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NON-COMPETITION AGREEMENT

NonCompetition Agreement

NON-COMPETITION AGREEMENT | Document Parties: Driftwood Ventures, Inc | Zoo Games, Inc You are currently viewing:
This NonCompetition Agreement involves

Driftwood Ventures, Inc | Zoo Games, Inc

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Title: NON-COMPETITION AGREEMENT
Governing Law: Delaware     Date: 9/18/2008
Law Firm: Mintz Levin    

NON-COMPETITION AGREEMENT, Parties: driftwood ventures  inc , zoo games  inc
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NON-COMPETITION AGREEMENT

 

This NON-COMPETITION AGREEMENT (the “ Agreement ”), dated as of September __, 2008, is by and between [NAME] (the “ Stockholder ”) and Driftwood Ventures, Inc., a Delaware corporation (“ Parent ”).

 

RECITALS

 

WHEREAS , Stockholder is the beneficial owner of certain shares of capital stock of Zoo Games, Inc., a Delaware corporation (the “ Target ”);

 

WHEREAS , Stockholder is employed by [EMPLOYER] (hereinafter the “Employer”) pursuant to a written employment agreement dated [DATE], (the “Employment Agreement”);

 

WHEREAS , Parent is acquiring all of the outstanding capital stock and all of the business of Target pursuant to an Agreement and Plan of Merger, dated as of July 7, 2008, by and among Parent, DFTW Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent, Target and the Representative, as amended (the “ Merger Agreement ”);

 

WHEREAS , the Stockholder acknowledges that the businesses conducted by Target prior to the consummation of the transactions contemplated under the Merger Agreement are those of developing, publishing and distributing gaming and packaged entertainment software for use on gaming platforms (collectively, the “ Business ”), which Business is intensely competitive;

 

WHEREAS , in connection with the Stockholder’s ownership interest in Target, the Stockholder has obtained specialized knowledge of the Business and has had access to trade secrets, customer lists, data, records, financial information, proprietary methods, personnel information, business secrets, operational methods and other valuable confidential business information in connection with the Business which is not generally publicly available, the disclosure of which would place Parent and its affiliates at a serious competitive disadvantage, and would do serious damage to Parent and its affiliates, financial and otherwise; and

 

WHEREAS , Target has made significant efforts and incurred significant costs and expenditures in developing relationships with customers, potential customers, suppliers, employees and others, which the Stockholder acknowledges would be irreparably damaged by his competition with Parent.

 

NOW, THEREFORE , as an inducement to Parent to enter into the Merger Agreement and as a condition to the consummation of the transactions contemplated therein, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the Stockholder covenants and agrees with Parent as follows:

 

SECTION 1.   Covenants .

 

SECTION 1.1 Covenant Against Competition . During the period commencing the date hereof and terminating on the third anniversary of the date of this Agreement, the Stockholder shall not, directly or indirectly, either alone or in association with others, anywhere within the world, other than in the performance of his or her duties as an employee or consultant of Parent or its affiliates:

 


 

(a)   engage, in any way or to any extent, in the Business;

 

(b)   whether as a principal, consultant, partner or in any other capacity, own, manage, control or participate in the ownership, management or control of, or render services directly related to, any person, corporation, partnership, proprietorship, firm, association or other business entity engaged in any way and to any extent in the Business or any other activities that are competitive with the Business;

 

(c)   induce, request or encourage any employee, consultant, officer or director of Parent or its affiliates to terminate any such relationship with Parent or such affiliate;

 

(d)   employ, cause to be employed, or assist in or solicit the employment of any employee, consultant, officer or director of Parent or its affiliates while any such person is providing services to Parent or its affiliates or within six months after any such person ceases providing services to Parent or its affiliates; or

 

(e)   solicit, divert or appropriate, or assist in or attempt to solicit, divert or appropriate, any customer or supplier, or any potential customer or supplier, of Parent or its affiliates for the purpose of competing with the Business.

 

Notwithstanding any provision of this Agreement to the contrary, the Stockholder may own, directly or indirectly, securities of any entity having a class of securities registered pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) which engages in a business competitive with the Business, provided that the Stockholder does not, directly or indirectly, individually or in the aggregate (including without limitation by being a member of a group within the meaning of Rule 13d-5 under the Exchange Act) own beneficially or of record more than one percent (1%) of any class of securities of such entity. For purposes of this Agreement, the term “affiliate” shall have the meaning ascribed to such term in Rule 405 under the Securities Act of 1933, as amended.

 

Notwithstanding anything to the contrary set forth in Section 1.1 above, if the Shareholder’s employment under the Employment Agreement is terminated by the Employer without cause or by the Stockholder due to a material breach by the Employer of the Employment Agreement, then this Section 1.1(a) and Section 1.1(b) shall apply to the Stockholder only for so long as the Stockholder is receiving severance pay due under the Employment Agreement or Base Salary pursuant to the following sentence. Notwithstanding anything to the contrary in the Employment Agreement, the Employer shall have the right to pay the Stockholder his Base Salary to extend the period of non-competition for as long as Employer determines, in the sole exercise of its discretion, but in no event beyond the Term Expiration Date.

 

This Agreement shall survive and be enforceable whether or not any compensatory payment is made if the Stockholder’s employment is terminated (i) for cause or (ii) if the Stockholder resigns for any reason other than a material breach by the Employer of the Employment Agreement.

 

2


 

SECTION 1.2 Covenant Regarding Confidentiality . The Stockholder shall maintain in confidence and shal


 
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