AMENDMENT NO. 1 TO THE MEMBERSHIP INTERESTS PURCHASE AGREEMENT
Exhibit 10.1
This Amendment No. 1 to the Membership Interests Purchase Agreement (this
“Amendment”), dated as of June 30, 2008, is entered into by and among Newpark Resources,
Inc., a Delaware corporation (“Newpark”), Newpark Drilling Fluids LLC, a Texas limited
liability company and a direct wholly-owned subsidiary of Newpark (“DFI”), Newpark Texas,
L.L.C., a Louisiana limited liability company and an indirect wholly-owned subsidiary of Newpark
(“Newpark Texas”), CCS Inc., an Alberta corporation (“CCS”), and CCS Midstream
Services, LLC, a Louisiana limited liability company (“Purchaser”), and an Affiliate of
CCS.
RECITALS:
A. Reference is herein made to that certain Membership Interests Purchase Agreement by and
among Newpark, DFI, Newpark Texas, CCS, and Purchaser, dated April 16, 2008 (the “Purchase
Agreement”). Terms used but not defined herein shall have the meanings set forth in the
Purchase Agreement.
B. The parties to the Purchase Agreement acknowledge that each of Newpark and CCS has
fulfilled its initial obligations under Section 5.2(a) of the Purchase Agreement as originally
written to file, or cause to be filed, on or before May 1, 2008 with the Department of Justice
(“DOJ”) and the Federal Trade Commission (“FTC”) the notification and report form
required for the transactions contemplated in the Purchase Agreement by the HSR Act, requesting
early termination of the waiting period thereunder.
C. Newpark, DFI, Newpark Texas, CCS, and Purchaser, who constitute all of the parties to the
Purchase Agreement, desire to amend the Purchase Agreement as set forth herein in accordance with
Section 11.8 of the Purchase Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual promises set forth herein and in the Purchase
Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, the parties hereby agree as follows:
Section 1. Amendment Format. In connection with each amendment to the Purchase
Agreement and the Newpark Disclosure Schedule as set forth herein or attached hereto that is not
being deleted or added in its entirety (i) the text of the language in the Purchase Agreement or
the Newpark Disclosure Schedule which is being deleted by such amendment is stricken through, and
(ii) the text of the language in the Purchase Agreement or the Newpark Disclosure Schedule which is
being added is double-underlined and boldfaced.
Section 2. Amendment to Defined Terms. The Parties to the Purchase Agreement
acknowledge that Purchaser changed its name to “CCS Midstream Services, LLC” on June 5, 2008.
Therefore, the definition of “Purchaser” in the Preamble of the Purchase Agreement is hereby
amended to mean CCS Midstream Services, LLC.
Section 3. Amendment to Section 2.4(c). Section 2.4(c) of the Purchase Agreement is
amended and restated in its entirety as follows:
(c) For purposes of this Agreement, “Net Working Capital” shall (i) be calculated as of
the Effective Time on an aggregate basis among the Transferred Entities and (ii) mean the
amount equal to the Current Assets minus Current Liabilities. “Current Assets” shall mean,
subject to the adjustments set forth below, the current assets of the Transferred Entities
as of the Effective Time comprised of accounts receivable, whether billed or unbilled (net
of allowances for doubtful accounts); costs and estimated earnings in excess of xxxxxxxx on
uncompleted contracts; the current portion of any notes or other receivables; inventories;
and prepaid expenses. “Current Liabilities” shall mean, subject to the adjustments set forth
herein, the current liabilities of the Transferred Entities as of the Effective Time
comprised of accounts payable; accrued liabilities; the current portion of any Capital
Leases; xxxxxxxx in excess of costs and estimated earnings on uncompleted contracts; and,
payroll, accrued incentive compensation and bonuses, accrued vacation benefits and related
taxes and withholdings payable. Subject to the adjustments set forth below, Current Assets
and Current Liabilities shall be computed in accordance with GAAP on a basis consistent with
the December 31, 2007 combined balance sheet of NESI. Notwithstanding the foregoing, for
purposes of calculating the Net Working Capital, the Current Assets and the Current
Liabilities shall not include:
(i) to the extent not incurred in the ordinary course of business, intercompany
receivables and payables between or among any of the Transferred Entities, Newpark
and its other Affiliates;
(ii) any bank or funded Indebtedness including, without limitation, any
short-term debt and the current portion of any long-term debt that has been or will
be paid in full by the Transferred Entities, Newpark and its other Affiliates prior
to the Effective Time;
(iii) any liability for income Taxes payable by any of the Transferred Entities
that are actually paid or payable, when due, by Newpark or one of its Affiliates
other than the Transferred Entities; and
(iv) any proceeds from the transfer of the owned barges pursuant
to Section 5.18.
Section 4. Amendment to Section 3.8 of the Newpark Disclosure Schedule. Section 3.8
of the Newpark Disclosure Schedule is amended and restated in its entirety to read as set forth on
Schedule 3.8 attached hereto.
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Section 5. Amendment to Section 3.16 and Section 3.16 of the Newpark Disclosure
Schedule.
5.1 The final paragraph of Section 3.16 of the Purchase Agreement is amended and restated in
its entirety by the following:
Except as set forth in Section 3.16 of the Newpark Disclosure Schedule, each
Contract required to be disclosed pursuant to this Section 3.16 (collectively, the
“Material Contracts”), whether written or oral, is in full force and effect and is a
valid and binding agreement of the Transferred Entity, as the case may be, and, to Newpark’s
knowledge, of each other party thereto. Except as set forth in Section 3.16 of the
Newpark Disclosure Schedule, none of the Transferred Entities or, to the knowledge of
Newpark, any other party thereto is in default or breach in any material respect under the
terms of any such Material Contract and neither any Transferred Entity, Newpark, DFI nor
Newpark Texas has received any notice of termination or threatened termination of any
Material Contract or is aware of any facts or circumstances that either currently or with
the passage of time could result in a breach or default under or give rise to a right to
terminate any Material Contract, including, without limitation, any Transportation Contract.
Newpark has made available to the Purchaser complete and correct copies of each Material
Contract.
5.2 Section 3.16 of the Newpark Disclosure Schedule is amended and restated in its entirety to
read as set forth on Schedule 3.16 attached hereto.
Section 6. Amendment to Section 5.1(a). Section 5.1(a) of the Purchase Agreement is
amended and restated in its entirety by the following:
(a) After the date of this Agreement until the earlier of the Closing or the
termination of this Agreement, Newpark shall, and shall cause each of the Transferred
Entities and their respective representatives to (i) afford Purchaser and its
representatives access, at reasonable times during normal business hours after first
obtaining the consent of Newpark, to the books, records, properties and personnel of the
Transferred Entities; (ii) furnish Purchaser and its representatives with such additional
financial, operating and other data and information within the control of Newpark and/or the
Transferred Entities as Purchaser may reasonably request; and (iii) otherwise cooperate with
the investigation by Purchaser and its representatives of the Transferred Entities;
provided, however, that if the Outside Date is extended past July 15, 2008, Newpark
may limit Purchaser’s access to the personnel of the Transferred Entities if Newpark
determines, in its reasonable discretion, that such access would be disruptive to Newpark’s
business. Any expenses related to the furnishing of such information which is within the
control of Newpark and/or the Transferred Entities shall be paid by Newpark. The foregoing
shall not require Newpark, DFI, Newpark Texas or any Transferred Entity to permit any
inspection, or to disclose any information, that in the reasonable judgment of Newpark is
reasonably likely to result in the disclosure of any trade secrets to third parties, violate
any of its obligations with respect to confidentiality or disclose information that does not
relate exclusively to the Business. All information provided to Purchaser and its
representatives in accordance with this Agreement, including this Section 5.1, or by a third
party subject to an obligation of confidentiality for the benefit, either directly or
indirectly, of Newpark shall, prior to the Closing, be held by Purchaser and its
representatives in accordance with, shall be considered “Evaluation Material” under,
and shall be subject to the terms of, the Confidentiality Agreement. All requests for
information made pursuant to this Section 5.1(a) shall be directed to a designated officer
of Newpark or such other individual as may be designated by Newpark, and shall not be
granted to the extent deemed inconsistent with any Law.
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Section 7. Amendment to Section 5.2(a). Section 5.2(a) of the Purchase Agreement is
amended and restated in its entirety by the following:
(a) Each of Newpark and CCS shall file, or cause to be filed, on or before
June 4, 2008 with the Department of Justice (“DOJ”) and the Federal Trade
Commission (“FTC”) the notification and report form required for the transactions
contemplated hereunder by the HSR Act, requesting early termination of the waiting period
thereunder. Newpark and CCS shall use reasonable efforts to coordinate their initial filing
of the notification and report form so that such filings are made simultaneously. Each of
the parties further agrees to use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective as promptly as practicable the transactions contemplated by
this Agreement and to cooperate with the other in connection with the foregoing, including
using commercially reasonable efforts (i) to supply promptly any additional information or
documentary material that may be requested by a Governmental Entity, including, without
limitation, the DOJ or the FTC, (ii) to obtain all other consents, approvals and
authorizations that are required to be obtained under any federal, state, local or foreign
Law or regulation, (iii) to lift or rescind any injunction or restraining order or other
order adversely affecting the ability of the parties to this Agreement to consummate the
transactions contemplated by this Agreement, (iv) to effect as promptly as practicable all
necessary registrations, filings and responses to requests for additional information or
documentary material from a Governmental Entity, if any, and (v) to fulfill all conditions
to this Agreement.
Section 8. Amendment to Article V. Article V of the Purchase Agreement is amended to
add the following Section 5.18:
5.18 Transfer of Owned Barges. Immediately prior to Closing, and after
satisfaction or waiver of all conditions to the parties’ obligations to close as set forth
in Article VIII, Newpark shall cause NESI to transfer and convey to CCS 7525, L.L.C. the
owned barges described in Section 5.18 of the Newpark Disclosure Schedule pursuant to the
terms and conditions set forth in transfer documents which are in a form mutually acceptable
to Newpark and CCS 7525, L.L.C. For the avoidance of doubt, Purchaser acknowledges that the
transfer of the barges as contemplated by this Section 5.18 shall not constitute a breach of
any representation, warranty or covenant of Newpark, DFI or Newpark Texas contained in this
Agreement.
Section 9. Amendment to Section 9.1(a)(ii). Section 9.1(a)(ii) of the Purchase
Agreement is amended and restated in its entirety by the following:
(ii) by Newpark if CCS (or Purchaser) shall not have filed on or before June
4, 2008 with the DOJ and FTC the notification and report form required to be filed by
CCS (or Purchaser) for the transactions contemplated hereby pursuant to the HSR Act;
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Section 10. Amendment to Section 9.1(a)(iii). Section 9.1(a)(iii) of the Purchase
Agreement is amended and restated in its entirety by the following:
(iii) by Purchaser if Newpark shall not have filed on or before June 4,
2008 with the DOJ and FTC the notification and report form required to be filed by Newpark
for the transactions contemplated hereby pursuant to the HSR Act;
Section 11. Amendment to Section 9.1(a)(iv). Section 9.1(a)(iv) of the Purchase
Agreement is amended and restated in its entirety by the following:
(iv) by either Newpark, on the one hand, or Purchaser, on the other hand, if the
Closing shall not have occurred on or before July 15, 2008 (the “Outside
Date”); provided, however, that (A) either Newpark or Purchaser may, at its sole
discretion, extend the Outside Date on one or more occasions for an aggregate period not to
exceed forty-five (45) days if all other conditions to consummation of the transactions
contemplated by this Agreement are satisfied or capable of then being satisfied, and the
sole reason that such transactions have not been consummated by such date is that the
condition set forth in Section 8.1(a) has not been satisfied, provided, that the extension
may be increased to a period not to exceed seventy-five (75) days if a Divestiture is
required and any dispute with respect to the Agreed Value is submitted to an Accounting
Arbitrator or a valuation expert in accordance with Section 5.2(e), provided, further, that
the Outside Date shall not be extended for a period in excess of five (5) Business Days
following the later to occur of the date upon which the waiting period (or any extension
thereof) under the HSR Act shall have expired or been terminated, or the date upon which a
determination of the Agreed Value is made, (B) either Newpark or Purchaser may, at its sole
discretion, extend the Outside Date on one or more occasions for an aggregate period not to
exceed forty-five (45) days if one or more Environmental Disputes shall have been submitted
to arbitration in accordance with Section 5.14(d), provided, that the Outside Date shall not
be extended for a period in excess of five (5) Business Days following the date upon which
the arbitrator shall have delivered his written decision with respect to such Environmental
Disputes, (C) either Newpark or Purchaser may, at its sole discretion, extend the Outside
Date (as same may have been extended) until the sooner to occur of (1) the expiration of
Purchaser’s thirty (30) day notice period provided for in Section 5.14(c)(iii), or (2) five
(5) Business Days following the Purchaser’s delivery of its notice under Section
5.14(c)(iii) that Purchaser is electing to continue with the transactions contemplated by
this Agreement, (D) either Newpark or Purchaser may, at its sole discretion, extend the
Outside Date (as same may have been extended) up to six (6) months if Newpark exercises its
option under Section 5.14(c)(iii) to cure or remediate the Selected Alleged Recognized
Environmental Conditions, (E) either Newpark or Purchaser may, at its sole discretion,
extend the Outside Date on one or more occasions for an aggregate period not to exceed
thirty (30) days if a dispute with respect to LTM EBITDA shall have been submitted to an
Accounting Arbitrator in accordance with Section 9.1(b), provided, that the Outside Date
shall not be extended for a period in excess of five (5) Business Days following the date on
which the Accounting Arbitrator shall have delivered his written decision with respect to
any such dispute, and (F) the right to terminate this Agreement under this Section
9.1(a)(iv) shall not be available to any party to this
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Agreement whose failure to comply or
perform in any material respect
with such party’s representations, warranties, covenants or other agreements contained
in this Agreement has been the cause of or resulted in the failure of the transactions
contemplated by this Agreement to occur on or before the Outside Date. In the event (x) any
Environmental Report required pursuant to Section 5.14 hereof shall not have been completed
on or before the Outside Date, or (y) any Environmental Dispute shall not have been resolved
by arbitration or otherwise on or before the Outside Date as it may have been extended
pursuant to clause (B) above, Newpark shall have the right, at its discretion, to terminate
this Agreement on the Outside Date (as same may have been extended). In the event Newpark
shall not have completed the cure or remediation of the Selected Alleged Recognized
Environmental Conditions on or before the Outside Date as it may have been extended pursuant
to clause (D) above, Purchaser shall have the right, at its discretion, to terminate this
Agreement on the Outside Date (as the same may have been extended);.
Section 12. Amendment to Section 9.1(a)(viii). Section 9.1(a)(viii) of the Purchase
Agreement is amended and restated in its entirety by the following:
(viii) by Purchaser, if it is not satisfied, in its sole discretion, with the results
of its due diligence, provided, however, that as a condition to its right to terminate this
Agreement pursuant to this Section 9.1(a)(viii), the Purchaser must provide written notice
of such termination to Newpark on or before July 15, 2008. If Purchaser fails to
provide such written notice of termination on or before July 15, 2008, Purchaser
shall have waived any right to terminate this Agreement pursuant to this Section
9.1(a)(viii);
Section 13. Amendment to Section 11.6. Section 11.6 of the Purchase Agreement is
amended and restated in its entirety by the following:
11.6 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties to this Agreement and their respective successors and permitted
assigns; provided, however, that no party to this Agreement will assign its rights or
delegate any or all of its obligations under this Agreement without the express prior
written consent of each other party to this Agreement, except that (i) each of Newpark, DFI,
Newpark Texas and Purchaser may assign their respective rights and obligations under this
Agreement to an Affiliate of Newpark and/or Purchaser, as the case may be; provided, that no
such assignment shall release Newpark, Newpark Texas and/or Purchaser from any liability or
obligation under this Agreement and (ii) CCS or Purchaser, as part of any merger,
consolidation, contribution by or reorganization of CCS or Purchaser in which all of
CCS’s or Purchaser’s operating assets are merged into, consolidated with or
otherwise contributed to Purchaser or any Affiliate of Purchaser, as the case may
be, may assign all of its respective rights and obligations under this Agreement to such
successor in interest to CCS’s or Purchaser’s assets; provided, that no such
assignment shall release CCS or Purchaser from
any liability or obligation under this Agreement. Any attempted assignment in violation
of this Section 11.6 shall be void.
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Section 14. Amendment to Section 5.18 of the Newpark Disclosure Schedule. Section
5.18 of the Newpark Disclosure Schedule shall be amended to add Section 5.18 which shall consist of
Exhibit A to this Amendment.
Section 15. Amendment to Section 10.2(d) of the Newpark Disclosure Schedule. Section
10.2(d) of the Newpark Disclosure Schedule is amended and restated in its entirety to read as set
forth on Schedule 10.2(d) attached hereto.
Section 16. Miscellaneous. The provisions of the Purchase Agreement shall remain in full
force and effect except as expressly amended and modified as set forth in this Amendment. This
Amendment and the rights and obligations of the parties hereunder shall be governed by and
interpreted, construed and enforced in accordance with the laws of the State of Texas without
regard to any choice of law principles. This Amendment may be executed in one or more counterparts,
each of which shall be an original and all of which shall constitute but one and the same document.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to the Membership Interests
Purchase Agreement as of the day and year first above written.
| NEWPARK RESOURCES, INC. |
||||
| By: | /s/ Xxxx X. Xxxxx | |||
| Name: | Xxxx X. Xxxxx | |||
| Title: | President and Chief Executive Officer | |||
| NEWPARK DRILLING FLUIDS LLC |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| NEWPARK TEXAS, L.L.C. |
||||
| By: | /s/ Xxxx. X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | Vice President | |||
| CCS INC. |
||||
| By: | /s/ Xxx XxXxxxx | |||
| Name: | Xxx XxXxxxx | |||
| Title: | Vice President | |||
| CCS MIDSTREAM SERVICES, LLC |
||||
| By: | /s/ Xxx XxXxxxx | |||
| Name: | Xxx XxXxxxx | |||
| Title: | Vice President | |||
Signature
Page to Amendment No. 1 to the Membership Interests Purchase Agreement.
