EXECUTION COPY
EXHIBIT 2.6
NONCOMPETITION AND NONDISCLOSURE AGREEMENT
NONCOMPETITON
AND NONDISCLOSURE
AGREEMENT
(the "Non-Competition
Agreement"), made as of the 23 day of June
2004, by and among HY-Tech Technology
Group, Inc., a Delaware corporation ("Hy-Tech Technology"), Hy-Tech Computer
Systems, Inc., a Delaware corporation
("Hy-Tech Computer
Systems" and together
with Hy-Tech Technology, "HYTT"), Gary McNear ("McNear") and Craig Conklin
("Conklin" and collectively with McNear and HYTT, the "HYTT Parties") and
Encompass Group Affiliates, Inc., a
Delaware corporation ("Encompass").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to that certain Agreement, dated May __, 2004, among
Encompass and HYTT (the "Agreement"), HYTT has agreed to (i) refrain from
pursuing certain rights it may have (the
"Rights") and (ii) license certain of
its assets to Encompass, in accordance with the terms of certain license
agreements (the "Licenses") to be entered into
among Encompass and HYTT on the
date hereof (the "Closing").
WHEREAS, in order to
protect the value of the Rights and the Licenses
and to protect the business of Encompass
and its Affiliates,
the parties hereto
have agreed that, for the consideration contained in the Agreement, the HYTT
Parties shall not compete with Encompass, in accordance with the terms and
conditions hereof; and
WHEREAS, the
agreements
of the HYTT Parties not to compete with
Encompass as provided herein are an integral part of the transactions
contemplated by the Agreement, and without
such agreements,
Encompass would not
have entered into the Agreement.
NOW, THEREFORE,
in consideration of the covenants and agreements
contained herein, the payment of the
consideration
hereunder and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending
to be legally bound hereby, agree as
follows:
1. Certain Definitions. Capitalized terms used herein and
not
otherwise defined shall have the meanings
ascribed to them in
the Agreement;
provided, however, that the following terms shall have the meanings set
forth
below irrespective of the meanings such
terms may have in the Agreement:
(a) "Affiliate" of any person means any other person,
directly or indirectly, through one or more intermediary
persons,
controlling,
controlled by or under common control with
such person.
(b) "Business"
means
(i) the marketing, sale,
integration, distribution or repair of computer
systems, components,
equipment
or peripherals, and any related consulting work, and (ii) conducting any
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business of a nature (A) now or anytime
hereafter engaged in by Encompass or its
current or future subsidiaries or (B) engaged in by
Hy-Tech Computer Systems or
its subsidiaries at the time of
Closing, or (C)
engaged in by any of BCD 2000,
Inc., Cyber Test, Inc. or Pacific Magtron International Corp. ("Potential
Encompass Subsidiaries") at the time the stock or assets of
which are acquired
by Encompass.
(c) "Confidential
Information" means all information
(i) heretofore or hereafter
developed or used by a
HYTT Party relating to
the
Business, or the operations, employees, customers, suppliers or
distributors of
HYTT relating to the Business including, but not limited to, customer lists,
customer orders, financial data, pricing
information and price lists, business
plans and market strategies and arrangements, all books, records, manuals,
advertising materials, catalogues, correspondence, mailing lists, production
data, sales materials and records,
purchasing materials
and records,
personnel
records, quality control records and
procedures included in
or relating to the
Business, and (ii) all such information of Encompass, its Affiliates and the
Potential Encompass Subsidiaries obtained by the HYTT
Parties prior to the date
hereof.
(d) The term
"control", with
respect to any person,
means the power to direct the
management and policies of such person,
directly or
indirectly,
by or through
stock ownership, agency or otherwise, or pursuant to or in connection
with an
agreement, arrangement or understanding
(written or oral) with one or more other
persons by or through stock ownership, agency or otherwise; and the terms
"controlling" and "controlled" have
meanings correlative to the foregoing.
(e) "Market" means the world.
(f) The term "person" means an individual,
corporation, partnership, joint venture,
limited liability company, association,
trust, unincorporated organization or other entity,
including a government
or
political subdivision or an agency or
instrumentality thereof.
(g) "Restricted
Period" means the period commencing
from and after the date of this
Non-Competition
Agreement and ending on the
fifth anniversary hereof.
2. Noncompetition in the Market.
(a) At all times
from and after the date of this
Non-Competition Agreement and until the
expiration of the Restricted Period, (i)
no HYTT Party will own or control,
throughout
the Market,
any business or
any
person who is engaged in any business,
that competes, directly or indirectly,
with the Business or is otherwise
engaged in
activities
competitive
with the
Business, (ii) no HYTT Party shall
directly, indirectly,
and whether for itself
or on behalf of any other person
(including any of its
Affiliates),
throughout
the Market, directly or indirectly,
engage in, own,
manage, operate,
provide
financing to, control or participate in the
ownership, management or control of,
or otherwise have a financial interest
(whether, except as provided in Section
4, as a stockholder, director, officer,
representative,
subcontractor, partner,
consultant, proprietor, member, agent or
otherwise) in, or aid or assist anyone
else in the conduct of, any business or any person who is engaged in any
business, that competes, directly or indirectly, with the Business or is
otherwise engaged in activities competitive
with the Business, and (iii) no HYTT
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Party shall, either personally or by its agent or by letters,
circulars or
advertisements and whether for itself or on
behalf of any other person, canvass
or solicit, or enter into or effect (or cause
or authorize
to be solicited,
entered into or effected), directly or
indirectly, for or on behalf of itself or
any other person, any business relating to the
Business from any person who is,
or has at any time within five (5) years
prior to the date of such action been,
a customer or supplier of the Business or
Encompass or Encompass' Affiliates.
(b) Notwithstanding
the foregoing, (i) for
a period
of three (3) months following the Closing,
Hy-Tech Computer Systems shall be
permitted to sell, in the ordinary course of its business, any inventory not
sold on or prior to the Closing and (ii) provided that HYTT acquires the
business of Robotic Workspace Technology, Inc. ("RWT"), for so long as RWT is
engaged so
