USED PRODUCT COLLECTION AGREEMENT
THIS USED PRODUCT COLLECTION AGREEMENT (this "Agreement") is made and
entered into on this the 29th day of September, 2000 by and between
PENNZOIL-QUAKER STATE COMPANY ("Pennzoil"), a Delaware corporation, having its
principal office at 700 Milam. Street (P. O. Box 2967), Houston, Texas 77002
(77252-2967), and Probex Fluids Recovery, Inc. ("Collector"), a Delaware
corporation, having its principal office at One Galleria Tower, Suite 1200,
13355 Noel Road, Dallas, Texas 75240.
WITNESSETH:
WHEREAS, Pennzoil is in the business of manufacturing, distributing and
selling petroleum products, various lubrication products, including motor oils,
and other automotive and industrial products (collectively, the "Products") to
various customers located throughout the United States of America; and
WHEREAS, Collector is in the business of providing collection,
transportation, handling, storage, treatment and/or disposal and/or recycling
services (whether at its own facility or the facility of another) to the general
public, which services may include the collection, hauling, disposal and/or
recycling of used motor oils, used motor oil filters, used antifreeze and/or
other used products within the states of Alabama, Arkansas, Florida, Georgia,
Louisiana, Maryland, Mississippi, North Carolina, Tennessee and Texas (the
"Territory");
WHEREAS, Pennzoil and Collector have agreed to enter into this
Agreement for the purpose of defining the terms and conditions upon which
Pennzoil will, in exchange for Collector making its various services available
to Pennzoil's customers, promote Collector's services to Pennzoil's customers
located within the Territory.
AGREEMENTS:
NOW, THEREFORE, for and in consideration of the mutual agreements and
covenants set forth in this Agreement, together with other good and valuable
considerations, the receipt of which is hereby acknowledged by the parties
hereto, Pennzoil and Collector hereby agree as follows:
1. For purposes of this Agreement, the following definitions shall be
applicable:
a. Services - shall mean, collectively, the collection, transportation,
handling, storage, treatment and/or disposal and/or recycling services
for the following materials:
XX Used Oil XX Used Oil Filters XX Used Antifreeze.
---- ------ ------
b. Used Antifreeze - shall mean any aqueous glycol antifreeze solution
removed from the cooling system of a motor vehicle or following use in
an industrial application, which solution is ready for disposal and/or
recycling; provided, however, solutions of the nature provided for
hereunder that have been used as solvents are specifically excluded
from this definition.
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c. Used Oil - shall mean any oil that has been refined from crude oil,
or any synthetic oil, that has been used and as a result of such use is
contaminated by physical or chemical impurities, including, but not
limited to, lubrication/cutting oils and hydraulic oils; provided,
however, oils that have been used as solvents are specifically excluded
from this definition.
d. Used Oil Filters - shall mean non-terne plated oil filters that have
been removed from motor vehicle engines following use or that have been
otherwise used in an industrial application and are ready for disposal
and/or recycling.
e. Used Products - shall mean, collectively, any Used Oil, Used
Antifreeze and/or Used Oil Filters for which Collector will be
performing the Services.
f. Management Facility - shall mean the facility or facilities
designated on Exhibit A. attached hereto and made a part hereof for all
purposes, at the Used Products will be stored, treated, recycled,
and/or disposed of in accordance with this Agreement.
2. Pennzoil agrees, consistent with Paragraph 3 hereof, that it will
promote Collector's Services to its customers located within the Territory,
subject to Collector's satisfaction of the following items:
a. Collector shall have participated in and successfully completed an
assessment of its general business operations conducted by Pennzoil's
Environmental, Safety and Health Department ("ESHA") or its agents,
which assessment shall include, but not be limited to, a review of
Collector's past and present business practices and regulatory
compliance;
b. Collector is currently licensed or otherwise authorized by law to
operate the Management Facility in the State(s) of Alabama, Arkansas,
Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina,
Tennessee and Texas to perform the Services, and a copy of such
license(s) or authorization(s) has (have) been provided to Pennzoil;
c. Collector has provided Pennzoil with a copy of its most recent
audited financial statement;
d. Collector has presented Pennzoil with a copy of its most recent
management guidelines which address the collection, handling,
transporting, storage, recycling and/or disposal (if performed by
Collector) of Used Products at any Management Facility owned and/or
operated by Collector, including Collector's spill response and cleanup
plans;
e. Collector has provided Pennzoil with any and all copies of any other
necessary licenses, permits or authorizations, including transportation
permits, required by any federal, state or local governmental authority
for the performance of the Services within the Territory;
f. Collector has provided Pennzoil with proof of insurance or other
indication of financial responsibility; and
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g. Collector has agreed, and by the execution of this Agreement does so
agree, to comply with and be bound by Pennzoil's corporate
"Environmental, Safety & Health Policy", a copy of which is attached
hereto as Exhibit B and incorporated herein by this reference.
3. Upon satisfaction of the conditions listed in Paragraph 2 hereof,
Pennzoil shall recommend and promote Collector to those of its customers within
the Territory that require Used Product services of the type being provided by
Collector; provided, however, Pennzoil cannot and will not require that its
customers use Collector for any such services.
4. On an annual basis, Collector shall be responsible for providing
Pennzoil with current financial statements, copies of all updated or newly
acquired licenses, permits or authorizations required by law for the performance
of the Services within the Territory, and any other information necessary to
confirm that Collector is performing the Services in accordance with all
federal, state and local laws, rules, regulations and ordinances applicable to
the Services, including any laws, rules, regulations and ordinances pertaining
to any Management Facility owned and/or operated by Collector and environmental
protection in the performance of the Services. Collector's failure to present
this information to Pennzoil in a timely manner shall be grounds for Pennzoil to
terminate this Agreement and to cease the promotion of Collector's Services to
Pennzoil's customers within the Territory.
5. Collector shall provide the Services to Pennzoil's customers at
rates that are competitive within the Territory and shall enter into separate
collection agreements with each and every one of such customers (collectively,
the "Customer Agreements"), the terms of which shall be solely between Collector
and Pennzoil's customer and shall in no way include Pennzoil as a party thereto
or otherwise indicate an involvement therein by Pennzoil; provided, however, at
the request of Pennzoil's customer, Pennzoil's local sales representative shall
work closely with Collector and/or its representatives to ensure that the needs
of Pennzoil's customers are being adequately satisfied by Collector.
6. Pennzoil will not and Collector hereby agrees that Pennzoil does not
guarantee the performance of any of its customers under the terms and conditions
of the Customer Agreements, including, without limitation, the payment by any
such customer for the Services or the manner in which the Used Product is
collected, stored or presented to Collector for collection, transporting and
disposal/recycling.
7. A. Collector shall hold harmless and fully indemnify Pennzoil, its
parent, subsidiaries, divisions, and affiliates, and their respective officers,
employees, agents, and representatives, from and against any and all claims,
damages, expenses or injuries (including injuries to Collector, its employees,
agents and representatives) arising from or in any manner related to the
Customer Agreements or the Services to be provided by Collector thereunder,
including, without limitation, (i) a failure by any customer to pay for the
Services provided by Collector under the Customer Agreements, unless the
billings for the Services are handled by Pennzoil, (ii) the collection or
accumulation of materials, including the Used Products, whether by Pennzoil's
customer or Collector, that are designated, determined to be, or at any time
after the date of this Agreement, designated as or determined to be, under any
federal, state or local laws, rules or regulations, "hazardous", a "hazardous
substance" and/or a "solid or hazardous waste" (as these terms may be defined
under such
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laws, rules or regulations) and would require handling and disposal in a manner
inconsistent with the Services provided by Collector or the permits, licenses or
other authorizations maintained by Collector for the performance of the
Services, and (iii) any and all environmental contamination caused by or which
is attributable to Pennzoil's customer, Collector or, if Collector is not the
party responsible for the actual management, disposal and/or recycling of the
materials, the party that bears such responsibility, including any and all
damages, fines, fees, penalties and costs (including clean-up costs and site
investigation costs) assessed by any federal, state or local governmental agency
against either Pennzoil's customer, Collector or the party responsible for the
actual management, disposal and/or recycling of the materials.
B. The indemnity provided for herein shall survive the termination of
this Agreement and shall remain effective despite the fact that all Customer
Agreements entered into during the term hereof have also been terminated.
C. Based upon the nature of the Services and the provisions of this
Agreement, Collector acknowledges that Pennzoil will be providing its customers
with an indemnity from and against the actions of Collector in the performance
of such Services (the "Customer Indemnity"), which Customer Indemnity will be
evidenced by a separate agreement made directly between Pennzoil and its
customers. Collector further acknowledges that the Customer Indemnity shall not
be considered by Collector to replace or in any manner diminish the
responsibility that Collector may have under the Customer Agreements (including
any indemnity provisions contained therein) or the provisions of this Paragraph
7. Collector shall not rely upon or be considered to be a third party
beneficiary of the Customer Indemnity and expressly waives any right to claim,
whether as a defense or otherwise, the benefit of the Customer Indemnity to
protect Collector from responsibility for its actions, or the actions of any
party with whom Collector contracts, in the performance of the Services.
D. Notwithstanding anything to the contrary in this Agreement, nothing
in this Section 7 shall be construed to modify or supersede the indemnities
provided in Article IX of the Asset Purchase Agreement, Article XIII of the
Services Agreements or Article XII of the Corporate Services Agreement. In the
case of any conflicts between this Section 7, on the one hand, and the Asset
Purchase Agreement, the Services Agreements or the Corporate Services Agreement,
on the other hand, the latter agreements shall control. For purposes of this
Section 7, "Asset Purchase Agreement" means the Asset Purchase Agreement dated
as of September 6, 2000, as amended, by and between Pennzoil and Collector and
"Services Agreements" and "Corporate Services Agreement" have the respective
meanings ascribed to them in the Asset Purchase Agreement.
8. This Agreement and the contents hereof, shall be considered to be
confidential between the parties. Collector is not authorized to publish,
represent or otherwise disseminate to the public the existence of this Agreement
or the terms contained herein (including the existence of the Customer
Indemnity), or make use of Pennzoil's name, logo, trademarks, or other
identification of Pennzoil, unless Collector has first obtained Pennzoil's
written consent and approval of such disclosure, representation or use. Any
violation of this provision will result in an automatic termination of this
Agreement and Pennzoil's obligations hereunder.
9. A. This Agreement, the contents hereof and any information or docu-
mentation provided by Pennzoil hereunder (the "Proprietary Information"), as
disclosed by Pennzoil to
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Collector, shall be considered to be confidential. Collector is not authorized
to publish, represent or otherwise disseminate to the public the Proprietary
Information (including the existence of the Customer Indemnity contained
herein), except for the purpose of carrying out the obligations of Collector
hereunder. Any violation of this provision will result in an automatic
termination of this Agreement and Pennzoil's obligations hereunder.
B. Collector agrees that the disclosure of Proprietary Information for
a purpose other than expressly set forth in this Agreement or otherwise agreed
to by the parties in writing may result in detriment to Pennzoil for which the
recovery of damages may not be sufficient. Therefore, Collector further
acknowledges and agrees that, in the foregoing event, Pennzoil shall have the
right to seek injunctive relief against Collector for the purpose of ceasing the
disclosure of such Proprietary Information.
C. Collector shall be under no obligation with respect to any of the
Proprietary Information (i) which is, at the time of disclosure, available to
the general public; or (ii) which following disclosure becomes available to the
general public through no fault of Collector; or (iii) which Collector can
demonstrate was in its possession before receipt; or (iv) which is disclosed to
Collector without restriction on disclosure; or (v) which, as shown by
Collector's records, was subsequent to disclosure, independently developed by an
employee of Collector who neither directly nor indirectly had access to
Proprietary Information. Specific Proprietary Information shall not be deemed to
come under the foregoing exceptions merely because it is embraced by more
general information which is or may become public knowledge.
D. For all purposes of this Agreement, the term "Proprietary
Information" shall include, by way of example, but without limitation, data,
know-how, formulae, processes, designs, sketches, photographs, plans, drawings,
specifications, samples, reports, customer lists, pricing information, studies,
findings, inventions, trademarks, logos, trade secrets and ideas. To the extent
practical, Proprietary Information shall be disclosed in a documentary or
tangible form marked "PROPRIETARY" or "CONFIDENTIAL", but failure to do so shall
not nullify the proprietary or confidential nature of the disclosure. In the
case of a disclosure in nondocumentary form made orally or by visual inspection,
the discloser shall have the right, or if requested by the recipient, the
obligation to confirm in writing the fact and general nature of each disclosure
within a reasonable time after it is made. The amount of Proprietary Information
to be disclosed is completely in the discretion of Pennzoil. Collector shall
retain all Proprietary Information that it receives in strict confidence and
prevent its disclosure to any third party, and shall limit internal
dissemination of Proprietary Information within its own organization to
individuals whose duties justify the need to know such information, and then
only provided that there is a clear understanding by such individuals of their
obligation to maintain the trade secret status of such information and to
restrict its use solely to the purpose specified in this Agreement.
10. If requested by Pennzoil in writing, Pennzoil shall have full
access to all Used Product collection and recycling data, including volumes,
costs, and management/operating practices employed by Collector, except for
access to litigation matters or other adversarial concerns arising out of this
Agreement. This information shall be made available to Pennzoil for all Customer
Agreements entered into during the term of this Agreement.
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11. Throughout the effective term of this Agreement, Pennzoil shall
have, and hereby retains by itself or through its agents, at its option, the
right to claim ownership of all or part of the total amount of the Used Products
collected by Collector from Pennzoil's customers at all of the Pennzoil
Locations (hereinafter defined), in exchange for their fair market cost or value
of the claimed Used Products. In the event that Pennzoil should choose to
exercise the right retained herein, Pennzoil shall deliver written notice to
Collector indicating its intent to exercise such right. Such notice shall be
given at least thirty (30) days prior to the date upon which Pennzoil's right
hereunder shall become effective and shall specify the exact location(s) at
which Pennzoil shall exercise the right granted herein. For purposes of this
Agreement, all locations designated by Pennzoil in the notice to Collector shall
hereinafter be referred to as the "Pennzoil Locations". In the event Pennzoil
should exercise its ownership rights under this Paragraph 11, Pennzoil shall be
responsible for the collection and transportation, whether through Collector or
otherwise, of that amount of the Used Products collected by Collector under the
Customer Agreements for the specific Pennzoil Locations.
12. The endorsement of Collector by Pennzoil pursuant to the terms of
this Agreement is not exclusive and Pennzoil hereby reserves the right to
recommend or endorse any one or more companies or entities that perform the
Services within the Territory, regardless of the fact that any such companies or
entities may be direct competitors of Collector.
13. This Agreement may be terminated in the following manner:
a. Immediately if Collector's actions in any way violate or run
contrary to existing federal, state or local regulations pertaining to
the management of the Used Products, including any and all laws or
regulations pertaining to environmental protection;
b. In accordance with any other provisions of this Agreement allowing
either party to terminate this Agreement; or
c. By either party upon no less than thirty (30) days written notice
to the other, with or without cause.
14. This Agreement constitutes the full and final understanding of the
parties hereto with regard to the subject matter hereof and may not be amended
or modified in any manner without the express written consent of Pennzoil and
Collector. There are no written or oral agreements, representations or
statements which have not been made a part of this Agreement.
15. This Agreement may not be assigned by Collector without the express
written consent of Pennzoil, which consent shall not be unreasonably withheld,
and any assignment without such consent shall be null and void and not binding
upon Pennzoil. Pennzoil may at any time during the term of this Agreement,
transfer or assign this Agreement to its parent or any of its affiliates,
divisions or subsidiaries.
16. Collector is an independent contractor and is not Pennzoil's agent
and may not represent itself to be Pennzoil's agent. Collector will not purport
to bind Pennzoil to any agreement or to undertake any obligations on Pennzoil's
behalf. Collector, and not Pennzoil, shall be responsible
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for paying its employees and other creditors and complying with all laws which
apply to Collector, its officers, employees and agents.
17. This Agreement shall be construed under and interpreted in
accordance with the laws of the State of Texas and, as applicable, the laws of
the United States of America.
Executed on the dates set forth below, but to be effective as of the
date first set forth in this Agreement.
PENNZOIL-QUAKER STATE COMPANY
Date: By:
--------------------------------------- -------------------------
Name:
-------------------------
Title:
-------------------------
PROBEX FLUIDS RECOVERY, INC.
Date: By:
--------------------------------------- -------------------------
Name:
-------------------------
Title:
-------------------------
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Exhibit A
The used products management facilities designated to perform the services
described in this Used Product Collection Agreement are listed below.
list locations
addresses
END OF LIST
<PAGE>
Exhibit B
Pennzoil Company's Corporate "Environmental, Safety & Health Policy"
Protecting the environment and the safety and health of employees, customers,
contractors, communities and the public is fundamental to the way Pennzoil
conducts its business. To integrate environmental, safety and health management
into business activities worldwide, Pennzoil will:
o Pursue excellence in the design, construction, operation and restoration of
all properties and facilities;
o Prepare for emergencies and other contingencies;
o Communicate openly regarding business activities;
o Assign clear responsibilities to all employees and contractors;
o Provide employees with resources and training to meet assigned
responsibilities;
o Assess the potential risks of business activities;
o Comply with all applicable laws and regulations;
o Participate in the development of new laws, regulations and technologies;
o Review performance and communicate progress; and
o Expect continuous improvement.
