NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of January 2, 2002, by and between
eB2B Commerce, Inc., a New Jersey corporation (the "Company"), with its
principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
Xxxxxx Xxxxxx (the "Stockholder"), with a principal place of business at 000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
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WHEREAS, the Company is acquiring Bac-Tech Systems, Inc., a New York
corporation ("Bac-Tech"), pursuant to the terms of an Agreement and Plan of
Merger, dated January 2, 2002 (the "Merger Agreement"), by and among the
Company, Bac-Tech, Stockholder and Xxxxxxx Xxxxxx; and
WHEREAS, as a condition to the obligations of the Company to consummate
the transactions contemplated by the Merger Agreement, Stockholder and the
Company shall have executed and delivered this Agreement to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS. Except as otherwise defined herein, the terms
defined in the Merger Agreement are used herein with their defined meanings.
2. NON-COMPETE.
(a) Stockholder agrees that for a period of four (4) years
from and after the date hereof (the "Term"), Stockholder shall not, directly or
indirectly, or through any other person, firm or corporation:
(i) compete with or "participate in" any other business or
organization in the Territory (as defined in paragraph (b) below) which
during the Term competes with the Company . The term "participate in" shall
mean: "directly or indirectly, for his own benefit or for, with, or through any
other person, firm, or corporation, own, manage, operate, control, loan money
to, or participate in the ownership, management, operation, or control of, or be
connected as a director, officer, employee, partner, consultant, agent or
independent contractor, or acquiesce in the use of his name." Notwithstanding
the foregoing, it shall not be a breach of the provisions of this Section
2(a)(i) if, during or after the Term, Stockholder is a passive investor in any
publicly held entity and Stockholder owns three (3%) percent or less of the
equity interests therein; or
(ii) recruit, contract or hire any employee of the
Company, or otherwise induce such employee to leave or terminate his or her
employment with the Company, to become an employee of or otherwise be associated
with Stockholder or any company or business with which Stockholder, directly or
indirectly, is or may become associated with, or competes with
the business of the Company.
(b) For purposes of this Agreement, the term "Territory" shall
mean North America and any other jurisdiction where Stockholder conducted
business similar to that of the business of the Company.
3. NON-PAYMENT BY THE COMPANY. This Agreement shall terminate in
the event that (i) the Company fails in any material respect to pay the
Stockholder his Base Salary (as such term is defined in the Employment
Agreement, dated the date hereof, between the Company and Stockholder) within
one month after the date due, (ii) the Company fails to pay the principal or
interest on the Note issued by the Company to Stockholder on the date hereof and
would constitute an "Event of Default" under the Security Agreement, or (iii)
the Company fails to pay within 30 days after the due date, the Additional
Payouts described in Section 1.10 of the Merger Agreement.
4. CONFIDENTIAL INFORMATION.
(a) Stockholder agrees that all Confidential Information (as
defined below) will be kept confidential and shall not, without the prior
written consent of the Company, be disclosed by him in any manner whatsoever, in
whole or in part, except as may be required by law or judicial order or as may
be required by a party hereto to enforce its rights hereunder.
(b) Stockholder agrees to use reasonable business precautions
to keep confidential the Confidential Information, and in this regard provide no
less protection than the safeguards presently used by him to maintain the
confidentiality of his own Confidential Information.
(c) Nothwithstanding anything in this Agreement to the
contrary, to the extent that the security interest granted to Stockholder in and
to the Intellectual Property Assets (as defined in the Security Agreement
between the Company, Stockholder and another party of even date herewith (the
"Security Agreement")) reverts to Stockholder pursuant to the terms of the
Security Agreement or the Merger Agreement, Stockholder shall be permitted to
utilize such Confidential Information as it relates specifically to the
Intellectual Property Assets.
(d) For the purposes of this Agreement, "Confidential
Information" shall mean all information relating to the business of the Company
of a commercial, financial, technical or non-technical nature, including without
limitation, customer lists, financial statements, contracts and employee
compensation. Confidential Information shall not include: (i) information which
at the time of the disclosure is, or subsequently becomes, generally part of the
public domain through no breach of the terms hereof by either party to this
Agreement; or (ii) information which is lawfully acquired from a third party who
did not breach a confidential obligation by disclosing the same to Stockholder;
or (iii) information which was known by the party receiving the information
prior to the date of this Agreement, provided prompt notice thereof is given to
the disclosing party. To the extent not inconsistent with this Section 4, the
Mutual Non-Use and Non-Disclosure Agreement, dated June 19, 2001, between
Bac-Tech and the Company shall remain in effect.
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5. SPECIFIC PERFORMANCE. Stockholder acknowledges that there may be
no adequate remedy at law for a breach of this Agreement and that money
damages may not be an adequate remedy for breach of this Agreement. Therefore,
the parties agree that the Company shall have the right, in addition to any
other rights it may have, to injunctive relief and specific performance of this
Agreement in the event of any breach hereof. Any remedies the Company may have
shall be cumulative and the remedy set forth above shall in no way limit any
other remedy the Company has at law, in equity or pursuant hereto.
6. REPRESENTATIONS AND WARRANTIES. Stockholder hereby represents
and warrants that he has full power and authority to enter into this
Agreement and this Agreement constitutes the valid and legally binding
obligation of Stockholder enforceable against Stockholder in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency
and other similar laws of general application affecting the rights of creditors
and by general equitable principles.
7. NO WAIVER; CUMULATIVE REMEDIES. This Agreement may not be
amended, modified, superseded, or canceled, and terms and conditions hereof
may not be waived, except by a written instrument signed by the parties hereto
or, in the case of a waiver, by the party waiving compliance. The Company shall
not by any act, delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of the Company, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof of the exercise
of any other right, power or privilege. A waiver by the Company of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Company would otherwise have on any future occasion.
8. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York (without
giving regard to any conflicts of law principles for such state). The parties
hereby irrevocable and unconditionally consent to submit to the jurisdiction of
the federal and state courts of the State of New York for any actions, suits or
proceeding arising out of or relating to this Agreement and the parties agree
not to commence any such action, suit or proceeding except in such courts. The
parties further agree that service of any process, summons, notice or document
by U.S. registered mail to its address set forth herein shall be effective
service of process for any action, suit, or proceeding brought against it in
such court. The parties hereby irrevocably and unconditionally waive and agree
not to raise any objection, including any objection based on forum non
conveniens, to the laying of venue of any action, suit or proceeding arising out
of this Agreement in the federal or state courts of the State of New York.
9. NOTICES. All notices, requests, demands or other communications
provided for herein shall be in writing and shall be deemed to have been given
when received if personally delivered or sent by (i) registered or certified
mail, return receipt requested, (ii) nationally recognized overnight courier
service or (iii) facsimile transmission electronically confirmed addressed to
the parties at their addresses set forth above or to such other person or
address as
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either party shall designate to the other from time to time in writing forwarded
in like manner.
10. MISCELLANEOUS.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective legal successors and
permitted assigns. This Agreement shall not be assignable, except that the
Company shall have the right to assign this Agreement to any of its affiliates
or to a successor in interest to its business.
(b) This Agreement contains the entire agreement and
understanding of the parties hereto with respect to the matters herein and
supersedes any other agreement, except as referenced herein, whether written or
oral, relating to the matters contemplated hereby.
(c) If any term, condition or provision of this Agreement
shall be declared, to any extent, invalid or unenforceable, the remainder of the
Agreement, other than the term, condition or provision held invalid or
unenforceable, shall not be affected thereby and shall be considered in full
force and effect and shall be valid and be enforced to the fullest extent
permitted by law. It is the intention of the parties that if any of the
restrictions or covenants contained herein is held to cover a geographic area or
to be for a length of time which is not permitted by applicable law, or in any
way construed to be too broad or to any extent invalid, such provision shall not
be construed to be null, void and of no effect, but to the extent such provision
would be valid or enforceable under applicable law, a court of competent
jurisdiction shall construe and interpret or reform this Agreement to provide
for a covenant having the maximum enforceable geographic area, time period and
other provisions as shall be valid and enforceable under such applicable law.
(d) The captions set forth in this Agreement are used solely
for convenience of reference and shall not control or affect the meaning or
interpretation of any of the provisions.
(e) This Agreement may be signed in any number of counterparts
each of which shall be deemed an original and all of which shall constitute one
agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
EB2B COMMERCE, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: CEO
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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