EXHIBIT 10.12
JOINT INVESTMENT AND NON-COMPETITION AGREEMENT
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THIS JOINT INVESTMENT AND NON-COMPETITION AGREEMENT (this "Agreement")
is made as of this 17th day of June, 1997 by and among RCN Telecom Services of
Massachusetts, Inc., a Massachusetts corporation ("RCN-Sub"), BecoCom, Inc.,
a Massachusetts corporation ("BecoCom"), and RCN-BecoCom, LLC, a Massachusetts
limited liability company (the "Company").
WHEREAS, RCN-Sub and BecoCom have entered into that certain Amended and
Restated Operating Agreement of the Company of even date herewith (the
"Operating Agreement"), setting forth the terms and conditions that will
govern the operation of the Company; and
WHEREAS, Boston Edison Company, a Massachusetts corporation ("BECO"), and
C-Tec Corporation, a Delaware corporation and indirect corporate parent of
RCN-Sub ("C-Tec"), have each executed instruments of adherence with respect to
certain provisions hereof; and
WHEREAS, RCN-Sub and BecoCom wish to establish the relationship to exist
between them with respect to any markets in New England (but outside the
Relevant Market) in which the Company develops a business which would (i)
create, own and operate a communications network and (ii) provide voice,
video, data, other communications services and the communications support
component of energy-related customer services (collectively, the "Services");
and
WHEREAS, RCN-Sub, BecoCom and the Company wish to establish the
exclusivity of the Company for the provision of Services in the Relevant
Market; and
WHEREAS, terms not defined herein shall have the meaning given to them
in the Operating Agreement;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Additional Markets Entered by RCN-Sub.
(a) If RCN-Sub or any Affiliate of RCN-Sub (each, an "RCN
Entity") provides, or proposes to provide, Services in any market in Maine,
New Hampshire, Vermont, Massachusetts (but outside the Relevant Market),
Rhode Island or Connecticut through an Entity in which an electric utility
company (an "Electric Utility Company") or any Affiliate of an Electric
Utility Company is a joint venturer or participant with an RCN Entity (the
"New Business"), the RCN Entity shall use its best efforts to offer BecoCom, or
to cause BecoCom to be offered, the opportunity to acquire an equity interest
in the New Business. Such offer shall be set forth in writing delivered by
the RCN Entity to BecoCom, describing the New Business, and the economic basis
on which the New Business will be developed. Within 30 days following receipt
of such offer, BecoCom may notify the RCN Entity of its election to acquire an
equity interest in the New Business, and specifying a percentage (but not
greater than 20%) that it wishes to acquire in the New Business. Failure to
deliver such notice shall be deemed an election not to acquire an interest in
the New Business.
(b) Upon the RCN Entity's receipt of BecoCom's notice as
aforesaid, the RCN Entity and BecoCom shall commence good faith negotiations
to establish the terms of BecoCom's investment in the particular New Business
on the same economic terms as those of the RCN Entity, taking into account
non-cash contributions by the RCN Entity, and BecoCom's investment shall be
conditioned on the execution of a definitive agreement setting forth such
terms, subject to the following:
(i) BecoCom will execute a voting agreement with the RCN
Entity in which BecoCom will agree to vote its equity interest in
the New Business on all operational or governance matters as
directed by the RCN Entity, except for any matter which materially
adversely affects BecoCom (it being agreed that a material adverse
effect on the New Business does not, of itself, constitute a
material adverse effect on BecoCom);
(ii) unless otherwise agreed, the New Business shall be
established through a legal entity separate from the Company and
shall operate independently from the Company, provided that the
RCN Entity and BecoCom and personnel of the RCN Entity and BecoCom
may provide services to both the Company and the New Business, so
long as the provision of such services does not impair the ability
of the RCN Entity or BecoCom and their respective personnel to
fulfill their obligations to the Company under the Operating
Agreement and the other Basic Agreements; and
(iii) BecoCom's opportunity to acquire an interest in the New
Business shall be subject to the Electric Utility Company involved
in the New Business not objecting to BecoCom's involvement in the
New Business provided, however, that the RCN Entity shall (A) act
in good faith and use its best efforts to overcome any such
objection, (B) consult with BecoCom with respect to strategy as to
how to overcome any such objection and (C) keep BecoCom advised as
to the progress of such negotiations.
(c) This Section 1 shall terminate upon (i) the latest to occur
of (A) 5 years from the date hereof or, (B) 2 years after the Investment
Percentage of RCN-Sub or any Affiliate of RCN-Sub in the Company becoming less
than 33 1/3% or (ii) the Investment Percentage of BecoCom or any Affiliate of
BecoCom in the Company becoming less than 33 1/3%.
2. Non-Competition and Non-Solicitation.
(a) Neither (i) BecoCom or any of its Affiliates nor (ii)
RCN-Sub or any of its Affiliates shall, without the prior written consent of
the other, directly or indirectly own, operate, manage, be employed by, be an
agent of, act as a consultant for, financially support, or have a proprietary
interest in, any enterprise or business which provides Services in the
Relevant Market, except for activities currently engaged in by BecoCom or its
Affiliates, as set forth in Schedule 2A hereto.
(b) Each of BecoCom and RCN-Sub shall cause their respective
Affiliates to comply with the provisions of this Section 2.
(c) The provisions of this Section 2 shall terminate (i) as to
RCN-Sub, two years after RCN-Sub no longer has any ownership interest in the
Company or its successors, and (ii) as to BecoCom, two years after BecoCom no
longer has any ownership interest in the Company or its successors.
3. Representations and Warranties. Each of the parties hereto
represents and warrants to the other that, as of the date hereof:
(a) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is formed;
(b) it has the power and authority to execute, deliver and
perform its obligations under this Agreement; and such execution, delivery,
performance and consummation have been duly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by it
and constitutes a valid and legally binding obligation of it, enforceable
against it in accordance with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization, or
other laws affecting creditors' rights generally or by the availability of
equitable remedies;
(c) the execution, delivery and performance by it of this
Agreement (i) do not contravene any provision of its organizational documents;
(ii) do not violate or conflict with any law, regulation or contractual
restriction to which it is subject; and (iii) shall not result in the creation
of, or violate or conflict with, any lien, mortgage, pledge or security
interest or any other encumbrance upon or with respect to any of its
properties;
(d) no consent, order, approval or authorization or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by it of this
Agreement and the consummation of the transactions contemplated hereby; and
(e) there is no action, suit, proceeding or investigation
pending, or, to its knowledge, threatened, against or affecting it or its
properties, assets or business, in any court or before or by any governmental
department, board, agency or instrumentality, or any arbitrator, that
materially affects or impairs its ability to enter into this Agreement, or to
consummate the transactions contemplated hereby.
4. General.
(a) Adherence of RCN Corporation. Contemporaneously with the
consummation by C-Tec, of its intended tax-free corporate reorganization (the
"Spin-Off") under Section 355 of the Internal Revenue Code of 1986, as
amended, C-Tec shall cause RCN Corporation , a Delaware corporation and the
entity which shall become the indirect corporate parent of RCN-Sub by virtue
of the Spin-Off (or any entity which shall become such corporate parent), to
become a party to this Agreement pursuant to an instrument of adherence in
form and substance satisfactory to BecoCom.
(b) Amendment. No modification or amendment of, or waiver
under, this Agreement shall be valid unless in writing and signed by each of
the parties hereto.
(c) Binding Agreement; Assignment. This Agreement shall inure
to the benefit of and be binding upon each of the parties hereto and their
respective successors and assigns. This Agreement may not be assigned by any
party hereto without the prior written consent of the other parties except to
a Wholly Owned Affiliate of such party, provided, however, that each of the
parties hereto shall remain obligated to each other party under the terms and
conditions of this Agreement.
(d) Governing Law; Severability. This Agreement is governed by
and shall be construed in accordance with the laws of the Commonwealth of
Massachusetts, excluding any conflict-of-laws rule or principle that might
refer the governance or the construction of this Agreement to the laws of
another jurisdiction. If any provision of this Agreement or its application
to any Person or circumstance is held invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provision to other
Persons or circumstances is not affected and such provision shall be enforced
to the greatest extent permitted by law.
(e) Counterparts. This Agreement may be executed in any number
of counterparts with the same effect as if all signatories had signed the same
document. All counterparts shall be construed together and constitute the
same instrument.
(f) Notices. All notices, requests and other communications
hereunder shall be deemed to have been duly delivered, given or made to or
upon any party hereto if in writing and delivered by hand against receipt, or
by certified or registered mail, postage prepaid, return receipt requested, or
to a courier who guarantees next business day delivery or sent by telecopy
(with confirmation), to such party at its address set forth below or to such
other address as such party may at any time, or from time to time, direct by
notice given in accordance with this Section 4(f).
If to RCN-Sub:
c/o RCN Telecom Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Manager
and
C-TEC Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000 and (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxx, Esq.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X Xxxxxx, Esq.
If to BecoCom:
c/o Boston Edison Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Vice President
Xxxxx Xxxxxxxxx, Esq., Assistant General Counsel
with a copy to:
Xxxxx, Xxxx & X'Xxxxxxxx, P.C.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to the Company:
RCN-BecoCom, LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: General Manager
The date of delivery of any such notice, request or other communication shall
be the earlier of (i) the date of actual receipt, (ii) three business days
after such notice, request or other communication is sent if sent by certified
or registered mail, (iii) if sent by courier who guarantees next business day
delivery the business day next following the day such notice, request or other
communication is actually delivered to the courier or (iv) the day actually
telecopied.
(g) Entire Agreement. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior contracts or agreements with respect to such matters,
whether oral or written.
(h) Specific Performance. The parties agree that irreparable
damage will result if this Agreement is not performed in accordance with its
terms, and the parties agree that any damages available at law for a breach of
this Agreement would not be an adequate remedy. Therefore, the provisions
hereof and the obligations of the parties hereunder shall be enforceable in a
court of equity, or other tribunal with jurisdiction, by a decree of specific
performance, and appropriate injunctive relief may be applied for and granted
in connection therewith without the requirement of the aggrieved party showing
the inadequacy of the available remedies at law. Such remedies and all other
remedies provided for in this Agreement shall, however, be cumulative and not
exclusive and shall be in addition to any other remedies that a party may have
under this Agreement, at law or in equity.
(i) Effect of Waiver or Consent. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by
that Person of its obligations hereunder is not a consent or waiver to or of
any other breach or default in the performance by that Person of the same or
any other obligations of that Person hereunder. Failure on the part of a
Person to complain of any act of any Person or to declare any Person in
default hereunder, irrespective of how long that failure continues, does not
constitute a waiver by that Person of its rights with respect to that default
until the applicable limitations period has expired.
(j) Interpretation. In any dispute concerning the construction
or interpretation of any provision of this Agreement or any ambiguity hereof,
there shall be no presumption that this Agreement or any provision hereof be
construed against the party who drafted this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
RCN TELECOM SERVICES OF MASSACHUSETTS, INC.
By
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Name:
Title:
BECOCOM, INC.
By
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Name:
Title:
RCN-BECOCOM, LLC
By
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Name:
Title:
SCHEDULE 2A
Activities Excluded from Scope of Non-Competition Provision
Existing agreement between BECO and Teleport Communications Group
("TCG"), dated 11/29/95, concerning certain point-to-point fiber capacity, but
not any expansions or renewals thereof.
Existing agreement between BECO and TCG, dated 4/30/96, concerning
certain point-to-point fiber capacity, but not any expansions or renewals
thereof.
Existing agreement between BECO and TCG, dated 8/21/96, concerning
certain point-to-point fiber capacity, but not any expansions or renewals
thereof.
Existing agreement between BECO and TCG, dated 9/1/96, concerning
certain point-to-point fiber capacity, but not any expansions or renewals
thereof.
Existing agreement between BECO and Metropolitan Fiber System, dated
11/30/93, concerning certain point-to-point fiber capacity, but not any
expansions or renewals thereof.
Nothing in this Agreement shall prevent BecoCom or its Affiliates (or
any successor thereto as owner of its electric transmission and distribution
facilities) from (i) acting solely as a builder , lessor or licensor of sites
for the location of wired or wireless communications facilities by third-party
telecommunications services providers on a non-discriminatory basis, in the
case of wired communications facilities to the extent required by law or
regulation, or (ii) acting solely as a builder, lessor or licensor of
facilities for the transmission of wired communications by third-party
telecommunications services providers on a non-discriminatory basis, to the
extent required by law or regulation.
