Exhibit 10.29
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 XXX
Communications Associates, Inc., a Delaware corporation (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 its 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 its association with the
Company including, without limitation, the ownership of shares of capital stock
of the Company, and its performance of services as a consultant of 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
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Selling Stockholder 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 its
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 it 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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XXX COMMUNICATIONS ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its:
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