Exhibit 10.3
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (the "Agreement") is made this 2nd day of
February, 1998 by and between Dispatch Management Services Corp., a Delaware
corporation (hereinafter "DMS"), and Xxxxxxx Xxxx, an individual residing at 000
Xxxxxx Xxxxx, Xxxxxx, XX 00000 (hereinafter "Xx. Xxxx").
WITNESSETH
WHEREAS, Xx. Xxxx is the Chairman of the Board of Directors of DMS, and
WHEREAS, in order to protect the legitimate interests of DMS, DMS is
requiring Xx. Xxxx to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the Premises, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties, the parties agree as follows:
1. Stated Intention. The intention of this Agreement is to provide
reasonable protection to DMS and its Affiliates (as hereinafter defined) against
any financial losses due to the departure of Xx. Xxxx from association with DMS
or any of its Affiliates, while recognizing the right of Xx. Xxxx to continue in
his profession in an area that is reasonably well-defined. Xx. Xxxx agrees that
DMS and its Affiliates are entitled to the protection set forth in this
Agreement. DMS agrees that Xx. Xxxx has a right to pursue his profession and
maintain his livelihood so long as such pursuit is in accordance with the
conditions of this Agreement.
For purposes of this Agreement, "Affiliates" shall mean an entity in which
DMS owns more than 20% of the voting interests.
2. Non-Competition Covenants. During the greater of (i) the term of Xx.
Xxxx'x association with DMS or any of its Affiliates plus one year thereafter,
or (ii) for a period of three years from the date hereof, Xx. Xxxx agrees that
he shall not:
a. own, operate, manage or control, or participate in the ownership,
operation, management or control of, or be connected with or have any interest
in, whether as an employee, consultant, advisor, agent, owner, partner,
co-venturer, principal, director, stockholder, affiliate, associate,
representative, lender or otherwise, any enterprise, person, firm, corporation
or business that provides time-critical, on demand, point-to-point delivery
services within a ten (10) mile radius of any business location of DMS or any of
its Affiliates (a "Competitive Business Activity");
b. induce or attempt to persuade any employee of DMS to discontinue
such employment relationship;
c. solicit any person, corporation, partnership or other entity or
organization which is a customer of DMS to become a customer of another entity
in the same or similar business as DMS; provided, however, that mailings made to
the general public or segments of the general public and other forms of general
advertising shall not be deemed to be solicitation for purposes of this section;
or
d. perform any acts which are intended to advance the interest of
any party which engages in, or intends to engage in, any Competitive Business
Activity.
If Xx. Xxxx violates any of the restrictions contained in this paragraph 2,
the restrictive period shall not run in favor of Xx. Xxxx from the time of the
commencement of any such violation until such time as such violation shall be
cured by Xx. Xxxx to the satisfaction of DMS.
3. Exception to Non-Competition Covenants. The provisions of paragraph 2
hereinabove shall not apply as to Xx. Xxxx'x Competitive Business Activity in
Kiwi Corp. Limited, a New Zealand limited liability company.
4. Remedies. Each of the parties bound by the provisions of this
Agreement acknowledge that the restrictions contained in this Agreement, in view
of the nature of the business in which DMS and its Affiliates are engaged, are
reasonable and necessary in order to protect the legitimate business interests
of DMS and its Affiliates and that any violation thereof would result in
irreparable and substantial harm to DMS and its Affiliates for which DMS and its
Affiliates do not have an adequate remedy at law, and the parties bound by this
Agreement therefor acknowledge that, in the event of a violation of any of these
restrictions, DMS shall be entitled to obtain from any court of competent
jurisdiction, temporary, preliminary and permanent injunctive relief, as well as
damages and an equitable accounting of all earnings, profits and other benefits
arising from such violation, which right shall be cumulative and in addition to
any other rights or remedies to which DMS may be entitled.
5. Savings Clause. If any of the covenants set forth in this Agreement
are held to be unenforceable by a court of competent jurisdiction because of the
duration or area covered by such undertakings, it is agreed that the court
making such determination shall have the power to reduce the duration and/or the
area covered by such covenant and enforce such provision in its reduced form.
6. Miscellaneous.
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a. Arbitration. Any issue, controversy, dispute or claim arising
out of or relating to this Agreement or its alleged breach that cannot be
resolved by mutual agreement shall be resolved exclusively by arbitration by a
single arbitrator in either the District of Columbia or New York City, at the
option of DMS in accordance with the commercial arbitration rules of the
American Arbitration Association ("AAA") and judgment on the award rendered by
the arbitrator may be entered by any court having jurisdiction thereof. It is
acknowledged by Xx. Xxxx that money damages are inadequate to compensate DMS and
its Affiliates for a breach of the terms of this Agreement, and that DMS shall
be entitled to specific performance of the terms of this Agreement.
The arbitrator may enter a default decision against any party who
fails to participate in the proceeding. The decision of the arbitrator shall be
final, conclusive, binding and non-appealable. The losing party shall pay all
costs and expenses of arbitration.
The arbitrator shall be selected by mutual agreement of the parties,
if possible. If the parties fail to reach agreement upon appointment of the
arbitrator within ten days after a demand for arbitration is made, the
arbitrator shall be selected from a list of proposed arbitrators submitted by
AAA. The selection process shall be that which is set forth in the AAA
commercial arbitration rules then prevailing, except that (1) the number of
preemptory strikes shall not be limited, and (2), if the parties fail to select
the arbitrator from one or more lists, AAA shall not have the power to make an
appointment but shall continue to submit additional lists until the arbitrator
has been selected as provided herein. If an arbitrator should die, withdraw, or
otherwise become incapable of serving, a replacement shall be selected and
appointed in a like manner. If the arbitrator has not been selected following
submission of three lists by AAA, either party may declare the existence of an
impasse by giving written notice to the other. In that event, the arbitrator
shall be selected in the following manner: Each party shall designate five
proposed arbitrators whose names appear on any of the lists previously submitted
by AAA. The parties shall then eliminate nine of the designated names by
alternately striking one, and the person whose name remains shall serve as
arbitrator. If necessary, the party to make the first strike shall be
designated by lot.
b. Heading. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
c. Notices. Any notice, demand, consent, election, offer, approval,
request, or other communication (collectively, a "notice") required or permitted
under this Agreement must be in writing and either delivered personally or sent
by certified or registered mail, postage prepaid, return receipt requested. A
notice must be addressed to Xx. Xxxx at his last known address on the records of
DMS. A notice to DMS must be addressed to the Board of Directors at DMS's
principal office or such other address designated in writing by the Board of
Directors to
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Xx. Xxxx. A notice delivered personally will be deemed given only when
acknowledged in writing by the person to whom it is delivered. A notice that is
sent by mail will be deemed given three (3) business days after it is mailed.
Any party may designate, by notice to all of the others, substitute addresses or
addressees for notices; and, thereafter, notices are to be directed to those
substitute addresses or addressees.
d. Entire Agreement. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, inducements or
conditions, expressed or implied, oral or written, except as herein contained.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by a subsequent agreement in writing.
e. Waiver. Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power, or privilege under this Agreement
shall operate as a waiver thereof.
f. Severability. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that any other provision may be
invalid or unenforceable in whole or in part.
g. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and all of
which, when taken together, constitute one and the same document. The signature
of any party to any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
h. Applicable Law. This Agreement shall be governed by the laws of
the State of Delaware, without regard to its principles regarding conflicts of
law.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
DISPATCH MANAGEMENT SERVICES CORP.
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
Chief Financial Officer
Witness:
/s/ R. Xxxxxxx Xxxx
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R. Xxxxxxx Xxxx
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