EXHIBIT 10.28
Exhibit "8"
NONCOMPETITON AGREEMENT
This Agreement ("Agreement") dated as of December 31, 1995 between and
among IWN, L.P., a limited partnership formed under the laws of the State of
Delaware, with its executive offices located at 5966 La Place Court, Carlsbad,
California 92008 ("Partnership"), IWN, Inc., a Delaware corporation, with its
executive offices located at 5966 La Place Court, Carlsbad, California 92008
("IWN") and NTN Communications, Inc., a Delaware corporation, with its executive
offices located at 5966 La Place Court, Carlsbad, California 92008 ("NTN").
BACKGROUND
Effective as of the date hereof, the Partnership has acquired by
license and otherwise, certain of the business assets of NTN and IWN which
involve two-way interactive, computerized broadcast systems ("Systems") and
certain other related technology ("Technology") used for Gaming Application (as
that term is described herein), all as more fully described in a certain
Investment Agreement dated as of December 31, 1995 ("Investment Agreement"),
among NTN, IWN and Symphony Management Associates, Inc. ("Symphony").
In connection with the Investment Agreement, NTN and IWN shall assign,
transfer and sell certain of its assets related to the Partnership Business (as
that term is defined in the Investment Agreement) and each of NTN, IWN, Symphony
and Symphony IWN Investment LLC shall execute and deliver noncompetition
agreements substantially in the form of this Agreement.
In order to induce NTN to consummate the transactions contemplated by
the Investment Agreement, IWN and the Partnership are willing to make the
covenants and agreements herein set forth.
In consideration of the mutual covenants herein contained and of the
mutual benefits, and intending to be legally bound hereby, the Partnership
agrees as follows:
1. IWN and the Partnership hereby acknowledge and agree that all
proprietary and confidential documents, records, techniques, formulas, processes
and other business secrets and confidential information which have come into its
possession related to the Systems and the Technology other than in connection
with Gaming Applications (collectively, "Interactive Technologies") from
time-to-time which have been used in connection with the Partnership Business
prior to the date hereof or could be used in connection with the Partnership
Business in the future shall be deemed to be confidential and proprietary to NTN
and IWN, as the case may be, whether written or oral, and, if oral, if it is
identified as "confidential" prior to disclosure and which, by virtue of the
nature of the circumstances
surrounding such disclosure should be considered, in good faith, to be treated
as proprietary and confidential.
2. IWN and the Partnership shall keep confidential and not divulge
to any other person any of the business secrets and confidential information of
NTN which, without limitation, relates to such matters as NTN's business
finances and operations, NTN's materials, processes, equipment, techniques,
plans,formulae, know-how used or related to NTN's business (the Interactive
Technologies as they relate to non-Gamimg Applications), the names of NTN's
customers and their requirements and the names of NTN's suppliersfollowing the
date hereof.
ALL OF NTN's business secrets and confidential information shall,
subject to any licenses and sublicenses between the parties, shall be the sole
and exclusive property of NTN and IWN.
3. For a period of three (3) years from the date hereof, neither
IWN, the Partnership, nor any of its respective directors, officers, owners,
employees, or affiliates shall compete directly or indirectly, or participate
directly or indirectly, as agent, representative or otherwise, or as a
stockholder, joint venturer, partner or otherwise, or have any direct or
indirect material financial interest, including without limitation the interest
of a creditor, in any form in any business competing directly or indirectly with
the business of NTN as presently conducted or with any business of NTN involving
the research, development, marketing, manufacture, distribution, sale or license
of Systems and Interactive Technologies anywhere in the world other than for
Gaming Applications. Ownership by IWN, the Partnership and its respective
owners, directors, officers, employees or affiliates of (1) any stock of NTN in
any amounts whatsoever, and (ii) of other stock other than NTN's stock which is
listed on a national securities exchange of any corporation conducting such
competing business, shall not be deemed a violation of this Section 1, provided
that with respect to clause (ii), that IWN, the Partnership and its respective
associates (as such term is defined in Regulation 14A of the Securities Exchange
Act of 1934, as in effect on the date hereof) collectively do not own more than
an aggregate of 5% of the stock of such entity. For purposes of this Agreement,
"Gaming Applications" shall mean any interaction where any sum of money is
risked on an uncertain outcome, such as casino gaming, pari-mutuel wagering,
lottery, sports betting, bingo, or other forms of gaming or wagering.
4. For a period of three (3) years after the date hereof, IWN and
the Partnership shall not (1) induce or attempt to induce, directly or
indirectly, any customer of NTN to cease doing business in whole or in part with
NTN or solicit the
-2-
business of any such customer for any products or services which compete with
any of the products or own account or for any other person (including without
limitation any firm, corporation, association or business employee of NTN) to
leave his employment with NTN or induce or attempt to induce any such employee
to breach his employment agreement with NTN.
5. In the event of a breach or any threatened breach by IWN or the
Partnership of the provisions of this Agreement, NTN shall be entitled to an
injunction restraining IWN or the Partnership from participation in violation of
this Agreement in any business which competes directly or indirectly with any of
the business of NTN as currently being conducted or with any business of NTN
involving the research, development, manufacture, distribution, sale or license
of Systems and Interactive Technologies anywhere in the world other than for
Gaming Applications. Nothing contained in this Agreement shall be construed as
prohibiting NTN from pursuing any other remedies available to it for any such
breach or threatened breach, including without limitation the recovery of
damages from the Partnership and any third parties. The covenants contained in
this Agreement shall run in favor of NTN and their respective successors and
assigns and shall survive the expiration or earlier termination of this
Agreement.
In the event of any breach by IWN or the Partnership of the
provisions of Sections 3 and 4 of this Agreement, the time periods set forth in
such paragraphs shall be extended by the length(s) of time during which such
breach was continuing.
6. This Agreement shall not be assigned by the parties hereto except
that NTN shall have the right to assign its rights hereunder or any successor in
interest of NTN, as the case may be, whether by merger, consolidation, purchase
of assets or otherwise.
7. All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been given if delivered
by hand, telecopied or mailed by first class, registered mail, return receipt
requested, postage fees prepaid, or by overnight courier of national reputation
addressed as follows:
(a) If to NTN: NTN Communications, Inc.
5966 La Place Court
Carlsbad, California 92008
Attention: Chief Executive Officer
Telecopier No.: 619-929-5289
with a copy to: Troy & Gould, Professional Corporation
1801 Century Park East, 16th Floor
-3-
Los Angeles, California 90067
Attention: William D. Gould, Esquire
Telecopier No.: 310-201-4746
(b) If to IWN or the Partnership:
c/o IWN, Inc.
5966 La Place Court
Carlsbad, California 92008
Attention: Chief Executive Officer
Telecopier No.: 619-930-1174
and
c/o Symphony Management Associates, Inc.
900 Bestgate Road, Suite 400
Annapolis, Maryland 21401
Attention: Chief Financial Officer
Telecopier No.: 410-573-5205
and
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Attention: William R. Sasso, Esquire
Telecopier No.: 215-564-8120
Addresses and telecopier numbers may be changed by notice in
writing signed by the addressees.
8. This Agreement embodies the entire agreement and understanding
related to the subject matter hereof between the parties hereto and supersedes
all prior agreements and understandings, oral or written, relating to the
subject matter hereof, and no change, alteration or modification hereof may be
made except in writing signed by the parties hereto. The headings in this
Agreement are for convenience of reference only and shall not be considered as
part of this Agreement nor limit or otherwise affect the meaning hereof. This
Agreement shall in all respects be governed and construed in accordance with the
laws of the State of Delaware.
9. If any one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable, it shall be enforced to the extent
permitted by law and the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected thereby. To the extent
permitted by applicable law, each party waives any provision of
-4-
law which renders any portion of this Agreement invalid, illegal or
unenforceable in any respect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.