EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of May 28, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), XXXXXX X. XXXXXXXX ("Xxxxxxxx") and XXXXXX X.
XXXXX ("Xxxxx") (Xxxxxxxx and Xxxxx 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 EXCALIBAR MINERALS INC., a
Texas corporation (the "Company").
B. The Company is a barite milling company specializing in services 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 Stockholders solely in
exchange for 166,667 (subject to adjustment as provided herein) 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) 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 Adjustment Based on Closing Value. If the "Closing Value" (as
defined in Section 18) is between $40.50 and $49.50, no adjustment will be made
in the number of Newpark Shares. If the Closing Value falls outside that range,
the number of Newpark Shares will be adjusted as follows: If the Closing Value
is less than $40.50, the number of Newpark Shares to be issued will be
determined by dividing $6,750,000 (90% of $7,500,000) by the Closing Value. If,
for example, the Closing Value is $40.00, the number of Newpark Shares will be
168,750 ($6,750,000 divided by $40.00). If the Closing Value is greater than
$49.50, the number of Newpark Shares to be issued will be determined by dividing
$8,250,000 (110% of $7,500,000) by the Closing Value. If, for example, the
Closing Value is $50.00, the number of Newpark Shares will be 165,000
($8,250,000 divided by $50.00). In no event will the number of Newpark Shares
be less than 151,667 or greater than 181,667.
1.5 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.
1.6 Pooling of Interests. 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 the treatment of the Exchange as a
"pooling of interests" for accounting purposes; (b) 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; (c) enter into any contract, agreement, commitment or arrangement with any
such effect; or (d) 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 "pooling of interests" for
accounting purposes or as a reorganization within the meaning of Section
368(a)(1)(B) of the Code.
2. Additional Agreements.
On the Closing Date, as a necessary incident of the Exchange, Newpark
and the Stockholders will execute and deliver the following additional
agreements: (i) Noncompetition Agreements substantially as set forth in Exhibit
2(a) attached to this Agreement (the "Noncompetition Agreements"); and (ii) a
Registration Rights Agreement substantially as set forth
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in Exhibit 2(b) attached to this Agreement (the "Registration Rights Agreement,"
and together with the Noncompetition Agreements, the "Additional Agreements").
3. Representations and Warranties of the Stockholders.
A. Except as otherwise specifically set forth in a three-ring binder
containing copies of documents, along with a ten-page outline ("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 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 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
5,000,000 shares of common stock, $1.00 par value, of which 100,000 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, and all securities convertible into, capital
stock of the Company. No shares of the Company are held as treasury stock.
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3.3 Equity Interests.
The Company does not have a material equity interest in any other
"Person" (as defined in Section 18).
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 balance sheets of the Company as of
December 31, 1994, December 31, 1995 and December 31, 1996, and the related
statements of income, stockholders' equity and cash flows for the years ended
December 31, 1994, December 31, 1995 and December 31, 1996, accompanied by the
reports and opinions of Xxx X. Xxxxxxxxxx, P.C., independent certified public
accountant, and the unaudited consolidated balance sheet of the Company as of
March 31, 1997, and the related statements of income, stockholders' equity and
cash flows for the three month period ended on said date, certified by the
principal financial officer of the Company, subject to year-end audit
adjustments, copies of which have heretofore been delivered to Newpark
(collectively the "Company Financial Statements"), were prepared in accordance
with the books and records of such Company in accordance with generally accepted
accounting principles (except for the absence of footnotes from the March 31,
1997, financial statements) consistently applied throughout the periods involved
(except as otherwise noted therein) and present fairly the consolidated
financial position, results of operations and cash flows of the Company for and
as of the end of each of such periods.
3.6 Properties. The Company has (except as disclosed in Disclosure
Letter) 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 $100,000; (b) bonus, incentive
compensation, pension, profit sharing, stock option, group insurance, medical
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reimbursement or employee welfare or benefit plans of any nature whatsoever; (c)
collective bargaining agreements or other contracts or commitments to or with
labor unions or other employee groups; (d) leases, contracts or commitments
affecting ownership of, title to, use of or any material interest in real
estate; (e) employment contracts and other contracts, agreements, or commitments
to or with individual employees, consultants or agents extending for a period of
more than six months from the date hereof or providing for earlier termination
only upon payment of a penalty or the equivalent thereof; (f) equipment leases
providing (in any one lease or group of related leases) for payments in excess
of $100,000 per year; (g) contracts under which the performance of any
obligation of the 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 $100,000 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 $100,000 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" of the Stockholders, as defined in
Section 18, 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 either or both of the Stockholders anticipate 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
$250,000 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 as disclosed in the
Disclosure Letter and except for liabilities and obligations reflected on the
latest balance sheet included in the Company Financial Statements or arising in
the ordinary course of business since the date of such balance sheet, none of
which latter items, individually or in the aggregate, have a Materially Adverse
Effect: (a) the 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
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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.
3.10 No Litigation. Except as disclosed in the Disclosure Letter,
there are no actions, suits or proceedings (whether or not purportedly on behalf
of 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 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, 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
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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.
3.12 Taxes.
3.12.1 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. The
Stockholders have paid all income Taxes required to be paid by them with respect
to all items of income, net of all deductions, allocable to them for federal
income tax purposes by reason of the Company's status as an S Corporation, for
each taxable year ended on or before December 31, 1996.
3.12.2 All contributions due from the 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 Stockholders have furnished to Newpark true and complete
copies of the federal income Tax Returns and comparable state Tax Returns of the
Company covering the years ended December 31, 1993, December 31, 1994 and
December 31, 1995, 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
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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. Except as disclosed in the Disclosure Letter:
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 has paid all social security and similar Taxes that are
due and payable and is not liable for any arrears or wages or any Taxes or
material penalties for failure to comply with any of the foregoing.
3.15 Employee Benefit Plans.
3.15.1 Definition of Benefit Plans. For purposes of this Section
3.15, the term "Benefit Plan" means any plan, program, arrangement, practice or
contract which provides benefits or compensation to or on behalf of employees or
former employees of the 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. 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.
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3.15.4 MEPPA Liability/Post-Retirement Medical Benefits/ Defined
Benefit Plans/Supplemental Retirement Plans. 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.
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.
3.15.5 Liabilities. The execution and performance of the
transactions contemplated by this Agreement will not create, accelerate or
increase any obligation to make any payment which, as an "excess parachute
payment" under Section 280G of the Code, would not be deductible.
3.16 Insurance. The Stockholders have furnished to Newpark a complete
list of all insurance policies that the Company maintains, indicating risks
insured against, carrier, policy number, amount of coverage, premiums and
expiration date.
3.17 Tax-Free Reorganization. Neither 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.
3.18 Interest in Competitors, Suppliers, etc. Except as set forth
in the Disclosure Letter, neither of the Stockholders and no officer or director
of the Company or any Family Member 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 or the subsequent operation of the business of the Company.
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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 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 $25,000
in a single transaction or $100,000 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
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type of distribution on or with respect to its capital stock, whether or not
similar to the foregoing, except dividends in an amount that is not in excess of
the federal income Tax liability of the Stockholders related to the income, net
of deductions, for 1996 that is allocable to them for as a result of the
Company's status as an S Corporation;
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;
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
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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 Newpark Common Stock. Such Stockholder is acquiring
his Newpark Shares in the Exchange for investment and not with a view to the
sale thereof other than in compliance with the requirements of the "Securities
Act" (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 the Stockholders, 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.
3.29 Title to Shares. Each 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, each 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:
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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, the Company will
not adopt any Benefit Plan 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.
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, 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
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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 and pay a dividend (the "Tax Dividend") to the Stockholders on or
before the Closing Date, in an amount equal to the Stockholders' estimated
liability for federal income Tax (the "Short Period Income Taxes") on income,
net of deductions allocated to them by reason of the Company's status as an S
Corporation, for the period from December 31, 1996, to and including the day
before the Closing Date (the "Short Period"); (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 indebtedness to any
Stockholder (except however, the existing commission arrangements between the
Company and Xxxxx as an individual, and between the Company and Xxxxxxxx
Enterprises, Inc., which arrangements shall terminate as of the Closing Date);
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 $50,000.
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 $50,000 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
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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.
4.8 Limit on Sale of Newpark Shares. Each Stockholder hereby agrees
that he will not offer to sell, transfer or otherwise dispose of any of the
Newpark Shares issued to him pursuant to the Exchange, except (a) in accordance
with the applicable provisions of the Securities Act and the Rules and
Regulations and (b) until such time as financial results covering at least 30
days of combined operations of Newpark and the Company have been published
within the meaning of Section 201.01 of the Commission's Codification of
Financial Reporting Policies.
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 Stockholders complete 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 20,000,000 shares of Common Stock, $.01 par value, of which 15,175,438 shares
were issued and outstanding on March 24, 1997, and 1,000,000 shares of Preferred
Stock, $.01 par value, of which no shares are issued and outstanding. Newpark's
Board of Directors and stockholders have approved amendments to Newpark's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock to 80,000,000 and to effect a two-for-one split of the Common
Stock, both to take effect on May 30, 1997.
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 "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.
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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 By-Laws 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
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
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
-16-
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.
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):
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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.
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:
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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 Additional Agreements Executed. The Additional Agreements shall
have been executed and delivered.
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, in form 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
basis of Newpark Shares received in the Exchange by a Stockholder will be the
same as the 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 shall be entitled to
make factual assumptions as are customary in similar tax opinions, and such
factual assumptions shall be confirmed by certificates signed by the
Stockholders and by responsible officers of the Company and Newpark.
7.6 Pooling. The Stockholders and Newpark shall have been advised in
writing, as of the Closing Date, by Deloitte & Touche that, in accordance with
generally accepted accounting principles, the Exchange qualifies to be treated
as a "pooling of interests" for accounting purposes, and that they are not aware
of any conditions that would preclude the utilization of pooling of interest
accounting.
7.7 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 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.
8.2 No 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
Materially Adverse Effect on the Company.
8.3 Stockholders' Certificate. The Stockholders shall have delivered
to Newpark a certificate, dated as of 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
obligations of Newpark hereunder have been fulfilled and (c) the Stockholders
have duly performed all obligations and covenants to be performed by them
hereunder.
8.4 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.
8.5 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for Newpark, and there shall have been furnished to such counsel by the
Stockholders certified copies of such corporate records of the Company and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
8.6 Opinion of the Stockholders' Counsel. Newpark shall have
received an opinion of Xxxx X. Xxxxxxxxx, Esq., dated the Closing Date,
substantially in the form attached hereto as Exhibit 8.6.
8.7 Directors of the Company. The number of authorized directors of
the Company shall have been increased to five, and Xxxxx X. Xxxx, Xx. Xxxxxx
Xxxxxxxxxx and Xxxxxxx X. Xxxxxx shall have been elected to serve as directors,
along with Stockholders.
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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, financial condition,
liquidity, assets, properties or business of Newpark and its subsidiaries, taken
as a whole, which, in their total effect, have a Material Adverse Effect on
Newpark and its subsidiaries.
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, 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.
10. Closing.
The closing ("Closing") of the transactions covered by this Agreement
shall take place at 1:30 p.m., on May 28, 1997, at the offices of Xxxx X.
Xxxxxxxxx, 0000 Xxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000. In the event
that the conditions specified in this Agreement have not been fulfilled by that
date, any party may postpone the Closing for the minimum
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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.
All representations, warranties and indemnifications made by
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 the earlier of
(a) one year after the Closing Date and (b) the date when Newpark's independent
accountants issue an audit report on their audit of the financial statements
containing combined operations of Newpark and the Company for the period ending
December 31, 1997. Neither party shall be entitled to recover against the other
for any misrepresentation or breach of warranty except to the extent that
written notice of any such claim has been delivered to the party against whom
recovery is sought within the applicable period setting forth in reasonable
detail and specifying the nature of the claim being asserted. The provisions of
this Section and Section 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.
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's consent.
12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing authority
asserts a claim, makes an assessment, or otherwise disputes the amount of Taxes
for any period prior to the Closing Date Newpark shall promptly inform the
Stockholders. The provisions of Section 13 shall apply to the defense of any
such claim, assessment or dispute.
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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. 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 pay the Short Period Income Taxes. If, based
on the Company's federal income Tax Return as filed for the Short Period or as
adjusted as a result of any federal tax audit of such income Tax Return, the
Short Period Income Taxes are greater than the amount of the Tax Dividend, the
Stockholders will pay the excess, and Newpark will issue to the Stockholders
additional Newpark Shares, valued at their Closing Value, in an equivalent
amount; if the Short Period Income Taxes are less than the amount of the Tax
Dividend, the Stockholders will refund the excess to the Company by delivering
Newpark Shares, valued at their Closing Value, in an equivalent amount, if the
Stockholders then hold Newpark Shares; otherwise, they shall refund the excess
in cash.
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, payment of any Taxes in accordance with this Agreement, and the conduct
of any audit or other proceeding. 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 audit adjustments that do not result in Tax liability but can
be reasonably expected to affect Tax Returns 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, 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 breach of any warranty or representation
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made by them under or in connection with 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 Stockholders against all damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) resulting from any breach of any
warranty or representation made by Newpark under or in connection with this
Agreement. The rights to such indemnification shall accrue solely to
Stockholders, and the 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 Shares are exchanged in the Exchange, for which purpose they
shall be valued at their Closing Value. To the fullest extent permitted by law,
Stockholders shall satisfy their liability hereunder by delivering to Newpark
some or all of such Newpark Shares, valued at their Closing Value, and Newpark
shall satisfy its liability by issuing additional Newpark Shares valued at their
Closing
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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
Stockholders hereunder, there shall be taken into account the amount of any Tax
benefits actually realized by Newpark and its subsidiaries attributable to such
damage, loss, liability, cost or expense or derived therefrom in the same or any
past or subsequent taxable period, also taking into account the Tax treatment of
the receipt by Newpark of any payment from Stockholders.
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 and, in any event, before Newpark's independent
accountants issue an audit report on their audit of the financial statements
containing combined operations of Newpark and the Company for the period ending
December 31, 1997. 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 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
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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. The arbitrators shall use
their best efforts to make their award before the expiration of the period
specified in the introduction to Section 13.4.1. 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.
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.
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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 by giving notice of such
change to the other party in the manner which is provided in this Section 16.
Stockholders: Xx. Xxxxxx X. Xxxxxxxx
Xx. Xxxxxx X. Xxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxx 00000
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Facsimile No.: (000) 000-0000
With a copy to:
Xxxx X. Xxxxxxxxx, Esq.
0000 Xxxx 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:
"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
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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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the 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 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.
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"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 governmental authority responsible for the imposition of any such
tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
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.
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20. Remedies Not Exclusive.
Except as provided in Section 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. Accountants' and Attorneys' Fees.
Newpark, the Company and the Stockholders shall each pay their own
accountants' and attorneys' fees related to the consummation of the Exchange.
In any litigation or arbitration relating to this Agreement, including
litigation or arbitration with respect to any instrument, document or agreement
made under or in connection with this Agreement, the prevailing party shall be
entitled to recover its costs and reasonable attorneys' fees.
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 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.
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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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
STOCKHOLDERS: NEWPARK:
NEWPARK RESOURCES, INC.
/s/ Xxxxxx X. Xxxxxxxx By:/s/ Xxxxx X. Xxxx
---------------------- ------------------------
Xxxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxx
Title: President
/s/ Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
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