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 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
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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.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: W. Xxxx Xxx, President
Facsimile No.: (000) 000-0000
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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
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 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 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: 9/17/98 By:/s/ XXXXX X. XXXX
Name: Xxxxx X. Xxxx
Title: PRESIDENT
U.S. LIQUIDS, INC.
Dated: 9/16/98 By:/s/ W. XXXXXXX XXX
Name: W. Xxxxxxx Xxx
Title: PRESIDENT
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