NONCOMPETITION AGREEMENT
(Phemus)
THIS NONCOMPETITION AGREEMENT is made and entered into this 18th 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 Phemus
Corporation, a Massachusetts corporation ("Phemus"), 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
Hollywood Digital Limited Partnership (the "Seller") all of Seller's business
and assets (the "Assets") subject to certain liabilities of Seller set forth in
the Purchase Agreement.
B. Phemus is a partner 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, Phemus
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. Phemus 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 law. Accordingly,
Phemus agrees that it will not, at any time within the three (3) year period
immediately following the Closing Date, directly or indirectly engage in, or
have any interest in any person, firm, corporation, or business
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(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 Phemus as an investor directly or indirectly to hold and make
investments in securities of any corporation, limited partnership, limited
liability company or other business entity provided that Phemus' equity interest
therein does not exceed, in the case of a corporation, either 50% of the total
combined voting power or 50% of the aggregate fair market value of the
outstanding shares in such corporation, and in the case of a partnership or
limited liability company, either 50% of the voting power, 50% of the capital
interests or 50% of the profits interests in such partnership, limited liability
company or other business entity.
2. REMEDIES. Phemus recognizes and agrees that a breach by Phemus 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.
3. DISPUTE RESOLUTION. Any controversy or claim arising out of or
relating to this Agreement, its enforcement or
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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.
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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: ___________________________
"Phemus"
Phemus Corporation
By: ____________________________
Its: ___________________________
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
