EXHIBIT 10.28
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT (this "AGREEMENT") is made this 31st day of
March, 1998 by and between Hybrid Networks, Inc., a Delaware corporation
("HYBRID"), and Xxxxxxx X. Gold, a California resident ("EMPLOYEE").
RECITALS
WHEREAS, Employee has been an officer of Pacific Monolithics, Inc., a
California corporation ("PACIFIC"), and is the owner of shares of capital stock
of Pacific; and
WHEREAS, Pacific is a party to an Agreement and Plan of Reorganization (the
"REORGANIZATION AGREEMENT") dated March 19, 1998 by and among Hybrid, Pacific
and HN Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of Hybrid ("NEWCO"), pursuant to which Newco is to merge with and into Pacific
(the "MERGER"); and
WHEREAS, the parties hereto recognize that Employee has unique knowledge
and experience regarding Pacific's business, and the Hybrid desires to be
assured that confidential information pertaining to Pacific's business and the
goodwill of Pacific will be preserved and protected and will inure to the
benefit of Hybrid; and
WHEREAS, execution and delivery of this Agreement is a condition precedent
to the closing of the transactions contemplated by the Reorganization Agreement
(the "CLOSING");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties contained herein, and further as an inducement to Hybrid to enter
into the Reorganization Agreement, the parties hereto hereby agree as follows:
1. COVENANT NOT TO COMPETE.
(a) For the two (2) year period following the "CLOSING DATE" as
defined in the Reorganization Agreement, Employee shall not, anywhere in the
world, including without limitation counties in the State of California listed
in Exhibit A hereto:
(i) (A) engage, directly or indirectly, in any business activity
as a sole proprietor, partner, beneficial shareholder, officer, director,
employee, agent, or consultant of, for, or with, (B) work for, consult, found,
or enter into any license agreement with, or (C) be involved in any way with,
any entity or person engaged in the design, research, development, marketing,
sale, or licensing of any wireless or wired cable modems product, including any
product similar to the Downconverter or the CypherPoint lines of products,
created, distributed,
or known by Employee to be under development by Pacific prior to the
termination of Employee's employment with Hybrid (a "COMPETITIVE BUSINESS");
and
(ii) actively solicit for employment any Pacific employees who
continue to be employed by Hybrid or Pacific after the Closing.
(b) Notwithstanding the foregoing, Employee may own, directly or
indirectly, up to 2% of any class of "publicly traded securities," and up to 5%
of the outstanding securities that are not "publicly traded securities," of any
Competitive Business. For the purposes of this Section 1, the term "publicly
traded securities" shall mean securities that are traded on a national
securities exchange or listed on the Nasdaq National Market.
2. CONSIDERATION; AGREEMENT REASONABLE. Employee acknowledges and agrees
that (a) this Agreement is being entered into as a condition to the consummation
of the Reorganization Agreement; (b) as a shareholder of Pacific, he is
receiving a substantial benefit for the consummation of the Reorganization
Agreement, including shares of unregistered Hybrid Common Stock, which benefit
constitutes adequate consideration for the covenants set forth in this
Agreement, and (c) the covenants provided for in this Agreement, including
without limitation the term and scope of the covenant not to compete, are
necessary and reasonable in order to protect Hybrid in the conduct of its
business.
3. ENFORCEABILITY OF RESTRICTION. The foregoing restriction may be
enforced throughout the world. The foregoing restriction shall be deemed to be
a series of separate covenants as to increasing degrees of scope and duration.
If any of such covenants shall be held invalid or unenforceable by reason of
being unreasonably broad as to duration, geographic scope, or otherwise, such
covenants shall be deemed eliminated to that extent and the remaining covenants
shall be enforced to the broadest extent deemed reasonable. The parties hereto
expressly agree that the restrictions as so amended shall be valid and binding
as though such invalid or unenforceable covenant had not been included herein.
4. REFORMATION. In the event that the provisions of this Agreement
should ever be deemed to exceed the scope, time, geographic, or other
limitations of applicable law regarding covenants not to compete, then such
provisions shall be reformed to the maximum scope, time, geographic, or other
limitations, as the case may be, permitted by applicable laws.
5. DAMAGES. In the event that Employee breaches any covenant or
agreement set forth in this Agreement, it is expressly agreed between the
parties that monetary damages would be inadequate to compensate Hybrid for any
such breach. Accordingly, Employee acknowledges and agrees that any such
violation or threatened violation will cause irreparable injury to Hybrid and
that, in addition to any other remedies which may be available, Hybrid shall be
entitled to obtain injunctive relief against the threatened breach of the
covenant or agreement set forth in this Agreement or the continuation of any
such breach.
6. ASSIGNMENT. This Agreement and the rights and obligations hereunder
shall not be assignable by any party without the written consent of the other
party, other than an assignment from Hybrid to any subsidiary, its parent, or
any subsidiary of its parent. The rights
and obligations of each party under this Agreement shall inure to the benefit
of and shall be binding upon the successors and permitted assigns of such
party.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the transactions contemplated hereby. It may not be
changed orally but only by an agreement in writing, signed by the party against
which or whom enforcement of any waiver, change, modification, extension, or
discharge is sought.
8. APPLICABLE LAW. This Agreement shall be interpreted in accordance
with the laws of the State of California, without regard to such State's
conflicts of law rules.
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have entered into this
Noncompetition Agreement as of the date first written above.
HYBRID NETWORKS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxxx X. Gold
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Xxxxxxx X. Gold
SIGNATURE PAGE TO NONCOMPETITION AGREEMENT
EXHIBIT A
CALIFORNIA COUNTIES
1. Alameda
2. Alpine
3. Xxxxxx
4. Butte
5. Calaveras
6. Colusa
7. Xxxxxx Xxxxx
0. Xxx Xxxxx
0. Xx Xxxxxx
00. Fresno
11. Xxxxx
12. Humboldt
13. Imperial
14. Xxxx
15. Kings
16. Lake
17. Lassen
18. Los Angeles
19. Madera
20. Marin
21. Mariposa
22. Mendocino
23. Merced
24. Modoc
25. Mono
26. Monterey
27. Napa
28. Nevada
29. Orange
30. Placer
31. Plumas
32. Riverside
33. Sacramento
34. San Xxxxxx
35. San Bernadino
36. San Diego
37. San Francisco
38. San Xxxxxxx
00. Xxx Xxxx Xxxxxx
00. San Mateo
41. Santa Xxxxxxx
