NON-COMPETITION AND NON-DISCLOSURE AGREEMENT This NON-COMPETITION AND NON-DISCLOSURE AGREEMENT (this "Agreement") is made as of October 30, 2000, by and between PurchasePro.com, Inc., a Nevada corporation (the "Company"), and Ronald M. Dressin ("Mr. Dressin"). RECITALS -------- WHEREAS, the Company is purchasing all of the issued and outstanding stock (the "Stock") of Stratton Warren Software, Inc. ("Stratton") from Mr. Dressin, the sole stockholder of Stratton pursuant to that certain Stock Purchase Agreement by and among the Company, Stratton and Mr. Dressin, dated as of October 30, 2000 (the "Purchase Agreement") (capitalized terms used herein and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement); and WHEREAS, the going concern value of the capital stock and the business of Stratton being sold by Mr. Dressin to the Company (the "Acquisition") would be diminished substantially if Mr. Dressin were to compete with the Company and/or Stratton in the provision of e-commerce products and services in the foodservice and/or hospitality industry (the "Business") within the United States (the "Territory"); NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and in connection with the Closing under the Purchase Agreement and the sale of the Stock in connection therewith, the parties hereto agree as follows: 1. Non-Competition. As an inducement for the Company to enter into --------------- the Purchase Agreement and to pay the Purchase Price for the Acquisition, and in consideration of Mr. Dresssin's exposure to confidential information of the Business, Mr. Dressin hereby covenants as follows: a. In General. Commencing on the date hereof (the "Effective ---------- Date") and for a period of two (2) years after the Effective Date (the "Term"), Mr. Dressin shall not, directly or indirectly, own, manage, engage in, operate or conduct, prepare to or plan to conduct or assists any person or entity to conduct any business, or have any interest in any business, person, firm, corporation or other entity (as a principal, owner, agent, employee, shareholder, officer, director, joint venturer, partner, security holder (except for the ownership of publicly-traded securities constituting not more than five percent (5%) of the outstanding securities of the issuer thereof), creditor (except for trade credit extended in the ordinary course of business), consultant or in any other capacity) that engages, directly or indirectly, in any business which is substantially similar to or competitive with the Business anywhere in the Territory. The covenants set forth in this Section 1(a) shall be ------------ construed as a series of separate covenants covering their subject matter in each of the separate states where the Company conducts the Businesses, and except for geographic coverage, each such separate covenant shall be deemed identical in terms to the covenant set forth above in this Section 1(a). To the ------------ extent that any such covenant shall be judicially unenforceable in any one or more of such state, such covenant shall not be affected with respect to each of the other states in the Territory. Each covenant with respect to such state in the Territory shall be construed as severable and independent. b. No Diversion of Others. During the Term, Mr. Dressin shall ---------------------- not, either for himself or for any other person, firm, corporation or other entity, directly or indirectly, or by action in concert with others: (i) induce or influence, or seek to induce or influence, any person who is engaged by the Company or Stratton (as an agent, employee, consultant, or in any other capacity) or any successor thereto with the purpose of obtaining such person as an employee or customer for a business competitive with the Business; or (ii) divert or take away or attempt to divert or take away, or solicit or attempt to solicit, any existing customer of Company or Stratton (whether or not such customer is actually a customer of the Business as of the Effective Date, including without limitation any customer solicited by Mr. Dressin or which became known by Mr. Dressin prior to the Effective Date) with the purpose of obtaining such person as an employee or customer for a business competitive with the Business. c. Organizing Competitive Business. Without limiting any of the ------------------------------- other provisions contained in this Section 1, during the Term, Mr. Dressin shall --------- not plan to compete, prepare to compete or discuss the Company's or Stratton's business or the Business with any third party, planning or preparing to compete with the Business, or conspire with agents, employees, consultants, other representatives of the Company or Stratton or any other third party for the purpose of organizing any business activity competitive with the Business. 2. Confidential Information and Non-Disclosure. ------------------------------------------- a. Definition of Confidential Information. For purposes of this -------------------------------------- Agreement, "Confidential Information" shall include, without limitation, all of the following materials and information of the Company and Stratton (whether or not reduced to writing and whether or not patentable or protected by copyright): (i) any and all trade secrets concerning the business and affairs of the Company or Stratton, (ii) any and all product specifications, procedures, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions, models, documentation, techniques, diagrams, flowcharts, existing new products and new technology information, product copies, manufacturing, development or marketing techniques, material development or marketing timetables, strategies and development plans, and past, current and planned research and development, current and planned manufacturing and distribution methods and processes, customer lists, current customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies and information, systems, structures and architectures (and related processes, formulae, compositions, improvements, devices, inventions, discoveries, designs, methods and information), information related to the customers, suppliers or personnel, all historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel and personnel training and techniques and materials, and any and all notes, analysis, compilations, studies, summaries, and other material prepared by or for the Company or Stratton containing or based, in whole or in part, on any information included in the foregoing. The parties hereto agree that the failure of any Confidential Information to be marked or otherwise labeled as confidential or proprietary information shall not affect its status as Confidential Information. Notwithstanding the foregoing, Confidential Information shall not include (1) any information which is generally known to the public or to companies in businesses similar to the Business, (2) any information which later, through no act of Mr. Dressin or any other party to the Purchase Agreement (except the Company), becomes generally known or (3) any information required to be disclosed by Person pursuant to a subpoena or court order, or pursuant to a requirement of a governmental agency or law of the United States of America or a state thereof or any governmental or political subdivision thereof, provided that (a) Mr. Dressin will provide the Company with prior written notice of such disclosure in order that the Company may attempt to obtain a protective order or the assurance of confidential treatment and (b) Mr. Dressin will cooperate with the Company in attempting to obtain such order or assurance. b. Non-Use and Non-Disclosure. Commencing on the date hereof and at -------------------------- all times thereafter, Mr. Dressin shall hold in the strictest confidence (except as previously approved by the Company in writing), and shall not, directly or indirectly, disclose, divulge, reveal, report, publish, transfer or otherwise communicate, or use for its or his own benefit or the benefit of any other person, partnership, firm, corporation or other entity, or use to the detriment of the Company, or misuse in any way, any Confidential Information. Mr. Dressin acknowledges that he will in no way infringe upon any copyrights of the Company or Stratton and will in no way use, copy, appropriate or redistribute any part of the Confidential Information, whether obtained directly or indirectly from the Company or Stratton, without a specific written license agreement with the Company or Stratton. It is agreed that any derivative, modification or elaboration of any Confidential Information by any third party remains the proprietary property of the Company or Stratton for purposes of this Agreement. Mr. Dressin and the Company each hereby stipulate that, as between them, all Confidential Information acquired by the Company constitutes important, material and confidential and/or proprietary information of the Business, constitutes unique and valuable information, and affects the successful conduct of the Business and the Company's goodwill, and that the Company shall be entitled to recover its damages, in addition to any injunctive remedy that may be available, for any breach of this Section 2. --------- c. Trade Secrets. All trade secrets of the Company or Stratton will ------------- be entitled to all of the protection and benefits under all applicable federal and state trade secrets law. If any information that the Company deems to be a trade secret is found by a court of competent jurisdiction not to be a trade secret for purposes of this Agreement, such information will, nevertheless, be considered Confidential Information for purposes of this Agreement. Mr. Dressin hereby waives any requirement that the Company submit proof of the economic value of any trade secret or post a bond or other security. d. Ownership. Mr. Dressin hereby acknowledges and agrees that all --------- right, title and interest in and to any Confidential Information shall be the exclusive property of the Company or Stratton. Without limiting the foregoing, Mr. Dressin shall assign to the Company any and all right, title or interest which Mr. Dressin may have in all Confidential Information made, developed or conceived of in whole or in part by Mr. Dressin or any employee or consultant of Mr. Dressin or Stratton who conceived in whole or in part such Confidential Information. Mr. Dressin further agrees to execute and deliver any and all instruments, and to do all other things reasonably requested by the Company in order to vest more fully in the Company all ownership rights in such Confidential Information. All equipment, notebooks, documents, memoranda, reports, files, samples, books, correspondence, lists, other written and graphic records, and the like, in any way relating to any Confidential Information or the Business, which Mr. Dressin or his employees, assigns or consultants prepared, used, constructed, observed, processed, or controlled (collectively, "Materials") shall be the Company's exclusive property, and Mr. Dressin hereby agrees to deliver all Materials, together with any and all copies thereof, promptly to the Company at the Company's request. 3. Reasonableness of Restrictions. MR. DRESSIN HAS CAREFULLY READ AND ------------------------------ CONSIDERED THE PROVISIONS OF SECTIONS 1 AND 2 HEREOF AND, HAVING DONE SO, HEREBY AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH SECTIONS ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY AND THE BUSINESS. 4. Injunctive Relief and Termination. --------------------------------- a. In General. Mr. Dressin acknowledges and agrees that the Company ---------- shall suffer irreparable harm in the event that Mr. Dressin breaches any of his or its obligations under Section 1 or 2 hereof, and that monetary damages shall be inadequate to compensate the Company for any such breach. Notwithstanding the arbitration provision of the Purchase Agreement, Mr. Dressin agrees that in the event of any breach or threatened breach by Mr. Dressin of any of the provisions of Section 1 or 2 hereof, the Company shall be entitled to a --------- - temporary restraining order, preliminary injunction and permanent injunction in order to prevent or restrain any such breach or threatened breach by Mr. Dressin, or by any or all of Mr. Dressin's agents, representatives or other persons directly or indirectly acting for, on behalf of or with Mr. Dressin. b. No Limitation of Remedies. Notwithstanding the provisions set ------------------------- forth in Section 4(a), above, or any other provision contained in this ------------ Agreement, the parties hereby agree that no remedy conferred by any of the specific provisions of this Agreement, including, without limitation, this Section 4, is intended to be exclusive of any other remedy, and each and every --------- remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. 5. MISCELLANEOUS ------------- a. Notices. All notices, requests and other communications ------- hereunder must be in writing and will be deemed to have been duly given only if delivered personally against written receipt or by facsimile transmission with answer back confirmation or mailed (postage prepaid by certified or registered mail, return receipt requested) or by overnight courier to the parties at the following addresses or facsimile numbers: If to Mr. Dressin, to: Ronald M. Dressin 13661 Acorn Patch Lane Poway, California 92064 If to the Company, to: PurchasePro.com, Inc. 3291 North Buffalo Drive Las Vegas, NV 89129 Facsimile No.: (702)316-7001 Attention: Scott Wiegand All such notices, requests and other communications will (i) if delivered personally to the address as provided in this Section 5(a), be deemed given upon ------------ delivery, (ii) if delivered by facsimile transmission to the facsimile number as provided in this Section 5(a), be deemed given upon receipt, and (iii) if ------------ delivered by mail in the manner described above to the address as provided in this Section 5(a), be deemed given upon receipt (in each case regardless of ------------ whether such notice, request or other communication is received by any other Person to whom a copy of such notice, request or other communication is to be delivered pursuant to this Section). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other parties hereto. b. Entire Agreement. This Agreement (and all exhibits attached ---------------- hereto), the Purchase Agreement (and all exhibits and schedules attached thereto) and all other documents delivered in connection herewith supersede all prior discussions and agreements among the parties with respect to the subject matter hereof and thereof and contains the sole and entire agreement among the parties hereto with respect thereto. c. Waiver. Any term or condition of this Agreement may be waived at ------ any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party hereto of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by law or otherwise afforded, will be cumulative and not alternative. d. Amendment. This Agreement may be amended, supplemented or --------- modified only by a written instrument duly executed by or on behalf of each party hereto. e. No Third Party Beneficiary. The terms and provisions of this -------------------------- Agreement are intended solely for the benefit of each party hereto and the Company's successors or assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other Person. f. No Assignment; Binding Effect. This Agreement shall inure to the ----------------------------- benefit of any successors or assigns of the Company. Mr. Dressin shall not be entitled to assign his obligations under this Agreement. g. Headings. The headings used in this Agreement have been inserted -------- for convenience of reference only and do not define or limit the provisions hereof. h. Severability. If any provision of this Agreement is held to be ------------ illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and mutually acceptable to the parties herein. i. Governing Law. This Agreement shall be governed by and construed ------------- in accordance with the laws of the State of California applicable to contracts executed and performed in such State, without giving effect to conflicts of laws principles. j. Attorneys Fees. In the event suit or action is brought by any -------------- party under this Agreement to enforce or construe any of its terms, the prevailing party shall be entitled to recover, in addition to all other amounts and relief, its reasonable costs and attorneys fees incurred at and in preparation for arbitration, trial, appeal and review, such sum to be set by the arbitrator or court before which the matter is heard. k. Construction. No provision of this Agreement shall be construed ------------ in favor of or against any party on the ground that such party or its counsel drafted the provision. Any remedies provided for herein are not exclusive of any other lawful remedies which may be available to either party. This Agreement shall at all times be construed so as to carry out the purposes stated herein. l. Counterparts. This Agreement may be executed in any number of ------------ counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one and the same instrument. [SIGNATURE PAGE TO FOLLOW] IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement as of the date first above written. PURCHASEPRO.COM, INC., a Nevada corporation By: _________________________________ Name: _______________________________ Title: ______________________________ RONALD M. DRESSIN _________________________________ Ronald M. Dressin [SIGNATURE PAGE TO THE NON-COMPETITION AND NON-DISCLOSURE AGREEMENT]
Non-Competition and Non-Disclosure Agreement - PurchasePro.com Inc. and Ronald M. Dressin
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