DYNAMIC MATERIALS CORPORATION
NON-COMPETITION AGREEMENT
IN CONNECTION WITH
SALE OF BUSINESS
This Non-Competition Agreement (the "NON-COMPETITION AGREEMENT") is
made as of the 18th day of March, 1998, by and between Dynamic Materials
Corporation, a Delaware corporation ("DMC"), and Xxxxxx Xxxxxxx, an individual
("XXXXXXX"). This is the Non-Competition Agreement contemplated by that certain
Asset Purchase Agreement (the "AGREEMENT"), dated March 18, 1998 by and between
DMC, Xxxxxxx and Spin Forge, LLC, a California limited liability company ("SPIN
FORGE").
WHEREAS, DMC, Xxxxxxx and Spin Forge have entered into the Agreement,
dated March 18, 1998 providing for the acquisition by DMC of certain tangible
and intangible assets related to Spin Forge's metal fabrication business (the
"BUSINESS");
WHEREAS, Xxxxxxx owns a substantial interest of Spin Forge;
WHEREAS, in order to protect the value of the assets and goodwill being
acquired, DMC requires that Xxxxxxx agree to certain restrictions on Xxxxxxx'x
ability to compete with DMC in the future;
WHEREAS, DMC and Spin Xxxxxxx desire that the Acquisition and the
transactions contemplated by the Agreement be consummated; and
WHEREAS, pursuant to the terms and conditions of the Agreement, Xxxxxxx
shall execute and deliver this Non-Competition Agreement to DMC prior to the
Closing.
NOW, THEREFORE, as inducement to DMC to proceed with the Closing and in
consideration of such Closing, and in consideration of the mutual covenants and
agreements contained herein and in the Agreement and for other good and valuable
consideration hereby acknowledged, intending to be legally bound, the parties
hereto do hereby agree as follows:
1. NON-COMPETITION. Xxxxxxx agrees that it shall not, directly or
indirectly, for the term of this Agreement, whether as an owner, consultant,
partner, joint venturer, stockholder, broker, agent, principal, trustee,
licensor or in any capacity whatsoever (a) own, manage, operate, join, control,
finance or participate in the ownership, management, operation, control or
financing of, or be connected as an officer, director, employee, partner,
principal, agent, representative, consultant, licensor, licensee or otherwise
with, any business or enterprise engaged in any business which is competitive
with DMC in the Business, or (b) engage in any other manner, in any business
which is competitive with DMC in the Business; provided, however, that
acquisition or ownership of less than 2 % of the outstanding shares of any
corporation engaged in any business which is competitive with DMC in the
Business whose stock is publicly traded shall not constitute a violation of this
Non-Competition Agreement. As used herein, "Business" shall mean the business
of DMC as presently conducted and as may be conducted from time-to-time
hereafter.
2. TERM. This Agreement shall remain in effect for a period of
thirty-six (36) months from the date hereof.
3. JUDICIAL LIMITATION. In the event that any provision of this
Non-Competition Agreement is more restrictive than permitted by the law of the
jurisdiction in which DMC seeks enforcement thereof, the provisions of this
Non-Competition Agreement shall be limited only to that extent that a judicial
determination finds the same to be unreasonable or otherwise unenforceable. Such
invalidity or unenforceability shall not affect any other terms herein, but such
term shall be deemed deleted, and such deletion shall not affect the validity of
the other terms hereof. In addition, if any one or more of the terms contained
in this Non-Competition Agreement shall for any reason be held to be excessively
broad or of an overly long duration that term shall be construed in a manner to
enable it to be enforced to the extent compatible with applicable law. Moreover,
notwithstanding any judicial determination that any provision of this
Non-Competition Agreement is not specifically enforceable the parties intend
that DMC shall nonetheless be entitled to recover monetary damages as a result
of any breach hereof.
4. INJUNCTIVE RELIEF. In view of the nature of the rights in goodwill,
business reputation and prospects of DMC to be protected under this
Non-Competition Agreement, Xxxxxxx understands and agrees that DMC could not be
reasonably or adequately compensated in damages in an action at law for
Xxxxxxx'x breach of its obligations hereunder. Accordingly, Xxxxxxx specifically
agrees that DMC shall be entitled to temporary and permanent injunctive relief
to enforce the provisions of this Non-Competition Agreement and that such relief
may be granted without the necessity of proving actual damages. This provision
with respect to injunctive relief shall not, however, diminish the right of DMC
to claim and recover damages in addition to injunctive relief.
5. WAIVER. The failure of DMC to enforce at any time any of the
provisions of this Non-Competition Agreement or to require at any time
performance by Xxxxxxx of the provisions hereof shall in no way be construed to
be a waiver of such provisions or to affect either the validity of this
Non-Competition Agreement, or any part hereof, or the right of DMC thereafter to
enforce each and every provision in accordance with the terms of this
Non-Competition Agreement.
6. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this Non-Competition Agreement shall not affect the other
provisions hereof, and this Non-Competition Agreement shall be construed in all
respects as if such invalid or unenforceable provisions were omitted.
7. ASSIGNABILITY. This Non-Competition Agreement shall be freely
assignable by DMC and shall inure to the benefit of its successors and assigns.
8. GOVERNING LAW AND VENUE. The validity of this Agreement and any of
its terms and provisions, as well as the rights and duties of the parties
hereunder, shall be governed by the laws
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of the State of Colorado (without regard to its conflicts of law doctrines) and
the venue for any action to enforce or to interpret this Agreement shall be in a
court of competent jurisdiction located in the State of Colorado and each of the
parties consents to the jurisdiction of such court in any such action or
proceeding and waives any objection to venue laid therein.
9. AMENDMENTS. This Non-Competition Agreement may not be amended,
altered or modified other than by a written agreement between the parties
hereto.
10. COUNTERPARTS. This Non-Competition Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which shall together constitute one and the same instrument. This
Non-Competition Agreement shall become binding when one or more counterparts
hereof shall bear the signatures of all of the parties indicated as the
signatories hereto.
11. NOTICES. All notices, requests, demands and other communications
under this Non-Competition Agreement shall be given in writing and shall be
served either personally, by facsimile or delivered by first class mail,
registered or certified, return receipt requested, postage prepaid and properly
addressed to the parties as noted herein. Notice shall be deemed received upon
the earliest of actual receipt, confirmed facsimile or three (3) days following
mailing pursuant to this section.
12. INTERPRETATION. Each party has had the opportunity and has reviewed
and revised this Non-Competition 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 Non-Competition Agreement.
The section headings contained in this Non-Competition Agreement are for
convenience and reference purposes only and shall not affect in any way the
meaning and interpretation of this Non-Competition Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Non-Competition Agreement as of the date first above written.
/s/Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
0000 Xxxx Xxxxx Xxxxxx
Xx Xxxxxxx, XX 00000
DYNAMIC MATERIALS CORPORATION
By: /s/Xxxxxxx Santa
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Xxxxxxx Santa
Vice President, Finance and
Chief Financial Officer
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
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