EXHIBIT 10.49
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (the "AGREEMENT") is made and entered
into as of this 15th day of December, 1999, by and among XXXXX X. XXXXXX (the
"SELLER"), QAD INC., a Delaware corporation (the "PURCHASER") and ENTERPRISE
ENGINES, INC. (the "COMPANY").
RECITALS
A. The Seller is the legal and beneficial owner of Two Million One
Hundred Thousand (2,000,100) shares of common stock, without par value, of the
Company, constituting One Hundred Percent (100%) of the issued and outstanding
shares of common stock of the Company (the "SHARES");
B. The Purchaser has agreed to purchase the Shares pursuant to the
terms of the Stock Purchase Agreement dated December 15, 1999 (the "PURCHASE
AGREEMENT") by and between the Seller, the Purchaser and the Company;
C. The Company has, is and plans to continue carrying on in the
business of the Company. The Company and its business, trademarks and trade
names have established a favorable reputation and/or recognition throughout the
world; and
D. In order to protect the name, goodwill and business of the Company
and as a condition to and in consideration of the execution, delivery and
performance of the Purchase Agreement by the Purchaser, the Seller has agreed to
(i) refrain from competing with the Company or the Purchaser, as set forth in
this Agreement and (ii) refrain from making disparaging comments about the
Purchaser or the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. COMPETITION
1.1 AGREEMENT NOT TO COMPETE.
(a) The Seller will refrain, for a period of two (2) years
from the date hereof, either alone or in conjunction with any other Person, or
directly or indirectly through his present or future Affiliates, from:
(i) employing, engaging or seeking to employ or
engage any Person who within the prior twelve (12) months had been an
officer or employee of the Company or the Purchaser;
1
(ii) causing or attempting to cause (A) any client,
customer or supplier of the Company or the Purchaser to terminate or
materially reduce its business with the Company or the Purchaser, or
(B) any officer, employee or consultant of the Company or the Purchaser
to resign or sever a relationship with the Company or the Purchaser;
(iii) disclosing (unless compelled by judicial or
administrative process) or using any confidential or secret information
relating to the Company or the Purchaser, or any of their respective
clients, customers or suppliers; or
(iv) competing with, participating or engaging in, or
otherwise lending assistance (financial or otherwise) to any Person
participating or engaged in selling, creating or developing Enterprise
Applications Software for businesses engaged in manufacturing,
distribution or supply chain management functions which involves any of
the functionality of the E-Xxxx System as further described below.
EEI has designed and is currently building a set of technologies for
integrating and executing business models known as the E-Xxxx System.
These technologies include the following:
APPLICATION INTERFACE: This interface surrounds all the other
functionality listed below. It is the interface to which all
applications are written and hides the details of transactions,
collections, naming, events, etc. from the application programmer.
TRANSACTIONS: These are all the transactional semantics and mechanics
that control the concurrency and integrity of every unit of work in a
running application. This advanced transaction model will allow
multiple transactional views to be open for each client, allowing end
users to manage multiple work orders concurrently.
DYNAMIC UI: This is the infrastructure to support dynamic Java user
interfaces. The UI, which can be either a Java applet or a Java
application, can respond dynamically to changes in the model. This
infrastructure also provides all the smart caching necessary to make
these UIs perform in mission critical applications that require fast
response times.
QUERY AND INDEXING: This is the subsystem necessary for the application
to do the searching and reporting on all of the data within the
application.
EVENT NOTIFICATION: this functionality allows the application
programmer to send events at a predetermined time and rate to any other
object(s) within the system
SYSTEMS INTERFACE: This is the infrastructure to support the interfaces
that will be used to communicate with external entities like other ERP
or
OBJECT IMPORT/EXPORT: This subsystem allows us to migrate object data
from one version of an application to another.
2
BUSINESS BACKPLANE: A new architecture for business components to be
developed by EEI and integrated into the Engine. It includes components
interface definitions and supports independent component upgrades.
ELECTRONIC EXCHANGE: A market-based message broker for identifying and
selecting among candidate providers for business requests. Exchanges
may be used at levels ranging from low-level data requests to
Internet-based buying and selling.
(b) The parties hereto recognize that the Laws and public
policies of various jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth in this Section. It is
the intention of the parties that the provisions of this Section be enforced to
the fullest extent permissible under the Laws and policies of each jurisdiction
in which enforcement may be sought, and that the unenforceability (or the
modification to conform to such Laws or policies) of any provisions of this
Section shall not render unenforceable, or impair, the remainder of the
provisions of this Section. Accordingly, if any provision of this Section shall
be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such provision in the particular jurisdiction in which such determination is
made and not with respect to any other provision or jurisdiction.
(c) The parties hereto acknowledge and agree that any remedy
at Law for any breach of the provisions of this Section would be inadequate, and
Seller hereby consents to the granting by any court of an injunction or other
equitable relief, without the necessity of actual monetary loss being proved, in
order that the breach or threatened breach of such provisions may be effectively
restrained.
1.2 CONSIDERATION FOR NONCOMPETITION AGREEMENT. The
Purchaser will pay to the Seller ONE HUNDRED THOUSAND DOLLARS ($100,000) for
this covenant payable in twelve (12) equal monthly installments commencing on
December 16, 1999.
2. REMEDIES.
2.1 INJUNCTIVE RELIEF. The Seller acknowledges and
agrees that the covenants and obligations contained in this Agreement relate to
special, unique and extraordinary matters, that the skills, talents, experience
and knowledge of the Seller are very valuable and, if used to compete with the
Company or the Purchaser, or if the Seller is permitted to disclose confidential
information or permitted to make negative or disparaging comments about the
Company, such competition, disclosure and/or comments will greatly decrease the
value of the business transferred to the Purchaser pursuant to the Purchase
Agreement, and that a violation of any of the terms of this Agreement will cause
the Purchaser and the Company irreparable injury for which adequate remedy at
law is not available. Therefore, in addition to other remedies that the
Purchaser or the Company may have, the Seller agrees that the Purchaser shall be
entitled to an injunction, restraining order or other equitable relief from any
court of competent jurisdiction, restraining the Seller from committing any
violation of the covenants and obligations set forth in this Agreement, together
with an award of attorneys' fees to be set by the Court.
3
2.2 REMEDIES CUMULATIVE. The Purchaser's rights and
remedies under SECTION 2.1 above are cumulative and are in addition to, and not
in lieu of, any other rights and remedies the Purchaser may have at law or in
equity.
3. MISCELLANEOUS.
3.1 NOTICE. All notices, demands and requests
required by this Agreement shall be in writing and shall be deemed to have been
given or made for all purposes (i) upon personal delivery, (ii) one (1) day
after being sent, when sent by professional overnight courier service, (iii)
five (5) days after posting when sent by registered or certified mail, or (iv)
on the date of transmission when sent by telegraph, telegram, telex or other
form of "hard copy" transmission, to either party hereto at the address set
forth below or at such other address as either party may designate by notice
pursuant to this SECTION 3.1.
If to Purchaser: QAD Inc.
0000 Xxx Xxxx
Xxxxxxxxxxx, XX 00000
Attn: General Counsel
Facsimile: 000-000-0000
With copy to: Xxxxxx X. Xxxx, Esq.
Nida & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Facsimile No.: 000-000-0000
If to Seller: Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxx Xxxxx, xxxxxxxxxx 00000
Facsimile: none
With copy to: Heller, Ehrman, White & XxXxxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxx X. X'Xxxx
Facsimile No.: 000-000-0000
If to Company: Enterprise Engines, Inc.
c/o QAD Inc.
10,000 Midlantic, #000 Xxxx
Xx. Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
Facsimile No.: 000-000-0000
4
With copy to: Xxxxxx X. Xxxx, Esq.
Nida & Xxxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Facsimile No.: 000-000-0000
This Agreement shall be binding on, and shall inure
to the benefit of, the parties hereto and their respective heirs, legal
representatives, successors, and assigns; PROVIDED, HOWEVER, that the Seller may
not assign, transfer or delegate his rights or obligations hereunder and any
attempt to do so shall be void.
3.3 ENTIRE AGREEMENT. This Agreement and the Purchase
Agreement contain the entire agreement of the parties with respect to the
subject matter hereof, and all other agreements, written or verbal, are of no
further force or effect.
3.4 AMENDMENT. This Agreement may be modified or
amended only by a written agreement signed by the Purchaser and the Seller.
3.5 WAIVERS. No waiver of any term or provision of
this Agreement will be valid unless such waiver is in writing and signed by the
party against whom enforcement of the waiver is sought. The waiver of any term
or provision of this Agreement shall not apply to any subsequent breach of this
Agreement.
3.6 CAPTIONS AND CROSS-REFERENCES. Captions to the
various sections in this Agreement are for the convenience of the parties only
and shall not affect the meaning or interpretation of this Agreement. All
cross-references in this Agreement, unless specifically directed to another
agreement or document, refer to provisions within this Agreement.
3.7 COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but together
they shall constitute one and the same instrument.
3.8 SEVERABILITY. The terms and provisions of this
Agreement shall be deemed severable, and if any term, provision or part of any
provision is held illegal, void or invalid under applicable law, the same shall
be deleted or changed to the minimum extent necessary to make it, as so changed,
or the remainder of the provision in the case of a deletion of any part of a
provision, legal, valid and binding. If any term or provision of this Agreement
is held illegal, void or invalid in its entirety, the remaining terms and
provisions of this Agreement shall not in any way be affected or impaired but
shall remain binding in accordance with their terms.
3.9 ARBITRATION. Any dispute relating to this
Agreement shall be resolved in accordance with the arbitration provisions set
forth in the Purchase Agreement.
5
3.10 ATTORNEYS' FEES AND COSTS. In the event of any
action at law or in equity between the parties hereto to enforce any of the
provisions hereof, the unsuccessful party or parties to such litigation shall
pay to the successful party or parties all costs and expenses including
reasonable attorneys' fees, incurred therein by such successful party or
parties, and if such successful party or parties shall recover judgment in any
such action or proceeding, such costs, expenses, and attorneys fees may be
included in and as part of such judgment. The successful party shall be the
party who is entitled to recover his costs of suit, whether or not the suit
proceeds to final judgment. If no costs are awarded, the successful party shall
be determined by the court.
3.11 GOVERNING LAW AND FORUM. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PURCHASER, THE COMPANY AND THE SELLER HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT
THE LAW OF CONFLICTS, OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. EXCEPT AS SET FORTH IN SECTION
3.9 ABOVE, ANY AND ALL ACTIONS AND PROCEEDINGS ARISING OUT OF OR RELATED
DIRECTLY OR INDIRECTLY TO THIS AGREEMENT SHALL BE LITIGATED IN ANY STATE COURT
OR FEDERAL COURT SITTING IN SAN FRANCISCO, STATE OF CALIFORNIA, AND EACH PARTY
HERETO HEREBY EXPRESSLY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT AND TO VENUE THEREIN AND CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY CERTIFIED OR REGISTERED MAILING OF THE SUMMONS AND
COMPLAINT THEREIN DIRECTED TO THE PARTIES IN THEIR RESPECTIVE ADDRESSES SET
FORTH IN SECTION 3.1 HEREOF.
3.12 COVENANT TO PERFORM NECESSARY ACTS. Each party
hereto agrees to perform any further acts and execute and deliver any further
documents which may be reasonably necessary or otherwise reasonably required to
carry out the provisions of this Agreement.
3.13 NUMBER AND GENDER. Words in the singular shall
include the plural, and words in a particular gender shall include either or
both genders when the context in which such words are used indicate that such is
the intent.
6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
PURCHASER:
QAD Inc.
By:____________________________________________
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
SELLER:
----------------------------------------------
Xxxxx X. Xxxxxx
COMPANY:
ENTERPRISE ENGINES, INC.
By:___________________________________________
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive Officer
7
