Fill and Sign the Sample Noncompetition Agreement between Two Businesses Form

NON-COMPETITION AGREEMENT THIS NON-COMPETITION AGREEMENT (this "Agreement") is made and entered into this ____________ day of _______________, 20________, by and between WPI GROUP, INC., a New Hampshire corporation, WPI ELECTRONICS, INC., a New Hampshire corporation and WPI POWER SYSTEMS, INC., a New Hampshire corporation (collectively "Seller") and WARNER POWER, LLC, a New Hampshire limited liability company (the "Company"). W I T N E S S E T H: WHEREAS, Seller has been engaged. in the manufacture, sale and distribution of power conversion products, including power systems and ballasts (the "Business"); WHEREAS, the Company has concurrently herewith acquired substantially all of the assets of Seller used and useful in the Business pursuant to an Asset Purchase Agreement dated as of the date hereof between the Seller and Company (the "Purchase Agreement"); WHEREAS, WPI Group, Inc. is the sole shareholder of WPI Power Systems, Inc. and WPI Electronics, Inc.; WHEREAS, in order to protect the Company's interest in the Business, the Company's obligation to consummate the Purchase Agreement is conditioned upon Seller entering into this Agreement and agreeing to the restrictive covenants contained herein. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Confidentiality. Seller acknowledges that it has been exposed to or has had access to confidential information regarding the Business which is proprietary to the Company, including, without limitation, the Company's manufacturing processes, trade secrets, "know-how", customer lists or records, supplier lists or records, information regarding independent contractors, information and trade secrets of third parties, marketing plans or strategies, pricing policies, product development techniques or plans, designs and design projects, inventions, research projects, financial records and, generally, the confidential information of the Company which gives, or may give, the Company an advantage in the marketplace against its competitors (all of the foregoing being herein referred to collectively as "Proprietary Information"). Seller acknowledges that the Proprietary Information constitutes a proprietary and exclusive interest of the Company and, therefore, Seller agrees that it shall hold and keep confidential and not divulge to any other person any of the Proprietary Information, or use the same for its own direct or indirect benefit or for the benefit of any other person other than the Company or its affiliates; provided, however, that Seller may disclose Proprietary Information (i) with the Company's express written consent, (ii) if such information is or becomes generally known to the public other than as a result of a breach hereof or of a similar confidentiality agreement, or (iii) as required by law or judicial or administrative process and following prior written notice to the Company. 2. Non-Competition. Seller agrees that for a period of three (3) years after the date hereof (the "Non-Competition Period"), it shall not "participate" in any business or enterprise which manufactures, sells or distributes any products which are similar to and competitive with the products manufactured, sold or distributed by the Company on the date hereof and which business or enterprise sells or distributes such products anywhere in North America and Europe. For purposes hereof, the term "participate" includes any direct or indirect interest in any business or enterprise, whether as an officer, director, employee, shareholder, partner, sole proprietor, member, agent, representative, independent contractor, joint venturer, consultant, franchisor, franchisee, distributor, creditor or otherwise; provided, however, that the term "participate" shall not include ownership of less than 3 % of the stock of a publicly- held corporation whose stock is traded on a national securities exchange or in the over-the-counter market, so long as Seller has no active participation in the business of such corporation. 3. Non-Solicitation. a. Seller agrees that the Seller shall not directly or indirectly, (except on behalf of the Company) (i) for a period of one (1) year after the date here (the "Employee Non-Solicitation Period") induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any employee thereof; or (ii) for a period of three (3) years after the date hereof (the "Customer Non-Solicitation Period"), with respect to business activities conducted and products manufactured, sold or distributed on the date hereof by the Company, induce or attempt to induce any customer, supplier, licensee, licensor, distributor or other business relation of the Company to cease doing business with the Company or in any way interfere with the relationship between any such customer, supplier, licensee, distributor or business relation and the Company, as the case may be (including, without limitation, making any negative statements or communications about the Company). b. Company agrees that the Company shall not directly or indirectly, (except on behalf of the Seller) (i) for the Employee Non-Solicitation Period, induce or attempt to induce any employee of the Seller to leave the employ of the Seller, or in any way interfere with the relationship between the Seller and any employee thereof; or (ii) for the Customer Non-Solicitation Period, with respect to business activities conducted and products manufactured, sold or distributed on the date hereof by the Company, induce or attempt to induce any customer, supplier, licensee, licensor, distributor or other business relation of the Seller to cease doing business with the Seller or in any way interfere with the relationship between any such customer, supplier, licensee, distributor or business relation and the Seller, as the case may be (including, without limitation, making any negative statements or communications about the Seller). c. The foregoing provisions shall not apply in the event that an employee of either party should respond to a "general advertisement" for an employment position with the other party, without any direct or indirect inducement by such party to do so. The term "general advertisement" shall mean the publication in a newspaper of general circulation, or other media, including electronic media, in New Hampshire advertising the availability of employment positions with such party. 4. Revision. If, at the time of enforcement of this Agreement, a court shall hold that the duration, scope, geographic area or other restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope, geographic area or other restrictions deemed reasonable under such circumstances by such court shall be substituted for the stated duration, scope, geographic area or other restrictions. 5. Remedies. Seller recognizes and affirms that in the event of a breach of §§ 1, 2 or 3 of this Agreement, money damages would be inadequate and the Company would have no adequate remedy at law. Accordingly, Seller agrees that the Company shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and Seller's obligations under this Agreement not only by an action or actions for damages, but also by an action or actions for specific performance, injunctive and/or equitable relief, in either case without proof of actual damages and without posting a bond or other security, in order to enforce or prevent any violations (whether anticipatory, continuing or future) of this Agreement. In the event of a breach or violation by Seller of § 2 or 3 of this Agreement, the running of the Non- Competition Period or Non- Solicitation Period, as the case may be, (but not of Seller's obligations hereunder) shall be tolled during the continuance of any actual breach or violation. 6. Binding Agreement. This Agreement shall be binding upon the parties hereto and their respective heirs, successors, personal representatives and assigns. 7. Entire Agreement; Amendment. This instrument contains the entire agreement of the parties with regard to the subject matter hereof, and may not be amended except by an agreement in writing signed by the parties hereto. 8. Notices and Other Communications. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally (including delivery by courier service), transmitted by telegram or facsimile transmission, or mailed by registered or certified mail, postage prepaid, return receipt requested, as follows: a. If to the Company, to: Warner Power, LLC 40 Depot Street Warner, NH 03278 Attn: Dennis M. Deegan Telephone: (603) 456-3111 Facsimile: (603) 456-2098 with a copy to: McLane, Graf, Raulerson & Middleton, Professional Association 900 Elm Street, P.O. Box 326 Manchester, NH 03105-0326 Attention: William V. A. Zorn Telephone: (603) 625-6464 Facsimile: (603) 625-5650 b. If to Seller, to: WPI Group, Inc. 1155 Elm Street Manchester, NH 03101 Attn: Michael B. Tule, Esquire Telephone: (603) 627-3500 Facsimile: (603) 627-3150 or to such other address as the party to whom notice is to be given may have previously furnished to the other party in writing in accordance herewith. Notice shall be deemed given on the date receive (or if receipt thereof is refused, on the date of such refusal). 9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Hampshire, without regard to the conflict of law principles of such State. 10. Counterpart. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same agreement. [The remainder of this page intentionally left blank.] IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date first above written. COMPANY: WARNER POWER, LLC, a New Hampshire Limited Liability Company By:/s/Dennis Deegan ------------------ Name:Dennis Deegan Title: SELLER: WPI GROUP, INC., a New Hampshire Corporation By:/s/Michael Tule -------------------- Name:Michael Tule Title:Vice President and General Counsel WPI POWER SYSTEMS, INC., a New Hampshire Corporation By:/s/Michael Tule ---------------------- Name:Michael Tule Title:Vice President and General Counsel WPI ELECTRONICS, INC., a New Hampshire Corporation By:/s/Michael Tule ------------------------- Name:Michael Tule Title:Vice President and General Counsel