NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (the "Agreement") is made effective and
entered into as of June ____, 1997 between Xxxxxx X. Xxxxxxx, an individual
("Stockholder"), and U S Liquids Inc., a Delaware corporation ("Liquids").
RECITALS
Liquids and Stockholder have entered into an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of the date hereof, pursuant to which three
separate wholly-owned subsidiaries of Liquids will be merged into Mesa
Processing, Inc. ("Mesa"), T&T Grease Service, Inc. ("T&T"), and Phoenix Fats &
Oils, Inc. ("Phoenix"), each a Texas corporation wholly-owned by Stockholder
(Mesa, T&T and Phoenix are hereinafter collectively referred to as the "Mesa
Companies"). Pursuant to the Merger Agreement, each of the Mesa Companies will
become a wholly-owned subsidiary of Liquids, and the Stockholder will receive
shares of common stock of Liquids.
Liquids desires to protect the businesses it is acquiring pursuant to the
Merger Agreement by having Stockholder enter into this Agreement.
Stockholder is required by the Merger Agreement to enter into this
Agreement, and Stockholder is entering into this Agreement in order to satisfy
this requirement.
NOW, THEREFORE in consideration of the matters appearing in the above
recitals and in consideration of the mutual promises and covenants set forth in
this Agreement, Liquids and Stockholder hereby agree as follows:
1. NONCOMPETITION.
(a) During the "Term" (as hereinafter defined), Stockholder shall
not, directly or indirectly, anywhere in the "Protected Area" (as
hereinafter defined), carry on or engage or participate in any activity
substantially similar to or in competition with the "Business" (as
hereinafter defined), so long as such Business is carried on by any of the
Mesa Companies, by Liquids, or by any of Liquids' other subsidiaries, or by
any person acquiring ownership of all or any material portion of the
Business from Liquids (including any subsidiaries of Liquids) or any of the
Mesa Companies, all of whom together with Liquids are sometimes
collectively called the "Protected Entities."
(b) During the Term, Stockholder will not, either on his own account
or directly or indirectly in conjunction with or on behalf of any person,
firm or company, employ, solicit or attempt to so employ or solicit any
person who is then or has, within six (6) months prior thereto, been an
officer, manager or employee of Liquids, any of the Mesa Companies or any
of Liquids' other subsidiaries, regardless of whether such a person would
commit a breach of his or her contract of employment, if any, by reason of
leaving the service of Liquids, or of any of the Mesa Companies, or of any
of Liquids' other subsidiaries.
(c) It is the desire and intent of the parties that the provisions of
this Section 1 shall be enforced to the fullest extent permissible under
the laws and public policies of the State of Texas. Accordingly, to the
extent that any provision hereunder or any portion thereof shall be
adjudicated to be invalid or unenforceable, this Section 1 shall be
reformed such that the restrictions imposed upon Stockholder are no greater
than would otherwise be permissible under applicable law. Moreover, each
provision of this Section 1 is intended to be severable, and in the event
that any one or more of the provisions contained in this Section 1 shall
for any reason be adjudicated to be invalid or unenforceable, the same
shall not affect the validity or enforceability of any other provision of
this Section 1, but this Section 1 shall be construed as if such invalid or
unenforceable provision had not been contained herein.
(d) Notwithstanding the foregoing, the parties hereto acknowledge
that it shall not constitute a violation of this Section 1 if Stockholder
at any time shall become an officer, director, employee, agent or
consultant of any of the Mesa Companies, of Liquids or of any of Liquids'
other subsidiaries, or shall own no more than five percent (5%) of the
common stock of a publicly traded company or any of its publicly traded
debt or preferred stock.
(e) The term "Business" shall mean (i) the processing and disposal of
nonhazardous liquids wastes including, without limitation, grease trap
wastes from restaurants and other food manufacturing and preparation
facilities, grit trap waste from car washes, Class I and Class II
nonhazardous liquids and other nonhazardous industrial and municipal
wastewater and/or (ii) the sale of fats and oils produced from the
processing of any such nonhazardous liquid wastes. The Protected Area
shall be all of the State of Texas.
(f) The phrase "carry on or engage or participate in any business
substantially similar to or in competition with the Business" shall include
Stockholder doing any of the
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following-listed acts, directly or indirectly, by himself or through any
other person or entity:
(i) carrying on, engaging in, or participating in any such
activity as a principal, director, officer, agent, broker, advisor,
employee, independent contractor, manager, consultant, partner
(general or limited), holder of an equity security, or otherwise;
(ii) as agent or principal carrying on or engaging in any
activities or negotiations with respect to the acquisition or the
disposition of any such activity;
(iii) lending credit or money for the purpose of establishing,
operating, or maintaining any such activity;
(iv) rendering material assistance to any other person, firm,
association or corporation engaging in any such activity; or
(v) lending or consenting to the use of his name or reputation
to be used in any such activity.
provided that the foregoing shall not include or prohibit the sale or purchase,
or the brokering for sale or purchase, of fats or oils processed by parties
unrelated to Stockholder. Without limiting the foregoing, it shall not be
relevant whether any of the foregoing actions were taken for profit or other
consideration.
(g) "Term" shall mean that period commencing with the date hereof and
ending five (5) years later; provided, however, that the duration of the
Term shall be extended by and for the duration of any period during which
Stockholder is in violation of this Section 1.
2. CONFIDENTIAL INFORMATION. Stockholder covenants and agrees that he
will not, during the term of this Agreement and thereafter, without the prior
written consent of Liquids, unless in the reasonable exercise of Stockholder's
duties as a director, officer or employee of Liquids or its affiliates or as may
be required by law or court order, divulge to any third party or use for his own
benefit, or for any purpose other than the exclusive benefit of Liquids, any
confidential information concerning the business and affairs of any of the Mesa
Companies, of Liquids or of any of Liquids' other subsidiaries, regardless of
whether such information was obtained by him by virtue of his earlier
association in any capacity with any of the Mesa Companies. As used herein,
"confidential information" shall include but not be limited to the products,
processes, services, marketing and customer information of any of the Mesa
Companies, Liquids and
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Liquids' other subsidiaries, it being the intent hereof that Stockholder shall
not divulge or use any information which is unpublished or not readily available
to the general public. In addition, Stockholder shall only be permitted to
divulge or use information that is available to the general public if it became
available to the general public other than as a result of the acts or omissions
of Stockholder. Upon execution and delivery of this Agreement, Stockholder
shall provide Liquids with all information, data, records, advertising and other
materials relating to the Business, and all copies or reproductions thereof, in
his possession or under his control.
3. INJUNCTIVE RELIEF AND DAMAGES.
(a) Stockholder acknowledges and agrees that, in the event of a
prospective or actual breach of the provisions of Sections 1 and/or 2 of
this Agreement by Stockholder, damages may not be an adequate remedy to
compensate the Protected Entities for the loss of goodwill and other harm
to the business of the Protected Entities.
(b) In the event of an actual breach of the provisions of Sections 1
and/or 2 of this Agreement by Stockholder, the parties agree that any
Protected Entity may be entitled, if it so elects, to a temporary
restraining order and to temporary and permanent injunctive relief to
prevent or terminate such anticipated or actual breach. In addition, each
Protected Entity shall be entitled to such damages as it can establish that
it sustained by reason of such actual breach.
(c) A Protected Entity shall have the right to inform any entity
described in Section 1 of this Agreement, and the principals thereof, and
any other third party: (i) that the Protected Entity reasonably believes it
or them to be, or to be contemplating, participating with Stockholder or
receiving from Stockholder assistance in violation of the terms of Section
1 of this Agreement;(ii) of the nature of the rights of the Protected
Entity hereunder; and (iii) that participation by any such entity or
persons with Stockholder in activities in violation of Section 1 of this
Agreement may give rise to claims by the Protected Entity against such
entity or persons.
4. INDEPENDENT COVENANTS. The covenants of Stockholder under this
Agreement shall be construed as and shall be independent of the covenants,
representations, warranties and obligations of Liquids under the Merger
Agreement, and accordingly any default by Liquids with respect to any such
representation, warranty, covenant or obligation shall not constitute an excuse
for Stockholder failing to perform under this Agreement.
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5. MISCELLANEOUS.
(a) GOVERNING LAW, CHOICE OF FORUM AND CONSENT TO SERVICE OF PROCESS
AND JURISDICTION. Any suit, action or proceeding against the Stockholder
with respect to this Agreement shall be brought exclusively in courts of
competent subject matter jurisdiction sitting in the State of Texas, County
of Xxxxxx. Stockholder hereby irrevocably waives any objections which he
may now or hereafter have to the jurisdiction or venue of any suit, action
or proceeding, arising out of or relating to this Agreement brought in such
courts, and hereby further irrevocably waives any claim that such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
(b) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto in reference to the subject matter hereof
and in reference to any of the matters or things herein provided for or
hereinabove discussed or mentioned in reference to such subject matter; all
prior agreements, promises, representations and understandings relative to
such subject matter are superseded by this Agreement.
(c) ASSIGNABILITY. Neither this Agreement nor any of the rights,
obligations or benefits hereof, shall be assignable by any party hereto.
Except as expressly provided herein, this Agreement shall not be construed
to confer upon or give to any person, other than the parties hereto, any
right, remedy or claim under or by reason of this Agreement or of any term,
covenant or condition hereof.
(d) AMENDMENTS; WAIVERS. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof
may be waived only by a written instrument executed by the parties hereto
or, in the case of a waiver, by the party waiving compliance. The failure
of any party at any time or times to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce the
same. No waiver by any party of the breach of any term or provision
contained in this Agreement, whether by conduct or otherwise, in any one or
more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any
other term or covenant contained in this Agreement.
(e) HEADINGS AND TERMS. All headings in this Agreement are for
convenience of reference only and shall not affect the
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meaning of any provision hereof. The term "person" shall include reference
to an individual or a legal entity.
(f) ATTORNEYS' FEES. Should either party hereto retain counsel for
the purpose of enforcing or preventing the breach of any provision hereof
including, but not limited to, by instituting any action or proceeding to
enforce any provision hereof or to enjoin the breach of any provision of
this Agreement, or for a declaration of such party's rights or obligations
under this Agreement, or for any other judicial remedy, then the successful
or prevailing party shall be entitled, in addition to any other relief as
to which such party may be entitled, to be reimbursed by the other party
for all costs and expenses incurred thereby including, without limitation,
fees and expenses of attorneys and expert witnesses, including costs of
appeal (whether or not taxable as such).
(g) SURVIVAL. All covenants, agreements, representations and
warranties made herein or otherwise made in writing by any party pursuant
hereto shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
(h) REASONABLE RESTRAINTS. Stockholder agrees that the covenants set
forth in Sections 1 and 2 of this Agreement are reasonable in light of the
activities and business of the Mesa Companies, Liquids and Liquids' other
subsidiaries.
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IN WITNESS WHEREOF, Stockholder has executed this Agreement and Liquids has
caused this Agreement to be duly executed by its authorized officer as of the
day and year first above written.
"LIQUIDS": U S LIQUIDS INC.,
a Delaware corporation
By: /s/ W. Xxxxxxx Xxx
-------------------------------------
W. Xxxxxxx Xxx
/s/ Xxxxxx X. Xxxxxxx
"STOCKHOLDER": -----------------------------------
Xxxxxx X. Xxxxxxx
