EXHIBIT 10.19
NON-COMPETITION AGREEMENT
Non-Competition Agreement, dated as of May 30, 1997 (the "Agreement"),
between Axsys Technologies, Inc., a Delaware corporation ("Axsys") and Xxxxxxx
Xxxxxx ("Seller"), c/o Teletrac, Inc. 000 Xxxx Xxxxxx, Xxxxx Xxxxxxx, XX 00000.
Concurrently with the execution and delivery of this Agreement, the Seller
is selling or agreeing to sell to Axsys Technologies, Inc., a Delaware
corporation ("Axsys") all of Seller's shares of capital stock of Teletrac, Inc.,
a California corporation (the "Company"), and Axsys is acquiring or agreeing to
acquire the remaining outstanding shares of capital stock of the Company from
the Company's other stockholders (Seller and such other stockholders referred to
collectively as the "Selling Stockholders"), pursuant to a Stock Purchase
Agreement, dated May 27, 1997 (the "Stock Purchase Agreement"), between Axsys,
the Company and the Selling Stockholders;
Section 1.4(a)(ii)(C) of the Stock Purchase Agreement requires that this
Agreement be executed and delivered to Axsys by the Seller as a condition to
Axsys's obligation to close and purchase Seller's capital stock pursuant to the
Stock Purchase Agreement; and
Seller recognizes that the consummation of the transactions contemplated by
the Stock Purchase Agreement will inure to Seller's benefit and therefore Seller
desires to induce Axsys to consummate the transactions contemplated by the Stock
Purchase Agreement and purchase Seller's capital stock and all of the other
capital stock of the Company pursuant to the Stock Purchase Agreement;
Therefore, the parties hereto hereby agree as follows:
1. Covenants of Seller.
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(a) Non-Competition. During the period commencing on
the date hereof (the "Commencement Date") and ending six years thereafter
(the "Applicable Period"), Seller shall not, without the prior written
consent of Axsys, directly or indirectly, engage in any business, whether
as an employee, consultant, partner, principal, agent, representative,
stockholder (other than as the holder of an interest of one percent (1%) or
less of the outstanding voting common stock of a publicly traded
corporation) or otherwise, or render any services or provide any advice or
assistance to any business, person or entity, if such business, person, or
entity, directly or indirectly, is engaged anywhere in the world in any
manner in the research, engineering, development, design, manufacture, sale
or servicing of any of the following motion control products, components,
subsystems and systems: (1) interferometers for linear, geometric and
velocity measurements; (2) servo motion controllers and motor amplifiers;
(3) laser based tracking autofocus systems for optical microscopy and other
applications; (4) spin stands and servo track writing sub-systems for disk
drive head, media electrical test and process equipment; (5) rotary and
linear positioning servo systems, including, but not limited to, rotary and
linear positioning servo systems used in the fabrication and testing of
semiconductors, flat-panel displays and magnetic, optical and other mass
storage media (and read and write head technology associated with such mass
storage media); and (6) polascopes. Nothing contained herein shall be
deemed to limit or restrict any obigations Seller may have to refrain from
competitive actions or from undertaking interests in conflict with the
Company while Seller is an employee, officer or director of the Company.
(b) Non-Solicitation. During the Applicable Period,
Seller shall not, directly or indirectly, divert, solicit or lure away from
the Company or any of its Affiliates (i) any customer or business of the
Company or of its any Affiliates or (ii) any prospective customer or
business of the Company or any Affiliates. Seller shall not, during the
Applicable Period, directly or indirectly, recruit, hire or assist others
in recruiting or hiring, or otherwise solicit for employment, any employees
of the Company or any of its Affiliates, customers or subcontractors. The
provisions of this Section 1(c) shall not be deemed to limit in any way the
provisions of any other Section of this Agreement. Nothing contained herein
shall be deemed to limit the Seller, at any time after termination of his
employment with the Company and prior to the expiration of the Applicable
Period, from conducting or engaging, directly or indirectly, in
advertisements and solicitations to hire and recruit employees if those
advertisements and solicitations are included solely in newspapers,
periodicals or journals of general circulation in the industry or business
in which the Company is engaged; provided, however, that, as a result of
such advertisements and solicitations, Seller may not
solicit or hire any current or former employees of the Company except such
employees who (x) have terminated their employment with the Company more
than ten months prior to Seller's termination of employment with the
Company, (y) who were terminated by Seller with the written approval of the
Board of Directors of the Company or (z) were terminated by the Company
after Seller's termination of employment with the Company.
(c) Acknowledgment. The Seller acknowledges that
the restrictions and covenants contained in this Section 1 (the
"Restrictive Covenants") are reasonable and valid in geographical and
temporal scope and in all other respects. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants shall be given
full effect, without regard to the invalid portions. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration, geographic or other scope of such
provision, such court shall have the power to reduce the duration or scope
of such provision, as the case may be, and in its reduced form, such
provision shall then be enforceable. If any court determines that any of
the Restrictive Covenants, or any part thereof, is unenforceable by reason
of the breadth of geographic scope or otherwise, it is the intention of the
parties that such determination shall not bar or in any way affect the non-
breaching party's right to enforce and enjoin violations of the Restrictive
Covenants in other jurisdictions within the geographic scope of such
Restrictive Covenants, as to breaches, if any, of such Restrictive
Covenants in such other jurisdictions, such Restrictive Covenants as they
relate to each jurisdiction being, for this purpose, severable into diverse
and independent covenants.
2. Representation and Warranties of Seller. Seller hereby represents and
warrants to Axsys as follows: (a) Seller has full power and authority and is
legally competent to execute and deliver, and has duly and validly executed,
this Agreement and (b) this Agreement constitutes a valid and legally binding
obligation of Seller enforceable in accordance with its terms.
3. Remedies. The services rendered by Seller to the Company and the
information disclosed to Seller by the Company or any of its Affiliates are of a
unique and special character, and any breach of the Restrictive Covenants will
cause the Company and its Affiliates irreparable injury and damage which will be
extremely difficult to quantify. Therefore, the Company and its Affiliates will
be entitled to, in addition to all other remedies available to it, injunctive
relief and specific performance to prevent a breach and to secure the
enforcement of all the Restrictive Covenants. Specifically, Seller agrees that
the Company and its Affiliates shall have (a) the right to an injunction without
bond in any court of competent jurisdiction permanently enjoining Seller from a
violation of the Restrictive Covenants, and (b) the right to recover any losses,
liabilities or damages (including reasonable attorney's fees) arising out of or
due to a breach of this Agreement. The remedies set forth in this Section 3
shall not be mutually exclusive and any one or all may be pursued without the
pursuit of one impairing or precluding the pursuit of another. In the event of
any litigation in connection with this Agreement, the prevailing party shall be
entitled to recover its reasonable attorney's fees and disbursements from the
other party as costs of suit and not as damages; provided, however, that, in the
event that such litigation arises in connection with Section 4 of the Agreement,
then a reasonable allocation of attorney's fees and disbursements shall be made
as between attorney's fees and disbursements relating to this Agreement, on the
one hand, and the Stock Purchase Agreement and/or Employment Agreement, on the
other hand, and, in such event, the prevailing party shall be entitled to
recover its reasonable attorney fees and disbursements relating solely to this
Agreement.
4. Termination. Seller's obligations under Section 1 shall terminate in
the event of a material breach by Axsys or the Company, as the case may be, of
its obligations under the Stock Purchase Agreement or the Seller's Employment
Agreement, dated the date hereof (the "Employment Agreement"), between the
Seller and the Company; provided, however, that (i) Seller's obligations under
Section 1 of this Agreement shall not terminate without Seller providing Axsys
and the Company 60 days prior written notice specifying in reasonable detail the
nature of such alleged breach and permitting the Company or Axsys, as the case
may be, an opportunity to cure such alleged breach within such period, and (ii)
Seller's obligations under Section 1 shall terminate if any such breach shall
not be fully cured within such 60-day period.
5. Miscellaneous.
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(a) Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed
to have been duly given when (a) delivered by hand (with written
confirmation of receipt), or by Federal Express, (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other
parties):
If to Seller, to:
Xxxxxxx Xxxxxx
c/o Teletrac, Inc.
000 Xxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Phone: 000-000-0000
Telecopy: 000-000-0000
With a copy to:
Price, Xxxxxx & Parma LLP
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xx Xxxxx
Phone: 000-000-0000
Telecopy: 000-000-0000
If to Axsys, to:
Xxxxxxx X. Xxxxxxx
Axsys Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Telecopy: 000-000-0000
With a copy to:
Axsys Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Phone: 000-000-0000
Telecopy: 000-000-0000
(b) Jurisdiction; Service of Process. Any action or proceeding
seeking to enforce any provision of, or based on any right arising out of,
this Agreement may be brought against any of the parties in any Los Angeles
County Court or United States District Court located in Los Angeles County,
and each of the parties consents to the jurisdiction of such courts (and of
the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or
proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
(c) Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or right unless
in writing signed by the other party; (b) no waiver that may be given by a
party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
(d) Entire Agreement and Modification. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter
(including, without limitation, the Letter Agreement by and among Axsys,
the Company and certain of the Selling Stockholders dated February 4, 1997,
as amended) and constitutes a complete and exclusive statement of the terms
of the agreement between
the parties with respect to its subject matter. This Agreement may not be
amended except by a written agreement executed by the party to be charged
with the amendment, and the parties hereby expressly agree that no
subsequent oral agreement to amend this Agreement shall be binding.
(e) Section Headings, Construction. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be constructed to be of such gender or number
as the circumstances require. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
(f) Governing Law. This Agreement will be governed by the laws of
the State of California without regard to its conflicts of laws principles.
(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
(h) Certain Definitions.
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"Affiliate" means any entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
AXSYS TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxxxx
By:--------------------------
Xxxxxxx X. Xxxxxxx
