NONCOMPETITION AGREEMENT
by and among
PEGASUS COMMUNICATIONS HOLDINGS, INC.
PEGASUS COMMUNICATIONS CORPORATION
and
XXXXXX COMMUNICATIONS CORP.
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Dated as of October 8, 1996
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NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT ("Agreement") is made as of the 8th day
of October, 1996, by and among Pegasus Communications Holdings, Inc.
("Pegasus"), a Delaware corporation, and its subsidiary, Pegasus Communications
Corporation ("PCC"), a Delaware corporation, and Xxxxxx Communications Corp.
("Xxxxxx"), a New York corporation. Pegasus, PCC and Xxxxxx are collectively
referred to herein as the "Parties."
RECITALS:
WHEREAS, Pegasus and Xxxxxx have entered into that certain Contribution
and Exchange Agreement dated as of May 30, 1996, and the Parties have entered
into that certain Joinder Agreement dated as of even date herewith (the
Contribution and Exchange Agreement together with the Joinder Agreement being
referred to herein as "Contribution Agreement"); and
WHEREAS, the Contribution Agreement requires that Xxxxxx execute and
deliver this Agreement as a condition precedent to the obligations of Pegasus
and PCC under the Contribution Agreement.
NOW, THEREFORE, in consideration of the premises, mutual promises,
covenants, agreements, representations and warranties contained herein and in
the Contribution Agreement, and intending to be legally bound hereby, the
Parties agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
shall have the respective meanings assigned to them in the Contribution
Agreement.
2. Acknowledgements by Xxxxxx. Xxxxxx acknowledges that: (i) Pegasus
and PCC have required that Xxxxxx make the covenants set forth in Section 3 of
this Agreement as a condition to Pegasus and PCC consummating the transactions
contemplated by the Contribution Agreement;
(ii) the provisions of Section 3 of this Agreement are reasonable and necessary
because of Xxxxxx'x access to confidential and proprietary information of
Pegasus, PCC and their Affiliates; and (iii) PCC would be irreparably damaged if
Xxxxxx were to breach the covenants set forth in Section 3 of this Agreement.
3. Noncompetition. Xxxxxx hereby agrees, for a period of five years
("Noncompetition Period"), that:
(a) Neither Xxxxxx nor its Subsidiaries shall engage in, own,
manage, operate or control any communications business involved in the
direct-to-home satellite delivery or multichannel multipoint distribution
("MMDS") of data, audio or video signals to residences, businesses or other
users in the Service Areas. Xxxxxx agrees that this covenant is reasonable with
respect to its duration, geographical area and scope.
(b) Xxxxxx shall not, directly or indirectly, either for
itself or any other Person, induce or attempt to induce any employee of PCC or
its subsidiaries to leave the employ of such company, or employ, or otherwise
engage as an employee, independent contractor or otherwise, any employee of PCC
or its subsidiaries.
(c) Xxxxxx shall not, directly or indirectly, either for
itself or any other Person, solicit the business of any Person that is a
Subscriber at Closing.
4. Remedies. If Xxxxxx breaches the covenants set forth in Section 3 of
this Agreement, Pegasus and PCC shall be entitled to (i) damages from Xxxxxx,
and (ii) the right to injunctive or other equitable relief to restrain any
breach or threatened breach or otherwise to specifically enforce the provisions
of Section 3 of this Agreement, it being agreed by the Parties that money
damages alone would be inadequate to compensate Pegasus and PCC for such breach
and that damages would be an inadequate remedy for such breach.
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5. General.
(a) This Agreement shall be binding upon the Parties and shall
inure to the benefit of their affiliates and successors.
(b) The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
Party 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,
(i) no claim or right arising out of this Agreement can be discharged by one
Party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other Parties; (ii) no waiver that may be given
by a Party will be applicable except in the specific instance for which it is
given; and (iii) no notice to or demand on one Party 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.
(c) This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania without regard to conflicts of laws principles.
(d) Whenever possible, each provision and term of this
Agreement shall 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 law or invalid,
then such provision or term shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions
or terms of this Agreement. If any of the covenants set forth in Section 3 of
this Agreement is held to be invalid or unenforceable
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due to its scope, breadth or duration, then it shall be modified to the scope,
breadth or duration permitted by law and shall be fully enforceable as so
modified.
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.
(f) The headings of Sections in this Agreement are provided
for convenience only and shall 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 shall be construed to be of such gender or number as the circumstances
require.
(g) This Agreement and the Contribution Agreement constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersede all prior written and oral agreements and
understandings with respect to the subject matter of this Agreement. This
Agreement may not be amended except by a written agreement executed by the
Parties.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this
Agreement as of the day and year first above written.
PEGASUS COMMUNICATIONS HOLDINGS, INC.
By: /s/ Xxx X. Lodge
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PEGASUS COMMUNICATIONS CORPORATION
By: /s/ Xxx X. Lodge
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XXXXXX COMMUNICATIONS CORP.
By: /s/ Xxxx X. Xxxxxxx, III
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