Exhibit 10.30
NON-COMPETITION, NON-SOLICITATION AND
NON-DISCLOSURE AGREEMENT
THIS NON-COMPETITION, NON-SOLICITATION AND NON-DISCLOSURE
AGREEMENT ("AGREEMENT"), dated January 20, 2000, by and between MJD
Communications, Inc., a Delaware corporation (the "COMPANY"), and Xxxxxx X.
Xxxxxxxxx (the "SELLING STOCKHOLDER").
RECITALS
A. Contemporaneously herewith, the Selling Stockholder is
selling certain outstanding shares of the Company's capital stock to Xxxxxx X.
Xxx Equity Fund IV, L.P. and certain of its related parties (collectively,
"THL") pursuant to a Stock Purchase Agreement, dated as of January 4, 2000, by
and among the Company, THL, Xxxxx Investment Associates V, L.P. ("KIA V") and
Xxxxx Equity Partners V, L.P. ("KEP V" and together with KIA V, "XXXXX"), the
Selling Stockholder and the other parties thereto (the "PURCHASE AGREEMENT").
B. The Selling Stockholder will receive significant
consideration as a result of THL's acquisition of his capital stock in the
Company.
C. The Selling Stockholder has had access to nonpublic,
confidential and proprietary information concerning the business and operations
of the Company and its subsidiaries, and the Selling Stockholder is capable of
utilizing such nonpublic, confidential and proprietary information to compete
with the Company and its subsidiaries and, as a result, could cause significant
harm to the Company and its subsidiaries.
D. THL and Xxxxx are making a significant investment in the
Company and its subsidiaries and such investment is contingent upon protecting
the entire goodwill and going business value inherent in the value of the shares
which they are acquiring from the significant harm that could be caused to the
Company and its subsidiaries by such competition from the Selling Stockholder
using such nonpublic, confidential and proprietary information.
E. The Company and the Selling Stockholder are entering into
this Agreement for the purpose of preserving the proprietary rights, going
business value and entire goodwill of the Company and its subsidiaries by
ensuring that the Selling Stockholder does not use any of such nonpublic,
confidential and proprietary information to directly or indirectly compete with
the Company and its subsidiaries for the period hereinafter set forth, and
acknowledge that execution of this Agreement is necessary to enable THL and
Xxxxx to capture all of the goodwill and going business value presently inherent
in the Company's capital stock.
F. In order to preserve the entire goodwill and going business
value of the Company, this Agreement must protect the Company from such
competition in all jurisdictions in which the Company currently does business or
plans to do business, which are those cities with populations of less than
250,000 in the states of Alabama, Colorado, Connecticut, Florida, Georgia,
Illinois, Kansas, Maine, Maryland, Massachusetts, Mississippi, New Hampshire,
New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota,
Texas, Vermont, Virginia, Washington and West Virginia.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Selling Stockholder hereby covenant and
agree as follows:
1. DEFINITIONS. In addition to the other terms defined
elsewhere in this Agreement, unless the context shall expressly or by necessary
implication indicate to the contrary, the following terms, as used herein, shall
have the following meanings:
"LINES OF BUSINESS" means the ownership, management
or operation of telephone companies or other access providers, including, but
not limited to, any production, marketing, promotion or sales related thereto.
"PERSON" means any individual, partnership, firm,
corporation, limited liability company, association, trust, unincorporated
organization or other entity.
"RESTRICTED PERIOD" means the period commencing on
the date hereof and ending five years after the date hereof.
"RESTRICTED TERRITORIES" means those cities with
populations of less than 250,000 in the states of Alabama, Colorado,
Connecticut, Florida, Georgia, Illinois, Kansas, Maine, Maryland, Massachusetts,
Mississippi, New Hampshire, New York, Ohio, Oklahoma, Oregon, Pennsylvania,
Rhode Island, South Dakota, Texas, Vermont, Virginia, Washington and West
Virginia.
2. NON-COMPETITION. During the Restricted Period, the Selling
Stockholder and its affiliates shall not, directly or indirectly, either
individually or acting in concert or as an advisor, representative, agent,
employee, partner, shareholder, investor, lender, lessor, director, consultant
or in any other capacity on behalf of any other Person, participate or engage
in, or assist others in participating or engaging in, the Lines of Business in
the Restricted Territories; PROVIDED, HOWEVER, nothing herein shall prohibit the
Selling Stockholder from (i) holding shares in a corporation engaging in the
Lines of Business in the Restricted Territories so long as such shares, in the
aggregate, represent less than 50% of the issued and outstanding capital stock
of such corporation and the Selling Stockholder is not an officer or director of
such corporation or (ii) having any role
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(whether ownership, employment, or otherwise) in a corporation that generates
less than 15% of its total revenue in the Lines of Business in the Restricted
Territories.
3. NON-SOLICITATION. During the Restricted Period, the Selling
Stockholder and its affiliates shall not directly or indirectly, either
individually or acting in concert or as an advisor, representative, agent,
employee, partner, shareholder, investor, lender, director, consultant or in any
other capacity on behalf of any other Person, (i) with respect to the Lines of
Business, request, induce or attempt to influence any distributor or supplier of
goods or services to the Company or any of its subsidiaries to curtail, cancel
or refrain from increasing the amount or type of business such distributor or
supplier of goods or services is currently transacting, or transacts during the
Restricted Period, with the Company or its subsidiaries; (ii) solicit any
customer of the Company or any of its subsidiaries with whom the Company or any
of its subsidiaries has had any dealings for the purpose of soliciting business
to sell or otherwise provide to such customer or any other customer of the
Company or any of its subsidiaries any product or service included in the Lines
of Business, and in furtherance thereof, the Selling Stockholder, individually
or as an advisor, representative, agent, employee, partner, shareholder,
investor, lender, director, consultant or in any other capacity on behalf of any
other Person, shall not attempt in any manner to solicit and/or otherwise
persuade or induce any such customer of the Company or any of its subsidiaries
to cease to do business, reduce the amount of business which any such customer
has customarily done or contemplated doing or refrain from increasing the amount
of business with the Company and its subsidiaries ; (iii) except for
advertisements in generally available publications, solicit for employment any
individual who is an employee, agent or representative of the Company or any of
its subsidiaries as of the date hereof or any time during the Restricted Period;
or (iv) except for advertisements in generally available publications, influence
or attempt to influence any employee of the Company or any of its subsidiaries
to terminate his or her employment.
4. NON-DISCLOSURE OF CONFIDENTIAL OR PROPRIETARY INFORMATION.
The Selling Stockholder acknowledges that, as a result of his association with
the Company including, without limitation, the ownership of shares of capital
stock of the Company, and his employment by the Company, the Selling Stockholder
has acquired confidential or proprietary information of special value to the
Company and its subsidiaries, and the Selling Stockholder covenants and agrees
that the Selling Stockholder and its affiliates shall not during the Restricted
Period directly or indirectly disclose any confidential or proprietary
information of the Company or any of its subsidiaries to any Person, except with
the prior written permission of the Company. For purposes of this Section 4, the
term "CONFIDENTIAL OR PROPRIETARY INFORMATION" means any and all information
which relates to matters such as, but not necessarily limited to, trade secrets,
research and development activities, books and records, customer lists,
suppliers, distribution channels, pricing information and private processes as
they may exist from time to time which the Selling Stockholder has obtained or
had disclosed to it as a result of its past association with the Company and its
subsidiaries. This Section 4 shall not be violated by disclosure of information
which (i) at the time of disclosure is publicly available through no act or
omission by the Selling Stockholder or any of its affiliates or (ii) is
disclosed pursuant to a court order or as otherwise required by law, on
condition that notice of the requirement for such disclosure is given to the
Company prior to the Selling Stockholder
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making or permitting any such disclosure and that the Selling Stockholder shall
cooperate in such manner as the Company may reasonably request in resisting such
disclosure.
5. REMEDIES. The Selling Stockholder acknowledges and agrees
that any breach of this Agreement will cause irreparable harm to the Company
and/or its subsidiaries and cannot be remedied solely by the recovery of
damages. Therefore, in the event of a breach by the Selling Stockholder or any
of its affiliates of this Agreement, the Company shall, in addition to any other
remedies it may have at law or in equity (including without limitation damages
or action for accounting or restitution) be entitled to an injunction and/or
restraining order from any court of competent jurisdiction. The election of any
remedy, at law or in equity, by the Company shall not be to the exclusion of any
other remedy then available to the Company and any and all such remedies shall
be cumulative.
6. JUDICIAL AMENDMENTS; SEVERABILITY. The parties agree and
intend that the covenants contained in this Agreement shall be construed as a
series of separate covenants, one for each applicable state or county. Except
for geographic coverage, each such separate covenant shall be deemed identical
in terms. It is expressly understood and agreed that, although the Company and
the Selling Stockholder consider the restrictions contained in this Agreement to
be reasonable for the purpose of preserving for the benefit of the Company and
its subsidiaries the proprietary rights, going business value and goodwill of
the Company and its subsidiaries, if a court of competent jurisdiction holds or
deems that any of the separate covenants contained in this Agreement is
unenforceable against the Selling Stockholder or any of its affiliates in
respect of a specific geographic area, then such unenforceable covenant shall be
deemed eliminated from this Agreement for the purpose of such proceedings to the
extent necessary to permit the remaining separate covenants to be enforced, and
such holding or determination shall not affect the enforceability of any of the
other separate covenants contained herein. If the court referred to above holds
or determines that any covenant or restriction contained in this Agreement is
unenforceable for any other reason, then the provisions of such covenant shall
not be rendered void but shall be deemed reduced or otherwise amended to the
extent such court may judicially determine or indicate to be reasonable and so
as to provide the Company and its subsidiaries, to the fullest extent permitted
by applicable law, the benefits intended by this Agreement.
7. ASSIGNMENT. The rights and obligations of the Company and
its subsidiaries hereunder shall inure to the benefit of, and be binding upon,
their successors and assigns. The Selling Stockholder may not delegate or assign
his obligations hereunder.
8. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when (i) delivered by
hand, (ii) transmitted by prepaid telex or telecopier, provided that a copy is
sent at about the same time by registered mail, return receipt requested, or
(iii) received by the addressee, if sent by Express Mail, Federal Express, or
other express delivery service to the addressee at the following addresses or
telecopier numbers (or to such other address or telecopier number as a party may
specify by notice given to the other party pursuant to this provision):
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If to the Selling Stockholder, to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
If to the Company, to:
MJD Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
with copies to:
Xxxxxx X. Xxx Partners, L.P.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. XxXxxx
Xxxx X. Xxxxxx
and
Xxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, XX, Esq.
9. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument, but
all of which taken together shall constitute one agreement.
10. NO WAIVER. The failure of the Company to insist, in any
one or more instances, upon the strict performance of the terms and conditions
of this Agreement shall not be construed as a waiver or relinquishment of any
right hereunder nor of the future performance of any such terms and conditions.
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11. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without giving
effect to any choice or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
12. IMPORTANCE OF THIS AGREEMENT. It is understood by and
between the Company and the Selling Stockholder that the provisions of this
Agreement are an essential element and material inducement of THL's and Xxxxx'x
agreement to purchase shares of capital stock of the Company and the Company's
redemption of shares of capital stock from the Selling Stockholder, and that,
but for this Agreement, the Company would not have entered into the Redemption
Agreement or consummated the transactions contemplated thereby or by the
Purchase Agreement and Xxxxx and THL would not have entered into the Purchase
Agreement. The Company and the Selling Stockholder acknowledge that the Line of
Business and Restricted Territory accurately depict the scope of the Company's
and its subsidiaries' business and that the Line of Business, Restricted
Territory and Restricted Period contained herein are reasonable, and the Selling
Stockholder represents and warrants that he will suffer no hardship as a result
of the specific enforcement of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this
Non-Competition, Non-Solicitation and Non-Disclosure Agreement as of the day and
year first written above.
MJD COMMUNICATIONS, INC.
By: /s/ XXXXXX X. XXXXX, XX.
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Its: SVP & CFO
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/s/ XXXXXX X. XXXXXXXXX
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XXXXXX X. XXXXXXXXX
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