06/28/98
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into as of 1998, by
and between ----------------- ETHOS COMMUNICATIONS CORP., an Oklahoma
corporation ("Ethos"), and XXXX X. XXXXXX ("Lottor"). W I T N E S S E T H:
WHEREAS, Lottor is the owner of Network Wizards, a sole proprietorship
(the "Business"), which conducts web hosting services under the trade name
"Xxxxxxx.xxx"; and
WHEREAS, Lottor has entered into that certain Asset Purchase Agreement
dated 1998 (the "Asset Purchase Agreement") with Ethos, pursuant to which Lottor
agreed to sell all of his right, title and interest in and to the assets of the
Business to Ethos (the "Asset Purchase"); and
WHEREAS, as a condition to the closing of the Asset Purchase Agreement,
Lottor has agreed to enter into this Agreement and to refrain from competing
with Ethos, as hereinafter provided, in order to induce Ethos to fulfill its
obligations under the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained, the mutual promises and agreements contained in the Asset
Purchase Agreement, and other good and valuable consideration, the adequacy of
which is hereby acknowledged, the parties hereby agree as follows:
1. Non-Competition.
1.1. Non-Competition. During the period expiring two (2) years
from the Closing Date (as defined in the Asset Purchase Agreement) of the Asset
Purchase (the "Non-competition Period"), Lottor will not (a) directly or
indirectly, own, manage, operate, join, control, be employed with, or
participate in the ownership, management, operation, or control of, or be
connected in any manner with, any business engaged in the design, operation or
management of Internet website hosting; (b) contact or attempt to contact,
directly or indirectly, any of the customers of the Business as of the Closing
Date, in order to sell for the benefit of anyone other than Ethos, any product
or products of a type similar to those sold by the Business as of the Closing
Date or provide services of a type similar to those provided by the Business as
of the Closing Date, nor will Lottor dissuade or attempt to dissuade any
customer of the Business as of the Closing Date from using services provided by
the Business at the Closing Date.
1.2. No Geographic Limitation. Lottor acknowledges and agrees
that due to the global nature of telecommunications and the ease with which a
business may enter the telecommunications industry, the conduct of an Internet
website hosting business is not limited by geographic location and that
companies may compete for customers in that business without being physically
situated in the same city, state, region or country. Consequently, the covenants
against competition contained herein shall not be subject to geographic boundary
and shall be a worldwide restriction on competition.
1.3. Severability of Covenants/Scope. Lottor acknowledges and
agrees that the covenants against competition contained herein are reasonable
and valid in geographical and temporal scope and in all other respects. If any
court determines that any of such covenants, or any part thereof, are invalid or
unenforceable, because of the duration or geographic scope of such provisions,
or for any other reason, the remainder of such covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portion.
Further, such court shall have the power to reduce the duration or scope of such
provisions as the case may be, and in its reduced form such provision shall then
be enforceable.
1.4. Excluded Activities. Notwithstanding the provisions of
this Section 1, Lottor shall be permitted to provide services for "xxx.xxx," a
not-for-profit business, in the provision of web-hosting services for artists,
provided that "xxx.xxx" does not provide virtual servers for artists or others
or web-hosting services for profit. In addition, Lottor shall be permitted to
provide general consulting services for companies so long as that consulting
assistance is not in any way related to setting up web hosting services,
providing programming assistance for operating or maintaining web site hosting
services or in any way related to web server operations including but not
limited to the back end accounting or operations of web site hosting.
2. Records and Information Confidential. The records of the Business,
including the names and addresses of its customers, to be acquired by Ethos
pursuant to the Asset Purchase Agreement, and any part of such records, whether
in original form or in computerized, duplicated, or copied form, and the names,
addresses, and other facts in such records, shall be the sole proprietary
information of Ethos and shall be treated by Lottor as confidential information,
shall be treated by Lottor as such, and shall not be transmitted verbally, in
writing, or in computerized form by Lottor. Lottor further agrees with respect
to the Assets, (a) to keep confidential all such information that is identified
as being of a confidential nature, (b) not to use such confidential information
on his own behalf, or on behalf of any other person, firm or entity and (c) not
to disclose such confidential information to any third party without the advance
written authorization of Ethos.
3. Termination. This Agreement shall terminate upon expiration of the
Non-Competition Period. Lottor may terminate this Agreement only in the event
that Ethos is in material breach of the Asset Purchase Agreement and such breach
has not been cured by Ethos as provided in the Asset Purchase Agreement.
Notwithstanding the foregoing, termination of this Agreement shall not terminate
the provisions of Section 2, which shall survive termination.
4. Other Provisions.
4.1. Notices. Any notice or other communication required or permitted hereunder
shall be ------- in writing and shall be delivered in accordance with the terms
of the Asset Purchase Agreement at such addresses as provided for therein.
4.2. Entire Agreement. This Agreement is one of several agreements contemplated
by the ----------------- Asset Purchase Agreement, constitutes the entire
agreement between the parties with respect to the subject matter hereof, and
supersedes all prior agreements, written or oral, with respect thereto.
4.3. Waivers and Amendments. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
4.4. Governing Law. This Agreement shall be governed and construed in accordance
with the -------------- laws of the State of Oklahoma applicable to agreements
made and to be performed entirely within such state.
4.5. Assignment. Neither party hereto may assign any rights hereunder without
the written ---------- consent of the other party hereto.
4.6. Counterparts. This Agreement may be executed in two or more counterparts,
each of ------------ which shall be deemed an original but all of which together
shall constitute one and the same instrument.
4.7. Headings. The headings in this Agreement are for reference purposes only
and shall -------- not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ETHOS:
-----
ETHOS COMMUNICATIONS CORP.
By:_______________________
Xxxxxx X. Xxxxx, President
LOTTOR:
--------------------------
Xxxx X. Xxxxxx
