Exhibit 10.9
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT, dated as of December
20, 2001 but effective as of the Effective Time (as defined below), by and
among, XXXXXXX RENTCORP ("XxXxxxx"), TYCO ACQUISITION CORP. 33 ("Acquiror"), a
direct, wholly-owned subsidiary of TYCO INTERNATIONAL LTD. ("Tyco"), and Xxxx X.
XxXxxxx ("Shareholder").
WHEREAS, XxXxxxx and Acquiror have proposed to enter into a merger
agreement dated as of the date hereof (the "Merger Agreement") pursuant to which
XxXxxxx will merge with and into Acquiror, with the surviving corporation being
a wholly-owned subsidiary of Tyco; and
WHEREAS, Shareholder is a founding and substantial shareholder of
XxXxxxx and will receive considerable monetary and other benefits by reason of
the consummation of the transactions contemplated by the Merger Agreement; and
WHEREAS, XxXxxxx and Acquiror wish to preserve the confidential
information of XxXxxxx and to protect against Shareholder using her skills,
knowledge, experience, ideas and influence for the benefit of the competitors of
XxXxxxx and its affiliates; and
WHEREAS, Shareholder is willing to enter into an agreement to provide
such protection to XxXxxxx, its successor and affiliates upon the terms and
conditions set forth in this Agreement and understands that Shareholder's
agreement to the terms set forth herein is a critical inducement to the entering
into the Merger Agreement by the parties thereto; and
WHEREAS, as a condition of its entering into the Merger Agreement,
Acquiror has requested Shareholder to agree to enter into this Agreement, and
Shareholder is executing this Agreement as an inducement to Acquiror to enter
into and execute the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Acquiror of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein and therein, and intending to be legally bound
hereby, the parties agree as follows:
1. Definitions.
"Business" means (i) the business of designing, manufacturing,
refitting, supplying, selling, leasing and renting modular buildings and
accessories and (ii) the business of renting, leasing and selling electronic
testing and measurement equipment, in each case as now or hereafter (during the
Non-Competition Period) conducted by the Company or any of its affiliates.
"Business Affiliate" means any affiliate of the Company (including
Tyco and its subsidiaries) now or hereafter engaged in the Business.
"Company" means XxXxxxx and Acquiror as successor to XxXxxxx
following the Merger and includes their respective subsidiaries.
"Competing Business" mean any business engaged in any of the
activities constituting or included within the Business.
"Confidential information" means and includes the following items
that relate to or are connected with the Business: (i) the name and address of
any customer, vendor or affiliate of the Company or any Business Affiliate and
any information concerning the transactions or relations of any customer, vendor
or affiliate of the Company or any Business Affiliate with the Company or any
Business Affiliate or any of its shareholders, directors, officers, employees,
agents, consultants, representatives and/or personnel; (ii) any information
concerning any product, technology or procedure employed by the Company or any
Business Affiliate but not generally known to its customers, vendors or
competitors, or under development by or being tested by the Company or any
Business Affiliate but not at the time offered generally to its customers or
vendors; (iii) any information relating to computer software or systems used by
the Company or any Business Affiliate other than off-the-shelf software and
systems furnished by third party vendors; (iv) any business plans, budgets,
advertising or marketing plans, pricing or marketing methods, sales margins,
cost of goods, cost of material, capital structure, operating results, or
borrowing arrangements of the Company or any Business Affiliate; (v) any
information belonging to customers, vendors or affiliates of the Company or any
Business Affiliate or any other person which the Company or any
Business Affiliate has agreed to hold in confidence; (vi) know-how, trade
secrets, technical data, designs, processes and formulae of the Company or any
Business Affiliate; (vii) any other information which is generally regarded as
confidential or proprietary; and (viii) all written, graphic, electronic and
other materials and records relating to any of the foregoing. Information that
is not novel or copyrighted or patented may nonetheless be proprietary
information; provided, however, that "confidential information" does not include
information generally available to and known by the public (other than by reason
of a breach of this Agreement).
"Effective Time" means the effective time of the merger contemplated
by the Merger Agreement.
"Non-Competition Period" means the period beginning on the date of
the Effective Time and ending on the fifth anniversary of that date.
"Territory" means the United States of America.
2. Acknowledgement. Shareholder acknowledges, as the basis for her
covenants and agreements contained in this Agreement:
(i) the accuracy of each of the Recitals above;
(ii) that the Business is intensely competitive and Shareholder's
former and current position with the Company has exposed, and will
continue to expose, Shareholder to knowledge and possession of
confidential information of the Company and/or its Business Affiliates;
(iii) that the confidential information constitutes a sensitive and
protectable business interest of the Company and/or its Business
Affiliates, as the case may be;
(iv) that the direct and indirect disclosure of any such confidential
information to existing or potential competitors of the Company and its
Business Affiliates, as well as the engaging by Shareholder in any of
the other activities prohibited by this Agreement, would place the
Company and its Business Affiliates at a competitive disadvantage and
would do damage, monetary or otherwise, to the operations, goodwill,
prospects and competitive position of the Company and its Business
Affiliates; and
(v) that Shareholder's engaging in any of the activities prohibited
by this Agreement would constitute improper appropriation and/or use of
and harm to the tangible and intangible property of the Company and its
Business Affiliates.
3. Confidentiality.
(a) Shareholder shall not, directly or indirectly, whether
individually, as a director, stockholder, owner, partner, employee, principal or
agent of any business, or in any other capacity, make known, disclose, furnish,
make available or utilize any of the confidential information of the Company or
any Business Affiliate other than in the proper performance of her duties as an
officer, employee or consultant of the Company or such Business Affiliate.
(b) Nothing in this Agreement shall prevent Shareholder from
disclosing any confidential information as required by a court of competent
jurisdiction or other administrative or legislative body; provided that prior to
disclosing any of the confidential information to a court or other
administrative or legislative body, Shareholder shall promptly notify the
Company or its Business Affiliate, as the case may be, shall cooperate with the
Company or such Business Affiliate in obtaining a protective order or other
means of protecting the confidentiality of the confidential information and
shall disclose only that information that is legally required to be disclosed.
The Company shall reimburse Shareholder for her reasonable expenses involved in
such cooperation and, if such cooperation requires more than 10 hours of
Shareholder's time, the Company and Shareholder shall agree on appropriate
remuneration to Shareholder.
(c) Shareholder agrees promptly to return all confidential
information in her possession, including all photocopies, extracts, summaries,
memoranda, documents, data, records, notes, designs, drawings, and other written
information, samples and models and any such information stored electronically
on tapes, computer disks or in any other manner, to the Company at any time upon
request by the Company or to or at the request of any Business Affiliate, as the
case may be.
4. Non-Competition.
During the Non-Competition Period, Shareholder shall not, directly or
indirectly, own, manage, operate, join, control, participate in, invest in or
otherwise be connected or associated in a like manner with any Competing
Business in the Territory, in any manner, including as an officer, director,
employee, partner, consultant, advisor, proprietor, manager, trustee or
investor; provided, however, that nothing contained in this Agreement shall
prevent Shareholder from owning less than five percent (5%) of the voting stock
of a publicly held corporation for investment purposes.
5. Non-Solicitation.
During the Non-Competition Period, Shareholder will not, directly or
indirectly, for her benefit or for the benefit of any other person, firm or
entity or otherwise:
(i) persuade or seek to persuade any customer of the Company or any
Business Affiliate to cease to do business or to reduce the amount of
business which the customer has customarily done or contemplates doing
with the Company or any Business Affiliate, whether or not the
relationship between the Company or any Business Affiliate and such
customer, supplier, or independent contractor was originally established
in whole or in part by the efforts of Shareholder;
(ii) seek to employ or engage, or assist anyone else to seek to
employ or engage, any person who, at the relevant time, is in the employ
of the Company or any Business Affiliate, or, as an independent
contractor provides material engineering, marketing, sales, financial or
management consulting services in connection with the business of the
Company or any Business Affiliate; or
(iii) interfere in any manner in the relationship of the Company or
any Business Affiliate with any of its customers, suppliers, or
independent contractors, whether or not the relationship between the
Company or any Business Affiliate and such customer, supplier, or
independent contractor was originally established in whole or in part by
the efforts of Shareholder.
6. Non-Disparagement.
During the Non-Competition Period, Shareholder will not, directly or
indirectly, for her benefit or for the benefit of any other person, firm or
entity or otherwise:
(i) make any statements or comments of a defamatory or disparaging
nature to third parties regarding the Company or any Business Affiliate
or its or their officers, directors, personnel, products or services; or
(ii) take any action which is intended, or would reasonably be
expected, to harm the Company or any Business Affiliate or its
reputation or which would reasonably be expected to lead to unwanted or
unfavorable publicity to the Company or any Business Affiliate.
7. Other Obligations. The obligations of Shareholder under this
Agreement are in addition to, and not in derogation of, any other obligations or
duties that Shareholder may have or owe towards the Company or any Business
Affiliate, including, without limitation, pursuant to any employment agreement
or arrangement or by law as a present or former officer and/or director of the
Company.
8. Specific Performance. Shareholder acknowledges that the Company and
its Business Affiliates would sustain irreparable injury in the event of a
violation by Shareholder of any of the provisions of this Agreement, and by
reason thereof Shareholder consents and agrees that if Shareholder violates any
of the provisions of this Agreement, in addition to any other remedies
available, the Company or its Business Affiliate, as the case may be, shall be
entitled to a decree specifically enforcing such provisions, and shall be
entitled to a temporary and permanent injunction restraining Shareholder from
committing or continuing any such violation, from any court of competent
jurisdiction, without the necessity of proving actual damages, posting any bond,
or seeking arbitration in any forum.
9. Enforceability. Shareholder acknowledges and agrees that due to the
uniqueness of her role with the Company, her services and position, the nature
of the confidential information she possesses or will possess and the benefits
that she will receive by reason of the transaction contemplated by the Merger
Agreement, the covenants set forth herein are reasonable and necessary for the
protection of the business and goodwill of the Company and its Business
Affiliates. Nevertheless, in the event that any court of competition
jurisdiction determines that any provisions of this Agreement are unreasonable
in respect of its geographic boundaries, scope or term, such court is empowered
and authorized to amend or modify the provisions of this Agreement to the
minimum extent necessary in order to render such provisions valid, lawful and
enforceable. Should any provision of this Agreement be held or declared invalid,
unlawful or unenforceable, such
invalidity, unlawfulness or unenforceability shall not in any way affect the
validity, lawfulness or enforceability of any other provision of this Agreement.
10. Entire Agreement. This Agreement sets forth the entire agreement
between the parties with respect to its subject matter and merges and supersedes
all prior discussions, agreements and understandings of every kind and nature
between any of them and neither party shall be bound by any term or condition
other than as expressly set forth or provided for in this Agreement. This
Agreement may not be changed or modified nor may any of its provisions be
waived, except by an agreement in writing, signed by the parties hereto.
11. Waiver. The failure of the Company or any Business Affiliate to
enforce any of its terms, provisions or covenants shall not be construed as a
waiver of the same or of the right of the Company or such Business Affiliate to
enforce the same. Waiver by the Company or any Business Affiliate of any breach
or default by Shareholder of any term or provision of this Agreement shall not
operate as a waiver of any other breach or default.
12. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
if and when delivered personally or by overnight courier to the parties at the
following addresses or sent by electronic transmission, with confirmation
received, to the facsimile numbers specified below:
If to the Company: XxXxxxx RentCorp.
0000 Xxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
If to Acquiror: Tyco Acquisition Corp. 33
c/o Tyco International (US) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attention: President
If to Shareholder: Xxxx X. XxXxxxx
#2 Sixth Ave
San Francisco, CA 9418
with a copy to: Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
or at such other address as shall be indicated to either party in writing by
like notice. Notice of change of address shall be effective only upon receipt.
13. Successors and Assigns. This Agreement shall inure to the benefit
of, and shall be enforceable by, the Company, any Business Affiliate and their
respective successors and assigns.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to conflicts
of law principles.
15. Headings. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
16. Counterparts. This Agreement may be executed in counterparts (by
original or facsimile signature), each of which shall be deemed an original for
all purposes but which, together, shall constitute one and the same instrument.
17. Effectiveness. This Agreement, and all rights and obligations of the
parties hereunder, shall become effective at the Effective Time and shall
terminate if the Merger Agreement is terminated in accordance with its terms
without consummation of the offer and merger transactions contemplated thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
XXXXXXX RENTCORP
By:
--------------------------------
Name:
Title:
TYCO ACQUISITION CORP. 33
By:
--------------------------------
Name:
Title:
SHAREHOLDER
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Name: Xxxx X. XxXxxxx
