SELLER NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered into
this 13th day of December, 1996 (the "Effective Date"), by and between
SANIFILL, INC., a Delaware corporation ("Seller"), and US LIQUIDS INC., a
Delaware corporation ("Buyer");
RECITALS:
WHEREAS, Seller and Buyer have entered into an Asset Purchase
Agreement (the "Asset Purchase Agreement"), dated as of December 2, 1996,
pursuant to which Buyer has agreed to purchase substantially all of the
assets of and to assume certain of the liabilities relating to Xxxxxxxx
Xxxxx, Ltd. and Xxxxxxxx Xxxxx Xxxx, Ltd., each a Delaware limited
partnership and a wholly owned subsidiary of Seller, in accordance with the
terms and subject to the conditions set forth in the Asset Purchase
Agreement; and
WHEREAS, it is a condition precedent to the closing under the Asset
Purchase Agreement that Buyer and Seller enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer hereby agree as follows:
1. CERTAIN DEFINITIONS. The following terms used herein shall have
the following meanings:
AFFILIATE OR AFFILIATE - a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with the Person specified. For purposes of this definition,
"control" (including the terms "controlling," "controlled by" and "under
common control with") of a Person means the possession, directly or
indirectly, of the power to (a) vote 50% or more of the voting interests
in such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
BUSINESS - Any one or more of the following activities: Collection,
Disposal and marketing, dealing in or soliciting orders for any of the
products, services or support activities included within the Business.
COLLECTION - The collection, transfer or transportation of NOW.
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COMPETITOR - Any Person that, directly or indirectly, engages in any
aspect of the Business within any portion of the Territory.
DISPOSAL - The treatment or disposal of NOW.
NOW - Nonhazardous oilfield waste associated with the exploration
and production of oil, gas and geothermal energy, that contains less than
30 picocuries per gram of Radium 226 or 228.
PERSON OR PERSON - Any individual, a corporation, a partnership,
an association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
THE TERRITORY - Any part of the following: the States of Louisiana,
Texas, Mississippi and Alabama and the Gulf of Mexico.
2. NONCOMPETITION. Seller hereby agrees, for itself and on behalf of
its Affiliates, that, during the term of this Agreement, except as otherwise
permitted under this Agreement, neither it nor any of its Affiliates will,
within any part of the Territory, directly or indirectly, do any one or more
of the following: (a) engage in any aspect of the Business; (b) own any
interest in any Competitor; or (c) operate, join, control or otherwise
participate in any Competitor.
3. NO SOLICITATION. Seller hereby further agrees that it will not,
during the term of this Agreement, hire any employee of Buyer, or solicit,
induce or contact with a view toward soliciting or inducing, directly or
indirectly, any such employee to leave his or her employment with Buyer to
accept employment with Seller, except as otherwise agreed to in writing by
Buyer and Seller.
4. TERM. The term of this Agreement commences on the Effective Date
and shall continue until the fifth anniversary of the Effective Date.
5. PERMITTED ACTIVITIES. Notwithstanding the provisions of Section 2
of this Agreement:
(a) Seller and its Affiliates, as passive investors, may own up to
5% of the equity securities of any Person whose equity securities are
publicly traded. In addition, in connection with their business described in
subparagraph (b) below, Seller and its Affiliates shall be permitted from
time to time to acquire interests representing more than 5% of the equity
securities of Persons that derive less than 10% of their revenues from
activities that cause such Persons to be Competitors, PROVIDED that Seller or
its Affiliates or the Persons who engage in such competitive activities
promptly formulate plans to dispose of those aspects of such businesses that
cause such Persons to be Competitors and actually complete such dispositions
within 120 days after such interests are acquired by Seller or one or more of
its Affiliates.
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(b) Buyer recognizes and acknowledges that Seller and its
Affiliates are in the business of the collection, treatment and disposal of
numerous varieties of wastes, including, without limitation, municipal solid
wastes, construction and demolition debris, industrial nonhazardous wastes
and special wastes such as contaminated soil and sludges. Buyer agrees that
this Agreement relates only to the specific activities included within the
Business and within the Territory. This Agreement is not intended to limit
or otherwise affect the business of Seller or its Affiliates except as
expressly set forth herein, and the parties expressly acknowledge that,
except as set forth herein and in the Buyer Noncompetition Agreement of even
date herewith, the parties may compete in activities outside the scope of the
Business and the Territory.
(c) Buyer further recognizes and acknowledges that Parent and its
Affiliates from time to time enter into joint venture arrangements with
unaffiliated third parties ("Joint Venture Partners") and that some of such
Joint Venture Partners may engage in aspects of the Business in the
Territory. Without limiting the applicability of this Agreement to Seller and
its Affiliates and such joint ventures, Buyer agrees that the terms of this
Agreement shall not apply to Joint Venture Partners solely as a result of
their entering into joint venture arrangements with Seller or its Affiliates.
6. INJUNCTIVE RELIEF. Seller hereby stipulates and agrees that any
breach by it or by any of its Affiliates of this Agreement will cause
irreparable harm to Seller that cannot be reasonably or adequately
compensated by damages in an action at law and that, in the event of such
breach, Buyer shall be entitled to injunctive or other equitable relief.
7. SEVERABILITY. Seller acknowledges that it has carefully read and
considered the provisions of this Agreement and, having done so, agrees that
the restrictions set forth herein (including, but not limited to, the time
period of restriction and the geographical areas of restriction) are fair and
reasonable and are reasonably required to protect the interests of Buyer. In
the event that, notwithstanding the foregoing, any of the provisions of this
Agreement shall be held to be invalid or unenforceable, the remaining
provisions hereof shall nevertheless continue to be valid and enforceable, as
though the invalid or unenforceable parts had not been included herein. In
the event that any provision of this Agreement relating to time periods or
areas of restriction or both shall be declared by a court of competent
jurisdiction to exceed the maximum time periods or areas (or both) that such
court deems reasonable and enforceable, said time periods or areas of
restriction or both shall be deemed to become and thereafter shall be the
maximum time periods and areas which such court deems reasonable and
enforceable.
8. ENTIRE AGREEMENT; WAIVER. This Agreement, together with the Asset
Purchase Agreement and the other agreements specifically referred to therein,
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous oral agreements,
understandings, negotiations and discussions of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided. Any failure to insist
on strict
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compliance with any of the terms and conditions of this Agreement shall not
be deemed a waiver of any such terms or conditions.
9. NATURE OF OBLIGATIONS. All covenants and obligations of Seller
hereunder shall be binding on Seller, its Affiliates and the assigns,
successors and legal representatives of each of them and shall inure to the
benefit of Buyer and any of its Affiliates that engage in any aspect of the
Business in any part of the Territory.
10. NOTICES. Any and all notices, demands, requests or other
communications hereunder shall be in writing and shall be deemed duly given
when personally delivered to or transmitted by overnight express delivery or
by facsimile to and received by the party to whom such notice is intended, or
in lieu of such personal delivery, overnight express delivery or facsimile
transmission, three days after deposit in the United States mail, first
class, certified or registered, postage prepaid, return receipt requested,
addressed to the applicable party at the address provided below. The parties
may change their respective addresses for the purpose of this Paragraph 10 by
giving notice of such change to the other party in the manner which is
provided in this Paragraph 10.
Seller: Sanifill, Inc.
First City Tower
0000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Buyer: US Liquids Inc.
00 Xxxxx Xxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxx 00000-0000
Attention: W. Xxxxxxx Xxx
Facsimile No.: (000) 000-0000
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With a copy to:
Xxxxxx & Xxxxxx
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: T. Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
11. LAW GOVERNING. The provisions of this Agreement and all rights and
obligations hereunder shall be governed by and construed in accordance with
the internal laws of the State of Texas applicable to contracts made and to
be wholly performed within the State of Texas.
12. CAPTIONS. The captions in this Agreement are included for
convenience of reference only, do not constitute a part hereof and shall be
disregarded in the interpretation or construction hereof.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
SANIFILL, INC.
By: /s/ XXXXX X. XXXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxxx
Title: Asst. Sec.
US LIQUIDS INC.
By: /s/ W. XXXXXXX XXX
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Name: W. Xxxxxxx Xxx
Title: President
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