EXHIBIT 10.5
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement"), dated as of August 12,
1996, is made and entered into by and between SANIFILL, INC., a Delaware
corporation ("Parent" or "Covenantor" herein), and NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark" or "Buyer" herein), with reference to the
following facts:
GG. Ancillary to and concurrently with the execution and delivery of this
Agreement, Covenantor, Xxxxxxxx Xxxxx, Ltd., a Delaware limited partnership and
an indirect wholly-owned subsidiary of Parent ("Xxxxxxxx Xxxxx"), NOW Disposal
Holding Co., a Delaware corporation and an indirect wholly-owned subsidiary of
Parent ("Holdco"), and Newpark have closed under an Asset Purchase and Lease
Agreement (the "Purchase Agreement") pursuant to which Newpark has purchased all
of the equity interests in NOW Disposal Operating Co., a Delaware corporation
and an indirect wholly-owned subsidiary of Parent ("Disposeco"), from Holdco and
has purchased or leased from Xxxxxxxx Xxxxx the "Included Assets" (as defined in
the Purchase Agreement) used in the "Acquired Business" (as defined in the
Purchase Agreement). Newpark may assign its rights and delegate its duties
under the Purchase Agreement and hereunder to a wholly-owned subsidiary
("Subsidiary"), provided that no such assignment of rights or delegation of
duties shall relieve Buyer of its obligations under this Agreement. If such
assignment is made, references to Buyer in this Agreement shall be deemed to
refer to Subsidiary, or to Buyer and Subsidiary, as appropriate.
B. The execution and delivery of this Agreement are required under the
Purchase Agreement.
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Covenantor and Buyer hereby agree and covenant as follows.
1. CERTAIN DEFINITIONS. The following terms used herein shall have the
following meanings:
AFFILIATE OR AFFILIATE - a Person that directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with the Person specified. For purposes of this definition,
"control" (including the terms "controlling," "controlled by" and "under
common control with") of a Person means the possession, directly or
indirectly, of the power to (a) vote 50% or more of the voting interests in
such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise. In addition, at
all times during the term of this Agreement, Xxxxxxxx Xxxxx shall be deemed
to be an Affiliate of Parent, and Persons controlled by Xxxxxxxx Xxxxx and
its controlled Affiliates, or jointly controlled by Xxxxxxxx Xxxxx and its
controlled Affiliates and Parent and its Affiliates, shall be deemed to be
Affiliates of Parent. Notwithstanding the foregoing, a Person who controls
Parent or Xxxxxxxx Xxxxx shall not be deemed to be an Affiliate of Parent
or Xxxxxxxx Xxxxx solely by reason of such control.
-1-
BUSINESS - Any one or more of the following activities: the Collection
or Disposal of NOW; the remediation and closure of oilfield waste pits,
including related loading and hauling; and marketing, dealing in or
soliciting orders for any of the products, services or support activities
included within the Business.
COLLECTION - The collection, transfer or transportation of NOW.
COMPETITOR - Any Person that, directly or indirectly, engages in any
aspect of the Business within any portion of the Territory.
DISPOSAL - The treatment or disposal of NOW.
EXCLUDED NOW - NOW that is generated and collected on land and is
delivered to the Landfarms from the site where it was generated entirely by
on-land transportation.
LANDFARMS - The NOW disposal facilities owned and operated by Xxxxxxxx
Xxxxx designated as Xxx Xxxxx, XX (XXX Xxxxxx # XXX 00-0), Xxxxx, XX (XXX
Permit #90-10 OWD), Xxxxxxx Island, LA (DNR Permit # 91-10 OWD), and
Mermentau, LA (DNR Permit # SWD 83-6).
NOW - Nonhazardous oilfield waste associated with the exploration and
production of oil, gas and geothermal energy, that contains less than 30
picocuries per gram of Radium 226 or 228.
PERSON OR PERSON - Any individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
THE TERRITORY - All or any part of the following: the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico.
2. NONCOMPETITION. Covenantor hereby agrees, for itself and on behalf
of its Affiliates, that, during the term of this Agreement, except as
otherwise permitted under this Agreement, neither it nor any of its
Affiliates will, within any part of the Territory, directly or indirectly, do
any one or more of the following: (a) engage in any aspect of the Business;
(b) own any interest in any Competitor; (c) operate, join, control or
otherwise participate in any Competitor; or (d) lend credit or money for the
purpose of assisting another to establish or operate any Competitor.
3. TERM. The term of this Agreement commences on the date hereof and
shall continue for sixty months thereafter.
4. MAINTENANCE OF CONFIDENTIALITY. For the term of this Agreement,
Covenantor and its Affiliates shall keep secret and retain in strictest
confidence, except for disclosure to any of their Affiliates, and will not
permit any Person other than their Affiliates to use any of the "Intangible
-2-
Assets" (as defined in the Purchase Agreement) which Buyer has been granted the
right to use, along with Covenantor and its Affiliates, under the Purchase
Agreement.
5. PERMITTED ACTIVITIES. Section 2 of this Agreement notwithstanding:
(a) Covenantor and its Affiliates, as passive investors, may own up
to 5% (including ownership by Covenantor and all of its Affiliates) of the
equity securities of any Person (other than Newpark) whose equity securities are
publicly traded. In addition, in connection with their business described in
subparagraph (b) below, Covenantor and its Affiliates shall be permitted from
time to time to acquire interests representing more than 5% of the equity
securities of Persons that derive less than 10% of their revenues from
activities that cause such Persons to be Competitors, provided that Covenantor
or its Affiliates or the Persons who engage in such competitive activities
immediately formulate plans to dispose of those aspects of such businesses that
cause such Persons to be Competitors and actually complete such dispositions
within 90 days after such interests are acquired by Covenantor or one or more of
its Affiliates.
(b) Buyer recognizes and acknowledges that Parent and its Affiliates
are in the business of the collection, treatment and disposal of numerous
varieties of wastes, including without limitation municipal solid wastes,
construction and demolition debris, industrial nonhazardous wastes and special
wastes, such as contaminated soil and sludges. Buyer agrees that this Agreement
relates only to the Collection and Disposal of NOW and the remediation and
closure of oilfield waste pits, including related loading and hauling, in the
Territory and that this Agreement is not intended to limit or otherwise affect
the business of Parent except as expressly set forth herein.
(c) Buyer further recognizes and acknowledges that Parent and its
Affiliates from time to time enter into joint venture arrangements with
independent (i.e., non-Affiliate) third parties ("Joint Venture Partners") and
that some of such Joint Venture Partners may engage in aspects of the Business
in the Territory. Without limiting the applicability of this Agreement to
Covenantor and its Affiliates and such joint ventures, Buyer agrees that the
terms of this Agreement shall not apply to Joint Venture Partners solely as a
result of their entering into joint venture arrangements with Covenantor and its
Affiliates.
(d) Parent and its Affiliates may continue to market, deal in,
solicit orders for and conduct other activity related to: (i) Disposal and
Collection at any of the Landfarms of Excluded NOW; (ii) Collection of NOW
within a 000-xxxx xxxxxx xx Xxxxxxxx Xxxxx' Xxxxxx, Xxxxx, facility and Disposal
of NOW so Collected at such facility; (iii) Disposal and Collection of NOW
contemplated under the NOW Disposal Agreement dated as of June 4, 1996, by and
among Parent, Xxxxxxxx Xxxxx and Disposeco; and (iv) Disposal and Collection of
NOW at Xxxxxxxx Xxxxx' Lacassine, LA, facility.
6. INJUNCTIVE RELIEF. Covenantor hereby stipulates and agrees that any
breach by it or by any of its Affiliates of this Agreement cannot be reasonably
or adequately compensated by damages in an action at law and that, in the event
of such breach, Buyer shall be entitled to injunctive relief, which may include
but shall not be limited to restraining Covenantor and its Affiliates from
engaging in any activity that would constitute a breach of this Agreement.
-3-
7. SEVERABILITY. Covenantor acknowledges that it has carefully read and
considered the provisions of this Agreement and, having done so, agrees that the
restrictions set forth herein (including but not limited to the time periods of
restriction and the geographical areas of restriction) are fair and reasonable
and are reasonably required to protect the interests of Buyer and its
stockholders. In the event that, notwithstanding the foregoing, any of the
provisions of this Agreement shall be held to be invalid or unenforceable, the
remaining provisions hereof shall nevertheless continue to be valid and
enforceable, as though the invalid or unenforceable parts had not been included
herein. In the event that any provision of this Agreement relating to time
periods or areas of restriction or both shall be declared by a court of
competent jurisdiction to exceed the maximum time periods or areas (or both)
that such court deems reasonable and enforceable, said time periods or areas of
restriction or both shall be deemed to become and thereafter shall be the
maximum time periods and areas which such court deems reasonable and
enforceable.
8. ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement and the other agreements specifically mentioned therein, constitutes
the entire agreement of Covenantor and Buyer with respect to the subject matter
hereof and supersedes all prior and contemporaneous oral agreements,
understandings, negotiations and discussions of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided. Any failure to insist on
strict compliance with any of the terms and conditions of this Agreement shall
not be deemed a waiver of any such terms or conditions.
9. NATURE OF OBLIGATIONS. All covenants and obligations of Covenantor
hereunder shall be binding on Covenantor, its Affiliates and the assigns,
successors and legal representatives of each of them and shall inure to the
benefit of Buyer and all of its Affiliates that engage in any aspect of the
Business in any part of the Territory.
10. NOTICES. Any and all notices, demands, requests or other
communications hereunder shall be in writing and shall be deemed duly given when
personally delivered to or transmitted by overnight express delivery or by
facsimile to and received by the party to whom such notice is intended, or in
lieu of such personal delivery or overnight express delivery or facsimile
transmission, 48 hours after deposit in the United States mail, first-class,
certified or registered, postage prepaid, return receipt requested, addressed to
the applicable party at the address provided below. The parties may change
their respective addresses for the purpose of this Paragraph 10 by giving notice
of such change to the other party in the manner which is provided in this
Xxxxxxxxx 00.
Xxxxxxxxxx: Sanifill, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000-0000
Attention: H. Xxxxxx Xxxxxx, Esq., Vice President
Facsimile No.: (000) 000-0000
-4-
With a copy to:
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Buyer: Newpark Resources, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, President
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx, Xxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
11. ATTORNEYS' FEES. In any litigation relating to this Agreement,
including litigation with respect to any supplement, modification or waiver of
this Agreement or any of its provisions, the prevailing party shall be entitled
to recover its costs and reasonable attorneys' fees.
12. LAW GOVERNING. The provisions of this Agreement and all rights and
obligations hereunder shall be governed by and construed in accordance with the
internal laws of the State of Texas applicable to contracts made and to be
wholly performed within the State of Texas.
13. CAPTIONS. The captions in this Agreement are included for convenience
of reference only, do not constitute a part hereof and shall be disregarded in
the interpretation or construction hereof.
-5-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
SANIFILL, INC.
By:
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Treasurer and Assistant Secretary
NEWPARK RESOURCES, INC.
By:
---------------------------------------
Name:
Title:
-6-
