NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of April 1, 1997 by
and between INTABEX S.A. (ZUG), a company organized under the laws of
Switzerland ("Intabex") (including its subsidiaries "Intabex"), and
FOLIUM INC., a company organized under the laws of the British Virgin
Islands (including its subsidiaries "Folium").
RECITALS
A. Pursuant to a Stock Purchase Agreement,
dated as of February 14, 1997, (the "Stock Purchase Agreement"), by
and among DIMON Incorporated, a Virginia corporation (including its
subsidiaries "DIMON"), Intabex, and the shareholders of Intabex, DIMON
has purchased all of the issued and outstanding shares of capital
stock of Intabex.
B. To induce DIMON to enter into the Stock
Purchase Agreement, Folium has agreed not to compete, and has agreed
to cause each other member of Folium Group (hereinafter defined) not
to compete, with Intabex or any of its affiliates (the "Intabex Group")
upon the terms and conditions set forth herein; and
C. In consideration for such agreement not to
compete, Intabex has agreed to make certain payments to Folium as set
forth herein.
NOW, THEREFORE, in consideration of the recitals
and the mutual covenants, conditions and agreements contained herein
and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Definitions. All capitalized terms used and
not otherwise defined herein shall have the meanings given such terms
in the Stock Purchase Agreement.
2. Term. This Agreement shall be effective
beginning on the date hereof and shall continue for a period of five
(5) years; provided, however, that in the event of any breach hereunder
by Folium or any other member of Folium Group, the term of this
Agreement shall be extended for a period equal to the period of such
breach.
3. Noncompetition Agreement. Folium covenants
and agrees that during the term hereof Folium shall not, and that
Folium shall cause each affiliate designated by Intabex and agreed to
by Folium (Folium and each such affiliate being referred to herein as
"Folium Group") not to, directly or indirectly, engage in or accept
employment with (as a consultant or otherwise), own any interest in,
or otherwise give assistance to, whether or not for compensation, any
person or entity engaged in the ownership or management of any business
- 222 -
involving the purchase, sale or processing of leaf tobacco anywhere in
Zimbabwe and its territories and possessions (which business the
parties agree will not include any business involving growing tobacco,
warehousing tobacco or the manufacture or sale of cigarettes); provided
that this Section 3 shall not prevent any member of Folium Group from
(i) owning any capital stock or indebtedness of any member of Intabex
Group, (ii) acting as a consultant to or director of Intabex or any
other member of Intabex Group, (iii) owning, operating or selling the
tobacco assets set forth on Schedule 3 hereto in accordance with such
schedule, or (iv) owning less than 5% of the capital stock of any
corporation that is publicly traded on a generally recognized national
securities exchange or inter-dealer quotation system. In the event
that any provision of this Section 3 is determined to be invalid or
overbroad by any court or other entity of competent jurisdiction, the
provisions of this Section 3 shall be deemed to have been amended, and
the parties hereto agree to execute all documents necessary to evidence
such amendment, so as to eliminate or modify any such invalid or
overbroad provision so as to carry out the intent of this Section 3
as far as possible and to render the terms of this Section 3 enforceable
in all respects as so modified. Folium acknowledges that a violation of
this Section 3 by it or any other member of Folium Group may cause
irreparable harm to Intabex Group. Accordingly, Folium hereby grants
Intabex the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex.
4. Confidential Information. Except as
specifically authorized by Intabex in writing, from the date hereof
and continuing forever, Folium agrees not to, and to cause each other
member of Folium Group not to, (i) disclose any Confidential Information
(as defined below) to any individual or entity, or otherwise knowingly
permit any person or entity to obtain or disclose any Confidential
Information, or (ii) use any Confidential Information, whether
individually or on behalf of another individual or entity, except
pursuant to the performance by any member of Folium Group of its duties
under any consulting agreement with a member of Intabex Group or as a
director of any member of Intabex Group. For purposes hereof,
"Confidential Information" means any and all information relating to
any part of the business of Intabex Group (including, without limitation,
Intabex), provided to Folium or to which Folium has had access (whether
before or after the date hereof), which information is not a matter of
public record or generally known to the tobacco industry, including,
without limitation: (i) financial and operating information regarding
Intabex Group; (ii) personnel data, including compensation arrangements,
relating to any employee of Intabex Group; (iii) internal plans,
practices and procedures of Intabex Group; (iv) the names, addresses
and requirements of any customers of Intabex Group; (v) the terms and
conditions of any supply agreements, customer or vendor commitments
and other agreements, documents and instruments to which any member
of Intabex Group is party; and (vi) any other information expressly
known by Folium to be confidential. Folium acknowledges that it has
had access to and has become familiar with or obtained Confidential
information in the course of its dealings with Intabex Group, and
that a violation of this Section 4 by it would cause irreparable harm
to Intabex Group. Accordingly, Folium hereby grants Intabex Group the
- 223 -
right to seek and be granted injunctive relief for any such violation,
in addition to any other legal remedies that may be available to
Intabex Group.
In the event that Folium or any other member of
Folium Group is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand or similar process) to disclose
any Confidential Information, Folium will, and will cause such other
member of Folium Group to, notify Intabex promptly of the request or
requirement and cooperate with Intabex in seeking an appropriate
protective order or waive compliance with the provisions of this
Section 4; provided, if prior to the issuance of a protective order
or the receipt of a waiver hereunder, Folium or such other member of
Folium Group is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for
contempt, Folium or such other member of Folium Group shall be
permitted to make such disclosure without any responsibility or
liability to Intabex Group but shall use its best efforts to obtain,
at the request of and at the expense of Intabex Group, an Order or
other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed
as Intabex Group shall designate.
5. Transition. Folium agrees that it will
use, and that it will cause each other member of Folium Group to use,
its commercially reasonable efforts to assist Intabex Group in
preserving and retaining all business relationships between Intabex
Group and its customers, suppliers and employees. Folium will not
take, and will cause each other member of Intabex Group not to take,
any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier or other
business associate of Intabex Group from maintaining the same
business relationships with Intabex Group after the Closing as it
maintained with Intabex Group prior to the Closing.
6. Payment. In consideration of the
agreements of Folium contained in this Agreement, Intabex hereby
delivers to Folium the sum of U.S.$1,000,000 by wire transfer of
immediately available funds and Folium hereby acknowledges receipt
of such payment.
7. Miscellaneous.
(a) Governing Law; Jurisdiction and Venue; Waiver
of Jury Trial. (i) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York
without regard to the conflicts of law rules or principles thereof.
(ii) Each party hereto consents to submit to the
exclusive jurisdiction of the United States District Court for the
Southern District of New York or in the event (but only in the event)
such court does not have subject matter jurisdiction, of the State
Courts of New York sitting in New York City, for any actions, suits
or proceedings arising out of or relating to this Agreement and the
transactions contemplated hereby. Each party hereto agrees not to
commence any action, suit or proceeding relating thereto except in
- 224 -
such courts. Each party hereto unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby, in such
courts, and waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
(iii) EACH PARTY HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON ANY CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY
OR IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
(b) Remedies. Folium acknowledges that a
violation of this Agreement may cause irreparable harm to the business
of Intabex and Intabex Group. Accordingly, Folium hereby grants
Intabex the right to seek and be granted injunctive relief for any
such violation, in addition to any other legal remedies that may be
available to Intabex. Folium shall not in any event be liable or
responsible to Intabex Group for any indirect or consequential damages
to Intabex Group (including lost profits).
(c) Agent for Service of Process. Folium hereby
irrevocably designates, appoints, and empowers CT Corporation System,
at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address
where such representative office may be located in New York City, and
its successors and assigns, as its true and lawful agent for service
of process to receive and accept on its behalf service of process in
any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby. Folium agrees
that the failure of such process agent to give any notice of any
service of process to it shall not impair or affect the validity of
service upon such agent or of any judgment based thereon.
(d) Severability. If any provision, clause or part
of this Agreement, or the application thereof under certain
circumstances is held invalid or unenforceable for any reason, the
remainder of this Agreement, or the application of such provision,
clause or part under other circumstances shall not be affected thereby.
(e) Entire Agreement; Amendment. This Agreement
contains all of the understandings and representations between the
parties hereto pertaining to the subject matter hereof and supersedes
all undertakings and agreements, whether oral or in writing, if any,
previously entered into by them with respect thereto. This Agreement
may not be amended otherwise than by a writing signed by the parties
hereto.
- 225 -
(f) Notices. All communications, notices and
disclosures required or permitted by this Agreement shall be in
writing and shall be deemed to have been given when delivered
personally or by messenger or by overnight delivery service, or
when received via telecopy, telex or other electronic transmission,
in all cases addressed to the person for whom it is intended at the
address set forth on the signature page hereof or to such other
address as a party shall have designated by notice in writing to
the other party in the manner provided by this Section.
(g) Counterparts; Headings. This Agreement may
be executed in two counterparts, each of which shall be deemed to be
an original, but both of which together shall constitute one and the
same instrument. The Article and Section headings in this Agreement
are inserted for convenience of reference only and shall not
constitute a part hereof.
(h) Successors and Assigns. Folium acknowledges
that Intabex may assign this Agreement, in whole or in part, to any
of its subsidiaries or affiliates, without its consent, and agrees
that this Agreement shall be binding upon, inure to the benefit of and
be enforceable by Intabex and its successors and assigns. At the
request of Intabex, Folium will cause each other member of Folium
Group to execute and deliver to Intabex a written agreement pursuant
to which such member of Folium Group agrees that it is bound by the
terms of this Agreement as if such member were expressly named as a
party hereto.
(i) Confidentiality. Except for information that
is otherwise publicly available, each party agrees to keep
confidential and not to disclose, and to cause each of its affiliates
not to disclose, this Agreement or any terms hereof, except as required
by law.
- 226 -
IN WITNESS WHEREOF, the parties hereto have executed, or
caused this Agreement to be executed by their duly authorized officers,
all as of the day and year first above written.
INTABEX S.A. (ZUG)
By: /s/ X. X. Xxxxxx
Its: Director
Address: Xxxxxxxxx Xxxxxxx 00/00
XX-0000 Xxxxx
Xxxxxxxxxxx
FOLIUM, INC.
By: /s/ Xxxxx X. Xxxxxx
Its: Authorized Agent
Address: Maitland & Co.
00 xxx XxXxxxxx
Xxxxx, Xxxxxx 00000
- 227 -
