"[T]he parties agree to ask the Arbitrator to resolve, expeditiously, the following legal issues...: Whether, or to what extent, the non-competition agreement...and the non-solicitation agreement...between Kaba and Gravelle are valid and enforceable under North Carolina law." (Stipulation,¶ 8)
And having been duly sworn, and having duly heard the proofs and allegations of the Parties, do hereby, AWARD, as follows:
Claimant, Gordon Gravelle o/a CodePro Manufacturing ("Gravelle") is represented in this matter by Barry Leon and Owen Bourns. Respondents, Kaba Ilco Corp. ("Kaba") and Chuck Murray ("Murray"), are represented by Mark Vasco and Peggy Kane. The parties have submitted affidavits, briefs and other materials in support of their respective positions on these issues, and the Arbitrator has conducted a brief telephone hearing on the issues as well. This matter is now ripe for decision.
"8.2, Non-Solicitation. For a period of ten (10) years from Closing, Seller shall not, directly or indirectly, solicit or induce or attempt to solicit or induce any employee or customer having a relation with the business of Buyer to leave or cease doing business with Buyer or in any way interfere with the relationship between any such employee or customer and the business."
"Competing Business shall mean the development, manufacture, distribution, sale, marketing, or providing of products and/or services that are the same as, substantially similar to, or otherwise competitive with the Buyer’s code type key cutting machine that the Buyer is purchasing the Software and Technology from the Seller to develop and which is based on or derived from the Software and the Technology.
"Furthermore, Seller may continue to develop, market and sell its key machine featuring a key blank hopper and auto-feed mechanism, designed only to cut single keys by bitting code, stamp, deburr and rerack them, provided, however, that it does not and shall not contain the Software and Technology in any form or version, including any part or derivative thereof, as acquired pursuant to the terms of their Agreement.
(a) Gravelle reconfirmed that all of his right, title and interest in and to the Technology have been transferred to Kaba.
(b) Kaba agreed to pay Gravelle $60,000 in advance payment of the royalties called for in Exhibit 2 of the Purchase Agreement, and, in exchange for the advance royalty payment, the parties agreed that Gravelle’s right to receive royalties for each "stand alone" machine sold by Kaba would not commence until after Kaba had sold 625 machines.
(c) Kaba agreed to pay Gravelle an additional $9,000 for his development work done and to be completed under the Purchase Agreement, thereby increasing the total amount to be paid to Gravelle for such work from $20,000 to $29,000.
(d) Kaba agreed to modify and clarify the terms and conditions of Gravelle’s Non-competition Agreement, as follows:
"Kaba agrees that Gravelle can build a high security code cutting machine [and a "commercial machine" that sells for at least $5,000 USD] that does not use any of the proprietary code, patented electronic touch off feature, nor electronic taper connection feature. Gravelle can use non-proprietary hardware parts that may be similar to those used in the EZ Code (switches, connectors, motors, etc.).
Gravelle can use generic source code commonly used, but shall not use any Technology." (Addendum,¶¶ 5, 8)
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