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Exhibit 10.1
COVENANT NOT TO COMPETE AGREEMENT
THIS COVENANT NOT TO COMPETE AGREEMENT (the "Agreement") is made and
entered into as of ________, 2001, between Star Services Group, Inc., a Florida
corporation (the "Company"); and [XXXX X. XXXXXXXXXX/XXXXXXX X. XXXXXXX/XXXXX X.
XXXXXXX/XXXX XXXXXXXXXX] ("Executive").
RECITALS
A. Executive is an officer, director and/or employee of the Company.
The Company and its subsidiaries operate solid waste collection, transfer,
disposal and recycling services businesses (the "Businesses") in Florida.
B. The Company, Allied Waste North America, Inc. ("Parent"), and Sage
Acquisition Corporation ("Purchaser") are parties to that certain Agreement and
Plan of Merger ("Merger Agreement") dated May 25, 2001, whereby Purchaser shall
merge with and into the Company and the Company shall be the surviving entity of
such merger.
C. To induce Parent and Purchaser to consummate the transactions
contemplated by the Merger Agreement, and in exchange for the consideration set
forth in Section 2 of this Agreement, Executive has agreed to forego certain
rights to compete with the Company and its affiliated corporations, including
those companies that shall become affiliates of the Company after the merger
(the "Affiliated Corporations"), on the terms and subject to the conditions set
forth in this Agreement.
D. Capitalized terms used but not otherwise defined herein shall have
the meanings set forth in the Merger Agreement.
ACCORDINGLY, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
1. NONCOMPETE DEFINITIONS. For purposes of this Agreement, the terms
listed below shall have the following meanings:
(a) "Area" means the following counties in the State of
Florida: Collier, Monroe, Dade, Broward, Palm Beach, Brevard and St. Lucie.
(b) "Customers" means individuals, partnerships, firms,
corporations, limited liability companies, associations, trusts, unincorporated
organizations, governmental entities or other entities ("Persons") (i) to which
the Company, any of its Affiliated Corporations or Executive has provided waste
services or (ii) that the Company, any of its Affiliated Corporations or
Executive has solicited with respect to the provision of waste services.
(c) "Time Period" means the period beginning as of the date of
this Agreement and ending seven years thereafter; provided, however, that if a
court of competent jurisdiction determines that such period is unenforceable,
Time Period shall mean the period beginning as of the date of this Agreement and
ending six years thereafter; provided, however, that if a court of competent
jurisdiction determines that such period is unenforceable, Time
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Period shall mean the period beginning as of the date of this Agreement and
ending five years thereafter; provided, however, that if a court of competent
jurisdiction determines that such period is unenforceable, Time Period shall
mean the period beginning as of the date of this Agreement and ending four years
thereafter; provided, however, that if a court of competent jurisdiction
determines that such period is unenforceable, Time Period shall mean the period
beginning as of the date of this Agreement and ending three years thereafter;
provided, however, that if a court of competent jurisdiction determines that
such period is unenforceable, Time Period shall mean the period beginning as of
the date of this Agreement and ending two years thereafter; provided, however,
that if a court of competent jurisdiction determines that such period is
unenforceable, Time Period shall mean the period beginning as of the date of
this Agreement and ending one year thereafter, or such other period as the court
shall determine to be reasonable. The Time Period shall be extended by the
number of days in any period in which Executive is in default or breach of this
Agreement.
2. PAYMENT. As full consideration for Executive entering into this
Agreement, the Company shall pay to Executive or a person or entity designated
by Executive the sum of [$700,000/700,000/300,000/300,000], which sum shall be
payable in 7 equal annual installments of $________, with the first such
installment due within 10 days after the consummation of the transactions
contemplated by the Merger Agreement, and subsequent annual installments due on
the annual anniversary of the date of this Agreement for the 6 years thereafter.
If the Company fails to make any such annual payment within 30 days after the
date it is due, all amounts remaining to be paid under this Agreement shall
accelerate and become immediately due and payable upon written demand by
Executive. Following any such acceleration, Executive shall no longer be bound
by the covenants in this Agreement until such time as the Company has paid
Executive all amounts due Executive under this Agreement, including accelerated
amounts. Notwithstanding anything herein to the contrary, the Company shall not
be obligated to make any payment to Executive during such time as Executive is
in default or breach of this Agreement.
3. COVENANTS. Executive covenants and agrees that, during the Time
Period, Executive shall not, directly or indirectly, individually or as a
stockholder, partner, member, financier, agent, employee, representative or
consultant for or otherwise on behalf of or in conjunction with any Person:
(a) NONCOMPETITION. Engage or have any interest, direct or
indirect, in any business in competition with the Businesses, as the Businesses
are constituted on the date hereof (whether or not the Businesses are
subsequently carried on by the Company, the Affiliated Corporations or by any
successor or subsequent purchaser of the Businesses), within the Area; provided,
however, that this shall not preclude Executive from: (i) owning less than 1% of
the securities of any publicly traded entity; or (ii) owning J. R. Capital, Inc.
("J.R.") and conducting through J. R. the business of C&D recycling, transfer
and disposal at J.R.'s facilities at Homestead, Riviera Beach, Lox Road, Davie,
and Naples as presently conducted pursuant to J.R.'s Management Agreement with
Delta Recycling, Inc. dated November 1, 1999 as in effect on the date of the
Merger Agreement. Notwithstanding clause (ii) above, however, J.R. shall be
precluded from conducting hauling operations, from expanding its business in
competition with the Businesses to facilities other than those listed above, and
from subcontracting with any
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person or entity other than the Company to perform the services presently
performed by the Company under the Star Agreement.
(b) NONSOLICITATION OF CUSTOMERS. Solicit or assist in the
solicitation of any Customers in the Area for any business of a nature that
directly or indirectly competes with the Businesses; or
(c) NONSOLICITATION OF EMPLOYEES. Hire, employ, solicit, or
otherwise encourage or entice to leave their employment with the Company or the
Affiliated Corporations, any of the Company's or the Affiliated Corporations'
employees, , other than immediate family members of Executive.
4. ENFORCEABILITY. Executive represents and warrants to and covenant
with the Company as follows:
(a) The covenants in this Agreement are reasonably necessary
for the protection of the interests of the Company and the Affiliated
Corporations, are reasonable as to duration, scope and territory, and are not
unreasonably restrictive of Executive.
(b) If Executive breaches any covenants set forth in this
Agreement, such breach would cause irreparable harm to the Company and the
Affiliated Corporations. In the event it is judicially determined that Executive
has breached any such covenants, the Company and the Affiliated Corporations
shall be entitled, in addition to monetary damages and to any other remedies
available to the Company and the Affiliated Corporations under this Agreement
and at law, to equitable relief, including injunctive relief, and the payment by
Executive of all costs incurred by the Company and the Affiliated Corporations
in enforcing the provisions of this Agreement, including reasonable attorneys'
fees.
(c) Notwithstanding subsection (a), should any court of
competent jurisdiction determine that any covenants in this Agreement are
unreasonable as to duration, scope, or territory, the covenants shall be
enforceable as provided in this Agreement with respect to the maximum duration,
scope and territory as the court determines to be reasonable.
5. ASSIGNMENT; BINDING EFFECT; AMENDMENT. This Agreement and the rights
of the parties under it may not be assigned (except by operation of law, except
that they may be assigned by the Company to an affiliate of the Company or to
any successor of the Company to the Businesses without the consent of Executive,
and except that Executive may assign his rights, but not his obligations, under
this Agreement to an entity of which he owns a majority of the voting interests
without the consent of the Company) and shall be binding upon and shall inure to
the benefit of the parties. In addition, this Agreement shall inure to the
benefit of: (a) the Affiliated Corporations; and (b) Executive's estate in the
event of Executive's death, in which case the Company shall continue to make
payments under this Agreement to Executive's estate as and when they would have
been made to Executive. This Agreement constitutes a valid and binding agreement
of the parties enforceable in accordance with its terms and may be modified or
amended only by a written instrument executed by each party.
6. ENTIRE AGREEMENT. This Agreement is the final, complete and
exclusive statement of the agreement among the parties with relation to the
subject matter of this Agreement. There
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are no oral representations, understandings or agreements covering the same
subject matter as this Agreement. This Agreement supersedes, and cannot be
varied, contradicted or supplemented by evidence of, any prior or
contemporaneous discussions, correspondence, or oral or written agreements or
arrangements of any kind.
7. COUNTERPARTS. This Agreement may be executed in two or more original
or facsimile counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
8. NOTICES. All notices or other communications required or permitted
under this Agreement shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, by overnight courier,
or by delivering the same in person to such party, addressed as follows:
(a) If to Executive, addressed to Executive at:
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
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with a copy to:
Atlas Xxxxxxxx, P.A.
Suite 1700
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx
and with a copy to:
Xxxxx & Xxxxxxxx LLP
00 Xxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
(b) If to the Company, addressed to it at:
c/o Allied Waste Industries, Inc.
00000 X. Xxxxxxxx-Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Vice President - Mergers
and Acquisitions
with a copy to:
Allied Waste Industries, Inc.
00000 X. Xxxxxxxx-Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Vice President and
General Counsel
and a copy to:
Xxxxxxxxx Xxxxx, P.C.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: X. X. Xxxxxxxxx, Xx.
Notice shall be deemed given and effective the day personally delivered, the day
sent by overnight courier, subject to signature verification, and the day of
deposit in the U.S. mail of a writing addressed and sent as provided above. Any
party may change the address for notice by notifying the other parties of such
change in accordance with this Section.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida, without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Florida or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Florida.
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10. NO WAIVER. No delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of or in any similar breach or default occurring later. No
waiver of any single breach or default shall be deemed a waiver of any other
breach or default occurring before or after that waiver.
12. SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal and enforceable but so as most nearly to
retain the intent of the parties. If such modification is not possible, such
provision shall be severed from this Agreement. In either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
13. CONSTRUCTION. The headings in this Agreement are inserted for
convenience only, and shall not constitute a part of this Agreement or be used
to construe or interpret any of its provisions. The parties have participated
jointly in the negotiation and drafting of this Agreement. If a question of
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement. The word "include" or "including" means include or including, without
limitation.
14. ATTORNEYS' FEES. If any legal action or any other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any provision of this
Agreement, the prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
15. REVIEW BY COUNSEL. Executive acknowledges and agrees that Executive
has had the opportunity to review this Agreement with legal counsel of
Executive's choosing.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
Executive:
[Xxxx X. Xxxxxxxxxx/Xxxxxxx X. Xxxxxxx/Xxxxx
X. Xxxxxxx/Xxxx Xxxxxxxxxx]
THE COMPANY:
Star Services Group, Inc.
By:
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Name:
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Its:
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GUARANTEE:
Allied Waste North America, Inc., a Delaware corporation ("Parent"),
hereby guarantees the obligations of the Company to Executive contained in
Section 2 of the Agreement.
Allied Waste North America, Inc.
By:
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Name:
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Its:
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