Sample Business Contracts

Non-Competition Agreement - Palm Inc. and Be Inc.

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                                    FORM OF
                           NON-COMPETITION AGREEMENT

   THIS NON-COMPETITION AGREEMENT (the "Agreement") is made as of the Effective
Date (as defined below) by and between Palm, Inc., a Delaware corporation
("Parent"), and the undersigned stockholder or optionholder ("Stakeholder") in
Be Incorporated, a Delaware corporation ("Seller").

   WHEREAS, concurrently with the execution of this Agreement, Parent, an
indirect wholly owned subsidiary of Parent ("Buyer") and Seller are entering
into an Asset Purchase Agreement dated as of August 16, 2001 (the "Purchase
Agreement") pursuant to which Buyer has agreed to purchase certain of the
assets (the "Assets") of Seller (the "Purchase"). The Closing Date (as defined
in the Purchase Agreement) shall be the "Effective Date" of this Agreement.

   WHEREAS, in connection with the Purchase, Seller shall receive significant
consideration in exchange for the sale of Assets pursuant to the terms of the
Purchase Agreement, and it is anticipated that Stakeholder will become an
employee of Parent as of the Effective Date.

   WHEREAS, as a condition to the Purchase, and to preserve the value of the
Assets being acquired by Buyer after the Purchase, the Purchase Agreement
contemplates, among other things, that Stakeholder shall enter into this
Agreement and that this Agreement shall become effective on the Effective Date.

   WHEREAS, Stakeholder's primary place of employment with Seller is in

   NOW, THEREFORE, in consideration of the mutual promises made herein, Parent
and the Stakeholder hereby agree as follows:

   1. Covenant Not to Compete or Solicit.

      (a) Non-Competition. Beginning on the Effective Date and ending on the
   earlier of: (i) the second anniversary of the Effective Date and (ii) the
   date of termination of Stakeholder's employment with Parent by Parent for
   other than Cause (as defined below) (the "Non-Competition Period"),
   Stakeholder shall not (other than on behalf of Parent), without the prior
   written consent of Parent, engage in a Competitive Business Activity (as
   defined below) anywhere in the Restricted Territory (as defined below). Upon
   termination of the Purchase Agreement without the prior occurrence of the
   Closing thereunder, this Agreement shall automatically terminate and be of
   no further force or effect.

      Solely for purposes of this Agreement, the term "Cause" shall mean: (i)
   Stakeholder's continued failure to perform his or her duties and
   responsibilities in good faith and in a commercially reasonable manner for a
   period of thirty days after written notice thereof from Parent to
   Stakeholder; (ii) Stakeholder personally engaging in fraud, (iii)
   Stakeholder being convicted of a felony; (iv) Stakeholder materially
   breaching any term of this Agreement or any other written agreement between
   Stakeholder and Parent or any subsidiary of Parent; (v) Stakeholder's
   commencement of employment or consulting arrangement with another employer
   while he or she is an employee of Parent or any subsidiary of Parent,
   without Parent's prior written consent, excluding any service by Stakeholder
   as an outside member of a board of directors; (vi) material noncompliance by
   Stakeholder with the human resources policies of Parent generally known by
   Parent's employees, made known or made available to Stakeholder or delivered
   in writing to Stakeholder, provided Stakeholder has been provided notice of
   such noncompliance and fails to cure such noncompliance within thirty (30)
   days of such notice; (vii) Stakeholder's material nonconformance with
   Parent's standard business practices and policies generally known by
   Parent's employees, made known or made available to Stakeholder or delivered
   in writing to Stakeholder, provided Stakeholder has been provided notice of
   such nonconformance and fails to cure such nonconformance within thirty (30)
   days of such notice; or (viii) termination or loss, through no fault or
   derogation of duty on the part of Parent, of Stakeholder's



   employment authorization from the U.S. Immigration and Naturalization
   Service or the U.S. Department of State reflecting a right to work in the
   United States.

      For all purposes hereof, the term "Competitive Business Activity" shall
   mean: (i) engaging in, or managing or directing persons engaged in any
   business in competition with Parent's operating systems platform business;
   (ii) acquiring or having an ownership interest in any entity that derives
   revenues from any business in competition with Parent's operating systems
   platform business (except for passive ownership of one percent (1%) or less
   of any entity whose securities are publicly traded on a national securities
   exchange or market or five percent (5%) or less of any entity whose
   securities are not publicly traded on a national securities exchange or
   market); or (iii) participating in the operation, management or control of
   any firm, partnership, corporation, entity or business (each, an "Entity")
   described in clause (ii) of this sentence; provided, however, that
   Stakeholder shall not be deemed to be engaging in a Competitive Business
   Activity solely because Stakeholder is employed by, serves as an independent
   contractor to or is otherwise associated with an Entity that engages in a
   Competitive Business Activity if (i) Stakeholder is employed in, serves as
   an independent contractor to or is otherwise associated with a division of
   such Entity other than the division engaged in a Competitive Business
   Activity (a "Competing Division") and (ii) the Stakeholder does not provide
   technical, marketing or other assistance to a Competing Division.

      For all purposes hereof, the term "Restricted Territory" shall mean each
   and every country, province, state, city or other political subdivision of
   North America, Central America, South America, Asia, Australia and Europe in
   which Parent is currently engaged in business or otherwise distributes,
   licenses or sells its products.

      (b) Non-Solicitation. During the Non-Competition Period, Stakeholder
   shall not (i) solicit, encourage or take any other action which is intended
   to induce or encourage, or could reasonably be expected to have the effect
   of inducing or encouraging, any employee of the Parent or any of its
   subsidiaries to terminate his or her employment with the Parent; provided,
   however, that any general solicitation of employees not specifically
   targeted to Parent's employees shall not be deemed a violation of this
   Section 1(b).

      (c) The covenants contained in Section 1(a) hereof shall be construed as
   a series of separate covenants, one for each country, province, state, city
   or other political subdivision of the Restricted Territory. Except for
   geographic coverage, each such separate covenant shall be deemed identical
   in terms to the covenant contained in Section 1(a) hereof. If, in any
   judicial proceeding, a court refuses to enforce any of such separate
   covenants (or any part thereof), then such unenforceable covenant (or such
   part) shall be eliminated from this Agreement to the extent necessary to
   permit the remaining separate covenants (or portions thereof) to be
   enforced. In the event that the provisions of this Section 1 are deemed to
   exceed the time, geographic or scope limitations permitted by applicable
   law, then such provisions shall be reformed to the maximum time, geographic
   or scope limitations, as the case may be, permitted by applicable laws.

      (d) Stakeholder acknowledges that following the Effective Date, provided
   he becomes an employee of Parent, he will be subject to Parent's trade
   secret protection policies and agrees to comply with such policies.

      (e) Stakeholder acknowledges (without in any way representing to Parent
   any of the following) that (i) the goodwill associated with the Assets prior
   to the Purchase is an integral component of the value of Assets to Parent
   and is reflected in the consideration to be received by Seller, and (ii)
   Stakeholder's agreement as set forth herein is necessary to preserve the
   value of the Assets for Parent following the Purchase. Stakeholder also
   acknowledges that the limitations of time, geography and scope of activity
   agreed to in this Agreement are reasonable because, among other things, (A)
   Seller and Parent are engaged in a highly competitive industry, (B)
   Stakeholder has unique access to, and will continue to have access to, the
   trade secrets and know-how relating to the Assets, including, without
   limitation, the plans and strategy (and, in particular, the competitive
   strategy) relating to the Assets, (C) if Stakeholder becomes an employee of
   Parent following the Effective Date, Stakeholder is accepting employment
   with Parent on favorable terms in connection with the Purchase, (D) in the
   event Stakeholder's employment with Parent ended, Stakeholder



   would be able to obtain suitable and satisfactory employment without
   violation of this Agreement, and (E) this Agreement provides no more
   protection than is necessary to protect Parent's interests in its goodwill,
   trade secrets and confidential information.

      (f) Stakeholder's obligations under this Agreement shall remain in effect
   if Stakeholder's employment with Parent is terminated for any reason,
   subject to the provisions of Section 1(a) above.

   2. Miscellaneous.

      (a) Governing Law; Consent to Personal Jurisdiction. This Agreement shall
   be governed by the laws of the State of California without reference to
   rules of conflicts of law. Stakeholder hereby consents to the personal
   jurisdiction of the state and federal courts located in California for any
   action or proceeding arising from or relating to this Agreement or relating
   to any arbitration in which the parties are participants.

      (b) Specific Performance; Injunctive Relief. The parties acknowledge that
   Parent will be irreparably harmed and that there will be no adequate remedy
   at law for a violation of any of the covenants or agreements of Stakeholder
   set forth herein. Therefore, it is agreed that, in addition to any other
   remedies that may be available to Parent upon any such violation, Parent
   shall have the right to seek enforcement of such covenants and agreements by
   specific performance, injunctive relief or by any other means available to
   Parent at law or in equity.

      (c) Severability. If any portion of this Agreement is held by an
   arbitrator or a court of competent jurisdiction to conflict with any
   federal, state or local law, or to be otherwise invalid or unenforceable,
   such portion of this Agreement shall be of no force or effect and this
   Agreement shall otherwise remain in full force and effect and be construed
   as if such portion had not been included in this Agreement.

      (d) No Assignment. Because the nature of the Agreement is specific to the
   actions of Stakeholder, Stakeholder may not assign this Agreement. This
   Agreement shall inure to the benefit of Parent and its successors and

      (e) Notices. All notices and other communications hereunder shall be in
   writing and shall be deemed given if delivered personally or by commercial
   messenger or courier service, or mailed by registered or certified mail
   (return receipt requested) or sent via facsimile (with acknowledgment of
   complete transmission) to the parties at the following addresses (or at such
   other address for a party as shall be specified by like notice); provided,
   however, that notices sent by mail will not be deemed given until received:

          (i) if to Parent, to:

                             Palm, Inc.
                             5470 Great America Parkway
                             Santa Clara, CA 95052
                             Attn: General Counsel
                             Telephone No.: (408) 878-9000
                             Facsimile No.: (408) 878-2180

                             with a copy to:

                             Wilson Sonsini Goodrich & Rosati
                             Professional Corporation
                             650 Page Mill Road
                             Palo Alto, California 94304
                             Attn: Katharine A. Martin, Esq.
                             Telephone No.: (650) 493-9300
                             Facsimile No.: (650) 493-6811

          (ii) if to Stakeholder, at the address set forth on the signature
       page hereto.



      (f) Entire Agreement. This Agreement contains the entire agreement and
   understanding of the parties and supersedes all prior discussions,
   agreements and understandings relating to the subject matter hereof. This
   Agreement may not be changed or modified, except by an agreement in writing
   executed by Parent and Stakeholder.

      (g) Waiver of Breach. The waiver of a breach of any term or provision of
   this Agreement, which must be in writing, shall not operate as or be
   construed to be a waiver of any other previous or subsequent breach of this

      (h) Headings. All captions and section headings used in this Agreement
   are for convenience only and do not form a part of this Agreement.

      (i) Counterparts. This Agreement may be executed in counterparts, and
   each counterpart shall have the same force and effect as an original and
   shall constitute an effective, binding agreement on the part of each of the

                 [Remainder of Page Intentionally Left Blank]



   IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.

                                          PALM, INC.:

                                          By: _________________________________

                                          Name: _______________________________

                                          Title: ______________________________


                                          By: _________________________________

                                          Name: _______________________________

                                          Address: ____________________________