NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made
effective and entered into as of June 17, 1997 between XXXXXXX
X. XXXXXX, XX., an individual ("Stockholder"), and U S Liquids
Inc., a Delaware corporation ("Liquids").
RECITALS
Liquids and Stockholder have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of the date
hereof, pursuant to which a subsidiary of Liquids will be merged
into American Wastewater Inc. ("AWW"), a Texas corporation owned
in part by Stockholder. Pursuant to the Merger Agreement, AWW
will become a wholly-owned subsidiary of Liquids, and the
Stockholder will receive shares of common stock of Liquids.
Liquids desires to protect the businesses it is acquiring
pursuant to the Merger Agreement by having Stockholder enter into
this Agreement.
Stockholder is required by the Merger Agreement to enter
into this Agreement, and Stockholder is entering into this
Agreement in order to satisfy this requirement.
NOW, THEREFORE in consideration of the matters appearing in
the above recitals and in consideration of the mutual promises
and covenants set forth in this Agreement, Liquids and
Stockholder hereby agree as follows:
1. NONCOMPETITION.
(a) During the "Term" (as hereinafter defined),
Stockholder shall not, directly or indirectly, anywhere in
the "Protected Area" (as hereinafter defined), carry on or
engage or participate in any activity substantially similar
to or in competition with the "Business" (as hereinafter
defined), so long as such Business is carried on by AWW, by
Liquids, or by any of Liquids' other subsidiaries, or by any
person acquiring ownership of all or any material portion of
the Business from Liquids (including any subsidiaries of
Liquids) or AWW, all of whom together with Liquids are
sometimes collectively called the "Protected Entities."
(b) During the Term, Stockholder will not, either on
his own account or directly or indirectly in conjunction
with or on behalf of any person, firm or company, employ,
solicit or attempt to so employ or solicit any person who is
then or has, within six (6) months prior thereto, been an
officer, manager or employee of Liquids, AWW, or any of
Liquids' other subsidiaries, regardless of whether such a
person would commit a breach of his or her contract of
employment, if any, by reason of leaving the service of
Liquids, or AWW, or of any of Liquids' other subsidiaries.
(c) It is the desire and intent of the parties that
the provisions of this Section 1 shall be enforced to the
fullest extent permissible under the laws and public
policies of the State of Texas. Accordingly, to the extent
that any provision hereunder or any portion thereof shall be
adjudicated to be invalid or unenforceable, this Section 1
shall be reformed such that the restrictions imposed upon
Stockholder are no greater than would otherwise be
permissible under applicable law. Moreover, each provision
of this Section 1 is intended to be severable, and in the
event that any one or more of the provisions contained in
this Section 1 shall for any reason be adjudicated to be
invalid or unenforceable, the same shall not affect the
validity or enforceability of any other provision of this
Section 1, but this Section 1 shall be construed as if such
invalid or unenforceable provision had not been contained
herein.
(d) Notwithstanding the foregoing, the parties hereto
acknowledge that it shall not constitute a violation of this
Section 1 if Stockholder at any time shall become an
officer, director, employee, agent or consultant of AWW, of
Liquids or of any of Liquids' other subsidiaries, or shall
own no more than five percent (5%) of the common stock of a
publicly traded company or any of its publicly traded debt
or preferred stock.
(e) The term "Business" shall mean (i) the processing
and disposal of nonhazardous liquids wastes including,
without limitation, grease trap wastes from restaurants and
other food manufacturing and preparation facilities, grit
trap waste from car washes, Class I and Class II
nonhazardous liquids and other nonhazardous industrial and
municipal wastewater and/or (ii) the sale of fats and oils
produced from the processing of any such nonhazardous liquid
wastes. The Protected Area shall be all of the State of
Texas.
(f) The phrase "carry on or engage or participate in
any business substantially similar to or in competition with
the Business" shall include Stockholder doing any of the
following-listed acts, directly or indirectly, by himself or
through any other person or entity:
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(i) carrying on, engaging in, or participating in
any such activity as a principal, director, officer,
agent, broker, advisor, employee, independent
contractor, manager, consultant, partner (general or
limited), holder of an equity security, or otherwise;
(ii) as agent or principal carrying on or engaging
in any activities or negotiations with respect to the
acquisition or the disposition of any such activity;
(iii) lending credit or money for the purpose of
establishing, operating, or maintaining any such
activity;
(iv) rendering material assistance to any other
person, firm, association or corporation engaging in
any such activity; or
(v) lending or consenting to the use of his name
or reputation to be used in any such activity.
Without limiting the foregoing, it shall not be relevant
whether any of the foregoing actions were taken for profit
or other consideration.
(g) "Term" shall mean that period commencing with the
date hereof and ending five (5) years later; provided,
however, that the duration of the Term shall be extended by
and for the duration of any period during which Stockholder
is in violation of this Section 1.
2. CONFIDENTIAL INFORMATION. Stockholder covenants and
agrees that he will not, during the term of this Agreement and
thereafter, without the prior written consent of Liquids, unless
in the reasonable exercise of Stockholder's duties as a director,
officer or employee of Liquids or its affiliates or as may be
required by law or court order, divulge to any third party or use
for his own benefit, or for any purpose other than the exclusive
benefit of Liquids, any confidential information concerning the
business and affairs of any of AWW, of Liquids or of any of
Liquids' other subsidiaries, regardless of whether such
information was obtained by him by virtue of his earlier
association in any capacity with any of AWW. As used herein,
"confidential information" shall include but not be limited to
the products, processes, services, marketing and customer
information of any of AWW, Liquids and Liquids' other
subsidiaries, it being the intent hereof that Stockholder shall
not divulge or use any information which is unpublished or not
readily available to the general public. In addition,
Stockholder shall only be permitted to divulge or use information
that is available to the general public if it became available to
the general public other than as a result
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of the acts or omissions of Stockholder. Upon execution and delivery of
this Agreement, Stockholder shall provide Liquids with all information,
data, records, advertising and other materials relating to the Business,
and all copies or reproductions thereof, in his possession or under his
control.
3. INJUNCTIVE RELIEF AND DAMAGES.
(a) Stockholder acknowledges and agrees that, in the
event of a prospective or actual breach of the provisions of
Sections 1 and/or 2 of this Agreement by Stockholder,
damages may not be an adequate remedy to compensate the
Protected Entities for the loss of goodwill and other harm
to the business of the Protected Entities.
(b) In the event of an actual breach of the provisions
of Sections 1 and/or 2 of this Agreement by Stockholder, the
parties agree that any Protected Entity may be entitled, if
it so elects, to a temporary restraining order and to
temporary and permanent injunctive relief to prevent or
terminate such anticipated or actual breach. In addition,
each Protected Entity shall be entitled to such damages as
it can establish that it sustained by reason of such actual
breach.
(c) A Protected Entity shall have the right to inform
any entity described in Section 1 of this Agreement, and the
principals thereof, and any other third party: (i) that the
Protected Entity reasonably believes it or them to be, or to
be contemplating, participating with Stockholder or
receiving from Stockholder assistance in violation of the
terms of Section 1 of this Agreement; (ii) of the nature of
the rights of the Protected Entity hereunder; and (iii) that
participation by any such entity or persons with Stockholder
in activities in violation of Section 1 of this Agreement
may give rise to claims by the Protected Entity against such
entity or persons.
4. INDEPENDENT COVENANTS. The covenants of Stockholder
under this Agreement shall be construed as and shall be
independent of the covenants, representations, warranties and
obligations of Liquids under the Merger Agreement, and
accordingly any default by Liquids with respect to any such
representation, warranty, covenant or obligation shall not
constitute an excuse for Stockholder failing to perform under
this Agreement.
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5. MISCELLANEOUS.
(a) GOVERNING LAW, CHOICE OF FORUM AND CONSENT TO
SERVICE OF PROCESS AND JURISDICTION. Any suit, action or
proceeding against the Stockholder with respect to this
Agreement shall be brought exclusively in courts of
competent subject matter jurisdiction sitting in the State
of Texas, County of Xxxxxx. Stockholder hereby irrevocably
waives any objections which he may now or hereafter have to
the jurisdiction or venue of any suit, action or proceeding,
arising out of or relating to this Agreement brought in such
courts, and hereby further irrevocably waives any claim that
such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. This Agreement
shall be governed by and construed in accordance with the
laws of the State of Texas.
(b) ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties hereto in reference to the
subject matter hereof and in reference to any of the matters
or things herein provided for or hereinabove discussed or
mentioned in reference to such subject matter; all prior
agreements, promises, representations and understandings
relative to such subject matter are superseded by this
Agreement.
(c) ASSIGNABILITY. Neither this Agreement nor any of
the rights, obligations or benefits hereof, shall be
assignable by any party hereto. Except as expressly
provided herein, this Agreement shall not be construed to
confer upon or give to any person, other than the parties
hereto, any right, remedy or claim under or by reason of
this Agreement or of any term, covenant or condition hereof.
(d) AMENDMENTS; WAIVERS. This Agreement may be
amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived only by a
written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The
failure of any party at any time or times to require
performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No
waiver by any party of the breach of any term or provision
contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or
covenant contained in this Agreement.
(e) HEADINGS AND TERMS. All headings in this
Agreement are for convenience of reference only and shall
not affect the
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meaning of any provision hereof. The term "person" shall include
reference to an individual or a legal entity.
(f) ATTORNEYS' FEES. Should either party hereto
retain counsel for the purpose of enforcing or preventing
the breach of any provision hereof including, but not
limited to, by instituting any action or proceeding to
enforce any provision hereof or to enjoin the breach of any
provision of this Agreement, or for a declaration of such
party's rights or obligations under this Agreement, or for
any other judicial remedy, then the successful or prevailing
party shall be entitled, in addition to any other relief as
to which such party may be entitled, to be reimbursed by the
other party for all costs and expenses incurred thereby
including, without limitation, fees and expenses of
attorneys and expert witnesses, including costs of appeal
(whether or not taxable as such).
(g) SURVIVAL. All covenants, agreements,
representations and warranties made herein or otherwise made
in writing by any party pursuant hereto shall survive the
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
(h) REASONABLE RESTRAINTS. Stockholder agrees that
the covenants set forth in Sections 1 and 2 of this
Agreement are reasonable in light of the activities and
business of the Mesa Companies, Liquids and Liquids' other
subsidiaries.
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IN WITNESS WHEREOF, Stockholder has executed this Agreement
and Liquids has caused this Agreement to be duly executed by its
authorized officer as of the day and year first above written.
"LIQUIDS": U S LIQUIDS INC.,
a Delaware corporation
By: /s/ W. Xxxxxxx Xxx, Chief Executive Officer
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"Stockholder": /s/ Xxxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx, Xx.
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