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EXHIBIT 10.16
NON-COMPETITION AGREEMENT
This NON-COMPETITION AGREEMENT (this "Agreement"), made as of this 3rd
day of July, 1995 by and among Xxxxxxx Xxxxxxxx (the "Seller") and
Xxxxxxxx/Heritage Acquisition Company, a Delaware corporation (the "Company"),
WHEREAS, the Company and the Seller are parties to a Stock Purchase
Agreement, dated as of July 3rd, 1995 (the "Stock Purchase Agreement"),
pursuant to which the Company will purchase all of the outstanding capital
stock (the "Stock") of Xxxxxxxx Companies, Inc., a Texas corporation
("Xxxxxxxx");
WHEREAS, the Seller is a principal stockholder of Xxxxxxxx, has been an
adviser to Xxxxxxxx, has been involved in key management decisions concerning
Xxxxxxxx and has been given access to confidential and proprietary information
relating to Xxxxxxxx'x business; and
WHEREAS, the Company seeks to protect its investment in the business and
goodwill of Xxxxxxxx, and is not willing to purchase the Stock unless the
Seller agrees to be bound by the non-competition provisions contained in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
Section 1. NON-COMPETITION. The Seller acknowledges that the
covenants and agreements in this Section 1 are a condition precedent to both
the Company's obligation to purchase the Stock from the Seller and the Seller's
obligation to sell the Stock to the Company under the Stock Purchase Agreement,
and that the Company would not purchase and the Seller would not sell the
Stock, but for the Seller's agreements herein. The Seller and the Company
acknowledge that the Company will sell products to customers located in markets
throughout the world and that engagement by the Seller in the Designated
Industry (as hereinafter defined) anywhere in the world could cause the Company
irreparable damage. For a period of five (5) years after the date hereof (the
"Restricted Period"), the Seller will not (a) engage in the Designated Industry
anywhere in North America, directly or indirectly, alone or as a shareholder,
partner, officer, director, employee or consultant of any other business
organization, (b) divert to any competitor of the Company in the Designated
Industry any customer of the Company, or (c) solicit or encourage any officer,
employee or consultant of the Company to leave its employ for employment by or
with the Seller or any competitor of the Company. The foregoing restriction
shall not prevent the Seller from owning five percent (5%) or less of the
equity securities of any publicly traded company. For purposes of this Section
1, the term "Designated Industry" shall mean the business of manufacturing or
distributing aluminum, wood, or vinyl windows or doors. If at any time the
provisions of this Section 1 shall be determined to be invalid or
unenforceable, by reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 1 shall be considered divisible and shall
become and be immediately amended to only such area, duration and scope of
activity as shall be determined to be reasonable and enforceable by the court
or other body having jurisdiction over the matter; and the Seller agrees that
this Section 1 as so amended shall be valid and binding as though any invalid
or unenforceable provision had not been included herein.
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Section 2. CONFIDENTIAL INFORMATION. The Seller recognizes and
acknowledges that certain of the assets of Xxxxxxxx, including without
limitation information regarding customers, pricing policies, methods of
operation, proprietary computer programs, sales, products, profits, costs,
markets, key personnel, formulae, product applications, technical processes,
and trade secrets (hereinafter called "Confidential Information") are valuable,
special, and unique assets of Xxxxxxxx. During the Restricted Period, the
Seller shall not disclose any or any part of the Confidential Information to
any person, firm, corporation, association, or any other entity for any reason
or purpose whatsoever, directly or indirectly, except as required by law,
unless and until such Confidential Information becomes publicly known or
available other than as a consequence of the breach by the Seller of his
confidentiality obligations hereunder.
Section 3. NON-COMPETITION FEE. In consideration of the Seller's
non-competition and other agreements set forth in this Agreement, the Company
agrees to pay to the Seller a fee of $2,000,000 at the Closing under the Stock
Purchase Agreement.
Section 4. NOTICES. All notices, demands and other communications
hereunder shall be in writing or by written telecommunication, and shall be
deemed to have been duly given if delivered personally or if mailed by
certified mail, return receipt requested, postage prepaid, or if sent by
overnight courier, or sent by written telecommunication, as follows:
If to the Company, to:
Xxxxxxxx/Heritage Acquisition Company
c/o Heritage Partners, Inc.
00 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: T. Xxxxx Xxxxxx
With a copy sent contemporaneously to:
Xxxxxx X. Xxxx, Esq.
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to the Seller, to:
Xxxxxxx Xxxxxxxx
0000 Xxxxxxxxx
Xxxxxx, Xxxxx 00000
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With a copy sent contemporaneously to:
O. Xxxxxx Xxxxxx, Jr., Esq.
Xxxxx, Xxxxxx & Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Any such notice shall be effective (a) if delivered personally, when
received, (b) if sent by overnight courier, when received, (c) if mailed, three
(3) days after being mailed as described above, and (d) if sent by written
telecommunication, when dispatched.
Section 5. CONSENT TO SERVICE OF PROCESS. Each party hereto agrees
that service of process upon it in any suit, action or proceeding shall be
deemed in every respect effective service of process upon it if given in the
manner set forth in Section 4.
Section 6. REMEDIES. The Seller acknowledges and agrees that the
Company's remedy at law for a breach or threatened breach of any of the
provisions of this Agreement would be inadequate and, in recognition of this
fact, in the even of a breach or threatened breach by the Seller of any of the
provisions of this Agreement it is agreed that, in addition to its remedy at
law, the Company shall be entitled, without posting any bond, to equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available; provided that nothing in this Section 6 shall restrict the Seller
from opposing any such action. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach. For purposes of this Section 6, "threatened
breach" shall mean any indication, verbal or otherwise, of the Seller's
intention to breach, or of the Seller's impending breach of, any of the
provisions of this Agreement.
Section 7. SEVERABILITY. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired.
Section 8. WAIVERS. No delay or omission by either party hereto in
exercising any right, power or privilege hereunder shall impair such right,
power or privilege, nor shall any single or partial exercise of any such right,
power or privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.
Section 9. COUNTERPARTS. This Agreement may be executed in several
identical counterparts, each of which when executed and delivered by the
parties hereto shall be an original, but all of which together shall constitute
a single instrument. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
Section 10. ASSIGNMENT; RIGHTS OF PARTIES. The rights and obligations
of the parties hereto shall inure to the benefit of, and shall be binding upon,
the successors and assigns of each of them. The Seller acknowledges that upon
completion of the purchase by the Company of all of the capital stock of
Xxxxxxxx pursuant to the Stock Purchase Agreement, the Company will merge with
and into
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Xxxxxxxx and Xxxxxxxx will thereupon succeed to the rights of the Company
hereunder and shall thereafter be entitled to enforce the provisions hereof as
if it were the Company.
Section 11. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement between the Company and the Seller, and, except as otherwise
expressly provided herein, this Agreement shall not be affected by reference to
any other document.
Section 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE
TO PRINCIPLES OF CONFLICTS OF LAW.
