1
Exhibit 10.11
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
THIS CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (the "Agreement"),
made effective as of May 12, 1997, by and between Integrated Site Development,
Inc., a Delaware corporation (the "Corporation"), and Xxxxxxx X. Xxxxx
("Xxxxx"), an individual residing in Wake County, North Carolina.
W I T N E S S E T H:
WHEREAS, the Corporation is engaged in all aspects of wireless
communications site acquisition, tower development and ownership, site
management, co-location marketing, project management, and site maintenance;
WHEREAS, as a part of said employment by the Corporation, Xxxxx is
expected to make new contributions and inventions of value to the Corporation
and Xxxxx will otherwise have access to confidential and proprietary
information of the Corporation;
WHEREAS, the Corporation desires to receive from Xxxxx a covenant not
to disclose certain information relating to the Corporation's business and
certain other covenants;
WHEREAS, the obligations of Whitney Equity Partners, L.P., a Delaware
limited partnership, and Kitty Hawk Capital Limited Partnership, III, a
Delaware limited partnership, pursuant to the Stock Purchase Agreement, of even
date herewith, by and among the Purchasers, the Corporation, U.S. Towers, Inc.,
a Delaware corporation, Telesite Services, LLC, an Arkansas limited liability
company, and Metrosite Management LLC, an Arkansas limited liability company,
are conditioned upon and subject to the Corporation's and Xxxxx'x entering into
this Agreement; and
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration,
including the employment of Xxxxx by the Corporation, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. CONFIDENTIALITY. Xxxxx acknowledges that, in and as a result of
his employment by the Corporation, he has been and will be making use of,
acquiring and/or adding to confidential information of a special and unique
nature and value, including, without limitation, the Corporation's trade
secrets, products, systems, programs, procedures, manuals, guides (as
periodically updated or supplemented), confidential reports and communications
(including, without limitation, customer information, technical information on
the performance and reliability of the Corporation's products and the
development or acquisition of future products or product enhancements by the
Corporation) and lists of customers, as well as the nature and type of the
services rendered by the Corporation and the fees paid by the Corporation's
customers. Xxxxx further acknowledges that any information and materials
received by the Corporation or Xxxxx from third parties in confidence (or
subject to non-disclosure covenants) shall be deemed to be and shall be
confidential information within the
2
meaning of this Section 1. As a material inducement to the Corporation to
continue to employ Xxxxx, Xxxxx covenants and agrees that he shall not, except
with the prior written consent of the Board of Directors of the Corporation, at
any time during or following the termination of his employment with the
Corporation, directly or indirectly, divulge, use, reveal, report, publish,
transfer or disclose, for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to him as a result of his
employment with the Corporation, including, without limitation, any Proprietary
Information, as defined in Section 2 hereof. The aforementioned obligation of
confidentiality and non-disclosure shall not apply when:
(i) Public Domain. The Proprietary Information disclosed
to Xxxxx was in the public domain at the time of disclosure, or at any
time after disclosure has become a part of the public domain by
publication or otherwise through sources other than Xxxxx, directly or
indirectly, and without fault on the part of Xxxxx in failing to keep
such information confidential; or
(ii) Requirement of Law or Order. Disclosure is required
by law or court order, provided Xxxxx gives the Corporation prior
written notice of any such disclosure and fully cooperates with the
Corporation in connection with, and uses his best efforts to limit the
nature and extent of, such disclosure; or
(iii) Agreement. Disclosure is made with the prior written
agreement of the Board of Directors of the Corporation; or
(iv) Prior Information. The information was in Xxxxx'x
possession prior to the Effective Date, as shown by written records in
existence prior to the Effective Date; or
(v) Third Party Disclosure. The Proprietary Information
is lawfully disclosed to Xxxxx after the termination of his employment
by a third party who is under no obligation of confidentiality to the
Corporation with respect to such information; or
(vi) Independently Developed. Such information is
independently developed by Xxxxx subsequent to the termination of his
employment with the Corporation, as demonstrated by written records of
Xxxxx which are contemporarily maintained.
2. COVENANT NOT TO COMPETE. It is recognized and understood by
the parties hereto that Xxxxx, through his association with the Corporation as
an employee, has and shall acquire a considerable amount of knowledge and
goodwill with respect to the business of the Corporation, which knowledge and
goodwill are extremely valuable to the Corporation and which would be extremely
detrimental to the Corporation if used by Xxxxx to compete with the
Corporation. It is, therefore, understood and agreed by the parties hereto
that, because of the nature of the business of the Corporation, it is necessary
to afford fair protection to the Corporation from such unfair competition by
Xxxxx. Consequently, as material inducement to employ Xxxxx in the
aforementioned position, Xxxxx covenants and agrees to the following:
(i) that at any time while engaged as an employee of the
Corporation and for a period of three (3) years following his
termination, he will not, directly or indirectly, with or through any
family member or former director, officer or employee of the
2
3
Corporation, or acting alone or as a director, employee, agent,
consultant, member of a partnership, firm, corporation or other entity
or as a holder of or investor in as much as 5% of any security of any
class of any corporation or other business entity:
(1) engage anywhere in those states in which the
Corporation conducted business at any time within three (3)
years prior to the termination of Xxxxx'x employment with the
Corporation (the "Noncompetition Area") in any business
related to wireless communications site acquisition, tower
development and ownership, site management, co-location
marketing, project management, and site maintenance then being
actively pursued or reasonably anticipated to be pursued by
the Corporation at the time of such termination; or
(2) interfere with, or seek to interfere with, the
relationship between the Corporation and any affiliate of the
Corporation with the following: (a) any of the employees of
such entities; (b) any of the customers of such entities then
existing or existing at any time within two (2) years prior to
termination of Xxxxx'x employment with the Corporation; or (c)
any of the suppliers of such entities then existing or
existing at any time within three (3) years prior to
termination of Xxxxx'x employment with the Corporation.
(ii) The parties hereto agree that in the event that the
Noncompetition Area set forth in paragraph (i) is deemed too
restrictive to be enforceable in any court proceeding, the court may
reduce the Noncompetition Area as follows:
(1) In the event that the Noncompetition
Area set forth in paragraph (i) is deemed too restrictive to
be enforceable in any court proceeding, the Noncompetition
Area shall be those counties in those states in which the
Corporation conducted business at any time within three (3)
years prior to the termination of Xxxxx'x employment with the
Corporation;
(2) In the event that the foregoing
Noncompetition Area is deemed too restrictive to be
enforceable in any court proceeding, the Noncompetition Area
shall be a radius of twenty-five (25) miles of any wireless
communication tower or system designed or constructed by the
Corporation or with respect to which the Corporation provided
site acquisition or project management services or site
maintenance services at any time within three (3) years prior
to the termination of Xxxxx'x employment with the Corporation;
or
(3) In the event that the foregoing
Noncompetition Area is deemed too restrictive to be
enforceable in any court proceeding, the Noncompetition Area
shall be a radius of ten (10) miles of any wireless
communication tower or system designed or constructed by the
Corporation or with respect to which the Corporation provided
site acquisition or project management services or site
maintenance services at any time within three (3) years prior
to the termination of Xxxxx'x employment with the Corporation;
or
3
4
(iii) The parties hereto agree that in the event that the
lengths of time and geographic areas set forth in paragraphs (i) or
(ii) are deemed too restrictive to be enforceable in any court
proceeding, the court may reduce such time restrictions to that which
it deems reasonable under the circumstances.
3. DEFINITION OF PROPRIETARY INFORMATION. For purposes of this
Agreement, the term "Proprietary Information" shall mean all of the following
materials and information (whether or not reduced to writing and whether or not
patentable or protectable by copyright) which Xxxxx receives, receives access
to, conceives of or develops, in whole or in part, as a direct or indirect
result of his employment with the Corporation, in the course of his employment
with the Corporation (in any capacity, whether executive, managerial, planning,
technical, sales, research, development, manufacturing, engineering, or
otherwise) or through the use of any of the Corporation's facilities or
resources:
(i) Manufactured products, assembled or unassembled, and
related goods or systems thereof and any and all future products
developed or derived therefrom;
(ii) With respect to the items described in Section 3(a)
above, all specifications, design concepts, documents and manuals; all
security systems relating to the product or procedures; all hardware
and software (and associated source and object codes) relating to
their design or manufacture, if any;
(iii) Trade secrets, production processes, marketing
techniques, software programs, marketing plans, formulae, data,
mailing lists, purchasing information, price lists, pricing policies,
quoting procedures, financial information, customer and prospect names
and requirements, customer data, customer site information, pricing
strategies and other materials or information relating to the manner
in which the Corporation does business;
(iv) Discoveries, concepts and ideas, whether or not
patentable or protectable by copyright, including, without limitation,
the nature and results of research and development activities,
technical information on product or program performance and
reliability, processes, formulas, techniques, "know-how", source
codes, object codes, designs, drawings and specifications;
(v) Any other materials or information related to the
business or activities of the Corporation which are not generally
known to others engaged in similar businesses or activities;
(vi) Any other materials or information that has been
created, discovered or developed, or otherwise become known to the
Corporation which has commercial value in the business in which the
Corporation is engaged; and
(vii) All ideas which are derived from or relate to Xxxxx'x
access to or knowledge of any of the above-enumerated materials and
information.
4
5
Failure to xxxx any of the Proprietary Information as confidential
shall not affect its status as Proprietary Information under the terms of this
Agreement.
4. OWNERSHIP OF INFORMATION.
(a) Xxxxx hereby assigns to the Corporation all of
Xxxxx'x right, title and interest in any idea (whether or not patentable or
protectable by copyright), invention, product, design, formula, computer
software program or other computer-related equipment or technology, conceived
or developed in whole or in part, or in which Xxxxx may have aided development,
while employed by the Corporation, including, without limitation, any
Proprietary Information (an "Invention"). If any one or more of the
aforementioned are deemed in any way to fall within the definition of "work
made by hire" as such term is defined in 17 U.S.C. Section 101, such work shall
be considered "work made for hire," copyright of which shall be owned solely
by, or assigned or transferred completely and exclusively to the Corporation.
Xxxxx agrees to execute any instruments and to do all other things reasonably
requested by the Corporation (both during and after Xxxxx'x employment with the
Corporation) in order to more fully vest in the Corporation all ownership
rights in those items thereby transferred by Xxxxx to the Corporation. Xxxxx
further agrees to disclose immediately to the Corporation all Proprietary
Information conceived of or developed in whole or in part by him during the
term of his employment with the Corporation and to assign to the Corporation
any right, title or interest he may have in such Proprietary Information.
(b) Notwithstanding anything in this Agreement to the
contrary, the obligation of Xxxxx to assign or offer to assign his rights in an
Invention to the Corporation shall not extend or apply to an Invention that
Xxxxx developed entirely on his own time without using the Corporation's
equipment, supplies, facility or trade secret information unless such Invention
(i) relates to the Corporation's business or actual or demonstrably anticipated
research or development, or (ii) results from any work performed by Xxxxx for
the Corporation. Xxxxx shall bear the burden of proof in establishing that his
Invention qualifies for exclusion under this Section 9(b). With respect to
Section 9(b) it is agreed and acknowledged that during Xxxxx'x employment, the
Corporation, with the concurrence of its Board of Directors and consistent with
the Corporation's mission, may enter other lines of business, which are related
or unrelated to its current lines of business, in which case this Agreement
would be expanded to cover such new lines of business.
5. REASONABLENESS OF RESTRICTIONS.
(a) Xxxxx has carefully read and considered the
provisions of Sections 1 and 2 hereof and, having done so, agrees that the
restrictions set forth therein are fair and reasonable and are reasonably
required for the protection of the interests of the Corporation, its officers,
directors, stockholders and employees. Xxxxx further acknowledges that the
nature of the Corporation's products are such that its natural market is
throughout the United States. Accordingly, Xxxxx agrees that the length of
time, geographic area and any other restrictions contained in this Agreement
are reasonable to protect the legitimate interests of the Corporation and do
not unfairly restrict or penalize Xxxxx.
5
6
(b) In the event that, notwithstanding the foregoing, any
part of the covenants set forth in Sections 1 and 2 hereof shall be held to be
invalid and unenforceable, the court so deciding may reduce or limit the terms
of such provision to allow such provision to be enforced.
6. REMEDY. Xxxxx understands and agrees that the Corporation
will suffer irreparable harm in the event that Xxxxx breaches any of his
obligations under this Agreement and that monetary damages will be inadequate
to compensate the Corporation for such breach. Accordingly, Xxxxx agrees that,
in the event of a breach or threatened breach by Xxxxx of any of the provisions
of this Agreement, the Corporation, in addition to and not in limitation of any
other rights, remedies or damages available to the Corporation at law or in
equity, shall be entitled to a permanent injunction in order to prevent or to
restrain any such breach by Xxxxx, or by Xxxxx'x partners, agents,
representatives, servants, employers, employees and/or any and all persons
directly or indirectly acting for or with him; provided such injunction shall
not affect Xxxxx'x ownership rights in the Corporation or compensation earned
or due Xxxxx.
7. ATTORNEYS' FEES. In the event that it shall become necessary
for either party to retain the services of an attorney to enforce any terms
under this Agreement, the prevailing party, in addition to all other rights and
remedies hereunder or as provided by law, shall be entitled to reasonable
attorneys' fees and costs of suit.
8. RECOUPMENT OF PROFITS. Xxxxx covenants and agrees that, if he
shall violate any of his covenants or agreements under this Agreement, the
Corporation shall be entitled to an accounting and repayment of all profits,
compensation, commissions, remunerations or benefits which Xxxxx directly or
indirectly has realized and/or may realize as a result of, growing out of or in
connection with any such violation; such remedy shall be in addition to and not
in limitation of any other remedy, including without limitation, damages for
lost profits of the Corporation or any affiliates of the Corporation,
injunctive relief or other rights or remedies to which the Corporation is or
may be entitled at law, in equity or under this Agreement.
9. SEVERABILITY. The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any provision (or
part thereof) of this Agreement shall in no way affect the validity or
enforceability of any other provision (or remaining part thereof).
10. GOVERNING LAW. This Agreement shall be governed by and
construed according to the laws of the State of North Carolina, without
reference to the choice of law provisions of such laws.
11. NOTICES. Any notice required to be given hereunder shall be
sufficient if in writing and sent by certified or registered mail, return
receipt requested, first-class postage prepaid, in the case of Xxxxx, to his
address as shown on the Corporation's records, and in the case of the
Corporation, to its principal office in the State of North Carolina.
12. BENEFIT. This Agreement shall be binding upon and shall inure
to the benefit of each of the parties hereto, and to their respective heirs,
representatives, successors and permitted assigns. This Agreement shall be
binding upon the Corporation and upon any successor
6
7
corporation. Xxxxx may not assign any of his rights or delegate any of his
duties under this Agreement without the prior written consent of the Board of
Directors of the Corporation.
13. ENTIRE AGREEMENT. This Agreement contains the entire
agreement and understandings by and between the Corporation and Xxxxx with
respect to the covenants herein described, and no representations, promises,
agreements or understandings, written or oral, not herein contained shall be of
any force or effect. No change or modification hereof shall be valid or
binding unless the same is in writing and signed by the parties hereto. No
waiver of any provision of this Agreement shall be valid unless the same is in
writing and signed by the party against whom such waiver is sought to be
enforced; moreover, no valid waiver of any other provision of this Agreement at
any time shall be deemed a waiver of any other provision of this Agreement at
such time nor will it be deemed a valid waiver of such provision at any other
time.
14. CAPTIONS. The captions in this Agreement are for convenience
only and in no way define, bind or describe the scope or intent of this
Agreement.
15. SURVIVAL OF COVENANTS. The provisions set forth in Sections 1
and 2 hereof shall survive the termination of this Agreement.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
7
8
IN WITNESS WHEREOF, the parties hereto have executed this
Confidentiality and Non-Competition Agreement and affixed their seals as of the
day and year first above written.
INTEGRATED SITE DEVELOPMENT, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Xxxxxx X. Xxxx, Secretary
/s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
8
