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EXHIBIT 10.28
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
AGREEMENT dated as of the 6th day of April 1998 between WMS INDUSTRIES
INC. ("WMS"), a Delaware corporation, and MIDWAY GAMES INC. ("Midway"), a
Delaware corporation, each with an address at 0000 Xxxxx Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, on the date hereof, WMS is distributing (the "Distribution") all
of its shares of Midway's common stock to holders of the shares of WMS' common
stock outstanding on March 31, 1998;
WHEREAS, prior to the Distribution, Midway has been a majority-owned
subsidiary of WMS;
WHEREAS, after the Distribution, the parties shall continue to have various
contractual relationships with and obligations to each other (the "Contractual
Relationships"), which involve the disclosure of confidential and proprietary
information and frequent contact with each other's customers and employees;
WHEREAS, WMS and Midway each recognize that the other is engaged in a
continuous program of research, development, design and production respecting
its business;
WHEREAS, WMS and Midway previously were parties to a confidentiality and
non-competition arrangement pursuant to a Manufacturing and Services Agreement,
dated as of July 1, 1996, which agreement has terminated; and
WHEREAS, the parties desire to set forth the terms of continuing
arrangements under which each party will preserve the other's confidential and
proprietary information and relationships with customers and employees following
the Distribution.
NOW, THEREFORE, in consideration of the Contractual Relationships, the
premises and the mutual covenants herein contained and intending to be legally
bound, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
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1.1 The following terms as used in this Agreement shall have the meanings
set forth below:
1.1.1 "Person" means an individual, corporation, partnership, limited
liability company, proprietorship, firm, association, trust, estate, joint
venture, unincorporated organization or other business entity or a government or
any agency or political subdivision thereof.
1.1.2 "Midway" include Midway and its subsidiaries, except where the
context otherwise requires.
1.1.3 "WMS" include WMS and its subsidiaries, except where the context
otherwise requires.
1.2 Unless the context otherwise requires
1.2.1 Words used in the singular include the plural and words used in
the plural include the singular; and
1.2.2 "herein", "hereto" and "hereunder" shall refer to this Agreement
as a whole and not to any particular paragraph or section.
2. CONFIDENTIALITY. Either WMS or Midway may from time to time by written
notice to the other designate information regarding its business as confidential
("Confidential Information"). Each party shall use its best efforts to maintain
the confidentiality of the other party's Confidential Information. All
Confidential Information which either party has obtained from the other shall be
returned or destroyed (if the owner of such information so notifies the holder)
upon the expiration or earlier termination of this Agreement. Each party shall
instruct its employees who have access to the Confidential Information of the
other party to keep the same confidential by using the same care and discretion
that it uses with respect to its own confidential property and trade secrets.
The provisions of this Section shall survive expiration or earlier termination
of this Agreement.
3. NON-COMPETITION. For a period of five years from the date hereof, neither
party hereto
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shall, without the prior written consent of the other, directly or indirectly,
individually or in concert with others, own, manage, operate or control any
Person that is engaged in, or participate, invest or engage in, the business
currently conducted by the other party hereto (except that Midway shall have the
right to engage in any business related to video-game manufacturing, cabinet
supply, spare parts sales and video-simulated non-mechanical pinball games), or
for itself, or on behalf of any other Person, be in contact with any customer,
supplier, licensee or licensor of the other party for the purpose of diverting,
taking away from or otherwise interfering with the other party's relationship
with any customer, supplier, licensee or licensor; provided, however, that
nothing in this Section shall be construed to prohibit a party from owning not
more than five (5%) percent of any class of publicly-held voting securities of
any issuer which is subject to the reporting requirements of the Securities and
Exchange Act of 1934, as amended.
4. NON-SOLICITATION. For the greater of (i) a period of two years from the
date hereof or (ii) a period ending one year after the date that any particular
Midway or WMS employee no longer is providing any services to the other party
pursuant to the Contractual Relationships, such other party shall not, without
the prior written consent of the employer, directly or indirectly hire or
solicit the employment of such employee or encourage such employee to leave his
or her employment or induce any such employee to seek, accept or obtain
employment by any Person other than such employer.
5. RIGHTS AND REMEDIES UPON BREACH. If either party hereto breaches or
threatens to commit a breach of, any of the provisions of Sections 2, 3, or 4
hereof, the other party shall have the right and remedy to have such covenants
specifically enforced by any court of competent jurisdiction, it being agreed
that any breach or threatened breach of such covenants would cause irreparable
injury and that money damages alone would not provide an adequate remedy. This
right of specific performance is in addition to, and not in lieu of, any other
rights and remedies available to the respective parties hereto under law or in
equity.
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6. SEVERABILITY OF COVENANT. Each of the parties hereto acknowledges and
agrees that the foregoing covenants are reasonable and valid in geographical and
temporal scope and in all other respects and that it has received full and
adequate consideration therefor. If any court determines that any of such
covenants, or any part thereof, is invalid or unenforceable, the remainder of
such covenants shall not thereby be affected and shall be given full effect,
without regard to the invalid portions. If any court determines that any of the
foregoing covenants, or any part thereof, is unenforceable because of the
duration or geographic scope of such provision, 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.
7. MISCELLANEOUS.
7.1 No waiver by either party of any default shall be effective unless in
writing, nor shall any such waiver operate as a waiver of any other default or
of the same default on any future occasion.
7.2 Each party warrants and represents that proceeding herewith is not
inconsistent in any material way with any contractual obligations, expressed or
implied, undertaken with any third party.
7.3 Neither party shall, without the prior written consent of the other,
assign any rights or delegate any obligations under this Agreement, such consent
not to be unreasonably withheld, conditioned or delayed.
7.4 The headings used in this Agreement are inserted only for the purpose
of convenience and reference, and in no way define or limit the scope or intent
of any provision or part hereof.
7.5 This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns. Nothing
herein, expressed or implied, shall be construed to give any other person any
legal or equitable rights hereunder. No person shall be deemed to be a third
party beneficiary of this Agreement. Nothing herein shall be construed to be an
admission or waiver of any rights, claims and defenses the parties may have
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against third parties, which rights, claims and defense the parties specifically
reserve.
7.6 All notices and other communications hereunder shall be in writing and
shall be delivered by hand, by facsimile or mailed by registered or certified
mail (return receipt requested) to the parties at the addresses set forth on the
first page of this Agreement (or at such other addresses for a party as shall be
specified by like notice) and shall be deemed given on the date on which such
notice is received.
7.7 The parties each shall take such actions and execute such documents
and instruments as may be reasonably requested by the other party to implement
the terms and provisions of this Agreement.
7.8 All controversies and disputes arising out of or under this Agreement
shall be determined pursuant to the laws of the State of Illinois, United States
of America, regardless of the laws that might be applied under applicable
principles of conflicts of laws.
7.9 This Agreement constitutes the entire understanding between the
parties hereto (and supersedes all prior written or oral communications)
relating to the subject matter covered in this Agreement. No amendment,
modification, extension or failure to enforce any condition of this Agreement by
either party shall be deemed a waiver of any of its rights herein. This
Agreement shall not be amended except by a writing executed by all the parties
hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
WMS INDUSTRIES INC.
By:/s/ Xxxxxx X. Xxxx, Xx.
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Xxxxxx X. Xxxx, Xx.
Vice President-Finance
MIDWAY GAMES INC.
By:/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
President
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