NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (this "AGREEMENT") is made as of the
Effective Date indicated below by and between Sync Research, Inc., a Delaware
corporation ("PARENT"), and Xxxxxx X. Xxxxx ("KEY EMPLOYEE").
BACKGROUND
This Agreement is entered into in connection with and is ancillary to an
Agreement and Plan of Reorganization (the "PLAN") dated as of June 27, 1996
among Parent, SR Acquisition Corp., a Delaware corporation and wholly owned
subsidiary of Parent ("Merger Sub"), and TyLink Corporation, a Delaware
corporation ("Company"), pursuant to which Merger Sub is to merge with and into
Company, Company will continue as the surviving corporation in the merger and
will become a wholly owned subsidiary of Parent, and the shares of Company
capital stock outstanding immediately prior to the effective time of the merger
will be converted into shares of Parent Common Stock, all as set forth in the
Plan (the "MERGER"). The date on which the Merger becomes effective will be the
effective date of this Agreement (the "EFFECTIVE DATE").
Key Employee is an option holder and the Chief Executive Officer of
Company and has been actively involved in the development and/or marketing of
Company's products. Parent is engaged in the Restricted Business, as defined
below. Parent intends to continue the business of Company after the Merger
and integrate such business into Parent's ongoing business as a subsidiary of
Parent. To preserve and protect the assets of Company, including Company's
goodwill, customers and trade secrets of which Key Employee has and will have
knowledge in his or her role as an employee of Parent and to preserve and
protect Parent's goodwill and business interests going forward, and in
consideration for Parent's entering into and performing under the Plan, Key
Employee has agreed to enter into this Agreement. Parent and Key Employee
have entered into an Employment Agreement (the "EMPLOYMENT AGREEMENT")
concurrently with execution of this Agreement.
Key Employee and Parent believe the limitations as to time, geographical
area and scope of activity contained in this Agreement hereof are reasonably
necessary to, and no greater than that required to, protect the goodwill and
business interests of Parent.
1. For a period ending on (i) the first anniversary of the Effective
Date or (ii) the end of the Severance Period (as defined in the Employment
Agreement), if a Severance Period is initiated pursuant to the Employment
Agreement and the Severance Period ends prior to the second anniversary of the
Effective Date, Key Employee will not (except to the extent permitted in
Section 3 of the Employment Agreement) individually or as an employee, partner,
officer, director or shareholder or in any other capacity whatsoever of or for
any person, firm, partnership, company or corporation other than Parent or its
subsidiaries:
(a) Own, manage, operate, sell, control or participate in the
ownership, management, operation, sales or control of any business (a
"COMPETITIVE BUSINESS") engaged, in
the geographical areas referred to in Section 2 below, in the design, research,
development, marketing, sale, licensing or support of networking products that
adapt Systems Network Architecture ("SNA") networks to frame relay, integrated
services digital network, asynchronous transfer mode or other switched wide area
network services, or products that provide circuit, access, transmission or
network management capabilities for wide area access networks (the "RESTRICTED
BUSINESS"); or
(b) Recruit, attempt to hire, solicit, assist others in
recruiting or hiring, or refer to others concerning employment, in or with
respect to the geographical areas referred to in Section 2 below, any person who
is an employee of Parent or any of its subsidiaries or induce or attempt to
induce any such employee to terminate such employee's employment with Parent or
any of its subsidiaries.
2. The geographical areas in which the restrictions provided for in
this Agreement apply include all cities, counties and states of the United
States, and all other countries, in which Parent or Company has engaged in sales
or otherwise conducted business or selling or licensing efforts in the
Restricted Business at any time during the two years prior to the Effective Date
hereof or during the term of this Agreement. Key Employee acknowledges that the
scope and period of restrictions and the geographical area to which the
restrictions imposed in this Section 2 applies are fair and reasonable and are
reasonably required for the protection of Parent and that this Agreement
accurately describes the business to which the restrictions are intended to
apply.
3. It is the intent of the parties that the provisions of this
Agreement will be enforced to the fullest extent permissible under applicable
law. If any particular provision or portion of this Section is adjudicated to
be invalid or unenforceable, this Agreement will be deemed amended to revise
that provision or portion to the minimum extent necessary to render it
enforceable. Such amendment will apply only with respect to the operation of
this paragraph in the particular jurisdiction in which such adjudication was
made.
4. Key Employee acknowledges that any breach of the covenants of
this Agreement will result in immediate and irreparable injury to Parent and,
accordingly, consents to the application of injunctive relief and such other
equitable remedies for the benefit of Parent as may be appropriate in the event
such a breach occurs or is threatened. The foregoing remedies will be in
addition to all other legal remedies to which Parent may be entitled hereunder,
including, without limitation, monetary damages.
5. MISCELLANEOUS.
(a) NOTICES. Any and all notices permitted or required to be
given under this Agreement must be in writing. Notices will be deemed given
(i) when personally received or when sent by facsimile transmission (to the
receiving party's facsimile number), (ii) on the first business day after having
been sent by commercial overnight courier with written verification of receipt,
or (iii) on the third business day after having been sent by registered or
certified mail from a location on the United States mainland, return receipt
requested, postage
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prepaid, whichever occurs first, at the address set forth below or at any new
address, notice of which will have been given in accordance with this Section
5(a):
If to Parent: Sync Research, Inc.
0 Xxxxxxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, President
If to Key Employee: c/o TyLink Corporation
00 Xxxxxxxx Xxx
Xxxxxx, XX 00000
(b) AMENDMENTS. This Agreement contains the entire agreement
and supersedes and replaces all prior agreements between Parent and Key Employee
or Company and Key Employee concerning the subject matter hereof. This
Agreement may not be changed or modified in whole or in part except by a writing
signed by the party against whom enforcement of the change or modification is
sought.
(c) SUCCESSORS AND ASSIGNS. This Agreement will not be
assignable by either Key Employee or Parent, except that the rights and
obligations of Parent under this Agreement may be assigned to a corporation
which becomes the successor to Parent as the result of a merger or other
corporate reorganization and which continues the business of Parent, or any
subsidiary of Parent, provided that Parent guarantees the performance by such
subsidiary of Parent's obligations hereunder.
(d) GOVERNING LAW. This Agreement will be governed by and
interpreted according to the substantive laws of the State of Delaware without
regard to such state's conflicts law.
(e) NO WAIVER. The failure of either party to insist on strict
compliance with any of the terms of this Agreement in any instance or instances
will not be deemed to be a waiver of any term of this Agreement or of that
party's right to require strict compliance with the terms of this Agreement in
any other instance.
(f) SEVERABILITY. Key Employee and Parent recognize that the
limitations contained herein are reasonably and properly required for the
adequate protection of the interests of Parent. If for any reason a court of
competent jurisdiction or binding arbitration proceeding finds any provision of
this Agreement, or the application thereof, to be unenforceable, the remaining
provisions of this Agreement will be interpreted so as best to reasonably effect
the intent of the parties. The parties further agree that the court or
arbitrator shall replace any such invalid or unenforceable provisions with valid
and enforcecable provisions designed to achieve, to the extent possible, the
business purposes and intent of such unenforceable provisions.
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(g) COUNTERPARTS. This Agreement may be executed in
counterparts which when taken together will constitute one instrument. Any copy
of this Agreement with the original signatures of all parties appended will
constitute an original.
(h) EFFECT OF AGREEMENT. This Agreement will be void and have
no effect if the Effective Date does not occur on or before August 31, 1996.
(i) DISPUTE RESOLUTION.
(i) ARBITRATION OF DISPUTES. Any dispute under this
Agreement shall be resolved by arbitration in Boston, Massachusetts, and, except
as herein specifically stated, in accordance with the commercial arbitration
rules of the American Arbitration Association ("AAA RULES") then in effect.
However, in all events, these arbitration provisions shall govern over any
conflicting rules which may now or hereafter be contained in the AAA Rules. Any
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction over the subject matter thereof. The arbitrator shall have
the authority to grant any equitable and legal remedies that would be available
in any judicial proceeding instituted to resolve such dispute.
(ii) COMPENSATION OF ARBITRATOR. Any such arbitration
will be conducted before a single arbitrator who will be compensated for his or
her services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon his
or her rate of compensation.
(iii) PAYMENT OF COSTS. Parent and the Key Employee will
bear the expense of deposits and advances required by the arbitrator in equal
proportions, but either party may advance such amounts, subject to recovery as
an addition or offset to any award. Each party will pay its own costs, fees and
expenses incurred in connection with the arbitration, including reasonable fees
and expenses of attorneys, accountants and other professionals which each party
engages.
(iv) BURDEN OF PROOF. For any dispute submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a judicial proceeding.
(v) AWARD. Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a written opinion setting forth the basis and reasons for
any decision reached and will deliver such documents to each party to this
Agreement along with a signed copy of the award.
(vi) TERMS OF ARBITRATION. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions of
this Agreement.
(vii) EXCLUSIVE REMEDY. Except as specifically otherwise provided in
this Agreement, arbitration will be the sole and exclusive remedy of the parties
for any dispute arising out of this Agreement.
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IN WITNESS WHEREOF, this Agreement is made and effective as of the
Effective Date.
SYNC RESEARCH, INC. KEY EMPLOYEE
By: ______________________________________ ______________________________
Name: Xxxxx X. Xxxx --Name--
Title: President and Chief Operating Officer
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Noncompetition Agreement for Xxxxxxx Xxxx is identical to the one for Xxxxxx
Xxxxx, except for the following information: "Key Employee" name is Xxxxxxx
Xxxx, and Title (in paragraph 2) is Vice President of Engineering.
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