EXHIBIT 10.35
NON-COMPETITION AGREEMENT
This NON-COMPETITION AGREEMENT (this "Agreement") is entered into as of
November 17/th/, 1999 by and among Xxxxxxx Xxxxx ("Shareholder"), a shareholder
of Advanced Nutraceuticals, Inc., a Delaware corporation (the "Company"),
Nutrition For Life International, Inc., a Texas corporation ("Buyer"), and its
wholly-owned subsidiary NL Acquisition Company, a Delaware corporation
("Newco").
RECITALS
A. This Agreement is entered into in connection with the acquisition by
Buyer of the Company pursuant to that certain Agreement and Plan of Merger dated
October 20, 1999 (the "Merger Agreement") by and among Buyer, Advanced
Nutraceuticals, Inc. ("ANI"), Newco, the Company and the Controlling
Shareholders of the Company named therein.
B. Pursuant to the Merger Agreement, among other things, the Company shall
be merged (the "Merger") with and into Newco (sometimes referred to herein as,
the "Surviving Corporation") and the Shareholder shall receive shares of
preferred stock, par value $.001 per share, of the Buyer.
C. Shareholder has agreed to execute and deliver this Agreement and to be
bound by its terms (i) to induce Buyer, ANI and Newco to complete the Merger,
(ii) with the intention of causing the effective preservation of the goodwill of
the Surviving Corporation unimpaired, and (iii) to provide assurance to Buyer,
ANI and Newco that Shareholder will take no action that could frustrate or
interfere with such preservation or otherwise impair such goodwill.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing facts and such other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Shareholder hereby covenants to and agrees with the Buyer and Newco
that, except as otherwise expressly provided in this Agreement or consented to,
approved or otherwise permitted by the board of directors of Buyer in writing,
for the period ending two years from the date hereof, Shareholder shall not,
directly or indirectly, acting alone or as a member of a partnership or other
business entity or as a holder of any security (including debt securities) of
any class (other than as a holder of less than five percent (5%) of the
outstanding amount of any security listed on a national securities exchange or
designated as a National Market System security by the National Association of
Securities Dealers, Inc.), or as an officer, director, partner, employee,
consultant, agent or representative of any corporation or other business entity;
(a) engage, within any county or other political subdivision of any
other state of the United States of America or in any foreign country in the
Nutritional Supplement Business (as hereinafter defined) or in any business,
trade or other enterprise substantially similar to, or directly or indirectly in
competition with, the Nutritional Supplement Business conducted by the Buyer or
the Surviving Corporation, during the term hereof, extend to or assist in
arranging credit to establish
or conduct any such business or to acquire all or any portion of any such
business or permit Shareholder's name, reputation or affiliations to be used in
connection with any such business. For the purposes hereof, the "Nutritional
Supplement Business" shall mean the cultivation, gathering, preparation,
processing, trading, manufacture, distribution, marketing or selling (whether at
wholesale or retail, by any method or means) of vitamins, minerals or other
nutritional supplements, whether for humans or animals, or the ingredients
therein or therefor;
(b) disclose to any person, firm, corporation, association or other
entity any confidential or proprietary information pertaining to the
organization or business conducted by the Buyer or Surviving Corporation at any
time;
(c) request, induce or attempt to influence any person who is or was a
customer or supplier of the Buyer, the Surviving Corporation or the Company to
limit, curtail or cancel its business with the Buyer or the Surviving
Corporation; or
(d) request, induce or attempt to influence any current or future
officer, director, employee, consultant, agent or representative of the Buyer or
Surviving Corporation to (i) terminate his, her or its employment or business
relationship with the Buyer or Surviving Corporation; (ii) commit any act that,
if committed by Shareholder, would constitute a breach of any provision hereof;
or (iii) hire any such person.
Provided, however, that such period set forth in this paragraph 1 shall be
extended by and for the duration of any period of time during which Shareholder
is in violation of any provision of this Agreement and, provided, further, that
such period shall not apply to subparagraph (b) above, which shall remain in
effect indefinitely. The provisions of clauses (a), (b), (c) and (d) above are
separate and distinct commitments independent of each of the other such clauses.
Shareholder agrees that the Buyer and Surviving Corporation have no adequate
remedy at law for any breach or threatened or attempted breach by Shareholder of
the covenants and agreements set forth in this Paragraph 1 and, accordingly,
Shareholder also agrees that the Buyer or Surviving Corporation may, in addition
to the other remedies that may be available to it under this Agreement, under
the Merger Agreement or at law, be entitled to an injunction without bond
temporarily or permanently enjoining Shareholder from breaching or threatening
or attempting any such breach of such covenants and agreements; and for purposes
of any such proceeding in equity, it shall be presumed that the remedies at law
available to the Buyer or Surviving Corporation would be inadequate and that
they would suffer irreparable harm as a result of the violation of any provision
hereof by Shareholder. The prevailing party or parties in any proceeding in
equity or at law commenced in respect of this Agreement shall be entitled to
recover from the other party or parties to such proceeding all reasonable fees,
costs and expenses (including reasonable fees and disbursements of counsel)
incurred in connection with such proceeding and any appeals therefrom.
2. The Buyer, Newco and Shareholder agree that if the scope of the
covenant set forth in Paragraph 1 hereof is deemed by any court to be overly
broad, the court may reduce the scope thereof to that which it deems reasonable
under the circumstances. If any one or more provisions hereof are held to be
invalid or unenforceable, the validity and enforceability of the remaining
provisions shall not be affected hereby.
3. The covenants and agreements of Shareholder hereunder are independent
of the covenants, representations, warranties and agreements of all the parties
to the Merger Agreement
under the Merger Agreement, and no default, breach or failure to perform by any
party to the Merger Agreement shall constitute an excuse or other justification
for Shareholder to fail to observe fully Shareholder's covenants and agreements
hereunder. No course of dealing between or among the Buyer, Surviving
Corporation and Shareholder and no delay by the Buyer or Surviving Corporation
in exercising any right, power or remedy hereunder, in equity or at law shall
constitute a waiver of, or otherwise prejudice, any such right, power or remedy.
4. This Agreement (i) constitutes the entire agreement and supersedes all
prior and contemporaneous agreement and understandings, both written and oral,
between the parties hereto with regard to the subject matter hereof, (ii) is not
intended to confer upon any other person any rights or remedies hereunder or
with respect to the subject matter hereof and (iii) shall inure to the benefit
of and be enforceable by the Buyer and Surviving Corporation and their
successors and assigns. All notices and other communications under or in
connection with this Agreement shall be given and deemed effective in the manner
set forth in Section 13.7 of the Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above set forth.
SHAREHOLDER: _____________________________________________
XXXXXXX XXXXX
BUYER: NUTRITION FOR LIFE INTERNATIONAL, INC.,
a Texas corporation
By:__________________________________________
Name:____________________________________
Title:___________________________________
NEWCO: (and after the NL ACQUISITION COMPANY,
Merger, SURVIVING a Delaware corporation
CORPORATION:
By:__________________________________________
Name:____________________________________
Title:___________________________________
