NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made and entered into in
duplicate effective as of July 5th, 2001, by and among Fishing Buddy LLC, a
North Dakota limited liability company (the "LLC"); Fishing Buddy, Inc., a
Nevada corporation ("Buyer"); and Xxxx Xxxxxx and Xxxxx Xxxxx, ("Sellers").
RECITALS
A. Concurrently with the execution and delivery of this Agreement,
Buyer is purchasing from the Sellers all units of membership interest in the LLC
(the "Units") on the terms and subject to the conditions of that certain
Purchase Agreement made as of the date specified in the preamble of this
Agreement (the "Purchase Agreement").
B. The parties to the Purchase Agreement desire that the Sellers
enter into and execute this Agreement for the purpose of protecting proprietary
information belonging to the LLC.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE THAT
SHALL BE DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT, AND THE MUTUAL
COVENANTS, PROMISES, UNDERTAKINGS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES
SPECIFIED IN THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO BE
OBLIGATED LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY COVENANT, PROMISE, AGREE,
REPRESENT AND WARRANT AS FOLLOWS:
1. Definitions. Capitalized terms not defined expressly in this Agreement
shall have the meanings ascribed to those terms by the provisions of the
Purchase Agreement.
2. Acknowledgments by the Sellers. Each Seller acknowledges that (a) such
Seller has occupied a position of trust and confidence with the LLC prior to the
date of this Agreement and has become familiar with the following, any and all
of which constitute confidential information of the LLC, (collectively, the
"Confidential Information") (i) any and all trade secrets concerning the
business and affairs of the LLC, 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,
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systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, of the LLC and any other
information, however documented, of the LLC that is a trade secret within the
meaning of applicable law; (ii) any and all information concerning the business
and affairs of the LLC (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of various personnel,
personnel training and techniques and materials), however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the LLC containing or based, in whole or in part, on
any information included in the foregoing; (b) the business of the LLC is
conducted nationally; (c) the products and services of the LLC are marketed
throughout the United States; (d) the LLC competes with other businesses that
are or could be located in any part of the United States; (e) Buyer has required
that the Sellers, and each of them, make the covenants set forth in Sections 3
and 4 of this Agreement as a condition to the Buyer's purchase of the Units; (f)
the provisions of Sections 3 and 4 of this Agreement are reasonable and
necessary to protect and preserve the LLC's business; and (g) the LLC would be
damaged irreparably if any Seller were to breach any of the covenants set forth
in Section 3 and Section 4 of this Agreement.
3. Confidential Information. Each Seller acknowledges and agrees that all
Confidential Information known or obtained by such Seller, whether before or
after the date of this Agreement, is the property of the LLC. Therefore, except
in connection with such Seller's ownership of Units or in connection with such
Seller's employment with the LLC, such Seller will not, at any time, disclose to
any unauthorized Persons or use for such Seller's account or for the benefit of
any third party any Confidential Information, whether such Seller 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 such Seller's fault or the fault of any other
Person obligated by a duty of confidentiality to Buyer or the LLC. Each Seller
shall 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 LLC and
any other Confidential Information that such Seller may then possess or have
that may be subject to such Seller's control.
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4. Noncompetition. As an inducement for Buyer to enter into the Purchase
Agreement and as additional consideration for the consideration to be paid to
the Sellers pursuant to the Purchase Agreement, each Seller agrees that:
(a) For a period of two (2) years after the Effective Date:
(i) such Seller will not (other than in connection with such
Seller's ownership of Buyer or in connection with such Seller's
employment with the LLC), 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, associated with, or in any manner connected with, lend
such Seller's name or any similar name to, lend such Seller's credit
to, or render services or advice to, any business whose products or
activities compete in whole or in part with the products or activities
of the LLC; provided, however, that such Seller may purchase or
otherwise acquire (A) Units of Buyer or (B) not more than three
percent (3%) of any class of securities of any issuer (but without
otherwise participating in the activities of such issuer) if such
securities are listed on any national or regional securities exchange
or have been registered pursuant to Section 12(g) of the Securities
Exchange Act of 1934. Each Seller agrees that this covenant is
reasonable with respect to the duration, geographical area and scope
of such covenant.
(ii) Each Seller will not, directly or indirectly, either for
himself or any other Person, (A) induce or attempt to induce any
employee of the LLC to leave the employ of the LLC; (B) in any way
interfere with the relationship between the LLC and any employee of
the LLC; (C) employ, or otherwise engage as an employee, independent
contractor, or otherwise, any employee of the LLC; or (D) induce or
attempt to induce any customer, supplier, licensee, or business
relation of the LLC to cease doing business with the LLC, or in any
way interfere with the relationship between any customer, supplier,
licensee, or business relation of the LLC.
(iii) Each Seller will not, directly or indirectly, either
for himself or any other Person (other than on behalf of Buyer or the
LLC), solicit the business of any Person known to such Seller to be a
customer of the LLC, whether or not such Seller had personal contact
with such Person;
(b) In the event of a breach by any Seller of any covenant set forth in
Section 4(a) of this Agreement, the term of such covenant with respect to such
Seller will be extended by the period of the duration of such breach; and
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(c) Each Seller will not, at any time during or after that two (2) year
period specified in Section 5(a) of this Agreement, disparage Buyer or the LLC,
or any of their shareholders, directors, officers, employees, or agents.
5. Remedies.
(a) If any Seller breaches the covenants set forth in Section 3 or
Section 4 of this Agreement, Buyer and the LLC will be entitled to the following
remedies:
(1) Recover damages from such Seller;
(2) To offset against any and all amounts owing to such Seller
pursuant to the Purchase Agreement any and all amounts which Buyer or
the LLC claims pursuant to Subsection 5(a)(1) of this Agreement; and
(3) In addition to the LLC's right to damages and any other
rights the LLC may have, to obtain injunctive or other equitable relief
to restrain any breach or threatened breach or otherwise to
specifically enforce the provisions of Section 3 and Section 4 of this
Agreement, as money damages would be inadequate to compensate the Buyer
and the LLC and would be an inadequate remedy for such breach.
(b) The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
6. Successors and Assigns. This Agreement shall obligate the Sellers, and
each of them, and will inure to the benefit of Buyer and the LLC and their
affiliates, successors and assigns.
7. 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 pursuant to 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
additional 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 resulting from 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
such waiver 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 additional action without notice or demand
as provided in this Agreement.
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8. Governing Law. This Agreement will be governed by the laws of the State
of Nevada, without regard to conflicts of laws principles.
9. Jurisdiction; Service of Process. Any action or proceeding seeking to
enforce any provision of, or based on any right resulting from, this Agreement
may be brought against any of the parties in the courts of the State of Nevada,
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. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
10. Severability. 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 determined by a court of competent jurisdiction to be
invalid, then such provision or term will be ineffective only to the extent of
such 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 4 of this Agreement are
determined by a court of competent jurisdiction 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 reduced scope, time and
geographic area will be effective, obligatory and enforceable against each
Seller.
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 be deemed to constitute
one and the same agreement.
12. Section Headings, Construction. The headings of sections in this
Agreement are provided for convenience only and will not affect the construction
or interpretation of this Agreement. 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. All notices, consents, waivers, and other communications
pursuant to 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 machine (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):
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Sellers:
Xxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: 401.696.8414
Xxxxx Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Facsimile: 401.696.8414
Buyer:
Fishing Buddy, Inc.
0000 00xx Xxxxxx XX
Xxxxxx, XX 00000
Facsimile: 701.663.3784
with a copy to:
Xxxxx Law Group
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
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14. Entire Agreement. This Agreement and the 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 among the parties with respect to the subject matter of this
Agreement. 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.
Fishing Buddy, Inc.,
a Nevada corporation
/s/ Xxxx Xxxxx /s/ Xxxx Xxxxxx
--------------------------- ---------------------------
By: Xxxx Xxxxx Xxxx Xxxxxx
Its: President
/s/ Xxxxx Xxxxx
---------------------------
Xxxxx Xxxxx
Fishing Buddy LLC,
a North Dakota limited liability company
/s/ Xxxx Xxxxxx
---------------------------
By: Xxxx Xxxxxx
Its: Managing Member
