NONCOMPETE AGREEMENT
THIS NONCOMPETE AGREEMENT (this "Agreement"), dated as of the 22nd day
of November, 1999, is by and between Xxx CATV Corporation., a Nebraska
corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx ("Shareholder").
RECITALS
WHEREAS, Shareholder was a stockholder of Diamond W Investments, Inc.
("Diamond") and is a party to that certain Agreement and Plan of Merger of
even date herewith (the "Merger Agreement") by and among the Company, TULSAT
Corporation, an Oklahoma corporation, Diamond and ADDvantage Media Group, Inc.
("AMG") whereby Diamond has been merged with and into the Company and
Shareholder and the other shareholder of Diamond, Xxxxx X. Xxxxxxxx, have
received AMG preferred stock and a promissory note and in exchange for their
shares of the capital stock of Diamond; and
WHEREAS, the parties have agreed in the Merger Agreement that, as a
condition to the Closing of the merger contemplated thereby, the Company and
Shareholder shall enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth herein, the parties hereto do hereby agree as follows:
1. Covenants and Commitments of Shareholder.
(a) Confidentiality. The term "Confidential Information" shall
include, without limitation, the Company's financial, marketing and
sales information, vendor, customer and client lists, contracts and
licenses, trade secrets, business arrangements, computer programs and
related business methods and practices. Shareholder recognizes and
agrees that Confidential Information is proprietary to the Company.
Shareholder agrees that she will not use for herself or for others or
disclose or authorize disclosure to others any Confidential Information.
All documents, including all copies thereof, and all other tangible
property (including, without limitation, magnetic tapes and disks) made
by or made available to Shareholder, whether or not such tangible items
contain Confidential Information are and will be the property of the
Company and will be delivered by Shareholder to the Company immediately
upon the execution hereof. Shareholder's obligations specified in this
Section shall not apply, and Shareholder shall have no further
obligations with respect to any items of Confidential Information which:
(i) are disclosed in a printed publication available to
the public, are described in an issued patent anywhere in the
world, are otherwise in the public domain at the time of
disclosure, or become publicly known through no wrongful act on
the part of Shareholder who received such Confidential
Information;
(ii) become known to Shareholder through disclosure by
sources other than the Shareholder, which sources have the right
to disclose such Confidential Information; and
(iii) are disclosed pursuant to the requirement of a
government agency or any law requiring disclosure thereof,
provided that the Company is provided with prior written notice of
any such disclosure.
A breach of the foregoing obligations shall not be absolved by the subsequent
occurrence of any of the above exceptions.
(b) Solicitation of Customers. Shareholder agrees that for so
long as Xxxxx X. Xxxxxxxx is subject to the restrictions of Section 4(b)
of the Employment Agreement entered into with the Company ("Employment
Agreement"), she will not directly or indirectly:
(i) solicit any person or entity with whom the Company
currently conducts business with the Company for the purpose of
selling any products which are competitive with the products sold
by the Company or of providing any services which are competitive
with the services provided by the Company, including services
heretofore provided by Diamond; or
(ii) accept any order or contract from any person or entity
with whom the Company currently conducts business with the Company
for the purpose of selling products or providing the types of
services which are competitive with those sold or provided by the
Company.
(c) Restriction. For so long as Xxxxx X. Xxxxxxxx is subject to
the restrictions of Section 4(c) of the Employment Agreement,
Shareholder shall not, directly or indirectly, own, operate, participate
in or be connected with, as an officer, consultant, Shareholder,
partner, stockholder or otherwise, any business, individual,
partnership, firm, corporation or other entity engaged in any business
engaged in by the Company including, but not limited to, manufacturing,
remanufacturing, selling or distributing products which are competitive
with the products of the Company, or providing services which are
competitive with the services provided by the Company. Nothing herein
shall prohibit Shareholder from owning not more than five percent (5%)
of the outstanding shares of a publicly held corporation if such
ownership does not involve managerial or operational responsibility.
The restrictions described in this paragraph shall apply only with
respect to the market areas in which the Company has operations or
employees or has otherwise conducted business as of the date hereof.
Shareholder agrees that the foregoing restrictions are reasonable both
as to time and geographical extent given the nature and scope of the
Company's present business. Upon any event of default under the
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Promissory Note of even date herewith issued to the Shareholder and her
spouse pursuant to the Merger Agreement, the restrictions contained in
this Section 1(b) and (c) shall cease and be of no further force or
effect if (i) the maker of the Promissory Note has not cured or remedied
such default within 30 days after receipt of written notice thereof, and
(ii) if Shareholder and her spouse are still the holders of the
Promissory Note (i.e., they have not assigned, transferred or
negotiated the Promissory Note to a third party without recourse). Any
failure by the maker to make payments under the Promissory Note because
of a breach by the Shareholder or her spouse of the restrictions
contained in this Agreement or in such Employment Agreement, as
applicable, shall not be deemed an event of default under the Promissory
Note for these purposes.
(d) Enforcement. The invalidity or non-enforceability of
this Section in any respect shall not affect the validity or
enforceability of this Section in any other respect or of any other
provisions of this Agreement. In the event that any provision of this
Section shall be held invalid or unenforceable by a court of competent
jurisdiction by reason of the geographic or business scope or the
duration thereof, such invalidity or unenforceability shall attach only
to the scope or duration of such provision and shall not affect or
render invalid or unenforceable any other provision of this agreement,
and, to the fullest extent permitted by law, this Agreement shall be
construed as if the geographic or business scope or the duration of such
provision had been more narrowly drafted so as not to be invalid or
unenforceable.
2. Notices. The address of Shareholder for the purposes of notices
hereunder shall be her last address as shown on the records of the Company.
Notice by mail shall be by certified or registered mail, postage and
certification or registration charges prepaid. The effective date of notice
by mail shall be three days after mailing or the date of receipt, whichever
shall first occur.
3. Other Agreements. Shareholder warrants to the Company that she
has no obligations inconsistent herewith, that the execution and performance
of this Agreement by her will not constitute a breach of any other Agreement
by which she is bound.
4. Miscellaneous. The language of this Agreement and all parts
hereof shall in all cases be construed as a whole, according to its fair
meaning, and not strictly for or against either party hereto. No waiver
of any provision hereof by any party hereto shall be binding unless such
waiver shall be evidenced by a writing signed by such party. This
Agreement may not be modified in any manner except by instruments in
writing signed by both parties hereto. The headings of the various
paragraphs this Agreement are solely for the purpose of convenience and
shall not be relied upon in construing any provision hereof. For
purposes of this Agreement, the term "Company" shall include its
predecessor, Diamond, and its parent and sibling companies, AMG
and TULSAT.
5. Separability. If any provision of this Agreement is rendered
or declared illegal or unenforceable by reason of any existing or
subsequently enacted legislation or by the decision of any arbitrator or
by any court of competent jurisdiction, the Shareholder and the Company
shall either meet and negotiate substitute provisions or promptly request
the court to substitute provisions for those rendered or declared illegal
or unenforceable to preserve the original intent of this Agreement to the
extent legally possible, but all other provisions of this Agreement shall
remain in full force and effect.
6. Injunction. In the event of breach of any provisions of this
Agreement, the Company shall be entitled to seek damages if determinable
but it is hereby agreed that any such remedy at law is inadequate as to a
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breach of Section 1 of this Agreement, and thus, the Company shall also be
entitled to injunctive relief. Such a breach shall cause the applicable
restrictive time period stated herein to be extended to run from the date
of full compliance with any court-ordered injunction. The prevailing party
shall be entitled to reasonable attorney's fees. The remedies herein
provided shall be cumulative and no single remedy shall be construed as
exclusive of any other or of any remedy provided at law. Failure of the
Company to exercise any remedy at any time shall not operate as a waiver
of the right of the Company to exercise any remedy for the same or
subsequent breach at any time thereafter.
EXECUTED in counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same Agreement, as of the
date herein first above written.
XXX CATV CORPORATION:
.
By: \s\ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, President
\s\ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
