EXHIBIT 2.5
NONCOMPETITION AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT
is made as of October 13, 2005, between CINEMAWARE, INC. a
California corporation ("Cinemaware"), and eGAMES, INC., a Pennsylvania
corporation ("eGames").
W I T N E S S E T H :
WHEREAS, contemporaneously with the execution and delivery
hereof,
eGames is acquiring the goodwill and
substantially all of the assets used or
useful by Cinemaware in designing,
developing, acquiring, promoting,
distributing, and/or selling interactive
entertainment software for various game
platforms and the Internet (the
"Business"), pursuant to an Asset Purchase
Agreement, dated as of October 6, 2005, to
which eGames and Cinemaware are
parties (the "Purchase Agreement"); and
WHEREAS, execution by Cinemaware of this Agreement is a
condition
precedent to eGames' obligation to perform
under the Purchase Agreement; and
WHEREAS, by virtue of the purchase of the Business, eGames is and
will
be engaged throughout the Area (as
hereinafter defined) in the Business which
was formerly conducted by Cinemaware;
and
WHEREAS, competition by Cinemaware with eGames, or disclosure
by
Cinemaware of certain confidential and
proprietary information of Cinemaware,
will result directly in damage to eGames
and its business, properties, assets,
and goodwill and will cause the loss by
eGames of the benefit of its bargain
with Cinemaware;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable
consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
1. Definitions. The following terms shall have the definitions
set
forth below:
(a) "Affiliate" of a person shall mean any Person that
directly or indirectly controls, is
controlled by, or is under common control
with, the indicated Person.
(b) "Area" shall mean anywhere within any state of the United
States of America or any other country in
which eGames or its Affiliates,
directly or indirectly, at any time during
the three-year period ending on the
date hereof carried on or engaged in
business or otherwise designed, developed,
manufactured, provided, sold, licensed or
distributed its products, services or
solutions.
(c) "Closing Date" shall mean the date of this Agreement.
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(d) "Confidential Information" shall mean all of the following
materials and information (whether or not
reduced to writing and whether or not
patentable) pertaining to the Business:
(1) All items of information relating to the Business
that could be classified as a trade secret
pursuant to law;
(2) The names and addresses of the customers of the
Business and the nature and amount of
business done with such customers;
(3) The names and addresses of employees, with
respect to the Business;
(4) The discoveries, concepts and ideas, whether
patentable or not, related to the nature
and results of research and development
activities, processes and techniques
related to research and development,
designs, drawings and specifications of
Cinemaware relating to the Business;
(5) Source and object codes, flow charts, algorithms,
coding sheets, design concept and related
documentation and manuals of
Cinemaware which relate to the
Business;
(6) Production processes, marketing techniques,
purchasing information, price lists,
pricing policies, quoting procedures,
financial information, customer names and
requirements, customer data and other
materials or information relating to
Cinemaware's manner of doing business with
respect to the Business;
(7) Any other materials or information related to the
Business which are not generally known to
others engaged in similar business
activities.
eGames' or Cinemaware's failure to make and keep any of the
foregoing
confidential shall not affect its status as
part of the Confidential Information
under the terms of this Agreement.
Capitalized terms used but not otherwise defined herein shall have
the
respective meanings given to them in the
Purchase Agreement.
2. Cinemaware covenants that it shall, and shall cause its wholly
owned
and majority owned subsidiaries and other
persons it controls to, for a period
of three (3) years from and after the
Closing Date, observe the following
separate and independent covenants:
(a) Agreement Not to Compete. Except as set forth in this
Agreement, Cinemaware shall not, and shall
not cause or permit any of its wholly
owned or majority owned subsidiaries or
other persons it controls to, anywhere
in the Area, on its own behalf or in the
service or on behalf of others (i)
engage in the Business; or (ii) use, or
become financially interested in (other
than as a holder of less than one percent
of the outstanding securities of any
entity whose voting securities are
registered under the Securities Act of 1933,
as amended, or Section 12 of the Securities
Exchange Act of 1934, as amended),
any business, person or entity that derives
revenues from or otherwise engages
in the Business, or (iii) participat