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EXHIBIT 10.13
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of June 18,
1998 by and among WebSideStory, Inc. a California corporation (the "Company")
and Xxxxx Xxxxxxxx, an individual resident of the State of California
("Founder").
RECITALS
A. Concurrently with the execution and delivery of this Agreement, the
Company, the Founders and certain investment partnerships and other investors
will enter into a Stock Purchase Agreement, dated as of June 18, 1999 (the
"Stock Purchase Agreement"). These investment partnerships and other investors
(collectively the "Investors," and each individually an "Investor") are named in
Exhibit A attached to the Stock Purchase Agreement.
B. Pursuant to the Stock Purchase Agreement, the Investors will (i)
purchase an aggregate of 12,528,925 shares of Common Stock from the Founders,
and (ii) purchase from the Company, in return for these 12,528,925 shares of
Common Stock and $5,000,000 in cash, (1) an aggregate of 15,034,712 shares of
Convertible Preferred Stock and (2) an aggregate of 100 shares of Redeemable
Preferred Stock, pursuant to the terms and conditions of the Stock Purchase
Agreement (collectively, these transactions are referred to herein as the "
Transactions").
C. Section 5.10 of the Stock Purchase Agreement requires that
noncompetition agreements be executed and delivered by each of Xxxxxx Xxxxxxxx
and Xxxxx Xxxxxxxx as a condition to the obligations of the Investors to
consummate the Share Transactions.
AGREEMENT
The parties hereto, intending to be legally bound, agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
respective meanings ascribed to them in the Stock Purchase Agreement.
2. ACKNOWLEDGMENTS BY FOUNDER
Founder acknowledges that: (a) Founder has occupied a position of trust
and confidence with the Company prior to the date hereof, and has become, or
will become, familiar with the following, any and all of which constitute
confidential information (collectively, the "Confidential Information") of the
Company: (i) any and all trade secrets concerning the business and affairs of
the Company, technical or non-technical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
employee salaries, financial plans, product plans, or lists of actual or
potential customers or
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suppliers that: (1) derive economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from their disclosure or use; and
(2) are the subject of efforts that are reasonable under the circumstances to
maintain their secrecy and any other information, however documented, of the
Company that is a trade secret within the meaning of the Uniform Trade Secrets
Act (California Civil Code Sections 3426 through 3426.11); (ii) of particular
importance to the Company is the protection of the confidentiality of its manner
and method of tracking visitor activity at internet websites; as some of the
particular techniques and methods that the Company utilizes are not used by any
other business or entity and are solely the product of research and development
by the Company; (iii) any and all information concerning the business and
affairs of the Company (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and (iv)
any and all notes, analyses, compilations, studies, summaries and other material
prepared by or for the Company containing or based, in whole or in part, on any
information included in the foregoing; (b) the business of the Company is
national in scope; (c) its products and services are marketed throughout the
United States; (d) the Company competes with other businesses that are or could
be located in any part of the United States; (e) the Investors have required
that Founder make the covenants set forth in Sections 3 and 4 of this Agreement
as a condition to their consummation of the Share Transactions; (f) the
provisions of Sections 3 and 4 of this Agreement are reasonable and necessary to
protect and preserve the Company's business; and (g) the Company would be
irreparably damaged if Founder were to breach the covenants set forth in
Sections 3 and 4 of this Agreement.
3. CONFIDENTIAL INFORMATION
Founder acknowledges and agrees that all Confidential Information known
or obtained, by Founder, whether before or after the date of this Agreement, is
the property of the Company. Therefore, Founder agrees that Founder will not, at
any time, disclose to any unauthorized persons or entities or use for his own
account or for the benefit of any third party any Confidential Information,
whether Founder has such information in Founder's memory or embodied in writing
or other physical form, without the Company's written consent, unless and to the
extent that the Confidential Information is or becomes generally known to and
available for use by the public other than as a result of Founder's fault or the
fault of any other person or entity bound by a duty of confidentiality to the
Company. If Founder ceases to be an employee of the Company, Founder agrees to
deliver to the Company upon the Company's request, all documents, memoranda,
notes, plans, records, reports, and other documentation, models, components,
devices, or computer software, whether embodied in a disk or in other form (and
all copies of all of the foregoing), relating to the businesses, operations or
affairs of the Company and any other Confidential Information that Founder may
then possess or have under Founder's control.
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4. NONCOMPETITION
As an inducement for the Investors to enter into the Stock Purchase
Agreement and as additional consideration for the consideration to be delivered
to Founder under the Stock Purchase Agreement, Founder agrees that:
(a) For a period of two (2) years after the Closing Date (the
"Noncompete Term"):
(i) Founder shall not, directly or indirectly, engage or invest
in, own, manage, operate, finance, control, or participate in the ownership,
management, operation, financing or control of, be employed by, associated with,
or in any manner connected with, lend Founder's name or any similar name to,
lend Founder's credit to, or render services or advice to, any business whose
products or activities compete in whole or in part with the products or
activities of the Company as the products and activities of the Company may
evolve during the Noncompete Term, anywhere within the United States where the
Company is presently doing business or marketing its services in the area of
internet related services; provided, however that Founder may purchase or
otherwise acquire up to (but not more than) five percent (5%) of any class of
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended. Founder acknowledges and agrees
that the Company is currently performing internet related services in a majority
of states and is currently marketing such services throughout the United States.
Founder further agrees that this covenant is reasonable with respect to its
duration, geographical area and scope;
(ii) Founder shall not, directly or indirectly, either for
himself or any other person or entity: (A) induce or attempt to induce any
employee of the Company to leave the employ of the Company; (B) in any way
interfere with the relationship between the Company and any of its employees;
(C) employ, or otherwise engage as an employee, independent contractor, or
otherwise, any employee of the Company; or (D) induce or attempt to induce any
customer, supplier, licensee, or business relation of the Company to cease doing
business with the Company, or in any way interfere with the relationship
between any customer, supplier, licensee or business relation of the Company;
and
(iii) Founder shall not, directly or indirectly, either for
himself or any other person or entity, solicit the business of any person or
entity known to Founder to be a customer of the Company, whether or not Founder
had personal contact with such person or entity, with respect to products or
activities which compete in whole or in part with the products or activities of
the Company;
(b) Founder shall not, at any time during or after the Noncompete Term,
disparage the Company, or any of its stockholders, directors, officers,
employees or agents; and
(c) Founder shall, during the Noncompete Term, within ten (10) days
after accepting any employment, advise the Company of the identity of any
employer of Founder. The Company may serve notice upon each such employer that
Founder is bound by this Agreement and furnish each such employer with a copy of
this Agreement or relevant portions thereof.
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5. REMEDIES
if Founder breaches the covenants set forth in Sections 3 or 4 of this
Agreement, the Company will be entitled to the following remedies:
(a) Damages from Founder;
(b) In addition to its right to damages and any other rights it may
have, to obtain injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the provisions of
Sections 3 and 4 of this Agreement, it being agreed that money damages alone
would be inadequate to compensate the Company and would be an inadequate remedy
for such breach; and
(c) The rights and remedies of the Company are cumulative and not
alternative.
6. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon the parties hereto and will inure to
the benefit of their respective affiliates, successors and assigns, heirs and
legal representatives.
7. WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party hereto in
exercising any right, power, or privilege under this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party hereto, in
whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party hereto; (b) no waiver that may be given by a
party hereto will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party hereto will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement.
8. GOVERNING LAW
This Agreement will be governed by the laws of the State of California
without regard to conflicts of laws principles.
9. DISPUTE RESOLUTION
Except as provided below, any dispute arising out of or relating to this
Agreement or the breach, termination or validity hereof shall be finally settled
by binding arbitration conducted. expeditiously by one arbitrator in accordance
with the J.A.M.S./Endispute Streamlined Arbitration Rules and Procedures (the
"J.A.M.S. Rules"). The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. sections 1-16, and judgment upon the award rendered by
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the arbitrator may be entered by any court having jurisdiction thereof. The
place of arbitration shall be San Diego, California.
Such proceedings shall be administered by the arbitrator in accordance
with the J.A.M.S. Rules as he/she deems appropriate, however, such proceedings
shall be conducted in accordance with the following agreed upon procedures:
(i) mandatory exchange of all relevant documents, to be
accomplished within forty-five (45) days of the
initiation of the procedure (documents not so exchanged
will be excluded from the evidence considered at the
hearing absent a showing of good cause);
(ii) no other discovery;
(iii) hearings before the arbitrator which shall consist of a
summary presentation by each side of not more than three
(3) hours; such hearings to take place on one or two
days at a maximum; and
(iv) decision to be rendered not more than ten (10) days
following such hearings.
Notwithstanding anything to the contrary contained herein, the
provisions of this Section 9 shall not apply with regard to any equitable
remedies to which any party may be entitled hereunder.
Each of the parties hereto (a) hereby irrevocably submits to the
personal jurisdiction of any court of competent jurisdiction in the United
States for the purpose of enforcing the award or decision in any such
proceeding, (b) hereby waives, and agrees not to assert, by way of motion, as a
defense, or otherwise, in any such suit, action or proceeding, any claim that it
is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution (except as
protected by applicable law), that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or the subject matter hereof may not be enforced
in or by such court, and hereby waives and agrees not to seek any review by any
court of any other jurisdiction which may be called upon to grant an enforcement
of the judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its or his submission to
jurisdiction and its or his consent to service of process by mail is made for
the express benefit of the other parties hereto. Final judgment against any
party hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.
10. SEVERABILITY
Whenever possible each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited by or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the
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remainder of such provision or term or the remaining provisions or terms of this
Agreement. If any of the covenants set forth in Section 4 of this Agreement are
held to be unreasonable, arbitrary or against public policy, such covenants will
be considered divisible with respect to scope, time and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Founder.
11. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
12. SECTION HEADINGS, CONSTRUCTION
The section headings in this Agreement are provided for convenience only
and will not affect its construction or interpretation. All references to
"section" or "sections" refer to the corresponding section or sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
13. NOTICES
All notices, consents, waivers, and other communications under this
Agreement shall be in writing and will be deemed to have been duly given when
(a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party hereto may designate by notice to the other parties):
Founder: Xxxxx Xxxxxxxx
0000 Xxxx Xxxx., Xxxxx X-000
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
The Company: WebSideStory, Inc.
0000 Xxxx Xxxx., Xxxxx X-000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President and Chief
Executive Officer
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx & XxXxxxxx
000 Xxxx Xxxxxxxx, Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
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14. ENTIRE AGREEMENT
This Agreement and the Stock Purchase Agreement constitute the entire
agreement between the parties hereto with respect to the subject matter of this
Agreement and supersede all prior written and oral agreements and understandings
between the Company and Founder with respect to the subject matter of this
Agreement. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
THE COMPANY FOUNDER:
By: /s/ XXXXXXX XXXXXXXXX /s/ XXXXX XXXXXXXX
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Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxx
Chief Operating Officer
and General Counsel
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