EXHIBIT 2.10
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of June 3, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), XXXXX XXXXXXX ("Xxxxxxx"), XXXXXXX SHELL
("Shell"), XXX XXXXXXX ("Ray") and XXX XXXX ("Xxxx") (Bennett, Shell, Ray and
Hill being sometimes referred to herein collectively as the "Stockholders"),
with reference to the following facts:
A. The Stockholders own beneficially and of record 100% of the
outstanding capital stock (the "Company Shares") of CHEMICAL TECHNOLOGIES, INC.,
a Texas corporation (the "Company").
B. The Company is a regional Gulf Coast drilling mud company
specializing in the distribution and sale of oil based drilling fluid components
to the oil industry.
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"). The Plan comprises the
acquisition by Newpark of the Company Shares from the Stockholders solely in
exchange for 186,666 newly issued shares of voting Common Stock of Newpark (the
"Newpark Shares"). Such transaction is sometimes referred to herein as the
"Exchange."
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. Subject to the provisions of this
Agreement, on the "Closing Date" (as defined in Section 10) the Stockholders
hereby agree to deliver to Newpark one or more certificates representing all of
the Company 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 Company Shares. No fractional Newpark Shares will be
issued; if fractional shares otherwise would issue, the Stockholders shall
instruct Newpark at least five business days before the Closing Date as to the
rounding of such shares.
1.3 Legend on Newpark Shares. 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 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Closing Date,
the number of Newpark Shares to be issued at the Closing Date shall be adjusted
to such extent as may be necessary to prevent dilution or enlargement of the
rights of the Stockholders. Such adjustments shall be made by the regular
independent certified public accountants for Newpark and a written report
thereof, showing the adjustment and the underlying calculations, shall be sent
to each party hereto.
1.5 368(a)(1)(B) Reorganization. Between the date hereof and the
Closing Date, neither Newpark nor the Stockholders or any of their "Affiliates"
(as defined in Section 18) shall (a) knowingly take any action, or knowingly
fail to take any action, that would jeopardize qualification of the Exchange as
a reorganization within the meaning of Section 368(a)(1)(B) of the Code; (b)
enter into any contract, agreement, commitment or arrangement with any such
effect; or (c) cause or permit the Company to take any such action or fail to
take any such action. Following the Closing Date, Newpark shall use its best
efforts to conduct the business of the Company and shall cause the Company to
use its best efforts to conduct its business in a manner that would not
jeopardize the characterization of the Exchange as a reorganization within the
meaning of Section 368(a)(1)(B) of the Code.
1.6 Concurrent Transaction. Concurrently with the execution and
delivery of this Agreement, Newpark, the Stockholders and other interested
parties are executing and delivering an agreement (the "Related Agreement")
pursuant to which Newpark intends to acquire (the "Related Acquisition") on the
Closing Date, solely in exchange for 35,554 newly issued shares of voting Common
Stock of Newpark, 100% of the outstanding equity interests in FMI WHOLESALE
DRILLING FLUIDS, U.S.A, L.P., a Texas limited partnership. The consummation of
the Related Acquisition on or before the Closing Date is a condition precedent
to each party's obligations under this Agreement unless waived in writing by
such party.
2. Ancillary Agreements.
On the Closing Date, as a necessary incident of the Exchange,
Newpark and the Stockholders will execute and deliver (i) noncompetition
agreements substantially as set forth in Exhibit 2.1 attached to this Agreement
and (ii) a Registration Rights Agreement substantially as set forth in Exhibit
2.2 attached to this Agreement.
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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 Company.
3.1.1 The 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. The 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 the Company or the nature of the business
transacted by the Company require such qualification, except where failure to be
so qualified would not have a "Material Adverse Effect" (as defined in Section
18). The Disclosure Letter includes a list of the jurisdictions in which the
Company is qualified to do business.
3.1.2 The Stockholders have furnished to Newpark complete
and correct copies of the 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 the 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 the
Company. The stock certificate books reflect all issuances, transfers and
cancellations of capital stock of the Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of the Company consists
of 1,000 common shares, $0.10 par value per share, of which 1,000 shares, i.e.,
the Company 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 Company Shares owned by, each of the Stockholders.
3.2.2 There are no options, warrants, subscriptions or
other rights outstanding for the purchase of, or any securities convertible
into, capital stock of the Company. No shares of the Company are held as
treasury stock.
3.3 Equity Interests. The Company does not have a material
equity interest in any other "Person" (as defined in Section 18).
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3.4 No Violation. The execution, delivery and performance of
this Agreement by the Stockholders are not contrary to the Articles of
Incorporation or By-Laws of the 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 the
Company, the Stockholders or any of them are a party or by which any of them are
bound.
3.5 Financial Statements. The unaudited balance sheets of the
Company as of December 31, 1996, January 31, 1997, February 28, 1997, and March
31, 1997, and the related unaudited statements of income, stockholders' equity
and cash flows for the seven months ended December 31, 1996, the months ended
January 31, 1997, February 28, 1997, and March 31, 1997, and for the period from
January 1, 1997, to the end of each such month, copies of which have heretofore
been delivered to Newpark (collectively the "Company Financial Statements"),
were prepared in accordance with the books and records of the Company and in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as otherwise noted therein) and present
fairly the financial position, results of operations and cash flows of the
Company as of the end of and for each of such periods.
3.6 Properties. The Company has and on the Closing Date will
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. At the Closing, such title will be free and clear of all liens,
charges, security interests, encumbrances, leases, covenants, conditions and
restrictions other than "Permitted Liens" (as defined in Section 18). The
plants, structures, leasehold improvements, machinery, equipment, furniture and
other tangible assets owned or leased by the Company 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 business of the Company in
accordance with its current methods of operation in all material respects.
3.7 Contracts.
3.7.1 The Disclosure Letter includes a listing 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 the Company of an amount or value in excess of $50,000; (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; (d) leases, con tracts 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 $50,000 per year;
(g) contracts under which the performance of any obligation of the
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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 the
Company; (i) bank credit, factoring and loan agreements, indentures, promissory
notes and other documents representing indebtedness in excess of $50,000 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 the Company is a party
and which have not been fully performed, involving consideration having a value
in excess of $50,000 and 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.
3.7.2 All Material Contracts are valid and binding
obligations of the Company and, to the "best of the knowledge" (as defined in
Section 18) of the Stockholders, the other parties thereto in accordance with
their respective terms, subject to the "Bankruptcy Exception" (as defined in
Section 18); 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 the 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, the Company is not a
party to any Material Contract on which any of the Stockholders anticipates
expenses materially in excess of revenues or which is otherwise onerous or
materially adverse; and the Company has not expressly waived any material rights
under any Material Contract.
3.8 Outstanding Indebtedness. The Disclosure Letter includes a
true and com plete schedule of all notes payable and other indebtedness in
excess of $10,000 for borrowed money owed by the 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 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 Company does not have, and
none of its 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 Company does not
have, and none of its 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. The Company is not in default with respect to any
material term or condition of any indebtedness.
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3.10 No Litigation. There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Company) pending or, to the
knowledge of the Stockholders, threatened against or affecting the Company, at
law or in equity or before or by any "Government Body" (as defined in Section
18) or before any arbitrator of any kind. To the best of the knowledge of the
Stockholders, the Company is not in default with respect to any judgment, order,
writ, injunction, decree or award of any Government Body.
3.11 Environmental Matters.
3.11.1 Neither the Company 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
Company (such real property and any and all buildings and other improvements
thereon being herein referred to as the "Property") used, generated,
manufactured, treated, handled, refined, processed, released, discharged, stored
or disposed of any "Hazardous Materials" (as defined in Section 18) 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
18) 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 Company on or prior to the
date that fee or leasehold title to such Property was transferred to a third
party by the Company. 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 Company.
3.11.2 While any Property was owned or leased by the
Company, it 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 Company or any
Property presently owned or leased by the Company, (2) claims made or threatened
by any Person or Government Body relating to the Property against the Company or
any Property presently owned or leased by the Company 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 Company that can
reasonably be expected to subject the Company 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 Company.
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3.12 Taxes.
3.12.1 Except as set forth in the Disclosure Letter, the
Company has filed all income, franchise and other "Tax Returns" (as defined in
Section 18) required to be filed by it by the date hereof. All "Taxes" (as
defined in Section 18) imposed by the United States, the State of Texas and by
any other state, municipality, subdivision, or other taxing authority, which are
due and payable by the Company have been paid in full or are adequately provided
for by reserves reflected on the latest balance sheet included in the Company
Financial Statements. The Company 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 inception.
3.12.2 All contributions due from the Company pursuant to
any unemployment insurance or workers compensation laws and all sales or use
Taxes which are due or payable by the Company have been paid in full and will be
so paid through the Closing Date. The Company has 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 its employees under state law and the applicable
provisions of the Code, and the Company will continue to do so with respect to
all wages paid by it through the Closing Date.
3.12.3 The Company has furnished to Newpark true and
complete copies of the federal income Tax Returns and comparable state Tax
Returns of the Company covering all taxable periods ended since the inception of
the Company and constituting complete and accurate representations in all
material respects of the Tax liabilities of the Company 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 Company has all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof, and the Company is in compliance in all material
respects with all applicable federal, state and local laws, rules, regulations
and orders relating to its business, 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 Company, where such violation or default would have a Material Adverse
Effect.
3.14 No Labor Problems. The Company has not been charged with
any unresolved unfair labor practices. There are no material controversies
pending or threatened between the Company and any of its employees. The Company
has 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 Company is not liable for
any arrears, wages or material penalties for failure to comply with any of the
foregoing.
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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 Company or any "ERISA Affiliate" (as
hereinafter defined), whether formal or informal, whether or not written,
including but not limited to the following:
(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 the Company is treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.15.3 Identification of Benefit Plans. Except as set
forth in the Disclosure Letter and except for Benefit Plans which have been
terminated and with respect to which neither the Company nor any ERISA Affiliate
has any liability or obligation, the Company does not maintain, and has not at
any time established or maintained, nor has 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. Except as set forth in the
Disclosure Letter, neither the Company 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. Except as set forth in the
Disclosure Letter, neither the Company 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.
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3.15.5 Documentation. The Stockholders have made available
to Newpark a true and complete copy of the following documents, if applicable,
with respect to each Benefit Plan identified in the Disclosure Letter: (1) all
documents, including any insurance contracts and trust agreements, setting forth
the terms of the Benefit Plan, or if there are no such documents evidencing the
Benefit Plan, a full description of the Benefit Plan, (2) the ERISA summary plan
description and any other summary of plan provisions provided to participants or
beneficiaries for each such Benefit Plan, (3) the annual reports filed for the
most recent three plan years and most recent financial statements or periodic
accounting of related plan assets with respect to each Benefit Plan, (4) each
favorable determination letter, opinion or ruling from the IRS for each Benefit
Plan which is intended to satisfy the requirements of Section 401(a) or Section
501 of the Code or which is dependent on such letter, ruling or opinion to avoid
current federal come tax to the beneficiaries of such Benefit Plan, and in (5)
each opinion or ruling from the Department of Labor or the Pension Benefit
Guaranty Corporation ("PBGC") with respect to such Benefit Plans.
3.15.6 Qualified Status. Each Benefit Plan that is funded
through a trust or insurance contract and is intended to satisfy the
requirements of Section 401(a) of the Code, has at all times satisfied in all
material respects, by its terms and to the best knowledge of the Stockholders in
its operation, all applicable requirements under Section 401(a) and related
sections of the Code, and any such trust has been and, at the Closing Date,
shall be exempt from federal income taxation under Section 501(a) of the Code.
All such plans have been operated to the best knowledge of the Stockholders in
all material respects in accordance with the applicable requirements of the Tax
Reform Act of 1986 and subsequent applicable legislation.
3.15.7 Compliance. Each Benefit Plan maintained by the
Company or any ERISA Affiliate has at all times been maintained, to the best
knowledge of the Stockholders, by its terms and in operation, in accordance with
all applicable laws in all material respects, including ERISA and (to the extent
applicable) Code Section 4980B. Further, there has been no failure to comply
with applicable ERISA or other requirements concerning the filing of reports,
documents and notices with the Secretary of Labor and Secretary of Treasury or
the furnishing of such documents to participants or beneficiaries that could
subject any Benefit Plan, the Company or any ERISA Affiliate to any material
civil or any criminal sanction or could require any such Person to indemnify any
other Person for such a sanction. There are no claims known to the Stockholders
which are pending or threatened against any Benefit Plan except claims for
benefits made in the ordinary course of the operation of such plans.
3.15.8 Funding. The Company and each ERISA Affiliate has
made full and timely payment of all amounts required to be contributed under the
terms of each Benefit Plan and applicable law or required to be paid as expenses
under such Benefit Plan including, but not limited to, PBGC premiums and amounts
required to be contributed under Section 412 of the Code, and no excise taxes
are assessable as a result of any nondeductible or other contributions made or
not made to a Benefit Plan. With respect to any Benefit Plan that is subject to
Title IV of ERISA, (i) the present value of all accrued benefits under such
Benefit Plan does not exceed the value of the assets of such Benefit Plan
allocated to such accrued benefits, (ii) no amount is due or owing from the
Company or any ERISA Affiliate to the PBGC or to any multi-employer plan on
account of any withdrawal therefrom, (iii) no such Benefit Plan has
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incurred any "accumulated funding deficiency", as such term is defined in
Section 412 of the Code, whether or not waived, since the effective date of such
Section 412, (iv) since September 2, 1974, no such Benefit Plan has been
completely or partially terminated, nor has any notice of intent to terminate
been filed or given, other than in accordance with ERISA or at a time when such
Benefit Plan was not sufficiently funded, (v) there has been no "reportable
event" as such term is defined in Section 4043(b) of ERISA, (vi) there has been
no withdrawal by the Company or any ERISA Affiliate that is a "substantial
employer" from a Benefit Plan that is a single employer plan that has two or
more contributing sponsors, at least two of whom are not under common control,
as referred to in Section 4063(b) of ERISA, and (vii) there has been no
cessation by the Company or any ERISA Affiliate of operations at a facility
causing more than 20% of a Benefit Plan's participants to be separated from
employment, as referred to in Section 4062(f) of ERISA. There are no liens
against the property of the Company or any ERISA Affiliate under Section 412(n)
of the Code or Sections 302(f) or 4068 of ERISA. The Company Financial
Statements properly reflect all amounts required to be accrued as liabilities
under each Benefit Plan. To the best knowledge of the Stockholders, the most
recent actuarial valuations of the Company's Benefit Plans were based on
accurate facts and information, and the Stockholders have no reason to believe
that the conclusions set forth in such valuations are incorrect.
3.15.9 Liabilities. Neither the Company nor any ERISA
Affiliate is subject to any material liability, tax or penalty whatsoever to any
Person whomsoever as a result of engaging in a prohibited transaction under
ERISA or the Code, and neither the Company nor any ERISA Affiliate has any
knowledge of any circumstances which reasonably might result in any such
material liability, tax or penalty, including but not limited to a penalty under
Section 502 of ERISA, as a result of a breach of and duty under ERISA or any
other applicable law. Other than routine claims for benefits under the Benefit
Plans, there are no pending or threatened investigations, proceedings, claims,
lawsuits, disputes, actions, audits or controversies involving the Benefit
Plans, or the fiduciaries, administrators, or trustees of any of the Benefit
Plans, or the Company or any ERISA Affiliate as the employer or sponsor under
any Benefit Plan, with any of the Internal Revenue Service, Department of Labor,
PBGC, any participant in or beneficiary of the Benefit Plans or any other Person
whatsoever. The Stockholders know of no reasonable basis for any such claim,
lawsuit, dispute, action or controversy. Except as set forth in the Disclosure
Letter, the execution and performance of the transactions contemplated by this
Agreement will not create, accelerate or increase any obligations under any
Benefit Plan, including any obligation to make any payment which would not be
deductible as an "excess parachute payment" under Section 280G of the Code.
3.16 Insurance. The Stockholders have furnished to Newpark a
complete list of all insurance policies that the Company maintains, indicating
risks insured against, carrier, policy number, amount of coverage, premiums and
expiration date.
3.17 Tax-Free Reorganization. None of the Stockholders plans or
intends to sell, exchange or otherwise dispose of a number of the Newpark Shares
that would reduce the Stockholders' ownership of Newpark Shares to a number of
shares having a value, as of the Closing Date, of less than fifty percent (50%)
of the value of all of the formerly outstanding Company Shares as of the same
date.
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3.18 Interest in Competitors, Suppliers, etc. Except as set
forth in the Disclosure Letter, none of the Stockholders, and no officer or
director of the Company or any "Family Member" (as defined in Section 18) 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 Company, or (b) has an
existing contractual relationship with the Company, including but not limited to
lessors of real or personal property leased to the Company and entities against
whom rights or options are exercisable by the Company. On the Closing Date the
Company will own, free and clear and without payment of any royalty or fee, all
interests in the assets, profits or business of the Company that are held by any
Affiliate of the Company, including the Stockholders and their Family Members.
3.19 Indebtedness with Insiders. Except as set forth in the
Disclosure Letter, and except for accrued salaries for one payroll period,
vacation pay and business expense reimbursements, the Company is not, and, on
the Closing Date, will not be, indebted to any of the stockholders, directors or
officers of the Company or any Affiliate of any such Person. None of such
Persons is or will be on the Closing Date indebted to the Company.
3.20 Consents. No authorizations, approvals or consents of any
Government Body are required for consummation of the transactions contemplated
by this Agreement.
3.21 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
name of the Company. The Company owns or has the right to use all Intangible
Assets now used in the conduct of its business. Such Intangible Assets include
all of the proprietary products and formulations developed by the Company or
used by it in its business. The Company is 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 Company
alleging any conflict between any aspect of the business of the Company and any
Intangible Assets claimed to be owned by others which, if determined adversely
to the Company, would have a Material Adverse Effect. Neither the Stockholders
nor any other officer or director of the Company, and no Person that is an
Affiliate of any such Person, has any interest in any Intangibles Assets which
are presently used by the Company or which infringe upon, conflict with or
relate to improvements or modifications of any Intangible Assets presently used
by the Company.
3.22 Purchases and Sales. Since December 31, 1996, the Company
has not placed any orders for materials, merchandise or supplies in exceptional
or unusual quantities based upon past operating practices and has 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.
3.23 Brokerage and Finder's Fees. Neither the Company nor the
Stockholders (or any Affiliate of the Stockholders) has incurred any liability
to any broker, finder or agent for
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any brokerage fees, finder's fees or commissions for which the Company could be
liable with respect to the transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since December 31, 1996, except
for matters of a general economic nature which do not affect the Company
uniquely, the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess
of $10,000 in a single transaction or $25,000 in the aggregate, except
borrowings under its bank lines of credit in the ordinary course of business, or
incurred or become subject to any obligation or liability (absolute or
contingent) in excess of $25,000 in a single transaction or $100,000 in the
aggregate, except obligations and liabilities incurred in the ordinary course of
business;
3.24.3 mortgaged, pledged, hypothecated or otherwise
encumbered any of its properties or assets except for Permitted Liens;
3.24.4 made or agreed to make any distribution of any
funds or assets of any kind whatsoever to any past or present stockholder of the
Company 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 its capital stock, whether or not similar to the foregoing,
except as described in Section 4.5;
3.24.5 made any payment of principal or interest on any
indebtedness owed to any past or present stockholder of the Company or any
Affiliate of any such Person;
3.24.6 sold or agreed to sell any of its assets,
properties or rights having an aggregate value in excess or $100,000 or canceled
or agreed to cancel any debts or claims exceeding $100,000 in the aggregate,
except for fair value in the ordinary course of business;
3.24.7 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;
3.24.8 increased the rate of compensation of or paid or
accrued bonuses to or for any of its officers, employees, consultants or agents,
except for normal merit or cost of living increases;
3.24.9 suffered any damage, destruction or loss in excess
of an aggregate of $100,000, whether or not covered by insurance, adversely
affecting any of its properties;
3.24.10 assigned or agreed to assign any of its Intangible
Assets having a value in excess of $100,000;
3.24.11 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 it is a party;
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3.24.12 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
3.24.13 entered into any other material transaction other
than in the ordinary course of business.
3.25 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 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):
3.26 Investment Representations. Either such Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the "Rules and
Regulations" (as defined in Section 18) 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 the Newpark Shares. 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" (as defined in Section 18) 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.
3.27 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 Company 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 Company Shares pursuant to any
trust, estate planning or other similar document or any prenuptial or post-
nuptial agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the
knowledge of such Stockholder, threatened in any court or arbitration forum or
by or before any Government Body involving the Company or such Stockholder
relating to or affecting any of the transactions contemplated by this Agreement.
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3.29 Title to Shares. Such Stockholder is the holder of record
and owns beneficially that number of Company Shares set forth opposite his name
in the Disclosure Letter. At the Closing, such Stockholder will own the Company
Shares set forth in the Disclosure Letter free and clear of all liens, security
interests, encumbrances and restrictions, other than restrictions contemplated
by this Agreement. Except as set forth in the Disclosure Letter, no Stockholder
is a party to any voting trust, proxy or other agreement with respect to the
voting of any of such Company Shares.
4. Additional Obligations and Covenants of the Stockholders.
Except as otherwise provided in the Disclosure Letter, the
Stockholders hereby jointly and severally covenant and agree with Newpark as
follows (the fulfillment of each such covenant and agreement is a condition
precedent to Newpark's obligations to consummate the Exchange and issue the
Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the
Closing Date, the Stockholders will and will cause the Company to comply with
the following:
4.1.1 The business of the Company shall be conducted
diligently and only in the ordinary course, and the Stockholders will use
reasonable efforts to preserve the organization of the Company intact, to keep
available to the Company its present key employees and to maintain the
relationships of the Company with its suppliers, customers and others. The
Company will not, without Newpark's prior written approval, increase the rate of
compensation payable or to become payable to any of its officers, employees,
consultants or agents over the rate being paid to them at the date hereof,
except for normal merit or cost of living increases to employees other than
officers of the Company.
4.1.2 Without Newpark's prior written approval, no
amendment will be made to any Benefit Plan, no commitment will be made to amend
any Benefit Plan and no commitment will be made to continue any Benefit Plan or
to adopt any new compensatory plan, fund or program for the benefit of any
employees of the Company or any ERISA Affiliate.
4.1.3 The Company will not, without Newpark's prior
written approval, enter into any Material Contract other than in the ordinary
course of business or enter 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.
4.1.4 The Company will not, without Newpark's prior
written approval, sell or dispose of any of its material properties or assets
except for sales at fair value in the ordinary course of business.
4.1.5 The Company will not, without Newpark's prior
written approval, acquire or enter into any agreement to acquire, by merger,
consolidation, purchase of stock or assets or otherwise, any business or entity.
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4.1.6 The Company will use reasonable diligence to
maintain its properties in their condition as of the date of this Agreement,
ordinary wear and tear excepted.
4.1.7 The Company will continue to carry its existing
insurance policies subject only to variations in amounts required by the
ordinary operations of its business. At the request of Newpark and at its sole
expense, the amount and scope of said insurance shall be increased by such
amounts and extended to provide coverage against such risks as Newpark shall
specify.
4.2 Access and Information. Subject to the execution by Newpark
of a confidentiality agreement in form and substance reasonably satisfactory to
the Stockholders, the Stockholders will afford to Newpark and Newpark's counsel,
accountants and other representatives reasonable access, throughout the period
from the date hereof to the Closing Date, to all of the Company's properties,
books, contracts, commitments, and records and shall furnish Newpark during such
period with all information that Newpark reasonably may request, including
copies and/or extracts of pertinent records, documents and contracts.
4.3 Efforts to Satisfy Conditions. The Stockholders agree to
use reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to Newpark's obligations under this Agreement, to the extent that
their action or inaction can control or influence the satisfaction of such
conditions. Without limiting the generality of the foregoing, the Stockholders
will and will cause the Company to refrain from all negotiations and
transactions, the con summation of which would be inconsistent with the
transactions contemplated by this Agreement, including, without limitation, any
transaction providing for the sale of any capital stock of the Company, any
merger or other business combination involving the Company, the acquisition of a
substantial equity interest in the Company by a third party or the sale of a
substantial portion of the assets of the Company.
4.4 Corporate Matters. Between the date hereof and the Closing
Date, the Stockholders will cause the Company not to, without Newpark's prior
written approval: (a) amend its Articles of Incorporation or Bylaws; (b) issue
any shares of its capital stock; (c) issue or create any warrants, obligations,
subscriptions, options, convertible securities or other commitments under which
any additional shares of its capital stock of any class might be directly or
indirectly authorized, issued or transferred from treasury; or (d) enter into
any agreement requiring it to do any of the foregoing prohibited acts.
4.5 No Distributions to Stockholders. Between the date hereof
and the Closing Date, the Stockholders will cause the Company not to, without
Newpark's prior written approval: (a) declare, set aside or pay any dividend or
make any distribution in respect of its capital stock, except that the Company
may declare a distribution (the "Distribution") to the Stockholders on or before
the Closing Date, payable after the Closing Date, in an amount equal to 39.6% of
each Stockholders' prorated share of the net profits of the Company from January
1, 1997 through the Closing Date (the "Short Period Income Taxes"); (b) directly
or indirectly purchase, redeem or otherwise acquire any shares of its capital
stock for consideration; (c) pay or distribute any cash or property to any
Stockholder as a loan or in payment of principal of or interest on any
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indebtedness to any Stockholder; or (d) enter into any agreement requiring it to
do any of the foregoing prohibited acts.
4.6 Capital Expenditures. Between the date hereof and the
Closing Date, the Stockholders will cause the Company not to, without Newpark's
prior written approval, make any commitment for capital expenditures in excess
of an aggregate of $10,000.
4.7 Indebtedness. Between the date hereof and the Closing Date,
the Stockholders will cause the Company not to, without Newpark's prior written
approval: (a) create, incur or assume any long-term debt (including capital
leases that individually involve annual payments in excess of $50,000) or,
except in the ordinary course of business under existing lines of credit,
create, incur or assume any short-term debt for borrowed money in excess of
$25,000 in a single transaction or $10,000 in the aggregate; (b) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person (except in
the ordinary course of business and consistent with past practice); (c) make any
loans or advances to any Person except in the ordinary course of business and
consistent with past practice; or (d) make any capital contributions to, or
investments in, any Person except in the ordinary course of business and
consistent with past practice.
5. 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):
5.1 Organization and Good Standing.
5.1.1 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.
5.1.2 Newpark has furnished to the Company and the
Stockholders com plete and correct copies of Newpark's Certificate of
Incorporation and Bylaws as in effect on the date hereof.
5.2 Capital Stock. The authorized capital stock of Newpark
consists of 80,000,000 shares of Common Stock, $.01 par value, of which
30,414,618 shares were issued and outstanding on May 8, 1997 (as adjusted for a
two-for-one stock split effective May 30, 1997), and 1,000,000 shares of
Preferred Stock, $.01 par value, of which no shares are issued and outstanding.
5.3 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
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"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.
5.4 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 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.
5.5 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" (as defined in Section 18) 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.
5.6 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
-17-
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.
5.7 No Litigation. Except as disclosed in the Newpark Reports
or omitted therefrom in accordance with the Rules and Regulations: (a) there are
no actions, suits or proceedings (whether or not purportedly on behalf of
Newpark or any Newpark Subsidiary) pending or, to the "knowledge of Newpark" (as
defined in Section 18), threatened against or affecting Newpark or any Newpark
Subsidiary, at law or in equity or before or by any Government Body or before
any arbitrator of any kind; and (b) to the best of the knowledge of Newpark,
neither Newpark nor any Newpark Subsidiary is in default with respect to any
judgment, order, writ, injunction, decree, award of any court, arbitrator or
Government Body.
5.8 Newpark Benefit Plans. Newpark has made available to the
Stockholders a true and complete copy of the ERISA summary plan description and
any other summary of plan provisions provided to participants or beneficiaries,
if applicable, for each Benefit Plan (as defined in Section 3.15.1, substituting
"Newpark" for "the Company") maintained by Newpark.
5.9 Environmental Matters. Newpark and the Newpark Subsidiaries
have complied in all material respects with all Hazardous Materials Laws
applicable to their properties and business. Neither Newpark nor, to the best of
Newpark's knowledge, any Newpark Subsidiary has received any complaint, order or
similar notice that it is not in compliance with any Hazardous Materials Laws or
that any Government Body is investigating its compliance with any Hazardous
Materials Laws, except as disclosed in the Newpark Reports or omitted therefrom
in accordance with the Rules and Regulations and except for routine inspections
and investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.10 Absence of Certain Changes. Since December 31, 1996, 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.
5.11 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 or Blue Sky laws relating to the Newpark Shares.
5.12 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 therein not
misleading.
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6. Additional Obligations and Covenants of Newpark.
Newpark hereby covenants and agrees with the Stockholders as
follows (the fulfillment of each such covenant and agreement is a condition
precedent to the Stockholders' obligations to consummate the Exchange):
6.1 Efforts. Newpark agrees to use reasonable efforts to
satisfy or cause to be satisfied all of the conditions precedent to the
Stockholders' obligations under this Agreement, to the extent that its action or
inaction can control or influence the satisfaction of such conditions.
6.2 Additional Information. Newpark will make available to each
Stockholder 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.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of this Agreement, will
issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use
all reasonable efforts to qualify the issuance of the Newpark Shares in
connection with the Exchange under Rule 506 of the Rules and Regulations and, if
necessary, to qualify the issuance thereof pursuant to all applicable state
securities or Blue Sky laws.
6.5 Continuing Employees. Each employee of the Company who
continues immediately after the Closing Date as an employee of the Company,
Newpark, or any of its subsidiaries ("Continuing Employee") shall be treated
under Newpark's compensation, benefit plans and employment policies and
practices on a basis which Newpark deems no less favorable than an employee of
Newpark who performs comparable duties and responsibilities for Newpark on an
equally satisfactory basis. Each Continuing Employee shall receive service
credit for all purposes (including, but not limited to, vesting, eligibility and
benefit accrual) under Newpark's "Benefit Plans" (as defined in Section 3.15.1,
substituting "Newpark" for "the Company") and under any Benefit Plan adopted in
the future for service completed with the Company as if such service had been
completed with Newpark except that (a) no such employee shall receive such past
service credit under a future Benefit Plan except on the same basis that
Newpark's employees also receive past service credit under such plan, and (b) no
such past service credit will be provided under a plan if the Internal Revenue
Service determines that such credit would adversely affect the tax qualified
status of such plan under Section 401 of the Code.
6.6 Stockholder Guarantees. Subject to consummation of the
Exchange, Newpark agrees that, after the Closing Date, it will cause the Company
to discharge in accordance with its terms all indebtedness of the Company as to
which the Stockholders have executed personal guarantees, as disclosed in the
Disclosure Letter.
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7. 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 Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
7.1 Securities Laws. All applicable Blue Sky and state
securities laws shall have been complied with in connection with the issuance of
the Newpark Shares, and no stop order suspending the qualification or
registration of the Newpark Shares under the Blue Sky laws of any jurisdiction
shall have been issued and no proceeding for that purpose shall have been
initiated or shall be threatened by the authorities of any such jurisdiction.
7.2 Related Acquisition Consummated. The Related Acquisition
shall have been consummated.
7.3 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 or the operation of the business of the Company following the Closing
Date 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 Date.
7.4 Injunction. At the Closing Date 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.
7.5 Tax Opinion. The Stockholders and Newpark shall each have
received a written opinion of Xxxxx, Xxxxx & Xxxxxx LLP, in form and substance
reasonably satisfactory to the Stockholders and Newpark (the "Tax Opinion"), to
the effect that (a) the Exchange will constitute a reorganization within the
meaning of Section 368(a)(1)(B) of the Code, (b) the exchange of the Company
Shares for Newpark Shares will not give rise to gain or loss to the
Stockholders, (c) the tax basis of Newpark Shares received in the Exchange by a
Stockholder will be the same as the tax basis of such Stockholder in Company
Shares which were exchanged for such Newpark Shares, and (d) the holding period
for Newpark Shares received in the Exchange by a Stockholder will include the
holding period of such Stockholder in Company Shares which were exchanged for
such Newpark Shares. In connection with such tax opinion, Xxxxx, Xxxxx & Xxxxxx
LLP shall be entitled to make factual assumptions as are customary in similar
tax opinions, and such factual assumptions shall be based on and confirmed by
certificates signed by the Stockholders and by responsible officers of the
Company and Newpark.
7.6 Listing of Newpark Shares. The Newpark Shares shall have
been listed on the New York Stock Exchange, subject to official notice of
issuance.
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8. 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 Closing, unless waived in writing by
Newpark:
8.1 Investigation of the Company. Newpark shall have made an
investigation of the business, properties (tangible and intangible), products,
customers, plants, contracts and financial condition of the Company and shall
have been satisfied with the results of such investigation. This condition
shall be deemed satisfied unless Newpark notifies the Stockholders in writing
within thirty (30) days of the date hereof that it is dissatisfied with the
results of such investigation.
8.2 Accuracy of Warranties and Representations. The
representations and warranties of the Stockholders herein shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect, except as to transactions permitted herein or to which Newpark
may have consented in writing and changes occurring in the ordinary course of
business after the date of this Agreement and not materially adversely affecting
the Company, or its properties, prospects, or financial condition, as though
such representations and warranties had been made on and as of the Closing Date,
and the Stockholders shall have performed in all material respects all covenants
required by this Agreement to be performed by them at or prior to the Closing.
8.3 No Material Adverse Change. There shall have been no
changes after the date of this Agreement in the results of operations, assets,
liabilities, financial condition or affairs of the Company which in their total
effect have a Material Adverse Effect on the Company.
8.4 Stockholders' Certificate. The Stockholders shall have
delivered to Newpark a certificate, dated the Closing Date, executed by each of
the Stockholders, individually, stating that, to the best knowledge of each, (a)
all the representations and warranties of the Stockholders contained in this
Agreement are true and accurate, (b) all of the conditions precedent to the obli
gations of Newpark hereunder have been fulfilled and (c) the Company and the
Stockholders have duly performed all obligations and covenants to be performed
by them hereunder.
8.5 Material Contracts. The Company 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 Date.
8.6 Opinion of the Stockholders' Counsel. Newpark shall have
received an opinion of Xxxxxxxxxx & xxxXxxx, dated the Closing Date,
substantially in the form attached hereto as Exhibit 8.6.
8.7 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
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there shall have been furnished to such counsel by the Stockholders certified
copies of such corporate records of the Company and copies of such other
documents as such counsel may reasonably have requested for such purpose.
9. 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 Closing, unless waived in writing by the Stockholders:
9.1 Accuracy of Warranties and Representations. The
representations and warranties of Newpark contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date, and Newpark 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.
9.2 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.
9.3 No Material Adverse Change. There shall have been no
changes since December 31, 1996, in the results of operations, assets,
liabilities, financial condition or affairs of Newpark and its subsidiaries,
taken as a whole, which, in their total effect, have a Material Adverse Effect
on Newpark and its subsidiaries.
9.4 Officers' Certificate of Newpark. Newpark shall have
delivered to the Stockholders a certificate dated the Closing Date, signed by
the President and Chief Financial Officer of Newpark and stating that, to the
best knowledge of each, (a) all the representations and warranties of Newpark
contained in this Agreement are true and accurate, (b) all of the conditions
precedent to the obligations of the Stockholders hereunder have been fulfilled
and (c) Newpark has duly performed all obligations and covenants to be performed
by it hereunder.
9.5 Opinion of Newpark's Counsel. The Stockholders shall have
received an opinion of Xxxxx, Xxxxx & Xxxxxx LLP, dated the Closing Date,
substantially in the form attached hereto as Exhibit 9.5.
9.6 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.
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10. Closing.
The closing ("Closing") of the transactions covered by this
Agreement shall take place at 10:00 a.m., on June 4, 1997, at the offices of
Newpark, 0000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxxx, XX 00000. If the conditions
specified in this Agreement have not been fulfilled by that date, any party may
postpone the Closing for the minimum reasonably necessary period or periods, in
any event not exceeding an aggregate of 45 days, by written notice to the other
parties. Any party exercising such right shall deliver written notice to the
other parties specifying in reasonable detail the condition which has not been
fulfilled, and the other parties will have the right to cure or correct the
matter within the 45-day period. The term "Closing Date" herein shall mean the
last date fixed by mutual agreement or otherwise under this Section.
11. Survival of Representations.
Except as otherwise provided herein, all representations,
warranties and indemnifications made by the Stockholders or Newpark under or in
connection with this Agreement (including any representations and warranties set
forth in the certificates delivered pursuant to Sections 8.4 and 9.4) shall
survive the Closing until 24 months after the Closing Date. The representations
and warranties of the Stockholders set forth in Paragraphs 3.11, 3.12, 3.15 and
3.29 shall survive until the expiration of the applicable statute of
limitations. 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 13.3.3 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" (as defined in Section 18).
12. Post-Closing Covenants.
12.1 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 Company or both
which were in effect or occurred on or prior to the Closing.
12.2 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
Company 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.
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12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing
authority asserts a claim, makes an assessment, or otherwise questions or
disputes the amount of Taxes of the Company for any period prior to the Closing
Date, Newpark shall promptly inform the Stockholders in writing of such fact.
The provisions of Section 13 shall apply to the defense of any such claim,
assessment or dispute.
12.3.2 Current Tax Returns. The Stockholders shall be
responsible for the preparation and filing of all Tax Returns for all taxable
periods that end or ended on or before the Closing Date and which have not been
filed or are not required to be filed by the Closing Date. The Company shall pay
any and all Taxes due with respect to such returns. Newpark will make available
to the Stockholders, without charge, the services of its personnel and the
personnel of the Company to assist the Stockholders in the preparation of such
Tax Returns. Such Tax Returns shall be reasonably satisfactory to Newpark in
form and substance. The Stockholders shall each pay their prorata portion of the
Short Period Income Taxes.
12.3.3 Refunds and Credits. Subject to the provisions of
Section 12.3.2 above, any refunds and credits of federal income Taxes
attributable to any taxable year ending on or before the Closing Date shall be
for the account of the Stockholders, and any refunds and credit of other Taxes
attributable to any taxable year ending on or before the Closing Date shall be
for the account of the Company; to the extent that any such refund of Taxes
other than federal income Taxes exceeds the amount, if any, accrued on the books
of the Company with respect to the period for which the refund is received, the
Stockholders shall receive credit against any liability they may have under
Section 13.
12.3.4 Cooperation. Newpark and the Stockholders shall
cooperate with each other in a timely manner in the preparation and filing of
any Tax Returns and the conduct of any audit or any other inquiry or proceeding
with respect to any Tax Return. Each party shall execute and deliver such powers
of attorney and make available such other documents as are necessary to carry
out the intent of this Section 12.3.4. Each party agrees to notify the other
party of any adjustments that do not result in Tax liability but can be
reasonably expected to affect any Tax Return of the other party.
12.3.5 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 or the audit
of such returns, 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 review or audit of such returns to the extent relevant to an
obligation or liability of a party under this Agreement.
13. Indemnifications.
13.1 Indemnification by the Stockholders. Subject to the
provisions of Sections 11 and 13.3, the Stockholders, jointly and severally (but
severally with respect to their
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individual representations and warranties set forth in paragraphs 3.26, 3.27,
3.28 and 3.29), hereby agree to indemnify, defend, protect and hold harmless
Newpark against all damages, losses, liabilities, costs and expenses (including
reasonable attorneys' fees) resulting from any and all breaches of any warranty
or representation made by them in this Agreement or any schedule or agreement
delivered pursuant to this Agreement. 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 Company, whether by right of
indemnification, contribution or otherwise.
13.2 Indemnification by Newpark. Subject to the provisions of
Sections 11 and 13.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless the 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 in this Agreement or any schedule
or agreement delivered pursuant to this Agreement. The rights to such
indemnification shall accrue solely to the Stockholders, and the Company shall
have no interest therein.
13.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
13.3.1 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.
13.3.2 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.
13.3.3 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 $50,000. 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 Company
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Shares are exchanged in the Exchange, for which purpose they shall be valued at
their "Closing Value" (as defined in Section 18). To the fullest extent
permitted by law, and to the extent that such Stockholder continues to own any
of the Newpark Shares, each Stockholder shall satisfy his 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.
13.3.4 In determining the amount of any damage, loss,
liability, cost or expense suffered by Newpark which gives rise to liability of
the 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 the Stockholders.
13.3.5 The rights and obligations of the parties under
this Article 13 shall be the exclusive rights and obligations of the parties
with respect to any breach of any representation or warranty in this Agreement
and shall be in lieu of any other rights or remedies to which the party entitled
to indemnification hereunder would otherwise be entitled as a result of such
breach under this Agreement.
13.4 Dispute Resolution; Arbitration.
13.4.1 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. 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 provisions of this Agreement and, to the extent
not inconsistent with such provisions, the Commercial Arbitration Rules of the
American Arbitration Association. To the extent lawful, the arbitrators, in
their discretion, may shorten any time periods or notice periods specified by
law, in the interest of timely completing arbitration and issuing their award.
13.4.2 The Stockholders, as one party, or Newpark may
initiate arbitration of a dispute by giving the other party written notice of
arbitration, which shall specify with reasonable detail (a) the issue in
dispute, (b) the claims asserted and (c) the remedy sought by the party invoking
arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the
-26-
arbitrators shall be affiliated in any way with either of the parties or have
any direct or indirect financial interest in the outcome of the arbitration. If
the parties fail to reach agreement upon a single arbitrator within 5 business
days following receipt by one party of the other party's notice of arbitration,
the initiating party shall submit in writing to the other party the name of a
neutral arbitrator selected by the initiating party. Within 5 business days
after such name is submitted, the other party shall submit to the initiating
party in writing the name of a neutral arbitrator selected by such other party
and may submit an answering statement. Within 10 days after appointment of the
second arbitrator, the two arbitrators appointed by the parties shall select a
third neutral arbitrator; the three arbitrators so selected shall finally
resolve the dispute. If the two arbitrators appointed by the parties fail
before the end of said 10 day period to agree on a third arbitrator, the
Judicial District Court of Xxxxxx County, Houston Division, shall, upon the
filing of a petition by any of the parties hereto select the third arbitrator
from a list of five individuals obtained by the Court from the Houston office of
the American Arbitration Association. If the non-initiating party shall fail to
appoint an arbitrator within 10 days after the name of the arbitrator selected
by the initiating party is submitted, the arbitrator appointed by the initiating
party shall be empowered to proceed to arbitrate and determine the matter in
controversy as the sole arbitrator. All references to "the arbitrators" in the
following Sections shall be deemed to refer to the sole arbitrator, if there is
only one arbitrator. The arbitrators shall, at the earliest possible date, set
dates for a hearing and establish any pre-hearing conferences or procedural
schedules that the arbitrators deem appropriate. The arbitrators may authorize
depositions and issue subpoenas and make other decisions provided for in Section
13.4.3 below. All decisions of the arbitrators shall be by a majority of the
arbitrators, unless the parties agree otherwise.
13.4.3 It is the mutual intention of the parties that
discovery, if any, shall be limited in nature and scope and, to the extent
possible, shall be handled informally and by agreement. Any dispute regarding
discovery shall be submitted promptly to the arbitrators and shall be resolved
by them. If necessary, any decision of the arbitrators respecting discovery may
be enforced by any court of competent jurisdiction in the same manner as a final
award under this Section, including an order for specific performance.
13.4.4 The arbitrators shall diligently, expeditiously and
in good faith decide the matter under consideration in accordance with the laws
of the State of Texas, excluding its choice of law rules. If there is only one
arbitrator, his decision shall be final, conclusive and binding on all parties;
if there are three arbitrators, the agreed decision of any two of them shall be
final, conclusive and binding on all parties. The arbitrators shall prepare an
award in writing which reflects the final decision of the 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 Xxxxxx County, Houston Division.
13.4.5 The arbitrators' compensation shall be agreed upon
by the parties and the arbitrators. The terms of compensation for each of the
arbitrators shall be identical. The parties shall share equally the cost of the
arbitration proceedings, including the fees and expenses of the arbitrators and
the cost of the stenographic record, provided that the arbitrators shall have
discretion to charge such costs to the parties in such different proportions as
they determine to be appropriate.
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13.4.6 If any other provision of this Agreement should be
or become invalid or unenforceable by force of law, the provisions of this
Section 13.4 shall not be affected but shall remain in full force and effect.
Any obligation to arbitrate which is established by this Section shall remain in
full force and effect. Any obligation to arbitrate which is established by this
Section shall not be extinguished upon the termination or expiration of this
Agreement but shall survive that event.
14. Destruction of Assets.
All risk of loss with respect to the assets and business of the
Company shall be borne by the Stockholders until the Closing to the extent set
forth in this Section 14. If on the Closing Date any assets of the Company
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 Company (whether or not similar to the foregoing) to an
extent which materially affects the value to Newpark of the Company Shares,
Newpark shall have the right at its election to complete the acquisition (in
which event, as Newpark's sole and exclusive remedy with respect to the
consequences of such loss or damage, all claims of the Company with respect to
such loss or damage and all insurance proceeds arising therefrom shall be for
the account of the Company), 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.
15. Termination.
In addition to any party's right to terminate this Agreement if
any condition precedent to its obligations is not satisfied on the Closing Date,
subject to the provisions of this Agreement relating to the postponement of the
Closing Date, 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 Closing Date 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.
16. 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 16
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by giving notice of such change to the other party in the manner which is
provided in this Section 16.
Stockholders: c/o Chemical Technologies, Inc.
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxx Xxxxxxx xxxXxxx, Esq.
Xxxxxxxxxx & xxxXxxx
000 Xxxxx Xxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Newpark: c/o Newpark Resources, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: Secretary
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxx LLP
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
17. 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.
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.
18. Certain Definitions.
As used herein, the following terms (whether used in the singular
or the plural) have the following meanings:
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"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.
"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 Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"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 Closing Date 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
-30-
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 Company.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark.
"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 Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"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 Government Body 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.
-31-
19. 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.
20. Remedies Not Exclusive.
Except as provided in Sections 13 and 14, (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.
21. Attorneys' Fees.
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.
22. 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 Company
and the Stockholders in connection with this Agreement and the transactions
contemplated hereby.
23. 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.
24. 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.
25. 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
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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.
26. 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.
27. Waivers.
At any time prior to the Closing Date, 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.
28. 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.
(Signatures set forth on the following page)
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
NEWPARK: THE STOCKHOLDERS:
NEWPARK RESOURCES, INC.
/s/ Xxxxx Xxxxxxx
_________________________________
Xxxxx Xxxxxxx
By:/s/ Xxxxx X. Xxxx
_________________________________
Name: Xxxxx X. Xxxx /s/ Xxxxxxx Shell
Title: President _________________________________
Xxxxxxx Shell
/s/ Xxx Xxxxxxx
_________________________________
Xxx Xxxxxxx
/s/ Xxx Xxxx
_________________________________
Xxx Xxxx
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