Re: Non-Competition Covenant
Exhibit
10.2
November
2, 2006
Answers
Corporation
000
Xxxx
00xx
Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxxxxxx, CEO
Re:
Non-Competition Covenant
Dear
Xxx:
In
consideration for the Purchase Price paid for the Transferred Assets by Buyer,
as detailed in the Asset Purchase Agreement entered into between Answers
Corporation (“Buyer”),
on
the one hand, and the undersigned, Xxxxxxxxxxx.xxx,
Inc. (“Seller”)
and
Xxxxx Xxxxxxx (“Shareholder”),
on
the other,
dated
November 2, 2006 (the "Purchase
Agreement"),
we,
the undersigned, jointly and severally, agree and undertake as
follows:
1.
|
Whether
as principal, agent, stockholder, consultant, partner, member, or
in any
other capacity whatsoever, other than on behalf of Buyer, not to
(a)
participate in, engage in, or be in any manner associated with the
development, publishing, marketing, distribution, creation, licensing
or
sale of any venture which competes, directly or indirectly, with
Buyer's
business in the area of (i) collaborative questions and answers websites,
(ii) "wiki" community website(s), and/or (iii) any website(s) targeting
the collection and editing of information through user-generated
content
(the "Non-Compete
Field")
for a period, commencing on the Closing Date, of (y) three (3) years
for
the area described in 1(a)(i) above and (z) one (1) year for the
area
described in 1(a)(ii) and 1(a)(iii) above, unless otherwise agreed
between
the parties in writing; or (b) interfere
with the business of Buyer or approach, contact, or solicit Buyer’s users
in connection with a purpose within the Non-Compete Field.
In
the event that the provisions of this Section 1 are deemed to exceed
the
time, geographic, or scope limitations permitted by applicable law,
then
such provisions shall be reformed to the maximum time, geographic
or scope
limitations, as the case may be, permitted by applicable
law.
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2.
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Each
of the undersigned acknowledges and agrees that the provisions of
this
Non-Competition Covenant are (a) a condition
of and inducement for Buyer entering into the Purchase Agreement,
and (b)
intended to preserve the value of the Transferred Assets being acquired
by
Buyer pursuant to the Purchase Agreement. Additionally, each
of the undersigned acknowledges and agrees that the provisions of
this
Non-Competition Covenant are reasonable with respect to the scope
of
restriction and duration and are reasonably necessary to protect
the value
of the Transferred Assets because, among other things, (i) Seller
and
Buyer
are engaged in a highly competitive industry, (ii) Shareholder is
receiving significant consideration in connection with the Purchase
Agreement.
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3.
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By
signing this Non-Competition Covenant, each of the undersigned undertakes
to refrain from investing in the Non-Compete Field in excess of 5%,
via a
beneficial interest of any entity or venture. For the avoidance of
doubt,
Shareholder's obligation pursuant to this Non-Competition Covenant
shall
not apply to his ownership of Seller, provided however, that Seller
restricts its business to fields outside the Non-Compete
Field.
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4.
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This
Non-Competition Covenant shall be binding upon and inure to the benefit
of
you and us, our successors and
assigns.
|
5.
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Terms,
which are used in this Non-Competition Covenant and are not otherwise
defined, shall have the meanings ascribed to such terms in the Purchase
Agreement.
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6.
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This
Non-Competition
Covenant
shall be governed by the laws of the State of New York without reference
to rules of conflicts of law. Shareholder hereby consents to the
personal
jurisdiction of the state and federal courts located in the Southern
District of New York for any action or proceeding arising from or
relating
to this Non-Competition
Covenant.
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7.
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The
waiver of a breach of any term or provision of this Non-Competition
Covenant,
which must be in writing, shall not operate as or be construed to
be a
waiver of any other previous or subsequent breach of this Non-Competition
Covenant.
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Sincerely
yours,
/s/
Xxxxx Xxxxxxx
|
/s/
Xxxxx Xxxxxxx
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____________________
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______________________
|
Xxxxx
Xxxxxxx
|
Xxxxxxxxxxx.xxx,
Inc.
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ACKNOWLEDGED
AND ACCEPTED:
Answers
Corporation
By:
/s/
Xxxxxx
X.
Xxxxxxxxxxx
________________________
Xxxxxx
X.
Xxxxxxxxxxx, CEO
Date:
November 2, 2006