NON-COMPETITION AGREEMENT Among HARRIS CORPORATION, STRATEX NETWORKS, INC. and HARRIS STRATEX NETWORKS, INC.
EXHIBIT 10.2
Among
XXXXXX CORPORATION,
STRATEX NETWORKS, INC.
and
XXXXXX STRATEX NETWORKS, INC.
Dated: January 26, 2007
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NON-COMPETITION AGREEMENT, dated as of January 26, 2007
(this “Agreement”), among XXXXXX
CORPORATION, a Delaware corporation (“Xxxxxx”),
STRATEX NETWORKS, INC., a Delaware corporation
(“Stratex”), and XXXXXX STRATEX NETWORKS, INC.,
a Delaware corporation (the “Company”).
WHEREAS, Xxxxxx, Stratex, the Company and Stratex Merger Corp., a
Delaware corporation and wholly owned subsidiary of the Company have entered into an Amended and Restated Formation,
Contribution and Merger Agreement, dated as of December 18,
2006, as amended by that certain letter agreement, dated
January 26, 2007 (the “Formation Agreement”),
among the parties thereto pursuant to
which the Company was formed to acquire Stratex pursuant to the
Merger and to receive the Contributed Assets from Harris in the
Contribution Transaction, in each case on the terms and subject
to the conditions set forth in the Formation Agreement;
WHEREAS, because of the importance of preserving the value of
the business being contributed by Harris as a going concern,
Stratex was not willing to enter into the Formation Agreement
without the undertakings of Harris contained in this
Agreement; and
WHEREAS, the execution and delivery of this Agreement is a
condition to closing under the Formation Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants in the Agreements, the parties agree as follows:
1. Definitions. The term “Restricted
Business” means the development, manufacture,
distribution and sale of any microwave radio systems and related
components, systems and services which are (i) competitive
with the products listed in Schedule 1 hereto, or
(ii) which are substantially similar to such products in
form, fit and function when used in terrestrial microwave
point-to-point
communications networks that provide access and trunking of
voice and data for telecommunications networks anywhere in the
world. In addition, all capitalized terms used but not defined
in this Agreement shall have the meanings assigned to them in
the Formation Agreement; provided, however, that
notwithstanding the foregoing neither the Company nor any of its
Subsidiaries shall be deemed to be a Subsidiary or Affiliate of
Xxxxxx or any of its other Subsidiaries or Affiliates for
purposes of this Agreement.
2. Non-Competition. In consideration for the
issuance to Harris of shares of the Company pursuant to the
Formation Agreement and the performance by Stratex of its
obligations under the Agreements (collectively, the
“Non-Compete Consideration”), Harris agrees
that, during the period commencing on the date of this Agreement
and ending on the fifth anniversary of the date hereof, Xxxxxx
will not, and will not permit any of its Subsidiaries to
(a) engage, directly or indirectly, in the Restricted
Business, (b) form any Person other than the Company and
its Subsidiaries (a “Covered Person”) or change
or extend the current business activities of any existing
Covered Person for the purpose of engaging, directly or
indirectly, in the Restricted Business or (c) invest,
directly or indirectly, in any Covered Person engaged, directly
or indirectly, in the Restricted Business in any material
respect; provided, however, that notwithstanding the
foregoing Xxxxxx and/or its Subsidiaries may
(i) collectively own less than 20% of the total equity
interests in any Covered Person engaged in the Restricted
Business as long as none of the employees of Xxxxxx or any of
its Subsidiaries is involved in the management of such Covered
Person, (ii) participate as a passive investor with no
management rights in any investment fund that holds an ownership
interests in Covered Persons engaged in the Restricted Business
which is managed by Persons that are not Affiliates of Xxxxxx
(each, an “Unaffiliated Person”) (x) with
any employee benefit or retirement plan funds and (y) with
any other funds subject, in the case of this
clause (y) only, to a maximum interest in such
investment fund of 15% and (iii) acquire a Covered Person
or business unit of a Covered Person engaged in the Restricted
Business if (x) the Restricted Business contributed less
than 20% of such Covered Person’s or business unit’s,
as applicable, total revenues (based on its latest annual
audited financial statements, if available) and (y) such
Covered Person or Xxxxxx, as applicable, divests or ceases to
conduct the Restricted Business within 18 months after the
acquisition date. Notwithstanding anything in this Agreement to
the contrary, the defined term “Restricted Business”
shall not include, and the prohibition contained in this
Section 2 shall in no way prohibit Xxxxxx and/or its
Subsidiaries from,
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(a) purchasing and reselling products produced by, and
marked with the brands of, an Unaffiliated Person in connection
with the sale, service, design or maintenance of a system that
contains or uses microwave radios or related components, systems
or services or (b) developing, manufacturing, distributing
or selling microwave radios or related components, systems or
services for use by Government Entities.
3. Sufficiency of Consideration. Each of the parties
acknowledges that the Non-Compete Consideration is sufficient
consideration for the duration and scope of the non-competition
agreement contained herein and that such duration and scope are
reasonable in all respects.
4. Severability; Enforceability. If any provision of
this Agreement, or any part thereof, is held by a court or other
authority of competent jurisdiction to be invalid or
unenforceable, the parties agree that the court or authority
making such determination will have the power to reduce the
duration or scope of such provision or to delete specific words
or phrases as necessary (but only to the minimum extent
necessary) to cause such provision or part to be valid and
enforceable. If such court or authority does not have the legal
authority to take the actions described in the preceding
sentence, the parties agree to negotiate in good faith a
modified provision that would, in so far as possible, reflect
the original intent of this Agreement without violating
applicable law.
5. Availability of Injunctive Relief. The parties
hereto acknowledge and recognize that irreparable damage could
result to the Company and its Subsidiaries, businesses and
properties if Xxxxxx fails or refuses to perform its obligations
under this Agreement and that no adequate remedy at law will
exist for any breach by Xxxxxx of this Agreement. In addition to
any other rights or remedies and damages available, the Company
shall be entitled to appropriate injunctive relief, including
preliminary and mandatory injunctive relief, enjoining or
restraining Xxxxxx or any of its Subsidiaries from any violation
or threatened violation of this Agreement.
6. Governing Law and Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The
parties hereby irrevocably submit to the jurisdiction of the
courts of the State of Delaware and the Federal courts of the
United States of America located in the State of Delaware
(collectively, the “Delaware Courts”) solely in
respect of the interpretation and enforcement of the provisions
of this Agreement and hereby waive, and agree not to assert, as
a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or
proceeding may not be brought or is not maintainable in any
Delaware Court or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced
in or by such courts, and the parties hereto irrevocably agree
that all claims with respect to such action or proceeding shall
be heard and determined in any Delaware Court; provided,
however, that notwithstanding the foregoing each party
agrees that any claim which primarily seeks injunctive relief
and related monetary claims that cannot be brought in any
Delaware Court for jurisdiction reasons may be commenced, heard
and determined in any other court having proper jurisdiction
over such claim. The parties hereby consent to and grant any
Delaware Court jurisdiction over the person of such parties and,
to the extent permitted by law, over the subject matter of such
dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner
provided in Section 12 or in such other manner as
may be permitted by law shall be valid and sufficient service
thereof.
(b) Each party acknowledges and agrees that any controversy
which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each such party
hereby irrevocably and unconditionally waives any right such
party may have to a trial by jury in respect of any litigation
directly or indirectly arising out of or relating to this
Agreement. Each party certifies and acknowledges that
(i) no representative, agent or attorney of any other party
has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce the
foregoing waiver, (ii) each party understands and has
considered the implications of this waiver, (iii) each
party makes this waiver voluntarily, and
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(iv) each party has been induced to enter into this
Agreement by, among other things, the mutual waivers and
certifications in this Section 6.
7. Amendment; Waiver. This Agreement may be amended
or any performance, term or condition waived in whole or in part
only by a writing signed by persons authorized to so bind each
party (in the case of an amendment) or the waiving party (in the
case of a waiver). No failure or delay by any party to take any
action with respect to a breach by another party of this
Agreement or a default by another party hereunder shall
constitute a waiver of the former party’s right to enforce
any provision of this Agreement or to take action with respect
to such breach or default or any subsequent breach or default.
Waiver by any party of any breach or failure to comply with any
provision of this Agreement by another party shall not be
construed as, or constitute, a continuing wavier of such
provisions, or a waiver of any other breach of or failure to
comply with any other provisions of this Agreement.
8. Entire Agreement. This Agreement constitutes the
entire agreement and understanding between the parties with
respect to the subject matter hereof.
9. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof
signed by the other party hereto. Until and unless each party
has received a counterpart hereof signed by the other party
hereto, this Agreement shall have no effect and no party shall
have any right or obligation hereunder (whether by virtue of any
other oral or written agreement or other communication).
10. Successors in Interest; Assignment. This
Agreement shall inure to the benefit of and be binding upon and
enforceable against the parties hereto and their respective
successors and permitted assigns. No party may assign, delegate
or otherwise transfer any of its rights or obligations under
this Agreement without the prior written consent of each other
party hereto.
11. No Third-Party Beneficiaries. This Agreement is
intended solely for the benefit of the parties and their
respective successors and permitted assigns and shall not confer
upon any other person any remedy, claim, liability,
reimbursement or other right. The Agreement is not intended and
shall not be construed to create any third party beneficiaries
or to provide to any third parties with any remedy, claim,
liability, reimbursement, cause of action or other right or
privilege.
12. Notices. Any notice, request, instruction or
other document to be given hereunder by any party to the others
shall be in writing and delivered personally or sent by
registered or certified mail or by overnight courier, postage
prepaid, or by facsimile:
| if to Harris: | |
| Xxxxxx Corporation | |
| 0000 Xxxx XXXX Xxxx. | |
| Xxxxxxxxx, XX 00000 | |
| Attn: Xxxxx X. Xxxxxx | |
| fax: (000) 000-0000 | |
| with a copy to (which shall not constitute notice): | |
| Xxxxxxxx & Xxxxxxxx LLP | |
| 000 Xxxxx Xxxxxx | |
| Xxx Xxxx, XX 00000 | |
| Attn: Xxxxxx X. XxXxxxxxx | |
| fax: (000) 000-0000 |
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| if to the Company: | |
| Xxxxxx Stratex Networks, Inc. | |
|
Research Triangle Park 000 Xxxxx Xxxxx Xxxxxxxxxxx, XX 00000 Attn: General Counsel fax: (000) 000-0000 |
|
| with a copy to (which shall not constitute notice): | |
|
Xxxxxxx XxXxxxxxx LLP 0000 Xxxxxxxxxx Xxxxxx Xxxx Xxxx Xxxx, XX 00000 Attn: Xxxx Xxxxxx fax: (000) 000-0000 |
or to such other Persons or addresses as may be designated in
writing by the party to receive such notice as provided above.
Any notice, request, instruction or other document given as
provided above shall be deemed given to the receiving party upon
actual receipt, if delivered personally; three Business Days
after deposit in the mail, if sent by registered or certified
mail; upon confirmation of successful transmission if sent by
facsimile (provided that if given by facsimile such notice,
request, instruction or other document shall be followed up
within one Business Day by dispatch pursuant to one of the other
methods described herein); or on the next Business Day after
deposit with a nationally recognized overnight courier, if sent
by a nationally recognized overnight courier.
13. Fees. In any action or proceeding related to or
arising out of the enforcement of, or defense against, any
provision of this Agreement, the non-prevailing party in such
action or proceeding shall pay, and the prevailing party shall
be entitled to, all reasonable
out-of-pocket costs and
expenses (including reasonable attorneys’ fees) of the
prevailing party incurred in connection with such action or
proceeding.
14. Enforcement by the Company. Xxxxxx agrees that a
majority of the Class A Directors shall have the sole and
exclusive right to direct the exercise and enforcement of all
rights of the Company hereunder.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
| XXXXXX CORPORATION | |
| By /s/ R. Xxxx Xxxxxxxx | |
|
|
| Name: R. Xxxx Xxxxxxxx | |
| Title: Vice President, Corporate Technology and Development | |
| STRATEX NETWORKS, INC. | |
| By /s/ Xxxx X. Xxxxxxx | |
|
|
| Name: Xxxx X. Xxxxxxx | |
| Title: Senior Vice President and Chief Financial Officer | |
| XXXXXX STRATEX NETWORKS, INC. | |
| By /s/ Xxx X. Xxxxxxxx | |
|
|
| Name: Xxx X. Xxxxxxxx | |
| Title: Chief Executive Officer and President |
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