Exhibit C NONCOMPETITION AND NONDISCLOSURE AGREEMENT
Exhibit
C
This
Noncompetition Agreement (the “Agreement”) is entered into this __ day of
July, 2007, between nCoat, Inc., a Delaware corporation (“nCoat”), MCC,
Inc., a Pennsylvania corporation (the “Company”) and Xxxxxxx Xxxxxxxxx,
an individual residing in the State of Pennsylvania (the
“Stockholder”). nCoat and the Company are sometimes hereafter
referred to collectively as “Buyer”.
RECITALS:
A. The
Stockholder has acquired extensive knowledge of and experience in the business
and/or operations of the Company through his status as a stockholder in the
Company;
B. Concurrently
herewith, nCoat, the Stockholder, and other stockholders of the Company, are
entering into a Stock Purchase Agreement (the “Purchase Agreement”),
pursuant to which nCoat is or has purchased one hundred percent (100%) of the
issued and outstanding shares of common stock of the Company;
C. The
parties to this Agreement acknowledge that the Stockholder has held a unique
position with respect to the Company, and has been made privy to highly
sensitive trade secrets and other confidential information of the Company,
that
the Stockholder in a unique and special manner has contributed significantly
to
the creation and maintenance of the good will of the Company, and that
nondisclosure of confidential information and a period of noncompetition are,
therefore, necessary to safeguard nCoat’s interests arising in connection with
the transaction which is the subject of the Purchase Agreement; and
D. Buyer
and the Stockholder desire to enter into a noncompetition agreement upon the
terms and subject to the conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises and agreements contained
herein, the adequacy and sufficiency of which are hereby acknowledged by the
Stockholder, the parties agree as follows:
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1.
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Noncompetition.
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(a) During
the term commencing on the date of this Agreement and ending on the fifth
(5th)
anniversary of the date hereof:
(i) the
Stockholder will not, directly or indirectly, own, manage, operate, control,
or
participate in the ownership, management, operation or control of, or be
associated as an officer, employee, consultant, agent, partner, or director
with, or provide capital or other funding to enable a third party to engage
in
any state, province or country, any business whose products or services compete
directly with products or services of Buyer (a “Restricted Business”);
provided, however, that nothing herein will be deemed to preclude the
Stockholder from owning up to one percent (1%) of the outstanding voting stock
of any publicly traded corporation whose shares are listed on a national stock
exchange or listed on NASDAQ;
(ii) the
Stockholder will not, directly or indirectly, solicit, divert, entice away or in any
other
manner persuade, or attempt to do any of the foregoing, with respect to any
actual or prospective customer of Buyer to become a customer
of
Stockholders or any third
party engaged in a Restricted Business or for any other transaction or
business opportunity except in respect of Buyer; and
(iii)
the Stockholder will not, solicit, directly or indirectly, any employee or
independent contractor of Buyer to leave such employment; provided, however
that
nothing herein will be deemed to preclude the Stockholder from hiring any such
employee pursuant to a response to a general solicitation for
employees.
(b) If
any restriction against engaging in a competitive activity contained in this
Section 1 is determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or
over
too great a geographical area or by reason of its being too extensive in any
other respect, it will be interpreted to extend only over the maximum period
of
time for which it may be enforceable, over the maximum geographical area as
to
which it may be enforceable and to the maximum extent in all other respects
as
to which it may be enforceable, all as determined by such court in such
action.
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2.
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Unauthorized
Disclosure.
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(a) The
Stockholder will not, without the prior written consent of the Chief Executive
Officer of nCoat, disclose to any person other than as required by law or court
order, any confidential information obtained by the Stockholder concerning
Buyer
or any Affiliate (as defined below) of Buyer before or during the term of this
Agreement, or any confidential information concerning any third party obtained
by the Stockholder in the course of his service as a director, officer, employee
or consultant of the Buyer or any Affiliate including, but not limited to,
such
information with respect to any products, improvements, processes, services,
formulas, customers, suppliers, vendors, marketing techniques, methods, future
plans, operating practices, financial statements, results or information
(“Confidential Information”). Confidential Information will
not include (i) any information known generally to the public or previously
disclosed to the public (other than as a result of unauthorized disclosure
by
the Stockholder); or (ii) any information disclosed to the Stockholder by a
third party without violating a legal duty owed to the Buyer or an
Affiliate.
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(b) The
Stockholder agrees that all documents, records, files, letters, disks,
memoranda, reports, data, sketches, drawings, computer diskettes, compact discs,
patents, patent pending, trade secrets, trademarks, copy rights, formulas,
drawings, diagrams and other media, laboratory notebooks, program listings
or
other written, electronic, photographic or other tangible material (“Tangible
Property”) containing Confidential Information, or any enhancements,
inventions and/or modifications pertaining to or arising from the Tangible
Property and/or Confidential Information during Stockholders employment with
the
Company, whether created by the Stockholder or others, which have or will come
into the Stockholder’s custody or possession will be and are the exclusive
property of the Company. The Stockholder agrees that upon the request
by Buyer the Stockholder will promptly deliver to Buyer all Tangible Property
in
the Stockholder’s possession or under the Stockholder’s control which contains
Confidential Information. The Stockholder will not retain or deliver
to any third person a copy of such Tangible Property.
(c) The
Stockholder agrees that the obligations not to disclose or use Confidential
Information or Tangible Property of the types set forth in Subsection 2(a)
or
2(b) above also extend to such types of Confidential Information and Tangible
Property of customers or suppliers to the Company or its Affiliates or other
third parties who may have disclosed or entrusted the same to the Company or
an
Affiliate or to the Stockholder in the course of the operation of the business
of the Company.
(d) The
covenants set forth in this Section s will lapse six (6) years following the
date of this Agreement.
(e) For
purposes of this Agreement, the term “Affiliate” means any person or
entity that controls, is controlled by, or is under common control with any
other person.
3. Public
Announcements. The Stockholder agrees that he will not make
or cause to be made any public statement, public announcement, or press release
which is intended, or would reasonably be expected, to disparage Buyer or the
transactions contemplated by the Purchase Agreement.
4. Injunctive
Relief. The Stockholder acknowledges that a breach of a
covenant or restriction contained in Section 2 or 3 hereof will cause
irreparable damage to Buyer, the exact amount of which will be difficult to
ascertain, and that any remedy at law for any such breach will be
inadequate. Accordingly, the Stockholder agrees that if the
Stockholder breaches any covenant or restriction contained in Section 2 or
3
hereof, then Buyer will be entitled to injunctive relief, without posting bond
or other security, in addition to any and all other remedies available to Buyer
at law or in equity.
5. Successors;
Binding Agreement. This Agreement will inure to the benefit
of and be enforceable by the Stockholder and by the Stockholder’s personal or
legal representatives, executors, administrators, heirs, distributees, and
devisees, and by Buyer and its successors and assigns.
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6. Notices. All
notices and other communications required or permitted under this Agreement
will
be in writing and will be deemed to have been duly given when personally
delivered, when delivered by facsimile or electronic mail or by courier or
overnight express service or five days after having been sent by certified
or
registered mail, postage prepaid, addressed: (a) if to the Stockholder, Xxxxxxx
Xxxxxxxxx, 000 Xxxxx Xxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000; to
nCoat, nCoat, Inc., 0000 Xxxx Xxxxx, X.X. Xxx 000, Xxxxxxxx, XX 00000, with
a
copy to Xxxxxxx X. Xxxxx, Durham Xxxxx & Xxxxxxx, 000 Xxxx Xxxxxxxx, Xxxxx
000, Xxxx Xxxx Xxxx, Xxxx 00000, Fax: (000) 000-0000; to the Company, MCC,
Inc.,
000 Xxxx Xxxx, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000,
Attn: President, Facsimile No.: (000) 000-0000 or (b) to
such other address as any party may have furnished to the other parties in
writing in accordance herewith, except that notices of change of address will
be
effective only upon receipt.
7. Governing
Law; Validity. The interpretation, construction and
performance of this Agreement will be governed by and construed and enforced
in
accordance with the internal laws of the State of Delaware without regard to
principles of conflicts of laws. The invalidity or unenforceability
of any provision of this Agreement will not affect the validity or
enforceability of any other provisions of this Agreement, which other provisions
will remain in full force and effect.
8. Counterparts;
Fax Signatures. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an original and all of
which together will constitute one and the same
instrument. Signatures transmitted via facsimile transmission will
constitute original signatures.
9. Litigation
Expenses. If any action, suit, or proceeding is brought by a
party hereto with respect to a matter or matters covered by this Agreement,
all
costs and expenses of the prevailing party incident to such proceeding,
including reasonable attorney's fees, will be paid by the other
party.
10. Miscellaneous. No
provision of this Agreement may be modified or waived unless such modification
or waiver is agreed to in writing and executed by the Stockholder and by a
duly
authorized officer of Buyer. No waiver by any party hereto at any
time of any breach by another party hereto of, or failure to comply with, any
condition or provision of this Agreement to be performed or complied with by
such other party will be deemed a waiver of any similar or dissimilar conditions
or provisions at the same or at any prior or subsequent time. Failure
by the Stockholder or Buyer to insist upon strict compliance with any provisions
of this Agreement or to assert any right which the Stockholder or Buyer may
have
hereunder will not be deemed to be a waiver of such provision or right or any
other provision of or right under this Agreement.
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[Remainder
of Page Intentionally Left Bank.
Signature
Page Follows.]
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IN
WITNESS WHEREOF, Buyer has caused this Agreement to be executed by its duly
authorized officer, and the Stockholder has executed this Agreement, effective
as of the day and year first above written.
nCoat:
/s/
Xxxx
X.
Xxxxxxx, Chief Executive Officer
The
Company:
MCC,
Inc.
/s/
Xxxxxxx
Xxxxxxxxx, Chief Executive Officer
Stockholder:
Xxxxxxx
Xxxxxxxxx
/s/
Signature
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