EXHIBIT 10.12
NON-COMPETITION AGREEMENT
BETWEEN
TORONTO STAR NEWSPAPERS LTD.
- AND-
TELE-DIRECT (SERVICES) INC.
- AND -
CITYSEARCH CANADA INC.
- AND -
METROLAND PRINTING, PUBLISHING AND DISTRIBUTING LTD.
MADE AS OF AUGUST 31, 1998
NON-COMPETITION AGREEMENT
THIS AGREEMENT made as of August 31, 1998;
BETWEEN:
TORONTO STAR NEWSPAPERS LTD., a corporation incorporated under
the laws of Ontario
("Tor News")
- and -
TELE-DIRECT (SERVICES) INC., a corporation incorporated under the
laws of Canada
("Tele-Direct")
- and -
CITYSEARCH CANADA INC., a corporation incorporated under the laws
of Ontario
("CitySearch Canada")
- and -
METROLAND PRINTING, PUBLISHING AND DISTRIBUTING LTD., a
corporation incorporated under the laws of Ontario
("Metroland")
WHEREAS Tor News, through its affiliate, Metroland, Tele-Direct and
CitySearch Canada formed the xxxxxxx.xxx Limited Partnership for the purpose of
carrying on the Limited Partnership Business;
AND WHEREAS Metroland, Tele-Direct and CitySearch Canada, among
others, entered into the Limited Partnership Agreement;
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AND WHEREAS CitySearch Inc. and CitySearch Canada are parties to an
Amended and Restated License and Services Agreement, under which certain rights
were sublicensed to xxxxxxx.xxx;
AND WHEREAS the parties hereto wish to make arrangements regarding
their respective rights and obligations to each other.
NOW THEREFORE THIS AGREEMENT WITNESSES that, for good and valuable
consideration and the payment by each of the parties to the other of the sum of
$1.00 of lawful money of Canada (the receipt and sufficiency of which
consideration is hereby acknowledged by each of the parties), the parties agree
as follows:
ARTICLE 1 - INTERPRETATION
--------------------------
1.01 DEFINITIONS
-----------
In this Agreement, unless something in the subject matter or context
is inconsistent therewith, the following terms as used herein, including the
recitals, shall have the meanings set forth below:
(a) "AMENDED AND RESTATED LICENSE AND SERVICES AGREEMENT" means the
amended and restated agreement between CitySearch Inc. and CitySearch
Canada providing for the licensing to CitySearch Canada of certain
software, technology and know-how dated as of August 31, 1998;
(b) "AGREEMENT" means this agreement and all amendments made hereto by
written agreement between the parties hereto;
(c) "CITYSEARCH INFORMATION SERVICE" means an online service of providing
Content related to restaurants, entertainment, retail establishment,
community events and other services, including on-line ticketing and
sale of merchandise, pertaining to a particular city or geographic
region which uses the CitySearch Systems;
(d) "CITYSEARCH SYSTEMS" has the meaning set forth in Section 1.01 of the
Amended and Restated License and Services Agreement;
(e) "COMPETING SERVICE" has the meaning set forth in Section 2.01;
(f) "CONTENT" has the meaning ascribed thereto in the Amended and Restated
License and Services Agreement; and
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(g) "LIMITED PARTNERSHIP AGREEMENT" means a limited partnership agreement
made as of August 31, 1998 between, among others, 1310818 Ontario
Inc., Tele-Direct, Metroland and CitySearch Canada.
1.02 OTHER CAPITALIZED TERMS
-----------------------
Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed thereto in the Limited Partnership Agreement.
1.03 HEADINGS
--------
The division of this Agreement into Articles and Sections and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "hereunder" and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion hereof and
include any agreement supplemental hereto. Unless something in the subject
matter or context is inconsistent therewith, references herein to Articles and
Sections are to Articles and Sections of this Agreement.
1.04 EXTENDED MEANINGS
-----------------
In this Agreement words importing the singular number only shall
include the plural and vice versa, words importing any gender shall include all
genders.
ARTICLE 2 - TERMS AND CONDITIONS
--------------------------------
2.01 COVENANT NOT TO COMPETE
-----------------------
Each of Tele-Direct, Tor News and CitySearch Canada hereby covenants
and agrees that it shall not, directly or indirectly either on its own or
through any agent, joint venture, subsidiary or independent contractor, at any
time during the currency of this Agreement, offer a local, on-line city guide
information service that taken as a whole competes with the CitySearch
Information Service of the Limited Partnership (the "Competing Service")
anywhere within [*].
2.02 CONTINUATION OF EXISTING BUSINESS
---------------------------------
Nothing herein shall restrict either Tor News or Tele-Direct from
continuing or expanding in the Exclusive Territory certain electronic offerings
being offered as of the date hereof that are not being transferred to the
Limited Partnership pursuant to the Limited Partnership Agreement, or from
creating an on-line version of a print product Tor News or Tele-Direct sells or
disbtributes, as long as such electronic offerings, considered as a whole, do
not comprise a Competing Service. For greater certainty, but without
limitation, excluded as
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Competing Services are the Excluded Assets listed in Sections 7.6 and 7.7 of the
Limited Partnership Agreement. Provided, however, that wherever possible the
Major Limited Partners will use the Limited Partnership as the entity for
Greater Toronto Area (the "GTA") related information. If one of the Major
Limited Partners does continue, expand or launch an internet service in the GTA
(other than the Excluded Assets) that competes with part of the business of the
Limited Partnership then such Major Limited Partner shall pay the Limited
Partnership the revenues less the costs thereof generated by it from within the
GTA from the competitive part of the business. For example, if one of the Major
Limited Partners launches a national classifieds database then the Limited
Partnership shall receive the revenues less the costs that are generated from
classifieds that arise from within the GTA. Such revenues less the costs shall
be paid by the Major Limited Partner to the Limited Partnership on a quarterly
basis and the Major Limited Partner shall provide the Limited Partnership with
financial statements prepared by an independent auditor showing the basis for
the calculation of the amount of the payment to the Limited Partnership.
2.03 INTELLECTUAL PROPERTY
---------------------
Each of the parties hereto covenants and agrees with CitySearch Canada
that it will not transfer outside the Exclusive Territory, use, or transfer to,
disclose to or authorize any third party, affiliated or unaffiliated, to use,
the CitySearch Systems and other know-how and intellectual property of
CitySearch Canada gained through operation of the Limited Partnership Business.
2.04 NON-SOLICITATION OF EMPLOYEES
-----------------------------
Each of the parties hereto hereby covenants and agrees that it shall
not, without the prior approval of each of the other parties hereto, directly or
indirectly, solicit or endeavour to entice away from any of the other parties
hereto, any person who is employed by or otherwise engaged to perform services
for any of such other parties hereto.
2.05 CONFIDENTIALITY
---------------
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(a) Each of the parties hereto acknowledges that it shall have access to
and will be entrusted with information that would reasonably be
confidential to the Limited Partnership or the other parties hereto.
Such information may include, without limitation, trade secrets, know
how, marketing plans and techniques, cost figures, customer lists and
other information relating to the customers of the Limited Partnership
and the Limited Partners. It is acknowledged that the disclosure of
any of such information to competitors of the Limited Partnership or
of the parties hereto or to the general public would be highly
detrimental to the best interests of the Limited Partnership or the
parties hereto, as the case may be. Accordingly, each of the parties
hereto hereby covenants and agrees that it shall not, at any time
until such information is disseminated to the public or becomes public
knowledge other than as a result of a breach of this Agreement,
without the consent of the other parties, which consent may be
unreasonably withheld, directly or indirectly, communicate or disclose
to any Person including to any Affiliates of any of the parties hereto
any of such information other than (a) to its professional advisors or
the directors, officers, employees or authorized representatives of
the Limited Partnership that have a need to know such information; (b)
for the purposes of Section 7.8 of the Limited Partnership Agreement;
and (c) in furtherance of the Limited Partnership Business; nor shall
it use or exploit, directly or indirectly, the same for any purpose
other than the purposes of the Limited Partnership. Each of the
parties hereto shall take all reasonable measures available to it to
keep such information in the strictest confidence.
(b) Notwithstanding Section 2.05(a), each of the parties hereto may
communicate such information if the disclosure of such information is
required by any applicable law, governmental rule or regulation,
subpoena, or order of any court or governmental agency, provided that
each party hereto shall:
(i) promptly notify the other parties hereto;
(ii) consult with the other parties hereto on the advisability of
taking steps to resist or narrow such requirement; and
(iii) if disclosure is required or deemed advisable, co-operate with
the other parties hereto in any attempt to obtain an order or
other assurance that such information will be accorded
confidential treatment.
(c) The foregoing Sections 2.05(a) and 2.05(b) do not apply to such
information that becomes available to the editorial departments of
Metroland, Tor News or any of their Affiliates other than through a
breach of this Agreement.
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2.06 APPLICATION
-----------
With the exception of Section 2.05 which shall survive the term of
this Agreement for a period of two (2) years, this Agreement ceases to apply to
any Limited Partner when such Limited Partner ceases to be a Shareholder or a
Limited Partner.
ARTICLE 3 - BREACH
------------------
3.01 REMEDIES FOR BREACH
-------------------
Each of the parties hereto acknowledges and agrees that any violation
of any of the covenants made in this Agreement will cause irreparable damage or
injury to the parties hereto for whose benefit it was made, the exact amount of
which would be impossible to ascertain, and that, for such reason, the parties
hereto shall be entitled to obtain interim, interlocutory, and final injunctive
relief restraining a party hereto from breaching, and requiring a party hereto
to comply with, its obligations under this Agreement, or to seek and obtain such
other relief against a party hereto as may be required to specifically enforce
any of the covenants or obligations contained in this Agreement. Each of the
parties hereto acknowledges the importance to the Limited Partnership of the
strict compliance with the terms of this Agreement and acknowledges that each of
parties' interest in the strict enforcement thereof will outweigh the balance of
convenience or harm which a party hereto may suffer as a result of the strict
enforcement of this Agreement.
3.02 EQUITABLE RIGHTS
----------------
Nothing in this Agreement shall be construed as abrogating or
diminishing any right of a party hereto at common law or in equity to restrain a
breach of duty including without limitation any breach of trust, confidence or
fiduciary duty.
ARTICLE 4 - GENERAL
-------------------
4.01 TERM
----
Subject to Article 10.1(g) of the Unanimous Shareholder Agreement,
this Agreement shall commence on the date hereof and continue until the
dissolution or winding-up of the Limited Partnership, with the exception of
Section 2.05 which survives the term of this Agreement for a period of two (2)
years.
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4.02 FURTHER ASSURANCES
------------------
Each party hereto shall from time to time execute and deliver all such
further documents and instruments and do all acts and things as the other party
may reasonably require to effectively carry out or better evidence or perfect
the full intent and meaning of this Agreement.
4.03 NOTICE
------
Any notices or other communications required or permitted hereunder
shall be given in accordance with Section 12.6 of the Unanimous Shareholder
Agreement.
4.04 SEVERABILITY
------------
Each covenant and provision contained in this Agreement shall be
severable, separate and distinct and the unenforceability in whole or in part of
any covenant or provision hereof shall be deemed not to affect or impair the
validity or enforceability of any other covenant or provision hereof. If any of
the activities, time periods or geographical areas specified herein are
considered by a court of competent jurisdiction as being unreasonable, the
Limited Partners agree that such court shall have authority to limit such
activities, time periods or geographical areas to such activities, time periods
or geographical areas as the court deems proper in the circumstances.
4.05 ENTIRE AGREEMENT
----------------
This Agreement, the Limited Partnership Agreement, the Unanimous
Shareholder Agreement and the Ancillary Agreements constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and cancel and supersede any prior understandings and agreements between the
parties hereto with respect thereto, including the "CitySearch Term Sheet for
Partnership Agreement" dated July 16, 1998 and the initialled addendum attached
thereto.
4.06 ASSIGNMENT
----------
None of the parties hereto shall have the right to assign or
otherwise be relieved of their obligations hereunder, except as may be expressly
agreed to in writing by all of the parties hereto. This Agreement shall be
binding upon and shall enure to the benefit of the parties hereto and their
successors and permitted assigns.
4.07 AMENDMENT AND WAIVER
--------------------
No modification of or amendment to this Agreement shall be valid or
binding unless set forth in writing and duly executed by the parties hereto and
no waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and
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signed by the party purporting to give the same and, unless otherwise provided,
shall be limited to the specific breach waived.
4.08 GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
4.09 COUNTERPARTS
------------
This Agreement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties have executed this Agreement.
TORONTO STAR NEWSPAPERS LTD.
By: /s/ Rocca Russi
---------------------------------
Name:
Title:
By:_________________________________
Name:
Title:
TELE-DIRECT (SERVICES) INC.
By: /s/ D. G. Renwicke
---------------------------------
Name:
Title:
By:________________________________
Name:
Title:
CITYSEARCH CANADA INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name:
Title:
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METROLAND PRINTING, PUBLISHING &
DISTRIBUTING LTD.
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------
Name:
Title:
