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EXHIBIT 10.9
NORTH CAROLINA
GUILFORD COUNTY
CONSULTING AND
NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT (the "Agreement") is made as
of the 4th day of October, 1996, by and between CBP RESOURCES, INC.,
("Company"), a Delaware corporation with its principal office in Greensboro,
North Carolina and XXXXXXX X. XXXXX, of Starke, Florida ("Consultant").
W I T N E S S E T H:
WHEREAS, Consultant has been and is a shareholder, director and employee
of Weststar Environmental, Inc. (f/k/a Weststar Environmental Pumping and Septic
Services, Inc.), a Florida corporation ("Weststar"); and
WHEREAS, pursuant to that certain Asset Purchase and Sale Agreement dated
of even date between Company and Weststar (the "Asset Agreement"), Company has
acquired certain assets from Weststar used in certain states in connection with
its grease trap business ("the Acquisition"); and
WHEREAS, Company desires to retain the Consultant's services, upon and
subject to the terms and conditions set forth below; and
WHEREAS, Consultant has knowledge of or will, through his association with
the Company, become familiar with the Company's methods, business practices,
business culture and environment, Company technology and overall business
approach to the Rendering Business (as that term is hereinafter defined); and
WHEREAS, as a result of consulting for and with the Company, consultant
will obtain the confidential business information and trade secrets described
herein, which
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information (1) derives independent economic value from not being generally
known to the public or to other persons who can obtain economic value from its
disclosure or use; and (2) has been and will continue to be the subject of
efforts that are reasonable under the circumstances to maintain the secrecy of
such information; and
WHEREAS, the Company would suffer and be subject to loss of customers,
suppliers and other business relations in the event Consultant should enter into
competition against or with the Company and/or use the confidential information
Consultant will have access to in connection with his duties and
responsibilities hereunder, and Consultant acknowledges that the terms and
conditions of this Agreement are reasonably necessary to protect the Company's
interests and that the Company would not enter into this Consulting Agreement
without such covenants from and by the Consultant;
NOW, THEREFORE, Company and Consultant hereby agree as follows:
ARTICLE I
Consulting Agreement
1.01 Consulting. Company hereby retains Consultant, and Consultant hereby
agrees to provide the services described herein, subject to the terms and
conditions contained herein.
1.02 Duties. Consultant shall assist Company with the transition of the
Accounts (as defined and described in the Asset Agreement) from Weststar to the
Company and shall perform such reasonable services in connection with such
transition and maintenance of such Accounts as directed by Company and such
other and further duties as Company may reasonably assign to Consultant from
time to time. Consultant agrees to perform his
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responsibilities diligently, faithfully and in a competent, professional manner,
and to devote his best efforts to the performance of said responsibilities.
Consultant agrees to observe all rules, policies and regulations, as they apply
in the performance of his responsibilities.
1.03 Compensation. As consideration for the services to be performed
hereunder, Company shall pay Consultant a consulting fee of $2,500.00 per month
for a period of forty-eight (48) months from the date of this Agreement. Such
payments shall commence on the last day of the month following the date hereof
and shall continue on the last day of each month thereafter for a total of 48
months.
1.04 Reimbursement of Expenses. Company will reimburse Consultant for all
reasonable and customary travel and other expenses incurred by him in the
performance of any duties hereunder as requested by the Employer, subject to
verification of such expenses and Consultant's compliance with Company's rules
and policies and Internal Revenue Code regulations, with regard to such
expenses.
1.05 Term. The term of consulting hereunder shall be for a period of four
(4) years beginning on the date of execution of this Agreement (the "Term").
1.06 Termination.
(a) Termination With Cause. The term of this Consulting Agreement may be
terminated upon immediate notice by Company by reason of one or more of the
following occurrences (each of which, for purposes hereof defined as "with
cause"):
(i) conviction of, or pleading guilty or no contest to, a felony or a
crime involving moral turpitude damaging to the business reputation
of Company, whether or not committed in the performance of
Consultant's responsibilities
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hereunder;
(ii) commission of an act of fraud upon, or an act evidencing intentional
bad faith towards Company or any of its affiliates which results in
damage to the business of Company; or
(iii) breach by Consultant of any material duty or obligation assigned to
Consultant by Company hereunder, as to which Company shall have
given Consultant ten (10) days written notice and which shall not
have been cured within said ten (10) day period; or
(iv) breach by Consultant of any of his agreements or covenants contained
in Sections 2.01, 2.02 or 2.03 hereunder for which no notice shall
be required.
(b) Termination Upon Death. The term of consulting shall terminate
immediately at the death of the Consultant. If the relationship created
hereunder is terminated by Company with cause or by the death of the Consultant,
the Consultant shall be entitled only to that portion of consideration earned
prior to the date of such termination. Termination of this Consulting Agreement
pursuant to this Section 1.05 shall not affect the obligations of Consultant
under Article II hereunder.
ARTICLE II
Noncompetition Agreement
2.01 Covenant Not to Compete. For and in consideration of the Acquisition
and the amounts to be paid by Company to Consultant pursuant to Section 2.04
hereunder and other good and valuable consideration, the receipt and sufficiency
of which is hereby expressly acknowledged, Consultant covenants and agrees that
for a period of ten (10) years
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after the date of this Agreement (the "Noncompetition Period"), Consultant will
not, in the Geographic Area (as defined hereinbelow), directly or indirectly,
either for himself or for any other person, partnership, corporation or company:
(a) engage in or in any way compete with Company in the business of
inedible or edible rendering, reducing or extracting fats or other
animal products, or in the buying, collecting, transporting,
manufacturing or dealing in fat, bones, tallow, cracklings, grease,
waste restaurant grease or other waste products provided by retail
or wholesale meat stores, xxxxxxxxx houses, packing houses, hotels
or restaurants, or in the operation of fat and bone routes, grease
routes or trap grease routes or any related goods and services (all
activities set forth in this Section 2.01(a) are individually
referred to herein as a "Covered Activity" and collectively referred
to herein as the "Covered Activities" or the "Rendering Business");
or
(b) solicit, or accept orders or business of any kind relating to the
Covered Activities as specified in subparagraph (a) hereof (i) from
any customer or active prospect of Company or Weststar; or (ii) from
any former customer of Weststar.
The term "engage in" shall include having any direct or indirect interest in any
enterprise, whether as an officer, director, employee, investor, partner, joint
venturer, sole proprietor, principal, agent, representative, independent
contractor, consultant, or owner (other than by passive ownership of less than
5% of the stock or other securities of a publicly held corporation whose stock
is traded on a national securities exchange or in an over-the-
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counter market).
In performing the covenants of this Section 2.01, the Consultant shall
not, without limitation, conduct any activity prohibited in this Section 2.01 in
the following areas (the "Geographic Areas") during the Noncompetition Period:
the states of North Carolina, South Carolina, Tennessee, Virginia, West
Virginia, Maryland, Alabama and District of Columbia, together with a fifty (50)
mile area or radius around such states, together with a territory within a one
hundred (100) mile radius of any operating facility owned, leased, or operated
by the Company during and as of the expiration of the Noncompetition Period.
The parties intend that each Geographic Area listed above be considered
independently and separate and distinct from each of the other listed Geographic
Areas. The parties acknowledge and agree that given the nature of Company's
business and the knowledge and experience Consultant has of and with Company and
its business, that the covenants were arrived at as a result of arms length
bargaining, that the consideration arrived at herein being paid to Consultant in
exchange for such agreement, and the Non-Competition Period, Geographic Areas
and Covered Activities are reasonable, and the parties hereby waive the right to
assert the unreasonableness of such restrictions.
2.02 Confidentiality.
(a) Consultant recognizes and acknowledges that he may, during his
consulting with Company hereunder, be privy to confidential,
proprietary and non-public information of the Company, including,
but not limited to, information relating to Company's financial
condition and results, operations, plans and activities, proprietary
and trade secret information, customer lists and other
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commercial aspects of its business ("Confidential Information").
Accordingly, Consultant covenants that he will hold such
Confidential Information in a fiduciary capacity for the benefit of
Company and will not, either during his consulting or at any time
thereafter either directly or indirectly use for his own benefit or
divulge, disclose or communicate Confidential Information to any
person, firm, corporation, association or other entity except in the
ordinary course of Company's business with the knowledge and consent
of Company and except for any disclosure made by Consultant to his
attorneys or accountants or as may otherwise be required by law
(including any disclosure ordered by a court of competent
jurisdiction). Consultant shall take all appropriate steps to
safeguard such Confidential Information against disclosures, misuse,
loss or theft.
(b) Company and Consultant agree that such Confidential Information to
which Consultant had or may have access shall not be considered
confidential if and to the extent that the information is, or
becomes through no fault or action of Consultant, published or part
of the public domain. Upon request by Company, Consultant will
promptly return to Company, as its property, all records related to
such Confidential Information in whatever form they may exist, which
are in Consultant's custody, possession or control. Additionally,
during his consulting and for a period of six (6) years thereafter,
and upon request of Company, Consultant will sign any additional
documents reasonable and necessary to give effect to any secrecy or
other agreements
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relating to Confidential Information between Company and any other
party.
2.03 Inducement of Employees and Business Relations. During Consultant's
consulting Term hereunder, and for a Period not to exceed ten (10) Years from
the date of this Agreement, Consultant shall not, directly or indirectly,
induce, attempt to induce or aid others in inducing an employee of the Company
to leave the employ of Company or in any way interfere with the relationship
between Company and an employee of Company or induce or attempt to induce any
customer, supplier, licensee or other business relation of Company to cease
doing business with Company, or in any way interfere with the relationship
between any customer or business relation and the Company.
2.04 Consideration. As consideration for the agreements of Consultant
under Section 2.01, 2.02 and 2.03 hereinabove, Company shall pay to Consultant
the sum of Two Hundred Thousand and 00/100 Dollars ($200,000.00) payable as
follows (collectively, the "Noncompete Payments").
(i) Twenty Thousand Dollars payable on the date hereof; and
(ii) Twenty Thousand Dollars ($20,000.00) each year payable on the
annual anniversary date of the first Noncompete Payment for a total of ten (10)
years.
2.05 Payment Following Death of Consultant. Notwithstanding any other
provision of this Agreement, if the Consultant dies prior to Noncompete Payments
beginning under Section 2.04 or after such Noncompete Payments begin but prior
to the end of the time that all Noncompete Payments are paid as provided in
Section 2.04, the Noncompete Payments shall be paid in full as provided in
Section 2.04 and Company's obligation to make such payments shall not be
extinguished. If Consultant is survived by a spouse, any amounts
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payable under Section 2.04 above shall, following Consultant's death, be paid to
such surviving spouse in accordance with the schedule set forth in Section 2.04.
If such surviving spouse should die before receiving all of such payments, all
remaining payments shall he paid to the estate of the surviving spouse in
accordance with the schedule set forth in Section 2.04. If Consultant is not
survived by a spouse, Company shall, following Consultant's death, pay any
amounts payable under Section 2.04 above to the estate of Consultant in
accordance with the schedule set forth in Section 2.04.
2.06 Remedies. The parties hereto agree that Company would suffer
irreparable harm that would not be adequately remedied by money damages from a
breach by Consultant of any of the covenants or agreements contained in this
Agreement. Therefore, in the event of the actual or threatened breach by
Consultant of any of the provisions of Sections 2.01, 2.02 or 2.03 of this
Agreement, Company or its successors or assigns may, in addition and
supplementary to any other rights and remedies existing in its favor, apply to
any court of law or equity of competent jurisdiction for specific performance or
injunctive relief in order to enforce, or prevent any violation of the
provisions of Sections 2.01, 2.02 or 2.03 hereof (including the extension of the
noncompetition period by a period equal to the length of the violation of this
Agreement plus the length of court proceedings necessary to stop such
violation). In the event of any alleged breach or violation by Consultant of any
of the provisions of Sections 2.01, 2.02 or 2.03 of this Agreement, the
Noncompetition Period described above will be tolled until such alleged breach
or violation is resolved. The Consultant agrees that these restrictions are
reasonable. In addition to any other relief or damages available to Company,
Consultant covenants and agrees that he shall return one
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hundred percent (100%) of the Noncompete Payments paid to him by Company
hereunder plus interest at the rate of ten percent (10%) from the time such
payment was made if any part of this Agreement is determined to be unenforceable
by a court of law. This Section 2.06 is not a liquidated damages provision and
is not intended to limit in any way the availability of additional equitable or
legal relief for the types of breaches discussed in this Section 2.06 where
circumstances and applicable legal principles support such relief, nor limit in
any way the availability of any legal or equitable relief for the breaches of
any other provisions of this Agreement.
ARTICLE III
Miscellaneous
3.01 Severability. If any provision or clause of this Agreement or portion
thereof shall be held by any court or other tribunal of competent jurisdiction
to be illegal, void or unenforceable in such jurisdiction, the remainder of such
provisions shall not thereby be affected and shall be given full effect without
regard to the invalid portion. It the intention of the parties that, and the
parties agree that as an essential part of the bargained for consideration of
this Agreement, if any court construes any provision or clause of this
Agreement, or any portion thereof, to be illegal, void or unenforceable because
of the duration of such provision, or the area or matter covered thereby, such
court shall reduce the duration, area or matter of such provision and, in its
reduced form, such provision shall then be enforceable to the greatest extent
permitted by law and shall be enforced.
3.02 Assignment. This Agreement shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement may
be assigned by
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Company without the consent of Consultant but may not be assigned by Consultant.
3.03 No-Waiver. Failure by either Company or Consultant to exercise any
remedy available to either party in the event of a default by the other shall
not be deemed to be a waiver of any other default, or of any repetition of the
initial default.
3.04 Amendments. No amendment or modification of this Agreement shall be
deemed effective unless and until executed in writing by both parties hereto.
3.05 Entire Agreement; Counterparts. This Agreement contains the entire
agreement between Consultant and Company with reference to Consultant's
relationship with Company. This Agreement may be executed as counterpart
documents each of which shall be deemed to be an original Agreement. The terms
and conditions of the Asset Agreement are hereby incorporated by reference, and
any breach of either Agreement shall constitute a breach of the other Agreement.
3.06 Pronouns. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, singular or plural, as the context may require.
3.07 Governing Law. This Agreement shall be governed in accordance with
the laws of the State of North Carolina.
3.08 Representation. The parties each warrant and represent to the other
that this Agreement is duly authorized and constitutes a valid and legally
binding obligation, enforceable in accordance with its respective terms, except
as such enforcement may be limited by: (i) applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium or other similar laws presently in effect
concerning the enforcement of creditors' rights generally, and (ii) the effect
of rules of law governing the availability of equitable remedies
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including, without limitation, injunction and specific performance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
COMPANY:
CBP RESOURCES, INC.
/s/ Xxxx D. Sachet By: /s/ Xxxxx Xxxx
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Witness Vice President
CONSULTANT:
/s/ Xxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
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Witness Xxxxxxx X. Xxxxx
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