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EXHIBIT 10.21
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 Xxxxxxx Island, Louisiana (DNR Permit #91-10 OWD) (the
"Xxxxxxx Island Landfarm"), Bourg, Louisiana (XXX Xxxxxx #00-00 XXX)
(xxx "Xxxxx 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 described in
subparagraph (b) below, USL and its Affiliates shall be permitted from time to
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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 000-xxxx xxxxxx
xx XXX?x Xxxxxx, Xxxxx, 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 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
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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.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: W. Xxxx Xxx, President
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx & Xxxxx, L.L.P.
Xxx Xxxxx Xxxxx
000 Xxxxxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
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Newpark: Newpark Resources, Inc.
Newpark Environmental Services, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, President
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx, Xxxxx & Xxxxxx, L.L.P.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
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 Buyuer Noncompetition Agreement,
both dated December 31, 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.
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 Xxxxxx 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: By:
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Name:
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Title:
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U.S. LIQUIDS, INC.
Dated: By:
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Name:
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Title:
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