NON-COMPETITION AGREEMENT OF TIDELANDS OIL & GAS CORPORATIONNonCompetition Agreement |
|
|
You are currently viewing: This NonCompetition Agreement involves
TIDELANDS OIL & GAS CORPORATION | West Texas Gas, Inc. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
Search NonCompetition Agreement by:
EXHIBIT
10.5
NON-COMPETITION
AGREEMENT
OF TIDELANDS OIL & GAS
CORPORATION
This
Non-competition Agreement (“Non-competition Agreement”) dated March 25, 2008, is
between West Texas Gas, Inc., a Texas corporation (“WTG”), and Tidelands Oil
& Gas Corporation, a Nevada corporation (“Tidelands”).
RECITALS
A. WTG and
Reef Ventures, L.P., a Texas limited partnership (“Reef”), have entered into a
Purchase and Sale Agreement dated March 25, 2008 (the “PSA”). Terms
with their initial letter capitalized and not otherwise defined herein have the
meanings given them in the PSA.
B. Tidelands,
together with its Affiliates (as defined below), own 98% of Reef.
C. In
connection with consummation of the transactions contemplated by the PSA, WTG
and Tidelands have agreed to enter into this Non-competition
Agreement.
For and
in consideration of the premises and mutual covenants contained herein and
intending to be legally bound hereby, WTG and Tidelands agree as
follows:
|
1.
|
Non-compete
Covenants. As an inducement for WTG to execute the PSA and all
documents executed pursuant thereto with Reef, and in consideration of
consummation of the purchase and the other transactions contemplated by
the PSA, Tidelands agrees that for a period of five years after the date
of this Non-competition Agreement, it will not: (i) directly or
indirectly, as an owner, partner, officer, director or shareholder or in
any other capacity whatsoever, or through any Affiliate, engage in any
activity that is in Competition (as defined below) in any manner
whatsoever with the business of WTG in the Specified Geographical Area (as
defined below); or (ii) derive any benefits whatever from such Competition
in the Specified Geographical Area. Tidelands further agrees that neither
it nor any Affiliate of it will render assistance or advice to any person,
firm or enterprise which is so engaged. For purposes of this
paragraph:
|
|
a.
|
“Competition”
means the sale, marketing, distribution or transportation of natural
gas.
|
|
b.
|
“Specified
Geographical Area” means a fifty (50) mile radius of Piedras Negras,
Coahuila, Mexico.
|
|
c.
|
“Affiliate”
means and includes any entity that, directly or indirectly, through one or
more intermediaries, is owned or controlled by Tidelands. Control means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such entity, whether through
the ownership of voting securities, by contract or
otherwise.
|
|
2.
|
Exception to
Non-compete Covenants. Tidelands will not be engaging in
Competition by the mere legal or beneficial ownership of not more than 5%
of any class of stock or other securities which are publicly traded on a
national securities exchange or in a recognized over-the-counter
market.
|
|
3.
|
Soliciting
Prohibited. Tidelands further agrees not solicit,
divert, or attempt to solicit or divert any of the customers served by the
assets transferred under the PSA, whether directly or indirectly or
through any person, partnership, corporation or other entity as described
in Section 1.
|
|
4.
|
Customers. Tidelands
agrees it will not impede WTG’s efforts to retain existing customers or
obtain potential customers who are physically and economically capable of
receiving gas deliveries directly from the assets conveyed to WTG under
the PSA.
|
|
5.
|
Injunctive
Relief. WTG and Tidelands acknowledge and agree that WTG
will be irreparably damaged if the provisions of this Non-competition
Agreement are not specifically enforced. Accordingly, WTG will
be entitled to an injunction restraining any violation of this
Non-competition Agreement by Tidelands or its Affiliates, without any bond
or other security being required, or any other appropriate decree of
specific performance. Such remedies will not be exclusive and
will be in addition to any other remedy that WTG may have at law or in
equity.
|
31
|
6.
|
Legal
Construction. If any court of competent jurisdiction
should determine that any term or terms of the covenants of Tidelands in
this Non-competition Agreement are too broad in terms of time, geographic
area, lines of commerce or otherwise, such court shall modify and revise
any such term or terms so that they comply with applicable law. If any one
or more of the provisions contained in this Non-competition Agreement is,
for any reason, held to be invalid, illegal or unenforceable in any
respect, any provision will be fully sev
|
