AGREEMENT RELATING TO NONCOMPETITION
The parties hereto are entering into this Agreement contemporaneously with
the execution of that certain Asset Purchase Agreement (the "Asset Purchase
Agreement") dated as of December 7, 1999, by and between Tanisys Operations,
LP, a Texas limited partnership ("Buyer") and Tanisys Technology, Inc., a
Wyoming corporation ("Buyer"), pursuant to which Buyer is purchasing
substantially all of the assets of Seller's worldwide memory components
distribution and manufacturing business. As an inducement for Buyer to
purchase the Assets and assume the Assumed Liabilities, Seller agrees not to
compete with Buyer or solicit customers or employees from Buyer or its
Affiliates as more particularly described in Section 7.15 of the Asset Purchase
Agreement. The parties agree that the allocation for tax purposes of $100,000
of the Purchase Price for such noncompetition agreement would be grossly
inadequate to compensate Buyer in the event Seller breaches the provisions of
Section 7.15 (a "Breach") of the Asset Purchase Agreement. Accordingly, the
parties agree that if Seller violates Section 7.15 of the Asset Purchase
Agreement, $1,500,000 of the Purchase Price shall be refunded in cash to Buyer
by Seller as the parties recognize that such violation necessarily means that
the value of the Asset Purchase Agreement was lower than otherwise contemplated
by the parties without such a Breach; therefore the parties have estimated and
assigned the stated sum as a proper reduction and refund amount. In addition
to the refund, Buyer shall be entitled to recover any additional actual damages
that may be proven or recovered at trial or in arbitration, as applicable.
The right of Buyer to receive a $1,500,000 refund hereunder may be invoked
as many times as it is proven or determined by a court or in arbitration that
Seller has violated Section 7.15 of the Asset Purchase Agreement in separate
instances; provided, however, that the amount of refunds hereunder may not
exceed the amount of the Purchase Price plus the Consulting Payments, the Earn
Out Payments and the amount of Assumed Liabilities.
This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of Texas without regard to its
principles of conflict of laws. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. All initial capitalized
terms used herein and not otherwise defined herein shall have the same meanings
as in the Asset Purchase Agreement.
TANISYS OPERATIONS, LP TANISYS TECHNOLOGHY, INC.
By: TANISYS ACQUISITION GP, INC. By: /s/ Xxxxxxx X. Xxxxxx
Its General Partner -------------------------------
Name: Xxxxxxx X. Xxxxxx
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Title: President & CEO
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/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, President
