EXHIBIT (e)
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this "Non-Competition Agreement") is entered
into as of the 30th day of December, 1997 by and among Emerging
Communications, Inc., a Delaware corporation ("ECI"), Atlantic Tele-Network,
Inc., a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxxx,
("Xxxxxxx").
WHEREAS, to eliminate corporate disputes and to maximize the value of the
Company for the benefit of the Company and its stockholders, the Company and
its co-chief executive officers and principal stockholders, Xxxxxxxxx X.
Prior, Jr. ("Prior") and Xxxxxxx, entered into a Principal Terms Agreement
dated January 29, 1997 which contemplated the separation of the businesses and
assets of the Company; and
WHEREAS, in order to accomplish such separation, the Company and ECI entered
into a Subscription Agreement (the "Subscription Agreement"), the Company,
Prior and Xxxxxxx entered into a Recapitalization Agreement (the
"Recapitalization Agreement") and the Company and ATN MergerCo. entered into
an Agreement and Plan of Merger (the "Merger Agreement"), all dated as of
August 11, 1997;
WHEREAS, Prior and the other stockholders of the Company are relying on the
covenants of ECI and Xxxxxxx in this Non-Competition Agreement in making
and/or retaining their investments in the Common Stock of the Company; and
WHEREAS, the execution and delivery of this Non-Competition Agreement by the
parties hereto is contemplated by the Subscription Agreement and is a
condition to the Closing (as defined in the Subscription Agreement); and
WHEREAS, each of the parties hereto desires to consummate, and will secure
substantial benefits from the consummation of, the Closing.
NOW, THEREFORE, for and in consideration of the covenants herein contained
and subject to the conditions hereinafter set forth, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used in this Non-Competition
Agreement without definition shall have the respective meanings ascribed to
such terms in the Subscription Agreement. As used in this Agreement, the
following terms have the meanings assigned to them below:
"Competitive Business" means any business which competes anywhere in the
world in any material respect with the conduct of the Subject Business by
the Company or any of its Subsidiaries.
"Confidential Information" means all information of a proprietary nature
and documents or other tangible items that record information of a
proprietary nature relating to the Subject Business, including without
limitation, books, records, customer lists, vendor lists, supplier lists,
pricing information, cost information, plans, strategies, forecasts,
financial statistics, budgets and projections, other than any such
information which is generally within the public domain at the time of
receipt thereof by ECI or Xxxxxxx or at the time of use or disclosure of
such information by ECI or Xxxxxxx (other than as a result of the breach by
ECI or Xxxxxxx of its or his agreement hereunder).
"Subject Business" means the business of providing telecommunications
services (including carrying and/or terminating telecommunications
traffic), directly or indirectly through service bureaus or other
intermediaries, to persons who generate international audiotext
telecommunications traffic (whether voice or data); provided, however, that
the Subject Business shall not include the provision of any
telecommunications services as a common carrier which does not involve the
installation of special
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equipment to facilitate the generation of international audiotext
telecommunications traffic or, directly or indirectly, the payment of any
fee, commission or other compensation, through sharing of accounting or
settlement rates, rate discounts or otherwise to persons generating such
traffic.
ARTICLE II
AGREEMENT NOT TO COMPETE;
DISCLOSURE OF INFORMATION
Section 2.01. Agreement Not To Compete. (a) Each of ECI and Xxxxxxx
recognizes the highly competitive nature of the Subject Business and agrees
that the value and goodwill of the Company and its Subsidiaries would be
substantially impaired if it or he, as the case may be, failed to comply with
its or his obligations hereunder. Accordingly, each of ECI and Xxxxxxx hereby
agrees from the consummation of the Merger that during a period of ten years
thereafter, each of ECI and Xxxxxxx shall not, directly or indirectly, on its
or his own behalf, as the case may be, or on behalf of any other person or
entity:
(i) engage in any Competitive Business, whether such engagement shall be
as an employer, officer, director, owner, employee, partner, advisor,
consultant, stockholder, investor, agent or other participant in any
Competitive Business (or in any similar capacity in which it or he, as the
case may be, derives an economic benefit from a Competitive Business);
(ii) assist others in engaging in any Competitive Business in the manner
described in the foregoing clause (i);
(iii) solicit, entice or induce any director, employee, consultant or
other agent of the Company or any current or future Subsidiary of the
Company materially involved in the Subject Business to terminate his or her
employment or other relationship with the Company or such current or future
Subsidiary or to engage in any Competitive Business;
(iv) solicit, entice or induce any vendor or distributor of the Company
or any current or future Subsidiary materially involved in the Subject
Business to terminate or materially diminish its relationship with the
Company or such current or future Subsidiary; or
(v) solicit, entice or induce any subscriber or customer of the Company
or any current or future Subsidiary of the Company with respect to the
Subject Business to purchase the products or services of any Competitive
Business, or to cease purchasing the services of the Subject Business from
the Company or any current or future Subsidiary of the Company.
(b) Anything contained in this Non-Competition Agreement to the contrary
notwithstanding, no provision of this Agreement shall prohibit (i) ECI or
Xxxxxxx from owning, as a passive investment, in the aggregate less than 5% of
a class of publicly-traded securities issued by any person or entity engaged
in a Competitive Business or (ii) the provision of services by ATNCO,
VITELCo or VCI pursuant to terms of the Technical Assistance Agreement.
Section 2.02. Disclosure of Information. From and after the date hereof,
each of ECI and Xxxxxxx shall hold in strict confidence and shall not use or
disclose to any person, firm, corporation or other business entity, except as
required by law or judicial process, any Confidential Information for any
reason or purpose whatsoever, nor shall ECI or Xxxxxxx make use of any of the
Confidential Information for ECI's or Xxxxxxx'x purposes or for the benefit of
any person or entity except the Company or any affiliate thereof.
Section 2.03. Acknowledgment. Xxxxxxx acknowledges that the provisions of
this Agreement are not designed to prevent Xxxxxxx from earning a living or
fostering his own career. The provisions of this Agreement are designed to
prevent any Competitive Business from gaining unfair advantage from Xxxxxxx'x
and ECI's knowledge of confidential and proprietary information relating to
the Subject Business.
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ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.01. Remedies. Each of ECI and Xxxxxxx acknowledges that a remedy
at law for any breach or threatened breach of the provisions of this Non-
Competition Agreement would be inadequate and therefore agrees that the
Company shall be entitled to injunctive relief; provided, however, that
nothing contained herein shall be construed as prohibiting the Company from
pursuing any other remedies available for any such breach or threatened
breach.
Section 3.02. Benefits. This Non-Competition Agreement and the rights and
obligations of the parties hereto shall bind and inure to the benefit of any
successor or successors of the Company by reorganization, merger or
consolidation or otherwise and any assignee of all or substantially all of its
business and properties.
Section 3.03. Severability, Blue Penciling. It is the desire and intent of
the parties hereto that the provisions of this Non-Competition Agreement shall
be enforced to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Non-Competition Agreement
shall be adjudicated to be invalid or unenforceable, such provision shall be
deemed amended to delete therefrom the portion thus adjudicated to be invalid
or unenforceable, such deletion to apply only with respect to the operation of
such provision in the particular jurisdiction in which such adjudication is
made. In addition, if any one or more of the provisions contained in this Non-
Competition Agreement shall for any reason be held to be excessively broad as
to duration, geographical scope, activity or subject, it shall be construed by
limiting and reducing it so as to be enforceable to the extent compatible with
the applicable law as it shall then appear.
Section 3.04. Notices. All notices or other communications required or
permitted hereunder shall be in writing and sufficient if (a) delivered
personally, (b) sent by nationally-recognized overnight courier or (c) sent by
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to the Company, to:
Atlantic Tele-Network, Inc.
Estate Havensight
X.X. Xxx 00000
Xx. Xxxxxx, X.X. Xxxxxx Xxxxxxx 00000
(000) 000-0000 or 000-0000
Attention: Xxxxxxxxx X. Prior
Telecopy: (000) 000-0000
if to ECI or Xxxxxxx, to:
Atlantic Tele-Network, Inc.
Chase Financial Center
X.X. Xxx 0000
Xx. Xxxxx, X.X. Xxxxxx Xxxxxxx 00000-0000
(000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with copies to:
Xxxxx Xxxxxxx, Esq.
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Telecopy: (000) 000-0000
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or, in each case, to such other address as the party to whom notice is to be
given may have furnished to the other party in writing in accordance herewith.
Any such communication shall be deemed to have been given (i) when delivered,
if personally delivered, (ii) on the business day after dispatch, if sent by
nationally-recognized overnight courier and (iii) on the third business day
after dispatch, if sent by mail.
Section 3.05. Complete Agreement; Amendments; Prior Agreements. The
foregoing is the entire agreement of the parties with respect to the subject
matter hereof and may not be amended, supplemented, canceled or discharged
except by a written instrument executed by the parties hereto. This Non-
Competition Agreement supersedes any and all prior agreements among the
parties hereto with respect to the matters covered hereby.
Section 3.06. Governing Law. This Non-Competition Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and performed wholly therein.
Section 3.07. Counterparts. This Non-Competition Agreement may be executed
in any number of counterparts, and each such counterpart shall be deemed to be
an original instrument, but all such counterparts together shall constitute
but one agreement.
Section 3.08. Jurisdiction. Any action or proceeding brought by any party to
this Non-Competition Agreement against any other party hereto with respect to
the enforcement or breach of this Non-Competition Agreement may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York. Each of the parties hereto irrevocably submits to the
jurisdiction of each such court in respect of any such action or proceeding,
irrevocably waives any objection that it may now or hereafter have to the
laying of venue of any such action or proceeding in any such court and any
claim that any such action or proceeding brought in any such court has been
brought in an inconvenient forum, and irrevocably consents that service of
process or other legal summons for purposes of any such action or proceeding
may be served on it by personal service within or without the State of New
York or by mailing a copy thereof by registered mail, or a form of mail
substantially equivalent to registered mail, addressed to such party at its
address as provided for notices hereunder.
Section 3.09. Expenses of Enforcement. In the event of any breach of this
Non-Competition Agreement by any party hereto, any other party hereto which is
aggrieved by such breach (an "Aggrieved Breach") shall be entitled to recover
from the party in breach, any and all costs and expenses, including without
limitation reasonable attorneys' fees, incurred by the Aggrieved Party as a
result of such breach or in connection with enforcing the provisions of this
Non-Competition Agreement with respect to such breach.
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IN WITNESS WHEREOF, this Non-Competition Agreement has been executed and
delivered by the parties hereto as of the date first above written.
Atlantic Tele-Network, Inc.
By: /s/ Xxxxxxxxx X. Prior, Jr.
---------------------------------
Name: Xxxxxxxxx X. Prior, Jr.
Title: Chief Executive Officer
Emerging Communications, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
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