Exhibit 10.2
NONCOMPETITION AND NONDISCLOSURE AGREEMENT
This Noncompetition, Nondisclosure
and Nonsolicitation Agreement (this “Agreement”) is
made and entered into as of this 18 th day of
December, 2007, by and among ENERGY WEST, INCORPORATED, a
Montana corporation (“Buyer”), and DAN F. WHETSTONE
a/k/a DANIEL F. WHETSTONE , an individual residing in Cut
Bank, Montana (“DFW”).
Background
DFW owns five thousand nine hundred
thirty-nine (5,939) shares (the “Whetstone Shares”) of
the common stock of Cut Bank Gas Company, Inc. (the
“Company”), which constitute approximately 65.762% of
the issued and outstanding shares of capital stock of the Company.
DFW is and has been an employee of the Company for 37 years
and has served as its President since 1979. Currently, his services
are being provided pursuant to an Employment Agreement, dated
December 20, 2006, for term ending December 31, 2013, a
copy of which has been provided to Buyer. Concurrently with the
execution and delivery of this Agreement, Buyer is purchasing the
Whetstone Shares from DFW pursuant to the terms and conditions of a
Stock Purchase Agreement, dated as of the date hereof, by and
between Buyer, DFW and certain other shareholders of the Company
who are selling his/her shares of the Company to Buyer (the
“Purchase Agreement”). Pursuant to the Purchase
Agreement, Buyer is purchasing a majority interest in the Company
as well as the goodwill of the Company. As a condition to Buyer
entering into the Purchase Agreement, Buyer requires that this
Agreement be executed and delivered by DFW. Since DFW will receive
substantial benefit from the transactions contemplated in the
Purchase Agreement, and because Buyer is willing to pay DFW
additional consideration pursuant to this Agreement in
consideration of his performance of the terms and conditions of
this Agreement, DFW has agreed to enter into this Agreement and
make the noncompetition, nondisclosure, nonsolicitation and other
covenants set forth in this Agreement.
Agreement
In consideration of the mutual
promises made herein, and for the consideration to be paid by Buyer
to Sellers pursuant to the Purchase Agreement, the parties hereto
agree as follows:
1.
Acknowledgements by DFW . DFW acknowledges
that he has occupied a position of trust and confidence with the
Company prior to the date hereof and has had access to and has
become familiar with the following information of the Company, any
and all of which is confidential to the Company (collectively, the
“Confidential Information”): (a) any and all trade
secrets concerning the business and affairs of the Company, data,
know-how, formulae, compositions, processes, current and/or planned
distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies,
business plans, computer software and programs, database
technologies, systems, structures, concepts, methods and
information of the Company and any other information, however
documented, of the Company that is a trade secret within the
meaning of the trade secret laws of Montana or under other
applicable law; (b) any and all information concerning the
business and affairs of the Company (which includes historical
financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, contractors, agents, suppliers
and potential suppliers, personnel training
techniques and materials, and purchasing methods and techniques
however documented); and (c) any and all notes, analysis,
compilations, studies, summaries and other material prepared by or
for the Company containing or based, in whole or in part, upon any
information included in the foregoing. DFW further acknowledges
that (i) the business of the Company is Territorial in scope;
(ii) the products and services related to such business are
marketed throughout the Territory; (iii) the Company competes
with other businesses that are or could be located in any part of
the Territory; (iv) Buyer has required that DFW make the
covenants set forth in this Agreement as a condition to
Buyer’s purchase of the Whetstone Shares; (v) the
provisions of this Agreement are reasonable and necessary to
protect and preserve Buyer’s interests in and right to the
Company from and after the date of this Agreement; and
(vi) Buyer would be irreparably damaged if any DFW were to
breach the covenants set forth in this Agreement.
2. Nondisclosure
of Confidential Information . DFW hereby agrees not
to disclose to any unauthorized Persons or use for DFW’s own
account or for the benefit of any third party any Confidential
Information, whether or not such information is embodied in writing
or other physical form or is retained in the memory of DFW, unless
and to the extent that (i) the Confidential Information is or
becomes generally known to and available for use by the public
other than as a result of DFW’s fault, or (ii) DFW is
required to disclose same by order of any court with jurisdiction
to make such order. DFW agrees to deliver to Buyer at the closing
of the Purchase Agreement, or at any other time Buyer may request,
all documents, memoranda, notes, plans, records, reports and other
documentation, models, components, devices or computer software,
whether embodied in a disk or in other form (and all copies of all
of the foregoing), that contain Confidential Information and any
other Confidential Information that DFW may then possess or have
under his control.
3. Noncompetition
and Nonsolicitation . As an inducement for Buyer to
enter into the Purchase Agreement, and as additional consideration
for the consideration to be paid to the Company under the Purchase
Agreement and to be paid to DFW under this Agreement, DFW agrees
that for a period of three (3) years after the Closing
hereof:
(a) DFW will not, directly or
indirectly, engage in, invest in, own, manage, operate, finance,
control, assist, advise or participate in as an employee,
shareholder, independent contractor or otherwise, any business,
firm, partnership,
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