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EXHIBIT 10.11
NON-COMPETITION COVENANT
In consideration of the Merger Consideration paid and provided by
XXXXXXXXXX INTERNATIONAL, INC., a Texas corporation, formerly known as "ICO,
Inc." (the "Parent Entity"), to the holders of Wedco Technology, Inc. Common
Stock pursuant to the Merger Agreement dated as of December __, 1995 ("Merger
Agreement") by and among the Parent Entity, W Acquisition Corp., a New Jersey
corporation, and Wedco Technology, Inc., a New Jersey corporation ("W Corp."),
Three Hundred Thousand Dollars ($300,000) to be paid to the undersigned by the
Parent Entity in sixty (60) equal monthly installments of Five Thousand Dollars
($5,000) beginning ___________________, 199__ and ending _____________________,
199__, and the mutual agreements, promises, covenants and conditions set forth
in the Merger Agreement, from which the undersigned, as a holder of Wedco
Technology, Inc. Common Stock, has received both direct and indirect benefits,
the undersigned, XXXXXXX X. XXXXXXXXXX (the "Covenantor"), intending to be
legally bound, hereby covenants and agrees, for the benefit of each of the
Parent Entity and the Surviving Corporation and their respective successors and
assigns, that, for a period of ten (10) years commencing on the date on which
the merger, as contemplated by the Merger Agreement, shall have become
effective pursuant to the laws of the State of New Jersey ("Effective Time")
(the "Restricted Period"), he shall not, directly or indirectly, as an owner,
partner, stockholder, proprietor, officer, director, manager, consultant,
employee or in any other capacity or capacities, (i) engage in any business
activity in which W. Corp. or any of its Subsidiaries or any joint venture in
which W Corp. or any of its Subsidiaries was a joint venturer was engaged
immediately prior to the Effective Time, including the manufacture of plastics
grinding machinery and the provision of plastics grinding services (e.g., size
reduction, classification, blending/mixing, repackaging and processing of
natural, new/prime polymers and other materials) and of color compounding and
related processing services (the "W Corp. Business"); or (ii) engage in any
business activity related to the W Corp. Business in which the Surviving
Corporation or any of its Subsidiaries or any joint venture in which the
Surviving Corporation or any of its Subsidiaries is a joint venturer engages or
may be engaged at any time during the Restricted Period ("Post-Effective Time
Business Activities"); or (iii) solicit, sell, service, accept, manage or
otherwise seek to acquire the custom or patronage in any Post-Effective Time
Business Activity of any person or entity who is a client, customer or active
prospective client or customer of the Surviving Corporation or of any of its
Subsidiaries or of any joint venture in which the Surviving Corporation or any
of its Subsidiaries is a joint venturer; or (iv) without the prior written
consent of the Parent Entity, solicit the employment, consulting or other
services of any other employee of the Surviving Corporation or of any of its
Subsidiaries or of any joint venture in which the Surviving Corporation or any
of its Subsidiaries is a joint venturer or otherwise induce any of such
employees to leave such employment or to breach an employment agreement
therewith. Each of clauses (i) through (iv), inclusive, above shall constitute
a separate and severable covenant of the Covenantor.
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The geographic scope of the foregoing restrictive covenants shall be
the territory comprised of the United States of America and its territories and
possessions, Canada, Mexico and (without duplication) all other countries in
which W Corp. or any of its Subsidiaries or any joint venture in which W Corp.
or any of its Subsidiaries was a joint venturer engaged in business at the
Effective Time (the "Restricted Territory"). Nothing in the foregoing
restrictive covenants shall be deemed to prohibit the Covenantor from obtaining
or maintaining beneficial ownership (as defined in Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended) of securities of any publicly
traded corporation or other entity if the Covenantor's beneficial ownership is
less than five percent (5%) of the issued and outstanding securities of that
class of that issuer.
The Covenantor acknowledges and agrees that this Non-Competition
Covenant is ancillary to the sale of a business enterprise and therefore is and
shall be entitled to the less stringent rules of judicial interpretation and
enforcement applicable to covenants ancillary to the sale of a business
enterprise. The Covenantor hereby further acknowledges the reasonableness of
both the Restricted Period and the Restricted Territory under all the relevant
facts and circumstances, including (without limitation) the Parent Entity's
need to protect the goodwill acquired by the Surviving Corporation pursuant to
the Merger Agreement, and agrees that this instrument is reasonably necessary
to protect the Parent Entity's legitimate business interests.
Acknowledging that the Parent Entity and the Surviving Corporation
would be injured irreparably in a manner not adequately compensated by money
damages in the event of a breach or threatened breach by the Covenantor of this
Non- Competition Covenant, the Covenantor agrees that, in the event of such
breach or threatened breach, the Parent Entity and/or the Surviving Corporation
shall be entitled, without limiting or other prejudice to its or their other
rights and remedies, to a temporary restraining order, a preliminary injunction
and other equitable relief, all without the need to post bond or other
security. Further, Covenantor agrees that a breach or default by Covenantor
under the terms of the Consulting Agreement between W Corp. and Covenantor of
even date herewith shall constitute a breach hereunder, and shall terminate
Parent Entity's obligation to make any payments hereunder to Covenantor during
the term of such breach or default. Except as provided below, Covenantor
hereby agrees that any actions or proceedings brought against Covenantor by
Parent Entity or the Surviving Corporation arising out of or relating to this
Non-Competition Covenant shall be venued in the courts of the State of New
Jersey or in any federal court located in said state.
Capitalized terms used in this instrument without specific definition
shall have the meanings respectively set forth in the Merger Agreement. This
Non-Competition Covenant shall be construed under and governed by the internal
substantive laws of the State of New Jersey applicable to contracts negotiated,
executed, delivered and wholly performed within the State of New Jersey. The
Covenantor hereby instructs any court or other tribunal of competent
jurisdiction that may find any provision of this Non-Competition Covenant to be
unenforceable
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as written: (i) to sever the unenforceable provision from the other
enforceable provisions of this instrument; (ii) to reform the unenforceable
provision to the extent necessary (but no more) to make it enforceable and to
give effect to the mutual intentions of the Covenantor, the Parent Entity and
the Surviving Corporation that the good will acquired pursuant to the Merger
Agreement should be protected; and (iii) to enforce the Non-Competition Covenant
as reformed. The prevailing party in any legal action initiated to interpret
or to enforce this Non-Competition Covenant shall be entitled to recover from
the non-prevailing party its or his reasonable attorneys' fees and
disbursements as well as all costs of suits.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand
effective as of the _____ day of ____________, 199__.
Witnesses:
______________________________
XXXXXXX X. XXXXXXXXXX
_____________________________________
Print Name:
_____________________________________
Print Name:
