<PAGE>
As filed with the Securities and Exchange Commission on April 18, 1997
Registration No. 333-
=======================================================================
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------------
NEWPARK RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-1123385
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
(504) 838-8222
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------------------
JAMES D. COLE, PRESIDENT
NEWPARK RESOURCES, INC.
3850 NORTH CAUSEWAY, SUITE 1770
METAIRIE, LOUISIANA 70002
(504) 838-8222
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------------
Copy to:
HOWARD Z. BERMAN, ESQ.
ERVIN, COHEN & JESSUP LLP
9401 WILSHIRE BOULEVARD
BEVERLY HILLS, CALIFORNIA 90212
(310) 273-6333
-----------------------------
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _______
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
Title of each class of Proposed Proposed maximum
securities to be Amount to be maximum offering aggregate offering Amount of
registered registered(1) price per unit(2) price(2) registration fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01
par value 100,000 shares $43.75 $4,375,000 $1,325.76
=========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
=======================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED APRIL 18, 1997
100,000 SHARES
NEWPARK RESOURCES, INC.
COMMON STOCK
($.01 par value)
----------------
This Prospectus relates to the resale of 100,000 shares (the "Shares")
of outstanding Common Stock of Newpark Resources, Inc. ("Newpark") by the
"Selling Stockholders". See "Selling Stockholders". Newpark will not receive
any proceeds from the sale of the Shares.
Newpark's Common Stock is listed on the New York Stock Exchange under
the symbol "NR". On April 14, 1997, the reported last sale price of the Common
Stock on The New York Stock Exchange Composite Tape was $43.75 per share.
For a discussion of certain factors that should be considered in
connection with an investment in the Common Stock, see "Risk Factors" on Page 5.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
----------------
The Shares generally may be offered for sale from time to time by the
Selling Stockholders on the New York Stock Exchange in ordinary brokerage
transactions at market prices prevailing at the time of sale or in negotiated
transactions at prices related to prevailing market prices. Brokers or dealers
will receive commissions or discounts from the Selling Stockholders in amounts
to be negotiated prior to the sale. Any brokers or dealers participating in the
offering of any such shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and the compensation received by them may be
deemed to be underwriting commissions or discounts. Substantially all of the
expenses of this offering, estimated at approximately $12,000, will be paid by
Newpark. See "Selling Stockholders" and "Plan of Distribution".
The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
Newpark is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices at 7 World Trade Center, 13th Floor, New York, NY 10048 and 500 West
Madison Street, Suite 1400, Chicago, IL 60661. Copies of such material can be
obtained from the Public Reference section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C., 20549, at prescribed rates, and on the
World Wide Web at the Commission's Web site located at "http://www.sec.gov".
Newpark's Common Stock is traded on the New York Stock Exchange, and such
reports and other information also can be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, NY 10005.
Newpark has filed with the Commission a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the registration statement and the exhibits thereto, to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any contract, agreement or other document are not necessarily complete. With
respect to each such contract, agreement or other document filed as an exhibit
to the registration statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement is
qualified in its entirety by such reference. Any interested parties may inspect
the registration statement, without charge, at the public reference facilities
of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and any
interested parties may obtain copies of all or any part of the registration
statement from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by Newpark with
the Commission are incorporated by reference into this Prospectus:
1. Newpark's Annual Report on Form 10-K for the year ended December 31,
1996.
2. All other reports filed by Newpark pursuant to Sections 13(a) or
15(d) of the Exchange Act since December 31, 1996.
3. The description of Newpark's Common Stock contained in its
Registration Statement pursuant to Section 12 of the Exchange Act, as
amended from time to time.
All documents filed by Newpark pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and made a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified, to constitute a part of this
Prospectus.
2
<PAGE>
Newpark will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon written or oral request a copy of any and all
documents incorporated by reference in this Prospectus, other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
in such documents. Requests should be directed to Ms. Edah Keating, Corporate
Secretary, Newpark Resources, Inc., 3850 North Causeway, Suite 1770, Metairie,
Louisiana 70002, or by telephone at (504) 838-8222.
THE COMPANY
Newpark is a leading provider of integrated environmental services to
the oil and gas exploration and production industry in the U.S. Gulf Coast area,
principally in Louisiana and Texas. These services are concentrated in three
key product lines: (i) processing and disposal of nonhazardous oilfield waste
("NOW"); (ii) processing and disposal of similar oilfield waste that is
contaminated with naturally occurring radioactive material ("NORM"); and (iii)
mat rental services in which patented prefabricated wooden mats are used as
temporary worksites in oilfield and other construction application. In its
waste disposal operation, Newpark utilizes patented and proprietary technology.
OILFIELD WASTE AND OTHER ENVIRONMENTAL SERVICES
Newpark collects, processes and disposes of oilfield waste, primarily
NOW and NORM. Newpark also treats NOW at the well site, remediates waste pits
and other contaminated sites and provides general oilfield services. In its NOW
processing and disposal business Newpark processes the majority of the NOW
received at its facilities for injection into environmentally secure geologic
formations deep underground and creates from the remainder a product which is
used as intermediate daily cover material or cell liner and construction
material at municipal waste landfills. In addition, Newpark has initiated a
process to recycle a portion of the NOW waste collected in its disposal
operations for use in the makeup of drilling fluids.
Since the fourth quarter of 1994, and until June 1996, Newpark provided
processing and disposal of NOW waste contaminated with NORM by processing the
waste into NOW for injection disposal into wills owned by Newpark. On May 21,
1996, Newpark was issued a license from the Texas Railroad Commission
authorizing the direct injection of NORM, subject to certain contamination
limits, into disposal wells at Newpark's Big Hill, Texas facility. The direct
injection of NORM permitted under the new license, which commenced on June 1,
1996, expands Newpark's NORM disposal capacity and significantly reduces the
amount of pre-injection transportation, processing and chemicals required,
thereby reducing Newpark's cost of disposal.
In December 1996, Newpark was issued a process patent covering its
offsite NOW and NORM waste processing operation. The patent covers the process
by which Newpark prepares the waste into a slurry for low pressure injection
into specific underground geological formations.
Newpark also provides industrial waste management, laboratory and
consulting services for the customers of its NOW and NORM services.
MAT RENTAL
Newpark uses a patented interlocking wooden mat system to provide
temporary worksites in unstable soil conditions typically found along the U.S.
Gulf Coast. Prior to 1994, Newpark's mat
<PAGE>
rental services were provided primarily to the oil and gas exploration and
production industry in Louisiana and Texas. In 1994, Newpark began marketing
these temporary worksites to other industries. Increasing environmental
regulation affecting the construction of pipelines, electrical distribution
systems and highways in and through wetlands environments has provided a
substantial new outlet for these services and has broadened the geographic area
served by Newpark to include the coastal areas of the Southeastern U.S.,
particularly Florida and Georgia, in addition to the U.S. Gulf Coast. In 1995
through a joint venture, Newpark began marketing its mat rental services in
Venezuela, and in September 1996, Newpark purchased the minority interests of
its partners in this venture. During the fourth quarter of 1996, Newpark made an
initial shipment of mats to Algeria, and Newpark plans to continue development
of this market during 1997. Mat rental revenue has increased from $11 million in
1990 to $33 million in 1996. Since 1992, Newpark has owned a sawmill in Batson,
Texas, to provide hardwood lumber used in construction of its mats, and Newpark
expanded the capacity of the facility during 1994 and 1995.
The recent trend toward more strict environmental regulation of both
drilling and production operations conducted by Newpark's customers has resulted
in greater synergy between Newpark's mat rental and general oilfield
construction services and its other environmental services. Newpark offers its
services individually and as an integrated package and provides a comprehensive
combination of on-site waste management and construction services for both the
drilling of new sites and the remediation of existing sites.
Newpark was organized in 1932 as a Nevada corporation and in April 1991
changed its state of incorporation to Delaware. Newpark's principal executive
offices are located at 3850 North Causeway Boulevard, Suite 1770, Metairie,
Louisiana 70002, and its telephone number is (504) 838-8222.
THE CAMPBELL WELLS ACQUISITION
On August 12, 1996, Newpark completed the acquisition (the "Campbell
Wells Acquisition") of substantially all of the marine-related NOW collection
operations of Campbell Wells Ltd. ("Campbell Wells"), a wholly owned subsidiary
of Sanifill, Inc. ("Sanifill"), for an aggregate purchase price $70.5 million.
The Campbell Wells Acquisition was completed pursuant to the terms of an Asset
Purchase and Lease Agreement, dated June 5, 1996 (the "Acquisition Agreement"),
which provided for the purchase and lease of certain marine-related assets of
Campbell Wells' NOW service business (the "Acquired Business"), excluding its
landfarming facilities and associated equipment. In connection with the
Campbell Wells Acquisition, Newpark assumed obligations under a NOW Disposal
Agreement (the "Disposal Agreement") with Sanifill and Campbell Wells, providing
for the delivery by Newpark for a period of 25 years of an agreed annual
quantity of NOW waste for disposal at certain of Campbell Wells' landfarming
facilities. Subsequently, USA Waste acquired Sanifill, and Sanifill and
Campbell Wells sold their landfarming facilities and associated equipment and
assigned their rights under the Disposal Agreement and other agreements with
Newpark that were executed upon consummation of the Campbell Wells Acquisition
to U.S. Liquids, Inc., a newly formed corporation which assumed Sanifill's and
Campbell Wells' obligations under such agreements. The acquisition by USA Waste
and the assignment and assumption by U.S. Liquids, Inc. did not, however,
release or diminish any party's obligations to Newpark under such agreements.
The aggregate purchase price under the Acquisition Agreement was $70.5
million, paid by wire transfer at the closing of the Campbell Wells Acquisition
with part of the proceeds from the sale
4
<PAGE>
of 3,450,000 shares of Newpark's Common Stock at $30.00 per share in an
underwritten public offering also completed on August 12, 1996. The remaining
net proceeds from the public offering, approximately $25.8 million after payment
of related transaction costs, was used to repay all amounts outstanding under
the revolving line of credit portion of Newpark's bank credit agreement.
The Campbell Wells Acquisition has significantly expanded Newpark's
service capabilities and processing capacity. Newpark believes that the
Campbell Wells Acquisition has provided and will continue to provide economies
of scale associated with handling a larger volume of waste through its
facilities. Newpark is combining the service capabilities of the Acquired
Business with its existing operations to speed the turnaround of barges and
boats at its transfer stations, thus providing better customer service. Newpark
believes that economic efficiencies will result from the reduction in the size
of the combined barge fleet operated by Newpark to service its transfer stations
and from the consolidation of operations at more efficient transfer stations,
permitting Newpark to receive a substantially higher volume of waste without
material additions to existing costs. Furthermore, Newpark expects that as a
result of the Campbell Wells Acquisition, access to Sanifill's disposal
facilities under the Disposal Agreement will allow Newpark to reduce its barge
transportation costs and make more efficient use of its barge fleet, further
augmenting its processing capacity. Newpark believes that its current processing
and disposal capacity, combined with access provided to the landfarm disposal
facilities of Sanifill under the Disposal Agreement, will be adequate to provide
for expected future demand for its oilfield waste disposal and other
environmental services. Newpark will nevertheless continue its strategy of
adding injection disposal capacity throughout the U.S. Gulf Coast region to more
efficiently serve its customers.
RECENT DEVELOPMENTS
On February 28, 1997, Newpark completed the acquisition of Sampey Bilbo
Meschi Drilling Fluids Management, Inc. ("SBM"), a regional Gulf Coast drilling
mud company specializing in engineering, technical and drilling fluids services
to the oil and gas exploration industry. Newpark plans to provide SBM certain
components recycled from the NOW waste collected by Newpark for use by SBM in
the make-up of drilling fluids for SBM's customers. Newpark believes that
providing SBM these recycled NOW waste components will reduce SBM's cost of
materials and reduce the costs to Newpark of handling and disposing of NOW. See
"Selling Stockholders" for further information regarding the acquisition of SBM
by Newpark.
RISK FACTORS
In addition to the other information contained in or incorporated by
reference into this Prospectus, prospective investors should carefully consider
the following factors relating to the business of Newpark in evaluating an
investment in the Common Stock.
DEPENDENCE ON OIL AND GAS INDUSTRY
Demand for Newpark's environmental and oilfield services depends in
large part upon the level of exploration and production of oil and gas and the
industry's willingness to spend capital on environmental and oilfield services.
This in turn depends on oil and gas prices, expectations about future prices,
the cost of exploring for, producing and delivering oil and gas, the discovery
rate of new oil and gas reserves and the ability of oil and gas companies to
raise capital. Domestic and international political, military, regulatory and
economic conditions also affect the industry. Prices
5
<PAGE>
for oil and gas historically have been extremely volatile and have reacted to
changes in the supply of and the demand for oil and natural gas, domestic and
worldwide economic conditions and political instability in oil producing
countries. No assurance can be given that current levels of oil and gas
activities will be maintained or that demand for Newpark's services will reflect
the level of such activities. Prices for oil and natural gas are expected to
continue to be volatile and affect the demand for Newpark's services. Shortages
of critical equipment and trained personnel to operate such equipment also may
limit the level of drilling activity in the oil and gas industry. A material
decline in oil or natural gas prices or activities could materially affect the
demand for the Company's services and, therefore, the Company's results of
operations and financial condition.
IMPACT OF GOVERNMENT REGULATIONS
Newpark believes that the demand for its principal environmental services
is directly related to state regulation of NOW and NORM. Rescission or
relaxation of such regulations, or a failure of governmental authorities to
enforce such regulations, could result in decreased demand for Newpark's
services and, therefore, could materially effect Newpark's results of operations
and financial condition. Newpark's business may also be adversely affected by
new regulations or changes in other applicable regulations.
NOW is currently exempt from the principal Federal statute governing the
handling of hazardous waste. In recent years, proposals have been made to
rescind this exemption. The repeal or modification of the exemption covering
NOW or modification of applicable regulations or their interpretation regarding
the treatment and/or disposal of NOW or NORM waste could require Newpark to
alter significantly its method of doing business. Such repeal or modification
could have a material adverse effect on Newpark's results of operations and
financial condition.
LOW BARRIERS TO ENTRY; LOSS OF TECHNOLOGY RIGHTS
Newpark has been granted U.S. patents on certain aspects of its system for
processing of NOW and NORM. There is no assurance that such patents will give
Newpark a meaningful competitive advantage. Barriers to entry by competitors for
Newpark's environmental and oilfield services are low. Therefore, competitive
products and services have been and may be successfully developed and marketed
by others. In addition, the environmental services business in the oilfield
could be impacted by future technological change and innovation, which could
result in a reduction in the amount of waste being generated or alternative
methods of disposal being developed.
INCREASED COMPETITION
The processing of NOW and NORM waste is a relatively new industry.
Competition in this market can be expected to increase as the industry develops.
In the meantime, Newpark expects to encounter significant competition from third
party competitors in connection with any proposed expansion into additional
geographic areas and services. Newpark also faces competition from oil and gas
producing customers who are continually seeking to enhance and develop their own
methods of disposal instead of utilizing the services of third party NOW and
NORM disposal companies such as Newpark. The desire to use such internal
disposal methods could be increased by future technological change and
innovation and limits the ability of Newpark to increase prices. The increased
used by Newpark's oil and gas producing customers of their own disposal methods
and other
6
<PAGE>
competitive factors could have a material adverse effect on Newpark's results of
operations and financial condition.
FAILURE TO COMPLY WITH GOVERNMENTAL REGULATIONS
Newpark's business is subject to numerous and continually evolving
Federal, state and local laws, regulations and policies that govern
environmental protection, zoning and other matters. If existing regulatory
requirements change, Newpark may be required to make significant unanticipated
capital and operating expenditures. Although Newpark believes that it is
presently in material compliance with applicable laws and regulations, there is
no assurance that it will be deemed to be in compliance in the future.
Governmental authorities may seek to impose fines and penalties on Newpark or to
revoke or deny the issuance or renewal of operating permits for failure to
comply with applicable laws and regulations. Under such circumstances, Newpark
might be required to curtail or cease operations or conduct site remediation
until a particular problem is remedied, which could have a material adverse
effect on Newpark's results of operations and financial condition.
POTENTIAL ENVIRONMENTAL LIABILITY; INSUFFICIENCY OF INSURANCE
Newpark's business exposes it to risks such as the potential for harmful
substances escaping into the environmental resulting in personal injury or loss
of life, severe damage to or destruction of property, environmental damage and
suspension of operations. The current and past activities of Newpark and the
activities of its former divisions and subsidiaries could result in the
imposition of substantial environmental, regulatory and other liabilities on
Newpark, including the costs of cleanup of contaminated sites and site closure
obligations. Such liabilities could also be imposed on the basis of negligence,
strict liability, breach of contract with customers or, in many instances, as a
result of contractual indemnification by Newpark of its customers in the normal
course of its business. Injection wells have been used for many years for
disposal of oilfield waste; however, certain aspects of Newpark's technology
have not been used previously by others and its future performance is uncertain.
While Newpark maintains liability insurance, the insurance is subject to
coverage limits and certain policies exclude coverage for damages resulting from
environmental contamination. Although there are currently numerous sources from
which such coverage may be obtained, there can be no assurance that insurance
will continue to be available to Newpark on commercially reasonable terms, that
the possible types of liabilities that may be incurred by Newpark will be
covered by its insurance, that Newpark's insurance carriers will be able to meet
their obligations under the policies or that the dollar amount of such
liabilities will not exceed Newpark's policy limits. Even a partially uninsured
claim, if successful and of significant magnitude, could have a material adverse
effect on Newpark's results of operations and financial condition.
FAILURE TO INTEGRATE ACQUIRED BUSINESSES
The Campbell Wells Acquisition is significantly larger than Newpark's
previous acquisitions and significantly increased the size of Newpark's
operations. Successful integration of the Acquired Business will depend
primarily on Newpark's ability to manage this additional business and eliminate
redundancies and excess costs. In addition, successful integration of SBM will
depend on the ability of Newpark to develop and integrate into its operations
the recycling of NOW into drilling fluids in order to reduce SBM's costs of
materials and reduce Newpark's handling and disposal costs. Material
7
<PAGE>
failure or substantial delay in accomplishing the integration of either business
could have a material adverse effect on Newpark's results of operations and
financial condition.
RELIANCE ON KEY PERSONNEL
Newpark is dependent upon the efforts and talents of its executive
officers and certain key personnel. Loss of the services of one or more of these
persons could adversely affect the operations of Newpark.
PREFERRED STOCK
The Board of Directors of Newpark is authorized to issue, without
further stockholder action, up to 1,000,000 shares of Preferred Stock with
rights that could adversely affect the rights of holders of Newpark Common
Stock. No shares of Preferred Stock are presently outstanding, and Newpark has
no present plans to issue any such shares. The issuance of shares of Preferred
Stock under certain circumstances could have the effect of delaying, deterring
or preventing a change in control of Newpark or other corporate action and of
discouraging bids for Newpark Common Stock at a premium.
SELLING STOCKHOLDERS
The Shares offered by this Prospectus are being sold for the account of
the selling stockholders (the "Selling Stockholders") named in the following
table, which also sets forth information concerning the Selling Stockholders'
beneficial ownership of Newpark Common Stock as of May 15, 1997, and as adjusted
to give effect to the sale of the Shares:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING AFTER OFFERING
------------------------ -----------------------
NUMBER
NUMBER PERCENT OF SHARES NUMBER PERCENT
NAME OF SHARES OF CLASS TO BE SOLD OF SHARES OF CLASS
------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Goldrus Drilling Company(1)....... 133,686 * 30,000 103,686 *
James A. Sampey................... 123,725 * 30,000 93,725 *
David A. Meschi(1)................ 103,105 * 30,000 73,105 *
Stephen Daniel.................... 41,240 * 10,000 31,240 *
</TABLE>
- -------------------
* Indicates ownership of less than one percent.
(1) Does not include 115,443 shares of Newpark Common Stock owned by Jasper N.
Warren, the Chairman of the Board, President and principal stockholder of
Goldrus Drilling Company. Also does not include 101,639 shares of Newpark
Common Stock owned by SBM Partners, of which Mr. Warren is the Managing
Partner, and 57,989 shares of Newpark Common Stock owned by Goldkey LLC, of
which Mr. Warren is the Manager and majority owner.
On February 28, 1997, Newpark acquired SBM, a Texas corporation in
which the Selling Stockholders were stockholders, by the merger of a wholly-
owned subsidiary of Newpark into SBM (the "Merger"). In the Merger, all of the
outstanding capital stock of SBM was converted into 582,000 shares of Newpark
Common Stock. In connection with the Merger, Messrs. Sampey, Meschi, Daniel and
Warren entered into noncompetition agreements covering competition in the
8
<PAGE>
drilling fluids industry in the States of Louisiana, Texas, Mississippi and
Alabama and the Gulf of Mexico until February 28, 2002. No additional
consideration was paid by Newpark for these noncompetition agreements. Following
the Merger, Mr. Sampey was appointed President of SBM, and Mr. Daniel was
appointed Executive Vice President of SBM, which remains as a wholly-owned
subsidiary of Newpark.
Newpark granted to the Selling Stockholders certain rights with respect
to the registration under the Securities Act of the shares of Common Stock
issued in the Merger, and the Shares offered hereby are being so registered
pursuant to the exercise of such registration rights. In accordance with the
terms of such registration rights, Newpark will pay substantially all of the
expenses of this offering.
Jasper N. Warren, the Chairman of the Board, President and principal
stockholder of Goldrus Drilling Company, has previously acted as a paid
consultant for Newpark in connection with the development and expansion of
Newpark's injection disposal facilities, and Mr. Warren continues to represent
Newpark in locating and assembling suitable real estate for its injection
operations. During 1994, 1995 and 1996, Newpark paid to Mr. Warren an aggregate
of $194,000, $298,000 and $214,000, respectively, under this consulting
arrangement. Newpark also paid Mr. Warren $112,000 in 1994, $221,000 in 1995 and
$195,000 in 1996 as a royalty with respect to the volume of waste injected at
the facilities Mr. Warren helped Newpark acquire. In 1996, Newpark purchased Mr.
Warren's interests in various injection well related assets and the royalty
agreement for the sum of $400,000 and the issuance of 108,571 shares of Newpark
Common Stock. An additional $100,000 per year will be paid to Mr. Warren
pursuant to the terms of a five-year noncompetition agreement entered into in
connection with such purchase.
Each of the transactions described above were negotiated at arms'
length, and Newpark believes that the terms of such transactions were
commercially reasonable in the circumstances.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Stockholders or
by pledgees, donees, transferees or other successors-in-interest of the Selling
Stockholder. Such sales may be made on the New York Stock Exchange or otherwise,
at prices and at terms then prevailing, at prices related to the then current
market price or in negotiated transactions. The Shares may be sold by any one or
more of the following methods: (a) ordinary brokerage transactions in which the
broker solicits purchasers; (b) purchases by a broker or dealer as principal and
resales by such broker or dealer for its account pursuant to this Prospectus;
and (c) block trades or exchange distributions in accordance with the rules of
such exchange. In effecting sales, brokers or dealers engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from the Selling Stockholders in
amounts to be negotiated prior to the sale. Such brokers or dealers and any
other participating brokers or dealers may be deemed to be "underwriters" within
the meaning of the Securities Act, and the compensation received by them may be
deemed to be underwriting commissions or discounts.
Upon the Company being notified by a Selling Stockholder that any
material arrangement has been entered into with a broker or dealer for the sale
of any Shares covered by this Prospectus, a prospectus supplement, if required,
will be distributed which will set forth the name of the participating brokers
or dealers, the number of Shares involved, the price at which such Shares were
sold and the commissions paid or discounts or concessions allowed to such
brokers or dealers. In
9
<PAGE>
certain jurisdictions, the Shares may be offered or sold in such jurisdictions
only through registered or licensed brokers or dealers.
Under the Exchange Act, any person engaged in a distribution of shares
of Common Stock offered by this Prospectus may not simultaneously engage in
market making activities with respect to the Common Stock during the applicable
"cooling off" period prior to the commencement of such distribution. In
addition, and without limiting the foregoing, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of Common Stock by
the Selling Stockholder. Newpark will inform the Selling Stockholders in writing
that they are is subject to the applicable provisions of the Exchange Act and
the rules and regulations thereunder.
10
<PAGE>
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY NEWPARK OR THE SELLING STOCKHOLDER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF NEWPARK
SINCE SUCH DATE.
----------------------------------
TABLE OF CONTENTS
PAGE
----
Available Information.................................... 2
Incorporation of Certain Documents by Reference.......... 2
The Company.............................................. 3
Risk Factors............................................. 5
Selling Stockholders..................................... 8
Plan of Distribution..................................... 9
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NEWPARK RESOURCES, INC.
100,000 SHARES
COMMON STOCK
($.01 par value)
PROSPECTUS
_________________________, 1997
- --------------------------------------------------------------------------------
<PAGE>
PART II--INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTIONS
The following table sets forth the estimated expenses payable by the
registrant in connection with the filing of this Form S-3 Registration
Statement:
Securities and Exchange Commission registration fee......... $ 1,325.76
Printing costs.............................................. 2,500.00
Legal fees.................................................. 5,000.00
Accounting fees and expenses................................ 1,000.00
Miscellaneous expenses...................................... 2,000.00
----------
Total............................................... $11,825.76
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"GCL") permits a corporation to, and the registrant's bylaws require that it,
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation), by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
As permitted under Section 145 of the GCL, the registrant's bylaws also
provide that it shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation. However, in such an action by or on behalf of a corporation, no
indemnification may be made in respect of any claim, issue or matter as to which
the person is adjudged liable for negligence or misconduct in the performance of
his duty to the corporation unless, and only to the extent that the court
determines that, despite the adjudication of liability but in view of all the
circumstances, the person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
In addition, the indemnification provided by section 145 shall not be
deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under any bylaw, agreement,vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office.
II-1
<PAGE>
The registrant's Certificate of Incorporation (the "Certificate")
provides that the registrant shall indemnify, to the fullest extent permitted by
law, each of its officers, directors, employees and agents who was or is a party
to, or is threatened to be made a party to, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the registrant. The Certificate also provides
that, to the fullest extent permitted by law, no director of the registrant
shall be liable to the registrant or its stockholders for monetary damages for
breach of his fiduciary duty as a director.
The Certificate also provides that the registrant may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the registrant, or is serving at the request of the
registrant as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against any liability incurred by such person in any such capacity, or arising
out of his status as such, regardless of whether the registrant is empowered to
indemnify such person under the provisions of law. Newpark does not currently
maintain any such insurance.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) EXHIBITS
2.1 Asset Purchase and Lease Agreement, dated June 5, 1996, among the
registrant, Campbell Wells, Ltd. and Sanifill, Inc.(1)
2.2 Merger Agreement and Plan of Reorganization, dated February 18,
1997, among the registrant, SBM Acquisition Corporation, Sampey
Bilbo Meschi Drilling Fluids Management, Inc. ("SBM"), James A.
Sampey, David A. Meschi, Steve Daniel and Jasper N. Warren.
2.3 Form of Noncompetition Agreement, dated February 28, 1997, between
the registrant and each of James A. Sampey, David A. Meschi, Steve
Daniel and Jasper N. Warren.
2.4 Registration Rights Agreement, dated February 28, 1997, between
the registrant and each of the stockholders of SBM.
4.1 Form of certificate representing shares of the registrant's Common
Stock.(2)
5.1 Opinion of Ervin, Cohen & Jessup LLP.
23.1 Consent of Deloitte & Touche LLP.
24.1 Powers of Attorney (set forth on Page II-4).
- -------------
(1) Incorporated by reference from the registrant's Registration Statement on
Form S-3 (File No. 333-05805).
(2) Incorporated by reference from the registrant's Registration Statement on
Form S-1 (File No. 33-40716).
II-2
<PAGE>
ITEM 17. UNDERTAKINGS
A. The registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more that a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (A)(l)(i) and (A)(l)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
related to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other
II-3
<PAGE>
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certified that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Metairie, State of Louisiana on April 17, 1997.
NEWPARK RESOURCES, INC.
By /s/ James D. Cole
-------------------------------------
James D. Cole, Chairman of the Board,
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints James D. Cole and Matthew W. Hardey, and
each of them, as his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for such person and in such person's
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or his or their substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ James D. Cole Chairman of the Board, April 17, 1997
- ------------------------------ President and Chief
James D. Cole Executive Officer
/s/ Matthew W. Hardey Vice President of Finance April 17, 1997
- ------------------------------ and Chief Financial Officer
Matthew W. Hardey
/s/ Wm. Thomas Ballantine Executive Vice President April 17, 1997
- ------------------------------ and Director
Wm. Thomas Ballantine
/s/ Dibo Attar Director April 17, 1997
- ------------------------------
Dibo Attar
II-5
<PAGE>
/s/ W. W. Goodson Director April 17, 1997
- ------------------------
W. W. Goodson
/s/ David P. Hunt Director April 17, 1997
- ------------------------
David P. Hunt
/s/ Dr. Alan J. Kaufman Director April 17, 1997
- ------------------------
Dr. Alan J. Kaufman
/s/ James H. Stone Director April 17, 1997
- ------------------------
James H. Stone
II-6
<PAGE>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
2.2 Asset Purchase and Lease Agreement, dated June 5,
1996, among the registrant, Campbell Wells, Ltd.
and Sanifill, Inc.(1)
2.2 Merger Agreement and Plan of Reorganization,
dated February 18, 1997, among the registrant,
SBM Acquisition Corporation, Sampey Bilbo
Meschi Drilling Fluids Management, Inc. ("SBM"),
James A. Sampey, David A. Meschi, Steve Daniel
and Jasper N. Warren.
2.3 Form of Noncompetition Agreement, dated February
28, 1997, between the registrant and each of James
A. Sampey, David A. Meschi, Steve Daniel and
Jasper N. Warren.
2.4 Registration Rights Agreement, dated February 28,
1997, between the registrant and each of the
stockholders of SBM.
4.1 Form of certificate representing shares of the
registrant's Common Stock.(2)
5.1 Opinion of Ervin, Cohen & Jessup LLP
23.1 Consent of Deloitte & Touche LLP
24.1 Powers of Attorney (set forth on Page II-4)
- ---------------
(1) Incorporated by reference from the registrant's Registration Statement on
Form S-3 (File No. 333-05805).
(2) Incorporated by reference from the registrant's Registration Statement on
Form S-1 (File No. 33-40716).
<PAGE>
EXHIBIT 2.2
MERGER AGREEMENT AND PLAN OF REORGANIZATION
THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made
and entered into on February 18, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), SBM ACQUISITION CORPORATION, a Delaware
corporation ("Newco"), which is a wholly-owned subsidiary of Newpark, SAMPEY
BILBO MESCHI DRILLING FLUIDS MANAGEMENT, INC., a Texas corporation (the
"Company"), and each of the stockholders of the Company whose signature appears
on the signature page of this Agreement (each a "Stockholder Party," and
collectively the "Stockholder Parties"), with reference to the following facts:
A. The Stockholder Parties own beneficially and of record
approximately 64.14% of the outstanding capital stock of the Company. The term
"Company Shares," as used herein, means 100% of the outstanding capital stock of
the Company.
B. The Company is a regional Gulf Coast drilling mud company
specializing in engineering, technical and drilling fluids services to the oil
industry.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Sections 368(a)(1)(A) and
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"). The
Plan comprises the merger (the "Merger") of Newco into the Company in accordance
with the applicable provisions of the Texas Business Corporation Act (the
"TBCA") and the Delaware General Corporation Law (the "DGCL"), with Newco
disappearing and the Company surviving, and the conversion of the Company Shares
into 582,000 newly issued shares of Common Stock of Newpark (the "Newpark
Shares").
D. Newpark, Newco, the Company and the Stockholder Parties believe
that it is in their best interests to adopt and consummate the Plan.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Plan of Reorganization.
1.1 Adoption of Plan. Newpark, Newco, the Company and the
Stockholder Parties hereby adopt the plan of reorganization herein set forth.
1.2 Merger of Newco into the Company. Subject to the provisions of
this Agreement, the TBCA and the DGCL, at the "Effective Time" (as defined in
Section 1.5) Newco will be merged with and into the Company, and the separate
corporate existence of Newco shall cease. The Company, which will retain its
name, will be the surviving corporation in the Merger and shall continue its
corporate existence under the laws of the State of Texas. The Merger will have
the effects set forth in Section 5.06 of the TBCA and Section 259 of the DGCL.
<PAGE>
1.3 Conversion of Shares.
1.3.1 At the Effective Time, the Company Shares will be converted
into 582,000 Newpark Shares, subject to adjustment in order to eliminate
fractional shares. Cash equal to the "Closing Value" (as defined in Section 18)
of such eliminated fractional shares will be paid in lieu thereof. Each
stockholder of the Company (each a "Stockholder" and collectively the
"Stockholders") will receive the number of Newpark Shares, subject to the
elimination of fractional shares, determined by dividing 582,000 by the total
number of Company Shares outstanding and multiplying the resulting quotient by
the number of Company Shares held by such stockholder. Certificates
representing the Newpark Shares and checks for fractional shares will be
delivered to the Stockholders upon surrender to Newpark of valid stock
certificates representing their Company Shares. Certificates representing the
Newpark Shares initially will bear the following legend: "THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER SAID ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE IN THE
OPINION OF COUNSEL FOR THE ISSUER."
1.3.2 At the Effective Time, each share of Common Stock of Newco
that is issued and outstanding will be converted into one newly issued share of
Common Stock of the Company. From and after the Effective Time, Newpark, as the
sole stockholder of the Company, shall be entitled to receive, upon surrender to
the Company of the certificate or certificates representing such shares, one or
more certificates representing the Common Stock of the Company into which such
shares have been converted.
1.4 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Effective Time,
the number of Newpark Shares to be issued at the Effective Time shall be
adjusted to such extent as may be necessary to prevent dilution or enlargement
of the rights of the Stockholders. Such adjustments shall be made by the
regular independent certified public accountants for Newpark and a written
report thereof, showing the adjustment and the underlying calculations, shall be
sent to each party hereto.
1.5 Effective Time. If all of the conditions precedent to the
parties' obligations to consummate the Merger under this Agreement are satisfied
or waived and this Agreement has not been terminated in accordance with the
provisions hereof, the parties shall cause Articles of Merger (the "Articles of
Merger") in form and substance as set forth in Exhibit 1.5 attached hereto to be
duly executed and filed with the Secretary of State of Texas on the Closing Date
and, concurrently therewith, a Certificate of Merger (the "Delaware Certificate
of Merger") in form and substance as set forth in Exhibit 1.5(a) attached hereto
to be duly executed and filed with the Secretary of State of Delaware. The
Merger shall become effective as of the time the Articles of Merger are accepted
for filing and officially filed in the State of Texas, as evidenced by a
Certificate of Merger issued by the Texas Secretary of State, and the Delaware
Certificate of Merger is accepted for filing and officially filed in the State
of Delaware. The date and time when the Merger becomes effective is referred to
herein as the "Effective Time." This Agreement, the Articles of Merger and the
Delaware Certificate of Merger are sometimes collectively referred to herein as
the "Merger Agreements."
-2-
<PAGE>
1.6 Pooling of Interests. From the date hereof through and including
the Effective Time, neither Newpark nor the Company nor any of their respective
subsidiaries or other "Affiliates" (as defined in Section 18) shall (a)
knowingly take any action, or knowingly fail to take any action, that would
jeopardize the treatment of Newpark's acquisition of the Company as a "pooling
of interests" for accounting purposes; (b) knowingly take any action, or
knowingly fail to take any action, that would jeopardize qualification of the
Merger as a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code (and any comparable provision of applicable foreign,
state or local law); or (c) enter into any contract, agreement, commitment or
arrangement with any such effect. Newpark covenants and agrees that after the
Effective Time it will use its best efforts and will cause its Affiliates
(including after the Effective Time, the Company) to use their best efforts to
cause the Merger to qualify as a "pooling of interests" for accounting purposes
and as a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code (and any comparable provision of applicable foreign,
state or local law) and to report the Merger on all regulatory filings, Tax
Returns and other relevant documents in a manner consistent with the treatment
of the Merger as a "pooling of interests" for accounting purposes and as a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Code (and any comparable provision of applicable foreign, state or local
law).
2. Ancillary Agreements.
2.1 Noncompetition Agreements. On the Closing Date, as a necessary
incident of the Merger, Newpark will execute and deliver noncompetition
agreements substantially as set forth in Exhibit 2.1(a) attached to this
Agreement with the Stockholder Parties and each other Stockholder identified on
Exhibit 2.1 attached to this Agreement, all of which together are referred to
herein as the "Noncompetition Agreements."
2.2 [Intentionally Omitted]
2.3 Registration Rights Agreement. On the Closing Date, Newpark will
execute and deliver an agreement substantially as set forth in Exhibit 2.3
attached to this Agreement (the "Registration Rights Agreement") with each of
the Stockholders.
3. Representations and Warranties of the Company and the Stockholder
Parties.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Company and the Stockholder Parties to
Newpark and Newco prior to the execution hereof, the Company and each
Stockholder Party warrant and represent the following (jointly and severally as
between the Company and each Stockholder Party and severally only as among the
Stockholder Parties), the truth and accuracy of each of which shall constitute a
condition precedent to Newpark's and Newco's obligations to consummate the
Merger and issue the Newpark Shares:
-3-
<PAGE>
3.1 Organization and Good Standing of the Company.
3.1.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the character or
location of the assets owned by the Company or the nature of the business
transacted by the Company require such qualification, except where failure to be
so qualified would not have a "Material Adverse Effect" (as defined in Section
18). The Disclosure Letter includes a list of the jurisdictions in which the
Company is qualified to do business.
3.1.2 The Company has furnished to Newpark complete and correct
copies of the Company's Articles of Incorporation and Bylaws as in effect on the
date hereof.
3.1.3 The Company has heretofore made available to Newpark for its
examination copies of the minute books, stock certificate books and corporate
seal of the Company. Said minute books are accurate in all material respects
and reflect all resolutions adopted and all material actions expressly
authorized or ratified by the stockholders and directors of the Company or any
committees thereof. The stock certificate books reflect all issuances,
transfers and cancellations of capital stock of the Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of the Company consists of
1,000,000 shares of Class A voting common stock, of which 1,000 shares (i.e.,
the Company Shares) are issued and outstanding as of the date hereof. All such
issued and outstanding shares are validly issued, fully paid and nonassessable.
The Disclosure Letter includes the names, addresses and social security numbers
of, and the number of the Company Shares owned of record and beneficially by,
each of the Stockholders.
3.2.2 The Disclosure Letter lists all options, warrants,
subscriptions or other rights outstanding for the purchase of, and all
securities convertible into, capital stock of the Company. No shares of the
Company are held as treasury stock.
3.3 Equity Interests.
The Company does not have a material equity interest in any other
"Person" (as defined in Section 18).
3.4 Authority. The execution and delivery of the Merger Agreements
by the Company and the consummation of the transactions contemplated thereby
have been duly authorized by the Board of Directors of the Company, this
Agreement has been duly executed and delivered by the Company and, when this
Agreement and the Merger have been approved by the Stockholders, no further
corporate action will be necessary on the part of the Company to make this
Agreement valid and binding upon the Company in accordance with its terms,
-4-
<PAGE>
subject to the "Bankruptcy Exception," as defined in Section 18. The Board of
Directors of the Company has authorized its management to solicit the
Stockholders to authorize and approve this Agreement and the Merger at the
earliest practicable time. The execution, delivery and performance of the
Merger Agreements by the Company and the Stockholder Parties are not contrary to
the Articles of Incorporation or Bylaws of the Company and will not result in a
violation or breach of any term or provision or constitute a default or give any
party a right to accelerate the due date of any indebtedness under any
indenture, mortgage, deed of trust or other material contract or agreement to
which the Company, the Stockholder Parties or any of them are a party or by
which any of them are bound.
3.5 Financial Statements. The audited balance sheet of the Company
as of October 31, 1994, the unaudited balance sheets of the Company as of
October 31, 1995, and October 31, 1996, and the unaudited statements of income,
stockholders' equity and cash flows for the fiscal years ended on October 31,
1994, October 31, 1995, and October 31, 1996, copies of which have heretofore
been delivered to Newpark (collectively the "Company Financial Statements"),
were prepared in accordance with the books and records of the Company and in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as set forth therein and exclusive of
footnote disclosures) and present fairly the financial position, results of
operations and cash flows of the Company as of the end of and for each of such
periods.
3.6 Properties. The Company has and on the Closing Date will have,
good title to the assets and properties shown in the Company Financial
Statements or acquired since the date of the latest balance sheet included
therein, except as since sold or otherwise disposed of in the ordinary course of
business. At the Closing, such title will be free and clear of all liens,
charges, security interests, encumbrances, leases, covenants, conditions and
restrictions other than "Permitted Liens," as defined in Section 18. The
plants, structures, leasehold improvements, machinery, equipment, furniture and
other tangible assets owned or leased by the Company are in good operating
condition and repair, subject only to ordinary wear and tear, taking into
account the respective ages of the assets involved, and constitute all the fixed
tangible assets necessary for the operation of the business of the Company in
accordance with its current methods of operation in all material respects.
3.7 Contracts.
3.7.1 The Disclosure Letter includes a listing of all oral or
written (a) contracts, commitments, sales orders or purchase orders, whether or
not entered into in the ordinary course of business, which involve future
payments, performance of services or delivery of goods and/or materials, to or
by the Company of an amount or value in excess of $250,000; (b) bonus, incentive
compensation, pension, profit sharing, stock option, group insurance, medical
reimbursement or employee welfare or benefit plans of any nature whatsoever; (c)
collective bargaining agreements or other contracts or commitments to or with
labor unions; (d) leases, con tracts or commitments affecting ownership of,
title to, use of or any material interest in real estate; (e) employment
contracts and other contracts, agreements, or commitments to or with individual
employees, consultants or agents extending for a period of more than six months
from the date hereof or providing for earlier termination only upon payment of a
penalty or the equivalent
-5-
<PAGE>
thereof; (f) equipment leases providing (in any one lease or group of related
leases) for payments in excess of $100,000 per year; (g) contracts under which
the performance of any obligation of the Company is guaranteed by a Stockholder
or other third party, including performance bonding arrangements; (h) contracts
or commitments providing for payments based in any manner upon the revenues,
purchases or profits of the Company; (i) bank credit, factoring and loan
agreements, indentures, promissory notes and other documents representing
indebtedness in excess of $100,000 for borrowed money; (j) patent licensing
agreements and all other agreements with respect to patents, patent
applications, trademarks, service marks, trade names, technical assistance,
special processes, know-how, copyright or other like items; and (k) other
contracts and agreements to which the Company is a party and which have not been
fully performed, involving consideration having a value in excess of $100,000
and a remaining period for performance in excess of nine months (all such items
being collectively referred to herein as "Material Contracts"). The Company has
furnished to Newpark true and complete copies of all such Material Contracts.
3.7.2 All Material Contracts are valid and binding obligations of
the Company and, to the best of the "knowledge of the Company" and the
Stockholder Parties, as defined in Section 18, the other parties thereto in
accordance with their respective terms, subject to the Bankruptcy Exception;
there have been no amendments to or modifications to any Material Contract
(except as set forth in the copies furnished to Newpark); no event has occurred
which is, or, following any grace period or required notice, would become a
material default by the Company under the terms of any Material Contract; except
to the extent specifically reserved against on the latest balance sheet included
in the Company Financial Statements, the Company is not a party to any Material
Contract on which it anticipates expenses materially in excess of revenues or
which is otherwise onerous or materially adverse; and the Company has not
expressly waived any material rights under any Material Contract.
3.8 Outstanding Indebtedness. The Disclosure Letter includes a true
and com plete schedule of all notes payable and other indebtedness in excess of
$250,000 for borrowed money owed by the Company, including a description of the
material terms thereof and a description of all properties or assets pledged,
mortgaged or otherwise hypothecated (voluntarily or involuntarily) as security
therefor.
3.9 Absence of Undisclosed Liabilities. Except for liabilities and
obligations reflected on the latest balance sheet included in the Company
Financial Statements or arising in the ordinary course of business since the
date of such balance sheet, none of which latter items, individually or in the
aggregate, have a Materially Adverse Effect: (a) the Company does not have, and
none of its properties are subject to, any debts, liabilities or obligations of
any nature, whether accrued, absolute, contingent or otherwise, which are of a
type which are required to be shown or reflected on financial statements
prepared in a manner consistent with generally accepted accounting principles;
and (b) to the best of the knowledge of the Company and the Stockholder Parties,
the Company does not have, and none of its properties are subject to, any
material debts, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, whether or not of a type which are required
to be shown or reflected on financial state ments prepared in a manner
consistent with generally accepted accounting principles. The Company is not in
default with respect to any material term or condition of any indebtedness.
-6-
<PAGE>
3.10 No Litigation. There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Company) pending or, to the
knowledge of the Company and the Stockholder Parties, threatened against or
affecting the Company, at law or in equity or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. To the best of the knowledge of
the Company and the Stockholder Parties, the Company is not in default with
respect to any judgment, order, writ, injunction, decree, award of any court,
arbitrator, governmental department, commission, bureau, board, agency or
instrumentality.
3.11 Environmental Matters.
3.11.1 Neither the Company nor, to the best of the knowledge
of the Company and the Stockholder Parties, any previous owner, lessee, tenant,
occupant or user of any real property owned or leased on or prior to the date
hereof by the Company (such real property and any and all buildings and other
improvements thereon being herein referred to as the "Property") used,
generated, manufactured, treated, handled, refined, processed, released,
discharged, stored or disposed of any "Hazardous Materials" (as defined in
Section 18) on, under, in or about the Property, or transported any Hazardous
Materials to or from the Property in violation of any "Hazardous Materials Laws"
(as defined in Section 18) in a manner or to an extent that resulted or is
reasonably likely to result in a Material Adverse Effect. To the best of the
knowledge of the Company and the Stockholder Parties, no underground tanks or
Hazardous Materials the existence of which would have a Material Adverse Effect
existed on, under, in or about any Property previously owned or leased by the
Company on or prior to the date that fee or leasehold title to such Property was
transferred to a third party by the Company. To the best of the knowledge of
the Company and the Stockholder Parties, no underground tanks or Hazardous
Materials the existence of which would have a Material Adverse Effect exist on,
under, in or about any Property that is currently owned or leased by the
Company.
3.11.2 While any Property was owned or leased by the Company,
it did not violate to an extent that would have a Material Adverse Effect any
applicable federal, state and local laws, ordinances or regulations, now or
previously in effect, relating to environmental conditions, industrial hygiene
or Hazardous Materials on, under, in or about such Property (including without
limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge of
the Company and the Stockholder Parties, there are no (1) enforcement, clean-up,
removal, mitigation or other governmental or regulatory actions instituted,
contemplated or threatened pursuant to any Hazardous Materials Laws against the
Company or regarding any Property presently owned or leased by the Company, (2)
claims made or threatened by any Person or governmental body relating to the
Property against the Company or any Property presently owned or leased by the
Company or relating to damage, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Materials or (3) any occurrence or
condition known to the Company on any Property that is currently owned or leased
by the Company that can reasonably be expected to subject the Company or such
Property to any material restrictions on occupancy, transferability or use of
any Property under any Hazardous Materials Laws. The Disclosure Letter includes
a list of all complaints, notices of violation and
-7-
<PAGE>
claims relating to Hazardous Materials Laws which, to the knowledge of the
Company and the Stockholder Parties, have been received by or asserted against
the Company the existence of which would have a Material Adverse Effect.
3.12 Taxes.
3.12.1 Except as set forth in the Disclosure Letter (1) The
Company has filed all income, franchise and other "Tax Returns" (as defined in
Section 18) required to be filed by it by the date hereof (taking into account
all extensions), and such Tax Returns are correct and complete in all material
respects, and (2) all "Taxes" (as defined in Section 18) imposed by the United
States, the State of Texas and by any other state, municipality, subdivision, or
other taxing authority (including but not limited to sales and use Taxes, Taxes
required to be withheld from the wages of the Company's employees and paid to
the appropriate governmental authority and contributions due from the Company
pursuant to applicable unemployment insurance or compensation laws), which are
due and payable by the Company (a) as of October 31, 1996, have been paid in
full or are adequately provided for by reserves, accruals and provisions
reflected on the latest balance sheet included in the Company Financial
Statements, and (b) as of the Effective Time will have been paid in full or
adequately provided for by such reserves, accruals and provisions, as adjusted
for operations and transactions through the Effective Time in accordance with
the past practice and custom of the Company.
3.12.2 The Company has furnished to Newpark correct and complete
copies of the federal income Tax Returns and comparable state Tax Returns of the
Company covering the last three (3) taxable years of the Company.
3.13 Permits and Licenses. The Company has all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof, and the Company is in compliance in all material respects with all
applicable federal, state and local laws, rules, regulations and orders relating
to their businesses, except where failure to have any such license, franchise,
permit or authorization or failure to comply with any such laws, rules,
regulations and orders would not have a Material Adverse Effect. The execution
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not violate any provision of or constitute a default
under any law, rule or regulation, order, writ, injunction or decree of any
court or other governmental agency or instrumentality applicable to the
Stockholder Parties or the Company, where such violation or default would have a
Material Adverse Effect.
3.14 No Labor Problems. The Company has not been charged with any
unresolved unfair labor practices. There are no material controversies pending
or, to the best knowledge of the Company and the Stockholder Parties, threatened
between the Company and any of its employees. The Company has complied in all
material respects with all laws relating to wages, hours, collective bargaining
and similar employment matters the noncompliance with which would have a
Material Adverse Effect, and the Company is not liable for any arrears or wages
or any material penalties for failure to comply with any of the foregoing.
-8-
<PAGE>
3.15 Employee Benefit Plans.
3.15.1 List of Plans. The Disclosure Letter includes a complete and
accurate list of all employee benefit plans ("Plans"), as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and benefit arrangements that are not Plans ("Benefit Arrangements"),
including, but not limited to any (1) employment or consulting agreements, (2)
incentive bonus or deferred bonus arrangements, (3) arrangements providing
termination allowance, severance or similar benefits, (4) equity compensation
plans, (5) deferred compensation plans, (6) cafeteria plans, (7) employee
assistance programs, (8) bonus programs, (9) scholarship programs, (10) vacation
policies, and (11) stock option plans that are currently in effect or were
maintained within three years of the Effective Time, or have been approved
before the Effective Time but are not yet effective, for the benefit of
directors, officers, employees or former employees (or their beneficiaries) of
the Company (Plans and Benefit Arrangements being collectively referred to as
"Designated Plans" herein).
3.15.2 No Title IV Plans or VEBAs. Neither the Company nor any Person
that was at any time during the six years before the Effective Time treated as a
single employer together with the Company under Section 414 of the Code has ever
maintained, had any obligation to contribute to or incurred any liability with
respect to a pension plan that is or was subject to the provisions of Title IV
of ERISA or Section 412 of the Code. Neither the Company nor any Person that was
at any time during the six years before the Effective Time treated as a single
employer together with the Company under Section 414 of the Code has ever
maintained, had an obligation to contribute to, or incurred any liability with
respect to a multiemployer pension plan as defined in Section 3(37) of ERISA.
During six years before the Effective Time, the Company has not maintained, had
an obligation to contribute to or incurred any liability with respect to a
voluntary employees' beneficiary association that is or was intended to satisfy
the requirements of Section 501(c)(9) of the Code.
3.15.3 Designated Plans Documents. With respect to each Designated
Plan, the Company has made available to Newpark, as applicable, true and
complete copies of (1) all written documents comprising such Plan or each
Benefit Arrangement (including amendments and individual agreements relating
thereto), or, where there are no such documents, a full description of such Plan
or Benefit Arrangement; (2) the trust, group annuity contract or other document
that provides for the funding of the Designated Plan or the payment of
Designated Plan benefits; (3) the three most recent annual Form 5500, 990 and
1041 reports (including all schedules thereto) filed with respect to the
Designated Plan; (4) the most recent actuarial report, valuation statement or
other financial statement; (5) the most recent Internal Revenue Service ("IRS")
determination letter; (6) the summary plan description currently in effect and
all material modifications thereto; and (7) all other correspondence from the
IRS or Department of Labor that relates to one or more of the Designated Plans
with respect to any matter, audit or inquiry.
3.15.4 Compliance with Law. To the knowledge of the Company and the
Stockholder Parties, each Designated Plan has been operated in a manner which is
in material compliance with its terms and with all applicable laws, including
all applicable reporting and disclosure requirements.
-9-
<PAGE>
3.15.5 Contributions. Full payment has been made of all amounts
which the Company is required, under applicable law or under any Designated Plan
or any agreement related to any Designated Plan to which the Company is a party,
to have paid as contributions thereto as of the last day of the most recent
fiscal year of each Designated Plan ended prior to the date hereof. Benefits
under all Designated Plans are as represented in the governing instruments
provided pursuant to Section 3.15.3 above, and have not been increased
subsequent to the date as of which documents have been provided. The Company
Financial Statements properly reflect all amounts required to be accrued as
liabilities under each Designated Plan.
3.15.6 Tax Qualification. Each Designated Plan that is intended to be
qualified under Sections 401(a) and 501(a) of the Code has been determined to be
so qualified by the IRS, has been submitted to the IRS for a determination with
respect to such qualified status or the remedial amendment period established
under Section 402(b) of the Code with respect to the Designated Plan will not
have expired prior to the Effective Time. To the knowledge of the Company and
the Stockholder Parties, each Designated Plan that is intended to be qualified
under Section 401(a) of the Code has been operated in compliance with Section
401(a) of the Code.
3.15.7 Claims Liability. There is no action, claim or demand
of any kind, other than routine claims for benefits, that has been brought or,
to the knowledge of the Company and the Stockholder Parties, threatened against,
or relating to, any Designated Plan, and the Company and the Stockholder Parties
have no knowledge of any pending investigation or administrative review by any
governmental entity relating to any Designated Plan.
3.15.8 Retiree Welfare Coverage. No Designated Plan provides
any health, life or other welfare coverage to employees of the Company beyond
termination of their employment with the Company by reason of retirement or
otherwise, other than such coverage as may be required under Section 4980B of
the Code or Part 6 of ERISA, or under the continuation of coverage provisions of
the laws of any state or locality.
3.15.9 No Excess Parachute Payments. No amount that could be
received (whether in cash or property or the vesting of property) as a result of
any of transactions contemplated by this Agreement by any employee, officer or
director of the Company who is a "disqualified individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or Designated
Plan currently in effect would be characterized as an "excess parachute payment"
(as such term is defined in Section 280G(b)(1) of the Code).
3.16 Insurance. The Company has furnished to Newpark a complete list
of all insurance policies that the Company maintains, indicating risks insured
against, carrier, policy number, amount of coverage, premiums and expiration
date.
3.17 Tax-Free Reorganization. To the best of the knowledge of the
Company and the Stockholder Parties, there is no plan or intention by any
Stockholder who individually owns five percent (5%) or more of the Company
Shares and, to the best of the knowledge of the
-10-
<PAGE>
Company and the Stockholder Parties, there is no plan or intention by the
remaining Stockholders to sell, exchange or otherwise dispose of a number of the
Newpark Shares received in the Merger that would reduce the Stockholders'
ownership of Newpark Shares to a number of shares having a value, as of the date
of the Merger, of less than fifty percent (50%) of the value of all of the
formerly outstanding Company Shares as of the same date.
3.18 Interest in Competitors, Suppliers, etc. Except as set forth in
the Disclosure Letter, neither the Stockholder Parties nor any officer or
director of the Company nor, to the best knowledge of the Company and the
Stockholder Parties, any Family Member of any such Person owns, directly or
indirectly, individually or collectively, any interest in any corporation,
partnership, proprietorship, firm or association which (a) is a competitor,
customer or supplier of the Company, or (b) has an existing contractual
relationship with the Company, including but not limited to lessors of real or
personal property leased to the Company and entities against whom rights or
options are exercisable by the Company.
3.19 Indebtedness with Insiders. Except as set forth in the
Disclosure Letter, and except for accrued salaries for one payroll period,
vacation pay and business expense reimbursements, the Company is not, and, on
the Closing Date, will not be, indebted to any of the Stockholders, directors or
officers of the Company or any Affiliate of any such Person. None of such
Persons is or will be on the Closing Date indebted to the Company.
3.20 Consents. Except for compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), no
authorizations, approvals or consents of any governmental department,
commission, bureau, agency or other public body or authority are required for
consummation of the transactions contemplated by this Agreement.
3.21 Patents, Trademarks and Other Intangibles. The Disclosure Letter
includes a list of all material patents, patent applications, trade names,
trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. To the best knowledge of the Company and the Stockholder
Parties, the Company owns or has the right to use all Intangible Assets now used
in the conduct of its business. The Company is not obligated to pay any royalty
or other fee to any licensor or other third party with respect to any Intangible
Assets. The Company has no knowledge of any claim received by it alleging any
conflict between any aspect of the business of the Company and any Intangible
Assets claimed to be owned by others which, if determined adversely to the
Company, would have a Material Adverse Effect. Neither the Stockholder Parties
nor any other officer or director of the Company, and no Person that is an
Affiliate of any such Person, has any interest in any Intangibles Assets which
are presently used by the Company or which infringe upon, conflict with or
relate to improvements or modifications of any Intangible Assets presently used
by the Company.
3.22 Purchases and Sales. Since October 31, 1996, the Company has not
placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and has not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from
-11-
<PAGE>
the conditions regularly and usually specified in contracts for similar
engagements from customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Company nor the
Stockholder Parties (or any Affiliate of the Stockholder Parties) has incurred
any liability to any broker, finder or agent for any brokerage fees, finder's
fees or commissions for which the Company could be liable with respect to the
transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since October 31, 1996, except for
matters of a general economic nature which do not affect the Company uniquely,
the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess of
$25,000 in a single transaction or $100,000 in the aggregate, except borrowings
under its bank lines of credit in the ordinary course of business, or incurred
or become subject to any obligation or liability (absolute or contingent) in
excess of $25,000 in a single transaction or $100,000 in the aggregate, except
obligations and liabilities incurred in the ordinary course of business;
3.24.3 mortgaged, pledged, hypothecated or otherwise encumbered
any of its properties or assets except for Permitted Liens;
3.24.4 made or agreed to make any distribution of any funds or
assets of any kind whatsoever to any past or present stockholder of the Company
or any Affiliate of any such Person, whether by way of dividend, redemption or
purchase of capital stock, or any other type of distribution on or with respect
to its capital stock, whether or not similar to the foregoing;
3.24.5 made any payment of principal or interest on any
indebtedness owed to any past or present stockholder of the Company or any
Affiliate of any such Person;
3.24.6 sold or agreed to sell any of its assets, properties or
rights having an aggregate value in excess or $100,000 or canceled or agreed to
cancel any debts or claims exceeding $100,000 in the aggregate, except for fair
value in the ordinary course of business;
3.24.7 entered or agreed to enter into any agreement or
arrangement granting any preferential right to purchase a material part of its
assets, properties or rights;
3.24.8 increased the rate of compensation of or paid or
accrued bonuses to or for any of their officers, employees, consultants or
agents, except for normal merit or cost of living increases;
-12-
<PAGE>
3.24.9 suffered any damage, destruction or loss in excess of an
aggregate of $100,000, whether or not covered by insurance, adversely affecting
any of their properties;
3.24.10 assigned or agreed to assign any of its Intangible
Assets having a value in excess of $100,000;
3.24.11 suffered any adverse amendment or termination of any
Material Contract (or any contract that would have been a Material Contract if
not amended or terminated) to which it is a party;
3.24.12 paid any commissions or similar fees to brokers or
finders for arranging the transactions contemplated by this Agreement or any
similar proposed transaction with any other party; or
3.24.13 entered into any other material transaction other than
in the ordinary course of business.
3.25 No Material Misstatements or Omissions. No representation or
warranty by the Company and the Stockholder Parties in this Agreement, and no
document, certificate, exhibit or schedule furnished or to be furnished to
Newpark pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated therein or necessary in order to make the statements or facts therein, in
the light of the circumstances under which they were made, not misleading.
3.26 Accuracy of Information for Memorandum. The information relating
to the Company furnished and to be furnished by the Company in writing for
inclusion in the "Memorandum" (as defined in Section 4.8) or in any amendment or
supplement to the Memorandum or in any application or other document ("Blue Sky
application") filed in any state or other jurisdiction in order to register or
qualify the offer and sale of Newpark Shares contemplated hereby under the
securities laws of such state or other jurisdiction shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein in the light
of the circumstances under which they were made not misleading at the time the
Memorandum is furnished to the Stockholders, at the time any such Blue Sky
application becomes effective or at the effective time of any post-effective
amendment or supplement thereto. All representations and warranties contained
in this Agreement with respect to the Company Financial Statements shall apply
to all financial statements furnished by the Company for use in the Memorandum.
B. Except as otherwise set forth in the Disclosure Letter, each
Stockholder Party represents and warrants with respect to himself, severally but
not jointly, the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's and Newco's obligations to
consummate the Merger and issue the Newpark Shares):
3.27 Enforceability. This Agreement has been duly and validly executed
by such Stockholder Party, and this Agreement constitutes a legal, valid, and
binding obligation of such
-13-
<PAGE>
Stockholder Party, enforceable against him in accordance with its terms, subject
to the Bankruptcy Exception. Such Stockholder Party has the requisite power to
enter into this Agreement and perform his obligations hereunder (including
without limitation to sell and deliver his Company Shares), and no other
Person's joinder as a party hereto is necessary therefor pursuant to any
community property laws or otherwise, and there is no restriction on the power
of the Stockholder Party to sell and deliver his Company Shares pursuant to any
trust, estate planning or other similar document or any prenuptial or post-
nuptial agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the knowledge
of such Stockholder Party, threatened in any court or arbitration forum or by or
before any governmental department, commission, bureau, agency or other public
body or authority involving such Stockholder Party relating to or affecting any
of the transactions contemplated by this Agreement.
3.29 Title to Shares. Such Stockholder Party is the holder of record
and owns beneficially that number of Company Shares set forth opposite his name
in the Disclosure Letter. At the Closing, such Stockholder Party will own the
Company Shares set forth in the Disclosure Letter free and clear of all liens,
security interests, encumbrances and restrictions, other than restrictions
contemplated by this Agreement. Except as set forth in the Disclosure Letter,
no Stockholder Party is a party to any voting trust, proxy or other agreement
with respect to the voting of any of such Company Shares.
4. Additional Obligations and Covenants of the Company and the
Stockholder Parties.
Except as otherwise provided in the Disclosure Letter, the Company
and, to the extent their actions or inactions can control or direct the Company,
the Stockholder Parties hereby jointly and severally covenant and agree with
Newpark and Newco as follows (the fulfillment of each such covenant and
agreement is a condition precedent to Newpark's and Newco's obligations to
consummate the Merger and issue the Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the Closing
Date:
4.1.1 The business of the Company shall be conducted diligently
and only in the ordinary course, and the Stockholder Parties and the Company
will use reasonable efforts to preserve the organization of the Company intact,
to keep available to the Company its present key employees and to maintain the
relationships of the Company with its suppliers, customers and others. The
Company will not, without Newpark's prior written approval, increase the rate of
compensation payable or to become payable to any of its officers, employees,
consultants or agents over the rate being paid to them at the date hereof,
except for normal merit or cost of living increases to employees other than
officers of the Company.
4.1.2 Amendment/New Plans. Without Newpark's prior written
approval, except as required by applicable law, no amendment will be made to any
Designated Plan, no commitment will be made to amend any Designated Plan and no
commitment will be made to continue any Designated Plan or to adopt any new
compensatory plan, fund or program for the benefit of any employees of the
Company.
-14-
<PAGE>
4.1.3 The Company will not, without Newpark's prior written approval,
enter into any Material Contract other than in the ordinary course of business
or enter into contracts with customers under conditions relating to price, terms
of payment, time of performance or like matters materially different from the
conditions regularly and usually specified in contracts for similar engagements
from customers similarly situated.
4.1.4 The Company will not, without Newpark's prior written
approval, sell or dispose of any of its material properties or assets except for
sales at fair value in the ordinary course of business.
4.1.5 The Company will not, without Newpark's prior written
approval, acquire or enter into any agreement to acquire, by merger,
consolidation, purchase of stock or assets or otherwise, any business or entity.
4.1.6 The Company will use reasonable diligence to maintain its
properties in their condition as of the date of this Agreement, ordinary wear
and tear excepted.
4.1.7 The Company will continue to carry its existing insurance
policies subject only to variations in amounts required by the ordinary
operations of its business. At the request of Newpark and at its sole expense,
the amount and scope of said insurance shall be increased by such amounts and
extended to provide coverage against such risks as Newpark shall specify.
4.2 Access and Information. Subject to the execution by Newpark of a
confidentiality agreement in form and substance reasonably satisfactory to the
Company, the Company and the Stockholder Parties will afford to Newpark and
Newpark's counsel, accountants and other representatives reasonable access,
throughout the period from the date hereof to the Closing Date, to all of the
Company's properties, books, contracts, commitments, and records and shall
furnish Newpark during such period with all information that Newpark reasonably
may request, including copies and/or extracts of pertinent records, documents
and contracts.
4.3 Efforts to Satisfy Conditions. The Company and the Stockholder
Parties agree to use reasonable efforts to satisfy or cause to be satisfied all
of the conditions precedent to Newpark's and Newco's obligations under this
Agreement, to the extent that their action or inaction can control or influence
the satisfaction of such conditions. Without limiting the generality of the
foregoing (a) each of the Stockholder Parties agrees to vote all of the Company
Shares beneficially owned by him or which he has the right to vote in favor of
the Merger and (b) the Stockholder Parties and the Company will refrain from all
negotiations and transactions, the consummation of which would be inconsistent
with the transactions contemplated by this Agreement, including, without
limitation, any transaction providing for the sale of any capital stock of the
Company, any merger or other business combination involving the Company, the
acquisition of a substantial equity interest in the Company by a third party or
the sale of a substantial portion of the assets of the Company.
4.4 Corporate Matters. Between the date hereof and the Closing Date,
the Company will not, without Newpark's prior written approval: (a) amend its
Articles of Incor-
-15-
<PAGE>
poration or Bylaws; (b) issue any shares of its capital stock; (c) issue or
create any warrants, obli gations, subscriptions, options, convertible
securities or other commitments under which any additional shares of its capital
stock of any class might be directly or indirectly authorized, issued or
transferred from treasury, or (d) enter into any agreement requiring it to do
any of the foregoing prohibited acts.
4.5 No Distributions to Stockholders. Between the date hereof and
the Closing Date, the Company will not, without Newpark's prior written
approval: (a) declare, set aside or pay any dividend or make any distribution
in respect of its capital stock; (b) directly or indirectly purchase, redeem or
otherwise acquire any shares of its capital stock for consideration; (c) pay or
distribute any cash or property to any Stockholder as a loan or in payment of
principal of or interest on any indebtedness to any Stockholder; or (d) enter
into any agreement requiring it to do any of the foregoing prohibited acts.
4.6 Capital Expenditures. Between the date hereof and the Closing
Date, the Company will not, without Newpark's prior written approval, make any
commitment for capital expenditures in excess of an aggregate of $100,000.
4.7 Indebtedness. Between the date hereof and the Closing Date, the
Company will not, without Newpark's prior written approval: (a) create, incur or
assume any long-term debt (including capital leases that individually involve
annual payments in excess of $100,000) or, except in the ordinary course of
business under existing lines of credit, create, incur or assume any short-term
debt for borrowed money in excess of $25,000 in a single transaction or $100,000
in the aggregate; (b) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person (except in the ordinary course of business and consistent with
past practice); (c) make any loans or advances to any Person except in the
ordinary course of business and consistent with past practice; or (d) make any
capital contributions to, or investments in, any Person except in the ordinary
course of business and consistent with past practice.
4.8 Information for Memorandum. The Company will furnish to Newpark
all information concerning the Company reasonably requested by Newpark for
inclusion in a private placement memorandum (the "Memorandum") to be furnished
to the Stockholders prior to their vote on the Merger. The Company will use
reasonable efforts to facilitate the qualification of the issuance of the
Newpark Shares in connection with the Merger under Rule 506 of the "Rules and
Regulations" (as defined in Section 18) and, if necessary, under the applicable
Blue Sky or securities laws of the various states. The Company will not solicit
approval by the Stockholders of the Merger Agreements and the Merger until
Newpark authorizes it to do so or if Newpark notifies the Company that the
Memorandum must be amended or supplemented prior to its use. The Company will
bear all fees and disbursements of counsel to the Company and the Stockholders
and the expenses of any audits of its financial statements which are incidental
to the performance of its obligations under this Section and Section 4.9.
4.9 Stockholder Approval. At the earliest practicable time,
consistent with applicable state and federal law, the Company shall solicit all
necessary approval by the Stockholders of the Merger Agreements and the Merger
and, through its Board of Directors, shall
-16-
<PAGE>
recommend such approval by the Stockholders. The Company will furnish copies of
the Memorandum to each of the Stockholders and will use diligent efforts to
assist Newpark in obtaining evidence reasonably satisfactory to Newpark (i) that
any Stockholder deemed by Newpark to be an "accredited investor" (as that term
is defined in Rule 501 of the Rules and Regulations) is such an accredited
investor, (ii) that any Stockholder who is not deemed to be such an accredited
investor, either alone or with such Stockholder's qualified "purchaser
representative" (as defined in Rule 501 of the Rules and Regulations), has such
knowledge and experience in financial and business matters that he or she is
capable of evaluating the risks and merits of an investment in Newpark Common
Stock and (iii) that each Stockholder is acquiring his or her Newpark Shares in
the Merger for investment and not with a view to the sale thereof other than in
compliance with the requirements of the "Securities Act" (as defined in Section
18) and applicable Blue Sky laws. Upon approval of the Merger by the
Stockholders, the Company shall take all other necessary corporate action
required on its part hereunder to effect the closing of this Agreement and the
consummation of the transactions contemplated hereby, subject to compliance by
Newpark of its obligations hereunder.
4.10 Affiliates. The Company and the Stockholder Parties shall
deliver to Newpark a supplemental letter identifying all Persons who, at the
time the Merger is submitted to a vote of the Stockholders, are "affiliates" of
the Company for purposes of Rule 145 under the "Securities Act" (as defined in
Section 18). The Company shall use reasonable efforts to cause each Person so
identified to deliver to Newpark at or prior to the Effective Time a written
statement, in form and substance satisfactory to Newpark, that such Person will
not offer to sell, transfer or otherwise dispose of any the Newpark Shares
issued to such Person pursuant to the Merger, except (a) in accordance with the
applicable provisions of the Securities Act and the Rules and Regulations and
(b) until such time as financial results covering at least 30 days of combined
operations of Newpark and the Company have been published within the meaning of
Section 201.01 of the Commission's Codification of Financial Reporting Policies.
4.11 Hart-Scott-Rodino Notification. The Company will promptly file a
notification form in compliance with the HSR Act, and will respond promptly to
any request for additional information that it receives. The Company will
furnish to Newpark copies of (a) the notification form before it is filed, (b)
any request for additional information that it receives promptly after receiving
it and (c) the additional information to be furnished in response to any such
request before it is filed.
4.12 Audited Financial Statements. Within four business days after
the date hereof, the Company will deliver to Newpark an audited balance sheet as
of October 31, 1996, and audited statements of income, stockholders' equity and
cash flows for the fiscal year ended on October 31, 1996. Such financial
statements shall be included in the "Financial Statements," as defined in
Section 3.5, and the representations and warranties made therein with respect to
the Financial Statements shall apply to such audited financial statements.
5. Representations and Warranties of Newpark and Newco. Newpark and
Newco hereby jointly and severally represent and warrant the following (the
truth and accuracy of each of which shall constitute a condition precedent to
the Company's and the Stockholder Parties' obligations to consummate the
Merger):
-17-
<PAGE>
5.1 Organization and Good Standing.
5.1.1 Each of Newpark and Newco is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newpark has corporate power and authority to carry on its business as presently
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it or both require qualification and failure to be so qualified
would have a Material Adverse Effect. Newco has not engaged in any business.
5.1.2 Newpark has furnished to the Company and the Stockholder
Parties complete and correct copies of Newpark's and Newco's Certificate of
Incorporation and Bylaws as in effect on the date hereof.
5.2 Capital Stock.
5.2.1 The authorized capital stock of Newpark consists of
20,000,000 shares of Common Stock, $.01 par value, of which 14,544,235 shares
were issued and outstanding on February 4, 1997, and 1,000,000 shares of
Preferred Stock, $.01 par value, of which no shares are issued and outstanding.
5.2.2 The authorized capital stock of Newco consists of 1,000
shares of Common Stock, $.01 par value, of which 1,000 shares are issued and
outstanding and held by Newpark on the date hereof.
5.3 Newpark Subsidiaries. Each subsidiary of Newpark that is a
"significant subsidiary," as defined in Rule 1-02(w) of Regulation S-X of the
Rules and Regulations (each a "Newpark Subsidiary" and collectively the "Newpark
Subsidiaries), is duly organized and in good standing under the laws of the
jurisdiction in which it was incorporated or organized, has full corporate power
and authority to carry on its business as now conducted by it and is entitled to
own or lease and operate its properties and assets now owned or leased and
operated by it. Each Newpark Subsidiary is duly qualified and in good standing
as a foreign corporation or other entity in each jurisdiction where the
character or location of the assets owned by it or the nature of the business
transacted by it require such qualification, except where failure to be so
qualified would not have a Material Adverse Effect. All shares of capital stock
of and other equity interests in the Newpark Subsidiaries owned by Newpark and
any Newpark Subsidiary are owned by Newpark or a Newpark Subsidiary free and
clear of all liens, encumbrances and adverse claims.
5.4 Authority. The execution and delivery of the Merger Agreements
by Newpark and the consummation of the transactions contemplated thereby have
been duly authorized by the Board of Directors of Newpark, and the execution and
delivery of the Merger Agreements by Newco and the consummation of the
transactions contemplated thereby have been duly authorized by the Board of
Directors of Newco and by Newpark in its stockholder capacity. This Agreement
has been duly executed and delivered to the Company and the Stockholder Parties
and no vote of the stockholders of Newpark or further corporate action is
necessary on the part of the Newpark or Newco to make this Agreement valid and
binding upon Newpark and Newco in accordance with its terms, subject to the
Bankruptcy Exception. The execution,
-18-
<PAGE>
delivery and performance of the Merger Agreements by Newpark and Newco are not
contrary to the Articles of Incorporation or Bylaws of Newpark or Newco and will
not result in a violation or breach of any term or provision or constitute a
default or give any party a right to accelerate the due date of any indebtedness
under any indenture, mortgage, deed of trust or other contract or agreement to
which Newpark or Newco are parties or by which Newpark or Newco are bound.
5.5 Newpark Reports. Newpark has delivered to the Company and the
Stockholder Parties copies of (a) Newpark's Annual Report on Form 10-K for the
years ended December 31, 1993, 1994 and 1995, (b) Newpark's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1996, June 30, 1996, and September
30, 1996, (c) Newpark's definitive Proxy Statement dated May 1, 1996, for its
Annual Meeting of Stockholder Parties held on June 12, 1996, and (d) Newpark's
final Prospectus dated August 6, 1996, with respect to a public offering of its
common stock. All of said documents and all periodic reports filed by Newpark
with the Commission after the date hereof are called the "Newpark Reports"
herein. The Newpark Reports have been or will be duly and timely filed with the
Commission and are or will be when filed in compliance with the Rules and
Regulations. As of their respective dates, none of the Newpark Reports
contained or will contain any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
5.6 Newpark Financial Statements. The financial statements
contained in the Newpark Reports (the "Newpark Financial Statements") filed on
or before the date hereof have been prepared in accordance with the books and
records of Newpark and its subsidiaries and in accordance with generally
accepted accounting principles consistently applied during the periods
indicated, all as more particularly set forth in such financial statements and
the Notes thereto. Each of the balance sheets included in the Newpark Financial
Statements presents fairly as of its date the consolidated financial condition
and assets and liabilities of Newpark and its subsidiaries. Except as and to
the extent reflected or reserved against in such balance sheets (including the
Notes thereto), Newpark (including its subsidiaries) did not have, as of the
dates of such balance sheets, any material liabilities or obligations (absolute
or contingent) of a nature customarily reflected in a balance sheet or the notes
thereto prepared in accordance with generally accepted accounting principles.
The consolidated statements of earnings and stockholders' equity and
consolidated statements of changes in financial position included in the Newpark
Financial Statements present fairly the results of operations and changes in
financial position of Newpark and its subsidiaries for the periods indicated.
5.7 No Litigation. Except as disclosed in the Newpark Reports or
omitted therefrom in accordance with the Rules and Regulations: (a) there are no
actions, suits or proceedings (whether or not purportedly on behalf of Newpark
or any Newpark Subsidiary) pending or, to the "knowledge of Newpark" (as defined
in Section 18), threatened against or affecting the Newpark or any Newpark
Subsidiary, at law or in equity or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind; and (b) to the best of the knowledge of
Newpark, neither Newpark nor any Newpark Subsidiary is in default with respect
to any judgment, order,
-19-
<PAGE>
writ, injunction, decree, award of any court, arbitrator, governmental
department, commission, bureau, board, agency or instrumentality.
5.8 Newpark Benefit Plans. Newpark has provided to the Company and
the Stockholder Parties a true and complete copy of the ERISA summary plan
description and any other summary of plan provisions provided to participants or
beneficiaries, if applicable, for each Plan or Benefit Arrangement (as defined
in Section 3.15.1, substituting "Newpark" for "the Company") maintained by
Newpark.
5.9 Environmental Matters.
5.9.1 Newpark and the Newpark Subsidiaries have complied in all
material respects with all Hazardous Materials Laws applicable to its properties
and business. Neither Newpark nor, to the best of Newpark's knowledge, any
Newpark Subsidiary has received any complaint, order or similar notice that it
is not in compliance with any Hazardous Materials Laws or that any public
authority is investigating its compliance with any Hazardous Materials Laws,
except as disclosed in the Newpark Reports or omitted therefrom in accordance
with the Rules and Regulations and except for routine inspections and
investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.9.2 Except as disclosed by Newpark in writing to Stockholder
Parties, all Hazardous Materials generated or transported by Newpark and the
Newpark Subsidiaries have been transported, stored, treated and disposed of by
carriers or treatment, storage and disposal facilities authorized or maintaining
valid permits under all applicable Environmental Laws, except as would not have
a Material Adverse Effect.
5.9.3 Except as disclosed by Newpark in writing to the Stockholder
Parties, neither Newpark nor any of the Newpark Subsidiaries have been named as
a Potentially Responsible Party in any site listed on the National Priorities
List under the Comprehensive Environmental Response, Compensation, and Liability
Act or any similar state law.
5.10 Absence of Certain Changes. Since September 30, 1996, there has
not been any material adverse change in the results of operations, financial
condition, liquidity, assets, properties or business of Newpark and its
subsidiaries, taken as a whole.
5.11 Consents. Except for compliance with the HSR Act, no
authorizations, approvals or consents of any governmental department,
commission, bureau, agency or other public body or authority are required for
consummation by Newpark and Newco of the transactions contemplated by the Merger
Agreements, except such qualifications as may be required under state securities
or Blue Sky laws relating to the Newpark Shares.
5.12 No Material Misstatements or Omissions. No representation or
warranty by Newpark and Newco in this Agreement, and no document, certificate,
exhibit or schedule furnished or to be furnished to the Company and the
Stockholder Parties and, in the case of the
-20-
<PAGE>
Memorandum, to the Stockholders, pursuant hereto contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact required to be stated therein or necessary to make the statements or facts
contained therein not misleading.
5.13 Permits and Licenses. Newpark and the Newpark Subsidiaries have
all licenses, franchises, permits and other governmental authorizations that are
legally required to enable them to conduct their business in all material
respects as described in the Newpark Reports, and Newpark and the Newpark
Subsidiaries are in compliance in all material respects with all applicable
federal, state and local laws, rules, regulations and orders relating to their
businesses, except where failure to have any such license, franchise, permit or
authorization or failure to comply with any such laws, rules, regulations and
orders would not have a Material Adverse Effect. The execution and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not violate any provision of or constitute a default under any law, rule or
regulation, order, writ, injunction or decree of any court or other governmental
agency or instrumentality applicable to Newpark or the Newpark Subsidiaries
where such violation or default would have a Material Adverse Effect.
5.14 No Labor Problems. Except as disclosed in the Newpark Reports,
neither Newpark nor any Newpark Subsidiary has been charged with any unresolved
unfair labor practices. Except as disclosed in the Newpark Reports, there are
no material controversies pending or, to the best knowledge of Newpark,
threatened between Newpark or any Newpark Subsidiary and any of its employees.
Except as disclosed in the Newpark Reports, Newpark and each Newpark Subsidiary
has complied in all material respects with all laws relating to wages, hours,
collective bargaining and similar employment matters the noncompliance with
which would have a Material Adverse Effect, and Newpark and each Newpark
Subsidiary has paid all social security and similar Taxes that are due and
payable and is not liable for any arrears or wages or any Taxes or material
penalties for failure to comply with any of the foregoing.
6. Additional Obligations and Covenants of Newpark and Newco.
Newpark and Newco, jointly and severally, hereby covenant and agree
with the Stockholder Parties and the Company as follows (the fulfillment of each
such covenant and agreement is a condition precedent to the Company's and the
Stockholder Parties's obligations to consummate the Merger):
6.1 Efforts. Newpark and Newco agree to use reasonable efforts to
satisfy or cause to be satisfied all of the conditions precedent to the
Company's and the Stockholder Parties's obligations under this Agreement, to the
extent that their action or inaction can control or influence the satisfaction
of such conditions.
6.2 Access and Information. Subject to the execution by the Company
and the Stockholder Parties of a confidentiality agreement in form and substance
reasonably satisfactory to Newpark, Newpark will afford to the Stockholder
Parties and the Company and their counsel, accountants and other representatives
reasonable access, throughout the period from the date hereof to the Closing
Date, to all of the Newpark's properties, books, contracts, commitments, and
records and shall furnish the Stockholder Parties and the Company during such
period with all
-21-
<PAGE>
information that the Stockholder Parties and the Company reasonably may request,
including copies and/or extracts of pertinent records, documents and contracts.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of the Merger Agreements,
will issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use
diligent efforts to qualify the issuance of the Newpark Shares in connection
with the Merger under Rule 506 of the Rules and Regulations and, if necessary,
to qualify the issuance thereof pursuant to all applicable state securities or
Blue Sky laws. Newpark will prepare the Memorandum in accordance with the
informational requirements of Regulation D of the Rules and Regulations.
Newpark will furnish to the Company copies of the Memorandum, which the Company
shall use in connection with the solicitation of the approval of the
Stockholders referred to in Section 4.9. In addition, Newpark will make
available to each Stockholder prior to the vote on the Merger the opportunity to
ask questions and receive answers concerning the terms and conditions of the
Merger and to obtain any additional information that Newpark is required to
furnish under Regulation D of the Rules and Regulations. Except as provided in
the last sentence of Section 4.8, all expenses incident to the preparation of
the Memorandum and the qualification or registration of the Newpark Shares under
the securities or Blue Sky laws of any state or other jurisdiction shall be
borne by Newpark.
6.5 Hart-Scott-Rodino Notification. Newpark will promptly file a
notification form in compliance with the HSR Act and will respond promptly to
any request for additional information that it receives. Newpark will furnish
to the Company copies of (a) the notification form before it is filed, (b) any
request for additional information that it receives promptly after receiving it
and (c) the additional information to be furnished in response to any such
request before it is filed.
6.6 Continuing Employees. Each employee of the Company who continues
immediately after the Effective Time as an employee of the Company, Newpark, or
any of its subsidiaries ("Continuing Employee") shall be treated under Newpark's
compensation, benefit plans and employment policies and practices on a basis
which Newpark deems no less favorable than an employee of Newpark who performs
comparable duties and responsibilities for Newpark on an equally satisfactory
basis. Each Continuing Employee shall receive service credit for all purposes
(including, but not limited to, vesting, eligibility and benefit accrual) under
Newpark's "Benefit Plans" (as defined in Section 3.15.1, substituting "Newpark"
for "the Company") and under any Benefit Plan adopted in the future for service
completed with the Company as if such service had been completed with Newpark
except that (a) no such employee shall receive such past service credit under a
future Benefit Plan except on the same basis that Newpark's employees also
receive past service credit under such plan, and (b) no such past service credit
will be provided under a plan if the Internal Revenue Service determines that
such credit would adversely affect the tax qualified status of such plan under
Section 401 of the Code.
-22-
<PAGE>
7. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the Merger
under this Agreement shall be subject to the satisfaction on or before the
Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
7.1 Securities Laws. All applicable Blue Sky and state securities
laws shall have been complied with in connection with the issuance of the
Newpark Shares, and no stop order suspending the qualification or registration
of the Newpark Shares under the Blue Sky laws of any jurisdiction shall have
been issued and no proceeding for that purpose shall have been initiated or
shall be threatened by the authorities of any such jurisdiction.
7.2 Company Stockholder Approval. The Merger and this Agreement
shall have been approved at the stockholders' meeting of the Company duly called
and held in accordance with the TBCA by the holders of a majority (or such
greater percentage as the TBCA may require) of the Company Stock outstanding and
entitled to vote thereon.
7.3 Consents. All consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement shall have been obtained or made, except for
filing of the Articles of Merger, the Delaware Certificate of Merger and any
other documents required to be filed at or after the Effective Time and except
where the failure to have obtained or made any such consent, authorization,
order, approval, filing or registration would not have a Material Adverse Effect
following the Effective Time.
7.4 HSR Act. Early termination shall have been granted or applicable
waiting periods shall have expired under the HSR Act.
7.5 Injunction. At the Effective Time there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the Merger may not be consummated as herein provided, no proceeding or
lawsuit shall have been commenced by any governmental or regulatory agency for
the purpose of obtaining any such injunction, writ or preliminary restraining
order and no written notice shall have been received from any such agency
indicating an intent to restrain, prevent, materially delay or restructure the
transactions contemplated by this Agreement.
7.6 Tax Opinion. The Stockholders, the Company and Newpark shall
each have received a written opinion of Ervin, Cohen & Jessup LLP, in form and
substance reasonably satisfactory to the Stockholder Parties, the Company and
Newpark (the "Tax Opinion"), to the effect that, for federal income tax
purposes, (a) the Merger will constitute a reorganization within the meaning of
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code, (ii) no gain or loss will be
recognized by the Stockholders upon the receipt by them of Newpark Shares
pursuant to the Merger, (c) the tax basis of Newpark Shares received pursuant to
the Merger by a Stockholder will be the same as the tax basis of the Company
Shares surrendered in exchange for such Newpark Shares, and (d) the holding
period for Newpark Shares received in the Merger by a
-23-
<PAGE>
Stockholder will include the holding period during which the Company Shares
surrendered in exchange therefor were held. In connection with such tax
opinion, Ervin, Cohen & Jessup LLP shall be entitled to rely upon
representations as to certain facts and circumstances and to make such
assumptions as are customary in similar tax opinions, and such representations
and assumptions shall be confirmed by certificates signed by responsible
officers of the Company and Newpark.
7.7 Pooling. The Company and Newpark shall have been advised in
writing, as of the Effective Time, by Deloitte & Touche LLP that, in accordance
with generally accepted accounting principles, the Merger qualifies to be
treated as a "pooling of interests" for accounting purposes.
7.8 Listing of Newpark Shares. The Newpark Shares shall have been
listed on the New York Stock Exchange, subject to official notice of issuance.
8. Conditions Precedent to Obligations of Newpark and Newco.
The obligations of Newpark and Newco to consummate the Merger and
issue the Newpark Shares are subject to the satisfaction of each of the
additional following conditions at or prior to the Closing, unless waived in
writing by Newpark:
8.1 Investigation of the Company. Newpark shall have made an
investigation of the business, properties (tangible and intangible), products,
customers, plants, contracts and financial condition of the Company and shall
have been satisfied with the results of such investigation. This condition
shall be deemed satisfied unless Newpark notifies the Company in writing within
fifteen (15) days of the date hereof that it is dissatisfied with the results of
such investigation.
8.2 Accuracy of Warranties and Representations. The
representations and warranties of the Company and the Stockholder Parties herein
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect, except as to transactions permitted herein
or to which Newpark may have consented in writing and changes occurring in the
ordinary course of business after the date of this Agreement and not materially
adversely affecting the Company, or its properties, prospects, or financial
condition, as though such representations and warranties had been made on and as
of the Closing Date, and the Company and the Stockholder Parties shall have
performed in all material respects all covenants required by this Agreement to
be performed by them at or prior to the Closing.
8.3 Authorization of Merger. All corporate action necessary by the
Company to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
8.4 No Material Adverse Change. There shall have been no changes
after the date of this Agreement in the results of operations, assets,
liabilities, financial condition or affairs of the Company which have had a
Material Adverse Effect on the Company.
-24-
<PAGE>
8.5 Officers' Certificate. The Company and the Stockholder Parties
shall have delivered to Newpark a certificate, dated the Closing Date, executed
by the President and the Chief Financial Officer of the Company and by each of
the Stockholder Parties, individually, stating that, to the best knowledge of
each, (a) all the representations and warranties of the Company and the
Stockholder Parties contained in this Agreement are true and accurate, (b) all
of the conditions precedent to the obligations of Newpark and Newco hereunder
have been fulfilled and (c) the Company and the Stockholder Parties have duly
performed all obligations and covenants to be performed by them hereunder.
8.6 Material Contracts. The Company shall have received consents to
assignment of all Material Contracts or written waivers of the provisions of any
Material Contracts requiring the consents of third parties as set forth in the
Disclosure Letter.
8.7 Dissenters. Holders of not more than 5% of the Company Shares
shall have elected to exercise appraisal rights under the TBCA and shall have
not voted in favor of the Merger.
8.8 Opinion of the Company's Counsel. Newpark and Newco shall have
received an opinion of Farnsworth & vonBerg, counsel to the Company, dated the
Closing Date, substantially in the form attached hereto as Exhibit 8.8., and an
opinion from each counsel to the Stockholder Parties, dated the Closing Date,
substantially in the form attached hereto as Exhibit 8.8(a).
8.9 Suitability of Financial Statements. Newpark shall have been
advised in writing by Deloitte & Touche LLP (a copy of which shall be sent to
the Company and the Stockholder Parties) that the Company Financial Statements
can be audited in accordance with generally accepted auditing standards without
unreasonable expense and that, when audited, they will be suitable or readily
adaptable for incorporation in registration statements and annual and other
reports to be filed by Newpark with the Commission.
8.10 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for Newpark, and there shall have been furnished to such counsel by the
Company certified copies of such corporate records of the Company (including
Board of Directors and stockholder resolutions approving the Merger Agreements)
and copies of such other documents as such counsel may reasonably have requested
for such purpose.
8.11 Amendment of Shareholder Agreement. All agreements among the
stockholder of the Company or any group thereof shall have been amended to
provide that Newpark is not bound by any agreement among the stockholder parties
thereto contained therein.
9. Conditions Precedent to Obligation of the Company and the Stockholder
Parties.
The obligations of the Company and the Stockholder Parties to
consummate the Merger are subject to the satisfaction of each of the following
additional conditions at or prior to the Closing, unless waived in writing by
the Stockholder Parties:
-25-
<PAGE>
9.1 Accuracy of Warranties and Representations. The representations
and warranties of Newpark and Newco contained in this Agreement shall be true
and correct in all material respects on and as of the Closing Date, with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date, and Newpark and Newco shall have performed
in all material respects all of the covenants required by this Agreement to be
performed by them on or before the Closing.
9.2 Authorization of Merger. All corporate action necessary by
Newpark and Newco to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby shall
have been duly and validly taken.
9.3 No Material Adverse Change. There shall have been no changes
after the date of this Agreement in the results of operations, assets,
liabilities, financial condition or affairs of Newpark and the Newpark
Subsidiaries which have had a Material Adverse Effect on Newpark.
9.4 Officers' Certificate of Newpark. Newpark shall have delivered
to the Company and the Stockholder Parties a certificate dated the Closing Date,
executed by the President and Chief Financial Officer of Newpark and stating
that, to the best knowledge of each, (a) all the representations and warranties
of the Newpark and Newco contained in this Agreement are true and accurate, (b)
all of the conditions precedent to the obligations of the Company and the
Stockholder Parties hereunder have been fulfilled and (c) Newpark and Newco have
duly per formed all obligations and covenants to be performed by them hereunder.
9.5 Opinion of the Newpark's Counsel. The Company and the
Stockholder Parties shall have received an opinion of Ervin, Cohen & Jessup LLP,
dated the Closing Date, substantially in the form attached hereto as Exhibit
9.5.
9.6 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for the Company and the Stockholder Parties, and there shall have been
furnished to such counsel by Newpark certified copies of such corporate records
of Newpark (including Board of Directors resolutions approving the Merger
Agreements) and copies of such other documents as such counsel may reasonably
have requested for such purpose.
10. Closing.
The closing ("Closing") of the transactions covered by this Agreement
shall take place at 10:00 a.m., on February 28, 1997, at the offices of Newpark,
3850 North Causeway, Suite 1770, Metairie, LA 70002. Regardless of the actual
time of the Closing, the Closing shall be deemed to have occurred effective at
the opening of business on the day the Closing occurs. In the event that the
conditions specified in this Agreement have not been fulfilled by that date, any
party may postpone the Closing for the minimum reasonably necessary period or
periods, in any event not exceeding an aggregate of 45 days, by written notice
to the other parties. Any party exercising such right shall deliver written
notice to the other parties specifying in reasonable detail the condition which
has not been fulfilled, and the other parties will have the right to cure
-26-
<PAGE>
or correct the matter within the 45-day period. The term "Closing Date" herein
shall mean the last date fixed by mutual agreement or otherwise under this
Section.
11. Survival of Representations.
All representations and warranties made by the Company or Newco under
or in connection with this Agreement shall terminate at the Effective Time and
shall be of no further force or effect thereafter. All representations,
warranties and indemnifications made by Stockholder Parties or Newpark under or
in connection with this Agreement (including any representations and warranties
set forth in the certificates delivered pursuant to Sections 8.5 and 9.4) shall
survive the Closing until the earlier to occur of (a) one year after the
Effective Time and (b) the date when Newpark's independent accountants issue an
audit report on their audit of the financial statements containing combined
operations of Newpark and the Company for the period ending December 31, 1997.
A party hereto shall have no liability or obligation for any misrepresentation
by it or breach of its warranties unless written notice thereof is given to such
party within the applicable survival period for such representation or warranty
setting forth in reasonable detail and specifying the nature of the claim being
asserted. The provisions of this Section and Section 13.3.3 apply only to
claims arising under this Agreement and do not affect any other claims that any
party may have at any time against any other party.
12. Post-Closing Covenants.
12.1 Cooperation and Assistance. Upon request, each of the parties
hereto shall cooperate with the other to the extent reasonably requested, at the
requesting party's expense, in furnishing information, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
involving the Stockholder Parties, the Company, Newpark or Newco which are based
upon contracts, arrangements or acts of the Stockholder Parties or the Company
or both which were in effect or occurred on or prior to the Closing.
12.2 Access to Records. The Stockholder Parties shall be entitled,
after the Closing, upon reasonable notice and during the regular business hours
of Newpark, to have access to and to make copies of the business records of the
Company which relate to periods prior to the Closing. Newpark shall retain such
business records for a period of five (5) years following the Closing Date (or
longer if required by Section 12.3.5 or by any applicable statute of
limitations), after which time Newpark may destroy or otherwise dispose of such
business records without the Stockholder Parties' consent.
12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing
authority proposes any adjustment, questions the treatment of any item, asserts
a claim, makes an assessment, or otherwise disputes the amount of any Taxes for
any period or portion thereof ending on or before the Closing Date, which
adjustment, question, claim, assessment or dispute could, if pursued
successfully, result in or give rise to a claim against any Stockholder Party
under this Agreement (a "Tax Claim"), Newpark shall promptly inform the
Stockholder Parties in
-27-
<PAGE>
writing of such Tax Claim. The provisions of Section 13 shall apply to the
handling of any Tax Claim.
12.3.2 Current Tax Returns. The Stockholder Parties shall be
responsible for the preparation of all Tax Returns of the Company for all
taxable periods that end or ended on or before the Closing Date and are not
required to be filed (taking into account all extensions) on or before the
Closing Date. Newpark will make available to the Stockholder Parties, without
charge, the services of its personnel and the personnel of the Company to assist
the Stockholder Parties in the preparation of such Tax Returns. Such Tax
Returns shall be reasonably satisfactory to Newpark in form and substance.
Provided such Tax Returns are delivered to Newpark, in form and substance
reasonably satisfactory to Newpark, at least five business days before the due
dates thereof (taking into account any and all extensions), Newpark will timely
file such Tax Returns or cause the Company to timely file such Tax Returns and
shall timely pay or cause the Company to pay the amounts of any Taxes shown as
due thereon.
12.3.3 Refunds and Credits. Any refunds of Taxes and credits
against Taxes (together in each case with any interest received or credited on
or with respect to such refund or credit) attributable to any taxable period or
portion thereof ending on or before the Closing Date shall be for the account of
the Company; provided, however, that, to the extent that any such refund, credit
or interest thereon exceeds the amount of such refund, credit or interest, if
any, accrued on the books of the Company as of the Effective Time, the
Stockholder Parties shall receive credit in an amount equal to the amount of
such excess against any liability they may have under Section 13.
12.3.4 Cooperation. Newpark and the Stockholder Parties shall
cooperate in good faith with each other in a timely manner in the preparation
and filing of any Tax Returns of the Company and the handling of any Tax Claims
and other Tax matters to which this Agreement relates, other than Tax Claims and
Tax matters solely involving Newpark and its Subsidiaries other than the
Company. Each party shall execute and deliver such powers of attorney and make
available such other documents and such personnel as are necessary to carry out
the intent of this Section 12.3.4. Each party agrees to promptly notify the
other parties of any such Tax Claim that does not result in Tax liability but
can be reasonably expected to affect any Tax Returns of any of the other
parties.
12.3.5 Retention of Records. Newpark shall (i) retain
records, documents, accounting data and other information (including computer
data) necessary for the preparation and filing of all Tax Returns of the Company
and the handling of any Tax Claims and other Tax matters to which this Agreement
relates, and (ii) give to the Stockholder Parties reasonable access to such
records, documents, accounting data and other information (including computer
data) and to its personnel (insuring their cooperation) and premises, for the
purpose of the preparation and review of such Tax Returns and the handling of
any Tax Claims and other Tax matters to which this Agreement relates, to the
extent necessary in connection with any Taxes to which this Agreement relates or
any obligation or liability of a party under this Agreement.
-28-
<PAGE>
12.4 Transfer of Shares. Subject to compliance with Section 4.10 and
with applicable securities laws, if any stockholder of SBM which is a
partnership or a limited liability company distributes to its partners or
members the Newpark Shares received by such entity pursuant to this Agreement,
Newpark will issue new certificates to such partners and members reflecting such
distribution, which certificates shall be legended pursuant to Section 1.3
hereof, and such shares shall be otherwise subject to the terms and provisions
of this Agreement.
13. Indemnifications.
13.1 Indemnification by the Stockholder Parties. Subject to the
provisions of Sections 11 and 13.3, each Stockholder Party, severally, hereby
agree to indemnify, defend, protect and hold harmless Newpark against all
damages, losses, liabilities, costs and expenses (including reasonable
attorneys' fees) resulting from any breach of any warranty or representation
made by him or it or by him or it and the Company in this Agreement. Such
indemnification shall be solely the responsibility of the Stockholder Parties,
and they shall not have any right to recover any portion of their liability from
the Company, whether by right of indemnification, contribution or otherwise.
13.2 Indemnification by Newpark. Subject to the provisions of
Sections 11 and 13.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless the Stockholders against all damages, losses, liabilities, costs
and expenses (including reasonable attorneys' fees) resulting from any breach of
any warranty or representation made by Newpark and Newco in this Agreement. The
rights to such indemnification shall accrue solely to the Stockholders, and the
Company shall have no interest therein.
13.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
13.3.1 No party shall be required to indemnify another
pursuant hereto unless the party seeking indemnification (the "Indemnitee")
shall, with reasonable promptness, provide the other party (the "Indemnitor")
with copies of any claims or other documents received and shall otherwise make
available to the Indemnitor all material relevant information. The Indemnitor
shall have the right to defend any such claim at its expense, with counsel of
its choosing, and the Indemnitee shall have the right, at its expense, using
counsel of its choosing, to join in the defense of any such claim. The
Indemnitee's failure to give prompt notice or to provide copies of documents or
to furnish relevant data shall not constitute a defense in whole or in part to
any claim by the Indemnitee against the Indemnitor except to the extent that
such failure by the Indemnitee shall result in a material prejudice to the
Indemnitor.
13.3.2 Except as hereinafter provided, neither party shall
settle or compromise any such claim unless it shall first obtain the written
consent of the other, which shall not be unreasonably withheld or delayed. The
foregoing notwithstanding, if suit shall have been instituted against the
Indemnitee and the Indemnitor shall have failed, after the lapse of a reasonable
time after written notice to it of such suit, to take action to defend the same,
the Indemnitee shall have the right to defend the claim (without limiting the
right of the Indemnitor to participate in the defense) and to charge the
Indemnitor with the reasonable cost of any such
-29-
<PAGE>
defense, including reasonable attorneys' fees, and the Indemnitee shall have the
right, after notifying but without consulting the Indemnitor, to settle or
compromise such claim on any terms reasonably approved by the Indemnitee.
13.3.3 Neither Newpark nor the Stockholder Parties shall have
any liability for breach or warranty or representation hereunder except to the
extent that the amount of all valid claims for breach of warranty or
representation against it or him hereunder exceeds an aggregate of $200,000. In
no event shall the liability of any of the Stockholder Parties for any breach of
warranty or representation hereunder exceed $1,000,000. To the fullest extent
permitted by law, and to the extent the Stockholder Party continues to own
shares of Newpark Common Stock, each Stockholder Party shall satisfy his
liability hereunder by delivering to Newpark some or all of such Newpark Shares,
valued at their Market Value as of the date of delivery, and Newpark shall
satisfy its liability by issuing additional Newpark Shares valued at their
Market Value as of the date of issuance. Nothing contained herein shall relieve
any of the Stockholder Parties or Newpark of any liability he or it may have for
any intentional breach of representation or warranty.
13.3.4 The amount of any damage, loss, liability, cost or
expense claimed by Newpark against any Stockholder Party hereunder shall be
reduced by any net Tax benefit or other benefit actually realized or received by
Newpark and its subsidiaries attributable to such damage, loss, liability, cost
or expense or derived therefrom in the same or any past or subsequent taxable
period, and increased to the extent necessary to take into account any Tax
actually incurred by Newpark as a result of the realization or receipt of any
payment from such Stockholder Party and any such other benefit.
13.3.5 The rights and obligations of the parties under this
Article 13 shall be the exclusive rights and obligations of the parties with
respect to any breach of any representation, warranty or covenant in this
Agreement and shall be in lieu of any other rights or remedies to which the
party entitled to indemnification hereunder would otherwise be entitled as a
result of such breach under this Agreement.
13.4 Dispute Resolution; Arbitration.
13.4.1 The parties desire to finally resolve any and all
issues and disputes arising out of or related to this Agreement or its alleged
breach as promptly as practicable and, in any event, before Newpark's
independent accountants issue an audit report on their audit of the financial
statements containing combined operations of Newpark and the Company for the
period ending December 31, 1997. Newpark and the Stockholder Parties shall
first attempt diligently to resolve any such issue or dispute. They may, if
they desire, attempt to mediate the dispute and shall, if they choose, do so in
accordance with the Commercial Mediation Rules of the American Arbitration
Association ("AAA"), either as written or as modified by mutual agreement. A
written agreement to undertake mediation may be made at any time. If
arbitration proceedings have been instituted, they shall be stayed until the
mediation process is terminated. Any dispute arising out of or related to this
Agreement or its alleged breach that cannot be resolved by mutual agreement
(including mutually agreed mediation) shall be resolved exclusively by final and
binding arbitration, conducted as expeditiously as possible in
-30-
<PAGE>
the City of Houston, Texas, in accordance with the provisions of this Agreement
and, to the extent not inconsistent with such provisions, the Commercial
Arbitration Rules of the American Arbitration Association. To the extent
lawful, the arbitrators, in their discretion, may shorten any time periods or
notice periods specified by law, in the interest of timely completing
arbitration and issuing their award.
13.4.2 The Stockholder Parties, as one party, or Newpark may
initiate arbitration of a dispute by giving the other party written notice of
arbitration, which shall specify with reasonable detail (a) the issue in
dispute, (b) the claims asserted and (c) the remedy sought by the party invoking
arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the arbitrators shall be
affiliated in any way with either of the parties or have any direct or indirect
financial interest in the outcome of the arbitration. If the parties fail to
reach agreement upon a single arbitrator within 10 business days following
receipt by one party of the other party's notice of arbitration, the initiating
party shall submit in writing to the other party the name of a neutral
arbitrator selected by the initiating party. Within 10 business days after such
name is submitted, the other party shall submit to the initiating party in
writing the name of a neutral arbitrator selected by such other party and may
submit an answering statement. Within 20 days after appointment of the second
arbitrator, the two arbitrators appointed by the parties shall select a third
neutral arbitrator; the three arbitrators so selected shall finally resolve the
dispute. If the two arbitrators appointed by the parties fail before the end of
said 20 day period to agree on a third arbitrator, the Judicial District Court
of Harris County, Houston Division shall, upon the filing of a petition by any
of the parties hereto select the third arbitrator from a list of five
individuals obtained by the Court from the Houston Office of the American
Arbitration Association. If the non-initiating party shall fail to appoint an
arbitrator within 20 days after the name of the arbitrator selected by the
initiating party is submitted, the arbitrator appointed by the initiating party
shall be empowered to proceed to arbitrate and determine the matter in
controversy as the sole arbitrator. All references to "the arbitrators" in the
following Sections shall be deemed to refer to the sole arbitrator, if there is
only one arbitrator. The arbitrators shall, at the earliest possible date, set
dates for a hearing and establish any pre-hearing conferences or procedural
schedules that the arbitrators deem appropriate. The arbitrators may authorize
depositions and issue subpoenas and make other decisions provided for in Section
13.4.3 below. All decisions of the arbitrators shall be by a majority of the
arbitrators, unless the parties agree otherwise.
13.4.3 It is the mutual intention of the parties that
discovery, if any, shall be limited in nature and scope and, to the extent
possible, shall be handled informally and by agreement. Any dispute regarding
discovery shall be submitted promptly to the arbitrators and shall be resolved
by them. If necessary, any decision of the arbitrators respecting discovery may
be enforced by any court of competent jurisdiction in the same manner as a final
award under this Section, including an order for specific performance.
-31-
<PAGE>
13.4.4 The arbitrators shall diligently, expeditiously and in good
faith decide the matter under consideration in accordance with the laws of the
State of Texas, excluding its choice of law rules. The arbitrators shall use
their best efforts to make their award before the expiration of the period
specified in the introduction to Section 13.4.1. If there is only one
arbitrator, his decision shall be final, conclusive and binding on all parties;
if there are three arbitrators, the agreed decision of any two of them shall be
final, conclusive and binding on all parties. The arbitrators shall prepare an
award in writing which reflects the final decision of the arbitrators and a copy
of such award shall be delivered to each party to the arbitration. Judicial
confirmation of the decision of the arbitrators shall be sought only in the
Judicial District Court of Harris County, Houston Division.
13.4.5 The arbitrators' compensation shall be agreed upon by
the parties and the arbitrators. The terms of compensation for each of the
arbitrators shall be identical. Newpark, on the one hand, and the Stockholder
Parties (in proportion to their interest), on the other hand, shall share
equally the cost of the arbitration proceedings, including the fees and expenses
of the arbitrators and the cost of the stenographic record, provided that the
arbitrators shall have discretion to charge such costs to the parties in such
different proportions as they determine to be appropriate.
13.4.6 If any other provision of this Agreement should be or
become invalid or unenforceable by force of law, the provisions of this Section
13.4 shall not be affected but shall remain in full force and effect. Any
obligation to arbitrate which is established by this Section shall remain in
full force and effect. Any obligation to arbitrate which is established by this
Section shall not be extinguished upon the termination or expiration of this
Agreement but shall survive that event.
14. Destruction of Assets.
All risk of loss with respect to the assets and business of the
Company shall be borne by the Company until the Closing to the extent set forth
in this Section 14. If on the Closing Date any assets of the Company shall have
suffered loss or damage on account of fire, flood, accident, act of war, civil
commotion, or any other cause or event beyond the reasonable power and control
of the Company (whether or not similar to the foregoing) to an extent which
materially affects the value to Newpark of the Company Shares, Newpark shall
have the right at its election to complete the acquisition (in which event, as
Newpark's sole and exclusive remedy with respect to the consequences of such
loss or damage, all claims of the Company with respect to such loss or damage
and all insurance proceeds arising therefrom shall be for the account of
Newpark), or, if it does not so elect, it shall have the right, which shall be
in lieu of any other right or remedy whatsoever, to terminate this Agreement.
In the latter event, all parties shall be released from liability hereunder.
15. Termination.
In addition to any party's right to terminate this Agreement if any
condition precedent to its obligations is not satisfied on the Closing Date,
subject to the provisions of this Agreement relating to the postponement of the
Closing Date, either Newpark or the Company
-32-
<PAGE>
and the Stockholder Parties may forthwith terminate this Agreement: (a) subject
to clause (b) below, without liability to the other of them if a bona fide
action or proceeding (by and at the sole instance of a party or parties not an
Affiliate or Affiliates of Newpark or the Company) shall be pending against
either party on the Closing Date wherein an unfavorable judgment, decree or
order would prevent or make unlawful the carrying out of the transactions
contemplated by this Agreement; or (b) without prejudice to other rights and
remedies which either party may have, if a material default shall be made by the
other of them in the observance or in the due and timely performance of its
covenants and agreements herein contained, or if there shall have been a
material breach of the warranties and representations herein contained.
16. Notices.
Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, 48
hours after deposit in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address provided below. The parties may change their
respective addresses for the purpose of this Section 16 by giving notice of such
change to the other party in the manner which is provided in this Section 16.
Stockholder Parties Sampey Bilbo Meschi Drilling Fluids
or the Company: Management, Inc.
15810 Park Ten Place, Suite 300
Houston, Texas 77084
Facsimile No.: (281) 578-1852
With a copy to:
Fran vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway
Suite 300
Houston, Texas 77060
Facsimile No.: (281) 931-6032
Newpark or Newco: c/o Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Facsimile No.: (504) 833-9506
-33-
<PAGE>
With a copy to:
Bertram K. Massing, Esq.
Ervin, Cohen & Jessup LLP
9401 Wilshire Boulevard, 9th Floor
Beverly Hills, CA 90212
Facsimile No.: (310) 859-2325
17. Assignment.
Rights hereunder shall not be assignable and duties hereunder shall
not be delegable by the Company, the Stockholder Parties, Newpark or Newco
without the prior written consent of the other; consent may be withheld for any
reason or without reason. Nothing contained in or implied from this Agreement
is intended to confer any rights or remedies upon any Person other than the
parties hereto and their successors in interest and permitted assignees, unless
expressly stated herein to the contrary.
18. Certain Definitions.
As used herein, the following terms (whether used in the singular or
the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 50% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the ten trading days immediately preceding the third trading day
prior to the Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
-34-
<PAGE>
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the Effective Time that relate to or impose
liability or standards of conduct concerning the environment, as now or
hereafter in effect and as have been or hereafter may be amended or
reauthorized, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. (S) 9601, et seq.), the
Hazardous Materials Transportation Act (42 U.S.C. (S) 1802, et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901, et seq.), the
Federal Water Pollution Control Act (33 U.S.C. (S) 1251, et seq.), the Toxic
Substances Control Act (14 U.S.C. (S) 2601, et seq.), the Clean Air Act (42
U.S.C., (S) 7901 et seq.), the National Environmental Policy Act (42 U.S.C. (S)
4231, et seq.), the Refuse Act (33 U.S.C. (S) 407, et seq.), the Safe Drinking
Water Act (42 U.S.C. (S) 300(f), et seq.), and all rules, regulations, codes,
ordinances and guidance documents promulgated or published thereunder, and the
provisions of any licenses, permits, orders and decrees issued pursuant to any
of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
"Knowledge of the Company" (and similar terms such as "to the best of
the knowledge of the Company") means the actual knowledge of the Stockholder
Parties or any other executive officer of the Company obtained without
investigation other than through the exercise of such person's normal duties.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark obtained without investigation other than through the exercise of such
person's normal duties.
"Market Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the ten trading days immediately preceding the third trading day
prior to the date of determination.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not
-35-
<PAGE>
materially impair the existing use or materially detract from the value of the
assets or property subject thereto, and (d) liens for current Taxes and
assessments not yet delinquent and Taxes and assessments the validity of which
are being contested in good faith by appropriate proceedings, for which adequate
reserves or other appropriate provisions required by generally accepted
accounting principles have been made in the Company Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the term "Taxes") means any
income, gross receipts, ad valorem, premium, excise, value-added, sales, use,
transfer, franchise, license, severance, stamp, occupation, service, lease,
withholding, employment, payroll, premium, property or windfall profits tax,
alternative or add-on-minimum tax, or other tax or assessment, together with any
interest and any penalty, addition to tax or additional amount imposed by any
governmental authority responsible for the imposition of any such tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
19. Applicable Law; Jurisdiction.
The provisions of this Agreement and all rights and obligations
hereunder and under all documents, instruments and agreements executed under or
in connection with this Agreement shall be governed and construed in accordance
with the internal laws of the State of Texas applicable to contracts made and to
be wholly performed within said State.
20. Remedies Not Exclusive.
Except as provided in Section 13.3.5 and Section 14, (a) no remedy
conferred by any of the specific provisions of this Agreement is intended to be
exclusive of any other remedy, (b) each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law, in equity, or otherwise and (c) the election of any one or more
remedies by either party hereto shall not constitute a waiver of the right to
pursue other available remedies.
-36-
<PAGE>
21. Attorneys' Fees.
In any litigation relating to this Agreement, including litigation
with respect to any instrument, document or agreement made under or in
connection with this Agreement, the prevailing party shall be entitled to
recover its costs and reasonable attorneys' fees.
22. Payment of Expenses. Whether or not the Merger is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark and Newco in connection with this Agreement and the transactions
contemplated hereby, and the Company will pay and be responsible for all costs
and expenses incurred by the Company and the Stockholders in connection with
this Agreement and the transactions contemplated hereby, except for personal
counsel retained by individual Stockholders which shall be at their expense.
23. Successors and Assigns.
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
24. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
25. Headings; Severability.
Captions and section headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. The
provisions of this Agreement are severable, and, if any one or more provisions
may be determined to be judicially unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provisions, to the extent
enforceable, shall nevertheless be binding and enforceable upon the parties
hereto.
26. Amendments.
No provision or term of this Agreement or any agreement contemplated
herein between the parties hereto may be supplemented, amended, modified, waived
or terminated except in a writing duly executed by the party to be charged.
This Agreement may be amended by the corporate parties hereto by or pursuant to
action taken by their respective Boards of Directors at any time before or after
the approval of the Merger by their stockholders, but after such approval, no
amendment or modification shall be made that reduces the amount or changes the
form of the consideration to be paid to Stockholders or that in any way
materially adversely affects the rights of the Stockholders or Newpark without
the further approval of the adversely affected Stockholders.
-37-
<PAGE>
27. Waivers.
At any time prior to the Effective Time, the parties hereto, may, to
the extent legally permitted: (i) extend the time for the performance of any of
the obligations or other acts or any other party; (ii) waive any inaccuracies in
the representations or warranties of any other party contained in this Agreement
or in any document or certificate delivered pursuant hereto; (iii) waive
compliance or performance by any other party with any of the covenants,
agreements or obligations of such party contained herein; and (iv) waive the
satisfaction of any condition that is precedent to the performance by the party
so waiving of any of its obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. A waiver by one party
of the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A
waiver by any party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed
at a later time.
28. Entire Agreement.
The Disclosure Letter and all schedules, exhibits and financial
statements provided for herein are a part of this Agreement. This Agreement and
the other agreements and documents provided for in this Agreement comprise the
entire agreement of the parties and supersede all earlier understandings of the
parties with respect to the subject matter hereof, except that the
Confidentiality Agreement shall continue in effect in accordance with its terms.
Each of the parties hereto acknowledges that in making the decision to enter
into this Agreement and to consummate the transactions contemplated hereby, such
party has relied solely on its own independent investigation and on the express
written representations, warranties, and covenants in this Agreement. Without
diminishing the scope of the express written representations, warranties and
covenants contained in this Agreement and without affecting or impairing a
party's right to rely thereon, each of the parties hereto acknowledges that the
other parties have not made, AND SUCH OTHER PARTIES HEREBY EXPRESSLY DISCLAIM
AND NEGATE, ANY OTHER REPRESENTATIONS OR WARRANTIES EXPRESSED OR IMPLIED,
RELATING TO THE ASSETS AND OPERATIONS OF THE COMPANY OR NEWPARK (INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED OR EXPRESSED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY OR CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS).
-38-
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
THE COMPANY: NEWPARK:
SAMPEY BILBO MESCHI DRILLING NEWPARK RESOURCES, INC.
FLUIDS MANAGEMENT, INC.
By:/s/ James A. Sampey By: /s/ James D. Cole
------------------------------ ----------------------------
Name: James A. Sampey Name: James D. Cole
Title: CEO Title: President
NEWCO: STOCKHOLDER PARTIES:
SBM ACQUISITION CORPORATION /s/ James A. Sampey
-------------------------------
JAMES A. SAMPEY
By: /s/ James D. Cole /s/ David A. Meschi
------------------------------- -------------------------------
James D. Cole, President DAVID A. MESCHI
/s/ Steve Daniel
-------------------------------
STEVE DANIEL
/s/ Jasper N. Warren
-------------------------------
JASPER N. WARREN
-39-
<PAGE>
Exhibit 2.3
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered into
this 28th day of February, 1997, by and between ____________________________
("Covenantor") and NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"),
ancillary to and as required by Merger Agreement and Plan of Reorganization
("the Merger Agreement") dated February 18, 1997, by and among Newpark, SBM
ACQUISITION CORPORATION ("Newco"), a Delaware corporation which is a wholly-
owned subsidiary of Newpark, SAMPEY BILBO MESCHI DRILLING FLUIDS MANAGEMENT,
INC., a Texas corporation (the "Company"), and the "Stockholder Parties" so
identified in the Merger Agreement (including Covenantor), pursuant to which
Newco is merging into the Company, and the Company is surviving as a wholly-
owned subsidiary of Newpark. Unless otherwise provided herein all terms used in
this Agreement that are defined in the Merger Agreement shall have the same
meanings herein as in the Merger Agreement.
In consideration of the foregoing, and in order to satisfy a condition
precedent to the obligations of Newpark and Newco under the Merger Agreement,
Covenantor and Newpark hereby agree and covenant as follows:
1. Certain Definitions. The following terms used herein shall have the
following meanings:
Affiliate or affiliate - a Person that directly or indirectly through one
or more intermediaries, controls, is controlled by or is under common control
with the Person specified. For purposes of this definition, "control"
(including the terms "controlling," "controlled by" and "under common control
with") of a Person means the possession, directly or indirectly, of the power to
(a) vote 50% or more of the voting interests in such Person or (b) direct or
cause the direction of the management and policies of such Person, whether by
contract or otherwise.
Business - Any one or more of the following activities: selling, providing,
installing, recycling, renting, marketing, or dealing in or with or otherwise
soliciting orders for any of the Products and Services or any products,
services, materials, supplies or support activities that compete with or may be
used to replace any Products and Services.
Competitor - Any Person that, directly or indirectly, engages in any aspect
of the Business within any portion of the Territory.
Person or person - Any individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.
Products and Services - All products, services, materials, supplies and
support activities which, as of the date hereof or within twelve months prior to
the date hereof, are or have been provided, sold, installed, recycled, rented,
marketed or dealt in or with by the Company, and all competitive products,
services, materials, supplies and support activities.
<PAGE>
The Territory - All or any part of the following: the States of Louisiana,
Texas, Mississippi and Alabama and the Gulf of Mexico.
2. Noncompetition. Covenantor hereby agrees that he will not, during the
term of this Agreement, directly or indirectly, or through one or more
Affiliates, do any one or more of the following: (a) engage in any aspect of the
Business, whether as an employee, agent, independent contractor or otherwise ;
(b) own any interest in any Competitor; (c) operate, join, control or otherwise
participate in any Competitor; (d) lend credit or money for the purpose of
assisting another to establish or operate any Competitor; (e) request or advise
any present or future customer or supplier of the Company to withdraw, curtail
or cancel its business with any of them; or (f) induce or influence (or attempt
to induce or influence) any person who is engaged (as an employee, agent,
independent contractor or otherwise) by the Company or any subsidiary to
terminate his or her employment or engagement or to perform any services for a
Competitor; provided, that nothing herein shall prohibit Covenantor from holding
an equity interest of less than 2% of the outstanding capital stock of any
Competitor whose equity securities are traded on a national stock exchange or
are quoted on Nasdaq.
3. Confidentiality. Covenantor shall keep secret and retain in
confidence, and shall not use for the benefit of Covenantor or others, any
confidential information concerning the business of the Company or its
affiliates ("Confidential Information") including, without limitation, "know-
how," trade secrets, customer lists, details of client or consultant contracts,
pricing policies, operational methods, marketing plans or strategies, business
acquisition plans, technical processes and designs and design projects of the
Company and its affiliates relating to the business of the Company learned by
Covenantor as a result of prior and current business relationships with the
Company or its predecessors. Confidential Information shall not include
information which (a) is or becomes generally available to the public other than
as a result of a disclosure by Covenantor, (b) was available to Covenantor on a
non-confidential basis prior to its disclosure to the Covenantor by the Company
or (c) becomes available to Covenantor on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a
confidentiality agreement with the Company known to Covenantor.
4. Term. The term of this Agreement commences on the date hereof and
shall continue for sixty months thereafter. Covenantor hereby acknowledges the
receipt and sufficiency of full consideration for this Agreement.
5. Injunctive Relief. Covenantor hereby stipulates and agrees that any
breach by him of this Agreement cannot be reasonably or adequately compensated
by damages in an action at law and that, in the event of such breach, Newpark
shall be entitled to injunctive relief, which may include but shall not be
limited to restraining Covenantor from engaging in any activity that would
constitute a breach of this Agreement.
6. Severability. Covenantor acknowledges that he has carefully read and
considered the provisions of Paragraphs 1 through 4 of this Agreement and,
having done so, agrees that the restrictions set forth therein (including but
not limited to the time periods of restriction and the geographical areas of
restriction) are fair and reasonable and are reasonably required to protect the
interests of Newpark and its stockholders. In the event that, notwithstanding
the foregoing,
-2-
<PAGE>
any of the provisions of Paragraphs 1 through 4 shall be held to be invalid or
unenforceable, the remaining provisions thereof shall nevertheless continue to
be valid and enforceable, as though the invalid or unenforceable parts had not
been included therein. In the event that any provision of Paragraphs 1 through
4 hereof relating to time periods or areas of restriction or both shall be
declared by a court of competent jurisdiction to exceed the maximum time periods
or areas (or both) that such court deems reasonable and enforceable, said time
periods or areas of restriction or both shall be deemed to become and thereafter
shall be the maximum time periods and areas which such court deems reasonable
and enforceable.
7. Entire Agreement. This Agreement constitutes the entire agreement of
Covenantor and Newpark with respect to the subject matter hereof and supersedes
all prior and contemporaneous oral agreements, understandings, negotiations and
discussions of the parties. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. Any failure to insist on strict compliance with any of the
terms and conditions of this Agreement shall not be deemed a waiver of any such
terms or conditions.
8. Nature of Obligations. All covenants and obligations of Covenantor
hereunder shall be binding on Covenantor, his assigns, successors and legal
representatives and shall inure to the benefit of Newpark and all of its
Affiliates that engage in any aspect of the Business in any part of the
Territory.
9. Law Governing. The provisions of this Agreement and all rights and
obligations hereunder shall be governed by and construed in accordance with the
internal laws of the State of Texas applicable to contracts made and to be
wholly performed within the State of Texas.
10. Attorneys' Fees. In any litigation relating to this Agreement,
including litigation with respect to any supplement, modification or waiver of
this Agreement or any of its provisions, the prevailing party shall be entitled
to recover its costs and reasonable attorneys' fees.
11. Notices. Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, 48
hours after deposit in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address provided below. Either party may change its
address for the purpose of this Paragraph 11 by giving notice of such change to
the other party in the manner which is provided in this Paragraph 11.
Covenantor: ________________________________
________________________________
________________________________
-3-
<PAGE>
Newpark: Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: Secretary
Facsimile No.: (504) 833-9506
12. Captions. The captions in this Agreement are included for convenience
of reference only, do not constitute a part hereof and shall be disregarded in
the interpretation or construction hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
Covenantor:
____________________________
NEWPARK RESOURCES, INC.
By__________________________
James D. Cole, President
-4-
<PAGE>
Exhibit 2.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") dated as of February
28, 1997, is entered into by and between NEWPARK RESOURCES, INC., a Delaware
corporation ("Newpark"), and each of the Persons whose names and addresses are
listed on Exhibit "A" attached to this Agreement (each a "Holder" and
collectively the "Holders"), with reference to the following facts:
A. Holders are entitled to receive an aggregate of 582,000 shares (the
"Shares") of Newpark's common stock, $.01 par value (the "Common Stock"), upon
the merger (the "Merger") of SBM ACQUISITION CORPORATION, a Delaware corporation
("Newco") which was a wholly owned subsidiary of Newpark, into SAMPEY BILBO
MESCHI DRILLING FLUIDS MANAGEMENT, INC., a Texas corporation (the "Company"),
pursuant to the Merger Agreement and Plan of Reorganization (the "Merger
Agreement") among Newpark, Newco, the Company and the "Stockholder Parties" so
identified in the Merger Agreement (each of whom is a Holder). Because the
Shares are being issued pursuant to an exemption from the registration
provisions of the Securities Act, resale of the Shares without registration
under the Securities Act is subject to restrictions.
B. In order to satisfy a condition precedent to the Merger, this
Agreement obligates Newpark to use its best efforts to register some of the
Shares under the Securities Act at certain times.
NOW, THEREFORE, in consideration of the premises set forth above and
the mutual promises and covenants hereinafter set forth, the parties agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
terms shall have the following respective meanings:
Common Stock - As defined in Paragraph A above.
Exchange Act - The Securities Exchange Act of 1934, as amended, or any
similar federal statute then in effect, and a reference to a particular section
thereof shall be deemed to include a reference to the comparable section, if
any, of any such similar federal statute.
Holder or Holders - As defined in the introduction to this Agreement.
Holder Party or Parties - As defined in Paragraph 6.1 below.
Participating Holder or Holders - Each Holder or all Holders for whom
Shares are included in a registration statement filed under the Securities Act.
Person or person - An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
<PAGE>
Registration Expenses - Any and all expenses incident to performance
of or compliance with this Agreement, including, without limitation: (i) all
SEC and stock exchange or National Association of Securities Dealers
registration and filing fees, (ii) all fees and expenses of complying with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Shares), (iii) all printing, messenger and delivery expenses, (iv) the fees and
disbursements of counsel for Newpark and of its independent public accountants,
(v) any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, including liability insurance if Newpark so desires, and
(vi) the reasonable fees and expenses of any special experts retained by Newpark
in connection with the requested registration, but excluding underwriting
discounts and commissions and transfer taxes, if any, applicable to
Participating Holders' Shares.
Rule 144 - Rule 144 under the Securities Act, as amended from time to
time, or any successor Rule.
Rule 145 - Rule 145 under the Securities Act, as amended from time to
time, or any successor Rule.
Rules and Regulations - The rules and regulations promulgated by the
SEC under the Securities Act and the Exchange Act.
Securities Act - The Securities Act of 1933, as amended, or any
similar federal statute then in effect, and a reference to a particular section
thereof shall be deemed to include a reference to the comparable section, if
any, of any such similar federal statute.
SEC - The Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
Shares - As defined in Paragraph A above.
2. Demand Registration Rights.
(a) Demand by Holders. Subject to the further terms and conditions of
this Agreement, if, at any time, one or more Holders request in writing to
Newpark that Newpark effect the registration under the Securities Act of at
least 50,000 of the Shares (which request shall specify the number of Shares
intended to be disposed of by each Holder and the intended method of disposition
thereof), Newpark will promptly give notice of such requested registration to
all other Holders and thereafter will use its best efforts to effect such
registration of (i) the Shares which Newpark has been so requested to register
by such Holders and (ii) all other Shares which Newpark has been requested to
register by other Holders by written requests delivered to Newpark within 20
days after the giving of such written notice by Newpark (which requests shall
specify the intended method of disposition of such other Holders' Shares), all
for disposition in accordance with the intended methods of disposition stated in
the requests of such Holders.
-2-
<PAGE>
(b) Priorities in Demand Registrations. Subject to clauses (i) and
(ii) below, Newpark may include in any registration statement filed in response
to Holders' requests other shares of Common Stock for sale by Newpark or by
other stockholders, provided, however, that (i) if such registration statement
relates to an underwritten offering and the managing underwriter or underwriters
advise Newpark in writing that, in its or their opinion, the number of shares of
Common Stock requested to be included in such registration would have a material
adverse effect on such offering (including, without limitation, a material
decrease in the price at which such shares can be sold), then the number of
shares of Common Stock included in the offering shall be reduced, and the Shares
and the other shares of Common Stock to be included in the offering shall
participate in such offering as follows: (x) the Shares to be sold by Holders
shall have priority over all shares of Common Stock to be offered by Newpark and
other stockholders of Newpark, and (y) if shares of Common Stock in excess of
Holders' Shares can, in the good faith judgment of such managing underwriter or
underwriters, successfully be marketed in such offering, such excess shares
shall be included in such offering in such proportions as may be agreed between
Newpark and such other stockholders; and (ii) if such offering is not
underwritten, then no other shares of Common Stock shall be included in such
registration statement unless Holders consent to the inclusion of such shares
therein, which consent shall not be unreasonably withheld.
(c) Limit on Number of Demand Registrations. Holders shall not be
entitled to make a request pursuant to this Paragraph 2 more than three times,
provided that the registrations so requested are actually effected and remain in
effect in accordance with Paragraph 5.1(b). This number shall be reduced by one
(i.e., to two) if Holders are given the opportunity to register pursuant to
Paragraph 3 at least 100,000 Shares, provided that such registration is actually
effected and remains in effect in accordance with Paragraph 5.1(b).
3. Incidental Registration Rights.
(a) Right to Include Shares. Subject to the further terms and
conditions of this Agreement, if Newpark at any time proposes to register any
Common Stock on any form for the registration of securities under the Securities
Act (other than Form S-4 and Form S-8), Newpark will at such time give prompt
written notice to Holders of its intention to do so and of Holders' rights under
this Paragraph 3. Upon the written request of any Holders made within 20 days
after receipt of any such notice that all or a portion of the Shares be included
in such registration (which request shall specify the number of Shares intended
to be disposed of by each Holder desiring to participate and the intended method
of disposition thereof), Newpark will cause the Shares for which Holders have
requested registration to be included in the registration statement filed with
respect to such registration under the Securities Act, provided that (i) if, at
any time after giving written notice of its intention to register Common Stock
but prior to the effective date of the registration statement filed in
connection with such registration, Newpark shall determine for any reason not to
register such Common Stock, Newpark may, at its election, give written notice of
such determination to Holders, and, thereupon, shall be relieved of its
obligation to register any Shares in such registration, and (ii) if such
registration involves an underwritten offering, Holders must sell their Shares
(if Holders continue to desire such Shares to be registered)
-3-
<PAGE>
to the underwriters of such offering on the same terms and conditions as apply
to Newpark or the stockholders for whose account securities are to be sold, as
the case may be.
(b) Priorities in Incidental Registrations. In connection with any
registration pursuant to this Paragraph 3 involving an underwritten offering, if
the managing underwriter or underwriters advise Newpark in writing that, in its
or their opinion, the number of shares of Common Stock requested to be included
in such registration would have a material adverse effect on such offering
(including, without limitation, a material decrease in the price at which such
Common Stock can be sold), then the amount of the Shares included in the
offering shall be reduced, and the Shares and the other shares of Common Stock
to be included in the offering shall participate in such offering as follows:
(i) shares of Common Stock to be sold by Newpark shall have priority over all
shares to be sold by stockholders of Newpark, including Holders, and (ii) to the
extent that shares of Common Stock in excess of the Common Stock to be sold by
Newpark can, in the good faith judgment of such managing underwriter or
underwriters, successfully be marketed in such offering, (x) the Shares to be
sold by Holders and shares of Common Stock to be sold by any other stockholders
of Newpark who have the right to registration of their Common Stock under
agreements in existence at the time Newpark gives notice to Holders pursuant to
this Paragraph 3 shall have priority over shares of Common Stock to be sold by
other stockholders of Newpark, subject to reduction prorata in proportion to the
number of shares of Common Stock proposed to be included in such offering by
each Holder and each other stockholder having such registration rights, and (y)
additional shares of Common Stock, if any, shall be included in such
registration in such proportions as may be agreed upon by Newpark and such other
stockholders.
4. Additional Provisions. Notwithstanding the provisions of Paragraphs 2
and 3 of this Agreement:
(a) Subject to the undertaking delivered pursuant to Section 4.10 of
the Merger Agreement, the maximum number of Shares that Holders of Shares are
entitled to have registered under Paragraph 2 or Paragraph 3 during various
periods is set forth below, provided, however, that if Holders do not in any
period have registered all of the Shares which they were entitled to have
registered in such period, they shall be entitled to have the Shares that were
not registered in such period registered in any subsequent period.
Effective Date of
Registration Statement Number of Shares
---------------------- ----------------
Prior to May 15, 1997 None
From May 15, 1997, to
February 28, 1998 100,000
From February 28, 1998, to
February 28, 1999 100,000
-4-
<PAGE>
Effective Date of
Registration Statement Number of Shares
---------------------- -----------------
After February 28, 1999 None
On or before April 15, 1997, Newpark will use its diligent efforts to file a
registration statement under the Securities Act to register the sale by the
Holders of 100,000 Shares and will use its diligent efforts to cause such
registration statement to become effective as of May 15, 1997. Prior to or
contemporaneously with such registration statement becoming effective, Newpark
will take such other actions as are called for by this Agreement to permit the
sale of such Shares as of such date. The foregoing registration shall be deemed
to be one of the registrations permitted to the Holders pursuant to Paragraph 2.
(b) If the aggregate number of Shares that Holders propose to have
registered in any period exceeds the foregoing limits, the number of Holders'
shares eligible to be registered in such period shall be allocated prorata among
Holders in proportion to the number of Shares owned by each or as they may
otherwise agree among themselves. If the aggregate number of Shares that
Holders propose to have registered in any registration statement exceeds the
foregoing limits, after the allocation called for by the immediately preceding
sentence, the number of Holders' Shares eligible to be included in such
registration statement shall be allocated prorata among requesting Holders in
proportion to the number of Shares proposed by each of them for inclusion in
such registration statement or as they may otherwise agree among themselves.
(c) Newpark shall not be required to effect or cause the registration
of Shares held by any Holder pursuant to Paragraph 2 or 3 if, within 25 days
after its receipt of a request to register such Shares, Newpark delivers to such
Holder an opinion of counsel in form and substance satisfactory to counsel to
such Holder, that the entire number of Shares proposed to be sold by such Holder
may be sold, in the manner proposed by such Holder, without registration under
the Securities Act, whether pursuant to Rule 144, Rule 145 or otherwise, within
a period ending not more than ninety (90) days after the date of such opinion.
5. Registration Procedures.
5.1 Newpark Obligations. If and whenever Newpark is required to
effect the registration of any Shares under the Securities Act as provided in
this Agreement, as expeditiously as possible:
(a) Newpark will prepare and file with the SEC a registration
statement with respect to such Shares and use its best efforts to cause such
registration statement to become effective as soon thereafter as possible,
provided, that, before filing such registration statement or prospectus or any
amendments or supplements thereto: Newpark will furnish to each Participating
Holder copies of all such documents proposed to be filed, which documents will
be subject to review by such Holders, and Newpark will not file any such
registration statement or prospectus or any amendment or supplement thereto to
which any Participating Holder shall reasonably
-5-
<PAGE>
object; Newpark may assume, for the purpose of the foregoing proviso, that a
Holder has no objection if Newpark has not received notice from such Holder
within five calendar days after delivery of such documents to Holder or, with
respect to any version of or amendment or supplement to any such registration
statement after the first draft furnished to such Holder, such shorter period as
Newpark may reasonably request when it furnishes such documents to such Holder,
if a longer delay would result in prejudice to the proposed offering. Newpark
will promptly notify the Participating Holders and confirm such advice in
writing, (i) when such registration statement becomes effective, (ii) when any
post-effective amendment to such registration statement becomes effective, (iii)
of the issuance by the SEC of any stop order suspending the effectiveness of
such registration statement or the initiation of any proceedings for that
purpose, (iv) of the issuance by any state securities commission or other
regulatory authority of any order suspending the qualification or the exemption
from qualification of any of the Shares under state securities or blue sky laws
or the initiation of any proceedings for that purpose, and (v) of any request by
the SEC for any amendment or supplement to such registration statement or any
prospectus relating thereto or for additional information. Newpark will make
every reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Newpark will prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for at least six (6) months (or for
such shorter period in which the Participating Holders have sold all of the
Shares included in such registration statement) and to comply with the
provisions of the Securities Act with respect to the disposition of the Shares
covered by such registration statement during such period in accordance with the
intended methods of disposition by Participating Holders set forth in such
registration statement, as so amended, or such prospectus, as so supplemented.
(c) Newpark will furnish to each Participating Holder one signed copy
of such registration statement as originally filed and each amendment thereto
(without exhibits unless otherwise requested by such Participating Holder) and
such number of copies of such registration statement and of each such amendment
and supplement thereto, such number of copies of the prospectus (as amended or
supplemented) included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as Participating
Holders may reasonably request in order to facilitate the disposition of the
Shares by all Participating Holders.
(d) Newpark will use its best efforts to register or qualify such
Shares covered by such registration statement under such securities or blue sky
laws of any State of the United States as the managing underwriter, if any, or
Participating Holders who have Shares included in such registration statement
shall reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable each Participating Holder and each
underwriter, if any, to consummate the disposition in such jurisdictions of the
Shares to be sold by such Participating Holder, except that Newpark shall not
for any such purpose be required
-6-
<PAGE>
to qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this Paragraph 5.1(d), it would not be
obligated to be so qualified, to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction.
(e) Newpark will promptly notify each Participating Holder at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act during the period mentioned in Paragraph 5.1(b) and Newpark
becomes aware that the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances existing at
the time it is to be delivered to a purchaser; and promptly prepare and furnish
to each Participating Holder a reasonable number of copies of an amended or
supplemental prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such Shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing. If a registration statement is not
effective for the full period called for by Paragraph 5.1(b) for the reasons
described above in this Paragraph, then Newpark's obligation to keep such
registration statement effective shall be extended for a period of time equal to
the period of time during which prospectuses were not available so that the
actual period of effectiveness for such registration statement shall equal that
called for in Paragraph 5.1(b).
(f) During the period when the prospectus is required to be delivered
under the Securities Act, Newpark will promptly file all documents required to
be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and furnish a copy thereof to each Participating Holder promptly
after such document is so filed.
(g) Newpark will otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and, if requested by Participating
Holders having Shares included in such registration statement, will obtain an
opinion letter from Newpark's counsel addressed to all Participating Holders in
customary form covering such matters as may reasonably be requested.
(h) Newpark will make available for inspection by Participating
Holders having Shares included in a registration statement, by any underwriter
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, in each case upon receipt of an appropriate
confidentiality agreement, all financial and other records, corporate documents
and properties of Newpark and its subsidiaries, and cause all of Newpark's
officers, directors and employees to supply all information, as may be
reasonably requested by such Participating Holders or any such underwriter,
attorney, accountant or agent in connection with such registration statement.
-7-
<PAGE>
5.2 Participating Holder Obligations.
(a) Each Participating Holder shall furnish Newpark in writing such
information and documents (or true copies of documents) regarding such Holder
and the distribution of his or her Shares as Newpark may reasonably request,
including questionnaires, powers of attorney, indemnities, standstill
agreements, underwriting agreements and other documents required under the terms
of such underwriting agreements.
(b) Each Participating Holder agrees that, upon receipt of any notice
from Newpark of the happening of any event of the kind described in Paragraph
5.1(e), such Holder will forthwith discontinue disposition of Shares pursuant to
the registration statement covering such Shares until such Holder's receipt of
copies of the supplemented or amended prospectus contemplated by Paragraph
5.1(e), and, if so directed by Newpark, such Holder will deliver to Newpark (at
Newpark's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Shares current at the time
of receipt of such notice. In the event Newpark shall give any such notice, the
period mentioned in Paragraph 5.1(b) shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Paragraph 5.1(e) to and including the date when all Participating
Holders shall have received the copies of the supplemented or amended prospectus
contemplated by Paragraph 5.1(e).
5.3 Expenses. Newpark will pay all Registration Expenses in
connection with each registration of Shares pursuant to Paragraphs 2 and 3;
provided, however, that (x) all underwriting discounts and commissions
attributable to the Shares shall be borne by Participating Holders in proportion
to the number of Shares sold by each of them, and (y) any other fees or expenses
incurred by any of the parties, including fees and expenses of attorneys and
accountants, other than those fees described in clause (ii) of the definition of
Registration Expenses, shall be borne by the party that incurred them.
6. Indemnification.
6.1 Indemnification by Newpark. In the event of any registration of
any of the Shares under the Securities Act pursuant to this Agreement, Newpark
will, and it hereby does, indemnify and hold harmless each Participating Holder,
each Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls any such underwriter or
Participating Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and the agents, employees, officers and
directors of Participating Holders or such underwriter and each such controlling
person (each a "Holder Party" and collectively as the "Holder Parties"), against
any and all losses, claims, damages or liabilities, joint or several, and
expenses (including any amounts paid in any settlement effected with Newpark's
written consent) to which any Participating Holder, any such underwriter or
controlling person may become subject under the Securities Act, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any
-8-
<PAGE>
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto, or
(ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and Newpark will reimburse Holder Parties for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding, provided, that Newpark shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon any breach by the indemnified person of its obligations under
this Agreement, including, without limitation, those contained in Paragraph 5.2
or any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or amendment or supplement thereto
or in any such preliminary, final or summary prospectus or amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to Newpark by or on behalf of such Participating Holder,
any such underwriter or controlling Person specifically for use in the
preparation thereof; and provided, further, that Newpark will not be liable to
any Person who participates as an underwriter in the offering or sale of Shares,
or to any other Person who controls such underwriter within the meaning of the
Securities Act and the Exchange Act, under the indemnity agreement in this
Paragraph 6.1 with respect to any preliminary prospectus or the final
prospectus, or the final prospectus as amended or supplemented, as the case may
be, to the extent that any such loss, claim, damage or liability of such
underwriter or controlling Person results from the fact that such underwriter
sold Shares to a person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final prospectus (including any
documents incorporated by reference therein) or of the final prospectus as then
amended or supplemented (including any documents incorporated by reference
therein), whichever is most recent, if Newpark has previously furnished copies
thereof to such underwriter and such final prospectus, as then amended or
supplemented, has corrected any such misstatement or omission, and if Newpark
shall sustain the burden of proving that the Holder Party sold Shares to the
person alleging such loss, claim, damage or liability without sending or giving,
at or prior to the written confirmation of such sale, a copy of the amended or
supplemented registration statement or prospectus if Newpark had previously
furnished copies thereof to such Holder Party. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
any Holder Party and shall survive the transfer of such securities by each such
Person.
6.2 Indemnification by Participating Holders. In the event of any
registration of any securities of Newpark under the Securities Act pursuant to
this Agreement, each Participating Holder, severally and not jointly, will, and
each Participating Holder hereby does, indemnify and hold harmless Newpark, each
director of Newpark, each officer of Newpark who shall sign the registration
statement and its controlling Persons, if any, and all other prospective sellers
and their respective directors, officers and controlling Persons against any and
all losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with the Participating
Holder's written consent) to which such Persons may become subject under the
Securities Act, common law or otherwise, to the extent that such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are
-9-
<PAGE>
based upon any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing to Newpark by or on behalf of
such Participating Holder for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
and such Participating Holder will reimburse Newpark and such other indemnified
persons for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, liability,
action or proceeding. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of Newpark or any of the
other prospective sellers or any of their respective directors, officers or
controlling Persons and shall survive the transfer of such securities by the
Participating Holder or such seller.
6.3 Notices of Claims, etc. Promptly after receipt by an indemnified
party hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Paragraph 6 such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Paragraph 6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof. No indemnifying party will
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.
6.4 Other Indemnification. Indemnification similar to that specified
in the preceding subdivisions of this Paragraph 6 (with appropriate
modifications) shall be given by Newpark to each Participating Holder and each
underwriter of Shares, and by each Participating Holder to Newpark, with respect
to any required registration or other qualification of securities under any
federal or state law or regulation other than the Securities Act.
6.5 Contribution. If the indemnification provided for in Paragraphs
6.1, 6.2 or 6.4 is insufficient to hold harmless an indemnified party or is
unavailable to a party that would have been an indemnified party under any such
section in respect of any and all losses, claims, damages or liabilities, joint
or several (or actions or proceedings in respect thereof), referred to therein,
then each indemnified party and each party that would have been an indemnifying
party
-10-
<PAGE>
thereunder shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and such indemnified party, on the other,
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, joint or several (or actions or proceedings in
respect thereof). The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statements of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or such indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Newpark and Holders agree that
it would not be just and equitable if contribution pursuant to this Paragraph
6.5 were determined by prorata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Paragraph 6.5. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Paragraph 6.5 shall include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim (which shall
be limited as provided in Paragraph 6.3 hereof if the indemnifying party has
assumed the defense of any such action in accordance with the provisions
thereof). No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
7. Rule 144 and Rule 145. Newpark covenants that it will duly and timely
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder to the
extent required from time to time to enable Holders to sell the Shares without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 and Rule 145. None of such reports will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. Upon the request of
any Holder, Newpark will deliver to such Holder a written statement as to
whether it has complied with such requirements.
8. Miscellaneous.
8.1 Transfer of Rights Hereunder. The rights granted to the Holders
under this Agreement may be transferred to any transferee of the Shares other
than a transferee of Shares that have been registered under the Securities Act,
and, from and after any such transfer, the provisions of this Agreement
applicable to Holders shall be applicable to such transferees. The foregoing
notwithstanding, no transfer of the Shares may be made without registration
under the Securities Act unless and until the transferor delivers to Newpark an
opinion of counsel reasonably satisfactory to Newpark to the effect that such
transfer would not violate the registration provisions of the Securities Act and
any applicable state law. In connection with the transfer of such Shares,
Newpark may require each certificate representing Shares transferred to bear an
appropriate restrictive legend. Such restrictive legend may be removed when (i)
a
-11-
<PAGE>
registration statement with respect to the sale of the Shares represented
thereby shall have become effective under the Securities Act, (ii) such Shares
shall have been distributed to the public pursuant to Rule 144 or Rule 145 (or
any successor provision) under the Securities Act, or (iii) such Shares shall
have been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by Newpark and subsequent
disposition of such Shares shall not require registration or qualification of
them under the Securities Act or any applicable state law.
8.2 Notices. Any and all notices, demands, requests or other
communications hereunder shall be in writing and shall be deemed duly given when
personally delivered to or transmitted by overnight express delivery or by
facsimile to and received by the party to whom such notice is intended, or in
lieu of such personal delivery or overnight express delivery or facsimile
transmission, 48 hours after deposit in the United States mail, first-class,
certified or registered, postage prepaid, return receipt requested, addressed to
the applicable party at the address provided below. The parties may change
their respective addresses for the purpose of this Paragraph 8.2 by giving
notice of such change to the other party in the manner which is provided in this
Paragraph 8.2.
Holders: At their respective addresses and facsimile
numbers, if any, set forth in Exhibit A
With a copy to:
Fran vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway
Houston, Texas 77060
Facsimile No.: (281) 931-6032
Newpark: 3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: Secretary
Facsimile No.: (504) 833-9506
With a copy to:
Bertram K. Massing, Esq.
Ervin, Cohen & Jessup LLP
9401 Wilshire Boulevard, 9th Floor
Beverly Hills, CA 90212
Facsimile No.: (310) 859-2325
-12-
<PAGE>
8.2 Severability. The provisions of this Agreement are severable,
and, if any one or more provisions may be determined to be judicially
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions, to the extent enforceable, shall nevertheless be
binding and enforceable upon the parties hereto.
8.3 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.4 Headings. The headings of the sections, subsections and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.
8.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.
8.6 Entire Agreement. All other prior or contemporary
representations, warranties, covenants or agreements, if any, between the
parties hereto, or their representatives, with respect to the subject matter
hereof are superseded by and merged into this Agreement. This Agreement shall
constitute the entire understanding between the parties with respect hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth on the first page hereof.
NEWPARK RESOURCES, INC.
By: /s/ James D. Cole
-----------------------------
James D. Cole, President
[Signatures of Holders contained on the following page]
-13-
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF ERVIN, COHEN & JESSUP APPEARS HERE]
April 15, 1997
0736-323
Newpark Resources, Inc.
3850 Causeway Boulevard
Suite 1770
Metairie, Louisiana 70002
Gentlemen:
You have advised us that Newpark Resources, Inc., a Delaware corporation
("Newpark"), is filing with the Securities and Exchange Commission a
Registration Statement on Form S-3 (the "Registration Statement") covering
resales of 100,000 shares of Newpark Common Stock by certain selling
stockholders. You have asked us to provide our opinion concerning the legality
of the securities to be sold pursuant to the Registration Statement.
Based upon our examination of the Registration Statement, the Certificate
of Incorporation and Bylaws of Newpark, the proceedings of the Board of
Directors of Newpark and such other documents as we have considered advisable,
we are of the opinion that the 100,000 shares of Newpark Common Stock to be sold
pursuant to the Registration Statement have been duly authorized and are legally
issued, fully paid and non-assessable shares of Newpark Common Stock.
We hereby consent to the use of this opinion in connection with the
Registration Statement to be filed by Newpark with the Securities and Exchange
Commission.
Very truly yours,
/S/ ERVIN, COHEN & JESSUP LLP
ERVIN, COHEN & JESSUP LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Newpark Resources, Inc. on Form S-3 of our report dated March 21, 1997,
appearing in the Annual Report on Form 10-K of Newpark Resources, Inc. for the
year ended December 31, 1996.
/s/ Deloitte & Touche LLP
- ----------------------------
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
April 17, 1997
