AGREEMENT
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This Agreement made and entered into this _____ day of ___________, 2002, by and
between XXXX X. XXXXXXXXX (hereinafter referred to as "Owner") and XXXXXXX
SELECT INTEGRATION SOLUTIONS, 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 VERITY
SOLUTIONS, LLC, an Ohio limited liability company ("Company), for the
acquisition of substantially all of the assets of Company relating to Companys
business of being a full service provider of a variety of information technology
consulting service and support solutions, including module or full suite
implementations, functional configuration, custom development, applications
training, version upgrades, database management support and data warehousing and
reporting solutions; and
WHEREAS, Owner owns One Hundred Percent (100%) of the outstanding membership
interest 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 Section 7.1 and Exhibit J-1 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 (100% of the membership interest which is owned by Owner),
Owner covenants and agrees that for a period equal to the later of four (4)
years from the closing of the Asset Purchase Agreement of even date or one
(1) year after the termination of Owners employment with Purchaser pursuant
to the terms of an Employment Agreement of even date, but no later than one
(1) year after termination of employment if Owners employment is terminated
without cause, Owner will not, or with any other person, corporation or
entity, directly or indirectly,
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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
(c) Engage in the Business of Purchaser in any state in which Purchaser or
its subsidiaries or affiliates has an office and conducts Business
during the term of this Agreement. A list of the states in which
Purchaser and its subsidiaries or affiliates 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; or
(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.
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) The providing of a variety of information technology consulting
service and support solutions, including module or full suite
implementations, functional configuration, custom development,
applications training, version upgrades, database management support
and data warehousing and reporting solutions;
(ii) 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;
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(iii) Sale or servicing, whether at the wholesale or retail level, or
leasing or renting, of computer hardware, software, peripheral devices
or related products;
(iv) 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;
(v) Providing of integrated desktop management and network services
including life cycle services, internetworking services, and end user
support services; and
(vi) 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.
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)
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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 Ohio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
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XXXX X. XXXXXXXXX
XXXXXXX SELECT INTEGRATION
SOLUTIONS, INC.
By:
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EXHIBIT A
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STATES IN WHICH PURCHASER
AND/OR ITS PARENT COMPANY
AND/OR SUBSIDIARIES OR OTHER
AFFILIATES TRANSACT BUSINESS
1. Alabama
2. Arkansas
3. California
4. Florida
5. Georgia
6. Indiana
7. Illinois
8. Iowa
9. Kansas
10. Kentucky
11. Maryland
12. Massachusetts
13. Michigan
14. Minnesota
15. Mississippi
16. Missouri
17. North Carolina
18. Ohio
19. Oklahoma
20. Pennsylvania
21. South Carolina
22. Tennessee
23. Texas
24. Virginia
25. West Virginia
