EXHIBIT 10.3
DEED OF COVENANT
This Deed of Covenant is made the 7th day of March 2001
BETWEEN:
(1) Xxx.xxx Inc a Delaware corporation whose registered office is at 00
Xxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000, U.S.A.,(the "Covenantor");
(2) xxx.xxx Limited a company registered in England and Wales under number
3709785 whose registered office is at 00 Xxxxx Xxxx, Xxxxxx, XX0 0XX (the
"Company");
(3) JLP Victoria Limited a company registered in England and Wales under number
3996267 whose registered office is at 000 Xxxxxxxx Xxxxxx, Xxxxxx, XX0X
0XX (the "Purchaser").
WHEREAS:
Pursuant to the provisions of an Agreement date today between the Covenantor and
the Purchaser, (the "Sale Agreement") the Purchaser has agreed to acquire the
entire issued share capital of the Company and the Covenantor has agreed to
enter into this Deed.
OPERATIVE TERMS:
1. INTERPRETATION
1.1 In this Deed unless the context or subject matter otherwise requires,
expressions defined in the Sale Agreement shall have the same meanings and
in addition the following expressions shall have the following meanings:
"Marks" means the Xxx.xxx Marks as defined in the Licence;
"Restricted Activity" means the use in any form or way whatsoever of the
Technology and Marks;
"Restricted Area" means the United Kingdom and Republic of Ireland;
"Restricted Period" means, subject to clause 2.2, a period of four years
from the Completion Date; and
"Technology" means the Licensed Technology;
1.2 The provisions of clauses 1.2 to 1.4 (inclusive) of the Sale Agreement
shall apply in this Deed (with the necessary modifications) as if repeated
in this Deed and set out in full herein.
2. COVENANTS
2.1 Subject to clause 2.2 and 2.5, the Covenantor hereby undertakes to each of
the Purchaser and the Company that it will not either alone or jointly with
others, whether as principal, agent, manager, shareholder, independent
contractor or in any other capacity, directly or indirectly through any
other person, for his own benefit or that of others:
(a) at any time during the Restricted Period engage in or carry on or be
concerned or interested in any Restricted Activity within the
Restricted Area in competition with the Company (other than as a
holder for investment of no more than 10 per cent of any class of
shares or securities dealt in on a recognised stock exchange); or
(b) at any time during the Restricted Period knowingly canvass or solicit
orders for the supply of any goods or services the same or
substantially similar to or otherwise competing with those supplied in
the normal course of the Restricted Activity from any person who has
been a customer of the Company during the 12 months preceding the
Completion Date, or induce or seek to induce any such person to cease
being a customer of the Company; or
(c) at any time during the Restricted Period do anything knowingly to
assist any Competitor in any material way in carrying on or developing
any Restricted Activity in the Restricted Area; or
(d) within 6 months after Completion solicit or entice away or knowingly
encourage any employee (an "Employee") of the Company and/or the
Purchaser to leave the employment of the Company and/or the Purchaser
(as the case may be), whether or not such Employee would by reason of
so leaving commit a breach of his contract of employment; or
(e) at any time after Completion make use of or disclose to any third
party any confidential information relating to the Purchaser or the
Company or to its or their businesses or affairs or any trade secrets
which is not in the
public domain, except if and to the extent that such disclosure is
required by law, but then only to the extent so required; or
(f) at any time after Completion represent itself or permit itself to be
held out as being in any way connected with or interested in the
business of the Company (other than the ongoing relationship pursuant
to the Licence Agreement and a service agreement between the parties
hereto of even date herewith);
PROVIDED that none of the foregoing restrictions shall prohibit the
Covenantor entering into co-development arrangements with third parties to
co-develop various generic sub-component parts to an e-commerce technology
solution if such generic sub-component parts are not used in such a way
that they can be aggregated together.
2.2 In the event that the Covenantor is subject to a Change of Control before
the expiry of a period of 4 years from the Completion Date:
(a) by a Competitor the definition of "Restricted Period" shall mean (i) a
period of 2 years from the Completion Date or (ii) the period from the
Completion Date until the date of Change of Control, whichever is
longer; or
(b) by any person other than a Competitor the definition of "Restricted
Period" shall mean (i) a period of 12 months from the Completion Date
or (ii) the period from the Completion Date until the date of Change
of Control, whichever is longer.
2.3 The Purchaser and the Company hereby undertake to the Seller that they will
not within 6 months after Completion either alone or jointly with others,
whether as principal, agent, manager, shareholder, independent contractor
or in any other capacity, directly or indirectly through any other person,
for their own benefit or that of others solicit or entice away or knowingly
encourage an Employee of the Seller to leave the employment or the Seller,
whether or not such Employee would by reason or so leaving commit a breach
of his contract of employment;
2.4 Each of the covenants contained in clause 0 is entirely separate and
severable and enforceable accordingly. Each of such covenants is
considered fair and reasonable in all the circumstances by the parties but
in the event that any such restriction shall be found to be void or
ineffective but would be valid and effective
if some part thereof were deleted or the duration or area of application
reduced such restriction shall apply with such modification as may be
necessary to make it valid and effective.
2.5 The Parties hereto acknowledge that it is not possible to limit all
Internet based inquiries and promotion from or to a geographical territory.
Accordingly, the Covenantor's incidental promotion of its business through
the Internet and/or incidental conduct of its respective business with
third parties located inside the Restricted Area will not constitute a
breach of any of this Deed. Incidental conduct shall include, but not be
limited to general purpose advertising that the Covenantor targets to
person's located outside the Restricted Area, but that reaches a de minimus
percentage of persons located inside the Restricted Area. The parties
intend that, notwithstanding any variance in the application of laws
between different territories, the foregoing will be construed to allow
incidental promotion and business conduct within the Restricted Area to the
same or an equivalent extent as the Covenantor is permitted to engage in
the promotion and conduct of its business outside of the Restricted Area.
3. GENERAL PROVISIONS
The following provisions of the Sale Agreement shall apply to this Deed as
if the same had been set out herein in full save that references therein to
the Seller, its address and the Agreement respectively shall be construed
as references to the Covenantor, its address specified in this Deed and
this Deed:
(a) clause 11 Continuing Obligations and Assignment
(b) clause 13 Notices
(c) clause 15.3 Variation
(d) clause 16.1 and 16.2 Waiver
(e) clause 17 Governing law.
4. CLAIMS UNDER COVENANT
If any allegation, claim, dispute or matter of difference arises in respect
of this Deed ("Covenant Claim") and the Purchaser (or any Affiliate of the
Purchaser) and/or the Company has commenced proceedings to enforce or in
respect of a
breach or alleged breach of the Licence arising from the same facts or
circumstances which give rise to the Covenant Claim then the Purchaser
hereby agrees that it and its Affiliates, and the Company hereby agrees
that it and its Affiliates, are prohibited from bringing proceedings to
enforce or in respect of a breach of this Deed in relation to such Covenant
Claim and may only seek and obtain relief through enforcement of the
Licence.
The parties hereto acknowledge that the Covenantor, the Company and Xxxx
Xxxxx plc ("JLP") have entered into a similar agreement under the Licence
pursuant to which if any allegation, claim, dispute or matter of difference
arises in respect of the Licence ("Licence Claim") and the Covenantor, the
Company or JLP and/or any Affiliate thereof has commenced proceedings to
enforce or in respect of a Covenant Claim arising from the same facts and
circumstances which give rise to the Licence Claim then the Covenantor, the
Company and JLP and/or any Affiliate thereof have agreed that they shall be
prohibited from bringing any proceedings to enforce or in respect of a
breach of the Licence in relation to such Licence Claim and may only seek
and obtain relief through enforcement of this Deed.
5. TERMINATION OF LICENCE
If the Licence is terminated in accordance with its terms, the provisions
of this Deed shall cease to have effect.
In witness whereof this Deed has been entered into the day and year first before
written.
Executed as a deed for )
and on behalf )
of Xxx.Xxx Inc )
in the presence of: )
Executed as a deed for )
and on behalf )
of JLP Victoria Limited )
in the presence of: )
Executed as a deed for )
and on behalf )
of Xxx.Xxx Limited )
in the presence of: )
