AGREEMENT
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This Agreement made and entered into this 6th day of May, 1999, by and between
XXXXX X. XXXXXX (hereinafter referred to as "Owner") and XXXXXXX COMPUTER
RESOURCES, INC., a Delaware corporation (hereinafter referred to as
"Purchaser").
W I T N E S S E T H :
WHEREAS, simultaneously with the execution of this Agreement, Purchaser entered
into an Asset Purchase Agreement ("Asset Purchase Agreement") with SYSTEMS
ATLANTA COMMERCIAL SYSTEMS, INC., a Georgia corporation, ("Company"), for the
acquisition of certain of its assets (the "Business"); and
WHEREAS, Owner owns twelve and 43/100 percent (12.43%) of the outstanding stock
of Company; and
WHEREAS, Purchaser would not have entered into the Asset Purchase Agreement with
Company without the consent of Owner to enter into this covenant not to compete
agreement; and
WHEREAS, pursuant to Sections 7.1 and 12.2(d)(vi) of said Asset Purchase
Agreement, Owner 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. As an inducement for Purchaser to enter into the Asset Purchase Agreement
with Company (12.43% of the stock of which is owned by Owner), Owner
covenants and agrees that for a period equal to the later of five (5) years
from the closing of the Asset Purchase Agreement of even date or one (1)
year after the termination of Owner's employment with Purchaser pursuant to
the terms of an Employment Agreement of even date, Owner 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
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(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 Owner 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.
(f) Nothing in this Agreement shall prohibit Owner from owning or
purchasing any stock, or serving as an officer or director, of Systems
Atlanta, Inc., an affiliate of Company engaged in providing integrated
systems, including hardware, software and peripheral devices and
related products and services for entities, persons or governmental
entities engaged in air traffic control.
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 and
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.
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Owner has carefully read all the terms and conditions of this
Paragraph 1 and has given careful consideration to the covenants and
restrictions imposed upon Owner herein, and agrees that the same are
necessary for the reasonable and proper protection of Owner'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 Owner that he will abide by and be bound by
each of the covenants and restrictions herein; and Owner 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. Owner 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 Owner's covenant not to compete shall be One Dollar
($1.00) and other valuable consideration, including the consideration paid
by the Purchaser to Company pursuant to an Asset Purchase Agreement to
which Owner is a party of even date herewith.
3. The terms and conditions of this Agreement shall be binding upon the Owner
and Purchaser, and their successors, heirs and assigns.
4. This Agreement shall be construed in accordance with and governed by the
laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
__________________________________
XXXXX X. XXXXXX
XXXXXXX COMPUTER RESOURCES, INC.
By:________________________________
XXXXXXX X. XXXXXXX, Chief Financial Officer
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EXHIBIT A
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STATES IN WHICH XXXXXXX
AND/OR ITS PARENT CORPORATION
AND/OR SUBSIDIARIES TRANSACT BUSINESS
1. Alabama
2. Arkansas
3. Florida
4. Georgia
5. Indiana
6. Illinois
7. Iowa
8. Kentucky
9. Mississippi
10. North Carolina
11. Ohio
12. Oklahoma
13. South Carolina
14. Tennessee
15. Texas
16. Virginia
17. West Virginia
