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EXHIBIT 10.17
PAYMENT AGREEMENT
This Payment Agreement (the "Agreement") is made and entered
into this 31st day of December, 1998, by and among U.S. Liquids, Inc. ("U.S.
Liquids" or "USL"), a Delaware corporation, Newpark Resources, Inc., a Delaware
corporation ("Newpark"), and Newpark Environmental Services, Inc. ("NESI"), a
Delaware corporation and wholly owned subsidiary of Newpark (i) to amend and
restate in its entirety the NOW Payment Agreement dated September 16, 1998 (as
amended effective September 22, 1998, the "NOW Payment Agreement"), by and
between NESI and USL and (ii) to amend certain other agreements referred to
herein.
WHEREAS the parties to this Agreement agree that, among the
purposes of this Agreement, the NOW Payment Agreement and the other agreements
described herein were and are: (i) cancellation of the waste disposal
obligations of NESI and Newpark under NOW Disposal Agreement (the "Disposal
Agreement") dated as of June 4, 1996, by and among Sanifill, Inc., a Delaware
corporation ("Sanifill"), Xxxxxxxx Xxxxx, Ltd., a Delaware limited partnership
("Xxxxxxxx"), and NOW Disposal Operating Co., a Delaware corporation
("Disposeco"), and the Assumption and Guaranty Agreement dated as of August 12,
1996, by and among Newpark, Sanifill and Xxxxxxxx; (ii) termination of any
obligation of Newpark and NESI to USL extending beyond the term of this
Agreement; (iii) establishment of fair compensation to USL for, among other
things, such cancellation and termination; and (iv) modification of certain
obligations of USL to Newpark and NESI, including but not limited to its
non-competition obligation, based on such cancellation and termination.
WHEREAS, concurrently with the execution and delivery of the
NOW Payment Agreement, the parties have executed and delivered the following
agreements (the "Other Agreements") in connection with the execution and
delivery of the NOW Payment Agreement: NESI and USL executed and delivered (a)
Asset Purchase Agreement dated September 16, 1998 (as amended as of September
22, 1998, the "Purchase Agreement"); and Newpark and USL executed and delivered
(b) Settlement of Arbitration and Release dated September 17, 1998 (the
"Release"); (c) Noncompetition Agreement dated September 16, 1998 (the
"Noncompetition Agreement"); and (d) Miscellaneous Agreement dated September 16,
1998 (the "Miscellaneous 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 Date: January 3, 2000.
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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.
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 375,000 barrels of NOW for the first
Contract Year, 500,000 barrels of NOW for the second Contract Year and 500,000
barrels of NOW for the third Contract Year.
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 the 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.
Covered Region: The States of Louisiana, Texas, Mississippi
and Alabama, and the Gulf of Mexico.
Disposal: The treatment or disposal of NOW.
Effective Date: July 1, 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 Xxx Xxxxx, XX (DNR Permit #OWD 89-1) (the "Elm Grove
Landfarm"); Bourg, LA (XXX Xxxxxx #00-00 XXX) (xxx "Xxxxx Xxxxxxxx"); Xxxxxxx
Island, LA (DNR Permit #91-10 OWD) (the "Xxxxxxx 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
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per gram of Radium 226 or 228. Without limiting the generality of the foregoing,
for waste disposed of in Louisiana, the term NOW shall include all wastes
containing less than 30 picocuries per gram of Radium 226 or 228 classified as
NOW under Louisiana Statewide Order 29-B, as currently in effect, 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.
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 I and October 1.
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 Initial Payment. 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.
2.2 Additional Payments.
2.2.1 First Contract Year. Separate from and in addition to
its obligations under Section 2.1, NESI shall make an additional
payment to USL in the total amount of $8 million for the first Contract
Year except as provided in Section 12.1. NESI shall pay USL $1 million
of the aforesaid additional payment 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 additional payment owed for the second Contract Year shall
total $10 million except as provided in Section 12.1, subject
to adjustment as provided in Section
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2.2.2b. The additional payment 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
such additional payment 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 Adjustment Date, January 3, 2000, the additional
payment 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 the Adjustment Date,
(ii) dividing said sum by the Base Rate and (iii) multiplying
the result by $5 million, except as provided in Section 12.l.
In the event that the net change in the Consumer Price Index
is negative, the additional payment 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 such additional payment for the second Contract
Year in six equal monthly installments due on or before
January 1, 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 additional payment owed for the
third Contract Year shall total $8 million except as provided in Section 12.1,
subject to adjustment as provided in the following sentence. On the Adjustment
Date, January 3, 2000, the additional payment 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 the 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
additional payment for the third Contract Year shall total $8 million, except as
provided in Section 12.1. NESI shall pay such additional payment in twelve equal
monthly installments due on or before July 3, 2000, August 1, 2000, September 1,
2000, 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.
2.3 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, if any, 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.
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ARTICLE III
DISPOSAL VOLUME
3.1 NOW Delivery.
3.1.1 Delivery Option.
x. XXXX may, at its option, deliver to USL for disposal at the
Xxxxxxx 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 limitations set forth in this Agreement, USL shall accept
for disposal at the Xxxxxxx Island Landfarm all NOW delivered
by or on behalf of NESI, provided, however, that in no event
shall USL be obligated to accept from NESI for disposal at any
Landfarm more than the Annual Volume during any Contract Year.
Failure to deliver the full Annual Volume shall not result in
any carryforward or increase in the Annual Volume in the
succeeding Contract Year.
x. XXXX shall have the right to deliver a volume no more than 10%
of the Annual Volume to the Bourg Landfarm at no cost, subject
to Section 3.1.l.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
x. XXXX shall have the right to deliver a volume no more than 10%
of the Annual Volume 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
additional payments required under Article II 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 Variance. The parties agree to cooperate to minimize monthly
and quarterly variances in NOW, if any, delivered for disposal at the Landfarms,
in order to avoid disruption of or problems in USL's operations.
3.3 Excess Volume.
3.3.1 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 Annual Volume (the "Excess Volume"). USL may decline to
accept Excess Volume for any reason. Should USL exercise its option to accept
delivery of an amount of Excess Volume of NOW, NESI agrees to pay the "Excess
Volume Rate" (as defined below) for disposal of the Excess Volume. In the event
USL elects not to accept NOW delivered by NESI in excess of the Annual Volume
during any Contract Year for any reason, including but not limited to rejection
in
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accordance with Section 6.6 of this Agreement, such election shall not cause (i)
the Annual Volume for any Contract Year to increase or (ii) the payments
required under this Agreement to decrease.
3.3.2 Excess Volume Rate.
a. First Contract Year. The rate for disposal of Excess Volume of NOW
(the "Excess Volume Rate") for the first Contract Year shall be $2.86 per
barrel, net of all currently applicable taxes. The Excess Volume Rate shall
never be less than $2.86 per barrel of NOW during the term of this Agreement.
b. Adjustment of Prevailing Rate. On the Adjustment Date, January 3,
2000, the Excess Volume 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 Adjustment Date, (ii) dividing said sum by
the Base Rate, and (iii) multiplying the result by $2.86. If the net change in
the Consumer Price Index is negative, then the Prevailing Rate shall be $2.86
per barrel of Excess Volume of NOW until June 30, 2001.
3.3.3 Invoice for Excess Volume: USL shall invoice NESI for
fees incurred from the disposal of Excess Volume of NOW, 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.
3.4 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.
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 usual and customary 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 other payments due in
accordance with this Agreement. USL will accept injectable saltwater at the
Landfarms for disposal upon request of NESI at the usual and customary 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 other amounts which are payable
pursuant to this Agreement.
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4.2 Disposal of Washwater. NESI shall pay USL to dispose of
Washwater at the rate of $1.50 per barrel of Washwater. On the Adjustment Date,
the 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 Adjustment Date, (ii) dividing said sum by the Base Rate, and
(iii) multiplying the result by $1.50. If the net change in the Consumer Price
Index is negative, then the rate for disposal of Washwater shall be $1.50 per
barrel. 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
xxxx 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 Xxxxxxx 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 of barrels of Excess Volume, if any,
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 all Persons 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 or the
other payments that are due pursuant to this Agreement.
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
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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 Xxxxxxx 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 of Excess Volume, if any, 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 all Persons 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 Effect of Breach of Noncompetition Agreement. If USL breaches the
Noncompetition Agreement by engaging in the "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
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,
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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
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
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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 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
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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 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 XXXX
XXXX 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),
12
(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:
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.
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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.
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. Xxxxxxxxx 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 Xxxxx 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.
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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.
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
15
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.
10.3.1 Promptly 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 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 subsequently incurred by such indemnified party in connection
with the defense thereof unless the named parties to such action or proceeding
(including any impleaded parties) shall include both an indemnifying party and
an indemnified party and the indemnified party shall have been advised by
counsel that there may be one or more defenses available to such indemnified
party that are different from or additional to those available to the
indemnifying party (in which case, if the indemnified party notifies the
indemnifying party that it wishes to employ separate counsel at the expense of
the indemnifying party (who shall promptly pay all such expenses 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).
10.3.2 If an indemnifying party, within a reasonable period of
time after notice by the indemnified party of the commencement of any action or
proceeding with respect to which the indemnified party is to make a claim
hereunder, fails to assume the defense thereof, the indemnified party shall have
the right (upon further notice to the indemnifying party) to undertake the
defense, compromise or settlement of such action or proceeding for the account
of the indemnifying party, subject to the right of the indemnifying party to
assume the defense of such action or proceeding at any time prior to settlement,
compromise or final determination thereof. The cost and expense of any such
defense and any judgment in any such action or proceeding shall be borne by the
indemnifying party, and, if paid by the indemnified party, shall be reimbursed
by the indemnifying party within thirty days after receipt of invoice therefor.
10.3.3 Except 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 compromise 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
16
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 Xxxxxx County,
Texas.
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 by NESI 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 Xxxxxxx 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.
12.1.1 If USL notifies NESI that it will temporarily suspend
operations at the Xxxxxxx 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 Xxxxx 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 Xxxxxxx Island Landfarm under
Section 3.1.l.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 Xxxxxxx Island Landfarm, NESI may
exercise its option to deliver NOW in accordance with Section 3.1.
12.1.2 If USL notifies NESI that it will temporarily suspend
operations at the Xxxxxxx 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
00
Xxxxxxx Xxxxxx Xxxxxxxx, NESI shall resume payments and may exercise its option
to deliver NOW in accordance with Section 3.1.
12.1.3 If USL notifies NESI that it will temporarily suspend
operations at the Xxxxxxx 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
Xxxxxxx Island Landfarm, NESI shall resume payments and may exercise its option
to deliver NOW in accordance with Section 3.1.
12.1.4 If operations are temporarily suspended at the Xxxxx,
Xxxxxxx 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 Landfarm, and provided
USL makes any Landfarrn 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.
12.1.5 Whenever, in accordance with the foregoing provisions
of this Section 12.1, NESI is excused from making payments of a portion of the
additional payment due pursuant to this Agreement for any month or months, such
excuse shall be a permanent excuse, and the total additional payments 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
18
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 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.
13.5.1 General. 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 or Newpark: With a copy to:
c/o Newpark Resources, Inc. Xxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxxxx, Xxxxx 0000 0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000 Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxx, President Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
If to USL: With a copy to:
U.S. Liquids, Inc. Xxxxx & Xxxxx, L.L.P.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx Xxx Xxxxx Xxxxx
Xxxxxxx, XX 00000 910 Louisiana
Attention: W. Xxxx Xxx, President Xxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000 Attention: Xxxxxx X. Xxxx, Esq.
Facsimile No.: (000)000-0000
or such other address as any party shall specify by written notice so given.
19
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
X.X. Xxx 0000
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
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.
13.8 Effect on NOW Payment and Other Agreements. The NOW Payment
Agreement is superseded in its entirety by this Agreement and shall be of no
further force or effect. Each of the Other Agreements is and shall remain in
full force and effect, except that all references to the NOW Payment Agreement
in the Other Agreements shall be deemed to refer solely to this Agreement unless
the context requires otherwise.
13.9 Entire Agreement; Amendment. This Agreement and the Other
Agreements constitute the entire agreement between the parties concerning the
subject matter hereof and supersede any and all other communications,
representations, proposals, understandings or agreements, either written or
oral, between the parties hereto with respect to such subject matter.
Concurrently with the execution and delivery of this Agreement, the parties are
also executing and delivering an agreement (the "Option") under which NESI and
Newpark are granted the option to extend certain provisions of this Agreement
for an additional two years. This Agreement may not be modified or amended, in
whole or in part, except by a writing signed by both parties hereto.
20
13.10 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.
13.11 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.
13.12 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.
13.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
21
ON THIS DATE, the Parties have executed multiple originals of this
Payment Agreement.
NEWPARK ENVIRONMENTAL SERVICES, INC.
Dated: December 31, 1998 By:
Name:
Title:
NEWPARK RESOURCES, INC.
Dated: December 31, 1998 By:
Name:
Title:
U.S. LIQUIDS, INC.
Dated: December 31, 1998 By:
Name:
Title:
