EXHIBIT 2.5
CONFIDENTIALITY AND NONCOMPETITION AGREEMENT
THIS CONFIDENTIALITY AND NONCOMPETITION AGREEMENT (this "Agreement") is
entered into as of the 30/th/ day of November, 1997, by and between U.S.
Remodelers, Inc., a Delaware corporation ("Purchaser"), and Reunion Home
Services, Inc., a Texas corporation ("Reunion"). This Agreement is being
executed and delivered by the parties pursuant to Section 9 of the Purchase
Agreement (as defined below).
W I T N E S S E T H:
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WHEREAS, Reunion is engaged in the business of marketing, promotion, sale,
financing and providing of home remodeling services, and Kitchen Masters, Inc.,
a Texas corporation ("KMI"), is engaged in the manufacture of parts and material
used by Reunion in providing such home remodeling services (such home remodeling
services and manufacture of such materials hereinafter referred to collectively
as the "Business"); and
WHEREAS, on the date hereof, Purchaser, Reunion and KMI are entering into
an Asset Purchase Agreement (the "Purchase Agreement") whereby, among other
things, Purchaser is purchasing substantially all assets of Reunion and specific
assets of KMI, (as more particulary described therein); and
WHEREAS, Reunion's covenants not-to-compete contained herein are an
important aspect of the above-referenced asset purchase transaction, and
Purchaser, Reunion and KMI would not enter into the Purchase Agreement absent
Reunion's covenants not-to-compete contained herein; and
WHEREAS, Reunion has financial resources, experience in the Business and
the ability to operate a business or businesses that could compete with
Purchaser in the Business in which Purchaser and/or its affiliates will be
engaged upon the closing of the transactions contemplated by the Purchase
Agreement (the "Closing"); and
WHEREAS, Purchaser would suffer damages, including the loss of profits, if
Reunion, or any of its affiliates, engaged, directly or indirectly, in
competition with Purchaser or any of its affiliates in the Business; and
WHEREAS, Purchaser and Reunion have reached this agreement in good faith
through arms-length negotiations;
NOW, THEREFORE, for and in consideration of the covenants not-to-compete
contained herein and the consideration to be paid therefor and other good and
valuable consideration, and of the other promises, covenants and conditions
contained herein, the receipt and adequacy of which consideration are hereby
acknowledged, the parties hereto agree as follows:
1. COVENANTS NOT-TO-COMPETE.
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(a) During the term of this Agreement, neither Reunion nor any of its
affiliates shall, directly or indirectly, for itself or on behalf of any other
corporation, person, firm, partnership, association, or any other entity
(whether as an individual, agent, servant, employee, employer, officer,
director, shareholder, investor, principal, consultant or in any other
capacity), engage or participate in any business in competition with the
Business purchased by Purchaser pursuant to the Purchase Agreement to the extent
and within 200 miles of any sales office or manufacturing facility through which
Reunion conducted the Business prior to the date hereof, or through which
Purchaser conducts the Business as of the date of or during the term of this
Agreement; provided, however, the provisions of this Agreement shall not prevent
Reunion fulfilling its obligations under that certain Transition Services
Agreement, dated of even date herewith, by and between Reunion and Purchaser..
(b) During the term of this Agreement, neither Reunion nor any of its
affiliates, shall for itself or on behalf of any other corporation, person,
firm, partnership, association, or any other entity (whether as an individual,
agent, servant, employee, employer, officer, director, shareholder, investor,
principal, consultant or in any other capacity) disclose to any person or entity
any of the client lists, client mailing lists, trade secrets, pricing,
advertising or marketing plans, methods, systems, procedures, data bases or
other software programs or applications or processes of, or utilized by,
Purchaser or any of its affiliates with respect to or related to the Business.
(c) During the term of this Agreement, neither Reunion nor any of its
affiliates, shall assist or finance any person or entity in any manner or in any
way inconsistent with the intents and purposes of this Agreement.
(d) Reunion shall, from the date of this Agreement forward, refrain
form making any disparaging, negative, or other similar remarks concerning
Purchaser or any of its affiliates, to any third party.
2. TERM. The term of this Agreement shall commence on the date hereof
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and shall continue for five (5) years.
3. REMEDIES. In the event of Reunion's breach, or threatened breach, of
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any term or provision contained in this Agreement, Reunion agrees that Purchaser
and/or its affiliates shall be entitled to the right of specific performance
and/or both temporary and permanent injunctive relief in addition to but not in
lieu of any other remedies available at law or in equity.
4. ENFORCEABILITY. If for any reason any provision contained in this
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Agreement should be held invalid in whole or in part by a court of competent
jurisdiction, then it is the intent of each of the parties hereto that the
balance of this Agreement be enforced to the fullest extent permitted by
applicable law. It is the intent of each of the parties that the covenants not-
to-compete contained
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in Section 1 herein be enforced to the fullest extent permitted by applicable
law. Accordingly, should a court of competent jurisdiction determine that the
scope of any covenant is too broad to be enforced as written or is otherwise
unenforceable, it is the intent of each of the parties that the court should
reform such covenant to such narrower scope or otherwise as it may determine is
necessary to make such covenant enforceable.
5. INTENT OF PARTIES. Each of the parties hereto recognizes and agrees
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that this Agreement is necessary and essential to the protection of the assets
of Reunion and KMI, which Purchaser is purchasing, and the Business which
Purchaser and its affiliates will conduct during the term of this Agreement,
and to enable Purchaser to realize and derive all of the benefits, rights and
expectations of the Purchase Agreement; that the area and duration of the
covenants herein are in all aspects, under the circumstances of the Purchase
Agreement, reasonable; and that good and valuable consideration exists for the
Reunion agreeing to be bound by such covenants.
6. PARTIES IN INTEREST. This Agreement and all terms, covenants and
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conditions contained herein shall inure to the benefit of and shall be binding
upon the undersigned parties and their respective heirs, executors,
administrators, trustees, successors and permitted assigns. The parties' rights
or obligations hereunder are not transferable or assignable to any other party,
except that Purchaser may assign its rights or obligations hereunder to any of
its affiliates that operates the Business as operated by Purchaser on the date
hereof. Any purported assignment of this Agreement in violation of this
provision shall be null and void and without any effect.
7. NOTICES. All notices, requests, demands and other communications to
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be given hereunder shall be delivered as set forth in the Purchase Agreement and
shall be deemed to have been given and received in the same manner as set forth
in the Purchase Agreement.
8. AFFILIATE. As used herein, an "affiliate" of any party means any
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person or entity controlling, controlled by or under common control with such
party.
9. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
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PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE
STATE OF TEXAS.
10. HEADINGS. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning of this
Agreement.
11. COUNTERPARTS. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
U.S. REMODELERS, INC.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, President
REUNION HOME SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
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