|
COVENANT NOT TO COMPETE
This
Covenant Not to Compete (the “Covenant”) is
entered into and effective as of July 15, 2008 by and between
_________________________________ (“Seller”) and
Platinum Studios, Inc., a California corporation
(“Purchaser”).
WHEREAS,
Purchaser, Seller and others have entered into an Acquisition
Agreement dated as of July 15, 2008 (the “Acquisition
Agreement”) pursuant to which Purchaser is purchasing
all of the outstanding membership interests in WOWIO, LLC, a
Pennsylvania limited liability company (the
“Company”), including the membership interests in
the Company owned by Seller (“Seller’s Membership
Interests”). Capitalized terms not otherwise defined
herein shall have the same meanings set forth for such terms
in the Acquisition Agreement;
WHEREAS,
Seller is receiving significant consideration in exchange for
the sale of Seller’s Membership Interests to Purchaser
pursuant to the terms of the Acquisition
Agreement;
WHEREAS,
to preserve the value of the business of the Company being
acquired by Purchaser under the Acquisition Agreement, it is a
condition to the consummation of the sale of Seller’s
Membership Interests thereunder that Seller shall enter into
this Covenant;
NOW,
THEREFORE, in consideration of the mutual promises made
herein, Seller hereby agrees as follows:
1.
Covenant Not to Compete or Solicit.
(a)
Non-Competition .
For a period of three years measured from the Closing Date (the
“Non-Competition Period”), Seller shall not, without
the prior written consent of Purchaser, engage in a Competitive
Business Activity (as defined below) anywhere in the Restricted
Territory (as defined below).
(i)
For
all purposes hereof, the term “Competitive Business
Activity” shall mean: (A) engaging in, or managing or
directing persons engaged in any business in competition with
the business of the Company being acquired by Purchaser
pursuant to the Acquisition Agreement (the “Acquired
Business”); (B) acquiring or having an ownership
interest in any entity that derives revenues from any business
substantially similar to the Acquired 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 (C) participating in the
operation, management or control of any firm, partnership,
corporation, entity or business (each, an
“Entity”) described in subsection (B)
above.
(ii)
For
all purposes hereof, the term “Restricted
Territory” shall mean each and every country, province,
state, city or other political subdivision in which the
Company is engaged in the Acquired Business.
(iii)
Notwithstanding
the provisions of subsection (i) above, the term
“Competitive Business Activity” does not include
(A) writing, editing, contributing to, compiling, publishing,
or promoting a book, magazine, or other literary work,
electronically or otherwise as long as such activities are not
being performed by Seller as an employee of, or independent
contractor or consultant for, a business substantially similar
to the Acquired Business; or (B) giving lectures, giving
addresses, speaking at conferences, or engaging in any other
type of public speaking
(b)
Non-Solicitation .
During the Non-Competition Period, Seller shall not 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 or independent contractor of
the Company or Purchaser or any of its subsidiaries to terminate
his or her employment or engagement with the Company or Purchaser;
provided, however, that any general solicitation of employees or
independent contractors not specifically targeted to
Purchaser’s 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.
<
|
