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Section 14.1 Covenant Not to Compete. Each of the
Principal Stockholders covenants and agrees that
commencing with the Effective Date and continuing for a
period of five (5) years or until the expiration of
three (3) years following the termination of any
Employment Agreement between [Scherer] as the surviving
corporation and a Principal Stockholder, whichever is
later, such Principal Stockholder shall not anywhere in
the United States and Canada, directly or indirectly,
by or for themselves or as the agent of another or
through others as their agent:
(a) promote, sell, license, distribute
or otherwise deal in products or services
which are in competition with those of
[Scherer] or any of its subsidiaries;
(b) own, manage, operate, be compensated
by, participate in, render advice to, have
any right to or interest in any business
directly or indirectly engaged in the design,
production, sale or distribution of products
or services directly competitive with
[Scherer] or any of its subsidiaries; or
(c) solicit or accept any business from
customers of [Scherer] or any of its
subsidiaries for products or services
directly competitive with those of [Scherer]
or any of its subsidiaries, or request,
induce or advise customers of [Scherer] or
any of its subsidiaries to withdraw, curtail
or cancel their business with [Scherer] or
any of its subsidiaries.
* * * * * * *
Section 14.4 No Consideration Paid for Covenant. [The
parties] each recognize and agree that the entire
consideration passing to the Stockholders pursuant to
the Merger represents and constitutes the fair market
value of the shares of Lorvic Stock, and that no
portion thereof represents payment for the covenants
not to compete by the Principal Stockholders set forth
in Section 14.1 or in the Employment Agreements
attached hereto * * * For federal and state income tax
purposes neither [of the parties] will treat any
portion of such consideration as representing payment
for said covenants not to compete.
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Last modified: May 25, 2011