EXECUTION COPY
EXHIBIT 2.6
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NON-COMPETITION
AGREEMENT
THIS NON-COMPETITION AGREEMENT (the "Agreement") dated as of the
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Closing Date by and between MathSoft, Inc., a Massachusetts corporation
("Seller") and MathSoft Corporate Holdings, Inc., a Delaware corporation
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("Buyer"). Capitalized terms used but not otherwise defined herein shall have
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the meanings ascribed to them in the Purchase Agreement (as defined below).
WITNESSETH:
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WHEREAS, MathSoft Engineering & Education, Inc., a Delaware
Corporation and a wholly-owned subsidiary of Seller ("Company"), Seller and
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Buyer have entered into a Stock Purchase Agreement dated as of the Closing Date
(the "Purchase Agreement"), whereby Buyer will purchase all of the outstanding
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shares of capital stock of the Company (the "Transaction");
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WHEREAS, Seller acknowledges that it would be seriously detrimental to
the Buyer if Seller competes with Buyer following the Transaction;
WHEREAS, Buyer acknowledges that it would be seriously detrimental to
the Seller if Buyer competes with Seller following the Transaction;
WHEREAS, in connection with the Transaction, in order to preserve the
value of the Buyer Business (as defined below), including its goodwill and
proprietary information, that is being acquired by Buyer and to preserve the
value of the Seller Business (as defined below), including its goodwill and
proprietary information, the Purchase Agreement contemplates, among other
things, that Seller and Buyer enter into this Agreement, and that this Agreement
become effective upon the closing of the Transaction;
NOW THEREFORE, in consideration of the mutual promises made herein,
the sufficiency of which is hereby acknowledged Seller and Buyer (each a "Party"
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and collectively referred to as the "Parties") hereby agree as follows:
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1. Certain Definitions
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(a) "Buyer Business" is developing, marketing or publishing any software
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product in any form on any media that provides users with the ability to (a)
perform calculations and analyses using "live" natural math notation or (b)
author and publish interactive technical or educational documents in a way that
is provided by the Mathcad and StudyWorks products.
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(b) "Seller Business" is developing, marketing or publishing any software
product in any form on any media based on the S or the R programming languages,
other than Axum as licensed by Seller.
(c) "Buyer Proprietary Information" means any information of a confidential
or proprietary nature pertaining to Buyer's business, technology, finances or
marketing and product strategy including, without limitation, all inventions,
discoveries, research and development information, technical data, ideas,
concepts, methods, processes, formulas, trade secrets, know-how, marketing plans
and strategies, pre-release information directly related to Buyer products or
future product plans, sales figures, sales forecasts, prices, costs or business
practices, and the identity of any strategic partners that have a business
relationship with Buyer, or are in discussions with Buyer regarding a potential
business relationship and all other intangible assets transferred by Seller to
Company on or prior to the date of this Agreement.
(d) "Seller Proprietary Information" means any information of a
confidential or proprietary nature pertaining to Seller's business, technology,
finances or marketing and product strategy including, without limitation, all
inventions, discoveries, research and development information, technical data,
ideas, concepts, methods, processes, formulas, trade secrets, know-how,
marketing plans and strategies, pre-release information directly related to
Seller products or future product plans, sales figures, sales forecasts, prices,
costs or business practices, and the identity of any strategic partners that
have a business relationship with Seller, or are in discussions with Seller
regarding a potential business relationship.
2. Seller Covenant Not to Compete or Solicit
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(a) For a period of three years from the Closing Date (the
"Non-Compete/Non-Solicitation Period"), Seller shall not engage directly or
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indirectly, anywhere in the world (the "Territory"), in Buyer Business, whether
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such engagement is as an officer, director, proprietor, employee, partner,
investor (other than as a passive investor of less than five percent (5%) of the
outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent or other participant in such Buyer Business activities in the
Territory, or assist others in Buyer Business activities in the Territory.
(b) During the Non-Compete/Non-Solicitation Period, Seller shall not
approach or solicit the services of, or initiate discussions with, any employee,
supplier or contractor of Buyer with a view to causing such employee or
contractor to terminate his or her employment or relationship with Buyer, unless
previously agreed to in each specific case by Buyer (provided that this clause
shall not prevent Seller from hiring any employee of Buyer who responds to a
general solicitation, including without limitation a help wanted advertisement
or posting, if Seller has not approached, solicited or otherwise initiated
discussions with such employee).
(c) During the Non-Compete/Non-Solicitation Period, Seller shall not induce
or attempt to induce (including without limitation by soliciting business from)
any customer, supplier, licensee or strategic partner of Buyer to cease doing
business with Buyer or in any way materially interfere with the relationship
between the Buyer and any of its customers, suppliers, licensees or strategic
partners.
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(d) Seller shall not use Buyer Proprietary Information, except to the
extent that such information: (i) was or becomes publicly known, otherwise than
as a consequence of a breach of this Agreement; (ii) was disclosed by Seller to
satisfy a legal demand by a competent court of law or a governmental body
(provided that Seller shall give timely notice to Buyer, under the
circumstances, and an opportunity to contest such disclosure prior to making
such disclosure); or (iii) was received from a third party who Seller reasonably
believes lawfully possessed and delivered such information without restrictions
as to disclosure to Seller and without breach of this Agreement.
3. Buyer Covenant Not to Compete or Solicit
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(a) During the Non-Compete/Non-Solicitation Period, Buyer shall not engage,
directly or indirectly in the Territory, in the Seller Business, whether such
engagement is as an officer, director, proprietor, employee, partner, investor
(other than as a passive investor of less than five percent (5%) of the
outstanding capital stock of a publicly traded corporation), consultant,
advisor, agent or other participant in such Seller Business activities in the
Territory, or assist others in Seller Business activities in the Territory.
(b) During the Non-Compete/Non-Solicitation Period, Buyer shall not
approach or solicit the services of, or initiate discussions with, any employee,
supplier or contractor of Seller with a view to causing such employee or
contractor to terminate his or her employment or relationship with Seller,
unless previously agreed to in each specific case by Seller (provided that this
clause shall not prevent Buyer from hiring any employee of Seller who responds
to a general solicitation, including without limitation a help wanted
advertisement or posting, if Buyer has not approached, solicited or otherwise
initiated discussions with such employee).
(c) During the Non-Compete/Non-Solicitation Period, Buyer shall not induce
or attempt to induce (including without limitation by soliciting business from)
any customer, supplier, licensee or strategic partner of Seller to cease doing
business with Seller or in any way materially interfere with the relationship
between the Seller and any of its customers, suppliers, licensees or strategic
partners.
(d) Buyer shall not use Seller Proprietary Information, except to the
extent that such information: (i) was or becomes publicly known, otherwise than
as a consequence of a breach of this Agreement; (ii) was disclosed by Buyer to
satisfy a legal demand by a competent court of law or a governmental body
(provided that Buyer shall give timely notice to Seller, under the
circumstances, and an opportunity to contest such disclosure prior to making
such disclosure); or (iii) was received from a third party who Buyer reasonably
believes lawfully possessed and delivered such information without restrictions
as to disclosure to Buyer and without breach of this Agreement.
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4. Existing Employee Noncompetition, Nondisclosure and Developments
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Agreements.
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Seller hereby waives as to each of the employees listed on Schedule A (the
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"Transferred Employees") its rights in the noncompetition provisions contained
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in such Transferred Employees' existing Employee Noncompetition, Nondisclosure
and Developments Agreement with Seller only to the extent that, and so long as,
such Transferred Employee is employed by the Company or any successor thereto
and, if during the Non-Compete/Non-Solicitation Period, neither Company nor
Buyer are engaged in the Seller Business.
5. Equitable Relief; Construction of Covenants
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(a) The Parties agree that it would be impossible or inadequate to measure
and calculate the damages from any breach of the covenants set forth in this
Agreement. Accordingly, the Parties agree that if any Party breaches any
provision of this Agreement, the aggrieved Party will have available, in
addition to any other right or remedy otherwise available, the right to obtain
an injunction from a court of competent jurisdiction restraining such breach or
threatened breach and to specific performance of any such provision of this
Agreement. The Parties further agree that no actual damages be required for
such equitable relief. Each Party hereby expressly consents to the issuance of
such injunctive relief, whether in the form of a temporary restraining order or
otherwise, and to the ordering of such specific performance satisfying all
criteria necessary to obtain such injunctive relief or specific performance.
(b) The covenants contained in sections 2 and 3 shall be construed as a
series of separate covenants, one for each country, province, state, city or
other political subdivision of the Territory. Except for geographic coverage,
each such separate covenant shall be identical in terms to the covenant
contained in the preceding paragraphs. If, in any judicial proceeding, a court
refuses to enforce any of such separate covenants (or any part thereof), then
such unenforceable covenant (or such part) shall be eliminated from this
Agreement to the extent necessary to permit the remaining separate covenants (or
portions thereof) to be enforced. In the event that the covenants contained in
sections 2 and 3 are deemed to exceed the time, geographic or scope limitations
permitted by applicable law, then such provisions shall be reformed to the
maximum time, geographic or scope limitations, as the case may be, permitted by
applicable laws.
6. Reasonableness
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The Parties hereby acknowledge and agree that the geographic boundaries,
scope of prohibited activities and term of the non-competition covenants of
sections 2 and 3: (i) are reasonable and are no broader than necessary to
protect the Parties' ongoing business interests and (ii) do not and will not
impose any unreasonable burden upon the Parties.
7. Miscellaneous
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(a) Severability. If any portion of this Agreement is held by a court of
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competent jurisdiction to conflict with any federal, state or local law, such
portion of this Agreement shall be of no force or effect and this Agreement
shall otherwise remain in full force and effect and be construed as if such
portion had not been included in this Agreement.
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(b) No Assignment. No Party shall assign this Agreement or any rights or
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obligations under this Agreement without the prior written consent of the other
Parties.
(c) Notice. All notices and other communications hereunder shall be in
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writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the Parties at the following addresses (or at such other address for a Party
as shall be specified by like notice):
(i) if to Seller, to:
MathSoft, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
#000
Xxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(ii) if to Buyer, to:
MathSoft Corporate Holdings, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: H. Xxxxx Xxxxxx, PC
Telephone: (000) 000-0000
Facsimile No.: (000) 000-0000
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(d) Entire Agreement. This Agreement and the Stock Purchase Agreement
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contain the entire agreement and understanding of the Parties and supersede all
prior discussions, agreements and understandings relating to the subject matter
of this Agreement. This Agreement may not be changed or modified, except by an
agreement in writing executed by all Parties.
(e) Waiver of Breach. The waiver of a breach of any term or provision of
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this Agreement, which must be in writing, shall not operate as or be construed
to be a waiver of any other previous or subsequent breach of this Agreement.
(f) Governing Law. This Agreement shall be governed, construed and
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enforced by the internal laws of the Commonwealth of Massachusetts without
giving effect to any choice or conflict of law provision or rule.
(g) Headings. All captions and section headings used in this Agreement are
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for convenient reference only and do not form a part of this Agreement.
(h) Counterparts. This Agreement may be executed in counterparts, and each
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counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
(i) Jury Trial Waiver. THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN
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ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN CONTRACT OR TORT) BROUGHT BY
ANY OF THE PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT
OF OR IN CONNECTION WITH THE TRANSACTION DOCUMENTS.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Closing Date.
BUYER: SELLER:
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MATHSOFT CORPORATE HOLDINGS, INC. MATHSOFT, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
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Title: President Title: President and Chief Executive
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Officer
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