NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement"), dated
August 16, 1995, is between XXXXXX ELECTRONICS, INC., a Delaware
corporation ("Xxxxxx"), and Loc M. Ha ("Shareholder").
RECITALS
A. Inland Empire Interconnects, a California
corporation ("IEI"), the shareholders of IEI (including
Shareholder) and Xxxxxx are parties to that certain Asset
Purchase Agreement, dated as of August __, 1995 (the "Purchase
Agreement"), pursuant to which Xxxxxx is purchasing substantially
all of the assets of and relating to IEI's business of custom
cable assembly and manufacture of interconnect products (the
"Business") and the goodwill of the Business. The Business has
been carried on in the 58 counties of the State of California and
in the states of Oregon, Washington, New York and Ohio and in the
countries of Italy, France and Canada (hereinafter referred to as
the "Restricted Territory").
B. Shareholder owns approximately thirty-three and
one-third percent (33-1/3%) of the issued and outstanding shares
of IEI.
C. In order to induce Xxxxxx to consummate the
purchase contemplated by the Purchase Agreement and to assure the
transfer of the goodwill of the Business to Xxxxxx, Shareholder
has agreed to enter into this Agreement with Xxxxxx for the
consideration set forth herein. The other shareholders of IEI
have also entered into agreements not to compete with Xxxxxx.
NOW, THEREFORE, the parties agree as follows:
1. REPRESENTATIONS. Shareholder represents and
warrants to Xxxxxx that IEI has carried on the Business in the
Restricted Territory including, without limitation, in each of
the 58 counties of the State of California.
2. CONSIDERATION FOR COVENANT. As consideration for
this Agreement, Xxxxxx is paying Shareholder the sum of $135,833
in cash concurrently with the execution and delivery of this
Agreement.
3. COVENANT NOT-TO-COMPETE. During the
Noncompetition Period (as hereinafter defined), Shareholder shall
not, in the Restricted Territory, directly or indirectly, by
ownership of debt or equity interests in any businesses, or by
participation in the management or operations of any businesses,
or by the solicitation of customers or suppliers, or otherwise,
participate or engage in any line of business or activity which
is the same as or substantially similar to IEI's business of
custom cable assembly and manufacture of interconnect products,
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and Shareholder shall not affirmatively assist or induce any
third party to engage in any activity which is so prohibited.
The foregoing restrictions shall not apply to or prohibit the
ownership by Shareholder of less than 5% of the outstanding
shares of capital stock of any corporation with one or more
classes of its capital stock listed on a national securities
exchange or publicly traded in the over-the-counter market. In
addition, the foregoing restrictions shall not apply to services
performed by Shareholder for Xxxxxx while employed by Xxxxxx.
4. NONCOMPETITION PERIOD. The Noncompetition Period
shall be a period of three years beginning on the date of this
Agreement and ending on the third anniversary of the date of this
Agreement unless Shareholder's employment by Xxxxxx is terminated
on or after the third anniversary of the date of this Agreement
in which case the Noncompetition Period shall be a period of 42
months from the date of this Agreement.
5. EMPLOYMENT BY XXXXXX. This Agreement is entered
into by Shareholder in order to induce Xxxxxx to consummate the
acquisition of the Business and to assure the transfer of the
goodwill of the Business to Xxxxxx. As consideration for this
Agreement, Xxxxxx is paying Shareholder the sum provided for
herein. As a matter completely separate and apart from such
acquisition, Xxxxxx and Shareholder have entered into an
employment agreement of even date herewith (the "Employment
Agreement"). It is the parties' intention that their respective
obligations under this Agreement and under the Employment
Agreement shall be completely separate and independent and that
the performance of one agreement shall not be a condition of an
obligation to perform the other agreement. Without limiting the
generality of the foregoing, it is understood and agreed that any
breach by Xxxxxx of its obligations under the Employment
Agreement or any claims Shareholder may have against Xxxxxx
arising out of an employment relationship between Xxxxxx and
Shareholder shall not excuse or discharge Shareholder's
obligations under this Agreement.
6. SEVERABILITY. If any one or more provisions
contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision
had never been contained herein.
It is the desired intent of the parties that the
provisions of this Agreement shall be enforceable to the fullest
extent permissible in each jurisdiction in which such enforcement
is sought. Accordingly, if any portion of the covenant not to
compete contained in this Agreement is held by any court of
competent jurisdiction to be unreasonable, arbitrary, against
public policy or otherwise invalid or unenforceable, then said
covenant not to compete shall be considered divisible both as to
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time and as to geographical area, and each month of the
Noncompetition Period shall be deemed a separate period of time,
and each state, county, city, parish or other local jurisdiction
in the Restricted Territory shall be deemed a separate
geographical area, so that the court may reduce the scope thereof
or otherwise amend or reform the portion thus adjudicated to a
lesser period of time or a smaller geographical area that is
determined to be reasonable, not arbitrary, not against public
policy and, valid and enforceable by Xxxxxx, such amendment or
reformation to apply only with respect to the operation of this
Agreement in the particular jurisdiction in which such
adjudication is made.
7. REMEDIES. The parties recognize that the
performance of the obligations under this Agreement by
Shareholder is special, unique and extraordinary in character,
and that in the event of a breach by Shareholder of the terms and
conditions of this Agreement, Xxxxxx shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of
competent jurisdiction, either in law or in equity, to obtain
damages for any breach of this Agreement, or to enforce the
specific performance thereof by Shareholder and/or to enjoin
Shareholder from any violation thereof.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their legal representatives, successors, permitted assigns
and heirs. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by Shareholder. This Agreement and
the rights and obligations hereunder shall be assignable by
Xxxxxx without the consent of Shareholder to (a) an affiliate of
Xxxxxx, (b) a person that acquires all or substantially all of
the assets of Xxxxxx or all or substantially all of the assets
used or held for use in the Business or (c) a person to which the
Purchase Agreement is assigned by Xxxxxx.
9. WAIVER; REMEDIES. No failure or delay by any
party in exercising any right, power or privilege hereunder will
operate as a waiver thereof nor will any single or partial
exercise thereof preclude any other or further exercise thereof
or the exercise of any right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law or equity.
10. AMENDMENT. This Agreement or any term hereof may
be changed, waived, discharged or terminated only by an agreement
in writing signed by the party against whom such change, waiver,
discharge or termination is sought to be enforced. Any change,
waiver, discharge or termination referred to in the preceding
sentence will apply only to the change, waiver, discharge or
termination specifically referred to in the writing and will not
be construed or applied to constitute a change, waiver, discharge
or termination of any future rights or powers of any party under
this Agreement.
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11. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of
California without regard to its conflicts of laws principles or
rules.
12. HEADINGS. The headings of the sections contained
in this Agreement have been inserted for convenience of reference
only and shall not form a part of or affect the meaning,
construction or scope thereof.
13. CONSTRUCTION. Each party has reviewed and revised
this Agreement and, therefore, the rule of construction requiring
that any ambiguity be resolved against the drafting party shall
not be employed in the interpretation of this Agreement.
14. ATTORNEYS' FEES. Should any party institute any
action or proceeding to enforce any provisions of this Agreement,
or for damages by reason of an alleged breach of any provision of
this Agreement, or for a declaration of rights hereunder, the
prevailing party (as determined by the court, agency or other
authority before which such action or proceeding is commenced)
shall, in addition to such other relief as may be awarded, be
entitled to recover attorneys' fees, expenses and costs of
investigation as actually incurred (including, without
limitation, attorneys' fees, expenses and costs of investigation
incurred in appellate proceedings or in any action or
participation in, or in connection with, any case or proceeding
under Chapter 7, 11 or 13 of the Bankruptcy Code).
15. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one
and the same instrument. Signatures may be exchanged by
telecopy, and each party agrees to be bound by its own telecopied
signature and to accept the telecopied signatures of the other
parties.
16. ENTIRE AGREEMENT. This Agreement, together with
the Purchase Agreement, constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof, and
supersedes all prior oral and written agreements and
understandings between the parties with respect to such matters.
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IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the day and year first above
written.
XXXXXX ELECTRONICS, INC. SHAREHOLDER
By /s/ Xxxxxxx X. Xxxxxx /s/ Loc M. Ha
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XXXXXXX X. XXXXXX LOC M. HA
Chief Financial Officer
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