EXHIBIT 10.18
NONCOMPETITION AGREEMENT
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This Noncompetition Agreement (this "Agreement") is made as of December 5,
1996, by and between RADNOR HOLDINGS CORPORATION, a Delaware corporation
("Buyer"), and XXXXXXX XXXXXXXXXX ("Xxxxxxxxxx").
BACKGROUND
A. Concurrently with the execution and delivery of this Agreement, Buyer
is purchasing from Seller, Xxxxx River Paper Company, Inc. ("JR"), Grupo
Industrial Hermes, S.A. de C.V. ("Grupo Hermes") and the Xxxxxxxxx Group (as
such term is defined in the Stock Purchase Agreement) all of the issued and
outstanding shares (the "Shares") of common and preferred capital stock, and all
options and warrants to purchase the common and preferred capital stock
(collectively, the "Other Interests"), of SP Acquisition Co. (the "Company")
pursuant to the terms and conditions of a stock purchase agreement made as of
October 30, 1996 (the "Stock Purchase Agreement").
B. Section 2.5(a)(iii) of the Stock Purchase Agreement requires that
Xxxxxxxxxx execute and deliver this Agreement as a condition to the purchase of
the Shares and the Other Interests by Buyer.
C. Section 2.3 of the Stock Purchase Agreement requires Buyer to pay to
Xxxxxxxxxx the sum of Four Million Seven Hundred Sixty Thousand Dollars in
consideration for his entering into this Agreement.
D. Capitalized terms not expressly defined in this Agreement shall have
the meanings ascribed to them in the Stock Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and intending to be legally bound,
Buyer and Xxxxxxxxxx hereby agree as follows:
AGREEMENT
1. Acknowledgments by Xxxxxxxxxx
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Xxxxxxxxxx acknowledges that (a) he has occupied a position of trust and
confidence with the Acquired Companies prior to the date hereof and has become
familiar with the following, any and all of which constitute confidential
information of the Acquired Companies (collectively the "Confidential
Information"): (i) any and all trade secrets
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concerning the business and affairs of the Acquired Companies, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current and planned research and development, current and planned manufacturing
and distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies, systems, structures and architectures (and related
processes, formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information) of the Acquired
Companies and any other information, however documented, of the Acquired
Companies that is a trade secret within the meaning of any applicable state
trade secret law; (ii) any and all information concerning the business and
affairs of the Acquired Companies (which includes historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
and techniques and materials used by the Acquired Companies), however
documented; and (iii) any and all notes, analyses, compilations, studies,
summaries, and other material prepared by or for the Acquired Companies
containing or based, in whole or in part, on any information included in the
foregoing; (b) the products and services of the Acquired Companies are marketed
throughout the United States of America and Canada; (c) the Acquired Companies
compete with other businesses that are or could be located in any part of the
United States of America and Canada; (d) Buyer has required that Xxxxxxxxxx make
the covenants set forth in Sections 2 and 3 of this Agreement as a condition to
the Buyer's purchase of the Shares and the Other Interests; (e) the provisions
of Sections 2 and 3 of this Agreement are reasonable and necessary to protect
and preserve the Acquired Companies' business; and (f) the Acquired Companies
would be irreparably damaged if Xxxxxxxxxx were to breach the covenants set
forth in Sections 2 and 3 of this Agreement.
2. Confidential Information
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Xxxxxxxxxx acknowledges and agrees that all Confidential Information known
or obtained by him, whether before or after the date hereof, is the property of
the Acquired Companies. Therefore, Xxxxxxxxxx agrees that he will not, at any
time, disclose to any unauthorized Persons or use for his own account or for the
benefit of any third party any Confidential Information, whether Xxxxxxxxxx has
such information in his memory or embodied in writing or other physical form,
without Buyer's written consent, unless and to the extent that the Confidential
Information is or becomes generally known to and available for use by the public
other than as a result of Xxxxxxxxxx'x fault or the fault of any other Person
bound by a duty of confidentiality to Buyer or the Acquired Companies.
Xxxxxxxxxx agrees to deliver to Buyer at the time of execution of this
Agreement, and at any other time Buyer may request, all documents, memoranda,
notes, plans, records, reports, and other documentation, models, components,
devices, or computer software, whether embodied in a disk or in other form (and
all copies of all of the foregoing), relating to the businesses, operations, or
affairs of the Acquired Companies and any other Confidential Information that
Xxxxxxxxxx may then possess or have under his control, except that Xxxxxxxxxx
may retain
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photocopies of documents which support or relate to the Disclosure Letter
provided by the Sellers pursuant to the Stock Purchase Agreement.
3. Noncompetition
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As an inducement for Buyer to enter into the Stock Purchase Agreement and
in consideration for the amount to be paid to Xxxxxxxxxx under this Agreement,
Xxxxxxxxxx agrees that:
(a) For a period of five (5) years after the Closing:
(i) Xxxxxxxxxx will not, directly or indirectly, engage or invest
in, own, manage, operate, finance, control, or participate in the ownership,
management, operation, financing, or control of, be employed by, associate in
business with, or in any manner connected with, lend his credit to, or render
services or advice to, any business whose products or activities include the
manufacture, sale or distribution of expandable polystyrene, foam cups or
containers (hereinafter the "Business"), anywhere within the United States or
Canada; provided, however, that Xxxxxxxxxx may purchase or otherwise acquire up
to (but not more than) one percent (1%) of any class of securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Securities Exchange
Act of 1934 and provided further that nothing herein shall prohibit Xxxxxxxxxx
from engaging in a block and shape business, excluding the manufacture of
expandable polystyrene. Xxxxxxxxxx agrees that this covenant is reasonable with
respect to its duration, geographical area, and scope;
(ii) Xxxxxxxxxx will not, directly or indirectly, either for himself
or any other Person, solicit the business of any Person known to Xxxxxxxxxx to
be a customer of an Acquired Company, whether or not Xxxxxxxxxx had personal
contact with such Person, with respect to products or activities which compete
in whole or in part with the products or activities of the Company.
(b) For a period of two (2) years after the Closing, Xxxxxxxxxx will not,
directly or indirectly, either for himself or any other Person, (A) induce or
attempt to induce any employee of an Acquired Company to leave the employ of
such Acquired Company, (B) in any way interfere with the relationship between an
Acquired Company and any employee of such Acquired Company, (C) employ, or
otherwise engage as an employee, independent contractor, or otherwise, any
employee of an Acquired Company, or (D) induce or attempt to induce any
customer, supplier, licensee, or business relation of an Acquired Company to
cease doing business with such Acquired Company, or in any way interfere with
the relationship between any customer, supplier, licensee, or business relation
of an Acquired Company.
(c) In the event of a breach by Xxxxxxxxxx of any covenant set forth in
Subsection
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3(a) of this Agreement, the term of such covenant will be extended by the period
of the duration of such breach;
(d) Xxxxxxxxxx will not, at any time during or after the five (5) year
period, disparage Buyer or the Acquired Companies, or any of their shareholders,
directors, officers, employees, or agents; and
(e) Xxxxxxxxxx will, for a period of five (5) years after the Closing,
within ten (10) days after accepting employment with any employer, advise Buyer
of the identity of such employer. Buyer or an Acquired Company may serve notice
upon each such employer that Xxxxxxxxxx is bound by this Agreement and may
furnish each such employer with a copy of this Agreement or relevant portions
thereof.
4. Compensation
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As consideration for the covenants of Xxxxxxxxxx in Sections 2 and 3 of
this Agreement, the Company will pay Xxxxxxxxxx the sum of Four Million Seven
Hundred Sixty Thousand Dollars ($4,760,000) at the Closing of the Stock Purchase
Agreement by wire transfer of immediately available funds to an account
designated by Xxxxxxxxxx.
5. Remedies
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If Xxxxxxxxxx breaches the covenants set forth in Sections 2 or 3 of this
Agreement, Buyer and the Acquired Companies will be entitled to the following
remedies:
(a) Damages from Xxxxxxxxxx; and
(b) In addition to their rights to damages and any other rights they may
have, to obtain injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the provisions of
Sections 2 and 3 of this Agreement, it being agreed that money damages alone
would be inadequate to compensate the Buyer and the Acquired Companies and would
be an inadequate remedy for such breach.
The rights and remedies of the parties to this Agreement are cumulative and not
alternative.
6. Successors and Assigns
----------------------
This Agreement will be binding upon Buyer and Xxxxxxxxxx and will inure to
the benefit of Buyer and the Acquired Companies and their affiliates, successors
and assigns and Xxxxxxxxxx and Xxxxxxxxxx'x assigns, heirs and legal
representatives.
7. Waiver
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The rights and remedies of the parties to this Agreement are cumulative and
not
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alternative. Neither the failure of, 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 one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (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 one 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.
8. Governing Law
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This Agreement will be governed by the laws of the State of Delaware,
without regard to conflicts of laws principles.
9. Jurisdiction; Service of Process
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Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Delaware, County of New Castle, or, if it
has or can acquire jurisdiction, in the United States District Court for the
District of Delaware, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any
action or proceeding referred to in the preceding sentence may be served on any
party anywhere in the world.
10. Severability
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Whenever possible, each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If
any of the covenants set forth in Section 3 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Xxxxxxxxxx.
11. Counterparts
------------
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will
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be deemed to constitute one and the same agreement.
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12. Section Headings, Construction
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The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
13. Notices
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All notices other communications required or permitted under this Agreement
shall be effective if delivered in accordance with Section 11.4 of the Stock
Purchase Agreement.
14. Entire Agreement
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This Agreement and the Stock Purchase Agreement constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior written and oral agreements and understandings
between Buyer and Xxxxxxxxxx with respect to the subject matter of this
Agreement, except that Buyer shall cause Xxxxxxx X. Xxxxxxx to execute and
deliver to Xxxxxxxxxx at Closing the agreement attached. This Agreement may not
be amended except by a written agreement executed by the party to be charged
with the amendment.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first above written.
RADNOR HOLDINGS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chairman
/s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx
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AGREEMENT
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Xxxxxxx X. Xxxxxxx hereby agrees that he will not, at any time during
or after the period of five (5) years after the Closing, disparage Xxxxxxxxxx,
provided that any breach of this agreement shall not entitle Xxxxxxxxxx to
terminate or otherwise be relieved of any of his obligations under the foregoing
Noncompetition Agreement, other than paragraph 3(d).
/s/ Xxxxxxx X. Xxxxxxx
_______________________________
Xxxxxxx X. Xxxxxxx
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