Exhibit 99.1
SELLER NON-COMPETITION
AGREEMENT
This SELLER
NON-COMPETITION AGREEMENT (this “ Agreement
”) is made and entered into as of February___, 2005 (the
“ Agreement Date ”), by and among
JACKSONVILLE TECHNOLOGY ASSOCIATES, INC. , a Delaware
corporation now known as WSECI, Inc. (the “ Seller
”), and the shareholders of the Seller signatory hereto (each
a “ Shareholder ” and collectively, the “
Shareholders ”) on the one hand, and VERSO
TECHNOLOGIES, INC. , a Minnesota corporation (the “
Purchaser ”), on the other hand.
RECITALS
WHEREAS , pursuant to the terms and conditions set forth in
that certain Asset Purchase Agreement dated as of February 23,
2005 (the “ Asset Purchase Agreement ”), by and
among the Seller, the Shareholders and the Purchaser, the Purchaser
has agreed to purchase certain assets, and assume certain
liabilities, of the Seller;
WHEREAS , the Seller will derive substantial economic value
from the consummation of the transactions contemplated by the Asset
Purchase Agreement, including, among other things, the receipt of
the Purchase Price and the additional Purchaser Shares which may be
earned by the Seller pursuant to Sections 1.7 and 1.8 of the
Asset Purchase Agreement;
WHEREAS , the Shareholders will derive substantial economic
value from the consummation of the transactions contemplated by the
Asset Purchase Agreement, including, among other things, the
distribution by the Seller to the Shareholders of the Purchaser
Shares the Seller receives pursuant to the Asset Purchase
Agreement; and
WHEREAS , each of the Seller and the Shareholders
acknowledges that the execution and delivery of this Agreement is a
condition precedent to the Purchaser’s obligation to
consummate the transactions contemplated by the Asset Purchase
Agreement, and that the Purchaser would not have entered into the
Asset Purchase Agreement unless the Seller and the Shareholders
agreed to enter into this Agreement;
NOW, THEREFORE , based on the above premises and in
consideration of the mutual promises, covenants, agreements,
representations and warranties hereinafter set forth and other good
and valuable consideration, the receipt, adequacy and sufficiency
of which is hereby acknowledged, the parties agree as
follows:
1. Definitions . Capitalized terms used herein
and not otherwise defined shall have the meanings assigned to them
in the Asset Purchase Agreement.
2. Covenant Not to Compete . Each of the
Shareholders and the Seller acknowledges that he, she or it is and
will be in possession of Confidential Information concerning the
Business, including, but not limited to, information about markets,
key personnel, current and prospective customers and other business
affairs and methods and other information not readily available to
the public; provided, however, that, for purposes of this
Agreement, Confidential Information shall not include information
which (a) is or becomes generally available to the public
other than as a result of wrongful disclosure by
any Shareholder or the Seller, or
(b) becomes available to any Shareholder or the Seller, as
applicable, from a third party without restriction or breach of
this Agreement and, to the knowledge of any Shareholder or the
Seller, as applicable, without breach of any other confidentiality
obligation owed to the Purchaser. As a means reasonably designed to
protect the Confidential Information, from the Agreement Date above
until the second anniversary of the Agreement Date, the Seller
agrees that it will not, directly or indirectly (including through
its Affiliates), within the geographic region of North America and
South America, engage in, assist (financially or otherwise), render
services to, or perform any activity that is competitive with the
Business (the “ Protected Activities ”). Also as
a means reasonably designed to protect the Confidential
Information, from the Agreement Date above until the second
anniversary of the Agreement Date, each of the Shareholders agrees
that he, she or it will not, directly or indirectly (including
through his, her or its Affiliates), within the geographic region
of North America and South America, engage in, assist (financially
or otherwise), render services to, or perform any activity that is
competitive with the Business and substantially similar to the
services rendered or the activities performed by such Shareholder
for the Seller (the “ Protected Activities ”) in
the capacity of a shareholder, officer, director or other
management personnel, whether as an employee or an independent
contractor. For avoidance of doubt, the Seller’s or any
Shareholder’s engaging in any Excluded Business shall not be
limited by this paragraph 2. Notwithstanding the foregoing, each of
the Shareholders and the Seller may own, directly or indirectly, an
aggregate of no more than one percent (1%) of the outstanding stock
or other equity interest of or in any publicly traded corporation
or other business enterprise that engages in the Protected
Activities, provided that such participation therein is solely as a
passive investor and does not include any role, as applicable, as
director, officer, manager or other service provider.
3. Non-Interference and Non-Solicitation . From
the Agreement Date until the second anniversary of the Agreement
Date, neither the Seller nor any Shareholder will, without the
prior written consent of the Purchaser, directly, indirectly
(including through his, her or its Affiliates) or as an agent on
behalf of or in conjunction with any person, firm, partnership,
corporation or other entity: (a) hire, solicit, encourage the
resignation of, or in any other manner seek to engage or employ,
any person who, as of the Agreement Date or at any time during the
six (6) month period prior thereto, was an employee of the
Seller and was engaged in the Business, including (but not limited
to) those employees listed on Exhibit A hereto, whether
or not for compensation and whether as an officer, employee,
consultant, adviser, independent sales representative, vendor,
independent contractor or participant ( provided ,
however , that if any such employee is hired by the
Purchaser and thereafter terminated by the Purchaser, then the
Seller may hire such person), or (b) contact, solicit, service
or otherwise have any dealings with any person or entity with whom
the Purchaser has a then-current business relationship in
connection with the Protected Activities or if such contact,
solicitation or other dealings could reasonably be expected to
adversely impact the Purchaser’s relationship with such
person or entity.
4. Non-Disclosure . Unless otherwise approved
in writing by the Purchaser, each of the Shareholders and the
Seller covenants and agrees that he, she or it will not use for any
purpose and will keep secret and will not intentionally disclose to
anyone other than the Purchaser, wherever located, any and all
Confidential Information during the term of this
Agreement.
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5. Equitable Relief . It is expressly agreed
among the par
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