<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 5, 1996
SANIFILL, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 1-10490 76-0279492
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
</TABLE>
2777 Allen Parkway, Suite 700
Houston, Texas 77019-2155
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (713) 942-6200
<PAGE>
ITEM 5. OTHER EVENTS
On June 5, 1996, Sanifill, Inc. ("Sanifill") issued a press release
announcing that it had executed definitive agreements for the purchase by
Newpark Resources, Inc. of the marine-related nonhazardous oilfield waste
collection operations of Campbell Wells, Ltd., a Sanifill subsidiary. A copy of
the press release is attached hereto as Exhibit 99a and incorporated herein by
reference. Copies of the agreements are attached hereto as Exhibits 99b and 99c
and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following exhibits are filed herewith:
99a -- Press release of Sanifill, Inc. dated June 5, 1996.
99b -- Asset Purchase and Lease Agreement dated June 5, 1996 among Sanifill,
Inc., Campbell Wells, Ltd., NOW Disposal Holding Co. and Newpark
Resources, Inc. [Schedules omitted.]
99c -- NOW Disposal Agreement dated as of June 4, 1996 among Sanifill, Inc.,
NOW Disposal Operating Co. and Campbell Wells, Ltd.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SANIFILL, INC.
/s/ H. STEVEN WALTON
By: ___________________________________
H. Steven Walton
Vice President and General Counsel
Date: June 7, 1996
3
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EXHIBIT 99a
-----------
FOR IMMEDIATE RELEASE CONTACT: J. Chris Brewster
- ---------------------
713/942-6216
FIL 96-07
SANIFILL TO SELL ITS MARINE NONHAZARDOUS OILFIELD
WASTE COLLECTION OPERATIONS TO NEWPARK RESOURCES;
ANNOUNCES RECENT ACQUISITIONS
Houston, Texas (June 5, 1996) -- Sanifill, Inc. (NYSE-FIL) and Newpark
Resources, Inc. (NYSE-NR) today announced that they have executed definitive
agreements for the purchase by Newpark of the marine-related nonhazardous
oilfield waste ("NOW") collection operations of Campbell Wells, Ltd. ("Campbell
Wells"), a Sanifill subsidiary, for a purchase price of $70.5 million, subject
to financing and certain regulatory approvals. Newpark plans a public offering
of Common Stock to fund the acquisition and the additional working capital that
will be needed as a result of the purchase. The offering will be made only by
means of a prospectus included in a registration statement that has become
effective under the Securities Act.
Earlier, Newpark and Sanifill filed notification forms specified under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and, on May 24, 1996, the Federal Trade Commission ("FTC") requested
additional information with respect to the proposed transaction, which the
parties have begun to accumulate. Under the HSR Act, the parties are not
permitted to proceed with the transaction until 20 days after they furnish the
requested information. Consummation of the transaction is also conditioned on
the absence of any injunction against the transaction or any pending or
threatened governmental proceedings seeking to enjoin the transaction.
If the acquisition is consummated, Newpark will purchase substantially all
of Campbell Wells' non-landfarm NOW assets and will assume leases associated
with five transfer stations located along the Gulf Coast and three receiving
docks at the landfarm facilities operated by Campbell Wells, all of which are
located in Louisiana. For the year ended December 31, 1995, Campbell Wells had
revenues of approximately $19 million from the business to be acquired by
Newpark. Sanifill will continue to own and operate its Louisiana NOW landfarms
and its South Texas NOW disposal site. Newpark, Sanifill and Campbell Wells
have entered into a NOW disposal agreement to become effective upon completion
of the acquisition, providing for delivery of an agreed-upon annual volume of
NOW to Campbell Wells' landfarms for disposal over a twenty-five year period.
- more -
<PAGE>
Campbell Wells and Sanifill have also agreed to refrain from competing in the
marine NOW collection business in the States of Louisiana, Texas, Mississippi
and Alabama and in the Gulf of Mexico for a limited period. Campbell Wells and
Sanifill will continue to compete for the disposal of NOW wastes that are
generated on and transported by land.
RECENT SOLID WASTE ACQUISITIONS
- -------------------------------
In other news, Sanifill announced a number of acquisition transactions that
had closed subsequent to its most recent press release dated April 17, 1996.
Since that time, Sanifill has closed acquisitions involving $13 million of
estimated annual revenues. The majority of the acquired revenues relate to
"tuck-in" collection acquisitions in the Portland, Oregon market. So far, in
1996, these transactions bring Sanifill's acquisition activity to $59 million in
estimated annual revenues. Sanifill now has under letters of intent additional
acquisitions involving $32 million of estimated annual revenues. While there
can be no assurance that transactions under letters of intent will close, the
Company believes it is well positioned for further growth by acquisition. Given
the transactions closed to date, those under letters of intent, and the high
activity level of the Company's acquisition team, management believes that, in
1996, Sanifill may exceed the record for acquisition activity that was set in
1995, which involved the purchase of companies with estimated annual revenues of
$120 million.
Sanifill, Inc., headquartered in Houston, Texas, is an environmental
services company specializing in the management and disposal of nonhazardous
waste in 23 states, the District of Columbia, the Commonwealth of Puerto Rico,
Mexico, and Canada.
- more -
<PAGE>
SANIFILL ACQUISITION SUMMARY, JAN. 1 - JUNE 5, 1996
---------------------------------------------------
ESTIMATED ANNUAL REVENUE AND CONSIDERATION PAID ($ MILLIONS)
------------------------------------------------------------
Total
-------
Estimated Annual Revenue $59 (a)
Value of consideration given at closing
Stock 34
Cash and Notes 53
---
Total $87 (a)
===
OPERATIONS AND PERMITS ACQUIRED IN 1996
---------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Market Landfills Collection Transfer Materials
Operations Stations Recovery
Facilities
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Denver 4
- -----------------------------------------------------------------------
Atlanta 1 1
- -----------------------------------------------------------------------
Baltimore/
Washington, D.C. 1 2
(MSW) (b,c)
- ------------------- -------- --------- ------- ---------
Baltimore/
Washington, D.C. 1
(Dry Waste) (c)
- -----------------------------------------------------------------------
Orlando (c) 1 1 1
- -----------------------------------------------------------------------
Houston 5
- -----------------------------------------------------------------------
Oklahoma City 1
- -----------------------------------------------------------------------
Toronto,Canada (c) 1 2(d)
- -----------------------------------------------------------------------
San Diego (c) 1
- -----------------------------------------------------------------------
Pennsylvania 1
- -----------------------------------------------------------------------
Portland 4
- -----------------------------------------------------------------------
Puerto Rico 1
- -----------------------------------------------------------------------
Phoenix 1
- -----------------------------------------------------------------------
Minnesota 2
- --------------------------------------------------------------------
</TABLE>
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<PAGE>
(a) These amounts exclude purchase consideration and expected revenues from a
previously announced (February 8, 1996) development project in the
Baltimore-Washington marketplace.
(b) To be constructed.
(c) New market entry in 1996.
(d) One in operation, one under construction.
<PAGE>
EXHIBIT 99b
ASSET PURCHASE AND LEASE AGREEMENT
THIS ASSET PURCHASE AND LEASE AGREEMENT ("Agreement") is made and entered
into this 5th day of June, 1996, by and between (a) SANIFILL, INC., a Delaware
corporation ("Parent"), CAMPBELL WELLS, LTD., a Delaware limited partnership
(the "Company"), and NOW DISPOSAL HOLDING CO., a Delaware corporation ("Holdco")
(Parent, the Company and Holdco being sometimes collectively referred to herein
as "Sellers"), and (b) NEWPARK RESOURCES, INC., a Delaware corporation ("Buyer"
or "Newpark"), with reference to the following facts:
A. The Company engages in the remediation and closure of oilfield waste
pits, including related loading and hauling, and the collection, transfer,
transportation, treatment and disposal of nonhazardous oilfield waste associated
with the exploration and production of oil, gas and geothermal energy("NOW")
(such activities being referred to herein as the "Business"). Those portions of
the Business that relate to (i) remediation and closure of oilfield waste pits,
including related loading and hauling, and (ii) the collection, transfer and
transportation of NOW (other than Excluded NOW, as defined below) are referred
to herein as the "Acquired Business." Those portions of the Business that
relate to (iii) the collection, transfer and transportation of "Excluded NOW",
i.e., NOW generated and collected on land and delivered to the Company's
Landfarms (as defined below) from the site where it was generated entirely by
on-land transportation and (iv) the treatment and disposal of NOW are referred
to herein as the "Excluded NOW Business." The Company does not engage in any
business other than the Acquired Business and the Excluded NOW Business.
B. The parties agree (i) Buyer shall purchase from Holdco and Holdco
shall sell to Buyer 100% of the outstanding shares (the "Equity Interests") in
NOW DISPOSAL OPERATING CO., a Delaware corporation ("Disposeco"), and (ii) that
Buyer shall purchase or lease from the Company, and the Company shall sell or
lease to Buyer substantially all of the operating assets of the Company that are
primarily used or useful in the Acquired Business, and that Sellers shall remain
liable for the liabilities and obligations related to the Business, including
the Acquired Business, except for certain obligations that Buyer will expressly
assume, all as hereinafter set forth. Buyer may assign its rights and delegate
its duties hereunder to Subsidiary (as defined below), 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.
NOW, THEREFORE, for and in consideration of the mutual promises, agreements
and warranties contained herein, Sellers and Buyer agree as follows:
1. Transfer of Acquired Business and Assets.
1.1 Included Assets. For the consideration hereinafter provided, the
Company shall sell or lease, transfer and assign to Buyer on the Closing Date
(as defined below), all of the business, properties and assets of the Company
related to the Acquired Business, other than the "Excluded Assets" specified in
Paragraph 1.2, and Holdco will sell to Buyer the Equity Interests.
<PAGE>
Unless otherwise stated in Paragraph 1.2, the business, properties and assets to
be sold or leased to Buyer hereunder other than the Equity Interests (the
"Included Assets"), together with the Equity Interests, shall include all assets
of the Company and Holdco related to the Acquired Business, including but not
limited to the following:
(a) Assets to be Sold.
(i) All interests in goodwill related to the Acquired Business;
(ii) the right, on a nonexclusive basis, to use all patents, patent
applications, copyrights, trademark registrations and applications therefor,
inventions, trade secrets, technical know-how, special processes, and similar
intangibles, parts lists, designs, specifications, drawings, bills of material,
maintenance manuals, warranty service data and sales literature (collectively
"Intangible Assets") related to the Acquired Business;
(iii) all books and records of account, employment records, customer
lists, supplier lists, and any other information relating to or arising out of
the Acquired Business prior to the Closing Date which has been reduced to
writing, or copies thereof where it is appropriate for the Company to retain the
originals;
(iv) all of Sellers' interest in the transfer stations ("Transfer
Stations") and the docks associated with the Transfer Stations ("Transfer
Station Docks") located in the State of Louisiana that are used in connection
with the Acquired Business, including all buildings, structures, improvements
and fixtures thereon (together the "Transfer Stations and Transfer Station
Docks"), a complete listing of which is attached to this Agreement as Exhibit
1.1.C; Transfer Stations and Transfer Station Docks will be leased (if owned by
the Company or an Affiliate, as defined below) or subleased (if held by the
Company under lease or sublease other than from an Affiliate) to Buyer for their
remaining useful lives, all in accordance with subparagraph 1.1(b);
(v) all barges and marine facilities (the "Marine Facilities") used
in the Acquired Business in connection with the transfer of NOW to the Transfer
Stations and Transfer Station Docks; a complete listing of the Marine Facilities
is attached hereto as Exhibit 1.1.D; the Marine Facilities will be sold to Buyer
for part of the Purchase Price, as defined below (if owned by the Company or an
Affiliate), or leased to Buyer for their remaining useful lives at the same
rental as paid by the Company, without any premium (if held by the Company or an
Affiliate under lease or sublease);
(vi) all vehicles, machinery, pit remediation equipment and other
equipment, furniture, tools, tooling, spare parts and other fixed assets (the
"Fixed Assets"), including but not limited to the Fixed Assets listed on Exhibit
1.1.E attached hereto, except as disposed of in the ordinary course of business
before the Closing Date;
2
<PAGE>
(vii) all of the Company's rights as of the Closing Date under all
contracts relating exclusively to the Acquired Business, to the extent assumed
by Buyer;
(viii) all of the Company's right, title and interest in and to all
names previously used by the Company or any predecessor in connection with the
Acquired Business the use of which use has been permanently discontinued by the
Company and the right to purchase for $1.00 at any time after the Closing Date
any and all names that are Excluded Assets, when, as and if Parent and the
Company permanently discontinue such use or announce the intention to
permanently discontinue such use; and
(ix) all other assets, whether tangible or intangible, definite or
contingent, and of every kind and description and wherever situated, that are
used or useful primarily in connection with the Acquired Business.
(b) Assets to be Leased. All of the assets listed on Schedule 1.1(b)
within the Disclosure Memorandum (as defined below), will be leased to Buyer in
accordance with the terms of one or more leases to be mutually approved by the
parties and entered into on the Closing Date. Such leases will be consistent
with Paragraph 13.1 of this Agreement.
1.2 Excluded Assets. All of the assets and property of the Company, Parent
and Holdco other than the Equity Interests and the assets and property included
within the Included Assets shall be "Excluded Assets," including but not limited
to the following:
(a) Parent's, the Company's and Holdco's rights under this Agreement,
including the consideration to be received hereunder;
(b) all interests in cash, accounts receivable and other components of
working capital of the Company;
(c) all property and assets relating exclusively to the Excluded NOW
Business;
(d) the NOW disposal facilities owned and operated by the Company
designated as Elm Grove, LA (DNR Permit # OWD 89-1), Bourg, LA (DNR Permit #90-
10 OWD), Bateman Island, LA (DNR Permit # 91-10 OWD), and Mermentau, LA (DNR
Permit # SWD 83-6)(collectively the "Landfarms") and associated operating
equipment;
(e) The Company's facility at Zapata, Texas, and all assets associated
with such facility (the "Zapata Facility");
(f) The Company's landfarming facility designated as Lacassine, LA,
and all assets associated with such facility (DNR Permit # 93-05 OWD) (the
"Lacassine Facility"); and
3
<PAGE>
(g) The name "Campbell Wells, Ltd.," and all other names that are used
by Parent or the Company or both in connection with the operation of the
Landfarms, the Zapata Facility or the Lacassine Facility.
2. Purchase and Lease Price and Payment.
------------------------------------
2.1 Aggregate Consideration. The aggregate consideration to be paid
by Buyer (the "Purchase Price") for the Equity Interests, Included Assets and
Noncompetition Agreement (as defined below) shall be $70,500,000. In addition
to the Purchase Price, if any excise, sales, use or similar taxes are imposed on
the sale, lease and transfer of the Equity Interests and Included Assets to
Buyer, Buyer shall pay such taxes up to an aggregate of $30,000, and Sellers
shall pay the balance, if any, of such taxes.
2.2 Payment. The Purchase Price shall be paid on the Closing Date in
cash in the form of a wire transfer of immediately available funds.
3. Ancillary Agreements.
--------------------
On the Closing Date, as a necessary incident of the sale and purchase
of the Equity Interests and the sale and purchase or lease of the Included
Assets, the following agreements will be executed by the parties indicated
below:
3.1 Noncompetition Agreement. Buyer and Parent will execute and
deliver a noncompetition agreement (the "Noncompetition Agreement") in form and
substance as set forth in Exhibit 3.1 attached to this Agreement, and the
Company will execute and deliver a Joinder Agreement (the "Joinder Agreement")
in form and substance as set forth in Exhibit 3.1A attached to this Agreement.
3.2 Guaranty. Buyer will execute and deliver an Assumption and
Guaranty Agreement (the "Guaranty") in form and substance as set forth in
Exhibit 3.2 attached to this Agreement with respect to Disposeco's obligations
arising after the Closing under the NOW Disposal Agreement dated as of June 4,
1996, among Parent, the Company and Disposeco (the "Disposal Agreement").
4. Assumption of Liabilities.
-------------------------
Except as expressly set forth in this Agreement, Buyer is not assuming
any of the obligations or liabilities of Parent, the Company or Holdco. The
foregoing notwithstanding, Buyer shall assume and discharge in due course the
Assumed Obligations (as defined below).
5. Acquired Business Employees.
---------------------------
The Disclosure Memorandum includes a list of all employees and
independent contractors of the Company engaged in the Acquired Business as of
the date of this Agreement
4
<PAGE>
("Acquired Business Employees"). Buyer shall be given the opportunity to offer
employment to any such Acquired Business Employees (other than the "Excluded
Employees," i.e., those who are listed in the Disclosure Memorandum as engaged
primarily in the operation of the Landfarms, the Zapata Facility or the
Lacassine Facility and certain other administrative personnel designated by
mutual agreement of Buyer and Sellers) in Buyer's sole discretion but shall be
under no obligation to offer employment to any Acquired Business Employee.
Sellers will be responsible for all of the obligations owed to the Acquired
Business Employees and the Excluded Employees to and including the Closing Date,
including but not limited to salary, bonus, vacation, severance and sick pay,
retirement benefits and amounts owed under employee benefit plans, and shall
defend, indemnify and hold harmless Buyer from all liability with respect
thereto, except that Buyer will be responsible for severance pay of the Acquired
Business Employees other than the Excluded Employees, whether or not they become
employees of Buyer. No severance pay will be payable by Buyer with respect to
Acquired Business Employees who become employees of Buyer, except upon
termination of their employment with Buyer. For a period of five years after
the Closing Date, none of the Company and its Affiliates will induce or
influence (or attempt to induce or influence) any of the Acquired Business
Employees that have entered into the employ of Buyer or Disposeco (or remained
in the employ of Disposeco) to terminate such employment.
6. Representations and Warranties of Sellers.
-----------------------------------------
Except as otherwise specifically disclosed by Sellers to Buyer in a
written memorandum (the "Disclosure Memorandum") making reference to this
Agreement, Sellers hereby jointly and severally warrant and represent the
following:
6.1 Organization and Good Standing.
(a) Parent. Parent is a corporation duly organized and in good
standing under the laws of the State of Delaware. It has corporate power and
authority to enter into this Agreement and the Related Agreements (as defined
below) and the transactions contemplated hereby. Parent owns, directly or
indirectly, the Equity Interests and all of the outstanding equity interests in
the Company.
(b) The Company. The Company is a limited partnership duly
formed and validly existing under the laws of the State of Delaware and has
partnership power and authority to conduct its business as it is now being
conducted. The Company is duly registered to transact business in each
jurisdiction where the character or location of the assets owned by it or the
nature of the business transacted by it require such registration except where
failure to be so registered would not have a Material Adverse Effect (as defined
below), and such registrations are in full force and effect. The Disclosure
Memorandum includes a list of the jurisdictions in which the Company is
registered to transact business .
(c) Holdco. Holdco is a corporation duly organized and in good
standing under the laws of the State of Delaware. It has corporate power and
authority to enter into this
5
<PAGE>
Agreement and to sell the Equity Interests to Buyer. Holdco is not required to
be qualified as a foreign corporation in any jurisdiction.
(d) Disposeco. Disposeco is a corporation duly organized and in
good standing under the laws of the State of Delaware. It has corporate power
and authority to conduct its business as it is now being conducted. Disposeco is
duly qualified to transact business in each jurisdiction where the character or
location of the assets owned by it or the nature of the business transacted by
it require such qualification except where failure to be so registered would not
have a Material Adverse Effect, and such qualifications are in full force and
effect. The Disclosure Memorandum includes a list of the jurisdictions in which
Disposeco is qualified to transact business.
6.2 Authority.
(a) Parent. The execution by Parent of this Agreement and each of
the Related Agreements to which Parent is a party, the delivery of each such
agreement to Buyer and the performance thereof by Parent have been duly
authorized by the Board of Directors of Parent. All necessary stockholder and
corporate action has been taken, and this Agreement and each of the Related
Agreements to which Parent is a party are valid and binding upon Parent and
enforceable in accordance with their terms, subject to the Bankruptcy Exception,
as defined below. The execution, delivery and performance by Parent of this
Agreement and each of the Related Agreements to which Parent is a party are not
contrary to the Certificate of Incorporation or By-Laws of Parent and will not
result in a violation or breach of any term or provision or constitute a default
or give any party a right to accelerate the due date of any indebtedness under
any indenture, mortgage, deed of trust or other contract or agreement to which
Sellers, or any of them, are parties or by which Sellers, or any of them, are
bound, which relate to or affect the Acquired Business, the Equity Interests or
the Included Assets.
(b) The Company. The Company has the requisite power under its
agreement and certificate of limited partnership and the Delaware Revised
Uniform Limited Partnership Act to enter into this Agreement and each of the
Related Agreements to which it is a party and to perform its obligations under
each such agreement. The execution, delivery and performance of this Agreement
and each of the Related Agreements to which the Company is a party and the
consummation of the transactions contemplated by this Agreement and such Related
Agreements have been duly authorized by all necessary partnership action on the
part of the Company, and no other partnership proceedings on the part of the
Company are necessary to authorize this Agreement or any of such Related
Agreements and the transactions contemplated hereby and thereby. This Agreement
and each of the Related Agreements to which the Company is a party are valid and
binding upon the Company and enforceable in accordance with their terms, subject
to the Bankruptcy Exception. The execution, delivery and performance of this
Agreement and the Related Agreements to which the Company is a party are not
contrary to the partnership agreement of the Company and will not result in a
violation or breach of any term or provision or constitute a default or give any
party a right to accelerate the due date of any indebtedness under any
indenture, mortgage, deed of trust or other contract or agreement to which
Sellers, or any of them,
6
<PAGE>
are parties or by which Sellers, or any of them, are bound, which relate to or
affect the Acquired Business, the Equity Interests or the Included Assets.
(c) Holdco. The execution by Holdco of this Agreement, the
delivery of this Agreement to Buyer and the performance thereof by Holdco have
been duly authorized by the Board of Directors of Holdco. No other corporate
action is required, and this Agreement is valid and binding upon Holdco and
enforceable in accordance with its terms, subject to the Bankruptcy Exception,
as defined below. The execution, delivery and performance of this Agreement by
Holdco are not contrary to the Certificate of Incorporation or By-Laws of Holdco
and will not result in a violation or breach of any term or provision or
constitute a default or give any party a right to accelerate the due date of any
indebtedness under any indenture, mortgage, deed of trust or other contract or
agreement to which Sellers, or any of them, are parties or by which Sellers, or
any of them, are bound, which relate to or affect the Acquired Business, the
Equity Interests or the Included Assets.
6.3 Financial Statements. All of the information provided by the
Company or Parent to Deloitte & Touche, Buyer's independent accountants, in
connection with such firm's examination of the balance sheets of the Company
with respect to the activities constituting the Acquired Business as of December
31, 1993, December 31, 1994, and December 31, 1995, and the related statements
of income, equity and cash flows for the years ended December 31, 1993, December
31, 1994, and December 31, 1995, was prepared from the books and records of the
Company and was true and correct in all material respects when so provided to
such firm. The balance sheet of the Company with respect to such activities as
of March 31, 1996, and the related statements of income, equity and cash flows
for the three months then ended were prepared from the books and records of the
Company, which books and records were true and correct in all material respects
as of such date, and such financial statements (including the notes thereto)
present fairly, as of the date or for the period presented, the financial
position, results of operations and changes in cash flows attributable to such
activities, in each case subject to year-end audit adjustments.
6.4 Holdco's and Parent's Interests. Holdco is the sole stockholder
of Disposeco and has good title to the Equity Interests, free and clear of all
Liens. The Equity Interests constitute 100% of the outstanding capital stock of
Disposeco. Parent has no interest in the Business other than (a) its indirect
ownership of the Equity Interests, (b) its equity interests, direct and
indirect, in the Company and the subsidiaries and Affiliates of the Company, and
(c) its interest in the Zapata Facility. Holdco has no interest in the Business
other than its ownership of the Equity Interests.
6.5 Title to and Condition of Properties. Holdco has good title to
the Equity Interests, and the Company has good title to the Included Assets.
The Company has the legal right to transfer and assign or lease the Included
Assets to Buyer without obtaining any consent, permit or approval of or from any
other Person, other than approval under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), except where failure to
obtain any such consent, permit or approval would not have a Material Adverse
Effect. The tangible assets within the Included Assets are in good operating
condition and repair, subject to ordinary wear and tear, taking into account the
respective ages of the assets involved.
7
<PAGE>
6.6 Contracts. Sellers have furnished to Buyer copies of or access
to all master service agreements (without related addenda containing price
information, which shall be made available to Buyer at the Closing) and all
other contracts to be assumed by Buyer hereunder, except for provisions of such
contracts that relate primarily to the Excluded NOW Business. The Disclosure
Memorandum contains a list of all Material Contracts (as defined below). To the
knowledge of Sellers, all of the Material Contracts are valid and binding
obligations of the parties thereto in accordance with their respective terms,
subject to the Bankruptcy Exception; there have been no material amendments to
or modifications to any Material Contract (except as set forth in the copies
furnished to Buyer); no event has occurred which is, or, following any grace
period or required notice, would become a material default under the terms of
any Material Contract; and the Company has not waived any material rights under
any Material Contract.
6.7 No Litigation. There is no suit or action (equitable, legal or
administrative), arbitration or other proceeding pending or, to the knowledge of
Sellers, threatened against Parent or the Company or any of their Affiliates,
which materially relates to the Equity Interests or the Included Assets or which
would materially adversely affect Buyer's conduct of the Acquired Business after
the Closing Date. There is no suit or action (equitable, legal or
administrative), arbitration or other proceeding pending or, to the knowledge of
Sellers, threatened by Parent, the Company or any of their Affiliates which
relates to or affects the Equity Interests, the Included Assets or Buyer's
conduct of the Acquired Business after the Closing Date.
6.8 Compliance With Laws. Parent and the Company are in compliance
with all applicable laws, statutes, ordinances, regulations, decrees and other
legal requirements, including but not limited to laws requiring the filing of
tax returns and reports and the payment of taxes, except where the failure to
comply would not have a Material Adverse Effect. Assuming satisfaction of the
condition set forth in Paragraph 11.3, the execution and performance of this
Agreement and the Related Agreements and the consummation of the transactions
contemplated hereby will not violate any provision of or constitute a default
under any law, rule or regulation, order, writ, injunction or decree of any
court or other governmental agency or instrumentality applicable to Parent or
the Company with respect to the Acquired Business, except where such violation
or default would not have a Material Adverse Effect.
6.9 Insurance. The Disclosure Memorandum includes a complete list of
all policies of fire, liability and other forms of insurance maintained by the
Company which cover the Acquired Business and the Included Assets, indicating
risks insured against, carrier, policy number, amount of coverage, premiums and
expiration date.
6.10 Letters of Credit and Performance Bonds. The Disclosure
Memorandum includes a list of all outstanding letters of credit and performance
bonds that have been issued in connection with the Acquired Business, including
a summary of the terms thereof and the obligations to which they relate.
6.11 Employee Benefit Plans. Buyer will not be subjected to any
liability under any employee benefit plan maintained by Parent or the Company.
8
<PAGE>
6.12 Permits, Licenses and Authorizations. The Company has all
licenses, franchises, permits and other governmental authorizations that are
legally required to enable it to conduct the Acquired Business in all material
respects as conducted on the date hereof, except where failure to have any such
license, franchise, permit or authorization would not have a Material Adverse
Effect. All such licenses, franchises, permits and other governmental
authorizations related to the Acquired Business are freely transferable to Buyer
and will be included within the Included Assets. Except as otherwise provided
in this Agreement, no authorizations, approvals or consents of any governmental
department, commission, bureau, agency or other public body or authority are
required for consummation of the transactions contemplated by this Agreement,
except where failure to obtain any such authorizations, approvals or consents
would not have a Material Adverse Effect.
6.13 Environmental Matters.
(a) To the knowledge of Parent and the Company, no underground
storage tanks the existence of which would have a Material Adverse Effect exist
on, under or in any real property or buildings and improvements thereon
constituting part of the Included Assets (collectively, the "Property").
(b) To the knowledge of Parent and the Company, during the time
that any Property was owned or leased by the Company or any predecessor with
respect to the Acquired Business, it did not violate to an extent that would
have a Material Adverse Effect any applicable federal, state and local laws,
ordinances or regulations, now or previously in effect, relating to
environmental conditions, industrial hygiene or Hazardous Materials (as defined
below) on, under, in or about such Property (including without limitation the
Hazardous Materials Laws, as defined below).
(c) As of the date hereof, to the best of the knowledge of Parent
and the Company, there are no (i) enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Company or any predecessor
with respect to the Acquired Business, or any Property included within the
Included Assets, (ii) claims made or threatened by any person or governmental
body against the Company or any predecessor relating to any Property or (iii)
any occurrence or condition known to Parent or the Company on any Property that
can reasonably be expected to subject Buyer or such Property to any material
restrictions on occupancy, transferability or use of any Property under any
Hazardous Materials Laws. The Disclosure Memorandum includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of Sellers have been received by or asserted against the
Company or any predecessor with respect to the Acquired Business or any Property
which could reasonably be expected to have a Material Adverse Effect.
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6.14 Absence of Certain Changes. Since December 31, 1995, there has
not been:
(a) any material adverse change in the financial condition,
assets, liabilities or net worth of the Company related to the Acquired
Business;
(b) any damage, destruction, or loss, whether or not covered by
insurance, materially and adversely affecting the Acquired Business or the
Included Assets;
(c) any material increase in the compensation payable or to
become payable to any employees of the Company engaged in the Acquired Business,
other than the Excluded Employees, or any bonus payment or arrangement made to
or with any of such employees;
(d) to the knowledge of Sellers, any mortgage, pledge or
subjection to lien, charge, or encumbrance of any kind of any of tangible assets
or Intangible Assets of the Company related to the Acquired Business;
(e) any sale, transfer or assignment of any assets, including
any interest in any Intangible Assets, of the Company related to the Acquired
Business, except sales for fair value in the ordinary course of business, or any
cancellation for less than fair value of any debts or claims due the Company,
except for any sales, transfers or assignments of assets that would not have a
Material Adverse Effect ; or
(f) to the knowledge of Sellers, any amendment or termination of
any Material Contract except (i) in the ordinary course of business, (ii) as
included in copies of such contracts furnished to Buyer, or (iii) any amendments
or terminations that would not have a Material Adverse Effect.
6.15 No Labor Problems. The Company is not a party to any contract
or agreement with a labor union or any local or subdivision thereof and has not
been charged with any unresolved unfair labor practices with respect to the
Acquired Business; Sellers have no knowledge of any present organizing activity
among employees of the Company involved in the Acquired Business, other than the
Excluded Employees, by any union. To the knowledge of Sellers, there are no
material controversies pending or threatened between the Company and any of its
employees engaged in the Acquired Business, other than the Excluded Employees,
and the Company has substantially complied in connection with the Acquired
Business with all laws relating to the employment of labor, including provisions
relating to wages, hours, benefits, collective bargaining, and the payment of
social security and similar taxes, and is not liable for any arrears in wages or
any taxes or penalties for failure to comply with any of the foregoing, except
where such failure to comply would not have a Material Adverse Effect.
6.16 Interest in Competitors, Suppliers, etc. Neither Parent nor any
of its Affiliates, and no officer or director of the Company or Family Member,
as defined below, of any such person, owns, directly or indirectly, individually
or collectively, any interest in any Person which has a material contractual
relationship with the Company related to the Acquired Business, including but
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not limited to lessors of real or personal property leased to the Company and
entities against whom rights or options are exercisable by the Company with
respect to the Acquired Business.
6.17 Purchases and Sales. Since December 31, 1995, the Company has
not placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices.
6.18 Employees and Suppliers. To the best knowledge of Sellers, the
Company has satisfactory relationships with its employees (other than Excluded
Employees), suppliers and independent contractors relating to the Acquired
Business, except where failure to have such satisfactory relationships would not
have a Material Adverse Effect.
6.19 Intangible Assets. The Company is not obligated to pay any
royalties or other fee to any licensor or other third party with respect to any
Intangible Assets the right to use of which is included within the Included
Assets. None of Sellers has received any claim alleging any conflict between
any aspect of the Acquired Business and any Intangible Assets claimed to be
owned by others.
7. Additional Obligations and Covenants of Sellers.
-----------------------------------------------
Sellers hereby jointly and severally covenant and agree as follows:
7.1 Conduct of Acquired Business. Except as otherwise provided in
this Agreement, between the date hereof and the Closing Date:
(a) The Acquired Business will be conducted in the ordinary
course, and Sellers will use commercially reasonable efforts to preserve the
organization of the Company intact and will not take any action intended to
interfere with the Company's relationships with its employees (other than
Excluded Employees), suppliers and customers, except where the failure to comply
with this subparagraph would not have a Material Adverse Effect.
(b) The Company will not, without Buyer's prior written approval,
enter into any material transaction affecting the Acquired Business other than
in the ordinary course of business.
(c) The Company will not, without Buyer's prior written approval,
enter into or cancel any Material Contracts, except that the Company may,
without Buyer's prior approval, terminate any Material Contract for any material
default thereunder by any party other than the Company or an Affiliate of the
Company.
(d) The Company will use commercially reasonable efforts to
maintain the Included Assets in their condition as of the date of this
Agreement, ordinary wear and tear excepted.
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(e) The Company will perform all repairs and maintenance required
by any leases or charters of barges and other leased assets within the Included
Assets, so that, on the Closing Date, such assets are in the condition that
would be required by such leases and charters if they were to terminate on the
Closing Date.
7.2 Access and Information. (a) Except as set forth in subparagraph
(b) below, Sellers will afford to Buyer and Buyer's counsel, accountants and
other representatives reasonable access, throughout the period from the date
hereof to the Closing Date, to all of their properties, books, contracts and
records related to the Acquired Business and will furnish Buyer during such
period with all information that Buyer reasonably may request, including copies
and/or extracts of pertinent records, documents and contracts. The
Confidentiality Agreement between Parent and Buyer shall remain in force and
effect and apply to the information received by Buyer and its representatives
hereunder.
(b) Buyer hereby acknowledges that it will have no right to
receive, and Sellers shall have no obligation to deliver, any documents in any
way relating to bids or proposals or other marketing efforts of the Company
prior to the Closing Date.
7.3 HSR Act Notification. Sellers have previously filed a
notification form in compliance with the HSR Act, and will respond promptly to
any reasonable inquiry or request for additional information that they receive
with respect to such notification form. Sellers will furnish to Buyer copies of
(a) the notification form, (b) any request for additional information that they
receive promptly after receiving it and (c) the additional information to be
furnished in response to any such request before it is filed, provided, however,
that Sellers' obligation to provide such documents or information which, in the
reasonable judgment of Sellers' counsel, should not be provided to Buyer because
of antitrust considerations shall be satisfied by delivery of such documents or
information to Buyer's counsel pursuant to a confidentiality agreement
satisfactory to Sellers.
7.4 Continuation of Insurance, Letters of Credit and Bonds. From and
after the date hereof and until the Closing Date, the Company will continue to
carry its existing insurance coverage (so long as coverage is available on
commercially reasonable terms), letters of credit and bonds posted to ensure
performance in connection with the Acquired Business, subject only to varia tion
in amounts required by the ordinary operations of the Acquired Business.
7.5 Efforts to Satisfy Conditions. Sellers agree to use commercially
reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to their or Buyer's obligations under this Agreement, to the extent
that their action or inaction can control or influence the satisfaction of such
conditions, provided, however, that Sellers will not be required under this
Paragraph 7.5 to take any action or refrain from taking any action to satisfy
any objections that the Federal Trade Commission may raise with respect to the
transactions contemplated by this Agreement and the Related Agreements.
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7.6 Title at Closing. At the Closing, Holdco will transfer to Buyer
good title to the Equity Interests, free and clear of all Liens (as defined
below). At the Closing the Company will transfer to Buyer good title to the
Included Assets, free and clear of all Liens other than Permitted Liens (as
defined below) related thereto and the Liens set forth on Schedule 7.6 hereto,
provided, however, that Buyer's acceptance of any of the Included Assets subject
as of the Closing Date to any Liens or Permitted Liens shall not excuse or limit
the obligations of Parent and the Company to defend, indemnify and hold harmless
Buyer as provided in this Agreement with respect to Seller Obligations evidenced
or secured by such Liens and Permitted Liens.
7.7 Consents of Others. As soon as reasonably practicable after the
date hereof, and in any event prior to the Closing, Sellers will use
commercially reasonable efforts to obtain all consents, authorization and
permits that are required for the assignment and transfer to Buyer of all of
leases, properties, assets, contracts, agreements and permits ("Entitlements")
herein provided to be assigned and transferred, leased or subleased to Buyer.
If any such consent is not obtained, the Company agrees to cooperate with Buyer
in any reasonable arrangements designed to provide for Buyer the benefits under
each such Entitlement, including enforcement of any and all rights of the
Company (and Buyer as successor in interest) against all other parties thereto.
7.8 Information for Registration Statement. Sellers acknowledge that
the financial statements referred to in Paragraph 6.3 will be included in a
Registration Statement to be filed by Buyer with the Securities Exchange
Commission in connection with the public offering contemplated by Paragraph
10.8. Sellers will furnish to Buyer such additional information concerning the
Acquired Business as Buyer may reasonably request in order to comply with the
requirements of the Securities Act of 1933, subject to Paragraph 7.2(b) and the
limitations contained in Paragraph 7.3. Any other information hereafter
furnished by Sellers to Buyer in writing specifically for inclusion in such
Registration Statement will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein in the light of the circumstances under
which they were made not misleading at the time such Registration Statement
becomes effective or at the effective time of any post-effective amendment or
supplement thereto.
8. Representations and Warranties of Buyer.
----------------------------------------
Except as otherwise specifically disclosed by Buyer to Sellers in
writing, Buyer hereby represents and warrants the following:
8.1 Organization and Good Standing. Buyer is a corporation duly
organized and validly existing under the laws of the State of Delaware. Buyer
has corporate power to conduct its business as it is now being conducted, to own
the Equity Interests, to carry on the Acquired Business and to own or lease, as
applicable, and operate the Included Assets being purchased or leased hereunder.
8.2 Authority of Buyer. The execution, delivery and performance of
this Agreement and the Related Agreements by Buyer have been duly authorized by
the Board of
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Directors of Buyer. No further corporate action is necessary on the part of
Buyer to make this Agreement and the Related Agreements valid and binding upon
Buyer in accordance with their terms, subject to the Bankruptcy Exception. The
execution, delivery and performance of this Agreement and the Related Agreements
by Buyer will not result in a violation or breach of (a) the Certificate of
Incorporation or Bylaws of Buyer or (b) any term or provision or constitute a
default or give any party a right to accelerate the due date of any indebtedness
under any indenture, mortgage, deed of trust or other contract or agreement to
which Buyer is a party.
8.3 Newpark's Capitalization. The authorized capital stock of
Newpark consists of 20,000,000 shares of Common Stock, $.01 par value, of which
10,795,442 shares were issued and outstanding on May 31, 1996, and 1,000,000
shares of Preferred Stock, $.01 par value, of which no shares are issued and
outstanding.
8.4 Newpark Reports. Newpark has delivered to Sellers copies of (i)
Newpark's Annual Reports on Form 10-K for the years ended December 31, 1993,
1994 and 1995 and (ii) all of Newpark's Quarterly Reports on Form 10-Q, all
Current Reports on Form 8-K and all proxy statements and other reports filed by
Newpark with the Securities and Exchange Commission (the "Commission") since
December 31, 1992 (the "Newpark Reports" herein). The Newpark Reports have been
duly and timely filed with the Commission and are in compliance with the Rules
and Regulations (as defined below). As of their respective dates, none of the
Newpark Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Since the filing with the Commission of the most recent
report on Form 10-Q included in the Newpark Reports, there has been no material
adverse change in the financial condition, assets, liabilities or net worth of
Newpark and its subsidiaries, taken as a whole.
8.5 Newpark Financial Statements. The financial statements
contained in the Newpark Reports (the "Newpark Financial Statements") have been
prepared in accordance with the books and records of Newpark and its
subsidiaries and in accordance with generally accepted accounting principles
consistently applied during the periods indicated, all as more particularly set
forth in such financial statements and the Notes thereto. Each of the balance
sheets included in the Newpark Financial Statements presents fairly as of its
date the consolidated financial condition and assets and liabilities of Newpark
and its subsidiaries. Except as and to the extent reflected or reserved against
in such balance sheets (including the Notes thereto), Newpark (including its
subsidiaries) did not have, as of the dates of such balance sheets, any material
liabilities or obligations (absolute or contingent) of a nature customarily
reflected in a balance sheet or the notes thereto prepared in accordance with
generally accepted accounting principles. The consolidated statements of
earnings and stockholders' equity and consolidated statements of changes in
financial position included in the Newpark Financial Statements present fairly
the results of operations and changes in financial position of Newpark and its
subsidiaries for the periods indicated.
8.6 Knowledge and Experience of Buyer. Buyer is in the NOW
collection, transfer, treatment and disposal business, including the marine NOW
collection, transfer, treatment and disposal business, and is familiar with such
industry and the risks associated therewith. Buyer
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has been provided access to all information considered by Buyer to be necessary
for a full and complete evaluation of the Acquired Business and the Included
Assets. Buyer has the knowledge, skill and experience in business, financial
and investment matters to evaluate the merits, risks and consequences of the
purchase of the Equity Interests and the purchase or lease of the Included
Assets and consummation of the other transactions contemplated by this
Agreement.
9. Additional Obligations and Covenants of Buyer.
---------------------------------------------
9.1 Efforts to Satisfy Conditions. Buyer hereby covenants and agrees
to use commercially reasonable efforts to satisfy or cause to be satisfied all
of the conditions precedent to its or Sellers' obligations under this Agreement,
to the extent that Buyer's action or inaction can control or influence the
satisfaction of such conditions, provided, however, that Buyer will not be
required under this Paragraph 9.1 to take any action or refrain from taking any
action to satisfy any objections that the Federal Trade Commission may raise
with respect to the transactions contemplated by this Agreement and the Related
Agreements, and further provided that Buyer shall not voluntarily fail to obtain
the financing referred to in Paragraph 10.8 unless, in Buyer's reasonable
judgment, such financing can be obtained only on terms that would have a
Material Adverse Effect on Buyer.
9.2 HSR Act Notification. Buyer has previously filed a notification
form in compliance with the HSR Act, and will respond promptly to any reasonable
inquiry or request for additional information that it receives with respect to
such notification form. Buyer will furnish to Sellers copies of (a) the
notification form, (b) any request for additional information that it receives
promptly after receiving it and (c) the additional information to be furnished
in response to any such request before it is filed, provided, however, that
Buyer's obligation to provide such documents or information which, in the
reasonable judgment of Buyer's counsel, should not be provided to Sellers
because of antitrust considerations shall be satisfied by delivery of such
documents or information to Sellers' counsel pursuant to a confidentiality
agreement satisfactory to Buyer.
10. Conditions Precedent to Obligations of Buyer.
--------------------------------------------
The obligations of Buyer under this Agreement are subject to the
satisfaction of each of the additional following conditions at or prior to the
Closing, unless waived in writing by Buyer:
10.1 Accuracy of Warranties and Representations. The representations
and warranties of Sellers herein shall be true and correct on and as of the
Closing Date, with the same force and effect, except as to transactions
permitted herein or to which Buyer may have consented in writing and changes
occurring in the ordinary course of business after the date of this Agreement
and not materially adversely affecting the Company, or its properties,
prospects, or financial condition related to the Acquired Business, as though
such representations and warranties had been made on and as of the Closing Date,
and Sellers shall have performed all covenants required by this Agreement to be
performed by them at or prior to the Closing.
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10.2 No Material Adverse Change. There shall have been no changes
after the date of this Agreement in the results of operations, assets,
liabilities, financial condition or affairs of the Company with respect to the
Acquired Business which in their total effect have or could reasonably be
expected to have a Materially Adverse Effect.
10.3 HSR Act. Early termination shall have been granted or
applicable waiting periods shall have expired under the HSR Act.
10.4 Injunction. On the Closing Date there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the transactions contemplated by this Agreement and the exhibits hereto may
not be consummated as herein provided, no proceeding or lawsuit shall have been
commenced by any governmental or regulatory agency for the purpose of obtaining
any such injunction, writ or preliminary restraining order and no written notice
shall have been received from any such agency indicating an intent to restrain,
prevent, materially delay or restructure the transactions contemplated by this
Agreement.
10.5 Sellers' Certificate. Sellers shall have furnished to Buyer a
certificate dated the Closing Date and signed by the chief executive officer and
the chief financial officer of each of Sellers stating that to the best of the
knowledge of each, after reasonable inquiry, the conditions set forth in
Paragraphs 10.1 and 10.2 above have been satisfied.
10.6 Opinion of Sellers' Counsel. A favorable opinion of H. Steven
Walton, Vice President-Governmental Affairs and General Counsel of Parent, in
form and substance as set forth in Exhibit 10.6 attached hereto, shall have been
delivered to Buyer, dated the Closing Date.
10.7 Consents Obtained. All third party consents, authorization and
permits that are required for the assignment and transfer to Buyer of all of the
Entitlements shall have been obtained, except where, after giving effect to
Paragraph 7.7, failure to obtain any such consents, authorizations and permits
would not have a Material Adverse Effect.
10.8 Public Offering. Buyer shall consummated a public offering of
its common stock providing net proceeds to Buyer of at least $60.0 Million.
11. Conditions Precedent to Obligations of Sellers.
----------------------------------------------
The obligations of Sellers under this Agreement are subject to the
satisfaction of each of the following additional conditions at or prior to the
Closing, unless waived in writing by Sellers:
11.1 Accuracy of Warranties and Representations. The representations
and warranties of Buyer contained in this Agreement shall be true and correct on
and as of the Closing Date, with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date, and
Buyer shall have performed all of the covenants required by this Agreement to be
performed by it on or before the Closing.
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11.2 No Material Adverse Change. There shall have been no changes
after the date of this Agreement in (a) the results of operations, assets,
liabilities, financial condition or affairs of Buyer and its subsidiaries, taken
as a whole, or (b) any of the Newpark Reports or Newpark Financial Statements,
which in their total effect have or could reasonably be expected to have a
Material Adverse Effect.
11.3 HSR Act. Early termination shall have been granted or
applicable waiting periods shall have expired under the HSR Act.
11.4 Injunction. On the Closing Date there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the transactions contemplated by this Agreement and the exhibits hereto,
may not be consummated as herein provided, no proceeding or lawsuit shall have
been commenced by any governmental or regulatory agency for the purpose of
obtaining any such injunction, writ or preliminary restraining order and no
written notice shall have been received from any such agency indicating an
intent to restrain, prevent, materially delay or restructure the transactions
contemplated by this Agreement.
11.5 Officers' Certificate of Buyer. Buyer shall have delivered to
the Company a certificate dated the Closing, signed by the chief executive
officer and the chief financial officer of Buyer and stating that, to the best
of the knowledge of each, after reasonable inquiry, the conditions set forth in
Paragraphs 11.1 and 11.2 have been satisfied.
11.6 Opinion of Buyer's Counsel. A favorable opinion of Ervin, Cohen
& Jessup, counsel for Buyer, in form and substance as set forth in Exhibit 11.6,
shall have been delivered to Sellers, dated the Closing Date.
12. Closing.
--------
The closing ("Closing") of the transactions contemplated by this
Agreement shall take place on the business day following the satisfaction of the
condition set forth in Paragraph 10.8 or, if later, on the business day
following the satisfaction or waiver of all of the other conditions precedent to
the parties' obligations hereunder. The Closing shall take place at a location
to be determined by mutual agreement. The term "Closing Date" herein shall mean
the date of the Closing.
13. Additional Post-Closing Obligations and Covenants.
-------------------------------------------------
Following the Closing, Sellers and Buyer shall perform all post-
Closing actions provided for herein, including those in Exhibits hereto, and the
following covenants and agreements:
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13.1 Lease Terms.
(a) The Purchase Price includes payment in full for all rentals
and other amounts payable under the leases from Sellers of the Landfarm Docks
listed under Item I., numbers 1 - 3 of Schedule 1.1(b) attached to the
Disclosure Memorandum. Sellers, at their expense, will pay all costs of
operation of such Landfarm Docks after the Closing Date, including all required
services and maintenance. Sellers, at their expense, will maintain all permits
that are required in connection with the operation of such Landfarm Docks and
will carry property, casualty and liability insurance in such amounts and with
respect to such perils as Buyer may reasonably request.
(b) Buyer will pay rent with respect to any other Included
Assets that are leased by the Company in the same amount and under the same
terms as were applicable to the Company before the Closing Date, and Buyer will
pay all costs of operation of the Transfer Stations.
13.2 Bonds and Licenses. For a period of 90 days after the Closing
Date, the Company will keep in force all of its performance bonds, permits,
licenses and authorizations relating to the Acquired Business to provide time
for Buyer to replace such items.
13.3 Further Documents. From time to time, as reasonably requested
by Buyer, whether at or after the Closing and without further consideration,
Sellers shall execute and deliver any further instruments of conveyance and
transfer and take any other action required to more effectively convey and
transfer the Equity Interests and the Included Assets to Buyer, provided that
such additional instruments and actions do not create any rights or obligations
that are not contemplated by this Agreement.
13.4 Pending and Subsequent Actions. To the extent commercially
reasonable, Sellers will cooperate, and will use their best efforts to have
their officers, directors and employees cooperate, with Buyer (at Buyer's
request and expense) on and after the Closing (a) in furnishing information,
testimony and other assistance in connection with any actions, proceedings,
arrangements, or disputes involving the Equity Interests, the Included Assets or
the Acquired Business based upon contracts, arrangements or acts of the Company
which were in effect or occurred on or prior to the Closing, and (b) by
providing Buyer reasonable access and information regarding the Acquired
Business on any matters in the possession or knowledge of Sellers for a period
of two years following the Closing Date. In addition, Sellers shall, from time
to time, upon the reasonable request of Buyer, consult with Buyer regarding the
history of the Acquired Business and the Included Assets, including, without
limitation, the contracts assumed by Buyer (to the extent such contracts do not
relate to the Excluded NOW Business). Notwithstanding any other provision of
this Agreement, the parties hereto acknowledge and agree that the consulting
services to be provided by Sellers under this Paragraph shall not include
providing any information or assistance with respect to the Excluded NOW
Business or any other area of operations now or hereafter engaged in by Sellers,
other than the Acquired Business. The parties agree that $1.0 Million of the
Purchase Price is allocable to Sellers' agreement to provide the consulting
services contemplated by this Paragraph.
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13.5 Tax Matters. Sellers shall be solely responsible for all Taxes
incurred or payable with respect to the Acquired Business for periods which end
or ended on or before the Closing Date. Buyer shall be solely responsible for
all Taxes incurred or payable with respect to the Acquired Business for all
periods commencing on or after the Closing Date. All Tax refunds (and related
interest) relating to the Acquired Business for taxable periods ending on or
prior to the Closing Date shall be paid and inure to the benefit of Sellers.
All Tax refunds (and related interest) relating to the Company for taxable
periods commencing after the Closing Date shall be paid and inure to the benefit
of Buyer. Sellers agree that, at Buyer's election, Sellers will consent to the
treatment of the transactions contemplated by this Agreement in accordance with
Section 338(h)(10) of the Internal Revenue Code of 1986, as amended.
14. Survival of Representations.
---------------------------
All representations and warranties made by the parties under or in
connection with this Agreement (including any representations and warranties set
forth in the certificates delivered pursuant to Paragraphs 10.5 and 11.5) shall
survive the Closing for a period of one year, except for the representations and
warranties set forth in Paragraphs 6.2, 6.4, 6.5, 6.11 and 6.13, which shall
survive until the expiration of the applicable statute of limitations. The
foregoing notwithstanding, if Buyer consummates the acquisition of the Equity
Interests and Included Assets with Actual Knowledge (as defined below) of a
material breach of warranty or representation of Sellers contained in this
Agreement and nevertheless consummates the purchase of the Equity Interests and
Included Assets, such consummation shall be deemed a waiver of such material
breach to the extent of Buyer's Actual Knowledge thereof; such waiver shall not
extend to or in any way affect Sellers' obligations under subparagraph 15.1(b)
below. All covenants and agreements made by the parties under or in connection
with this Agreement, including but not limited to the covenants set forth in
subparagraphs 15.1(b) and 15.1(c), shall survive until the expiration of the
applicable statute of limitations.
15. Indemnifications.
----------------
15.1 General Indemnification.
(a) Sellers (jointly and severally) and Buyer each hereby agree
to defend, indemnify and hold harmless the other party against all Damages
resulting from any breach of any warranty or representation made by such party
contained herein.
(b) Sellers hereby jointly and severally agree to defend, fully
indemnify and hold Buyer harmless against all Damages (as defined below) arising
out of the Seller Obligations (as defined below), whether or not the existence
of such Seller Obligations was disclosed to Buyer hereunder or constitutes a
breach of representation or warranty.
(c) Buyer agrees to defend, fully indemnify and hold Sellers
harmless from all Damages arising out of the Assumed Obligations (as defined
below).
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15.2 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
(a) The party seeking indemnification (the "Indemnitee") shall,
with reasonable promptness, provide the other party (the "Indemnitor") with
copies of any claims or other documents received and shall otherwise make
available to the Indemnitor all material relevant information. The Indemnitor
shall have the right to defend any such claim at its expense, with counsel of
its choosing, and the Indemnitee shall have the right, at its expense, using
counsel of its choosing, to join in the defense of any such claim. The
Indemnitee's failure to give prompt notice or to provide copies of documents or
to furnish relevant data shall not constitute a defense in whole or in part to
any claim by the Indemnitee against the Indemnitor except to the extent that
such failure by the Indemnitee shall result in a material prejudice to the
Indemnitor.
(b) The foregoing notwithstanding, if suit shall have been
instituted against the Indemnitee and the Indemnitor shall have failed, after
the lapse of a reasonable time after written notice to it of such suit, to take
action to defend the same, the Indemnitee shall have the sole right to defend
the claim and shall be entitled to charge the Indemnitor with the reasonable
cost of any such defense, including reasonable attorneys' fees. Neither party
shall settle or compromise any such claim unless it shall first obtain the
written consent of the other, which shall not be unreasonably withheld.
(c) Neither Buyer nor Sellers shall have any obligation to
indemnify the other with respect to Damages arising as a result of breach of
warranty or representation hereunder except to the extent that the amount of all
valid claims against such party for indemnification for breach of warranty or
representation hereunder exceeds an aggregate of $200,000. This provision shall
not apply to the express covenants and agreements contained herein, including
but not limited to the covenants set forth in subparagraphs 15.1(b) and 15.1(c).
(d) In determining the amount of Damages which gives rise to
liability hereunder, there shall be taken into account the amount of any Tax
benefits and insurance recoveries actually realized by the damaged party and its
Affiliates attributable to such Damages or derived therefrom, also taking into
account the Tax treatment of the receipt of any payment hereunder.
16. Amendment of Disclosure Memorandum.
----------------------------------
By written notice to Buyer from time to time prior to the Closing,
Sellers may supplement or amend the Disclosure Memorandum to correct any matter
that would constitute a breach of any warranty or representation of Sellers
contained in this Agreement; provided, however, that, except as provided in the
following sentence, no such supplement or amendment will affect the rights or
obligations of the parties to this Agreement until after the Closing Date.
Notwithstanding any other provision hereof, if the Closing occurs, any such
supplement or amendment of the Disclosure Memorandum will be effective for
indemnification purposes to cure and correct any breach of any warranty or
representation that would have existed if Sellers had not made such supplement
or amendment.
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17. Destruction of Assets.
---------------------
Possession of the Included Assets shall pass to Buyer at the Closing.
Accordingly, all risk of loss with respect to the Included Assets shall be borne
by Sellers until the Closing. If on the Closing Date any Included Assets shall
have suffered loss or damage on account of fire, flood, accident, act of war,
civil commotion, or any other cause or event beyond the reasonable power and
control of Sellers (whether or not similar to the foregoing) to an extent which
materially affects the value to Buyer of the Included Assets, Buyer shall have
the right at its election to complete the acquisition (in which event all claims
of Sellers with respect to such loss or damage and all insurance proceeds
arising therefrom shall be included within the Included Assets) or, if it does
not so elect, it shall have the right, which shall be in lieu of any other right
or remedy whatsoever, to terminate this Agreement. In the latter event, all
parties shall be released from liability hereunder.
18. Termination.
-----------
Either Buyer or Sellers may forthwith terminate this Agreement by
written notice to the other: (a) subject to clause (b) below, without liability
to the other of them, if the Closing has not occurred on or before September 10,
1996, unless the failure of the Closing to occur on or before said date is due
to the failure of the party seeking to terminate this Agreement to perform in
all respects each of its obligations under this Agreement required to be
performed by it on or before said date pursuant to the terms hereof; or (b)
without prejudice to other rights and remedies which either party may have, if
default shall be made by the other of them in the observance or in the due and
timely performance of any of its covenants and agreements herein contained, or
if there shall have been a breach material to any of the warranties and
representations herein contained, or if any condition precedent to its
obligations has not been satisfied. Paragraphs 21 through 32 shall survive any
termination of this Agreement.
19. 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 19 by giving notice of
such change to the other party in the manner which is provided in this Paragraph
19.
Sellers or any Sanifill, Inc.
of them: 2777 Allen Parkway, Suite 700
Houston, TX 77019-2155
Attention: H. Steven Walton, Esq., Vice President
Facsimile No.: (713) 942-6299
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With a copy to:
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, TX 77002-4995
Attention: Louise Shearer, Esq.
Facsimile No.: (713) 229-1522
Buyer: Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: James D. Cole, President
Facsimile No.: (504) 833-9506
With a copy to:
Ervin, Cohen & Jessup
9401 Wilshire Boulevard
Beverly Hills, CA 90212
Attention: Bertram K. Massing, Esq.
Facsimile No.: (310) 859-2325
20. Certain Definitions.
-------------------
As used herein, the following terms have the following meanings:
"Actual Knowledge" of Buyer with respect to a material breach of a
warranty or representation of Sellers contained herein means the actual personal
knowledge of James D. Cole, Wm. T. Ballantine or Matthew W. Hardey of the
existence of the facts that constitute such material breach, proven by Sellers
by a preponderance of the evidence.
"Affiliate" or "affiliate" means 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 (a) to 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.
"Assumed Obligations" means (a) the performance after the Closing
Date of all obligations arising after the Closing Date under all contracts,
leases and other agreements transferred to Buyer pursuant to the terms of this
Agreement, provided that each such contract, lease or other
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agreement has been specifically disclosed in the Disclosure Memorandum and
assumed by Buyer and (b) all of the obligations of the Acquired Business that
come into existence after the Closing.
"Bankruptcy Exception" means the limitation on enforceability imposed
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.
"Damages" means damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees).
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Hazardous Materials Laws" means any and all federal, state and local
laws in effect that relate to or impose liability or standards of conduct
concerning the environment, as now in effect and as have been amended or
reauthorized, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. (S) 9601, et seq.), the
Hazardous Materials Transportation Act (42 U.S.C. (S) 1802, et seq.), the
Resource Conservation and Recovery Act (49 U.S.C. (S) 5101, et seq.), the
Federal Water Pollution Control Act (33 U.S.C. (S) 1251, et seq.), the Toxic
Substances Control Act (15 U.S.C. (S) 2601, et seq.), the Clean Air Act (42
U.S.C., (S) 7401 et seq.), the National Environmental Policy Act (42 U.S.C. (S)
4321, et seq.), the Refuse Act (33 U.S.C. (S) 407, et seq.), the Safe Drinking
Water Act (42 U.S.C. (S) 300(f), et seq.), and all rules, regulations, codes and
ordinances promulgated or published thereunder, and the provisions of any
licenses, permits, orders and decrees issued pursuant to any of the foregoing.
"Hazardous Materials" means any substances defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," or "toxic substances" under the Hazardous Materials Laws.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien (including but not limited to any tax lien) or charge of any kind,
covenant, condition or restriction, including any agreement to grant any of the
foregoing, any conditional sale or other title retention agreement, any lease in
the nature of a lien, and the filing of or agreement to file any financing
statement under the Uniform Commercial Code of any jurisdiction in connection
with any of the foregoing.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations or business of the entity referred
to.
"Material Contracts" means all contracts or agreements affecting the
Included Assets or the Acquired Business that involve (a) the ownership or use
of real property included within the Included Assets, (b) the ownership or use
of personal property included within the Included Assets having a value in
excess of $100,000, (c) payments or receipts greater than $100,000 during any
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fiscal year and which by their terms do not terminate or may not be terminated
by the Company within one year after the Closing Date without penalty or premium
in excess of $50,000, or which involve payments or receipts greater than
$200,000 in any year, (d) collective bargaining or labor unions involving
employees engaged in the Acquired Business, other than the Excluded Employees,
(e) the employment or engagement as an independent contractor of any person
involved in the Acquired Business, other than the Excluded Employees, on a full-
time, part-time, consulting or other basis, in each case involving greater than
$75,000 in any year (f) bonuses, incentive compensation, or stock option plans
involving employees engaged in the Acquired Business, other than the Excluded
Employees, (g) performance of any obligation of the Company related to the
Acquired Business that is guaranteed by Parent or any other third party,
including performance bonding arrangements, (h) payments based in any manner
upon the revenues, purchases or profits of the Company involving the Acquired
Business, (i) any restriction on the Company's engaging in any activity, (j)
ownership or use of Intangible Assets related to the Acquired Business, or (k)
transactions outside the ordinary course of the Acquired Business.
"Permitted Lien" means any of the following Liens: (a) carriers',
warehousemen's, mechanics', landlords', materialmen's, suppliers', tax
assessment and other governmental charges and other similar Liens arising in the
ordinary course of business and securing obligations which do not relate to
obligations for borrowed money and which are either not overdue or the amount,
validity or applicability of which is being contested in good faith by
appropriate proceedings; (b) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money); (c)
easements, rights of way, restrictions or other similar charges, covenants or
encumbrances which do not materially interfere with the continued use of the
Included Assets; (d) Liens arising as a result of the institution of litigation
and attachment or judgment Liens in existence less than 60 days after the entry
thereof or with respect to which execution has been effectively stayed or the
payment of which is covered in full by insurance or a bond; (e) negative pledge
or other agreements to refrain from giving Liens; (f) rights reserved to or
vested in any municipality or governmental, statutory or public authority by the
terms of any right, power, franchise, grant, license or permit, or by any
provision of law, to terminate such right, power, franchise, grant, license or
permit; (g) rights reserved to or vested in any municipality or governmental,
statutory or public authority to control or regulate any property within the
Included Assets, or to use such property in a manner which does not materially
impair the use of such property; (h) any obligations or duties affecting any
property within the Included Assets to any municipality or governmental,
statutory or public authority with respect to any franchise, grant, license or
permit; (i) zoning, planning and environmental laws and ordinances and municipal
regulations; (j) encumbrances (other than to secure the payment of money),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any property or rights of way related to the use of the
Included Assets for the purpose of roads, pipelines, transmission lines,
transportation liens, distribution liens, removal of gypsum, gas, oil, coal,
metals, steam, minerals, timber or other natural resources, and other like
purposes, or for the joint or common use of real property, rights of way,
facilities or equipment, or defects, irregularities and deficiencies in title of
any property or rights of way, none of which materially interfere with the
continued use of the
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<PAGE>
Included Assets; and (k) any other Liens (other than to secure the payment of
money) that are not of the same character as the Permitted Liens described in
clauses (a), (b) and (d) above, the existence of which would not have a
Material Adverse Effect on the use of the Included Assets.
"Person" or "person" means an 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.
"Related Agreements" means the Disposal Agreement, the Noncompetition
Agreement, the Guaranty and the Joinder Agreement.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Securities Exchange Act of 1934.
"Seller Obligations" means all obligations of the Business other than
the Assumed Obligations, and includes, without limitation, all liabilities
arising under the laws and regulations for the protection of the environment
with respect to the Landfarms and all liabilities secured by any Liens to which
the Included Assets are subject at Closing, other than Permitted Liens of the
types described in one or more of clauses (c) and (e) through (k) of the
definition of Permitted Liens.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any governmental authority responsible for the imposition of any such
tax.
21. Assignment.
----------
Rights hereunder shall not be assignable and duties hereunder shall
not be delegable by either Sellers or Buyer without the prior written consent of
the other. Sellers hereby consent to Buyer's transferring and assigning its
rights and obligations hereunder to Newpark Disposal Service, L.L.C.
("Subsidiary"), a limited liability company and a wholly-owned subsidiary of
Buyer, provided that any such transfer or assignment shall not relieve Buyer of
its obligations hereunder. Nothing contained in or implied from this Agreement
is intended to confer any rights or remedies upon any person or entity, other
than the parties hereto and their successors in interest and permitted
assignees, unless expressly stated herein to the contrary.
22. Applicable Law; Jurisdiction.
----------------------------
The provisions of this Agreement and all rights and obligations
hereunder and under all documents, instruments and agreements executed under or
in connection with this Agreement shall be governed and construed in accordance
with the internal laws of the State of Texas applicable to contracts made and to
be wholly performed within said State.
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23. Remedies Not Exclusive.
----------------------
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 shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law, in equity, or otherwise. The
election of any one or more remedies by either party hereto shall not constitute
a waiver of the right to pursue other available remedies.
24. Attorneys' Fees.
---------------
In any litigation relating to this Agreement, including litigation
with respect to any instrument, document or agreement made under or in
connection with this Agreement, the prevailing party shall be entitled to
recover its costs and reasonable attorneys' fees.
25. Successors and Assigns.
----------------------
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
26. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
27. Headings.
--------
Captions and paragraph headings used herein are for convenience only
and are not a part of this Agreement and shall not be used in construing it.
28. Amendments; Waivers.
-------------------
No provision or term of this Agreement or any agreement contemplated
herein between the parties hereto may be supplemented, amended, modified, waived
or terminated except in a writing duly executed by the party to be charged. 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. Failure of a party 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 and conditions.
29. Entire Agreement.
----------------
All schedules, exhibits and financial statements provided for herein
are a part of this Agreement. This Agreement and the other agreements and
documents provided for in this
26
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Agreement comprise the entire agreement of the parties and supersede all earlier
understandings of the parties with respect to the subject matter hereof.
30. Publicity.
---------
Except as otherwise required by law, any press release, announcement
or other public communication with respect to this Agreement or the sale and
purchase of the Included Assets shall be subject to advance approval by both
parties; each party agrees that it will not unreasonably withhold its approval
of any such release, announcement or communication.
31. Expenses.
--------
Except as otherwise expressly set forth herein or in the other
agreements and documents provided for herein, Buyer, on the one hand, and
Sellers, on the other hand, shall each be responsible for its own expenses with
respect to this Agreement and the transactions contemplated hereby, including,
without limitation, any broker's, finder's or similar fee or commission based on
arrangements made by or on behalf of the responsible party.
32. Severability.
------------
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall continue in full force and effect unless the enforcement of this
Agreement on that basis would materially alter the rights and privileges of any
party hereto or materially alter the terms of the transaction contemplated
hereby.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
SANIFILL, INC. ("Parent")
By /s/ H. STEVEN WALTON
------------------------------------
CAMPBELL WELLS, LTD. (the "Company")
By SANIFILL GP HOLDING CO., INC., its
General Partner
By /s/ W. GREGORY ORR
-------------------------------------
NOW DISPOSAL HOLDING CO. ("Holdco")
By /s/ W. GREGORY ORR
------------------------------------
NEWPARK RESOURCES, INC. ("Buyer")
By /s/ JAMES D. COLE
------------------------------------
James D. Cole, President
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LIST OF EXHIBITS
Disclosure Memorandum
Exhibit 1.1.C - List of Transfer Stations and Transfer Station Docks,
indicating whether owned or leased and by which entity
Exhibit 1.1.D - List of Marine Facilities, indicating whether owned or
leased and by which entity
Exhibit 1.1.E - List of Fixed Assets
Exhibit 3.1 - Noncompetition Agreement
Exhibit 3.1A - Joinder Agreement
Exhibit 3.2 - Assumption and Guaranty Agreement
Exhibit 10.6 - Form of opinion of Sellers' counsel
Exhibit 11.6 - Form of opinion of Buyers' counsel
<PAGE>
Schedules have been omitted from this filing.
<PAGE>
EXHIBIT 3.1
-----------
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement"), dated as of
_______________, 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:
A. Ancillary to and concurrently with the execution and delivery of this
Agreement, Covenantor, Campbell Wells, Ltd., a Delaware limited partnership and
an indirect wholly-owned subsidiary of Parent ("Campbell Wells"), 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 Campbell Wells 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, Campbell Wells shall be deemed to be an Affiliate of Parent, and
Persons controlled by Campbell Wells and its controlled Affiliates, or jointly
controlled by Campbell Wells and its controlled Affiliates and Parent and its
Affiliates, shall be deemed to be Affiliates of
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Parent. Notwithstanding the foregoing, a Person who controls Parent or Campbell
Wells shall not be deemed to be an Affiliate of Parent or Campbell Wells solely
by reason of such control.
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 Campbell
Wells designated as Elm Grove, LA (DNR Permit # OWD 89-1), Bourg, LA (DNR Permit
#90-10 OWD), Bateman 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.
2
<PAGE>
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
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 200-mile
radius of Campbell Wells' Zapata, Texas, 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,
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<PAGE>
Campbell Wells and Disposeco; and (iv) Disposal and Collection of NOW at
Campbell Wells' 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.
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,
4
<PAGE>
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 Paragraph 10.
Covenantor: Sanifill, Inc.
2777 Allen Parkway, Suite 700
Houston, TX 77019-2155
Attention: H. Steven Walton, Esq., Vice President
Facsimile No.: (713) 942-6299
With a copy to:
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, TX 77002-4995
Attention: Louise Shearer, Esq.
Facsimile No.: (713) 229-1522
Buyer: Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: James D. Cole, President
Facsimile No.: (504) 833-9506
With a copy to:
Ervin, Cohen & Jessup
9401 Wilshire Boulevard
Beverly Hills, CA 90212
Attention: Bertram K. Massing, Esq.
Facsimile No.: (310) 859-2325
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.
5
<PAGE>
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.
6
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
SANIFILL, INC.
By:
---------------------------
Name:
Title:
NEWPARK RESOURCES, INC.
By:
---------------------------
Name:
Title:
7
<PAGE>
EXHIBIT 3.1A
------------
JOINDER AGREEMENT
This Joinder Agreement (the "Joinder"), dated as of _____________,
1996, is made and entered into by Campbell Wells, Ltd., a Delaware limited
partnership ("Campbell Wells"), with reference to the following facts:
A. Concurrently with the execution of this Joinder, Sanifill, Inc.,
a Delaware corporation ("Parent"), of which Campbell Wells is an indirect
wholly-owned subsidiary, has entered into a Noncompetition Agreement (the
"Agreement") with Newpark Resources, Inc., a Delaware corporation ("Newpark"),
under which Parent agreed, on behalf of itself and its Affiliates, not to
compete with Newpark and its Affiliates with respect to the Business in the
Territory. Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms as set forth in the Agreement, unless otherwise
provided herein.
B. Campbell Wells is an Affiliate of Parent that has heretofore
engaged in the Business. This Joinder sets forth Campbell Wells' agreement to
be bound by the obligations of Parent under the Agreement.
NOW, THEREFORE, for good consideration, the receipt and sufficiency of
which are hereby acknowledged, Campbell Wells hereby agrees as follows, for the
benefit of Newpark and its Affiliates.
1. Campbell Wells hereby agrees that, with the exceptions contained
in the Agreement, it and its Affiliates will perform all of the obligations
imposed on Parent with respect to Campbell Wells and its Affiliates under the
Agreement, with the same force and effect as if Campbell Wells were a party
thereto having directly undertaken such obligations.
2. This Joinder and the Agreement shall be binding on Campbell Wells
even if, at some future date, it ceases to be an Affiliate of Parent.
<PAGE>
IN WITNESS WHEREOF, Campbell Wells has executed and delivered this
Joinder as of the first date written above.
CAMPBELL WELLS, LTD.
By: SANIFILL GP HOLDING CO., INC.,
its General Partner
By:
------------------------------
ACCEPTED:
NEWPARK RESOURCES, INC.
By:
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT 3.2
-----------
ASSUMPTION AND GUARANTEE AGREEMENT
This Assumption and Guarantee Agreement (the "Agreement"), dated as of
_____________, 1996, is entered into by and among Newpark Resources, Inc., a
Delaware corporation ("Newpark"), Sanifill, Inc., a Delaware corporation
("Sanifill"), and Campbell Wells, Ltd., a Delaware limited partnership, the
equity interests of which are owned directly or indirectly by Sanifill
("Campbell Wells" and, collectively with Sanifill, the "Sellers").
WHEREAS, Newpark and Campbell Wells are each engaged in the collection
and disposal of nonhazardous oilfield waste; and
WHEREAS, the Sellers, NOW Disposal Holding Co. ("Holdco") and Newpark
have entered into that certain Asset Purchase and Lease Agreement (the "Purchase
Agreement") pursuant to which Newpark is, simultaneously with the execution of
this Agreement, (i) purchasing all of the equity interests (the "Equity
Interests") in NOW Disposal Operating Co., a Delaware corporation and a wholly-
owned subsidiary of Holdco ("Disposeco"), and (ii) purchasing or leasing from
Campbell Wells the "Included Assets" (as defined in the Purchase Agreement) used
in the "Acquired Business" (as defined in the Purchase Agreement); and
WHEREAS, simultaneously with the execution of this Agreement, the
Sellers and Newpark are also entering into that certain Noncompetition Agreement
pursuant to which, with exceptions stated therein, the Sellers are agreeing not
to engage in the collection or disposal of nonhazardous oilfield waste generated
in the States of Louisiana, Texas, Mississippi and Alabama and in the Gulf of
Mexico; and
WHEREAS, after giving effect to the transactions described above,
Campbell Wells will continue to operate and own certain landfarms and a landfill
at which nonhazardous oilfield wastes are disposed of; and
WHEREAS, the Sellers and Disposeco have previously entered into that
certain NOW Disposal Agreement (the "Disposal Agreement") pursuant to which
Disposeco has agreed to deliver and Campbell Wells has agreed to accept certain
quantities of nonhazardous oilfield wastes at its landfarms in Louisiana each
year for a period of 25 years; and
WHEREAS, in connection with the transactions referenced above,
including without limitation the transfer of the Equity Interests pursuant to
the Purchase Agreement, Newpark has agreed to guarantee the obligations of
Disposeco under the Disposal Agreement and to take, or refrain from taking,
certain other actions in connection with the Disposal Agreement; and
WHEREAS, the parties desire to enter into this Agreement to more fully
set forth the terms and conditions of their understanding.
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
Unless otherwise specifically defined herein, all capitalized terms
used herein shall have the respective meanings ascribed to such terms in the
Disposal Agreement.
ARTICLE II
PERFORMANCE OF DISPOSAL AGREEMENT
Newpark hereby covenants and agrees that it shall cause Disposeco to
fully perform all of its obligations under the Disposal Agreement in a timely
manner. Newpark further covenants and agrees that it shall take all action,
including without limitation supplying information necessary for the
determination of quantities of NOW to be delivered pursuant to the Disposal
Agreement, or shall refrain from taking any action, as is necessary or
appropriate to permit Disposeco to fully perform all of its obligations under
the Disposal Agreement in a timely manner.
ARTICLE III
GUARANTEE OF DISPOSAL AGREEMENT
3.1 Unconditional Guarantee. Newpark hereby unconditionally and
irrevocably guarantees the performance in full of all obligations of Disposeco
under the Disposal Agreement (such obligations of Disposeco being collectively
referred to herein as the "Guaranteed Obligation"), with the same force and
effect and to the same extent as if Newpark were a party to the Disposal
Agreement having the same rights and obligations thereunder as Disposeco.
3.2 No Set-Off; Guaranty of Performance or Payment Upon Demand. Newpark
shall perform any obligations or pay any amounts due in respect of the
Guaranteed Obligation promptly upon demand by the Sellers, without any set-off,
defense or deduction for any claims or counterclaims of any kind, except for any
such set-offs, defenses, deductions that Newpark could assert if it were a party
to the Disposal Agreement having the same rights and obligations thereunder as
Disposeco.
3.3 Waiver of Diligence, Etc. Newpark hereby waives diligence,
presentment, demand, protest and notice of any kind with respect to this
Agreement, as well as any requirement that Sellers exhaust any rights or take
any action against Disposeco.
3.4 Waiver of Suretyship Defenses. To the extent permitted by applicable
law, Newpark hereby waives any and all legal and equitable defenses that arise
by reason of Newpark's status as a surety for Disposeco, which defenses would
not be available to Newpark if it were a party to the Disposal Agreement having
the same rights and obligations thereunder as Disposeco.
2
<PAGE>
ARTICLE IV
COVENANTS, REPRESENTATIONS AND WARRANTIES OF NEWPARK
Newpark hereby covenants, represents and warrants to Sellers as of the
date of this Agreement that:
4.1 Organization and Qualification. Newpark (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is proposed to be conducted and (c) is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business conducted or proposed to
be conducted by it makes such qualification or license necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed or in good
standing would not have, either individually or in the aggregate, a material
adverse effect on the transactions contemplated hereby.
4.2 Authorization and Validity of Agreement. Newpark has all requisite
power and authority to enter into this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby. The execution,
delivery and performance by Newpark of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of Newpark. No action or approval of the equity owners of
Newpark is necessary to authorize Newpark's execution or delivery of, or the
performance of its obligations under, this Agreement. This Agreement has been
duly executed and delivered by Newpark and is a valid and binding obligation of
Newpark, enforceable in accordance with its terms.
4.3 No Conflict. The execution and delivery by Newpark of this Agreement
do not, and exercise by Newpark of its rights hereunder and the consummation of
the transactions contemplated hereby will not (a) require any consent, approval,
order or authorization of or other action by any governmental entity on the part
of or with respect to Newpark; (b) require on the part of Newpark any consent by
or approval of or notice to any other Person; or (c) result in a violation of
any law, rule, regulation, order, judgment or decree applicable to Newpark,
except in any case covered by (a), (b) or (c) where failure to obtain such
consent or such violation would not, either individually or in the aggregate,
have a material adverse effect on the transactions contemplated hereby.
4.4 Transfer of Affiliates of Newpark. The parties recognize and agree
that due to the method of calculating Annual Volume as set forth in Section
[2.2] of the Disposal Agreement, the purpose and intent of the Disposal
Agreement and of this Agreement would be frustrated in the event Newpark sold or
otherwise transferred (an "Affiliate Transfer") its interest in, or
substantially all of the assets of, any of its Affiliates which are engaged in
processing or disposal of NOW in the Covered Region where such transfer resulted
in such Persons no longer being, or such assets no longer being owned by,
Affiliates of Newpark under the terms of the Disposal Agreement. Newpark agrees
that it shall notify Campbell Wells of any such proposed Affiliate Transfer
prior to the consummation of such transaction and that no such Affiliate
Transfer shall take place unless the
3
<PAGE>
transferee agrees (a) to report to Campbell Wells all quantities of NOW
received by such former Affiliate of Newpark in the Covered Region during the
remaining term of the Disposal Agreement and (b) that any subsequent retransfer
of such interests or assets by such transferee shall be subject to this Article
IV as if such transferee were Newpark. Newpark further agrees that it shall not
enter into any Affiliate Transfer unless the agreement with the transferee
expressly names Campbell Wells as a third party beneficiary of the obligation of
the transferee to make such reports and to subject subsequent retransfers to
this Article IV.
ARTICLE V
DISPUTE RESOLUTION
All disputes arising under this Agreement shall be resolved in
accordance with the arbitration procedures set forth in Article X of the
Disposal Agreement. In the event a set of facts gives rise to related disputes
under this Agreement and the Disposal Agreement, such disputes shall be
consolidated into a single arbitration proceeding, the result of which shall be
binding on all parties under both Agreements, unless the arbitrator or
arbitrators determine that it would manifestly unfair to honor this provision
and determine that separate arbitration procedures are required.
ARTICLE VI
MISCELLANEOUS
6.1 Status of the Parties. Each party hereto is and shall perform this
Agreement as an independent contractor, and as such, shall have and maintain
complete control over all of its employees, agents, and operations. Except as
expressly otherwise provided in this Agreement, neither party nor anyone
employed by it shall be, represent, act, purport to act or be deemed to be the
agent, representative, employee or servant of the other party.
6.2 No Set-Off Rights. The parties hereby agree that neither party shall
have any right to set-off or apply against any sums due under this Agreement any
sums due or amounts otherwise owing pursuant to any other provision of this
Agreement or any other agreement or arrangement between the parties.
6.3 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Campbell Wells and Newpark may assign their rights, obligations and
duties under this Agreement with the written consent of the other parties to the
Agreement, which consent shall not be unreasonably withheld; provided that the
assigning party shall remain primarily liable for all obligations and duties
arising hereunder.
6.4 Notices. Notices and other communications provided for herein shall
be in writing and shall be deemed to have been validly given (a) 3 days after
deposit in the United States mails, registered or certified mail with proper
postage prepaid and return receipt requested, (b) upon
4
<PAGE>
transmission thereof and receipt of the appropriate confirmation if sent via
telecopier or telefax, (c) the business day after the same shall have been
deposited with a reputable overnight courier, shipping prepaid and (d) if
delivered in person, upon delivery, in each case addressed as follows:
If to Newpark, to: with a copy to:
James D. Cole Bertram K. Massing
President Ervin, Cohen & Jessup
Newpark Resources, Inc. 9401 Wilshire Boulevard
3850 N. Causeway, Ste. 1770 Ninth Floor
Metairie, Louisiana 70002 Beverly Hills, California 90212-2974
ph: 504-838-8222 ph: 310-273-6333
fax: 504-833-9506 fax: 310-859-2325
If to Campbell Wells, to: with a copy to:
W. Gregory Orr Louise A. Shearer
President Baker & Botts. L.L.P.
Campbell Wells, Ltd. One Shell Plaza
2014 West Pinhook Road, Ste. 900 910 Louisiana
Lafayette, Louisiana 70508 Houston, Texas 77002-4995
ph: 318-266-7976 ph: 713-229-1286
fax: 318-266-7922 fax: 713-229-1522
If to Sanifill, to: with a copy to:
H. Steven Walton Louise A. Shearer
Secretary Baker & Botts. L.L.P.
Sanifill, Inc. One Shell Plaza
2777 Allen Parkway, Ste. 700 910 Louisiana
Houston, Texas 77019-2155 Houston, Texas 77002-4995
ph: 713-942-6200 ph: 713-229-1286
fax: 713-942-6299 fax: 713-229-1522
or such other address as any party shall specify by written notice so given.
6.5 Non-Waiver. The failure of any party to enforce its rights under any
provision of this Agreement shall not be construed to be a waiver of such
provision. No waiver of any breach of this Agreement shall be held to be a
waiver of any other breach.
6.6 Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes any and all other communications, representations, proposals,
understandings or agreements, either written or oral,
5
<PAGE>
between the parties hereto with respect to such subject matter. This Agreement
may not be modified or amended, in whole or in part, except by a writing signed
by both parties hereto.
6.7 Severability. If any provision of this Agreement is declared invalid
or unenforceable, then such portion shall be deemed to be severable from this
Agreement and shall not affect the remainder hereof.
6.8 Headings. The Article and Section headings contained herein are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.
6.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
6
<PAGE>
EXECUTED as of the day and year first above written.
NEWPARK RESOURCES, INC.
By:________________________
Name:______________________
Title:_____________________
SANIFILL, INC.
By:_________________________
Name:_______________________
Title:______________________
CAMPBELL WELLS, LTD.
By:_________________________
Name:_______________________
Title:______________________
7
<PAGE>
EXHIBIT 10.6
------------
[Letterhead of H. Steven Walton]
July __, 1996
Newpark Resources, Inc.
3850 N. Causeway, #1770
Metairie, Louisiana 70002
Attention: James D. Cole, President
Re: Asset Purchase and Lease Agreement and Related Agreements
---------------------------------------------------------
Ladies and Gentlemen:
I am Vice President - Governmental Affairs and General Counsel of Sanifill,
Inc., a Delaware corporation ("Parent"), and have represented Parent and its
wholly-owned subsidiaries, Campbell Wells, Ltd., a Delaware limited partnership
(the "Company"), and NOW Disposal Holding Co., a Delaware corporation ("Holdco")
in connection with the Asset Purchase and Lease Agreement dated as of June 5,
1996 (the "Purchase Agreement"), by and among Parent, the Company and Holdco
(collectively "Sellers"), and Newpark Resources, Inc., a Delaware corporation
("Buyer," which term also includes "Subsidiary"), pursuant to which Buyer is
purchasing the Equity Interests from Holdco and is purchasing or leasing from
the Company the Included Assets related to the Acquired Business. Unless
otherwise defined herein, terms used herein that are defined in the Purchase
Agreement shall have the same meanings herein as in the Purchase Agreement.
This opinion is being furnished pursuant to Paragraph 10.6 of the Purchase
Agreement.
I have examined originals or copies, certified or otherwise identified to my
satisfaction, of the Purchase Agreement, each of the Related Agreements and such
records, other agreements, certificates of public officials, and other
instruments and documents and have made such other investigations as I have
deemed necessary in connection with the opinions hereinafter set forth. In such
examination, I have assumed the genuineness of all signatures, the authenticity
of all documents submitted to me as originals and the conformity with originals
of all documents submitted to me as copies thereof.
Based on the foregoing, and subject to the qualifications, limitations,
assumptions and exceptions set forth herein, I am of the opinion that:
1. Parent is a corporation duly organized and in good
standing under the laws of the State of Delaware. It has corporate power and
authority to enter into the Purchase Agreement and the Related Agreements to
which it is a party and the transactions contemplated
<PAGE>
Newpark Resources, Inc.
July __, 1996
Page 2
thereby. Parent owns, directly or indirectly, the Equity Interests and all of
the outstanding equity interests in the Company.
2. The Company is a limited partnership duly formed and
validly existing under the laws of the State of Delaware and has partnership
power and authority to conduct its business as it is now being conducted. The
Company is duly registered to transact business in each jurisdiction where,
according to the Disclosure Memorandum, it is stated to be so registered, and
such registrations are in full force and effect.
3. Holdco is a corporation duly organized and in good
standing under the laws of the State of Delaware and has corporate power to
conduct its business as it is now being conducted. NOW Disposal Operating Co.,
a Delaware corporation ("Disposeco") is a corporation duly organized and in good
standing under the laws of the State of Delaware and has corporate power to
conduct its business as it is now being conducted. Neither Holdco nor Disposeco
is or is required to be qualified to transact business as a foreign corporation
in any jurisdiction.
4. The execution of the Purchase Agreement and the Related
Agreements to which Parent is a party, the delivery of the Purchase Agreement
and such Related Agreements to Buyer and Parent's performance of such agreements
have been authorized by the Board of Directors of Parent, and no other corporate
action is necessary to authorize such acts. The Purchase Agreement and the
Related Agreements to which Parent is a party (other than the Noncompetition
Agreement, as to which I express no opinion) are valid and binding upon Parent
and enforceable against Parent in accordance with their terms, subject to the
Bankruptcy Exception. The execution, delivery and performance by Parent of the
Purchase Agreement and the Related Agreements to which Parent is a party are not
contrary to the Certificate of Incorporation or By-Laws of Parent and, to my
knowledge, will not result in a violation or breach of any term or provision or
constitute a default or give any party a right to accelerate the due date of any
indebtedness under any indenture, mortgage, deed of trust or other material
contract or agreement to which Sellers, or any of them, are parties or by which
Sellers, or any of them, are bound, which relate to or affect the Acquired
Business, the Equity Interests or the Included Assets.
5. The Company has the requisite power under its agreement
and certificate of limited partnership and the Delaware Revised Uniform Limited
Partnership Act to enter into the Purchase Agreement and each of the Related
Agreements to which it is a party and to perform its obligations under each such
agreement. The execution, delivery and performance
<PAGE>
Newpark Resources, Inc.
July __, 1996
Page 3
of the Purchase Agreement and such Related Agreements and the consummation of
the transactions contemplated thereby have been duly authorized by all necessary
partnership action on the part of the Company, and no other partnership
proceedings on the part of the Company are necessary to authorize the Purchase
Agreement and such Related Agreements and the transactions contemplated thereby.
The Purchase Agreement and the Related Agreements to which the Company is a
party (other than the Joinder Agreement, as to which I express no opinion) are
valid and binding upon the Company and enforceable against the Company in
accordance with their terms, subject to the Bankruptcy Exception. The execution,
delivery and performance of the Purchase Agreement and the Related Agreements to
which the Company is a party are not contrary to the partnership agreement of
the Company and, to my knowledge, will not result in a violation or breach of
any term or provision or constitute a default or give any party a right to
accelerate the due date of any indebtedness under any indenture, mortgage, deed
of trust or other material contract or agreement to which Sellers, or any of
them, are parties or by which Sellers, or any of them, are bound, which relate
to or affect the Acquired Business, the Equity Interests or the Included Assets.
6. The execution, delivery and performance of the Purchase
Agreement by Holdco have been authorized by the Board of Directors of Holdco,
and no other corporate action is necessary to authorize such acts. The Purchase
Agreement is valid and binding upon Holdco and enforceable against Holdco in
accordance with its terms, subject to the Bankruptcy Exception. The execution,
delivery and performance by Holdco of the Purchase Agreement are not contrary to
the Certificate of Incorporation or By-Laws of Holdco and, to my knowledge, will
not result in a violation or breach of any term or provision or constitute a
default or give any party a right to accelerate the due date of any indebtedness
under any indenture, mortgage, deed of trust or other material contract or
agreement to which Sellers, or any of them, are parties or by which Sellers, or
any of them, are bound, which relate to or affect the Acquired Business, the
Equity Interests or the Included Assets.
7. Holdco is the sole stockholder of Disposeco and has good
title to the Equity Interests, free and clear of all Liens. The Equity
Interests constitute 100% of the issued and outstanding capital stock of
Disposeco, and Holdco has corporate power and authority to transfer the Equity
Interests to Buyer.
8. Except as otherwise provided in the Purchase Agreement,
no authorizations, approvals or consents of any governmental department,
commission, bureau, agency or other public body or authority are required for
consummation of the transactions
<PAGE>
Newpark Resources, Inc.
July __, 1996
Page 4
contemplated by the Purchase Agreement, except where failure to obtain any such
authorizations, approvals or consents would not have a Material Adverse Effect.
The opinions set forth above are subject to the following qualifications and
limitations:
A. Insofar as the opinion expressed in Paragraph 8 of this
opinion depends on Louisiana law, I have relied exclusively on the opinion of
Perret, Doise, Daigle, Longman, Russo & Zaumbrecher, a Professional Law
Corporation, a signed original of which has been furnished to you, and my
opinion in Paragraph 8 incorporates the applicable limits and qualifications set
forth in such opinion.
B. Except as provided in Paragraph A above, the opinions
expressed herein are limited in all respects to the laws of the State of Texas
and the corporate and limited partnership law of the State of Delaware.
C. The opinions expressed herein are given as of the date
hereof, and I expressly disclaim any undertaking to advise you of any events
occurring subsequent to the date hereof that might affect any of the matters
covered by any of such opinions.
This opinion is delivered to you solely in connection with and for purposes
of the transactions contemplated by the Purchase Agreement and the Related
Agreements and is not to be relied upon by any other Person, quoted, in whole or
in part, or otherwise referred to (except in a list of closing documents), nor
is it to be provided to any other Person without my prior written consent.
Very truly yours,
<PAGE>
EXHIBIT 11.6
------------
[Letterhead of Ervin, Cohen & Jessup]
July __, 1996
Sanifill, Inc.
2777 Allen Parkway, Suite 700
Houston, Texas 77019-2155
Campbell Wells, Ltd.
2014 West Pinhook Road
Lafayette, Louisiana
NOW Disposal Holding Co.
2777 Allen Parkway, Suite 700
Houston, Texas 77019-2155
Re: Asset Purchase and Lease Agreement and Related Agreements
---------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Newpark Resources, Inc., a Delaware corporation
("Buyer"), in connection with the negotiation, execution and performance of an
Asset Purchase and Lease Agreement dated as of June 5, 1996 (the "Purchase
Agreement"), by and among Sanifill, Inc., a Delaware corporation ("Parent"),
Campbell Wells, Ltd., a Delaware limited partnership (the "Company"), and NOW
Disposal Holding Co. ("Holdco", and, together with Parent and the Company, the
"Sellers"), and Buyer pursuant to which Buyer is purchasing the Equity Interests
from Holdco and is purchasing or leasing from the Company the Included Assets
related to the Acquired Business. Unless otherwise defined herein, terms used
herein that are defined in the Purchase Agreement shall have the same meanings
herein as in the Purchase Agreement. This opinion is being furnished pursuant
to Paragraph 11.6 of the Purchase Agreement.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of the Purchase Agreement, each of the Related Agreements and
such records, other agreements, certificates of public officials, and other
instruments and documents and have made such other investigations as we have
deemed necessary in connection with the opinions hereinafter set forth. In such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals and the conformity with originals
of all documents submitted to us as copies thereof.
<PAGE>
Sanifill, Inc.
Campbell Wells, Ltd.
NOW Disposal Holding Co.
July __, 1996
Page 2
Based on the foregoing, and subject to the qualifications, limitations,
assumptions and exceptions set forth herein, we are of the opinion that:
1. Buyer is a corporation duly organized and in good
standing under the laws of the State of Delaware. It has corporate power and
authority to enter into the Purchase Agreement and the Related Agreements to
which it is a party and the transactions contemplated thereby.
2. The execution of the Purchase Agreement and the Related
Agreements to which Buyer is a party, the delivery of the Purchase Agreement and
such Related Agreements to the Sellers and Buyer's performance of such
agreements have been authorized by the Board of Directors of Buyer, and no other
corporate action is necessary to authorize such acts. The execution, delivery
and performance by Buyer of the Purchase Agreement and the Related Agreements to
which Buyer is a party are not contrary to the Certificate of Incorporation or
By-Laws of Parent and, to our knowledge, will not result in a violation or
breach of any term or provision or constitute a default or give any party a
right to accelerate the due date of any indebtedness under any indenture,
mortgage, deed of trust or other material contract or agreement to which Buyer
is a party.
3. The Purchase Agreement and the Related Agreements to
which Buyer is a party (other than the Noncompetition Agreement and the Joinder
Agreement, as to which we express no opinion) are valid and binding upon Buyer
and enforceable against Buyer in accordance with their terms, subject to the
Bankruptcy Exception.
The opinions set forth above are subject to the following qualifications and
limitations:
A. Insofar as the opinion expressed in Paragraph 3 of this
opinion depends on Texas law, we have relied exclusively on the opinion of
[Newpark's Texas counsel], a signed original of which has been furnished to you,
and, insofar as such opinion depends on Louisiana law, we have relied
exclusively on the opinion of Nesser, King and LeBlanc, a signed original of
which has been furnished to you, and our opinion in Paragraph 3 incorporates the
applicable limits and qualifications set forth in those opinions.
B. Except as provided in Paragraph A above, the opinions
expressed herein are limited in all respects to the corporate law of the State
of Delaware.
<PAGE>
Sanifill, Inc.
Campbell Wells, Ltd.
NOW Disposal Holding Co.
July __, 1996
Page 3
C. The opinions expressed herein are given as of the date hereof, and
we expressly disclaim any undertaking to advise you of any events occurring
subsequent to the date hereof that might affect any of the matters covered by
any of such opinions.
D. Our use of the qualification "to our knowledge" with respect
to any matter is intended to indicate that we have not conducted an independent
investigation or otherwise verified the accuracy of such matter and that during
the course of our representation of Buyer no information that would give us
actual knowledge of the inaccuracy of such matter has come to our attention. We
have not conducted an independent investigation or otherwise verified the
accuracy of the statements and representations made to us, but have relied
solely upon certificates given to us, statements made to us, inquiries of
attorneys in our firm who have performed services for Buyer and information
furnished to us by Buyer. No inference as to our knowledge of the existence or
absence of any facts should be drawn from the fact of our representation of
Buyer.
This opinion is delivered to you solely in connection with and for purposes
of the transactions contemplated by the Purchase Agreement and the Related
Agreements and is not to be relied upon by any other Person, quoted, in whole or
in part, or otherwise referred to (except in a list of closing documents), nor
is it to be provided to any other Person without our prior written consent.
Very truly yours,
<PAGE>
EXHIBIT 99c
NOW DISPOSAL AGREEMENT
This NOW Disposal Agreement (the "Agreement"), dated as of June 4,
1996, but effective as of the Effective Date (as defined below), is entered into
by and among Sanifill, Inc., a Delaware corporation ("Sanifill"), NOW Disposal
Operating Co., a Delaware corporation and an indirect wholly-owned subsidiary of
Sanifill ("Disposeco"), and Campbell Wells, Ltd., a Delaware limited
partnership, the equity interests of which are owned directly or indirectly by
Sanifill ("Campbell Wells").
WHEREAS, Campbell Wells is engaged, and Disposeco proposes to engage,
in the collection and disposal of nonhazardous oilfield waste; and
WHEREAS, the parties desire that Disposeco agree to deliver, and
Campbell Wells agree to accept at its Louisiana landfarms, certain quantities of
nonhazardous oilfield waste each year for the next 25 years; and
WHEREAS, the parties further desire to set forth the basis on which
the quantities of waste to be delivered by Disposeco and accepted by Campbell
Wells shall be calculated, the price to be paid by Disposeco to Campbell Wells
for such disposal and related activities, the procedures to be followed by the
parties in determining the locations to which waste is to be taken and the
procedures to be followed in effecting the transfer and receipt of such waste at
Campbell Wells' facilities;
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings (unless indicated otherwise, all Article and Section
references are to Articles and Sections in this Agreement):
Actual Volume: For any Contract Year, the aggregate amount of NOW
actually delivered by or on behalf of Disposeco and accepted for disposal by
Campbell Wells in accordance with the provisions of this Agreement.
Adjustment Dates: June 30, 1998 and each subsequent December 31 and
June 30 during the term of this Agreement.
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, the term "control"
(including the terms "controlling," "controlled by" and "under common control
with") of a Person means the possession, direct or indirect, of the power to (i)
vote 50% or
<PAGE>
more of the voting interests in such Person or (ii) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
Annual Volume: For each Contract Year, the annual volume of NOW,
before consideration of Prior Years Adjustments, required to be delivered by
Disposeco to Campbell Wells for disposal at the Landfarms, which volume shall be
determined in accordance with Section 2.2.1.
Collection. The collection, transfer or transportation of NOW.
Contract Year: Twelve-month period commencing each July 1 during the
term of this Agreement; provided, however, that the first Contract Year shall be
the period commencing on the Effective Date and ending on June 30, 1997.
Covered Region: The States of Louisiana, Texas, Mississippi and
Alabama and the Gulf of Mexico.
Current Test Period: For any Adjustment Date, the six-month period
commencing six months prior to such Adjustment Date and concluding on such
Adjustment Date.
Disposal: The treatment or disposal of NOW.
Effective Date: The date Campbell Wells gives written notice to
Disposeco of the effectiveness of the Agreement.
Excluded NOW: NOW generated and collected on land and delivered to
the Landfarms from the site where it was generated entirely by on-land
transportation.
Force Majeure: Substantial changes to laws, regulations or taxes
directly and materially affecting the rights, obligations, consideration or
ability to perform of the parties under this Agreement, including without
limitation, regulatory changes, the loss of environmental or other permits
directly and materially affecting the rights, obligations, consideration or the
ability to perform of the parties under this Agreement, acts of God, landslides,
lightning, forest fires, storms, hurricanes, floods, freezing, earthquakes,
civil disturbances, strikes, lockouts, other industrial disturbances, acts of
the public enemy, wars, blockades, public riots, breakage, explosions, accidents
to machinery, pipelines or materials or other cause, whether of the kind
enumerated or otherwise, which is not reasonably within the control of the party
claiming the existence of a Force Majeure.
Landfarm Average Volume: For any Landfarm during each Contract Year,
the product of (a) the Annual Volume for such Contract Year less the Prior Years
Adjustment, if any, for such Contract Year multiplied by (b) the Median Range
for such Landfarm as set forth in Section 2.4.
Landfarms: The NOW disposal facilities owned and operated by Campbell
Wells designated as Elm Grove, LA (DNR Permit #OWD 89-1); Bourg, LA (DNR Permit
#90-10 OWD); Bateman Island, LA (DNR Permit #91-10 OWD); and Mermentau, LA (DNR
Permit #SWD 83-6).
2
<PAGE>
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. Without limiting the generality of
the foregoing, for waste disposed of in Louisiana, the term NOW shall include
all wastes containing less than 30 picocuries per gram of Radium 226 or 228
classified as NOW under Louisiana Statewide Order 29-B as currently in effect.
Preceding Test Period: For any Adjustment Date, the six month period
commencing 12 months prior to such Adjustment Date and concluding six months
prior to such Adjustment Date.
Prevailing Rate: At any given time, the price Disposeco shall be
obligated to pay per barrel of NOW delivered to Campbell Wells and disposed at a
Landfarm in accordance with this Agreement as determined in accordance with
Section 3.1.
Person: Any individual, corporation, association, partnership, joint
venture, trust, estate or other entity or organization or government or any
agency or political subdivision thereof.
Prior Years Adjustment: Optional adjustments to Annual Volume
pursuant to Section 2.1 for any Contract Year as determined in accordance with
Section 2.3. The Prior Years Adjustment may be a negative number.
Quarter: Calendar quarters commencing each January 1, April 1, July 1
and October 1; provided, however, that the first Quarter shall commence on the
Effective Date and end on September 30, 1996.
Zapata Facility: A NOW disposal facility owned and operated by
Campbell Wells located near Zapata, Texas.
ARTICLE II
DISPOSAL
2.1 Delivery and Acceptance. In accordance with the terms and provisions
of this Agreement, during each Contract Year, Disposeco shall deliver to
Campbell Wells for disposal at the Landfarms a minimum amount of NOW equal to
(i) the Annual Volume of NOW for such Contract Year (ii) minus the Prior Years
Adjustment, if any, for such Contract Year as set forth in Section 2.3 (iii)
minus 92,500 barrels of NOW. Subject to the terms and conditions and the
limitations set forth in this Agreement, Campbell Wells shall accept for
disposal at the Landfarms all NOW delivered by or on behalf of Disposeco;
provided that in no event shall Campbell Wells be obligated to accept from or on
behalf of Disposeco for disposal at the Landfarms more than 2.22 million barrels
of NOW in any Contract Year. In the event Campbell Wells elects not to accept
NOW delivered by Disposeco in excess of 2.22 million barrels during any Contract
Year, Campbell Wells shall reject such waste in accordance with Section 5.6 of
this Agreement.
3
<PAGE>
2.2 Annual Volume.
2.2.1 Annual Volume. The Annual Volume of NOW during any Contract
Year shall be equal to the Preliminary Annual Volume (as defined in Section
2.2.2 below) (a) minus the Volume Adjustment (as defined in Section 2.2.3
below), if any, exercised by Disposeco in accordance with Section 2.2.4 during
such Contract Year, (b) minus the amount of NOW, if any, rejected by Campbell
Wells pursuant to Section 7.5(ii).
2.2.2 Preliminary Annual Volume. For each Contract Year, the
Preliminary Annual Volume of NOW shall be the lesser of (i) 33.33% of the total
barrels of NOW that Newpark Resources, Inc., a Delaware corporation ("Newpark"),
and its Affiliates accept, acquire, take possession of, procure, direct, control
or otherwise receive for processing and disposal during the Contract Year in the
Covered Region (with the exception of any NOW produced by third-party generators
which Newpark or its Affiliates treat and dispose of on the site at which the
NOW was generated) and (ii) 1,850,000 barrels of NOW, in each case excluding
injectable saltwater.
2.2.3 Volume Adjustment. Within 25 days after the end of each
Quarter, Campbell Wells shall determine the aggregate revenues actually received
by Sanifill, Campbell Wells and their Affiliates during such preceding Quarter
from the Collection or Disposal of NOW and other oilfield wastes, the
remediation and closure of oilfield waste pits, including related loading and
hauling, or onshore cleaning operations in the Covered Region, with the
exception of revenues attributable to extraordinary levies as described in
Section 3.5 and revenues from (i) the Disposal of Excluded NOW, (ii) the
Disposal at the Zapata Facility of NOW Collected within a 200-mile radius of the
Zapata Facility, including charges for such Collection or (iii) the Disposal of
NOW pursuant to this Agreement (the "Sanifill NOW Revenues"). The Volume
Adjustment for each Quarter shall be calculated by dividing the aggregate
Sanifill NOW Revenues for such Quarter by the Prevailing Rate for such Quarter.
Campbell Wells shall notify Disposeco (the "Volume Adjustment Notice") of the
Volume Adjustment within 25 days after the end of each Quarter. Notwithstanding
the foregoing, any Person who acquires any of the Landfarms, directly or
indirectly, shall become subject to this Section 2.2.3 as if it were Campbell
Wells; provided, however, that no revenues from operations of such Person or its
Affiliates that existed at the time of such acquisition shall be included in
calculations under this Section 2.2.3.
2.2.4 Exercise of the Volume Adjustment. Disposeco shall have the
option to decrease the Annual Volume for the current Contract Year (or, if
applicable, the subsequent Contract Year) by all or part of the Volume
Adjustment for any Quarter by notifying Campbell Wells in writing of its
intention to do so before the expiration of the fourth complete Quarter after
the end of the Quarter in which the Volume Adjustment Notice for such Volume
Adjustment is received. Volume Adjustments shall be exercised in the order in
which they are accrued. Any portion of the Volume Adjustment for any Quarter as
to which Disposeco fails to timely exercise such option shall expire.
2.3. Carryforward Account; Prior Years Adjustment.
2.3.1 Determination of Carryforward Amount. Within 30 days after the
end of each Contract Year during the term of this Agreement, Disposeco shall
determine and notify Campbell
4
<PAGE>
Wells of the amount equal to the difference between (i) the Actual Volume for
such Contract Year and (ii) the Annual Volume for such Contract Year. For any
Contract Year in which the Annual Volume is more than the Actual Volume, the
difference shall be referred to as a "Negative Carryforward." For any Contract
Year in which the Actual Volume is more than the Annual Volume, the difference
shall be referred to as a "Positive Carryforward."
2.3.2 Carryforward Account; Initial Balance. The parties shall
maintain a Carryforward Account. The initial balance of the Carryforward Account
shall be zero. The balance of the Carryforward Account shall be increased by the
amount of any Positive Carryforward; provided that the balance of the
Carryforward Account may not exceed 185,000 barrels. Any portion of a Positive
Carryforward which would cause the current balance of the Carryforward Account
to exceed 185,000 barrels shall be disregarded. The balance of the Carryforward
Amount shall be reduced by the amount of any Negative Carryforward. The balance
of the Carryforward Account may be negative.
2.3.3 Reduction in Balance from Unused Positive Carryforwards. In the
event that a Positive Carryforward accruing in any Contract Year is not fully
offset against Negative Carryforwards accruing prior to such Positive
Carryforward or within the two Contract Years immediately following the Contract
Year in which such Positive Carryforward accrued, the portion of such Positive
Carryforward not so offset shall be deducted from the positive balance of the
Carryforward Account as of the end of the second Contract Year after the
Contract Year in which such Positive Carryforward accrued. No such reduction
shall cause the balance in the Carryforward Account to be negative.
2.3.4 Deliveries following a Negative Carryforward Account Balance.
Following any Contract Year in which a Negative Carryforward (the "Triggering
Carryforward") accrues causing the balance of the Carryforward Account to become
negative in any Contract Year, Disposeco shall be obligated to deliver to
Campbell Wells, over the two Contract Years immediately following the Contract
Year in which such Negative Carryforward accrued, amounts of NOW in excess of
the Annual Volumes for such Contract Years equal to the negative Carryforward
Account balance. In the event Disposeco fails to deliver such amounts over the
next two Contract Years, at the end of the second Contract Year, Campbell Wells
will invoice Disposeco, and Disposeco shall be obligated to pay, an amount equal
to the Prevailing Rate at the time multiplied by the quantity of the remaining
portion of the Triggering Carryforward. Upon receipt of payment, the
Carryforward Account balance shall be adjusted to reflect such amounts as if
they had been actually delivered during the preceding Contract Year.
2.3.5 Prior Years Adjustment. In any Contract Year with a positive
Carryforward Account balance, the amount of the positive Carryforward Account
balance shall be applied as a Prior Years Adjustment pursuant to Section 2.1.
Such amount so applied shall be subtracted from the Annual Volume for such
Contract Year in accordance with Section 2.1.
2.4 Allocation of NOW among Landfarms. Unless otherwise provided in this
Agreement or agreed by the parties, on a Quarterly basis, deliveries of NOW by
Disposeco to all Landfarms shall be allocated to the individual Landfarms such
that the amount of NOW delivered to an individual Landfarm as a percentage of
NOW delivered to all Landfarms shall fall within the
5
<PAGE>
Permissible Range for such Landfarm as set forth below. Upon request of any
party, the parties agree to meet at least annually to review the Permissible
Ranges and to negotiate in good faith to modify the Permissible Ranges as the
parties deem appropriate. In the event Disposeco delivers NOW to any Landfarm
in excess of the Permissible Range for such Landfarm, Campbell Wells shall have
the right, but not the obligation, to reject such NOW in accordance with Section
5.6. Rejection of NOW by Campbell Wells pursuant to this Section 2.4 shall not
reduce the Annual Volume of NOW to be delivered by Disposeco for such Contract
Year or otherwise affect Disposeco's obligation to deliver NOW in such
quantities as are permissible or required under the terms of this Agreement.
Subject to Section 2.8, Disposeco shall use commercially reasonable efforts to
cause substantially all materials delivered by Disposeco or its Affiliates to
the Landfarm near Mermentau to be delivered by truck.
<TABLE>
<CAPTION>
Landfarm Median Range Permissible Range
-------- ------------ -----------------
<S> <C> <C>
Bourg, LA 40% 35% - 45%
Bateman Island, LA 50% 45% - 55%
Mermentau, LA 10% 5% - 15%
Elm Grove, LA N/A N/A
</TABLE>
2.5 Radium Concentration. Notwithstanding anything contained in this
Agreement to the contrary, Campbell Wells shall not be obligated to accept NOW
from Disposeco at any Landfarm where such NOW (i) when combined with other NOW
in an individual treatment cell, would cause the weighted average concentration
of Radium 226 or 228 to exceed 5 pCi/gm, excluding background or (ii) would
require the loading of two or more treatment cells simultaneously to prevent the
weighted average concentration of Radium 226 or 228 from exceeding 5 pCi/gm,
excluding background. In the event Disposeco delivers NOW contravening the
foregoing sentence, Campbell Wells shall have the right, but not the obligation,
to reject such NOW in accordance with Section 5.6. Rejection of NOW by Campbell
Wells pursuant to this Section 2.5 shall not reduce the Annual Volume of NOW to
be delivered by Disposeco for such Contract Year or otherwise affect Disposeco's
obligation to deliver NOW in such quantities as are permissible or required
under the terms of this Agreement.
2.6 Variance as to All Landfarms.
2.6.1 Conflict of Provisions. In the event of any irreconcilable
conflict between the provisions of Section 2.6 and the provisions of Sections
2.1 and 2.3, the provisions of Sections 2.1 and 2.3 shall control.
2.6.2 Quarterly Variance. Subject to the other terms and conditions
of this Agreement and unless otherwise agreed in advance by the parties, in
every Quarter during the term of this Agreement, (a) Disposeco shall be
obligated to deliver to Campbell Wells for disposal at the Landfarms a minimum
of 20% of the Annual Volume of NOW for such Contract Year and (b)
6
<PAGE>
Campbell Wells shall be obligated to accept from Disposeco for disposal at all
Landfarms a maximum of 555,000 barrels of NOW.
2.6.3 Monthly Variance. Subject to the other terms and conditions of
this Agreement and unless otherwise agreed in advance by the parties, Campbell
Wells shall be obligated to accept from Disposeco for disposal at the Landfarms
a maximum of 250,000 barrels of NOW during any one month. The parties agree to
cooperate to minimize monthly variances in NOW delivered for disposal at the
Landfarms.
2.7 Variance as to Individual Landfarms. Subject to the other terms and
conditions of this Agreement and unless otherwise agreed in advance by the
parties, in each Quarter, Disposeco shall be obligated to deliver to each
Landfarm a minimum of 20% of the Landfarm Average Volume for such Landfarm for
such Contract Year and (b) Campbell Wells shall be obligated to accept from
Disposeco for disposal at such Landfarm a maximum of 33% of the Landfarm Average
Volume for such Landfarm for such Contract Year.
2.8 Limitation on Deliveries to Landfarms by Truck. Notwithstanding
anything contained herein to the contrary, unless otherwise agreed by the
parties, Campbell Wells shall not be obligated to accept from Disposeco or its
Affiliates for disposal in any Contract Year more than 185,000 barrels of NOW
delivered by truck to the Landfarm near Mermentau or more than 75,000 barrels of
NOW delivered by truck to the Landfarm near Bourg.
2.9 Adjustments for the First Contract Year and the First Quarter. For
the first Contract Year, the fixed numerical volume amounts specified in Section
2.1, Section 2.2.2(ii), Section 2.3 and Section 2.6.1 shall be adjusted by
multiplying such amounts by a fraction, the numerator of which shall be the
number of days in the first Contact Year and the denominator of which shall be
365. For the first Quarter, the fixed numerical volume amount specified in
Section 2.6.2 shall be adjusted by multiplying such amount by a fraction, the
numerator of which shall be the number of days in the first Quarter and the
denominator of which shall be 91.
2.10 Schedules Attached. Attached to this Agreement are three Schedules
(Nos. 1, 2 and 3) that illustrate the operation of Sections 2.1 and 2.3. Such
Schedules are hereby incorporated into this Agreement by reference and
constitute an integral and material part of the parties' understanding.
ARTICLE III
PAYMENT
3.1 Prevailing Rate. The initial Prevailing Rate shall be equal to $5.50
per barrel of NOW delivered to Campbell Wells and disposed of at a Landfarm, net
of all currently applicable taxes. The Prevailing Rate may be adjusted in
accordance with Section 3.2, provided that the Prevailing Rate shall never be
less than $5.50 per barrel.
3.2 Adjustments to the Prevailing Rate. On each Adjustment Date, the
Prevailing Rate shall be subject to an adjustment equal to the sum of the
following (the "Rate Adjustment"):
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<PAGE>
(i) 30% of the difference between the average waste disposal price
received by Disposeco and its Affiliates for NOW Disposal (not
including taxes and exclusive of charges to customers for
services, such as cleaning, off-loading, waste processing and
related operations) during the Current Test Period and such
average price during the Preceding Test Period; and
(ii) 15% of the difference between the average price per barrel (not
including taxes) charged to customers received by Disposeco and
its Affiliates for NOW services (such as cleaning, off-loading,
waste processing and related operations) during the Current Test
Period and such average price during the Preceding Test Period.
Within 30 days after each Adjustment Date, Disposeco will determine the Rate
Adjustment and the adjusted Prevailing Rate (the "Current Rate") and will apply
the Current Rate retroactively to all invoices received from Campbell Wells for
the previous six-month period to determine the difference between (i) the
amounts which would have been invoiced if the Current Rate had been charged and
(ii) amounts actually invoiced under the previous Prevailing Rate (the "Invoice
Adjustment Amount"). Campbell Wells shall have 15 days to review Disposeco's
determination of the Rate Adjustment, the Current Rate and the calculation of
the Invoice Adjustment Amount. In the event the parties are not able to agree
on the proper calculation of such amounts after 15 days, the parties shall
submit the matter to Fast-Track Arbitration as set forth in Section 10.2. If
the Invoice Adjustment Amount is positive, Disposeco shall pay Campbell Wells
the Invoice Adjustment Amount within 15 days. If the Invoice Adjustment Amount
is negative, Disposeco shall be entitled to a credit for such amount against
future invoices from Campbell Wells. Disposeco hereby covenants and agrees that
it shall not during the term of this Agreement adjust fees for services covered
by clause (ii) of this Section 3.2 or fees for Disposal covered by clause (i) of
this Section 3.2 in a manner which is inconsistent with prevailing market
practice and is intended to deprive or has the effect of depriving Campbell
Wells of the full benefits of the adjustment to the Prevailing Rate provided for
herein.
3.3 Additional Services; Disposal of Injectable Saltwater. Pursuant to
this Agreement, Campbell Wells will perform standard off-loading and customary
handling services associated with disposal of NOW at no additional charge.
Campbell Wells will perform additional services, including, without limitation,
cleaning, upon request of Disposeco at the posted rates of Campbell Wells for
such services, or at such other rates as the parties may mutually agree upon.
All charges for such additional services shall be in addition to and independent
of the Prevailing Rate. Campbell Wells will accept injectable saltwater at the
Landfarms for disposal upon request of Disposeco at the posted rates of Campbell
Wells for disposal of injectable saltwater, or at such other rates as the
parties may mutually agree upon. All charges for disposal of injectable
saltwater shall be in addition to and independent of the Prevailing Rate.
3.4 Billing. Campbell Wells shall invoice Disposeco on a monthly basis for
disposal fees, additional service fees and all other sums, including inspection
fees as set forth in Section 5.4 and Section 5.7, incurred pursuant to this
Agreement during the preceding calendar month. Disposeco agrees to pay such
charges due and owing hereunder to Campbell Wells on or before the 30th day
following the date of receipt of the invoice. In the event of a dispute as to
services rendered or
8
<PAGE>
payment owed, Disposeco shall pay the undisputed portion of each invoice, and
the parties shall resolve the dispute as provided in Section 10.2. Without
limitation, amounts validly due and invoiced in accordance with this Section 3.4
and all other amounts owed from one party to the other pursuant to this
Agreement, shall be payable within 30 days after invoice or notice and
thereafter shall accrue interest at a rate equal to the lower of 18% per annum
or the highest lawful rate, commencing with the date of receipt of the original
invoice or notice.
3.5 Extraordinary Levies.
3.5.1 Taxes. Notwithstanding anything to the contrary contained
herein, if during the term of this Agreement there is levied upon Campbell Wells
or any of its Affiliates or upon the operations of Campbell Wells any tax,
assessment or charge (other than income taxes applicable generally) by any
governmental authority which tax, assessment or charge increases Campbell Wells'
costs to operate the Landfarms, Campbell Wells shall notify Disposeco of the
cause and the per barrel amount of the cost increase. Following the
effectiveness of the tax, assessment or charge giving rise to such fee,
Disposeco shall be obligated to pay such additional fee with regard to each
barrel of NOW delivered to a Landfarm by or on behalf of Disposeco or any of its
Affiliates, which fee shall appear on all invoices issued to Disposeco by
Campbell Wells.
3.5.2 Landfarm Environmental Regulations. Notwithstanding anything to
the contrary contained herein, if during the term of this Agreement there is a
substantial change in regulatory requirements related to the waste disposal
business having general applicability to the handling, treatment or disposal of
NOW, which change increases in a material manner Campbell Wells' costs to
operate the Landfarms, (i) Campbell Wells shall notify Disposeco of the cause
and the per barrel amount of the cost increase, (ii) Disposeco shall use
commercially reasonable efforts to increase its waste disposal prices so as to
pass as much of such increased cost as is commercially possible on to its
customers and (iii) Disposeco shall pay to Campbell Wells 100% of all revenues
attributable to such increase in waste disposal prices up to a maximum amount
equal to the per barrel cost increase multiplied by the barrels of NOW delivered
to the Landfarms for disposal by or on behalf of Disposeco or any of its
Affiliates after the effectiveness of such increase. If, after the application
of this Section 3.5.2, the difference between the increased costs of Campbell
Wells resulting from such regulatory change and the amount of the increased
revenues received by Campbell Wells pursuant to clause (iii) above is large
enough to have a material adverse effect on Campbell Wells, such change in
regulation shall be considered a Force Majeure event.
3.5.3 Right of Inspection. In the event Campbell Wells notifies
Disposeco of a cost increase pursuant to this Section 3.5, Disposeco shall have
the right to conduct a reasonable review of the calculations, working papers and
the books and records related to the determination of such fee increase. All
costs of such review shall be borne exclusively by Disposeco.
9
<PAGE>
ARTICLE IV
TERM
The term of this Agreement shall be for a period of approximately
twenty-five years commencing on the Effective Date and ending on June 30, 2021,
unless extended by mutual consent of the parties.
ARTICLE V
OPERATING PROCEDURES
5.1. Compliance with Operating Procedures. Disposeco and its Affiliates
shall comply in all material respects with and abide by, and shall require their
employees, servants, agents, representatives, contractors, subcontractors,
haulers and transporters to comply in all material respects with and abide by,
all applicable federal, state and local laws, ordinances, permits, regulations,
directives, codes, standards and requirements relating to the subject matter of
this Agreement or the performance of services hereunder, as well as all of
Campbell Wells' rules, regulations, procedures and guidelines, written or oral,
as the same may be reasonably adopted and modified from time to time, including,
without limitation, all safety and/or security regulations, practices and
procedures and all procedures reasonably adopted by Campbell Wells in compliance
with its permits or utilized by Campbell Wells in the inspection, sampling and
testing of material delivered to the Landfarms for disposal.
5.2 Inspection and Testing by Disposeco; Notification. Disposeco agrees
that it shall inspect and test all materials accepted, acquired, taken
possession of, procured, directed, controlled or otherwise received by it from
third party generators or other parties for disposal (with the exception of any
NOW produced by third-party generators which Disposeco or its Affiliates treat
and dispose of on the site at which the NOW was generated) to the extent
required by applicable federal, state and local laws, ordinances, permits,
regulations, directives, codes, standards and requirements. Disposeco shall
promptly notify Campbell Wells if it becomes aware of any unusual or special
characteristics of any materials being delivered to the Landfarms which cause
such materials to require special treatment, handling or care. Upon request by
Campbell Wells, Disposeco shall provide copies of all inspection and test
results relating to material to be disposed of at the Landfarms under the terms
of this Agreement to Campbell Wells upon delivery.
5.3 Shipment and Delivery of NOW. Disposeco, its Affiliates and/or its
contractors and subcontractors shall be responsible for proper containerization,
preparation and labeling for shipment, shipment, transportation and delivery to
the Landfarms and shall comply fully with all applicable federal, state and
local laws, ordinances, permits, regulations, directives, codes, standards and
requirements in making such delivery to the Landfarms. Sanifill, Campbell Wells
and their Affiliates undertake no responsibility whatsoever for the preparation,
handling or transportation of any material prior to acceptance of delivery as
hereinafter provided.
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5.4 Inspections.
5.4.1 Barges. Upon arrival of any barge transporting material to a
Landfarm at the direction of Disposeco or any of its Affiliates, Campbell Wells
shall have the right to have an independent third party inspector selected by
Campbell Wells undertake an inspection of the barge transporting material to the
Landfarm for the purpose of determining (a) the volume of materials delivered
and (b) the condition of the barge on arrival at the Landfarm. The costs of such
inspector shall be split evenly between Disposeco and Campbell Wells, and
Disposeco's portion of such expense shall be included on the monthly invoices
prepared by Campbell Wells in accordance with Section 3.4. Before any materials
are off-loaded from the barge or any inspection or testing is undertaken by
Campbell Wells, the independent inspector will provide the authorized
representatives of Disposeco and Campbell Wells with an inspector's report
indicating the time and date, the barge identification number and volume of
waste materials in the barge. The authorized representatives of the parties will
indicate their acceptance of the inspector's report by signing the report. In
the event either authorized representative disagrees with the volume
determination, either authorized representative may request that an additional
independent third party inspector prepare an inspector's report, the cost of
which shall be borne by the party requesting the same. If the parties are unable
to agree on the actual volume of waste after the preparation of the second
inspector's report, the two independent inspectors shall select a third
independent inspector to prepare an inspector's report, the cost of which will
be borne half by Disposeco and half by Campbell Wells. The final volume
determination shall be that volume agreed upon by the majority of the
independent inspectors that have inspected the barge. If the barge appears to be
damaged in any significant respect, the inspector shall summarize the apparent
damage and take photographs as appropriate to evidence the scope of the damage.
The authorized representative of Disposeco shall approve such damage summary by
executing the same prior to the time any material is off-loaded from the barge.
With regard to barges owned and operated by Disposeco, Campbell Wells agrees
that it shall not exercise its right to implement the procedures set forth in
this Section 5.4.1 unless the parties have previously had a dispute or
disagreement relating to the quantity of materials delivered to a Landfarm by
Disposeco or the condition of a barge owned and operated by Disposeco and such
dispute or disagreement was not amicably resolved within 30 days.
5.4.2 Trucks. Upon arrival of a truck transporting material to a
Landfarm on behalf of Disposeco or any of its Affiliates, Campbell Wells
personnel shall undertake an inspection to determine the volume of materials
delivered. Before any materials are off-loaded from the truck or any inspection
or testing is undertaken by Campbell Wells, Campbell Wells shall prepare a
receipt indicating the time and date and the volume of materials in the truck.
The driver of the truck shall indicate his or her acceptance of the receipt by
signing the receipt. In the event the driver disagrees with the volume
determination, Campbell Wells shall have the option of (i) accepting the volume
stated by the driver and preparing a receipt evidencing such volume to be signed
by the driver or (ii) rejecting such materials in accordance with Section 5.6.
Rejection of materials by Campbell Wells pursuant to this Section 5.4.2 shall
not reduce the Annual Volume of NOW to be delivered by Disposeco for such
Contract Year or otherwise affect Disposeco's obligation to deliver NOW in such
quantities as are required under the terms of this Agreement.
5.5 Inspection and Testing of Material. After all inspections, if any,
pursuant to Section 5.4 have been concluded, Campbell Wells shall conduct
inspections, testing and sampling using such
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equipment and procedures as are required by or consistent with its permits.
Campbell Wells may rely exclusively on the results of its inspection in
determining whether materials delivered may be disposed at the Landfarm in
accordance with its permits and this Agreement. Disposeco authorizes Campbell
Wells to retain samples and all data relating thereto, including test results,
for so long as required by federal, state or local law, ordinance, permit,
regulation, directive, code, standard or requirement and additionally for so
long as Campbell Wells in its sole discretion shall determine.
5.6 Acceptance or Rejection of Material.
5.6.1 Acceptance. Campbell Wells shall only be obligated to accept
waste materials at any Landfarm which are permissible under the permit
requirements of such Landfarm at the time of delivery. For a period of ten days
after the date of delivery, Campbell Wells shall have the right to reject (or
revoke any prior acceptance) all or any part of a shipment of material delivered
by or on behalf of Disposeco to a Landfarm if (i) such material is not in
accordance with the terms of this Agreement or (ii) Campbell Wells concludes
that such material exceeds the parameters of the permits applicable to the
Landfarm. Campbell Wells shall notify Disposeco of any rejection in writing and
shall state the reason therefor. The expiration of such ten-day period without a
rejection or a revocation of a prior acceptance of material shall constitute
"Final Acceptance" of such material.
5.6.2 Rejected Material. Rejected material shall remain at
Disposeco's risk and expense and shall not be deemed to be incorporated into the
Landfarm or come under the possession, custody, control or ownership of Campbell
Wells. Notwithstanding the foregoing, to the extent required by federal, state
or local law, ordinance, permit, regulation, directive, code, standard or
requirement, or by Campbell Wells' safety and/or security rules, practices or
procedures, Campbell Wells may detain any rejected materials, including the
vehicle and/or containers in which such rejected materials arrived, and shall
notify regulatory or other authorities wherever necessary or appropriate to do
so.
5.6.3 Removal. In the event Campbell Wells rejects all or any part of
a shipment of material from Disposeco, after compliance in all material respects
with all regulatory and any other requirements involving detention of such
shipment, upon written request of Campbell Wells, Disposeco, unless otherwise
directed by a regulatory agency or other lawful authority, shall promptly remove
or cause to be removed from the Landfarm all of the rejected material at
Disposeco's risk and expense in a manner consistent with all applicable federal,
state and local laws, ordinances, permits, regulations, directives, codes,
standards and requirements. In the event Disposeco fails to complete such
removal by the fifth business day after the date of the request by Campbell
Wells, Campbell Wells, unless otherwise required by law or regulation, may
remove or cause to be removed from the Landfarm any and all of the rejected
material, and may containerize and transport it or cause it to be containerized
and transported to an authorized storage site or returned to Disposeco at its
nearest location. Disposeco hereby authorizes Campbell Wells in such event to
contract for such storage for Disposeco's account. For its services, Campbell
Wells shall charge and Disposeco shall pay Campbell Wells' cost plus 15%. Any
and all material that Campbell Wells rejects shall remain property and the
responsibility of Disposeco at Disposeco's risk and expense.
5.7 Third-Party Deliveries. Campbell Wells may follow the procedures set
forth in this Article V with respect to any third-party generator's vessels or
vehicles containing materials that are
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delivered to any Landfarm at the direction of Disposeco or its Affiliates. In
addition, Campbell Wells may establish and enforce other policies and procedures
relating to the independent inspection of any such third-party generator's
vessels or vehicles before the material contained in such vessels or vehicles
shall be accepted for disposal.
ARTICLE VI
COVENANTS, REPRESENTATIONS AND WARRANTIES OF DISPOSECO
Disposeco hereby covenants, represents and warrants to Sanifill and
Campbell Wells as follows:
6.1 Organization and Qualification. Disposeco (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own, lease and
operate its properties and to carry on its business as it is now being conducted
and is proposed to be conducted and (c) is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business conducted or proposed to
be conducted by it makes such qualification or license necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed or in good
standing would not have, either individually or in the aggregate, a material
adverse effect on the transactions contemplated hereby.
6.2 Authorization and Validity of Agreement. Disposeco has all requisite
power and authority to enter into this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby. The execution,
delivery and performance by Disposeco of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of Disposeco. No action or approval of the equity owners of
Disposeco is necessary to authorize Disposeco's execution or delivery of, or the
performance of its obligations under, this Agreement. This Agreement has been
duly executed and delivered by Disposeco and is a valid and binding obligation
of Disposeco, enforceable in accordance with its terms.
6.3 No Conflict. The execution and delivery by Disposeco of this
Agreement does not, and exercise by Disposeco of its rights hereunder and the
consummation of the transactions contemplated hereby will not (a) require any
consent, approval, order or authorization of or other action by any governmental
entity on the part of or with respect to Disposeco; (b) require on the part of
Disposeco any consent by or approval of or notice to any other Person; or (c)
result in a violation of any law, rule, regulation, order, judgment or decree
applicable to Disposeco, except in any case covered by (a), (b) or (c) where
failure to obtain such consent or such violation would not, either individually
or in the aggregate, have a material adverse effect on the transactions
contemplated hereby.
6.4 Licensed Carriers. Any carrier with which Disposeco contracts to
transport NOW and all of Disposeco's driver personnel shall at all times
relevant to the performance of services under this Agreement remain properly
licensed and otherwise fully qualified to perform the services required
hereunder.
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ARTICLE VII
COVENANTS, REPRESENTATIONS AND WARRANTIES OF CAMPBELL WELLS
Campbell Wells hereby covenants, represents and warrants to Disposeco as
follows:
7.1 Organization and Qualification. Each of Campbell Wells and Sanifill
(a) is duly organized and validly existing under the laws of the jurisdiction of
its organization (and Sanifill is in good standing under such laws), (b) has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted and (c) is duly qualified or
licensed and in good standing to do business in each jurisdiction in which the
properties owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or license necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed or in good
standing would not have, either individually or in the aggregate, a material
adverse effect on the transactions contemplated hereby.
7.2 Authorization and Validity of Agreement. Campbell Wells has all
requisite power and authority to enter into this Agreement and to perform its
obligations hereunder and consummate the transactions contemplated hereby. The
execution, delivery and performance by Campbell Wells of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of Campbell Wells. No action or approval of
the equity owners of Campbell Wells is necessary to authorize Campbell Wells'
execution or delivery of, or the performance of its obligations under, this
Agreement. This Agreement has been duly executed and delivered by Campbell
Wells and is a valid and binding obligation of Campbell Wells, enforceable in
accordance with its terms.
7.3 No Conflict. The execution and delivery by Campbell Wells of this
Agreement does not, and exercise by Campbell Wells of its rights hereunder and
the consummation of the transactions contemplated hereby will not (a) require
any consent, approval, order or authorization of or other action by any
governmental entity on the part of or with respect to Campbell Wells or any of
its Affiliates; (b) require on the part of Campbell Wells or any of its
Affiliates any consent by or approval of or notice to any other Person; or (c)
result in a violation of any law, rule, regulation, order, judgment or decree
applicable to Campbell Wells or any of its Affiliates, except in any case
covered by (a), (b) or (c) where failure to obtain such consent or such
violation would not, either individually or in the aggregate, have a material
adverse effect on the transactions contemplated hereby.
7.4 Services and Equipment. Campbell Wells possesses the business,
professional and technical expertise to handle, treat and dispose of NOW and
possesses the equipment, plant and employee resources required to perform this
Agreement. Campbell Wells shall use its commercially reasonable efforts to turn
all barges delivering materials to the Landfarms in a timely manner consistent
with the number of Disposeco and third-party generator barges on site at such
moment and with its general practice of giving priority to third-party
generators' barges. The equipment shall, at all times relevant to the
performance of services hereunder, be maintained in good and safe condition and
fit for use.
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7.5 Licenses and Permits. As of the Effective Date, Campbell Wells shall
be duly licensed, permitted and authorized pursuant to all applicable federal,
state and local laws to handle, treat and dispose of NOW, and the Landfarms will
have been issued all licenses, permits and authorizations required by all
applicable federal, state and local laws. At any time during the term of this
Agreement, upon Disposeco's reasonable request, Campbell Wells shall provide to
Disposeco, at Disposeco's expense, a complete copy of the current permits
applicable to the operation of the Landfarms. During the term of this
Agreement, Campbell Wells shall use its best efforts to keep all such licenses,
permits and authorizations in effect and shall promptly notify Disposeco if any
such license, permit or authorization is to expire and not be renewed or becomes
the subject of any administrative or judicial action seeking revocation or
suspension; provided, however, that in the event any Landfarm has not been
issued all licenses, permits and authorizations required to dispose of NOW as of
the Effective Date of this Agreement or should lose any such license, permit or
authorization or for any other reason terminate operation during the term of
this Agreement, Campbell Wells shall, subject to Article XI, have the option to
(i) subject to Disposeco's reasonable approval, direct the disposal of NOW
delivered by Disposeco to any of the other Landfarms, provided that Campbell
Wells shall bear all actual additional out-of-pocket costs arising therefrom,
(ii) reject NOW delivered by Disposeco in accordance with Section 5.6 without
further obligation hereunder, provided that the volume of such NOW shall be
deducted from the Annual Volume for the current Contract Year, or (iii) subject
to Disposeco's reasonable approval, transport NOW delivered by Disposeco and
dispose of it at any alternative disposal facility that is approved by Disposeco
(which approval shall not be unreasonably withheld) and licensed and permitted
to receive NOW, pursuant to all the same terms and provisions of this Agreement,
including the payment of the Prevailing Rate established under Section 3.1.
7.6 Workers' Compensation. Campbell Wells shall comply in all material
respects with all applicable workers' compensation laws during the term of this
Agreement. In the event any work is performed by Campbell Wells' agent or
subcontractor, Campbell Wells shall obtain certification from such agent or
subcontractor that it too is in compliance in all material respects with such
laws or does not fall within the scope of such laws.
ARTICLE VIII
INSURANCE
8.1 Insurance Coverage. Campbell Wells and Disposeco, at their own
expense, shall procure and maintain in full force and effect during the term of
this Agreement the following kinds of insurance with limits of coverage equal to
or exceeding those limits specified therefor:
8.1.1 Workers' Compensation; Employer's Liability. Workers'
Compensation Insurance shall be obtained in accordance with the provisions of
the applicable Workers' Compensation Law or similar laws of a state having
jurisdiction over any employee. Employer's Liability Insurance shall be obtained
with a minimum limit of liability of $1,000,000. To the extent exposures fall,
or may fall, within Federal jurisdictions, including the U.S. Longshore and
Harbor Workers' Compensation Act, the Defense Bases Act and the Federal
Employers Liability Act, extensions of coverage shall be obtained in accordance
with the requirements of such laws. Should
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operations occur where maritime liability law, the Jones Act, or General
Admiralty Law apply, applicable coverages shall be required at limits of not
less than $1,000,000.
8.1.2 General Liability. Comprehensive or Commercial General
Liability Insurance, including Products/Completed Operations and Contractual
Liability, which shall cover the indemnity provisions contained in this
Agreement, shall be obtained with a combined single limit of not less than
$1,000,000 per occurrence for bodily injury and property damage.
8.1.3 Automobile Liability. Business or Commercial Automobile
Liability Insurance covering all owned, non-owned, and hired vehicles, shall be
obtained with a combined single limit of $1,000,000 per occurrence or accident.
8.1.4 Umbrella Liability. Umbrella Liability Insurance over the
foregoing coverages shall be obtained as applicable at limits of $10,000,000 per
occurrence.
8.2 Terms. All coverages shall be written through insurers authorized to
transact business in the states of operation and reasonably satisfactory and
acceptable to both parties. Each party shall be added as an additional insured,
and subrogation as to the policies of the other party shall be waived as
applicable. All policies will be endorsed to provide not less than 30 days
written notice of cancellation, termination, non-renewal or material change in
the policy. Each party will furnish the other party certificates of insurance
evidencing compliance with the requires of Section 8.1.
8.3 Site Financial Assurance and Environmental Impairment Liability. To
the extent available on commercially reasonable terms and subject to the other
terms of this Agreement, Campbell Wells shall (i) maintain policies of
environmental impairment liability insurance covering the ownership and
operation of the Landfarms in substantially such amounts and on such terms as
shall be in place on the Effective Date and (ii) comply with all applicable
federal or state governmental financial assurance requirements imposed in
connection with its operation of the Landfarms.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by Sanifill and Campbell Wells. Sanifill and
Campbell Wells shall jointly and severally defend, indemnify and hold harmless
Disposeco and its Affiliates and their employees, officers, owners, directors
and agents, from and against any and all liabilities, penalties, fines,
forfeitures, demands, claims, causes of action, suits, judgments and costs and
expenses incidental thereto, including reasonable attorneys' fees, which any or
all of them may hereafter suffer, incur, be responsible for or pay out as a
result of personal injuries, property damage, or contamination of or adverse
effects on the environment, to the extent directly or indirectly caused by, or
arising from or in connection with (i) the negligence, gross negligence or
willful act or omission or willful misconduct of Sanifill or Campbell Wells or
any of their employees, officers, owners, directors, agents or subcontractors in
the performance of this Agreement; (ii) the violation of any environmental rule,
law or regulation by Sanifill or Campbell Wells or any of their employees,
officers, owners, directors, agents or subcontractors; (iii) operations of the
Landfarms,
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including, without limitation, the receipt and disposal of waste delivered to
the Landfarms by Disposeco and others; or (iv) the breach of, misrepresentation
in, untruth in or inaccuracy in any representation, warranty or covenant of
Sanifill or Campbell Wells set forth in this Agreement.
9.2 Indemnification by Disposeco. Disposeco shall defend, indemnify and
hold harmless Sanifill and Campbell Wells and their Affiliates and their
employees, officers, owners, directors, agents and subcontractors, from and
against any and all liabilities, penalties, fines, forfeitures, demands, claims,
causes of action, suits, judgments and costs and expenses incidental thereto,
including reasonable attorneys' fees, which any or all of them may hereafter
suffer, incur, be responsible for or pay out with respect to claims by third
parties for personal injuries, property damage or other loss to the extent
directly or indirectly caused by, or arising from or in connection with (i) the
negligence, gross negligence or willful act or omission of Disposeco, any of its
employees, officers, owners, directors, agents or subcontractors or any third-
party generator acting at Disposeco's direction in the performance of this
Agreement, (ii) the violation of any environmental rule, law or regulation by
Disposeco, any of its employees, officers, owners, directors, agents or
subcontractors or any third-party generator acting at Disposeco's direction;
(iii) material delivered to any of the Landfarms by Disposeco or any third-party
generator acting at Disposeco's direction which is not in accordance with the
terms of this Agreement or otherwise not permitted to be disposed at such
Landfarm; or (iv) the breach of, misrepresentation in, untruth in or inaccuracy
in any representation, warranty or covenant of Disposeco set forth in this
Agreement.
9.3 Indemnification Procedures.
9.3.1 Promptly after receipt by an indemnified party under this
Article IX of notice of the commencement of any action or proceeding evidenced
by service of process or other legal pleading, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify in writing the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party (i) will not relieve it from any
liability that it may have to any indemnified party under this Article IX unless
and to the extent that the indemnifying party has been prejudiced in any
material respect by such omission and (ii) will not relieve the indemnifying
party from any liability that it may have to any indemnified party other than
under this Article IX. If any such action or proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under this Article IX for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless the named parties to such action or proceeding
(including any impleaded parties) shall include both an indemnifying party and
an indemnified party and the indemnified party shall have been advised by
counsel that there may be one or more defenses available to such indemnified
party that are different from or additional to those available to the
indemnifying party (in which case, if the indemnified party notifies the
indemnifying party that it wishes to employ separate counsel at the expense of
the indemnifying party (who shall promptly pay all such expenses
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as incurred), the indemnifying party shall not have the right to assume the
defense of such action or proceeding on behalf of such indemnified party).
9.3.2 If an indemnifying party, within a reasonable period of time
after notice by the indemnified party of the commencement of any action or
proceeding with respect to which the indemnified party is to make a claim
hereunder, fails to assume the defense thereof, the indemnified party shall have
the right (upon further notice to the indemnifying party) to undertake the
defense, compromise or settlement of such action or proceeding for the account
of the indemnifying party, subject to the right of the indemnifying party to
assume the defense of such action or proceeding at any time prior to settlement,
compromise or final determination thereof. The cost and expense of any such
defense and any judgment in any such action or proceeding shall be borne by the
indem nifying party, and, if paid by the indemnified party, shall be reimbursed
by the indemnifying party within thirty days after receipt of invoice therefor.
9.3.3 Except as otherwise provided in Section 9.3.2, an indemnifying
party shall not be liable for any settlement of any litigation or proceeding
effected without its written consent. An indemnifying party shall not, without
the indemnified party's written consent, settle or com promise any action or
proceeding or consent to entry of any judgment that would impose an injunction
or other equitable relief upon the indemnified party or that does not include as
an unconditional term thereof the release by the claimant or the plaintiff of
such indemnified party from all liability in respect of such action or
proceeding.
ARTICLE X
DISPUTE RESOLUTION
10.1 Negotiation of Disputes. In the event of any dispute or
disagreement arising out of or relating to the implementation and performance of
this Agreement, the parties agree to attempt to resolve such dispute in good
faith. Should a resolution of such dispute not be obtained within 15 days after
the origination of the dispute, either party may submit the dispute to
arbitration in accordance with the provisions of this Article X by written
notice to the other party.
10.2 Fast-Track Arbitration for Payment Disputes. Within 60 days after
the Effective Date of this Agreement, Campbell Wells and Disposeco shall select
an independent third party mutually acceptable to both parties (the "Financial
Arbitrator") and an alternate third party (the "Alternate") to decide disputes
to be referred to the Financial Arbitrator as provided in Sections 3.2 and 3.4.
The Financial Arbitrator and the Alternate shall have experience in accounting
and finance and the waste disposal business. Disposeco or Campbell Wells may
refer disputes arising under Sections 3.2 or 3.4 after the expiration of the
negotiation period set forth in Section 10.1 by providing written notice to the
Financial Arbitrator and the other party. In the event the Financial Arbitrator
is unavailable to resolve the dispute within the time period stated in this
Section 10.2, the dispute shall be referred to the Alternate. The Financial
Arbitrator or the Alternate, as appropriate (the "Arbitrator"), shall be
directed to resolve the dispute in 15 days after the referral. The parties
shall cooperate in good faith in providing the Arbitrator any information
reasonably needed to resolve the dispute. If the dispute relates to the
accuracy of an invoice or a series of invoices or to the accuracy of any
calculations made by any party, the costs and expenses of the arbitration shall
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be borne by the party referring the dispute to arbitration unless the Arbitrator
determines that the invoiced amounts or calculations were in error by greater
than 10% or $50,000, in which case the costs and expenses shall be borne by the
other party. If the dispute relates to any other type of disagreement arising
under Sections 3.2 and 3.4, the costs and expenses of the arbitration shall be
borne by the losing party, unless the Arbitrator finds that it would be
manifestly unfair to honor this provision and determines a different allocation
of costs.
10.3 General Arbitration. Any claim, dispute or controversy arising out
of or relating to this Agreement or the breach thereof not settled in accordance
with the provisions of Sections 10.1 or 10.2 shall be submitted to binding
arbitration by the American Arbitration Association (the "AAA") for arbitration
in Houston, Texas, in accordance with the Commercial Arbitration Rules of the
AAA then in effect. There shall be three arbitrators, with each party selecting
one. The third arbitrator shall be selected by the two party-selected
arbitrators and shall be the chairperson of the panel. The party requesting
arbitration shall name its arbitrator in the demand for arbitration and the
other party shall name its arbitrator within 30 days after receipt of the
arbitration demand. The third arbitrator shall be named within 30 days after
the appointment of the second arbitrator. The AAA shall be empowered to appoint
any arbitrator not named in accordance with the procedure set forth herein. The
decision of the arbitrators shall be final and binding upon the parties without
the right to appeal to the courts. The award rendered in arbitration shall be
final and judgment thereon may be entered by any court having jurisdiction
thereof. The costs and expenses of the arbitrations (including reasonable
attorney's fees) will be borne by the losing party, unless the arbitrators
determine that it would be manifestly unfair to honor this provision and
determine a different allocation of costs.
10.4 Applicable Law and Arbitration Act. This agreement to arbitrate
shall be enforceable in either federal or state court. The enforcement of this
agreement to arbitrate and all procedural aspects of this agreement to
arbitrate, including, without limitation, the construction and interpretation of
this agreement to arbitrate, the scope of the arbitrable issues, allegations of
waiver, delay or defenses as to arbitrability, and the rules governing the
conduct of the arbitrations, shall be governed by and construed pursuant to the
United States Arbitration Act. In deciding the substance of any such claim,
dispute or disagreement, the arbitrators shall apply the substantive laws of the
State of Texas; provided, however, that the arbitrators shall have no authority
to award punitive damages under any circumstances regardless of whether such
damages may be available under Texas law, the parties hereby waiving their
right, if any, to recover punitive or consequential damages in connection with
any such claims, disputes or disagreements.
10.5 Continuation of Performance. In the event of a dispute arising
under this Agreement, the parties shall continue performance of their respective
obligations hereunder.
ARTICLE XI
FORCE MAJEURE
11.1 Suspension of Performance. If, as a result of a Force Majeure
event, either Campbell Wells or Disposeco is wholly or partially unable to meet
its obligations under this Agreement, the affected party shall give the other
party or parties notice of such situation, describing it in reasonable
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detail. The obligations under this Agreement of the party giving notice, other
than the payment of monies due, shall be suspended to the extent and for the
duration of the Force Majeure event. The party affected by the Force Majeure
event shall use good faith efforts to attempt to rectify the conditions brought
about by the Force Majeure event in a commercially reasonable manner.
Notwithstanding anything to the contrary expressed herein, the parties agree
that the settlement of strikes, lockouts or other industrial disturbances, and,
subject to Article IX, litigation, including appeals, shall be entirely within
the discretion of the party involved therein, and such party may make settlement
thereof at such time, and on such terms and conditions as it may deem to be
advisable, and no delay in making such settlement shall deprive such party of
the benefit of this provision. In the event a Force Majeure event is based on a
change of law or regulations, the parties agree to negotiate in good faith to
modify or amend this Agreement, if possible, to continue the intent and purposes
of the Agreement. Following the end of a Force Majeure event giving rise to a
suspension by Campbell Wells pursuant to this Section 11.1, the suspension of
the parties' obligation to perform shall continue for such time as is
commercially reasonable to permit Disposeco to resume deliveries to the
Landfarms, provided that such continuation period shall not exceed 21 days. In
the event of a suspension of performance, the rights and obligations of the
parties for the Contract Year or Contract Years and the Quarter or Quarters
during which such suspension is in effect shall be proportionately reduced.
11.2 Termination Because of Force Majeure. If performance by one party
under this Agreement is suspended as a result of any event of Force Majeure and
either Disposeco or Campbell Wells determines that such suspension is likely to
continue for a period of at least six consecutive months, such party may notify
the other of its desire to meet to negotiate a modification or amendment to this
Agreement (the "Negotiation Notice"); provided that if neither Campbell Wells
nor Disposeco issues a Negotiation Notice following an event of Force Majeure, a
Negotiation Notice shall be deemed to have been given on the date that
performance by one party has been suspended as a result of such event of Force
Majeure for a period of six consecutive months. For a period of 60 days after
the date of the Negotiation Notice or, if longer, until such suspension has
continued for six consecutive months (the "Negotiation Period"), the parties
agree to negotiate in good faith to modify or amend this Agreement, if possible,
to continue the intent and purposes of the Agreement. If no agreement is
reached during the Negotiation Period, either party may terminate this Agreement
on 30 days' written notice; provided that such termination shall only become
effective if (i) the event of Force Majeure is continuing at the end of such 30-
day period, (ii) the performance by one party under this Agreement has been
suspended as a result of the event of Force Majeure for at least six consecutive
months and (iii) the party electing to terminate will suffer a continuing
material adverse effect as a result of such event of Force Majeure after giving
pro forma effect to the final offer made by other party during the Negotiation
Period (taking into account all aspects of such offer, including without
limitation the ameliorative effects of such offer on the consequences of such
Force Majeure event and any negative effects of such offer on the party electing
to terminate). Any party with a right to terminate pursuant to this Section
11.2 must give written notice of its election to do so to the other parties
within 60 days after the end of the Negotiation Period. If such a party does
not elect to terminate the Agreement within such 60-day period, such party's
termination right with respect to such event of Force Majeure shall expire;
provided that the expiration of the former right to terminate shall not preclude
or estop such party from issuing a subsequent Negotiation Notice under this
Section 11.2 if the event of Force Majeure is continuing.
20
<PAGE>
ARTICLE XII
MISCELLANEOUS
12.1 Status of the Parties. Each party hereto is and shall perform this
Agreement as an independent contractor, and as such, shall have and maintain
complete control over all of its employees, agents, and operations. Except as
expressly otherwise provided in this Agreement, neither party nor anyone
employed by it shall be, represent, act, purport to act or be deemed to be the
agent, representative, employee or servant of the other party.
12.2 No Set-Off Rights. The parties hereby agree that neither party
shall have any right to set-off or apply against any sums due under this
Agreement any sums due or amounts otherwise owing pursuant to any other
provision of this Agreement or any other agreement or arrangement between the
parties.
12.3 Subrogation; Assignment of Rights. In the event Disposeco delivers
and Campbell Wells accepts a delivery of materials (the "Nonconforming
Materials") containing hazardous or dangerous substances in violation of this
Agreement and in violation of Disposeco's agreement with the third party
generator producing such materials, Disposeco agrees that, upon the request of
Campbell Wells, Campbell Wells shall become fully subrogated to the rights of
Disposeco against such generator related to the Nonconforming Materials, and
Disposeco shall (i) assign or take such further action as is necessary or
desirable to transfer to Campbell Wells any and all rights of action of
Disposeco against such generator relating to such Nonconforming Materials
arising at law under Disposeco's agreement with such generator or in equity and
(ii) use its good faith best efforts to assist in the prosecution of any claim
brought by Campbell Wells against such third party generator relating to the
Nonconforming Materials.
12.4 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Campbell Wells and Disposeco may assign their rights, obligations
and duties under this Agreement with the written consent of the other parties to
the Agreement, which consent shall not be unreasonably withheld; provided that
the assigning party shall remain primarily liable for all obligations and duties
arising hereunder.
12.5 Notices. Notices and other communications provided for herein shall
be in writing and shall be deemed to have been validly given (a) 3 days after
deposit in the United States mails, registered or certified mail with proper
postage prepaid and return receipt requested, (b) upon transmission thereof and
receipt of the appropriate confirmation if sent via telecopier or telefax, (c)
the business day after the same shall have been deposited with a reputable
overnight courier, shipping prepaid and (d) if delivered in person, upon
delivery, in each case addressed as follows:
21
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
If to Disposeco, to: with a copy to:
W. Gregory Orr Louise A. Shearer
President Baker & Botts. L.L.P.
Campbell Wells, Ltd. One Shell Plaza
2014 West Pinhook Road, Ste. 900 910 Louisiana
Lafayette, Louisiana 70508 Houston, Texas 77002-4995
ph: 318-266-7976 ph: 713-229-1286
fax: 318-266-7922 fax: 713-229-1522
If to Campbell Wells, to: with a copy to:
W. Gregory Orr Louise A. Shearer
President Baker & Botts. L.L.P.
Campbell Wells, Ltd. One Shell Plaza
2014 West Pinhook Road, Ste. 900 910 Louisiana
Lafayette, Louisiana 70508 Houston, Texas 77002-4995
ph: 318-266-7976 ph: 713-229-1286
fax: 318-266-7922 fax: 713-229-1522
If to Sanifill, to: with a copy to:
H. Steven Walton Louise A. Shearer
Secretary Baker & Botts. L.L.P.
Sanifill, Inc. One Shell Plaza
2777 Allen Parkway, Ste. 700 910 Louisiana
Houston, Texas 77019-2155 Houston, Texas 77002-4995
ph: 713-942-6200 ph: 713-229-1286
fax: 713-942-6299 fax: 713-229-1522
</TABLE>
or such other address as any party shall specify by written notice so given.
12.6 Non-Waiver. The failure of any party to enforce its rights under
any provision of this Agreement shall not be construed to be a waiver of such
provision. No waiver of any breach of this Agreement shall be held to be a
waiver of any other breach.
12.7 Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes any and all other communications, representations, proposals,
understandings or agreements, either written or oral, between the parties hereto
with respect to such subject matter. This Agreement may not be modified or
amended, in whole or in part, except by a writing signed by both parties hereto.
12.8 Severability. If any provision of this Agreement is declared
invalid or unenforceable, then such portion shall be deemed to be severable from
this Agreement and shall not affect the remainder hereof.
22
<PAGE>
12.9 Headings. The Article and Section headings contained herein are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument.
12.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
23
<PAGE>
EXECUTED as of the day and year first above written.
NOW DISPOSAL OPERATING CO.
By: /s/ W. GREGORY ORR
--------------------------
Name: W. GREGORY ORR
--------------------------
Title: PRESIDENT
--------------------------
SANIFILL, INC.
By: /s/ H. STEVEN WALTON
--------------------------
Name: H. STEVEN WALTON
--------------------------
Title: VICE PRESIDENT
--------------------------
CAMPBELL WELLS, LTD.
By: /s/ W. GREGORY ORR
--------------------------
Name: W. GREGORY ORR
--------------------------
Title: PRESIDENT
--------------------------
24
<PAGE>
SCHEDULE 1: DECREASING ACTUAL VOLUME OVER 10 YEAR PERIOD.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Contract Prior Years Annual Volume Minimum Volume Actual Carryforward Carryforward
Year Adjustment (Assumed to be Volume Amount Account -
(= to positive 1,850/year) (assumed) (=Actual Year End
Carryforward Volume - Balance
Acct. Bal.) Annual
Volume)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 NA 1,850 1,757.5 2,000 150 150
(=1,850-92.5) (=0+150)
- -------------------------------------------------------------------------------------------------------
2 150 1,850 1,607.5 2,000 150 185
(=1,850-150-92.5) (=150 + 150
subject to
maximum)
- -------------------------------------------------------------------------------------------------------
3 185 1,850 1,572.5 1,900 50 185
(=1,850-185-92.5) (=185 + 50 -
150*
subject to
maximum)
- -------------------------------------------------------------------------------------------------------
4 185 1,850 1,572.5 1,900 50 85
(=1,850-185-92.5) (=185+50 -
150*)
- -------------------------------------------------------------------------------------------------------
5 100 1,850 1,657.5 1,850 0 35
(=1,850-100-92.5) (=85+0-50)*
- -------------------------------------------------------------------------------------------------------
6 50 1,850 1,707.5 1,850 0 0
(=1,850-50-92.5) (=35+0-
35**)
- -------------------------------------------------------------------------------------------------------
7 NA 1,850 1,757.5 1,800 - 50 -50
(=1,850-92.5) (0+-50)
- -------------------------------------------------------------------------------------------------------
8 NA 1,850 1,757.5 1,800 - 50 -100
(=1,850-92.5) (-50+-50)
- -------------------------------------------------------------------------------------------------------
9 NA 1,850 1,757.5 1,775 - 75 -125
(=1,850-92.5) (=50
credit***
-50-75)
- -------------------------------------------------------------------------------------------------------
10 NA 1,850 1,757.5 1,975 125 0
(=1,850-92.5) (-125+125)
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Pursuant to Section 2.3.3, the Positive Carryforward accruing in the
Contract Year two years earlier expires.
** Under the last sentence in Section 2.3.3, the reduction in account balance
resulting from the expiration of an earlier Positive Carryforward shall not
cause the balance of the Carryforward Account to become negative.
** Pursuant to Section 2.3.4, Disposeco would be obligated in Contract Year 9
to pay an amount equal to 50,000 barrels multiplied by the Prevailing Rate
based on the Triggering Carryforward accruing in Contract Year 7.
<PAGE>
SCHEDULE 2: INCREASING ACTUAL VOLUME OVER 10 YEAR PERIOD.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Contract Prior Years Annual Volume Minimum Volume Actual Carryforward Carryforward
Year Adjustment (Assumed to be Volume Amount Account -
(= to positive 1,850/year) (assumed) (=Actual Year End
Carryforward Volume - Balance
Acct. Bal.) Annual
Volume)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 NA 1,850 1,757.5 1,775 -75 -75
(=1,850-92.5) (=0+-75)
- -------------------------------------------------------------------------------------------------------
2 NA 1,850 1,757.5 1,775 -75 -150
(=1,850-92.5) (=-75+-75)
- -------------------------------------------------------------------------------------------------------
3 NA 1,850 1,757.5 1,800 -50 -125
(=1,850-92.5) (=75 credit*+
-75+-50)
- -------------------------------------------------------------------------------------------------------
4 NA 1,850 1,757.5 1,800 -50 -50
(=1,850-92.5) (=75 credit*+
-50+-50)
- -------------------------------------------------------------------------------------------------------
5 NA 1,850 1,757.5 1,850 0 0
(=1,850-92.5) (=50 credit*+
0)
- -------------------------------------------------------------------------------------------------------
6 NA 1,850 1,757.5 1,850 0 0
(=1,850-92.5) (=0+0)
- -------------------------------------------------------------------------------------------------------
7 NA 1,850 1,757.5 1,900 50 50
(=1,850-92.5) (0+50)
- -------------------------------------------------------------------------------------------------------
8 50 1,850 1,707.5 1,900 50 100
(=1,850-50-92.5) (=50+50)
- -------------------------------------------------------------------------------------------------------
9 100 1,850 1,657.5 1,950 100 150
(=1,850-100- (=100+100-
92.5) 50**)
- -------------------------------------------------------------------------------------------------------
10 150 1,850 1,607.5 1,700 -150 0
(=1,850-150-
92.5)
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Pursuant to Section 2.3.2, Disposeco would be obligated in each of the
marked Contract Years to pay an amount equal the then Prevailing Rate
multiplied by the volume of the Triggering Carryforward accruing in two
years earlier.
** Pursuant to Section 2.3.3, the Positive Carryforward accruing in Contract
Year 7 expires.
<PAGE>
SCHEDULE 3: VARIABLE ACTUAL VOLUME OVER 10 YEAR PERIOD.
<TABLE>
- ------------------------------------------------------------------------------------------------------
Contract Prior Years Annual Volume Minimum Volume Actual Carryforward Carryforward
Year Adjustment (Assumed to be Volume Amount Account -
(= to positive 1,850/year) (assumed) (=Actual Year End
Carryforward Volume - Balance
Acct. Bal.) Annual
Volume)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 NA 1,850 1,757.5 2,000 150 150
(=1,850-92.5) (=0+150)
- -------------------------------------------------------------------------------------------------------
2 150 1,850 1,607.5 1,750 -100 50
(=1,850-150-92.5) (=150+-100)
- -------------------------------------------------------------------------------------------------------
3 50 1,850 1,707.5 1,850 0 0
(=1,850-50-92.5) (=50-unused
50 from yr 1)
- -------------------------------------------------------------------------------------------------------
4 NA 1,850 1,757.5 1,800 -50 -50
(=1,850-92.5) (=0-50)
- -------------------------------------------------------------------------------------------------------
5 NA 1,850 1,757.5 2,000 150* 100
(=1,850-92.5) (=-50+150)
- -------------------------------------------------------------------------------------------------------
6 100 1,850 1,657.5 1,750 -100 0
(=1,850-100- (=100+-100)
92.5)
- -------------------------------------------------------------------------------------------------------
7 NA 1,850 1,757.5 1,850 0 0
(=1,850-92.5) (=0+0)
- -------------------------------------------------------------------------------------------------------
8 NA 1,850 1,757.5 1,900 50 50
(=1,850-92.5) (=0+50)
- -------------------------------------------------------------------------------------------------------
9 50 1,850 1,757.5 1,775 -75 -25
(=1,850-92.5) (=50+-75)
- -------------------------------------------------------------------------------------------------------
10 NA 1,850 1,757.5 1,875 25 0
(=1,850-92.5)
- -------------------------------------------------------------------------------------------------------
</TABLE>
* Note that Contract Year 5 above is an example of a Positive Carryforward
which is partially offset prior to the Contract Year in which it is accrued
with the remainder being offset after the Contract Year in which it is
accrued.
