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 third Person) Directory Products in those Service Areas in
the Publisher Region in which it was conducting any such business
at the date of execution of the agreement(s) pursuant to which such
Change of Control or disposition transaction occurs;
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