CONFIDENTIALITY AND NONCOMPETITION AGREEMENT
AGREEMENT made as of February 25, 1999 by and among
MicroFrame, Inc., a New Jersey corporation (the "Company"), LeeMAH DataCom
Security Corporation, a California corporation (the "Seller"), and LeeMAH
Corporation, a California corporation (the "Parent") (the Seller and the Parent,
"Covenantors").
WHEREAS, the parties are simultaneously entering into an Asset
Purchase Agreement pursuant to which the Seller is selling and assigning certain
assets to the Buyer as contemplated therein.
WHEREAS, the parties desire to set forth certain rights and
obligations in connection with confidential information of the Company as well
as set forth the obligation of Covenantors from competing with the Company.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Nondisclosure and Nonuse of Confidential Information.
(a) Covenantors will not disclose or use at any time in any manner
whatsoever any Confidential Information (as defined below) of which Covenantors
are or become aware. Covenantors will take all appropriate steps to safeguard
Confidential Information and to protect the same against disclosure, misuse,
espionage, loss and theft.
(b) As used in this Agreement, the term "Confidential Information"
means information that is not generally known in the industry or to the public
and that is used, developed or obtained by the Company in connection with its
business, including but not limited to (i) products or services, (ii) fees,
costs and pricing structures, (iii) designs, (iv) analyses, (v) drawings,
photographs and reports, (vi) computer software, including operating systems,
applications and program listings, (vii) flow charts, manuals and documentation,
(viii) data bases, (ix) accounting and business methods, (x) inventions,
devices, new developments, methods and processes, whether patentable or
unpatentable and whether or not reduced to practice, (xi) customers and clients
and customer or client lists, (xii) other copyrightable works, (xiii) all
technology and trade secrets, and (xiv) all similar and related information in
whatever form.
2. Noncompetition. Covenantors acknowledge and agree with the Company
that the Company's business is unique in nature and that the Company would be
irreparably damaged if Covenantors were to provide services to any person or
entity competing with the Company or engaged in a similar business. Covenantors
accordingly covenant and agree with the Company that
during the period commencing with the date of this Agreement and ending on the
fifth anniversary hereof (the "Noncompetition Period"), Covenantors will not,
directly or indirectly, either for themselves or for any other individual,
corporation, limited liability company, partnership, joint venture or other
entity, participate in any business (including, without limitation, any
division, group or franchise of a larger organization) anywhere in the United
States which is in direct or indirect competition with any of the Company's
businesses. For purposes of this Agreement, the term "participate in" includes,
without limitation, having any direct or indirect interest in any corporation,
limited liability company, partnership, joint venture or other entity, whether
as a sole proprietor, owner, member, stockholder, partner, joint venturer,
creditor or otherwise, or rendering any direct or indirect service or assistance
to any individual, corporation, limited liability company, partnership, joint
venture and other business entity (whether as a director, officer, member,
manager, supervisor, employee, agent, consultant or otherwise).
3. Nonsolicitation. During the Noncompetition Period, Covenantors
shall not (i) induce or attempt to induce any employees of the Company to leave
the employ of the Company, or in any way interfere with the relationship between
the Company and any employees thereof, (ii) hire directly or through another
entity any person who was an employee of the Company at any time during the
Noncompetition Period, or (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company to cease doing
business with the Company, or in any way interfere with the relationship between
any such customer, supplier, licensee or business relation and the Company.
4. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid), transmitted or facsimile, or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to each party listed below at the
addresses indicated below:
To Covenantors: c/o LeeMAH Corporation
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxx
Facsimile No.: (000) 000-0000
To the Company: MicroFrame, Inc.
00 Xxxxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxx X. XxXxxxx
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or such other address or to the attention of such other person as the recipient
party will have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
5. General Provisions.
(a) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. The parties
agree that a court of competent jurisdiction making a determination of the
invalidity or unenforceability of any term or provision of any covenant
contained in this Agreement will have the power to reduce the scope, duration or
area of any such term or provision, to delete specific words or phrases or to
replace any invalid or unenforceable term or provision contained herein with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement will be enforceable as so modified.
(b) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(c) Use of the term "the Company". For all purposes herein, the term
"the Company" shall be deemed to include all former, present and future
subsidiaries and affiliates of the
Company.
(d) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this
Agreement will bind and inure to the benefit of and be enforceable by the
Company and Covenantors and their respective successors and assigns; provided
that, the rights and obligations of Covenantors under this Agreement will not be
assignable without the prior written consent of the Company.
(f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
any choice or conflict of law provision or rule (either of the State of New York
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
(g) Remedies. Each of the parties to this Agreement will be entitled
to enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that Covenantors' breach of any
term or provision of this Agreement will materially and irreparably harm the
Company, that money damages will accordingly not be an adequate remedy for any
breach of the provisions of this Agreement by Covenantors and that the Company
in its sole discretion and in addition to any other remedies it may have at law
or in equity may apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
(h) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Covenantors.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
MICROFRAME, INC.
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President-Business
Development
LEEMAH DATACOM SECURITY
CORPORATION
By: /s/ Xxxxxx Xxx
--------------------------
Name: Xxxxxx Xxx
Title: Chief Financial Officer
LEEMAH CORPORATION
By: /s/ Warrant Gee
----------------------------
Name: Warrant Gee
Title: Vice President Finance
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