NON-COMPETITION AND NON-SOLICITATION AGREEMENT (this “Agreement”) dated as of
Exhibit
10.5
NON-COMPETITION
AND NON-SOLICITATION AGREEMENT (this “Agreement”) dated as
of
[ ] [ ],
2008, between THE
BRINK’S COMPANY, a Virginia
corporation (“Brink’s”), and BRINK’S
HOME
SECURITY HOLDINGS, INC., a Virginia corporation
(“BHS”). Capitalized
terms used herein but not otherwise
defined
herein shall have the meanings set forth in the Separation and Distribution
Agreement (as defined below).
WHEREAS,
pursuant to a Separation and Distribution Agreement (the “Separation
and Distribution Agreement”) dated as of
[ ] [ ],
2008, Brink’s has agreed to distribute, on a pro rata basis, to the
Record Holders all the outstanding shares of BHS Common Stock owned by Brink’s
on the Distribution Date (the “Distribution”);
and
WHEREAS,
on and after the Distribution Date, BHS is to continue to engage in the BHS
Business, including the Restricted Activities (as defined herein), and Brink’s
is to continue the Brink’s Business;
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements contained
herein, in the Separation and Distribution Agreement and in the other Ancillary
Documents entered into pursuant to or related to the Separation and Distribution
Agreement, the parties hereto agree as follows:
SECTION
1. Definitions. For
purposes of
this Agreement, the following terms shall have the following
meanings:
(a) “Agreement” has the
meaning set forth in the preamble hereto.
(b) “BHS” has the meaning
set forth in the preamble hereto.
(c) “Brink’s” has the meaning
set forth in the preamble hereto.
(d) “Competing Business”
means any business that is engaged, directly or indirectly, in Restricted
Activities.
(e) “Non-Compete Period”
means the period commencing on the Distribution Date and automatically
terminating without further documentation on the fifth anniversary of the
Distribution Date.
(f) “Non-Solicitation
Period” means the period commencing on the Distribution Date and
automatically terminating without further documentation on the second
anniversary of the Distribution Date.
(g) “Restricted
Activities” means (i) the provision, rental, installation,
servicing, repair, distribution, storage, monitoring and maintenance of
(A) security alarm systems for business and residential premises, including
any video surveillance and any fire, carbon dioxide, water, temperature,
intrusion and/or medical emergency alarm components of such security alarm
systems, and (B) personal emergency response systems for senior citizens;
(ii) personal identity protection services; and (iii) the marketing,
packaging, advertising and promotion of any of the services listed in this
definition; in each case, carried on within the Territory during the Non-Compete
Period.
(h) “Separation and Distribution
Agreement” has the meaning set forth in the preamble hereto.
(i) “Subsidiary” has the
meaning set forth in the Separation and Distribution Agreement. For
the avoidance of doubt, for purposes of this Agreement, the term “Subsidiary”
does not include the VEBA or any other trust maintained for the benefit of
current or former employees of Brink’s or its Subsidiaries.
(j) “Territory” means
the United States of America, Puerto Rico and Canada.
(k) “VEBA” means the
voluntary employees’ beneficiary association employee welfare benefits trust
established by the Parent Employee Welfare Benefit Trust (f/k/a The Pittston
Company Employee Welfare Benefit Trust) entered into by and between The Pittston
Company, a Virginia corporation, and The Chase Manhattan Bank, as the trustee,
as of July 28, 1999, as amended by the First Amendment of The Pittston Company
Employee Welfare Benefit Trust dated as of November 1, 2001, entered into among
The Pittston Company, The Chase Manhattan Bank, as the trustee, and Fleetboston
Bank, as the successor trustee, and the Second Amendment of The Pittston Company
Employee Welfare Benefit Trust, dated as of September 30, 2003, entered
into by Parent, as sponsor, formerly The Pittston Company, as further amended
from time to time.
SECTION
2. Effectiveness. This
Agreement shall be effective as of the Distribution Date and (a) shall be
null and void and of no further force and effect if the Separation and
Distribution Agreement is terminated in accordance with its terms prior to the
Distribution and (b) shall terminate at the end of the Non-Compete
Period.
SECTION
3. Agreement
Not to Compete. (a) Except
as provided in Sections 3(b) and (c), Brink’s shall not, and shall cause
each of its Subsidiaries not to, (i) directly or indirectly, participate
in, engage in or carry on any Restricted Activities or own, operate, control,
share any revenues of or have any profit or other debt or equity interest in any
Competing Business or (ii) actively assist any Person (other than BHS or
its Subsidiaries) in any way (including by means of providing financing to such
Person), directly or indirectly, to participate in, engage in or carry on any
Restricted Activities or own, operate, control, share any revenues of or have
any profit or other debt or equity interest in any Competing
Business.
(b) Notwithstanding
anything herein to the contrary, Section 3(a) shall not prohibit Brink’s or
its Subsidiaries from the following activities:
(i) the
participation or engagement in any type of business conducted by BHS or any of
its Subsidiaries other than the Restricted Activities;
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(ii) in
the ordinary course of business of Brink’s or any of its Subsidiaries, the
purchase of products or services from, or sale of products or services to,
a Person that is engaged in Restricted Activities, provided that the
primary purpose of any such purchases or sales is not to assist such Person in
engaging in or establishing a Competing Business;
(iii) the
beneficial ownership of not more than an aggregate of 5.0% of the outstanding
voting power of any Person engaged in any Competing Business whose securities
are listed on any national securities exchange or automated quotation
system, provided that Brink’s
does not, directly or indirectly, control such Competing Business;
(iv) the
ownership of indebtedness of any Competing Business if (A) the aggregate
principal amount of indebtedness of such Competing Business owned by Brink’s and
its Subsidiaries does not exceed $50,000,000 and (B) such indebtedness
owned by Brink’s and its Subsidiaries does not represent more than 5.0% of any
series of indebtedness of such Competing Business, provided that all
series of indebtedness of any Competing Business that vote as a single class
shall be considered a single series of indebtedness for purposes of this
Section 3(b)(iv); or
(v) the
acquisition of any interest in, or indebtedness of, a Competing Business, if the
Restricted Activities of such Competing Business account for less than 20.0% of
such Competing Business’s consolidated annual revenues for the fiscal year
immediately preceding the date on which such acquisition or combination is
consummated, provided that, if
revenues from such Restricted Activities exceeded $50,000,000 during the
12 month period immediately preceding such acquisition or combination,
Brink’s or its Subsidiary, as the case may be, will sell its interest in such
Competing Business within 12 months of such acquisition or
combination.
(c) In
the event Brink’s or any of its Subsidiaries acquires an ownership or other
interest in, or indebtedness of, any Competing Business in excess of the
percentage or dollar thresholds set forth in Section 3(b)(iii), (iv) or
(v), Section 3(a) shall nevertheless be deemed not breached in the event
that Brink’s or the relevant Subsidiary uses all reasonable efforts to dispose
of such interest or indebtedness in excess of such thresholds in a bona fide sale at market
value (as determined in good faith by the Board of Directors of Brink’s) as soon
as possible, and Brink’s or the relevant Subsidiary completes the sale of such
interest or indebtedness in excess of such thresholds within 12 months of the
date of acquisition of such interest or indebtedness. For the
avoidance of doubt, Brink’s or the relevant Subsidiary will be in breach of this
Agreement if it continues to have any ownership or other interest in, or
indebtedness of, such Competing Business in excess of such thresholds beyond 12
months following the date of the acquisition of such interest or
indebtedness.
(d) During
the Non-Compete Period, Brink’s shall not, and shall cause each of its
Subsidiaries not to, enter into any new agreement to license any of the Trade Symbols
(as defined in the Brand Licensing Agreement) or any other xxxx using the word
“Brink’s” or any derivation thereof to any Person (other than BHS or any of its
Subsidiaries) for use in any Restricted Activities.
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SECTION
4. Agreement not to
Solicit. (a) During the Non-Solicitation Period,
neither Brink’s nor any of its Subsidiaries will (a) solicit, recruit or
hire any employee of BHS or any of its Subsidiaries or (b) solicit or
encourage any employee of BHS or any of its Subsidiaries to leave the employment
of BHS or such Subsidiary, provided that this Section will not
prohibit (i) general solicitations of or advertisements for employment by
Brink’s or any of its Subsidiaries that are not specifically directed toward
such employees and (ii) the solicitation, recruitment or hiring by Brink’s
or any of its Subsidiaries of any such employee whose employment with BHS or any
of its Subsidiaries was involuntarily terminated prior to such solicitation,
recruitment or hiring.
(b) During
the Non-Solicitation Period, neither BHS nor any of its Subsidiaries will
(a) solicit, recruit or hire any employee of Brink’s or any of its
Subsidiaries or (b) solicit or encourage any employee of Brink’s or any of
its Subsidiaries to leave the employment of Brink’s or such Subsidiary, provided that this Section will not
prohibit (i) general solicitations of or advertisements for employment by
BHS or any of its Subsidiaries that are not specifically directed toward such
employees and (ii) the solicitation, recruitment or hiring by BHS or any of
its Subsidiaries of any such employee whose employment with Brink’s or any of
its Subsidiaries was involuntarily terminated prior to such solicitation,
recruitment or hiring.
SECTION
5. Dispute
Resolution. The Dispute Resolution provisions in
Article VIII of the Separation and Distribution Agreement shall apply,
mutatis mutandis, to this
Agreement.
SECTION
6. Miscellaneous. (a) Except
as otherwise expressly set forth in this Agreement, the Miscellaneous provisions
in Article XII of the Separation and Distribution Agreement (which
Article XII addresses counterparts, entire agreement, corporate power,
governing law, assignability, third party beneficiaries, notices, severability,
force majeure, publicity, expenses, headings, survival of covenants, waivers of
default, specific performance, amendments, interpretation, jurisdiction, service
of process, currency and late payments) shall apply, mutatis mutandis, to this
Agreement.
(b) Construction. If
any restriction or covenant contained in this Agreement is in any way construed
to be too broad or to any extent invalid, such provision shall not be construed
to be void and of no effect, but to the extent such provision would be valid or
enforceable under applicable law, such provision shall be construed and
interpreted or reformed so as to provide for a provision having the maximum
enforceable geographic area, time period and other terms (not exceeding those
contained herein) as valid and enforceable under applicable law. The
parties hereto acknowledge that this Agreement has been negotiated and that the
restrictions contained herein are reasonable in light of the circumstances that
pertain to the parties hereto.
(c) Assignability. This
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns; provided, however, that no
party hereto may assign its rights or delegate its obligations under this
Agreement without the express prior written consent of the other party
hereto. Notwithstanding anything herein to the contrary, (i) in
the event any Person acquires, by any means, including by merger or
consolidation, assets of BHS or its Subsidiaries, including equity interests in
any such Subsidiaries, that constitute all or substantially all the consolidated
assets of BHS and its Subsidiaries that are used in connection with the BHS
Business (as such term is defined in the Transition Services Agreement), BHS may
assign its rights and obligations hereunder to such acquirer and
(ii) Brink’s agrees not to effect (or allow any of its Subsidiaries to
effect), or enter into (or allow any of its Subsidiaries to enter into) any
agreement to effect, any sale, transfer or other disposition by any means of
assets constituting all or substantially all the consolidated assets of Brink’s
and its Subsidiaries to any Person (other than Brink’s or any of its
Subsidiaries) if the successor, surviving or acquiring Person will not
automatically succeed to the obligations of Brink’s under this Agreement by
operation of law, unless such Person agrees in writing, for the benefit of BHS,
to assume the obligations of Brink’s hereunder with respect to the assets so
acquired by such Person.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.
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THE
BRINK’S COMPANY,
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by:
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Name:
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Title:
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BRINK’S
HOME SECURITY HOLDINGS, INC.,
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by:
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Name:
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Title:
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