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EXHIBIT 10.117
AMENDMENTS TO NON-COMPETITION AGREEMENTS
OF
XXXXX XXXXXXX AND XXXX XXXXXXX
In consideration for the promises and covenants of MIDCOM
Communications Inc. and Xxxxx Xxxxxxx and Xxxx Xxxxxxx made herein in connection
with that certain Release and Settlement Agreement of even date ("Settlement")
and for other good and valuable consideration, the Non-Competition Agreements of
Xxxxx Xxxxxxx and Xxxx Xxxxxxx are modified pursuant to A and B respectively as
follows:
A. Xxxxx Xxxxxxx
Section 2 Term is amended to read in its entirety as follows:
"The term of this Agreement shall continue through December 29, 1999."
B. Xxxx Xxxxxxx
Section 1 Consideration is amended by the addition of the following:
"The payments of $10,000 per month payable to Xxxxxxx for the months of
December 1996 through December 1997 shall be paid in a lump sum
pursuant to the terms and conditions of Section 4 of the Employment
Agreement dated December 29, 1995 between Xxxxxxx and MIDCOM and as a
part of the severance payment defined in Section 2 (a) of the
Settlement."
Section 2 Term is amended to read in its entirety as follows:
"The term of this Agreement shall continue through December 29, 1999."
Subsection 3.3 (a) and (b) Restrictive Covenants are modified to read
in their entirety as follows:
"(a) induce or attempt to induce any current employees of the ADNET
DIVISION of MIDCOM to leave its employ but this restriction will not
prohibit hiring or entering into business relationships with Xxxxx
Xxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxx, or any other persons who have left
the employ of the AdNet Division of MIDCOM on their own initiative and
without any inducement on the part of Xxxx Xxxxxxx."
"(b) except in the regular course of any representation of MIDCOM as a
consultant, directly or indirectly sell or market any long distance
telecommunications services to any MIDCOM subscriber (or prospective
customers whose identity was obtained by Xxxxxxx through his employment
or consulting relationship with MIDCOM or in an unauthorized manner)
except that sales by other persons in any organization with which
Xxxxxxx is affiliated to MIDCOM subscribers shall not violate this
provision if Xxxxxxx does not provide any direct or indirect assistance
in such sales."
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New Subsection 4.3 is added as follows:
"4.3 Arbitration. Except as to the remedies provided for in Section
4.2, injunctive relief, the parties agree that any dispute, difference or
disagreement in respect of this Non-Competition Agreement and the meaning and
construction hereof shall fully and finally be resolved by binding arbitration
conducted in accordance with the rules of the American Arbitration Association
before a single arbiter agreed upon by the parties. If a single arbiter cannot
be agreed upon within a reasonable time an arbitrator shall be selected in
accordance with the rules of the American Arbitration Association. Any judgment
upon any arbitration award may be entered in any court having jurisdiction
thereof. Venue for any arbitration matters shall be in Portland, Oregon.
New Section 13 is added as follows:
"13. Rights of First Refusal"
13.1 MIDCOM's Rights of First Refusal. If Xxxxx Xxxxxxx or any
entity or venture which he holds a majority equity or partnership interest of
50% ("the Xxxxxxx Group") shall at any time prior to the first Release Event (as
defined in the Settlement) receive offers or series of offers from any
unaffiliated InterExchange Carrier or other providers of telecommunication
services ("Other Providers") giving the Xxxxxxx Group opportunities to serve as
an independent distributor or certified reseller of long-distance
telecommunications services consisting of i) one plus, ii) 800, iii) calling
card or iv) frame relay services (individually "Covered Service" or jointly
"Covered Services") , the Xxxxxxx Group shall use its best efforts to obtain
bona fide, written offers from such Other Providers and shall subject to
applicable legal or contractual restrictions submit exact copies of such offers
(which may have redacted confidential portions not required to enable MIDCOM to
assess rates and essential terms) to MIDCOM or, if the Xxxxxxx Group is legally
or contractually prohibited from providing an exact copy of such an offer, the
Xxxxxxx Group shall provide to MIDCOM a summary of the terms set forth in such
offer in as much detail as is permissible under applicable laws and contractual
restrictions which are sufficient to MIDCOM for it to make a knowledgeable
decision of its Rights of First Refusal. MIDCOM shall have the right,
exercisable by written notice delivered to the Xxxxxxx Group within ten (10)
days from the date of delivery of each offer for a Covered Service to MIDCOM, to
meet the rates or commissions and the essential terms and conditions contained
in such offer (including without limitation price, payment terms, product mix,
geographic coverage, billing data and delivery accuracy, order provision
accuracy and timeliness, contract period, and commitment level, if any for all
Covered Services included in such offer for the same term specified therein
provided, however, that any service agreement between the parties will include a
right of either party to terminate such agreement in the event the other party
has materially breached its obligations thereunder and has failed to cure such
breach within fifteen (15) days after notice (or such shorter period as may be
provided in the applicable Other Provider offer).
13.2 Terms of Service Agreements. In connection with each
service agreement between MIDCOM and the Xxxxxxx Group entered into pursuant to
this Section 13, (each a "Service Agreement") MIDCOM shall be required to [*]
*CONFIDENTIAL TREATMENT REQUESTED.
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In case MIDCOM breaches any of its obligations under this Section 13, MIDCOM's
Rights of First Refusal with respect to any other offer made by Other Providers
for any Covered Service shall terminate. If MIDCOM does not exercise its Right
of First Refusal with respect to any offer or if MIDCOM cannot or is not willing
to meet the essential terms and conditions contained in any offer, the Xxxxxxx
Group may after the waiting period provided for herein accept the offer of such
Other Providers pursuant to and on the terms of such offer, provided that if any
Other Provider's offer is not accepted within one hundred twenty (120) days
after delivery of such offer to MIDCOM, or there is a material change in the
terms of the transaction such that the transaction becomes more beneficial to
the Other Provider, MIDCOM shall again have continued Rights of First Refusal
provided in this Section 13. Notwithstanding anything herein to the contrary,
MIDCOM's right to perform services hereunder shall not apply if MIDCOM is not
able or not willing to provide all services offered by the Other Provider or if
any material term or condition of MIDCOM's services is less advantageous to the
Xxxxxxx Group than the comparable term or condition of the Other Provider's
offer. Except as specifically set forth herein, the grounds for termination
between the Xxxxxxx Group and MIDCOM shall in all material respects be the same
as those set forth in the agreements upon which the Rights of First Refusal are
predicated.[*]
13.3 Period of Agreement. In the event the period of any
Service Agreement between MIDCOM and the Xxxxxxx Group expires before the first
Release Event, Rights of First Refusal shall apply to all other offers for any
Covered Service from Other Providers received by the Xxxxxxx Group prior to the
first Release Event, which shall be provided to MIDCOM in accordance with the
terms of Subsection 13.1. Notwithstanding anything herein to the contrary,
MIDCOM's rights under this Section 13 shall terminate immediately upon (1) the
date that Xxxx Xxxxxxx owns less than three quarters of one percent (3/4%) of
MIDCOM's outstanding
*CONFIDENTIAL TREATMENT REQUESTED.
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common stock and the Wiegands have disposed of more than seventy percent (70%)
of their combined current interests in MIDCOM common stock or options to acquire
such stock or, (2) MIDCOM files a plan of reorganization or a plan of
liquidation under Chapter 11 or Chapter 7 of the federal Bankruptcy Code or
voluntary or involuntary dissolution or liquidation proceedings are commenced by
or against the Company or the Company makes a general assignment for the benefit
of creditors of institutes or consents to a proceeding for appointment of a
receiver or custodian or similar officer.
13.4 Failure to Submit. A failure of the Xxxxxxx Group to
submit offers to MIDCOM pursuant to Section 13 and the Xxxxxxx Group's execution
of a definitive agreement with the Other Provider contrary to MIDCOM rights
under this Section 13 shall be deemed to constitute a breach of this
Non-Competition Agreement by Xxxx Xxxxxxx entitling MIDCOM to the remedies set
forth in Section 4, but no breach by Xxxx Xxxxxxx of his obligations hereunder
shall entitle MIDCOM to refuse to perform its obligations to Xxxx Xxxxxxx under
the Stock Option Agreement between MIDCOM and Xxxx Xxxxxxx dated November 25,
1996, which obligations are independent of this Agreement and shall remain in
effect notwithstanding any dispute between the parties hereunder.
13.5 Restrictions on the Parties. Neither party shall at any
time during the term of this Agreement or for six months thereafter use
confidential information such as a Customer List to market or provide any
services to the other party's customers.
Except as specifically amended herein, all the remaining terms and
conditions of each of the Non-Competition Agreements of Xxxxx Xxxxxxx and Xxxx
Xxxxxxx of December 29, 1995 respectively shall remain in full force and effect.
DATED this 27 day of December, 1996.
MIDCOM COMMUNICATIONS INC.
By: /s/ XXXX X. XXXXX
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Xxxx X. Xxxxx
Its: Vice President and General Counsel
/s/ XXXX XXXXXXX
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Xxxx Xxxxxxx
/s/ XXXXX XXXXXXX
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Xxxxx Xxxxxxx
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