EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of July 24, 1997, by and among (a) NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), and (b) HILL ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. (each a "Stockholder" and, together, the "Stockholders"),
with reference to the following facts:
A. The Stockholders own beneficially and of record 100% of the
outstanding capital stock (the "Target Shares") of ▇▇▇▇▇▇▇ CONSTRUCTION COMPANY,
INC., a Texas corporation ("▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ CONSTRUCTION COMPANY OF
LOUISIANA, INC., a Texas corporation ("▇▇▇▇▇▇▇ Louisiana") (each a "Company,"
and, together, the "Companies"). Each reference to "the Companies" herein means
either or both of them or, with respect to negative statements, neither nor both
of them.
B. The Companies are engaged together in providing construction and
site preparation services to the oil and gas industry in the Gulf Coast region.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the "Code") and that the transaction
will be treated as a "pooling of interests" for accounting purposes. The Plan
comprises the acquisition by Newpark of the Target Shares (including the
goodwill of the Companies associated therewith) from the Stockholders solely in
exchange for 251,000 newly issued shares of voting Common Stock of Newpark (the
"Newpark Shares"). Such transaction is sometimes referred to herein as the
"Exchange," and the consummation of the Exchange on the date hereof is sometimes
referred to herein as the "Closing."
D. Newpark and the Stockholders believe that it is in their best
interests to adopt the Plan and consummate the Exchange.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Plan of Reorganization.
1.1 Adoption of Plan. Newpark and the Stockholders hereby adopt the
plan of reorganization herein set forth.
1.2 Exchange of Shares. Concurrently with the execution of this
Agreement, and subject to all of the terms hereof, the Stockholders will deliver
to Newpark certificates representing all of the Target Shares, duly endorsed for
transfer to Newpark or accompanied by separate stock powers so endorsed, and
Newpark will issue and deliver certificates representing the Newpark Shares to
the Stockholders, in proportion to their ownership of the Target Shares. No
fractional Newpark Shares will be issued; if fractional shares otherwise would
issue, the Stockholders shall instruct Newpark as to the rounding of such
shares.
1.3 Securities Act Legend on Newpark Shares. Each Stockholder hereby
agrees that he will not offer to sell, transfer or otherwise dispose of any of
the Newpark Shares issued to him pursuant to the Exchange, except in accordance
with the applicable provisions of the "Securities Act" and the "Rules and
Regulations" (as such terms are defined in Section 15). Certificates
representing the Newpark Shares initially will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS REGISTERED UNDER SAID ACT OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE IN THE OPINION OF COUNSEL FOR THE ISSUER."
1.4 Pooling of Interests Restriction. Each Stockholder hereby agrees
that he will not offer to sell, transfer or otherwise dispose of any of the
Newpark Shares issued to him pursuant to the Exchange until such time as
financial results covering at least 30 days of combined operations of Newpark
and the Companies have been published within the meaning of Section 201.01 of
the Commission's Codification of Financial Reporting Policies.
2. Ancillary Agreements.
2.1 Noncompetition Agreements. At the Closing, as a necessary incident
of the Exchange, Newpark and the Stockholders will execute and deliver
noncompetition agreements substantially as set forth in Exhibit 2.1 attached to
this Agreement.
2.2 Registration Rights Agreement. On the Closing Date, Newpark and
the Stockholders will execute and deliver a Registration Rights Agreement
substantially as set forth in Exhibit 2.2 attached to this Agreement.
3. Representations and Warranties of the Stockholders.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Stockholders to Newpark prior to the
execution hereof, the Stockholders hereby jointly and severally warrant and
represent the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's obligations to consummate the
Exchange and issue the Newpark Shares):
3.1 Organization and Good Standing of the Companies.
3.1.1 Each Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. Each Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the character or
location of the assets owned by such Company or the nature of the business
transacted by such Company require such
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qualification, except where failure to be so qualified would not have a
"Material Adverse Effect" (as defined in Section 15). The Disclosure Letter
includes, for each Company, a list of the jurisdictions in which such Company is
qualified to do business.
3.1.2 The Stockholders have furnished to Newpark complete and correct
copies of each Company's Articles of Incorporation and Bylaws as in effect on
the date hereof.
3.1.3 The Stockholders have heretofore made available to Newpark for
its examination copies of the minute books, stock certificate books and
corporate seal of each Company. Said minute books are accurate in all material
respects and reflect all resolutions adopted and all material actions expressly
authorized or ratified by the stockholders and directors of such Company. The
stock certificate books reflect all issuances, transfers and cancellations of
capital stock of such Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of ▇▇▇▇▇▇▇ consists of 20,000
shares of stock, $10.00 par value per share, of which 7,200 shares are issued
and outstanding as of the date hereof. The authorized capital stock of ▇▇▇▇▇▇▇
Louisiana consists of 1,000 shares of stock, $1.00 par value per share, of which
1,000 shares are issued and outstanding as of the date hereof. All such issued
and outstanding shares are validly issued, fully paid and nonassessable. The
Disclosure Letter includes the names, addresses and social security numbers of,
and the number of the Target Shares owned by, each of the Stockholders.
3.2.2 There are no options, warrants, subscriptions or other rights
outstanding for the purchase of, and all securities convertible into, capital
stock of either Company. No shares of either Company are held as treasury
stock.
3.3 Equity Interests. The Companies do not have a material equity
interest in any other "Person" (as defined in Section 15).
3.4 No Violation. The execution, delivery and performance of this
Agreement by the Stockholders are not contrary to the Articles of Incorporation
or Bylaws of either Company and will not result in a violation or breach of any
term or provision or constitute a default or give any party a right to
accelerate the due date of any indebtedness under any indenture, mortgage, deed
of trust or other material contract or agreement to which either Company, the
Stockholders or any of them are a party or by which any of them are bound.
3.5 Financial Statements. The compiled balance sheets of each Company as
of December 31, 1994, December 31, 1995 and December 31, 1996, and the related
compiled statements of income, stockholders' equity and cash flows for the years
ended December 31, 1994, December 31, 1995 and December 31, 1996, accompanied by
the reports and opinions of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, independent certified
public accountants, and the unaudited balance sheet of each Company as of May
31, 1997, and the related statement of income for the five month period ended on
said date, certified by the principal financial officer of each Company, subject
to year-end
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adjustments, copies of which have heretofore been delivered to Newpark
(collectively the "Company Financial Statements"), were prepared in accordance
with the books and records of such Company in accordance with generally accepted
accounting principles (except for the absence of statements of stockholders'
equity and cash flows and footnotes from the May 31, 1997, financial statements)
consistently applied throughout the periods involved (except as otherwise noted
therein) and present fairly the financial position, results of operations and
cash flows of each Company for and as of the end of each of such periods.
3.6 Properties. The Companies have good title to the assets and
properties shown in the Company Financial Statements or acquired since the date
of the latest balance sheet included therein, except as since sold or otherwise
disposed of in the ordinary course of business. Such title is free and clear of
all liens, charges, security interests, encumbrances, leases, covenants,
conditions and restrictions other than "Permitted Liens" (as defined in Section
15). The plants, structures, leasehold improvements, machinery, equipment,
furniture and other tangible assets owned or leased by the Companies are in good
operating condition and repair, subject only to ordinary wear and tear, taking
into account the respective ages of the assets involved, and constitute all the
fixed tangible assets necessary for the operation of the businesses of the
Companies in accordance with their current methods of operation in all material
respects.
3.7 Contracts.
3.7.1 The Disclosure Letter includes a listing with respect to each
Company of all oral or written (a) contracts, commitments, sales orders or
purchase orders, whether or not entered into in the ordinary course of business,
which involve future payments, performance of services or delivery of goods
and/or materials, to or by such Company of an amount or value in excess of
$25,000; (b) bonus, incentive compensation, pension, profit sharing, stock
option, group insurance, medical reimbursement or employee welfare or benefit
plans of any nature whatsoever; (c) collective bargaining agreements or other
contracts or commitments to or with labor unions or other employee groups; (d)
leases, contracts or commitments affecting ownership of, title to, use of or any
material interest in real estate; (e) employment contracts and other contracts,
agreements, or commitments to or with individual employees, consultants or
agents extending for a period of more than six months from the date hereof or
providing for earlier termination only upon payment of a penalty or the
equivalent thereof; (f) equipment leases providing (in any one lease or group of
related leases) for payments in excess of $10,000 per year; (g) contracts under
which the performance of any obligation of such Company is guaranteed by a
Stockholder or other third party, including performance bonding arrangements;
(h) contracts or commitments providing for payments based in any manner upon the
revenues, purchases or profits of such Company; (i) bank credit, factoring and
loan agreements, indentures, promissory notes and other documents representing
indebtedness for borrowed money; (j) patent licensing agreements and all other
agreements with respect to patents, patent applications, trademarks, service
marks, trade names, technical assistance, special processes, know-how, copyright
or other like items; and (k) other contracts and agreements to which such
Company is a party and which have not been fully performed, involving
consideration having a value in excess of $25,000 or a remaining period for
performance in excess of nine months (all such items being collectively referred
to herein as "Material Contracts"). The Stockholders have furnished to Newpark
true and complete copies of all such Material Contracts.
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3.7.2 All Material Contracts are valid and binding obligations of the
contracting Company listed in the Disclosure Letter and, to the "best of the
knowledge of the Stockholders" (as defined in Section 15), the other parties
thereto in accordance with their respective terms, subject to the "Bankruptcy
Exception" (as defined in Section 15); there have been no amendments to or
modifications to any Material Contract (except as set forth in the copies
furnished to Newpark); no event has occurred which is, or, following any grace
period or required notice, would become a material default by such Company under
the terms of any Material Contract; except to the extent specifically reserved
against on the latest balance sheet included in the Company Financial
Statements, neither Company is a party to any Material Contract on which the
Stockholders anticipate expenses materially in excess of revenues or which is
otherwise onerous or materially adverse; and neither Company has expressly
waived any material rights under any Material Contract.
3.8 Outstanding Indebtedness. The Disclosure Letter includes a true and
complete schedule of all notes payable and other indebtedness for borrowed money
owed by each Company, including a description of the material terms thereof and
a description of all properties or assets pledged, mortgaged or otherwise
hypothecated (voluntarily or involuntarily) as security therefor.
3.9 Absence of Undisclosed Liabilities. Except as disclosed in the
Disclosure Letter and except for liabilities and obligations reflected on the
latest balance sheet included in the Company Financial Statements or arising in
the ordinary course of business since the date of such balance sheet, none of
which latter items, individually or in the aggregate, have a Materially Adverse
Effect: (a) the Companies do not have, and none of their properties are subject
to, any debts, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, which are of a type which are required to be
shown or reflected on financial statements prepared in a manner consistent with
generally accepted accounting principles; and (b) to the best of the knowledge
of the Stockholders, the Companies do not have, and none of their properties are
subject to, any material debts, liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, whether or not of a type
which are required to be shown or reflected on financial statements prepared in
a manner consistent with generally accepted accounting principles. Neither
Company is in default with respect to any material term or condition of any
indebtedness.
3.10 No Litigation. Except as disclosed in the Disclosure Letter, there
are no actions, suits or proceedings (whether or not purportedly on behalf of a
Company) pending or, to the knowledge of the Stockholders, threatened against or
affecting either Company, at law or in equity or before or by any "Government
Body" (as defined in Section 15) or before any arbitrator of any kind. To the
best of the knowledge of the Stockholders, neither Company is in default with
respect to any judgment, order, writ, injunction, decree, award of any
Government Body.
3.11 Environmental Matters.
3.11.1 Neither the Companies nor, to the best of the knowledge of the
Stockholders, any previous owner, lessee, tenant, occupant or user of any real
property owned or leased on or prior to the date hereof by the Companies (such
real property and any and all buildings and other improvements thereon being
herein referred to as the "Property") used, generated,
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manufactured, treated, handled, refined, processed, released, discharged, stored
or disposed of any "Hazardous Materials" (as defined in Section 15) on, under,
in or about the Property, or transported any Hazardous Materials to or from the
Property in violation of any "Hazardous Materials Laws" (as defined in Section
15) in a manner or to an extent that resulted or is reasonably likely to result
in a Material Adverse Effect. To the best of the knowledge of the Stockholders,
no underground tanks or underground deposits or Hazardous Materials, the
existence of which would have a Material Adverse Effect, existed on, under, in
or about any Property previously owned or leased by the Companies on or prior to
the date that fee or leasehold title to such Property was transferred to a third
party by the Companies. To the best of the knowledge of the Stockholders, no
underground tanks or underground deposits or Hazardous Materials the existence
of which would have a Material Adverse Effect exist on, under, in or about any
Property that is currently owned or leased by the Companies.
3.11.2 While any Property was owned or leased by the Companies, they
did not violate to an extent that would have a Material Adverse Effect any
applicable federal, state and local laws, ordinances or regulations, now or
previously in effect, relating to environmental conditions, industrial hygiene
or Hazardous Materials on, under, in or about such Property (including without
limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge of the
Stockholders, there are no (1) enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Companies or any Property
presently owned or leased by the Companies, (2) claims made or threatened by any
Person or Government Body relating to the Property against the Companies or any
Property presently owned or leased by the Companies or relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials or (3) any occurrence or condition known to the Stockholders
on any Property that is currently owned or leased by the Companies that can
reasonably be expected to subject the Companies or such Property to any material
restrictions on occupancy, transferability or use of any Property under any
Hazardous Materials Laws. The Disclosure Letter includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of the Stockholders, have been received by or asserted
against the Companies.
3.12 Taxes.
3.12.1 The Companies have filed all income, franchise and other "Tax
Returns" (as defined in Section 15) required to be filed by them by the date
hereof. All "Taxes" (as defined in Section 15) imposed by the United States, the
States of Texas and Louisiana and by any other state, municipality, subdivision,
or other taxing authority, which are due and payable by the Companies have been
paid in full or are adequately provided for by reserves reflected on the latest
balance sheet included in the Company Financial Statements. ▇▇▇▇▇▇▇ Louisiana is
an S corporation under Subchapter S of the Code for federal income Tax purposes
and has maintained its status as an S corporation continuously since its
election to be taxed as such on January 1, 1993. The Stockholders have paid all
income Taxes required to be paid by them with respect to all items of income,
net of all deductions, allocable to them for federal income tax purposes by
reason of
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▇▇▇▇▇▇▇ Louisiana's status as an S corporation, for each taxable year ended on
or before December 31, 1996.
3.12.2 All contributions due from the Companies pursuant to any
unemployment insurance or workers compensation laws and all sales or use Taxes
which are due or payable by the Companies have been paid in full. The Companies
have withheld and paid to, or will cause to be paid to, the appropriate taxing
authorities all amounts required to be withheld from the wages of their
employees under state law and the applicable Code provisions.
3.12.3 The Stockholders have furnished to Newpark true and complete
copies of the federal income Tax Returns and comparable state Tax Returns of the
Companies covering the years ended December 31, 1994, December 31, 1995 and
December 31, 1996, constituting complete and accurate representations in all
material respects of the Tax liabilities of the Companies for the relevant
periods stated therein and accurately setting forth all relevant material items,
including the Tax bases of all assets, where required to be set forth in such
Tax Returns.
3.13 Permits and Licenses. The Companies have all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable them to conduct their businesses in all material respects as conducted on
the date hereof, and the Companies are in compliance in all material respects
with all applicable federal, state and local laws, rules, regulations and orders
relating to their businesses, except where failure to have any such license,
franchise, permit or authorization or failure to comply with any such laws,
rules, regulations and orders would not have a Material Adverse Effect. The
execution and performance of this Agreement and the consummation of the
transactions contemplated hereby will not cause the termination or suspension of
any license, franchise, permit or governmental authorization or violate any
provision of or constitute a default under any law, rule or regulation, order,
writ, injunction or decree of any Government Body applicable to the Stockholders
or the Companies, where such violation or default would have a Material Adverse
Effect.
3.14 No Labor Problems. The Companies have not been charged with any
unresolved unfair labor practices and there are no material controversies
pending or threatened between the Companies and any of their employees. The
Companies have complied in all material respects with all laws relating to
wages, hours, collective bargaining and similar employment matters the
noncompliance with which would have a Material Adverse Effect, and the Companies
have paid all social security and similar Taxes that are due and payable and are
not liable for any arrears or wages or any Taxes or material penalties for
failure to comply with any of the foregoing.
3.15 Employee Benefit Plans.
3.15.1 Definition of Benefit Plans. For purposes of this Section 3.15,
the term "Benefit Plan" means any plan, program, arrangement, practice or
contract which provides benefits or compensation to or on behalf of employees or
former employees of the Companies or any "ERISA Affiliate" (as hereinafter
defined), whether formal or informal, whether or not written, including but not
limited to the following:
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(a) Arrangements - any bonus, incentive compensation, stock
option, deferred compensation, commission, severance, golden parachute or other
compensation plan, rabbi trust, program, contract, arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any "multi-employer plan"
(as defined in Section 3(37) and Section 4001(a)(3) of ERISA), defined benefit
pension plan, profit sharing plan, money purchase pension plan, 401(k) plan,
savings or thrift plan, stock bonus plan, employee stock ownership plan, or any
plan, fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability, or
life insurance benefits; and
(c) Other Employee Fringe Benefits - any stock purchase, vacation,
scholarship, day care, prepaid legal services, severance pay or other fringe
benefit plan, program, arrangement, contract or practice.
3.15.2 ERISA Affiliate. For purposes of this Section 3.15, the term
"ERISA Affiliate" means each trade or business (whether or not incorporated)
which together with either Company is treated as single employer under Section
414(b), (c), (m) or (o) of the Code.
3.15.3 Identification of Benefit Plans. The Companies do not maintain,
and have not at any time established or maintained, nor have at any time been
obligated to make contributions to or under or otherwise participate in any
Benefit Plan.
3.15.4 MEPPA Liability/Post-Retirement Medical Benefits/ Defined
Benefit Plans/Supplemental Retirement Plans. Neither the Companies nor any ERISA
Affiliate maintains, or has at any time established or maintained, or has at any
time been obligated to make contributions to or under any multi-employer plan.
Neither the Companies nor any ERISA Affiliate maintains, or has at any time
established or maintained, or has at any time been obligated to make
contributions to or under (i) any plan which provides post-retirement medical or
health benefits, (ii) any organization described in Sections 501(c)(9) or
501(c)(20) of the Code, (iii) any defined benefit pension plan subject to Title
IV of ERISA or (iv) any plan which provides retirement benefits in excess of the
limitations of Section 415 of the Code.
3.15.5 Liabilities. The execution and performance of the transactions
contemplated by this Agreement will not create, accelerate or increase any
obligation to make any payment which, as an "excess parachute payment" under
Section 280G of the Code, would not be deductible.
3.16 Insurance. The Stockholders have furnished to Newpark a complete list
of all insurance policies that the Companies maintain, indicating risks insured
against, carrier, policy number, amount of coverage, premiums and expiration
date.
3.17 Interest in Competitors, Suppliers, etc. Except as set forth in the
Disclosure Letter, none of the Stockholders, and no officer or director of the
Companies or any Family Member
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of any such Person, owns, directly or indirectly, individually or collectively,
any interest in any corporation, partnership, proprietorship, firm or
association which (a) is a competitor, customer or supplier of the Companies, or
(b) has an existing contractual relationship with the Companies, including but
not limited to lessors of real or personal property leased to the Companies and
entities against whom rights or options are exercisable by the Companies. The
Companies own, free and clear and without payment of any royalty or fee, all
interests in the assets, profits or businesses of the Companies that have
previously been held by any Affiliate of the Companies, including the
Stockholders and their Family Members.
3.18 Indebtedness with Insiders. Except for accrued salaries for one
payroll period, vacation pay and business expense reimbursements, the Companies
are not indebted to any of the Stockholders, directors or officers of the
Companies or any Affiliate of any such Person. None of such Persons is indebted
to the Companies.
3.19 Consents. No authorizations, approvals or consents of any Government
Body are required for consummation of the transactions contemplated by this
Agreement or the subsequent operation of the businesses of the Companies.
3.20 Patents, Trademarks and Other Intangibles. The Disclosure Letter
includes a list of all material patents, patent applications, trade names,
trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
names of the Companies. The Companies own or have the right to use all
Intangible Assets now used in the conduct of their businesses. Such Intangible
Assets include all of the proprietary products and formulations developed by the
Companies or used by them in their businesses. The Companies are not obligated
to pay any royalty or other fee to any licensor or other third party with
respect to any Intangible Assets. The Stockholders have no knowledge of any
claim received by the Companies alleging any conflict between any aspect of the
businesses of the Companies and any Intangible Assets claimed to be owned by
others which, if determined adversely to the Companies, would have a Material
Adverse Effect. None of the Stockholders, no other officer or director of the
Companies, and no Person that is an Affiliate of any such Person has any
interest in any Intangibles Assets which are presently used by the Companies or
which infringe upon, conflict with or relate to improvements or modifications of
any Intangible Assets presently used by the Companies.
3.21 Purchases and Sales. Since December 31, 1996, the Companies have not
placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and have not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from the conditions
regularly and usually specified in contracts for similar engagements from
customers similarly situated.
3.22 Brokerage and Finder's Fees. Neither the Companies nor the
Stockholders (or any Affiliate of the Stockholders) has incurred any liability
to any broker, finder or agent for any brokerage fees, finder's fees or
commissions for which the Companies could be liable with respect to the
transactions contemplated by this Agreement.
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3.23 Absence of Certain Changes. Since December 31, 1996, except for
matters of a general economic nature which do not affect the Companies uniquely,
the Companies have not:
3.23.1 suffered any Material Adverse Effect;
3.23.2 borrowed or agreed to borrow any funds in excess of $25,000 in
the aggregate or incurred or become subject to any obligation or liability
(absolute or contingent) in excess of $25,000 in the aggregate, except
obligations and liabilities incurred in the ordinary course of business;
3.23.3 mortgaged, pledged, hypothecated or otherwise encumbered any of
its properties or assets except for Permitted Liens;
3.23.4 made or agreed to make any distribution of any funds or assets
of any kind whatsoever to any past or present stockholder of the Companies or
any Affiliate of any such Person, whether by way of dividend, redemption or
purchase of capital stock, or any other type of distribution on or with respect
to their capital stock, whether or not similar to the foregoing, except
dividends by ▇▇▇▇▇▇▇ Louisiana in an amount that is not in excess of the federal
income Tax liabilities of the Stockholders related to the income, net of
deductions, that is allocable to them as a result of ▇▇▇▇▇▇▇ Louisiana's status
as an S corporation for 1996 and for the period from January 1, 1997 to and
including the day before the date hereof (the "Short Period Income Taxes");
3.23.5 made any payment of principal or interest on any indebtedness
owed to any past or present stockholder of the Companies or any Affiliate of any
such Person;
3.23.6 sold or agreed to sell any of its assets, properties or rights
having an aggregate value in excess or $10,000 or canceled or agreed to cancel
any debts or claims exceeding $10,000 in the aggregate, except for fair value in
the ordinary course of business;
3.23.7 entered or agreed to enter into any agreement or arrangement
granting any preferential right to purchase a material part of its assets,
properties or rights;
3.23.8 increased the rate of compensation of or paid or accrued
bonuses to or for any of their officers, employees, consultants or agents,
except for normal merit or cost of living increases;
3.23.9 suffered any damage, destruction or loss in excess of an
aggregate of $100,000, whether or not covered by insurance, adversely affecting
any of their properties;
3.23.10 assigned or agreed to assign any of their Intangible Assets;
3.23.11 suffered any adverse amendment or termination of any Material
Contract (or any contract that would have been a Material Contract if not
amended or terminated) to which they are a party;
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3.23.12 paid any commissions or similar fees to brokers or finders for
arranging the transactions contemplated by this Agreement or any similar
proposed transaction with any other party; or
3.23.13 entered into any other material transaction other than in the
ordinary course of business.
3.24 No Material Misstatements or Omissions. No representation or warranty
by the Stockholders in this Agreement, and no document, statement, certificate,
exhibit or schedule furnished or to be furnished to Newpark pursuant hereto, or
in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated therein or necessary in order to make the
statements or facts contained herein or therein, in the light of the
circumstances under which they were made, not misleading.
B. Except as otherwise set forth in the Disclosure Letter, each
Stockholder represents and warrants with respect to himself, severally but not
jointly, the following (the truth and accuracy of each of which shall constitute
a condition precedent to Newpark's obligations to consummate the Exchange and
issue the Newpark Shares):
3.25 Investment Representations. Either such Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the Rules and
Regulations, or such Stockholder, either alone or with such Stockholder's
qualified "purchaser representative" (as defined in Rule 501 of the Rules and
Regulations), has such knowledge and experience in financial and business
matters that he is capable of evaluating the risks and merits of an investment
in Newpark Common Stock. Such Stockholder is acquiring his Newpark Shares in
the Exchange for investment and not with a view to the sale thereof other than
in compliance with the requirements of the Securities Act and applicable Blue
Sky laws. At the request of Newpark, each Stockholder will furnish to Newpark
evidence reasonably satisfactory to Newpark that the foregoing representations
are true. Such Stockholder acknowledges that Newpark has made available to him
the opportunity to ask questions and receive answers concerning the terms and
conditions of the Exchange and to obtain any additional information that Newpark
is required to furnish under Regulation D of the Rules and Regulations.
3.26 Enforceability. This Agreement has been duly and validly executed by
such Stockholder, and this Agreement constitutes a legal, valid, and binding
obligation of such Stockholder, enforceable against him in accordance with its
terms, subject to the Bankruptcy Exception. Such Stockholder has the requisite
power to enter into this Agreement and perform his obligations hereunder
(including without limitation to sell and deliver his Target Shares), and no
other Person's joinder as a party hereto is necessary therefor pursuant to any
community property laws or otherwise, and there is no restriction on the power
of the Stockholder to sell and deliver his Target Shares pursuant to any trust,
estate planning or other similar document or any prenuptial or post-nuptial
agreement or arrangement.
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3.27 No Litigation. There are no actions pending or, to the knowledge of
the Stockholders, threatened in any court or arbitration forum or by or before
any Government Body involving the Companies or such Stockholder relating to or
affecting any of the transactions contemplated by this Agreement.
3.28 Title to Shares. Such Stockholder is the holder of record and owns
beneficially that number of Target Shares set forth opposite his name in the
Disclosure Letter and owns such Target Shares free and clear of all liens,
security interests, encumbrances and restrictions, other than restrictions
contemplated by this Agreement. Such Stockholder is not a party to any voting
trust, proxy or other agreement with respect to the voting of any of his Target
Shares.
4. Representations and Warranties of Newpark. Newpark hereby represents
and warrants the following (the truth and accuracy of each of which shall
constitute a condition precedent to the Stockholders' obligations to consummate
the Exchange):
4.1 Organization and Good Standing.
4.1.1. Newpark is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Newpark has corporate
power and authority to carry on its business as presently conducted and is
qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it or both require qualification and failure to be so qualified would have a
Material Adverse Effect.
4.1.2. Newpark has furnished to the Stockholders complete and correct
copies of Newpark's Certificate of Incorporation and Bylaws as in effect on the
date hereof.
4.2 Capital Stock. The authorized capital stock of Newpark consists of
80,000,000 shares of Common Stock, $.01 par value, of which 31,367,874 shares
were issued and outstanding on June 30, 1997, and 1,000,000 shares of Preferred
Stock, $.01 par value, of which no shares are issued and outstanding.
4.3 Newpark Subsidiaries. Each subsidiary of Newpark that is a
"significant subsidiary," as defined in Rule 1-02(w) of Regulation S-X of the
Rules and Regulations (each a "Newpark Subsidiary" and collectively the "Newpark
Subsidiaries), is duly organized and in good standing under the laws of the
jurisdiction in which it was incorporated or organized, has full corporate power
and authority to carry on its business as now conducted by it and is entitled to
own or lease and operate its properties and assets now owned or leased and
operated by it. Each Newpark Subsidiary is duly qualified and in good standing
as a foreign corporation or other entity in each jurisdiction where the
character or location of the assets owned by it or the nature of the business
transacted by it require such qualification, except where failure to be so
qualified would not have a Material Adverse Effect.
4.4 Authority. The execution and delivery of this Agreement by Newpark
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board
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of Directors of Newpark. This Agreement has been duly executed and delivered to
the Stockholders and no vote of the stockholders of Newpark or further corporate
action is necessary on the part of Newpark to make this Agreement valid and
binding upon Newpark in accordance with its terms, subject to the Bankruptcy
Exception. The execution, delivery and performance of this Agreement by Newpark
are not contrary to the Certificate of Incorporation or Bylaws of Newpark and
will not result in a violation or breach of any term or provision or constitute
a default or give any party a right to accelerate the due date of any
indebtedness under any indenture, mortgage, deed of trust or other contract or
agreement to which Newpark is a party or by which Newpark is bound.
4.5 Newpark Reports. Newpark has delivered to the Stockholders copies of
Newpark's Annual Reports on Form 10-K for the years ended December 31, 1994,
1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the Commission
after the date hereof are called the "Newpark Reports" herein. The Newpark
Reports have been or will be duly and timely filed with the Commission and are
or will be when filed in compliance with the Rules and Regulations. As of their
respective dates, none of the Newpark Reports contained or will contain any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
4.6 Newpark Financial Statements. The financial statements contained in
the Newpark Reports (the "Newpark Financial Statements") filed on or before the
date hereof have been prepared in accordance with the books and records of
Newpark and its subsidiaries and in accordance with generally accepted
accounting principles consistently applied during the periods indicated, all as
more particularly set forth in such financial statements and the Notes thereto.
Each of the balance sheets included in the Newpark Financial Statements presents
fairly as of its date the consolidated financial condition and assets and
liabilities of Newpark and its subsidiaries. Except as and to the extent
reflected or reserved against in such balance sheets (including the Notes
thereto), Newpark (including its subsidiaries) did not have, as of the dates of
such balance sheets, any material liabilities or obligations (absolute or
contingent) of a nature customarily reflected in a balance sheet or the notes
thereto prepared in accordance with generally accepted accounting principles.
The consolidated statements of earnings and stockholders' equity and
consolidated statements of changes in financial position included in the Newpark
Financial Statements present fairly the results of operations and changes in
financial position of Newpark and its subsidiaries for the periods indicated.
4.7 Absence of Certain Changes. Since March 31, 1997, there has not been
any material adverse change in the results of operations, financial condition,
liquidity, assets, properties or business of Newpark and its subsidiaries, taken
as a whole.
4.8 Issuance and Listing of Stock. Newpark has reserved for issuance the
Newpark Shares, and the Newpark Shares, when issued in accordance with this
Agreement, will be validly issued, fully paid and nonassessable.
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4.9 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except such qualifications as may be required
under state securities laws relating to the Newpark Shares.
4.10 No Material Misstatements or Omissions. No representation or warranty
by Newpark in this Agreement, and no document, statement, certificate, exhibit
or schedule furnished or to be furnished to the Stockholders pursuant hereto, or
in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit to state
a material fact required to be stated therein or necessary to make the
statements or facts contained herein or therein, in the light of the
circumstances under which they were made, not misleading.
5. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the Exchange
under this Agreement shall be subject to the satisfaction on or before the date
hereof of each of the following conditions except to the extent the parties may
waive any of such conditions in writing:
5.1 Government Body Consents. All consents, authorizations, orders and
approvals of (or filings or registrations with) any Government Body required in
connection with the execution, delivery and performance of this Agreement,
including the issuance of the Newpark Shares, or the operation of the business
of the Companies following the date hereof shall have been obtained or made,
except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not have a Material
Adverse Effect following the Closing.
5.2 Injunction. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a court or
governmental agency of competent jurisdiction to the effect that the Exchange
may not be consummated as herein provided, no proceeding or lawsuit shall have
been commenced by any Government Body for the purpose of obtaining any such
injunction, writ or preliminary restraining order and no written notice shall
have been received from any Government Body indicating an intent to restrain,
prevent, materially delay or restructure the transactions contemplated by this
Agreement.
5.3 Listing of Newpark Shares. The Newpark Shares shall have been listed
on the New York Stock Exchange, subject to official notice of issuance.
6. Conditions Precedent to Obligations of Newpark. The obligations of
Newpark to consummate the Exchange and issue the Newpark Shares are subject to
the satisfaction of each of the additional following conditions at or prior to
the date hereof, unless waived in writing by Newpark:
6.1 Accuracy of Warranties and Representations. The representations and
warranties of the Stockholders herein shall be true and correct in all material
respects, and the
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Stockholders shall perform or shall have performed in all material respects all
covenants required by this Agreement to be performed by them at or prior to the
Closing.
6.2 No Material Adverse Change. There shall have been no changes after
December 31, 1996, in the results of operations, assets, liabilities, financial
condition or affairs of the Companies which in their total effect have a
Materially Adverse Effect on the Companies.
6.3 Material Contracts. The Companies shall have received consents to
assignment of all Material Contracts or written waivers of the provisions of any
Material Contracts requiring the consents of third parties as set forth in the
Disclosure Letter, except where the failure to have obtained any such consent or
written waiver would not have a Material Adverse Effect following the Closing.
6.4 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for Newpark, and there shall have been furnished to such counsel by the
Stockholders certified copies of such corporate records of the Companies and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
6.5 Opinion of the Stockholders' Counsel. Newpark shall have received an
opinion of Sheldon, Jordan & ▇▇▇▇▇▇, L.L.P., counsel to the Stockholders, dated
the date of the Closing, substantially in the form attached hereto as Exhibit
6.5.
6.6 Directors of the Companies. All of the directors of the Companies
shall have resigned, and ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ shall have been elected to serve as the directors of the Companies.
7. Conditions Precedent to Obligation of the Stockholders. The
obligations of the Stockholders to consummate the Exchange are subject to the
satisfaction of each of the following additional conditions at or prior to the
date hereof, unless waived in writing by the Stockholders:
7.1 Accuracy of Warranties and Representations. The representations and
warranties of Newpark contained in this Agreement shall be true and correct in
all material respects, and Newpark shall perform or shall have performed in all
material respects all of the covenants required by this Agreement to be
performed by it on or before the Closing.
7.2 Authorization of Exchange. All corporate action necessary by Newpark
to authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken.
7.3 No Material Adverse Change. There shall have been no changes since
March 31, 1997, in the results of operations, financial condition, liquidity,
assets, properties or business of Newpark and its subsidiaries, taken as a
whole, which, in their total effect, have a Material Adverse Effect on Newpark
and its subsidiaries.
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7.4 Opinion of Newpark's Counsel. The Stockholders shall have received an
opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to Newpark, dated the date of the
Closing, substantially in the form attached hereto as Exhibit 7.4.
7.5 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for the Stockholders, and there shall have been furnished to such
counsel by Newpark certified copies of such corporate records of Newpark
(including Board of Directors resolutions approving the Exchange Agreements) and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
8. Survival of Representations. All representations, warranties and
indemnifications made by Stockholders or Newpark under or in connection with
this Agreement shall survive the consummation of the Exchange until the earlier
of (a) one year after the Closing or (b) the date when Newpark's independent
accountants issue an audit report on their audit of the financial statements
containing combined operations of Newpark and the Companies for the period
ending December 31, 1997. Neither party shall be entitled to recover against
the other for any misrepresentation or breach of warranty except to the extent
that written notice of any such claim has been delivered to the party against
whom recovery is sought within the applicable period setting forth in reasonable
detail and specifying the nature of the claim being asserted. The provisions of
this Section and Section 10.3.3 apply only to claims arising under this
Agreement and do not affect any other claims that any party may have at any time
against any other party, including but not limited to claims that may arise
under Hazardous Material Laws.
9. Post-Closing Covenants.
9.1 Cooperation and Assistance. Upon request, each of the parties hereto
shall cooperate with the other to the extent reasonably requested, at the
requesting party's expense, in furnishing information, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
involving the Stockholders and Newpark which are based upon contracts,
arrangements or acts of the Stockholders or the Companies or both which were in
effect or occurred on or prior to the Closing.
9.2 Access to Records. The Stockholders shall be entitled, after the
Closing, upon reasonable notice and during the regular business hours of
Newpark, to have access to and to make copies of the business records of the
Companies which relate to periods prior to the Closing. Newpark shall retain
such business records for a period of five (5) years following the Closing Date,
after which time Newpark may destroy or otherwise dispose of such business
records without the Stockholders' consent.
9.3 Tax Matters.
9.3.1 Control of Tax Proceedings. Whenever any taxing authority
proposes any adjustment, questions the treatment of any item, asserts a claim,
makes an assessment, or otherwise disputes the amount of any Taxes for any
period or portion thereof ending on or before
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the date hereof, which adjustment, question, claim, assessment or dispute could,
if pursued successfully, result in or give rise to a claim against the
Stockholders under this Agreement (a "Tax Claim"), Newpark shall promptly inform
the Stockholders in writing of such Tax Claim. The provisions of Section 10
shall apply to the handling of any Tax Claim.
9.3.2 Current Tax Returns. The Stockholders shall be responsible for
the preparation of all Tax Returns of the Companies for all taxable periods that
end or ended on or before the date hereof and are not required to be filed
(taking into account all extensions) on or before the date hereof. Newpark will
make available to the Stockholders, without charge, the services of its
personnel and the personnel of the Companies to assist the Stockholders in the
preparation of such Tax Returns. Such Tax Returns shall be reasonably
satisfactory to Newpark in form and substance. With respect to ▇▇▇▇▇▇▇, provided
such Tax Returns are delivered to Newpark, in form and substance reasonably
satisfactory to Newpark, at least five business days before the due dates
thereof (taking into account any and all extensions), Newpark will cause ▇▇▇▇▇▇▇
to timely file such Tax Returns and to pay the amounts of any Taxes shown as due
thereon. With respect to ▇▇▇▇▇▇▇ Louisiana, the Stockholders shall pay the Short
Period Income Taxes.
9.3.3 Refunds and Credits. Subject to the provisions of Section 9.3.2
above, any refunds and credits against federal income Taxes paid by ▇▇▇▇▇▇▇
(together in each case with any interest received or credited on or with respect
to such refund or credit) attributable to any taxable period or portion thereof
ending on or before the date hereof shall be for the account of ▇▇▇▇▇▇▇, and any
refunds and credits against federal income Taxes paid by the Stockholders with
respect to ▇▇▇▇▇▇▇ (together in each case with any interest received or credited
on or with respect to such refund or credit) attributable to any taxable period
or portion thereof ending on or before the date hereof shall be for the account
of the Stockholders; any refunds or credits of other Taxes attributable to any
taxable period ending on or before the date hereof for either ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇
Louisiana shall be for the account of such Company. To the extent that any such
refund, credit or interest thereon exceeds the amount of such refund, credit or
interest, if any, accrued on the books of the Companies as of the Effective
Time, the Stockholders shall receive credit in an amount equal to the amount of
such excess against any liability they may have under Section 10.
9.3.4 Cooperation. Newpark and the Stockholders shall cooperate in
good faith with each other in a timely manner in the preparation and filing of
any Tax Returns of the Companies and the handling of any Tax Claims and other
Tax matters to which this Agreement relates, other than Tax Claims and Tax
matters solely involving Newpark and its Subsidiaries other than the Companies.
Each party shall execute and deliver such powers of attorney and make available
such other documents and such personnel as are necessary to carry out the intent
of this Section 9.3.4. Each party agrees to promptly notify the other parties of
any such Tax Claim that does not result in Tax liability but can be reasonably
expected to affect any Tax Returns of any of the other parties.
9.3.5 Retention of Records. Newpark shall (i) retain records,
documents, accounting data and other information (including computer data)
necessary for the preparation and filing of all Tax Returns of the Companies and
the handling of any Tax Claims and other Tax matters
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to which this Agreement relates, and (ii) give to the Stockholders reasonable
access to such records, documents, accounting data and other information
(including computer data) and to its personnel (insuring their cooperation) and
premises, for the purpose of the preparation and review of such Tax Returns and
the handling of any Tax Claims and other Tax matters to which this Agreement
relates, to the extent necessary in connection with any Taxes to which this
Agreement relates or any obligation or liability of a party under this
Agreement.
9.4 Stockholder Guarantees. Subject to consummation of the Exchange,
Newpark agrees that it will cause the Companies to discharge in accordance with
their terms all indebtedness of the Companies as to which the Stockholders have
executed personal guarantees, as disclosed in the Disclosure Letter.
10. Indemnifications.
10.1 Indemnification by the Stockholders. Subject to the provisions of
Sections 8 and 10.3, the Stockholders, jointly and severally, hereby agree to
indemnify, defend, protect and hold harmless Newpark against all damages,
losses, liabilities, costs and expenses (including reasonable attorneys' fees)
resulting from (i) any breach of any warranty or representation made by them
under or in connection with this Agreement and (ii) the presence on, under, in
or about the Property of any Hazardous Materials as of the Effective Time or the
noncompliance by the Company with any Hazardous Materials Laws on or before the
Effective Time, whether or not disclosed in the Disclosure Letter. Such
indemnification shall be solely the responsibility of the Stockholders, and they
shall not have any right to recover any portion of their liability from the
Companies, whether by right of indemnification, contribution or otherwise.
10.2 Indemnification by Newpark. Subject to the provisions of Sections 8
and 10.3, Newpark hereby agrees to indemnify, defend, protect and hold harmless
Stockholders against all damages, losses, liabilities, costs and expenses
(including reasonable attorneys' fees) resulting from any breach of any warranty
or representation made by Newpark under or in connection with this Agreement.
The rights to such indemnification shall accrue solely to Stockholders, and the
Companies shall have no interest therein.
10.3 Indemnification Procedures and Limitations. The following provisions
shall apply to all indemnification and hold harmless provisions of this
Agreement:
10.3.1 No party shall be required to indemnify another pursuant
hereto unless the party seeking indemnification (the "Indemnitee") shall, with
reasonable promptness, provide the other party (the "Indemnitor") with copies of
any claims or other documents received and shall otherwise make available to the
Indemnitor all material relevant information. The Indemnitor shall have the
right to defend any such claim at its expense, with counsel of its choosing, and
the Indemnitee shall have the right, at its expense, using counsel of its
choosing, to join in the defense of any such claim. The Indemnitee's failure to
give prompt notice or to provide copies of documents or to furnish relevant data
shall not constitute a defense in whole or in part to any claim by the
Indemnitee against the Indemnitor except to the extent that such failure by the
Indemnitee shall result in a material prejudice to the Indemnitor.
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10.3.2 Except as hereinafter provided, neither party shall settle or
compromise any such claim unless it shall first obtain the written consent of
the other, which shall not be unreasonably withheld. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including reasonable attorneys'
fees, and the Indemnitee shall have the right, after notifying but without
consulting the Indemnitor, to settle or compromise such claim on any terms
reasonably approved by the Indemnitee.
10.3.3 Neither Newpark nor the Stockholders shall have any liability
for breach of warranty or representation hereunder except to the extent that the
amount of all valid claims for breach of warranty or representation against it
or them hereunder exceeds an aggregate of $25,000. In no event shall the
liability of any of the Stockholders for any breach of warranty or
representation hereunder exceed the value of the Newpark Shares for which his
Target Shares are exchanged in the Exchange, for which purpose they shall be
valued at their Closing Value. To the fullest extent permitted by law,
Stockholders shall satisfy their liability hereunder by delivering to Newpark
some or all of such Newpark Shares, valued at their Closing Value, and Newpark
shall satisfy its liability by issuing additional Newpark Shares valued at their
Closing Value. Nothing contained herein shall relieve any of the Stockholders or
Newpark of any liability he or it may have for any intentional breach of
representation or warranty or for breach of any covenants or agreements made
herein by such party.
10.3.4 In determining the amount of any damage, loss, liability, cost
or expense suffered by Newpark which gives rise to liability of Stockholders
hereunder, there shall be taken into account the amount of any Tax benefits
actually realized by Newpark and its subsidiaries attributable to such damage,
loss, liability, cost or expense or derived therefrom in the same or any past or
subsequent taxable period, also taking into account the Tax treatment of the
receipt by Newpark of any payment from Stockholders.
10.4 Dispute Resolution; Arbitration. The parties desire to finally
resolve any and all issues and disputes arising out of or related to this
Agreement or its alleged breach as promptly as practicable and, in any event,
within the survival period specified in Section 8. Newpark and the Stockholders
shall first attempt diligently to resolve any such issue or dispute. They may,
if they desire, attempt to mediate the dispute and shall, if they choose, do so
in accordance with the Commercial Mediation Rules of the American Arbitration
Association ("AAA"), either as written or as modified by mutual agreement. A
written agreement to undertake mediation may be made at any time. If
arbitration proceedings have been instituted, they shall be stayed until the
mediation process is terminated. Any dispute arising out of or related to this
Agreement or its alleged breach that cannot be resolved by mutual agreement
(including mutually agreed mediation) shall be resolved exclusively by final and
binding arbitration, conducted as expeditiously as possible in the City of
Houston, Texas, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The decision of the arbitrator or arbitrators
shall be final, conclusive and binding on all parties. The arbitrators shall
prepare an award in writing which reflects the final decision of the
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arbitrators and a copy of such award shall be delivered to each party to the
arbitration. Judicial confirmation of the decision of the arbitrators shall be
sought only in the Judicial District Court of ▇▇▇▇▇▇ County, Houston Division.
11. Destruction of Assets. All risk of loss with respect to the assets
and businesses of the Companies shall be borne by the Stockholders until the
Closing to the extent set forth in this Section 11. If on the date hereof any
assets of the Companies shall have suffered loss or damage on account of fire,
flood, accident, act of war, civil commotion, or any other cause or event beyond
the reasonable power and control of the Companies (whether or not similar to the
foregoing) to an extent which materially affects the value to Newpark of the
Target Shares, Newpark shall have the right at its election to complete the
Exchange (in which event, as Newpark's sole and exclusive remedy with respect to
the consequences of such loss or damage, all claims of the Companies with
respect to such loss or damage and all insurance proceeds arising therefrom
shall be for the account of the Companies), or, if it does not so elect, it
shall have the right, which shall be in lieu of any other right or remedy
whatsoever, to terminate this Agreement. In the latter event, all parties shall
be released from liability hereunder.
12. Termination. In addition to any party's right to terminate this
Agreement if any condition precedent to its obligations is not satisfied at or
before the Closing, either Newpark or the Stockholders may forthwith terminate
this Agreement: (a) subject to clause (b) below, without liability to the other
of them if a bona fide action or proceeding (by and at the sole instance of a
party or parties not an Affiliate or Affiliates of Newpark or the Stockholders)
shall be pending against either party on the date hereof wherein an unfavorable
judgment, decree or order would prevent or make unlawful the carrying out of the
transactions contemplated by this Agreement; or (b) without prejudice to other
rights and remedies which either party may have, if a material default shall be
made by the other of them in the observance or in the due and timely performance
of its covenants and agreements herein contained, or if there shall have been a
material breach of the warranties and representations herein contained.
13. 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 13 by giving notice
of such change to the other party in the manner which is provided in this
Section 13.
Stockholders: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Sheldon, Jordan & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Newpark: c/o Newpark Resources, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Secretary
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
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14. Assignment. Rights hereunder shall not be assignable and duties
hereunder shall not be delegable by the Stockholders or Newpark without the
prior written consent of the other; consent may be withheld for any reason or
without reason; provided, however, Newpark may, in its sole discretion, assign
any or all of its rights under this Agreement to any of its Affiliates; provided
further, however, that no such assignment shall relieve Newpark of any
obligation or liability hereunder. Nothing contained in or implied from this
Agreement is intended to confer any rights or remedies upon any Person other
than the parties hereto and their successors in interest and permitted
assignees, unless expressly stated herein to the contrary.
15. Certain Definitions. As used herein, the following terms (whether
used in the singular or the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 25% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
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"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the five trading days immediately preceding the third trading day
prior to the date of this Agreement.
"Commission" means the U.S. Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the date hereof that relate to or impose liability
or standards of conduct concerning the environment, as now or hereafter in
effect and as have been or hereafter may be amended or reauthorized, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601, et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. (S) 1802, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901, et seq.), the Federal Water Pollution Control
Act (33 U.S.C. (S) 1251, et seq.), the Toxic Substances Control Act (14 U.S.C.
(S) 2601, et seq.), the Clean Air Act (42 U.S.C., (S) 7901 et seq.), the
National Environmental Policy Act (42 U.S.C. (S) 4231, et seq.), the Refuse Act
(33 U.S.C. (S) 407, et seq.), the Safe Drinking Water Act (42 U.S.C. (S) 300(f),
et seq.), and all rules, regulations, codes, ordinances and guidance documents
promulgated or published thereunder, and the provisions of any licenses,
permits, orders and decrees issued pursuant to any of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
"Knowledge of the Stockholders" (and similar terms such as "to the
best of the knowledge of the Stockholders") means the actual knowledge of the
Stockholders or any other executive officer of the Companies.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Companies or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
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"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not materially impair the existing use or materially detract from the value of
the assets or property subject thereto, and (d) liens for current taxes not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any governmental authority responsible for the imposition of any such
tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
16. Disclaimer Concerning Tax Consequences. Although the parties intend
that the Exchange will be a tax-free exchange, no party makes any express or
implied warranty to any other party as to the Tax consequences of the Exchange,
and all such warranties are hereby expressly disclaimed.
17. Applicable Law; Jurisdiction. The provisions of this Agreement and
all rights and obligations hereunder and under all documents, instruments and
agreements executed under or in connection with this Agreement shall be governed
and construed in accordance with the internal laws of the State of Texas
applicable to contracts made and to be wholly performed within said State.
18. Remedies Not Exclusive. Except as provided in Section 11, (a) no
remedy conferred by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, (b) each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law, in equity, or otherwise and (c) the election of
any one or more remedies by either party hereto shall not constitute a waiver of
the right to pursue other available remedies.
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19. Accountants' and Attorneys' Fees. Newpark, the Companies and the
Stockholders shall each pay their own accountants' and attorneys' fees related
to the consummation of the Exchange. In any litigation or arbitration relating
to this Agreement, including litigation or arbitration with respect to any
instrument, document or agreement made under or in connection with this
Agreement, the prevailing party shall be entitled to recover its costs and
reasonable attorneys' fees.
20. Payment of Expenses. Whether or not the Exchange is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark in connection with this Agreement and the transactions contemplated
hereby, and the Stockholders will pay and be responsible for all costs and
expenses incurred by the Companies and the Stockholders in connection with this
Agreement and the transactions contemplated hereby.
21. Successors and Assigns. All covenants, representations, warranties
and agreements of the parties contained herein shall be binding upon and inure
to the benefit of the parties, their respective heirs, personal representatives
and permitted successors and assigns.
22. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23. Headings; Severability. Captions and section headings used herein are
for convenience only and are not a part of this Agreement and shall not be used
in construing it. The provisions of this Agreement are severable, and, if any
one or more provisions may be determined to be judicially unenforceable, in
whole or in part, the remaining provisions, and any partially unenforceable
provisions, to the extent enforceable, shall nevertheless be binding and
enforceable upon the parties hereto.
24. Amendments. No provision or term of this Agreement or any agreement
contemplated herein between the parties hereto may be supplemented, amended,
modified, waived or terminated except in a writing duly executed by the party to
be charged.
25. Waivers. At any time prior to the Closing, the parties hereto, may,
to the extent legally permitted: (i) extend the time for the performance of any
of the obligations or other acts or any other party; (ii) waive any inaccuracies
in the representations or warranties of any other party contained in this
Agreement or in any document or certificate delivered pursuant hereto; (iii)
waive compliance or performance by any other party with any of the covenants,
agreements or obligations of such party contained herein; and (iv) waive the
satisfaction of any condition that is precedent to the performance by the party
so waiving of any of its obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. A waiver by one party
of the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A
waiver by any party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed
at a later time.
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26. Entire Agreement. The Disclosure Letter and all schedules, exhibits
and financial statements provided for herein are a part of this Agreement. This
Agreement and the other agreements and documents provided for in this Agreement
comprise the entire agreement of the parties and supersede all earlier
understandings of the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
NEWPARK: STOCKHOLDERS:
NEWPARK RESOURCES, INC.
/s/ Hill ▇. ▇▇▇▇▇▇▇
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Hill ▇. ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief
Financial Officer /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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