EXHIBIT 10.22
FORM OF
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NONCOMPETITION AGREEMENT
NONCOMPETITION AGREEMENT dated as of ________, 1998 by and between Xxx-Xxxx
Corporation, a Delaware corporation having a principal place of business at 00
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company"), and Xxxxxx X.
Xxxxxxx of ____________ (the "Executive").
WHEREAS, in consideration of (i) the employment of the Executive by the
Company, which necessarily involves the disclosure by the Company to the
Executive of, and access by the Executive to, confidential information relating
to the method of business, processes, products, operations and clients of the
Company, and (ii) the grant by the Company to the Executive of certain options
to purchase common stock of the Company, the parties hereto covenant and agree
as follows:
ARTICLE 1. TRADE SECRETS; CONFIDENTIAL INFORMATION;
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PROPRIETARY PROPERTY
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Section 1.01 Trade Secrets; Confidential Information. It is specifically
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agreed between the parties hereto that: (a) the trade secrets of the Company
(the "Trade Secrets") shall include (i) the names and locations of the customers
of the Company and the services provided to each customer or supplier and (ii)
the terms and conditions of the contracts the Company has with each such
customer or supplier; and (b) the confidential information (the "Confidential
Information") of the Company shall include (i) any other confidential or
proprietary information or data relating to the business of the Company, or any
of its Affiliates (as defined below), which is not generally known to the public
and which provides the Company and its Affiliates some competitive advantage, or
the opportunity to obtain such advantage, or the disclosure of which could be
detrimental to the interests of the Company and its Affiliates, including,
without limitation, all notes, memoranda, inventions, drawings, file data,
documentation, diagrams, specifications, know how, processes, formulas, models,
customer lists, sales representative lists, sales plans, proprietary
information, research and development procedures, research or development and
test results, marketing techniques and materials, marketing and development
plans, price lists, pricing policies, business plans, reports, information
relating to customers and/or suppliers' identities, characteristics and
agreements, financial information and projections, and employee files, and (ii)
any information described above which the Company or any of its Affiliates
obtains from another party and which the Company or such Affiliate treats as
proprietary or designates as Confidential Information, whether or not owned or
developed by the Company or such Affiliate.
Section 1.02 Nondisclosure; Nonuse. As long as the Executive is employed
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by the Company and any time thereafter, the Executive shall keep secret and
shall not ever publish, divulge, furnish, impart or disclose any of the Trade
Secrets or Confidential Information to any person, firm or corporation other
than the Company or any of its Affiliates, or use any of the Trade Secrets or
Confidential Information, directly or indirectly, for the Executive's own
benefit or for the benefit of any person, firm or corporation other than the
Company and its Affiliates.
Section 1.03 Company's Proprietary Right to Documents. All Trade Secrets
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and Confidential Information shall be the property of the Company and its
Affiliates and shall be delivered by the Executive to the Company or an
Affiliate upon termination of the Executive's employment with the Company or an
Affiliate at any earlier time at the request of the Company or such Affiliate.
Specifically, the Executive agrees that any Trade Secrets or Confidential
Information coming into the Executive's possession by reason of the Executive's
employment with the Company or an Affiliate, including, without limitation,
custom computer programs, software, or related data, are the property of the
Company or such Affiliate and shall not be used in any way except on behalf of
and for the benefit of the Company or any of its Affiliates. The Executive will
not deliver, reproduce or otherwise use such documents or information for the
Executive's own benefit or in any way allow such documents or things to be
delivered or used by any third party without the prior written consent of the
Company. As long as the Executive is employed by the Company and any time
thereafter, the Executive will not publish, release or otherwise make available
to any third party any information describing any Trade Secret or Confidential
Information of the Company or any of its Affiliates, without the prior written
consent of the Company.
Section 1.04 Proprietary Property. The Executive agrees to, and does
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hereby, sell, assign, transfer and set over to the Company, its successors,
assigns or Affiliates, as the case may be, all of the Executive's right, title
and interest in and to any custom software, documentation, copyrights,
inventions, improvements, proprietary information, patents or applications for
patents (collectively, the "Proprietary Property") conceived of, prepared or
developed by the Executive, individually or in conjunction with others, during
the period that he hereafter will be employed by the Company; provided, however,
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that the foregoing sale or assignment shall only apply to Proprietary Property
which either relates to the product areas in which the Company or any of its
Affiliates is then engaged or constitutes an application of any Proprietary
Property then belonging to the Company or any of its Affiliates. The right,
title and interest transferred pursuant to this Section 1.04 shall be held and
enjoyed by the Company, its Affiliates, and their respective successors and
assigns, to the full extent of the term for which any copyright or Letters
Patent may be granted, and as fully as the same would have been held by the
Executive had such sale or assignment not been made. The Executive agrees to
disclose promptly to the Company all such Proprietary Property and to deliver
any documents and take any other action necessary to vest in the Company all of
the Executive's rights in and to such Proprietary Property.
ARTICLE 2. NONCOMPETITION
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Section 2.01 Noncompetition. The Executive covenants and agrees that he
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shall not, for a period beginning on the date of this Agreement and ending on
the third anniversary of the date the Executive's employment with the Company is
terminated (the "Termination Date"), without the express prior written consent
of the Company, directly or indirectly, anywhere in the Restricted Area (as
defined below) (a) engage in any activity in the Designated Industry (as defined
below) or (b) engage, participate or invest in or assist (whether as owner,
part-owner, shareholder, partner, member, director, officer, trustee, employee,
agent or consultant, or in any other capacity) any business organization whose
activities, products or services are in the Designated Industry; provided,
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however, that the Executive may make passive investments in a competitive
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enterprise, the shares of which are publicly traded, if the Executive's
aggregate investment in such enterprise constitutes less than one percent (1%)
of the equity ownership of such enterprise. Without implied limitation, the
foregoing noncompetition covenant shall prohibit the Executive from (i) hiring,
attempting to hire or otherwise soliciting, for himself or on behalf of any
entity or person, any officer, director, consultant or other employee of the
Company or any of its Affiliates, or authorizing or approving any such action by
any other person, (ii) encouraging for himself or on behalf of any entity or
person any officer, director, consultant or other employee to terminate his or
her relationship or employment with the Company or any of its Affiliates,
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(iii) soliciting for or on behalf of any entity or person any customer or
Prospective Customer of the Company or any of its Affiliates and (iv) diverting
to any entity or person any customer or Prospective Customer of the Company or
any of its Affiliates.
Section 2.02 Definitions. For purposes of this Agreement, the following
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terms shall have the following meanings:
(a) "Restricted Area" means each state of the United States in which the
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Company and its Affiliates are, collectively, as of the date of this
Agreement or at any time prior to the Termination Date, conducting any
business activities.
(b) "Designated Industry" means the principal business of the Company and
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its Affiliates as of the date of this Agreement, including, without
limitation, the business of (1) owning, selling, leasing, operating or
servicing card or coin-operated laundry machines and (2) producing,
selling, leasing and servicing appliance products, including, without
limitation, refrigerators, freezers and microwave ovens, in the "in room"
environments of college and university residence halls, hotels and
motels, government or military accommodations or the senior living
market.
(c) "Affiliate" shall mean, with respect to any person or entity (herein
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the "first party"), any other person or entity that directly or
indirectly controls, or is controlled by, or is under common control
with, such first party (the term "control" as used herein (including the
terms "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to (X) vote twenty-five
percent (25%) or more of the outstanding voting securities of such person
or entity, or (Y) otherwise direct the management or policies of such
person or entity by contract or otherwise).
(d) "Prospective Customer" shall mean any person or entity with whom the
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Company or any of its Affiliates, as the case may be, was actively
attempting to develop a customer relationship (whether for laundry
services or otherwise) at any time during the six (6) months immediately
preceding the Termination Date.
ARTICLE 3. MISCELLANEOUS
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Section 3.01 Scope of Agreement. The parties acknowledge that the time,
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scope, geographic area and other provisions of this Agreement have been
specifically negotiated by sophisticated commercial parties and agree that all
such provisions are reasonable under the circumstances of the Executive's
employment with the Company. The Executive has independently consulted with his
counsel and has been advised in all respects concerning the reasonableness and
propriety of the covenants contained herein, with specific regard to the
businesses conducted by the Company and its Affiliates.
Section 3.02 Specific Performance; Severability. It is specifically
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understood and agreed by the parties hereto that the breach by the Executive of
any provision of this Agreement will result in irreparable injury to the Company
and its Affiliates, that the remedy at law alone will be an inadequate remedy
for such breach and that, in addition to any other remedy they may have, the
Company and each of its Affiliates shall be entitled to enforce the specific
performance of this Agreement by the Executive through both temporary and
permanent injunctive relief without the necessity of proving actual damages. If
the Company is required to post a bond in connection with obtaining any
temporary or permanent injunctive relief, the parties hereto agree that such
bond
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shall be limited in amount to $10,000 and that such amount is reasonable and
adequate for such bond. In the event that any covenant or provision contained in
this Agreement shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too long a period of time or over
too large a geographical area or by reason of its being too extensive in any
other respect, such covenant or provision shall not be construed to be null,
void and of no effect, but rather shall be interpreted to extend only over the
maximum period of time for which it may be enforceable, and/or over the maximum
geographical area as to which it may be enforceable, and/or to the maximum
extent in all other respects as to which it may be enforceable, all as
determined by such court in such action. The existence of any claim or cause of
action which the Executive may have against the Company or any of its Affiliates
shall not constitute a defense or bar to the enforcement of any of the
provisions of this Agreement and shall be pursued through separate court action
by the Executive.
Section 3.03 Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of The Commonwealth of Massachusetts,
without regard to the conflicts or choice of law provisions thereof.
Section 3.04 Attorneys' Fees. If any suit or action is instituted by
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either party to enforce or in connection with any dispute relating to this
Agreement, the prevailing party in such suit or action shall be entitled to have
all court costs and attorneys' fees paid by the non-prevailing party.
Section 3.05 Successors and Assigns. This Agreement shall inure to the
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benefit of, and be binding upon, the successors of the Company and its
Affiliates by way of merger, consolidation or transfer of all or substantially
all of the assets of the Company, and may not be assigned by the Executive.
Section 3.06 No Conflicting Obligations. The Executive hereby represents
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and warrants to the Company that he is not now under, or bound to be under in
the future, any obligation to any person, firm or corporation which is or would
be inconsistent or in conflict with this Agreement or would prevent, limit or
impair in any way the full and absolute performance by the Executive of his
obligations hereunder. In addition, the Executive covenants that he will not
enter into or discuss entering into any such agreement.
Section 3.07 Entire Agreement; Modifications. This Agreement constitutes
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the entire agreement between the parties pertaining to the subject matter hereof
and supersedes all prior and contemporaneous agreements, representations,
negotiations and understandings of the parties, whether oral or written. No
supplement, modification or amendment to this Agreement shall be binding unless
executed in writing by all the parties hereto.
Section 3.08 No Employment Obligations. The Executive understands and
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agrees that this Agreement does not create any obligation on the part of the
Company to continue his employment with the Company.
Section 3.09 Waivers. The failure of any party to require the performance
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or satisfaction of any term or obligation of this Agreement, or the waiver by
any party of any breach of this Agreement, shall not prevent subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
failure or breach.
Section 3.10 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
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Section 3.11 Notices. All notices and other communications under this
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Agreement shall be in writing and shall be delivered by certified mail, return
receipt requested, postage prepaid, to the address set forth above unless
another address shall be furnished in writing by such party.
[End of Text]
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IN WITNESS WHEREOF, the parties have duly executed this Noncompetition
Agreement as of the date and year first written above.
COMPANY:
XXX-XXXX CORPORATION, a Delaware
corporation
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Name:
Title:
EXECUTIVE:
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Xxxxxx X. Xxxxxxx
