EXHIBIT 10.4
NONCOMPETITION AND NONDISCLOSURE AGREEMENT
NONCOMPETITON AND NONDISCLOSURE AGREEMENT (the "AGREEMENT"), made as of
the 3rd day of June, 2004, by and between Cyber-Test, Inc., a Florida
corporation ("CYBER-TEST"), Lisa Welton, Robert Heynssens, Alan Heynssens and
Lori Peterson (collectively, "SELLERS") and Cyber-Test, Inc., a Delaware
corporation ("PURCHASER").
W I T N E S S E T H:
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WHEREAS, Purchaser has acquired (the "ACQUISITION") effective as of June
3, 2004 (the "CLOSING DATE") substantially all of the assets of Cyber-Test,
pursuant to the terms and conditions of an Asset Purchase Agreement dated May
27, 2004 (the "PURCHASE AGREEMENT") among Sellers and Purchaser; and
WHEREAS, in order to protect the value of the Purchased Assets (as defined
in the Purchase Agreement) being acquired by Purchaser pursuant to the Purchase
Agreement and to protect the business of Purchaser, the parties hereto have
agreed that, for the consideration contained in the Purchase Agreement, Sellers
shall not compete with Purchaser, in accordance with the terms and conditions
hereof; and
WHEREAS, the agreements of Sellers not to compete with Purchaser as
provided herein are an integral part of the transactions contemplated by the
Purchase Agreement, and without such agreements, Purchaser would not have
entered into the Purchase Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the payment of the consideration hereunder and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. CERTAIN DEFINITIONS. Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Purchase
Agreement; PROVIDED, HOWEVER, that the following terms shall have the meanings
set forth below irrespective of the meanings such terms may have in the Purchase
Agreement:
(a) "AFFILIATE" of any person means any other person, directly
or indirectly, through one or more intermediary persons, controlling, controlled
by or under common control with such person.
EXHIBIT 10.4
(b) "BUSINESS" means (i) the marketing, sale, integration,
distribution or repair of computer systems, components, equipment or
peripherals, and any related consulting work, and (ii) conducting any business
of a nature engaged in by Purchaser or its subsidiaries or Sellers at the time
of Closing, or engaged in by any of BCD 2000, Inc. or Pacific Magtron
International, Inc. ("POTENTIAL PURCHASER SUBSIDIARIES") at the time the stock
or assets of which are acquired by Purchaser.
(c) "CONFIDENTIAL INFORMATION" means all information (i)
heretofore or hereafter developed or used by Sellers relating to the Business,
or the operations, employees, customers, suppliers or distributors of Sellers
relating to the Business including, but not limited to, customer lists, customer
orders, financial data, pricing information and price lists, business plans and
market strategies and arrangements, all books, records, manuals, advertising
materials, catalogues, correspondence, mailing lists, production data, sales
materials and records, purchasing materials and records, personnel records,
quality control records and procedures included in or relating to the Business,
and (ii) all such information of Purchaser, its Affiliates and the Potential
Purchaser Subsidiaries obtained by Sellers prior to the date hereof.
(d) The term "CONTROL", with respect to any person, means the
power to direct the management and policies of such person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other persons by or through stock ownership, agency or
otherwise; and the terms "CONTROLLING" and "CONTROLLED" have meanings
correlative to the foregoing.
(e) "MARKET" means the world.
(f) The term "PERSON" means an individual, corporation,
partnership, joint venture, limited liability company, association, trust,
unincorporated organization or other entity, including a government or political
subdivision or an agency or instrumentality thereof.
(g) "RESTRICTED PERIOD" means the period commencing from and
after the date of this Agreement and ending on the fifth anniversary hereof.
2. NONCOMPETITION IN THE MARKET. At all times from and after the
date of this Agreement and until the expiration of the Restricted Period, (a)
Sellers will not own or control, throughout the Market, any business or any
person who is engaged in any business, that competes, directly or indirectly,
with the Business or is otherwise engaged in activities competitive with the
Business, (b) Sellers shall not directly, indirectly, and whether for itself or
on behalf of any other person (including any of its Affiliates), throughout the
Market, directly or indirectly, engage in, own, manage, operate, provide
financing to, control or participate in the ownership, management or control of,
or otherwise have a financial interest (whether, except as provided in Section
4, as a stockholder, director, officer, representative, subcontractor, partner,
consultant, proprietor, member, agent or otherwise) in, or aid or assist anyone
else in the conduct of, any business or any person who is engaged in any
business, that competes, directly or indirectly, with the Business or is
otherwise engaged in activities competitive with the Business, and (c) Sellers
shall not, either personally or by its agent or by letters, circulars or
advertisements and whether for itself or on behalf of any other person, canvass
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or solicit, or enter into or effect. (or cause or authorize to be solicited,
entered into or effected), directly or indirectly, for or on behalf of itself or
any other person, any business relating to the Business from any person who is,
or has at any time within five (5) years prior to the date of such action been,
a customer or supplier of the Business or Purchaser or Purchaser's Affiliates.
3. EXCLUDED INVESTMENTS AND ACTIVITIES BY SELLERS. Each of the
parties hereto acknowledges that nothing contained herein shall prohibit Sellers
from acquiring equity securities of a publicly held company engaged in
activities which are similar to, or competitive with, the Business, which in the
aggregate do not exceed 1% of the issued and outstanding equity securities of
such publicly held company.
4. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Sellers acknowledge
that it is the policy of Purchaser to maintain as secret and confidential all
Confidential Information. The parties hereto recognize that by reason of
Sellers' operation of the Business prior to the Closing, and activities in
connection with the Purchase Agreement, Sellers have acquired Confidential
Information. Sellers recognize that, effective upon the Closing, all such
Confidential Information is and shall remain the sole property of Purchaser,
free of any rights of Sellers, and acknowledges that Purchaser has a vested
interest in assuring that all such Confidential Information remains secret and
confidential. Therefore, Sellers agree that at all times from and after the date
hereof, they will not, directly or indirectly, without the prior written consent
of Purchaser, disclose to any person, firm, company or other entity (other than
Purchaser or any of its Affiliates) any Confidential Information, except to the
extent that (i) any such Confidential Information becomes generally available to
the public or trade, other than as a result of a breach by Sellers of this
Section 4, or (ii) any such Confidential Information becomes available to
Sellers on a non-confidential basis from a source other than Purchaser;
PROVIDED, that such source is not known by Sellers to be bound by a
confidentiality agreement with, or other obligation of secrecy to, Purchaser or
another party. In addition, it shall not be a breach of the confidentiality
obligations hereof if Sellers are required by law or legal process to disclose
any Confidential Information; PROVIDED, that in such case, Sellers shall (a)
give Purchaser the earliest notice possible that such disclosure is or may be
required, and (b) cooperate with Purchaser, at Purchaser's expense, in
protecting, to the maximum extent legally permitted, the confidential or
proprietary nature of the Confidential Information which must be so disclosed.
The obligations of Sellers under this Section 4 shall survive any termination of
this Agreement.
5. NON-SOLICITATION. At all times from and after the date of this
Agreement and until the expiration of the Restricted Period, Sellers shall not,
directly, indirectly or otherwise, either personally or through agents,
employees, officers or Shareholders or by letters, circulars or advertisements,
and whether for itself or on behalf of any other person:
(a) seek to persuade any employee of Purchaser or any of its
Affiliates to discontinue his or her status or employment therewith or seek to
persuade any employee or former employee of Purchaser or any of its Affiliates
to become employed or to provide consulting services or contract services in a
business or activities competitive with the Business, or
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(b) solicit or employ or, directly or indirectly, cause to be
solicited or employed, or engage, directly or indirectly, the services of any
employee or former employee of Purchaser or any of its Affiliates.
6. RIGHT TO INJUNCTIVE RELIEF. Sellers acknowledge that any breach
or threatened breach by it of any of the covenants or provisions contained
herein will result in irreparable and continuing harm to Purchaser and its
Affiliates for which neither Purchaser nor its Affiliates would have an adequate
remedy at law. Therefore, Sellers acknowledge and agrees that, in addition to
any other remedy which Purchaser or its Affiliates may have at law or in equity,
Purchaser and its Affiliates shall be entitled to injunctive relief, temporary
and permanent restraining orders or other equitable remedies in the event of any
such breach or threatened breach. Sellers further acknowledge and agree that
monetary damages would be insufficient to compensate Purchaser and its
Affiliates in the event of a breach by Sellers of any of the covenants or
provisions contained herein, and that in the event of a breach thereof,
Purchaser and/or its Affiliates shall be entitled to specific performance of the
obligations hereunder without the obligation to post a bond or to prove damages
or that other remedies are insufficient.
7. ENFORCEABILITY; SEVERABILITY. If any provision of this Agreement
shall be adjudicated to be invalid or unenforceable, then such provision shall
be deemed modified, as to duration, territory or otherwise, so as to be
enforceable as similar as possible to the provision at issue, in order to render
the remainder of this Agreement valid and enforceable and to the extent found
necessary, such provisions shall be revised, reformed or redrafted or a new
agreement created by a court of competent jurisdiction to accomplish the
foregoing. The invalidity or unenforceability of any provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision were
omitted.
8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of Sellers, Purchaser and their respective
Affiliates, successors and assigns.
9. ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the documents and instruments referenced therein, contains the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersedes all prior negotiations and understandings among Purchaser,
Purchaser's Affiliates and Sellers with respect hereto. This Agreement may not
be amended or modified except by a written instrument signed by the parties
hereto.
10. APPLICABLE LAW; SUBMISSION TO JURISDICTION.
(a) This Agreement and the rights, obligations and relations of
the parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware.
(b) The parties hereto hereby, to the fullest extent permitted
by law, (i) agree to submit themselves, and any legal action or proceeding
relating to this Agreement or for recognition and enforcement of any judgment in
respect hereof, to the exclusive jurisdiction of the courts of the State of
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Delaware, the courts of the United States District Court for the District of
Delaware, and appellate courts from any therefor, (ii) consent that any action
or proceeding shall be brought in such courts, and waive any objection that each
may now or hereafter have to the venue of any such action or proceeding in any
such court, (iii) agree that service of process of any such action or proceeding
may be effected by serving the appropriate party personally at its address as
set forth herein, and service made shall be deemed to be completed upon actual
receipt thereof, and (iv) agree that nothing herein shall affect the right to
effect service of process in any other manner permitted by law.
11. NOTICES.
(a) Except as provided in Section 10(b)(iii) with respect to
service of process which must be delivered personally, any notice or other
communication required or permitted hereunder shall be in writing and shall be
delivered personally by hand or by recognized overnight courier or mailed (by
registered or certified mail, postage prepaid) or telecopied, as follows:
(i) If to Purchaser:
420 Lexington Avenue, Ste 2739
New York, NY 10170
Attention: Wayne I. Danson, President
Telecopier: 646-227-1666
with a simultaneous copy to:
Gary A. Miller, Esq.
Eckert Seamans Cherin & Mellott, LLC
1515 Market Street, Ninth Floor
Philadelphia, Pennsylvania 19102
Telecopier: (215)851-8383
(ii) If to Sellers, one copy to:
448 Commerce Way, Suite 100
Florida Central Commerce Park
Longwood, FL 32750
Attention: President
Telecopier: _____________________________
with a simultaneous copy to:
Victor Chapman, Esquire
Barrett, Chapman & Ruda, P.C.
18 Wall Street
Orlando, FL 32801
Telecopier: ______________________________
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(b) Each such notice or other communication shall be effective (i)
if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in Section 11(a) (with confirmation of transmission), or (ii)
if given by other means, when delivered at the address specified in Section
11(a). Any party by notice given in accordance with this Section 11 to the other
party may designate another address or person for receipt of notices hereunder.
Notices by a party may be given by counsel to such party.
12. HEADINGS. The headings of sections and subsections of this
Agreement are for convenience only and are not to be considered in construing
this Agreement.
13. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which, when taken together, shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SELLER:
CYBER-TEST, INC., a Florida corporation
By: /s/ Lisa Welton
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Lisa Welton, President
/s/ Lisa Welton
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Lisa Welton
/s/ Robert Heynssens
--------------------------
Robert Heynssens
/s/ Alan Heynssens
--------------------------
Alan Heynssens
/s/ Lori Peterson
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Lori Peterson
PURCHASER:
CYBER-TEST, INC., a Delaware corporation
By: /s/ Wayne I. Danson
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Wayne I. Danson, President