AGREEMENT
This Agreement made and entered into this ____ day of
____________, 1997, by and between XXXXXXX X. XXXX
(hereinafter referred to as "Owner") and XXXXXXX COMPUTER
RESOURCES OF SOUTH CAROLINA, INC., a South Carolina
corporation (hereinafter referred to as "Xxxxxxx").
W I T N E S S E T H :
WHEREAS, simultaneously with the execution of this
Agreement, Xxxxxxx entered into an Agreement and Plan of
Reorganization ("Merger Agreement") with THE COMPUTER STORE,
INC., a South Carolina corporation ("CSI"), Owner, XXXXXX X.
XXX and XXXXXX X. XXXXXXXX for the merger of CSI with and
into Xxxxxxx; and
WHEREAS, immediately prior to the Effective Date (as defined
in the Merger Agreement) Owner owned six and 25/100 percent
(6.25%) of the outstanding stock of CSI; and
WHEREAS, Xxxxxxx would not have entered into the Merger
Agreement with CSI without the consent of Owner to enter
into this covenant not to compete agreement; and
WHEREAS, pursuant to Sections 3 and 11.2(g) of said Merger
Agreement, Owner agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained and in consideration of the
execution and closing of the Merger Agreement, the parties
hereto agree as follows:
1. As an inducement for Xxxxxxx to enter into the Merger
Agreement with CSI (6.25% of the stock of which is owned by
Owner), Owner covenants and agrees that for a period equal
to the later of (i) five (5) years from the Effective Date
as defined in the Merger Agreement or (ii) one (1) year
after the termination of Owner's employment with Xxxxxxx
under an Employment Agreement executed by and between the
Owner and Xxxxxxx of even date herewith, Owner neither by
himself nor with any other person, corporation or entity,
directly or indirectly, by stock or other ownership,
investment, management, employment or otherwise, or in any
relationship whatsoever:
(a) Solicit, divert or take away, or attempt to
solicit, divert or take away, any of the business, clients,
customers or patronage of Xxxxxxx, its Parent Corporation
(as defined in Paragraph 4 of this Agreement) or any
subsidiary thereof relating to the Business of Xxxxxxx, as
defined below; or
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(b) Attempt to seek or cause any clients or customers
of Xxxxxxx, its Parent Corporation or any any of their
subsidiaries to refrain from continuing their patronage of
the Business of Xxxxxxx; or
(c) Engage in the Business of Xxxxxxx in any state in
which Xxxxxxx, its Parent Corporation or any of their
subsidiaries have an office during the term of Owner's
employment by Xxxxxxx. A list of the states in which
Xxxxxxx, its Parent Corporation, and any of their
subsidiaries currently transact business is attached hereto
as Exhibit A;
(d) Knowingly employ or engage, or attempt to employ
or engage, in any capacity, any person in the employ of
Xxxxxxx, or its Parent Corporation or any of their
subsidiaries.
(e) Nothing in this Agreement shall prohibit Owner
from owning or purchasing less than five percent (5%) of the
outstanding stock of any publicly traded company whose stock
is traded on a nationally or regionally recognized stock
exchange or is quoted on NASDAQ or the OTC Bulletin Board or
from taking any action described in items 1(b) - (d) above
for the benefit of or on behalf of Xxxxxxx, its Parent
Corporation, or any of their subsidiaries.
For purposes of this Section, the "Business of Xxxxxxx"
shall mean any person, corporation, partnership or other
legal entity engaged, directly or indirectly, through
subsidiaries or affiliates, in the following line of
business:
(i) Distributing of computer hardware, software,
peripheral devices, and related products and services to
other entities or persons engaged in any manner in the
business of the distribution, sale, resale or servicing,
whether at the wholesale or retail level, or leasing or
renting, of personal computer hardware, software, peripheral
devices or related products;
(ii) Sale or servicing, whether at the wholesale or
retail level, or leasing or renting, of personal computer
hardware, software, peripheral devices or related products;
and
(iii) Sale or servicing of microcomputer products
and computer integration products, peripheral devices and
related products and the sale of microcomputer products and
computer integration and networking services.
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Owner has carefully read all the terms and conditions
of this Paragraph 1 and has given careful consideration to
the covenants and restrictions imposed upon Owner herein,
and agrees that the same are necessary for the reasonable
and proper protection of the business of CSI acquired by
Xxxxxxx and have been separately bargained for and agrees
that Xxxxxxx has been induced to enter into the Merger
Agreement and pay the consideration described in Paragraph 2
by the representation of Owner that he will abide by and be
bound by each of the covenants and restrictions herein; and
Owner agrees that Xxxxxxx will suffer irreparable injury in
the event of a breach by Owner, and Owner agrees that
Xxxxxxx is entitled to injunctive relief in the event of any
breach of any covenant or restriction contained herein in
addition to all other remedies provided by law or equity.
Owner hereby acknowledges that each and every one of said
covenants and restrictions is reasonable with respect to the
subject matter, the line of business, the length of time and
geographic area embraced therein, and agrees that
irrespective of when or in what manner this agreement may be
terminated, said covenants and restrictions shall be
operative during the full period or periods hereinbefore
mentioned and throughout the area hereinbefore described.
The parties acknowledge that this Agreement, which
Agreement is ancillary to the main thrust of the Merger
Agreement, is being entered into to protect a legitimate
business interest of Xxxxxxx including, but not limited to,
(i) trade secrets; (ii) valuable confidential business or
professional information that otherwise does not qualify as
trade secrets; (iii) substantial relationships with specific
prospective or existing customers or clients; (iv) client or
customer good will associated with an ongoing business by
way of trade name, trademark, or service xxxx, a specific
geographic location, or a specific marketing or trade area;
and (v) extraordinary or specialized training. In the event
that any provision or portion of this Paragraph 1 shall for
any reason be held invalid or unenforceable, it is agreed
that the same shall not affect the validity or
enforceability of any other provision of Paragraph 1 of this
Agreement, but the remaining provisions of Paragraph 1 of
this Agreement shall continue in force and effect; and that
if such invalidity or unenforceability is due to the
reasonableness of the line of business, time or geographical
area covered by certain covenants and restrictions contained
in Paragraph 1, said covenants and restrictions shall
nevertheless be effective for such line of business, period
of time and for such area as may be determined by
arbitration or by a Court of competent jurisdiction to be
reasonable.
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2. The consideration for Owner's covenant not to compete
shall be One Dollar ($1.00) and other valuable
consideration, including consideration paid by the Xxxxxxx
to Owner pursuant to the Merger Agreement.
3. The terms and conditions of this Agreement shall be
binding upon the Owner and Xxxxxxx, and their respective
successors, heirs and assigns, including, but not limited to
the Parent Corporation, in the event Xxxxxxx is merged or
liquidated into the Parent Corporation during the term of
this Agreement.
4. The term "Parent Corporation," as such term is used
herein, means Xxxxxxx Computer Resources, Inc., a Delaware
corporation.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
OWNER:
__________________________________
XXXXXXX X. XXXX
XXXXXXX:
XXXXXXX COMPUTER
RESOURCES OF SOUTH CAROLINA,
INC.
By:________________________________
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EXHIBIT A
STATES IN WHICH XXXXXXX
AND/OR ITS PARENT CORPORATION
AND/OR SUBSIDIARIES TRANSACT BUSINESS
1. Alabama
2. Florida
3. Indiana
4. Iowa
5. Kentucky
6. North Carolina
7. Ohio
8. South Carolina
9. Tennessee
10. West Virginia
??
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