Document:

exv10w3

 

Exhibit 10.3

EMPLOYEE SEVERANCE AND RESTRICTIVE COVENANT AGREEMENT

     THIS EMPLOYEE SEVERANCE AND RESTRICTIVE COVENANT AGREEMENT (“Agreement”)
is made as of this 30th day of September, 2004, by and between Halifax
Corporation, a Virginia corporation (“Company”), and L.L. Whiteside
(“Employee”).

BACKGROUND

     A. Pursuant to that certain Agreement and Plan of Merger (the “Merger
Agreement”) dated the date hereof by and among Company, Employee, AlphaNational
Technology Services, Inc., a Texas corporation (“ANTS”), AlphaNational
Acquisition Inc., a Delaware corporation, and certain shareholders of ANTS
parties thereto, Company has agreed to acquire ANTS through the consummation of
merger transactions more fully described in the Merger Agreement (the
“Transactions”).

     B. Company and Employee desire to set forth certain arrangements in the
event of Employee’s separation from the Company.

     C. It is a condition precedent to the respective obligations of the
parties to the Merger Agreement to consummate the Transactions that Company and
Employee enter into this Agreement.

     NOW, THEREFORE, in consideration of the facts, mutual promises, and
covenants contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:

          1. Office and Duties. During the term of this
Agreement, Employee shall serve as Senior Vice President Service & Support of
the Company and shall report to the President and Chief Executive Officer of
the Company, which as of the date hereof is Charles L. McNew.

          2. Base Salary. In consideration of the services
rendered by Employee to Company, Employee shall receive an annual base salary
(“Base Salary”) of $193,000, payable in equal periodic
installments in accordance with Company’s regular payroll practices in effect
from time to time.

          3. Severance.

               (a) In the event Employee’s employment with Company is terminated for
other than “Cause” or “Good Reason” (as defined below) or as permitted in
Section 3(c) during the period beginning on the date hereof and ending on the
third annual anniversary of the date hereof, Employee’s base salary shall
continue as severance payments until, and terminate upon, the 12 month
anniversary of the date of such termination. Upon termination of Employee’s
employment with Company, whether for Cause or otherwise, Employee shall be
entitled to any earned and unpaid benefits (other than base salary) up to the
date of termination, provided, however, that Company may set off any amounts
owed by Employee to Company or its affiliates (including but not limited to any
unearned salary advances or outstanding loans)

 

 

against any payments due Employee hereunder (whether for severance or
otherwise). The severance payments referenced above shall be payable during
the applicable severance period specified above in accordance with Company’s
regular payroll practices in effect and shall be subject to such withholding as
may be required by applicable law.

               (b) For purposes of this Agreement, the term “Cause” shall mean the
following: (i) if Employee is in material violation or breach of the terms of
this Agreement or neglects or refuses to perform his employment duties
reasonably assigned to him by the person referred to in Section 1 hereof as the
person to whom Employee reports or fails to attempt in good faith to follow any
material express written direction of any lawful rule or regulation established
by the Company or its Board of Directors which is consistent with the scope of
Employee’s employment duties and such neglect, refusal, violation or breach
continues uncured for thirty (30) days following receipt by Employee of written
notice of such breach (specifying in reasonable detail the basis therefore and
stating that it is grounds for Cause); provided, however, the Employee shall be
permitted to respond and to defend himself before the Board of Directors or any
appropriate committee thereof within a reasonable period of time following
written notification of any proposed termination; provided, further, however,
that Employee shall have this cure right only twice during each twelve (12)
consecutive month period; provided, further, that the cure provision contained
in this Section 3(b)(i) shall not apply to any breaches of the covenants
contained in Section 4 hereof; or (ii) if Employee commits fraud or theft
against Company and/or its subsidiaries or affiliates or is convicted of a
felony offense or any crime involving moral turpitude.

               For purposes of this Agreement, termination by Employee of employment with
Company for “Good Reason” shall mean termination based on any of the following:
(i) a reduction by Company in Employee’s salary, compensation or benefits (as
set forth in Section 1 hereof or as increased at any time during the term of
this Agreement); (ii) a demotion in Employee’s position with the Company from
the position referenced in Section 1 hereof; (iii) a material breach by Company
of the terms of this Agreement; or (iv) Company’s requiring Employee to be
based more than 25 miles from the greater Fort Worth, Texas area.

               (c) The Company shall have the right to terminate Employee’s employment
without the payment of severance (i) in the event of Employee’s death or (ii)
if, due to any physical or mental illness, disability or incapacity, Employee
is prevented from performing the essential functions of his employment duties
for a period of not less than ninety (90) consecutive days or for an aggregate
of one hundred fifty days during any period of twelve consecutive months, even
with reasonable accommodations.

               (d) Recognition. Employee recognizes and accepts that
(i) Employee is employed by Company on an “at will” basis, (ii) this Agreement
does not guarantee or otherwise provide for employment and that, at any time
and for any reason, Employee may resign or Company may terminate Employee’s
employment with Company, and (iii) Company shall not, in any case, be
responsible for any additional amount, severance pay, termination pay,
severance obligation or other damages whatsoever arising from the termination
of his employment, above and beyond those specifically provided for in this
Agreement.

          4. Restrictive Covenants.

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               (a) Employee will not, during the term of his employment with Company and
for one year thereafter and in any event no earlier than two years from the
date hereof (the “Restricted Period”), in any capacity (including, but not
limited to, owner, member, partner, shareholder, consultant, advisor,
financier, agent, employee, officer, director, manager or otherwise), whether
directly, indirectly or through affiliates, within the State of Texas and
within a 100 mile radius of the location of any office of Company or its
subsidiaries or affiliates, for his own account or for the benefit of any
person or entity, establish, engage in or be connected with (i) the Business
(as defined herein) or (ii) any business which is similar to or in competition
with the business conducted by Company (or any subsidiaries or affiliates
thereof) during the Restricted Period.

               (b) Employee will not, during the Restricted Period, in any capacity
(including, but not limited to, owner, member, partner, shareholder,
consultant, advisor, financier, agent, employee, officer, director, manager or
otherwise), whether directly, indirectly or through affiliates, for their own
account or for the benefit of any other person or entity, including without
limitation, a person or entity in (i) the Business or (ii) any business in
competition with Company (or any subsidiaries or affiliates thereof) during the
Restricted Period:

                    (i) Solicit, hire, contract, engage, retain, divert, induce or accept
business from or otherwise take away or interfere with any customer of Company
(or any subsidiaries or affiliates thereof) or any prospective customer of
Company (or any subsidiaries or affiliates thereof) with which Company (or any
subsidiaries or affiliates thereof) has had a substantial business contact
during the Restricted Period for the purpose of providing the same or similar
services or goods as that of Company (or any subsidiaries or affiliates
thereof); and/or

                    (ii) Solicit, divert or induce any of the employees or consultants of
Company (or any subsidiaries or affiliates thereof) to leave or to work for
Employee or any person or entity with which Employee is connected.

               (c) Employee will not, at any time after the date hereof, whether
directly, indirectly or through affiliates, disclose, communicate or divulge to
any person or entity, or use for the benefit of any person or entity, any
secret, confidential or proprietary knowledge or information with respect to
the conduct or details of the business (including, without limitation, the
Business) conducted by Company (or any subsidiaries or affiliates thereof)
including, but not limited to, know-how, processes, customers, prospects,
costs, pricing information, trade secrets, products, employees, agents,
representatives, policies, marketing methods and strategies, finances,
financial condition and suppliers.

               (d) Neither Company nor Employee will, at any time after the date hereof,
whether directly, indirectly or through affiliates, publish or communicate
disparaging or derogatory statements or opinions about the other (and with
respect to the Company or ANTS, including but not limited to, disparaging or
derogatory statements or opinions about Company’s, ANTS’ and/or their
respective subsidiaries’ or affiliates’ management, products or services) to
any third party. It shall not be a breach of this Section for either party to
testify truthfully in any judicial or administrative proceeding or to make
statements or allegations in legal filings that are based on his reasonable
belief and are not made in bad faith.

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               (e) Employee agrees that at no time will it take any action, directly or
indirectly, to circumvent its respective obligations under, or to deprive
Company (or its subsidiaries or affiliates) of any benefit intended by, any
provision of this Agreement. Without limiting the generality of the foregoing,
Employee shall not in any way assist or enable any person or entity to take any
action that Employee is prohibited from taking himself pursuant to this
Agreement.

               (f) Employee and Company agree that any breach by either party of the
covenants and agreements contained in this Section 4 may result in irreparable
injury to the other (including, with respect to the Company, its subsidiaries
and affiliates) for which money damages may not adequately compensate the
injured party and, therefore, in the event of any such breach, Employee or
Company, as the case may be, shall be entitled (in addition to any other rights
and remedies which it may have at law or in equity) to seek to have an
injunction issued by any competent court of equity enjoining and restraining
Employee or Company, as the case may be, and any other person or entity
involved therein from continuing such breach.

               (g) If any portion of the covenants and agreements contained in this
Section 4, or the application thereof, is construed to be invalid or
unenforceable, then the other portions of such covenant(s) or agreement(s) or
the application thereof shall not be affected and shall be given full force and
effect without regard to the invalid or unenforceable portions. If any
covenant or agreement in this Section 4 is held to be unenforceable because of
the area covered, the duration thereof, or the scope thereof, then the court
making such determination shall have the power to reduce the area and/or
duration and/or limit the scope thereof, and the covenant or agreement shall
then be enforceable in its reduced form.

               (h) The term, “Business”, as used herein, means providing onsite
computer/network repairs, help desk support, and related computer services.

               (i) This Section 4 shall be void and of no force and effect if Employee is
terminated without Cause or if Employee terminates his employment for Good
Reason.

          5. Miscellaneous.

               (a) Waivers and Amendments. This Agreement may be
amended or modified only by a written instrument signed by all the parties.
Neither the failure, nor any delay, on the part of any party to exercise any
right, remedy, power or privilege hereunder shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any right, remedy, power or
privilege hereunder, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder, preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege
hereunder.

               (b) Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the State of
Delaware (notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary), and without the aid of any canon,
custom or rule of law

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requiring construction against the draftsman.

               (c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
delivered (personally, by courier service such as Federal Express, or by other
messenger) or when deposited in the United States mails, registered or
certified mail, postage prepaid, return receipt requested, addressed as set
forth below:

	 	 	 	 	 	 	 
	

	 	(i)
	 	If to Employee:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	L.L. Whiteside	 	 
	

	 	 	 	1618 Forest Bend Lane	 	 
	

	 	 	 	Keller, TX 76248	 	 
	 
	 	 	 	 	 	 
	

	 	(ii)
	 	If to Company:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	Halifax Corporation	 	 
	

	 	 	 	5250 Cherokee Avenue	 	 
	

	 	 	 	Alexandria, Virginia 22312	 	 
	

	 	 	 	Attn: Joseph Sciacca, Chief Financial Officer	 	 
	

	 	 	 	Telefax: (703) 658-2426	 	 
	 
	 	 	 	 	 	 
	 	with a copy, given in the manner prescribed above, to
	 
	 	 	 	 	 	 
	

	 	 	 	Blank Rome LLP	 	 
	

	 	 	 	One Logan Square	 	 
	

	 	 	 	Philadelphia, PA 19103	 	 
	

	 	 	 	Attn: Barry H. Genkin, Esq.	 	 
	

	 	 	 	Telefax: (215) 832-5514	 	 

     In addition, notice by mail shall be by air mail if posted outside of the
continental United States.

     Any party may alter the addresses to which communications or copies are to
be sent by giving notice of such change of address in conformity with the
provisions of this Section for the giving of notice.

               (d) Binding Nature of Agreement. The rights and
obligations of both parties under this Agreement shall inure to the benefit of
and shall be binding upon their heirs, successors and assigns.

               (e) Assignment. This Agreement may not be assigned by
Employee. Company, without the consent of Employee, may assign its rights and
obligations hereunder to an affiliate thereof or in connection with a sale of
substantially all of its assets.

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               (f) Execution in Counterparts. This Agreement may be
executed in any number of counterparts, including by facsimile, each of which
shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same
instrument. This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.

               (g) Provisions Severable. If any provision of this
Agreement is construed to be invalid or unenforceable, such determination shall
not affect the remaining provisions of this Agreement, all of which shall
remain in full force and effect.

               (h) Entire Agreement. This Agreement contains the
entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, with respect thereto.

               (i) Section Headings. The Section headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.

               (j) Gender, Etc. Words used herein, regardless of the
number and gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine, feminine
or neuter, as the context indicates is appropriate.

[Signature page follows]

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     IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement, intending to be legally bound hereby, as of the date first above
written.

	 	 	 	 	 
	 	 	HALIFAX CORPORATION
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 	 	Name: Charles McNew
	 	 	Title: President & CEO
	 
	 	 	 	 
	 	 	EMPLOYEE:
	 
	 	 	 	 
	 	 	

	 	 	L.L. WHITESIDE

[Signature Page to Employee Severance and Restrictive Covenant Agreement]exv10w9

 

Exhibit 10.9

Summary of Understanding with

Barnabas Foundation and

Christian Reformed Home Missions

Regarding Class 1 Unit Repurchases

Effective August 2004

The understanding among the management of JCM Partners, LLC (the “Company”) and
JCM Properties, LLC (the “Subsidiary”) and Barnabas Foundation (“Barnabas”) and
Christian Reformed Home Missions (“CRHM”) has the following terms:

	 	1.	 	The purchase price for Barnabas’ and CRHM’s Class 1 Units is fixed at
$1.56 per Class 1 Unit (Barnabas and CRHM are referred to herein as
the “Entities”);
	 
	 	2.	 	The Company will use its commercially reasonable best efforts to cause
the Subsidiary to purchase the Entities’ Class 1 Units no later than
March 31, 2005, with approximately half of the Entities’ Class 1 Units
to be purchased by December 31, 2004 (herein, the “Targeted Repurchase
Dates”);
	 
	 	3.	 	The Subsidiary will repurchase the Entities’ Class 1 Units earlier
than the Targeted Repurchase Dates if the Company is successful in
raising capital on terms acceptable to the Company, and management of
the Company has determined that it is prudent to purchase the
Entities’ Class 1 Units earlier than the Targeted Repurchase Dates;
	 
	 	4.	 	Any purchases by the Subsidiary of the Entities’ Class 1 Units from
either CRHM or Barnabas shall be made in tandem for each entity, e.g.,
500,000 Units repurchased from Barnabas and 500,000 Units repurchased
from CRHM;
	 
	 	5.	 	The Subsidiary will give priority in using available funds to
repurchases of Units of other members under the Company’s repurchase
program; and
	 
	 	6.	 	Each purchase will be documented pursuant to the Company’s customary
forms used to process repurchases under the Company’s repurchase
guidelines. The first purchase is anticipated to be made in September
2004 in an amount yet to be determined.

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