AMENDMENT NO. 2 TO THE MEMBERSHIP INTERESTS PURCHASE AGREEMENT
Exhibit 10.2
This Amendment No. 2 to the Membership Interests Purchase Agreement (this
“Amendment”), dated as of September 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 (as amended by
Amendment No. 1 dated as of June 30, 2008, the “Purchase Agreement”). Terms used but not
defined herein shall have the meanings set forth in the Purchase Agreement.
B. 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 as set forth herein that is not being deleted or added in its entirety (i) the text of
the language in the Purchase Agreement which is being deleted by such amendment is stricken through
and boldfaced, and (ii) the text of the language in the Purchase Agreement which is being added is
double-underlined and boldfaced.
Section 2. Amendment to Section 5.1(a). The first paragraph of 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 October 8 November 14, 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.
Section 3. Amendment to Section 5.2(e). Section 5.2(e) of the Purchase Agreement is
amended and restated in its entirety by the following:
(e) For purposes of this Agreement, the “Agreed Value” of any Divested Asset
shall be the amount equal to: (A) (x) the number obtained by dividing $85,000,000 by the LTM
EBITDA (determined in accordance with Sections 9.1(a)(x) and 9.1(b)) multiplied by (y) the
Adjusted EBITDA (the “Adjusted EBITDA Method”), or (B) if the Divested Asset is a
property or asset owned or leased by CCS or its Affiliates and CCS reasonably determines
that the Adjusted EBITDA Method will not result in a fair determination of the Agreed Value,
CCS may calculate the Agreed Value utilizing a discounted cash flow analysis based upon the
present value of the estimated future cash flows from such Divested Asset over a ten (10)
year period beginning July November 1, 2008 and ending June 30 October 31,
2018, using a discount rate of ten percent (10%) per annum (the “DCF Method”). If a
Divestiture is required to obtain any necessary Governmental Consent, promptly following the
determination by CCS that such Divestiture is required CCS shall provide written notice to
Newpark (a “Divestiture Notice”) which shall identify the proposed Divested Assets
and set forth CCS’ calculation of the Agreed Value relating to such assets. Newpark shall
have ten (10) calendar days following the receipt of such Divestiture Notice to review the
calculation of the Agreed Value. If Newpark and CCS are unable to agree on the calculation
of such Agreed Value, such dispute shall be resolved as follows: (i) if the Agreed Value was
determined on the basis of the Adjusted EBITDA Method, any such dispute shall be submitted
to the Accounting Arbitrator selected in the manner provided in Section 2.4(b), and (ii) if
the Agreed Value was determined on the basis of the DCF Method, any such dispute shall be
submitted to a valuation expert mutually acceptable to CCS and Newpark who shall determine
the Agreed Value in accordance with the DCF Method. If CCS and Newpark are unable to
mutually agree upon a valuation expert within twenty (20) calendar days following the
receipt of such Divestiture Notice, Newpark and CCS shall each select a valuation expert, and the two valuation experts shall select a third valuation
expert who will determine, on its own, the Agreed Value of such Divested Asset in accordance
with the preceding sentence. Any costs and expenses of an Accounting Arbitrator or valuation
experts shall be shared equally by Newpark and CCS.
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Section 4. 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 October 8 November 14, 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 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);.
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Section 4. 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 October 8 November 14, 2008. If
Purchaser fails to provide such written notice of termination on or before October 8
November 14, 2008, Purchaser shall have waived any right to terminate this Agreement
pursuant to this Section 9.1(a)(viii);
Section 5. 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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| 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. 2 to the Membership Interests Purchase Agreement
