DURING OR AFTER THE
EMPLOYMENT PERIOD) TO ESTABLISH AND CONFIRM SUCH OWNERSHIP (INCLUDING, WITHOUT
LIMITATION, THE EXECUTION AND DELIVERY OF ASSIGNMENTS, CONSENTS, POWERS OF
ATTORNEY AND OTHER INSTRUMENTS) AND TO PROVIDE REASONABLE ASSISTANCE TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES IN CONNECTION WITH THE
7
prosecution of any applications for patents, trademarks, trade names, service
marks or reissues thereof or in the prosecution or defense of interferences
relating to any Work Product.
(B)
CALIFORNIA EMPLOYEE PATENT ACT NOTIFICATION.
IN ACCORDANCE WITH SECTION 2872 OF THE CALIFORNIA EMPLOYEE PATENT ACT, WEST'S
CAL. LAB. CODE SECTION 2870 ET. SEQ., EXECUTIVE IS HEREBY ADVISED THAT SECTION
6(A) DOES NOT APPLY TO ANY INVENTION, NEW DEVELOPMENT OR METHOD (AND ALL COPIES
AND TANGIBLE EMBODIMENTS THEREOF) MADE SOLELY BY EXECUTIVE FOR WHICH NO
EQUIPMENT, FACILITY, MATERIAL, CONFIDENTIAL INFORMATION OR INTELLECTUAL PROPERTY
OF THE COMPANY OR ANY OF ITS SUBSIDIARIES WAS USED AND WHICH WAS DEVELOPED
ENTIRELY ON EMPLOYEE'S OWN TIME; PROVIDED, HOWEVER, THAT SECTION 6(A) SHALL
APPLY IF THE INVENTION, NEW DEVELOPMENT OR METHOD (I) RELATES TO THE COMPANY'S
OR ANY OF ITS SUBSIDIARIES' ACTUAL OR DEMONSTRABLY ANTICIPATED BUSINESSES OR
RESEARCH AND DEVELOPMENT, OR (II) RESULTS FROM ANY WORK PERFORMED BY EXECUTIVE
FOR THE COMPANY OR ANY OF ITS SUBSIDIARIES.
7.
NON-COMPETE AND NON-SOLICITATION.
(A)
THE EXECUTIVE ACKNOWLEDGES AND AGREES WITH
THE COMPANY THAT DURING THE COURSE OF THE EXECUTIVE'S INVOLVEMENT AND/OR
EMPLOYMENT WITH THE COMPANY, SUCH EXECUTIVE HAS HAD AND WILL CONTINUE TO HAVE
THE OPPORTUNITY TO DEVELOP RELATIONSHIPS WITH EXISTING EMPLOYEES, VENDORS,
SUPPLIERS, CUSTOMERS AND OTHER BUSINESS ASSOCIATES OF THE COMPANY WHICH
RELATIONSHIPS CONSTITUTE GOODWILL OF THE COMPANY, AND THE COMPANY WOULD BE
IRREPARABLY DAMAGED IF THE EXECUTIVE WERE TO TAKE ACTIONS THAT WOULD DAMAGE OR
MISAPPROPRIATE SUCH GOODWILL.
ACCORDINGLY, THE EXECUTIVE AGREES AS FOLLOWS:
(I)
THE EXECUTIVE ACKNOWLEDGES THAT THE
COMPANY CURRENTLY CONDUCTS ITS BUSINESS THROUGHOUT THE UNITED STATES, INCLUDING
WITHOUT LIMITATION THE AREAS LISTED ON EXHIBIT A ATTACHED HERETO (THE
"TERRITORY").
ACCORDINGLY, DURING THE PERIOD COMMENCING ON THE DATE HEREOF AND
ENDING ON THE LATER OF (X) THE TERMINATION OF THE EMPLOYMENT PERIOD OR (Y) IF
THE EXECUTIVE WAS TERMINATED WITHOUT CAUSE OR RESIGNS WITH REASONABLE
JUSTIFICATION, FOR SO LONG AS SEVERANCE PAYMENTS ARE BEING MADE PURSUANT TO
SECTION 4(B) (SUCH PERIOD IS REFERRED TO HEREIN AS THE "NON-COMPETE PERIOD"),
THE EXECUTIVE SHALL NOT, DIRECTLY OR INDIRECTLY, ENTER INTO, ENGAGE IN, ASSIST,
GIVE OR LEND FUNDS TO OR OTHERWISE FINANCE, BE EMPLOYED BY OR CONSULT WITH, OR
HAVE A FINANCIAL OR OTHER INTEREST IN, ANY BUSINESS WHICH ENGAGES IN SELLING, AT
THE RETAIL LEVEL, MUSICAL INSTRUMENTS, PRO-AUDIO EQUIPMENT OR RELATED
ACCESSORIES WITHIN THE TERRITORY (THE "LINE OF BUSINESS"), WHETHER FOR OR BY
HIMSELF OR AS A REPRESENTATIVE FOR ANY OTHER PERSON.
(II)
NOTWITHSTANDING THE FOREGOING, THE
AGGREGATE OWNERSHIP BY THE EXECUTIVE OF NO MORE THAN TWO PERCENT (ON A
FULLY-DILUTED BASIS) OF THE OUTSTANDING EQUITY SECURITIES OF ANY ENTITY, WHICH
SECURITIES ARE TRADED ON A NATIONAL OR FOREIGN SECURITIES EXCHANGE, QUOTED ON
THE NASDAQ STOCK MARKET OR OTHER AUTOMATED