NON-COMPETITION AGREEMENT
Exhibit 2.1.2
THIS AGREEMENT is made the 16th day of August, 2007,
BETWEEN:
XXXXX XXXXXXXX, of the City of Ottawa in the Province of Ontario
(“Xxxxxxxx”)
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XXXXX XXXXXXXX, of the City of Ottawa in the Province of Ontario
(“Xxxxxxxx”)
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XXXXXX XXXXX, of the City of Ottawa in the Province of Ontario
(“Xxxxx”)
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XXX XXXXXXXX, of the City of Toronto in the Province of Ontario
(“Xxxxxxxx”)
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DECIMA RESEARCH INC., a corporation amalgamated under the laws of
the Province of Ontario (the “Company”)
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2144798 ONTARIO INC., a corporation incorporated under the laws of
the Province of Ontario (the “Buyer”)
RECITALS:
| 1. | The Sellers (as hereinafter defined), the Buyer and certain others entered into a share purchase agreement (the “Share Purchase Agreement”) dated the 16th day of August, 2007 for the sale and purchase of the Purchased Shares. | |
| 2. | The obligation of the Buyer to complete the purchase of the Purchased Shares is conditional on the Sellers entering into this non-competition agreement. |
IN CONSIDERATION of the sum of $1.00, the closing of the Share Purchase Agreement of other
consideration now given by each party to the other (the receipt and
sufficiency of which are acknowledged by each party), the parties agree with one another as
follows:
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1. DEFINITIONS
1.1 In this Agreement,
“Affiliate”, when used to indicate a relationship with a specified Person, means a
Person that directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such specified Person and a
Person shall be deemed to be controlled by another Person if controlled in any
manner whatsoever that results in control in fact by that other Person (or that
other Person and any Person or Persons with whom that other Person is acting jointly
or in concert), whether directly or indirectly, and whether through the ownership of
securities, a trust, a contract or otherwise;
“Agreement” means this non-competition agreement and the Recitals, as supplemented,
amended or restated from time to time by a written agreement signed by the parties;
“Business” means all of the respective businesses and undertaking carried on by the
Company and the Target Group Subsidiaries, being principally providing full-service
market research services, including data collection through telephone interviewing,
online surveys and focus groups, research based consulting services and production
of client-specific market research reports and excluding, for greater
certainty, consulting services which are not research based and the
reports business including the reports business carried on by Decima Reports Inc.;
“Competitive Business” means any business or venture that competes with or carries
on any activities that is substantially similar to the whole of or any significant
line of the Business;
“Customer” means any Person who:
| (a) | has received a written proposal or quote from the Company or who has been a customer or client of the Company at any time during the three year period prior to the date hereof; or | ||
| (b) | is a customer or client of the Company who purchases products or services from the Company any time during the Restricted Period. |
“Disputes” includes all disputes, controversies, claims, counterclaims or similar
matters which relate to or arise out of or in connection with this Agreement
including the validity, existence, construction, meaning, performance or effect of
this Agreement or the rights and liabilities of the parties to this Agreement,
whether they arise during the term of this Agreement or thereafter;
“Final Determination ” means a decision of an Arbitrator or a court of competent
jurisdiction, from which no appeal lies or in respect of which all appeal rights
have been exhausted or all time periods for appeal have expired without appeals
having been taken;
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“Person” shall be broadly interpreted and includes an individual, body corporate
(with or without share capital), partnership, limited partnership, syndicate, sole
proprietorship, joint venture, association, unincorporated organization, trust,
trustee, a Governmental Authority and the executors, administrators or other
personal representatives of an individual in such capacity, and any other entity;
“Restricted Period” means the period from the date hereof to and including the fifth
anniversary of the date hereof;
“Sellers” means Anderson, Loiselle, Xxxxx and Xxxxxxxx, collectively, and in the
singular means any one of them;
“Share Purchase Agreement” has the meaning set forth in paragraph 1 of the Recitals;
and
“Territory” means Canada.
1.2 Terms defined in the Share Purchase Agreement and used herein have the same meaning herein as
in the Share Purchase Agreement, unless otherwise defined herein or unless the context otherwise
requires or unless specifically defined in this Agreement.
2. NON-COMPETITION
Except as otherwise provided in Section 7 hereof, each of the Sellers shall not, and each
shall cause its Affiliates, as applicable, not to, in any manner whatsoever during the Restricted
Period and within the Territory, either individually or in partnership or jointly or in conjunction
with any other Person:
| (a) | directly, or indirectly, carry on, engage in, or participate in, any Competitive Business either alone, in partnership, jointly or in conjunction with any other Person; | ||
| (b) | directly, or indirectly, assist (as principal, beneficiary, director, shareholder, partner, nominee, executor, trustee, agent, servant, employee, independent contractor, supplier, consultant, lender, guarantor, financier or in any other capacity whatever) any Person to carry on, engage in, or participate in, a Competitive Business; or | ||
| (c) | have any direct or indirect interest (as principal, beneficiary, director, shareholder, partner, nominee, executor, trustee, agent, servant, employee, consultant, independent contractor or in any other capacity whatever) in or with any Person, if any part of the activities of such Person consists of carrying on, engaging in or participating in a Competitive Business. |
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3. NON-SOLICITATION
3.1 Except as otherwise provided in Section 7 hereof, during the Restricted Period, each of the
Sellers shall not, and each shall cause its Affiliates, as applicable, not to, either individually
or in partnership or jointly or in conjunction with any other Person:
| (a) | directly, or indirectly solicit any Customer; | ||
| (b) | directly, or indirectly assist (be it as principal, beneficiary, servant, director, shareholder, partner, nominee, executor, trustee, agent, employee, independent contractor, supplier, consultant, lender, financier or in any other capacity whatever) any Person directly or indirectly to solicit any Customer; or | ||
| (c) | have any direct or indirect interest (be it as principal, beneficiary, director, shareholder, partner, nominee, executor, trustee, agent, servant, employee, consultant, independent contractor, supplier, creditor or in any other capacity whatever) in or with any Person if any of the activities of which Person consists of soliciting any Customer, |
if such solicitation is, directly or indirectly, intended to result in a sale or provision of any
product or service to such Customer within the Territory that is competitive with any product or
service forming a material part of the Business.
3.2 In addition, the Company shall not and shall cause its Affiliates not to, directly or
indirectly induce or attempt to induce any Customer to cease or refrain from doing business with
the Company or in any way interfere with the relationship (or prospective relationship) between any
Customer and the Company.
4. NON-SOLICITATION OF EMPLOYEES
Each of the Sellers shall not, and each shall cause its Affiliates, as applicable, not to,
during the Restricted Period, directly or indirectly, hire, solicit or induce to perform services,
or attempt to solicit or induce to perform services (as an employee, consultant or otherwise) any
individuals who are employees of the Company or take any actions which are intended to persuade any
such employee to leave the employ of the Company, without the prior written consent of the Buyer.
This Section 4 shall not apply to solicitations made generally to individuals through public media
and which are not specifically targeted at employees of the Company.
5. NO DISPARAGEMENT
During the Restricted Period but subject to the enforcement of their respective rights under
the Share Purchase Agreement and any closing document delivered pursuant thereto, each of the
Sellers shall not and each shall cause its Affiliates, as applicable, not to, take any action which
would disparage or otherwise damage the reputation of the Buyer, the Company or any of their
Affiliates.
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6. COVENANTS REASONABLE
6.1 Each of the Sellers acknowledges and agrees with the Buyer and the Company that:
| (a) | the covenants in this Agreement are reasonable in the circumstances and are necessary to protect the Buyer and the value of the Business to the Buyer and the Company; | ||
| (b) | the Sellers will receive, directly and/or indirectly, a substantial financial benefit as a result of the sale of the Purchased Shares to the Buyer; | ||
| (c) | the covenants of the Sellers contained in this Agreement were a material inducement for the Buyer to enter into the Share Purchase Agreement and the execution and delivery of this Agreement is a condition to the Buyer’s obligation to complete the purchase of the Purchased Shares pursuant to the Share Purchase Agreement; | ||
| (d) | the breach by such Sellers of any of the provisions of this Agreement would cause serious and irreparable harm to the Buyer and the Company which could not adequately be compensated for in damages; and | ||
| (e) | the principles of law to be applied to the interpretation of this Agreement are those that apply to restrictive covenants given by a seller on the sale of a business. |
6.2 Each of the Sellers consents to an order specifically enforcing the provisions of this
Agreement, or an order of injunction being issued against it restraining it from any breach of such
provisions. The provisions of this section shall not derogate from any other remedy which the
Buyer or the Company may have in the event of such a breach.
7. EXCEPTIONS
7.1 Notwithstanding any provisions or restrictions contained in this Agreement, nothing in this
Agreement shall prohibit or restrict any Seller from owning, less than 4.9% in the aggregate of the
publicly traded voting securities of any entity which carries on, engages in or participates in,
any Competitive Business, if such Seller does not in fact have the power to control, or direct the
management of, or is not otherwise engaged in activities with or on behalf of or otherwise for the
benefit of, such Competitive Business.
7.2 This Agreement shall not apply to any products or services that, at the time that any Seller
engages in any conduct prescribed by Sections 2 or 3, the Company has permanently ceased from
selling, distributing or rendering in the Territory.
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8. SEVERABILITY
If there is a Final Determination that any term or provision of this Agreement is illegal,
invalid or unenforceable in any jurisdiction, such illegality, invalidity or unenforceability of
that term or provision will not affect: (a) the legality, validity or enforceability of the
remaining terms and provisions of this Agreement; and (b) the legality, validity or enforceability
of such term or provision in any other jurisdiction.
9. DISPUTE RESOLUTION
All Disputes arising under or related to this Agreement shall be resolved pursuant to Article
6 (Dispute Resolution and Arbitration) of the Share Purchase Agreement, whose provisions shall
apply mutatis mutandis.
10. GENERAL
10.1 The division of this Agreement into articles, sections, subsections and paragraphs and the
insertion of headings are for convenience of reference only and shall not affect the construction
or interpretation of this Agreement. The article, section, subsection and paragraph headings in
this Agreement are not intended to be full or precise descriptions of the text to which they refer
and are not to be considered part of this Agreement. All uses of the words “hereto”, “herein,”
“hereof,” “hereby” and “hereunder” and similar expressions refer to this Agreement and not to any
particular section or portion of it. References to an Article, Section or Subsection, refer to the
applicable article, section, subsection of this Agreement.
10.2 In this Agreement, words in the singular include the plural and vice-versa and words in one
gender include all genders. Whenever the words “include”, “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without limitation”, unless the
context otherwise requires. The language used in this Agreement is the language chosen by the
parties to express their mutual intent, and no rule of contra preferentum or strict construction
shall be applied against any party.
10.3 This Agreement may be amended or supplemented only by a written agreement signed by each
party.
10.4 Time is of the essence of each provision of this Agreement.
10.5 This Agreement shall be governed by, and interpreted and enforced in accordance with, the laws
of the Province of Ontario and the laws of Canada in force in such Province (excluding any conflict
of laws rule or principle which might refer such construction, interpretation or enforcement to the
laws of another jurisdiction) and shall be treated in all respects as an Ontario contract. Each
party irrevocably submits to the non-exclusive jurisdiction of the courts of Ontario with respect
to any matter arising hereunder or related hereto.
10.6 This Agreement and the rights of the Buyer or the Company hereunder may be assigned by either
of them: (i) to any Person who acquires all or substantially all of the assets or shares of the
Company or the Buyer; and (ii) to any Affiliate of the Buyer or the Company, without the consent of
the Sellers.
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10.7 This Agreement shall enure to the benefit of and be binding upon the parties and their
respective heirs, executors, administrators, personal representatives, successors (including any
successor by reason of amalgamation or statutory arrangement of any party) and permitted assigns.
For greater certainty, each of the Sellers acknowledge that the Buyer may cause the Company to be
amalgamated with the Buyer and such amalgamation shall not affect any right or claim which could
otherwise be made by the Buyer and/or the Company hereunder prior to or following the amalgamation.
10.8 This Agreement, together with the Share Purchase Agreement, constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and supersedes all prior
negotiations, discussions, understandings, undertakings, statements, arrangements, promises,
representations and agreements, both written or oral, between the Parties. There are no
representations, warranties, conditions, undertakings, commitments, other agreements or
acknowledgements, whether direct or collateral, express or implied, that form part of or affect
this Agreement, or which induced any party to enter into this Agreement or on which reliance is
placed by any party, except as specifically set forth in this Agreement and the Share Purchase
Agreement.
10.9 Any waiver of, or consent to depart from, the requirements of any provision of this Agreement
shall be effective only if it is in writing and signed by the party giving it, and only in the
specific instance and for the specific purpose for which it has been given. No failure on the part
of any party to exercise, and no delay in exercising, any right under this Agreement shall operate
as a waiver of such right. No single or partial exercise of any such right shall preclude any
other or further exercise of such right or the exercise of any other right.
10.10 The rights and remedies of Buyer and the Company under this Agreement are cumulative and are
in addition to, without prejudice to and not in substitution for, any rights or remedies provided
by law. Any single or partial exercise by the Buyer or the Company of any right or remedy for
default or breach of any term, covenant or condition of this Agreement does not waive, alter,
affect or prejudice any other right or remedy to which the Buyer or the Company may be lawfully
entitled for the same default or breach.
10.11 This Agreement may be executed in any number of counterparts. Each executed counterpart
shall be deemed to be an original. All executed counterparts taken together shall constitute one
agreement. To evidence the fact that it has executed this Agreement, a party may send a copy of
its executed counterpart to all other parties by facsimile transmission or email, and if sent by
email shall be sent in Portable Document File (PDF) format. In such event, such party shall
forthwith deliver to the other parties the counterpart of this Agreement executed by such party.
10.12 Any notice to be given by one party to another hereunder may be given at the address and in
the manner provided in the Share Purchase Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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TO WITNESS THEIR AGREEMENT, the parties have duly executed this Agreement as of the date set
forth above.
/s/ Xxxxxxxx Xxxxxxxxxx
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Witness
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Witness
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Witness
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Witness
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XXX XXXXXXXX | ||||
| DECIMA RESEARCH INC. |
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| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Chairman | |||
| 2144798 ONTARIO INC. |
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| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | President | |||
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