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| EXHIBIT 10.16 | |
| NON-DISCLOSURE, ASSIGNMENT OF | |
| INVENTIONS AND NON-COMPETITION AGREEMENT | |
| Employee Name: Kevin Bennis | |
| Date: February 2, 1998 | |
| WHEREAS, certain investors have agreed to provide financing (the | |
| "Financing") to Pathnet, Inc. (the "Company") subject to the terms of that | |
| certain Investment and Stockholders' Agreement, dated October 31, 1997 (the | |
| "Investment and Stockholders' Agreement"), by and among the Company, David | |
| Schaeffer and the investors identified therein (the "Investors"); | |
| WHEREAS, such Financing will significantly benefit the Company and | |
| indirectly benefit the above-named Employee, as a stockholder of the Company; | |
| and | |
| WHEREAS, this Non-Disclosure, Assignment of Inventions and Non-Competition | |
| Agreement (this "Agreement") is a condition to the Investment and Stockholders' | |
| Agreement. | |
| NOW THEREFORE, in consideration of the foregoing and the mutual covenants | |
| and agreements hereinafter set forth, the parties hereto agree as follows: | |
| 1. | |
| NON-DISCLOSURE OBLIGATION. | |
| I understand and agree that my employment | |
| creates a relationship of confidence and trust between me and the Company with | |
| respect to (a) all proprietary and confidential information of the Company, and | |
| (b) the confidential information of others with which the Company has a business | |
| relationship. | |
| The information referred to in clauses (a) and (b) of the | |
| preceding sentence is referred to in this Agreement, collectively, as | |
| "Confidential Information." | |
| I will not at any time, whether during or after the | |
| termination of employment, for any reason whatsoever (other than to promote and | |
| advance the business of the Company), reveal to any person or entity (both | |
| commercial and non-commercial) or use for any purpose other than the furtherance | |
| of the Company's business interests any of the trade secrets or Confidential | |
| Information, including, but not limited to, the Company's research and | |
| development activities, marketing plans and strategies, pricing and costing | |
| policies, customer and supplier lists, and business or financial information of | |
| the Company so far as they have come or may come to my knowledge, except as may | |
| be required in the ordinary course of performing my duties as an employee of the | |
| Company. | |
| This restriction shall not apply to: (i) information that may be | |
| disclosed generally or is in the public domain through no fault of mine; (ii) | |
| information received from a third party outside the Company that was disclosed | |
| without a breach of any confidentiality obligation; or (iii) information that | |
| may be required by law or an order of any court, agency or proceeding to be | |
| disclosed, provided that such disclosure is subject to all applicable | |
| governmental or judicial protection available for like material, and I agree to | |
| provide the Company with prior notice of any such disclosure. | |
| I shall keep | |
| secret all matters of such nature entrusted to me and shall not use or disclose | |
| any such information in any manner. | |
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| 2. | |
| ASSIGNMENT OF INVENTIONS. | |
| I expressly understand and agree that any | |
| and all right or interest I have or obtain in any designs, trade secrets, | |
| technical specifications, technical data, know-how and show-how, internal | |
| reports and memoranda, marketing plans, inventions, concepts, ideas, | |
| expressions, discoveries, improvements, copyrights, and patent or patent rights | |
| conceived, devised, developed, reduced to practice, or which I otherwise have or | |
| obtain during the term of this Agreement which relates to the business of the | |
| Company or arise out of my employment with the Company are expressly regarded as | |
| "works for hire" (the "Inventions"). | |
| I hereby assign to the Company the sole and exclusive right to such | |
| Inventions. | |
| I agree that I will promptly disclose to the Company any and all | |
| such Inventions, and that, upon request of the Company, I will execute and | |
| deliver any and all documents or instruments and take any other action which the | |
| Company shall deem necessary to assign to and vest completely in the Company, to | |
| perfect trademark, copyright and patent protection with respect to, or to | |
| otherwise protect the Company's trade secrets and proprietary interest in such | |
| Inventions. | |
| The obligations of this Section shall continue beyond the | |
| termination of my employment with respect to such Inventions conceived of or | |
| made by me during the term of this Agreement. | |
| The Company agrees to pay any and | |
| all copyright, trademark and patent fees and expenses or other costs incurred by | |
| me for any assistance rendered to the Company pursuant to this Section. | |
| My obligation to assign Inventions shall not apply to any invention about | |
| which I can prove that: (i) it was developed entirely on my own time and effort; | |
| (ii) no equipment, supplies, facilities, trade secrets or confidential | |
| information of the Company was used in its development; (iii) it does not relate | |
| to the business of the Company or to the Company's actual or anticipated | |
| research and development, and (iv) it does not result from any work performed by | |
| me for the Company. | |
| 3. | |
| DOCUMENTS, RECORDS, ETC. | |
| All documents, records, apparatus, equipment | |
| and other physical property, whether or not pertaining to Confidential | |
| Information, which are furnished to me by the Company or are produced by me in | |
| connection with my employment will be and remain the sole property of the | |
| Company. | |
| I will return to the Company all such materials and property as and | |
| when requested by the Company. | |
| In any event, I will return all such materials | |
| and property immediately upon termination of my employment for any reason. | |
| I | |
| will not take with me any such material or property or any copies thereof upon | |
| such termination. | |
| 4. | |
| NON-COMPETITION COVENANT. | |
| While I am employed by the Company and for | |
| a period of two (2) years after the termination or cessation of such employment | |
| for any reason, I shall not, without the Company's prior written consent, | |
| directly or indirectly, alone or as a partner, joint venturer, officer, | |
| director, employee, consultant, agent, independent contractor or stockholder of | |
| any company or business, engage in any business activity which is or may | |
| reasonably be construed to be competitive with the "PathNet Business." | |
| For | |
| purposes of this Agreement, the "PathNet Business" shall mean the business of | |
| installing, constructing, aggregating and linking digital capacity and marketing | |
| and selling the bulk | |
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| telecommunications capacity and services created by such systems. | |
| My ownership | |
| of not more than one(1%) percent of the shares of any class of stock of any | |
| corporation which is actively traded on a national securities exchange or on | |
| NASDAQ shall not be deemed, in and of itself, to violate the prohibitions of | |
| this paragraph. | |
| I understand that the restrictions set forth in this Section | |
| are intended to protect the Company's valid business interests and agree that | |
| such restrictions are reasonable and appropriate for this purpose. | |
| 5. | |
| NON-SOLICITATION. | |
| During my employment with the Company and for a | |
| period two (2) years thereafter, I will not encourage any employee of the | |
| Company to terminate their employment with the Company, nor solicit nor hire any | |
| employee of the Company for employment by any corporation or any other | |
| commercial enterprise other than the Company, unless first approached in writing | |
| by the Company employee. | |
| I understand that the restrictions set forth in this | |
| Section are intended to protect the Company's valid business interests and agree | |
| that such restrictions are reasonable and appropriate for this purpose. | |
| 6. | |
| RESTRICTIONS ON CORPORATE OPPORTUNITIES. | |
| During my employment with | |
| the Company and for a period of two (2) years thereafter, I will not pursue, | |
| engage in or have an interest in other business ventures or opportunities which | |
| are or may reasonably be construed to be competitive with the "PathNet | |
| Business." | |
| In addition, I will be obligated to present any telecommunications | |
| business or investment opportunity arising out of the Company's operations to | |
| the Company, and the Company shall have the exclusive right to pursue such | |
| business or investment opportunity. | |
| 7. | |
| ABSENCE OF CONFLICTING AGREEMENTS. | |
| I understand the Company does not | |
| desire to acquire from me any trade secrets, know-how or confidential business | |
| information that I may have acquired from others. | |
| I represent that I am not | |
| bound by any agreement or any other existing or previous business relationship | |
| which conflicts with or prevents the full performance of my duties and | |
| obligations to the Company under this Agreement or otherwise during the course | |
| of my employment. | |
| 8. | |
| NO EMPLOYMENT OBLIGATION. | |
| Other than the provisions of Section 9 | |
| hereof, I understand that this Agreement does not create an obligation on the | |
| part of the Company to continue my employment with the Company. | |
| I am employed | |
| as an employee "at will". | |
| 9. | |
| SEVERANCE. | |
| If I am terminated for any reason, in consideration for | |
| the Non-competition covenant and the other covenants and agreements set forth in | |
| the Agreement, I will receive a salary of $275,000 per annum for one year after | |
| such termination payable in bi-weekly installments in accordance with the | |
| Company's payroll procedures. | |
| 10. | |
| REMEDIES UPON BREACH. | |
| I agree that it would be difficult to measure | |
| any damages caused to the Company which might result from any breach by me of | |
| the promises set forth in this Agreement, and that, in any event, money damages | |
| would be an inadequate remedy for any such breach. | |
| Accordingly, I agree that if | |
| I breach or propose to breach any portion of this Agreement, the Company shall | |
| be entitled, in addition to all other remedies | |
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| that it may have, to an injunction or other appropriate equitable relief to | |
| restrain any such breach without showing or proving any actual damage to the | |
| Company. | |
| 11. | |
| BINDING EFFECT. | |
| This Agreement will be binding upon me and my heirs, | |
| executors, administrators and legal representatives and will inure to the | |
| benefit of the Company, any subsidiary of the Company, and its and their | |
| respective successors and assigns. | |
| My obligations under this Agreement shall | |
| survive the termination of my relationship with the Company regardless of the | |
| manner of such termination. | |
| 12. | |
| ENFORCEABILITY. | |
| If any portion or provision of this Agreement is to | |
| any extent declared illegal or unenforceable by a court of competent | |
| jurisdiction, then the remainder of this Agreement, or the application of such | |
| portion or provision in circumstances other than those as to which it is so | |
| declared illegal or unenforceable will not be affected thereby, and each portion | |
| and provision of this Agreement shall be valid and enforceable to the fullest | |
| extent permitted by law. | |
| In the event that any provision of this Agreement is | |
| determined by any court of competent jurisdiction to be unenforceable by reason | |
| of excessive scope as to geographic, temporal or functional coverage, such | |
| provision will be deemed to extend only over the maximum geographic, temporal | |
| and functional scope as to which it may be enforceable. | |
| 13. | |
| ENTIRE AGREEMENT. | |
| This Agreement constitutes the entire agreement | |
| between the Company and myself with respect to the subject matter hereof, and | |
| supersedes all prior representations and agreements with respect to such subject | |
| matter. | |
| This Agreement may not be amended, modified or waived except by a | |
| written instrument duly executed by the person against whom enforcement of such | |
| amendment, modification or waiver is sought. | |
| The failure of any party to | |
| require the performance of any term or obligation of this Agreement or the | |
| waiver by any party of any breach of this Agreement in any particular case will | |
| not prevent any subsequent enforcement of such term or obligation or to be | |
| deemed a waiver of any separate or subsequent breach. | |
| 14. | |
| THIRD-PARTY BENEFICIARIES. | |
| This Agreement is being entered into at | |
| the request of the Investors and such Investors are intended to be third-party | |
| beneficiaries hereunder with full power to enforce the terms hereof. | |
| 15. | |
| NOTICES. | |
| Any notices, requests, demands and other communications | |
| provided for by this Agreement will be sufficient if in writing and delivered in | |
| person, or sent by registered or certified mail, postage prepaid, to me at the | |
| last address which I have filed in writing with the Company or, in the case of | |
| any notice to the Company, at its main offices to the attention of its Chief | |
| Executive Officer. | |
| 16. | |
| GOVERNING LAW. | |
| This Agreement shall be construed under and be | |
| governed in all respects by the laws of the District of Columbia. | |
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| I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. | |
| I HAVE READ IT | |
| CAREFULLY AND AM SATISFIED THAT I UNDERSTAND IT COMPLETELY. | |
| /s/ Kevin Bennis | |
| --------------------------- | |
| Kevin Bennis | |
| Accepted and Agreed to by | |
| PATHNET, INC. | |
| By: /s/ Richard A. Jalkut | |
| ------------------------ | |
| Name: | |
| Title: | |
| 5- | |