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
SEPTEMBER 22, 1998
(Date of earliest event reported)
U S LIQUIDS INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13259 76-0519797
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
411 NORTH SAM HOUSTON PARKWAY EAST, SUITE 400, HOUSTON, TEXAS 77060
(Address of principal executive offices) (Zip Code)
(281) 272-4500
Registrant's telephone number, including area code
Item 5. Other Events.
As previously reported, in July 1998, U S Liquids Inc. (the "Company")
commenced an arbitration proceeding against Newpark Resources, Inc. ("Newpark")
for failure to satisfy its delivery and payment obligations under a certain NOW
Disposal Agreement dated June 4, 1996 (the "Disposal Agreement"). Specifically,
the Company alleged that Newpark had fallen short of its delivery obligations
under the Disposal Agreement. The Company had requested that the arbitrators
enter an order (i) declaring that Newpark had breached the Disposal Agreement
and no condition existed which would excuse Newpark's breach, and (ii) awarding
the Company damages. On September 22, 1998, the Company and Newpark settled this
arbitration proceeding.
Under the terms of the settlement, Newpark and the Company entered into a
thirty-three month agreement, pursuant to which Newpark will pay to the Company
at least $30 million. This amount, which may be increased based upon future
increases in the consumer price index, will be paid to the Company in monthly
installments beginning in September 1998 and continuing through June 2001. These
payments will permit Newpark to deliver to the Company for processing and
disposal specified amounts of oilfield waste. At Newpark's option, the term of
the agreement may be extended for up to two additional years. This thirty-three
month agreement replaces Newpark's obligations under the Disposal Agreement.
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As part of the settlement, the Company secured the right to immediately
enter into the business of cleaning tanks, barges and other vessels and
containers used in the storage and/or transportation of oilfield waste and
acquired certain assets used in the business in exchange for a payment of $2.15
million. Prior to this settlement, the Company was contractually prohibited from
engaging in any such cleaning business within the states of Louisiana, Texas,
Mississippi and Alabama and the Gulf of Mexico.
The settlement does not substantially alter the Company's contractual
obligation not to engage, directly or indirectly, in (i) the collection,
transfer, transportation, treatment or disposal of oilfield waste generated in a
marine environment or transported in marine vessels, or (ii) the remediation and
closure of oilfield waste pits business, in each case within the states of
Louisiana, Texas, Alabama and Mississippi and the Gulf of Mexico. However, the
settlement agreements provide that these noncompete provisions shall terminate
immediately if Newpark fails to make in a timely manner all payments required to
be made to the Company under the terms of the settlement.
As part of the settlement, the parties also reduced the term of the lease
agreements pursuant to which Newpark leases the dock facilities at the Company's
landfarms in Bourg, Louisiana, Mermentau, Louisiana and Bateman Island,
Louisiana. These leases will now terminate on June 30, 2001, as opposed to
August 31, 2021.
The foregoing discussion is only a summary and is qualified in its
entirety by reference to Exhibits 99.1, 99.2, 99.3, 99.4 and 99.5 to this
Current Report on Form 8-K filed herewith.
Item 7. Exhibits.
(a)-(b) None.
(c) EXHIBITS.
99.1 Settlement of Arbitration and Release between U S Liquids Inc.
and Newpark Resources, Inc.
99.2 NOW Payment Agreement, dated September 16, 1998, between U S
Liquids Inc. and Newpark Environmental Services, Inc., as
amended by Amendment to NOW Payment Agreement.
99.3 Noncompetition Agreement of September 16, 1998 between U S
Liquids Inc. and Newpark Resources, Inc.
99.4 Miscellaneous Agreement, dated September 16, 1998, between
Newpark Resources, Inc. and U S Liquids Inc.
99.5 Asset Purchase Agreement, dated September 16, 1998, between
Newpark Environmental Services, Inc. and U S Liquids Inc.
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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.
U S LIQUIDS INC.
Date: September 24, 1998 By: /s/ MICHAEL P. LAWLOR
Michael P. Lawlor, Chief Executive
Officer
EXHIBIT 99.1
SETTLEMENT OF ARBITRATION AND RELEASE
This Settlement of Arbitration and Release (herein referred to as
"Release") is entered into by and between U.S. Liquids, Inc. (herein referred to
as "USL") and Newpark Resources, Inc. (herein referred to as "Newpark")
(collectively referred to as the "Parties") and each of its respective officers,
directors, employees, agents, attorneys, representatives, predecessors,
successors, and assigns, and each of its respective direct and indirect
corporate parents, subsidiaries, partners, affiliates, and joint venturers and
all of their respective officers, directors, employees, agents, attorneys,
representatives, predecessors, successors, and assigns, who are expressly
intended to be beneficiaries of this Settlement of Arbitration and Release.
RECITALS
A. WHEREAS, Newpark and USL each assumed the obligations and rights under
a NOW Disposal Agreement dated June 4, 1996, which provided for the disposal of
nonhazardous oilfield waste ("NOW"); and a Noncompetition Agreement dated August
12, 1996.
B. WHEREAS, disputes arose with regard to the effect of certain events on
Newpark's payment obligations under the NOW Disposal Agreement.
C. WHEREAS, USL filed a Demand for Arbitration styled U.S. LIQUIDS VS.
NEWPARK RESOURCES, INC., Action No. 70 198 00220 98, In the Houston Regional
Office of the American Arbitration Association (the "Arbitration").
D. WHEREAS, the Parties desire to compromise and forever settle all
matters in dispute between them of whatever kind and character for the cause of
action asserted in the Arbitration identified in these Recitals and to enter
into this Settlement of Arbitration and Release.
AGREEMENTS AND RELEASE
In consideration of the foregoing and the mutual commitments
specified below, the receipt and adequacy of which are hereby acknowledged, the
Parties to this Release agree as follows:
1. TERMINATION OF AGREEMENTS. A separate agreement captioned
"Miscellaneous Agreement" executed concurrently herewith sets forth the Parties'
understanding with respect to certain agreements to which Newpark is a party,
which were assumed by USL in connection with Asset Purchase Agreement dated
December 2, 1996, by and among (i) SANIFILL, INC., a Delaware corporation
("Sanifill"), CAMPBELL WELLS, L.P., a Delaware limited partnership also known as
CAMPBELL WELLS, LTD. ("Campbell"), and CAMPBELL WELLS NORM, L.P., a Delaware
limited partnership ("Campbell Wells NORM") (collectively, "Sellers") and (ii)
USL, as "Buyer." By the execution of this Release, the Parties agree that the
following described agreements are terminated solely with respect to the rights,
interests and obligations of USL effective September 16, 1998, to the extent
provided in the Miscellaneous Agreement:
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a. An Agreement captioned "NOW Disposal Agreement" entered
into June 4, 1996, by and between Sanifill, Inc., NOW Disposal Operating Company
and Campbell Wells, Ltd.; and
b. An Agreement captioned "Noncompetition Agreement" dated
August 12, 1996, by and between Sanifill, Inc. and Newpark.
2. EXECUTION OF AGREEMENTS. By the execution of this Settlement of
Arbitration and Release, the Parties agree to execute and deliver the following
described agreements:
a. An Agreement captioned "NOW Payment Agreement" and attached
hereto;
b. An Agreement captioned "Noncompetition Agreement" and
attached hereto;
c. An Agreement captioned "Asset Purchase Agreement" and
attached hereto; and
d. An Agreement captioned "Miscellaneous Agreement" and
attached hereto.
3. DISMISSAL OF ARBITRATION. USL, acting by and through its
attorney, agrees to procure either the dismissal with prejudice of the
arbitration complaint filed against Newpark in the Houston Regional Office of
the American Arbitration Association ("AAA"), being Action No. 70 198 00220 98,
with each party to bears its costs and attorneys' fees therein, or a written
confirmation from the AAA that the same has already been dismissed on such
basis. To implement this provision, the Parties agree that they shall,
subsequent to the effective date of this Agreement, themselves do, and cause
their respective attorneys to do, all things and sign all documents which are
reasonable and necessary to carry out and effectuate the foregoing.
4. RELEASE. USL shall and hereby does completely release, acquit,
and discharge Newpark (and each of Newpark's officers, directors, employees,
agents, attorneys, representatives, predecessors, successors, and assigns as
well as all of Newpark's present and former direct and indirect corporate
parents, subsidiaries, partners, affiliates, and joint venturers and all of
their respective officers, directors, employees, agents, attorneys,
representatives, predecessors, successors, and assigns) of and from the cause of
action asserted in the Arbitration up to and including the date of this Release;
namely, the failure by Newpark to either deliver the minimum volume of
nonhazardous oil field waste required by the NOW Disposal Agreement or pay the
minimum amount to which USL was entitled under the NOW Disposal Agreement, up to
and including the date of this Release.
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5. NO ADMISSION OF LIABILITY. Recitals of fact and representations
made herein and any consideration provided are not to be construed as an
admission of liability on the part of any party hereto, and Newpark expressly
denies any liability whatsoever to USL.
6. NO ASSIGNMENTS. USL represents and warrants that it has not
assigned, pledged, encumbered, or otherwise in any manner whatsoever sold or
transferred, either by instrument in writing or otherwise, any right, claim,
cause of action, title, interest, lien, or security interest released herein or
relating in any way to the claims that were or could have been asserted in the
Arbitration. USL further represents and warrants that it is fully authorized and
empowered to fully release and extinguish the claim that has been asserted in
the Arbitration.
7. NO REPRESENTATIONS. This Release is entered into with full
knowledge of any and all rights which the Parties may have by reason of the
pending Arbitration. The Parties have received independent legal advice, have
conducted such investigation as each of them and its respective counsel thought
appropriate, and have consulted with such other independent advisors as each of
them and its respective counsel deemed appropriate regarding the Release and its
rights and asserted rights in connection therewith. None of the Parties is
relying upon any representations or statements made by any other party, or such
other party's employees, agents, representatives or attorneys, regarding this
Release or its preparation except to the extent such representations are
expressly incorporated herein. None of the Parties is relying upon a legal duty,
if one exists, on the part of any other party (or such other party's employees,
agents, representatives, or attorneys) to disclose any information in connection
with the execution of this Release or its preparation, it being expressly
understood that no party shall ever assert any failure to disclose information
on the part of any other party as a ground for challenging this Release.
8. COUNTERPARTS. This Release 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. When signed by each of
the Parties hereto, this Release shall be binding upon and inure to the benefit
of each party to this Release, and its respective successors, assigns,
receivers, trustees, executors, administrators, heirs, beneficiaries, or other
legal representatives.
9. CONSTRUCTION. The language used in this Release will be deemed to
be the language chosen by the Parties to express their mutual intent, and no
rule of strict construction shall be applied against any party. Any reference to
any federal, provincial, state, local, or foreign statute or law shall be deemed
also to refer to all rules and regulations promulgated thereunder.
10. SUPERSEDING EFFECT. This Release supersedes any and all other
representations, discussions, or agreements concerning settlement, either oral
or in writing, between USL and Newpark.
11. ENFORCEMENT ACTION. In any action brought to enforce this
Release, the prevailing party shall be entitled to recover from the unsuccessful
party its reasonable attorneys' fees, costs, and disbursements.
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12. VENUE. Any action brought to enforce this Release must be filed
in Texas state court in Harris County.
13. GOVERNING LAW. THE INTERPRETATION AND CONSTRUCTION OF THIS
RELEASE AND ANY AMENDMENT HEREOF, AND WAIVERS AND CONSENTS HEREUNDER, SHALL, TO
THE EXTENT THE PARTICULAR SUBJECT MATTER IS CONTROLLED BY STATE LAW, BE GOVERNED
BY AND BE CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF TEXAS
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
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ON THIS DATE, the Parties have executed multiple originals of this
Settlement of Arbitration and Release.
NEWPARK RESOURCES, INC.
Dated: 9/17/98 By:/s/ JAMES D. COLE
Name: James D. Cole
Title: PRESIDENT
Dated: 9/17/98 /s/ BERTRAM K. MASSING
Bertram K. Massing
Attorney for Newpark Resources, Inc.
U.S. LIQUIDS, INC.
Dated: 9/17/98 By:/s/ W. GREGORY ORR
Name: W. Gregory Orr
Title: PRESIDENT
Dated: 9/17/98 /s/ PHILIP J. JOHN
Philip J. John
Attorney for U.S. Liquids, Inc.
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EXHIBIT 99.2
NOW PAYMENT AGREEMENT
This NOW Payment Agreement (the "Agreement"), dated September 16,
1998, but effective as of the Effective Date, is entered into by and between
U.S. Liquids, Inc. ("U.S. Liquids" or "USL"), a Delaware corporation, and
Newpark Environmental Services, Inc. ("NESI"), a Delaware corporation and wholly
owned subsidiary of Newpark Resources, Inc. ("Newpark").
WHEREAS, the parties agree to:
a. Execute and deliver a Settlement of Arbitration and Release dated
September 16, 1998 (the "Release");
b. Execute and deliver the Noncompetition Agreement of September 16,
1998 (the "Noncompetition Agreement");
c. Execute and deliver the Asset Purchase Agreement (the "Purchase
Agreement") dated September 16, 1998;
d. Execute and deliver the Miscellaneous Agreement dated September 16,
1998 (the "Miscellaneous Agreement"); and
e. execute and deliver this NOW Payment Agreement dated September 16,
1998 (the "Agreement");
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):
ADJUSTMENT DATES: January 3, 2000, June 30, 2001, and June 30, 2002.
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
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.
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ANNUAL VOLUME: For any Contract Year, the maximum volume of NOW
permitted to be delivered by or on behalf of NESI at no cost and accepted for
disposal by USL, which volume shall be determined in accordance with Section
3.3.
BASE RATE: The number reflecting the most current measure of the
Consumer Price Index in effect as of the Effective Date. The Base Rate shall be
146.4.
COLLECTION: The collection, transfer or transportation of NOW.
CONSUMER PRICE INDEX: The number reflecting the measure of the
average change in prices over time of certain goods and services purchased by
all urban consumers in the Houston Area, as compiled and reported every
even-numbered month by the United States Department of Labor, Bureau of Labor
Statistics. On any Adjustment Date, the Consumer Price Index shall be the number
last reported and in effect as of that date. If the Consumer Price Index as
defined becomes unavailable, the parties shall use the number last reported as a
measure of the average change in prices of goods and services purchased by all
urban consumers in (i) the State of Texas or, in the event that number is
unavailable, (ii) the United States.
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, 1999.
COVERED REGION: The States of Louisiana, Texas, Mississippi and
Alabama, and the Gulf of Mexico.
DISPOSAL: The treatment or disposal of NOW.
DISPOSAL AMOUNT: The measure of money NESI owes and must pay to USL
as calculated in accordance with Section 2.2.
EFFECTIVE DATE: September 16, 1998.
EXCLUDED NOW: NOW generated and collected on land and delivered to a
Landfarm from the site where it was generated entirely by on-land
transportation.
LANDFARMS: The NOW disposal facilities owned and operated by USL
designated as Elm Grove, LA (DNR Permit #OWD 89-1) (the "Elm Grove Landfarm");
Bourg, LA (DNR Permit #90-10 OWD) (the "Bourg Landfarm"); Bateman Island, LA
(DNR Permit #91-10 OWD) (the "Bateman Island Landfarm"); and Mermentau, LA (DNR
Permit #SWD 83-6) (the "Mermentau Landfarm").
NOW: Nonhazardous oilfield waste (including Washwater) 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
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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, and all waste that is classified
as "E&P Waste" by the Louisiana Department of Natural Resources.
PAYMENT IN FULL AND ON TIME: Payment or reimbursement made to USL on
or before any date specified for such payment in this Agreement except and
unless timely paid in accordance with Section 13.6.
PREVAILING RATE: The price per barrel NOW delivered by NESI and
accepted by USL for disposal at a Landfarm in accordance with this Agreement, as
calculated in accordance with Section 3.2.
PERSON: Any individual, corporation, association, partnership, joint
venture, trust, estate or other entity or organization or government or any
agency or political subdivision thereof.
QUARTER: Calendar three-month period 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, 1998.
QUARTERLY VOLUME: For any Quarter, the maximum amount of NOW
permitted to be delivered by or on behalf of NESI at no cost and accepted for
disposal by USL.
RELEASE: The Settlement of Arbitration and Release dated September
16, 1998.
WASHWATER: Fluids generated by the cleaning and/or decontamination
of tanks, barges, vessels, containers or other similar structures used in the
storage and/or transportation of NOW. Washwater may contain cleaning agents and
emulsifiers, etc., in addition to the basic cleaning agent (water).
ZAPATA FACILITY: A NOW disposal facility owned and operated by USL
located near Zapata, Texas.
ARTICLE II
PAYMENT
2.1 SETTLEMENT PAYMENT. The parties agree that, as part of the
consideration for the Release, NESI shall pay USL $4 million during the first
Contract Year. NESI shall pay USL $4 million as follows: (a) $3 million due on
the Effective Date and (b) $1 million due on or before October 1, 1998. Failure
to make Payment in Full and on Time under this Section constitutes a breach of
this Agreement.
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2.2 DISPOSAL AMOUNT.
2.2.1 FIRST CONTRACT YEAR. Separate from and in addition to its
obligations under Section 2.1, NESI shall pay USL a Disposal Amount which shall
be $8 million for the first Contract Year except as provided in Section 12.1.
NESI shall pay USL $1 million of the aforesaid Disposal Amount on each of the
following eight occasions: November 2, 1998, December 1, 1998, January 4, 1999,
February 1, 1999, March 1, 1999, April 1, 1999, May 1, 1999, and June 1, 1999,
except as provided in Section 12.1. Failure to make Payment in Full and on Time
under this Section constitutes a breach of this Agreement.
2.2.2 SECOND CONTRACT YEAR.
a. The Disposal Amount owed for the second Contract Year shall be no
less than $10 million except as provided in Section 12.1. The
Disposal Amount for the first and second Quarters of the second
Contract Year shall total $5 million except as provided in Section
12.1. During the first and second Quarters of the second Contract
Year, NESI shall pay the Disposal Amount in six equal monthly
installments due on or before July 1, 1999, August 2, 1999,
September 1, 1999, October 1, 1999, November 1, 1999, and December
1, 1999, respectively, except as provided in Section 12.1.
b. On the first Adjustment Date, January 3, 2000, the Disposal Amount
for the remainder of the second Contract Year shall be adjusted by
(i) adding to the Base Rate 70% of the positive amount, if any,
determined by subtracting the Base Rate from the Consumer Price
Index in effect on that Adjustment Date, (ii) dividing said sum by
the Base Rate and (iii) multiplying the result by $5 million, except
as provided in Section 12.1. In the event that the net change in the
Consumer Price Index is negative, the Disposal Amount for the third
and fourth Quarters of the second Contract Year shall total $5
million except as provided in Section 12.1. NESI shall pay the
remainder of the Disposal Amount for the second Contract Year in six
equal monthly installments due on or before January 3, 2000,
February 1, 2000, March 1, 2000, April 3, 2000, May 1, 2000, and
June 1, 2000, respectively, except as provided in Section 12.1.
Failure to make Payment in Full and on Time under this Section
constitutes a breach of this Agreement.
2.2.3 THIRD CONTRACT YEAR. The Disposal Amount owed for the third
Contract Year shall be no less than $8 million except as provided in Section
12.1. On the first Adjustment Date, January 3, 2000, the Disposal Amount for the
third Contract Year shall be adjusted by (i) adding to the Base Rate 70% of the
positive amount, if any, determined by subtracting the Base Rate from the
Consumer Price Index in effect on that Adjustment Date, (ii) dividing said sum
by the Base Rate, and (iii) multiplying the results by $8 million except as
provided in Section 12.1. In the event that the net change in the Consumer Price
Index is negative, the Disposal Amount for the third Contract Year shall be $8
million, except as provided in Section 12.1. NESI shall pay the Disposal Amount
in twelve equal monthly installments due on or before July 3, 2000, August 1,
2000, September 1, 2000,
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October 2, 2000, November 1, 2000, December 1, 2000, January 2, 2001, February
1, 2001, March 1, 2001, April 2, 2001, May 1, 2001, and June 1, 2001,
respectively, except as provided in Section 12.1. Failure to make Payment in
Full and on Time under this Section constitutes a breach of this Agreement.
2.2.4 ADDITIONAL CONTRACT YEARS. Should NESI exercise its option to
extend the term of the Agreement in accordance with Section 5.2, the Disposal
Amount shall be no less than $8 million for each additional Contract Year except
as provided in Section 12.1. On the second Adjustment Date, June 30, 2001, the
Disposal Amount owed for the fourth Contract Year shall be adjusted by (i)
dividing 100% of the Consumer Price Index in effect on that date by 100% of the
Base Rate; and (ii) multiplying the result by $8 million except as provided in
Section 12.1. In the event the net change in the Consumer Price Index is
negative, the Disposal Amount for the fourth Contract Year shall be $8 million,
except as provided in Section 12.1. NESI shall pay the Disposal Amount for the
fourth Contract Year in twelve equal monthly installments due on or before July
2, 2001, August 1, 2001, September 3, 2001, October 1, 2001, November 1, 2001,
December 3, 2001, January 2, 2002, February 1, 2002, March 1, 2002, April 1,
2002, May 1, 2002, and June 3, 2002, respectively, except as provided in Section
12.1. Should NESI exercise its option to extend the Agreement for a fifth
Contract Year, the Disposal Amount for that Contract Year shall be adjusted on
the third Adjustment Date, June 30, 2002 by (i) dividing 100% of the Consumer
Price Index in effect on that date by 100% of the Base Rate; and (ii)
multiplying the result by $8 million. In the event the net change in the
Consumer Price Index is negative, then the Disposal Amount for the fifth
Contract Year shall be $8 million except as provided in Section 12.1. NESI shall
pay the Disposal Amount for the fifth Contract Year in twelve equal monthly
installments due on or before July 1, 2002, August 1, 2002, September 2, 2002,
October 1, 2002, November 1, 2002, December 2, 2002, January 1, 2003, February
3, 2003, March 3, 2003, April 1, 2003, May 1, 2003, and June 2, 2003,
respectively, except as provided in Section 12.1. Failure to make Payment in
Full and on Time under this Section constitutes a breach of this Agreement.
2.3 OBLIGATION TO PAY. NESI's obligation to make Payment in Full and on
Time where required by any Section in this Agreement exists without regard to
whether NESI exercises its option to deliver NOW to USL in accordance with
Section 3.1. Failure to make Payment in Full and on Time in every instance for
any reason whatsoever constitutes a breach of this Agreement and shall not
entitle NESI to any offsets, carryovers, or counterclaims of any kind.
ARTICLE III
DISPOSAL, VOLUME AND PREVAILING RATE
3.1 NOW DELIVERY.
3.1.1 DELIVERY OPTION.
a. NESI may, at its option, deliver to USL for disposal at the Bateman
Island Landfarm a maximum amount of NOW equal to the Annual Volume
for such Contract Year at no cost without prior notice or approval.
Subject to the terms and conditions and the
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limitations set forth in this Agreement, USL shall accept for
disposal at the Bateman Island Landfarm all NOW delivered by or on
behalf of NESI; provided, however, that in no event shall USL be
obligated to accept from or on behalf of NESI for disposal at any
Landfarm (i) more than the Quarterly Volume during any one Quarter
as determined in Sections 3.3 and 3.4, or (ii) more than 25% of the
Annual Volume during any one Quarter. Failure by NESI to deliver the
Quarterly Volume in any Quarter shall constitute waiver of NESI's
option to deliver the remainder for that Quarter. Failure to deliver
the full Quarterly or Annual Volume shall not result in any
carryforward or increase in the Quarterly or Annual Volume in the
succeeding Quarter or Contract Year.
b. NESI shall have the right to deliver a volume no more than 10% of
the Quarterly Volume for that Quarter to the Bourg Landfarm at no
cost, subject to Section 3.1.1.a, and prior notice by NESI in
accordance with Section 13.5.2, of 48 hours if such delivery shall
arrive by marine transportation; or
c. NESI shall have the right to deliver a volume no more than 10% of
the Quarterly Volume for that Quarter to the Mermentau Landfarm at
no cost, subject to Section 3.1.1.a and prior written approval by
USL, which approval will not be unreasonably withheld.
3.1.2 OBLIGATION TO PAY. NESI is obligated to pay the Disposal
Amount regardless of the volume of NOW, if any, delivered to or accepted by USL
in accordance with this Section 3.1, except as provided in Section 12.1. Failure
by NESI to exercise its option to deliver NOW to USL for disposal shall not
alter, lessen, decrease, alleviate, or relieve NESI of its obligation to pay USL
in accordance with Article II. NESI shall make all payments in accordance with
Article II without regard to the volume of NOW, if any, offered or delivered to
USL for disposal.
3.2 PREVAILING RATE.
3.2.1 FIRST CONTRACT YEAR. The Prevailing Rate for the first
Contract Year shall be $5.71 per barrel NOW delivered to USL for disposal, net
of all currently applicable taxes. The Prevailing Rate shall never be less than
$5.71 per barrel NOW during the term of this Agreement.
3.2.2 ADJUSTMENT OF PREVAILING RATE. On the first Adjustment Date,
January 3, 2000, the Prevailing Rate shall be adjusted by (i) adding to the Base
Rate 70% of the positive amount, if any, determined by subtracting the Base Rate
from the Consumer Price Index as of the first Adjustment Date, (ii) dividing
said sum by the Base Rate, and (iii) multiplying the result by $5.71. If the net
change in the Consumer Price Index is negative, then the Prevailing Rate shall
be $5.71 per barrel NOW until June 30, 2001.
3.2.3 ADDITIONAL CONTRACT YEARS. Should NESI exercise its option to
extend the term of the Agreement in accordance with Section 5.2, then the
Prevailing Rate shall be calculated as follows. On the second and third
Adjustment Dates, the Prevailing Rate for the fourth and fifth
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Contract Years, respectively, shall be adjusted by (i) dividing 100% of the
Consumer Price Index in effect on the respective Adjustment Date by 100% of the
Base Rate; and (ii) multiplying the result by $5.71. If the net change in the
Consumer Price Index is negative, then the Prevailing Rate is $5.71.
3.3 ANNUAL VOLUME. The Annual Volume for the first Contract Year shall be
1,401,000 barrels of NOW. The Annual Volume for the second Contract Year shall
be no more than 1,751,000 barrels of NOW. On the first Adjustment Date, January
3, 2000, the Annual Volume for the second Contract Year shall be adjusted by
dividing the adjusted Disposal Amount for the third and fourth Quarters in the
second Contract Year as calculated under Section 2.2.2 by the adjusted
Prevailing Rate as calculated under Section 3.2.2. In each succeeding Contract
Year, the Annual Volume for that year shall be calculated on the Adjustment Date
preceding that Contract Year by dividing the Disposal Amount for that Contract
Year by the Prevailing Rate for that Contract Year.
3.4 QUARTERLY VOLUME. The Quarterly Volume for each Contract Year shall be
calculated by dividing the Annual Volume by four.
3.5 EXCESS VOLUME.
3.5.1 ACCEPTANCE OPTION. During any Contract Year, USL has the
option, but not the obligation, to accept for disposal an amount of NOW from
NESI in excess of the Quarterly Volume. Should USL exercise its option to accept
delivery of an amount of NOW in excess of the Quarterly Volume, NESI agrees to
pay the Prevailing Rate for disposal of the excess volume. In the event USL
elects not to accept NOW delivered by NESI in excess of the Quarterly Volume
during any Quarter, USL may reject such waste in accordance with Section 6.6 of
this Agreement without causing (i) the Annual Volume for any Contract Year to
increase or (ii) the Disposal Amount to decrease.
3.5.2 INVOICE FOR EXCESS VOLUME: USL shall invoice NESI for fees
incurred from the disposal of volume in excess of the Quarterly Volume to be
paid no later than 30 days from receipt of the invoice. Failure to pay USL in
accordance with the terms of the invoice shall constitute a breach of this
Agreement.
3.6 RADIUM CONCENTRATION. Notwithstanding anything contained in this
Agreement to the contrary, USL shall not be obligated to accept NOW from NESI 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 NESI delivers NOW contravening the foregoing sentence,
USL shall have the right, but not the obligation, to reject such NOW in
accordance with Section 6.6.
3.7 VARIANCE. The parties agree to cooperate to minimize monthly variances
in NOW delivered for disposal at the Landfarms.
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ARTICLE IV
SERVICES, LEVIES, AND INSPECTION
4.1 ADDITIONAL SERVICES; DISPOSAL OF INJECTABLE SALTWATER. Pursuant to
this Agreement, USL will perform standard off-loading and customary handling
services associated with disposal of NOW up to, and including, the Annual Volume
at no additional charge. USL will perform additional services upon request of
NESI at the posted rates of USL 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. USL will accept
injectable saltwater at the Landfarms for disposal upon request of NESI at the
posted rates of USL 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.
4.2 DISPOSAL OF WASHWATER. NESI shall pay USL to dispose of Washwater at
the rate of $1.50 per barrel of Washwater. On each Adjustment Date, the rate
shall be adjusted in the same manner as the Prevailing Rate is adjusted in
Sections 3.2.2 and 3.2.3. The disposal of Washwater shall be for the benefit of
NESI, and USL shall provide NESI with billing information specified by NESI to
enable NESI to bill the customer or customers for whose account any related
cleaning services were performed.
4.3 INVOICE FOR ADDITIONAL SERVICES: USL shall invoice NESI on a monthly
basis for fees or expenses incurred from any services performed pursuant to
Section 4.1 or 4.2 to be paid no later than 30 days from receipt of the invoice.
Failure to pay USL in accordance with the terms of the invoice shall constitute
a breach of this Agreement.
4.4 EXTRAORDINARY LEVIES.
4.4.1 TAXES. Notwithstanding anything to the contrary contained
herein, if during the term of this Agreement there is levied upon USL or any of
its Affiliates or upon the operations of USL any tax, fee, assessment, or other
charge (other than income taxes applicable generally) by any governmental
authority, which tax, assessment or charge increases USL's costs to operate any
Landfarm, USL shall notify NESI of the cause and the per barrel amount of the
cost increase. If NESI chooses to deliver NOW to USL following the effectiveness
of the tax, fee, assessment or other charge, USL will invoice NESI for and NESI
will be obligated to pay NESI's share of the cost increase for so long as such
tax, fee, assessment or other charge remains in effect as follows: (i) with
respect to any cost increase resulting from any tax, fee, assessment or other
charge levied by a governmental authority on a per barrel basis, an amount
determined by multiplying such per barrel charge (but not more than the increase
in cost resulting therefrom) by the number of barrels of NOW delivered by NESI
to USL; and (ii) with respect to any tax, fee, assessment or other charge levied
by a governmental authority on any basis other than per barrel, NESI's
proportionate share of the cost increase resulting from such tax, fee,
assessment or charge. NESI's proportionate share shall be calculated as follows:
(a) if such tax, fee, assessment or other charge increases the cost to operate
the Bateman Island Landfarm, the NESI's proportionate share shall be calculated
by (i) dividing the number of barrels of NOW delivered to USL by NESI by the
Annual Volume plus the total number
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of barrels in excess of the Annual Volume delivered to USL by NESI and accepted
by USL and (ii) multiplying the result by the amount of the cost increase
resulting from the tax, fee, assessment, or other charge; (b) if such tax, fee,
assessment or other charge increases the cost to operate the Bourg and/or
Mermentau Landfarm, then NESI's proportionate share shall be calculated by (i)
dividing the number of barrels of NOW delivered to USL by NESI to that Landfarm
by the total number of barrels delivered to that Landfarm by any entity and (ii)
multiplying the result by the amount of the cost increase at that Landfarm
resulting from the tax, fee, assessment, or other charge. Such payment or
reimbursement shall not alter the Annual Volume nor alter the Disposal Amount.
4.4.2 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 USL's costs to operate any
Landfarm, (i) USL shall notify NESI of the cause and the per barrel amount of
the cost increase and, to the extent that NESI chooses to deliver NOW to USL,
(ii) USL will invoice NESI for NESI's proportionate share of the cost increase
and NESI will be obligated to pay such amount so long as such cost increase
remains in effect. NESI's proportionate share shall be calculated as follows:
(a) if such change in regulatory requirements increases costs to operate the
Bateman Island Landfarm, then NESI's proportionate share shall be calculated by
(i) dividing the number of barrels of NOW delivered to USL by NESI by the Annual
Volume plus the total number of barrels in excess of the Annual Volume delivered
to USL by NESI and accepted by USL and (ii) multiplying the result by the amount
of the cost increase; (b) if such change in regulatory requirements increases
costs to operate the Bourg and/or Mermentau Landfarm, then NESI's proportionate
share shall be calculated by (i) dividing the number of barrels of NOW delivered
to USL by NESI to that Landfarm by the total number of barrels delivered to that
Landfarm by any entity and (ii) multiplying the result by the amount of the cost
increase at that Landfarm. Failure to pay USL in accordance with the terms of
the invoice shall constitute a breach of this Agreement.
4.4.3 RIGHT OF INSPECTION. In the event USL notifies NESI of a cost
increase pursuant to this Section 4.4, NESI 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 NESI.
ARTICLE V
TERM
5.1 TERM. The term of this Agreement shall be for a period of three years,
commencing on the Effective Date and ending on June 30, 2001. Each party shall
notify the other of the pending expiration of the Agreement no later than seven
months before such expiration.
5.2 EXTENSION OF TERM.
5.2.1 OPTION. At its option, NESI may extend the term of this
Agreement by one or two additional one-year terms upon giving written notice of
such intent at least six months prior
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to the expiration of the Agreement. Should NESI exercise its option to extend
the Term of this Agreement for a second additional one-year term, the second
additional one-year term must immediately succeed the first. For each Contract
Year of the extended term, NESI shall recover 100% of any revenues received by
USL and its Affiliates during each Quarter of that Contract Year from the
"Business," as that term is defined in the Noncompetition Agreement of September
16, 1998. USL shall reimburse NESI in the proper amount within 30 days of the
end of each Quarter.
5.2.2 EFFECT OF BREACH OF NONCOMPETITION AGREEMENT. If USL breaches
the Noncompetition Agreement dated September 16, 1998, by engaging in
"Business," as that term is defined therein after the Effective Date, USL must
pay to NESI any and all revenues received from activities that constitute such
breach. Breach of the Noncompetition Agreement shall have no effect whatsoever
on NESI's payment obligations under this Agreement. USL shall use all reasonable
commercial efforts to enforce the Seller Noncompetition Agreement and the Buyer
Noncompetition Agreement, both dated December 13, 1996 by and between Sanifill,
Inc. and USL.
ARTICLE VI
OPERATING PROCEDURES
6.1 COMPLIANCE WITH OPERATING PROCEDURES. NESI 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 USL's
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 USL in compliance with its permits or
utilized by USL in the inspection, sampling and testing of material delivered to
any Landfarm for disposal.
6.2 INSPECTION AND TESTING BY NESI; NOTIFICATION. NESI 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 NESI 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. NESI shall promptly notify USL if it becomes
aware of any unusual or special characteristics of any materials being delivered
to any Landfarm which cause such materials to require special treatment,
handling or care. Upon request by USL, NESI shall provide copies of all
inspection and test results relating to material to be disposed of at any
Landfarm under the terms of this Agreement to USL upon delivery.
6.3 SHIPMENT AND DELIVERY OF NOW. NESI, its Affiliates and/or its
contractors and subcontractors shall be responsible for proper containerization,
preparation and labeling for shipment, shipment, transportation and delivery to
any Landfarm, and shall comply fully with all applicable federal, state and
local laws, ordinances, permits, regulations, directives, codes, standards and
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requirements in making such delivery to any Landfarm. USL and its Affiliates
undertake no responsibility whatsoever for the preparation, handling or
transportation of any material prior to acceptance of delivery as hereinafter
provided.
6.4 INSPECTIONS.
6.4.1 BARGES. Upon arrival of any barge transporting material to a
Landfarm at the direction of NESI or any of its Affiliates, USL shall have the
right to have an independent third-party inspector selected by USL 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 NESI and USL, and NESI's portion of such expense shall be
included on the monthly invoices prepared by USL in accordance with Section 4.3.
Before any materials are off-loaded from the barge or any inspection or testing
is undertaken by USL, the independent inspector will provide the authorized
representatives of NESI and USL 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 NESI and half by
USL. 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 NESI 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 NESI, USL
agrees that it shall not exercise its right to implement the procedures set
forth in this Section 6.4.1 unless the parties have previously had a dispute or
disagreement relating to the quantity of materials delivered to a Landfarm by
NESI or the condition of a barge owned and operated by NESI and such dispute or
disagreement was not amicably resolved within 30 days.
6.4.2 TRUCKS. Upon arrival of a truck transporting material to a
Landfarm on behalf of NESI or any of its Affiliates, USL 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 USL, USL 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, USL 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 6.6.
6.5 INSPECTION AND TESTING OF MATERIAL. After all inspections, if any,
pursuant to Section 6.4 have been concluded, USL shall conduct inspections,
testing and sampling using such equipment
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and procedures as are required by or consistent with its permits. USL 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. NESI authorizes USL 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 USL in its sole discretion shall
determine.
6.6 ACCEPTANCE OR REJECTION OF MATERIAL.
6.6.1 ACCEPTANCE. USL shall only be obligated to accept waste
materials at the Landfarm which are permissible under the permit requirements of
that Landfarm at the time of delivery. For a period of ten days after the date
of delivery, USL 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 NESI to
the Landfarm if (i) such material is not in accordance with the terms of this
Agreement or (ii) USL concludes that such material exceeds the parameters of the
permits applicable to the Landfarm. USL shall notify NESI 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.
6.6.2 REJECTED MATERIAL. Rejected material shall remain at NESI'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 USL. Notwithstanding
the foregoing, to the extent required by federal, state or local law, ordinance,
permit, regulation, directive, code, standard or requirement, or by USL's safety
and/or security rules, practices or procedures, USL 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.
6.6.3 REMOVAL. In the event USL rejects all or any part of a
shipment of material from NESI, after compliance in all material respects with
all regulatory and any other requirements involving detention of such shipment,
upon written request of USL, NESI, 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 NESI'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 NESI fails to complete such removal by the fifth business day after the
date of the request by USL, USL, 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 NESI at its nearest
location. NESI hereby authorizes USL in such event to contract for such storage
for NESI's account. For its services, USL shall charge and NESI shall pay USL's
cost plus 15%. Any and all material that USL rejects shall remain property and
the responsibility of NESI at NESI's risk and expense.
6.7 THIRD-PARTY DELIVERIES. USL may follow the procedures set forth in
this Article VI with respect to any third-party generator's vessels or vehicles
containing materials that are delivered
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to any Landfarm at the direction of NESI or its Affiliates. In addition, USL 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 VII
COVENANTS, REPRESENTATIONS AND WARRANTIES OF NESI
NESI hereby covenants, represents and warrants to USL as follows:
7.1 AUTHORIZATION AND VALIDITY OF AGREEMENT. NESI 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 NESI of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of NESI. No action or approval of the equity owners of NESI
is necessary to authorize NESI's execution or delivery of, or the performance of
its obligations under, this Agreement. This Agreement has been duly executed and
delivered by NESI and is a valid and binding obligation of NESI, enforceable in
accordance with its terms.
7.2 NO CONFLICT. The execution and delivery by NESI of this Agreement does
not, and exercise by NESI 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 NESI; (b) require on the part of NESI 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 NESI, 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.
7.3 LICENSED CARRIERS. Any carrier with which NESI contracts to transport
NOW and all of NESI'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.
7.4 CUSTOMER APPROVAL. NESI's obligations under this Agreement shall not
be affected in any way by the approval, disapproval, recommendation,
instruction, direction or other communication between NESI and its customers,
including any request by any NESI customer as to where its waste should be
delivered. NESI shall remain responsible for payment under this Agreement
without reference or regard to NESI's customers.
ARTICLE VIII
COVENANTS, REPRESENTATIONS AND WARRANTIES OF USL
USL hereby covenants, represents and warrants to NESI as follows:
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8.1 AUTHORIZATION AND VALIDITY OF AGREEMENT. USL 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 USL of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of USL. No action or approval of the equity owners of USL is
necessary to authorize USL's execution or delivery of, or the performance of its
obligations under, this Agreement. This Agreement has been duly executed and
delivered by USL and is a valid and binding obligation of USL, enforceable in
accordance with its terms.
8.2 NO CONFLICT. The execution and delivery by USL of this Agreement does
not, and exercise by USL 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 USL or any of its Affiliates; (b) require on the part of
USL 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 USL 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.
8.3 SERVICES AND EQUIPMENT. USL 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. USL
shall use its commercially reasonable efforts to turn all barges delivering
materials to the Landfarms in a timely manner consistent with the number of NESI
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.
8.4 LICENSES AND PERMITS. As of the Effective Date, USL 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 NESI's reasonable request, USL shall provide to NESI, at NESI's expense, a
complete copy of the current permits applicable to the operation of the
Landfarms. During the term of this Agreement, USL shall use its best efforts to
keep all such licenses, permits and authorizations in effect and shall promptly
notify NESI 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.
8.5 WORKERS' COMPENSATION. USL 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 USL's agent or subcontractor, USL 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.
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ARTICLE IX
INSURANCE
9.1 INSURANCE COVERAGE. USL and NESI, each at its 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:
9.1.1 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 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.
9.1.2 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.
9.1.3 AUTOMOBILE LIABILITY. Business or Commercial Automobile
Liability Insurance covering all owned, nonowned, and hired vehicles, shall be
obtained with a combined single limit of $1,000,000 per occurrence or accident.
9.1.4 UMBRELLA LIABILITY. Umbrella Liability Insurance over the
foregoing coverages shall be obtained as applicable at limits of $10,000,000 per
occurrence.
9.2 COVERAGE 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, nonrenewal or material
change in the policy. Each party will furnish the other party certificates of
insurance evidencing compliance with the requirements of Section 9.1.
9.3 SITE FINANCIAL ASSURANCE AND ENVIRONMENTAL IMPAIRMENT LIABILITY. To
the extent available on commercially reasonable terms and subject to the other
terms of this Agreement, USL 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.
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ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY USL. USL shall defend, indemnify and hold harmless
NESI 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 USL or any of its employees, officers, owners,
directors, agents or subcontractors in the performance of this Agreement; (ii)
the violation of any environmental rule, law or regulation by USL or any of its
employees, officers, owners, directors, agents or subcontractors; (iii)
operations of the Landfarms, including, without limitation, the receipt and
disposal of waste delivered to the Landfarms by NESI and others; or (iv) the
breach of, misrepresentation in, untruth in or inaccuracy in any representation,
warranty or covenant of USL set forth in this Agreement.
10.2 INDEMNIFICATION BY NESI. NESI shall defend, indemnify and hold
harmless USL and its 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 NESI, any of its employees, officers,
owners, directors, agents or subcontractors or any third-party generator acting
at NESI's direction in the performance of this Agreement, (ii) the violation of
any environmental rule, law or regulation by NESI, any of its employees,
officers, owners, directors, agents or subcontractors or any third-party
generator acting at NESI's direction; (iii) material delivered to any of the
Landfarms by NESI or any third-party generator acting at NESI'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 NESI set
forth in this Agreement.
10.3 INDEMNIFICATION PROCEDURES.
10.3.1Promptly after receipt by an indemnified party under this
Article X 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 X 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 X. If any such action or proceeding shall be brought against
any indemnified party and it shall notify the
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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 X for any legal or other expenses subse quently 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 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).
10.3.2If 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
indemnifying party, and, if paid by the indemnified party, shall be reimbursed
by the indemnifying party within thirty days after receipt of invoice therefor.
10.3.3Except as otherwise provided in Section 10.3.2, 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 XI
DISPUTE RESOLUTION
11.1 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 in accordance with the provisions
of this Article XI file suit. Any suit filed by any party that relates to this
Agreement must be filed in Texas state court in Harris County, Texas.
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11.2 CONTINUATION OF PERFORMANCE. In the event of a dispute arising under
this Agreement, the parties shall continue performance of their respective
obligations hereunder.
11.3 EFFECT OF BREACH. Breach of this Agreement shall automatically
terminate the Noncompetition Agreement of September 16, 1998.
ARTICLE XII
SUSPENSION OF PERFORMANCE
12.1 SUSPENSION OF PERFORMANCE BY USL. USL shall have the right to suspend
operations under this Agreement at the Bateman Island Landfarm for any reason.
Upon such suspension, USL shall give NESI written notice of the basis for, and
an estimate of, the length of the suspension.
12.1.1If USL notifies NESI that it will temporarily suspend
operations at the Bateman Island Landfarm due to litigation, court order or
directive of any governmental body having jurisdiction over the operation of the
Landfarm, or substantial changes to laws or regulations, then NESI shall
continue to make all Payments in Full and on Time as this Agreement requires;
provided, however, that USL shall make available the Bourg and/or Mermentau
Landfarms to accept, in a timely fashion, delivery of that portion of the Annual
Volume that NESI would otherwise deliver to the Bateman Island Landfarm under
Section 3.1.1.a. If USL fails to make available either the Bourg Landfarm or the
Mermentau Landfarm to accept delivery, in a timely fashion, of the NOW that NESI
desires to deliver, up to the Annual Volume (prorated for the period involved),
then NESI shall be excused from payments due each month such failure continues.
Upon the resumption of operations at the Bateman Island Landfarm, NESI may
exercise its option to deliver NOW in accordance with Section 3.1.
12.1.2If USL notifies NESI that it will temporarily suspend
operations at the Bateman Island Landfarm due to, caused by or resulting from
fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicles, riot
or civil commotion, sinkhole collapse, volcanic action, falling objects, weight
of snow, ice or sleet, water damage, vandalism, and malicious mischief, flood,
and/or earthquake, including order of civil authority when such order is given
as a direct result of any other cause named in this sentence, then NESI shall be
excused from payments due each month that operations are suspended. Upon the
resumption of operations at the Bateman Island Landfarm, NESI shall resume
payments and may exercise its option to deliver NOW in accordance with Section
3.1.
12.1.3If USL notifies NESI that it will temporarily suspend
operations at the Bateman Island Landfarm voluntarily for any reason other than
under Section 12.1.1 or 12.1.2 above, NESI is excused from payments due each
month that operations are suspended. Upon the resumption of operations at the
Bateman Island Landfarm, NESI shall resume payments and may exercise its option
to deliver NOW in accordance with Section 3.1.
d. If operations are temporarily suspended at the Bourg, Bateman
Island and Mermentau Landfarms at once or in reasonably close succession, then
NESI is excused from payments due each month that operations are suspended. Upon
the resumption of operations at any
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Landfarm, and provided USL makes any Landfarm available to accept delivery in a
timely fashion, of the NOW that NESI desires to deliver, up to the Annual Volume
(prorated for the period involved), then NESI shall resume payments and may
exercise its option to deliver NOW in accordance with Section 3.1.
e. Whenever, in accordance with the foregoing provisions of this
Section 12.1, NESI is excused from making payments of a portion of the Disposal
Amount for any month or months, such excuse shall be a permanent excuse, and the
total Disposal Amount for the Contract Year or Contract Years in which such
excuse occurs shall be reduced accordingly.
12.2 SUSPENSION OF PERFORMANCE BY NESI. NESI has no right to suspend its
performance except as specifically provided elsewhere in this Agreement and any
other suspension or attempt to suspend its obligations shall constitute breach
of this Agreement. Disapproval, instruction or communication by a customer of
NESI, including any request by any NESI customer as to where its waste should be
delivered, in a manner contrary to the terms of this Agreement shall not
constitute force majeure nor provide a basis for suspension of performance.
ARTICLE XIII
MISCELLANEOUS
13.1 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.
13.2 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.
13.3 SUBROGATION; ASSIGNMENT OF RIGHTS. In the event NESI delivers and USL
accepts a delivery of materials (the "Nonconforming Materials") containing
hazardous or dangerous substances in violation of this Agreement and in
violation of NESI's agreement with the third-party generator producing such
materials, NESI agrees that, upon the request of USL, USL shall become fully
subrogated to the rights of NESI against such generator related to the
Nonconforming Materials, and NESI shall (i) assign or take such further action
as is necessary or desirable to transfer to USL any and all rights of action of
NESI against such generator relating to such Nonconforming Materials arising at
law under NESI'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 USL
against such third-party generator relating to the Nonconforming Materials.
13.4 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. USL and NESI may assign
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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. Without limiting the
generality of the foregoing, if USL sells the Landfarms and/or related business,
the purchaser shall assume USL's obligations under this Agreement, and NESI
shall retain its obligations under this Agreement.
13.5 NOTICES.
13.5.1GENERAL. Except under Section 3.1.1, notices and other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been validly given (a) three calendar 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:
If to NESI:
Newpark Environmental Services, 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
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If to USL: With a copy to:
U.S. Liquids, Inc. Baker & Botts, L.L.P.
411 N. Sam Houston Parkway East One Shell Plaza
Houston, TX 77060 910 Louisiana
Attention: W. Greg Orr, President Houston, TX 77002-4995
Facsimile No.: (281) 272-4545 Attention: Philip J. John, Esq.
Facsimile No.: (713) 229-1522
or such other address as any party shall specify by written notice so given.
13.5.2 OTHER NOTICES. Notices provided for in Section 3.1.1 shall be
made in writing by telefax or mailed to USL as follows:
U.S. Liquids, Inc.
Division Manager
P.O. Box 1467
Jennings, LA 70546
Attention: Jerry Brazell
Facsimile No.: (318) 824-3147
13.6 OPPORTUNITY TO CURE. In the event that NESI (i) fails to pay USL any
amount required under this Agreement on or before the date such payment is due
and such payment is not excused by Section 12.1 and/or (ii) otherwise fails to
perform under this Agreement, USL shall give notice to NESI of its failure to
perform in accordance with Section 13.5. The notice shall include a description
of the manner in which NESI failed to perform under this Agreement and shall
include the date on which performance was due. NESI shall have fifteen (15)
calendar days from the date notice is deemed validly given to correct or cure
its failure to perform under this Agreement. If NESI fails to do so, then such
failure shall constitute a breach of this Agreement. If NESI receives from USL
notice that NESI has failed to pay USL any amount required, due and not
otherwise excused under this Agreement and NESI fails to correct or cure such
failure within 15 days from the date such notice is given, then such failure
shall be deemed failure to make Payment in Full and on Time and shall constitute
a breach of this Agreement. Failure by USL to act in accordance with this
Section shall not itself constitute a breach of this Agreement nor shall such
failure cause USL to waive or relinquish any right or option provided by any
Section in this Agreement; provided, however, that NESI shall not be deemed to
have breached this Agreement unless and until notice of such alleged breach
shall have been given in accordance with this section, and NESI shall have
failed to cure or correct its failure to perform as specified in such notice.
13.7 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.
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13.8 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.
13.9 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.
13.10 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.
13.11 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.
13.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
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ON THIS DATE, the Parties have executed multiple originals of this NOW
Payment Agreement.
NEWPARK ENVIRONMENTAL SERVICES, INC.
Dated: 9/17/98 By:/s/ JAMES D. COLE
Name: James D. Cole
Title: CHAIRMAN
U.S. LIQUIDS, INC.
Dated: 9/16/98 By:/s/ W. GREGORY ORR
Name: W. Gregory Orr
Title: PRESIDENT
<PAGE>
AMENDMENT
TO
NOW PAYMENT AGREEMENT
This AMENDMENT TO NOW PAYMENT AGREEMENT (the "Amendment") is
made and entered into effective September 22, 1998, by and between Newpark
Environmental Services, Inc. ("NESI") and U.S. Liquids, Inc. ("USL")
(collectively, the "Parties"), with reference to the following facts:
A. On September 17, 1998, NESI and USL entered into an agreement
captioned "NOW Payment Agreement."
B. The Parties now mutually desire to modify certain provisions of
the NOW Payment Agreement.
NOW THEREFORE, the Parties hereby agree as follows:
1. The definition of the Effective Date under Article I of the NOW
Payment Agreement is hereby amended to read as follows:
"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):
EFFECTIVE DATE: July 1, 1998."
2. Section 2.1 is hereby amended to read as follows:
"NESI shall pay USL $4 million as follows: (a) $3 million due before
the close of business on September 22, 1998, and (b) $1 million due on or before
October 1, 1998."
3. Subsection 3.3.a of the NOW Payment Agreement is hereby amended
to read as follows:
"ANNUAL VOLUME. The Annual Volume for the first Contract Year shall
be 1,050,788 barrels of NOW."
4. Terms used in this Amendment that are defined in the NOW Payment
Agreement shall have the same meanings herein as in the NOW Payment Agreement
unless noted otherwise elsewhere in this Amendment.
5. Except as hereby amended, the NOW Payment Agreement is and shall
remain in full force and effect in accordance with its terms.
<PAGE>
IN WITNESS WHEREOF, the Parties have duly executed this Amendment as
of the date first set forth above.
NEWPARK ENVIRONMENTAL SERVICES, INC.
Dated: 9/17/98 By:/s/ JAMES D. COLE
Name: James D. Cole
Title: PRESIDENT
U.S. LIQUIDS, INC.
Dated: 9/16/98 By:/s/ W. GREGORY ORR
Name: W. Gregory Orr
Title: PRESIDENT
EXHIBIT 99.3
NONCOMPETITION AGREEMENT OF SEPTEMBER 16, 1998
This Noncompetition Agreement (the "Agreement") dated September 16, 1998,
is made and entered into by and between U.S. LIQUIDS, INC., a Delaware
corporation ("U.S. Liquids" or "USL" herein), and NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark" herein), with reference to the following facts:
On this day the parties agreed:
a. To execute and deliver a Settlement of Arbitration and Release
dated September 16, 1998 (the "Release"), which, to the extent provided in the
Miscellaneous Agreement, (i) terminates the NOW Disposal Agreement dated June 4,
1996; and (ii) the Noncompetition Agreement dated August 12, 1996;
b. To execute and deliver a NOW Payment Agreement dated September
16, 1998 (the "NOW Payment Agreement");
c. To execute and deliver an Asset Purchase Agreement dated
September 16, 1998 (the "Purchase Agreement");
d. To execute and deliver the Miscellaneous Agreement dated
September 16, 1998 (the "Miscellaneous Agreement"); and
e. To execute and deliver this Noncompetition Agreement of September
16, 1998.
In consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, USL
and Newpark 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. At all times
during the term of this Agreement, Persons controlled by USL or one or
more of its controlled Affiliates, or jointly controlled by USL and one or
more of its controlled Affiliates, shall be deemed to be Affiliates of
USL. Notwithstanding the foregoing, a Person who acquires control of USL
after the Effective Date of this Agreement shall not be bound by this
Agreement solely by reason of such control, with respect to the
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continuation of activities in which such Person was engaged immediately
prior to its acquisition or control of USL.
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, excluding the Cleaning Business.
CLEANING BUSINESS - The Cleaning Business shall include, but is not
limited to, any one or more of the following activities: (1) performance
of onshore and/or offshore cleaning of tanks, barges, vessels, containers
or other similar structures used in the storage and/or transportation of
NOW; (2) the lease, rental or sale of labor and/or equipment involved in
cleaning. USL shall be free to engage in any aspect of the Cleaning
Business inside and/or outside the Territory. The Cleaning Business does
not include the Collection or Disposal of NOW (including Washwater), the
remediation and closure of oilfield waste pits and related loading and
hauling.
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.
EFFECTIVE DATE - September 16, 1998.
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.
LANDFARM - The NOW disposal facility owned and operated by USL
designated as Bateman Island, Louisiana (DNR Permit #91-10 OWD) (the
"Bateman Island Landfarm"), Bourg, Louisiana (DNR Permit #90-10 OWD) (the
"Bourg Landfarm"), Elm Grove, Louisiana (DNR Permit #OWD 89-1) (the "Elm
Grove Landfarm"), and Mermentau, Louisiana (DNR Permit #SWD 83-6) (the
"Mermentau Landfarm").
NOW - Nonhazardous oilfield waste (including Washwater) 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, and
all waste that is classified as "E&P Waste" by the Louisiana Department of
Natural Resources.
PAYMENT IN FULL AND ON TIME - Payment or reimbursement made to USL
on or before any date specified in the NOW Payment Agreement except and
unless made in accordance with Section 13.6 of the NOW Payment Agreement.
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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.
TERRITORY - All or any part of the following: the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico.
WASHWATER - Fluids generated by the cleaning and/or decontamination
of tanks, barges, vessels, containers, or other similar structures used in
the storage and/or transportation of NOW. Washwater may contain cleaning
agents or emulsifiers, etc., in addition to the basic cleaning agent
(water).
2. NONCOMPETITION. USL 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, except what is excluded
in Section 5 of this Agreement; (b) own any interest in any Competitor; (c)
operate, join, control or otherwise participate in any Competitor; or (d) lend
credit or money for the purpose of assisting another to establish or operate any
Competitor.
3. TERM. The term of this Agreement commences on the date hereof and shall
continue in force each month that Newpark makes to USL all Payments in Full and
on Time under the NOW Payment Agreement. Any breach and/or failure to make
Payment in Full and on Time under the NOW Payment Agreement shall immediately
terminate this Agreement. This Agreement shall automatically terminate on June
30, 2001 if it has not been terminated sooner. Upon termination of this
Agreement, USL may (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; and/or (d) lend credit or money for the purpose of assisting
another to establish or operate any Competitor.
4. MAINTENANCE OF CONFIDENTIALITY. For the term of this Agreement, USL and
its Affiliates shall keep secret and retain in strictest confidence, except for
disclosure to any of its Affiliates, and will not permit any Person other than
its Affiliates to exercise 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 Business,
which Newpark has been granted the right to use, along with USL and its
Affiliates.
5. PERMITTED ACTIVITIES. Section 2 of this Agreement notwithstanding:
a. USL and its Affiliates, as passive investors, may own up to 5%
(including ownership by USL 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
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described in subparagraph (b) below, USL 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 USL 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 USL or one or more of its Affiliates.
b. Newpark recognizes and acknowledges that USL 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. Newpark 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 excludes the Cleaning Business. This Agreement is not
intended to limit or otherwise affect the business of USL except as expressly
set forth herein.
c. Newpark further recognizes and acknowledges that USL and its
Affiliates from time to time enter into joint venture arrangements with
independent (i.e., non-Affiliate) third parties ("Joint Venture Partners") who
engage in aspects of the Business in the Territory. Without limiting the
applicability of this Agreement to USL and its Affiliates and such joint
ventures, Newpark 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 USL and its Affiliates with respect to the continuation of
activities in which such Joint Venture Partners were engaged immediately prior
to entering into such joint venture arrangements.
d. USL and its Affiliates may 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
USL's Zapata, Texas, facility and Disposal of NOW so Collected at such facility;
(iii) Disposal and Collection of NOW contemplated under the NOW Payment
Agreement dated as of September 16, 1998, by and among USL and Newpark
Environmental Services, Inc.; (iv) Disposal and Collection of NOW at USL's
facility in Lacassine, Louisiana; and (v) the Cleaning Business.
e. USL shall be free to engage in any aspect of the Cleaning
Business.
6. SEVERABILITY. USL 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 Newpark 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
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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.
7. ENTIRE AGREEMENT. This Agreement, together with the Release, the NOW
Payment Agreement, and Purchase Agreement and the other agreements specifically
mentioned therein, constitutes the entire agreement of USL and Newpark 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.
8. NATURE OF OBLIGATIONS. All covenants and obligations of USL hereunder
shall be binding on USL, its Affiliates and the assigns, successors and legal
representatives of each of them, and shall inure to the benefit of Newpark and
all of its Affiliates that engage in any aspect of the Business in any part of
the Territory.
9. 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 Section 9 by giving notice of such
change to the other party in the manner which is provided in this Section 9.
USL: U.S. Liquids, Inc.
411 N. Sam Houston Parkway East
Houston, TX 77060
Attention: W. Greg Orr, President
Facsimile No.: (281) 272-4545
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With a copy to:
Baker & Botts, L.L.P.
One Shell Plaza
910 Louisiana
Houston, TX 77002-4995
Attention: Philip J. John, Esq.
Facsimile No.: (713) 229-1522
Newpark: Newpark Resources, Inc.
Newpark Environmental Services, 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, L.L.P.
9401 Wilshire Boulevard
Beverly Hills, CA 90212
Attention: Bertram K. Massing, Esq.
Facsimile No.: (310) 859-2325
10. INJUNCTIVE RELIEF. USL 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, Newpark shall be entitled to injunctive relief, which may include,
but shall not be limited to, restraining USL and its Affiliates from engaging in
any activity that would constitute a breach of this Agreement.
11. OPTION IN CASE OF BREACH. If USL breaches this Noncompetition
Agreement dated September 16, 1998, by engaging in Business as that term is
defined herein after the Effective Date, USL must pay to Newpark Environmental
Services, Inc. any and all revenues received from activities that constitute a
breach. Breach of this Noncompetition Agreement shall have no effect whatsoever
on Newpark Environmental Services, Inc.'s payment obligations under the NOW
Payment Agreement. USL shall use all reasonable commercial efforts to enforce
the Seller Noncompetition Agreement and the Buyer Noncompetition Agreement, both
dated December 13, 1996 by and between Sanifill, Inc. and USL.
12. 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.
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13. LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
14. VENUE OF LAWSUIT. Any suit relating to this agreement must be filed in
state court in Harris County, Texas.
15. 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.
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ON THIS DATE, the Parties have executed multiple originals of this
Noncompetition Agreement.
NEWPARK RESOURCES, INC.
Dated: 9/17/98 By:/s/ JAMES D. COLE
Name: James D. Cole
Title: PRESIDENT
U.S. LIQUIDS, INC.
Dated: 9/16/98 By:/s/ W. GREGORY ORR
Name: W. Gregory Orr
Title: PRESIDENT
8
EXHIBIT 99.4
MISCELLANEOUS AGREEMENT
THIS MISCELLANEOUS AGREEMENT (the "Agreement") is made and entered
into this 16th day of September, 1998 (the "Effective Date"), by and between
Newpark Resources, Inc., a Delaware corporation (herein, together with each of
its officers, directors, employees, agents, attorneys, representatives,
predecessors, successors, and assigns, and its direct and indirect corporate
parents, subsidiaries, partners, affiliates, and joint venturers, and all of
their respective officers, directors, employees, agents, attorneys,
representatives, predecessors, successors, and assigns, referred to as
"Newpark"), and U.S. Liquids, Inc., a Delaware corporation (herein, together
with each of its officers, directors, employees, agents, attorneys,
representatives, predecessors, successors, and assigns and its direct and
indirect corporate parents, subsidiaries, partners, affiliates, and joint
venturers and all of their respective officers, directors, employees, agents,
attorneys, representatives, predecessors, successors, and assigns, referred to
as "USL"), with reference to the following facts:
A. On or about December 13, 1996, pursuant to Asset Purchase
Agreement dated December 2, 1996 (the "Sanifill Purchase Agreement"), by and
among (i) SANIFILL, INC., a Delaware corporation ("Sanifill"), CAMPBELL WELLS,
L.P., a Delaware limited partnership also known as CAMPBELL WELLS, LTD.
("Campbell") and CAMPBELL WELLS NORM, L.P., a Delaware limited partnership
("Campbell Wells NORM") (collectively "Sellers"), and (ii) USL, as "Buyer," USL
assumed all liabilities and obligations of Sanifill and Campbell under the
contracts (the "Contracts") listed on Schedule I attached to this Agreement,
which are referred to in this Agreement by the names with which they are
identified on Schedule I. Sanifill and Campbell were not relieved of any of
their obligations to Newpark under the Contracts and certain other agreements.
B. Concurrently with the execution of this Agreement, Newpark and
USL are executing a Settlement of Arbitration and Release (the "Release"), a
"NOW Payment Agreement," a "Noncompetition Agreement," and an "Asset Purchase
Agreement" (collectively, the "New Deal Agreements"), which may affect the
continued existence of the Contracts.
C. By this Agreement, the parties intend to clarify the continuing
status of the Contracts after the execution of the Release and the New Deal
Agreements.
NOW THEREFORE, in consideration of the foregoing and of their mutual
covenants and agreements contained herein, the parties hereby agree as follows:
1. STATUS OF DISPOSAL AGREEMENT. Articles VI, VII, VIII, IX, X
(other than Section 10.2) and XII of the Disposal Agreement shall remain in full
force and effect in accordance with their terms solely with respect to events
occurring and circumstances existing before the Effective Date. All other
provisions of the Disposal Agreement are hereby terminated, except to the extent
that such terminated provisions are necessary to the interpretation of the
articles of the Disposal Agreement that remain in effect.
2. STATUS OF SANIFILL NONCOMPETITION AGREEMENT AND JOINDER
AGREEMENT. As between Newpark and USL, the Sanifill Noncompetition Agreement
between Sanifill, Inc. and USL
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and the Joinder Agreement shall be superseded as of the Effective Date by the
Noncompetition Agreement dated September 16, 1998. As regards Sellers and their
Affiliates, the Sanifill Noncompetition Agreement and the Joinder Agreement
shall remain in full force and effect in accordance with the terms of each.
3. GUARANTEE OF NOW PAYMENT AGREEMENT.
3.1 PERFORMANCE OF NOW PAYMENT AGREEMENT. Newpark hereby
covenants and agrees that it shall cause Newpark Environmental Services, Inc.
("NESI") to fully perform all of its obligations under the NOW Payment 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 that may be delivered pursuant to the NOW
Payment Agreement, or shall refrain from taking any action, as is necessary or
appropriate, to permit NESI to fully perform all of its obligations under the
NOW Payment Agreement in a timely manner.
3.2 UNCONDITIONAL GUARANTEE. Newpark hereby unconditionally
and irrevocably guarantees the performance in full of all obligations of NESI
under the NOW Payment Agreement, with the same force and effect and to the same
extent as if Newpark were a party to the NOW Payment Agreement having the same
rights and obligations thereunder as NESI.
3.3 NO SET-OFF; GUARANTY OF PERFORMANCE OR PAYMENT UPON
DEMAND. Newpark shall perform any obligations or pay any amounts due in respect
of the obligations of NESI under the NOW Payment Agreement promptly upon demand
by USL or its Affiliates, without any set-off, defense or deduction for any
claims or counterclaims of any kind, except for any such set-offs, defenses, or
deductions that Newpark could assert if it were a party to the NOW Payment
Agreement having the same rights and obligations thereunder as NESI.
3.4 WAIVER OF DILIGENCE, ETC. Newpark hereby waives diligence,
presentment, demand, protest and notice of any kind with respect to this
Guarantee, as well as any requirement that USL or its affiliates exhaust any
rights or take any action against NESI.
3.5 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 NESI, which defenses
would not be available to Newpark if it were a party to the NOW Payment
Agreement having the same rights and obligations thereunder as NESI.
3.6 STATUS. This Section 3 shall remain in full force and
effect to the extent that the NOW Payment Agreement remains in full force and
effect in accordance with its terms and shall terminate when and to the extent
that the NOW Payment Agreement is terminated.
4. STATUS OF PRIOR GUARANTY. The Prior Guaranty shall remain in full
force and effect to the extent that the Disposal Agreement remains in full force
and effect in accordance with
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its terms and shall terminate as of the Effective Date to the extent that the
Disposal Agreement is terminated.
5. GUARANTEE OF ASSET PURCHASE AGREEMENT. Newpark hereby
unconditionally and irrevocably guarantees the performance in full of all
obligations of NESI under the Asset Purchase Agreement, with the same force and
effect and to the same extent as if Newpark were a party to the Asset Purchase
Agreement having the same rights and obligations thereunder as NESI. Newpark
hereby waives diligence, presentment, demand, protest and notice of any kind
with respect to this Guarantee, as well as any requirement that USL or its
affiliates exhaust any rights or take any action against NESI.
6. STATUS OF LEASE AND SUBLEASES. The Lease and the Subleases
referred to in Schedule I of this Agreement shall remain in full force and
effect for three years beginning July 1, 1998, and then terminate on June 30,
2001. USL shall take all necessary and reasonable measures to ensure that the
Lease and Subleases remain in full force and effect until June 30, 2001.
7. OTHER AGREEMENTS. All other agreements between or among Newpark
and Sellers, or any of them, whether or not assumed by USL, shall remain in full
force and effect in accordance with their terms. USL shall use commercially
reasonable efforts to enforce for the benefit of Newpark all relevant covenants,
including, but not limited to, noncompetition covenants, made by Sellers in
favor of USL under or in connection with the Sanifill Purchase Agreement.
8. EFFECT ON SELLERS. Although Sellers are not party to this
Agreement, the parties intend that none of Sellers shall be relieved of any
obligations owed by them to Newpark by reason of the transactions which gave
rise to the Contracts, except to the extent that certain provisions of the
Disposal Agreement are prospectively terminated hereby.
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ON THIS DATE, the Parties have executed multiple originals of this
Miscellaneous Agreement.
NEWPARK RESOURCES, INC.
Dated: 9/17/98 By:/s/ JAMES D. COLE
Name: James D. Cole
Title: PRESIDENT
U.S. LIQUIDS, INC.
Dated: 9/16/98 By:/s/ W. GREGORY ORR
Name: W. Gregory Orr
Title: PRESIDENT
4
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Schedule I
List of Contracts
1. NOW Disposal Agreement by and among Sanifill, Inc., a Delaware
corporation, NOW Disposal Operating Co., a Delaware corporation and an
indirect wholly-owned subsidiary of Sanifill, and Campbell Wells, Ltd., a
Delaware limited partnership, dated as of June 4, 1996, as assumed by
Newpark Resources, Inc., by an Assumption and Guarantee Agreement dated
August 12, 1996 (the "Disposal Agreement")
2. Noncompetition Agreement by and between Sanifill, Inc., a Delaware
corporation, and Newpark Resources, Inc., a Delaware corporation, dated as
of August 12, 1996 (the "Sanifill Noncompetition Agreement")
3. Joinder Agreement, dated as of August 12, 1996, by Campbell Wells, Ltd., a
Delaware limited partnership, for the benefit of Newpark Resources, Inc.,
and its Affiliates (the "Joinder Agreement")
4. Assumption and Guarantee Agreement by and among Newpark Resources, Inc., a
Delaware corporation, Sanifill, Inc., a Delaware corporation, and Campbell
Wells, Ltd., a Delaware limited partnership, dated as of August 12, 1996
(the "Prior Guaranty")
5. Lease and Access Agreement by and between Campbell Wells, Ltd., a Delaware
limited partnership, and Newpark Resources, Inc. [no date] (the "Lease")
6. Sublease and Access Agreement by and between Campbell Wells, Ltd., a
Delaware limited partnership, and Newpark Resources, Inc. [no date] (the
"First Sublease")
7. Sublease and Access Agreement by and between Campbell Wells, Ltd. a
Delaware limited partnership, and Newpark Resources, Inc. [no date] (the
"Second Sublease," and, together with the First Sublease, the "Subleases")
1
EXHIBIT 99.5
ASSET PURCHASE AGREEMENT
BY
AND
BETWEEN
NEWPARK ENVIRONMENTAL SERVICES, INC.
AND
U.S. LIQUIDS, INC.
Dated as of the 16th day
of September, 1998
<PAGE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") dated September 16,
1998 by and among Newpark Environmental Services, Inc., a Delaware corporation
("NESI" or "Seller"), and U.S. Liquids, Inc., a Delaware corporation ("USL" or
"Purchaser").
WHEREAS, one of Seller's lines of business is the Cleaning Business
as defined herein and activities related thereto; and
WHEREAS, Purchaser wishes to purchase from Seller and Seller wishes
to sell, transfer, assign and deliver to Purchaser the Acquisition Assets (as
hereinafter defined) on the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements stated herein, the parties
hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles.
Section 1.2 DEFINED TERMS. As used in this Agreement, the following terms
have the meanings specified in this Section 1.2. Other capitalized terms have
the meanings assigned to them elsewhere in this Agreement.
AFFILIATE: with respect to any Person, means any Person directly or
indirectly controlling, controlled by or under common control with such Person,
and any natural Person who is an officer, director or partner of such Person and
any members of their immediate families living within the same household. A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
CERCLA: means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
CLEANING BUSINESS: shall include but is not limited to any one or more of
the following activities: (1) performance of onshore and/or offshore cleaning of
tanks, barges, vessels, containers or other similar structures used in the
storage and/or transportation of NOW; and (2) the lease, rental or sale of labor
and/or equipment involved in cleaning.
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CODE: means the Internal Revenue Code of 1986, as amended, or any amending
or superseding tax laws of the United States of America.
ENVIRONMENTAL LAWS: means any and all laws, common law, statutes,
ordinances, rules, regulations, judgments, orders or other official acts or
determinations of any Governmental Authority relating to the protection of human
health or safety or regulating or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance, element,
compound, mixture or material in any and all jurisdictions in which property of
Seller is located or the business of Seller is conducted or in which such
business at any time has been conducted, including, without limitation, (a)
CERCLA, (b) RCRA, (c) the Solid Waste Disposal Act, as amended, (d) the
Hazardous and Solid Waste Amendments Act of 1984, as amended, (e) the Clean Air
Act, as amended, (f) the Toxic Substances Control Act, as amended, (g) the Safe
Drinking Water Act, as amended, (h) the Federal Water Pollution Prevention and
Control Act, as amended, (i) the Occupational Safety and Health Act of 1970, as
amended, (j) the Hazardous Materials Transportation Act, as amended, (k) the
Rivers and Harbors Act of 1899, as amended, and (l) any rules and regulations
promulgated pursuant to any or all of (a) through (k) above. The terms "release"
or "threatened release" shall have the meanings specified in CERCLA, and the
terms "solid waste" and "disposal" (or "disposed") shall have the meanings
specified in RCRA; provided, however, that, to the extent the laws of any
jurisdiction applicable to Seller or any of their respective properties or
assets establish a meaning for "release," "solid waste" or "disposal" which is
broader than that specified in either CERCLA or RCRA, such broader meaning shall
apply in such jurisdiction.
GOVERNMENTAL AUTHORITY: means any nation or government, any state or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government.
PERMITTED ENCUMBRANCES: means (a) minor defects and irregularities
affecting title to the Acquisition Assets, but only if such defects and
irregularities do not and will not impair in any material respect the operation,
value, marketability or use of the asset affected by such defect or
irregularity; and (b) rights reserved to or vested in any governmental body to
control or regulate any asset in any manner that does not materially impair the
value or use of such asset.
PERSON: means any individual, partnership, joint venture, corporation,
limited liability company, association, trust, unincorporated organization,
government or agency or subdivision thereof or any other entity.
RCRA: means the Resources Conservation and Recovery Act of 1976, as
amended.
SUBSIDIARY or SUBSIDIARIES: means, with respect to any specified Person, a
corporation, partnership, joint venture, trust, limited liability company,
unincorporated organization or other Person at least a majority of whose
securities having ordinary voting power for the election of its board of
directors or other similar managing body are, at the time as of which any
determination is being made, owned legally or beneficially by such Person or one
or more Subsidiaries thereof.
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TAX RETURN: means any return, report, statement, information return or
other document (including any related or supporting information) filed or
required to be filed with any Governmental Authority in connection with the
determination, assessment or collection of any Taxes or the administration of
any laws, regulations or administrative requirements relating to any Taxes.
TAXES: means all federal, foreign, state, local or other net or gross
income, gross receipts, sales, use, transfer, real property gains or transfer,
ad valorem, property, value-added, franchise, production, severance, windfall
profit, withholding, payroll, employment, excise or similar taxes, assessments,
duties, fees, levies or other governmental charges, together with any interest
thereon, any penalties, additions to tax or additional amounts with respect
thereto and any interest in respect of such penalties, additions or additional
amounts.
ARTICLE II
CLOSING
CLOSING. The closing of the purchase and sale provided for herein
(the "Closing") shall take place at the offices of U.S. Liquids, Inc., 411 North
Sam Houston Parkway East, Suite 400, Houston, Texas 77060, on the date hereof,
or at such other place, time or date as may be agreed upon by the parties hereto
(the "Closing Date").
ARTICLE III
PURCHASE, SALE AND DELIVERY
Section 3.1 ACQUISITION ASSETS. Subject to the terms and conditions of
this Agreement, and on the basis of the representations and warranties
hereinafter set forth, at the Closing Newpark shall sell, transfer, convey,
assign and deliver to Purchaser, and Purchaser shall acquire and purchase from
Newpark, the assets of Newpark attached hereto (the " Acquisition Assets"), free
and clear of any and all Liens, other than Permitted Encumbrances.
Section 3.2 PURCHASE PRICE. The consideration for the purchase of the
Acquisition Assets is $2,150,000 (collectively, the price for the Acquisition
Assets shall be referred to as the "Purchase Price"). The Purchase Price has
been, shall be paid or shall be deemed to have been paid as follow:
(a) At the Closing, Purchaser shall pay $537,500 to Seller;
(b) Purchaser shall pay to Seller $537,500 on each of the following
three dates: October 1, 1998, January 1, 1999, and March 1, 1999.
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All such payments of the Purchase Price by Purchaser to Seller shall be by wire
transfer to an account designated in writing by Seller or by a bank cashier's
check made payable to Seller.
Section 3.3 FURTHER ASSISTANCE. Seller shall execute and deliver to
Purchaser, at the Closing or thereafter, any other instrument which may be
requested by Purchaser and which is reasonably appropriate to perfect or
evidence any of the sales, assignments, transfers or conveyances contemplated by
this Agreement or to transfer any Acquisition Assets.
ARTICLE IV
LIABILITIES AND OBLIGATIONS
LIABILITIES NOT ASSUMED BY PURCHASER. Purchaser does not hereby
assume or agree to pay, perform or discharge, and shall not be responsible for,
any liabilities or obligations of Seller, whether accrued, absolute, contingent
or otherwise, including, without limitation, liabilities or obligations based
on, arising out of or in connection with (i) payment or nonpayment of Taxes,
(ii) any employee relating to service rendered prior to the Closing Date and
under any pension plan or agreement or employee benefit plan, (iii) claims or
conditions arising under or relating to Environmental Laws, or (iv) any claim,
litigation or proceeding, whether now pending or hereafter initiated, to the
extent based on any act or omission of Seller occurring before the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents, warrants and agrees to and with Purchaser as
follows:
Section 5.1 ORGANIZATION; QUALIFICATION. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller is duly licensed or qualified as an entity to do business and
is in good standing in all jurisdictions wherein the character of the properties
owned or held by it or the nature of the business transacted by it requires it
to be so licensed or qualified.
Section 5.2 AUTHORITY; ENFORCEABILITY. Seller has all requisite corporate
power and authority to own and operate its assets and properties and to carry on
its business as presently conducted, to enter into this Agreement and to perform
its other obligations under this Agreement. The execution, delivery and
performance of this Agreement and the transactions contemplated hereby have been
duly and validly authorized by all requisite corporate action on the part of
Seller. This Agreement has been duly and validly executed and delivered by
Seller. There is no action, claim, suit, arbitration, investigation or
proceeding pending or threatened against Seller which purports to affect
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the validity or enforceability of this Agreement or that seeks to prohibit,
restrict or delay the consummation of the transaction contemplated hereby.
Section 5.3 BINDING AGREEMENT. This Agreement constitutes, as of the date
hereof, and this Agreement and all documents and instruments required hereunder
to be executed and delivered by Seller at Closing will constitute, on the
Closing Date, legal, valid and binding obligations of Seller enforceable against
Seller in accordance with their respective terms.
Section 5.4 CONFLICTING AGREEMENTS AND OTHER MATTERS; CONSENTS. The
execution and delivery of this Agreement does not, the fulfillment of or
compliance with the terms and provisions hereof will not, and the consummation
of the transactions contemplated hereby will not (i) violate or conflict with
any provision of, or require any notice, consent, authorization or approval
under, the charter or bylaws of Seller, (ii) violate or conflict with any
provision of any judicial, administrative or arbitration order, award, judgment,
writ, injunction or decree applicable to or binding upon Seller or to which any
of its assets or properties is subject, or (iii) constitute a default under any
agreement or instrument to which Seller is a party or by which Seller is bound
or to which any of its properties is subject.
Section 5.5 TITLE TO PROPERTIES; CONDITION OF ACQUISITION ASSETS. Seller
has good and marketable title to the Acquisition Assets and the Acquisition
Assets are not subject to any lien, including, without limitation, liens with
respect to Taxes, or encumbrance. The Acquisition Assets are in good operating
condition and repair (subject to normal wear and tear) and are adequate for the
uses to which they are being put, and none of the Acquisition Assets is in need
of maintenance or repairs except for ordinary, routine maintenance and repairs
that are not material in nature or cost.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS ANY AND
ALL EXPRESS AND IMPLIED WARRANTIES CONCERNING THE ACQUISITION ASSETS, INCLUDING,
BUT NOT LIMITED TO, THE PHYSICAL CONDITION OF THE ACQUISITION ASSETS AND THEIR
FITNESS FOR ANY PARTICULAR PURPOSE. SELLER IS SELLING, AND PURCHASER IS
PURCHASING, THE ACQUISITION ASSETS "AS IS."
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, warrants and agrees to and with Seller as
follows:
Section 6.1 CORPORATE EXISTENCE. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.
Section 6.2 AUTHORITY; ABSENCE OF CONFLICTS; ENFORCEABILITY. Purchaser has
all requisite corporate power and authority to carry on its business as
presently conducted, to enter into this
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Agreement and to perform its obligations under this Agreement. The execution,
delivery and performance of this Agreement and the transactions contemplated
hereby have been duly and validly authorized by all requisite corporate action
on the part of Purchaser. This Agreement has been duly and validly executed and
delivered by Purchaser. The consummation of the transactions contemplated by
this Agreement will not violate, or be in conflict with, any provision of
Purchaser's certificate of formation, any agreement or instrument to which
Purchaser is a party or by which Purchaser is bound or any law applicable to
Purchaser. There is no action, claim, suit, arbitration, investigation or
proceeding pending or threatened against Purchaser which purports to affect the
validity or enforceability of this Agreement or that seeks to prohibit, restrict
or delay the consummation of the transactions contemplated hereby.
Section 6.3 BINDING AGREEMENT. This Agreement constitutes, as of the date
hereof, and this Agreement and all documents and instruments required hereunder
to be executed and delivered by Purchaser at Closing will constitute, on the
Closing Date, legal, valid and binding obligations of Purchaser enforceable
against Purchaser, as the case may be, in accordance with their respective
terms.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of
Purchaser to consummate the transactions contemplated herein are subject, at the
option of Purchaser, to satisfaction of the following conditions:
(a) COMPLIANCE. Seller shall have complied with their covenants and
agreements contained herein, and the representations and warranties
contained in Article V hereof shall be true and correct on the date hereof
and as of the Closing Date.
(b) SELLER'S RESOLUTIONS. Seller shall deliver to Purchaser
certified copies of resolutions duly adopted by the board of directors of
each Seller authorizing and approving the execution and delivery of this
Agreement, including any attachment hereto, and the consummation of the
transactions contemplated herein.
(c) TRANSFER DOCUMENTS. Seller shall execute and deliver to
Purchaser such bills of sale and other instruments of sale, transfer,
conveyance, assignment and delivery covering the Acquisition Assets or any
part thereof, executed by Seller or other appropriate parties, as
Purchaser may reasonably require to assure the full and effective sale,
transfer, conveyance, assignment and delivery to Purchaser of the
Acquisition Assets.
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Section 7.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller
to consummate the transactions contemplated herein are subject, at the option of
Seller, to satisfaction of the following condition: Purchaser shall have
complied with its covenants and agreements contained herein, and the
representations and warranties contained in Article VI hereof shall be true and
correct on the date hereof and as of the Closing Date.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 SELLER'S INDEMNITY OBLIGATIONS. Seller shall indemnify and
hold Purchaser (including its officers, directors, employees and agents)
harmless from and against any and all claims, actions, causes of action,
arbitrations, proceedings, losses, damages, liabilities, judgments and expenses
(including, without limitation, reasonable attorneys' fees) ("Indemnified
Amounts") incurred by Purchaser as a result of (a) any breach or
misrepresentation in any of the representations and warranties made by or on
behalf of Seller in this Agreement, (b) any violation or breach by Seller of or
default by Seller under the terms of this Agreement, (c) except for liabilities
and obligations expressly assumed by Purchaser pursuant to this Agreement, any
act or omission by Seller, including, without limitation, those acts or
omissions relating to intellectual property rights or to products manufactured
or sold by Seller, occurring prior to the Closing Date with respect to the
Seller's business or the Acquisition Assets, (d) any act or omission occurring
after the Closing Date by Seller with respect to Seller's business or (e) any of
Seller's Liabilities.
Section 8.2 PURCHASER'S INDEMNITY OBLIGATIONS. Purchaser shall indemnify
and hold Seller (including its officers, directors, employees and agents)
harmless from and against any and all Indemnified Amounts incurred by Seller as
a result of (a) any breach or misrepresentation in any of the representations
and warranties made by or on behalf of Purchaser in this Agreement, (b) any
violation or breach by Purchaser of or default by Purchaser under the terms of
this Agreement or (c) any act or omission occurring after the Closing Date by
Purchaser with respect to the Acquisition Assets.
ARTICLE IX
MISCELLANEOUS
Section 9.1 SURVIVAL. Except as otherwise provided herein, the
representations and warranties set forth in this Agreement and in any
certificate or instrument delivered in connection herewith shall be continuing
and shall survive the Closing for a period of one (1) year following the Closing
Date, notwithstanding any investigation at any time made by or on behalf of
Purchaser, but shall thereafter terminate and be of no further force or effect;
PROVIDED, HOWEVER, that in the case of all representations and warranties, there
shall be no such termination with respect to any such
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representation or warranty as to which a bona fide claim has been asserted by
written notice of such claim delivered to the party or parties making such
representation or warranty prior to the expiration of the survival period.
Section 9.2 EXPENSES. Except as otherwise expressly provided herein, each
party shall bear its own respective expenses incurred in connection with the
negotiation, preparation and execution of this Agreement and the transactions
contemplated hereby, including his or its own consultant's fees, attorneys'
fees, accountants' fees, investment banking and loan fees and other similar
costs and expenses.
Section 9.3 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been received only if and when (a)
personally delivered or (b) on receipt after mailing, by United States mail,
first class, postage prepaid, by certified mail return receipt requested, or by
facsimile transmission to the respective parties, addressed in each case as
follows (or to such other address as may be specified by like notice):
(i) If to Seller, to Newpark Environmental Services, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 77002
Attention: James D. Cole, President
Facsimile No.: (504) 833-9506
(ii) If to Purchaser, to U.S. Liquids, Inc.
411 N. Sam Houston Parkway East
Houston, Texas 77060
Attention: W. Greg Orr, President
Facsimile: (281) 272-4545
Section 9.4 ENTIRE AGREEMENT. This Agreement, including any attachments
hereto, which attachments are incorporated herein by reference and deemed to be
a part of this Agreement, and the Noncompetition Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof, and may not
be modified, amended or terminated except by a written instrument specifically
referring to this Agreement signed by all the parties hereto. Concurrently with
the execution and delivery of this Agreement, the parties and Newpark Resources,
Inc., a Delaware corporation, are executing the following additional agreements
(the "New Deal Agreements"): Settlement of Arbitration and Release, NOW Payment
Agreement, Noncompetition Agreement and Miscellaneous Agreement. In the event of
any conflict between the provisions of this Agreement and any of the New Deal
Agreements, the provisions of the New Deal Agreement or Agreements shall
control.
Section 9.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
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TEXAS WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
Section 9.6 ASSIGNMENTS AND THIRD PARTIES. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. No party hereto
shall assign this Agreement or any part hereof without the prior written consent
of the other party; PROVIDED, HOWEVER, that it is understood and agreed that
Purchaser may assign all or any portion of its rights and delegate all or any
portion of its duties hereunder to an Affiliate of Purchaser, in which event the
assignee of Purchaser shall execute and deliver all documents, certificates and
other instruments to be executed and delivered by Purchaser at the Closing in
lieu of Purchaser, which documents, certificates and other instruments shall be
appropriately modified to conform to such assignee's organizational status. No
assignment shall release a party of any of its obligations under this Agreement.
Section 9.7 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any of the parties hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
Section 9.8 AMENDMENTS; NO WAIVERS. Any provision of this Agreement may be
amended or waived prior to the Closing Date if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by all parties
hereto, or in the case of a waiver, by the party against whom the waiver is to
be effective. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 9.9 NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement shall
entitle any Person other than the parties hereto or their respective successors
and assigns permitted hereby to any claim, cause of action, remedy or right of
any kind.
Section 9.10 HEADINGS; USE OF CERTAIN TERMS. The headings and table of
contents included herein are for convenience only and shall have no significance
in the interpretation hereof. Unless the context shall otherwise require, the
singular shall include the plural and vice versa, and each pronoun in any gender
shall include all other genders.
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Section 9.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed for all purposes to be an original,
but all of which together shall constitute one and the same agreement.
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ON THIS DATE, the Parties have executed multiple originals of this Asset
Purchase Agreement.
NEWPARK ENVIRONMENTAL SERVICES, INC.
Dated: 9/17/98 By:/s/ JAMES D. COLE
Name: James D. Cole
Title: CHAIRMAN
U.S. LIQUIDS, INC.
Dated: 9/16/98 By:/s/ W. GREGORY ORR
Name: W. Gregory Orr
Title: PRESIDENT
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