.
8. Exclusive Jurisdiction; Service of Process. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement shall be brought by
or against any of the parties only in the courts of the State of Georgia, County of Xxxxxx, or, if
it has or can acquire jurisdiction, in the United States District Court for the Northern District
of Georgia, Atlanta Division, and the applicable appellate courts for such courts (the “Agreed
Courts”). Each of the parties specifically consents to the exclusive jurisdiction of the
Agreed Courts in any such action or proceeding, waives any objection to venue laid therein, and
agrees not to assert the doctrine of forum non conveniens in order to avoid the jurisdiction of or
venue in the Agreed Courts. Every court located in the United States and elsewhere shall be
obligated to give full faith and credit to any decision of the Agreed Courts. Process in any
action or proceeding referred to in the preceding sentence may be served on any party anywhere in
the world.
9. Governing Law. This Agreement shall be construed, and the legal relations between
the parties hereto shall be determined, in accordance with the local laws of the State of Georgia
applicable to agreements made and to be performed entirely
7
within the State of Georgia (notwithstanding that a portion of the Geographic Area is located
outside of the State of Georgia), without giving effect to its conflicts of laws provisions as part
of the agreed-upon exchange contemplated by the Asset Purchase Agreement and this Agreement, the
parties hereto have specifically agreed that in no event or circumstance shall the laws of Florida
apply to any portion of this Agreement.
10. Attorneys’ Fees. In connection with any action brought to enforce this Agreement,
the prevailing party shall be entitled to recover from the non-prevailing party its reasonable
attorneys’ and paralegals’ fees and costs incurred in connection with such litigation. The
foregoing shall include reasonable attorneys’ and paralegals’ fees and costs incurred at trial, on
any appeal and in any administrative or bankruptcy proceeding.
11. Successors and Assigns. This Agreement will be binding upon the Buyer and each
Seller and will inure to the benefit of the Buyer Parties and each Seller, and in each such case,
its respective successors and assigns. Sellers specifically agree that in connection with any
assignment of this Agreement by the Buyer, no consent of either Seller shall be required;
provided, however, that the parties agree that the scope of the activities prohibited to
the Sellers under Sections 3 and 5 of this Agreement shall not be increased solely by virtue of any
such assignment. The Acquired Companies are specifically designated as third party beneficiaries
of this Agreement.
12. Recitals. The recitals set forth at the beginning of this Agreement are true and
correct and by this reference are incorporated into the body of this Agreement.
13. Waiver. The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by a party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other parties; (b) no waiver
that may be given by a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on a party will be deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement.
14. Notices. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand
(with written confirmation of receipt), (b) sent by facsimile (with written confirmation of
receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate by notice to the other
parties):
| Sellers: | Southern Saw Holdings, Inc. | |||
| Xxxxx X. Xxxxx | ||||
| President | ||||
| 0000 Xxxxx Xxxxx, XX | ||||
| Xxxxxxx, XX 00000-0000 | ||||
| Facsimile No.: (000) 000-0000 | ||||
| Buyer Parties: | Southern Saw Acquisition Corporation | |||
| c/o Kasco Corporation | ||||
| 000 Xxxxxxx Xxxx., Xxxxx 000 | ||||
| Xxxx Xxxx, XX 00000 | ||||
| Attention: Xxxx X. Xxxxxxxxx III, Chairman | ||||
| Facsimile No.: (000) 000-0000 |
8
| Kasco Corporation | ||||
| 000 Xxxxxxx Xxxx., Xxxxx 000 | ||||
| Xxxx Xxxx, XX 00000 | ||||
| Attention: Xxxx X. Xxxxxxxxx III, Chairman | ||||
| Facsimile No.: (000) 000-0000 |
15. Complete Agreement. This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof and, except as provided herein, supersedes
all previous oral and written and all contemporaneous oral negotiations, commitments, writings and
understandings relating to the subject matter hereof. In the event of any direct conflict between
the express terms of the Asset Purchase Agreement and the express terms of this Agreement, the
express terms of this Agreement shall control.
16. Modifications and Amendments. All modifications or amendments to this Agreement
shall be in writing and signed by the Buyer and Sellers.
17. Rules of Construction. The following rules of construction shall be applicable to
this Agreement:
(a) The headings in this Agreement are for convenience of reference only and will not affect
in any way the meaning or interpretation of this Agreement.
(b) As used herein, the plural includes the singular, the singular includes the plural and any
reference to the gender of any person shall be deemed adjusted to connote the gender of the person
intended to be designated by such reference.
(c) The parties shall be deemed to have participated equally in the preparation of this
Agreement, so that this Agreement shall not be construed more strictly against one party by virtue
of such party’s being deemed responsible for its preparation than against the other parties.
18. Counterparts. This Agreement may be executed in any number of counterparts and
any party hereto may execute any such counterpart, each of which when executed and delivered will
be deemed to be an original and all of which counterparts taken together will constitute but one
and the same instrument. The execution of this Agreement by any party hereto will not become
effective until counterparts hereof have been executed by all the parties hereto.
[SIGNATURES FOLLOW]
9
IN WITNESS WHEREOF, the parties, each thereunto duly authorized, have executed this Agreement
as of the day and year first above written.
| “SELLERS” | ||||||
| SOUTHERN SAW HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxx X. Xxxxx
|
|||||
| President | ||||||
| SOUTHERN SAW SERVICE, L.P. | ||||||
| By: | SOUTHERN SAW HOLDINGS, INC., | |||||
| its General Partner | ||||||
| By: | /s/ Xxxxx X. Xxxxx
|
|||||
| President | ||||||
| “BUYER” | ||||||
| SOUTHERN SAW ACQUISITION CORPORATION, a Delaware corporation |
||||||
| By: | /s/ Xxxx X. Xxxxxxxxx, III
|
|||||
10
