EXHIBIT 99.04
NONCOMPETITION AND NONSOLICITATION AGREEMENT
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This Noncompetition and Nonsolicitation Agreement (the "Agreement") is
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entered into as of June 4, 1997 by and between Electronic Arts Inc., a Delaware
corporation, ("Electronic Arts"), and Xxxxxxx X. Xxxxxx, a resident of
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California ("Xxxxxx"). Any references to Electronic Arts in this Agreement shall
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be deemed to include subsidiaries of Electronic Arts, including without
limitation, Maxis, Inc. a Delaware corporation ("Maxis").
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RECITALS
A. This Agreement is entered into concurrently with the merger of Maxis
Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of
Electronic Arts, with and into Maxis (the "Merger"), pursuant to that certain
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Agreement and Plan of Reorganization among Electronic Arts, Village Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Electronic
Arts, and Maxis, dated of even date herewith (the "Reorganization Agreement").
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B. Pursuant to the Merger, Maxis will become a wholly owned subsidiary of
Electronic Arts.
X. Xxxxxx has been responsible for the growth and success of Maxis, and
Xxxxxx'x entering into and agreeing to be bound by this Agreement is a material
inducement for Electronic Arts and Maxis to consummate the Merger.
THEREFORE, in consideration of the promises and the terms and conditions
set forth in this Agreement, the parties agree as follows:
1. TERM OF AGREEMENT. This Agreement will commence on the Effective Date
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(as defined in the Reorganization Agreement) and will continue until two years
after the Effective Date.
2. COVENANTS AGAINST COMPETITION. Xxxxxx acknowledges that the services
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Xxxxxx has rendered to Maxis and may render to Electronic Arts are of a
special, unusual character which have a unique value to Electronic Arts, the
loss of which cannot adequately be compensated by damages in an action at law.
In view of the unique value to Electronic Arts of Xxxxxx'x services and the
facts set forth in the recitals to this Agreement, and as a material inducement
to Electronic Arts to consummate the Merger, Xxxxxx hereby covenants and agrees
with Electronic Arts as follows:
2.1 ENGAGE IN BUSINESS. For a period of two (2) years after the date
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hereof (such period hereinafter referred to as the "Noncompete Period"), Xxxxxx
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shall not, either for himself or for any other person or entity, directly or
indirectly, carry on or engage in any business in the interactive entertainment
software industry (the "Competing Area"), in any county of the State of
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California, State of the United States, province of Canada or country of the
world in which, or in any geographic area where, Maxis carries on, is actually
engaged in or currently contemplates doing such business, or maintains or
currently contemplates maintaining sales or service representatives or employees
for the purpose of carrying on or engaging in such business, or sells or
currently contemplates selling, directly or indirectly, products developed by
Maxis. "Carry on or engage in any business" within the meaning of this Section 2
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shall include, without limitation, each of the following activities: to actually
engage in, work with, have a financial interest in, advise, lend money to,
guarantee the debts or obligations of, or permit one's name or any part thereof
to be used in connection with, an enterprise or endeavor, either individually,
in partnership or in conjunction with any person or persons, firms,
associations, companies or corporations, whether as a principal, agent,
shareholder, employee, officer, director, partner, consultant or in any other
manner whatsoever; provided, however, that Xxxxxx shall retain the right to
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invest in or have an interest in entities traded on any public market or offered
by any national brokerage house, provided that such interest does not exceed two
percent (2%) of the voting control of such entity. In addition, Xxxxxx may (a)
make passive investments in privately held entities that are determined by the
Board of Directors of Electronic Arts not to be competitors of the Maxis
business (not to be unreasonably withheld) and (b) maintain an ownership
interest in Neighborhood or any of its successors in any amount.
2.2 CUSTOMER SOLICITATION. During the Noncompete Period, Xxxxxx
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shall not, either for himself or for any other person or entity, directly or
indirectly, solicit business in the Competing Area from, or attempt to sell or
provide the same or similar products or services in the Competing Area to, any
clients or customers or potential clients or customers of Electronic Arts except
in connection with his employment with Electronic Arts.
2.3 XXXXXX SOLICITATION. During the Noncompete Period, Xxxxxx shall
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not, either for himself or for any other person or entity, directly or
indirectly, solicit, induce or attempt to induce any employee or contractor of
Electronic Arts to discontinue his or her employment or provision of contracted
services for Electronic Arts.
2.4 ENFORCEABILITY. If any court of competent jurisdiction shall
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determine that any provision of Sections 2.1, 2.2 or 2.3 of this Agreement is
unenforceable with respect to the term thereof or with respect to the scope of
subject matter or territory covered thereby, then such provision shall
nevertheless be enforceable by any such court upon such shorter term or within
such lesser scope as may be determined by such court to be reasonable and
enforceable.
3. MISCELLANEOUS.
3.1 DISPUTE RESOLUTION. Xxxxxx and Electronic Arts shall submit to
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mandatory binding arbitration in any controversy or claim arising out of, or
relating to, this Agreement or any breach hereof in Santa Xxxxx County,
California, in accordance with the commercial arbitration rules of the American
Arbitration Association then in effect, provided, however, that each of Xxxxxx
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and Electronic Arts retains its rights to, and shall not be prohibited, limited
or in any other way restricted from, seeking or obtaining equitable relief from
a court having jurisdiction over the parties.
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3.2 SEVERABILITY. If any provision of this Agreement shall be found
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by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so would
not deprive one of the parties of the substantial benefit of its bargain. Such
provision shall, to the extent allowable by law and the preceding sentence, be
modified by such arbitrator or court so that it becomes enforceable and, as
modified, shall be enforced as any other provision hereof, all the other
provisions continuing in full force and effect.
3.3 REMEDIES. Electronic Arts and Xxxxxx acknowledge that Electronic
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Arts would not have consummated the Merger unless Xxxxxx had, among other
things, entered into this Agreement. Any breach of this Agreement will result in
irreparable damage to Electronic Arts for which Electronic Arts will not have an
adequate remedy at law. Accordingly, Xxxxxx hereby consents and agrees that for
any breach or violation by Xxxxxx of any of the provisions of this Agreement
(including, without limitation, Section 2), a restraining order and/or
injunction may be issued against Xxxxxx, in addition to any other rights and
remedies Electronic Arts may have, at law or equity, including, without
limitation, the recovery of money damages.
3.4 NO WAIVER. The failure by either party at any time to require
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performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
breach of such provision or as a waiver of the provision itself. No waiver of
any kind shall be effective or binding, unless it is in writing and is signed by
the party against whom such waiver is sought to be enforced.
3.5 ASSIGNMENT. This Agreement and all rights hereunder are personal
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to Xxxxxx and may not be transferred or assigned by Xxxxxx at any time. Any
attempt by Xxxxxx to do so will be void and of no effect. Electronic Arts may
assign its rights, together with its obligations hereunder, to any parent,
subsidiary, affiliate or successor, or in connection with any sale, transfer or
other disposition of all or substantially all of the business and assets of
Village, provided, however, that any such assignee assumes Electronic Arts'
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obligations hereunder.
3.6 ENTIRE AGREEMENT. This Agreement constitutes the entire and only
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agreement between the parties relating to the noncompetition and nonsolicitation
obligations of Xxxxxx, and this Agreement supersedes and cancels any and all
previous contracts, arrangements or understandings with respect thereto.
3.7 AMENDMENT. This Agreement may be amended, modified, superseded,
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canceled, renewed or extended only by an agreement in writing executed by all
parties hereto.
3.8 NOTICES. All notices and other communications required or
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permitted under this Agreement shall be in writing and hand delivered, sent by
facsimile, sent by registered mail, postage pre-paid, or sent by nationally
recognized express courier service. Such
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notices and other communications shall be effective upon receipt if hand
delivered or sent by facsimile, five (5) days after mailing if sent by mail, and
one (l) day after dispatch if sent by express courier, to the following
addresses, or such other addresses as any party shall notify the other parties:
If to Electronic Arts: Electronic Arts Inc.
0000 Xxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxx, SVP & General Counsel
If to Xxxxxx: 0000 X. Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
3.9 BINDING NATURE. This Agreement shall be binding upon, and inure
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to the benefit of, the successors and personal representatives of the respective
parties hereto.
3.10 HEADINGS. The headings contained in this Agreement are for
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reference purposes only and shall in no way affect the meaning or interpretation
of this Agreement. In this Agreement, the word "or" is used in the inclusive
sense.
3.11 COUNTERPARTS. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original but all of which,
taken together, constitute one and the same agreement.
3.12 GOVERNING LAW. This Agreement and the rights and obligations of
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the parties hereto shall be construed in accordance with the laws of California,
without giving effect to the principles of conflict of laws.
3.13 ADVICE OF COUNSEL. Xxxxxx acknowledges that he has received the
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advice of counsel in connection with entering into this Agreement and is fully
aware of his rights and obligations under this Agreement.
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IN WITNESS WHEREOF, Electronic Arts and Xxxxxx have executed this Agreement as
of the date first above written.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
ELECTRONIC ARTS INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Its: Senior Vice President, General Counsel
[SIGNATURE PAGE TO NONCOMPETITION AND NONSOLICITATION AGREEMENT]
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