EXHIBIT 10.3
NON-COMPETITION AGREEMENT
This Non-Competition Agreement (this "Agreement") is being executed
and delivered as of February 1, 2006 by and between Xxxxx X. XxxXxxxxx, XX
("Unitholder") and WebSideStory, Inc., a Delaware corporation ("Parent").
WHEREAS, Visual Sciences, LLC, a Delaware limited liability company
(the "Company"), Parent and VS Acquisition, LLC, a Delaware limited liability
company and a wholly owned subsidiary of Parent ("Merger Sub"), have entered
into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which
the Company will merge with and into Merger Sub (the "Transaction").
WHEREAS, goodwill was a material consideration in Parent's decision to
enter into the Transaction. If Unitholder were to compete with the business of
Parent and the Company and Merger Sub subsequent to the consummation of the
Transaction, such competition would materially and adversely affect the value of
the business acquired by Parent in the Transaction.
WHEREAS, in connection with the Transaction and to more fully secure
unto Parent the benefits of the Transaction, Parent has requested that
Unitholder enter into this Agreement, and Unitholder has agreed to enter into
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
1. ACKNOWLEDGMENTS BY UNITHOLDER. Unitholder acknowledges that the promises
and restrictive covenants that Unitholder is providing in this Agreement are
reasonable and necessary to the protection of Parent's business and Parent's
legitimate interests in the Transaction (including the Company's goodwill)
pursuant to the Merger Agreement. Unitholder acknowledges that, in connection
with the consummation of the Transaction, all of Unitholder's Units in the
Company will be converted into Parent Common Stock, Senior Notes, Parent
warrants and cash. Unitholder further acknowledges that he will be eligible to
receive additional stock options from Parent, and that goodwill was a material
consideration in Parent's decision to enter into the Transaction. Unitholder
acknowledges that if Unitholder were to compete with the business of the Company
subsequent to the consummation of the Transaction, such competition could
materially and adversely affect the value of the business acquired by Parent in
the Transaction.
2. NON-COMPETITION. During the period commencing at the Effective Time and
ending on twenty-four (24) months from the Effective Time (the "Restrictive
Period"), Unitholder shall not be or become an officer, director, Unitholder,
owner, affiliate, salesperson, co-owner, partner, trustee, promoter, technician,
engineer, analyst, employee, agent, representative, supplier, investor or
lender, consultant, advisor or manager of or to, or otherwise acquire or hold
any interest in any person or entity that competes directly with the Company
Business (as defined below) as conducted by the Company on or during the six (6)
months preceding the Effective Time, which for purposes of this Agreement shall
mean and be limited to
the business of developing and providing software or enabling services for use
by businesses to conduct web site and/or interactive telephone system usage
analytics (collectively, the "Company Business"); provided, however, that
nothing in this Section 2 shall prevent Unitholder from owning as a passive
investment less than one percent (1%) of the outstanding shares of the capital
stock of a publicly-held corporation if (A) such shares are actively traded on
an established national securities market in the United States and (B)
Unitholder is not otherwise associated directly or indirectly with such
corporation or any affiliate of such corporation.
3. NON-SOLICITATION. During the Restrictive Period, Unitholder shall not,
directly or indirectly, solicit to employ (other than for the benefit of the
Company) any person who is at the time of such solicitation known by Unitholder
to be an employee of Parent or any of its Subsidiaries (including the Company
and its successors) without obtaining the prior written consent of Parent (it
being understood that any newspaper or other public solicitation not directed
specifically to such person shall not be deemed to be a solicitation for
purposes of this provision).
4. INDEPENDENCE OF OBLIGATIONS. The covenants and obligations of Unitholder
set forth in this Agreement shall be construed as independent of any other
agreement or arrangement between Unitholder, on the one hand, and Parent, on the
other hand.
5. SPECIFIC PERFORMANCE. Unitholder agrees that in the event of any breach
or threatened breach by Unitholder of any covenant, obligation or other
provision contained in this Agreement, Parent shall be entitled (in addition to
any other remedy that may be available to it) to the extent permitted by
Applicable Law to (a) a decree or order of specific performance to enforce the
observance and performance of such covenant, obligation or other provision and
(b) an injunction restraining such breach or threatened breach.
6. NON-EXCLUSIVITY. The rights and remedies of Parent hereunder are not
exclusive of or limited by any other rights or remedies which Parent may have,
whether at law, in equity, by contract or otherwise, all of which shall be
cumulative (and not alternative). Without limiting the generality of the
foregoing, the rights and remedies of Parent hereunder, and the obligations and
liabilities of Unitholder hereunder, are in addition to their respective rights,
remedies, obligations and liabilities under the law of unfair competition,
misappropriation of trade secrets and the like. This Agreement does not limit
Unitholder's obligations or the rights of Parent under the terms of (a) the
Merger Agreement or (b) the terms of any other agreement executed by Unitholder
and Parent.
7. NOTICES. Any notice or other communication required or permitted to be
delivered to Unitholder or Parent under this Agreement shall be in writing and
shall be deemed properly delivered, given and received if (a) delivered in
person, (b) transmitted by telecopy (with written confirmation), (c) mailed by
certified or registered mail (return receipt requested) (in which case such
notice shall be deemed given on the third (3rd) day after such mailing, but only
if deposited at a U.S. Postal Service office in California) or (d) delivered by
an express courier (with written confirmation) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
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IF TO PARENT: WebSideStory, Inc.
00000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
With copies (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx LLP
00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
IF TO UNITHOLDER: Xxxxx X. XxxXxxxxx, XX
[Address]
8. SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broadly as is enforceable.
9. GOVERNING LAW. The validity and effect of this Agreement and the rights
and obligations of the parties hereto shall be construed and determined in
accordance with the law of the Commonwealth of Virginia, and the parties agree
that any dispute arising out of or relating to this Agreement will be litigated
in the federal, state or local courts in the Commonwealth of Virginia, which
shall have exclusive jurisdiction and venue over the parties with respect to any
such dispute.
10. WAIVER. No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy. No party shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
11. CAPTIONS. The captions contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.
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12. FURTHER ASSURANCES. Unitholder shall execute and/or cause to be
delivered to Parent such instruments and other documents and shall take such
other actions as Parent may reasonably request to effectuate the intent and
purposes of this Agreement.
13. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of
the parties hereto relating to the subject matter hereof and supersedes all
prior agreements and understandings between any of such parties relating to the
subject matter hereof.
14. AMENDMENTS; TERMINATION. This Agreement may not be amended, modified,
altered, or supplemented other than by means of a written instrument duly
executed and delivered on behalf of Parent and Unitholder. This Agreement shall
automatically terminate and be of no further force or effect upon the
termination of the Restrictive Period.
15. ASSIGNMENT. This Agreement and all obligations hereunder are personal
to Unitholder and may not be transferred or assigned by Unitholder at any time.
Parent may assign its rights and delegate its obligations under this Agreement
in whole or in part, without the consent or approval of Unitholder or any other
person or entity, to (i) a wholly owned subsidiary of Parent, in which event all
of the rights and powers of Parent and remedies available to Parent under this
Agreement shall extend to and be enforceable by such subsidiary (provided that
Parent remains jointly and severally liable with such assignee for any
obligations of Parent hereunder after such assignment) or (ii) any person or
entity that acquires Parent, whether by way of merger or the purchase of all of
Parent's outstanding capital stock or substantially all of Parent's assets.
16. BINDING NATURE; INTERPRETATION OF THIS AGREEMENT. Subject to Section 15
hereof, this Agreement shall be binding upon the parties and their
representatives, executors, administrators, estate, heirs, successors and
assigns, and shall inure to the benefit of the parties and their respective
successors and assigns. The parties agree that this Agreement shall not be
interpreted against either party solely because this Agreement was drafted by
attorneys for Parent.
17. SIGNATURE IN COUNTERPARTS. This Agreement may be signed in
counterparts.
18. DEFINED TERMS. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Merger Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, the parties here executed this Agreement as of the date
first above written.
UNITHOLDER: PARENT:
Name: Xxxxx X. XxxXxxxxx, XX WEBSIDESTORY, INC., A DELAWARE
CORPORATION
Signature: /s/ Xxxxx X. XxxXxxxxx, XX By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- ------------------------------------
Address: Name: Xxxxxxx X. Xxxxxxxx
---------------------------- Title: Chief Executive Officer
----------------------------
[Counterpart Signature Page to Non-Competition Agreement]
