EXCLUSIVITY AND NON-COMPETE CLAUSE AGREEMENT
This Exclusivity and Non-Compete Clause Agreement (this "Agreement") is made at __________ on __________.
BETWEEN
__________, __________, of __________ (the "Landlord", which expression includes its successors in interest and permitted assigns);
AND
__________, __________, of __________ (the "Tenant", which expression includes its successors in interest and permitted assigns).
The Landlord and the Tenant are each a "Party" and together the "Parties".
RECITALS
C. The Tenant has agreed to take the Premises on the Term and Rent stated in the Lease Deed, and to invest in fitting out and operating its business there, on the understanding that the Landlord will not let other space within the area described below to a business that directly competes with it. The Parties wish to record that understanding in this Agreement.
D. This Agreement is supplemental to the Lease Deed and is to be read with it. It grants the Tenant no occupation, right of entry or interest in any part of the Complex beyond what the Lease Deed already grants in the Premises, as clause 7 states.
NOW THIS AGREEMENT WITNESSES as follows.
- 1. DEFINITIONS
1.4 References to a statute are to that statute as amended or re-enacted, and include a statute as extended to the place where the Complex is situated. Headings do not affect interpretation.
- 2. THE EXCLUSIVITY COVENANT
2.1 During the Exclusivity Period, the Landlord shall not let, license, or otherwise grant occupation of any part of the Protected Area to any person for the purpose of operating a Competing Business, and shall not itself operate, or permit an affiliate of the Landlord to operate, a Competing Business within the Protected Area.
2.2 The covenant in clause 2.1 binds the Landlord in respect of every letting, licence or other grant of occupation made on or after the date of this Agreement. It does not require the Landlord to terminate, decline to renew, or take any step against a tenancy or licence already validly subsisting on the date of this Agreement, save to the extent clause 4.2 requires.
- 3. CARVE-OUTS AND PERMITTED COMPETITION
3.2 A carve-out under clause 3.1 is not affected by a mere change in the name, ownership or management of the carved-out business, so long as its format or the character of its trading, as the case may be, does not change so as to fall within the definition of Competing Business.
- 4. NOTIFICATION AND THE LANDLORD'S OBLIGATION ON BREACH
4.1 If the Tenant becomes aware that a Competing Business has commenced trading within the Protected Area otherwise than under a carve-out in clause 3, it shall notify the Landlord in writing, giving reasonable particulars.
4.2 On receiving a notice under clause 4.1, the Landlord shall, within thirty days, either satisfy the Tenant that the business notified falls within a carve-out in clause 3, or use reasonable commercial efforts available to it under its own arrangements with that occupant to procure that the Competing Business ceases to trade in breach of clause 2, which may include enforcing a permitted-use or exclusivity restriction in its own favour under that occupant's lease or licence, where one exists.
4.3 The remedy in clause 5 accrues from the date the Competing Business commenced trading in breach of clause 2, and continues for as long as it does so, whether or not the Landlord takes any step under clause 4.2, and whether or not that step succeeds.
- 5. REMEDY FOR BREACH
5.2 The remedy in clause 5.1 is the Tenant's remedy for that breach in addition to, and not in place of, any right to terminate the Lease Deed the Tenant may separately have under its own terms, but is without prejudice to any other right or remedy available to the Tenant in law, including an injunction, to the extent a court is prepared to grant one.
- 6. TERM
6.1 This Agreement takes effect on __________ and continues for the Exclusivity Period, unless it ends earlier because the Lease Deed itself ends earlier, in which case this Agreement ends with it.
6.2 If the Lease Deed is renewed or extended beyond the original Term, and the Exclusivity Period under clause 1.3 is for the whole of the Term including a renewal or extension, this Agreement continues for the renewed or extended Term on the same terms. If the Exclusivity Period is instead for a fixed number of years, this Agreement ends at the end of that period even though the Lease Deed continues.
- 7. RELATIONSHIP TO THE LEASE DEED
7.1 This Agreement is supplemental to the Lease Deed and is to be read with it. A term defined in the Lease Deed has the same meaning in this Agreement unless this Agreement defines it differently.
7.2 Except as this Agreement expressly states, it does not amend, extend or vary the Rent, the Term, the extent of the Premises or any other provision of the Lease Deed, and does not grant the Tenant any occupation, right of entry, exclusive possession or other interest in any part of the Complex beyond what the Lease Deed already grants in the Premises. This Agreement creates no lease, licence, easement or other interest in immovable property in favour of the Tenant or against the Landlord's title, and binds the Landlord personally, subject to clause 8.
7.3 If there is a conflict between this Agreement and the Lease Deed on the subject of exclusivity, this Agreement prevails; on every other subject, the Lease Deed prevails.
- 8. ASSIGNMENT
8.1 The benefit of this Agreement passes automatically to a person to whom the Tenant validly assigns the Lease Deed with the Landlord's consent, without a separate instrument, and the expression "Tenant" in this Agreement then means that assignee.
8.2 The burden of this Agreement binds a person to whom the Landlord transfers its interest in the Complex only if the Landlord gives that person written notice of this Agreement before the transfer and procures that person's written undertaking to be bound by clause 2 for the remainder of the Exclusivity Period; the Landlord shall use reasonable efforts to procure that undertaking, and shall remain liable to the Tenant under clause 5 if it does not.
- 9. CONFIDENTIALITY
9.1 Each Party shall keep the terms of this Agreement confidential, except that either may disclose them to its professional advisers, auditors, lenders and group companies, and where disclosure is required by law, by a regulator, or for stamping, registration or the enforcement of this Agreement.
- 10. STAMP DUTY AND REGISTRATION
10.2 The Article 5 figure is not stated in this Agreement because neither jurisdiction's published ready reckoner lists a plain Agreement by name; it shall be confirmed before the stamp is purchased, in Punjab at the SHCIL e-stamping counter or the office of the Sub-Registrar of the tehsil in which the Complex lies, and in Chandigarh at the SHCIL e-stamping counter or the office of the Sub-Registrar, 30 Bays Building, Sector 17.
10.3 This Agreement is not compulsorily registrable, for the reason stated in clause 7.2. The Parties may nonetheless register it under Section 18 of the Registration Act, 1908, at their option and expense, and doing so does not by itself enlarge the interest this Agreement grants.
10.4 The Tenant shall bear the stamp duty on this Agreement and, if the Parties choose to register it, the registration fee and every other incidental charge of registration, unless the Parties agree otherwise in writing.
- 11. NOTICES
11.1 Notices under this Agreement shall be given in writing, in the manner and to the addresses the Lease Deed provides for notices under the Lease Deed. Until either Party notifies otherwise in writing, that is the Landlord at __________ and the Tenant at __________.
- 12. DISPUTE RESOLUTION AND GOVERNING LAW
12.1 The Parties shall first attempt to resolve any dispute by discussion between their authorised representatives within thirty days of written notice of the dispute.
12.4 This Agreement is governed by the laws of India as in force at the place where the Complex is situated.
- 13. GENERAL
13.1 This Agreement is the entire agreement of the Parties on the subject of exclusivity for the Premises, and supersedes all prior discussion and correspondence on that subject.
13.2 No amendment is effective unless made in writing and signed by both Parties.
13.3 A failure or delay in enforcing a right under this Agreement is not a waiver of it, and a single or partial exercise does not prevent further exercise.
13.4 If any provision of this Agreement is held invalid or unenforceable, the rest continues in effect, and the Parties shall replace that provision with a valid one of the nearest effect.
13.5 This Agreement is executed in duplicate, one for each Party.
IN WITNESS WHEREOF the Parties have executed this Agreement at __________ on __________.
SIGNED AND DELIVERED by the LANDLORD
__________
Signature: ______________________________
SIGNED AND DELIVERED by the TENANT
__________
Signature: ______________________________
WITNESSES