NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Agreement") is made this 15th day of
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August, 2006 (the "Effective Date"), by and among Xxxx X. Xxxxxxxx ("Seller"),
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Complete Tower Sources, Inc., a Louisiana corporation ("Company"), and Ayin
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Holding Company Inc., a Delaware corporation ("Purchaser"). All capitalized
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terms not otherwise defined herein shall have the meaning given to them in the
Stock Purchase Agreement, dated as of June 20, 2006, among Company, Purchaser,
and Seller (the "Stock Purchase Agreement").
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W I T N E S S E T H:
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WHEREAS, Seller is the sole shareholder of Complete Tower Sources, Inc.,
which is in the business of tower construction for wireless communications (the
"Business");
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WHEREAS, pursuant to the Stock Purchase Agreement, Purchaser is purchasing
all of the Company's issued and outstanding shares of capital stock;
WHEREAS, contemporaneously herewith, Seller and Xxxxxxxx Site Acq., Inc.
("Xxxxxxxx") are entering into an Employment Agreement (the "Employment
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Agreement");
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WHEREAS, Company and Purchaser would not have entered into the Stock
Purchase Agreement, and Xxxxxxxx would not have entered into the Employment
Agreement, without ensuring the confidentiality of certain information and
protection against competition and solicitation by the Seller; and
WHEREAS, Company, or its respective assigns, will continue to engage in its
business throughout the states of Louisiana, Alabama, Mississippi, and Texas
(the "Territory").
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NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein and in the Stock Purchase Agreement and Employment
Agreement, the benefits which Seller will receive from the transactions
contemplated by the Stock Purchase Agreement and Employment Agreement, and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. COVENANTS
1.1 Acknowledgements by Seller. Seller acknowledges the following:
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(a) Seller has been engaged in the Business. Such Business is
highly competitive.
(b) Seller's participation in the Business has provided Seller
with valuable, confidential and proprietary information concerning the Business
and its future plans, much of which Seller participated in developing.
(c) Seller has had access to and have become acquainted with
various trade secrets, proprietary data and other confidential information of
the Business and may have contributed to such information, consisting of
documents, files, software, development work computer programs and
databases, processes, techniques and procedures, and related
documentation, compilations of information, records and specifications, used in
or related to the Business, including:
(i) business information, such as (but not limited to) the
business practices, suppliers, operational methods, technical processes, future
plans, techniques, patent information and applications, leases, contracts and
business plans;
(ii) financial information, such as (but not limited to)
earnings, sales, assets, debts, prices, pricing structure, margins, volume and
quantities of purchases or sales, and other financial data;
(iii) marketing information such as (but not limited to)
prior, ongoing or proposed marketing programs, presentations or agreements by or
on behalf of the Business, pricing information, marketing tests and results of
marketing efforts;
(iv) personnel information, such as (but not limited to)
employees' personal or medical histories, compensation, employee incentive
programs, terms of employment, actual or proposed promotions, hirings,
resignations, terminations including reasons for such terminations, training
methods and other personnel information;
(v) customer information, such as (but not limited to) past,
existing or prospective customers' names, addresses or backgrounds, customer
specifications and requirements, prices that particular or various customers are
charged or pay for services, proposals or agreements between customers and the
Business, status of customers' accounts, and other information about actual or
prospective customers; and
(vi) customer or prospective customer trade secrets,
proprietary data and other confidential information that is provided to Seller
for the sole and exclusive purpose of permitting Seller to market or provide
products or services of the Business to such customers or prospective customers.
(d) Any unauthorized possession, communication or use of
Confidential Information (defined below) would enable Seller (or any third party
to whom the Seller might disseminate the Confidential Information) to compete
unfairly with Company by using the Confidential Information to such person's
advantage.
(e) The agreements and covenants contained in this Agreement are
essential to protect the interests of Company in connection with the
transactions contemplated by the Stock Purchase Agreement.
(f) Company and Ayin Holding Company Inc, would not have
consummated the transactions contemplated by the Stock Purchase Agreement, and
Xxxxxxxx would not have entered into the Employment Agreement, but for the
agreements and covenants contained in this Agreement.
For purposes of this Agreement, the trade secrets and confidential
information referred to in Section 1.1 (c) above, including those described in
subsections 1.1 (c)(i) through (vi), shall be collectively referred to as the
"Confidential Information"; provided, however, that "Confidential
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Information" shall not include information that (A) is available from sources,
other than Seller or their respective affiliates, which sources Seller
reasonably believes do not have a duty of confidentiality to Company with
respect to such information, or (B) is or becomes publicly available other than
as a result of any Seller's breach of this Agreement.
1.2 Noncompetition. For a period of two (2) years from the date of
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this Agreement or, if longer, for a period beginning on the date of this
Agreement and ending two (2) years after the Employment Agreement's Expiration
Date (as defined in the Employment Agreement), (the "Restricted Period"), Seller
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shall not, on its own behalf or on behalf of others (except for the benefit of
Purchaser), directly or indirectly, own, manage, operate, control, invest in, or
participate in the ownership, management, operations, or control of, lend
Seller's name or any similar name to, any person, entity or business engaged in
the Business in the Territory. Notwithstanding the foregoing: (i) the
noncompetition restrictions set forth in this Section 1.2 and applicable during
the Restricted Period (and only such restrictions) shall terminate and be of no
further force and effect upon the occurrence of Ayin Holding Company Inc.'s
failure to make a payment under the Promissory Note (as that term is defined
under the Stock Purchase Agreement) where such payment is not prohibited by
applicable loan agreements to which Ayin Holding Company Inc. or Charys is a
party, and (ii) Seller shall not be prohibited from having beneficial ownership
of up to 2% of the equity interest of any business entity, the equity securities
of which are registered under the Securities Exchange Act of 1934, as amended.
1.3 Payment. In consideration for the Seller's fulfillment of the
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covenants and conditions set forth herein, Purchaser shall deliver to Seller the
Parent Common Stock, as provided by Section 2.04 of the Stock Purchase
Agreement. Any and all state or federal income or other taxes payable on the
amounts paid pursuant to this Section shall be borne by Seller in their
entirety.
1.4 Nondisclosure of Confidential Information.
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(a) Seller acknowledges that (i) Company has a legitimate and
continuing proprietary interest in the Confidential Information that Company has
acquired for significant consideration; and (ii) in order to guard such interest
of Company, it is necessary for Company to protect all Confidential Information.
Seller agrees that its obligations under Section 1.4(b) of this Agreement shall
be absolute and unconditional.
(b) Seller shall not, directly or indirectly, during the
Restricted Period, use, exploit, publish or otherwise disclose in any manner any
Confidential Information, and shall otherwise keep all Confidential Information
confidential. Notwithstanding the foregoing, Seller shall be entitled to
disclose Confidential Information as may be required by applicable law,
including a subpoena or court or administrative order, provided that in any such
case Seller shall use reasonable efforts to give advance written notice of any
such disclosure to Company and Ayin Holding Company Inc. In addition, Seller
shall be entitled to use or disclose Confidential Information to the extent
necessary to (i) prepare tax returns of Seller or (ii) to enforce its rights
under the Stock Purchase Agreement and other documents executed in connection
therewith.
(c) Seller acknowledges that all physical property of the Business
in the direct or indirect possession of any Seller, including all documents,
files, software, development work computer programs and databases,
processes, techniques and procedures, and related
documentation, compilations of information, records, specifications, equipment
and similar items relating to the Business or any of the Customers, whether or
not prepared by Seller and whether or not such property is Confidential
Information, (i) is and shall remain the exclusive property of the Business and
(ii) shall not be removed from the premises of the Business. For purposes of
this Section 1.4 and Section 1.6 of this Agreement, "Customers" shall mean the
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customers of the Business and Purchaser, including, without limitation,
Cingular, NSORO, Bechtel, Centennial, Louisiana Tower and their respective
affiliates, successors, and assigns.
1.5 Nonsolicitation of Employees. During the Restricted Period,
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Seller shall not, directly or indirectly, solicit the employment of, employ,
recruit, or retain as an independent contractor, consultant or otherwise, any
current employee of Company, or in any way induce or cause any current or future
employee of Company, or any independent contractor or consultant with whom
Company does business, to terminate its relationship with Company, or otherwise
interfere or attempt to interfere in any way with any such relationship.
1.6 Nonsolicitation of Customers. During the Restricted Period, Seller
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shall not, on Seller's own behalf or on behalf of others, directly or
indirectly, solicit any Customers for the purpose of engaging in the Business,
1.7 Non-Disparagement. Unless necessary to prosecute any claims against
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each other pursuant to this Agreement, the Stock Purchase Agreement or as
required by law, including in response to a subpoena or court or administrative
order, neither Company nor Seller shall, during the Restricted Period or anytime
thereafter, disparage the other or any of its officers, directors, employees or
direct or indirect equity owners (or their respective officers, directors or
employees) in any way, including by making statements that would call into
question the professional competence, billing or distribution practices,
business competence or reputation of any of them.
2. RIGHTS AND REMEDIES UPON BREACH.
Seller acknowledges that (a) the provisions of this Agreement are fundamental
and essential for the protection of Company's legitimate business and
proprietary interests; (b) such provisions are reasonable and appropriate in all
respects; and (c) any breach of this Agreement will result in irreparable damage
to Company for which an adequate monetary remedy does not exist and a remedy at
law may prove to be inadequate. Accordingly, in the event of any actual or
threatened breach by Seller of any provision of Sections 1.2, 1.4, 1.5, 1.6 or
1.7, Company shall, in addition to any other remedies permitted by law, be
entitled to seek, and Seller consents to, equitable remedies including specific
performance, injunctive relief, a temporary restraining order, and temporary or
permanent injunctions, in federal court in Bexar County, San Antonio, State of
Texas, to prevent or otherwise restrain a breach of such provision, without the
necessity of proving harm or damages or the posting of any bond or other
security, and to recover any and all costs and expenses, including reasonable
attorneys' fees, incurred in enforcing this Agreement against Seller. Such
relief shall be in addition to, and not in substitution of, any other remedies
available to Company. The existence of any claim or cause of action of Seller
against Company shall not constitute a defense to the enforcement by Company of
the covenants contained in Sections 1.2,1.4, 1.5, 1.6 or 1.7. Seller shall not
defend any such claim or cause of action on the basis that there is an adequate
remedy at law. The Restricted Period shall be extended by any
period during which Seller is in breach of this Agreement as finally determined
by a court of competent jurisdiction.
3. SEVERABILITY; BLUE PENCILING.
The necessity of each of the restrictions set forth above and the nature and
scope of each such restriction has been carefully considered, bargained for and
agreed to by Company, Ayin Holding Company Inc., and Seller (each a "Party",
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and, collectively, the "Parties"). The Parties hereby agree and acknowledge that
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the duration, scope and geographic area applicable to each of the restrictions
set forth in this Agreement are fair, reasonable and necessary. The
consideration provided for in the Stock Purchase Agreement, Employment
Agreement, and recited in this Agreement is sufficient and adequate to
compensate Seller for agreeing to each of the restrictions contained in this
Agreement. However, in the event that any portion of this Agreement shall be
determined by any court of competent jurisdiction to be unenforceable, including
by reason of its being extended over too great a period of time or too large a
geographic area or over too great a range of activities, it shall be interpreted
to extend only over the maximum period of time, geographic area or range of
activities as to which it maybe enforceable. Each provision and part of a
provision of this Agreement shall be deemed a separate and severable covenant.
It is the desire and intent of the Parties that the provisions of this Agreement
shall be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which such enforcement is sought
Accordingly, a court of competent jurisdiction is directed to modify any
provision to the extent necessary to render such provision enforceable, and if
such cannot be lawfully done, to sever any such portion of a provision, but only
such portion of a provision as necessary to cause the remaining provisions or
portions of such provision to be enforceable.
4. MISCELLANEOUS.
4.1 Representations of Seller. Seller represents and warrants that
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Seller has read and understands this Agreement and has consulted with legal
counsel who has explained all of its terms and provisions and that the agreed
upon consideration for the undertakings made by Seller in this Agreement is
adequate. Seller acknowledges and agrees that the restrictions on competitive
activities and the other undertakings made by Seller in this Agreement will
adversely affect such Seller's ability to obtain future business and to engage
in other pursuits and that Seller nonetheless intends to be bound by all of the
restrictions, undertakings and other obligations required in this Agreement.
4.2 Amendments and Waiver. No amendment, waiver or consent with respect
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to any provision of this Agreement shall in any event be effective unless it is
in writing and signed by the Parties, and then such amendment, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. Any Party's lack of enforcement of any provision of this
Agreement shall not be construed as a waiver, and the nonbreaching Party may
elect to enforce any such provision at any time in the event of a past, repeated
or continuing breach. The rights and remedies in this Agreement are the
exclusive rights and remedies that the Parties may have upon a breach of this
Agreement.
4.3 Notices. All notices or other communications required or
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permitted under this Agreement shall be in writing and will be deemed to have
been duly given when (a) delivered by
hand, (b) sent by facsimile, provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if sent by a
nationally recognized overnight courier service (receipt requested), in each
case to the appropriate addresses and fax numbers set forth below (or to such
other addresses and fax numbers as a party may designate by notice to the other
parties):
SELLER: COMPANY:
XXXX X. XXXXXXXX COMPLETE TOWER SOURCES, INC.
000 Xxxxxxxxxxxx Xxxx 000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000 Xxxxxxxx, XX 000000
Fax No.: (000) 000-0000
With a copy to: Attention: Chairman of the Board
G. XXXXXXXXX XXXXXXX, ESQ. PURCHASER:
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx X, Xxxxx 000-X AYIN HOLDING COMPANY, INC.
Xxxxxxxxx, XX 00000-0000 00000 XX 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx, President
With copies to :
CHARYS HOLDING COMPANY, INC.
0000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx X000
Xxxxxxx, Xxxxxxx 00000
Attention : Xxxxx X. Xxx, Xx., Chief
Executive Officer
and
PAUL, HASTINGS, XXXXXXXX & XXXXXX, LLP
000 Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Fax No: (000) 000-0000
Attention: Xxxxx Xxxxxxx
Either Party may change its address for receiving notice by giving written
notice to the other Party in the manner provided in this Section 4.3.
4.4 Governing Law. This Agreement shall be governed by, and construed,
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enforced and interpreted in accordance with, the substantive laws (without
regard to its conflicts of laws provisions) of the State of Delaware.
4.5 Successors and Assigns. This Agreement, and the rights and
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obligations of the Parties, shall inure to the benefit of and be binding on the
Parties and their respective successors
and assigns. Seller not may assign any rights, benefits, duties or obligations
under this Agreement.
4.6 Entire Agreement. This Agreement, the Stock Purchase Agreement,
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and Employment Agreement express the entire agreement and understanding between
the Parties with respect to the subject matter hereof, and all promises,
representations, understandings, arrangements and prior agreements are merged
herein and therein and superseded hereby and thereby.
4.7 Rules of Construction. The term "including" shall mean "including
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without limitation." The term "person" shall be broadly construed to mean any
individual, trust, partnership, corporation, limited liability company,
organization, joint venture or any other entity or body of any nature. The
Article, Section and other headings contained herein are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
4.8 Expenses. Each Party shall pay its own costs and expenses in
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connection with the transactions contemplated by this Agreement.
4.9 Counterparts. This Agreement may be executed in multiple
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counterparts, each of which shall for all purposes be deemed to be an original
and all of which, when taken together, shall constitute one and the same
instrument.
4.10 Set-Off. The Purchaser shall be entitled to set-off from any
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amounts payable hereunder any amounts owed by Seller or the Company to Purchaser
pursuant to the Stock Purchase Agreement or the other documents and instruments
executed and delivered in connection therewith.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
COMPANY: SELLER:
COMPLETE TOWER SOURCES, INC.
BY: /S/ Xxxx X. Xxxxxxxx /S/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
NAME: Xxxx X. Xxxxxxxx
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TITLE: President
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PURCHASER :
AYIN HOLDING COMPANY INC.
BY: /S/ Xxxxx X. Xxxxxx
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NAME: Xxxxx X. Xxxxxx
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TITLE: President
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SIGNATURE PAGE TO NON-COMPETITION AGREEMENT
