NON-COMPETITION AGREEMENT
This NON-COMPETITION AGREEMENT made as of the 16th day of
March, 2005
(the "AGREEMENT") is by and among 180 CONNECT INC., a Nevada
corporation
("180"); DIGITAL INTERIORS INC., a California corporation ("DI")
and HOME
DIRECTOR, INC., a Delaware corporation, the sole shareholder of DI
("HD").
WHEREAS 180 Digital Interiors, Inc. a wholly owned
subsidiary of 180
has purchased from DI certain assets which are used in connection
with DI's
business of installing, connecting, integrating and activating
internet home
networks from facilities at the four (4) locations in Livermore and
Montclair,
California; Colorado Springs, Colorado and The Woodlands, Texas
(the
"Purchase"); and
WHEREAS HD is the sole shareholder of DI and as such is
the owner of
all of the issued and outstanding capital stock of DI; and
WHEREAS DI and HD have agreed to execute this Agreement,
voluntarily,
as a condition of and consideration for the Purchase;
NOW, THEREFORE, in consideration of the premises, the
mutual covenants
hereinafter set forth, the terms and conditions of the Purchase by
180 and other
good and valuable consideration, the receipt and sufficiency of
which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
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1.1 DEFINITIONS
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As used herein, the following terms have the following
meanings:
"AFFILIATE" means, with respect to any Person, any other
Person that
directly or indirectly through one or more intermediaries,
controls, is
controlled by or is under common control with, that
Person. The term
"control" (including, with correlative meaning, the terms
"controlled
by" and "under common control with"), as used with respect
to any
Person, means the possession, directly or indirectly, of
the power to
elect a majority of the board of directors or to direct or
cause the
direction of the management and policies of such Person,
whether
through the ownership of voting securities or other
ownership
interests, by Contract, family relationship or otherwise
and, in any
event and without limitation of the foregoing, any Person
owning 10% or
more of the voting securities or other ownership interests
of another
Person shall be deemed to control that Person.
"ASSOCIATE", when used to indicate a relationship with any
Person,
means (i) a body corporate of which that Person
beneficially owns or
controls, directly or indirectly, shares or securities
currently
convertible into shares carrying more than 10% of the
voting rights
under all circumstances or under any circumstances that
have occurred
and are continuing, or a currently exercisable option or
right to
purchase those shares or those convertible securities;
(ii) a partner
of that Person acting on behalf of the partnership of
which they are
partners; (iii) a trust or estate in which that Person has
a
substantial interest or in respect of which he serves as a
trustee or
in a similar capacity; (iv) a spouse of that Person; or
(v) a relative
of that Person or of her spouse if that relative has the
same residence
as that Person.
"BUSINESS" has the meaning set forth in Subsection 2.1(a).
"COMPETE" means directly or indirectly: (i) owning,
controlling,
financing, managing, operating, investing in (other than
investments in
publicly owned companies which constitute not more than 2%
of the
voting securities of such public companies), promoting or
engaging in
any Competitive Business; (ii) working for, advising,
consulting,
representing, or providing information or services to a
Competitive
Business, as a director, officer, employee, agent,
employee or
otherwise; (iii) inducing or influencing or attempting to
induce or
influence any employee of 180 or any of its Affiliates or
Associates to
discontinue, reduce or modify his or her employment with
180 or
Affiliate or Associate; (iv) hiring, employing or
otherwise engaging
the services of, or offering employment to any employee,
agent,
consultant or independent contractor of 180 or any
Affiliate or
Associate; (v) soliciting business from any client or
customer of 180
or any Affiliate or Associate; (vi) inducing or
influencing any client
or customer of 180 or any Affiliate or Associate to (A)
discontinue,
reduce or modify its business relationship with 180 or any
Affiliate or
Associate, (B) to commence doing business with or increase
the amount
of business done with a Competitive Business, or (C) to
hire another
person or entity to provide services being provided by
180; or (vii)
using Confidential Information for personal gain.
"COMPETITIVE BUSINESS" means any (i) Person, business or
concern
engaged or planning to engage in activities that are the
same or
similar to the Business or any existing or planned
business activities
of 180 at any time, or (ii) any Person, business or
concern that owns,
invests in, operates, manages or controls any entity
referred to in
clause (i) of this definition.
"CONFIDENTIAL INFORMATION" means information, technology,
material or
other property of any kind which is confidential or
proprietary to 180
or any Affiliate or Associate or to any supplier,
customer, client,
agent, employee, director or officer of 180 or any
Affiliate or
Associate, including without limitation: (i) the names,
addresses, and
purchasing history of and any other information about the
customers,
clients, employees, consultants, agents, suppliers or
other business
associates of 180 or any Affiliate or Associate; (ii)
Proprietary
Rights of 180 or any Affiliate or Associate whether owned,
licensed or
otherwise held or used; (iii) all current and future
Inventions of 180
or any Affiliate or Associate; (iv) information relating
to the past,
present and contemplated business plans, financial
condition or
financial results, practices, resolutions, products,
strategies,
pricing policies and lists, services, methods of
production and
operation, business processes, marketing and marketing
plans,
distribution, installations, facilities, machinery and
equipment, and
research and development of 180 or any Affiliate or
Associate; (v)
data,
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correspondence, notes, memoranda, manuals, financial
statements, books
and records, documents, licensing arrangements, financing
programs,
credit terms, banking arrangements or other contracts,
terms or
negotiations of any kind whatsoever related to the assets,
financial
condition or business of 180 or any Affiliate or
Associate; (vi)
information which is instructional or informational, or
promotional
materials or manuals; (vii) any information of a
confidential or
sensitive nature which is received from or otherwise
relates to any
Competitive Business; (viii) any information, the
disclosure of which
could be reasonably expected to materially adversely
affect 180 or any
Affiliate or Associate, or affect the competitive position
of 180 or
any Affiliate or Associate; and (ix) originals, and Copies
or
Representations, of any of the foregoing; provided,
however, that
"Confidential Information" does not include information
which is or
becomes generally available to the public, other than as a
result of a
disclosure in violation of this Agreement.
"CONTROL" in relation to a body corporate means control of
the body
corporate, and for the purposes of this Agreement, a
Person or Persons
control a body corporate and a body corporate is
controlled by a Person
or Persons if securities of the body corporate to which
are attached
more than 50% of the votes that may be cast to elect
directors of the
body corporate are held, other than by way of security
only, by or for
the benefit of that Person.
"COPIES OR REPRESENTATIONS" means copies, versions,
summaries,
representations or depictions of any kind or produced in
any manner,
including photocopies or telefax copies, electromagnetic
and electronic
versions, computerized versions and any media on which
such versions
are recorded or stored, plans, diagrams, schematics, blue
prints,
technical drawings, technical specifications, graphics or
other
representations, lists, maps or charts.
"PERSON" means, where applicable, any individual,
partnership,
corporation, limited liability company, association, joint
stock
company, trust, joint venture, unincorporated
organization,
governmental entity or any department, agency or division
thereof.
"PROPRIETARY RIGHTS" means all intellectual property of
180 or any
Affiliate or Associate, including without limitation
foreign and
domestic: (i) patents, patent applications, patent
disclosures and
inventions, (ii) trademarks, service marks, trade dress,
trade names,
logos, industrial designs, internet domain names and 180's
corporate
name (in its jurisdiction of incorporation) and
registrations and
applications for registration thereof, (iii) copyrights
and
registrations and applications for registration thereof,
(iv) mask
works and registrations and applications for registration
thereof, (v)
computer software, programs, database technologies, data
and
documentation (in both source code and object code form),
demo disks,
source language statements and benchmark test results,
(vi) trade
secrets and other confidential and proprietary information
(including,
but not limited to, inventions, whether patentable or
unpatentable),
know-how, licences and copyrightable works, (vii) other
confidential
and proprietary intellectual property rights, (viii)
Copies and
Representations of the foregoing (in whatever form or
medium) and (ix)
all renewals, extensions, revivals and resuscitations of
the foregoing.
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ARTICLE 2
COVENANTS OF DI AND HD
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2.1 NON-COMPETITION
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(a) Acknowledgement. DI and HD acknowledge that: (i)
180 (and its
Affiliates, Associates and subsidiaries) as a
result of the
Purchase is and will continue to be engaged in
the business of
installing, connecting, integrating and
activating structured
wiring/whole house integration networks (the
"BUSINESS"); (ii)
180 (and its Affiliates, Associates and
subsidiaries) are and
will be actively engaged in the Business
throughout North
America, and the Business and its goodwill is and
will be
national and international in scope; (iii) DI and
HD are
familiar with DI trade secrets and with other
proprietary and
confidential information concerning DI and the
Business that
were acqui
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