EXHIBIT 10.9
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (this "Agreement") is dated as of March 19,
2003 and entered into by and among DealerTrack Holdings, Inc., a Delaware
corporation ("Buyer"), Credit Online, Inc., a Delaware corporation ("Company"),
First American Credit Management Solutions, Inc., a Delaware corporation
("CMSI") and The First American Corporation, a California corporation
("Parent").
RECITALS
WHERAS, this Agreement is entered into in connection with that certain
Stock Purchase Agreement, dated as of January 30, 2003, by and among Buyer,
Company, CMSI and Parent (the "Stock Purchase Agreement"; capitalized terms
defined therein and used herein without delimitation shall have the meaning
assigned to such term therein).
NOW THEREFORE, in connection with the Stock Purchase Agreement and for the
consideration stated herein and therein, the parties hereby agree as follows:
AGREEMENT
1. Definitions. As used in this Agreement, the following definitions shall
apply:
"Automobile(s)" means passenger vehicles, light trucks, snowmobiles,
recreational vehicles, motorcycles, boats and other watercraft and/or commercial
vehicles.
"Asset Remarketing" means an Internet-based, business-to-business
e-commerce system, which enables multiple Lenders to market and sell leased
Automobiles either (i) pre-lease termination, (ii) post-lease termination or
(iii) post-repossession, in each case, to Dealers.
"CMSI Business" means single Lender credit origination and/or credit
decisioning systems, which enable such single Lenders, to do one or more of the
following: (i) receive credit application data with respect to a loan or lease,
(ii) retrieve collateral related data, such as collateral value, (iii) score
credit applications, (iv) determine whether a credit application meets such
Lender's criteria for the granting of credit, and/or (v) determine the terms for
the granting of such credit. These systems may be delivered on an Application
System Processing ("ASP") basis or through software and systems operating
internally at a Lender. In addition, the CMSI Business means a
business-to-business system for mortgage or home equity Lenders to retrieve and
deliver real property (i) flood certifications, (ii) title insurance and (iii)
appraisal services.
"CMSI Lender" means a Lender who currently uses, or is in
discussions or negotiations with respect to the use of, the products and/or
services offered by CMSI, or any successor in interest thereto.
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"Dealer" means an Automobile dealer in the United States or Canada.
"DealerTrack Business" means (1) an Internet-based, business-to
business e-commerce system, which enables (i) Dealers to do one or more of the
following (a) directly route/transmit credit application data with respect to a
loan or lease to multiple Lenders, (b) receive credit decisions with respect to
credit applications submitted by such Dealer, or (c) obtain contract status,
pay-off quotes, prospecting reports, rates, programs and other information
related to the items set forth in this clause (c) from multiple Lenders, (d)
filter and route credit applications to multiple Lenders and/or (e) obtain other
information on products and services Lenders offer to Dealers; (ii) the
eContracting Service; (iii) PaymentTrack; (iv) Dealers to directly receive
and/or generate reports from multiple Lenders related to any of the foregoing;
and/or (v) non-affiliated Lenders to pass credit applications with respect to
Automobiles between and/or among themselves; and (2) Asset Remarketing.
"eContracting Service" means a product and/or service, which enables
(i) multiple Lenders to allow Dealers to access, process, complete and source
certain electronic Automobile loan and lease contracts and ancillary documents
related thereto on-line and transmit such contracts and documents to one or more
Lenders, (ii) one or more Lenders to receive electronic "authoritative" copies
(as such term is used in Section 9-105 of the New York Uniform Commercial Code
or any successor provision thereto) of Automobile loan and lease contracts
and/or securitize such loan and lease contracts, (iii) a person or entity which
controls electronic "authoritative" copies (as such term is used in Section
9-105 of the New York Uniform Commercial Code or any successor provision
thereto) of Automobile loan and lease contracts to access, view, store, add,
delete, replace, track, pool, control, transfer, convert to a legally binding
paper copy, print and/or restore such electronic "authoritative" copies of
Automobile loan and lease contracts in a controlled system which logs all
transactions associated therewith, and/or (iv) Lenders to access such Automobile
loan and lease contracts in a manner to facilitate the pooling and/or transfer
of such Automobile loans in a securitization.
"First American Business" means any business related to (i) real
property, including, without limitation, the financing, transferring,
encumbering, leasing, appraising, insuring or collateralizing thereof, (ii)
personal property (other than with respect to businesses that constitute the
DealerTrack Business), including, without limitation, the financing,
transferring, appraising, insuring, encumbering or collateralizing thereof,
(iii) the collection, storage, sale, licensing, provision and/or receipt of data
regarding real property and personal property (other than with respect to
businesses that constitute the DealerTrack Business), (iv) the insuring of title
and histories to Automobiles and/or any other motorized method of
transportation, (v) the provision of insurance to Automobile owners and users
and/or the owners and users of any other motorized method of transportation,
(vi) the provision, collection, storage, sale, licensing and/or receipt of
credit bureau reports and related data, (vii) the merging of credit bureau
reports, (viii) employee screening, (ix) drug testing and other occupational
health services, (x) tenant screening, (xi) the provision of Automobile history
reports, (xii) the insuring of title and histories to cargo containers, rail
cars and other portable storage containers, and (xiii)
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the provision of VIN decoding, valuations, lien release, title outsourcing
(including storage and processing) and electronic liens and title for
Automobiles by Dealers, Lenders and motor vehicle agencies.
"Lender" means a financial institution or other financing source or
an Affiliate thereof which is also a financial institution or a financing
source. For purposes hereof, Route One, LLC, or any successor in interest
thereto, is not an Affiliate of any Lender.
"Other Multi-Lender Automotive Finance Portal" means an
Internet-based, business-to business e-commerce system run by a Person other
than Buyer or its Affiliates or any successor in interest thereto, which enables
(i) Dealers to do one or more of the following (a) directly route/transmit
credit application data with respect to a loan or lease to multiple Lenders, (b)
receive credit decisions with respect to credit applications submitted by such
Dealer, or (c) obtain contract status, pay-off quotes, prospecting reports,
rates, programs and other information related to the items set forth in this
clause (c) from multiple Lenders, (d) filter and route credit applications to
multiple Lenders and/or (e) obtain other information on products and services
Lenders offer to Dealers; and/or (ii) the eContracting Service.
"PaymentTrack" means a product or service (i) which enables a Dealer
or consumer to compare with respect to Automobiles (a) available lease programs,
(b) available retail programs (prime and non-prime), and/or (c) available retail
and lease programs, in each case, to identify the potential best program for the
Dealer or consumer, as applicable, based on the criteria supplied by such party;
and/or (ii) through which residual value data, Lender rates, and/or program data
is licensed or subscribed to with respect to Automobiles.
2. NONCOMPETE.
A. As a material inducement to Buyer's willingness to enter into and
perform the Stock Purchase Agreement and to purchase the Stock, each of Parent
and CMSI (the "Relevant Seller Parties") agrees that it and its Affiliates will
not Compete (as defined below) at any time for ten (10) years after the Closing
Date anywhere in North America (such period, the "Non-Competition Period"). As
used in this Section 2A only, "Compete" means, for its own benefit or as agent
for another, carry on activities or participate in the ownership of (except as
the holder of not more than twenty percent (20%) of the outstanding equity
interests in an entity), or management or control of, or the financing of, any
present or future business enterprise that competes with the DealerTrack
Business; provided, however, that in no event shall the DealerTrack Business be
construed to include any business which is a First American Business. In
addition to the foregoing, during the Non-Competition Period, CMSI shall not
enable a "single" Lender to accept input (including, without limitations credit
application, contract or other data) from a Dealer and transmit such input from
a Dealer to any non-affiliated Lender at the request, initiation or direction of
such Dealer.
B. As a material inducement to Parent and CMSI's willingness to
enter into and perform the Stock Purchase Agreement and for CMSI to purchase and
for Parent to cause CMSI to purchase the DelearTrack Shares, each of Buyer and
Company (following the Closing)
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(the "Relevant Buyer Parties") agrees that it and its Affiliates will not
Compete (as defined below) at any time during the Non-Competition Period
anywhere in North America. For purposes of this Section 2B only, "Compete"
means, for its own benefit or as agent for another, carry on activities or
participate in the ownership of (except as the holder of not more than twenty
percent (20%) of the outstanding equity interests in an entity), or management
or control of, or the financing of, any present or future business enterprise
that competes with the CMSI Business.
C. The Relevant Seller Parties and the Relevant Buyer Parties
acknowledge and agree that the provisions of this Section 2 have been
specifically negotiated and carefully tailored with a view to preventing the
serious and irreparable injury that Buyer and/or Company will suffer in the
event of operation of a competing business by a Relevant Seller Party or its
Affiliates during the Non-Competition Period and that Parent and/or CMSI will
suffer in the event of operation of a competing business by a Buyer Relevant
Party or its Affiliates during the Non-Competition Period, as applicable. The
Relevant Seller Parties and the Relevant Buyer Parties further acknowledge that
a breach by any Relevant Seller Party or its Affiliates or by any Relevant Buyer
Party or its Affiliates, as applicable of this Section 2 will cause irreparable
injury and damage to Buyer and/or Company (in the case of a breach by a Relevant
Seller Party or its Affiliates) or Parent and/or CMSI (in the case of a breach
by a Relevant Buyer Party or its Affiliates), the exact amount of which would be
difficult to ascertain, and that the remedies at law for any such breach would
be inadequate. Accordingly, if any Relevant Seller Party or its Affiliates or
any Relevant Buyer Party or its Affiliates breaches this Section 2, Buyer and/or
Company (in the case of a breach by a Relevant Seller Party or its Affiliates)
or Parent and/or CMSI (in the case of a breach by a Relevant Buyer Party or its
Affiliates) shall be entitled to injunctive relief without posting bond or other
security and no other party hereto shall object thereto on the grounds that
money damages would be adequate; provided, however, that Buyer and/or Company,
or Parent and/or CMSI, as applicable, may elect, at its option, to seek damages
instead of injunctive relief by virtue of such breach.
D. In the event that, despite the express agreement of Buyer,
Company, CMSI and Parent, any provision of this Section 2 shall be determined by
any court or other tribunal of competent jurisdiction to be unenforceable for
any reason whatsoever, the parties agree that this Section 2 shall be
interpreted to extend only over the maximum period of time for which it may be
enforceable, and/or over the maximum geographical areas as to which it may be
enforceable, and/or to the maximum extent in any and all other respects as to
which it may be enforceable, all as determined by such court or tribunal;
provided that the maximum period of time for which it may be enforceable, and/or
the maximum geographical areas as to which it may be enforceable, and/or the
maximum extent in any and all other respects as to which it may be enforceable
are identical as between the Relevant Seller Parties and the Relevant Buyer
Parties, mutatis mutandis.
3. Non-Solicitation.
A. CMSI agrees, for a period of three (3) years from the Closing
Date, that CMSI shall not knowingly hire any officer or any employee directly
reporting to an officer of (i) Buyer, (ii) Company (from and after Closing) or
(iii) any of their respective Subsidiaries
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engaged in the DealerTrack Business to work in any other business, in each case,
except with express written consent of Buyer.
B. Buyer agrees, for a period of three (3) years from the Closing
Date, that Buyer shall not knowingly hire any officer or any employee directly
reporting to an officer of CMSI or any of its Subsidiaries engaged in the CMSI
Business to work in any other business, in each case, except with express
written consent of CMSI.
C. Parent and its Affiliates (other than CMSI) agree, for a period
of three (3) years from the Closing Date, that Parent and its Affiliates (other
than CMSI) shall not knowingly solicit any officer or any employee directly
reporting to an officer of Buyer, Company or any of their respective
Subsidiaries engaged in the DealerTrack Business to work in any other business,
in each case, except with express written consent of Buyer. For purposes of
clarification, the general solicitation of third parties through the use of
means generally available to the public, including, without limitation, the
placement of advertisements in the newspaper and postings on Internet job sites,
shall not be deemed to violate this clause.
4. Nondisclosure.
A. At all times from and after the date hereof, each of CMSI and
Parent shall keep secret and retain in strictest confidence and shall not,
except with the express prior written consent of Buyer, directly or indirectly
disclose, communicate or divulge to any Person, or use for the benefit of any
Person, any confidential or proprietary information or material relating to
Buyer's or Company's operations or businesses which it may have learned as an
owner, shareholder, employee, officer or director of Company or in connection
with the negotiation of this Agreement. Confidential or proprietary information
or material includes, without limitation, the following types of information or
material regarding Buyer, its direct or indirect parents, Subsidiaries or
related companies: proprietary data processing systems and software; corporate
information, including contractual arrangements, plans, strategies, tactics,
policies, resolutions, patent, copyright, trademark, and tradename applications,
designs, technologies, inventions, know-how, and any litigation or negotiations;
marketing information and methods, including sales or product plans, products,
product lines, proposed products, pricing policies, fees, strategies, methods,
vendors, customers, customer lists, prospects, or market research data;
financial information, including cost and performance data, debt arrangements,
equity structures, investors and holdings; operational and scientific
information, including trade secrets, technical information, and personnel
information, including personnel lists, resumes, personnel data, terms of
employment agreements, organizational structure, and performance evaluations
(collectively, "Buyer Proprietary Information"). The restriction contained in
the preceding sentence shall not apply to any Buyer Proprietary Information to
the extent that (i) such information is or hereafter becomes generally available
to the public without a breach of this Agreement, (ii) disclosure is made to a
Governmental Entity where it is necessary or appropriate to disclose such
information to such Governmental Entity having jurisdiction over the relevant
party, or (iii) disclosure is otherwise required by Law, (iv) is lawfully
received by the disclosing party from a third party without restriction on
disclosure and without breach of a non-disclosure obligation or (v) is developed
independently by the disclosing party without the use of or reference to any
confidential information as evidenced by such party's written records created
contemporaneously with such development.
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B. At all times from and after the date hereof, each of Buyer and
Company shall keep secret and retain in strictest confidence and shall not,
except with the express prior written consent of Parent, directly or indirectly
disclose, communicate or divulge to any Person, or use for the benefit of any
Person, any confidential or proprietary information or material relating to
CMSI's or Parent's operations or businesses which it may have learned as an
Affiliate of Parent or in connection with the negotiation of this Agreement.
Confidential or proprietary information or material includes, without
limitation, the following types of information or material regarding Parent,
Subsidiaries or related companies: proprietary data processing systems and
software; corporate information, including contractual arrangements, plans,
strategies, tactics, policies, resolutions, patent, copyright, trademark, and
tradename applications, designs, technologies, inventions, know-how, and any
litigation or negotiations; marketing information and methods, including sales
or product plans, products, product lines, proposed products, pricing policies,
fees, strategies, methods, vendors, customers, customer lists, prospects, or
market research data; financial information, including cost and performance
data, debt arrangements, equity structures, investors and holdings; operational
and scientific information, including trade secrets, technical information, and
personnel information, including personnel lists, resumes, personnel data, terms
of employment agreements, organizational structure, and performance evaluations
(collectively, "Parent Proprietary Information"). The restriction contained in
the preceding sentence shall not apply to any Parent Proprietary Information to
the extent that (i) such information is or hereafter becomes generally available
to the public without a breach of this Agreement, (ii) disclosure is made to a
Governmental Entity where it is necessary or appropriate to disclose such
information to such Governmental Entity having jurisdiction over the relevant
party, (iii) disclosure is otherwise required by Law, (iv) is lawfully received
by the disclosing party from a third party without restriction on disclosure and
without breach of a non-disclosure obligation or (v) is developed independently
by the disclosing party without the use of or reference to any confidential
information as evidenced by such party's written records created
contemporaneously with such development.
5. Lender Access. In the event that during the Non-Competition Period,
Parent, CMSI or any of their respective Affiliates provides any CMSI Lender with
access to any Other Multi-Lender Automotive Finance Portal, Parent or CMSI, as
applicable, shall use commercially reasonable efforts to provide similar access
to the DealerTrack Business operated by Buyer or its Affiliates or any successor
in interest thereto on terms no less favorable. Without limiting the foregoing,
each of Parent, and CMSI agrees that, during the Non-Competition Period, neither
Parent, CMSI nor any of their Affiliates will initiate or otherwise facilitate
the connection of any part of the CMSI Business operated by CMSI and its
Affiliates or any successor in interest thereto to any Other Multi-Lender
Automotive Finance Portal; provided however, that CMSI and Parent and any of
their respective Affiliates shall be permitted to facilitate such a connection
if required by a CMSI Lender. In the event that, at any time during the
Non-Competition Period, a CMSI Lender requests that CMSI or Parent or any of
their respective Affiliates provide such Lender with access to the DealerTrack
Business operated by Buyer or its Affiliates or any successor in interest
thereto, CMSI or Parent or such Affiliates, as applicable, shall provide such
access at a rate not in excess of its then-current rates.
6. Notices. All notices and other communications provided for herein shall
be in writing and shall be deemed to have been duly given when delivered
personally or sent by telex or telecopy or three (3) business days after being
mailed by registered or certified mail, return
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receipt requested, postage prepaid, to the party to whom it is directed or one
(1) business day after being sent via a nationally recognized courier service
for next business day delivery, to the party to whom it is directed:
If to the Buyer or Company, to:
DealerTrack Holdings, Inc.
000 Xxxxxx Xxxx
Xxxxx X000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Facsimile: (000)000-0000
with a copy (which shall not constitute notice) to:
O'Melveny & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to CMSI,to:
The First American Corporation
Xxx Xxxxx Xxxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxxx XxXxxxxxx
Facsimile: (000) 000-0000
with a copy to each of (which shall not constitute notice):
Credit Management Stations, Inc.
000 Xxxxxxxx Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
and
White & Case LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: 000-000-0000
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If to Parent, to:
The First American Corporation
Xxx Xxxxx Xxxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Xxxxxxx XxXxxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
White & Case LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile: 000-000-0000
or for any party, at such other address as such party
shall have specified in writing to each of the others in
accordance with this Section
7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but such counterparts
together shall constitute one and the same instrument.
8. Section Headings. The section headings of this Agreement are for
convenience of reference only and shall not be deemed to limit or affect any of
the provisions hereof.
9. Amendments; No Waivers.
(A) Any provision of this Agreement may be waived or amended if,
and only if, such amendment or waiver is in writing and signed
by all of the parties.
(B) No failure by any party hereto to insist upon the strict
performance of any covenant, duty, agreement or condition of
this Agreement, or to exercise any right or remedy consequent
upon a breach hereof, shall constitute a waiver of any such
breach or any other covenant, duty, agreement or condition
hereof.
10. Entire Agreement; No Assignment. This Agreement (a) constitutes the
entire Agreement and understandings of the parties hereto and supersedes all
prior agreements and understandings, both written and oral, among the parties
hereto with respect to the subject matter hereof, (b) is not intended to confer
upon any other Person any rights or remedies hereunder, and (c) shall not be
assigned, by operation of Law or otherwise.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of New York (without regard to the choice
of law provisions thereof).
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12. Severability. Without limiting Section 2D hereof, if it is determined
by a court of competent jurisdiction that any provision of this Agreement is
invalid under applicable law, such provision shall be ineffective only to the
extent of such invalidity, without invalidating the remainder of this Agreement;
provided, however, that in the event either Section 2A hereof or Section 2B
hereof is determined by a court of competent jurisdiction to be invalid under
applicable law, Section 2B hereof or Section 2A hereof, respectively, shall
terminate and be of no further force and effect.
13. JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO AND ACCEPTS FOR
ITSELF AND ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF AND SERVICE OF PROCESS PURSUANT TO THE LAWS OF THE STATE OF NEW
YORK AND THE RULES OF ITS COURTS, WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY ARISING UNDER OR OUT OF IN
RESPECT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED DOCUMENT OR
OBLIGATION. EACH PARTY FURTHER IRREVOCABLY DESIGNATES AND APPOINTS THE
INDIVIDUAL IDENTIFIED IN OR PURSUANT TO SECTION 6 HEREOF TO RECEIVE NOTICES ON
ITS BEHALF, AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY
SUCH ACTION BEFORE ANY BODY, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO
SERVED SHALL BE MAILED BY REGISTERED MAIL TO EACH PARTY AT ITS ADDRESS PROVIDED
IN SECTION 6 THAT SUCH SERVICE SHALL BE EFFECTIVE AND BINDING IN EVERY RESPECT.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR
PROCEEDING AGAINST THE OTHER PARTY IN ANY OTHER JURISDICTION.
14. Attorneys Fees. In the event of any proceeding arising out of or
related to this Agreement, the prevailing party shall be entitled to recover
from the losing party all of its costs and expenses incurred in connection with
such proceeding, including court costs and reasonable attorneys' fees, whether
or not such proceeding is prosecuted to judgment.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written:
DEALERTRACK HOLDINGS, INC.
By: _____________________________________
FIRST AMERICAN CREDIT MANAGEMENT
SOLUTIONS, INC.
By: _____________________________________
THE FIRST AMERICAN CORPORATION
By: _____________________________________
CREDIT ONLINE, INC.
By: _____________________________________
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