Exhibit (d)(5)
UNFAIR COMPETITION AGREEMENT
This Unfair Competition Agreement (this "Agreement"), dated as of August 8,
2002, is entered into by Bureau Veritas, S.A., a societe anonyme organized under
the laws of the French Republic (the "Parent"), Voice Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Bureau Veritas Holdings,
Inc. ("Purchaser"), U.S. Laboratories Inc., a Delaware corporation (the
"Company"), and Xxxxxxxxx Xxxxxx, an individual (the "Principal").
RECITALS
A. The Principal is a stockholder and employee of the Company.
B. Concurrently with the execution and delivery hereof, the Parent,
Purchaser and the Company are entering into an Agreement and Plan of Merger
dated as of August 8, 2002 and such other transaction documents contemplated
thereby (the "Merger Agreement") pursuant to which Purchaser will acquire all of
the outstanding shares of common stock of the Company, including those of
Principal, and will be merged with and into the Company with the Company
continuing as the surviving corporation and an indirect wholly-owned subsidiary
of the Parent.
C. The Principal acknowledges and agrees that the Principal has executive,
technical, managerial and sales expertise associated with the business and
operations of the Company. In addition, the Principal has valuable business
contacts with clients and potential clients of the Company. Because the
Principal has the ability to compete with the Company in the operation of the
business of the Company and with the Parent in the operation of its business and
because Principal is selling all of his shares in the Company, the Parent,
Purchaser and the Company desire that the Principal enter into this Agreement.
D. The Principal has obtained the advice of his own counsel (and not the
Company's nor the Parent's nor Purchaser's) in connection with negotiating and
executing this Agreement.
AGREEMENT
NOW THEREFORE, the parties hereby agree as follows:
1. Defined Terms. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Merger Agreement. For the purposes of
this Agreement, the term "affiliate" means any person controlling, controlled by
or under common control with any other person.
2. Covenant as to Unfair Competition. Until the later of the fifth
anniversary of the Effective Time or (ii) the third anniversary of the date on
which the Principal is no longer
employed by the Company, its successors or assigns or any other affiliate of the
Parent or Purchaser (the "Restricted Period"), Principal shall not, as
principal, proprietor, director, officer, partner, shareholder, employee,
member, manager, consultant, agent, independent contractor or otherwise, for
himself or on behalf of any other person or entity (except the Company, its
successors or assigns or any affiliate of the Company, the Parent or Purchaser,
in either case at the Company's request), directly or indirectly, engage in, or
enter into, in any of the counties of the State of California listed in Schedule
1 hereto or anywhere else in the United States in which the Company operates or
does business in (x) the business of engineering inspection and testing or (y)
any other business conducted by the Company or any of its affiliates as of the
date of such termination or expiration of employment of the Principal; provided
that the direct or indirect ownership by Principal as an inactive investor of
not more than five percent of the outstanding voting securities of an entity
listed for trading on a national stock exchange or quoted on any nationally
recognized automated quotation system shall not be deemed a violation of this
Agreement.
3. No Disparagement. During the Restricted Period and thereafter, the
Principal will not, and will use reasonable efforts to ensure that the
Principal's attorneys, agents or other representatives do not, take any action
or make or publish any statement, whether oral or written, which disparages in
any way, directly or indirectly, the Company, the Parent or Purchaser or any of
the present or former employees or directors of the Company, the Parent or
Purchaser.
4. Injunctive Relief; Specific Performance. In view of the services which
the Principal will perform, which services are special, unique, extraordinary
and intellectual in character and which will place the Principal in a position
of confidence and trust with the customers and employees of the Company and its
affiliates and will provide to Principal access to confidential financial
information, trade secrets, "know-how" and other confidential and proprietary
information, the Principal expressly acknowledges that the restrictive covenants
set forth in this Agreement are reasonable and are necessary to protect and
maintain the proprietary and other legitimate business interests of Company and
its affiliates and that the enforcement of such restrictive covenants will not
prevent the Principal from earning a livelihood. The Principal further
acknowledges that the remedy at law for any breach or threatened breach of this
Agreement, if such breach or threatened breach is held by the court to exist,
will be inadequate and, accordingly, that the Company and its affiliates shall,
in addition to all other available remedies, be entitled to injunctive relief
without being required to post bond or other security and without having to
prove the inadequacy of the available remedies at law. The Principal waives
trial by jury and agrees not to plead or defend on grounds of adequate remedy at
law or any element thereof in an action by the Company and/or any affiliate
against the Principal for injunctive relief or for specific performance of any
obligation pursuant to this Agreement. The period of time during which the
provisions of this Agreement shall apply shall be extended by the length of time
during which the Principal is in breach of the terms of this Agreement. The
Company shall provide to Principal notice of any such alleged breach as soon as
practicable after the Company has reason to believe that a breach has occurred.
5. Severability.
(a) If any of the provisions of this Agreement or portion thereof are held
to be unenforceable for any reason, including but not limited to the duration of
such provision, the
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territory being covered thereby or the type of conduct restricted therein, the
parties agree that the court is authorized and directed to modify the duration,
geographic area and/or other terms of such provisions to the maximum benefit of
the Company as permitted by law, and, as so modified, said provision shall then
be enforceable. If the courts of any one or more jurisdictions hold such
provisions wholly or partially unenforceable by reason of the scope thereof or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company's right to the relief provided for herein
in the courts of any other jurisdictions as to breaches or threatened breaches
of such provisions in such other jurisdictions, the above provisions as they
relate to each jurisdiction being, for this purpose, severable into diverse
independent covenants.
(b) For the purposes of this Agreement, the parties hereof agree and
acknowledge that (i) the restrictions and remedies contained in this Agreement
are reasonable as to time, geographic area and scope of activity and do not
impose a greater restraint than is necessary to protect the goodwill and other
legitimate business interests of the Company, the Parent and Purchaser under the
Merger Agreement, and (ii) the provisions and obligations of this Agreement are
for and run to the benefit of the Parent, Purchaser, and the Company and its
affiliates, as the "Surviving Corporation" upon merger of the Purchaser with and
into the Company, with the terms, conditions and obligations hereof running to
the Company and its affiliates as of and at the Effective Time.
6. Effectiveness. This Agreement shall only become effective at the time of
the consummation of the Offer, as defined in the Merger Agreement.
7. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given (a) on the date of delivery if delivered
personally, (b) on the first Business Day following the date of dispatch if
delivered by a nationally recognized next-day courier service, (c) on the sixth
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid or (d) if sent by
facsimile transmission between the hours of 9:00 a.m. and 5:00 p.m. in the
recipient party's time zone, with a copy mailed on the same day in the manner
provided in (a) or (b) above, when transmitted. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
(a) if to Parent, Purchaser or the Company:
c/o Bureau Veritas, S.A.
00 xxx, Xxxxx des Reflets
La Defense 2
00000 Xxxxxxxxxx, Xxxxxx
Attention: Francois Tardan and Xxxx-France
Saugnac
Fax: 000-000-0000-0000
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With a copy to:
Xxxxxx Xxxx & Priest LLP
00 X. 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) If to the Principal:
Xxxxxxxxx Xxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
With copy to:
O'Melveny & Xxxxx LLP
Suite 100
114 Pacifica
Xxxxxx, Xxxxxxxxxx 00000
Attn: J. Xxx Xxxxxx
Fax: (000) 000-0000
8. Incorporation of Recitals. The Recitals to this Agreement are
incorporated fully herein and shall be treated as an integral part of this
Agreement.
9. Entire Agreement; Amendments and Waivers. This Agreement together with
the Employment Agreement between the Company and the Principal constitute the
complete, final and exclusive statement of the agreement among the parties
pertaining to the subject matter hereof and thereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties with respect to such subject matter. No amendment,
supplement, modification, rescission or waiver of this Agreement shall be
binding unless executed in writing by the parties. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a continuing
waiver unless otherwise expressly provided. The parties expressly acknowledge
that they have not relied upon any prior agreements, understandings,
negotiations and discussions, whether oral or written.
10. Assignment. The Principal agrees that the Parent, Purchaser or the
Company may assign their respective rights and obligations under this Agreement
to any successor-in-interest. Except as expressly provided in this paragraph, no
party may assign its rights and obligations under this Agreement; and any
attempt to do so shall be void. Subject to the foregoing, the rights
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and obligations of the parties under this Agreement shall inure to the benefit
of and be binding upon their respective successors and assigns.
11. Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without giving effect to the
conflict of laws principles thereof.
12. Captions. All Section titles or captions contained in this Agreement
are for convenience only and shall not be deemed as part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BUREAU VERITAS, S.A.
By: /s/ XXXXX XXXXXXXXXXX
-----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: President and Chief Executive Officer
VOICE ACQUISITION CORP.
By: /s/ XXXXX XXXXXXXXXXX
-----------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: President
THE COMPANY
By: /s/ XXXXXX X'XXXXX
-----------------------------------------
Name: XxxxXx X'Xxxxx
---------------------------------------
Title: Vice President
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/s/ XXXXXXXXX XXXXXX
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Xxxxxxxxx Xxxxxx, an individual
Schedule 1
List of California Counties
Alameda Orange
Alpine Placer
Xxxxxx Plumas
Butte Riverside
Calaveras Sacramento
Colusa San Xxxxxx
Contra Costa San Bernardino
Del Norte San Diego
El Dorado San Francisco
Fresno San Xxxxxxx
Xxxxx San Xxxx Obispo
Humboldt San Mateo
Imperial Santa Xxxxxxx
Inyo Santa Xxxxx
Xxxx Santa Xxxx
Kings Shasta
Lake Sierra
Lassen Siskiyou
Los Angeles Xxxxxx
Xxxxxx Sonoma
Marin Stanislaus
Mariposa Xxxxxx
Mendocino Tehama
Merced Trinity
Modoc Tulare
Mono Tuolumne
Monterey Ventura
Napa Yolo
Nevada Yuba
