AGREEMENT
---------
This Agreement made and entered into this _____ day of July, 2000, by and
between DATANET TANGIBLE PRODUCTS, LLC, a North Carolina limited liability
company (hereinafter referred to as "Seller") and XXXXXXX COMPUTER RESOURCES,
INC., a Delaware corporation (hereinafter referred to as "Purchaser").
W I T N E S S E T H :
WHEREAS, Seller is a full-service provider of a variety of computer service and
support solutions, including installation, training, set-up and consultation,
to large and medium size commercial, governmental and other professional
customers throughout the Raleigh, North Carolina Metropolitan area; and
WHEREAS, simultaneously with the execution of this Agreement, Seller and
Purchaser have entered into an Asset Purchase Agreement ("Asset Purchase
Agreement") whereby Seller has sold to Purchaser substantially all of the assets
of Seller relating to Seller's Business of marketing and selling a broad range
of microcomputers and related products including equipment selection,
procurement and configuration; and
WHEREAS, the Purchaser would not have entered into the Asset Purchase Agreement
with Seller without the consent of Seller to enter into this Covenant Not to
Compete Agreement; and
WHEREAS, pursuant to Sections 7.1 and 14.2(d)(vi) of said Asset Purchase
Agreement, Seller 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 Asset
Purchase Agreement, the parties hereto agree as follows:
1. In consideration of the payments to be made by Purchaser to Seller for
its assets, Seller covenants and agrees that for a period equal to five (5)
years from the closing of the Asset Purchase Agreement of even date, Seller will
not, or 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 Purchaser or any
affiliate or subsidiary thereof relating to the Business of Purchaser, as
defined below; or
(b) Attempt to seek or cause any clients or customers of Purchaser or any
such affiliate or subsidiary relating thereto to refrain from continuing their
patronage of the Business of Purchaser; or
(c) Engage in the Business of Purchaser in any state in which Purchaser or
its subsidiaries has an office during the term of this Agreement. A list of the
states in which Purchaser and its subsidiaries currently transact business is
attached hereto as Exhibit A; or
(d) Knowingly employ or engage, or attempt to employ or engage, in any
capacity, any person in the employ of the Purchaser or any affiliate or
subsidiary.
(e) Nothing in this Agreement shall prohibit Seller 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 Purchaser or any of its subsidiaries.
For purposes of this Section, the "Business of Purchaser" 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 computer hardware,
software, peripheral devices or related products;
(ii) Sale or servicing, whether at the wholesale or retail level, or
leasing or renting, of computer hardware, software, peripheral devices or
related products;
(iii) Sale, servicing, or supporting of microcomputer products,
microcomputer support solutions and computer integration products, peripheral
devices and related products and the sale of networking services; and
(iv) Any other business activity which can reasonably be determined to be
competitive with the principal business activity being engaged in by Purchaser
or any of its subsidiaries.
Seller has carefully read all the terms and conditions of this Paragraph 1 and
has given careful consideration to the covenants and restrictions imposed upon
Seller herein, and agrees that the same are necessary for the reasonable and
proper protection of Seller's Business acquired by Purchaser and have been
separately bargained for and agrees that Purchaser has been induced to enter
into the Asset Purchase Agreement and pay the consideration described in
Paragraph 2 by the representation of Seller that it will abide by and be bound
by each of the covenants and restrictions herein; and Seller agrees that
Purchaser 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. Seller hereby acknowledges that each and every one
of said covenants and restrictions is reasonable with respect to the subject
matter, 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 Asset Purchase Agreement, is being entered into to protect
the legitimate business interests of Purchaser, 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 on-going 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 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.
2. The consideration for Seller's covenant not to compete shall be One
Dollar ($1.00) and other valuable consideration, including the consideration
paid by the Purchaser to Seller pursuant to an Asset Purchase Agreement to which
Seller and Purchaser are parties of even date herewith.
3. The terms and conditions of this Agreement shall be binding upon the
Seller and Purchaser, and their successors and assigns.
4. This Agreement shall be construed in accordance with and governed by the
laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
SELLER:
------
DATANET TANGIBLE PRODUCTS, LLC
MEMBER:
DATANET, INC., a North Carolina corporation
By: _____________________________________
Xxxxxxx Xxxxx, President
PURCHASER:
---------
XXXXXXX COMPUTER RESOURCES, INC.
By: ___________________________________
Xxxxxxx X. Xxxxxxx, Chief Financial Officer
EXHIBIT A
---------
STATES IN WHICH PURCHASER
AND/OR SUBSIDIARIES OR OTHER
AFFILIATES TRANSACT BUSINESS
1. Alabama
2. Arkansas
3. California
4. Florida
5. Georgia
6. Indiana
7. Illinois
8. Iowa
9. Kentucky
10. Michigan
11. Minnesota
12. Mississippi
13. North Carolina
14. Ohio
15. Oklahoma
16. Pennsylvania
17. South Carolina
18. Tennessee
19. Texas
20. Virginia
21. West Virginia
