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NON-COMPETITION AGREEMENT

NonCompetition Agreement

NON-COMPETITION AGREEMENT You are currently viewing:
This NonCompetition Agreement involves

FAIRPOINT COMMUNICATIONS INC | Idearc Media Corp | Northern New England Spinco Inc | Verizon Communications Inc

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Title: NON-COMPETITION AGREEMENT
Governing Law: New York     Date: 4/3/2008
Industry: COMSRV     Sector: SERVIC

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EX-2.5
 

Exhibit 2.5
NON-COMPETITION AGREEMENT
     This Non-Competition Agreement (this “Agreement”) is entered into as of March 31, 2008 between Idearc Media Corp., a Delaware corporation (“Publisher”), and Northern New England Spinco Inc., a Delaware corporation (“Spinco”). Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms the Publishing Agreement (as defined below).
RECITALS
     WHEREAS, Verizon Communications Inc. (“Verizon”), Spinco’s ultimate parent company, and Spinco have entered into a Distribution Agreement, dated as of January 15, 2007 (the “Distribution Agreement”), pursuant to which (i) Verizon shall separate the Spinco Assets (as defined in the Distribution Agreement) from the Verizon Assets (as defined in the Distribution Agreement) and (ii) Verizon shall distribute all of the issued and outstanding shares of Spinco Common Stock to Verizon’s stockholders (the “Distribution”);
     WHEREAS, Spinco and FairPoint Communications, Inc. (“Buyer”) have entered into an Agreement and Plan of Merger, dated as of January 15, 2007 (the “Merger Agreement”), pursuant to which Buyer will merge with and into Spinco (the “Merger”) immediately after the consummation of the Distribution;
     WHEREAS, Publisher and Verizon, are parties to a Non-Competition Agreement, dated as of November 17, 2006 (the “Verizon Non-Competition Agreement”), Section 2.2(b) of which provides, among other things, that in the event Verizon ceases to provide local telephone service in all or a portion of one or more certain geographic areas (the “Verizon Service Areas”), Verizon shall, subject to certain conditions, require the acquiring Person to agree to enter into with Publisher, and Publisher shall enter into with such Person, an agreement substantially similar to the Verizon Non-Competition Agreement that relates to the relevant Verizon Service Areas;
     WHEREAS, as a result of the Distribution and the Merger, Verizon will cease to provide local telephone service in the Service Areas, which are Verizon Service Areas, and, therefore, in accordance with Section 2.2(b) of the Verizon Non-Competition Agreement, Spinco, as the acquirer of the access lines with which Verizon provides such service, and Publisher have agreed to enter into this Agreement;
     WHEREAS, in connection with the transactions contemplated by the Distribution Agreement, Publisher, Spinco and certain of Spinco’s Affiliates are, concurrently with the execution of this Agreement, entering the Publishing Agreement (the “Publishing Agreement”), pursuant to which Spinco is, among other things, designating Publisher as

 


 

its exclusive official publisher of Directory Products within certain of its Service Areas, subject to the terms and conditions set forth therein;
     WHEREAS, in connection with the transactions contemplated by the Distribution Agreement and the Publishing Agreement, Spinco has agreed to certain non-competition and non-solicitation covenants, as set forth in this Agreement;
     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the Parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1 General Rules of Construction. For all purposes of this Agreement: (i) the terms defined in this Agreement include the plural as well as the singular; (ii) all references in this Agreement to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of the body of this Agreement; (iii) pronouns of either gender or neuter include, as appropriate, the other pronoun forms; (iv) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; (v) “or” is not exclusive; (vi) “including” and “includes” shall be deemed to be followed by “but not limited to” and “but is not limited to,” respectively; (vii) any definition of or reference to any law, agreement, instrument or other document herein shall be construed as referring to such law, agreement, instrument or other document as from time to time amended, supplemented or otherwise modified; and (viii) any definition of or reference to any statute shall be construed as referring also to any rules and regulations promulgated thereunder.
     Section 1.2 Definitions. The following definitions shall apply within this Agreement.
     “Affiliate” has the meaning set forth in the Publishing Agreement.
     “Agreement” has the meaning set forth in the introductory paragraph of this Agreement.
     “Branding Agreement” means the Branding Agreement, dated as of the date hereof, between Buyer and Publisher.

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     “Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized or obligated by law or executive order to close.
     “Buyer” has the meaning set forth in the second recital of this Agreement
     “Covenant Cure Period” has the meaning set forth in Section 3.2.
     “Directory Product” means a telephone directory product or service consisting principally of searchable (e.g., by alphabet letter or category of products or services) multiple landline telephone listings and classified advertisements that is delivered or otherwise made available to end users in tangible media (e.g., paper directories, CD-ROM), or digital media (e.g., PDA download but only downloads of a complete directory product that is otherwise published in tangible media) but shall not include any of the foregoing products or service made available or delivered by electronic media (e.g., Internet, CATV, satellite, broadcasting).
     “Distribution Agreement” has the meaning set forth in the first recital of this Agreement.
     “Excluded Affiliates” means any entity as to which Spinco does not directly or indirectly possess the sole legal or contractual right to cause such entity to enter into contractual arrangements (it being understood that no wholly owned subsidiary of Spinco shall be an Excluded Affiliate); provided that any such entity shall cease to be an Excluded Affiliate if, when and for so long as Spinco obtains the sole legal or contractual right to cause such entity to enter into contractual arrangements.
     “Internet” means the collection of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the “transmission control protocol/internet protocol,” or any predecessor or successor protocols to such protocol, and includes the world wide web.
     “Internet Services” has the meaning set forth in the Branding Agreement.
     “Law” means any federal, state, local, municipal, foreign, international, multinational or other constitution, law, ordinance, principle of common law, code, regulation, statute or treaty.

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     “Material Default” means, with respect to either Party, a breach of any material term, condition, covenant or obligation of this Agreement that is so material and continuing that it has the effect of abrogating such Party’s performance and the other Party’s enjoyment of the benefits under this Agreement taken as a whole, including an uncured breach by Spinco of Section 2.2(a).
     “Merger” has the meaning set forth in first recital of this Agreement.
     “Party” means each of Publisher and Spinco (collectively, the “Parties”).
     “Person” means an association, a corporation, an individual, a partnership, a limited liability company, a trust or any other entity or organization, including a Governmental Entity.
     “Publisher” has the meaning set forth in the preamble to this Agreement.
     “Publisher Parties” has the meaning set forth in the introductory paragraph of this Agreement.
     “Publishing Agreement” has the meaning set forth in the fifth recital of this Agreement.
     “Publisher Region” means the geographic area (which may not be contiguous) comprised of all of the Service Areas.
     “Remediable Breach” has the meaning set forth in Section 3.2
     “Restricted Activity Notice” has the meaning set forth in Section 3.1.
     “Spinco” has the meaning set forth in the preamble to this Agreement.
     “Spinco Restricted Activities” has the meaning set forth in Section 2.1.
     “Spinco Successor” has the meaning set forth in Section 2.2 (a).
     “Verizon” has the meaning set forth in first recital of this Agreement.

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     “Voice Portal Directory” means a telephone directory product or service that the user accesses through an interactive voice portal.
ARTICLE II
SPINCO NON-COMPETITION COVENANTS
     Section 2.1 Restrictions. Subject to the exclusions, exceptions and limitations expressly set forth in this Agreement, Spinco agrees that it and its Affiliates (other than the Excluded Affiliates) (i) shall not, (ii) shall not act as a sales agent on behalf of a third Person in order to, or (iii) shall not enter into a joint venture, strategic alliance, product bundling, revenue sharing or similar arrangement with a third Person a purpose of which is to (or subsequently vote in favor of or give its consent to any modification of any such arrangement a primary purpose of which is to), publish, market, sell or distribute any Directory Products that (A) consist principally of listings and classified advertisements of subscribers in the Publisher Region and (B) are directed primarily at end users in the Publisher Region (“Spinco Restricted Activities”); provided, however, that if the Publishing Agreement is terminated with respect to any Service Area(s) (thereby causing the definition of Publisher Region to exclude such Service Area(s)), the obligations and restrictions of this Section 2.1 shall no longer apply with respect to such Service Area(s), without limiting the continued application of such obligations and restrictions with respect to the remaining Service Areas.
     Section 2.2 Successor Restrictions.
     (a) Subject to the exclusions, exceptions and limitations expressly set forth in this Agreement, following a Change of Control of Spinco whereby Spinco is no longer directly bound as a Party to this Agreement (e.g., because the Change of Control is a sale or transfer of assets or is the result of a transaction pursuant to which the successor, surviving or acquiring entity (the “Spinco Successor”) does not automatically succeed to the obligations of Spinco by operation of law), Spinco shall require the Spinco Successor to agree in writing to assume this Agreement on substantially similar terms as are then in effect hereunder.
     (b) Subject to the exclusions, exceptions and limitations expressly set forth in this Agreement, if Spinco exits any Service Area in the Publisher Region as a result of (i) a sale, assignment or other transfer of access lines, (ii) a merger or other business combination transaction with a Person in respect of access lines, or (iii) any other agreement with any third Person pursuant to which such Person shall provide local telephone service in lieu of Spinco in such Service Area (or portion thereof), and, in any of the foregoing cases, such event does not constitute a Change of Control: (A) Spinco shall, if Publisher has entered into with the acquiring Person binding agreements on terms substantially similar to the Publishing Agreement and Branding Agreement (to the extent set forth in Section 3.8(c) of the Publishing Agreement), require the acquiring Person to agree to enter into with Publisher, and Publisher shall enter into with such Person, a binding agreement on terms substantially similar to this Agreement with respect to the

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relevant Service Area(s) and (B) neither Publisher nor Spinco shall be released from its obligations under this Agreement other than with respect to such Service Area or portion thereof.
     Section 2.3 Exceptions and Limitations.
     (a) None of Spinco, the Spinco Successor or any of their respective Affiliates shall be deemed to have engaged in Spinco Restricted Activities with respect to marketing and sales by non-employee sales agents if such Person uses its commercially reasonable efforts, including establishing reasonable procedures, to restrict the activities of those of their respective agents and other distribution parties that are marketing Spinco local telephone service on an exclusive basis (e.g., the agents do not represent any other provider of local telephone service) from engaging in Spinco Restricted Activities.
     (b) Publisher acknowledges and agrees that none of Spinco, the Spinco Successor or any of their respective Affiliates (including the Excluded Affiliates) shall have any restrictions on the publication, marketing, sale or distribution of Directory Products directed principally at end-users outside the Publisher Region using any brand, other than the brands “SuperPages” or any combination mark of “SuperPages” and “Idearc” or any other brand of Publisher or its Affiliates.
     (c) Nothing contained in this Agreement shall prohibit any of Spinco, the Spinco Successor or any of their respective Affiliates (including, for the avoidance of doubt, the Excluded Affiliates) from engaging in any activity in which it is required by Law to engage in itself or through its Affiliates, including publishing or distributing White Pages to the extent permitted or required in the event of a Publishing Order, subject and pursuant to the terms and conditions of Section 3.11 of the Publishing Agreement.
     (d) Nothing contained in this Agreement shall restrict the Spinco Successor from continuing to publish, market, sell or distribute (on its own behalf or on behalf of any
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