Exhibit 10.6
CONFIDENTIALITY AND
NON-COMPETITION AGREEMENT
THIS AGREEMENT (this “ Agreement ”) is made and
entered into as of the 10 th day of July, 2007, by
Perfect Circle Projectiles, LLC, an Illinois limited liability
company (“ PCP
”), and certain key employees of PCP party
hereto (“ Employees
”), for the benefit of PCP Acquisition, Inc.,
a Colorado corporation, and its successors and assigns
(collectively, the “ Company ”).
R E C I T A L S:
A.
The Company is in the business of developing,
marketing and selling various products and services developed for
the security and surveillance industry (the “
Company Business ”).
B.
Prior to the date hereof, PCP has conducted as part
of its overall business the manufacture and sale of spherical
shaped projectiles, as described in Schedule D of the Asset
Purchase Agreement between the parties (the “
Business ”).
C.
PCP, the Company, Gary E. Gibson and Security With
Advanced Technology, Inc. are parties to an Asset Purchase
Agreement dated as of the date hereof (the “
Purchase Agreement ”), pursuant to which PCP will sell and transfer to the
Company, and the Company will purchase and assume from PCP, the
Assets (as defined in the Purchase Agreement) that are used or
useful in connection with the PCP Business.
D.
In order to prevent the improper use of confidential
and proprietary information relating to the Assets and the
resulting unfair competition and misappropriation and diminution of
the goodwill and other proprietary interests of the Assets which
were acquired by the Company, PCP and each Employee agree that
limitations must be imposed on their right to compete with the
Company.
E.
As consideration for and as a condition to the
closing of the transactions contemplated by the Purchase Agreement,
PCP and the Employees shall have entered into certain other
agreements, as applicable, including, but not limited to this
Agreement.
F.
Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing
recitals and the Company acquiring the Assets the parties agree as
follows:
SECTION 1 - NONDISCLOSURE OF CONFIDENTIAL
INFORMATION .
(a)
“ Confidential
Information ” means information,
not generally known, that is proprietary exclusively to the
Business, including without limitation:
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1)
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“ Proprietary
Rights ” means, with respect to the
Business, worldwide industrial and intellectual property rights and
all rights associated therewith, including all patents and
applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part
thereof, all inventions (whether patentable or not), invention
disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data, proprietary processes and
formulae, algorithms, specifications and designs;
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2)
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the financial and accounting data, sales records,
profit and loss and other performance reports, pricing manuals,
selling and pricing procedures relating to the Business;
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3)
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the vendor and supplier information relating to the
Business;
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4)
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confidential information of the clients of the
Business.
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(b)
PCP and each Employee hereby agrees not to directly
or indirectly disclose any Confidential Information to any third
party without the prior written consent of the Company or as
required by applicable law. PCP and each Employee further agrees
not to use, directly or indirectly, any Confidential Information
for the benefit of PCP, any Employee, or any third party in
competition with the Business. Confidential Information does not
include any of the items in this Section which are or become
publicly known and made generally available through no wrongful act
of PCP or any Employee, or of others who PCP or any Employee did
not know and had no reasonable basis for knowing were under
confidentiality obligations as to the item or items
involved.
SECTION 2 - RESTRICTIONS AGAINST
COMPETITION .
In order to prevent the improper use of Confidential
Information and the resulting unfair competition and
misappropriation and diminution of the goodwill and other
proprietary interests of the Business which were acquired by the
Company, PCP and each Employee hereby agrees that for a period of
six years, except in the case of Michael Varacins such period shall
be two years, after the date of this Agreement, PCP, each Employee,
and any of their respective Subsidiaries (as hereinafter defined)
will not, directly or indirectly, on their own behalf or in the
service or on behalf of others:
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a)
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solicit any client of the Business as of the date
hereof, for the purpose of obtaining the business of such client
anywhere in the world, in competition with the Business;
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b)
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advise or recommend to any other person that such
person solicit any client of the Business as
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