SINCE DECEMBER 31, 2005,
OR (III) THAT WERE INCURRED UNDER THIS AGREEMENT OR IN COMPLIANCE WITH THE
TRANSACTIONS CONTEMPLATED HEREBY.
5.
POST CLOSING COVENANTS.
5.1.
NON-COMPETITION. THE SELLER AGREES THAT, IN CONSIDERATION OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE SELLER, SELLER PARENT, AND
HOLDINGS, AND THEIR SUBSIDIARIES, ASSIGNS, AND SUCCESSORS, SHALL NOT, AND THE
SELLER SHALL USE COMMERCIALLY REASONABLE EFFORTS TO CAUSE FRANCHISEES AND
LICENSEES OF THE SELLER, SELLER PARENT, AND HOLDINGS, AND THEIR SUBSIDIARIES,
ASSIGNS, AND SUCCESSORS (INCLUDING, WITHOUT LIMITATION, ANY LICENSEE OF THE
SELLER'S TRADE NAME), NOT TO, ON OR PRIOR TO THE FIFTH ANNIVERSARY OF THE
CLOSING DATE (THE "NON-COMPETITION PERIOD"), DIRECTLY OR INDIRECTLY, OPEN,
OPERATE, CONTROL, OR INVEST IN, IN EACH CASE, ANY NEW RETAIL PARTY GOODS STORE
(INCLUDING, WITHOUT LIMITATION, ANY RETAIL PARTY GOODS STORES THAT ARE OPENED
AND OPERATED TEMPORARILY FOR HALLOWEEN OR ANY OTHER HOLIDAY OR SEASON) IN
MASSACHUSETTS, RHODE ISLAND, NEW HAMPSHIRE, VERMONT, MAINE, OR WINDHAM AND NEW
LONDON COUNTIES IN CONNECTICUT (THE "RESTRICTED REGION"); PROVIDED, HOWEVER,
THAT THE RESTRICTED PARTIES SHALL NOT BE DEEMED TO BE IN VIOLATION OF THIS §5.1
SOLELY BY VIRTUE OF ANY OF THE FOLLOWING:
(A)
A RESTRICTED PARTY OR ITS AFFILIATE, DIRECTLY OR INDIRECTLY,
OPERATING, CONTROLLING, OR INVESTING IN ANY RETAIL PARTY GOODS STORE IN THE
RESTRICTED REGION THAT WAS OPENED
18
FOR BUSINESS AND OPERATED, CONTROLLED, OR INVESTED IN BY ANY RESTRICTED PARTY OR
ITS AFFILIATE PRIOR TO (I) THE CLOSING DATE OR (II) SOLELY WITH RESPECT TO ANY
ASSIGNS OR SUCCESSORS OF THE SELLER, SELLER PARENT, OR HOLDINGS, OR OF THEIR
SUBSIDIARIES, FRANCHISEES, OR LICENSEES, THE DATE WHEN SUCH ASSIGNS OR
SUCCESSORS BECOME SUBJECT TO THE TERMS OF THIS AGREEMENT;
(B)
A RESTRICTED PARTY OR ITS AFFILIATE, DIRECTLY OR INDIRECTLY,
ACQUIRING ANY RETAIL PARTY GOODS STORES IN THE RESTRICTED REGION AFTER THE
CLOSING DATE, PROVIDED THAT, UNLESS SUCH ACQUISITION IS OF RETAIL PARTY GOODS
STORES LOCATED IN RHODE ISLAND THAT ARE, DIRECTLY OR INDIRECTLY, OPERATED,
CONTROLLED, OR INVESTED IN BY A FRANCHISEE OF THE SELLER AS OF THE CLOSING DATE,
NO MORE THAN TWENTY PERCENT (20%) OF THE TOTAL NUMBER OF RETAIL PARTY GOODS
STORES OWNED BY THE SELLER OF SUCH STORES AND ITS FRANCHISEES, LICENSEES, AND
AFFILIATES IMMEDIATELY PRIOR TO SUCH ACQUISITION ARE LOCATED IN THE RESTRICTED
REGION;
(C)
A RESTRICTED PARTY OR ITS AFFILIATE, DIRECTLY OR INDIRECTLY,
OWNING LESS THAN FIVE PERCENT (5%) OF THE OUTSTANDING STOCK OF ANY PUBLICLY
TRADED CORPORATION; OR
(D)
ANY ACTION BY AN AFFILIATE OF A RESTRICTED PARTY NOT A DIRECT OR
INDIRECT SUBSIDIARY THEREOF.
SELLER ACKNOWLEDGES AND AGREES THAT (I) THE PROVISIONS OF THIS §5.1 WILL NOT
IMPOSE AN UNDUE HARDSHIP ON IT AND (II) BREACH OF THE PROVISIONS OF THIS
§5.1WILL CAUSE IRREPARABLE INJURY AND DAMAGE TO BUYER, THE EXACT AMOUNT OF WHICH
WILL BE DIFFICULT TO ASCERTAIN AND THAT REMEDIES AT LAW FOR ANY SUCH BREACH
WOULD BE INADEQUATE AND THAT THEREFORE, IN THE EVENT OF SUCH A BREACH, BUYER
SHALL BE ENTITLED, IN ADDITION TO ALL REMEDIES AVAILABLE AT LAW, TO