**Exhibit10.15**

 

 

NONCOMPETITIONAGREEMENT

 

 

This NoncompetitionAgreement (this "Agreement") is made as of March 26, 1999, by andbetween Henry Company, a California corporation ("Henry"), and JamesVan Pelt ("Executive") a Principal Executive and Shareholder ofGrundy Industries, Inc., an Illinois corporation (Grundy Industries, Inc.,together with its subsidiaries, the "Company").

 

RECITALS

 

Concurrently with the execution and delivery of thisAgreement, Buyer is purchasing from Seller all of the Company's issued andoutstanding shares (the "Shares") of capital stock pursuant to astock purchase agreement dated as of March 26, 1999 (the "Stock PurchaseAgreement"). Section 2.4(a)(iii) of the Stock Purchase Agreement requiresthat Executive execute and deliver to Buyer a noncompetition agreement as acondition to the Buyer's purchase of the Shares.

 

The parties, intending to be legally bound, agree asfollows:

 

ARTICLE 1.

 

DEFINITIONS

 

Capitalized terms not expressly defined in thisAgreement shall have the meanings ascribed to them in the Stock PurchaseAgreement.

 

ARTICLE 2.

 

ACKNOWLEDGMENTS BYEXECUTIVE

 

Executive acknowledges that (a) Executive has occupieda position of trust and confidence with the Company prior to the date hereof,is highly knowledgeable with respect to the business of the Company, and hasbecome familiar with the following, any and all of which constituteconfidential information of the Company, (collectively the "ConfidentialInformation"): (i) any and all trade secrets concerning the business andaffairs of the Company, product specifications, data, know–how, formulae,compositions, processes, designs, sketches, photographs, graphs, drawings,samples, inventions and ideas, past, current and planned research anddevelopment, current and planned manufacturing and distribution methods andprocesses, customer lists, current and anticipated customer requirements, pricelists, market studies, business plans, computer software and programs(including object code and source code), computer software and databasetechnologies, systems, structures and architectures (and related processes,formulae, compositions, improvements, devices, know–how, inventions,discoveries, concepts, ideas, designs, methods and information, of the Companyand any other information, however documented, of the Company that mayconstitute a trade secret under applicable law; (ii) any and all informationconcerning the business and affairs of the Company (including

 

 

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historical financial statements, financial projections and budgets,historical and projected sales, capital spending budgets and plans, the namesand backgrounds of key personnel, personnel training and techniques andmaterials, however documented; and (iii) any and all notes, analysis, studiesand other material prepared by or for the Company containing or based, in wholeor in part, on any information included in the foregoing; (b) the business ofthe Company is based in the midwest; (c) its products and services are marketedthroughout the midwest; (d) the Company competes with other businesses that areor could be located in any part of the United States; (e) the provisions ofSections 3 and 4 of this Agreement are reasonable and necessary to protect andpreserve the Company' business, and (g) the Company would be irreparablydamaged if Executive were to breach the covenants set forth in Sections 3 and 4of this Agreement.

 

ARTICLE 3.

 

CONFIDENTIALINFORMATION

 

Executive acknowledges and agrees that allConfidential Information known or obtained by Executive, whether before orafter the date hereof, is the property of the Company. Therefore, Executiveagrees that Executive will not, at any time, disclose to any unauthorizedPersons or use for his own account or for the benefit of any third party anyConfidential Information, whether Executive has such information in Executive'smemory or embodied in writing or other physical form, without Henry's writtenconsent, unless and to the extent that the Confidential Information is orbecomes generally known to and available for use by the public other than as aresult of Executive's fault or the fault of any other Person bound by a duty ofconfidentiality to Henry or the Company.

 

ARTICLE 4.

 

NONCOMPETITION

 

For the consideration to be under this Agreement,Executive agrees that:

 

(1)           For a period of six (6) years fromthe date hereon (the "Period");

 

(a)           Executive will not, directly orindirectly, engage or invest in, own, manage, operate, finance, control, orparticipate in the ownership, management, operation, financing, or control of,be employed by, associated with, or lend Executives' name or any similar nameto, or render services or advice to, any business whose products or activitiescompete in whole or in part with the current products or activities of the Company,anywhere in the United States, provided, however, that Executive may purchaseor otherwise acquire up to (but not more than) one percent (1%) of any class ofsecurities of any enterprise (but without otherwise participating in theactivities of such enterprise) if such securities are listed on any national orregional securities exchange or have been registered under Section 12(g) of theSecurities Exchange Act of 1934. Executive agrees that this covenant isreasonable with respect to its duration, geographical area, and scope.

 

 

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(b)           Executive will not, directly orindirectly, either for himself or any other Person, (A) induce or attempt toinduce any employee of the Company or the Company's parent entity to leave theemploy of such company, (B) in any way interfere with the relationship betweenthe Company or the Company's parent entity and any employee of the Company orthe Company's parent entity, (C) employ, or otherwise engage as an employee,independent contractor, or otherwise, any employee of the Company or theCompany's parent entity, or (D) induce or attempt to induce any customer,supplier, licensee, or business relation of the Company or the Company's parententity to cease doing business with such company, or in any way interfere withthe relationship between any customer, supplier, licensee, or business relationof any such company.

 

(c)           Executive will not, directly orindirectly, either for himself or any other Person, solicit the business of anyPerson known to Executive to be a customer of the Company or the Company'sparent entity, whether or not Executive had personal contact with such Person;

 

(2)           If Executive breaches any covenantset forth in Subsection 4(l) of this Agreement, the term of such covenant willbe extended by the period of the duration of such breach; and

 

(3)           Executive will not, at any timeduring or after the Period, disparage Henry, the Company or the Company'sparent entity, or any of their shareholders, directors, officers, employees, oragents.

 

ARTICLE 5.

 

COMPENSATION

 

As consideration for the covenants in Section 4 ofthis Agreement, the Company will pay Executive the sum of Six Hundred FiftyThousand Dollars ($650,000) (the "Non–Compete Consideration"),subject to a holdback of $100,000 of the Non–Compete Consideration (the"Holdback") which Henry may cause to be retained as security for theSeller's indemnification obligations under Article 8 of the Stock PurchaseAgreement. The Holdback shall be administered as provided in the Stock PurchaseAgreement. The Company will be entitled to offset against the Holdback theamount of any and all claims that the Company may have against the Executivepursuant to Article 8 of the Stock Purchase Agreement.

 

ARTICLE 6.

 

REMEDIES

 

If Executive breaches the covenants set forth inSections 4 or 5 of this Agreement, Henry and the Company will be entitled tothe following remedies:

 

(1)           Damages from Executive;

 

(2)           In addition to its right to damagesand any other rights it may have, to obtain injunctive or other equitablerelief to restrain any breach or threatened breach or otherwise to

 

 

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specifically enforce theprovisions of Sections 4 and 5 of this Agreement, it being agreed that moneydamages alone would be inadequate to compensate Henry or the Company and wouldbe an inadequate remedy for such breach.

 

(3)           The rights and remedies of theparties to this Agreement are cumulative and not alternative.

 

ARTICLE 7.

 

SUCCESSORS ANDASSIGNS

 

This Agreement will be binding upon Henry andExecutive and will inure to the benefit of Henry and the Company and itsaffiliates, successors and assigns and Executive and Executives' assigns, heirsand legal representatives.

 

ARTICLE 8.

 

WAIVER

 

The rights and remedies of the parties to thisAgreement are cumulative and not alternative. Neither the failure nor any delayby any party in exercising any right, power, or privilege under this Agreementwill operate as a waiver of such right, power, or privilege, and no single orpartial exercise of any such right, power, or privilege will preclude any otheror further exercise of such right, power, or privilege or the exercise of anyother right, power, or privilege. To the maximum extent permitted by applicablelaw, (a) no claim or right arising out of this Agreement can be discharged byone party, in whole or in part, by a waiver or renunciation of the claim orright unless in writing signed by the other party; (b) no waiver that may begiven by a party will be applicable except in the specific instance for whichit is given; and (c) no notice to or demand on one party will be deemed to be awaiver of any obligation of such party or of the right of the patty giving suchnotice or demand to take further action without notice or demand as provided inthis Agreement.

 

ARTICLE 9.

 

GOVERNING LAW

 

This Agreement will be governed by the laws of theState of Illinois without regard to conflicts of laws principles.

 

ARTICLE 10.

 

JURISDICTION;SERVICE OF PROCESS

 

Any action or proceeding seeking to enforce anyprovision of, or based on any right arising out of, this Agreement shall bebrought against any of the parties in the federal and state courts of the Stateof Illinois, each of the parties consents to the jurisdiction of such courts(and of the

 

 

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appropriate appellate courts) in any such action or proceeding andwaives any objection to venue therein. Process in any action or proceedingreferred to in the preceding sentence may be served on any party anywhere inthe world.

 

ARTICLE 11.

 

SEVERABILITY

 

Whenever possible each provision and term of thisAgreement will be interpreted in a manner to be effective and valid but if anyprovision 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 suchprohibition or invalidity, without invalidating or affecting in any mannerwhatsoever the remainder of such provision or term or the remaining provisionsor terms of this Agreement. If any of the covenants set forth in Sections 3 and4 of this Agreement are held to be unreasonable, arbitrary, or against publicpolicy, 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 Executive.

 

ARTICLE 12.

 

COUNTERPARTS

 

This Agreement may be executed in one or morecounterparts, each of which will be deemed to be an original copy of thisAgreement and all of which, when taken together, will be deemed to constituteone and the same agreement.

 

ARTICLE 13.

 

SECTION HEADINGS,CONSTRUCTION

 

The headings of Sections in this Agreement areprovided for convenience only and will not affect its construction orinterpretation. All references to "Section" or "Sections"refer to the corresponding Section or Sections of this Agreement unlessotherwise specified. All words used in this Agreement will be construed to be ofsuch gender or number as the circumstances require. Unless otherwise expresslyprovided, the word "including" does not limit the preceding words orterms.

 

ARTICLE 14.

 

NOTICES

 

All notices, consents, waivers, and othercommunications under this Agreement must be in writing and will be deemed tohave been duly given when (a) delivered by hand (with written confirmation ofreceipt), (b) sent by facsimile (with written confirmation of receipt),provided that a copy is mailed by registered mail, return receipt requested, or(c) when received by the addressee,

 

 

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if sent by a nationally recognized overnight delivery service (receiptrequested), in each case to the appropriate addresses and facsimile numbers setforth below (or to such other addresses and facsimile numbers as a party maydesignate by notice to the other parties):

 
| Executive: | James Van Pelt                    |
|------------|-----------------------------------|
|       | 1393 Edgewood Lane                |
|       | Winnetka, Illinois 60093          |
|       |                              |
|       | Facsimile No.:                    |   |   |
|       |                              |
| Henry:     | Henry Company                     |
|       | 2911 Slauson Avenue               |
|       | Huntington Park, California 90255 |
|       |                              |
|       | Attention: Jeffrey A. Wahba       |
|       | Facsimile No.: 323/581–7764  |

 

ARTICLE 15.

 

ENTIRE AGREEMENT

 

This Agreement, the Employment Agreement and the StockPurchase Agreement constitute the entire agreement between the parties withrespect to the subject matter of this Agreement and supersede all prior writtenand oral agreements and understandings between Henry and Executive with respectto the subject matter of this Agreement. This Agreement may not be amended exceptby a written agreement executed by the party to be charged with the amendment.

 

 

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IN WITNESS WHEREOF, the parties have executed anddelivered this Agreement as of the date first above written.

 

| **HENRY COMPANY**     |                  |
|-----------------------|-----------------------|
|                  |                  |
| By:                   | /s/ Richard Gordinier |   |
| Its:                  | President             |   |
|                  |                  |
| **EXECUTIVE**         |                  |
| /s/ James S. Van Pelt |                  |
| James S.Van Pelt      |                  |

 

 

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