ALARMGUARD, INC.
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000-0000
NON-COMPETE LETTER AGREEMENT
March 16, 1998
Security Systems, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Asset Purchase Agreement, dated as of March 5, 1998, by and among
Alarmguard, Inc., Security Systems, Inc. d/b/a Sentry
Protective Systems, Xxxxx Xxxx and Xxxxxx Xxxxxx (the "Agreement")
Gentlemen:
Reference is made to the Agreement and the transactions
contemplated thereby. Capitalized terms used herein
without definition shall have the respective meanings
assigned thereto in the Agreement. In consideration of the
rights and obligations of Alarmguard, Inc. under the
Agreement, you hereby agree as follows:
(a) you agree that for a period commencing on the
Closing Date and expiring on the earlier of (i) the second
anniversary of such date or (ii) the date upon which
Purchaser sells all or substantially all of its assets or
becomes owned by an entity not affiliated with Alarmguard
Holdings, Inc., you will not directly or indirectly through
one or more subsidiaries or other intermediaries, other than
pursuant to and in accordance with the express terms and
conditions of this Agreement:
(i) engage or be interested, whether alone or
together, with or on behalf of or through any other Person,
whether as sole proprietor, partner, shareholder, agent,
officer, director, employee, adviser, consultant, trustee,
beneficiary or otherwise, in any Competing Business (as
defined below) or sell or market any products or programs
sold or marketed by the Business or perform any services
performed by the Business or solicit any existing customers
of the Business for any Competing Business; or
(ii) own any capital stock or any other securities
of, or have any other direct or indirect interest in, any
entity which owns or operates a Competing Business;
provided, however, that the foregoing shall not prevent you
from acquiring the securities of or an interest in any
business, provided such ownership of securities or interest
represents at the time of such acquisition, but including
any previously held ownership interest, less than ten
percent (10%) of any class or type of securities of, or
interest in, such business.
(b) you agree that for a period commencing on the
Closing Date and expiring on the third anniversary of such
date with respect to clause (b)(i) and the seventh
anniversary of such date with respect to the other clauses
herein you will not, directly or indirectly through one or
more subsidiaries or other intermediaries, other than
pursuant to and in accordance with the express terms and
conditions of this Agreement,:
(i) offer employment or solicit for employment
any person who was an officer or other employee of the
Purchaser unless such officer or other employee was not
hired by the Purchaser or was so hired but subsequently
terminated by Purchaser other than for cause;
(ii) at any time disclose to any person other than
Purchaser, or use, in competition with or in a manner
otherwise detrimental to the Business interests of
Purchaser, for the benefit of you or others, any
confidential information related to the Business, including
without limitation trade secrets, customer lists, details of
client or customer contracts, pricing policies, operational
methods, marketing plans or strategies, and sales records,
for any reason or purpose whatsoever;
(iii) for any reason contact, solicit or
otherwise seek to conduct Business with, or engage in the
Business with, any clients or customers to whom Purchaser or
Seller has at any time prior to the date hereof rendered
services or sold products; or
(iv) use, authorize or license any third person to
use the name "Sentry Protective Systems" or any variation
thereof in the burglar or fire alarm business.
(c) "Competing Business" means any operations or
business consisting of or competitive with the Business in
the states where Purchaser conducts its Business.
(d) you agree that Purchaser may suffer unique injury
in the event of a breach of the above covenants contained in
this Letter Agreement, which breach could not be adequately
compensated by the payment of damages. Accordingly in the
event of any such breach by you, you agree that this
Agreement may be enforced by a decree of specific
performance or an injunction and further agrees not to
contest any application for specific performance or
injunctive relief which Purchaser may seek and waives any
defense to granting of relief based on the adequacy of
remedy at law or absence of irreparable harm.
(e) you specifically acknowledge and agree that the
time period and scope of the covenants provided for herein
have been determined after negotiations at arms' length, and
that each was represented by counsel of its choice in such
negotiations and that each understands the terms of the
covenant contained herein. In the event that the provisions
of this Letter Agreement should ever be deemed to exceed the
time or geographic limitations or any other limitations
permitted by applicable laws, then such provisions shall be
deemed reformed to the maximum time or geographic
limitations permitted by applicable law. You specifically
acknowledge and agree that the foregoing restrictions are
reasonable and necessary to protect the legitimate interests
of Purchaser, that Purchaser would not have entered into
this Letter Agreement in the absence of such restrictions,
and that any violation of such restrictions will result in
irreparable injury to Purchaser.
(f) Notwithstanding any of the foregoing, you and your
stockholders, directors, officers, employees, consultants
and agents shall be entitled to continue in the sale,
marketing, operation, management and growth of the uniformed
personnel security (guard and patrol) business (or in any
other business in which Purchaser or its successors or
assigns is not currently engaged) including, without
limitation, engaging in the guard and patrol or other
business with existing customers of the Business and
existing and future customers of the Purchaser.
If you are in agreement with the foregoing, please sign
this Letter Agreement in the space below indicated.
Very truly yours,
ALARMGUARD, INC.
By:/s/ Xxxxxx X. XxxXxxxxxx
Xxxxxxx X. XxxXxxxxxx
Chief Executive Officer
ACCEPTED AND AGREED:
Security Systems, Inc.
_______________________
