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EXHIBIT 10.16
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NONCOMPETITION AGREEMENT
THIS AGREEMENT is made as of the 24th day of April, 1998, by and between
OSAGE SYSTEMS GROUP, INC., a Delaware corporation (hereinafter "Company"), and
O. XXXX XXXXXXXX, an individual (hereinafter "Xxxxxxxx").
W I T N E S S E T H:
WHEREAS, pursuant to a certain Stock Purchase Agreement ("SPA") dated
April 24, 1998, the Company is acquiring 100% of the stock of Open System
Technologies, Inc. ("OST"), a Delaware corporation, of whom Xxxxxxxx .was a 100%
owner; and
WHEREAS, as a substantial part of the consideration that the Company has
bargained for in exchange for its promises set forth in the SPA, Xxxxxxxx has
agreed that he will enter into a binding agreement appropriately limiting his
ability to compete with the Company or OST following the sale of OST to the
Company;
NOW, THEREFORE, in consideration of the mutual premises and covenants
of the parties contained within the SPA and in this Agreement, the parties
hereto do hereby agree as follows:
1. Acknowledgment of Necessity for Protections of Company's Business.
Xxxxxxxx recognizes and acknowledges that it is essential, for the
proper protection of the business of OST, and of the investment by the Company
in acquiring OST, that Xxxxxxxx be reasonably restrained: (a) from soliciting or
inducing any employee of the Company or OST to leave the employ of the Company
or OST; (b) from hiring or attempting to hire any employee of the Company or
OST; (c) from soliciting the trade of, or trading with, the customers or
suppliers of the Company or OST for any business purpose other than that of the
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Company or OST; and (d) from competing against the Company or OST for a
reasonable period of time and within a reasonable geographic area following the
Company's acquisition of OST.
2. Restrictions on Competition.
Xxxxxxxx covenants and agrees that, for and in consideration of the
consideration he is receiving under the SPA, the sufficiency and receipt of
which is hereby acknowledged, during a period of five (5) years following the
execution of the SPA, Xxxxxxxx shall not, within a 200-mile radius of any of the
places of business of the Company or OST, or of any of either of their
subsidiaries or affiliates (the "Restricted Area"), engage, directly or
indirectly, whether as principal, or as agent, officer, director, employee,
consultant, shareholder, or otherwise, alone or in association with any other
person, corporation or other entity, in any "Competing Business". For purposes
of this Agreement, the term "shareholder" shall exclude any interest owned by
Xxxxxxxx in a public company to the extent that Xxxxxxxx owns less than five
percent (5%) of any such company's outstanding common stock or has an investment
in such company of less than $250,000. For the further purposes of this
Agreement, the term, "Competing Business", shall mean any person, corporation or
other entity that is engaged in a business that competes with, or is similar to,
the business of the Company and/or OST on the date hereof; provided, however,
that in order to be construed as a "Competing Business", such person,
corporation or other entity must be engaging in a competitive business that
acquires at least fifty (50%) percent or more of its products/services for
resale from: (i) Sun Microsystems, Inc. ("SUN") or any affiliate, predecessors
or successors of Sun; or (ii) any aggregators, distributors or wholesalers who
acquire products from, or are acting as agents for, Sun, or any affiliates,
predecessors or successors of Sun; or (iii) any manufacturers, aggregators,
distributors or wholesalers who, at the
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time of the execution of the SPA, provide the Company and/or OST with at least
fifty (50%) percent of its products/services for resale.
3. Xxxxxxxx'x Abilities.
Xxxxxxxx represents that Xxxxxxxx'x experience and capabilities, and
the limited provisions of the immediately-preceding Section 2, are such that he
will not be prevented by this Agreement from earning his livelihood in
businesses similar to that of the Company and/or OST, other than the "Competing
Businesses", as specifically defined in the immediately preceding Section 2.
Xxxxxxxx acknowledges that there are a significant number of businesses for
which his qualifications and experience would render him qualified for
employment that are within the 200-mile radius referred to in Section 2 and that
do not constitute a "Competing Business", such that his ability to become
employed after the execution of the SPA would not be impaired by this Agreement.
4. Non-Solicitation of Customers and Suppliers.
Xxxxxxxx agrees that for a period of five (5) years following the
execution of the SPA, he shall not, directly or indirectly, solicit the trade
of, or trade with, any past, present or prospective customer or supplier of the
Company and/or OST for any business purpose that competes with the business
being undertaken by the Company and/or OST or any of their subsidiaries or
affiliates in the Restricted Area.
5. Non-Solicitation of Employees.
Xxxxxxxx agrees that, for a period of five (5) years following the
execution of the SPA, Xxxxxxxx shall not, directly or indirectly, solicit or
induce, or attempt to solicit or induce, any employee of the Company and/or OST
to leave the Company and/or OST for any reason
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whatsoever, or assist or participate in the hiring of any employee of the
Company and/or OST to work for another entity.
6. Remedies.
In the event of a breach by Xxxxxxxx of any of the terms of this
Agreement, the Company and/or OST shall be entitled, if either of them shall so
elect, to institute legal proceedings to obtain damages for any such breach, or
to enforce the specific performance of this Agreement by Xxxxxxxx and to enjoin
Xxxxxxxx from any further violation of this Agreement, and to exercise such
remedies cumulatively or in conjunction with all other rights and remedies
provided by law. Xxxxxxxx acknowledges and agrees that money damages for any
breach by him of any of the provisions of this Agreement may be inadequate to
compensate the Company and/or for the injuries either of them may suffer as the
result of any such breach, and accordingly that the Company shall be entitled to
injunctive relief against Anderson, in addition to money damages, in the event
of any such breach by Xxxxxxxx.
7. Review by Counsel.
Xxxxxxxx expressly acknowledges and represents that Xxxxxxxx has been
given a full and fair opportunity to review this Agreement with an attorney of
Xxxxxxxx'x choice, and that Xxxxxxxx has satisfied himself, with or without
consulting with counsel, that the terms and provisions of this Agreement,
specifically including, but not limited to, the restrictive covenant and related
provisions of Sections 2 through 5 hereof, are reasonable and enforceable.
8. Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
hand or mailed, certified or
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registered mail, return receipt requested, with postage prepaid, at the
following addresses or to such other address as either party may designate by
like notice:
A. If to Xxxxxxxx, to:
Mr. O. Xxxx Xxxxxxxx
0000 X.X. 00xx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx Xxxxx, Esquire
Xxxxxxxx, Xxxx & Xxxxx, LLP
0000 Xxxxxxxxxx Xxxxx, XX
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
and
if to Company, to it at:
Xx. Xxxx Xxxxxxxxxx, Chief Executive Officer
Osage Systems Group, Inc.
0000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx Ingersoll, P.C.
Eleven Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
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9. Additional Provisions.
A. This Agreement, including without limitation its
confidentiality, restrictive covenant and related provisions, shall inure to the
benefit of, and be binding upon, the Company and OST and their successors and
assigns, and Xxxxxxxx, his heirs, executors, administrators and legal
representatives, subject to the provisions of Section 9.F. hereof, which
expressly prohibits the assignment or delegation of any of Xxxxxxxx'x personal
rights or obligations hereunder.
B. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof, and cannot be modified
orally. This Agreement supersedes all prior and contemporaneously-made written
or oral agreements between the parties relating to the subject matter hereof. No
modification or waiver of any of the provisions hereof shall be effective unless
set forth in a writing that specifically states that it is intended to be a
modification of this Agreement and that is signed by the President of the
Company and/or OST.
C. If any provision(s) of this Agreement shall be or shall
become illegal or unenforceable in whole or in part, for any reason whatsoever,
the remaining provisions shall nevertheless be deemed valid, binding and
subsisting, and any invalid or unenforceable provision(s) shall be deemed
modified to the least extent possible so as to make them valid and enforceable
and so as to give the maximum effect allowable by law to the parties' original
intent as expressed by the terms hereof.
D. No failure on the part of the Company to exercise, and
no delay by the Company in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by
the Company of any right, power or remedy hereunder,
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preclude any other or further exercise thereof, or the exercise of any other
right, power or remedy by the Company.
E. "Person" as used herein shall mean a natural person,
joint venture, corporation, partnership, trust, estate, sole proprietorship,
governmental agency or authority or other juridical entity.
F. This is a personal services contract and the rights and
obligations set forth herein may not be assigned or delegated by Xxxxxxxx.
G. The headings of the several sections of this
Agreement have been inserted for convenience of reference only and shall in no
way be used to restrict, modify, or explain any of the terms or provisions
hereof.
H. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Florida, without regard
to its, or any other sovereignty's, conflicts of laws principles. The parties
agree that any claims brought pursuant to this Agreement shall be brought in a
court of competent jurisdiction located in Broward, Florida.
I. Tolling Period. The non-competition and non-solicitation
obligations contained in Sections 2 through 5 of this Agreement shall be
extended by the length of time during which Xxxxxxxx shall have been in breach
of any of the provisions of such Sections, regardless of whether the Company or
OST knew or should have known of such breach.
J. Company and/or OST Violation Not a Defense. In an action
by the Company and/or OST to enforce any provision of this Agreement, any claims
asserted by Xxxxxxxx against the Company and/or OST shall not constitute a
defense to the Company's and/or OST's action.
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K. Construction. This Agreement shall be construed
according to the plain meaning of its terms, and not strictly for or against
either party hereto.
L. Counterparts. This Agreement may be executed in
counterparts, and the counterparts, taken together, shall constitute the entire
Agreement. The Agreement may further be executed by facsimile transmission, and
the facsimile signatures may be deemed original signatures for all purposes,
including for purposes of the Best Evidence Rule and all other rules or
doctrines of similar effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first above written.
IMPORTANT NOTICE: THIS AGREEMENT RESTRICTS XXXXXXXX'X RIGHTS TO OBTAIN
OTHER EMPLOYMENT FOLLOWING HIS EMPLOYMENT WITH THE COMPANY. BY SIGNING IT,
XXXXXXXX ACKNOWLEDGES THIS FACT, AND FURTHER ACKNOWLEDGES THAT HE HAS BEEN
ADVISED BY THE COMPANY TO READ THE AGREEMENT CAREFULLY, AND/OR TO CONSULT
WITH COUNSEL OF HIS CHOICE CONCERNING THE LEGAL EFFECTS OF SIGNING THE
AGREEMENT, PRIOR TO SIGNING IT.
OSAGE SYSTEMS GROUP, INC.
By:________________________________ Dated:______________________________
Chairman, Board of Directors
O. XXXX XXXXXXXX
By:________________________________ Dated:______________________________
O. XXXX XXXXXXXX, on his
own behalf
WITNESS:
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______________________________
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