NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
THIS NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
("Agreement") is made this 21st day of October, 1996, by Valco
Inc., a Colorado corporation ("Valco") and Xxxxxx X. Xxxxxxxx
("Xxxxxxxx"), in favor of Continental Materials Corporation, a
Delaware corporation ("CMC").
Preliminary Recitals:
WHEREAS, that certain Acquisition Agreement dated the date
hereof (the "Acquisition Agreement") by Valco and CMC, provides
for the acquisition by CMC of certain rights, properties, assets
(including a partnership interest) owned or held by Valco;
WHEREAS, that certain Fee Sand And Gravel Lease dated the
date hereof (the "Lease") between Valco and CMC provides for the
lease by Valco to CMC of certain property containing sand and
gravel deposits in Pueblo County, Colorado;
WHEREAS, Xxxxxxxx is presently President and a stockholder
of Valco;
NOW, THEREFORE, in consideration of CMC's agreements and
covenants contained in the Acquisition Agreement and the Lease
and to induce CMC to consummate the purchase and lease provided
for in the Acquisition Agreement and the Lease, Valco and
Xxxxxxxx hereby covenant and agree with CMC as follows:
1. Preamble; Preliminary Recitals
The preamble and preliminary recitals set forth above are by
this reference incorporated in and made a part of this Agreement.
2. Non-competition
(a) Without the prior written consent of CMC (which may be
withheld in CMC's sole discretion), for a period of ten (10)
years from and after the date hereof, neither Valco nor Xxxxxxxx
shall, directly or indirectly, whether as a stockholder,
individual, partner, agent, representative, employee, employer,
director, officer, principal, consultant, advisor, or independent
contractor, or through any of the foregoing, or in any other
relation or capacity whatsoever: (I) engage in the business
relating to sand and gravel mining or sales of ready mix
concrete, asphalt and construction aggregates, in Pueblo and/or
El Paso Counties, Colorado; (ii) operate or own a concrete batch
plant, aggregates operation or asphalt plant in Teller County,
Colorado; or (iii) except to Valco's present customers and
prospective customers in similar businesses, make any sales to
any customers in Teller County, Colorado.
(b) Without the prior written consent of CMC (which may be
withheld in CMC's sole discretion), for a period of two (2) years
from and after the date hereof, neither Valco nor Xxxxxxxx shall,
directly or indirectly, whether as a stockholder, individual,
partner, agent, representative, employee, employer, director,
officer, principal, consultant, advisor, or independent
contractor, or through any of the foregoing, or in any other
relation or capacity whatsoever, solicit employment of any of
Valco's current or former Pueblo area employees who are retained
by CMC or any of its subsidiaries in connection with the Pueblo
operations, or encourage any such employees to leave the employ
of CMC or any of its subsidiaries.
3. Non-disclosure
(a) Except as provided in Subsection (b) below, each of
Valco and Xxxxxxxx agrees that, for a period of ten (10) years
from and after the date hereof, all information previously or
hereafter disclosed to any of them by CMC in connection with the
transactions contemplated by the Acquisition Agreement and Lease
and information relating to Valco's (after the date hereof CMC's)
Pueblo operations is confidential (collectively, "Confidential
Information") and shall be held in strict confidence and not
disclosed to any person or entity.
(b) Valco and Xxxxxxxx shall have no requirement to keep
information confidential, and no such information shall be
considered Confidential Information, to the extent any of the
following applies: (I) the information was within the public
domain at the time it was first known or provided to Valco and
Xxxxxxxx; (ii) the information was published or otherwise became
part of the public domain after it was first known or provided to
Valco and Xxxxxxxx through no fault of either of them or their
respective directors, officers, agents employees or affiliates;
or (iii) the information is required to be disclosed (x) by any
federal or state law, rule or regulation, (y) by any applicable
judgment, order or decree of any court, governmental agency or
arbitrator having or purporting to have jurisdiction in the
matter, or (z) pursuant to any subpoena or other discovery
request in any litigation, arbitration or other proceeding;
provided, however, that if any of Valco and Xxxxxxxx proposes to
disclose the information in accordance with (x), (y) or (z), such
party shall, to the extent feasible, first give CMC reasonable
prior notice of the proposed disclosure of any such information
to the application of such law, rule or regulation, or to appear
before any court, governmental agency or arbitration order to
contest the disclosure, as the case may be.
(c) Valco may disclose, on a need to know basis,
Confidential Information to directors, officers, employees,
attorneys and accountants, subject to the last sentence of this
paragraph (c). With CMC's prior written consent (which will not
be unreasonably withheld), Valco and Xxxxxxxx may disclose, on a
need to know basis, Confidential Information to consultants,
advisors and institutional lenders, subject to the last sentence
of this paragraph (c). Valco also may disclose, on a need to
know basis, and subject to the last sentence of this paragraph
(c), to any bona fide acquirer (whether by purchase, exchange,
merger or otherwise) of the stock, of substantially all of the
assets of Valco, or of the interest of Valco under the Lease, the
formula under the Lease for determining the Production Royalty
Rate, the historical revenues received under the Lease, the total
tonnage mined (on an aggregate and not product type basis) under
the Lease and total remaining tons to be mined under the Lease,
and with CMC's prior written consent (not
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to be unreasonably withheld), any other information concerning
the Lease, but CMC may withhold such consent in its sole
discretion as to such other information if in CMC's sole judgment
a recipient of such other information is or could be expected
to become a competitor of CMC in the Pueblo area. In the case of
any permitted disclosure of Confidential Information under this
paragraph (c), Valco and Xxxxxxxx shall inform such persons of
the existence of this Agreement and take all reasonable steps to
ensure that such persons comply with the provisions of this
Agreement applicable to Valco and Xxxxxxxx.
4. Enforcement; Damages; Construction
(a) Valco's and Xxxxxxxx'x obligations hereunder shall be
joint and several as long as Xxxxxxxx controls Valco. If
Xxxxxxxx no longer controls Valco, Valco's and Xxxxxxxx'x
obligation herein shall be several. Each of Valco and Xxxxxxxx
recognizes that it would be impossible to measure in money all
the damages which will accrue to CMC by reason of a failure to
comply with the restrictions and perform the obligations under
this Agreement. Each of Valco and Xxxxxxxx hereby acknowledges
that CMC would lack an adequate remedy at law and CMC shall, in
addition to and not in lieu of money damages, be entitled to
specific performance and injunctive relief against Valco and
Xxxxxxxx in an action or procedure to enforce the provisions
hereof. Valco and Xxxxxxxx shall reimburse CMC for its expenses,
including reasonable attorney's fees, incurred in connection with
the enforcement of the provisions hereof relating to a breach of
this Agreement by Valco or Xxxxxxxx.
(b) No waiver or amendment to this Agreement shall be valid
unless signed in writing by each of Valco, Xxxxxxxx and CMC. If
any provision of this Agreement shall be invalid or
unenforceable, in whole or in part, or as applied to any
circumstance, under the laws of any jurisdiction which may govern
for such purpose, then such provision shall be deemed to be
modified or restricted to the extent and in a manner necessary to
render the same valid and enforceable, either generally or as
applied to such circumstance, or shall be deemed excised from
this Agreement, as the case may require, and this Agreement shall
be construed and enforced to the maximum extent permitted by law,
as if such provision had been originally incorporated herein as
so modified or restricted, or as if such provision had not been
originally incorporated herein, as the case may be.
(c) This Agreement shall be binding upon, and inure to the
benefit of, the successors and assigns of each of Valco, Xxxxxxxx
and CMC.
(d) The captions used in this Agreement are for convenience
only and shall not be construed to limit or define the scope or
intent of any paragraph.
(e) This Agreement has been executed and delivered in
Colorado Springs, Colorado and the validity and interpretation
hereof shall be governed in all respects by the laws of the State
of Colorado.
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IN WITNESS WHEREOF, each of Valco and Xxxxxxxx has executed
this Agreement on the day and year first above written.
VALCO INC.
By: ___________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President
XXXXXX X. XXXXXXXX
By: ___________________________
Xxxxxx X. Xxxxxxxx
