Exhibit 10.6
 
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
 
Made as of June 4, 2012
 
Between
 
2314505 ONTARIO INC.
 
(the “Purchaser”)
 
and
 
KAREN DALICANDRO
 
(“Karen”)
 

 
and
 
DONALD DALICANDRO
 
(“Don”)
 

 

 

 
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TABLE OF CONTENTS
 

RECITALS 1     ARTICLE 1 – DEFINITIONS 2   Section 1.1 Definitions 2  
Section 1.2 Defined Terms in Purchase Agreement 3   Section 1.3 Additional Rules
of Interpretation  3       ARTICLE 2 – CONFIDENTIALITY 4   Section 2.1
Acknowledgement 4   Section 2.2 Don's Obligation Not to Disclose 4  
Section 2.3 Karen's Obligation Not to Disclose
4   Section 2.4 Obligation to Return Property 4       ARTICLE 3 –
NON-COMPETITION 5   Section 3.1 Non-Competition by Don 5   Section 3.2
Non-Competition by Karen 5       ARTICLE 4 – NON-SOLICITATION  6   Section 4.1
Non-Solicitation of Employees 6       ARTICLE 5 – GENERAL  6   Section 5.1
Restrictions Reasonable 6   Section 5.2 Termination of Agreement 6   Section 5.3
Equitable Remedies 7   Section 5.4 Survival 7   Section 5.5 Severability 7  
Section 5.6 Representation by Counsel 7   Section 5.7 Governing Law and Forum  7
  Section 5.8 Assignment and Enurement 7   Section 5.9 General 7   Section 5.10
Entire Agreement  7

 
 

 
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NON-COMPETITION AND NON-SOLICITATION AGREEMENT
 
This Agreement (the “Agreement”) dated as of  June 4, 2012 (the “Closing Date”)
between:
 
2314505 ONTARIO INC., a corporation formed under the laws of the Province of
Ontario
 
(the “Purchaser”)
 
- and -
 
KAREN DALICANDRO, an individual residing in Burlington, Ontario
 
(“Karen”)
 
- and -
 
DONALD DALICANDRO, an individual residing in Burlington, Ontario
 
(“Don”)
 
RECITALS
 
A. By a share purchase agreement dated the date hereof (the “Purchase
Agreement”) by and among Don, the Purchaser, DPS, Karen and 2293046 Ontario Inc.
(“Karenco” and, together with Karen, the “Vendors”), the Vendors agreed to sell,
and the Purchaser agreed to purchase, all shares held by the Vendors in the
capital of Apex Systems Integrators Inc. (the “Corporation”).
 
B. Don is Karen’s husband, is the president of the Corporation and will receive
a significant indirect financial benefit from the transactions contemplated
under the Purchase Agreement.
 
C. In connection with the sale of the Corporation to the Purchaser, Don wishes
to be employed by the Corporation under his Employment Agreement following the
closing of the transactions contemplated in the Purchase Agreement and the
Corporation wishes to employ Don under the Employment Agreement.
 
D. Karen’s employment with the Corporation was terminated, effective December
31, 2011.
 
E. Karen and Don each have had access to confidential information customer lists
and other proprietary assets of the Corporation, the use of which would diminish
the value to the Purchaser of the Purchased Shares.
 
F. The Purchaser would not complete the Purchase contemplated by the Purchase
Agreement unless each Principal executes and delivers this Agreement.
 
FOR VALUE RECEIVED, the Parties agree as follows:
 
 
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ARTICLE 1 – DEFINITIONS
 
Section 1.1 Definitions
 
In this Agreement:
 
(1) “Agreement” has the meaning given to it in the Preamble.
 
(2) “Business” means the business of licensing, selling and installing wireless
mobile workforce software solutions (which software applications are limited to
warehouse management, merchandizing, sales and delivery, field service and
logistics and transportation) in Canada and the United States as conducted by
the Corporation on the Closing Date.
 
(3) “Closing Date” has the meaning given to it in the Preamble.
 
(4) “Confidential Information” means collectively all proprietary information,
information treated as confidential by the Corporation, and information not
generally known to the public, concerning the Corporation, the Business and its
Customers, including writings, equipment, processes, sales literature and data,
control systems, operations, drawings, notes, manuscripts, consulting methods
and materials, reports, manuals, invention records, surveys and survey forms,
financial data and information, business plans, customer lists, contact persons,
the identity of or other data about Customers, prices, pricing lists and
policies, inventory lists, financing requirements and services, wages,
arrangements with Suppliers and Customers or product information programs,
systems, software, source code, object code, algorithms, formats, formulas, data
bases, electronically stored or compiled data, plans, projects, designs,
methodologies, procedures, technology, concepts and techniques, ideas, advances
over general common knowledge, copyrights, trade secrets or other materials
embodying trade secrets, Customer or product information or technical,
managerial or business information of the Corporation.  Confidential Information
does not include general technical skills or general experience gained by me
during my contact with the Corporation.
 
(5) “Corporation” has the meaning given to it in Recital A and includes the
corporation resulting from any amalgamation between the Corporation and the
Purchaser.
 
(6) “Customer” means all Persons who, during the 6-month period before the
commencement of the applicable Restrictive Period, were invoiced by the
Corporation and in respect of Don’s Restrictive Period, and any customers of DPS
invoiced by DPS in the twenty-four month period prior to the commencement of
Don’s Restrictive Period.
 
(7) “Don’s Restrictive Period” has the meaning given to it in Section 3.1.
 
(8) “DPS” means DecisionPoint Systems, Inc. and its successors and assigns.
 
(9) “Event of Default” means any one or more of the following:
 
(a)  
a failure by the Purchaser to:

 
(i)  
pay that part of the 2013 EBITDA Basic Earn-Out Amount, if any, owing to the
Vendors under Section 2.4(2)(a) of the Purchase Agreement;

 
(ii)  
deliver that part of the consideration in respect of the 2013 EBITDA Basic
Earn-Out Amount, if any, owing to the Vendors under Section 2.4(2)(b) of the
Purchase Agreement or the 2013 EBITDA Additional Earn-Out Amount, if any, owing
to the Vendors under Section 2.5 of the Purchase Agreement; or

 
(iii)  
pay to the Vendors any principal or interest due under the Convertible Note,

 
 
 
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and, in each such case, such failure continues for a period of 10 Business Days
after the Principals deliver a written notice of default to the Purchaser and
DPS;
 
(b)  
failure by the Corporation to pay to Don any salary due to Don under Section 3.1
of the Employment Agreement or any Bonus Payments due to Don under Article 4 of
the Employment Agreement, and, in each such case, such failure continues for a
period of 10 Business Days after Don delivers a written notice of default to the
Corporation and DPS; and

 
(c)  
Don has terminated the Employment Agreement and his employment thereunder
pursuant to Section 12.1(1)(b) of the Employment Agreement, and Don has given
the Corporation and DPS not less than 10 Business Days written notice to cure
the cause or Deemed Cause specified in such notice;

 
(d)  
the Corporation has terminated the Employment Agreement and Don’s employment
thereunder pursuant to Section 12.1(2)(b) thereof and the Arbitrator has issued
an arbitral award under Article 15 of the Employment Agreement determining that:
(i) the Corporation terminated the Employment Agreement and Don’s employment
thereunder pursuant to Section 12.1(2)(b) thereof; and (ii) the Corporation did
not have cause to terminate the Employment Agreement and Don’s employment
thereunder pursuant to Section 12.1(2)(b) thereof.

 
(10) “Karen’s Restrictive Period” has the meaning given to it in Section 3.1.
 
(11) “Person” is to be broadly interpreted and includes an individual, a
partnership, a corporation, a trust, a joint venture, any Governmental Authority
or any incorporated or unincorporated entity or association of any nature and
the executors, administrators or other legal representatives of an individual in
such capacity.
 
(12) “Principals” means, collectively, Karen or Don, and “Principal” means any
one of them.
 
(13) “Purchase Agreement” has the meaning given to it in Recital A.
 
(14) “Restrictive Period” means Don’s Restrictive Period or Karen’s Restrictive
Period, as the case may be.
 
(15) “Supplier” means all Persons who, during the 6-month period before the
commencement of the applicable Restrictive Period, invoiced the Corporation.
 
(16) “Vendors” means, collectively, Karen and Karenco, and “Vendor” means any
one of them
 
Section 1.2 Defined Terms in Purchase Agreement
 
Any other capitalized terms used in this Agreement but not defined herein shall
have the meanings given to them in the Purchase Agreement.
 
Section 1.3 Additional Rules of Interpretation
 
(1) Gender and Number.  In this Agreement, unless the context requires
otherwise, words in one gender include all genders and words in the singular
include the plural and vice versa.
 
(2) Headings and Table of Contents.  The inclusion in this Agreement of headings
of Articles and Sections and the provision of a table of contents are for
convenience of reference only and are not intended to be full or precise
descriptions of the text to which they refer.
 
(3) Section References.  Unless the context requires otherwise, references in
this Agreement to Sections or Schedules are to Sections or Schedules of this
Agreement.
 
(4) Words of Inclusion.  Wherever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation” and the words following “include”, “includes” or
“including” shall not be considered to set forth an exhaustive list.
 
(5) References to this Agreement.  The words “hereof”, “herein”, “hereto”,
“hereunder”, “hereby” and similar expressions shall be construed as referring to
this Agreement in its entirety and not to any particular Section or portion of
it.
 
(6) Statute References.  Unless otherwise indicated, all references in this
Agreement to any statute include the regulations thereunder, in each case as
amended, re-enacted, consolidated or replaced from time to time and in the case
of any such amendment, re-enactment, consolidation or replacement, reference
herein to a particular provision shall be read as referring to such amended,
re-enacted, consolidated or replaced provision and also include, unless the
context otherwise requires, all applicable guidelines, bulletins or policies
made in connection therewith and which are legally binding.
 
(7) Document References.  All references herein to any agreement (including this
Agreement), document or instrument mean such agreement, document or instrument
as amended, supplemented, modified, varied, restated or replaced from time to
time in accordance with the terms thereof and, unless otherwise specified
therein, includes all schedules and exhibits attached thereto.
 
(8) Writing.  References to “in writing”, “written” and similar expressions
include material that is printed, handwritten, typewritten, faxed, emailed, or
otherwise capable of being visually reproduced at the point of reception.
 
 
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ARTICLE 2 – CONFIDENTIALITY
 
Section 2.1 Acknowledgement
 
Each Principal acknowledges and agrees that he or she is now and will become
aware of Confidential Information relating to the Business during his or her
past employment with the Corporation and, in the case of Don, his continued
employment with the Corporation, and that such Confidential Information is a
valuable, special and unique asset of the Corporation, which has commercial and
competitive value that can be used to the detriment of the Purchaser, if
disclosed.
 
Section 2.2 Don’s Obligation Not to Disclose
 
Except with the prior written consent of the Purchaser, Don agrees during Don’s
Restrictive Period:
 
(a)  
to hold in strict confidence and not use, discuss or disclose, directly or
indirectly, to any other person or entity, any Confidential Information, save
and except in the proper discharge of his employment duties for the Corporation
(while taking appropriate steps to guard the confidentiality of such
information) or as may be specifically required by law; and

 
(b)  
to not remove any articles or copies, facsimiles, reproductions or originals of
any documents or computer software containing Confidential Information from the
premises of the Corporation, save and except in the proper discharge of his
employment duties for the Corporation (while taking appropriate steps to guard
the confidentiality of such information).

 
Section 2.3 Karen’s Obligation Not to Disclose
 
Except with the prior written consent of the Purchaser, Karen agrees during
Karen’s Restrictive Period, to hold in strict confidence and not use, discuss or
disclose, directly or indirectly, to any other person or entity, any
Confidential Information, save and except as may be specifically required by
law.
 
Section 2.4 Obligation to Return Property
 
Karen agrees that, upon the Closing Date, she will, (a) deliver all Confidential
Information to the Corporation, (b) not take with her or retain without advance
written authorization of DPS any documents, files or other property of the
Corporation, and (c) deliver to the Corporation any such documents, files or
property in her possession or custody.  In connection with this Agreement, Karen
recognizes that all documents, files and property that she has received from the
Corporation, including customer or subscriber lists, handbooks, memoranda,
policy manuals, product specifications, and other materials, are for the
exclusive use of the Corporation and the employees thereof who are properly
discharging their responsibilities on behalf of the Corporation, and that she
has no claim or right to the continued use, possession or custody of such
documents, files or property following the termination of her employment
relationship with the Corporation.
 
 
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ARTICLE 3 – NON-COMPETITION
 
Section 3.1 Non-Competition by Don
 
Don undertakes and agrees that, for the period until the later of the date that
is three (3) years from the Closing Date and the date that is two (2) years
after the end of Don’s employment with the Corporation pursuant to the
Employment Agreement (“Don’s Restrictive Period”), he will not, either
individually or in partnership or otherwise in connection with any Person,
directly or indirectly:
 
(a)  
operate, perform, or carry on business;

 
(b)  
render advice to, be employed by, provide services to or for, or permit his name
or any part thereof to be used or employed by or associated with, or otherwise
be engaged in or concerned with a business; or

 
(c)  
lend money to, guarantee the debts or obligations of, have any interest in or
become interested in any capacity in, any Person connected with or interested in
any business,

 
which performs, sells or otherwise provides products or services, similar to or
the same as, or which develops, creates or offers products and services anywhere
in Canada or the United States in competition with the Business of the
Corporation without the prior written consent of DPS, acting reasonably.  For
these purposes, ownership of securities of DPS or any other company whose
securities are publicly traded under a recognized securities regime not in
excess of 5% of any class of such securities shall not be considered to be a
breach of this Section 3.1.  Any activities performed by Don in good faith in
fulfillment of his duties to the Corporation or DPS or the directorships
permitted under the Employment Agreement shall not be considered a breach of the
foregoing covenants.
 
Section 3.2 Non-Competition by Karen
 
Karen undertakes and agrees that, for the period until the date that is three
(3) years from the Closing Date (“Karen’s Restrictive Period”), she will not,
either individually or in partnership or otherwise in connection with any
Person, directly or indirectly:
 
(a)  
operate, perform, or carry on business;

 
(b)  
render advice to, be employed by, provide services to or for, or permit her name
or any part thereof to be used or employed by or associated with, or otherwise
be engaged in or concerned with a business; or

 
(c)  
lend money to, guarantee the debts or obligations of, have any interest in or
become interested in any capacity in, any Person connected with or interested in
any business,

 
which performs, sells or otherwise provides products or services, similar to or
the same as, or which develops, creates or offers products and services anywhere
in Canada or the United States in competition with the Business of the
Corporation without the prior written consent of DPS, acting reasonably.  For
these purposes, ownership of securities of DPS or any other company whose
securities are publicly traded under a recognized securities regime not in
excess of 5% of any class of such securities shall not be considered to be a
breach of this Section 3.2.
 
 
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ARTICLE 4 – NON-SOLICITATION
 
Section 4.1 Non-Solicitation and No Hire of Employees
 
Each Principal agrees that, during his or her Restrictive Period, as applicable,
that he or she shall not directly or indirectly, anywhere in Canada or the
United States:
 
(a)  
induce, advise or encourage any employee, agent, consultant or independent
contractor of the Corporation to terminate his or her relationship with the
Corporation; or

 
(b)  
hire or retain, attempt to hire or retain or cause the hiring or retaining of,
any such employee, agent, consultant or independent contractor, with another
Person, except with the specific, advance written consent of DPS.

 
ARTICLE 5  – GENERAL
 
Section 5.1 Restrictions Reasonable
 
Each Principal acknowledges and agrees that the type and periods of restrictions
imposed in this Agreement are fair and reasonable, and that such restrictions
are intended solely to protect the legitimate interests of the Purchaser and the
Corporation, rather than to prevent him from earning a livelihood.
 
Section 5.2 Termination of Agreement
 
(1) Where an Event of Default occurs, then the obligations of the Principals
under Article 2 of this Agreement shall be terminated and be of no further force
or effect.
 
(2) For greater certainty:
 
(a)  
the Principals shall not deliver a written notice of default in respect of:

 
(i)  
a failure to pay the 2013 EBITBA Basic Earn-Out Amount until the expiry of not
less than 21 days after the final determination of the 2013 EBITBA Basic
Earn-Out Amount and the 2013 EBITBA Additional Earn-Out Amount pursuant to
Section 2.6(3) of the Purchase Agreement; and

 
(ii)  
a failure to deliver that part of the consideration in respect of the 2013
EBITBA Basic Earn-Out Amount under Section 2.4(2)(b) of the Purchase Agreement
and 2013 EBITBA Additional Earn-Out Amount under Section 2.5 of the Purchase
Agreement until the expiry of not less than 30 days after the final
determination of the 2013 EBITBA Basic Earn-Out Amount and the 2013 EBITBA
Additional Earn-Out Amount pursuant to Section 2.6(3) of the Purchase Agreement;
and

 
 
(b)  
Don shall not deliver a written notice of default in respect of a failure to pay
the 2013 Bonus Amount, 2014 Bonus Amount and 2015 Bonus Amount until the expiry
of not less than 10 Business Days after the final determination of the
applicable Bonus Amount pursuant to Section 4.4 of the Employment Agreement.

 
 
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Section 5.3 Equitable Remedies
 
Each Principal acknowledges and agrees that a breach by him of any of the
provisions hereof would cause substantial and irreparable harm to the Purchaser
and the Corporation, which could not be adequately compensated for by damages.
 
Section 5.4 Survival
 
Notwithstanding the termination of this Agreement for any reason, the
aforementioned restrictive covenants and restrictions contained in this
Agreement shall survive and continue in force to the extent specifically set out
in this Agreement.
 
Section 5.5 Severability
 
Whenever possible, each provision and term of this Agreement will be interpreted
in a manner to be effective and valid but if any provision or term of this
Agreement is held to be prohibited or invalid, then such provision or term will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement.  If
any of the covenants set forth this Agreement are held to be unreasonable,
arbitrary or against public policy, such covenants will be considered divisible
with respect to scope, time and geographic area, and in such lesser scope, time
and geographic area, will be effective, binding and enforceable against each
Principal.  Specifically, and without limiting the generality of the foregoing,
to the extent that any provision contained in Sections 3.1, 3.2 or 4.1 is held
by a court of competent jurisdiction to be invalid or unenforceable, in whole or
in part, such invalidity or unenforceability shall not affect the validity or
enforceability of the remaining provisions, or part thereof, and such remaining
provisions, or part thereof, shall remain enforceable and binding.
 
Section 5.6 Representation by Counsel
 
Each Principal hereby states that he has read this Agreement in its entirety,
that he has been given an opportunity to consider the Agreement and seek legal
counsel and advice and that he enters into this Agreement voluntarily and
intending to be legally bound.
 
Section 5.7 Governing Law and Forum
 
This Agreement (and any claim or controversy arising out of or relating to this
Agreement) is governed by, the laws of the Province of Ontario and the federal
laws of Canada applicable therein, and each of the Parties irrevocably attorns
to the exclusive jurisdiction of the courts of Ontario.
 
Section 5.8 Assignment and Enurement
 
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any Principal without the prior written consent of the
board of directors of DPS, and any purported assignment or other transfer
without such consent shall be void and unenforceable.  This Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Parties to this
Agreement and their respective successors and assigns.  No such assignment shall
release the assignor from any of its obligations hereunder.
 
Section 5.9 General
 
Sections 8.4, 8.5, 8.8, 8.9 and 8.13 of the Purchase Agreement are incorporated
by reference into this Agreement as if set out in full herein.
 
Section 5.10 Entire Agreement
 
This Agreement constitutes the entire agreement between the Parties with respect
to the subject matter and supersedes all prior agreements, negotiations,
discussions, undertakings, representations, warranties and understandings,
whether written or oral.
 

 
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The parties have executed this Agreement.
 

 
2314505 ONTARIO INC.
           
By:
/s/ Nicholas R. Toms
     
Name:
     
Title:
 

[illegible]
 
/s/ Karen Dalicandro
 
Signature of Witness
 
KAREN DALICANDRO
 

 
[illegible]
 
/s/ Donald Dalicandro
 
Signature of Witness
 
DONALD DALICANDRO
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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