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Exhibit 10.9
NONCOMPETITION AGREEMENT
This Noncompetition Agreement ("Agreement") is entered into between IRI
International Corporation ("IRI"), a Delaware corporation having offices at 0000
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, and Xxxxxxx Xxxxxx, its Chairman
and Chief Executive Officer ("Ansary"), to be effective as hereinafter provided.
RECITAL:
A. IRI is party to an Agreement of Merger of even date herewith
among itself, Arrow Acquisition, Inc. and National-Oilwell, Inc. ("Oilwell")
(the "Merger Agreement").
For and in consideration of the mutual promises, covenants, and
obligations contained herein, IRI and Ansary agree as follows:
1. TERM OF THIS AGREEMENT.
1.1. The term of this Agreement shall be for three (3) years from
the Closing Date (as such term is defined in the Merger Agreement).
2. NON-COMPETITION OBLIGATIONS.
2.1. In consideration for the amounts to be paid to Ansary
hereunder, IRI and Ansary agree to the non-competition provisions of this
Article 2. Ansary agrees that during the term of this Agreement, he will not,
directly or indirectly for himself or for others, in any county within the State
of Texas, and to the extent allowed by law, in any geographic area or market
where IRI or any of its subsidiaries or affiliated companies are engaged in the
Relevant Business as of Closing Date or have during the previous twelve months
engaged in the Relevant Business:
(i) engage in the business of the design, manufacture, sale,
repair and distribution of products used in oil and gas
drilling and production or any other business; in either case
if engaged in by Oilwell immediately prior to the Closing Date
(the "Relevant Business");
(ii) render services to any other person, association, or entity
who is engaged, directly or indirectly, in the Relevant
Business; and
(iii) induce any employee of IRI or any of its subsidiaries or
affiliates to terminate his or her employment with IRI or any
of its subsidiaries or affiliates, or initiate or assist in
the hiring of any such employee by any person, association, or
entity not affiliated with IRI or any of its subsidiaries or
affiliates; provided, however, that
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this clause (iii) shall not apply to responses to general
advertising not directed toward employees of IRI or any of its
subsidiaries or affiliates.
These non-competition obligations shall apply only to businesses having annual
revenues in excess of $___ million competitive with any line of business
conducted by Oilwell or any of its subsidiaries having annual revenues in excess
of $___ million for the most recent fiscal year. If Oilwell or any of its
subsidiaries or affiliates abandons a particular aspect of its business, that
is, ceases such aspect of its business with the intention to permanently refrain
from such aspect of its business, then this non-competition covenant shall not
apply to such former aspect of that business.
2.2. Ansary acknowledges that money damages would not be sufficient
remedy for any breach of this Article 2 by him, and IRI or any of its
subsidiaries or affiliates shall be entitled to enforce the provisions of this
Article 2 specific performance and injunctive relief as remedies for such breach
or any threatened breach. Such remedies shall not be deemed the exclusive
remedies for a breach of this Article 2, but shall be in addition to all
remedies available at law or in equity to IRI or any of its subsidiaries or
affiliates, including, without limitation, the recovery of damages from Ansary.
2.3. It is expressly understood and agreed that IRI and Ansary
consider the restrictions contained in this Article 2 to be reasonable to
protect the proprietary information of IRI and its subsidiaries and affiliates.
Nevertheless, if any of the aforesaid restrictions are found by a court having
jurisdiction to be unreasonable, or overly broad as to geographic area or time,
or otherwise unenforceable, the parties intend for the restrictions therein set
forth to be modified by such courts so as to be reasonable and enforceable and,
as so modified by the court, to be fully enforced.
3. PAYMENTS
3.1. In consideration for Ansary's non-competition agreement set
forth herein, IRI agrees to pay to Ansary $3 million, payable $1 million on the
Closing Date and $1 million on each of the first and second anniversaries
thereof, each such payment to be made by wire transfer to Ansary's account
#0000-0000-0000 at Bank of America, 000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000-0000,
ABA #000-0000-00. All payments made pursuant to this Agreement shall be made
without deduction for any and all taxes or withholdings as legally allowed.
4. MISCELLANEOUS ASSETS
4.1 At any time prior to the Closing Date Ansary shall have the
right, but not the obligation, to assume the IRI's obligations under that
certain agreement (the "Lease") for the lease of the IRI's executive offices
located at 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, and/or purchase the
assets listed on Exhibit A hereto in return for payment by Ansary to IRI of the
book value of such assets, as indicated on Exhibit A. In addition, at any time
prior to the Closing Date, Ansary shall have the right, but not the obligation,
to assume all of the Company's rights and obligations under the retail
automobile lease contracts relating to three (3) automobiles
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being made available for his personal use. IRI agrees to execute all bills of
sale and other necessary or appropriate documentation necessary in order to
effect the transactions contemplated by this Section 4.1.
5. MISCELLANEOUS:
5.1. For purposes of this Agreement the terms "affiliates" or
"affiliated" means an entity who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with IRI.
5.2. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to IRI to:
IRI International Corporation
Address: 0000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxx
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx XX
If to Ansary, to:
IRI International Corporation
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxx
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx X. Xxxxx XX
Either IRI or Ansary may furnish a change of address to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
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5.3. This Agreement shall be governed in all respects by the laws
of the State of Texas, excluding any conflict-of-law rule or principle that
might refer the construction of the Agreement to the laws of another state or
country.
5.4. No failure by either party hereto at any time to give notice
of any breach by the other party of, or to require compliance with, any
condition or provision of this Agreement shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
5.5. This Agreement shall be binding upon and inure to the benefit
of IRI, its subsidiaries and affiliates, and any other person, association, or
entity which may hereafter acquire or succeed to all or a portion of the
business or assets of IRI by any means whether direct or indirect, by purchase,
merger, consolidation, or otherwise. Ansary's rights and obligations under this
Agreement are personal and such rights, benefits, and obligations of Ansary
shall not be voluntarily or involuntarily assigned, alienated, or transferred,
whether by operation of law or otherwise, by Ansary without the prior written
consent of IRI.
IN WITNESS WHEREOF, IRI and Ansary have duly executed this Agreement in
multiple originals to be effective on the date first stated above.
IRI International Corporation
By: XXXXXXX XXXXXX
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Title:
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/s/ XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx
The obligations of IRI under this Agreement
Are hereby unconditionally and irrevocably
guaranteed.
National Oilwell, Inc.
By: /s/ XXXXXX X. XXXXXXX
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Title: Vice President & Chief Financial Officer
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