PURCHASE AGREEMENT
BY AND AMONG
NEWPARK RESOURCES, INC.
AND
SCF-IV, L.P.
SERIES A CUMULATIVE PERPETUAL PREFERRED STOCK
WARRANTS FOR COMMON STOCK
APRIL 8, 1999
TABLE OF CONTENTS
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ARTICLE I.DEFINITIONS
Section 1.1 Definitions............................................. 1
Section 1.2 References and Titles................................... 5
ARTICLE II.PURCHASE OF THE SECURITIES
Section 2.1 Purchase of the Securities.............................. 5
ARTICLE III.REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization, Standing and Power........................ 6
Section 3.2 Material Subsidiaries................................... 6
Section 3.3 Capital Structure....................................... 6
Section 3.4 Authority; No Violations; Approvals..................... 8
Section 3.5 SEC Documents........................................... 9
Section 3.6 Absence of Certain Changes or Events.................... 10
Section 3.7 No Undisclosed Material Liabilities..................... 11
Section 3.8 No Default.............................................. 11
Section 3.9 Compliance with Applicable Laws......................... 12
Section 3.10 Litigation.............................................. 12
Section 3.11 Title to Properties..................................... 13
Section 3.12 Certain Agreements...................................... 13
Section 3.13 Status of Securities.................................... 13
Section 3.14 Intellectual Property................................... 13
Section 3.15 Environmental Matters................................... 14
Section 3.16 Insurance............................................... 14
Section 3.17 No Brokers or Finders................................... 14
Section 3.18 Vote.................................................... 15
ARTICLE IV.REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1 Organization, Standing and Power........................ 16
Section 4.2 Authority; Approvals.................................... 16
Section 4.3 Investment Intent....................................... 17
Section 4.4 Transfer Restrictions................................... 17
Section 4.5 Purchaser Status........................................ 19
Section 4.6 Access to Information; Investigation.................... 19
Section 4.7 No Brokers or Finders................................... 19
ARTICLE V.COVENANTS
Section 5.1 Affirmative Covenants of the Company.................... 20
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Section 5.2 Negative Covenants of the Company....................... 20
Section 5.3 Approvals............................................... 20
Section 5.4 HSR Act Notification.................................... 20
Section 5.5 Notification of Certain Matters......................... 21
Section 5.6 Board of Directors...................................... 21
Section 5.7 Registration Rights Agreement........................... 21
Section 5.8 Confidentiality......................................... 21
Section 5.9 Standstill.............................................. 22
Section 5.10 Indemnification......................................... 23
Section 5.11 Restrictive Actions..................................... 23
ARTICLE VI.CONDITIONS PRECEDENT TO CLOSING
Section 6.1 Conditions Precedent to Each Party's Obligation......... 23
Section 6.2 Conditions Precedent to Obligation of Purchaser......... 24
Section 6.3 Conditions Precedent to Obligations of Company.......... 24
ARTICLE VII.CLOSING
Section 7.1 Closing................................................. 25
Section 7.2 Actions to Occur at the Closing......................... 25
ARTICLE VIII.TERMINATION
Section 8.1 Termination............................................. 26
Section 8.2 Effect of Termination................................... 27
ARTICLE IX.RECOVERY OF FEES
Section 9.1 Recovery of Fees........................................ 27
ARTICLE X.MISCELLANEOUS
Section 10.1 Survival of Provisions.................................. 27
Section 10.2 No Waiver; Modification in Writing...................... 27
Section 10.3 Specific Performance.................................... 28
Section 10.4 Severability............................................ 28
Section 10.5 Fees and Expenses....................................... 28
Section 10.6 Parties in Interest..................................... 28
Section 10.7 Notices................................................. 28
Section 10.8 Counterparts............................................ 29
Section 10.9 Entire Agreement........................................ 29
Section 10.10 Governing Law........................................... 29
Section 10.11 Public Announcements.................................... 29
Section 10.12 Assignment.............................................. 30
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Section 10.13 Headings................................................ 30
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Exhibit 6.2(c) Opinions to be Provided by Xxxxx, Xxxxx & Xxxxxx LLP at
Closing
Exhibit 6.2(e) Form of Certificate of Designation
Exhibit 6.3(c) Opinions to be Provided by Xxxxxx & Xxxxxx, L.L.P. at
Closing
Exhibit 7.2(b)(ii) Form of Warrants
Exhibit 7.2(b)(iii) Form of Registration Rights Agreement
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of April 8, 1999, by and among Newpark
Resources, Inc., a Delaware corporation (together with its successors, if any,
the "Company"), and SCF-IV, L.P., a Delaware limited partnership, (the
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"Purchaser").
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In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
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Section 1.1 Definitions. As used in this Agreement, and unless the
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context requires a different meaning, the following terms have the meanings
indicated:
"Affiliate" means, with respect to any Person, any other Person directly,
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or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person. For purposes of this definition and this
Agreement, the term "control" (and correlative terms "controlling," "controlled
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by" and "under common control with") means possession of the power, whether by
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contract, equity ownership or otherwise, to direct the policies or management of
a Person.
"Agreement" means this Purchase Agreement, as the same may be amended,
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supplemented or modified from time to time in accordance with the terms hereof.
"Approval" means any approval, authorization, grant of authority, consent,
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order, qualification, permit, license, variance, exemption, franchise,
concession, certificate, filing or registration or any waiver of the foregoing,
or any notice, statement or other communication required to be filed with,
delivered to or obtained from any Governmental Entity.
"Authorized Preferred Stock" has the meaning set forth in Section 3.3(a).
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"Board" means the Board of Directors of the Company.
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"Business Day" means any day except Saturday, Sunday and any day which
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shall be a legal holiday or a day on which banking institutions in Houston,
Texas or New Orleans, Louisiana generally are authorized or required by law or
other government actions to close.
"Bylaws" mean the Company's bylaws, as amended from time to time.
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"Capital Stock" means (i) with respect to any Person that is a corporation,
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any and all shares, interests, participations or other equivalents (however
designated) of capital or capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Certificate of Designation" shall mean the Certificate of Designation in
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the form attached hereto as Exhibit 6.2(e).
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"Certificate of Incorporation" means the Company's Certificate of
----------------------------
Incorporation, as amended from time to time.
"Closing" has the meaning set forth in Section 7.1.
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"Closing Date" has the meaning set forth in Section 7.1.
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"Code" means the Internal Revenue Code of 1986, as amended, and the rules
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and regulations thereunder as in effect on the date hereof.
"Common Stock" means the Company's common stock, par value $.01 per share,
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and any Capital Stock for or into which such Common Stock hereafter is
exchanged, converted, reclassified or recapitalized by the Company or pursuant
to a business combination to which the Company is a party.
"Company" has the meaning set forth in the introductory paragraph hereof.
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"Company Disclosure Schedule" has the meaning set forth in Article III.
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"Company 1998 Form 10-K" means the Report on Form 10-K filed by the Company
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with the SEC for the year ended December 31, 1998.
"Company Options" has the meaning set forth in Section 3.3(c).
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"Company SEC Documents" has the meaning set forth in Section 3.5.
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"Contracts" means all agreements, contracts, or other binding commitments,
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arrangements or plans, written or oral (including any amendments and other
modifications thereto), to which the Company or any of its Subsidiaries is a
party or is otherwise bound.
"Cure Period" has the meaning set forth in Section 8.1(b)(i).
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"Environmental Laws" has the meaning set forth in Section 3.15.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
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the rules and regulations of the SEC promulgated thereunder.
"GAAP" has the meaning set forth in Section 3.5(b).
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"Governmental Entity" means any agency, bureau, commission, court,
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authority, department, official, political subdivision, tribunal or other
instrumentality of any government, whether (i) regulatory, administrative or
otherwise, (ii) federal, state or local, or (iii) domestic or foreign.
"Hazardous Materials" has the meaning set forth in Section 3.15.
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"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
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as amended.
"Intellectual Property" has the meaning set forth in Section 3.14.
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"Knowledge" of any Person means the actual knowledge of such Person's
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executive officers obtained without investigation other than through the
exercise of each such Person's normal duties.
"Law" means any constitutional provision, statute or other law, ordinance,
---
rule, regulation or interpretation of any thereof having the force of law and
any Order of any Governmental Entity (including Environmental Laws) now in
effect.
"Lien" means any mortgage, lien, pledge, encumbrance, easement, charge or
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security interest of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"Litigation" has the meaning set forth in Section 3.10.
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"Material Adverse Effect" or "Material Adverse Change" means any effect,
----------------------- -----------------------
change, event or occurrence that is materially adverse to the business,
operations, properties, condition (financial or otherwise), results of
operations, assets, liabilities or prospects of the Company and its Subsidiaries
taken as a whole.
"Material Contracts" means any contract required to be filed as an exhibit
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to a Report on Form 10-K filed by the Company with the SEC.
"Material Subsidiary" means any Subsidiary of the Company that had revenues
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of more than $1,000,000 for the year ended December 31, 1998 or that had assets
or liabilities (including contingent liabilities) of a value or amount in excess
of $1,000,000 as of the date of this Agreement.
"Order" means any decree, injunction, judgment, settlement, order, ruling,
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assessment or writ of a court.
"Person" means an individual or a corporation, partnership, trust,
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incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PS" means the Company's Series A Cumulative Perpetual Preferred Stock,
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$.01 par value per share.
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"Purchase Price" has the meaning set forth in Section 2.1(b).
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"Purchaser" has the meaning set forth in the introductory paragraph hereto.
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"Purchaser's Expenses" means all reasonable out-of-pocket fees, costs and
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expenses incurred by Purchaser in connection with its due diligence efforts or
the transactions contemplated by this Agreement and the other Transaction
Documents, including fees, costs and expenses of its accountants, counsel and
other similar advisors.
"Registration Rights Agreement" means the Registration Rights Agreement in
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the form of Exhibit 7.2(b)(iii).
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"SEC" means the Securities and Exchange Commission.
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"Securities" means the Shares and the Warrants.
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"Securities Act" means the Securities Act of 1933, as amended, and the
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rules and regulations of the SEC promulgated thereunder.
"Shares" means the 150,000 shares of PS purchased by Purchaser pursuant to
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this Agreement, and any Capital Stock for or into which such Shares hereafter
are exchanged, converted, reclassified or recapitalized by the Company or
pursuant to a business combination to which the Company is a party.
"Stock Plans" means the Company's stock option, stock incentive or other
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similar plans.
"Subsidiary" means, (i) a corporation, a majority of whose stock with
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voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by a Subsidiary of the Company or
by the Company and another Subsidiary, or (ii) any other Person (other than a
corporation) in which the Company, a Subsidiary or the Company and a Subsidiary,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest.
"Transaction Documents" means this Agreement, the Certificate of
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Designation, the Warrants and the Registration Rights Agreement.
"Transfer" has the meaning set forth in Section 4.4.
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"Underlying Shares" means the shares of Common Stock issuable upon exercise
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of the Warrants in accordance with the terms thereof, any shares of Common Stock
issued in payment of accrued dividends on the Shares, and any shares of Common
Stock issued upon conversion of the Shares.
"Voting Stock" of a Person means Capital Stock of such Person of the class
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or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances
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to vote in the election of the board of directors, managers or trustees of such
Person; provided that if such Person has more than one class or series of Voting
Stock, any calculation as to a percentage of such Voting Stock shall be made
with respect to the percentage of votes entitled to be cast in respect of such
Voting Stock in such circumstances.
"Warrants" means the warrants to purchase initially 2,400,000 shares of
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Common Stock, at an exercise price of $8.50 per share (as may be adjusted from
time to time as set forth therein), in substantially the form of Exhibit
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7.2(b)(ii).
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Section 1.2 References and Titles. All references in this Agreement to
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Exhibits, Schedules, Articles, Sections, subsections, and other subdivisions
refer to the corresponding Exhibits, Schedules, Articles, Sections, subsections,
and other subdivisions of this Agreement unless expressly provided otherwise.
Titles appearing at the beginning of any Articles, Sections, subsections, or
other subdivisions of this Agreement are for convenience only, do not constitute
any part of such Articles, Sections, subsections or other subdivisions, and
shall be disregarded in construing the language contained therein. The words
"this Agreement," "herein," "hereby," "hereunder," and "hereof," and words of
-------------- ------ ------ --------- ------
similar import, refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The words "this Section," "this
------------ ----
subsection," and words of similar import, refer only to the Sections or
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subsections hereof in which such words occur. The word "including" (in its
various forms) means "including without limitation." Pronouns in masculine,
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feminine, or neuter genders shall be construed to state and include any other
gender and words, terms, and titles (including terms defined herein) in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise expressly requires. Unless the context otherwise
requires, all defined terms contained herein shall include the singular and
plural forms of such defined terms. All references in this Agreement to "the
Company and its Subsidiaries" or to "the Company and its Material Subsidiaries"
means the Company and its Subsidiaries or the Company and its Material
Subsidiaries, as the case may be, taken as a whole.
ARTICLE II.
PURCHASE OF THE SECURITIES
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Section 2.1 Purchase of the Securities.
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(a) Subject to the terms and conditions herein set forth, the Company will
sell to Purchaser, and Purchaser will purchase from the Company, the Securities.
(b) The aggregate purchase price payable for the Securities shall be $15
million (the "Purchase Price"). The Purchase Price shall be allocated between
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the Shares and the Warrants as agreed to between the parties in writing at or
prior to Closing.
(c) Delivery of the Securities shall be made at Closing by delivery to
Purchaser, against payment of the Purchase Price therefor as provided herein, of
(i) one or more share certificates, registered in the name of Purchaser,
representing an aggregate of 150,000 shares of PS and (ii) the Warrants, all to
be purchased at Closing by Purchaser hereunder.
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(d) Payment of the Purchase Price for the Securities to be purchased
hereunder shall be made by or on behalf of Purchaser by wire transfer of
immediately available funds to an account of the Company (the number for which
account shall have been furnished to Purchaser at least two Business Days prior
to the Closing Date).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Purchaser as follows (in each case
as qualified by matters reflected on the disclosure schedule dated as of the
date of this Agreement by reference to the Section of this Agreement so
qualified and delivered by the Company to Purchaser on or prior to the date of
this Agreement (the "Company Disclosure Schedule") and made a part hereof by
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reference):
Section 3.1 Organization, Standing and Power. Each of the Company and
--------------------------------
each of its Material Subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized and has the requisite
corporate or other such entity power and authority to own its properties and
carry on its business as now being conducted. Each of the Company and each of
its Material Subsidiaries is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, other than in such jurisdictions where the failure to be so qualified
or licensed or to be in good standing, individually or in the aggregate, has not
had and could not reasonably be expected to have a Material Adverse Effect. The
Company has delivered to Purchaser prior to the execution of this Agreement
complete and correct copies of its Certificate of Incorporation and Bylaws and,
in the case of the Material Subsidiaries, made available similar organizational
documents, in each case, as in effect on the date of this Agreement.
Section 3.2 Material Subsidiaries. Except as set forth in the Company
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1998 Form 10-K, all the outstanding shares of share capital (or other voting or
equity securities or interests, as applicable) of each Material Subsidiary of
the Company have been validly issued and are fully paid and nonassessable (with
respect to corporate Subsidiaries) and, except as set forth in Schedule 3.2, are
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owned directly or indirectly by the Company, free and clear of all Liens.
Section 3.3 Capital Structure.
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(a) The authorized Capital Stock of the Company consists of 100,000,000
shares of Common Stock and 1,000,000 shares of preferred stock, $.01 par value,
which may be divided into and issued in one or more series upon the creation
thereof by the Board (the "Authorized Preferred Stock"), of which, as of April
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8, 1999, (A) 68,884,951 shares of Common Stock are issued and outstanding, (B)
6,823,769 shares of Common Stock have been authorized and reserved for issuance
under the Stock Plans, (C) 0 shares of Common Stock are held by the Company in
its treasury and (D) no shares of Common Stock are held by any of the Company's
Subsidiaries. Except as described in this Section 3.3, the Company has no
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authorized, issued or outstanding shares of Capital Stock as of the date of this
Agreement.
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(b) Except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights, there are no restrictions or limitations,
contractual or otherwise, binding upon the Company or any of its Subsidiaries or
to which the Company or any of its Subsidiaries is subject that prohibit or
limit the enforceability of the terms and provisions of the Certificate of
Designation or, except as provided for in the Warrants, will prohibit or limit
the right of a holder of Warrants to exercise Warrants for shares of Common
Stock; and the exercise of any Warrants for shares of Common Stock will not
violate or result in or constitute a default under any existing loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding to which the Company or any of its Subsidiaries is a party or by
which they or any of their properties or assets are bound other than any such
violations or defaults that, individually or in the aggregate, have not had and
could not reasonably be expected to have a Material Adverse Effect;
(c) There are no outstanding warrants, share or stock options, share or
stock appreciation rights or other rights to receive or purchase any Capital
Stock of the Company or any of its Subsidiaries granted under the Stock Plans or
otherwise except as set forth in the Company 1998 Form 10-K or Schedule 3.3(c)
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of the Company Disclosure Schedule (such warrants, share or stock options, share
or stock appreciation rights or other rights disclosed thereon, collectively,
the "Company Options"). Except for the Company Options and except as provided
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in the Transaction Documents, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which the Company or any of its Subsidiaries is a party or by
which any of them is bound obligating the Company or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, any Capital
Stock of the Company or of any of its Material Subsidiaries or obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. There are no outstanding obligations of the Company or any of
its Subsidiaries (contingent or otherwise) to repurchase, redeem or otherwise
acquire any Capital Stock of the Company or any of its Material Subsidiaries or
any security exchangeable for or convertible into such Capital Stock.
(d) All outstanding shares of Capital Stock of the Company and its Material
Subsidiaries are, and all shares which may be issued upon exercise of the
Warrants, conversion of the Shares or as a dividend on the Shares, will be, when
issued in accordance with the terms of the Warrants and upon delivery of the
exercise price, payable with respect thereto or in accordance with the terms of
the Shares, as the case may be, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive or similar rights.
(e) Except as contemplated hereby or in the other Transaction Documents or
as set forth in the Company 1998 Form 10-K or Schedule 3.3(e), there are not any
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registration rights agreements, shareholder agreements, voting agreements or
trusts, proxies or other agreements or contractual obligations to which the
Company or any Subsidiary is a party or bound with respect to the registration
with any Government Entity of any Capital Stock of the Company or any of its
Material Subsidiaries, or the voting or disposition of any Capital Stock of the
Company or any of its Material Subsidiaries and, to the Company's Knowledge,
there are no other shareholder agreements, voting
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agreements or trusts, proxies or other agreements or contractual obligations
among the shareholders of the Company with respect to the voting or disposition
of any Capital Stock of the Company or any of its Material Subsidiaries.
Section 3.4 Authority; No Violations; Approvals.
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(a) The Board has approved this Agreement, the other Transaction Documents
and the transactions contemplated hereby and thereby, and declared this
Agreement, the other Transaction Documents and the transactions contemplated
hereby and thereby to be in the best interests of the Company. The Board has
approved the sale of the Securities and, upon any exercise of the Warrants or
conversion of the Shares, the issuance of the Underlying Shares to Purchaser
hereunder. The Company has all requisite corporate power and authority to enter
into this Agreement and each of the other Transaction Documents and to
consummate each of the transactions and perform each of the obligations
contemplated hereby and thereby. The execution and delivery of this Agreement
and each of the other Transaction Documents and the consummation of each of the
transactions and the performance of each of the obligations contemplated hereby
and thereby have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement has been, and, subject to the completion of
the Closing, at the Closing the Warrants and the Registration Rights Agreement
will be, duly executed and delivered by the Company, and the Certificate of
Designation has been duly adopted by the Board of Directors in accordance with
applicable Law. The Certificate of Designation (upon the filing of the same
with the Delaware Secretary of State) and, assuming this Agreement and each of
the other Transaction Documents to which Purchaser is a party constitute the
valid and binding obligations of Purchaser, this Agreement and each of the
Warrants and the Registration Rights Agreement, constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms, subject, as
to enforceability, to bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditors'
rights and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) The execution and delivery of this Agreement and each of the Warrants
and the Registration Rights Agreement, and the adoption of the Certificate of
Designation, does not, and the consummation of the transactions contemplated
hereby and thereby and compliance with the provisions hereof and thereof will
not, conflict with, require the consent of any other Person to or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any material obligation or to the loss of any material benefit under, or give
rise to a right of purchase under, result in the creation of any Lien upon any
of the material properties or assets of the Company or its Material Subsidiaries
under, or otherwise result in a material detriment to the Company or its
Material Subsidiaries under, any provision of (A) the Certificate of
Incorporation or Bylaws or any provision of the comparable organizational
documents of any of the Company's Material Subsidiaries, (B) any loan or credit
agreement, note, bond, mortgage, indenture, lease, instrument, permit,
concession, franchise, license or other contract or agreement, arrangement or
understanding to which the Company or any of its Material Subsidiaries is a
party or otherwise is bound or by which any of them or their respective
properties are bound or any existing Approval applicable to the Company or any
of its Material Subsidiaries, (C) any joint venture or other ownership
arrangement to which the Company or any
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of its Material Subsidiaries is a party or otherwise is bound or by which any of
them or their respective properties are bound or (D) assuming the Approvals
referred to in Section 3.4(c) are duly and timely obtained or made, any Law or
--------------
Order applicable to the Company or any of its Subsidiaries or any of their
respective properties or assets, other than, in the case of clause (B) (other
than with respect to any material loan or credit agreement, note, bond, mortgage
or indenture or any Material Contract), (C) or (D), any such conflicts, failures
to obtain consents, violations, defaults, rights, losses, Liens or detriments,
that, individually or in the aggregate, (x) have not had and could not
reasonably be expected to have a Material Adverse Effect, (y) have not impaired
and could not reasonably be expected to impair the ability of the Company to
perform its obligations under any of the Transaction Documents in any material
respect, and (z) have not and could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions, or
performance of any of the obligations of the Company contemplated by any of the
Transaction Documents.
(c) No Approval from any Governmental Entity is required by or with respect
to the Company or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or any other Transaction Document by the Company or
the consummation by the Company of the transactions contemplated hereby or
thereby, except for: (A) the possible filing of a notification report by the
Company under the HSR Act and the expiration or termination of the applicable
waiting period with respect thereto in connection with the issuance of
Underlying Shares (but not in order to consummate the Closing), (B) the filing
of the Certificate of Designation in accordance with the requirements of Section
103 of the Delaware General Corporation Law and (C) any such Approvals the
failure of which to be made or obtained (1) has not had and could not reasonably
be expected to have a Material Adverse Effect, (2) has not impaired and could
not reasonably be expected to impair the ability of the Company to perform its
obligations under any of the Transaction Documents in any material respect and
(3) have not and could not reasonably be expected to delay in any material
respect or prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents.
Section 3.5 SEC Documents.
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(a) The Company has made available to Purchaser a true and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by the Company with the SEC since December 31, 1997 (the "Company SEC
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Documents"), including the Company 1998 Form 10-K, which are all the documents
---------
(other than preliminary materials) that the Company was required to file with
the SEC since December 31, 1997. As of their respective dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act, or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Documents, and
none of the Company SEC Documents contained as of their respective dates any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(b) The financial statements of the Company included in the Company SEC
Documents, including the notes and schedules thereto, at the time filed complied
as to form in all material
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respects with the rules and regulations of the SEC with respect thereto, were
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
----
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC)
and fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as of their respective dates and the consolidated
results of operations and the consolidated cash flows of the Company and its
consolidated Subsidiaries for the periods presented therein in accordance with
applicable requirements of GAAP (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which are material)
applied on a consistent basis during the periods presented (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Rule 10-01 of Regulation S-X promulgated under the Securities Act).
Section 3.6 Absence of Certain Changes or Events.
------------------------------------
(a) Except as disclosed in the Company SEC Documents filed prior to the
date of this Agreement, or except as contemplated by this Agreement, since
December 31, 1998, the Company and its Material Subsidiaries have conducted
their business only in the ordinary course of business consistent with past
practice, and there has not been: (i) any declaration, setting aside or payment
of any dividend or other distribution (whether in cash, stock or property) with
respect to any Capital Stock of the Company; (ii) any split, combination,
reclassification or amendment of any term of any outstanding Capital Stock or
other security of the Company or any of its Material Subsidiaries or (other than
issuance of Common Stock upon the exercise of any Company Options) any issuance
or the authorization of the issuance of any securities of the Company or any of
its Material Subsidiaries, other than in connection with the transactions
contemplated hereby; (iii) any repurchase, redemption or other acquisition by
the Company or any Subsidiary of the Company of any outstanding Capital Stock or
other securities of the Company or any Material Subsidiary of the Company,
except as contemplated by the Stock Plans; (iv) (A) any grant by the Company or
any of its Subsidiaries to any officer of the Company or any of its Material
Subsidiaries of any increase in compensation, except for increases in the
ordinary course of business consistent with past practice or as required under
employment or other agreements or benefit arrangements in effect as of December
31, 1998, or (B) any grant by the Company or any of its Subsidiaries to any such
officer of any increase in severance or termination pay, except as was required
or provided for under any employment, severance, termination or other agreements
or benefit arrangements in effect as of December 31, 1998; (v) except as
required by a change in GAAP, any material change in accounting methods,
principles or practices by the Company or any of its Material Subsidiaries, (vi)
any material casualties affecting the Company and its Material Subsidiaries, or
any material loss, damage or destruction to any of their properties or assets,
whether covered by insurance or not.
(b) Except as disclosed in the Company's consolidated financial statements
included in the Company 1998 Form 10-K, and the notes thereto, and except for
matters relating to general economic conditions and conditions which affect the
oilfield services industry generally, since December 31, 1998, there has not
been any event, circumstance or fact that (x) has had or could reasonably be
expected to have a Material Adverse Effect, (y) has impaired or could reasonably
be expected to impair the ability of the Company to perform its obligations
under any of the Transaction Documents in any material respect, or (z) could
reasonably be expected to delay in any material
-10-
respect or prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents.
Section 3.7 No Undisclosed Material Liabilities. Except as disclosed in
-----------------------------------
Schedule 3.7 of the Company Disclosure Schedule or the Company's financial
------------
statements included in the Company 1998 Form 10-K, and the notes thereto, there
are no liabilities or obligations of the Company or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than: (i) liabilities adequately provided for
on the balance sheet of the Company dated as of December 31, 1998 (including the
notes thereto) contained in the Company 1998 Form 10-K; (ii) liabilities
incurred in the ordinary course of business consistent with past practice since
December 31, 1998, which liabilities, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect; (iii) liabilities
arising under the Transaction Documents; and (iv) liabilities not required by
GAAP to be recognized or disclosed on a consolidated balance sheet of the
Company and its consolidated Subsidiaries or in the notes thereto, which
liabilities, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
Section 3.8 No Default. Neither the Company nor any of its Subsidiaries
----------
is in default or violation (and no event has occurred which, with notice or the
lapse of time or both, would constitute a default or violation) of any term,
condition or provision of (i) the Certificate of Incorporation or Bylaws of the
Company or the comparable organizational documents of any of its Material
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease, instrument, permit, concession, franchise, license or any
other contract, agreement, arrangement or understanding to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective properties or assets is bound, or (iii)
any Order or Law applicable to the Company or any of its Subsidiaries, except in
the case of clause (ii) and (iii), for violations or defaults that, individually
or in the aggregate, (x) have not had and could not reasonably be expected to
have a Material Adverse Effect, (y) have not impaired and could not reasonably
be expected to impair the ability of the Company to perform its obligations
under any of the Transaction Documents in any material respect, and (z) have not
and could not reasonably be expected to delay in any material respect or prevent
the consummation of any of the transactions contemplated by any of the
Transaction Documents. The Company and its Subsidiaries (i) are not in breach
of or default under any covenant, including financial covenants, under
agreements relating to money borrowed in excess of $5 million where such breach
or default would (or would, with the passage of time or giving of notice, or
both) entitle any other party to any such agreement to accelerate the time of
repayment of any indebtedness of the Company or its Subsidiaries thereunder, and
(ii) do not believe that it is reasonably likely that they will be in breach of
or default under any such covenant under any such agreement as of the next date
on which they are required to be in compliance with any such covenants.
Section 3.9 Compliance with Applicable Laws.
-------------------------------
(a) The Company and each of its Subsidiaries has in effect all Approvals
of all Governmental Entities necessary for the lawful conduct of their
respective businesses, and there has occurred no default or violation (and no
event has occurred which, with notice or the lapse of time
-11-
or both, would constitute a default or violation) under any such Approval,
except for failures to obtain, or for defaults or violations under, Approvals
which failures, defaults or violations, individually or in the aggregate, (i)
have not had and could not reasonably be expected to have a Material Adverse
Effect, (ii) have not impaired and could not reasonably be expected to impair
the ability of the Company to perform its obligations under any of the
Transaction Documents in any material respect, and (iii) could not reasonably be
expected to delay in any material respect or prevent the consummation of any of
the transactions contemplated by any of the Transaction Documents.
(b) Except as otherwise disclosed in the Company SEC Documents, the Company
and its Subsidiaries are in compliance with all applicable Laws and Orders,
except for possible noncompliance which, individually or in the aggregate, (i)
has not had and could not reasonably be expected to have a Material Adverse
Effect, (ii) has not impaired and could not reasonably be expected to impair the
ability of the Company to perform its obligations under any of the Transaction
Documents in any material respect, and (iii) could not reasonably be expected to
delay in any material respect or prevent the consummation of any of the
transactions contemplated by any of the Transaction Documents.
(c) No investigation or review by any Governmental Entity with respect to
the Company, any of its Subsidiaries or the transactions contemplated by this
Agreement and the other Transaction Documents is pending or, to the Knowledge of
the Company, threatened, nor has any Governmental Entity notified the Company or
any of its Subsidiaries in writing or, to the Company's Knowledge, otherwise of
any intention to conduct the same, other than those the outcome of which,
individually or in the aggregate, (i) have not had and could not reasonably be
expected to have a Material Adverse Effect, (ii) have not impaired and could not
reasonably be expected to impair the ability of the Company to perform its
obligations under any of the Transaction Documents in any material respect, or
(iii) could not reasonably be expected to delay in any material respect or
prevent the consummation of any of the transactions contemplated by any of the
Transaction Documents.
Section 3.10 Litigation. Except as disclosed in the Company SEC
----------
Documents or Schedule 3.10 of the Company Disclosure Schedule, there is no suit,
-------------
action, proceeding or indemnification claim, at law or in equity, pending before
any Governmental Entity or arbitrator, or, to the Knowledge of the Company,
threatened, against or affecting the Company, any Subsidiary of the Company or
any of its Material Contracts ("Litigation"), and neither the Company nor any
----------
Subsidiary is a party to any Litigation, that, with respect to each matter, (i)
has had or could reasonably be expected to have a Material Adverse Effect, (ii)
has impaired or reasonably could be expected to impair the ability of the
Company to perform its obligations under any of the Transaction Documents in any
material respect, or (iii) reasonably could be expected to delay in any material
respect or prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents, nor is there any Order of any Governmental
Entity or arbitrator outstanding against or binding upon the Company or any
Subsidiary of the Company or any of its Material Contracts which (i) has had or
could reasonably be expected to have a Material Adverse Effect, (ii) has
impaired or reasonably could be expected to impair the ability of the Company to
perform its obligations under any of the Transaction Documents in any material
respect, or (iii) reasonably
-12-
could be expected to delay in any material respect or prevent the consummation
of any of the transactions contemplated by any of the Transaction Documents.
Section 3.11 Title to Properties. Except as set forth in the Company SEC
-------------------
Documents and Schedule 3.2, the Company or its Subsidiaries own, of record (to
------------
the extent applicable) and beneficially, or have a valid leasehold interest in,
all material personal property and real property, in each case, as reflected on
the latest balance sheet included in the Company SEC Documents as being owned or
leased by it or any of its Subsidiaries or as thereafter acquired by it or any
of its Subsidiaries (except to the extent that any such properties have
thereafter been disposed of in the ordinary course of business), free and clear
of any liens or other similar encumbrances that are material to the business of
the Company and its Subsidiaries.
Section 3.12 Certain Agreements.
------------------
(a) Except as included in the list of exhibits to the Company 1998 Form 10-
K or Schedule 3.12(a) of the Company Disclosure Schedule, there are no, whether
----------------
in oral or written form, Material Contracts. Each Material Contract is in full
force and effect.
(b) The Company or the relevant Subsidiary and, to the Company's Knowledge,
each other party to the Material Contracts has performed in all material
respects the obligations required to be performed by it under the Material
Contracts and is not (with or without lapse of time or the giving of notice, or
both) in breach or default thereunder in any material respect. No party to any
Material Contract has given written notice of any action to terminate, cancel,
rescind or procure a judicial reformation thereof.
Section 3.13 Status of Securities. The issuance and sale of the
--------------------
Securities and the reservation and issuance of the Underlying Shares have been
duly authorized by all necessary corporate action on the part of the Company
(except that there has been no reservation of any shares of Common Stock that
may be issued in payment of accrued dividends on the Shares), and the Shares,
when delivered to Purchaser at the Closing against payment therefor as provided
herein, will be validly issued, fully paid and non-assessable and the issuance
and sale of the Securities and the issuance of the Underlying Shares are not and
will not be subject to preemptive rights of any Person.
Section 3.14 Intellectual Property. The Company and the Subsidiaries
---------------------
own, possess or license, or, to the Company's Knowledge can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business of
the Company and the Material Subsidiaries in all material respects as now
operated by them, and neither the Company nor any of the Subsidiaries has
received any written notice or, to the Knowledge of the Company, is otherwise
aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property (including Intellectual Property which is
licensed) or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
the Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision,
-13-
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. To the
Company's Knowledge, the Company will not suffer any Material Adverse Effect
with respect to Year 2000 non-compliance.
Section 3.15 Environmental Matters. Except for such matters as could
---------------------
not, singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect or as disclosed on Schedule 3.15, (A) neither the Company nor any
-------------
of the Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and
the Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the Company's Knowledge,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of the Subsidiaries and (D) to the Company's Knowledge there are
no events or circumstances that might reasonably be expected to form the basis
of an order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the Company
or any of the Subsidiaries relating to Hazardous Materials or Environmental
Laws.
Section 3.16 Insurance. The Company has made available to Purchaser a
---------
listing of all insurance policies maintained by the Company and its Material
Subsidiaries, indicating risks insured against, carrier, amount of coverage and
expiration date, and, to the Company's Knowledge, all such insurance is in full
force and effect.
Section 3.17 No Brokers or Finders. No agent, broker, finder or
---------------------
investment or commercial banker, or other Person or firm engaged by or acting on
behalf of the Company or its Subsidiaries in connection with the negotiation,
execution or performance of this Agreement is or will be entitled to any
brokerage or finder's or similar fee or other commission as a result of this
Agreement, the other Transaction Documents or the transactions contemplated
hereby or thereby, other than any such fees or commissions that have been
disclosed to Purchaser and as to which the Company shall have full
responsibility.
Section 3.18 Vote. There are no approvals required of the holders of any
----
class or series of shares or stock of the Company necessary to approve this
Agreement or any other Transaction Documents and the transactions contemplated
hereby or thereby.
Section 3.19 Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any of the Subsidiaries exists or, to the Company's
Knowledge is imminent, and, to the
-14-
Company's Knowledge, there is no existing or imminent labor disturbance by the
employees of any of its or any of the Subsidiaries' principal suppliers,
manufacturers, customers or contractors, which, in either case, could reasonably
be expected to result in a Material Adverse Effect.
Section 3.20 Tax Returns. Except as set forth on Schedule 3.20, all
----------- -------------
United States federal income tax returns of the Company and the Subsidiaries
required by law to be filed (taking into account all extensions) have been filed
and all federal income taxes shown by such returns or otherwise assessed, which
are due and payable, have been paid, except for such taxes and assessments, if
any, as are being contested in good faith and by adequate proceedings and as to
which adequate reserves have been provided. The Company and the Subsidiaries
have filed all other tax returns that are required to have been filed by them
pursuant to applicable foreign, federal, state, local or other law except
insofar as the failure to file such returns could not reasonably be expected to
result in a Material Adverse Effect, and have paid all taxes shown by such
returns or pursuant to any assessment received by the Company and the
Subsidiaries, which are due and payable, except for such taxes or assessments,
if any, as are being contested in good faith and by appropriate proceedings and
as to which adequate reserves have been provided or where the amount due, in the
aggregate, is not material to the business of the Company and its Material
Subsidiaries. The charges, accruals and reserves on the books of the Company in
respect of all federal, state, local and foreign tax liabilities of the Company
and each Subsidiary for any years not finally determined are adequate to meet
any assessments or reassessments for additional income tax that is reasonably
expected to be payable for any years not finally determined, except to the
extent of any inadequacy that could not reasonably be expected to result in a
Material Adverse Effect.
Section 3.21 ERISA. The Company and each of the Subsidiaries is in
-----
compliance in all material respects with the applicable provisions of ERISA, and
no "reportable event", as such term is defined in Section 403 of ERISA, has
occurred with respect to any plan of the Company or the Subsidiaries.
Section 3.22 Related Party Transactions. No relationship, direct or
--------------------------
indirect, exists between or among any of the Company, the Subsidiaries or any
affiliate of the Company, on the one hand, and any director, officer,
stockholder, customer or supplier of any of them, on the other hand, which would
be required by the Exchange Act or by the rules and regulations enacted
thereunder to be described in the Company's proxy statement for the election of
directors in 1999 which is not described in the Company SEC Documents of the
Company Disclosure Schedule.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser represents and warrants to the Company as follows:
Section 4.1 Organization, Standing and Power. Purchaser is a limited
--------------------------------
partnership duly organized, validly existing, and in good standing under the
laws of Delaware and has all requisite partnership power and authority to own,
lease, and operate its properties and to carry on its business as now being
conducted and to execute and deliver this Agreement and the other Transaction
-15-
Documents to which Purchaser is a party and consummate each of the transactions
and perform each of the obligations contemplated hereby and thereby.
Section 4.2 Authority; Approvals.
--------------------
(a) (i) The execution and delivery by Purchaser of this Agreement and the
other Transaction Documents to which it is a party, the purchase of the
Securities to be purchased by it and the consummation of each of the
transactions and the performance of each of the obligations contemplated hereby
and thereby have been duly and properly authorized by all necessary partnership
action on the part of Purchaser and (ii) this Agreement has been and the other
Transaction Documents to which Purchaser is a party will be (on or prior to the
Closing), duly executed and delivered by it and, assuming the accuracy of the
representations and warranties of the Company in Section 3.4 hereof, constitute
-----------
the valid and legally binding obligations of Purchaser, enforceable against it
in accordance with their respective terms, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(b) The execution and delivery by Purchaser of this Agreement and the other
Transaction Documents to which it is a party, the purchase of the Securities to
be purchased by it and the consummation of each of the transactions and the
performance of each of the obligations contemplated hereby and thereby (i) does
not conflict with or violate (whether with or without notice or a lapse of time
or both), require the consent of any Person to or otherwise result in a material
detriment to Purchaser under, (1) its organizational documents or (2) any
agreements to which it is a party or, assuming the Approvals referred to in
Section 4.2(c) are duly and timely made or obtained, any Law or Order applicable
--------------
to it, in each case in a manner that could reasonably be expected to materially
hinder or impair the completion of any of the transactions contemplated hereby
or have a material adverse effect on the business, properties, condition
(financial or otherwise), liabilities or prospects of Purchaser; or (ii) does
not impose any penalty or other onerous condition on Purchaser that could
reasonably be expected to materially hinder or impact the completion of any of
the transactions contemplated hereby.
(c) No Approval from any Governmental Entity is required by or with respect
to Purchaser in connection with the execution and delivery by Purchaser of this
Agreement or any other Transaction Document to which it is a party or the
consummation by Purchaser of the transactions contemplated hereby or thereby,
except for: (A) the possible requirement of the filing of a notification report
by Purchaser under the HSR Act, and the expiration or termination of the
applicable waiting period with respect thereto in connection with the
acquisition of Underlying Shares (but not in order to consummate the Closing)
and (B) any such Approval the failure of which to be made or obtained (1) has
not impaired and could not reasonably be expected to impair the ability of
Purchaser to perform its obligations under any of the Transaction Documents in
any material respect and (2) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the transactions
contemplated by any of the Transaction Documents.
-16-
Section 4.3 Investment Intent. The Securities to be acquired by
-----------------
Purchaser hereunder and any Underlying Shares to be acquired upon the exercise,
conversion or exchange of such Securities are being, or, in the case of the
Underlying Shares, will be, acquired for its own account for investment and with
no intention of distributing or reselling such Securities or Underlying Shares
or any part thereof or interest therein in any transaction which would be in
violation of the securities Laws of the United States of America or any
applicable state or any foreign country or jurisdiction.
Section 4.4 Transfer Restrictions.
--------------------
(a) Purchaser acknowledges and agrees that (i) no Transfer of the Shares
may be made prior to April 15, 2004 (other than to the Company), (ii) the
foregoing restriction on Transfer is reasonable in light of the nature of the
transactions contemplated by this Agreement and Purchaser's investment goals in
connection with its acquisition of the Securities, and (iii) the Company would
not have entered into this Agreement but for the agreement of Purchaser set
forth in this Section 4.4(a).
--------------
(b) If Purchaser should decide to dispose of any of the Securities to be
purchased by it or any Underlying Shares, Purchaser understands and agrees that
it may do so only pursuant to an effective registration statement under the
Securities Act (and registration or qualification under all applicable state and
foreign securities Laws) or pursuant to an exemption from registration under the
Securities Act and such state and foreign securities Laws. In connection with
any offer, resale, pledge or other transfer (individually and collectively, a
"Transfer") of any Securities or Underlying Shares other than pursuant to an
--------
effective registration statement, (i) the transferor shall have notified the
Company of the proposed Transfer and shall have furnished the Company with a
statement in reasonable detail of the circumstances surrounding the proposed
Transfer, and (ii) the Company may require that the transferor of such
Securities or Underlying Shares provide to the Company an opinion of counsel
which opinion shall be reasonably satisfactory in form and substance to the
Company, to the effect that such Transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act and any applicable state or foreign securities Laws. In the
discretion of the Company, the Company may condition any Transfer of any
Securities or Underlying Shares (other than pursuant to an effective
registration statement, pursuant to Rule 144 promulgated under the Securities
Act or pursuant to a distribution by Purchaser to its partners such that such
partners upon receipt of such securities will be eligible to sell such
securities pursuant to Rule 144(k) promulgated under the Securities Act,
provided that, in the case of any such distribution, Purchaser shall have
provided to the Company an opinion of counsel, reasonably satisfactory in form
and substance to the Company, to such effect) upon the transferee's delivery to
the Company of a written agreement, in form and substance satisfactory to the
Company, whereby the transferee (i) makes such representations and warranties to
and for the benefit of the Company as are comparable to the representations and
warranties of Purchaser set forth in Article IV of this Agreement, as and to the
extent applicable to the proposed Transfer, and (ii) agrees to be bound by the
transfer restriction set forth in this Section 4.4. Purchaser agrees to the
-----------
imprinting, so long as appropriate, of substantially the following legend on
certificates representing the Securities and any Underlying Shares:
-17-
THE SECURITIES (THE "SECURITIES") EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE OR FOREIGN SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER AGREES THAT IT WILL NOT OFFER, RESELL,
PLEDGE OR OTHERWISE TRANSFER (INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER")
THE SECURITIES EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT (AND REGISTRATION OR
QUALIFICATION UNDER ALL APPLICABLE STATE AND FOREIGN SECURITIES LAWS), OR
(B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND
ALL APPLICABLE STATE AND FOREIGN SECURITIES LAWS. IF THE PROPOSED TRANSFER
IS TO BE MADE OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
IN ADDITION, THE SECURITIES MAY ONLY BE TRANSFERRED IN COMPLIANCE WITH
SECTION 4.4 OF THE PURCHASE AGREEMENT PURSUANT TO WHICH THEY WERE ISSUED.
-----------
COPIES OF SUCH PURCHASE AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO
THE SECRETARY OF THE COMPANY.
Purchaser also agrees to the imprinting, so long as appropriate, of
substantially the following legend on certificates representing the Shares:
THE SHARES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN TO THE COMPANY
PRIOR TO APRIL 15, 2004.
The legends set forth above relating to securities Law matters may be
removed if and when the Securities or Underlying Shares, as the case may be,
represented by such certificate are disposed of pursuant to an effective
registration statement under the Securities Act or the Company receives an
opinion of counsel, reasonably satisfactory to the Company, that such legends
may be removed. The Share certificates, Warrants and certificates for Underlying
Shares shall also bear any additional legends required by applicable federal,
state or foreign securities Laws, which legends (together with the legends set
forth above relating to securities Law matters) may be removed when, in the
opinion of counsel to the Company, the same are no longer required under the
applicable requirements of such securities Laws. Purchaser agrees that, in
connection with any Transfer of Securities by it pursuant to an effective
registration statement under the Securities Act, it will comply with all
prospectus delivery requirements of the Securities Act and will affect all
Transfers thereunder in accordance with such registration statement and all
requirements of applicable federal, state and foreign securities Laws. The
Company makes no representation, warranty or agreement as to the
-18-
availability of any exemption from registration under the Securities
Act or any state or foreign securities Laws with respect to any resale
of Securities or Underlying Shares. The Company is authorized to
notify its transfer agent of the status of any Securities or
Underlying Shares bearing any of the foregoing legend(s) and to take
such other action as shall be reasonable and proper to prevent any
violation of the Securities Act, any state or foreign securities Laws
or any other restrictions on Transfer set forth herein.
(c) The provisions of this Section 4.4 shall not be construed to limit any
-----------
of the obligations of Purchaser under the Warrants.
Section 4.5 Purchaser Status. Purchaser represents and warrants to, and
----------------
covenants and agrees with the Company that (i) at the time it was offered the
Securities, it was, (ii) at the date hereof, it is, and (iii) at the Closing
Date, it will be, an accredited investor as defined in Rule 501(a) under the
Securities Act, and has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the Company and
the merits and risks of an investment in the Securities and the Underlying
Shares, and is able to bear the economic risk of such investment for an
indefinite period of time.
Section 4.6 Access to Information; Investigation. Purchaser represents
------------------------------------
and acknowledges that it (a) has had access to and the opportunity to review the
Company's properties, assets, financial statements, contracts and other books
and records and has made such investigation with respect thereto as it deems
necessary to enter into the transactions contemplated hereby, (b) has been
afforded the opportunity to ask appropriate representatives of the Company
questions concerning the business, assets, financial condition and prospects of
the Company and has been furnished, to its Knowledge, with all requested
information, and (c) has been solely responsible for its own due diligence
investigation of the Company and its management and business, for its own
analysis of the merits and risks of an investment in the Securities, and for its
own analysis of the terms of the investment in the Securities. Anything herein
to the contrary notwithstanding, the provisions of this Section 4.6 shall not in
-----------
any way limit any of the representations and warranties of the Company set forth
in this Agreement or in any Schedule delivered pursuant hereto by the Company or
its authorized representatives or the rights of Purchaser with respect to any
breach of any such representations and warranties.
Section 4.7 No Brokers or Finders. No agent, broker, finder or
---------------------
investment or commercial banker, or other Person or firm engaged by or acting on
behalf of Purchaser in connection with the negotiation, execution or performance
of this Agreement is or will be entitled to any brokerage or finder's or similar
fee or other commission as a result of this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby, other than any
such fees or commissions that have been disclosed to the Company and as to which
Purchaser shall have full responsibility.
ARTICLE V.
COVENANTS
---------
-19-
Section 5.1 Affirmative Covenants of the Company. The Company hereby
------------------------------------
covenants and agrees that, until the earlier of the Closing or the termination
of this Agreement, unless consented to in writing by Purchaser (such consent not
to be unreasonably withheld), the Company will and will cause each of its
Material Subsidiaries to operate its business in the usual and ordinary course
consistent with past practices except as contemplated by this Agreement.
Section 5.2 Negative Covenants of the Company.
---------------------------------
(a) Except as expressly contemplated by this Agreement or otherwise
consented to in writing by Purchaser, from the date of this Agreement until
earlier of the Closing or the termination of this Agreement, the Company shall
not do, and shall, to the extent applicable, not permit any of its Material
Subsidiaries to do, any of the following:
(i) adopt or propose to adopt any amendments to the Company's
Certificate of Incorporation or Bylaws; other than transactions between the
Company and one or more of its Subsidiaries or among one or more of its
Subsidiaries, adopt resolutions authorizing a liquidation, dissolution,
merger, consolidation, restructuring, recapitalization, or other
reorganization of the Company or any Material Subsidiary; or make any other
changes in the Company's capital structure;
(ii) declare or pay any dividend or make any other distribution
(whether in cash, stock or property) with respect to its Capital Stock (or
other voting or equity securities or interests, as applicable), other than
dividends paid by any Subsidiary to the Company or another Subsidiary, or
take any other action that if taken after the issuance of the Warrants
would result in an adjustment to the number of shares acquirable upon
exercise of the Warrants; or
(iii) agree in writing or otherwise to do any of the foregoing.
Section 5.3 Approvals. The Company and Purchaser each agree to
---------
cooperate and use all commercially reasonable efforts to obtain (and will
promptly prepare all registrations, filings and applications, requests and
notices preliminary to) all Approvals that may be necessary or which may be
reasonably requested by the Company or Purchaser to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
Section 5.4 HSR Act Notification. If after the Closing and until the
--------------------
later of (i) the date the Shares are no longer outstanding and (ii) the earlier
to occur of the date on which the Warrants are fully exercised and the date on
which all outstanding Warrants are no longer exercisable, filings are required
under the HSR Act so that Purchaser may acquire the Underlying Shares or
otherwise acquire securities pursuant to the Transaction Documents, the Company
will upon the written request of Purchaser, and Purchaser will upon the written
request of the Company, (i) file or cause to be filed, as promptly as
practicable after the receipt of such notice and in no event later than fifteen
Business Days after the receipt of such notice, with the Federal Trade
Commission and the United States Department of Justice, all reports and other
documents required to be filed by such party under the HSR Act concerning the
transactions contemplated in such notice, (ii) promptly comply with or
-20-
cause to be complied with any requests by the Federal Trade Commission
or the United States Department of Justice for additional information
so that the waiting period applicable thereto under the HSR Act shall
expire as soon as practicable, and (iii) cooperate with the other
parties in requesting early termination of any applicable waiting
period under the HSR Act. The Company will reimburse Purchaser for any
filing fees in connection with such filings by Purchaser.
Section 5.5 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to Purchaser, and Purchaser shall give prompt notice to the
Company, of (a) the occurrence, or failure to occur, of any event that causes
any representation or warranty contained in any Transaction Document to be
untrue or inaccurate in any material respect at any time from the date of this
Agreement to the Closing Date and (b) any failure of the Company or Purchaser to
comply with or satisfy, in any material respect, any covenant, condition or
agreement to be complied with or satisfied by it under any Transaction Document
at any time from the date of this Agreement to the Closing Date.
Section 5.6 Board of Directors. The Company shall use its reasonable
------------------
best efforts to cause promptly following the Closing (a) the Board to be
increased by one (unless there is an existing vacancy on the Board) and (b) an
individual identified by Purchaser to the Company to be elected as a director of
the Company. As long as Purchaser owns a majority of the Shares, at any meeting
of the shareholders of the Company held for the purpose of electing directors of
the Company, Purchaser shall be entitled to nominate one individual for election
to the Board (unless the term of the director previously nominated by the
Purchaser pursuant to this Section 5.6 would continue after such election) and
-----------
the Company shall use its reasonable best efforts to cause to be elected to the
Board such individual. If the director nominated by the Purchaser shall resign
or otherwise cease serving as director, then Purchaser may designate a
replacement, and the Company shall use its reasonable best efforts to ensure
that such designated replacement shall serve on the Board in the place of such
former director until the next scheduled meeting of shareholders held for the
purpose of electing directors.
Section 5.7 Registration Rights Agreement. The Company agrees to enter
-----------------------------
into a Registration Rights Agreement in substantially the form attached hereto
as Exhibit 7.2(b)(iii).
-------------------
Section 5.8 Confidentiality. Purchaser shall, and shall cause its
---------------
representatives to, hold confidential all information relating to the Company or
its Subsidiaries it has received prior to the Closing from the Company or any of
its representatives, or information, if any, it receives after the Closing from
the Company or any of its representatives as a result of or in connection with
Purchaser's ownership of the Securities or Purchaser's right to nominate and/or
elect any of the directors of the Company (including, without limitation,
information provided to any such director); provided, however, that the
foregoing shall not apply to (a) information that is or becomes generally
available to the public other than as a result of a disclosure by a Purchaser or
any of its representatives in violation of this Section 5.8, (b) information
-----------
that is or becomes available to Purchaser or any of its representatives on a
nonconfidential basis from a source other than the Company or its
representatives, provided that such source is not known by Purchaser to be bound
by a confidentiality agreement with or other obligation of secrecy to the
Company or any other party, and (c) information that is required to be disclosed
by Purchaser or any of its representatives as a
-21-
result of any applicable Law; provided further, however, that in the event
information is required to be disclosed pursuant to clause (c), the Person
proposing such disclosure shall provide the Company to the extent practicable an
opportunity, reasonably in advance of any such disclosure, to review and comment
on the form and content of such proposed disclosure. The provisions of this
Section 5.8 shall terminate on the first anniversary of the termination of the
-----------
provisions of Section 5.6.
-----------
Section 5.9 Standstill.
----------
(a) Purchaser will not, and will not permit any of its Affiliates to,
acquire or agree to acquire, directly or indirectly, by purchase or otherwise
(including by joining a "group" within the meaning of Section 13(d)(3) of the
Exchange Act), any of the Voting Stock of the Company, any securities directly
or indirectly convertible into or exchangeable for Voting Stock of the Company,
any direct or indirect rights, warrants or options to acquire any voting Stock
of the Company or any right to vote Voting Stock of the Company if, after giving
effect to such purchase or other acquisition, Purchaser and its Affiliates
together would hold in the aggregate, or have the right to vote, more than 15%
of the Voting Stock of the Company determined on a fully diluted basis.
(b) For purposes of Section 5.9(a), (i) all calculations of the fully
--------------
diluted voting power of the Voting Stock of the Company shall assume the
conversion or exchange of all outstanding securities convertible into or
exchangeable for such Voting Stock and the exercise of all outstanding rights,
warrants and options to acquire such Voting Stock, regardless of whether such
rights of conversion, exchange, purchase or acquisition are then exercisable,
and (ii) any voting rights of the Shares and any shares of Common Stock issuable
or issued upon the conversion of the Shares or issued in payment of dividends on
the Shares shall be disregarded and excluded from any determination of the
amount of Voting Stock owned by Purchaser and its Affiliates.
(c) Purchaser agrees that it will not form, or encourage the formation of,
a "group" within the meaning of Section 13(d)(3) of the Exchange Act, to effect
or acquire control of the Company.
(d) Purchaser agrees that with respect to any election of directors by the
holders of Common Stock, it will (i) vote all shares of Common Stock then owned
by it either, at Purchaser's election, (x) in the same proportion as the votes
cast by all other holders of Common Stock or (y) in the manner recommended by
the Company's then Board of Directors and (ii) as long as the Company is not in
breach of Section 5.6, not solicit proxies in opposition to the slate of
-----------
nominees proposed by the Company's then Board of Directors.
(e) The provisions of this Section 5.9 shall terminate and be of no further
-----------
force or effect upon the earlier of (i) April 15, 2004 and (ii) a Change of
Control (as such term is defined in the Certificate of Designation).
Section 5.10 Indemnification. The Company agrees to indemnify the
---------------
Purchaser and hold the Purchaser harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind (including, without
limitation, the reasonable fees and disbursements of Purchaser's counsel in
connection with any investigative, administrative or judicial proceeding), which
may be incurred by Purchaser as a result of any claims made against Purchaser by
any Governmental Entity or shareholder of the Company that relate to or arise
out of this Agreement or the Securities,
-22-
provided that Purchaser shall not have the right to be indemnified hereunder for
(or be relieved of any liability for) its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction or any conduct
constituting a breach of or default under this Agreement or any other
Transaction Document, and provided further, that notwithstanding anything to the
contrary above, it is expressly understood between the parties hereto that the
Company pursuant to this Section 5.10 shall not be responsible for or assume any
------------
of the investment risk associated with the Securities or have any liability or
responsibility for any lost profits of Purchaser.
Section 5.11 Restrictive Actions. The Company agrees it will not adopt
-------------------
or amend a shareholders rights plan, or take similar action, that would have the
effect of restricting to a greater extent than the provisions of Section 5.9 (to
-----------
be determined without giving effect to Section 5.9(e)), the ability of Purchaser
--------------
and its Affiliates to acquire, directly or indirectly, Voting Stock of the
Company.
ARTICLE VI.
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
Section 6.1 Conditions Precedent to Each Party's Obligation. The
-----------------------------------------------
respective obligations of Purchaser and the Company to effect the transactions
contemplated hereby are subject to the satisfaction on or prior to the Closing
Date of the following conditions:
(a) Approvals. All Approvals of, or expirations of waiting periods imposed
---------
by, any Governmental Entity necessary for the consummation of the transactions
contemplated by this Agreement shall have been filed, occurred, or been
obtained, as applicable.
(b) No Injunctions or Restraints. No temporary restraining order,
----------------------------
preliminary or permanent injunction, or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby shall be in effect.
(c) No Action. No action shall have been taken nor any statute, rule, or
---------
regulation shall have been enacted by any Governmental Entity that makes the
consummation of the transactions contemplated hereby illegal.
(d) No Adverse Action or Decision. There shall be no action, suit,
-----------------------------
investigation or proceeding, pending or threatened, against or affecting
Purchaser or the Company or any of its Subsidiaries or any of their respective
properties or rights, or any of their Affiliates, officers or directors, before
any court, arbitrator or administrative or governmental body which (i) seeks to
restrain, enjoin or prevent the consummation of or otherwise affect the
transactions contemplated by this Agreement or the other Transaction Documents
or (ii) questions the validity or legality of any such transaction or seeks to
recover damages or to obtain other relief in connection with any such
transaction.
(e) Consents Under Agreements. There shall have been obtained all consents
-------------------------
or approvals required to be obtained by the Company or any of its Subsidiaries
with respect to the
-23-
consummation of each of the transactions contemplated by this Agreement the
failure of which to obtain reasonably could be expected to result in a Material
Adverse Effect, and each such consent or approval shall be unconditional.
Section 6.2 Conditions Precedent to Obligation of Purchaser. The
-----------------------------------------------
obligation of Purchaser to effect the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions unless
waived, in whole or in part, by Purchaser:
(a) Representations and Warranties. The representations and warranties of
------------------------------
the Company set forth in this Agreement shall be true and correct in all
respects (provided that, for purposes of this Section 6.2(a), any representation
--------------
or warranty of the Company contained herein that is qualified by a materiality
standard or a Material Adverse Effect qualification shall be read without regard
to any such qualifications as if such qualifications were not contained therein)
as of the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date except for such failures which, individually or in
the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect, and Purchaser shall have received a certificate to the
foregoing effect signed on behalf of the Company by the chief executive officer
or by the chief financial officer of the Company.
(b) Performance of Obligations. The Company shall have performed in all
--------------------------
material respects all obligations required to be performed by it under this
Agreement prior to the Closing Date, and Purchaser shall have received a
certificate to such effect signed on behalf of the Company by the chief
executive officer or by the chief financial officer of the Company.
(c) Legal Opinions. Purchaser shall have received from Xxxxx, Xxxxx &
--------------
Xxxxxx LLP an opinion dated the Closing Date, with respect to the matters set
forth in Exhibit 6.2(e).
--------------
(d) Closing Deliveries. All documents, instruments, certificates or other
------------------
items required to be delivered by the Company pursuant to Section 7.2(b) shall
--------------
have been delivered.
(e) Certificate of Designation. The Certificate of Designation, in the
--------------------------
form attached as Exhibit 6.2(e), shall have been filed with the Delaware
--------------
Secretary of State.
Section 6.3 Conditions Precedent to Obligations of Company. The
----------------------------------------------
obligation of the Company to effect the transactions contemplated by this
Agreement is subject to the satisfaction of the following conditions unless
waived, in whole or in part, by the Company:
(a) Representations and Warranties. The representations and warranties of
------------------------------
Purchaser set forth in this Agreement shall be true and correct in all respects
(provided that, for purposes of this Section 6.3(a), any representation or
--------------
warranty of Purchaser contained herein that is qualified by a materiality
standard shall be read without regard to any such qualifications as if such
qualifications were not contained therein) as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date except for
such failures which, individually or in the aggregate, have not had and could
not reasonably be expected to have a material adverse effect on Purchaser,
-24-
and the Company shall have received a certificate to the foregoing effect signed
on behalf of Purchaser by its general partner.
(b) Performance of Obligations of Purchaser. Purchaser shall have
---------------------------------------
performed in all material respects the obligations required to be performed by
it under this Agreement prior to the Closing Date, and the Company shall have
received a certificate to such effect signed on behalf of Purchaser by its
general partner.
(c) Legal Opinions. The Company shall have received from Xxxxxx & Xxxxxx
--------------
L.L.P. an opinion dated the Closing Date, with respect to the matters set forth
in of Exhibit 6.3(c).
--------------
(d) Closing Deliveries. All documents, instruments, certificates or other
------------------
items required to be delivered by Purchaser pursuant to Section 7.2(a) shall
--------------
have been delivered.
ARTICLE VII.
CLOSING
-------
Section 7.1 Closing. Subject to the satisfaction or waiver of the
-------
conditions set forth in Article VI, the purchase and sale of the Securities to
be purchased by Purchaser hereunder (the "Closing") will take place at the
-------
offices of Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxxxx, Xxxxx, 00000, at 10:00
a.m., local time, on the third Business Day following the satisfaction or waiver
(subject to applicable Law) of each of the conditions to the obligations of the
parties to effect the transactions to occur at such Closing as set forth in
Article VI, or on such other date as mutually agreed to by the parties hereto.
The date on which the Closing occurs is herein referred to as the "Closing
-------
Date". All closing transactions at the Closing shall be deemed to have occurred
----
simultaneously.
Section 7.2 Actions to Occur at the Closing.
-------------------------------
(a) At the Closing, Purchaser shall deliver to the Company the following:
(i) Purchase Price. An amount equal to the Purchase Price for the
--------------
Securities in accordance with Article II.
(ii) Certificates. The certificates described in Sections 6.3(a) and
------------ ---------------
6.3(b).
------
(iii) Registration Rights Agreement. The Registration Rights
-----------------------------
Agreement, duly executed by Purchaser.
(iv) Legal Opinion. The opinion of counsel referred to in Section
------------- -------
6.3(c).
------
(b) At the Closing, the Company shall deliver to Purchaser the following:
(i) Share Certificates. Certificates representing the Shares.
------------------
-25-
(ii) Warrants. The Warrants, the form of which is attached hereto as
--------
Exhibit 7.2(b)(ii).
------------------
(iii) Registration Rights Agreement. The Registration Rights
-----------------------------
Agreement, duly executed by the Company, the form of which is attached
hereto as Exhibit 7.2(b)(iii).
-------------------
(iv) Certificates. The certificates described in Sections 6.2(a) and
------------ ---------------
6.2(b).
------
(v) Consents Under Agreements. The original of each consent or
-------------------------
approval, if any, pursuant to Section 6.1(e).
--------------
(vi) Legal Opinions. The opinion of counsel referred to in Section
-------------- -------
6.2(d).
------
ARTICLE VIII.
TERMINATION
-----------
Section 8.1 Termination. This Agreement may be terminated prior to the
-----------
Closing:
(a) by mutual consent of Purchaser and the Company;
(b) by either Purchaser or the Company:
(i) in the event of a breach by the other party of any
representation, warranty, covenant or agreement contained in this Agreement
which (A) would give rise to the failure of a condition set forth in
Section 6.2 or 6.3, and (B) cannot be cured or, if curable, has not been
----------- ---
cured within 20 days (the "Cure Period") following receipt by the breaching
-----------
party of written notice of such breach;
(ii) if a court of competent jurisdiction or other Governmental
Entity shall have issued an order, decree, or ruling or taken any other
action (which order, decree, or ruling Purchaser and the Company shall use
all commercially reasonable efforts to lift), in each case permanently
restraining, enjoining, or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling, or other
action shall have become final and nonappealable; provided, however, that
the right to terminate this Agreement under this clause (ii) shall not be
available to any party whose breach of this Agreement has been the cause
of, or resulted in, such order, decree, ruling or other action; or
(iii) if the Closing shall not have occurred by April 30, 1999,
provided, however, that the right to terminate this Agreement under this
clause (iii) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, the failure of the Closing
to occur on or before such date.
Section 8.2 Effect of Termination. In the event of the termination of
---------------------
this Agreement, written notice thereof shall forthwith be given to the other
party specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall forthwith become null and void, except for
Sections 5.8 and 5.10 and liability of a party arising out of a willful breach
------------ ----
of, or
-26-
willful misrepresentation under, this Agreement prior to such termination (but
in no event shall any party hereto be entitled to recover punitive or exemplary
damages).
ARTICLE IX.
RECOVERY OF FEES
----------------
Section 9.1 Recovery of Fees.
----------------
Any party who shall obtain a final judgment in a court of competent
jurisdiction for the payment of damages by another party for a breach of this
Agreement or any other Transaction Document shall be entitled to recover
reasonable attorneys' fees and court costs incurred in connection with the
obtaining of such judgment.
ARTICLE X.
MISCELLANEOUS
-------------
Section 10.1 Survival of Provisions.
----------------------
(a) The representations and warranties of the Company and Purchaser made
herein and the covenants of the Company and Purchaser to be complied with on or
prior to the Closing Date shall remain operative and in full force and effect
pursuant to their terms, regardless of (x) any investigation made by or on
behalf of Purchaser or the Company, as the case may be, or (y) acceptance of any
of the Securities and payment by Purchaser therefor, until the later of the
first anniversary of the Closing or April 15, 2000; provided that the
representations and warranties contained in Sections 3.1 (insofar as it applies
------------
to the Company), 3.3, 3.4(a), 3.13, 4.1 and 4.2(a) shall survive until the
--- ------ ---- --- ------
eighth anniversary of the Closing and the representations and warranties
contained in Sections 4.3, 4.4 and 4.5 shall survive through the period of the
------------ --- ---
applicable statute of limitations; and provided, further, that such
representations and warranties shall survive as to any claim or demand made
prior to their termination date until such claim or demand is fully paid or
otherwise resolved by the parties hereto in writing or otherwise.
(b) The covenants and agreements of the Company and Purchaser contained in
this Agreement that, by their terms, are to be performed or complied with after
the Closing Date will survive until the period specified herein with respect to
such covenant or agreement (or for the period during which the same remain
applicable to the parties in accordance with their terms); and provided,
further, that such covenants and agreements shall survive as to any claim or
demand made prior to their termination date until such claim or demand is fully
paid or otherwise resolved by the parties hereto in writing or otherwise.
Section 10.2 No Waiver; Modification in Writing. No failure or delay on
----------------------------------
the part of the Company or Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
provisions of this
-27-
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given without the written consent of the Company
and Purchaser. Any waiver of any provision of this Agreement, shall be effective
only in the specific instance and for the specific purpose for which made or
given. Except where notice is specifically required by this Agreement, no notice
to or demand on any party hereto in any case shall entitle the other party to
any other or further notice or demand in similar or other circumstances.
Section 10.3 Specific Performance. The parties recognize that in the
--------------------
event the Company or Purchaser should refuse to perform under the provisions of
this Agreement or any other Transaction Document, monetary damages alone will
not be adequate. Purchaser or the Company, as the case may be, shall therefore
be entitled, in addition to any other remedies which may be available, including
money damages, to obtain specific performance of the terms of this Agreement. In
the event of any action to enforce this Agreement or any other Transaction
Document specifically, the Company and Purchaser hereby waive the defense that
there is an adequate remedy at law.
Section 10.4 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal, or incapable of being enforced by any rule of
applicable law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein are not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal, or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated herein are consummated as originally contemplated to the fullest
extent possible.
Section 10.5 Fees and Expenses. Within 30 days after the Closing, the
-----------------
Company shall pay to Purchaser an amount equal to Purchaser's Expenses through
the Closing Date (provided the amount and nature of such costs and expenses in
reasonable detail shall have been furnished to the Company at least within 25
days after the Closing Date).
Section 10.6 Parties in Interest. This Agreement shall be binding upon
-------------------
and, except as provided below, inure solely to the benefit of each party hereto
and their permitted successors and assigns, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 10.7 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally or by
facsimile or mailed by registered, certified mail (return receipt requested) or
Federal Express or other recognized overnight courier to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
-28-
(a) If to Purchaser, to:
SCF-IV, L.P.
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
(b) If to the Company, to:
Newpark Resources Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile: 000-000-0000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three Business Days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one Business Day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
Section 10.8 Counterparts. This Agreement may be executed and delivered
------------
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
Section 10.9 Entire Agreement. This Agreement (which term shall be
----------------
deemed to include the Exhibits and Schedules hereto and the other certificates,
documents and instruments delivered hereunder) and the other Transaction
Documents constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements,
letters of intent and understandings, both written and oral, among the parties
with respect to the subject matter hereof and thereof. There are no
representations or warranties, agreements, or covenants of the parties with
respect to the subject matter hereof and thereof other than those expressly set
forth in this Agreement and the other Transaction Documents.
Section 10.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PROVISIONS.
Section 10.11 Public Announcements. The Company and Purchaser shall
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or the transactions
contemplated hereby, except for statements required by Law or by any
-29-
listing agreements with or rules of any national securities exchange or the
National Association of Securities Dealers, Inc., or made in disclosures
reasonably determined as required to be filed pursuant to the Securities Act or
the Exchange Act.
Section 10.12 Assignment. Neither this Agreement nor any of the rights,
----------
interests, or obligations hereunder shall be assigned by any of the parties
hereto, whether by operation of Law or otherwise.
Section 10.13 Headings. The headings of this Agreement are for
--------
convenience of reference only and are not part of the substance of this
Agreement.
[The remainder of this page is intentionally left blank.]
-30-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
NEWPARK RESOURCES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Chief Financial Officer
SCF-IV, L.P.
By SCF-IV, G.P., Limited Partnership,
its General Partner
By: X.X. Xxxxxxx & Associates, Incorporated,
its General Partner
By: /s/ Xxxxx X. Xxxxxxx
---------------------
1. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.
2. Each of the Transaction Documents, and the performance of the Company
thereunder, has been duly authorized by all necessary corporate action on the
part of the Company, and each of the Transaction Documents has been duly
executed and delivered by the Company.
3. The Certificate of Designation has been duly adopted by the Board of
Directors and duly filed with the Secretary of State of the State of Delaware in
accordance with the DGCL.
4. The powers, preferences and relative, participating, optional and
other special rights and the qualifications, limitations and restrictions of the
Series A Preferred Stock are as stated in the Certificate of Designation.
1. The Purchaser is a duly formed and validly existing partnership in
good standing under the laws of the State of Delaware.
2. Each of the Purchase Agreement and the Registration Rights Agreement,
and the performance of the Purchaser thereunder, has been duly authorized by all
necessary partnership action on the part of the Purchaser, and the Purchase
Agreement and the Registration Rights Agreement have been duly executed and
delivered by the Purchaser.
