NON-SOLICITATION AGREEMENT
Exhibit 10.2
Execution Version
This Non-Solicitation Agreement (this “Agreement”) is being executed and delivered as of May 6, 2014, by Edison Venture Fund VII, LP (“Stockholder”) in favor and for the benefit of inContact, Inc., a Delaware corporation (together with any of its affiliates and subsidiaries, the “Purchaser”).
All capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Merger Agreement (as defined below).
RECITALS
A. Purchaser, INCC Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of the Purchaser (the “Survivor”); CallCopy, Inc., a Delaware corporation (the “Company”); all of the stockholders of the Company (the “Stockholders”); and Xxxx Xxxxxx, as the Stockholders’ Agent are entering into an Agreement and Plan of Merger dated the date hereof (the “Merger Agreement”), pursuant to which the Company will merge with and into the Survivor and the Stockholders will exchange their shares of Company Common Stock for cash and Purchaser Common Stock on the terms set forth in the Merger Agreement;
B. As a condition and mutual inducement to close the Merger, the Merger Agreement contemplates, among other things, that Stockholder shall enter into this Agreement and that this Agreement shall become effective at the Effective Time;
C. Stockholder is a Stockholder of the Company and has detailed knowledge of the Business (as defined below), including confidential and proprietary information of the Company;
D. Stockholder has a material economic interest in the consummation of the Merger, and the consideration received as a result of the Merger is paid in consideration, in part, for the Stockholder’s covenant not to solicit (as set forth herein); and
E. Stockholder understands and agrees that this Agreement is offered and accepted as partial consideration of the Merger.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises made herein, Purchaser and Stockholder hereby agree as follows:
1. Definitions. For purposes of this Agreement, the parties agree to the following definitions of the following terms used in this Agreement:
“Business” shall mean the business of designing, creating, distributing or selling products and services that provide workforce optimization suite to enable call centers and other organizations to improve operational efficiencies with call recording, quality management, desktop recording, speech analytics, and performance management functions delivered through premise based software or cloud based software delivered as a service.
“Restricted Territory” shall mean each of the following areas in which the Purchaser maintains, with respect to the Business, operations, facilities or customers:
| (a) | the United States of America; and |
| (b) | all other countries of the world; provided that the Company maintains non-trivial operations, facilities, or customers in such geographic area as of the Closing Date. |
“Restricted Period” shall mean the period of time beginning on the Closing Date and ending on the two (2) year anniversary of the Closing Date.
2. Non-Solicitation. Stockholder further agrees that during the Restricted Period and anywhere in the Restricted Territory, without the prior written consent of Purchaser, the Stockholder shall not knowingly, personally or through others, directly or indirectly, encourage, induce, attempt to induce, solicit or attempt to solicit (on Stockholder’s own behalf or on behalf of any other person or entity), or take any other action that is intended to induce or encourage, or has the effect of inducing or encouraging, any employee, consultant or independent contractor of the Company as of the Closing Date to discontinue its, his or her employment or consulting arrangement with the Survivor or the Purchaser, whether such person is a full-time, part-time or temporary employee or contractor and whether or not such employment or consulting arrangement is pursuant to a written agreement, for an indeterminate period, or for a predetermined period.
Provided, however, that notwithstanding the foregoing, for purposes of this Agreement, the following shall not be deemed to be violations of this Agreement: (i) the placement of general advertisements that may be targeted to a particular geographic or technical area, but which are not targeted directly or indirectly towards the Company’s employees, (ii) the solicitation or hiring of any employee of the Survivor or the Purchaser whose employment or other arrangement with the Survivor or the Purchaser has been terminated for at least 180 days prior to any such solicitation or hiring, or (iii) the solicitation of Xxxx Xxxxxx, Xxx Xxxxx, Xxxx Xxxxxx or Xxx Xxxxxx to serve as a director for a portfolio company of the Stockholder or its affiliates, but only after such person obtains the prior written approval of the Chief Executive Officer of the Purchaser.
For the avoidance of doubt, nothing in this Agreement shall prohibit or restrict Stockholder or any of its affiliates, funds or portfolio companies from investing in, owning, controlling, managing or operating any business or entity that conducts or competes with the Business or Purchaser as long as Stockholder complies with its obligations in this Section 2.
3. Severability of Covenants. The covenants contained in Section 2 herein shall be construed as a series of separate covenants, one for each country, province and state in the Restricted Territory. If, in any judicial proceeding, a court determines that any of such separate covenants (or any part thereof) is unenforceable because it is deemed to exceed the time, geographic or scope limitations permitted by applicable law, then such unenforceable covenant (or such part) shall be eliminated from this Agreement and the remaining separate covenants (or portions thereof) shall remain in full force and effect.
4. Independence of Obligations. The covenants and obligations of Stockholder set forth in this Agreement shall be construed as independent of any other agreement or arrangement between Stockholder, on the one hand, and Purchaser on the other. Stockholder nevertheless understands and agrees to the Stockholder’s obligations and the restraints they may impose and in particular:
(a) Stockholder Acknowledgement of Receipt of Value. Stockholder acknowledges that (i) Stockholder’s agreement as set forth herein is necessary to preserve the value of the Company for Purchaser following the Merger, (ii) as consideration for the Stockholder’s covenants set forth herein, Purchaser has entered into the Merger Agreement and would not have done so but for the agreement of Stockholder to enter into this Agreement, and (iii) the consideration provided for in the Merger Agreement is sufficient and adequate to compensate Stockholder for agreeing to the restrictions contained in this Agreement and that such restrictions will not cause Stockholder undue hardship.
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(b) Stockholder Acknowledgement of Restraints. Stockholder also acknowledges that the limitations of time, geography and scope of activity agreed to in this Agreement are reasonable because, among other things: (i) the Purchaser is engaged in a highly competitive industry, (ii) Stockholder has unique access to the trade secrets and know-how of the Company, including without limitation the plans and strategy (and, in particular, the competitive strategy) of the Company, and (iii) this Agreement provides no more protection than is necessary to protect Purchaser’s interests in its trade secrets and confidential information.
5. Enforcement. Stockholder understands, acknowledges and agrees that:
(a) Stockholder has gained a special and unique expertise in the Business that is of unique and peculiar value and that the provisions of this Agreement are required for the fair and reasonable protection of Purchaser’s proprietary interest in the Company, and are intended to prohibit Stockholder and any third parties from benefiting from Stockholder’s historical relationship with the Company and with the Business at the expense and economic detriment of Purchaser or its successors or assigns.
(b) Purchaser and its successors or assigns will suffer irreparable injury that cannot adequately be compensated for by monetary damages alone in the event of Stockholder’s breach or violation of any covenant or undertaking contained in this Agreement. Stockholder, therefore, agrees that Purchaser or its successors or assigns (as applicable) in addition to such damages and other remedies and without limiting any other remedy or right that they may have, shall have the immediate right to seek an interim, interlocutory and final or permanent injunction against Stockholder issued by a court of competent jurisdiction enjoining any such alleged breach or violation without posting any bond or other security that might otherwise be required, and Stockholder agrees that he or she shall not plead adequacy of any relief at law available to Purchaser or its successors or assigns (as applicable) (including monetary damages) as a defense to any petition, originating process claim or motion for preliminary, interim, interlocutory and final or permanent injunctive relief to enforce any provision of this Agreement.
(c) In the event that Stockholder should contest the enforceability of any provision of this Agreement in any court of competent jurisdiction, then, if Stockholder is found not to be in compliance with such provision, whether as set forth in this Agreement or as reformed by said court, any time period associated with any such challenged provision shall be deemed suspended at the time of filing the action in which such enforceability is contested during the period of non-compliance with such provision (whether as set forth in this Agreement or as reformed by said court). In the event that such court of competent jurisdiction upholds the enforceability of any such provision, all periods of appeal having expired thereon, then the suspended portion of any such time period shall automatically thereafter once again become effective. For purposes of this Agreement, the suspended portion of any such time period shall be the difference between the full stated time period in this Agreement relating to any such provision, less any time that Stockholder complied with such provision.
(d) The rights and remedies of Purchaser hereunder are not exclusive of or limited by any other rights or remedies that Purchaser 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 Purchaser hereunder, and the obligations and liabilities of Stockholder 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 Stockholder’s obligations or the rights of the Company under the terms of any other agreement between Stockholder and the Company.
(e) If Purchaser or its successors or assigns successfully, in whole or part, asserts an action at law or in equity to enforce any of the terms of this Agreement, then the prevailing party to such action, shall be entitled to recover from the non-prevailing party all reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which it may be entitled.
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6. General Provisions.
(a) Notices. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received: (i) if delivered by hand, when delivered; (ii) if sent via facsimile with confirmation of receipt, when transmitted and receipt is confirmed; (iii) if sent by electronic mail or other electronic transmission, upon delivery; (iv) if sent by registered, certified or first class mail, the third business day after being sent; and (v) if sent by overnight delivery via a national courier service, one business day after being sent, in each case to the address, email address or facsimile telephone number set forth below (or to such other address, email address or facsimile telephone number as such party shall have specified in a written notice given to the other parties hereto):
(A) if to Purchaser, to:
0000 Xxxxx Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, General Counsel
Facsimile: (000) 000-0000
Email: xxxxxx.xxxxx@xxxxxxxxx.xxx
(B) if to Stockholder, to such Stockholder’s address as set forth on the signature page to this Agreement.
(b) Counterparts; Facsimile. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.
(c) Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings both written and oral, among the parties with respect to the subject matter hereof.
(d) No Third Party Beneficiaries. This Agreement is not intended to, and shall not, confer upon any other person any rights or remedies hereunder.
(e) Assignment. This Agreement shall not be assigned by operation of law or otherwise, except that Purchaser may assign its rights and delegate its obligations hereunder to any of the Purchaser’s affiliates or subsidiaries, or to any person acquiring the Purchaser or the Survivor.
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(f) Other Remedies. Any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.
(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
(h) Consent to Jurisdiction. Each of the parties hereto irrevocably agrees and consents to the exclusive jurisdiction and venue of the courts in the State of Utah, in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of Utah for such persons and waives and covenants not to assert or plead any objection that they might otherwise have to such jurisdiction, venue and such process. Each party agrees not to commence any legal proceedings related hereto except in such courts.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the parties have caused this Non- Solicitation Agreement to be duly executed on the date first above written.
| inContact, Inc. | ||
| By: | /s/ | |
| Name: | Xxxx Xxxxxx | |
| Title: | CEO | |
| Stockholder | ||
| Edison Venture Fund VII, LP | ||
| By: Edison Partners VII, LLC, its General Partner | ||
| By: | /s/ | |
| Name: | Xxxxxxx X. Xxxxxxxx | |
| Title: | Managing Member | |
| Address: | ||
| c/o Edison Partners VII, LLC | ||
| 0000 Xxxxxx Xxxxx #0 | ||
| Xxxxxxxxxxxxx, XX, 00000 | ||
| Attn: Xxxxxxx Xxxxxxxx | ||
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