EXHIBIT 10.45
NONCOMPETITION AGREEMENT
This Noncompetition Agreement ("Agreement") is entered into as of this
9th day of March, 2000, by and among ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC, a Delaware limited
liability company ("Company"), Textron Financial Corporation, a Delaware
corporation ("TFC"), Entrade Inc., a Pennsylvania corporation ("Entrade"), and
ATM Service, Ltd., a New York corporation ("ATM" and together with TFC and
Entrade are sometimes referred to as the "Members" and individually as a
"Member") who agree as follows:
1. Introduction. Contemporaneously with the execution and delivery of
this Agreement, each Member has entered into a Contribution Agreement between
Company and such Member (the "Contribution Agreement") pursuant to which such
Member has contributed certain assets of Member to Company for a membership
interest in Company on the terms and conditions set forth therein. Member is a
member of Company, whose agreement not to compete with Company and its
subsidiaries (the "Protected Group") is essential to the Protected Group's
ability to succeed. As a condition to Company's agreement to perform its
obligations under the Contribution Agreement, the Company has required that
Member enter into this Agreement for the benefit of the Protected Group.
2. Agreements. For $100 in hand paid to each Member and as inducement
for Company to enter into and perform its obligations under the Contribution
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Member agrees that so long as
such Member is a Member of the Company and for a period of two years thereafter
(except in the event that the Company is dissolved sooner), no Member nor any of
such Member's Affiliates (as defined below) shall, directly or indirectly, for
its own account or for the account of others, as a shareholder, member, owner,
partner, promoter, consultant, manager, advisor or otherwise:
(a) individually engage in, or participate (i) in the case of ATM
or Entrade, with any North American bank, national financial
institution or Fortune 500 industrial company, or (ii) in the
case of TFC, with any company providing asset disposition
services, in the promotion, formation, advancement, financing,
ownership, management, or provision of services for, any
business or other related enterprise, which, as its primary
business, provides asset disposition services in North America
for surplus machinery and equipment and excess inventories in
a manner and form that competes directly with the Protected
Group (as defined below); provided, however, that any Member
is expressly permitted to hold up to a twenty-six percent
(26%) passive ownership interest in any such business; and,
provided further, that (i) nothing in this Section 2(a) shall
limit the right of any party to engage or participate in other
Internet-based enterprises, including, without limitation,
Internet-based asset disposition businesses, that do not
compete directly with the Protected Group, and (ii) the
pursuit of such engagement or participation shall in no event
be deemed to be wrongful or improper or a breach of the
pursuing Member's fiduciary obligation to present
opportunities to the Company.
(b) knowingly solicit for employment any person employed by the
Protected Group at the date hereof, or any time in the future,
unless: (i) such Member solicits such person for employment at
least six months after such person was last employed by any
member of the Protected Group or (ii) such Member was not
aware of and should not have been aware of the employment of
such person by any member of the Protected Group; provided,
however, that such Member and any of its Affiliates may employ
any such person who applies for employment in response to a
general solicitation or advertisement, or who such Member can
demonstrate first approaches such Member or such Affiliate
concerning possible employment; or
(c) request, advise or attempt to influence any person or entity
which is a source of materials, supplies, personnel, services,
funds or information for the Protected Group to withdraw,
cancel or curtail the sale or furnishing of such items to such
member of the Protected Group.
(d) For purposes of this Agreement, the phrase "competes directly
with the Protected Group" shall mean providing asset
disposition services for all classes of surplus machinery,
equipment, excess inventories and commercial real estate in a
horizontal application across all industry segments in the
United States.
Notwithstanding the foregoing provisions of this Section 2, the parties agree
that: (i) Entrade has created and intends to continue to create numerous
vertical applications for asset disposition services within specific industry
segments, which currently include Nationwide Auction Systems, ▇▇▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. None
of such businesses, nor any similar industry-specific vertical businesses, shall
be deemed to compete directly with the Protected Group; and (ii) with respect to
ATM, the disposition of non-industrial excess finished goods inventories shall
not be deemed to compete directly with the Protected Group.
3. Prospective Customers. In the event a prospective customer of the
Protected Group elects not to transact business with the Company and either
Entrade or ATM or both enters into a relationship with such prospective customer
in violation of Section 2(a) pursuant to which such prospective customer,
Entrade or ATM, as the case may be, competes directly with the Protected Group
(as defined in Section 2(d)), then Entrade or ATM will pay to TFC twenty-five
percent (25%) of the commission revenues or, in the case of an asset acquisition
and sale, net proceeds received by Entrade or ATM from such business.
4. Compliance with Law. Each Member acknowledges that it has consulted
with counsel of its choosing with respect to this Agreement and understands
fully the legal and practical significance of its execution and delivery of this
Agreement. Each Member acknowledges and agrees that this Agreement is ancillary
to the Contribution Agreement, that the Contribution Agreement is enforceable
and that the limitations contained herein with respect to time, geographical
area and scope of activity to be restrained are reasonable and do not impose a
greater restraint than is necessary to protect the goodwill or other business
interests of the Protected Group.
5. Breach of Restrictive Covenants. Each Member acknowledges that any
violation of any of the restrictive covenants contained in this Agreement will
cause irreparable harm to the Protected Group for which monetary damages would
not be adequate compensation. Each Member, therefore, agrees that, if it
violates or threatens to violate any of these restrictive Agreements, the
Protected Group shall be entitled, in addition to any other legal or equitable
remedies available to it, to entry of an injunction, temporary and permanent,
enjoining such breach and securing specific performance of this Agreement.
6. Amendments. This Agreement may be amended only by a written
agreement entered into by and among Company and the Members.
7. Severability of Terms. If any of the agreements or restrictions in
this Agreement are held invalid by a court of competent jurisdiction, such
holding will not invalidate any of the other agreements and/or restrictions
herein, as it is intended that the agreements and/or restrictions herein shall
be severable and that the invalidity of one shall not invalidate any others.
8. Reformation. If this Agreement is found to contain limitations as to
time, geographical area, or scope of activity to be restrained that are not
reasonable and impose a greater restraint that is necessary to protect the
goodwill or other business interest of the Protected Group, the court shall
reform this Agreement to the extent necessary to cause the limitations contained
in the Agreement as to time, geographical area, and scope of activity to be
restrained to be reasonable and to impose a restraint that is not greater than
necessary to protect the goodwill or other business interest of the Protected
Group and enforce the Agreement as reformed.
9. Waiver. No omission or delay on the part of any party of due and
punctual fulfillment of any obligation shall be deemed to constitute a waiver by
any other party of any of its rights to require such due and punctual
fulfillment of any other obligation hereunder, whether similar or otherwise, or
a waiver of any remedy it may have. A waiver by a member of the Protected Group
of similar rights to any other member shall not constitute a waiver of the
Protected Group's rights with respect to any Member.
10. Governing Law. In the event of any dispute arising under this
Agreement, it is agreed by the parties that the law of the State of New York
will govern the interpretation, validity, and effect of this Agreement without
regard to the place or performance thereof.
11. References. All headings, captions or arrangements used in this
Agreement are intended solely for the convenience of the parties and shall not
be deemed to limit, amplify or modify the terms of this Agreement nor affect the
meaning thereof. Whenever in this Agreement the word "including" is used, it
shall be deemed to be for purposes of identifying only one or more of the
possible alternatives, and the entire provision in which such word appears shall
be read as if the phrase "including without limitation" were actually used in
the text. The term "Affiliate" means, when used with reference to a specified
person, any person who directly or indirectly, is controlled by the specified
person.
12. Notices. Any notice required or permitted under this Agreement shall
be given in writing and shall be deemed to have been duly given if (i) sent by
postage prepaid, United States first class, registered or certified mail, return
receipt requested, or (ii) sent by a recognized overnight delivery service to
the parties at their respective addresses specified below, or at such other
address for a party as that party may specify by notice. Notice shall be
effective upon receipt.
(a) If to Company: ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Manager
(b) If to TFC: Textron Financial Corporation
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
(c) If to Entrade: Entrade Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
(d) If to ATM: ATM Service, Ltd.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
13. Assignment. This Agreement shall inure to the benefit of and by
binding upon the Protected Group and their respective successors and assigns and
each Member and its successors and assigns. No Member shall be entitled to
assign any obligations or rights hereunder without the prior written consent of
Company.
14. Entire Agreement. Except for the Contribution Agreement and the
Operating Agreement of the Company, this Agreement represents the full agreement
among the Members and the Company with respect to the subject matter hereof and
supersedes any other agreements, oral or written, among the parties. In signing
this Agreement, neither any Member nor Company relied upon any promise,
representation, or any other inducement that is not expressed in this Agreement.
15. Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument.
EXECUTED as of the date first written above.
TEXTRON FINANCIAL CORPORATION
By:________________________________
Its:_______________________________
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, LLC
By:________________________________
Its:_______________________________
ENTRADE INC.
By:________________________________
Its:_______________________________
ATM SERVICE, LTD.
By:________________________________
Its:_______________________________
