NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into effective as of
the 1st day of August, 1997, by and between XXXX XXXXXXX ("Covenantor") and
GLOBAL CASINOS, INC., a Utah corporation, and its subsidiaries ("Global");
WITNESSETH:
WHEREAS, Covenantor and GLOBAL ALASKA INDUSTRIES, INC., an Alaska
corporation ("GAI"), a wholly-owned subsidiary of Global, have of even date
herewith consummated a Stock Purchase and Sale Agreement dated as of August 1,
1997(the "Agreement"), pursuant to which GAI acquired from Covenantor one
hundred percent (100%) of the issued and outstanding shares of common stock of
ALASKA BINGO SUPPLY, INC., an Alaska corporation ("ABS"); and
WHEREAS, it is understood that GAI intends to hold and operate ABS as a
wholly-owned subsidiary; and
WHEREAS, the parties recognize that Covenantor has expertise in the
business conducted by ABS, the technology to compete in this industry, and the
economic resources to compete in this industry. Therefore, both parties agree
a non-competition agreement is necessary, prudent, and has been bargained for
in respect to the asset purchase;
WHEREAS, in connection with said Agreement, Covenantor has undertaken and
delivered to Global this non-competition agreement; and
WHEREAS, both parties agree the value of such non-competition is
$100,000.00, which is based on an estimate of the loss of earnings that would
occur if Covenantor was in direct competition with ABS;
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
of the parties contained in the Agreement, and for such other good and
valuable consideration, the receipt whereof being hereby acknowledged,
Covenantor covenants and agrees as follows:
1. Except for matters expressly provided for in or contemplated by the
Agreement, and except for the ownership of equity securities of Global,
Covenantor, for herself covenants to and with Global, its subsidiaries,
successors and assigns, that for a period of five (5) years from the date of
this Agreement, it will not without the prior written consent of GAI or
Global, directly or indirectly, either as principal, agent, manager, owner,
partner (dominant or otherwise), stockholder, creditor, consultant or
otherwise solicit, attempt to obtain or assist any other person or entity
other than Global, its subsidiaries, successors in interest and assigns, in
soliciting or attempting to obtain or accept any business or engage or become
interested financially or otherwise, in any business, agency, trade or
occupation similar to or in competition with Global or its subsidiaries; nor
shall Covenantor, for a period of five (5) years from the date of this
Agreement, consult provided services to or enter into any agreement or
arrangement with any other person, firm, corporation or entity that engages in
any business trade, occupation or activity similar to or in competition with
any services or products offered or sold by Global, or its subsidiaries,
without first having obtained Global's express written consent thereto.
Notwithstanding the restrictions set forth in this Agreement, Global consents
to Covenantor's continued participation in the ACGA substantially in the
manner heretofore conducted as well as the continuation by Covenantor of his
current business activities unrelated to the activities of ABS to the extent
that they may involve the sale of pull-tabs for the benefit of third-party
permitees; provided, however, that such sale of pull-tabs may be made only to
the extent that such pull-tabs are purchased by Covenantor from ABS in the
ordinary course of business. Because of the nature of the business, the
parties agree that it is reasonable for the covenant to apply to the entire
geographic area of the State of Alaska. If the geographic area is determined
by a court to be overly broad in scope, it shall be modified only to the
extent necessary to bring it within the requirements of the law and
interpreted to give Global the broadest protection allowed by law.
2. Covenantor further covenants with Global that all information
concerning the customers, clients, contracts, and business of ABS, as well as
the information set forth in Exhibit 5.16 of the Agreement, is confidential
information and will be treated by it as such, and that it will not hereafter,
directly or indirectly, make use of such information or divulge any such
information nor reveal any customer lists or other confidential information to
any other person. The foregoing restrictions on disclosure of information
shall not include (i) information that has properly come into the public
domain, (ii) information learned by Covenantor from a third party without an
obligation of confidentiality, (iii) information gained or learned by
Covenantor independent of and subsequent to the closing of the transactions
covered by the Agreement, (iv) information otherwise protected by applicable
law, such as the information pertaining to patents or copyrights.
3. Covenantor further covenants with Global that it will not directly
or indirectly or permit or encourage others to directly or indirectly, (i)
interfere in any manner whatsoever with Global's contractual or other
relations with any or all of its customers, clients, employees, or
consultants, or (ii) induce or attempt to induce any client, customer,
employee or consultant of Global to cease doing business with Global.
4. Global shall be entitled to confirm that Covenantor is honoring this
agreement and shall have the right to receive a written confirmation from
Covenantor each year that they have not entered into competition with Global.
5. In the event of a breach or threatened breach by Covenantor of any
provisions of this Agreement, Global shall be entitled to an injunction
restraining Covenantor from the commission of such breach. Nothing herein
contained shall be construed as prohibiting Global from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of money damages. The covenants contained in this Agreement shall be
construed as independent of any other provisions of the Agreement; and the
existence of any claim or cause of action of Covenantor against Global,
whether predicated on the Agreement or otherwise, shall not constitute a
defense to the enforcement by Global of said covenants.
6. The covenants contained in this Agreement shall terminate, and, upon
termination, shall be unenforceable and of no further legal force and effect
in the event (i) Global breaches the Agreement or ancillary agreements
provided for therein; (ii) Global or any successor to Global, becomes
insolvent; (iii) or ceases for any reason to conduct business operations for a
continuous period of at least ninety (90) days.
7. Global shall have the right to assign the aforesaid covenants; and
Covenantor agrees to remain bound by the terms of the covenants to any and all
subsequent purchasers and assignees of the assets and business of Global.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
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GLOBAL CASINOS, INC., a Utah corporation
Attest:
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxx, President