NONCOMPETITION AGREEMENT
(Hollywood Digital and HD-Related Partners)
THIS NONCOMPETITION AGREEMENT is made and entered into this ___ day of June,
1997 by and between the Xxxx-XX Corporation, a Delaware corporation, and Xxxx-XX
HD, Inc., a California corporation (collectively, the "Purchaser"), and
Hollywood Digital Limited Partnership, a Delaware limited partnership (the
"Seller"); Hollywood Digital, Inc., a Delaware corporation; The Palladion
Limited Partnership, a Delaware limited partnership; and HDZ Digital Limited
Partnership, a Massachusetts limited partnership (collectively, the "HD-Related
Partners"); with reference to the following facts:
A. Pursuant to that certain Agreement for the Purchase and Sale of Assets
dated June 18, 1997 (the "Purchase Agreement"), the Purchaser is purchasing from
Seller all of Seller's business and assets subject to certain liabilities of
Seller set forth in the Purchase Agreement.
B. The HD-Related Partners are among the partners of Seller. The partners of
Seller anticipate that the Seller will be wound up and liquidated promptly
following the closing of the purchase of Seller's business and assets by the
Purchaser.
C. As an inducement for Purchaser to enter into the Purchase Agreement, the
Seller and the HD-Related Partners has agreed to enter into this Noncompetition
Agreement.
D. Capitalized terms used in this Agreement and not defined herein shall have
the meanings ascribed to them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements, covenants and other provisions contained in the Purchase Agreement
and herein, the parties agree as follows:
1. NONCOMPETITION. The Seller and each of the HD-Related Partners agrees
that after the closing Purchaser shall be entitled to the goodwill and going
concern value of the Assets and to protect and preserve the same to the maximum
extent permitted by
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law. Accordingly, the Seller and each of the HD-Related Partners agrees that it
will not, at any time within the five (5) year period immediately following the
Closing Date, directly or indirectly engage in, or have any interest in any
person, firm, corporation, or business (whether as an employee, officer,
director, agent, security holder, creditor, consultant, or otherwise) that
engages in any activity in any of the counties of California which is attached
hereto as Exhibit A, or within the greater metropolitan areas of New York City,
Atlanta and London, which activity is the same as, similar to, or competitive
with any activity now engaged in by Seller in any of these counties or areas so
long as Purchaser (or any successor) shall engage in this activity in such
county or area. Nothing herein shall limit the right of the Seller or any
HD-Related Partners as an investor to hold and make investments in securities of
any corporation, limited partnership or limited liability company that is
registered on a national securities exchange or admitted to trading privileges
thereon or actively traded in a generally recognized over the counter market
provided that its equity interest therein does not exceed 10% of the outstanding
shares or interests in such corporation, partnership or limited liability
company.
2. REMEDIES. The Seller and each of the HD-Related Partners recognizes
and agrees that a breach by any of them of Section 1 hereof could cause
irreparable harm to Purchaser; that Purchaser's remedies at law in the event of
such breach would be inadequate, and that, accordingly, in the event of such
breach, a restraining order or injunction or both may be issued against Seller
in addition to any other rights and remedies which are available to Purchaser.
If this Section 2 is more permissive than allowed by the laws of the
jurisdiction in which Purchaser seeks enforcement hereof, this Section 2 shall
be limited to the extent required to permit enforcement under such laws.
Without limiting the generality of the foregoing, the parties intend that the
covenants contained in Section 1 shall be construed as a series of separate
covenants, one for each county specified. Except for geographical coverage,
each such separate covenant shall be deemed identical in terms. If, in any
judicial proceeding, a court shall refuse to enforce any of the separate
covenants deemed included in this Agreement, then such unenforceable covenant
shall be deemed eliminated from these provisions for the purpose of those
proceedings to the extent necessary to permit the remaining separate covenants
to be enforced.
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3. DISPUTE RESOLUTION. Any controversy or claim arising out of or
relating to this Agreement, its enforcement or interpretation, shall be resolved
in accordance with the dispute resolution procedure set forth in Article 17 of
the Purchase Agreement.
4. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of California applicable to agreements
made and to be performed in such jurisdiction with respect to the counties of
California set forth on Exhibit A, by the laws of the State of New York with
respect to greater New York City, by the laws of the State of Georgia with
respect to greater Atlanta, and by the laws of the United Kingdom with respect
to greater London.
5. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, each of which shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"Purchaser"
THE XXXX-XX CORPORATION
By: ____________________________
Its: ___________________________
XXXX-XX HD, INC.
By: ____________________________
Its: ___________________________
"Seller"
HOLLYWOOD DIGITAL LIMITED PARTNERSHIP
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By: __________________________
Its: _________________________
"HD-Related Partners"
HOLLYWOOD DIGITAL, INC.
By: __________________________
Its: _________________________
THE PALLADION LIMITED PARTNERSHIP
By: XXXXXXX, XXXXX AND XXXX, INC.,
Its general partner
By: __________________________
Its: _________________________
HDZ DIGITAL LIMITED PARTNERSHIP
By: XXXXXXX, XXXXX AND XXXX LIMITED PARTNERSHIP
II
By: XXXXXXX, XXXXX AND XXXX, INC., Its
general partner
By: _____________________
Its: ____________________
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EXHIBIT A
CALIFORNIA COUNTIES
Alameda Sacramento
Alpine San Xxxxx
Xxxxxx San Bernardino
Butte San Xxxxxx
Calaveras San Xxxx Obispo
Colusa San Francisco
Contra Costa San Xxxxxxx
Del Norte San Mateo
El Dorado Santa Xxxx
Fresno Santa Xxxxxxx
Xxxxx Santa Xxxxx
Humboldt Shasta
Imperial Sierra
Inyo Siskiyou
Xxxx Xxxxxx
Kings Sonoma
Lake Xxxxxxxxxx
Xxxxxx Xxxxxx
Los Angeles Tehama
Madera Trinity
Marin Tulare
Mariposa Tuolumne
Mendocino Xxxxxxx
Xxxxxx Yolo
Modoc Yuba
Mono
Monterey
Napa
Nevada
Orange
Placer
Plumas
Riverside
