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EXHIBIT 10.26
ALLIANCE AGREEMENT
AMONG
TUBOSCOPE INC.,
TUBOSCOPE VETCO INTERNATIONAL, INC.,
NEWPARK RESOURCES, INC.,
NEWPARK DRILLING FLUIDS, L.L.C.,
AND
NEWPARK ENVIRONMENTAL SERVICES, L.L.C.
February 3, 2000
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TABLE OF CONTENTS
1. Definitions..............................................................................................1
2. Waste Services...........................................................................................3
(a) Waste Services Relationship.....................................................................3
(b) Pricing.........................................................................................3
(c) Representations and Covenants of the Tuboscope Parties..........................................4
(d) Existing Bids and Contracts.....................................................................5
3. ▇▇▇▇▇▇ Energy Environmental, L.P.........................................................................5
(a) Acknowledgement by the Newpark Parties..........................................................5
(b) Covenants by the Tuboscope Parties..............................................................5
(c) Right of First Refusal..........................................................................5
(d) Purchase Option.................................................................................6
4. Solids Control Services..................................................................................8
(a) Solids Control Relationship.....................................................................8
(b) Pricing.........................................................................................8
(c) Representations and Covenants of the Newpark Parties............................................9
(d) Canadian Market................................................................................10
(e) Existing Bids and Contracts....................................................................10
5. Term and Termination....................................................................................10
(a) Term...........................................................................................10
(b) Termination by Mutual Consent..................................................................10
(c) Termination by Tuboscope.......................................................................10
(d) Termination by Newpark.........................................................................11
(e) Effect of Termination..........................................................................11
(f) Survival of Certain Provisions.................................................................11
6. Indemnification.........................................................................................11
(a) Indemnification by the Tuboscope Parties.......................................................11
(b) Indemnification by the Newpark Parties.........................................................11
7. Insurance...............................................................................................11
(a) Tuboscope Parties..............................................................................11
(b) Newpark Parties................................................................................11
8. Miscellaneous...........................................................................................12
(a) Payment Terms..................................................................................12
(b) Press Releases and Public Announcements........................................................12
(c) Confidentiality................................................................................12
(d) No Agency......................................................................................13
(e) Force Majeure..................................................................................13
(f) No Third-Party Beneficiaries...................................................................13
(g) Entire Agreement...............................................................................13
(h) Succession and Assignment......................................................................13
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(i) Counterparts...................................................................................14
(j) Headings.......................................................................................14
(k) Notices........................................................................................14
(l) Governing Law..................................................................................15
(m) Amendments and Waivers.........................................................................15
(n) Severability...................................................................................15
(o) Expenses.......................................................................................15
(p) Construction...................................................................................15
(q) Submission to Jurisdiction.....................................................................15
(r) Remedies Not Exclusive.........................................................................15
Exhibit A-Alliance Price Sheet
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ALLIANCE AGREEMENT
This Alliance Agreement is entered into as of February 3,
2000, by and among Tuboscope Inc., a Delaware corporation ("Tuboscope"), and
Tuboscope Vetco International, Inc., a Texas Corporation ("TVI", and
collectively with Tuboscope, the "Tuboscope Parties"), on the one hand, and
Newpark Resources, Inc., a Delaware corporation ("Newpark"), Newpark Drilling
Fluids, L.L.C., a Texas limited liability company ("NDF"), and Newpark
Environmental Services, L.L.C., a Louisiana limited liability company ("NES",
and together with Newpark and NDF, the "Newpark Parties"), on the other hand.
Tuboscope, TVI, Newpark, NDF and NES are referred to collectively herein as the
"Parties" and individually a "Party."
RECITALS
WHEREAS, both the Tuboscope Parties and the Newpark Parties
conduct or have conducted oilfield solids control operations and oilfield waste
services operations in the United States;
WHEREAS, the Tuboscope Parties desire to discontinue their
oilfield waste services operations in the Gulf Coast Market (as defined herein);
WHEREAS, the Newpark Parties desire to discontinue their
oilfield solids control operations in the United States Market (as defined
herein);
WHEREAS, the Tuboscope Parties and the Newpark Parties desire
to establish a relationship by which (i) the Newpark Parties are the exclusive
providers of oilfield waste services to the Tuboscope Parties in the Gulf Coast
Market and (ii) the Tuboscope Parties are the exclusive providers of solids
control services to the Newpark Parties in the United States Market; and
WHEREAS, the Tuboscope Parties and the Newpark Parties desire
to define the terms of such relationship in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the Parties agree as follows:
1. Definitions.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"BEELP" has the meaning ascribed thereto in Section 3(a).
"Confidential Information" means, with respect to any Party,
all confidential information relating to the business affairs, finances,
products, services or intellectual property of such Party.
"Damages" has the meaning ascribed thereto in Section 6(a).
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"Discloser" has the meaning ascribed thereto in Section 8(c).
"Effective Date" has the meaning ascribed thereto in
Section 5(a).
"Exception Areas" means those areas within the States of
Texas, Louisiana, Mississippi, Alabama and Florida, including all territorial
waters of such states and all federal and international waters of the Gulf of
Mexico abutting such states, in which the Newpark Parties do not provide Waste
Services on terms and at prices at least as favorable to the purchaser of such
services as those offered by the primary participants in the Waste Services
market in such areas.
"Final Closing Date" has the meaning ascribed thereto in
Section 3(d)(iii).
"Gulf Coast Market" means the States of Texas, Louisiana,
Mississippi, Alabama and Florida, including all territorial waters of such
states and all federal and international waters of the Gulf of Mexico abutting
such states; provided, however, that the Gulf Coast Market does not include the
Exception Areas.
"High Island Site" has the meaning ascribed thereto in Section
3(a).
"Marine Conveyance" means a ship, supply boat, barge, shipping
container (including but not limited to a cutting box) or any other type of
marine conveyance.
"Newpark Notice" has the meaning ascribed thereto in Section
3(d)(i).
"Newpark Option" has the meaning ascribed thereto in Section
3(d)(i).
"Party" and "Parties" have the meanings set forth in the
preface above.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Recipient" has the meaning ascribed thereto in Section 8(c).
"Solids Control Services" means the business of selling and
renting equipment used in, and providing services relating to, the separation
and containment of solid drill cuttings from fluids used in oil and gas drilling
processes.
"Subsidiary" means any corporation, partnership, limited
liability company or other entity with respect to which a specified Person (or a
Subsidiary thereof) owns a majority of the voting power or has the power to vote
or direct the voting of sufficient securities to elect a majority of the
directors, general partners, managing members or the equivalent.
"Term" has the meaning ascribed thereto in Section 5(a).
"Tuboscope Interest" has the meaning ascribed thereto in
Section 3(c)(i).
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"Tuboscope Offer" has the meaning ascribed thereto in Section
3(c)(i).
"United States Market" means all states within the United
States, including all state and territorial waters and the federal and
international waters of the Gulf of Mexico and other approved offshore drilling
regions of the United States, where oil and gas drilling and other energy well
bores are drilled and production exists or where disposal well drilling and
utility usage well bores are drilled, but excluding those areas of the United
States in which the Tuboscope Parties do not provide Solids Control Services on
terms and at prices at least as favorable to the purchaser of such services as
those offered by the primary participants in the Solids Control Services market
in such areas.
"Waste Services" means the business of processing and
disposing of oilfield exploration and production waste, but excludes Solids
Control Services.
2. Waste Services.
(a) Waste Services Relationship.
(i) Gulf Coast Market. Subject to the conditions
set forth herein, the Newpark Parties shall serve as the exclusive provider of
Waste Services to the Tuboscope Parties in the Gulf Coast Market during the
Term.
(ii) Exception Areas. If the Tuboscope Parties
propose a Waste Services project in the Exception Areas, the Tuboscope Parties
shall notify the Newpark Parties in writing of such proposal prior to
commencement of the project. If the Tuboscope Parties propose to use a third
party provider of Waste Services for such project, their notice to the Newpark
Parties shall indicate the price and other payment terms offered by such third
party. Upon such notice from the Tuboscope Parties, the Newpark Parties shall
have ten days to match or beat the price and terms offered by the third party.
If the Newpark Parties at least match such price and terms, then the Newpark
Parties shall be the Waste Services provider for the project. If the Newpark
Parties do not at least match the price and terms of such third party provider,
the Tuboscope Parties shall be permitted to utilize the services of the third
party provider for so long as such services are provided by the third party
provider at prices and terms no less favorable to the Tuboscope Parties as those
set forth in the notice to the Newpark Parties. Additionally, nothing herein
shall prohibit the Tuboscope Parties from delivering waste to a customer (i.e.,
the owner of the waste) for the customer's disposal of the waste or to any third
party provider of Waste Services who has been specifically designated by a
Tuboscope Parties' customer; provided, however, that the Tuboscope Parties shall
not recommend any Waste Services provider other than the Newpark Parties and
shall provide Newpark with written notice of any delivery of waste to a third
party specifically designated by the customer.
(b) Pricing.
(i) Temporary Disposal Pricing. Until such time
as the Tuboscope Parties have withdrawn from the Waste Services business in the
Gulf Coast Market as provided herein, the Newpark Parties will provide disposal
services for materials delivered by the Tuboscope Parties to Port ▇▇▇▇▇▇, Texas
by means of a barge at the following prices:
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(A) if the barge is returned to service
for collection of waste by the Tuboscope Parties, $6.50 per barrel; and
(B) if the barge is returned to the
owner of such barge and removed from service for collection of waste, $4.50 per
barrel.
(ii) General Pricing. Except as set forth in
Section 2(b)(i), all prospective Waste Services projects governed by this
Agreement shall be reviewed, priced, bid and submitted by the Newpark Parties.
Pricing shall take into consideration appropriate quantity discounts on large
projects as well as adjustments necessitated by special logistics. In all cases,
pricing shall not exceed the following (excluding special handling, special
services, cleaning or logistics required by the Tuboscope Parties, which will be
billed at the Newpark Parties' published list price):
(A) for waste disposal, 95% of the
Newpark Parties' current published list price;
(B) for services and dock charges, 95%
of the Newpark Parties' current published list price; and
(C) for cutting boxes, $4.75 per barrel
of designed capacity (stevedoring charge).
(iii) No Superior Terms. The Newpark Parties
hereby represent and warrant that the above pricing terms, taken as a whole, are
at least as favorable to the Tuboscope Parties as the pricing terms for Waste
Services currently in effect with respect to, and being offered by the Newpark
Parties or their Subsidiaries to, any other customer or prospective customer of
the Newpark Parties or their Subsidiaries in the Gulf Coast Market. Moreover,
the Newpark Parties shall not during the term of this Agreement offer Waste
Services in the Gulf Coast Market to any other party on terms superior (from the
standpoint of the other party) to the terms set forth above without also
concurrently offering such terms to the Tuboscope Parties. If the Newpark
Parties offer such superior terms to the Tuboscope Parties and the Tuboscope
Parties accept such terms, the Newpark Parties and the Tuboscope Parties shall
enter into an amendment to this Agreement to reflect such superior terms.
(c) Representations and Covenants of the Tuboscope
Parties.
(i) Discontinued Operations. The Tuboscope
Parties represent and warrant that, except for the operations of BEELP, they and
their Subsidiaries have discontinued their Waste Services operations in the Gulf
Coast Market.
(ii) Authority, No Conflict; Enforceability: Each
of the Tuboscope Parties hereby represents and warrants as follows: (1) it has
the full authority and legal right to carry out the terms of this Agreement; (2)
the terms of this Agreement will not violate the terms of any material
agreement, contract or other instrument to which it is a party and no consent or
authorization of any other person is required in order for it to enter into and
carry out the terms of this Agreement; (3) it has taken all corporate and other
action necessary to authorize the execution and delivery of this Agreement; and
(4) this Agreement is a legal, valid and binding
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obligation of such Tuboscope Party, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, whether enforcement is sought in equity or at law.
(iii) No Solicitation. From the Effective Date
until the end of the Term, the Tuboscope Parties shall not actively solicit any
Waste Services business in the Gulf Coast Market.
(iv) Oilfield Waste Collection Stations.
From the Effective Date until the end of the Term, the Tuboscope Parties shall
not operate, or provide marine transportation services for, oilfield waste
collection stations in the Gulf Coast Market without the prior written consent
of the Newpark Parties.
(v) Exceptions. Notwithstanding
anything to the contrary herein, the Tuboscope Parties and their Subsidiaries
are expressly permitted (A) to conduct Solids Control Services operations in the
Gulf Coast Market and the Exception Areas and (B) to continue offering Waste
Services through "on lease" disposal and thermal desorption technologies (e.g.,
cuttings reinjection, thermal desorption, land farming and land spreading, end
of well pump downs and pit closures) to customers in the Gulf Coast Market and
the Exception Areas.
(d) Existing Bids and Contracts. The Tuboscope Parties
have delivered, or will promptly deliver, to the Newpark Parties all of the
Tuboscope Parties' annual contracts and outstanding bids relating to Waste
Services. The Newpark Parties will not be obligated to honor the terms of such
contracts and bids; provided, however, that the Newpark Parties will consider
exceptions for committed single-well drilling projects which were underway as of
November 12, 1999. Each such annual contract and outstanding bid must be
withdrawn by the Tuboscope Parties unless the Newpark Parties expressly consent
to the continuance of such contract or bid.
3. ▇▇▇▇▇▇ Energy Environmental, L.P.
(a) Acknowledgement by the Newpark Parties. The Newpark
Parties acknowledge that the Tuboscope Parties or their Subsidiaries are the
majority owners of ▇▇▇▇▇▇ Energy Environmental, L.P. ("BEELP"), which operates a
Waste Services business in the Gulf Coast Market, including the High Island
injection disposal site (the "High Island Site"). The Newpark Parties further
acknowledge that the Tuboscope Parties or their Subsidiaries have certain
contractual obligations to the other owners of BEELP which could result in the
High Island Site remaining in competition with the Newpark Parties under
separate management. Nothing herein shall prevent the Tuboscope Parties or their
Subsidiaries from fulfilling their contractual obligations to the other owners
of BEELP.
(b) Covenants by the Tuboscope Parties. As soon as
practical after the Effective Date, to the extent consistent with their
contractual obligations, the Tuboscope Parties will, and will cause their
Subsidiaries to, use their best efforts to cease an active role in the
management of BEELP and to cease providing financial support to BEELP.
(c) Right of First Refusal.
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(i) Restrictions on Transfer. The Tuboscope
Parties may not transfer their interest in the High Island Site (the "Tuboscope
Interest") to any third party which is not affiliated with a Tuboscope Party
without first offering such interest to the Newpark Parties. Prior to
transferring the Tuboscope Interest to a proposed third party, the Tuboscope
Parties shall provide to Newpark a written offer to transfer to the Newpark
Parties the Tuboscope Interest on terms (including price terms) no less
favorable than those offered to the proposed third party (a "Tuboscope Offer").
The written offer shall set forth the proposed amount and form of consideration
and terms and conditions of payment for the Tuboscope Interest.
(ii) Option to Purchase. Upon Newpark's receipt
of a Tuboscope Offer, the Newpark Parties shall have the option, for a period of
30 days, to purchase the Tuboscope Interest by delivering written notice of
their exercise of the option to Tuboscope. If the Newpark Parties do not deliver
such notice of exercise within the 30-day period described above, the Tuboscope
Parties shall have the right for a period of 90 days after the expiration of
such 30-day period (or, if sooner, after written waiver by the Newpark Parties
of their option to purchase) to offer for sale, and to sell, the Tuboscope
Interest to a third party, but only at a price per share and on terms and
conditions no less favorable to the purchaser than those set forth in the
Tuboscope Offer.
(iii) Claims. If the Newpark Parties elect to
purchase the Tuboscope Interest pursuant to this Section 3(c), the closing of
such purchase shall take place on or before the fifteenth day following the date
the Newpark Parties deliver their notice of exercise (or, if such date is not a
business day, the next succeeding business day) or on such other date as
Tuboscope and Newpark agree, but in no case more than 90 days after the date the
Newpark Parties deliver their notice of exercise.
(iv) Expiration. The right of first refusal
provided for in this Section 3(c) shall terminate on the third anniversary of
this Agreement.
(d) Purchase Option.
(i) General Terms. Subject to the consent of the
other owners of BEELP, the Tuboscope Parties hereby grant to the Newpark Parties
a two-year option (the "Newpark Option") to purchase the Tuboscope Interest on
an "AS IS" basis (but subject to customary representations, warranties and
indemnification on behalf of the Tuboscope Parties) for fair market value
(calculated in accordance with Section 3(d)(ii) below). To validly exercise this
option, the Newpark Parties must provide written notice to the Tuboscope Parties
of their intention to purchase the Tuboscope Interest (the "Newpark Notice") on
or prior to the second anniversary of this Agreement. If the Newpark Parties do
not provide the Newpark Notice to the Tuboscope Parties on or before the second
anniversary of this Agreement, the Newpark Option shall expire and be of no
further force or effect. The Tuboscope Parties agree to use commercially
reasonable efforts to obtain the consent of the other owners of BEELP to the
option granted hereby.
(ii) Fair Market Value.
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(A) For purposes of Section 3(d)(i)
above, the fair market value of the Tuboscope Interest shall be determined by
agreement of the Newpark Parties and the Tuboscope Parties or by a certified
appraiser appointed in accordance with this Section 3(d)(ii). If the Newpark
Parties exercise the Newpark Option, the Newpark Parties and the Tuboscope
Parties shall attempt to agree on the fair market value of the Tuboscope
Interest. If the Tuboscope Parties and the Newpark Parties are unable to agree
on such fair market value within 30 days after the date of the Newpark Notice,
the fair market value of the Tuboscope Interest shall be determined by one or
more independent certified appraisers, selected in accordance with this Section
3(d)(ii).
(B) If the fair market value of the
Tuboscope Interest is not determined by mutual agreement of the parties in
accordance with Section 3(d)(ii)(A), then, within 60 days after the date of the
Newpark Notice, the Tuboscope Parties and the Newpark Parties shall attempt to
mutually designate one certified appraiser. If the Tuboscope Parties and the
Newpark Parties mutually designate a certified appraiser within such 60-day
period, then such certified appraiser shall determine the fair market value of
the Tuboscope Interest. The fees and expenses of such certified appraiser shall
be borne equally by the Tuboscope Parties, on the one hand, and the Newpark
Parties, on the other hand.
(C) If the Tuboscope Parties are unable
to agree on a certified appraiser within such 60-day period, then within 75 days
after the date of the Newpark Notice, the Tuboscope Parties shall designate one
certified appraiser and the Newpark Parties shall designate another certified
appraiser. In such case, the two certified appraisers shall independently
appraise the Tuboscope Interest within 105 days after the date of the Newpark
Notice. If the appraisals of the two certified appraisers are within a 10%
range, then the average of such appraisals shall constitute the fair market
value of the Tuboscope Interest. The fees and expenses of the appraiser
designated by the Tuboscope Parties shall be borne by the Tuboscope Parties and
the fees and expenses of the appraiser designated by the Newpark Parties shall
be borne by the Newpark Parties.
(D) If there is a variance of greater
than 10% between any appraisals performed pursuant to Section 3(d)(ii)(c), then
the two certified appraisers appointed pursuant to Section 3(d)(ii)(c) shall
jointly appoint a third certified appraiser, or if they cannot agree to such
appointment within 125 days after the date of the Newpark Notice, then the
senior sitting Federal District Judge for the Southern District of Texas,
Houston Division, on active status, acting in a nonjudicial capacity, shall
appoint such certified appraiser on written request made by any Party. This
certified appraiser shall determine the fair market value of the Tuboscope
Interest. The fees and expenses of such certified appraiser shall be borne
equally by the Tuboscope Parties, on the one hand, and the Newpark Parties, on
the other hand.
(E) The fair market value of the
Tuboscope Interest as determined by this Section 3d(ii) shall in all cases be
determined as of the date of the Newpark Notice, subject to any material adverse
changes occurring since the date of the Newpark Notice.
(iii) Closing. If the Newpark Parties exercise the
Newpark Option, they must complete the purchase of the Tuboscope Interest on or
before the fifteenth day after the date that the fair market value of the
Tuboscope Interest is determined in accordance with
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Section 3(d)(ii) (the "Final Closing Date"). If the Newpark Parties fail to
complete the purchase of the Tuboscope Interest by the Final Closing Date as a
result of the failure by any of the Newpark Parties to perform its obligations
in connection with such purchase, the Newpark Option will expire and be of no
further force or effect. The closing of such purchase shall take place at the
principal corporate office of Tuboscope. At such closing, the Tuboscope Parties
shall assign and deliver to the Newpark Parties the appropriate instruments
evidencing the Tuboscope Interest. The Newpark Parties shall deliver to the
Tuboscope Parties the full consideration therefor specified in Section 3(d)(ii)
in immediately available funds. Any transfer or similar taxes involved in such
sale shall be paid by the Newpark Parties.
(iv) No Prohibition on Sale. Nothing in this
Section 3(d) shall prohibit the Tuboscope Parties from selling or otherwise
transferring the Tuboscope Interest to a third party subject to the restrictions
of Section 3(c).
4. Solids Control Services.
(a) Solids Control Relationship.
(i) United States Market. Subject to the
conditions set forth herein, the Tuboscope Parties shall serve as the exclusive
provider of Solids Control Services to the Newpark Parties in the United States
Market.
(ii) Exceptions. If the Newpark Parties propose a
Solids Control Service project in an area in which the Tuboscope Parties do not
provide Solids Control Services on terms and at prices at least as favorable to
the purchaser of such services as those offered by the primary participants in
the Solids Control Services market in such area, the Newpark Parties shall
notify the Tuboscope Parties in writing of such proposal prior to commencement
of the project. If the Newpark Parties propose to use a third party provider of
Solids Control Services for such project, their notice to the Tuboscope Parties
shall indicate the price and other payment terms offered by such third party.
Upon such notice from the Newpark Parties, the Tuboscope Parties shall have ten
days to match or beat the price and terms offered by the third party. If the
Tuboscope Parties at least match such price and terms, then the Tuboscope
Parties shall be the Solids Control Service provider for the project. If the
Tuboscope Parties do not at least match the price and terms of such third party
provider, the Newpark Parties shall be permitted to utilize the services of the
third party provider for so long as such services are provided by the third
party provider at a price and terms no less favorable to the Tuboscope Parties
as those set forth in the notice to the Newpark Parties. Additionally, nothing
herein shall prohibit the Newpark Parties from using a third party provider of
Solids Control Services who has been specifically designated by a Newpark
Parties' customer; provided, however, that the Newpark Parties shall not
recommend any Solids Control Services provider other than the Tuboscope Parties
and shall provide the Tuboscope Parties with written notice of any delivery of
waste to a third party specifically designated by the customer.
(b) Pricing.
(i) General Pricing. All prospective Solids Control
Services projects governed by this Agreement shall be reviewed, priced, bid and
submitted by the Tuboscope
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Parties. Pricing shall take into consideration appropriate quantity discounts on
large projects as well as adjustments necessitated by special logistics. In all
cases, the percentage discounts off published list prices to the Newpark Parties
shall equal or exceed the discounts listed on Exhibit A. Exhibit A also contains
a compilation of Tuboscope's recent published list prices. It is acknowledged
that the prices listed on Exhibit A may be raised by Tuboscope from time to
time.
(ii) Special Pricing on Newpark Minimization Management
Projects. Notwithstanding the foregoing, on each "minimization management"
project of the Newpark Parties, the Tuboscope Parties shall offer to the Newpark
Parties Solids Control Services with pricing at 10% below the "bid pricing"
offered to the customer on such project; provided that such "bid pricing" must
be reasonably acceptable to the Tuboscope Parties.
(iii) No Superior Terms. The Tuboscope Parties hereby
represent and warrant that the above pricing terms, taken as a whole, are at
least as favorable to the Newpark Parties as the pricing terms for Solids
Control Services currently in effect with respect to, and being offered by the
Tuboscope Parties or their Subsidiaries to, any other customer or prospective
customer of the Tuboscope Parties or their Subsidiaries in the United States
Market, except for those offered by Tuboscope's subsidiary, Advanced Wire Cloth,
Inc., with respect to replacement screens for shakers. Moreover, the Tuboscope
Parties shall not during the term of this Agreement offer Solids Control
Services in the United States Market to any other party on terms superior (from
the standpoint of the other party) to the terms set forth above without also
concurrently offering such terms to the Newpark Parties. If the Tuboscope
Parties offer such superior terms to the Newpark Parties and the Newpark Parties
accept such terms, the Newpark Parties and the Tuboscope Parties shall enter
into an amendment to this Agreement to reflect such superior terms.
(c) Representations and Covenants of the Newpark Parties.
(i) Discontinued Operations. The Newpark Parties
represent and warrant that they and their Subsidiaries have discontinued their
Solids Control Services operations in the United States Market.
(ii) Authority; No Conflict; Enforceability. Each of the
Newpark Parties hereby represents and warrants as follows: (1) it has the full
authority and legal right to carry out the terms of this Agreement; (2) the
terms of this Agreement will not violate the terms of any material agreement,
contract or other instrument to which it is a party and no consent or
authorization of any other person is required in order for it to enter into and
carry out the terms of this Agreement; (3) it has taken all corporate and other
action necessary to authorize the execution and delivery of this Agreement; and
(4) this Agreement is a legal, valid and binding obligation of such Newpark
Party, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
whether enforcement is sought in equity or at law.
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(iii) No Solicitation. From the Effective Date
until the end of the Term, the Newpark Parties shall not actively solicit any
Solids Control Services business in the United States Market.
(iv) Exceptions. Notwithstanding anything to the
contrary herein, the Newpark Parties and their Subsidiaries are expressly
permitted to directly participate in minimization management and drilling fluids
projects (i) at rig sites at which they utilize the products and services of the
Tuboscope Parties and (ii) at all projects in which the Tuboscope Parties do not
at least match the price and terms of the third party provider as set forth in
Section 4(a)(ii).
(d) Canadian Market. The Parties shall use their best
efforts to enter into an alliance with respect to Solids Control Services in
Canada on substantially the same terms as those relating to the United States
Market set forth herein.
(e) Existing Bids and Contracts. The Newpark Parties have
delivered, or will promptly deliver, to the Tuboscope Parties all of the Newpark
Parties' annual contracts and outstanding bids relating to Solids Control
Services. The Tuboscope Parties will not be obligated to honor the terms of such
contracts and bids; provided, however, that the Tuboscope Parties will consider
exceptions for committed single-well drilling projects which were underway as of
November 12, 1999. Each such annual contract and outstanding bid must be
withdrawn by the Newpark Parties unless the Tuboscope Parties expressly consent
to the continuance of such contract or bid.
5. Term and Termination.
(a) Term. This Agreement shall be effective on the date
of this Agreement (the "Effective Date") and shall continue in effect from the
Effective Date until three years thereafter unless terminated earlier pursuant
to the provisions of this Section 5 or extended by mutual consent of the
parties. Thereafter, this Agreement shall automatically renew for successive one
year terms unless either party provides the other with written notice of its
intention to terminate this Agreement at least 90 days prior to the expiration
of the then-current term. The period in which this Agreement is in effect is
referred to herein as the "Term."
(b) Termination by Mutual Consent. The Parties may
terminate this Agreement upon the unanimous consent of the Parties.
(c) Termination by Tuboscope. Tuboscope will have the
right to terminate this Agreement immediately upon written notice to Newpark at
any time if:
(i) Any Newpark Party is in material breach of
(i) any material term, condition or covenant of this Agreement or (ii) its
payment obligations under any other contract with a Tuboscope Party related to
Solids Control Services, and, in either case, fails to cure that breach within
30 days after written notice of such breach.
(ii) Newpark: (A) becomes insolvent; (B) admits
in writing to insolvency or inability to pay its debts or perform its
obligations as they mature; or (C) makes an assignment for the benefit of
creditors.
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(d) Termination by Newpark. Newpark will have the right
to terminate this Agreement immediately upon written notice to Tuboscope at any
time if:
(i) Any Tuboscope Party is in material breach of
(i) any material term, condition or covenant of this Agreement or (ii) its
payment obligations under any other contract with a Newpark Party related to
Waste Services and, in either case, fails to cure that breach within 30 days
after written notice of such breach.
(ii) Tuboscope: (A) becomes insolvent; (B) admits
in writing to insolvency or inability to pay its debts or perform its
obligations as they mature; or (C) makes an assignment for the benefit of its
creditors.
(e) Effect of Termination. If any Party terminates this
Agreement pursuant to this Section 5, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
(f) Survival of Certain Provisions. Sections 6 and 8
shall survive the termination of this Agreement.
6. Indemnification.
(a) Indemnification by the Tuboscope Parties. The
Tuboscope Parties shall indemnify, defend and hold harmless the Newpark Parties
and the Newpark Parties' affiliates, stockholders, members, directors, officers,
employees, contractors, agents and other representatives from all demands,
claims, actions, causes of action, proceedings, assessments, losses, damages,
liabilities, settlements, judgments, fines, penalties, interest, costs and
expenses (including fees and disbursements of counsel) (collectively, "Damages")
of every kind (i) directly caused by the provision by the Tuboscope Parties of
Solids Control Services pursuant to this Agreement and (ii) arising from or
related to any breach by the Tuboscope Parties of any of their obligations under
this Agreement.
(b) Indemnification by the Newpark Parties. The Newpark
Parties shall indemnify, defend and hold harmless the Tuboscope Parties and the
Tuboscope Parties' affiliates, stockholders, members, directors, officers,
employees, contractors, agents and other representatives from all Damages of
every kind (i) directly caused by the provision by the Newpark Parties of Waste
Services pursuant to this Agreement and (ii) arising from or related to any
breach by the Newpark Parties of any of their obligations under this Agreement.
7. Insurance.
(a) Tuboscope Parties. The Tuboscope Parties agree to
maintain fire and casualty, general liability and product liability insurance
coverage covering their Solids Control Services operations hereunder throughout
the Term, which coverage shall be from reputable insurance carriers and shall be
in character and amount at least equivalent to that carried by persons engaged
in similar businesses and subject to the same or similar hazards.
(b) Newpark Parties. The Newpark Parties agree to
maintain fire and casualty, general liability and product liability insurance
coverage covering their Waste Services
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operations hereunder throughout the Term, which coverage shall be from reputable
insurance carriers and shall be in character and amount at least equivalent to
that carried by persons engaged in similar businesses and subject to the same or
similar hazards.
8. Miscellaneous.
(a) Payment Terms. All invoices and other charges payable
hereunder will be paid solely in United States Dollars. If conversion from other
currencies is required for any purpose, the mid-market, mid-day rate as posted
by Reuters shall apply. All invoices will be due and payable in full within 30
days after receipt. Any amounts disputed in good faith and the reasons therefor
shall be reported within 15 days after receipt of the applicable invoice, and
the Parties agree to work diligently to resolve the dispute within 30 days of
the receipt of the notice of dispute. Invoices that are not paid within 30 days,
other than those for which a dispute has been reported in good faith, shall be
assessed a late payment charge at the rate of 1.5% per month on the unpaid
invoice, retroactive to the date of invoice.
(b) Press Releases and Public Announcements. Neither the
Tuboscope Parties, on the one hand, or the Newpark Parties, on the other hand,
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of the
other; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise Tuboscope or
Newpark, as appropriate, prior to making the disclosure).
(c) Confidentiality. In the performance of or otherwise
in connection with this Agreement, any party ("Discloser") may disclose to any
other party ("Recipient") certain Confidential Information of the Discloser. The
Recipient will treat such Confidential Information as confidential and
proprietary of the Discloser and during and after the Term will:
(i) use the Confidential Information of the
Discloser solely for the purposes set forth in this Agreement;
(ii) take suitable precautions and measures to
maintain the confidentiality of the Confidential Information of the Discloser;
and
(iii) not disclose or otherwise furnish the
Confidential Information of the Discloser to any third party other than
employees or independent contractors of the Recipient who have a need to know
the Confidential Information to perform its obligations under this Agreement,
provided such employees or independent contractors are obligated to maintain the
confidentiality of the Confidential Information.
(iv) The obligations under this Section 8(c) will
not apply to any: (i) use or disclosure of any information pursuant to the
exercise of the Discloser's rights under this Agreement; (ii) information that
is now or hereafter becomes generally known or available to the public other
than through a violation of this Agreement; (iii) information that is obtained
by the Recipient from a third party (other than in connection with this
Agreement) who was not under any obligation of secrecy or confidentiality with
respect to such information;
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(iv) information that is independently developed by the Recipient without
reference to any Confidential Information and such independent development can
be shown by documentary evidence; (v) any disclosure required by applicable law,
provided that the Recipient will use reasonable efforts to give advance notice
to and cooperate with the Discloser in connection with any such disclosure; and
(vi) any disclosure made with the consent of the Discloser. The Recipient shall
promptly return to the Discloser or destroy all copies of any Confidential
Information of the Discloser in its possession or control upon request, or in
any event, upon any termination or expiration of the Term.
(d) No Agency. Each of the Tuboscope Parties, on the one
hand, and the Newpark Parties, on the other hand, will act as an independent
contractor hereunder, and neither will (i) have authority or represent that it
has any authority to assume or create any obligation, express or implied, on
behalf of the other, or (ii) represent the other as an agent, employee or in any
other capacity. Neither execution nor performance of this Agreement shall be
construed to have established any agency, joint venture or partnership.
(e) Force Majeure. If performance hereunder is prevented,
restricted or interfered with by any act or condition whatsoever beyond the
reasonable control of a Party, the Party so affected, upon giving prompt notice
to the other Parties, shall be excused from such performance to the extent of
such prevention, restriction or interference. In the event of any such
prevention, restriction or interference, the party affected shall promptly
notify the other party in writing and shall use all commercially reasonable
efforts to overcome the event or circumstance causing the prevention,
restriction or interference as soon as practicable. In addition, if a party's
performance is excused pursuant to this Section 8(e), the other party may take
any steps deemed reasonably necessary to secure the services of a third party to
replace the services previously provided by the non-performing party for so long
as such prevention, restriction or interference shall remain and for a
reasonable period of time thereafter if necessary to secure such replacement
services.
(f) No Third-Party Beneficiaries. This Agreement shall
not confer any rights or remedies upon any Person other than the Parties and
their respective successors and permitted assigns.
(g) Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior understandings, agreements or representations
by or between the Parties, written or oral, to the extent they related in any
way to the subject matter hereof.
(h) Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the Parties named herein and their
respective successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests or obligations hereunder without the
prior written approval of the other Party; provided, however, that any Party may
(i) assign any or all of its rights and interests hereunder to one or more of
its Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases such Party nonetheless shall
remain responsible for the performance of all of its obligations hereunder).
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(i) Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. This Agreement may be
executed by any party by delivery of a facsimile signature, which signature
shall have the same force and effect as an original signature. Any Party which
delivers a facsimile signature shall promptly thereafter deliver an originally
executed signature to the other Parties; provided, however, that the failure to
deliver an original signature page shall not affect the validity of any
signature delivered by facsimile.
(j) Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(k) Notices. All notices, requests, demands, claims and
other communications hereunder will be in writing. Any notice, request, demand,
claim or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to any Newpark Resources, Inc.
Newpark Party: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Tuboscope Inc.
Tuboscope Party: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail or electronic mail), but no such notice, request,
demand, claim, or other communication shall be deemed to have been duly given
unless and until it actually is received by the intended recipient. Any Party
may
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change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
(l) Governing Law. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Texas without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Texas or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Texas.
(m) Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by Tuboscope and Newpark. No waiver by any Party of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(n) Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(o) Expenses. Each of the Parties will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
(p) Construction. The Parties have participated jointly
in the negotiation and drafting of this Agreement. If an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement.
(q) Submission to Jurisdiction. Each of the Parties
submits to the jurisdiction of any state or federal court sitting in Houston,
Texas, in any action or proceeding arising out of or relating to this Agreement
and agrees that all claims in respect of the action or proceeding may be heard
and determined in any such court. Each Party also agrees not to bring any action
or proceeding arising out of or relating to this Agreement in any other court.
Each of the Parties waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought and waives any bond, surety or other
security that might be required of any other Party with respect thereto. Nothing
in this Section 8(q), however, shall affect the right of any Party to serve
legal process in any other manner permitted by law or in equity. Each Party
agrees that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or in equity.
(r) Remedies Not Exclusive. Except as specifically
provided for elsewhere in this Agreement, no remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy will be cumulative and will be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by a
party will not constitute a waiver of the right to pursue other available
remedies.
*****
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
TUBOSCOPE INC., a
Delaware corporation
By:
---------------------------------------
Name:
Title:
TUBOSCOPE VETCO INTERNATIONAL, INC., a
Texas corporation
By:
---------------------------------------
Name:
Title:
NEWPARK RESOURCES, INC., a
Delaware corporation
By:
---------------------------------------
Name:
Title:
NEWPARK DRILLING FLUIDS, L.L.C.,
a Texas limited liability company
By:
---------------------------------------
Name:
Title:
NEWPARK ENVIRONMENTAL SERVICES,
L.L.C., a Louisiana limited
liability company
By:
---------------------------------------
Name:
Title:
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EXHIBIT A
ALLIANCE PRICE SHEET
--------------------
