NON-COMPETITION AGREEMENT
THIS AGREEMENT dated March 31, 1998 is made by and between Technology
Services Corporation, a Delaware corporation ("Buyer"), and C & L Acquisitions,
Inc. ("Seller").
RECITALS
A. Buyer and Seller have entered into a Stock Purchase Agreement dated
March 31, 1998 (the "Purchase Agreement") pursuant to which the Buyer has agreed
to purchase from Seller all of Seller's capital stock in Valley Communications,
Inc., a California corporation (VCI") upon the terms and conditions contained in
the Purchase Agreement; and
B. The execution and delivery of this Agreement is a condition
precedent to the obligation of the Purchaser to complete the transactions
contemplated in the Purchase Agreement;
For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties agree as follows:
ARTICLE I
INTERPRETATION
1. Definitions. In this Agreement, the following terms shall have the
meanings set out below unless the context requires otherwise:
"Affiliate" means, with respect to any Person, any other Person who directly or
indirectly controls, is controlled by, or is under direct or indirect common
control with, such Person, and includes any Person in like relation to an
Affiliate. A Person is deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such other Person, whether through the ownership
of voting securities, by contract or otherwise; and the term "controlled" has a
corresponding meaning.
"Agreement" means this Agreement, including the Schedules to this Agreement as
it or they may be amended or supplemented from time to time, and the expressions
"hereof", "herein", "hereto", "hereunder", "hereby" and similar expressions
refer to this Agreement and not to any particular Section or other portion of
this Agreement.
"Business" means the business carried on by and intended or proposed to be
carried on by Buyer.
"Business Day" means any day except Saturday, Sunday or any day on which banks
are generally not open for business in San Francisco, California. "Party" means
a party to this Agreement and any reference, to a party includes its successors
and permitted assigns; "Parties" means every Party.
"Person" is to be broadly interpreted and includes an individual, a corporation,
a limited liability company, a partnership, a trust, an unincorporated
organization, the government of a country or any political subdivision thereof,
or any agency or department of any such government, and the executors,
administrators or other legal representatives of an individual in such capacity.
2. Article and Section Headings. The division of this Agreement into Articles
and Sections and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement.
3. Number and Gender. Unless the context requires otherwise, words importing the
singular include the plural and vice versa and words importing gender include
all genders.
4. Section and Schedule References. Unless the context requires otherwise,
references in this Agreement to Sections or Schedules are to Sections or
Schedules of this Agreement.
ARTICLE II
NON-COMPETITION
1. Non-Competition by Seller. Without the prior written consent of the
Purchaser, and at any time within the period of two years following the date of
termination of employment or the date of this Agreement, which ever is later,
Seller shall not, and shall ensure that its Affiliates do not, either
individually or in partnership or jointly or in conjunction with each other or
any Person, as principal, agent, consultant, lender, contractor, employer,
employee, investor or shareholder, or in any other manner, directly or
indirectly, advise, manage, carry on, establish, acquire control of, be engaged
in, invest in or lend money to, guarantee the debts or obligations of, or permit
VCI's name or any part thereof to be used or employed by any Person that
operates, is engaged in or has an interest in, a business that is Substantially
Similar To or Competes with the Business in California and Nevada.
"Substantially Similar To" shall mean a business that derives more than 20% of
its revenues from the design, engineering, installation and testing of major
structured wiring systems for voice and data networking, network integration
services and LAN/WAN maintenance services. Competing with the Business means
directly or indirectly engaging in or permitting the solicitation or sale to any
of the present customers of the Business of any products or services of the
particular type sold by the Business as at the date of this Agreement. In
connection with this Section, Buyer acknowledges that nothing herein shall
preclude Seller's affiliate, Coyote Technologies, LLC, from continuing to market
and sell its DSS switches, ancillary services, and equipment to any customers.
During the life of this Agreement, if Seller should be placed in violation of
the covenant by virtue of an acquisition, Seller shall have a period of six
months from the date of such acquisition to dispose of the portion of the
business that causes the violation. 2. Employees. Seller shall not, and shall
ensure that its Affiliates do not, for a period of two years from the date of
this Agreement, without the prior written consent of the Purchaser, induce any
employee employed or to be employed in the Business at the date of this
Agreement to leave such employ or offer to employ or employ such employee.
3. Severability. Each provision of this Agreement shall constitute a separate
and distinct covenant and shall be severable from all other such separate and
distinct covenants contained in this Agreement. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability and shall be severed from the balance of this Agreement, all
without affecting the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
4. Remedies. Seller acknowledge that a breach by it or any of its Affiliates of
any of the covenants contained in this Agreement would result in damages to
Purchaser and that Purchaser may not be adequately compensated for such damages
by monetary award alone. Accordingly, Seller agrees that in the event of any
such breach or threatened breach, in addition to any other remedies available at
law or otherwise, Purchaser shall be entitled as a matter of right to apply to a
court of competent jurisdiction for relief by way of injunction, restraining
order, decree or otherwise as may be appropriate to ensure compliance by Seller
and its Affiliates with the provisions of this Agreement. Any remedy expressly
set out in this Agreement shall be in addition to and not inclusive of or
dependent upon the exercise of any other remedy available at law or otherwise.
5. Reasonableness of Restrictions. The Parties agree that all restrictions in
this Agreement are necessary and fundamental to the protection of the respective
businesses of the Parties and are reasonable and valid. All defenses to the
strict enforcement of this Agreement against the Parties or any of their
Affiliates are hereby waived.
ARTICLE III
GENERAL
1. Successors and Assigns. This Agreement shall inure to the benefit of, and be
binding on, the Parties and their respective successors and permitted assigns.
No Party may assign or transfer, whether absolutely, by way of security or
otherwise, all or any part of its respective rights or obligations under this
Agreement without the prior written consent of the other.
2. Notices. Any notice or other communication required or permitted to be given
or made under this Agreement shall be in writing and shall be effectively given
and made if (i) delivered personally, (ii) sent by prepaid courier service, or
(iii) sent prepaid by fax or other similar means of electronic communication, in
each case to the applicable address set out below: if to Seller to:
Xxx Xxxxxx, President
Coyote Network Systems, Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxxx
Reinhart, Boerner, Van Deuren, Xxxxxx & Xxxxxxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
if to Purchaser to:
Xxx X. Xxxxxx
Technology Services Corporation
0000 Xxxxxxx
Xxxxxxxxxx, XX 00000
with copies to:
Xxxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Any such communication so given or made shall be deemed to have been given or
made and to have been received on the day of delivery if delivered (i)
personally, or (ii) by a nationally recognized overnight courier, or on the day
of faxing or sending by other means of recorded electronic communication,
provided that such day in either event is a Business Day and such communication
is so delivered, faxed or sent before 4:30 p.m. on such day. Otherwise, such
communication shall be deemed to have been given and made and to have been
received on the next following Business Day. Any such communication given or
made in any other manner shall be deemed to have been given or made and to have
been received only upon actual receipt.
Any Party may from time to time change its address by notice of the other Party
given in the manner provided by this Section.
3. Amendment. No amendment of this Agreement shall be effective unless made in
writing and signed by the Parties.
4. Waiver. A waiver of any default, breach or non-compliance under this
Agreement shall not be effective unless in writing and signed by the Party to be
bound by the waiver. No waiver shall be inferred from or implied by any failure
to act or delay in acting by a Party in respect of any default, breach or
non-observance or by anything done or omitted to be done by any other Party. The
waiver by a Party of any default, breach or non-compliance under this Agreement
shall not operate as a waiver of that Party's rights under this Agreement in
respect of any continuing or subsequent default, breach or non-observance
(whether of the same or any other nature).
5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware so applied to agreements made
and performed in Delaware by residents of the State of Delaware.
6. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which taken together
shall be deemed to constitute one and the same instrument. Counterparts may be
executed either in original or faxed form and the Parties adopt any signatures
received by a receiving fax machine as original signatures of the Parties;
provided, however, that any Party providing its signature in such manner shall
promptly forward to the other Parties an original of the signed copy of this
Agreement which was so faxed.
[This space intentionally left blank.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
C & L ACQUISITIONS, INC. TECHNOLOGY SERVICES CORPORATION
/s/ Xxxxxx X. Xxxxxx /s/ Xxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xxx X. Xxxxxx
Title: President Title: President
