NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of April 22,
1998, by and between Xxxxx Company, a California corporation ("Xxxxx"), and
Xxxxxx X. Xxxxxx ("Executive") a Principal Executive and Shareholder of
Monsey Products Co., a Pennsylvania corporation (Monsey Products Co.,
together with its subsidiaries, the "Company").
RECITALS
Concurrently with the execution and delivery of this Agreement, Buyer is
purchasing from Seller and the other shareholders of the Company all of the
Company's issued and outstanding shares (the "Shares") of capital stock
pursuant to a stock purchase agreement dated as of February 27, 1998 (the
"Stock Purchase Agreement"). Section 2.4(a)(iii) of the Stock Purchase
Agreement requires that certain of the Principal Executives execute and
deliver to Buyer a noncompetition agreement as a condition to the Buyer's
purchase of the Shares.
The parties, intending to be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Stock Purchase Agreement.
ARTICLE II.
ACKNOWLEDGMENTS BY EXECUTIVE
Executive acknowledges that (a) Executive has occupied a position of
trust and confidence with the Company prior to the date hereof, is highly
knowledgeable with respect to the business of the Company, and has become
familiar with the following, any and all of which constitute confidential
information of the Company, (collectively the "Confidential Information"):
(i) any and all trade secrets concerning the business and affairs of the
Company, 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
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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 Company and any other information, however documented, of
the Company that may constitute a trade secret unde applicable; (ii) any and
all information concerning the business and affairs of the Company (including
historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and techniques and
materials, however documented; and (iii) any and all notes, analysis, studies
and other material prepared by or for the Company containing or based, in
whole or in part, on any information included in the foregoing; (b) the
business of the Company is international in scope; (c) its products and
services are marketed throughout the United States and Canada; (d) the
Company competes with other businesses that are or could be located in any
part of the United States or Canada; (e) the provisions of Sections 3 and 4
of this Agreement are reasonable and necessary to protect and preserve the
Company' business, and (g) the Company would be irreparably damaged if
Executive were to breach the covenants set forth in Sections 3 and 4 of this
Agreement.
ARTICLE III.
CONFIDENTIAL INFORMATION
Executive acknowledges and agrees that all Confidential Information known
or obtained by Executive, whether before or after the date hereof, is the
property of the Company. Therefore, Executive agrees that Executive 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
Executive has such information in Executives' memory or embodied in writing or
other physical form, without Henry'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 Executives' fault or the fault
of any other Person bound by a duty of confidentiality to Xxxxx or the Company.
ARTICLE IV.
NONCOMPETITION
For the consideration to be under this Agreement, Executive agrees that:
(1) For a period of ten (10) years from the date hereon (the "Period");
(a) Executive will not, directly or indirectly, engage or invest in,
own, manage, operate, finance, control, or participate in the ownership,
management, operation, financing, or
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control of, be employed by, associated with, or lend Executives' name
or any similar name to, or render services or advice to, any business whose
products or activities compete in whole or in part with the current products
or activities of the Company, which business is the manufacture and sale of
building envelope systems and related products, roofing membranes (modified
bitumen and other related roofing products), asphalt or wax based industrial
emulsions, roof and driveway coatings and cement, and paving sealers,
provided, however, that Executive 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. Executive agrees that this covenant is
reasonable with respect to its duration, geographical area, and scope;
provided, further, that the Period with respect to the manufacture and sale
of building envelope systems shall be five (5) years.
(b) Executive will not, directly or indirectly, either for himself
or any other Person, (A) induce or attempt to induce any employee of the
Company or the Company's parent entity to leave the employ of such company,
(B) in any way interfere with the relationship between the Company or the
Company's parent entity and any employee of the Company or the Company's
parent entity, (C) employ, or otherwise engage as an employee, independent
contractor, or otherwise, any employee of the Company or the Company's parent
entity, or (D) induce or attempt to induce any customer, supplier, licensee,
or business relation of the Company or the Company's parent entity to cease
doing business with such company, or in any way interfere with the
relationship between any customer, supplier, licensee, or business relation
of any such company.
(c) Executive will not, directly or indirectly, either for himself
or any other Person, solicit the business of any Person known to Executive to
be a customer of the Company or the Company's parent entity, whether or not
Executive had personal contact with such Person;
(2) If Executive breaches any covenant set forth in Subsection 3(1) of
this Agreement, the term of such covenant will be extended by the period of
the duration of such breach;
(3) Executive will not, at any time during or after the Period,
disparage Xxxxx, the Company or the Company's parent entity, or any of their
shareholders, directors, officers, employees, or agents; and
ARTICLE V.
COMPENSATION
As consideration for the covenants in Section 4 of this Agreement, the
Company will pay Executive the sum of One Million Two Hundred Ninety-Six
Thousand Dollars ($1,296,000) on the date hereof.
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ARTICLE VI.
REMEDIES
If Executive breaches the covenants set forth in Sections 4 or 5 of this
Agreement, Xxxxx and the Company will be entitled to the following remedies:
(1) Damages from Executive;
(2) In addition to its right to damages and any other rights it 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 4 and 5 of this Agreement, it being agreed that money damages alone
would be inadequate to compensate Xxxxx or the Company and would be an
inadequate remedy for such breach.
(3) The rights and remedies of the parties to this Agreement are
cumulative and not alternative.
ARTICLE VII.
SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Xxxxx and Executive and will inure
to the benefit of Xxxxx and the Company and its affiliates, successors and
assigns and Executive and Executives' assigns, heirs and legal
representatives.
ARTICLE VIII.
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 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
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notice or demand to take further action without notice or demand as provided
in this Agreement.
ARTICLE IX.
GOVERNING LAW
This Agreement will be governed by the laws of the State of Delaware
without regard to conflicts of laws principles.
ARTICLE X.
JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement shall be brought against any of
the parties in the federal and state courts of the State of Delaware, 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 therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world.
ARTICLE XI.
SEVERABILITY
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 by 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 Sections 3 and 4 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 Executive.
ARTICLE XII.
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
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constitute one and the same agreement.
ARTICLE XII.
SECTION HEADINGS, CONSTRUCTION
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.
ARTICLE XIV.
NOTICES
All notices, consents, waivers, and other communications under 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 (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):
Executive: Xxxxxx X. Xxxxxx
Monsey Bakor
Cold Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile No.: 610/933-4598
Xxxxx: Xxxxx Group of Companies
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile No.: 213/583-8582
ARTICLE XV.
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ENTIRE AGREEMENT
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 Xxxxx and Executive 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.
XXXXX COMPANY Executive:
/s/ Xxxxxxx Xxxxxxxxx
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By: Xxxxxxx Xxxxxxxxx
--------------------------
/s/ X. X. Xxxxxx
------------------------
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Xxxxxx X. Xxxxxx
Its: President
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