NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is made and entered
into as of the 4th day of December, 1998, by and among AGGREKO INC., a Louisiana
corporation ("Purchaser"),TOWER TECH, INC., an Oklahoma corporation ("Seller")
and XXXXXX X. XXXXXX, a resident of Cleveland County, Oklahoma ("Xxxxxx").
WITNESSETH:
WHEREAS, Seller is currently engaged in the business of, among other
things, leasing and renting industrial modular cooling towers (the "Business");
WHEREAS, pursuant to that certain Asset Purchase Agreement (herein so
called) dated as of December 4, 1998, by and between Purchaser and Seller,
Seller has agreed to, among other things, sell to Purchaser and Purchaser has
agreed to, among other things, purchase from Seller, the Acquired Assets (as
such term is defined in the Asset Purchase Agreement) in order to acquire the
Business from Seller;
WHEREAS, Xxxxxx owns a significant amount of the issued and outstanding
capital stock of Seller and will therefore, directly or indirectly, benefit and
receive substantial consideration from the sale of the Acquired Assets to
Purchaser;
WHEREAS, pursuant to the Asset Purchase Agreement, Seller and Xxxxxx
have agreed to execute and deliver this Agreement as a condition to the purchase
by Purchaser of the Acquired Assets; and
WHEREAS, Purchaser desires to protect the value of the Acquired Assets
and the Business by obtaining from Seller and Xxxxxx this Agreement to (i)
maintain the confidentiality of certain information concerning the Acquired
Assets and the Business, including, without limitation, trade secrets and other
confidential and/or proprietary information, and (ii) refrain from competing
with the Business and Purchaser for a reasonable period of time in the
Restricted Area (as defined in Section 2 below).
NOW, THEREFORE, in consideration of the foregoing premises and of the
respective representations and warranties hereinafter set forth, of the
covenants and agreements contained herein and in the Asset Purchase Agreement,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Disclosure of Information. Seller and Xxxxxx agree that for a period
of five (5) years from the date hereof (the "Term"), neither of them nor any of
their respective Affiliates (as defined in Section 15 below) shall, without the
prior written consent of the Board of Directors of Purchaser, directly or
indirectly, reveal, divulge, disclose or otherwise communicate to any person,
firm, association, corporation or other entity in any manner whatsoever, or
otherwise make use of, confidential, proprietary or trade secret information of
any kind, nature or description concerning any matters affecting or relating to
Purchaser or the Business, including, without limitation: (a) the names of any
of the prior, present or prospective clients, customers or accounts of the
Business, (b) the prices for which the Business obtains or has obtained, or at
which it sells or has sold, or at which it leases or rents or has leased or
rented, the properties or services of the Business, (c) the names of the
personnel involved in the Business, (d) the financial affairs of the Business,
(e) the method of operating the Business, (f) the method of marketing, and
determining markets for, the Business, or (g) the processes, techniques,
methods, know-how, designs, design improvements, plans, trade secrets or other
data of any kind, nature or description whatsoever relating primarily to the
Business. Without regard to whether any or all of the foregoing matters would be
deemed confidential, material or important, the parties hereto stipulate that as
between them, the same are confidential, material and important and gravely
affect Purchaser's effective and successful conduct of the Business and its
goodwill. Notwithstanding anything contained in this paragraph to the contrary,
neither Seller nor Xxxxxx nor any of their respective Affiliates shall be
prohibited from disclosing any information regarding the Business if such
information is required to be included in any filing with the Securities and
Exchange Commission, including financial statements included therewith, or is
ordered to be made available by any court of competent jurisdiction or any
governmental authority; provided, however, that Seller or Xxxxxx shall provide
Purchaser with written notice of such court order or order by a governmental
authority prior to disclosing such information.
Notwithstanding the foregoing paragraph, neither the Seller nor Xxxxxx
shall be liable pursuant to this Section 1 for disclosures as to (i) information
that is or becomes generally available to the public other than as a result of a
disclosure by Seller or Xxxxxx, or (ii) information which is received from a
third party; provided, that, such source is not known by Seller or Xxxxxx to be
bound by a confidentiality agreement, or other obligation of secrecy, to
Purchaser.
2. Covenant Not to Compete. Seller and Xxxxxx agree that for the Term
of this Agreement, without the prior written consent of the Board of Directors
of Purchaser, neither of them nor any of their respective Affiliates shall,
directly or indirectly, through any corporation, organization or other entity
owned or controlled by Seller or Xxxxxx, or as stockholder or holder of any
equity security (except for an equity interest in a public company that does not
exceed five percent (5%) of its total outstanding voting stock), partner or in
any other capacity whatsoever:
(a) call upon, solicit, divert, take away or attempt to call
upon, solicit, divert or take away any existing, clients, customers,
suppliers, businesses or accounts or potential clients, customers,
suppliers, businesses or accounts of the Business or any portion
thereof, or of Purchaser or any of its Affiliates in connection with
any business competitive with the Business or any portion thereof in
the Restrictive Area (as hereinafter defined) nor interfere or compete
with Purchaser or any of its Affiliates, or any portion of the Business
in connection with such clients, customers, suppliers, businesses and
accounts in the Restricted Area;
(b) hire, knowingly attempt to hire, contact or solicit with
respect to hiring any of those employees listed on Schedule A attached
hereto;
(c) engage in, or give any advice to any Person engaged in,
any business competitive in any respect with the Business or any
portion thereof in the Restricted Area;
(d) lend credit, money or reputation for the purpose of
establishing or operating any business competitive with the Business or
any portion thereof in the Restricted Area; or
(e) participate in the ownership, management, operation or
control of any Person that is engaged in any business competitive with
the Business or any portion thereof in the Restricted Area.
The foregoing covenants are intended to restrict Seller, Xxxxxx and
their respective Affiliates from competing in any manner with Purchaser or any
of its Affiliates in any business similar to the Business or any portion thereof
in the activities which have heretofore been carried on in connection with the
Business or any portion thereof. The parties hereto hereby agree that the
prohibitions set forth in this Section 2 shall be liberally interpreted so as to
carry out the intents and purposes of this Agreement.
If, during any period within the Term, Seller or Xxxxxx is not in
compliance with the terms of this Section 2, the Purchaser shall be entitled to,
among other remedies, require compliance by Seller and Xxxxxx with the terms of
this Section 2 for an additional period equal to the period of such
noncompliance. The term "Term" shall also include this additional period. Seller
and Xxxxxx hereby acknowledge that the geographic boundaries, scope of
prohibited activities and the time duration of the provisions of this Section 2
are reasonable and are not broader than are necessary to maintain the goodwill
associated with the Business and to protect other legitimate business interests
of the Purchaser and its Affiliates.
For purposes of this Agreement, the term "Restricted Area" shall mean:
(i) anywhere in North America (including, without limitation,
the United States, Canada, Mexico, Puerto Rico and the U.S. Virgin
Islands), Central America, South America, Africa, Europe (including,
without limitation, Russia and the former Soviet states), Asia
(including, without limitation, China, Japan and India), Australia, New
Zealand and every province, district, state or territory of the
foregoing countries, in which the Business is currently conducted;
(ii) to the extent not the referred to in the foregoing,
anywhere in North America (including, without limitation, the United
States, Canada, Mexico, Puerto Rico and the U.S. Virgin Islands),
Central America, South America, Africa, Europe (including, without
limitation, Russia and the former Soviet states), Asia (including,
without limitation, China, Japan and India), Australia, New Zealand and
every province, district, state or territory of the foregoing
countries, in which Seller has or had operations in connection with the
Business; and
(iii) to the extent not referred to in the foregoing, anywhere
in North America (including, without limitation, the United States,
Canada, Mexico, Puerto Rico and the U.S. Virgin Islands), Central
America, South America, Africa, Europe (including, without limitation,
Russia and the former Soviet states), Asia (including, without
limitation, China, Japan and India), Australia, New Zealand and every
province, district, state or territory of the foregoing countries.
(Seller hereby acknowledges that the Business as currently conducted
directly affects regional markets and as a consequence, extends beyond
the regions in which the Business directly operates).
3. Noncompetitive Activities. Notwithstanding anything to the contrary
contained in Section 1 or Section 2 hereof, the parties hereto understand and
agree that neither Seller's nor any of its Affiliate's involvement in the
following activities shall be deemed to be competition prohibited by Section 2
hereof:
(i) designing, engineering, manufacturing, marketing, selling or
servicing industrial modular cooling towers for non-rental or
non-leasing applications; and
(ii) utilizing a capital lease to finance the sale of an industrial
modular cooling tower for a non-rental application.
4. Enforcement of Covenants. Seller and Xxxxxx acknowledge that a
violation or attempted violation, on its part or on the part of any of its
Affiliates, of any agreement in Sections 1 and 2 above will cause such damage to
Purchaser as will be irreparable and that the remedy at law will be inadequate.
Accordingly, Seller and Xxxxxx agree that the Purchaser shall be entitled as a
matter of right to an injunction, without posting of a bond or any other
security, from any court of competent jurisdiction, restraining any further
violation of such agreements by Seller, Xxxxxx or their respective Affiliates.
Any exercise by the Purchaser of its rights pursuant to this Section 4 shall be
cumulative and in addition to any other remedies to which Purchaser may be
entitled.
5. Reformation of Sections 1 and 2. Purchaser, Seller and Xxxxxx agree
and stipulate that the agreements and covenants contained in Sections 1 and 2
hereof are fair and reasonable in light of all of the facts and circumstances of
the relationship between Purchaser and Seller and Xxxxxx. However, the parties
are aware that in certain circumstances courts have refused to enforce certain
agreements not to compete. Therefore, in furtherance of, and not in derogation
of the provisions of Sections 1 and 2, Purchaser, Seller and Xxxxxx agree that
in the event a court should decline to enforce the provisions of Sections 1 and
2, that Sections 1 and 2 shall be deemed to be modified or reformed to restrict
Seller's or Xxxxxx' competition with Purchaser or its Affiliates to the maximum
extent, as to time, geography and business scope, which the court shall find
enforceable; provided, however, in no event shall the provisions of Section 1
and 2 be deemed to be more restrictive to Seller and Xxxxxx than those contained
herein.
6. Indemnification. From and after the date hereof, Seller and Xxxxxx,
jointly and severally, shall indemnify, defend and hold the Purchaser harmless
from and against any and all claims, losses, damages, costs and expenses that
may be incurred by, imposed upon or asserted by or against Purchaser arising
from any breach of any provisions of this Agreement by Seller or Xxxxxx if
Seller and/or Xxxxxx is held to be in violation of this Agreement by a court of
competent jurisdiction.
7. Survival. Without affecting the time limitations set forth in
Section 1 and Section 2 hereof, the respective representations, warranties and
agreements of the parties hereto set forth herein shall survive consummation of
any transactions contemplated by the Asset Purchase Agreement.
8. Invalid Provisions. If any provision hereof (other than Sections 1
and 2) is held to be illegal, invalid or unenforceable under present or future
laws effective during the Term hereof, such provisions shall be fully severable;
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as a part hereof a provision as
similar in the terms, but in any event no more restrictive than, such illegal,
invalid or unenforceable provision as may be possible and be legal, valid and
enforceable.
9. Waivers and Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure therefrom, shall be effective
unless the same be in writing and signed by of each party hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.
10. Number and Gender. Whenever herein the singular number is used, the
same shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.
11. Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way limit or amplify the
terms and provisions hereof.
12. Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICT OF LAWS.
13. Jurisdiction and Venue. Any judicial proceeding brought by or
against any of the parties to this Agreement on any dispute arising out of this
Agreement shall be brought in the state or federal courts of Dallas County,
Texas, and by execution and delivery of this Agreement, each of the parties
hereto accepts individually the exclusive jurisdiction and venue of the
aforesaid courts.
14. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective legal representatives,
heirs, successors and assigns. No party hereto shall assign any of its rights
hereunder or any interest herein without the prior written consent of the other
parties hereto.
15. Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
16. Use of Certain Terms.
(a) As used in this Agreement, the term "Affiliate" shall mean
any Person that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, such Person at any time on or after the date hereof,
including, without limitation, the officers and directors of any such
Person. For purposes of this definition, "control" shall mean the
power, directly or indirectly, to (i) vote ten percent (10%) or more of
the securities having ordinary voting power for the election of
directors of such Person, or (ii) direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise.
(b) As used in this Agreement, the term "Person" shall mean
any corporation, partnership, joint venture, trust, sole
proprietorship, individual or person or entity.
(c) As used in this Agreement, the words "herein," "hereby,"
"hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular section, subsection
or other subdivision.
17. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement, but in making proof
hereof it shall only be necessary to exhibit one such counterpart.
18. Entirety. This Agreement contains the agreement and understanding
among the parties with respect to the matters addressed herein and supersedes
all prior representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PURCHASER: AGGREKO INC.
By:ss/XXXXXX X. XXXXXX
--------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
By: ss/XXXXXX X. XXXXXXX, XX.
------------------------------------
Printed Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President Finance
SELLER: TOWER TECH, INC.
By: ss/XXXXXX X. XXXXXX
--------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXXX: ss/XXXXXX X. XXXXXX
--------------------------------
Xxxxxx X. Xxxxxx, Individually
SCHEDULE A
LIST OF EMPLOYEES
Name Address Social Security
Xxxxx X. Xxxxxxxx 2909 Carolina, Xxxxxxxxx, XX 00000 ###-##-####
Xxxxx Xxxx Xxxxxx 0000 X. 00xx Xx., Xxxxxxxxx,XX 000000 ###-##-####
Xxxxxx X. Xxxxx X.X. Xxx 000, Xxxxxxxxx, XX 00000 ###-##-####
Xxxxx X. XxXxxxxx 0000 X. 00xx Xx., Xxxxxxxxx XX 00000 ###-##-####
Xxxxx "Xxxxx" Xxxx 000 X. Xxxxxxxx #0, Xxxxxx, XX 00000 ###-##-####
