1
Exhibit 10.47
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
July 1, 1997, by and between Xxxx Xxxxxx ("Executive") and NES Acquisition
Corp., a Delaware corporation (the "Company"). The Company and Executive are
sometimes collectively referred to herein as the "Parties" and individually as
a "Party."
Executive has been an employee, officer, director and/or stockholder of
Sprint Industrial Services, Inc., a Texas corporation ("Sprint"), and as such,
possesses special knowledge, abilities and experience regarding the business of
Sprint. The Company, Sprint and the stockholders of Sprint are parties to an
Asset Purchase Agreement, dated as of July 1, 1997 (the "Purchase Agreement"),
whereby the Company shall purchase substantially all of the assets of the
Sprintank division of Sprint ("Sprintank"). As a condition to the consummation
of the transactions contemplated by the Purchase Agreement, the Company desires
to obtain, and, subject to the terms and conditions hereof, Executive agrees to
provide certain representations, warranties and covenants as more fully set
forth below.
In consideration of the mutual covenants and agreements set forth herein,
the Parties agree as follows:
1. Confidential Information. Executive acknowledges that all information
concerning the business and affairs of Sprintank and/or the Company or any of
its affiliates which (i) is confidential and proprietary to Sprintank and/or
the Company or any of its affiliates, (ii) confers a competitive advantage on
Sprintank and/or the Company or any of its affiliates, or (iii) would be
detrimental or embarrassing to Sprintank and/or the Company or any of its
affiliates if disclosed (collectively, "Confidential Information") is the
property of the Company or such affiliate. Therefore, Executive agrees that
Executive shall not disclose to any unauthorized person or use for Executive's
own purposes any Confidential Information without the prior written consent of
the Chief Executive Officer of the Company (the "CEO"), unless and to the
extent that the aforementioned matters (i) become generally known to and
available for use by the public (other than by reason of any disclosure by
Executive), (ii) are independently developed by a person or entity that is not
a party to this Agreement (other than as a result of any disclosure by
Executive), or (iii) are required by law or by the order of any court of
competent jurisdiction or government agency to be disclosed, in which case, (A)
Executive will use reasonable best efforts to notify the Company promptly of
such request or requirement so that the Company may seek an appropriate
protective order or waive compliance with the provisions of this Section 1, and
(B) if, in the absence of such a protective order or waiver, Executive is
compelled to disclose any Confidential Information, Executive will use
reasonable best efforts to limit such disclosure to Confidential Information
which is so required to be disclosed and to obtain an order or other assurance
that confidential treatment will be accorded to any Confidential Information
disclosed. Executive shall deliver to the Company at any time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documents and data (and copies thereof)
relating to the Confidential Information, Work Product (as defined below) or
the business of
2
Sprintank and/or the Company or any of its affiliates which Executive may then
possess or have under Executive's control.
2. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable)
which primarily relate to Sprintank's or the Company's or any of its
affiliates' actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed or
made by Executive while employed by Sprint or the Company or any of its
affiliates ("Work Product") belong to the Company or such affiliate. Executive
shall promptly disclose such Work Product to the CEO and perform all actions
reasonably requested by the CEO (regardless of when requested) to establish and
confirm such ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).
3. Non-Compete, Non-Solicitation.
(a) In consideration of the Noncompete Payment (as defined below) to be
paid to Executive hereunder, Executive acknowledges that in the course of
Executive's employment with Sprint Executive has become familiar with, and in
the course of Executive's employment with the Company Executive shall become
familiar with, Sprintank's and the Company's trade secrets and with other
Confidential Information concerning Sprintank and the Company and its
affiliates and that Executive's services have been and shall be of special,
unique and extraordinary value to Sprintank and/or the Company and its
affiliates. Therefore, in order to induce the Company to consummate the
transaction contemplated by the Purchase Agreement, Executive agrees that,
during the two-year period commencing on the date of Executive's termination of
employment with the Company (the "Noncompete Period"), Executive shall not
directly or indirectly own any interest in, manage, control, participate in,
consult with or render services for any industrial tank or mobile storage box
rental business in any state or country in which the Company conducts such
business on the date of Executive's termination of employment with the Company
(other than on behalf of, and at the direction of, the Company). Nothing
herein shall prohibit Executive from being a passive owner of not more than 2%
of the outstanding stock of any class of a corporation which is publicly
traded, so long as Executive has no active participation in the business of
such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any of its affiliates to leave the employ of the Company or
such affiliate, or in any way interfere with the relationship between the
Company or any of its affiliates and any employee thereof, or (ii) induce or
attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any of its affiliates to cease doing
business with the Company or such affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any of its affiliates (including, without limitation, making
any negative statements or communications about the Company or its affiliates).
- 2 -
3
4. Noncompete Payment. As a condition to Executive's obligations
hereunder, the Company shall deliver to Executive on the date hereof $15,000
(the "Noncompete Payment") in immediately available funds.
5. Enforcement. If, at the time of enforcement of paragraph 1, 2 or 3 of
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services have been and/or are unique and because Executive
has access to Confidential Information and Work Product, the parties hereto
agree that money damages would not be an adequate remedy for any breach of this
Agreement. Therefore, in the event a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security). In addition, in the event of an alleged
breach or violation by Executive of paragraph 3 of this Agreement, the
Noncompete Period shall be tolled until such breach or violation has been duly
cured. Executive agrees that the restrictions contained in paragraph 3 of this
Agreement are reasonable.
6. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the Company and its affiliates, successors and assigns and
shall be binding upon and inure to the benefit of Executive and Executive's
legal representatives and assigns. The Company may assign or transfer its
rights hereunder to any of its affiliates or to a successor entity in the event
of merger, consolidation or transfer or sale of all or substantially all of the
assets of Sprintank or the Company.
7. Modification of Waiver. No amendment, modification or waiver of this
Agreement shall be binding or effective for any purpose unless it is made in a
writing signed by the Party against which enforcement of such amendment,
modification or waiver is sought. No course of dealing between the Parties to
this Agreement shall be deemed to affect or to modify, amend or discharge any
provision or term of this Agreement. No delay on the part of the Company or
Executive in the exercise of any of their respective rights or remedies shall
operate as a waiver thereof, and no single or partial exercise by the Company
or Executive of any such right or remedy shall preclude other or further
exercises thereof. A waiver of right or remedy on any one occasion shall not
be construed as a bar to or waiver of any such right or remedy on any other
occasion.
8. Governing Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed
by, and construed in accordance with, the laws of the State of Texas, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Texas or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Texas.
- 3 -
4
9. Severability. Whenever possible each provision and term of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision or term of this Agreement shall be
held to be prohibited by or invalid under such applicable law, then such
provision or term shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of
this Agreement.
10. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any Party.
11. Executive's Representations. Executive represents and warrants to the
Company that (i) Executive's execution, delivery and performance of this
Agreement does not and shall not conflict with, or result in the breach of or
violation of, any other agreement, instrument, order, judgment or decree to
which Executive is a party or by which Executive is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any person or entity other than the Company and
(iii) upon the execution and delivery of this Agreement, this Agreement shall
be the valid and binding obligation of Executive, enforceable in accordance
with its terms.
12. Notice. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or one day
after being sent by Federal Express or other reputable overnight carrier or
five days after being sent by certified or registered mail addressed to the
other Party hereto at such Party's address shown below:
If to the Company:
NES Acquisition Corp.
c/o National Equipment Services
0000 Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Perl
If to Executive:
Xxxx Xxxxxx
- 4 -
5
00000 Xxxxxxxxxx
Xxxxxxx, XX 00000
or at such other address as such Party may designate by written notice to the
other Party.
13. Captions. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and shall not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no caption had been used in this Agreement.
14. Counterparts. This Agreement may be executed in counterparts, any one
of which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same instrument.
* * * *
- 5 -
6
IN WITNESS WHEREOF, the undersigned have executed this Noncompetition
Agreement as of the date first above written.
NES ACQUISITION CORP.
By: /s/ Xxxxx Xxxxxxx
-------------------------------
Its: CEO
-------------------------------
/s/ Xxxx Xxxxxx
------------------------------------
XXXX XXXXXX
