NON-COMPETE, CONFIDENTIALITY AND DIRECTOR NON-REMOVAL AGREEMENT DATED AS OF JANUARY 3, 2008
Exhibit 10.8
NON-COMPETE, CONFIDENTIALITY AND
DIRECTOR NON-REMOVAL AGREEMENT
DIRECTOR NON-REMOVAL AGREEMENT
DATED AS OF JANUARY 3, 2008
NON-COMPETE, CONFIDENTIALITY AND
DIRECTOR NON-REMOVAL AGREEMENT
DIRECTOR NON-REMOVAL AGREEMENT
THIS NON-COMPETE, CONFIDENTIALITY AND DIRECTOR NON-REMOVAL AGREEMENT (as the same may be
amended, modified or supplemented in accordance with its terms, this “Agreement”) is made
as of January 3, 2008 by and between Cascal B.V.1, a Dutch private limited liability
company (“Cascal”) and Biwater Plc, a company organized under the laws of the United
Kingdom (the “Parent”).
Following the series of stock split and recapitalization transactions that will effectively
result in a 2,067-for-1 split of Cascal’s shares, the Parent will indirectly own 21,849,343 common
shares, par value EUR 0.50 per share, of Cascal. This Agreement is being entered into in order to
state affirmatively the agreement of Parent to refer certain business opportunities to Cascal in
accordance with the terms hereof after consummation of the planned initial public offering of
Cascal (the “IPO”), in which a subsidiary of the Parent expects to sell for its own account
a portion of the shares to be sold in the IPO.
NOW, THEREFORE, in consideration of the mutual premises herein and other good and valuable
consideration, the receipt and sufficiency of which the parties acknowledge, the parties hereby
agree as follows:
1. Non-Compete Agreement.
(a) The Parent agrees with Cascal that the Parent will refer, and will cause each of its
subsidiaries to refer, to Cascal all future long-term water and wastewater project opportunities
for Cascal’s consideration before the Parent or any of its subsidiaries considers the project for
its own portfolio. In connection with such referral, Cascal will, and where appropriate Cascal
shall cause the Cascal Group Member to, (i) acknowledge to and agree with Biwater that it will
abide by any confidentiality obligations to which Biwater is subject and (ii) will retain as
confidential any other information provided to Cascal by Biwater.
(b) The Parent agrees with Cascal that it will take all reasonable measures to cause its
direct and indirect subsidiaries and entities in which it has made any joint venture investments
(in which it has a greater than 50% interest) other than Cascal, Cascal’s subsidiaries or Cascal’s
joint venture investments (collectively along with Parent, “Biwater”) to refer to Cascal
all future long-term water and wastewater project opportunities for Cascal’s consideration before
Biwater considers the project for its own portfolio. If Cascal or any of its subsidiaries or joint
venture investments (in which it has a greater than 50% interest) (collectively along with Cascal,
referred to in this clause as “Cascal Group Member”) promptly elects to pursue the
opportunity and continues in good faith to pursue the opportunity, Biwater will not be permitted to
pursue the opportunity. Having elected to do so, if the Cascal Group Member subsequently determines
that it does not wish to continue to pursue such an opportunity, Cascal will, or will cause the
Cascal Group Member to, (i) immediately inform Biwater and (ii) offer to transfer the
| 1 | Cascal B.V. will be converted to a Dutch public limited liability company and renamed Cascal N.V prior to the completion of its initial public offering. |
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opportunity to Biwater for development. Cascal agrees that time is of the essence in
considering whether to elect to undertake a project. Cascal and Biwater acknowledge the benefit of
regular dialogue through monthly business development meetings.
(c) The agreement in this Section 1 will terminate upon the earlier of:
(i) three years after the closing of the IPO; or
(ii) Biwater owning less than 15% of Cascal’s outstanding common shares.
(d) For the avoidance of doubt, this Section 1 will not restrict Biwater’s design,
engineering, constructing or consulting businesses (including the
▇▇▇▇▇▇ business) and excludes all projects which have been
previously notified to Cascal.
(e) Upon termination of this Agreement, Biwater may elect to compete against Cascal for all
future long-term water and wastewater project opportunities.
2. Additional Obligations of Parent.
(a) The Parent shall use its best efforts to cause its subsidiary, Biwater Investments
Limited, to satisfy its obligations under Sections 2 and 3 of the Agreement Relating to
Registration Rights and Other Matters, dated as of January 1, 2008, between Biwater Investments
Limited and Cascal.
(b) The Parent acknowledges that Biwater and/or its Representatives (hereinafter defined) have
been furnished and may in the future be furnished certain information which is non-public,
confidential or proprietary in nature, including material non-public information within the meaning
of the U.S. federal securities laws. Such information (whether provided orally or in written,
electronic, recorded or other form) furnished or disclosed to Biwater and/or its employees,
representatives (including, without limitation, financial advisors, attorneys and accountants) or
agents (collectively, “Representatives”), together with analyses, compilations, studies or
other documents or materials prepared by Biwater or Biwater’s Representatives which contain or
otherwise reflect such information, is hereinafter referred to as the “Confidential Information.”
For the avoidance of doubt, “Confidential Information” shall include all information provided by
Cascal to the Parent that is reasonably requested by the Parent, which Cascal hereby agrees to
provide in a timely manner, as necessary in order for the Parent and its officers (i) to comply
with U.K. law (including U.K. corporate and tax law), (ii) to enable the Parent and its officers to
operate the Parent’s business efficiently (including government statistics, pension information and
tax calculations and computations), and (iii) monthly, semi-annual and annual financial reports
under the accounting principles currently used by the Parent in its financial statements.
In consideration of the furnishing to Biwater of the Confidential Information, the Parent agrees as
follows:
(i) The Parent hereby acknowledges the confidential and proprietary nature of the
Confidential Information, and agrees that the Confidential Information will be kept
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confidential by Biwater and Biwater’s Representatives and shall not, without the prior
written consent of Cascal, be disclosed by Biwater or Biwater’s Representatives, in any
manner whatsoever, in whole or in part. The Parent agrees that Biwater shall reveal
Confidential Information only to those of Biwater’s Representatives who need to know the
Confidential Information for lawful and legitimate business purposes, who are informed by
Biwater of the confidential nature of the Confidential Information and who shall be bound by
the terms and conditions of this confidentiality agreement (without the need for any
additional joinder or signature page hereto).
(ii) The Parent agrees to be responsible for any breach of this confidentiality
agreement by Biwater or Biwater’s Representatives, including those whose relationship with
Biwater terminates after the date hereof.
(iii) The undertakings set forth herein shall not apply to any portion of the
Confidential Information which (i) at the time of disclosure or thereafter is or becomes
generally available to the public through no fault or action by Biwater or by Biwater’s
Representatives, (ii) is or becomes available to Biwater on a nonconfidential basis from a
source other than Cascal, its subsidiaries and/or its joint ventures (the “Cascal
Group”) or any of its representatives, which source, to Biwater’s knowledge or to the
knowledge of Biwater’s Representatives after reasonable inquiry, is not prohibited from
disclosing such portions to Biwater by a contractual, legal or fiduciary obligation, (iii)
was within Biwater’s possession prior to its being furnished to Biwater by or on behalf of
the Cascal Group, provided that the source of such information was not, to Biwater’s
knowledge or to the knowledge of Biwater’s Representatives after reasonable inquiry, (A)
bound by a confidentiality agreement with the Cascal Group, or (B) subject to any duty,
contractual or otherwise, prohibiting transmission of information to Biwater, or (iv) was
independently developed or acquired by Biwater without violating any of Biwater’s
obligations under this confidentiality agreement.
(iv) The Parent hereby acknowledges that nothing in this confidentiality agreement
shall give Biwater any right, title, license or interest whatsoever in or to the
Confidential Information or to any existing or future intellectual property of the Cascal
Group.
(v) In the event that Biwater or any of Biwater’s Representatives receives notification
of a legal requirement to disclose, or becomes legally compelled to disclose, any of the
Confidential Information, the Parent will provide Cascal with prompt prior written notice,
to the extent permitted by law, so that the Cascal Group may, at its sole expense, seek a
protective order or other appropriate remedy. In the event that such protective order or
other remedy is not obtained, or that Cascal waives compliance with the provisions of this
confidentiality agreement, Biwater or Biwater’s Representatives, as the case may be, agree
to furnish only that portion of the Confidential Information which the Parent’s legal
counsel advises, in an opinion delivered to the Cascal Group, be disclosed and Biwater will
use best efforts in cooperation with Cascal to obtain reasonably satisfactory assurances
that the confidentiality of the Confidential Information will be maintained following its
required disclosure.
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(vi) It is further understood and agreed that no failure or delay by the Cascal Group
in exercising any right, power or privilege under this Section 2 will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege hereunder.
3. Miscellaneous.
(a) No Inconsistent Agreements. The Parent will not, and will not permit any of
its subsidiaries to, hereafter enter into any agreement with respect to its potential
portfolio of projects which is inconsistent with or violates the rights granted to Cascal in
this Agreement unless Cascal shall have consented to such agreement, which consent shall not
be unreasonably withheld or delayed.
(b) Remedies. Any party having rights under any provision of this Agreement
will be entitled to enforce those rights specifically to recover damages caused by reason of
any breach of any provision of this Agreement and to exercise all other rights granted by
law. The parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive relief in
order to enforce or prevent violation of the provisions of this Agreement. In the event of
any legal proceedings to enforce any provision of this Agreement, if a court of competent
jurisdiction in a final, non-appealable order determines that Biwater or Biwater’s
Representatives have breached this agreement, then the Cascal Group shall be entitled to
recover its costs incurred to enforce this agreement, including, without limitation,
attorneys’ fees and expenses to the extent that a court of competent jurisdiction awards the
same to the Cascal Group in a final non-appealable order.
(c) Amendment or Waiver. The provisions of this Agreement may be amended or
waived only with both the written approval of Cascal and the Parent.
(d) Successors and Assigns. All covenants and agreements in this Agreement by
or on behalf of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto, and the Cascal Group, whether so
expressed or not.
(e) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under applicable law,
that provision will be ineffective only to the extent of the prohibition or invalidity,
without invalidating the remainder of this Agreement.
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(f) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one party, but
all counterparts taken together will constitute one and the same agreement.
(g) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(h) Governing Law. This Agreement will be governed by the laws and jurisdiction
of England (regardless of the laws that might otherwise govern under applicable principles
of conflicts of law) as to all matters.
(i) Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in writing and
shall be deemed to have been given when delivered personally to the recipient, sent to the
recipient by reputable express courier service (charges prepaid) or mailed to the recipient
by certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications will be sent to Cascal and the Parent at the
addresses indicated below:
If to Cascal, to:
Cascal B.V.
Biwater House
Station Approach
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Attention: Chief Executive Officer
Biwater House
Station Approach
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Attention: Chief Executive Officer
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Parent, to:
Biwater Plc
Station Approach
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Attention: Company Secretary
Station Approach
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Attention: Company Secretary
or to such other address or to the attention of such other person as the recipient has
specified by prior written notice to the sender.
Except as otherwise provided in this Agreement, each notice shall be effective and
shall be deemed delivered on the earlier of (i) its actual receipt, if delivered personally,
by courier service, or by fax (on the condition that the sending party has confirmation of
transmission receipt of the notice), or (ii) on the third (3rd) day after the
notice is postmarked for mailing by first class, postage prepaid, certified, or registered
mail, with return receipt requested (whether or not the return receipt is subsequently
received by the sender).
(j) If the closing of the IPO does not occur on or before February 28, 2008, then this
Agreement shall automatically terminate on that date.
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IN WITNESS WHEREOF, the parties have executed, or have caused their duly authorized
representatives to execute, this Agreement as of the date first written above.
| Cascal B.V. |
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| By: | /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| Biwater Plc |
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| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
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