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EXHIBIT 10.27
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (the "Agreement") is made as of October
13, 1998, by and among Platinum Software Corporation, a Delaware corporation
("Parent") Zoo Acquisition Corporation, a Delaware corporation ("Merger Sub"),
and Xxxxxx X. Xxxxxxx ("Stockholder").
RECITALS
A. Stockholder is a stockholder of DataWorks Corporation, a Delaware
corporation ("Company"). Parent, Merger Sub and Company have entered into an
Agreement and Plan of and Reorganization dated as of October 13, 1998 (the
"Reorganization Agreement"), providing for the acquisition (the "Acquisition")
by Parent of Company pursuant to a merger of Merger Sub and Company (the
"Merger"). Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Reorganization Agreement.
B. Stockholder plans to vote in favor of the Merger and receive all
the benefits of the Merger, and in connection therewith and in exchange for the
consideration described herein, Stockholder has agreed pursuant to and to the
extent permitted by Section 16601 of the Business and Professions Code of the
State of California not to compete with Company in the manner and to the extent
herein set forth.
C. Stockholder is entering into this Agreement as an inducement to
Parent and Merger Sub to consummate the Merger, with all of the attendant
financial benefits to Stockholder as a stockholder of Company. Stockholder has
also entered into an Executive Employment Agreement with Parent dated as of
October 13, 1998 ("the Employment Agreement").
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein
contemplated and intending to be legally bound hereby, Merger Sub, Parent and
Stockholder agree as follows:
1. ACKNOWLEDGMENTS BY STOCKHOLDER. Stockholder acknowledges that by virtue of
his position with Company he has developed considerable expertise in the
business operations of Company and has had access to extensive confidential
information with respect to Company. Stockholder recognizes that Merger Sub and
Parent would be irreparably damaged, and their substantial investment in Company
materially impaired, if Stockholder were to enter into an activity competing
with Company's business in violation of the terms of this Agreement or if
Stockholder were to disclose or make unauthorized use of any confidential
information concerning the business of Company. Accordingly, Stockholder
expressly acknowledges that he is voluntarily entering into this Agreement and
that the terms and conditions of this Agreement are fair and reasonable to
Stockholder in all respects and further acknowledges that the covenants of
Stockholder herein are given in part in consideration of Stockholder's
entitlement to and receipt of benefits of the Merger.
2. NONCOMPETITION. Commencing as of the Closing and until the later of (a) the
date three (3) years after the Closing Date, and (b) the time Stockholder ceases
to serve as an employee
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and/or consultant to Parent pursuant to that certain Executive Employment
Agreement (the "Executive Employment Agreement") entered into between
Stockholder and Parent as of October __, 1998 (the "Restriction Period"),
Stockholder shall not, directly or indirectly, without the prior written consent
of Parent, (a) engage or participate in any business or activity that competes
with the business of the Parent or (b) be or become an officer, director,
stockholder, owner, salesperson, co-owner, partner, trustee, promoter,
technician, engineer, analyst, employee, agent, representative, consultant,
advisor or manager of or to, or otherwise acquire or hold any interest in, any
person or entity, which is competitive with the business of the Parent within
the Territory. For the purposes of this Section 3, the "business of the Parent"
shall be defined as the business of the Parent consisting of the selling,
implementation and support of multi-function integrated applications software
primarily relating to manufacturing, help desk, customer support, customer
service, human resource, payroll, salesforce automation or financial accounting.
Notwithstanding the above, Stockholder shall not be deemed to be engaged
directly or indirectly in any business in contravention of subparagraphs (a) or
(b) above, if (x) Stockholder participates in any such business solely as a
passive investor in up to 2% of the equity securities of a company or
partnership, the securities of which are publicly traded, or (y) Stockholder is
employed by a business or enterprise that is engaged primarily in a business
other than the business of the Parent and Stockholder does not apply his
expertise at such business or enterprise to that part of such business or
enterprise that is or could be competitive with the business of the Parent.
3. NONSOLICITATION. Stockholder agrees that he will not:
(a) personally or through others, encourage, induce, attempt to
induce, solicit or attempt to solicit (on Stockholder's own behalf or on behalf
of any other person or entity) during the Restriction Period any employee of
Company, Parent or any of Parent's subsidiaries to leave his or her employment
with Company, Parent or any of Parent's subsidiaries; or
(b) employ, or permit any entity over which Stockholder exercises
voting control to employ, during the Restriction Period any person who shall
have voluntarily terminated his or her employment with Company, Parent or any of
Parent's subsidiaries following October 21, 1998 (excluding any person who shall
have been involuntarily terminated by the act of the Company, Parent or any of
Parent's subsidiaries) until such time as the employee has not been an employee
of Company, Parent or any of Parent's subsidiaries for at least one (1) year.
4. NONCOMPETITION PAYMENT. In consideration of Stockholder's obligations
described herein, concurrent with the Effective Time (as defined in the
Reorganization Agreement) of the Merger, Parent shall pay to Stockholder the
amount of $1,000,000.
5. SEVERABILITY, ETC.
(a) If any provision of this Agreement shall be held by a court of
competent jurisdiction to be excessively broad as to duration, activity or
subject, it shall be deemed to extend only over the maximum duration, activity
and/or subject as to which such provision shall be valid and enforceable under
applicable law. If any provisions shall, for any reason, be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement
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shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(b) The parties intend that the covenant contained in Section 2 above
shall be construed as a series of separate covenants, one for each geographical
unit specified. Except for geographical coverage, each such separate covenant
shall be deemed identical in terms to the covenant contained in Section 2 above.
If, in any judicial proceeding, a court shall refuse to enforce any of the
separate covenants deemed included in this Agreement, then the unenforceable
covenant shall be deemed eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced.
6. NOTICES. All notices or other communications hereunder shall be in writing
and deemed given if and when delivered to a party in person, or if and when
mailed by registered or certified mail, return receipt requested, to the parties
at the addresses set forth below or such other addresses as shall be specified
by notice to the other party hereunder:
To Parent or
Merger Sub at: Platinum Software Corporation
000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Vice President, General Counsel
Fax: (000) 000-0000
with a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
To Stockholder at: Xxxxxx X. Xxxxxxx
00000 Xxxxx Xxxxx
Xxxxxx Xxxxx Xx, XX 00000
7. WAIVER OF BREACH. The failure or delay by Parent or Merger Sub in enforcing
any provision of this Agreement shall not operate as a waiver thereof, and the
waiver by Parent or Merger Sub or a breach of any provision of this Agreement by
Stockholder shall not operate or be construed as a waiver of any subsequent
breach or violation thereof. All waivers shall be in writing and signed by the
party to be bound.
8. ASSIGNMENT. This Agreement shall be assignable by Parent or Merger Sub only
to any person, firm or corporation which may become a successor in interest by
purchase, merger or otherwise to Parent, Merger Sub or Company or the business
operated by Parent, Merger Sub or Company. This Agreement is not assignable by
Stockholder.
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9. ENTIRE AGREEMENT; AMENDMENT. This Agreement represents the entire agreement
and understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith. This Agreement may not be altered or amended except by an agreement
in writing signed by the parties to be bound.
10. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of Parent and its permitted successors and assigns and Stockholder and
Stockholder's heirs and legal representatives.
11. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California as applied to
contracts entered into between California residents and to be performed entirely
within California.
12. AGREEMENT SUBJECT TO CLOSING OF MERGER. Notwithstanding any other provision
of this Agreement, Stockholder shall have no obligations under this Agreement
until the Closing occurs and Stockholder's obligations under this Agreement
shall be subject to the Closing. This Agreement shall terminate in any event
upon the termination of the Reorganization Agreement in accordance with its
terms.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first above written.
STOCKHOLDER
/s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
PLATINUM SOFTWARE CORPORATION
By: /s/ L. XXXXXX XXXXX
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L. Xxxxxx Xxxxx
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[Print Name Title]
ZOO ACQUISITION CORPORATION
By: /s/ XXXXX XXXXXXXXX
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Xxxxx Xxxxxxxxx
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[Print Name Title]
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APPENDIX A
TERRITORY
(1) All counties of California, (2) all other states and territories
of the United States of America and provinces and territories of Canada, and (3)
any other foreign country or territory in which the business of the Parent is
carried on.
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