BUYER NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered into
this 13th day of December, 1996 (the "Effective Date"), by and between
SANIFILL, INC., a Delaware corporation ("Seller"), and US LIQUIDS INC., a
Delaware corporation ("Buyer");
RECITALS:
WHEREAS, Seller and Buyer have entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement"), dated as of December 2, 1996,
pursuant to which Buyer has agreed to purchase substantially all of the
assets of and to assume certain of the liabilities relating to Xxxxxxxx
Xxxxx, Ltd. and Xxxxxxxx Xxxxx Xxxx, Ltd., each a Delaware limited
partnership and a wholly owned subsidiary of Seller, in accordance with the
terms and subject to the conditions set forth in the Asset Purchase
Agreement; and
WHEREAS, it is a condition precedent to the closing under the Asset
Purchase Agreement that Buyer and Seller enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer hereby agree as follows:
1. CERTAIN DEFINITIONS. The following terms used herein shall have
the following meanings:
AFFILIATE OR AFFILIATE - a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with the Person specified. For purposes of this definition,
"control" (including the terms "controlling," "controlled by" and "under
common control with") of a Person means the possession, directly or
indirectly, of the power to (a) vote 50% or more of the voting interests in
such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
BUSINESS - The collection, treatment and disposal of municipal solid
wastes, construction and demolition debris.
COLLECTION - The collection, transfer or transportation of NOW.
COMPETITOR - Any Person that, directly or indirectly, engages in any
aspect of the Business within any portion of the Territory.
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DISPOSAL - The treatment or disposal of NOW.
NOW - Nonhazardous oilfield waste associated with the exploration and
production of oil, gas and geothermal energy, that contains less than 30
picocuries per gram of Radium 226 or 228.
PERSON OR PERSON - Any individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
THE TERRITORY - The United States of America.
2. NONCOMPETITION. Buyer hereby agrees, for itself and on behalf of
its Affiliates, that, during the term of this Agreement, except as otherwise
permitted under this Agreement, neither it nor any of its Affiliates will,
within any part of the Territory, directly or indirectly, do any one or more
of the following: (a) engage in any aspect of the Business; (b) own any
interest in any Competitor; or (c) operate, join, control or otherwise
participate in any Competitor.
3. NO SOLICITATION. Buyer hereby further agrees that it will not,
during the term of this Agreement, hire any employee of Seller, or solicit,
induce or contact with a view toward soliciting or inducing, directly or
indirectly, any such employee to leave his or her employment with Seller to
accept employment with Buyer, except as otherwise agreed to in writing by
Seller and Buyer.
4. TERM. The term of this Agreement commences on the Effective Date
and shall continue until the fifth anniversary of the Effective Date.
5. PERMITTED ACTIVITIES. Notwithstanding the provisions of Section 2
of this Agreement:
(a) Buyer and its Affiliates, as passive investors, may own up to
5% of the equity securities of any Person (other than Sanifill, Inc. or any
of its Affiliates, including, without limitation, USA Waste, Inc.) whose
equity securities are publicly traded. In addition, in connection with their
business described in subparagraph (b) below, Buyer and its Affiliates shall
be permitted from time to time to acquire interests representing more than 5%
of the equity securities of Persons that derive less than 10% of their
revenues from activities that cause such Persons to be Competitors, PROVIDED
that Buyer or its Affiliates or the Persons who engage in such competitive
activities promptly formulate plans to dispose of those aspects of such
businesses that cause such Persons to be Competitors and actually complete
such dispositions within 120 days after such interests are acquired by Buyer
or one or more of its Affiliates.
(b) Seller recognizes and acknowledges that, following
consummation of the transactions contemplated by the Asset Purchase
Agreement, Buyer will be in the business of Collection and Disposal;
remediation and closure of oilfield waste pits, including related loading and
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hauling; and marketing, dealing in or soliciting orders for any of the
products, services or support activities related thereto. Seller agrees that
this Agreement relates only to the specific activities included within the
Business and within the Territory. This Agreement is not intended to limit
or otherwise affect the business of Buyer or its Affiliates except as
expressly set forth herein, and the parties expressly acknowledge that,
except as set forth herein and in the Seller Noncompetition Agreement of even
date herewith, the parties may compete in activities outside the scope of the
Business and the Territory.
(c) Seller further recognizes and acknowledges that Buyer from
time to time may enter into joint venture arrangements with unaffiliated
third parties ("Joint Venture Partners") and that some of such Joint Venture
Partners may engage in aspects of the Business in the Territory. Without
limiting the applicability of this Agreement to Buyer and such joint
ventures, Seller agrees that the terms of this Agreement shall not apply to
Joint Venture Partners solely as a result of their entering into joint
venture arrangements with Buyer.
6. REASONABLENESS OF TERRITORY. The parties hereby stipulate and
acknowledge that because (i) Seller and its Affiliates operate in a
significant number of states within the United States and (ii) Buyer expects
that it will expand its operations to additional states within the United
States during the Term, the scope of the Territory is necessary to protect
the legitimate interests of Seller and its Affiliates.
7. INJUNCTIVE RELIEF. Buyer hereby stipulates and agrees that any
breach by it or by any of its Affiliates of this Agreement will cause
irreparable harm to Seller that cannot be reasonably or adequately
compensated by damages in an action at law and that, in the event of such
breach, Seller shall be entitled to injunctive or other equitable relief.
8. SEVERABILITY. Buyer acknowledges that it has carefully read and
considered the provisions of this Agreement and, having done so, agrees that
the restrictions set forth herein (including but not limited to the time
period of restriction and the geographical areas of restriction) are fair and
reasonable and are reasonably required to protect the interests of Seller and
its Affiliates. In the event that, notwithstanding the foregoing, any of the
provisions of this Agreement shall be held to be invalid or unenforceable,
the remaining provisions hereof shall nevertheless continue to be valid and
enforceable, as though the invalid or unenforceable parts had not been
included herein. In the event that any provision of this Agreement relating
to time periods or areas of restriction or both shall be declared by a court
of competent jurisdiction to exceed the maximum time periods or areas (or
both) that such court deems reasonable and enforceable, said time periods or
areas of restriction or both shall be deemed to become and thereafter shall
be the maximum time periods and areas which such court deems reasonable and
enforceable.
9. ENTIRE AGREEMENT; WAIVER. This Agreement, together with the Asset
Purchase Agreement and the other agreements specifically referred to therein,
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous oral agreements,
understandings, negotiations and discussions of the parties. No supplement,
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modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided. Any failure to insist
on strict compliance with any of the terms and conditions of this Agreement
shall not be deemed a waiver of any such terms or conditions.
10. NATURE OF OBLIGATIONS. All covenants and obligations of Buyer
hereunder shall be binding on Buyer, its Affiliates and the assigns,
successors and legal representatives of each of them and shall inure to the
benefit of Seller and any of its Affiliates that engage in any aspect of the
Business in any part of the Territory.
11. NOTICES. Any and all notices, demands, requests or other
communications hereunder shall be in writing and shall be deemed duly given
when personally delivered to or transmitted by overnight express delivery or
by facsimile to and received by the party to whom such notice is intended, or
in lieu of such personal delivery or overnight express delivery or facsimile
transmission, 48 hours after deposit in the United States mail, first class,
certified or registered, postage prepaid, return receipt requested, addressed
to the applicable party at the address provided below. The parties may
change their respective addresses for the purpose of this Paragraph 11 by
giving notice of such change to the other party in the manner which is
provided in this Paragraph 11.
Seller: Sanifill, Inc.
First City Tower
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Buyer: US Liquids Inc.
00 Xxxxx Xxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxx 00000-0000
Attention: W. Xxxxxxx Xxx
Facsimile No.: (000) 000-0000
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With a copy to:
Xxxxxx & Xxxxxx
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: T. Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
12. LAW GOVERNING. The provisions of this Agreement and all rights and
obligations hereunder shall be governed by and construed in accordance with
the internal laws of the State of Texas applicable to contracts made and to
be wholly performed within the State of Texas.
13. CAPTIONS. The captions in this Agreement are included for
convenience of reference only, do not constitute a part hereof and shall be
disregarded in the interpretation or construction hereof. IN WITNESS
WHEREOF, the parties have duly executed this Agreement as of the date first
above written.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
SANIFILL, INC.
By: /s/ XXXXX X. XXXXXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Asst. Sec.
US LIQUIDS INC.
By: /s/ W. XXXXXXX XXX
--------------------------------
Name: W. Xxxxxxx Xxx
Title: President
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