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EXHIBIT 10.2
CONFIDENTIALITY, NONSOLICITATION AND
NONCOMPETITION AGREEMENT
This is a Confidentiality, Nonsolicitation and Noncompetition Agreement dated as
of January 26, 2001, among (i) Ayrshire Electronics LLC (the "PROTECTED PARTY"),
and (ii) Xxxxxxx Piano & Organ Company (the "SELLING PARTY")
RECITALS
A. Pursuant to an Asset Purchase Agreement dated as of January 26, 2001 (the
"PURCHASE AGREEMENT"), the Protected Party is purchasing certain assets from the
Selling Party. The agreement by the Selling Party to the terms of this Agreement
was material to the decision of the Protected Party to enter into the
transactions described in the Purchase Agreement. The Selling Party acknowledges
that it engages in the contract electronic manufacturing services business (the
"BUSINESS") on a worldwide basis.
B. For purposes of this Agreement, "PROPRIETARY INFORMATION" means any trade
secret of or private information concerning the Protected Party or information
concerning the business, assets, customers and operation of the Protected Party,
including, without limitation, confidential or trade secret information acquired
pursuant to the terms of the Purchase Agreement, the Protected Party's design,
development, use, purchase or sale of its products; marketing plans or
proposals; business plans; expansion plans; contracts; agreements; customer
lists, identities, needs, requirements and preferences; and the terms of
customer agreements and arrangements. The Protected Party has expressly or
impliedly protected such information from unrestricted use by persons not
associated with the Protected Party.
THE PARTIES, INTENDING TO BE LEGALLY BOUND, AGREE AS FOLLOWS:
1. CONFIDENTIAL INFORMATION.
(a) The Selling Party agrees that it shall (i) maintain the strict confidence
of, undertake all necessary steps to avoid divulging or disclosing, and preserve
and protect the Proprietary Information, trade secrets, customer lists, business
records, and financial records of the Protected Party (collectively, the "TRADE
SECRETS") from disclosure to, or access or use by, any person or entity,
including any competitor or potential competitor of the Protected Party, and
(ii) not use the Trade Secrets to compete, directly or indirectly, with the
Protected Party, nor attempt to otherwise take commercial advantage of the Trade
Secrets. The Selling Party acknowledges that the Trade Secrets constitute
valuable, special and unique property of the Protected Party.
(b) The Selling Party represents and warrants to the Protected Party that it has
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delivered to the Protected Party any and all papers, books, records, documents,
memoranda and manuals, including all copies thereof, whether hard or digital
copies, or relating to the business, or containing any Proprietary Information
or Trade Secrets (excluding however such information as the Selling Party is
required to retain for legal, accounting, auditing or tax purposes), except that
with respect to electronic information if that information is otherwise provided
in some other form, then the Selling Party agrees that it will destroy all
electronic copies of such information.
(c) The Selling Party agrees that, if at any time after the date of this
Agreement, the Selling Party determines that it has any Proprietary Information
or Trade Secrets in its possession or control, such Selling Party shall
immediately deliver all such Proprietary Information or Trade Secrets to the
Protected Party, including all copies or portions thereof (excluding if,
however, such information as the Selling Party is required to retain for legal,
accounting, auditing or tax purposes so long as the Selling Party has provided
Protected Party with a copy of such information).
(d) The Protected Party agrees that nothing in this Agreement shall apply to any
Trade Secrets, Proprietary Information, Customer Lists and other records of the
Selling Party which is not related to the Business or assigned to Protected
Party pursuant to the Purchase Agreement.
(e) Nothing herein shall prevent the Selling Party from enforcing or protecting
its rights pursuant to the Purchase Agreement.
2. EMPLOYEE SOLICITATION. The Selling Party agrees that it shall not, for a
period of five years after the date of this Agreement, directly or indirectly,
induce, encourage or solicit any employee of the Protected Party to leave the
employ of the Protected Party or become employed by the Selling Party or any
competitor or potential competitor of the Protected Party, or, directly or
indirectly, hire any former employees of the Protected Party.
3. NONCOMPETITION COVENANT.
(a) The Selling Party agrees that it shall not, for a period of five years after
the date of this Agreement, directly or indirectly, individually, or through any
person, partnership, joint venture, corporation or other entity in which the
Selling Party has any interest, including, without limitation, as a shareholder,
owner, member, partner, investor, director, officer, employee or consultant, or
otherwise, (i) engage in the Business anywhere in the world or (ii) solicit the
Protected Party's past or present customers or clients with respect to the
Business; provided, however, that the Selling Party may invest in publicly-held
companies regardless of this paragraph 3(a), so long as the Selling Party does
not own greater than 3% of the ownership interests in such publicly-held
company.
(b) The consideration for the Selling Party's covenants in this Agreement is the
purchase price consideration set forth in the Purchase Agreement.
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(c) Except for the purchase price consideration paid pursuant to the Purchase
Agreement, all of the restrictive covenants in this Agreement shall be construed
as an agreement independent of any provision of the Purchase Agreement, and the
existence of any claim or cause of action of the Selling Party against a
Protected Party shall not constitute a defense to the enforcement by the
Protected Party of such restrictive covenants. It is specifically agreed that
the periods during which the covenants of the Protected Parties shall be
effective shall be computed by excluding from such computation any time during
which the Protected Party is in violation of any provision of this Agreement.
4. COOPERATION. The Selling Party agrees that it shall cooperate in connection
with the Protected Party with respect to maintaining the goodwill and reputation
of the Protected Party.
5. SPECIFIC ENFORCEMENT. In the event of a breach of the Selling Party's
covenants in this Agreement, it is agreed that damages will be difficult to
ascertain and the Protected Party may peti-tion a court of law or equity for,
and be granted, injunctive relief in addition to any other relief which the
Protected Party may have under the law, including reasonable attorney's fees.
6. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Kentucky, without regard to or
application of its conflicts of laws principles. Each of the parties has
participated in the preparation of this Agreement and agree that in construing
the provisions of this Agreement, the general rule that provisions shall be
construed most strongly against the party that drafted such provisions shall
have no application.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and supersedes all prior and
other understandings with respect to the subject matter hereof. No change,
modification, addition or amendment of this Agreement shall be enforceable
unless in writing and signed by the party against whom enforcement is sought.
8. CONSTRUCTION. The parties agree that the restrictions set forth herein are
reasonable and necessary to preserve the business of the Protected Party and
that the maximum protection available under the law shall be pro-vided to the
Protected Party by this Agreement to protect the Protected Party's interests in
its business and confidential information and that, if the restrictions imposed
hereby are held by any court to be invalid, illegal or unenforceable as to time,
xxxxx-xxxx, scope or otherwise, this Agreement shall be construed to impose
restrictions which are valid, legal and enforceable as to time, territory, scope
or otherwise, as the case may be, to the maximum extent permitted under
applicable law.
9. HEADINGS. The headings contained in this Agreement are included for ease of
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reference only and shall not be considered in the interpretation or enforcement
of this Agreement.
10. PROVISIONS SEVERABLE. To the extent that any one or more of the provisions
of this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
11. NOTICES. All notices required to be given under this Agreement shall be in
writing and shall be deemed to have been duly given if mailed by certified mail,
return receipt requested, postage prepaid to the addresses set forth in the
Purchase Agreement, or to such other addresses which a party has given the other
parties written notice.
12. BENEFIT. This Agreement shall be binding upon and shall inure to the benefit
of the parties to this Agreement and, as applicable, their respective heirs,
executors, administrators, personal representatives, successors and assigns.
13. BUSINESS OF THE PROTECTED PARTY. In connection with the definition of
Propriety Information continued herein, the Protected Party hereby respects and
warrants that its business is contract electronic manufacturing and related
sales, service and distribution.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth in the preamble above.
AYRSHIRE ELECRONICS LLC
By: CDR Manufacturing, Inc., sole member
By: /s/ XXXX X. XXXXXX
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Title: Chairman & CEO
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XXXXXXX PIANO & ORGAN COMPANY
By: /s/ XXXXX X. XXXXXX, XX.
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Title: Exec. Vice President, Chief Financial Officer
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