Document:

ncoat8ka061907ex10-4.htm

    
      

      

    

     

    Exhibit
      C

    

    NONCOMPETITION
      AND NONDISCLOSURE
      AGREEMENT

    

    

    This
      Noncompetition Agreement (the “Agreement”) is entered into this __ day of
      July, 2007, between nCoat, Inc., a Delaware corporation (“nCoat”), MCC,
      Inc., a Pennsylvania corporation (the “Company”) and Michael Novakovic,
      an individual residing in the State of Pennsylvania (the
“Stockholder”).  nCoat and the Company are sometimes hereafter
      referred to collectively as “Buyer”.

    

    RECITALS:

    

    A.         The
      Stockholder has acquired extensive knowledge of and experience in the business
      and/or operations of the Company through his status as a stockholder in the
      Company;

    

    B.         Concurrently
      herewith, nCoat, the Stockholder, and other stockholders of the Company, are
      entering into a Stock Purchase Agreement (the “Purchase Agreement”),
      pursuant to which nCoat is or has purchased one hundred percent (100%) of the
      issued and outstanding shares of common stock of the Company;

    

    C.         The
      parties to this Agreement acknowledge that the Stockholder has held a unique
      position with respect to the Company, and has been made privy to highly
      sensitive trade secrets and other confidential information of the Company,
      that
      the Stockholder in a unique and special manner has contributed significantly
      to
      the creation and maintenance of the good will of the Company, and that
      nondisclosure of confidential information and a period of noncompetition are,
      therefore, necessary to safeguard nCoat’s interests arising in connection with
      the transaction which is the subject of the Purchase Agreement; and

    

    D.         Buyer
      and the Stockholder desire to enter into a noncompetition agreement upon the
      terms and subject to the conditions set forth herein.

    

    NOW,
      THEREFORE, in consideration of the mutual promises and agreements contained
      herein, the adequacy and sufficiency of which are hereby acknowledged by the
      Stockholder, the parties agree as follows:

    

    
      	
               

            	
              1.

            	
              Noncompetition.

            

    

    

    (a)        During
      the term commencing on the date of this Agreement and ending on the fifth
      (5th)
      anniversary of the date hereof:

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (i)         the
      Stockholder will not, directly or indirectly, own, manage, operate, control,
      or
      participate in the ownership, management, operation or control of, or be
      associated as an officer, employee, consultant, agent, partner, or director
      with, or provide capital or other funding to enable a third party to engage
      in
      any state, province or country, any business whose products or services compete
      directly with products or services of Buyer (a “Restricted Business”);
      provided, however, that nothing herein will be deemed to preclude the
      Stockholder from owning up to one percent (1%) of the outstanding voting stock
      of any publicly traded corporation whose shares are listed on a national stock
      exchange or listed on NASDAQ;

    

    (ii)        the
      Stockholder will not, directly or indirectly, solicit, divert, entice away or in any
      other
      manner persuade, or attempt to do any of the foregoing, with respect to any
      actual or prospective customer of Buyer to become a customer
      of
      Stockholders or any third
      party engaged in a Restricted Business or for any other transaction or
      business opportunity except in respect of Buyer; and

    

    (iii)       
      the Stockholder will not, solicit, directly or indirectly, any employee or
      independent contractor of Buyer to leave such employment; provided, however
      that
      nothing herein will be deemed to preclude the Stockholder from hiring any such
      employee pursuant to a response to a general solicitation for
      employees.

    

    (b)        If
      any restriction against engaging in a competitive activity contained in this
      Section 1 is determined by any court of competent jurisdiction to be
      unenforceable by reason of its extending for too great a period of time or
      over
      too great a geographical area or by reason of its being too extensive in any
      other respect, it will be interpreted to extend only over the maximum period
      of
      time for which it may be enforceable, over the maximum geographical area as
      to
      which it may be enforceable and to the maximum extent in all other respects
      as
      to which it may be enforceable, all as determined by such court in such
      action.

    

    
      	
               

            	
              2.

            	
              Unauthorized
                Disclosure.

            

    

    

    (a)        The
      Stockholder will not, without the prior written consent of the Chief Executive
      Officer of nCoat, disclose to any person other than as required by law or court
      order, any confidential information obtained by the Stockholder concerning
      Buyer
      or any Affiliate (as defined below) of Buyer before or during the term of this
      Agreement, or any confidential information concerning any third party obtained
      by the Stockholder in the course of his service as a director, officer, employee
      or consultant of the Buyer or any Affiliate including, but not limited to,
      such
      information with respect to any products, improvements, processes, services,
      formulas, customers, suppliers, vendors, marketing techniques, methods, future
      plans, operating practices, financial statements, results or information
      (“Confidential Information”).  Confidential Information will
      not include (i) any information known generally to the public or previously
      disclosed to the public (other than as a result of unauthorized disclosure
      by
      the Stockholder); or (ii) any information disclosed to the Stockholder by a
      third party without violating a legal duty owed to the Buyer or an
      Affiliate.

    

    

    
      
        
           

        

        
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    (b)        The
      Stockholder agrees that all documents, records, files, letters, disks,
      memoranda, reports, data, sketches, drawings, computer diskettes, compact discs,
      patents, patent pending, trade secrets, trademarks, copy rights, formulas,
      drawings, diagrams and other media, laboratory notebooks, program listings
      or
      other written, electronic, photographic or other tangible material (“Tangible
      Property”) containing Confidential Information, or any enhancements,
      inventions and/or modifications pertaining to or arising from the Tangible
      Property and/or Confidential Information during Stockholders employment with
      the
      Company, whether created by the Stockholder or others, which have or will come
      into the Stockholder’s custody or possession will be and are the exclusive
      property of the Company.  The Stockholder agrees that upon the request
      by Buyer the Stockholder will promptly deliver to Buyer all Tangible Property
      in
      the Stockholder’s possession or under the Stockholder’s control which contains
      Confidential Information.  The Stockholder will not retain or deliver
      to any third person a copy of such Tangible Property.

    

    (c)        The
      Stockholder agrees that the obligations not to disclose or use Confidential
      Information or Tangible Property of the types set forth in Subsection 2(a)
      or
      2(b) above also extend to such types of Confidential Information and Tangible
      Property of customers or suppliers to the Company or its Affiliates or other
      third parties who may have disclosed or entrusted the same to the Company or
      an
      Affiliate or to the Stockholder in the course of the operation of the business
      of the Company.

    

    (d)        The
      covenants set forth in this Section s will lapse six (6) years following the
      date of this Agreement.

    

    (e)        For
      purposes of this Agreement, the term “Affiliate” means any person or
      entity that controls, is controlled by, or is under common control with any
      other person.

    

    3.         Public
      Announcements.   The Stockholder agrees that he will not make
      or cause to be made any public statement, public announcement, or press release
      which is intended, or would reasonably be expected, to disparage Buyer or the
      transactions contemplated by the Purchase Agreement.

    

    4.         Injunctive
      Relief.   The Stockholder acknowledges that a breach of a
      covenant or restriction contained in Section 2 or 3 hereof will cause
      irreparable damage to Buyer, the exact amount of which will be difficult to
      ascertain, and that any remedy at law for any such breach will be
      inadequate.  Accordingly, the Stockholder agrees that if the
      Stockholder breaches any covenant or restriction contained in Section 2 or
      3
      hereof, then Buyer will be entitled to injunctive relief, without posting bond
      or other security, in addition to any and all other remedies available to Buyer
      at law or in equity.

    

    5.         Successors;
      Binding Agreement.   This Agreement will inure to the benefit
      of and be enforceable by the Stockholder and by the Stockholder’s personal or
      legal representatives, executors, administrators, heirs, distributees, and
      devisees, and by Buyer and its successors and assigns.

    

    

    
      
        
           

        

        
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    6.          Notices.   All
      notices and other communications required or permitted under this Agreement
      will
      be in writing and will be deemed to have been duly given when personally
      delivered, when delivered by facsimile or electronic mail or by courier or
      overnight express service or five days after having been sent by certified
      or
      registered mail, postage prepaid, addressed: (a) if to the Stockholder, Michael
      Novakovic, 113 North Spring Mill Road, Villanova, Pennsylvania 19085; to
      nCoat, nCoat, Inc., 7237 Pace Drive, P.O. Box 189, Whitsett, NC 27377, with
      a
      copy to Jeffrey M. Jones, Durham Jones & Pinegar, 111 East Broadway, Suite
      900, Salt Lake City, Utah 84111, Fax: (801) 415-3500; to the Company, MCC,
      Inc.,
      100 Ross Road, King of Prussia, Pennsylvania  19406,
      Attn:  President, Facsimile No.:  (610) 265-0110 or (b) to
      such other address as any party may have furnished to the other parties in
      writing in accordance herewith, except that notices of change of address will
      be
      effective only upon receipt.

    

    7.          Governing
      Law; Validity.   The interpretation, construction and
      performance of this Agreement will be governed by and construed and enforced
      in
      accordance with the internal laws of the State of Delaware without regard to
      principles of conflicts of laws.  The invalidity or unenforceability
      of any provision of this Agreement will not affect the validity or
      enforceability of any other provisions of this Agreement, which other provisions
      will remain in full force and effect.

    

    8.          Counterparts;
      Fax Signatures.   This Agreement may be executed in two or
      more counterparts, each of which will be deemed to be an original and all of
      which together will constitute one and the same
      instrument.  Signatures transmitted via facsimile transmission will
      constitute original signatures.

    

    9.          Litigation
      Expenses.  If any action, suit, or proceeding is brought by a
      party hereto with respect to a matter or matters covered by this Agreement,
      all
      costs and expenses of the prevailing party incident to such proceeding,
      including reasonable attorney's fees, will be paid by the other
      party.

    

    10.        Miscellaneous.   No
      provision of this Agreement may be modified or waived unless such modification
      or waiver is agreed to in writing and executed by the Stockholder and by a
      duly
      authorized officer of Buyer.  No waiver by any party hereto at any
      time of any breach by another party hereto of, or failure to comply with, any
      condition or provision of this Agreement to be performed or complied with by
      such other party will be deemed a waiver of any similar or dissimilar conditions
      or provisions at the same or at any prior or subsequent time.  Failure
      by the Stockholder or Buyer to insist upon strict compliance with any provisions
      of this Agreement or to assert any right which the Stockholder or Buyer may
      have
      hereunder will not be deemed to be a waiver of such provision or right or any
      other provision of or right under this Agreement.

    

    

    

    

    

    
      
        
           

        

        
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    [Remainder
      of Page Intentionally Left Bank.

    Signature
      Page Follows.]

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      
        
           

        

        
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    IN
      WITNESS WHEREOF, Buyer has caused this Agreement to be executed by its duly
      authorized officer, and the Stockholder has executed this Agreement, effective
      as of the day and year first above written.

    

    nCoat:

    

    nCoat,
      Inc.

    

         
      /s/                                                          

    Paul
      S.
      Clayson, Chief Executive Officer

    

    The
      Company:

    

    MCC,
      Inc.

    

         
      /s/                                                          

    Michael
      Novakovic, Chief Executive Officer

    

    

    Stockholder:

    

    Michael
      Novakovic

    

         
      /s/                                                          

    Signature

    

    

    

    

    

     

     

     

    6ncoat8ka061907ex10-5.htm

    
      

      

    

    

      EXHIBIT
        D

      

      CONSULTING
        AGREEMENT

      

      THIS
        CONSULTING
        AGREEMENT (this "Agreement"), effective as of June 29, 2007 (the
        "Effective Date"), is made by and between MCC, Inc., its
        successors or assigns (the "Company"), and Nova-Van,
        LLC, a Pennsylvania limited liability company (the
        "Consultant").  The Company and the Consultant are collectively
        referred to as the “Parties”.

      

      RECITALS

      

      A.         The
        Company desires to retain Michal Novakovic, who is an employee of Consultant,
        to
        render services, and Consultant desires to render, through its employee,
        Michael
        Novakovic, such services to the Company, upon the terms and conditions contained
        herein.

      

      B.         The
        Executive Committee of the Company (the "Executive Committee") has
        authorized the consulting services as provided for in this
        Agreement.

      

      AGREEMENT

      

      NOW,
        THEREFORE, in consideration of the
        covenants contained herein, the above recitals and other good and valuable
        consideration, the receipt and sufficiency of which are hereby acknowledged,
        the
        Parties hereto agree as follows:

      

      ARTICLE
        I

      DUTIES

      

      1.01      Duties.  The
        Company hereby hires Consultant as a consultant, to provide through its
        employee, Michael Novakovic, his associations, contacts, relationships,
        affiliations, connections, experience, know how, expertise, advice and knowledge
        in the automotive, military and commercial coatings industries (“Consulting
        Services”) and Consultant hereby accepts the engagement to provide the
        Consulting Services upon the terms and conditions contained
        herein.  Consultant shall exercise the authority, assume the assigned
        duties and responsibilities and carry out the Consulting Services to the
        Company
        as specified by the Executive Committee from time to time during the Term
        (as
        defined below).  Without the prior written agreement of the Company,
        which may be refused for any reason or no reason, Consultant will render
        the
        Consulting Services solely through the personal services of Michael
        Novakovic.

      

      1.02      Minimum
        Time Commitment.  While Consultant shall generally determine the
        time and circumstances in which it renders the Consulting Services consistent
        with the terms of this Agreement, Consultant shall be available to the Company
        to render Consulting Services for a minimum number of hours per weeks, as
        follows:

      

      (a)        During
        the first 30 days following the Effective Date – 40 hours per week.

      

      (b)        During
        the second 30 day period following the Effective Date – 30 hours per
        week.

      

      (c)        During
        the third 30 day period following the Effective Date – 20 hours per
        week.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (d)        Following
        the third 30 day period following the Effective Date and continuing through
        the
        end of the Term – 8 hours per week.

      

      Should
        Consultant provide the Consulting Services of Michael Novakovic for more
        than
        the required number of days within any weekly period, the excess days shall
        be
        credited toward the minimum requirement for the following
        week.  Consultant and the Company shall establish procedures
        reasonably acceptable to both to monitor the Consulting Services
        rendered.

      

      1.03      Independent
        Contractor.  Consultant acknowledges that Consultant’s retention
        does not confer upon Consultant any ownership interest in or personal claim
        upon
        any license, right or product of the Company, nor does this Agreement confer
        any
        employment right on Consultant.  Consultant agrees that in performing
        its duties under this Agreement, it shall be operating as an independent
        contractor as that term is defined in United States Treasury Department
        regulations and United States Internal Revenue Service rulings and
        interpretations.  Nothing contained herein shall in any way constitute
        any association, partnership, employer/employee relationship, or joint venture
        between the Parties hereto, or be construed to be evidence of the intention
        of
        the Parties to establish any such relationship.  Neither Party shall
        have any right, power or authority to make any representation nor to assume
        or
        create any obligation, whether express or implied, on behalf of the other,
        or to
        bind the other Party in any manner whatsoever.  Both of the Parties
        agree, respectively, that they shall not hold themselves out in any manner
        that
        would be contrary to the terms of this Section 1.03.

      

      ARTICLE
        II

      TERM
        OF
        AGREEMENT

      

      Term.  The
        term of this Agreement shall commence on the Effective Date and shall terminate
        at 11:59 p.m. Mountain Standard Time on December 31, 2009 (the "Contract
        Term") unless sooner terminated hereunder.  The Contract Term
        shall be extended for successive one-year periods (such period to be called
        a
“Renewal Period” and together with the Contract Term, the “Term”)
        unless notice is given by one of the Parties at least sixty (60) days before
        the
        end of any Term.

      

      ARTICLE
        III

      COMPENSATION

      

      During
        the Term thereto, the Company shall pay, or cause to be paid to Consultant,
        the
        following:

      

      3.01     Annual
        Base Consulting Fee.  Subject to the terms and conditions of this
        Agreement, Consultant shall be paid an annual base consulting fee ("Annual
        Base Consulting Fee") as set forth in Addendum A of this
        Agreement.

      

      3.02     Performance
        Bonuses.  Subject to the terms and conditions of this Agreement,
        Consultant shall be paid performance bonuses (“Performance Bonuses”) as
        set forth in Addendum A of this Agreement.

      

      3.03     Annual
        Performance Review.  On a basis no less frequently than annually
        during the Term, the Executive Committee and the Consultant shall review
        the
        performance of the Consulting Services as described in Article I
        hereof.  As a result of such review, the Executive Committee and the
        Consultant may agree to modify or alter the specific assignments or duties
        which
        constitute the Consulting Services.

      

      
        
           

        

        
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      3.04     Automobile
        Purchase.  At the request of Consultant, before August 31, 2007,
        the Company shall purchase an automobile of Consultant’s choosing for
        Consultant’s sole ownership and exclusive use; provided that the Company shall
        not be required to spend more than $70,000 in connection with such
        purchase.  Alternatively, the Company will pay Consultant $70,000 for
        its use in purchasing an automobile of its choosing.

      

      3.05     2007
        Bonus.  Prior to August 31, 2007, the Company shall pay Consultant
        a bonus in the amount of $130,000 (the “2007 Bonus”); provided that at
        the request of the Consultant the Company will allocate a portion of the
        2007
        Bonus to employees of the Company in amounts as determined in the sole
        discretion of the Consultant.

      

      ARTICLE
        IV

      OTHER
        BENEFITS

      

      4.01     Office
        and Support.  During the Term and as determined by the Executive
        Committee, Consultant shall be entitled to reasonable office space, furnishings
        and other equipment to support its consulting for and on behalf of the Company,
        whether at the Company or the home office of Michael Novakovic, as discussed
        in
        Article I, above, all of which shall be reasonably adequate for the performance
        of his duties.

      

      4.02     Work
        Schedule.  Consultant shall manage its work and efforts required
        to accomplish the Consulting Services in consultation and coordination with
        the
        Executive Committee.

      

      ARTICLE
        V

      RESTRICTIVE
        COVENANTS

      

      
        	
                 

              	
                5.01

              	
                Definitions.

              

      

      

      “Confidential
        Information” means all past, present and future confidential and/or
        proprietary information belonging to the Company or any affiliate of the
        Company, whether developed by Consultant or by other Company employees,
        consultants, agents or any other third party, whether in writing, electronic
        format or otherwise, including but not limited to, all Intellectual Property
        as
        set forth in Section 3.9 of the Stock Purchase Agreement between the Company,
        nCoat, Inc., Consultant and others of even date, as owned by or licensed
        to or
        by the Company, all chemical or biological technology, materials, ingredients,
        measurements, dimensions, formulations, formulas, processes, knowledge, know
        how, software, applets, content, flow charts, algorithms, functionality,
        design
        and technical specifications, copyrights, trade marks, registration marks,
        trade
        secrets, patents and patent pendings, user and application interfaces and
        the
        structure, sequence and organization thereof, research, development,
        technologies, processes, and business information including without limitation
        business plans, marketing plans, techniques, strategies and materials, customer
        information, customer lists, customer identities, customer development plans,
        customer pre-production approval documents, customer documentation of parts
        and
        processes, suppliers, vendors, business acquisition or disposition plans,
        new
        personnel employment plans, financial budgets and forecasts, projections,
        financial operations or information, investors, sales estimates, internal
        performance results relating to the past, present or future business activities
        of the other Party, the negotiations towards or the existence of each agreement
        or instrument between or among the parties hereto and the contents, terms
        and
        conditions contained therein, the receipt of any Confidential Information,
        and
        any notes, memoranda, summaries, analyses, compilations and other writings
        relating to any of the foregoing or based thereon prepared by Consultant
        and any
        other information marked as confidential or which reasonably should be
        understood to be confidential or proprietary, whether or not so
        marked.  Consultant agrees that there shall be a presumption that all
        information received from the Company or any affiliate of the Company is
        Confidential and Proprietary Information, and that it is his obligation to
        seek
        acknowledgement from the Company of any information which Consultant may
        wish to
        exclude from being treated as Confidential Information. The Company shall
        be
        provided a reasonable time following any identification by Consultant of
        information he wishes to exclude within which to reassert that such information
        is Confidential Information and/or to seek judicial intervention to confirm
        same. However, Confidential Information does not include information that
        Consultant can show has become available for unrestricted public use, without
        breach of this or any other agreement.

      

      
        
           

        

        
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      “Consultant
        Inventions” means all inventions, technology, products, formulations, ideas,
        processes, trade secrets, materials, and Confidential Information, whether
        or
        not published, patented, copyrighted, registered, or suitable therefor, and
        all
        intellectual property rights therein, that are made, developed, written,
        conceived, or first reduced to practice by Consultant in part or in whole,
        whether alone or with others, during the Term, to the extent they relate
        to the
        Company’s past, present, future, or anticipated business, research, development,
        or trade, or are developed using the Company’s time, equipment, or
        materials.

      

      “Prospective
        Customer” means any company, supplier, vendor, investor or third party to
        whom the Company is attempting to market, trade, lease, license or sell or
        has
        sold goods, products or services to in the past or with whom the Company
        has had
        contact, directly or indirectly, during the Term for the purpose of marketing
        or
        offering its products, services or goods.

      

      5.02     Obligations
        of Confidentiality.  In the course of my consulting term with the
        Company, Consultant may receive Confidential Information, which shall remain
        the
        sole property of the Company.  Consultant agrees that, except as
        appropriate in connection with the Company’s business, Consultant shall not at
        any time, during or after the Term, (i) disclose Confidential Information
        to any
        person or (ii) use any Confidential Information for the direct or indirect
        benefit of any person or entity other than the Company, except as the Company
        may otherwise consent or direct in writing.  Consultant shall use
        reasonable and diligent efforts to maintain the proprietary nature, security
        and
        confidentiality of all Confidential Information.  Consultant shall
        also keep confidential any information provided by any client or other third
        party to the Company under obligation of confidentiality.  Consultant
        shall promptly notify the Company if he becomes aware of any misuse or wrongful
        disclosure of Confidential Information by any person.  All obligations
        of confidentiality shall continue for as long as is permitted under applicable
        law.

      

      5.03     Obligations
        re Consultant Inventions.  Consultant acknowledges and agrees that
        all Consultant Inventions are the sole and exclusive property of the Company,
        and hereby assigns to the Company any copyrights, patent rights, trade secrets,
        and other rights that Consultant may have therein.  Consultant agrees
        to promptly disclose the existence, use, and manner of operation of any
        Consultant Inventions to the Company.  Consultant agrees to take all
        actions reasonably requested by the Company, both during and after the Term,
        to
        assign to the Company and to establish (including, without limitation, assisting
        in obtaining or registering copyrights, patents, trademarks or similar property
        rights and executing assignments to the Company), perfect, exercise, or protect
        the Company’s rights in any Consultant Inventions or title
        thereto.  If the Company is unable, because of Michael Novakovic’s
        mental or physical incapacity, geographic distance, or for any other reason,
        as
        determined by the Company, to obtain his approval or signature on any document
        necessary or useful to claim, secure, extend, protect, or enforce any right
        in
        intellectual property to which the Company has a reasonable claim, then
        Consultant hereby appoints the Company and its duly authorized officers as
        its
        agent and attorney-in-fact to act for its and in its place and stead for
        the
        purpose of accomplishing such act with the same legal force and effect as
        if
        executed by Consultant.

      

      
        
           

        

        
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      5.04     No
        Competitive Use of Materials.  During the Term and for a period of
        two (2) years thereafter, Consultant shall not (a) give, sell, trade or use
        any
        materials or ideas from Consultant Inventions or Confidential Information
        in any
        manner that would compete with, or pose a threat of competition to, the Company
        or (b) give, sell, trade or use technology, software, designs, specifications,
        formulations, processes, equipment or other components of any Consultant
        Inventions, whether or not a threat of competition is posed, without the
        express, written consent of the Company.

      

      5.05     No
        Unrelated Business with Customers.  During the Term, unless the
        Company agrees in advance in writing, Consultant shall not contact or initiate
        discussions, directly or indirectly, with any customer or Prospective Customer
        of the Company to attempt to sell such customer or Prospective Customer any
        goods, product or service other than the Company’s goods, products or
        services.

      

      5.06     Return
        of Information.  Upon the Company’s request or at the end of the
        Term, Consultant shall immediately return and deliver all Consultant Inventions,
        Confidential Information and all other property of the Company to the Company,
        whether in written, electronic or any other form, including all copies of
        such
        information in its possession or control.

      

      5.07     Scope
        of
        Restrictions.  Consultant acknowledges and agrees that the
        restrictions of Sections 5.02 through 5.06 are reasonable under the
        circumstances and represent the least restriction on Consultant’s future
        consulting opportunities that are consistent with the protection of the
        Company’s good will and Confidential Information, that these restrictions do not
        prevent Michael Novakovic from earning a livelihood without violating the
        terms
        of this Agreement, and that the Company has a legitimate business purpose
        in
        requiring Consultant to abide by these covenants.  If any restriction
        or term herein is found to be unreasonable or invalid by a court of competent
        jurisdiction, then such court shall reduce or modify such term to the minimum
        extent necessary to make it reasonable, valid, and enforceable, protecting
        both
        Consultant and the Company.  If such term cannot be so reduced or
        modified, it shall be severed and all other terms and restrictions of this
        Agreement shall remain in full force and effect and shall be interpreted
        in such
        a way as to give maximum validity and enforceability to this
        Agreement.  If Consultant violates these restrictive covenants, then
        their time limitations shall be extended for a period of time equal to the
        time
        during which such breach occurs.  Sections 5.02 through 5.06 are
        intended to be construed as a series of separate covenants, one for each
        city,
        county, or geographic area in which the Company does or intends or attempts
        to
        do business.  Except for geographic coverage, each such separate
        covenant shall be deemed identical in terms.

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      5.08     No
        Conflicts.  Consultant hereby covenants, represents, and warrants
        that (i) it is not now subject to, and will not enter into, any employment,
        consulting, or other agreement or arrangement that may conflict with the
        performance by it of any of its obligations to the Company (under this Agreement
        or otherwise); and (ii) it has not, and will not, use or disclose Confidential
        Information of any other former employer or any other person or entity to
        which
        it has any duty of confidentiality.

      ARTICLE
        VI

      TERMINATION

      

      6.01     Termination
        of Agreement.  This Agreement may be terminated at any time during
        the Term by mutual agreement of the parties, or as otherwise provided in
        this
        Article.

      

      6.02     Termination
        for Cause.  The Company may terminate this Agreement for Cause
        without prior written notice of such termination.  For purposes of
        this Agreement, "Cause" for termination shall mean:

      

      (a)        the
        willful failure or refusal to carry out the reasonable directions of the
        Executive Committee, which directions are consistent with Consultant’s duties as
        set forth under this Agreement, other than a failure resulting from Michael
        Novakoiv’s complete or partial incapacity due to physical or mental illness or
        impairment;

      

      (b)        a
        conviction of Michael Novakovic for a violation of a state or federal criminal
        law involving the commission of a felony;

      

      (c)        a
        willful act by Consultant that constitutes gross negligence in the performance
        of its duties under this Agreement.  No act or failure to act by
        Consultant shall be considered "willful" unless committed without good faith
        and
        without a reasonable belief that the act or omission was in the Company's
        best
        interest;

      

      (d)        a
        material breach of the terms of this Agreement, which breach has not been
        cured
        by Consultant within fifteen (15) days of written notice of said breach by
        the
        Company;

      

      (e)        unethical
        business practices in connection with the Company’s business, including, but not
        limited to, embezzlement, disparagement or unauthorized disclosure of
        Confidential Information; or

      

      (f)         confirmed
        and validated failure of Michael Novakovic of any Company mandated drug
        test.

      

      Upon
        termination for Cause, Consultant shall not be entitled to payment of any
        compensation other than salary and benefits under this Agreement earned up
        to
        the date of such termination.

      

      6.03      Termination
        Due to Death.  In the event of Michael Novakovic’s death within
        six months from the date thereof, (i) the Company shall pay one-half (1/2)
        of
        the Annual Base Consulting Fee to Consultant in six (6) equal monthly payments
        following the date of his death, (ii) Consultant shall be paid by the Company
        the earned New Accounts and Qualified Accounts Performance Bonus, if any,
        up to
        date of death of Michael Novakovic, and (iii) Consultant shall be paid by
        the
        Company the Performance Bonus for Qualified Accounts for a period of twelve
        (12)
        months following the date of Michael Novakovic’s death.

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      6.04      Voluntary
        Termination.  At any time after the first twelve (12) month period
        following the Effective Date, Consultant may unilaterally terminate this
        Agreement by giving the Company 60 days prior written notice.  Upon
        such voluntary termination by Consultant, Consultant shall be entitled to
        (i)
        payment of any compensation, Performance Bonuses and benefits under this
        Agreement earned up to the date of such termination and (ii) Performance
        Bonus
        for Qualified Accounts for a period of twelve (12) months following the date
        of
        such termination.

      

      ARTICLE
        VII

      MISCELLANEOUS

      

      7.01      Assignment,
        Successors.  This Agreement may not be assigned by Consultant
        without the prior written consent of the Company. This Agreement shall be
        binding upon, and inure to the benefit of, Consultant and his estate and
        the
        Company and any assignee of or successor to the Company.

      

      7.02      Nonalienation
        of Benefits.  Benefits, if any, payable under this Agreement shall
        not be subject in any manner to anticipation, alienation, sale, transfer,
        assignment, pledge, encumbrance, charge, garnishment, execution, or levy
        of any
        kind, either voluntary or involuntary, prior to actually being received by
        Consultant, and any such attempt to dispose of any right to benefits payable
        hereunder shall be void.

      

      7.03      Severability.  If
        all or any part of this Agreement is declared by any court or governmental
        authority to be unlawful or invalid, such unlawfulness or invalidity shall
        not
        serve to invalidate any portion of this Agreement not declared to be unlawful
        or
        invalid. Any paragraph or part of a paragraph so declared to be unlawful
        or
        invalid shall, if possible, be construed in a manner that will give effect
        to
        the terms of such paragraph or part of a paragraph to the fullest extent
        possible while remaining lawful and valid.

      

      7.04      Amendment
        and Waiver.  This Agreement shall not be altered, amended, or
        modified except by written instrument executed by the Company and
        Consultant.  A waiver of any term, covenant, agreement, or condition
        contained in this Agreement shall not be deemed a waiver of any other term,
        covenant, agreement, or condition, and any waiver of any other term, covenant,
        agreement, or condition, and any waiver of any default in any such term,
        covenant, agreement, or condition shall not be deemed a waiver of any later
        default thereof or of any other term, covenant, agreement, or
        condition.

      

      7.05      Notices.  All
        notices hereunder shall be sufficiently given for all purposes hereunder
        if in
        writing and delivered personally, sent by documented overnight delivery service
        or, to the extent receipt is confirmed, telecopy, facsimile or other electronic
        transmission service to the appropriate address or number as set forth
        below.  Notices to the Parties shall be addressed to:

       

      
        	
              	
                If
                  to the Company:

              	
                nCoat,
                  Inc.

              

      

      7237
        Pace
        Drive

      P.O.
        Box
        38

      Whitsett,
        NC 27377

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      
        	
              	
                with
                  a copy to:

              	
                Durham
                  Jones & Pinegar

              

      

      111
        East
        Broadway, Suite 900

      Salt
        Lake
        City, Utah 84111

      Attn:  Jeffrey
        Jones, Esq.

      Facsimile
        No.:  801-415-3500

      

      
        	
              	
                If
                  to Consultant:

              	
                Nova-Van,
                  LLC

              

      

      Attn:
        MICHAEL NOVAKOVIC

      113
        North
        Spring Mill Road

      Villanova,
        Pennsylvania 19085

      

      Either
        Party may from time to time designate a new address by notice given in
        accordance with this Section.  Such notice shall be deemed to be given
        when received if delivered personally, or two (2) business days after the
        date
        mailed if sent certified or registered mail, return receipt requested, or
        one
        (1) day after deposited with a nationally recognized overnight courier service
        in time for next day delivery, provided such next day is not a Saturday,
        Sunday
        or holiday.  Any notice of any change of address shall be given in the
        manner set forth above.  Whenever the giving of notice is required,
        the giving of such notice may be waived in writing by the party entitled
        to
        receive such notice.

      

      7.06     Counterpart
        Originals.  This Agreement may be executed in counterparts, each
        of which shall be deemed to be an original but all of which together will
        constitute one and the same instrument.

      

      7.07     Entire
        Agreement.  This Agreement forms the entire agreement between the
        parties hereto with respect to any severance payment and with respect to
        the
        subject matter contained in the Agreement.

      

      7.08     Applicable
        Law. The provisions of this Agreement shall be interpreted and construed
        in
        accordance with the laws of the State of Delaware, without regard to its
        choice
        of law principles.

      

      7.09     Effect
        on Other Agreements.  This Agreement shall supersede all prior
        agreements, promises, and representations regarding employment by the Company
        and severance or other payments contingent upon termination of
        employment.

      

      7.10     Extension
        or Renegotiation.  The parties hereto agree that at any time prior
        to the expiration of this Agreement, they may extend or renegotiate this
        Agreement upon mutually agreeable terms and conditions.

      

      IN
        WITNESS WHEREOF the parties have executed this Consulting Agreement on the
        date
        first written above.

      

      

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      

      
        	 	
                NCOAT,
                  INC.

              
	 	 	 
	 	
                By:

              	
                 
                     
                  /s/                                                    
                  

              
	 	 	 
	 	
                Name:

              	
                _______________________________

              
	 	 	 
	 	
                Title:

              	
                _______________________________

              
	 	 	 
	 	
                Date:

              	
                _______________________________

              
	 	 	 
	 	 	 
	 	
                NOVA-VAN,
                  LLC

              
	 	 	 
	 	
                By:

              	
                
                   
                       
                    /s/                                                    
                    

                

              
	 	 	 
	 	
                Name:

              	
                _______________________________

              
	 	 	 
	 	
                Title:

              	
                _______________________________

              
	 	 	 
	 	
                Date:

              	
                _______________________________

              
	 	 	 
	 	 	 
	 	
                Agreed
                  and Accepted:

              
	 	 	 
	 	 	 
	 	
                MICHAEL
                  NOVAKOVIC

              
	 	 	 
	 	
                By:

              	
                
                  
                     
                         
                      /s/                                                    
                      

                  

                

              
	 	 	 
	 	
                Signature:

              	
                
                  _______________________________

                

              
	 	 	 
	 	
                Print:

              	
                
                  _______________________________

                

              
	 	 	 
	 	
                Date:

              	
                
                  _______________________________

                

              

      

      

      

      

      

      

      

      

9

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