NON-COMPETITION
AGREEMENT
HARRIS STRATEX NETWORKS,
INC.
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NON-COMPETITION
AGREEMENT
NON-COMPETITION AGREEMENT, dated as of January 26, 2007 (this
“ Agreement ”), among HARRIS CORPORATION, a
Delaware corporation (“ Harris ”), STRATEX
NETWORKS, INC., a Delaware corporation (“ Stratex
”), and HARRIS STRATEX NETWORKS, INC., a Delaware corporation
(the “ Company ”).
WHEREAS, Harris, Stratex, the Company and Stratex Merger Corp., a
Delaware corporation and wholly owned subsidiary of the Company
have entered into an Amended and Restated Formation, Contribution
and Merger Agreement, dated as of December 18, 2006, as
amended by that certain letter agreement, dated January 26,
2007 (the “ Formation Agreement ”), among the
parties thereto pursuant to which the Company was formed to acquire
Stratex pursuant to the Merger and to receive the Contributed
Assets from Harris in the Contribution Transaction, in each case on
the terms and subject to the conditions set forth in the Formation
Agreement;
WHEREAS, because of the importance of preserving the value of the
business being contributed by Harris as a going concern, Stratex
was not willing to enter into the Formation Agreement without the
undertakings of Harris contained in this
Agreement; and
WHEREAS, the execution and delivery of this Agreement is a
condition to closing under the Formation Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual
covenants in the Agreements, the parties agree as
follows:
1. Definitions. The term “ Restricted
Business ” means the development, manufacture,
distribution and sale of any microwave radio systems and related
components, systems and services which are (i) competitive
with the products listed in Schedule 1 hereto, or
(ii) which are substantially similar to such products in form,
fit and function when used in terrestrial microwave point-to-point
communications networks that provide access and trunking of voice
and data for telecommunications networks anywhere in the world. In
addition, all capitalized terms used but not defined in this
Agreement shall have the meanings assigned to them in the Formation
Agreement; provided, however , that notwithstanding the
foregoing neither the Company nor any of its Subsidiaries shall be
deemed to be a Subsidiary or Affiliate of Harris or any of its
other Subsidiaries or Affiliates for purposes of this
Agreement.
2. Non-Competition. In consideration for the issuance
to Harris of shares of the Company pursuant to the Formation
Agreement and the performance by Stratex of its obligations under
the Agreements (collectively, the “ Non-Compete
Consideration ”), Harris agrees that, during the period
commencing on the date of this Agreement and ending on the fifth
anniversary of the date hereof, Harris will not, and will not
permit any of its Subsidiaries to (a) engage, directly or
indirectly, in the Restricted Business, (b) form any Person
other than the Company and its Subsidiaries (a “ Covered
Person ”) or change or extend the current business
activities of any existing Covered Person for the purpose of
engaging, directly or indirectly, in the Restricted Business or
(c) invest, directly or indirectly, in any Covered Person
engaged, directly or indirectly, in the Restricted Business in any
material respect; provided, however , that notwithstanding
the foregoing Harris and/or its Subsidiaries may
(i) collectively own less than 20% of the total equity
interests in any Covered Person engaged in the Restricted Business
as long as none of the employees of Harris or any of its
Subsidiaries is involved in the management of such Covered Person,
(ii) participate as a passive investor with no management
rights in any investment fund that holds an ownership interests in
Covered Persons engaged in the Restricted Business which is managed
by Persons that are not Affiliates of Harris (each, an “
Unaffiliated Person ”) (x) with any employee
benefit or retirement plan funds and (y) with any other funds
subject, in the case of this clause (y) only, to a
maximum interest in such investment fund of 15% and
(iii) acquire a Covered Person or business unit of a Covered
Person engaged in the Restricted Business if (x) the
Restricted Business contributed less than 20% of such Covered
Person’s or business unit’s, as applicable, total
revenues (based on its latest annual audited financial statements,
if available) and (y) such Covered Person or Harris, as
applicable, divests or ceases to conduct the Restricted Business
within 18 months after the acquisition date. Notwithstanding
anything in this Agreement to the contrary, the defined term
“Restricted Business” shall not include, and the
prohibition contained in this Section 2 shall in no way
prohibit Harris and/or its Subsidiaries from,
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(a) purchasing and reselling
products produced by, and marked with the brands of, an
Unaffiliated Person in connection with the sale, service, design or
maintenance of a system that contains or uses microwave radios or
related components, systems or services or (b) developing,
manufacturing, distributing or selling microwave radios or related
components, systems or services for use by Government
Entities.
3. Sufficiency of Consideration. Each of the parties
acknowledges that the Non-Compete Consideration is sufficient
consideration for the duration and scope of the non-competition
agreement contained herein and that such duration and scope are
reasonable in all respects.
4. Severability; Enforceability. If any provision of
this Agreement, or any part thereof, is held by a court or other
authority of competent jurisdiction to be invalid or unenforceable,
the parties agree that the court or authority making such
determination will have the power to reduce the duration or scope
of such provision or to delete specific words or phrases as
necessary (but only to the minimum extent
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