Exhibit 10.35
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of March 1, 1998, by
and between MASTER GRAPHICS, INC., a Delaware corporation ("Buyer"), and XXXX
XXXXXXXX, XX., residing in Springdale, Arkansas ("Seller").
RECITALS
Concurrently with the execution and delivery of this Agreement, Buyer is
purchasing from Seller all of the outstanding shares (the "Shares") of common
stock of Xxxxxxxx Litho, Inc., an Arkansas corporation ("Xxxxxxxx") pursuant to
the terms and conditions of a stock purchase agreement made as of March 1, 1998,
(the "Stock Purchase Agreement"). It is contemplated that after the purchase of
the Shares, Xxxxxxxx will be merged into Premier Graphics, Inc., a Delaware
corporation ("Premier"), which is a wholly owned subsidiary of Buyer (Premier
and Xxxxxxxx shall hereinafter be collectively referred to as the "Company").
Section 2.4(a)(iv) of the Stock Purchase Agreement requires that a
noncompetition agreement be executed and delivered by Seller as a condition to
the purchase of the Shares by Buyer.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Stock Purchase Agreement.
2. ACKNOWLEDGMENTS BY SELLER
Seller acknowledges that (a) Seller has occupied a position of trust and
confidence with Xxxxxxxx prior to the date hereof and has become familiar with
the following, any and all of which constitute confidential information of the
Company, (collectively the "Confidential Information"): (i) any and all trade
secrets concerning the business and affairs of the Company, product
specifications, data, know-how, formulae, compositions, processes, designs,
samples, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, and computer software and programs of the
Company and any other information, however documented, of the Company that is a
trade secret; (ii) any and all information concerning the business and affairs
of the Company (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key personnel, and personnel
training and techniques and materials), however documented; and (iii) any and
all notes, analysis,
compilations, studies, summaries, and other material prepared by or for the
Company containing or based, in whole or in part, on any information included in
the foregoing, (b) the business of the Company is national in scope, (c) its
products and services are marketed throughout the United States; (d) the Company
competes with other businesses that are or could be located in any part of the
United States; (e) Buyer has required that Seller make the covenants set forth
in Sections 3 and 4 of this Agreement as a condition to the Buyer's purchase of
the Shares owned by Seller; (f) the provisions of Sections 3 and 4 of this
Agreement are reasonable and necessary to protect and preserve Xxxxxxxx'
business, and (g) the Company could be irreparably damaged if Seller were to
breach the covenants set forth in Sections 3 and 4 of this Agreement.
3. CONFIDENTIAL INFORMATION
Seller acknowledges and agrees that Seller claims no interest in the
Confidential Information. Seller agrees that, provided Buyer and/or the Company
are not in default of any of the obligations set forth in the Stock Purchase
Agreement, the Promissory Note or the Employment Agreement, Seller will not, at
any xxxx Xxxxxx is employed by the Company and for a period of five (5) years
after Seller's employment is terminated, except as may be necessary in
connection with discharging his duties pursuant to the Employment Agreement or
as otherwise required by law, disclose to any unauthorized Persons or use for
his own account or for the benefit of any third party any Confidential
Information, without Buyer's written consent, unless and to the extent that the
Confidential Information is or becomes generally known to and available for use
by the public other than as a result of Seller's fault or the fault of any other
Person bound by a duty of confidentiality to Buyer or the Company. Seller agrees
to deliver to Buyer at the time of execution of this Agreement, and at any other
time Buyer may request, all documents, memoranda, notes, plans, records,
reports, and other documentation, models, components, devices, or computer
software, whether embodied in a disk or in other form (and all copies of all of
the foregoing), relating to the businesses, operations, or affairs of the
Company and any other Confidential Information that Seller may then possess or
have under Seller's control.
4. NONCOMPETITION
As an inducement for Buyer to enter into the Stock Purchase Agreement, and as
additional consideration for the consideration to be paid to Seller under the
Stock Purchase Agreement, Seller agrees that:
(a) During the xxxx Xxxxxx is employed by the Company and for a period of five
(5) years after Seller's employment with the Company is terminated, provided
Buyer and /or the Company are not in default of any of the obligations set forth
in the Stock Purchase Agreement, the Promissory Note or the Employment
Agreement:
(i) Seller will not, directly or indirectly, engage or invest in, own, manage,
operate, finance, control, or participate in the ownership, management,
operation, financing, or
control of, be employed by, associated with, or in any manner connected with,
lend Seller's name or any similar name to, or render services or advice to, any
business within the states of Arkansas, Missouri and Oklahoma whose products or
activities compete directly with the printing lines Seller is involved with
during Seller's employment with Buyer; provided, however, that Seller may
purchase or otherwise acquire up to (but not more than) five percent (5%) of any
class of securities of any enterprise (but without otherwise participating in
the activities of such enterprise) if such securities are listed on any national
or regional securities exchange or have been registered under Section 12(g) of
the Securities Exchange Act of 1934. Seller agrees that this covenant is
reasonable with respect to its duration, geographical area, and scope.
(ii) Seller will not, directly or indirectly, either for himself or any other
Person, (A) induce or attempt to induce any employee of the Company to leave the
employ of the Company, (B) intentionally interfere with the relationship
between the Company and any employee of the Company, (C) employ, or otherwise
engage as an employee, independent contractor, or otherwise, any employee of the
Company, (unless the Company has terminated such employee), or (D) induce or
attempt to induce any customer, supplier, licensee, or business relation of the
Company to cease doing business with the Company, or in any way intentionally
interfere with the relationship between any customer, supplier, licensee, or
business relation of the Company.
(iii) Seller will not, directly or indirectly, either for himself or any other
Person, solicit the business of any Person known to Seller to be a customer of
the Company, whether or not Seller had personal contact with such Person, with
respect to products or activities which compete in whole or in part with the
printing lines Seller is involved with during Seller's employment with Buyer;
(b) In the event of a material breach by Seller of any covenant set forth in
Subsection 4(a) of this Agreement, the term of such covenant will be extended by
the period of the duration of such breach.
(c) Seller will not at any time during the period set forth in paragraph (a)
above make disparaging remarks regarding the Company, its shareholders
,directors, officers, employees or agents if the intent of such remarks is to
inflict serious damage to the reputation of the Company or to alienate the
Company's customers or employees.
5. REMEDIES
If Seller breaches the covenants set forth in Sections 3 or 4 of this Agreement,
upon a showing of proper proof, Buyer and the Company will be entitled to the
following remedies:
(a) Damages from Seller; and
(b) In addition to its right to damages and any other rights it may have, to
obtain injunctive or other equitable relief to restrain any breach or threatened
breach or otherwise to specifically enforce the provisions of Sections 3 and 4
of this Agreement, it being agreed that money damages alone would be inadequate
to compensate the Buyer and the Company and would be an inadequate remedy for
such breach.
6. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Buyer, the Company and Seller and will inure
to the benefit of Buyer and the Company and their affiliates, successors and
assigns, and Seller and Seller's assigns, heirs and legal representatives.
7. 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 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 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.
8. GOVERNING LAW
This Agreement will be governed by the laws of the State of Arkansas without
regard to conflicts of laws principles.
9. JURISDICTION; SERVICE OF PROCESS
Subject to the arbitration clause in Section 11.17 of the Stock Purchase
Agreement which is specifically incorporated herein by reference, 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 the courts
of the State of Tennessee, County of Shelby, the State of Arkansas or, if it has
or can acquire jurisdiction, in the United States District Court for the Eastern
or Western District of Arkansas, 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.
10. SEVERABILITY
Whenever possible each provision and term of this Agreement will be interpreted
in a manner to be effective and valid but if any provision or term of this
Agreement is held to be prohibited by or invalid, then such provision or term
will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth in Section 4 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Seller.
11. 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.
12. 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
unless otherwise specified. All words used in this Agreement will be construed
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.
13. 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), (b) sent by facsimile (with
electronic 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 facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Seller: Xxxx Xxxxxxxx, Xx.
c/x Xxxxxxxx Litho
000 Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
with a copy to: Lax, Vaughan, Xxxxxx & Xxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxx, Esq.
Facsimile No.: (000) 000-0000
Buyer: Master Graphics, Inc
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx
Attention: Xxxx X. Xxxxxx
Facsimile No.:(000) 000-0000
with a copy to: Black Bobango & Xxxxxx
000 Xxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
14. ENTIRE AGREEMENT
This Agreement, the Employment Agreement and the Stock Purchase Agreement
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior written and oral agreements and
understandings between Buyer and Seller with respect to the subject matter of
this Agreement. This Agreement may not be amended except by a written agreement
executed by Buyer and Seller.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first above written.
BUYER: MASTER GRAPHICS, INC.
By: /s/ Xxxx X. Xxxxxx
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Its: President
SELLER: /s/ Xxxx Xxxxxxxx, Xx.
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Xxxx Xxxxxxxx, Xx.
