Exhibit 10.3
Noncompetition Agreement and Confidentiality
Agreement with ▇▇▇ ▇▇▇▇
NONCOMPETITION AND CONFIDENTIALITY AGREEMENT
THIS NONCOMPETITION AND CONFIDENTIALITY AGREEMENT (this "Agreement") is
made and entered into as of September 30, 1996 by and between LAMCOR,
INCORPORATED, a Minnesota corporation (the "Company") and ▇▇▇ ▇▇▇▇ (the
"Seller").
BACKGROUND
A. Pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement") dated September 30, 1996 by and among the Company, Packaging
Acquisition Corporation, a Georgia corporation ("Buyer"), and LI Acquisition
Corporation, a wholly owned subsidiary of Buyer ("Sub"), Buyer has agreed to
acquire the Company through the merger of Sub with and into the Company.
B. Prior to the consummation of the transactions contemplated by the
Merger Agreement, the Seller was a shareholder of the Company.
C. The Seller will receive substantial consideration for the
transactions contemplated by the Merger Agreement.
D. The Company is engaged in the business of flexible packaging
pouch-making, slitting and lamination (the "Business") throughout the
territorial United States and Canada (the "Territory").
E. The Seller has acquired intimate knowledge of the Business, which,
if exploited by the Seller in contravention of this Agreement, would seriously,
adversely and irreparably affect the ability of Buyer to derive benefit from its
acquisition of the Company and for the Company to continue to operate the
Business.
F. The Merger Agreement requires the Seller to enter into this
Agreement with the Company as a condition precedent to the consummation of the
transactions contemplated by the Merger Agreement, and Buyer would be unwilling
to consummate the transactions contemplated by the Merger Agreement without this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises contained
herein and in the Merger Agreement, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
CASH PAYMENT TO SELLER
In consideration of the covenants of the Seller contained herein, the
Company agrees to pay to the Seller on the date hereof in cash the sum of Fifty
Eight Thousand Four Hundred Dollars ($58,400), payable on January 3, 1997.
ARTICLE II
CONFIDENTIALITY
2.1 Definitions. As used in this Article 2, the term "Confidential
Information" shall mean any and all information regarding the organization,
business or finances of the Company, including, without limitation, any and all
business plans and strategies, financial information, proposals, reports,
marketing plans and information, cost information, customer information, sales
volume and other sales statistics, personnel data, pricing information, concepts
and ideas, information respecting existing and proposed investments and
acquisitions, and information regarding providers and suppliers, but the term
"Confidential Information" shall not include information which prior to receipt
thereof by the Seller (i) was generally publicly available, or (ii) was in the
possession of the Seller free of any restrictions on its use or disclosure and
from a source other than the Company or any of its affiliates.
2.2 Non-Disclosure. Seller covenants and agrees that he will not use or
disclose any of the Confidential Information for any reason or purpose
whatsoever, except that Seller may disclose Confidential Information to
authorized representatives of the Company or as directed or authorized by the
Company or use such Confidential Information so long as such disclosure and use
is in connection with the proper and lawful performance of his services to the
Company.
2.3 Records of the Company. The Seller shall not remove any records,
documents or any other tangible items (excluding items of personal property
owned by the Seller) from the premises of the Company, in either original or
duplicate form, except as needed in the ordinary course of performing services
to the Company. Upon the request of the Company, the Seller shall promptly
deliver to the Company or destroy any such records, documents or other tangible
items removed from the premises of the Company by the Seller or his
representatives.
ARTICLE III
COVENANT NOT TO COMPETE
The Seller covenants and agrees that, for a period of two (2) years
after the date of this Agreement, the Seller shall not, for himself or in
conjunction with any person, firm or corporation, engage in, acquire, establish
or own any financial, beneficial or other interest in any entity engaged in a
Restricted Business (as hereinafter defined) within any part of the Territory,
or be employed by or render any managerial, marketing or other advice within any
part of the Territory for or in connection with a Restricted Business, other
than for the Company; provided, however, that the foregoing shall not prohibit
the Seller from owning less than five percent (5%) of any class of securities of
a publicly held corporation. As used in this Agreement, the term "Restricted
Business" shall mean any person or entity that is engaged, directly or
indirectly, in any business or enterprise which is like the Business.
ARTICLE IV
NONSOLICITATION OF CUSTOMERS
The Seller covenants and agrees that, for a period of two (2) years
after the date of this Agreement, the Seller shall not, for his own benefit or
the benefit of others, other than for the Company, solicit or induce, or attempt
to solicit or induce, any Restricted Business Customer (as hereinafter defined)
to purchase from a Restricted Business goods or services like or similar to the
goods and services manufactured or performed by the Company. As used in this
Agreement, the term "Restricted Business Customer" means any person or entity
located in the Territory to whom the Company has sold, or attempted to sell,
within the three (3) year period preceding the date hereof; products or services
manufactured or performed by the Company.
ARTICLE V
NONSOLICITATION OF EMPLOYEES
The Seller covenants and agrees that, for a period of two (2) years
after the date of this Agreement, he will not solicit or induce, or attempt to
solicit or induce, any employee of the Company to terminate his or her
employment with the Company, whether or not such employment is for a specified
term or is at will, and whether or not such employment is pursuant to an oral or
written agreement.
ARTICLE VI
REASONABLENESS; INJUNCTIVE RELIEF
The restrictions contained in this Agreement arise out of the
acquisition by Buyer of the Company, and are made and given to protect and
preserve unto Buyer the benefit of its acquisition thereof and the good will of
the business associated therewith. The Seller acknowledges and agrees that he
has entered into this Agreement in consideration of Buyer's entering into the
Merger Agreement. The Seller further acknowledges and agrees that such
restrictions are fair and reasonable, that such restrictions are necessary to
protect and preserve unto Buyer the benefit of its bargain in the acquisition of
the Company, and that such restrictions are necessary for the protection of the
legitimate business interests of the Company. Each of the restrictive covenants
contained in this Agreement are independent of each other and of any other
provision of this Agreement, and the existence of a claim which the Seller may
have against the Company, whether based on this Agreement or otherwise, will not
prevent the enforcement of any of these restrictive covenants. The Seller agrees
that the Company's remedies at law for any breach or threat of breach by the
Seller of the provisions of this Agreement, or any part hereof; will be
inadequate, and that the Company shall be entitled to an injunction or
injunctions to prevent a breach or threatened breach of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof. The
Company agrees that injunctive relief shall be the sole and exclusive remedy for
Seller's breach of any of the restrictive covenants contained herein. The length
of time for which these restrictive covenants shall be in force shall be
extended by any period of violation or any other period required for litigation
during which the Company seeks to enforce these covenants. Should any provision
of these covenants be held invalid, illegal or unenforceable, in whole or in
part, the validity, legality or enforceability of the remaining part of such
provision, and the validity, legality and enforceability of the other provisions
hereof; shall not be affected thereby. If any invalidity shall be caused by the
length of any period of time, the size of any area, or the scope of activities
set forth in any provision hereof; such period of time, such area, such scope or
all of such factors, shall be considered to be reduced to a period, area or
scope which would cure such invalidity. Any provision of this Agreement which is
held invalid, illegal or unenforceable in any jurisdiction shall not be deemed
invalid, illegal or unenforceable in any other jurisdiction.
ARTICLE VII
MISCELLANEOUS
7.1 Assignment. This Agreement and the rights and obligations of the
Company hereunder may be assigned by the Company and shall inure to the benefit
of; shall be binding upon and shall be enforceable by any such assignee,
provided that any such assignee shall agree to assume and be bound by this
Agreement. This Agreement and the rights and obligations of the Seller hereunder
may not be assigned or delegated by the Seller without the prior written consent
of the Company, and any such assignment without consent shall be deemed to be
void and of no effect. The Company and the Seller acknowledge and agree that
Buyer is intended to be a third party beneficiary under this Agreement. Subject
to the foregoing, this Agreement shall be binding upon the parties hereto and
shall inure to the benefit of the parties hereto, Buyer and their respective
successors and assigns, and no other person shall have any right, benefit or
obligation hereunder.
7.2 Notices Agents. Unless otherwise provided herein, any notice,
request, instruction or other document to be given hereunder by any party to the
others shall be in writing and delivered in person or by courier (effective when
delivered), telegraphed, telexed or by facsimile transmission (effective when
received) or mailed by certified mail, postage prepaid, return receipt requested
(such mailed notice to be effective on the date such receipt is acknowledged),
as follows:
If to Seller: ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇▇▇▇▇
With a copy (which ▇▇▇▇, Plant, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
shall not constitute 3400 City Center
notice) to: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company: Lamcor, Incorporated
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With copies (which Packaging Acquisition Corporation
shall not constitute ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
notice) to: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ & Bird
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
in any manner other than by facsimile transmission, such party shall also give a
notice by facsimile transmission.
7.3 Choice of Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
Georgia applicable to contracts made and wholly performed within such state,
except with respect to matters of law concerning the internal corporate or trust
affairs of any corporate or trust entity which is a party to or subject of this
Agreement, as to those matters of law of the jurisdiction under which the
respective entity derives its powers shall govern.
7.4 Entire Agreement; Amendments and Waivers. This Agreement
constitutes the entire agreement among the parties and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties provided, however, that the Company acknowledges that it
continues to owe Seller Thirty Six Thousand Five Hundred Dollars ($36,500.00)
for accrued but unpaid salary as of August 31, 1996. No supplement, modification
or waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a waiver of waiver
unless otherwise expressly provided. The Company, on the one hand, and the
Seller, on the other hand, may by written instrument only (a) waive compliance
with any of the covenants of the other party contained in this Agreement and (b)
waive the other party's performance of any of the obligations set out in this
Agreement. In the event the Merger is not consummated, this Agreement shall be
null and void and of no force and effect, and no payment as described in Article
I shall be due and owing.
7.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.6 Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
7.7 Construction. The provisions of this Agreement have been carefully
negotiated and bargained for between the parties hereto, and the fact that one
party may have taken the lead in drafting this Agreement shall not cause any
supposed ambiguities or other defects in any provisions hereof to be construed
against the drafting party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
LAMCOR, INCORPORATED
By:___________________________________
Name:_________________________________
Title:________________________________
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