EXHIBIT 10.8
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT, dated as of February 10, 1998, by and between
MTL Inc. (the "Company") and Xxxxx X. Xxxxxxx (the ?Shareholder?);
WHEREAS, the Shareholder is a principal shareholder of the Company;
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Company and Sombrero Acquisition Corp. (?Sub?) are entering into an
Agreement and Plan of Merger (the "Merger Agreement"), dated as of the date
hereof, providing for the merger (the ?Merger?) of Sub with and into the
Company;
WHEREAS, upon the date (the ?Effective Date?) of the closing of the Merger,
the Shareholder will receive in exchange for his shares of common stock, par
value $.01 per share, of the Company, a certain number of shares in the
surviving corporation in the Merger and a certain amount of cash, which
represents part of the consideration for the Shareholder's obligations under
this Agreement;
WHEREAS, the Shareholder has substantial experience and significant
business relationships in the bulk transportation services business;
WHEREAS, the Company would suffer damages, including the loss of profits,
if the Shareholder disclosed any confidential information of the Company or its
subsidiaries, engaged in any business that is competitive with the Company or
its subsidiaries or solicited the termination of the Company's or its
subsidiaries' relationships with their suppliers, customers or employees;
WHEREAS, the Company would not have entered into the Merger Agreement
absent the execution by the Shareholder of this Agreement;
WHEREAS, it is the interest of the Shareholder that the transactions
contemplated by the Merger Agreement be consummated; and
WHEREAS, this Agreement has been reached in good faith in arms-length
negotiations.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Confidential Information. The Shareholder recognizes and acknowledges
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that he has had access to certain information of members of the Company Group
(as defined below) and that such information is confidential and constitutes
valuable, special and unique property of such members of the Company Group. The
Shareholder shall not at any time after the date hereof, disclose, divulge,
publish or otherwise communicate to anyone, nor retain, copy or permit to be
copied, or make use of for personal purposes or for the benefit of any person,
firm, corporation or other entity (other than the Company Group) any
Confidential Information (as defined below) of any member of the Company Group
(regardless of whether developed by the Shareholder) without the prior written
consent of the Company.
As used herein, "Company Group" means the Company (including its
subsidiaries), and any entity that directly or indirectly controls, is
controlled by, or is under common control with, the Company and its
subsidiaries. For purposes of this definition, "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise. In addition, "Company Group" shall mean
any entity that is part of the Company's "Affiliate Program" (as defined in the
Merger Agreement) and any other independent owner/operator with whom the Company
has a contractual relationship.
The term "Confidential Information" with respect to any person means any
trade secrets and any other secret or confidential information or knowledge and
shall include, but shall not be limited to, the plans, customers, suppliers,
costs, prices, uses and applications of products and services, results of
investigations, studies or experiments known to or used by such person,
information relating to employees, customers and suppliers, and all apparatus,
products, processes, compositions, samples, formulas, computer programs, and
servicing, marketing or business methods and techniques at any time used,
developed, investigated or otherwise known to such person, all financial matters
and all information relating to mergers and acquisitions, in all such cases
before or during the term of this Agreement, that are not readily available to
the public or that are maintained as confidential by such person.
2. No Competition. Commencing upon the consummation of the transactions
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contemplated by the Merger Agreement and continuing until the fifth anniversary
thereof, the Shareholder shall not, without the express written consent of the
Company, directly or indirectly, within any geographic area in which any member
of the Company Group conducts its business, engage in the bulk transportation
services business or in any related business (the "BTS Business"). For purposes
of this Section 2, the Shareholder shall be deemed to engage in a business if
he, directly or indirectly, engages or invests in, owns, manages, operates,
controls or participates in the ownership, management, operation or control of,
is employed by, associated or in any manner connected with, or renders services
or advice to, any business engaged in the BTS Business; provided, however, that
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the Shareholder may invest in the securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if (x) such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934 and
(y) the Shareholder does not beneficially own (as
defined Rule 13d-3 promulgated under the Securities Exchange Act of 1934) in
excess of 2% of the outstanding equity of such enterprise.
3. No Solicitation. During the same period as the restrictions of Section 2
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hereof shall apply, the Shareholder shall not (a) request, induce, attempt to
influence or have any other business contact with any distributor or supplier of
goods or services to any member of the Company Group to curtail or cancel any
business they may transact with any member of the Company Group; (b) request,
induce, attempt to influence or have any other business contact with any
customers of any member of the Company Group that have done business with or
potential customers which have been in contact with any member of the Company
Group to curtail or cancel any business they may transact with any member of the
Company Group, (c) request, induce, attempt to influence or have any other
business contact with any employee of any member of the Company Group to
terminate his or her employment with such member of the Company Group or (d)
request, induce, attempt to influence or have any other business contact with
any governmental entity or regulatory authority to terminate, revoke or
materially and adversely alter or impair any license, authority or permit held,
owned, used or reserved for the Company Group.
4. Business Goodwill. During the same period as the restrictions of Section
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2 hereof shall apply, the Shareholder will make only positive comments about the
Company Group and its directors, officers, employees and agents, and shall make
no comments or take any other actions, direct or indirect, that will reflect
adversely on any of the foregoing or adversely affect their business reputation
or good will.
5. Enforceability. The Shareholder agrees that if a court of competent
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jurisdiction determines that the length of time or any other restriction, or
portion thereof, set forth in this Agreement is overly restrictive and
unenforceable, the court may reduce or modify such restrictions to those which
it deems reasonable and enforceable under the circumstances, and as so reduced
or modified, the parties hereto agree that the restrictions of this Agreement
shall remain in full force and effect. The Shareholder further agrees that if a
court of competent jurisdiction determines that any provision of this Agreement
is invalid or against public policy, the remaining provisions of this Agreement
and the remainder of this Agreement shall not be affected thereby, and shall
remain in full force and effect.
The Shareholder acknowledges that the restrictions imposed by the
Agreement are legitimate, reasonable and necessary to protect the Company
Group's investment in its businesses and the goodwill thereof. The Shareholder
acknowledges that the scope and duration of the restrictions contained herein
are reasonable in light of the time that the Shareholder has been engaged in the
BTS Business, the Shareholder's reputation in the markets for the BTS Business
and the Shareholder's relationship with the suppliers, customers and clients of
the Company Group. The Shareholder further acknowledges that the restrictions
contained herein are not burdensome to the Shareholder in light of the
consideration paid therefor and the other opportunities that remain open to the
Shareholder. Moreover, the Shareholder acknowledges that he has other means
available to him for the pursuit of his livelihood.
6. Remedies. The Shareholder acknowledges that money damages or other
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remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or default under, this Agreement, but the Shareholder agrees that
in addition to all other remedies available to the Company, the Company shall be
entitled to the fullest extent permitted by law to an injunction restraining
such breach, violation or default or threatened breach, violation or default and
to any other equitable relief, including, without limitation, restraining
orders, injunctive relief and specific performance, without the posting of a
bond or other security interest being required.
7. Shareholder Agreement. The parties hereto shall use good reasonable
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efforts to enter into a Shareholders Agreement effective as of the Effective
Date hereof substantially in accordance with the terms attached hereto as
Exhibit A.
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8. Intent of Parties. Each of the parties hereto recognizes and agrees
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that this Agreement is necessary and essential to enable the Company to realize
and derive all of the benefits, rights and expectation of the Merger Agreement;
that the area and duration of the covenants herein are in all things, under the
circumstances of the Merger Agreement, reasonable; and that good and valuable
consideration exists for Shareholder's agreeing to be bound by such covenants.
9. Successors and Assigns. This Agreement shall inure to the benefit of
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and the successors and assigns of the Company. The Company may assign its rights
under this Agreement in connection with any sale, transfer of other disposition
of all or a substantial portion of the stock or assets of the Company. The
Shareholder may not assign his duties or obligations hereunder, but this
Agreement shall be enforceable against the Shareholder's heirs and estate to the
extent of any violation hereof by the Shareholder.
10. Effectiveness. This Agreement shall become effective upon consummation
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of the transactions contemplated by the Merger Agreement and prior thereto shall
be of no force and effect. If the Merger Agreement shall be terminated in
accordance with its terms, this Agreement shall automatically be deemed to have
been terminated and shall thereafter be of no force or effect.
11. Governing Law. This Agreement and the rights and obligations of the
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parties hereto shall be governed, construed and enforced in accordance with the
laws of the State of Florida.
12. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.
13. Headings. The headings of this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
MTL INC.
By: ____________________________________
Xxxxxxx X. X'Xxxxx, Xx.
President
SHAREHOLDER
___________________________________________
Xxxxx X. Xxxxxxx
