Exhibit 10.4
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT ("Agreement") is made and entered into as of
the 11th day of August, 1997, by and among TELECO ACQUISITION CORP., AN OHIO
CORPORATION (the "Company"), XXXX XXXXXXXXXXXXX ("Shareholder") and TELECOMM
INDUSTRIES CORP., A DELAWARE CORPORATION ("Parent" and/or "Telecomm").
RECITALS:
A. The Company is acquiring the assets of Unitel, Inc., a telecommunications
businesses (the "Asset Purchase Agreement") of which Shareholder is an
owner and executive officer, pursuant to the terms of an Assets Purchase
Agreement.
B. The Company is concurrently engaging Shareholder as an executive officer
pursuant to the terms of an Employment Agreement.
C. To induce the Company to consummate the Asset Purchase Agreement and
employ Shareholder as an executive officer, Shareholder agrees to the
terms, conditions and restrictions of this Agreement.
D. To induce the Company to consummate the Asset Purchase Agreement and
employ Shareholder as an executive officer, and to further induce the
Parent to guarantee the Employment Agreement of Shareholder, Shareholder
agrees to the terms, conditions and restrictions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt, adequacy and
sufficiency of which is acknowledged, the Company and Shareholder agree as
follows:
SECTION 1. - COVENANT NOT TO COMPETE
a) DEFINITIONS. The following terms will have the meanings set forth
below:
i) "Company's Affiliates" means Telecomm and any subsidiary or commonly owned
corporation, partnership, limited liability company, joint venture, or
other entity of Telecomm.
ii) "Compete" means to manage, operate, control, or participate in, or have
any ownership interest in, or make loans to, or guaranty loans for, or
act as surety for, or aid or advise as an employee, officer, director,
consultant, agent or otherwise, whether directly or indirectly, any
business (whether an individual, sole proprietorship, partnership,
corporation, firm, joint venture, trust, or other entity) which is
engaged in any business in which the Company or the Company's
Affiliates is engaged.
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iii) "Restricted Area" means any state, territory, province or other
jurisdiction of the United States of America or Canada in which the
Company or the Company's Affiliates engage in or solicit business, or
plan to engage in or solicit business (as evidenced by business
records existing at the time of termination if known to Shareholder),
at any time during Shareholder's employment with the Company or any of
the Company's Affiliates. The Restricted Area is deemed to include, at
a minimum, the States of Illinois, Indiana, Michigan, Ohio, Kentucky
and Wisconsin.
iv) "Restricted Period" means during Shareholder's employment with
the Company or any of the Company's Affiliates and continuing for a
period of one (1) year following the date of termination.
v) "Shareholder's Affiliates" means, collectively and individually:
Any trust, corporation, partnership, limited liability company, joint
venture, or other entity for the benefit of, controlled by, or under
common control with, directly or indirectly, Shareholder.
b) IN GENERAL. As a consequence of Shareholder's prior ownership and
operation of Unitel, Inc. and employment with the Company or any of the
Company's Affiliates, Shareholder has and will receive and deal with
confidential information and business methods which are the exclusive
property of the Company and the Company's Affiliates, including, but not
limited to, its financial data, market data, business practices, pricing
techniques, market development techniques, acquisition and development plans,
and relationships with customers and suppliers. Shareholder further
acknowledges that the confidential information acquired from the Merged
Companies or the Company or the Company's Affiliates are of such a value and
nature as to make it reasonable and necessary for the protection of the
Company and the Company's Affiliates that Shareholder not Compete with the
Company or the Company's Affiliates within the area and for a period of time
hereinafter set forth, and that the Company and the Company's Affiliates will
be irreparably injured, and the value of their capital stock and goodwill
irreparably damaged, if Shareholder were to use or disclose any of the
confidential information concerning the Company or the Company's Affiliates
which Shareholder has acquired or will acquire, or if Shareholder were to
Compete with the Company or any of the Company's Affiliates.
Accordingly, except as hereinafter set forth, Shareholder represents,
warrants, covenants and agrees that during the Restricted Period, neither
Shareholder nor Shareholder's Affiliates will Compete with the Company or any
of the Company's Affiliates in the Restricted Area.
Without limiting the generality of the foregoing restrictive covenant,
Shareholder further represents, warrants, covenants and agrees that neither
Shareholder nor any of Shareholder's Affiliates will, during the Restricted
Period: (i) promote the business of any person or entity engaged in a
business which Competes with the Company or any of the Company's Affiliates;
(ii) solicit, divert or take away or attempt to solicit, divert or take away
any of the Company's or any of the Company's Affiliate's customers,
distributors, suppliers or patronage; (iii) attempt to seek or cause any of
the Company's or any of the Company's Affiliates clients or customers to
refrain from patronizing the Company or any of the Company's Affiliates; or
(iv) employ or engage or attempt to employ or engage in any capacity any
person employed or contracted by the Company or any of the Company's
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Affiliates at the date of termination of Shareholder's employment with the
Company and any of the Company's Affiliates.
c) REASONABLENESS OF RESTRICTIONS. Shareholder acknowledges
that: (i) Shareholder's experience and capabilities are such that the
provisions of this Section 1 will not prevent Shareholder from earning a
livelihood; (ii) the services to be rendered by Shareholder to the Company
and the Company's Affiliates are of a special nature and it would be very
difficult or impossible to replace those services; (iii) the terms and
conditions contained in this Section 1 and Section 2 are reasonable and
necessary for the protection of the Company and the Company's Affiliates; and
(iv) the Company and the Company's Affiliates cannot be adequately
compensated with monetary damages for any violation by Shareholder of any of
the provisions of this Section 1 and/or Section 2.
Accordingly, Shareholder agrees and consents that if Shareholder
violates any of the provisions contained in this Section 1 or Section 2, the
Company and the Company's Affiliates will be entitled to seek injunctive from
any court of competent jurisdiction, without bond, restraining Shareholder
from committing or continuing any violation of this Section 1 or Section 2.
The Company and the Company's Affiliates will also be entitled to any other
remedies they may have at law, in equity, under this Agreement, or otherwise.
d) SUSPENSION OF RESTRICTED PERIOD. In the event Shareholder
breaches any obligations, representations, warranties or covenants as set
forth herein, the Restricted Period will be tolled from the date of the
breach until such time as the violation(s) ceases, and the Restricted Period
extended for a period equal to the period of breach.
e) SEVERABILITY. Shareholder agrees that each of the covenants
set forth in this Section 1 and in Section 2 is a separate and distinct
covenant, independent of others and any other provision of this Agreement,
and that the illegality or invalidity of any one, or more of the covenants or
any part of one or more of them, will not render the others illegal or
invalid. If the invalidity or unenforceability is due to the
unreasonableness of the time or geographical area covered by said covenants,
then said covenants will nevertheless be enforced to the maximum extent
permitted by law and effective for such period of time and for such area as
may be determined to be reasonable by a court of competent jurisdiction, and
the parties hereby consent and agree that such scope may be judicially
modified in any proceeding brought to enforce such covenants.
f) INDEPENDENT SIGNIFICANCE. The covenants set forth in this
Section 1 and the covenants of confidentiality contained in Section 2 below
are of the essence of this Agreement and will be construed as independent of
any other of the provisions of this Agreement, the Merger Agreement and the
Employment Agreement, and the existence of any claim or cause of action of
Shareholder against the Company or the Company's Affiliates, whether
predicated on this Agreement or otherwise, will not constitute a defense to
the enforcement by the Company or any of the Company's Affiliates of any of
said covenants.
SECTION 2. - CONFIDENTIAL INFORMATION
a) NON-DISCLOSURE - IN GENERAL. From the date hereof,
Shareholder will maintain in strict confidence and will not, directly or
indirectly, or through Shareholder's
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Affiliates, divulge, transmit, publish, release, or otherwise use of cause to
be used in any manner contrary to the interests of the Company or any of the
Company's Affiliates, any confidential information relating to the Company's
or any of the Company's Affiliates' systems, operations, products, services,
business methods, management practices, contracts, computer programs and data
bases, records, development data and reports, quality control specifications,
cost analyses, flow charts, know-how, consumer lists, supplier lists,
prospects, market development programs, acquisition programs, personnel data,
or any information relating to customers, suppliers, products, sales,
acquisitions, acquisition plans, financial structure, or pricing, and other
information of like nature. Shareholder acknowledges that all information
regarding the Company or the Company's Affiliates compiled or obtained by, or
furnished to Shareholder regarding the Company, the Company's Affiliates or
their respective businesses is confidential information and the Company's and
the Company's Affiliates' exclusive property. Upon demand by the Company,
and in any event upon termination of Shareholder's services, Shareholder will
deliver to the Company all original and facsimile records, documents and data
in Shareholder's possession or under Shareholder's control, or in
Shareholder's Affiliates' possession or under Shareholder's Affiliates'
control, pertaining to the Company or any of the Company's Affiliates.
b) EXCEPTIONS. Notwithstanding the foregoing, this provision
does not apply to the extent, and only to the extent, that such information
is clearly obtainable in the public domain through no fault of Shareholder or
Shareholder's Affiliates.
SECTION 3. - NON-WAIVER
The failure of either party at any time or from time to time to require
performance of any of the other party's obligations under this Agreement will
in no matter affect such party's rights to enforce any provision of this
Agreement at a subsequent time, and the waiver by either party of any right
arising out of any breach will not be construed as a waiver of any right
arising out of any subsequent breach.
SECTION 4. - NOTICES
All notices and other communications hereunder will be in writing and
will be either personally delivered or mailed by certified mail, return
receipt requested, addressed as follows:
To Employee: Xxxx Xxxxxxxxxxxxx
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xx. Xxxxxx X. Xxxxx, Esq.
Xxxxx & Kraft
0xx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
To the Company: Teleco Acquisition Corp.
0000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxx 00000
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With a copy to: Xxxxxx X. Xxxxxxx, Esquire
Xxxxxxx & Xxxxxxxxx Co., L.P.A.
000 Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxx 00000
Either party may designate a different address pursuant to all written notices
to each other party complying as to delivery with the terms of this Section.
All such notices and other communications will be effective when deposited in
the mail or upon personal delivery, addressed as aforesaid.
SECTION 5. - MISCELLANEOUS
a) AMENDMENTS. This Agreement may be amended from time to time as
the parties desire, so long as such amendments are in writing and executed by
the parties hereto.
b) ASSIGNMENT. This Agreement is personal services to Shareholder
and may not be assigned or transferred by Shareholder to, or the obligations of
Shareholder fulfilled by, any other person or entity. Similarly, this Agreement
and the rights and obligations thereunder may not be assigned by the Company to
any other person or entity, except to any and all successors in interest to the
Company or the Company's Affiliates (whether by way of sale, exchange,
disposition, merger, consolidation, reorganization or otherwise).
c) ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto regarding the subject matter hereof and supersedes
all prior and contemporaneous agreements, understandings, negotiations, and
discussions, whether oral or written, respecting the within subject matter.
d) GOVERNING LAW. This Agreement will be governed by, and construed
in accordance with, the laws of the State of Ohio. Non-exclusive venue and
jurisdiction for any action arising hereunder will be in the Courts of Common
Pleas of Cuyahoga County, Ohio or in federal courts situated in the Northern
District of Ohio (Eastern Division), in addition to any other courts having
venue and jurisdiction. Each party irrevocably consents to the personal and
subject matter jurisdiction of said courts.
e) BINDING EFFECT. This Agreement will be binding upon and inure to
the benefit of the Company, its successors and assigns, and Seller, and Seller's
heirs, representatives and permitted assigns. The terms of this Agreement, as
they relate to the Company's Affiliates, will also inure to the benefit of the
Company's Affiliates, their successors and assigns.
f) RECITALS. The recitals hereto are an integral part of this
Agreement and are incorporated herein by reference.
g) COSTS AND EXPENSES. Each party will bear such party's own costs
and expenses in connection with the negotiation and preparation of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
"SHAREHOLDER"
/s/ Xxxx Xxxxxxxxxxxxx
-----------------------------------
Xxxx Xxxxxxxxxxxxx
"COMPANY"
TELECO ACQUISITION CORP.
AN OHIO CORPORATION
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, Chairman
"PARENT"/"TELECOMM"
TELECOMM INDUSTRIES CORP.
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, Chairman
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