EXHIBIT 10.11
NONCOMPETITION AGREEMENT
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This Noncompetition Agreement (the "Agreement") is made and entered
into as of April 13, 1993 by and between Union Oil Company of California, a
California corporation ("Seller"), and National Auto/Truckstops, Inc., a
Delaware corporation ("Buyer").
RECITALS
WHEREAS, Seller, through its national auto/truckstop network (the
"A/TS Network"), has been engaged in the business of owning and operating a
national auto/truckstop network (the "Business");
WHEREAS, the A/TS Network sells gasoline, petroleum distillates and
other petroleum products and related goods and services to trucks operating
throughout the United States on the United States interstate highway system,
including certain national and regional fleet customers;
WHEREAS, pursuant to that certain Asset Purchase Agreement dated as
of November 23, 1992, by and between Seller and Buyer (the "Asset Purchase
Agreement"), Buyer is purchasing on the date hereof from Seller the goodwill and
substantially all of the assets of the A/TS Network (the
"Acquisition");
WHEREAS, Buyer would not have entered into the Asset Purchase
Agreement if Seller had not agreed to execute this Noncompetition Agreement;
WHEREAS, Buyer intends to carry on the Business formerly conducted
by Seller;
WHEREAS, concurrently with the execution of this Agreement, the
parties hereto are entering into a Trademark License Agreement, dated as of the
date hereof (the "Trademark License Agreement"), pursuant to which Seller is
licensing to Buyer the right to use the Marks and the Service Marks (as such
terms are defined in the Trademark License Agreement) in connection with the
operation of the Business;
WHEREAS, the goodwill of the Business and the value of Buyer's
rights under the Trademark License Agreement would be adversely affected if
Seller were to compete with Buyer in the Business; and
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WHEREAS, Seller understands and acknowledges that Seller's execution
and delivery of this Agreement is a material inducement and condition precedent
to the consummation of the Acquisition and the execution of the Trademark
License.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby covenant and agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings set forth below. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Trademark License Agreement.
"Buyer's Facility" means any Designated Facility owned, leased or
sub-leased by or to Buyer that uses the Marks and/or the Service Marks.
"Card Lock Facility" means an attended or unattended resale fueling
facility with one or more card-activated dispensers targeting local commercial
fleet customers.
"Excluded Facility" means a retail motor fuel facility that on the
Closing Date (as defined in the Asset Purchase Agreement) uses the Marks but
which is not sold or assigned to Buyer pursuant to the Asset Purchase Agreement
or any of the six separate California Purchase Agreements dated as of November
23, 1992.
"Prohibited Facility" means:
(a) an Auto/Truckstop;
(b) a Fuel Stop located within two (2) miles of the center
line of an Interstate Highway, or within twenty-five
(25) miles of any Buyer's Facility;
(c) a retail motor fuel facility (including but not limited
to a Card Lock Facility) that is not a Designated
Facility but which:
(i) is located outside the PAD V Area, and either (A)
within an SMSA and within two (2) miles of a
Buyer's Facility, or (B) outside an SMSA
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and within ten (10) miles of a
Buyer's Facility; or
(ii) is located within the PAD V Area (excluding
California) and either (A) within an SMSA and
within one (1) mile of a Buyer's Facility, or (B)
outside an SMSA and within five (5) miles of a
Buyer's Facility; or
(iii) is located within California and within one (1)
mile of a Buyer's Facility, measured along the
Interstate Highway or any street, highway or road
upon which such Buyer's Facility is located;
PROVIDED, HOWEVER, that in no case shall
an Excluded Facility be a Prohibited
Facility.
"SMSA" means a Standard Metropolitan Statistical area, as defined in
the Trademark License Agreement.
"Southeastern Area" shall mean the following states: Alabama,
Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South
Carolina, Tennessee and Virginia.
"Territory" means the lower 48 contiguous states of the United
States of America, including each and every county, city and other political
subdivision thereof. The parties hereto agree that this definition of
"Territory" shall be deemed to include each and every county located in the
Territory as if fully set forth herein.
2. NONCOMPETITION.
(a) For a period of 10 years commencing on the date hereof
(the "Term"), without the prior written approval of Buyer, Seller shall not, and
will cause its Affiliates not to, directly or indirectly, (i) own, manage,
control, operate or otherwise participate, franchise or assist in the business
of any Prohibited Facility located in the Territory, (ii) own, manage, control,
operate, be connected with as an employee or consultant for any Person owning,
managing, controlling, operating or otherwise participating or assisting in the
business of any Prohibited Facility located in the Territory, or (iii) license,
franchise or otherwise authorize any Person (other than Buyer and its licensees)
to conduct business under the marks Pure, Protech or Firebird or under any of
the Marks (or sell any products or provide any services in connection with the
marks Pure, Protech or Firebird or the Marks and/or the Service Marks (as such
terms are defined in the Trademark License Agreement)) at any Prohibited
Facility located in the Territory or otherwise utilize any of the Marks and/or
Service Marks or any commercial symbol similar thereto in connection with the
business of any Prohibited Facility located in the Territory; PROVIDED HOWEVER,
that nothing in this Agreement shall prohibit (x) Seller or its licensee or
assignee of the marks Pure or Firebird from licensing the marks Pure and/or
Firebird to any Prohibited Facility in the Southeastern Area at any time after a
date on which Buyer is neither (A) selling motor fuel at any Auto/Truckstop or
Fuel Stop in the Southeastern Area under one or more of the Marks nor (B)
prominently displaying one or more of the Marks at any Auto/Truckstop or Fuel
Stop in the Southeastern Area and (y) Seller's jobbers, distributors and
marketers from selling products other than motor fuel to any Prohibited
Facility.
(b) During the Term, Seller shall not, and will cause its
Affiliates not to, directly or indirectly, materially expand any Excluded
Facility that is an Auto/Truckstop or a Fuel Stop owned or operated by Seller or
its Affiliates or otherwise materially alter the products and/or services sold
by or through any such Excluded Facility; PROVIDED, HOWEVER, that nothing in
this Section 2 shall prohibit Seller or its Affiliates from repairing or
replacing any existing structures, fixtures or other assets of such an Excluded
Facility, damaged or worn by reason of casualty or wear and tear, with
comparable structures, fixtures or other assets.
3. NONSOLICITATION. During the Term, Seller shall not, and will
cause its Affiliates not to, directly or indirectly, either for its own account
or for the account of any other Person, solicit, entice, persuade, induce or
attempt to solicit, entice, persuade or induce any employee, agent, client or
customer of the Business or Buyer to terminate, alter or refrain from extending
or renewing any contractual or other relationship of such employee, agent,
client or customer with the Business or Buyer; PROVIDED, HOWEVER, that nothing
in this Section 3 shall prohibit Seller or its Affiliates from engaging in any
form of generalized advertising that does not directly target or involve the
direct solicitation of any employee, agent, client or customer of the Business
or Buyer.
4. SEVERABILITY; SEPARATE COVENANTS. If any provision of this
Agreement shall be invalid or unenforce- able for any reason and to any extent,
the remainder of this Agreement shall not be affected thereby, but shall be
enforced to the greatest extent permitted by law. Without limiting the
generality of the foregoing, the covenants
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contained in this Agreement shall be deemed to consist of a series of separate
covenants, one for each state included within the Territory. Seller expressly
acknowledges and agrees that the character, duration and geographic scope of the
covenants contained in this Agreement are reasonable in light of the
circumstances as they exist on the date hereof. However, should a determination
nonetheless be made by a court or arbitrator at a later date that the character,
duration or geographic scope of the covenants contained in this Agreement is
unreasonable in light of the circumstances as they then exist, then it is the
intention and the agreement of the parties that this Agreement shall be
construed by the court or arbitrator (as applicable) in such a manner as to
impose only those restrictions on the conduct of Seller which are reasonable in
light of the circumstances as they then exist and as are necessary to assure
Buyer of the intended benefit of this Agreement. If, in any judicial proceeding,
a court or arbitrator (as applicable) shall refuse to enforce all of the
separate covenants deemed included herein because, taken together, they are more
extensive than necessary to assure Buyer of the intended benefit of this
Agreement, it is expressly understood and agreed between the parties hereto that
those of such covenants which, if eliminated, would permit the remaining
separate covenants to be enforced in such proceeding shall, for the purpose of
such proceeding, be deemed eliminated from the provisions hereof.
5. ENFORCEMENT OF COVENANTS. The existence of any claim or cause of
action of Seller or any of its Affiliates and entities in which it may be a
joint venturer or a partner against either Buyer or any other Person, whether
predicated on this Agreement, the Asset Purchase Agreement or otherwise, shall
not constitute a defense to the enforcement by Buyer of the covenants and
agreements contained herein.
6. INJUNCTIVE RELIEF. The parties hereto acknowledge and agree that
the remedies at law for any breach of this Agreement are and will be inadequate,
and in the event of a breach or threatened breach by Seller of the provisions of
this Agreement, Buyer shall be entitled to an injunction or injunctions
restraining Seller from soliciting or interfering with employees, agents,
clients or customers of the Business or Buyer, or from disclosing, in whole or
in part, any Confidential Information, or from rendering any services to any
Person to whom such information has been disclosed, or is threatened to be
disclosed, from engaging, participating or otherwise being connection with any
business described in Section 2 hereof or from otherwise violating the
provisions of this Agreement. Seller hereby irrevocably waives any requirement
for the securing or posting of any bond in connection with any such remedy and
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agrees to take any further action reasonably required by Buyer to effect such
waiver. Nothing herein contained shall be construed as prohibiting Buyer from
pursuing any other remedies available to Buyer for such breach or threatened
breach, including, without limitation, the recovery of damages from Seller and
indemnification from Seller under Section 7.1 of the Asset Purchase Agreement.
7. SUCCESSORS AND ASSIGNS. Buyer shall have the right to assign any
or all of its rights and obligations hereunder to any of Buyer's Affiliates or
lenders, or to any successor in interest of Buyer whether by merger,
consolidation, purchase of assets, dissolutions, liquidation or otherwise.
8. GOVERNING LAW. This Agreement shall be deemed to consist of a
series of separate agreements, one for each state included within the Territory,
and each such agreement shall be construed and enforced in accordance with and
governed by the laws of such state, without regard to principles of conflicts of
laws.
9. AMENDMENT. This Agreement may be modified or amended only by a
written instrument duly executed by each party hereto.
10. WAIVER. No breach of any covenant, agreement, warranty or
representation shall be deemed waived unless expressly waived in writing by the
party who might assert such breach. No waiver of any right hereunder shall
operate as a continuing waiver or as a waiver of any other right or of the same
or a similar right on another occasion. No failure or delay by Buyer in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof by Buyer, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege of Buyer.
11. ENTIRE AGREEMENT. This Agreement, together with the Asset
Purchase Agreement and the Trademark License Agreement, contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
12. HEADINGS. The headings of each section of this Agreement are for
convenience of reference only and shall not limit, control or otherwise affect
in any way, the meaning thereof.
13. COUNTERPARTS. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original for all
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purposes, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective authorized representatives as of the date first
above written.
UNION OIL COMPANY OF CALIFORNIA
By: /s/ X.X. Xxxxxxxxx
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Name: X.X. Xxxxxxxxx
Title: Vice President
NATIONAL AUTO/TRUCKSTOPS, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Vice President and
Chief Financial Officer
