NON-COMPETITION AGREEMENT
This
NON-COMPETITION AGREEMENT
(the
“Agreement”),
dated
as of September __, 2008, is by and between [NAME] (the “Stockholder”)
and
Driftwood Ventures, Inc., a Delaware corporation (“Parent”).
RECITALS
WHEREAS,
Stockholder is the beneficial owner of certain shares of capital stock of Zoo
Games, Inc., a Delaware corporation (the “Target”);
WHEREAS,
Stockholder is employed by [EMPLOYER] (hereinafter the “Employer”) pursuant to a
written employment agreement dated [DATE], (the “Employment
Agreement”);
WHEREAS,
Parent
is acquiring all of the outstanding capital stock and all of the business of
Target pursuant to an Agreement and Plan of Merger, dated as of July 7, 2008,
by
and among Parent, DFTW Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent, Target and the Representative, as amended
(the “Merger
Agreement”);
WHEREAS,
the
Stockholder acknowledges that the businesses conducted by Target prior to the
consummation of the transactions contemplated under the Merger Agreement are
those of developing, publishing and distributing gaming and packaged
entertainment software for use on gaming platforms (collectively,
the “Business”),
which
Business is intensely competitive;
WHEREAS,
in
connection with the Stockholder’s ownership interest in Target, the Stockholder
has obtained specialized knowledge of the Business and has had access to trade
secrets, customer lists, data, records, financial information, proprietary
methods, personnel information, business secrets, operational methods and other
valuable confidential business information in connection with the Business
which
is not generally publicly available, the disclosure of which would place Parent
and its affiliates at a serious competitive disadvantage, and would do serious
damage to Parent and its affiliates, financial and otherwise; and
WHEREAS,
Target
has made significant efforts and incurred significant costs and expenditures
in
developing relationships with customers, potential customers, suppliers,
employees and others, which the Stockholder acknowledges would be irreparably
damaged by his competition with Parent.
NOW,
THEREFORE,
as an
inducement to Parent to enter into the Merger Agreement and as a condition
to
the consummation of the transactions contemplated therein, in consideration
of
the mutual promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby mutually
acknowledged, the Stockholder covenants and agrees with Parent as follows:
SECTION
1. Covenants.
SECTION
1.1 Covenant
Against Competition.
During
the period commencing the date hereof and terminating on the third anniversary
of the date of this Agreement, the Stockholder shall not, directly or
indirectly, either alone or in association with others, anywhere within the
world, other than in the performance of his or her duties as an employee or
consultant of Parent or its affiliates:
(a) engage,
in any way or to any extent, in the Business;
(b) whether
as a principal, consultant, partner or in any other capacity, own, manage,
control or participate in the ownership, management or control of, or render
services directly related to, any person, corporation, partnership,
proprietorship, firm, association or other business entity engaged in any way
and to any extent in the Business or any other activities that are competitive
with the Business;
(c) induce,
request or encourage any employee, consultant, officer or director of Parent
or
its affiliates to terminate any such relationship with Parent or such affiliate;
(d) employ,
cause to be employed, or assist in or solicit the employment of any employee,
consultant, officer or director of Parent or its affiliates while any such
person is providing services to Parent or its affiliates or within six months
after any such person ceases providing services to Parent or its affiliates;
or
(e) solicit,
divert or appropriate, or assist in or attempt to solicit, divert or
appropriate, any customer or supplier, or any potential customer or supplier,
of
Parent or its affiliates for the purpose of competing with the
Business.
Notwithstanding
any provision of this Agreement to the contrary, the Stockholder may own,
directly or indirectly, securities of any entity having a class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) which engages in a business competitive with the Business,
provided that the Stockholder does not, directly or indirectly, individually
or
in the aggregate (including without limitation by being a member of a group
within the meaning of Rule 13d-5 under the Exchange Act) own beneficially or
of
record more than one percent (1%) of any class of securities of such entity.
For
purposes of this Agreement, the term “affiliate” shall have the meaning ascribed
to such term in Rule 405 under the Securities Act of 1933, as
amended.
Notwithstanding
anything to the contrary set forth in Section 1.1 above, if the Shareholder’s
employment under the Employment Agreement is terminated by the Employer without
cause or by the Stockholder due to a material breach by the Employer of the
Employment Agreement, then this Section 1.1(a) and Section 1.1(b) shall apply
to
the Stockholder only for so long as the Stockholder is receiving severance
pay
due under the Employment Agreement or Base Salary pursuant to the following
sentence. Notwithstanding anything to the contrary in the Employment Agreement,
the Employer shall have the right to pay the Stockholder his Base Salary to
extend the period of non-competition for as long as Employer determines, in
the
sole exercise of its discretion, but in no event beyond the Term Expiration
Date.
This
Agreement shall survive and be enforceable whether or not any compensatory
payment is made if the Stockholder’s employment is terminated (i) for cause or
(ii) if the Stockholder resigns for any reason other than a material breach
by
the Employer of the Employment Agreement.
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SECTION
1.2 Covenant
Regarding Confidentiality.
The
Stockholder shall maintain in confidence and shall not, without the prior
written consent of Parent, use, disclose or give to others, any fact or
information regarding the business of Parent and its affiliates (including
the
Business), which is not generally available to the public (including but not
limited to information and facts concerning business plans, cost and pricing
policies, customers, customer profiles, future customers, suppliers, licensors,
licensees, partners, investors, affiliates or others, training methods and
materials, financial information, sales prospects, client lists, vendor lists,
documentation, algorithms, software methodologies, source code listings,
inventions or any other technical, trade or business secret or confidential
or
proprietary information of Parent, any customer or supplier of Parent or the
affiliated entities of Parent, or of any third party provided to the Stockholder
in the course of the Stockholder’s relationship with Parent. Notwithstanding
anything contained herein to the contrary, the foregoing restrictions shall
not
apply to any information which is: (a) presently publicly available or a matter
of public knowledge, public record or public domain generally; (b) lawfully
received by the Stockholder from a third party who is or was not bound in any
confidential relationship to Parent; (c) is or becomes generally available
to
the public through no act or omission of, or breach of this Agreement by the
Stockholder; (d) approved for release by written authorization of Parent, but
only to the extent of such authorization; (e) required by law or regulation
to
be disclosed, but only to the extent, and for the purposes of, such required
disclosure; or (f) disclosed in response to a valid order of a court or other
governmental body of any country or jurisdiction in which the Stockholder is
performing services for Parent, or any political subdivisions or agencies
thereof, but only to the extent of, and for the purposes of, such order, and
in
the case of clauses (e) and (f) only if the Stockholder first notifies Parent
of
the order and permits Parent a reasonable opportunity, to the extent
practicable, to seek a protective order.
SECTION
2. Rights
and Remedies Upon Breach.
In the
event the Stockholder breaches or threatens to commit a breach of any provision
of this Agreement, Parent shall have the following rights and remedies each
of
which shall be independent of the others and severally enforceable, and each
of
which shall be in addition to, and not in lieu of, any other rights and remedies
available to Parent under law or in equity.
SECTION
2.1 Specific
Performance.
The
right and remedy to have the provisions of this Agreement specifically enforced
by injunctive relief in any court of competent jurisdiction, it being agreed
that any breach or threatened breach of this Agreement would cause irreparable
injury to Parent and that money damages would not provide an adequate remedy
to
Parent.
SECTION
2.2 Accounting.
The
right and remedy to require the Stockholder to account for and pay over to
Parent all profits, monies, accruals, increments or other benefits, if any,
derived or received by the Stockholder as the result of any transactions
constituting a breach of this Agreement.
Section
2.3 Money
Damages.
The
right and remedy to recover money damages insofar as they can be
determined.
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SECTION
3. Judicial
Modification.
The
parties acknowledge and agree that the provisions of this Agreement are
reasonable and valid in duration and scope and in all other respects. The
Stockholder recognizes that Parent will operate the Business nationally and
internationally and that the provisions of this Agreement are necessary in
order
to protect the legitimate business interests of Parent. If any court of
competent jurisdiction determines that any of the provisions of this Agreement,
or any part thereof, is invalid or unenforceable, such court shall have the
power to reduce the duration or scope of such provision, as the case may be,
and, in its reduced form, such provision shall then be enforceable. The 3-year
restrictive period set forth in Section 1 above shall be extended by the length
of any period of time during such restrictive period during which the
Stockholder is engaging in conduct in violation of the non-competition covenant
set forth Section 1.
SECTION
4. Severability.
The
parties acknowledge and agree that, in the event that any of the provisions
of
this Agreement are determined, notwithstanding Section 3 herein, to be invalid
or unenforceable, the remainder of this Agreement shall not thereby be affected
and shall be given full effect, without regard to the invalid
portions.
SECTION
5. Waiver.
The
waiver or consent by Parent of any breach by the Stockholder of any provision
of
this Agreement shall not operate as or be construed as a waiver or consent
of
any subsequent breach thereof.
SECTION
6. Amendment.
This
Agreement may be amended, modified, or terminated only by a written instrument
executed by the parties hereto.
SECTION
7. Successors
and Assigns.
Parent
may assign its rights and obligations hereunder to any person or entity that
succeeds to all or substantially all of the Business. The Stockholder’s rights
and obligations under this Agreement may not be assigned without the prior
written consent of Parent. This Agreement shall be binding upon and inure to
the
benefit of Parent, its successors and permitted assigns. This Agreement shall
be
binding upon the Stockholder and the Stockholder’s successors and permitted
assigns.
SECTION
8. Applicable
Law; Forum; Waiver of Jury Trial.
This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the internal laws of the State
of
Delaware, without giving effect to the conflict of law principles thereof.
The
Stockholder and Parent each hereby: (a) consents to submit itself to the
personal jurisdiction of the state courts of the State of Delaware in the event
any dispute arises out of this Agreement, (b) agrees that it will not attempt
to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agrees that it will not bring any action relating
to
this Agreement other than in the state courts in the State of Delaware (d)
waives any right to trial by jury with respect to any action related to or
arising out of this Agreement and (e) consents to service of process by delivery
pursuant to Section 11 hereof. Without in any way limiting the provisions of
Section 2 hereof, Parent and the Stockholder agree to attempt to resolve
disputes between them arising hereunder through good faith negotiations carried
out by authorized representatives of the parties in an attempt to reach a prompt
resolution of any such dispute.
SECTION
9. Headings.
Section
and other headings contained in this Agreement are for reference purposes only
and are in no way intended to define, interpret, describe or otherwise limit
the
scope, extent or intent of this Agreement or any of its provisions.
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SECTION
10. Attorney’s
Fees.
Each
party shall bear its own fees, cost and expenses in any action at law or in
equity (including arbitration) brought to enforce or interpret the terms of
this
Agreement. Nothing contained herein, however, shall prevent a party from seeking
reimbursement for reasonable attorney’s fees, costs and disbursements in any
such action.
SECTION
11. Notices.
All
notices, requests, demands or other communications which are required or may
be
given pursuant to the terms of this Agreement will be in writing and will be
deemed to have been duly given: (i) on the date of delivery if personally
delivered by hand, (ii) upon the third day after such notice is deposited in
the
United States mail, if mailed by registered or certified mail, postage prepaid,
return receipt requested, (iii) upon the date scheduled for delivery after
such
notice is sent by a nationally recognized overnight express courier or (iv)
by
fax upon written confirmation (including the automatic confirmation that is
received from the recipient’s fax machine) of receipt by the recipient of such
notice:
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If
to Parent:
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0000
Xxxxxx xx xxx Xxxxx, Xxxxx 0000
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Xxx
Xxxxxxx, Xxxxxxxxxx 00000
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Attention:
Chief Executive Officer
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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With
a copy to:
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Xxxxxxx
X. Xxxx, Esq.
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Mintz
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C.
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000
Xxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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| If to the Stockholder: | [ADDRESS] |
Such
addresses may be changed, from time to time, by means of a notice given in
the
manner provided in this Section 11.
SECTION
12. Counterparts.
This
Agreement may be executed in one or more counterparts, and by different parties
hereto on separate counterparts, each of which shall be deemed an original,
but
all of which together shall constitute one and the same instrument.
SECTION
13 Employment
Agreement. Nothing
contained herein shall be deemed to have amended the Employment Agreement in
any
way.
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remainder of this page has been intentionally left blank.]
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IN
WITNESS WHEREOF,
the
parties hereto have duly executed this Non-Competition Agreement under seal
as
of the day and year first above written.
PARENT:
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By:
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Name:
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Title:
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STOCKHOLDER:
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By:
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[NAME]
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