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NON-COMPETITION AGREEMENT

NonCompetition Agreement

NON-COMPETITION AGREEMENT | Document Parties: EXTENDED SYSTEMS INC | Sybase, Inc You are currently viewing:
This NonCompetition Agreement involves

EXTENDED SYSTEMS INC | Sybase, Inc

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Title: NON-COMPETITION AGREEMENT
Governing Law: California     Date: 8/1/2005
Industry: Computer Peripherals     Sector: Technology

NON-COMPETITION AGREEMENT, Parties: extended systems inc , sybase  inc
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Exhibit 2.6


NON-COMPETITION AGREEMENT

        This Non-Competition Agreement (the " Agreement ") is made and entered into as of July 28, 2005, by and between Sybase, Inc., a Delaware corporation (" Parent ") and Charles Jepson (" Equity Holder ").

RECITALS

        A.    This Agreement is entered into in connection with that certain Agreement and Plan of Merger dated as of July 28, 2005 (the " Merger Agreement "), by and among Parent, Ernst Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (" Merger Sub "), and Extended Systems, Incorporated, a Delaware corporation (the " Company "). Pursuant to and subject to the terms of the Merger Agreement, at the Effective Time (as defined in the Merger Agreement) the Merger Sub will be merged with and into the Company (the " Merger "), the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation, and the Company shall thereupon become a wholly-owned subsidiary of Parent.

        B.    In order to induce Parent to consummate the transactions contemplated by the Merger Agreement (including but not limited to acquisition by Parent of the Company and the settlement of all of Equity Holder's stock and other equity interests in the Company), and to protect for Parent all of the goodwill associated with the business of the Company and to be acquired by Parent, Equity Holder is willing to enter into this Agreement.

        C.    This Agreement is a material inducement to the willingness of the parties to enter into the Merger Agreement and consummate the transactions contemplated thereby.

AGREEMENT

        The parties hereby agree as follows:

         1.     Experience and Skill of Equity Holder.     As an owner, chief executive officer and key employee of the Company, Equity Holder has been actively involved in the management of the Company's business and in the development of the Company's products and has thereby acquired considerable experience and skill. Parent wishes to protect its investment in the business acquired pursuant to the Merger Agreement by restricting the activities of Equity Holder which might compete with or otherwise harm such business, and, as part of the consideration and inducement to Parent for acquiring the business, Equity Holder is willing to agree to and abide by such restrictions as hereinafter provided.

         2.     Non-Competition and Non-Solicitation of Employee Covenants.     

         2.1     General.     Equity Holder acknowledges that he holds a substantial number of shares of the Common Stock of the Company. Equity Holder further acknowledges that the value of the consideration paid by Parent in connection with its acquisition of the Company pursuant to the Merger Agreement is substantial and that preservation of the goodwill associated with the Company is a part of the consideration which Parent is receiving in the Merger Agreement. Parent desires that Equity Holder enter into a non-competition agreement with Parent as set forth in this section, and Equity Holder is willing to agree to such non-competition provisions as set forth below. The Company and Equity Holder agree that such non-competition provisions are separately bargained-for consideration and are material inducements to Parent to enter into the Merger Agreement. Accordingly, Equity Holder and the Company agree to the non-competition and non-solicitation provisions set forth in this section.

         2.2     Non-Competition.     

        (a)   During the period beginning at the Effective Time and ending on the date that is two years following the Effective Time (the "Restricted Period"), Equity Holder covenants and agrees that he will


 

not, directly or indirectly either for Equity Holder or for any other person or business entity, do any of the following:

          (i)  engage in the business of developing, selling, or otherwise distributing or providing products or offering or performing services similar or competing with those products and services of the Company as of the Effective Time (the "Restricted Business") anywhere the Company is then providing products and services; however, nothing in this agreement shall prevent Equity Holder from serving as an employee, consultant or contractor of any entity that engages in a Restricted Business so long as Equity Holder do not directly or indirectly engage or participate in the Restricted Business or otherwise assist that entity in engaging or participating in the Restricted Business.

         (ii)  solicit, induce or attempt to solicit or induce any then current employee, temporary worker or independent contractor of the Company to discontinue employment or engagement with the Company for the purpose of seeking or commencing employment or engagement with any third party;

        (iii)  persuade or attempt to persuade any person providing services, products or facilities to the Company not to do business with the Company or to reduce the amount of business it does with the Company.

        (iv)  For purposes of clause (i) above, the term "engage" in a business shall include, without limitation, any relationship as an officer, director, stockholder, owner, investor, salesperson, affiliate, co-owner, partner, member, trustee, promoter, founder, technician, engineer, analyst, employee, agent, representative, distributor, re-seller, sublicensor, supplier, investor or lender, consultant or contractor, advisor or manager of or to the particular business, or otherwise acquiring or holding any interest in, or otherwise engaging in the provision of service to, any person or entity that engages in the particular business.

        (b)   The provisions of this Agreement shall not be construed to prevent Equity Holder from being gainfully employed. Equity Holder understands and acknowledges that the Parent is prepared to vigorously enforce the promises of this Agreement, and that violation of this provision could result in the assessment of damages and other legal remedies against Equity Holder and any of his subsequent employers. Equity Holder acknowledges that product and service life cycles in the Company's business are, at least, two years and, thus, the provisions of this Section 2.2 are reasonable. Equity Holder further acknowledges that the Company's business is global in nature and that its products are sold and distributed throughout the world and, thus, the broad geographic scope of this Section 2.2 is reasonable.

        (c)   Nothing in this Section 2.2, however, shall prevent Equity Holder from (x) owning as a passive investment less than 1% of the outstanding shares of the capital stock of a publicly-held corporation if Equity Holder is not otherwise associated directly or indirectly with such corporation or any affiliate of such corporation or (y) serving as an employee or consultant to the Parent.

         2.3     Severability.     


 
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