Exhibit 4
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into on
February 8, 1999, by and between Gametech International, Inc., a Delaware
corporation ("Gametech"), Bingo Technologies Corporation, a Nevada corporation
("BingoTech") and Xxxxxx Xxxxxxx, a stockholder of BingoTech ("Stockholder").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Stock Purchase Agreement (the "Purchase Agreement")
dated as of February 8, 1999, among Gametech, BingoTech and the stockholders and
indemnitors named therein.
BACKGROUND
A. The Purchase Agreement provides for the acquisition by Gametech of
all of the outstanding capital stock of BingoTech (the "Acquisition").
B. Stockholder is receiving significant cash and stock of Gametech
pursuant to the terms of the Purchase Agreement and Stockholder acknowledges
that a portion of the consideration paid by Gametech in connection with the
Acquisition is based on Stockholder entering into and performing the obligations
of this Agreement.
C. As a condition to the Acquisition and to preserve the value and
goodwill of BingoTech after it is acquired by Gametech, the Purchase Agreement
contemplates, among other things, that Stockholder enter into this Agreement and
that this Agreement become effective upon the closing of the Acquisition.
D. BingoTech is currently engaged in the business of developing,
designing, manufacturing, marketing, distributing, selling, leasing and
licensing electronic gaming products, gaming software, software supporting
gaming businesses, and related services including: hand-held electronic bingo
daubing products, computerized bingo accounting products, point of sale bingo
system products, player tracking systems, casino accounting systems, pulltab
accounting systems, big screen electronic bingo daubing products, and networked
high-speed bingo products, (the "Business"). The Business also includes all
activities planned to be conducted by BingoTech and its subsidiaries as of the
Effective Date. Following the Acquisition, Gametech will continue conducting the
Business worldwide.
NOW, THEREFORE, in consideration of the mutual promises made herein,
Gametech and Stockholder (collectively referred to as the "Parties") hereby
agree as follows:
1. COVENANT NOT TO COMPETE OR SOLICIT.
(a) NON-COMPETITION. For five (5) years after the Effective Date of
the Acquisition (the "Noncompetition Period"), Stockholder shall not directly or
indirectly, without the prior written consent of Gametech, (i) engage, or
attempt to engage, anywhere in the world in (whether as an
employee, agent, consultant, advisor, independent contractor, proprietor,
partner, officer, director or otherwise) or have any ownership interest in
(except for ownership of one percent (1%) or less of any entity whose securities
have been registered under the Securities Act of 1933 or Section 12 of the
Securities Exchange Act of 1934 and except for ownership of securities of
Gametech) or participate in the financing, operation, management or control of
any firm, partnership, corporation, limited liability company, entity or
business that is competitive with the Business; or (ii) induce or attempt to
induce, directly or indirectly, any customer, supplier or distributor of
BingoTech or Gametech to terminate or reduce its relationship with Gametech in
order to enter into any relationship with Stockholder or with any other person
in a competing Business.
(b) NON-SOLICITATION. During the Noncompetition Period, Stockholder
shall not, directly or indirectly, without the prior written consent of
Gametech, solicit or take any other similar action which is intended to induce
any employee of Gametech or any subsidiary of Gametech or BingoTech to terminate
employment with Gametech or any subsidiary of Gametech or BingoTech.
(c) SEVERABLE COVENANTS. The covenants contained in the preceding
paragraphs shall be construed as a series of separate covenants, one for each
county, city, state and country of any geographic area of the world. Except for
geographic coverage, each such separate covenant shall be deemed identical in
terms to the covenants contained in the preceding paragraphs. If, in any
judicial proceeding, a court refuses to enforce any of such separate covenants
(or any part thereof), then such unenforceable covenant (or such part) shall be
eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. In the event that the
provisions of this Section 1 are deemed to exceed the time, geographic or scope
limitations permitted by applicable law, then such provisions shall be reformed
to the maximum time, geographic or scope limitations, as the case may be,
permitted by applicable laws.
(d) EQUITABLE REMEDY. Stockholder agrees that it would be impossible
or inadequate to measure and calculate Gametech's or BingoTech's damages from
any breach of the covenants set forth in this Section 1. Accordingly,
Stockholder agrees that if he breaches any provision of this Section 1, Gametech
or BingoTech will have available, in addition to any other right or remedy
otherwise available, the right to obtain an injunction from a court of competent
jurisdiction restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement.
(e) REASONABLENESS OF RESTRICTIONS. Stockholder recognizes that the
consideration to be paid and all other obligations of Gametech to be performed
pursuant to the Purchase Agreement are intended to secure Stockholder's
agreement to the conditions of this Agreement, and Stockholder recognizes that
the scope of the restrictions and the foregoing territorial and time limitations
are reasonable and properly required for the adequate protection of the business
of Gametech and its subsidiaries and affiliates, including, following the
Effective Date, BingoTech, and that in the event the foregoing restrictions are
deemed to be unreasonable for any reason by any tribunal having jurisdiction,
Stockholder agrees to request, and to submit to, a narrowing of the scope of the
foregoing restrictions or the reduction of either said territorial or time
limitation to such an area or period as shall be deemed reasonable by such
tribunal.
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2. MISCELLANEOUS.
(a) GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement
shall be governed by the laws of the State of Arizona without reference to rules
of conflicts of law. Stockholder hereby consents to the personal jurisdiction of
the state and federal courts located in Arizona for any action or proceeding
arising from or relating to this Agreement or relating to any arbitration in
which the parties are participants.
(b) NO ASSIGNMENT. Stockholder shall not assign this Agreement or
any rights or obligations under this Agreement without the prior written consent
of Gametech.
(c) NOTICE. Any notice or communication required or permitted under
this Agreement shall be made in writing and delivered personally to the other
party or sent by certified or registered mail, return receipt requested and
postage prepaid.
(d) ENTIRE AGREEMENT. This Agreement contains the entire agreement
and understanding of the parties and supersedes all prior discussions,
agreements and understandings relating to the subject matter hereof. This
Agreement may not be changed or modified, except by an agreement in writing
executed by Gametech and Stockholder.
(e) WAIVER OF BREACH. The waiver of a breach of any term or
provision of this Agreement, which must be in writing, shall not operate as or
be construed to be a waiver of any other previous or subsequent breach of this
Agreement.
(f) HEADINGS. All captions and section headings used in this
Agreement are for convenience only and do not form a part of this Agreement.
(g) COUNTERPARTS. This Agreement may be executed in counterparts,
and each counterpart shall have the same force and effect as an original and
shall constitute an effective, binding agreement on the part of each of the
undersigned.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
GAMETECH INTERNATIONAL, INC. STOCKHOLDER
By:/s/ Xxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Name: Xxxx X. Xxxxx
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Title: Chief Executive Officer
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BINGO TECHNOLOGIES CORPORATION
By:/s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: President
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