<PAGE>
As filed with the Securities and Exchange Commission on August 19, 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 (I.R.S. Employer
of incorporation 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, 9TH FLOOR
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 260,465 shares $ 33.875 $ 8,823,252 $ 2,673.71
============================================================================================================
</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>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THE 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 AUGUST 19, 1997
260,465 SHARES
NEWPARK RESOURCES, INC.
COMMON STOCK
($.01 par value)
_______________
This Prospectus relates to the resale of 260,465 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 August 15, 1997, the reported last sale price of the Common
Stock on The New York Stock Exchange Composite Tape was $33.875 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 7.
_______________
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 $17,000, 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, Inc., 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, as amended on May 23, 1997.
2. All other reports filed by Newpark pursuant to Sections 13(a) or 15(d)
of the Exchange Act since December 31, 1996, including Newpark
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997
and June 30, 1997, and Newpark's Current Report on Form 8-K dated
May 14, 1997.
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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
5(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.
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 oilfield waste, including
nonhazardous oilfield waste ("NOW") and oilfield waste that is contaminated with
naturally occurring radioactive material ("NORM"), utilizing patented and
proprietary technology; (ii) mat rental services in which patented prefabricated
wooden mats are used, utilizing patented and proprietary technology as temporary
worksites in oilfield and other construction applications; and (iii)
engineering, technical and drilling fluids services to the oil and gas
exploration industry.
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
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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 wells 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, expanded Newpark's NORM disposal capacity and significantly
reduced 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 operations. 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 and 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 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
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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. In addition, Newpark believes that the
opportunity exists to integrate its drilling fluids services and products with
its mat rental and waste disposal services to provide a complete drilling-site
services product offering.
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 of $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 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, were
used to repay all amounts outstanding under the revolving line of credit portion
of Newpark's bank credit agreement.
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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 has combined 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 have resulted 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 has allowed 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.
DRILLING FLUIDS RELATED ACQUISITIONS
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. In the acquisition, the former
stockholders of SBM were issued an aggregate of 1,164,000 shares of Newpark
Common Stock. 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. On July 24, 1997, SBM changed its
name to Newpark Drilling Fluids, Inc.
Since the acquisition of SBM, Newpark has acquired several additional
companies in the drilling fluids business in order to expand its capabilities
and increase its access to barite used in the make-up of drilling fluids and its
distribution of drilling fluid components. On May 28, 1997, Newpark acquired
Excalibar Minerals, Inc. ("Excalibar"), a specialty milling company which grinds
barite and other industrial minerals for oilfield and industrial markets, in
exchange for 333,334 shares of Newpark Common Stock. On June 4, 1997, Newpark
acquired two related drilling fluids companies operating in the South Texas
markets, Chemical Technologies, Inc. ("CTI"), a retailer of drilling fluids, and
FMI Wholesale Drilling Fluids U.S.A., L.P. ("FMI"), a wholesaler of drilling
fluids. An aggregate of 222,222 shares of
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Newpark Common Stock were issued in connection with the acquisition of CTI and
FMI. On July 24, 1997, Newpark acquired two additional drilling fluids
distribution companies operating in the Texas markets, Smithey, Inc., in
exchange for 70,000 shares of Newpark Common Stock, and Advanced Chemical
Technologies, Inc. ("ACT"), in exchange for 60,000 shares of Newpark Common
Stock. See "Selling Stockholders" for further information regarding each of the
foregoing acquisitions. Newpark may seek to acquire additional businesses in the
drilling fluids business.
OTHER RECENT ACQUISITIONS
In addition to the acquisitions in its drilling fluids business, Newpark
also has recently acquired three oilfield site contractors in order to add to
its customer base and strengthen Newpark's presence and service capabilities in
the site preparation and contracting business. On May 29, 1997, Newpark acquired
two related Lafayette, Louisiana based oilfield site contractors, Supreme
Contractors, Inc. ("Contractors") and Supreme Contractors International, Inc.
("International"), in exchange for an aggregate of 244,444 shares of Newpark
Common Stock. See "Selling Stockholders" for further information regarding the
acquisition of Contractors and International by Newpark. On July 24, 1997,
Newpark acquired Bockmon Construction Company, Inc., a Beaumont, Texas based
oilfield site contractor, in exchange for 251,000 shares of Newpark Common
Stock.
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 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
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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 consolidated financial statements.
IMPACT OF GOVERNMENT REGULATIONS
Newpark believes that the demand for its principal environmental services
is directly related to 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 affect Newpark's consolidated financial statements.
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 consolidated financial
statements.
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
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internal disposal methods could be increased by future technological change and
innovation and limits the ability of Newpark to increase prices. The increased
use by Newpark's oil and gas producing customers of their own disposal methods
and other competitive factors could have a material adverse effect on Newpark's
consolidated financial statements.
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 consolidated financial statements.
POTENTIAL ENVIRONMENTAL LIABILITY; INSUFFICIENCY OF INSURANCE
Newpark's business exposes it to risks such as the potential for harmful
substances escaping into the environment, 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
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significant magnitude, could have a material adverse effect on Newpark's
consolidated financial statements.
FAILURE TO INTEGRATE ACQUIRED BUSINESSES
Newpark's recent acquisitions, including the Campbell Wells Acquisition and
the acquisition of SBM and other companies in the drilling fluids business,
significantly increased the size of Newpark's operations. Successful
integration of these additional operations will depend primarily on Newpark's
ability to manage this additional business and eliminate redundancies and excess
costs. In addition, successful integration of SBM and Newpark's other recent
acquisitions in the drilling fluids business will depend on the ability of
Newpark to develop and integrate into their operations the recycling of NOW into
drilling fluids in order to reduce the costs of materials and reduce Newpark's
handling and disposal costs. Material failure or substantial delay in
accomplishing the integration of these businesses could have a material adverse
effect on Newpark's consolidated financial statements.
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 August 18, 1997, and as
adjusted to give effect to the sale of the Shares. All share numbers have been
adjusted to reflect the two-for-one split of Newpark Common Stock effective
May 30, 1997.
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<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
PRIOR TO OFFERING BENEFICIAL OWNERSHIP
------------------- 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>
Thomas E. Eisenman....................... 239,340 * 78,982 160,358 *
Robert E. Jones.......................... 93,994 * 31,018 62,976 *
Mark L. Phillips......................... 81,482 * 20,000 61,482 *
Jerry L. Miller.......................... 81,842 * 20,000 61,482 *
James A. Miller.......................... 81,480 * 20,000 61,480 *
Perry Bennett............................ 139,377 * 26,133 113,244 *
Bob Hill................................. 18,667 * 3,733 14,934 *
Ray T. Bennett........................... 18,667 * 3,733 14,934 *
Kentner P. Shell......................... 18,666 * 3,733 14,933 *
FMI Wholesale Drilling Fluids, Inc.(1)... 356 * 356 -- --
General Supply Co.(1).................... 21,156 * 12,445 8,711 *
American Polymer, Inc.(1)................ 5,333 * 5,333 -- --
C. M. Smithey............................ 70,000 * 20,000 50,000 *
John V. Filecia.......................... 40,529 * 10,132 30,397 *
S. Kim Tillery........................... 19,471 * 4,867 14,604 *
</TABLE>
_________________________
* Indicates ownership of less than one percent.
(1) Mr. Gene McElvany is the principal stockholder and a director and executive
officer of each of FMI Wholesale Drilling Fluids, Inc., General Supply Co.
and American Polymer, Inc.
On May 28, 1997, Newpark acquired Excalibar, a Texas corporation in which
Thomas E. Eisenman and Robert E. Jones were the stockholders. In the
acquisition, all of the issued and outstanding shares of capital stock of
Excalibar were exchanged for an aggregate of 333,334 shares of Newpark Common
Stock, with Excalibar becoming a wholly-owned subsidiary of Newpark. Concurrent
with the acquisition, Messrs. Eisenman and Jones entered into employment
agreements with Excalibar, with Mr. Eisenman serving as President of Excalibar,
at a salary of $110,000 per year, and Mr. Jones serving as Vice President of
Excalibar, at a salary of $85,000 per year. The employment agreements continue
until June 30, 2000, and automatically renew for successive 12-month periods
thereafter unless terminated by either party. In connection with the
acquisition, Messrs. Eisenman and Jones entered into noncompetition agreements
covering competition in the drilling fluids industry in the States of Louisiana,
Texas, Mississippi and Alabama and the Gulf of Mexico, and no additional
consideration was paid by Newpark for these noncompetition agreements. Each
noncompetition agreement remains in effect during the term of the relevant
employment agreement, plus an additional period of twelve months following the
termination of such agreement.
11
<PAGE>
On May 29, 1997, Newpark acquired Contractors, a Louisiana corporation, and
its related company, International, a Delaware corporation. Mark L. Phillips,
Jerry L. Miller and James A. Miller were the stockholders of both Contractors
and International. In the acquisition, all of the issued and outstanding shares
of capital stock of Contractors and International were exchanged for an
aggregate of 244,444 shares of Newpark Common Stock, with Contractors and
International becoming wholly-owned subsidiaries of Newpark. In connection with
the acquisition, each of the former stockholders of Contractors entered into
noncompetition agreements covering competition in the site construction industry
in certain identified parishes in the State of Louisiana, and in the States of
Texas, Mississippi and Alabama and the Gulf of Mexico, until May 29, 1999. No
additional consideration was paid by Newpark for these noncompetition
agreements. Concurrent with the acquisition, Mark L. Phillips and Contractors
entered into an employment agreement, which provides for the employment of Mr.
Phillips as the President of Contractors at a salary of $87,000 per year. The
employment agreement continues until June 30, 2000, and automatically renews for
successive 12-month periods thereafter unless terminated by either party.
On June 4, 1997, Newpark acquired CTI, a Texas corporation in which Perry
Bennett, Kentner Shell and Ray Bennett were the stockholders. In the
acquisition, all of the issued and outstanding shares of capital stock of CTI
were exchanged for an aggregate of 186,666 shares of Newpark Common Stock, with
CTI becoming a wholly-owned subsidiary of Newpark. In connection with the
acquisition, each of the former stockholders of CTI entered into noncompetition
agreements covering competition in the drilling fluids industry in the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico until June 4,
2002. No additional consideration was paid by Newpark for these noncompetition
agreements. Concurrent with the acquisition, Perry Bennett and CTI entered into
an employment agreement, which provides for the employment of Mr. Bennett as a
senior executive officer of CTI at a salary of $108,000 per year. The
employment agreement continues until June 30, 2000, and automatically renews for
successive 12-month periods thereafter unless terminated by either party.
On June 4, 1997, Newpark acquired FMI, a Texas limited partnership in which
FMI Wholesale Drilling Fluids, Inc., General Supply Co., American Polymer, Inc.
and Perry Bennett were the partners. In the acquisition, all of the partnership
interests in FMI were exchanged for an aggregate of 35,556 shares of Newpark
Common Stock, with FMI continuing as a wholly-owned subsidiary of Newpark. In
connection with the acquisition, FMI Wholesale Drilling Fluids, Inc., the
general partner of FMI, and Perry Bennett entered into noncompetition agreements
covering competition in the drilling fluids industry in the States of Louisiana,
Texas, Mississippi and Alabama and the Gulf of Mexico until June 4, 2002. In
addition, General Supply Co. and American Polymer, Inc. entered into
noncompetition
12
<PAGE>
agreements covering competition in the drilling fluids industry in the State of
Texas, excluding the Texas Panhandle, until June 4, 1999. No additional
consideration was paid by Newpark for these noncompetition agreements.
On July 24, 1997, Newpark acquired Smithey, Inc., a Texas corporation in
which C. M. Smithey was the sole stockholder. In the acquisition, Smithey, Inc.
was merged with and into SBM (which concurrently changed its name to Newpark
Drilling Fluids, Inc.), and all of the issued and outstanding shares of capital
stock of Smithey, Inc. were converted into an aggregate of 70,000 shares of
Newpark Common Stock. In connection with the acquisition, Mr. Smithey entered
into a noncompetition agreement covering competition in the drilling fluids
industry in the States of Louisiana, Texas, Mississippi and Alabama and the Gulf
of Mexico until July 31, 2000. No additional consideration was paid by Newpark
for the noncompetition agreement. Concurrent with the acquisition, Mr. Smithey
entered into an employment agreement with Newpark Drilling Fluids, Inc.
("Fluids"), which provides for the employment of Mr. Smithey as a Vice President
of Fluids at a salary of $85,000 per year. The employment agreement continues
until July 31, 2000, and automatically renews for successive 12-month periods
thereafter unless terminated by either party.
On July 24, 1997, Newpark acquired ACT, a Texas corporation in which John
V. Filecia and S. Kim Tillery were the stockholders. In the acquisition, ACT was
merged with and into Fluids (formerly SBM), and all of the issued and
outstanding shares of capital stock of ACT were converted into an aggregate of
60,000 shares of Newpark Common Stock. In connection with the acquisition, Mr.
Filecia and Mr. Tillery entered into noncompetition agreements covering
competition in the drilling fluids industry in the States of Louisiana, Texas,
Mississippi and Alabama and the Gulf of Mexico until July 31, 2000. No
additional consideration was paid by Newpark for these noncompetition
agreements. Concurrent with the acquisition, Mr. Filecia and Mr. Tillery entered
into employment agreements with Fluids, which provide for the employment of Mr.
Filecia and Mr. Tillery as Vice Presidents of such corporation, at a salary of
$85,000 per year for Mr. Filecia and $70,000 per year for Mr. Tillery. Each of
the employment agreements continue until July 31, 2000, and automatically renew
for successive 12-month periods thereafter unless terminated by either party.
Newpark granted to the Selling Stockholders other than Messrs. Smithey,
Filecia and Tillery certain rights with respect to the registration under the
Securities Act of the shares of Common Stock issued in the foregoing acquisition
transactions, 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. Newpark also has agreed to include a portion of the shares owned by
Messrs. Smithey, Filecia and Tillery in this offering and to pay substantially
all expenses associated therewith.
13
<PAGE>
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
Stockholders. 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
and 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 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 subject to the applicable provisions of the Exchange
Act and the rules and regulations thereunder.
14
<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.............................................................. 7
Selling Stockholders...................................................... 10
Plan of Distribution...................................................... 14
___________________________________________
NEWPARK RESOURCES, INC.
260,465 SHARES
COMMON STOCK
($.01 PAR VALUE)
PROSPECTUS
, 1997
___________________________________________
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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.....$ 2,673.71
Printing costs.......................................... 2,500.00
Legal fees.............................................. 10,000.00
Accounting fees and expenses............................ 1,000.00
Miscellaneous expenses.................................. 1,000.00
--------
Total................................................$ 17,173.71
========
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
II-1
<PAGE>
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.
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 Agreement and Plan of Reorganization, dated May 28, 1997, among the
registrant, Thomas E. Eisenman and Robert E. Jones.
2.2 Form of Noncompetition Agreement, dated May 28, 1997, between the
registrant and each of Thomas E. Eisenman and Robert E. Jones.
2.3 Employment Agreement, dated May 28, 1997, between Excalibar
Minerals, Inc. and Thomas E. Eisenman.
2.4 Employment Agreement, dated May 28, 1997, between Excalibar
Minerals, Inc. and Robert E. Jones.
2.5 Registration Rights Agreement, dated May 28, 1997, between the
registrant and Thomas E. Eisenman and Robert E. Jones.
2.6 Agreement and Plan of Reorganization, dated May 28, 1997, among the
registrant, Mark L. Phillips, Jerry L. Miller and James A. Miller.
II-2
<PAGE>
2.7 Form of Noncompetition Agreement, dated May 29, 1997, between the
registrant and each of Mark L. Phillips, Jerry L. Miller and James
A. Miller.
2.8 Employment Agreement, dated May 29, 1997, between Supreme
Contractors, Inc. and Mark L. Phillips.
2.9 Registration Rights Agreement, dated May 29, 1997, between the
registrant and Mark L. Phillips, Jerry L. Miller and
James A. Miller.
2.10 Agreement and Plan of Reorganization, dated June 3, 1997, among the
registrant, Perry Bennett, Kentner Shell, Ray Bennett and Bob Hill.
2.11 Form of Noncompetition Agreement, dated June 4, 1997, between the
registrant and each of Perry Bennett, Kentner Shell, Ray Bennett and
Bob Hill.
2.12 Employment Agreement, dated June 4, 1997, between Chemical
Technologies, Inc. and Perry Bennett.
2.13 Registration Rights Agreement, dated June 4, 1997, between the
registrant and Perry Bennett, Kentner Shell, Ray Bennett and
Bob Hill.
2.14 Agreement and Plan of Reorganization, dated June 3, 1997, among the
registrant, Newpark Holdings, Inc., Newpark Texas L.L.C., FMI
Wholesale Drilling Fluids, Inc., General Supply Co., American
Polymer, Inc. and Perry Bennett.
2.15 Form of Noncompetition Agreement, dated June 4, 1997, between the
registrant and each of FMI Wholesale Drilling Fluids, Inc. and
Perry Bennett.
2.16 Form of Noncompetition Agreement, dated June 4, 1997, between the
registrant and each of General Supply Co. and American Polymer, Inc.
2.17 Registration Rights Agreement, dated June 4, 1997, between the
registrant and FMI Wholesale Drilling Fluids, Inc., General Supply
Co., American Polymer, Inc. and Perry Bennett.
2.18 Agreement and Plan of Reorganization, dated July 24, 1997, among the
registrant, Sampey Bilbo Meschi Drilling Fluids Management, Inc.,
Smithey, Inc. and C. M. Smithey.
2.19 Noncompetition Agreement, dated July 24, 1997, between the
registrant and C. M. Smithey.
2.20 Employment Agreement, dated July 24, 1997, between Newpark Drilling
Fluids, Inc. ("Fluids") and C. M. Smithey.
2.21 Agreement and Plan of Reorganization, dated July 24, 1997, among the
registrant, Fluids, Advanced Chemical Technologies, Inc., John V.
Filecia and S. Kim Tillery.
2.22 Form of Noncompetition Agreement, dated July 24, 1997, between the
registrant and each of John V. Filecia and S. Kim Tillery.
2.23 Employment Agreement, dated July 24, 1997, between Fluids and
John V. Filecia.
2.24 Employment Agreement, dated July 24, 1997, between Fluids and
S. Kim Tillery.
4.1 Form of certificate representing shares of the registrant's Common
Stock.(1)
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<PAGE>
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-1 (File No. 33-40716).
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)(1)(i) and (A)(1)(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.
II-4
<PAGE>
(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 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-5
<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 August 19, 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, President August 19, 1997
___________________________ and Chief Executive Officer
James D. Cole
/s/ Matthew W. Hardey Vice President of Finance August 19, 1997
___________________________ and Chief Financial Officer
Matthew W. Hardey
II-6
<PAGE>
/s/ Wm. Thomas Ballantine Executive Vice President August 19, 1997
___________________________ and Director
Wm. Thomas Ballantine
/s/ Dibo Attar Director August 19, 1997
___________________________
Dibo Attar
/s/ W.W. Goodson Director August 19, 1997
___________________________
W. W. Goodson
/s/ David P. Hunt Director August 19, 1997
___________________________
David P. Hunt
/s/ Dr. Alan J. Kaufman Director August 19, 1997
___________________________
Dr. Alan J. Kaufman
/s/ James H. Stone Director August 19, 1997
___________________________
James H. Stone
II-7
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ------------
<S> <C> <C>
2.1 Agreement and Plan of Reorganization, dated May 28, 1997, among the
registrant, Thomas E. Eisenman and Robert E. Jones.
2.2 Form of Noncompetition Agreement, dated May 28, 1997, between the
registrant and each of Thomas E. Eisenman and Robert E. Jones.
2.3 Employment Agreement, dated May 28, 1997, between Excalibar Minerals, Inc.
and Thomas E. Eisenman.
2.4 Employment Agreement, dated May 28, 1997, between Excalibar Minerals, Inc.
and Robert E. Jones.
2.5 Registration Rights Agreement, dated May 28, 1997, between the registrant
and Thomas E. Eisenman and Robert E. Jones.
2.6 Agreement and Plan of Reorganization, dated May 28, 1997, among the registrant,
Mark L. Phillips, Jerry L. Miller and James A. Miller.
2.7 Form of Noncompetition Agreement, dated May 29, 1997, between the registrant
and each of Mark L. Phillips, Jerry L. Miller and James A. Miller.
2.8 Employment Agreement, dated May 29, 1997, between Supreme Contractors, Inc.
and Mark L. Phillips.
2.9 Registration Rights Agreement, dated May 29, 1997, between the registrant
and Mark L. Phillips, Jerry L. Miller and James A. Miller.
2.10 Agreement and Plan of Reorganization, dated June 3, 1997, among the registrant,
Perry Bennett, Kentner Shell, Ray Bennett and Bob Hill.
2.11 Form of Noncompetition Agreement, dated June 4, 1997, between the registrant and
each of Perry Bennett, Kentner Shell, Ray Bennett and Bob Hill.
2.12 Employment Agreement, dated June 4, 1997, between Chemical Technologies, Inc.
and Perry Bennett.
2.13 Registration Rights Agreement, dated June 4, 1997, between the registrant and
Perry Bennett, Kentner Shell, Ray Bennett and Bob Hill.
2.14 Agreement and Plan of Reorganization, dated June 3, 1997, among the registrant,
Newpark Holdings, Inc., Newpark Texas L.L.C., FMI Wholesale Drilling Fluids, Inc.,
General Supply Co., American Polymer, Inc. and Perry Bennett.
2.15 Form of Noncompetition Agreement, dated June 4, 1997, between the registrant and
each of FMI Wholesale Drilling Fluids, Inc. and Perry Bennett.
2.16 Form of Noncompetition Agreement, dated June 4, 1997, between the registrant and
each of General Supply Co. and American Polymer, Inc.
2.17 Registration Rights Agreement, dated June 4, 1997, between the registrant and
FMI Wholesale Drilling Fluids, Inc., General Supply Co., American Polymer, Inc.
and Perry Bennett.
2.18 Agreement and Plan of Reorganization, dated July 24, 1997, among the registrant,
Sampey Bilbo Meschi Drilling Fluids Management, Inc., Smithey, Inc. and C. M. Smithey.
2.19 Noncompetition Agreement, dated July 24, 1997, between the registrant and C. M. Smithey.
2.20 Employment Agreement, dated July 24, 1997, between Newpark Drilling Fluids, Inc.
("Fluids") and C. M. Smithey.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ------------
<S> <C> <C>
2.21 Agreement and Plan of Reorganization, dated July 24, 1997, among the registrant, Fluids,
Advanced Chemical Technologies, Inc., John V. Filecia and S. Kim Tillery.
2.22 Form of Noncompetition Agreement, dated July 24, 1997, between the registrant and each
of John V. Filecia and S. Kim Tillery.
2.23 Employment Agreement, dated July 24, 1997, between Fluids and John V. Filecia.
2.24 Employment Agreement, dated July 24, 1997, between Fluids and S. Kim Tillery.
4.1 Form of certificate representing shares of the registrant's Common Stock.(1)
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).
</TABLE>
__________
(1) Incorporated by reference from the registrant's Registration Statement
on Form S-1 (File No. 33-40716).
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of May 28, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), THOMAS E. EISENMAN ("Eisenman") and ROBERT E.
JONES ("Jones") (Eisenman and Jones being sometimes referred to herein
collectively as the "Stockholders"), with reference to the following facts:
A. The Stockholders own beneficially and of record 100% of the
outstanding capital stock (the "Company Shares") of EXCALIBAR MINERALS INC., a
Texas corporation (the "Company").
B. The Company is a barite milling company specializing in services to
the oil industry.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the "Code"). The Plan comprises the
acquisition by Newpark of the Company Shares from Stockholders solely in
exchange for 166,667 (subject to adjustment as provided herein) newly issued
shares of voting Common Stock of Newpark (the "Newpark Shares"). Such
transaction is sometimes referred to herein as the "Exchange."
D. Newpark and the Stockholders believe that it is in their best
interests to adopt the Plan and consummate the Exchange.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Plan of Reorganization.
1.1 Adoption of Plan. Newpark and the Stockholders hereby adopt the
plan of reorganization herein set forth.
1.2 Exchange of Shares. Subject to the provisions of this Agreement,
on the "Closing Date" (as defined in Section 10) Stockholders hereby agree to
deliver to Newpark one or more certificates representing all of the Company
Shares, duly endorsed for transfer to Newpark or accompanied by separate stock
powers so endorsed, and Newpark will issue and deliver certificates representing
the Newpark Shares to the Stockholders, in proportion to their ownership of the
Company Shares. No fractional Newpark Shares will be issued; if fractional
shares otherwise would issue, the Stockholders shall instruct Newpark at least
five business days before the Closing Date as to the rounding of such shares.
1.3 Legend on Newpark Shares. Certificates representing the Newpark
Shares initially will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY
<PAGE>
NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
SAID ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE IN THE
OPINION OF COUNSEL FOR THE ISSUER."
1.4 Adjustment Based on Closing Value. If the "Closing Value" (as
defined in Section 18) is between $40.50 and $49.50, no adjustment will be made
in the number of Newpark Shares. If the Closing Value falls outside that range,
the number of Newpark Shares will be adjusted as follows: If the Closing Value
is less than $40.50, the number of Newpark Shares to be issued will be
determined by dividing $6,750,000 (90% of $7,500,000) by the Closing Value. If,
for example, the Closing Value is $40.00, the number of Newpark Shares will be
168,750 ($6,750,000 divided by $40.00). If the Closing Value is greater than
$49.50, the number of Newpark Shares to be issued will be determined by dividing
$8,250,000 (110% of $7,500,000) by the Closing Value. If, for example, the
Closing Value is $50.00, the number of Newpark Shares will be 165,000
($8,250,000 divided by $50.00). In no event will the number of Newpark Shares
be less than 151,667 or greater than 181,667.
1.5 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Closing Date,
the number of Newpark Shares to be issued at the Closing Date shall be adjusted
to such extent as may be necessary to prevent dilution or enlargement of the
rights of the Stockholders. Such adjustments shall be made by the regular
independent certified public accountants for Newpark and a written report
thereof, showing the adjustment and the underlying calculations, shall be sent
to each party hereto.
1.6 Pooling of Interests. Between the date hereof and the Closing
Date, neither Newpark nor the Stockholders or any of their "Affiliates" (as
defined in Section 18) shall (a) knowingly take any action, or knowingly fail to
take any action, that would jeopardize the treatment of the Exchange as a
"pooling of interests" for accounting purposes; (b) knowingly take any action,
or knowingly fail to take any action, that would jeopardize qualification of the
Exchange as a reorganization within the meaning of Section 368(a)(1)(B) of the
Code; (c) enter into any contract, agreement, commitment or arrangement with any
such effect; or (d) cause or permit the Company to take any such action or fail
to take any such action. Following the Closing Date, Newpark shall use its best
efforts to conduct the business of the Company and shall cause the Company to
use its best efforts to conduct its business in a manner that would not
jeopardize the characterization of the Exchange as a "pooling of interests" for
accounting purposes or as a reorganization within the meaning of Section
368(a)(1)(B) of the Code.
2. Additional Agreements.
On the Closing Date, as a necessary incident of the Exchange, Newpark
and the Stockholders will execute and deliver the following additional
agreements: (i) Noncompetition Agreements substantially as set forth in Exhibit
2(a) attached to this Agreement (the "Noncompetition Agreements"); and (ii) a
Registration Rights Agreement substantially as set forth
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in Exhibit 2(b) attached to this Agreement (the "Registration Rights Agreement,"
and together with the Noncompetition Agreements, the "Additional Agreements").
3. Representations and Warranties of the Stockholders.
A. Except as otherwise specifically set forth in a three-ring binder
containing copies of documents, along with a ten-page outline ("the Disclosure
Letter") delivered by the Stockholders to Newpark prior to the execution hereof,
the Stockholders hereby jointly and severally warrant and represent the
following (the truth and accuracy of each of which shall constitute a condition
precedent to Newpark's obligations to consummate the Exchange and issue the
Newpark Shares):
3.1 Organization and Good Standing of the Company.
3.1.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the character or
location of the assets owned by the Company or the nature of the business
transacted by the Company require such qualification, except where failure to be
so qualified would not have a "Material Adverse Effect" (as defined in Section
18). The Disclosure Letter includes a list of the jurisdictions in which the
Company is qualified to do business.
3.1.2 Stockholders have furnished to Newpark complete and correct
copies of the Company's Articles of Incorporation and Bylaws as in effect on the
date hereof.
3.1.3 Stockholders have heretofore made available to Newpark for its
examination copies of the minute books, stock certificate books and corporate
seal of the Company. Said minute books are accurate in all material respects and
reflect all resolutions adopted and all material actions expressly authorized or
ratified by the stockholders and directors of the Company. The stock certificate
books reflect all issuances, transfers and cancellations of capital stock of the
Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of the Company consists of
5,000,000 shares of common stock, $1.00 par value, of which 100,000 shares,
i.e., the Company Shares, are issued and outstanding as of the date hereof. All
such issued and outstanding shares are validly issued, fully paid and
nonassessable. The Disclosure Letter includes the names, addresses and social
security numbers of, and the number of the Company Shares owned by, each of the
Stockholders.
3.2.2 There are no options, warrants, subscriptions or other rights
outstanding for the purchase of, and all securities convertible into, capital
stock of the Company. No shares of the Company are held as treasury stock.
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3.3 Equity Interests.
The Company does not have a material equity interest in any other
"Person" (as defined in Section 18).
3.4 No Violation. The execution, delivery and performance of this
Agreement by the Stockholders are not contrary to the Articles of Incorporation
or By-Laws of the Company and will not result in a violation or breach of any
term or provision or constitute a default or give any party a right to
accelerate the due date of any indebtedness under any indenture, mortgage, deed
of trust or other material contract or agreement to which the Company, the
Stockholders or any of them are a party or by which any of them are bound.
3.5 Financial Statements. The balance sheets of the Company as of
December 31, 1994, December 31, 1995 and December 31, 1996, and the related
statements of income, stockholders' equity and cash flows for the years ended
December 31, 1994, December 31, 1995 and December 31, 1996, accompanied by the
reports and opinions of Dan R. Lafollette, P.C., independent certified public
accountant, and the unaudited consolidated balance sheet of the Company as of
March 31, 1997, and the related statements of income, stockholders' equity and
cash flows for the three month period ended on said date, certified by the
principal financial officer of the Company, subject to year-end audit
adjustments, copies of which have heretofore been delivered to Newpark
(collectively the "Company Financial Statements"), were prepared in accordance
with the books and records of such Company in accordance with generally accepted
accounting principles (except for the absence of footnotes from the March 31,
1997, financial statements) consistently applied throughout the periods involved
(except as otherwise noted therein) and present fairly the consolidated
financial position, results of operations and cash flows of the Company for and
as of the end of each of such periods.
3.6 Properties. The Company has (except as disclosed in Disclosure
Letter) and on the Closing Date will have, good title to the assets and
properties shown in the Company Financial Statements or acquired since the date
of the latest balance sheet included therein, except as since sold or otherwise
disposed of in the ordinary course of business. At the Closing such title will
be free and clear of all liens, charges, security interests, encumbrances,
leases, covenants, conditions and restrictions other than "Permitted Liens," as
defined in Section 18. The plants, structures, leasehold improvements,
machinery, equipment, furniture and other tangible assets owned or leased by the
Company are in good operating condition and repair, subject only to ordinary
wear and tear, taking into account the respective ages of the assets involved,
and constitute all the fixed tangible assets necessary for the operation of the
business of the Company in accordance with its current methods of operation in
all material respects.
3.7 Contracts.
3.7.1 The Disclosure Letter includes a listing of all oral or
written (a) contracts, commitments, sales orders or purchase orders, whether or
not entered into in the ordinary course of business, which involve future
payments, performance of services or delivery of goods and/or materials, to or
by the Company of an amount or value in excess of $100,000; (b) bonus, incentive
compensation, pension, profit sharing, stock option, group insurance, medical
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reimbursement or employee welfare or benefit plans of any nature whatsoever; (c)
collective bargaining agreements or other contracts or commitments to or with
labor unions or other employee groups; (d) leases, contracts or commitments
affecting ownership of, title to, use of or any material interest in real
estate; (e) employment contracts and other contracts, agreements, or commitments
to or with individual employees, consultants or agents extending for a period of
more than six months from the date hereof or providing for earlier termination
only upon payment of a penalty or the equivalent thereof; (f) equipment leases
providing (in any one lease or group of related leases) for payments in excess
of $100,000 per year; (g) contracts under which the performance of any
obligation of the Company is guaranteed by a Stockholder or other third party,
including performance bonding arrangements; (h) contracts or commitments
providing for payments based in any manner upon the revenues, purchases or
profits of the Company; (i) bank credit, factoring and loan agreements,
indentures, promissory notes and other documents representing indebtedness in
excess of $100,000 for borrowed money; (j) patent licensing agreements and all
other agreements with respect to patents, patent applications, trademarks,
service marks, trade names, technical assistance, special processes, know-how,
copyright or other like items; and (k) other contracts and agreements to which
the Company is a party and which have not been fully performed, involving
consideration having a value in excess of $100,000 and a remaining period for
performance in excess of nine months (all such items being collectively referred
to herein as "Material Contracts"). The Stockholders have furnished to Newpark
true and complete copies of all such Material Contracts.
3.7.2 All Material Contracts are valid and binding obligations of the
Company and, to the "best of the knowledge" of the Stockholders, as defined in
Section 18, the other parties thereto in accordance with their respective terms,
subject to the Bankruptcy Exception, as defined in Section 18; there have been
no amendments to or modifications to any Material Contract (except as set forth
in the copies furnished to Newpark); no event has occurred which is, or,
following any grace period or required notice, would become a material default
by the Company under the terms of any Material Contract; except to the extent
specifically reserved against on the latest balance sheet included in the
Company Financial Statements, the Company is not a party to any Material
Contract on which either or both of the Stockholders anticipate expenses
materially in excess of revenues or which is otherwise onerous or materially
adverse; and the Company has not expressly waived any material rights under any
Material Contract.
3.8 Outstanding Indebtedness. The Disclosure Letter includes a true
and com plete schedule of all notes payable and other indebtedness in excess of
$250,000 for borrowed money owed by the Company, including a description of the
material terms thereof and a description of all properties or assets pledged,
mortgaged or otherwise hypothecated (voluntarily or involuntarily) as security
therefor.
3.9 Absence of Undisclosed Liabilities. Except as disclosed in the
Disclosure Letter and except for liabilities and obligations reflected on the
latest balance sheet included in the Company Financial Statements or arising in
the ordinary course of business since the date of such balance sheet, none of
which latter items, individually or in the aggregate, have a Materially Adverse
Effect: (a) the Company does not have, and none of its properties are subject
to, any debts, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, which are of a type which are required to be
shown or reflected on financial statements
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prepared in a manner consistent with generally accepted accounting principles;
and (b) to the best of the knowledge of the Stockholders, the Company does not
have, and none of its properties are subject to, any material debts, liabilities
or obligations of any nature, whether accrued, absolute, contingent or
otherwise, whether or not of a type which are required to be shown or reflected
on financial statements prepared in a manner consistent with generally accepted
accounting principles. The Company is not in default with respect to any
material term or condition of any indebtedness.
3.10 No Litigation. Except as disclosed in the Disclosure Letter,
there are no actions, suits or proceedings (whether or not purportedly on behalf
of the Company) pending or, to the knowledge of the Stockholders, threatened
against or affecting the Company, at law or in equity or before or by any
Government Body or before any arbitrator of any kind. To the best of the
knowledge of the Stockholders, the Company is not in default with respect to any
judgment, order, writ, injunction, decree, award of any Government Body.
3.11 Environmental Matters.
3.11.1 Neither the Company nor, to the best of the knowledge of the
Stockholders, any previous owner, lessee, tenant, occupant or user of any real
property owned or leased on or prior to the date hereof by the Company (such
real property and any and all buildings and other improvements thereon being
herein referred to as the "Property") used, generated, manufactured, treated,
handled, refined, processed, released, discharged, stored or disposed of any
"Hazardous Materials" (as defined in Section 18) on, under, in or about the
Property, or transported any Hazardous Materials to or from the Property in
violation of any "Hazardous Materials Laws" (as defined in Section 18) in a
manner or to an extent that resulted or is reasonably likely to result in a
Material Adverse Effect. To the best of the knowledge of the Stockholders, no
underground tanks or underground deposits or Hazardous Materials the existence
of which would have a Material Adverse Effect existed on, under, in or about any
Property previously owned or leased by the Company on or prior to the date that
fee or leasehold title to such Property was transferred to a third party by the
Company. To the best of the knowledge of the Stockholders, no underground tanks
or underground deposits or Hazardous Materials the existence of which would have
a Material Adverse Effect exist on, under, in or about any Property that is
currently owned or leased by the Company.
3.11.2 While any Property was owned or leased by the Company, it
did not violate to an extent that would have a Material Adverse Effect any
applicable federal, state and local laws, ordinances or regulations, now or
previously in effect, relating to environmental conditions, industrial hygiene
or Hazardous Materials on, under, in or about such Property (including without
limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge of the
Stockholders, there are no (1) enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Company or any Property
presently owned or leased by the Company, (2) claims made or threatened by any
Person or Government Body relating to the Property against the Company or any
Property presently owned or leased by the Company or relating to
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damage, contribution, cost recovery, compensation, loss or injury resulting from
any Hazardous Materials or (3) any occurrence or condition known to the
Stockholders on any Property that is currently owned or leased by the Company
that can reasonably be expected to subject the Company or such Property to any
material restrictions on occupancy, transferability or use of any Property under
any Hazardous Materials Laws. The Disclosure Letter includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of the Stockholders, have been received by or asserted
against the Company.
3.12 Taxes.
3.12.1 The Company has filed all income, franchise and other "Tax
Returns" (as defined in Section 18) required to be filed by it by the date
hereof. All "Taxes" (as defined in Section 18) imposed by the United States,
the State of Texas and by any other state, municipality, subdivision, or other
taxing authority, which are due and payable by the Company have been paid in
full or are adequately provided for by reserves reflected on the latest balance
sheet included in the Company Financial Statements. The Company is an S
Corporation under Subchapter S of the Code for federal income Tax purposes. The
Stockholders have paid all income Taxes required to be paid by them with respect
to all items of income, net of all deductions, allocable to them for federal
income tax purposes by reason of the Company's status as an S Corporation, for
each taxable year ended on or before December 31, 1996.
3.12.2 All contributions due from the Company pursuant to any
unemployment insurance or workers compensation laws and all sales or use Taxes
which are due or payable by the Company have been paid in full and will be so
paid through the Closing Date. The Company has withheld and paid to, or will
cause to be paid to, the appropriate taxing authorities all amounts required to
be withheld from the wages of its employees under state law and the applicable
provisions of the Code, and the Company will continue to do so with respect to
all wages paid by it through the Closing Date.
3.12.3 The Stockholders have furnished to Newpark true and complete
copies of the federal income Tax Returns and comparable state Tax Returns of the
Company covering the years ended December 31, 1993, December 31, 1994 and
December 31, 1995, constituting complete and accurate representations in all
material respects of the Tax liabilities of the Company for the relevant periods
stated therein and accurately setting forth all relevant material items,
including the Tax bases of all assets, where required to be set forth in such
Tax Returns.
3.13 Permits and Licenses. The Company has all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof, and the Company is in compliance in all material respects with all
applicable federal, state and local laws, rules, regulations and orders relating
to its business, except where failure to have any such license, franchise,
permit or authorization or failure to comply with any such laws, rules,
regulations and orders would not have a Material Adverse Effect. The execution
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not cause the termination or suspension of any license,
franchise, permit or governmental authorization or
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violate any provision of or constitute a default under any law, rule or
regulation, order, writ, injunction or decree of any Government Body applicable
to the Stockholders or the Company, where such violation or default would have a
Material Adverse Effect.
3.14 No Labor Problems. Except as disclosed in the Disclosure Letter:
the Company has not been charged with any unresolved unfair labor practices;
there are no material controversies pending or threatened between the Company
and any of its employees; the Company has complied in all material respects
with all laws relating to wages, hours, collective bargaining and similar
employment matters the noncompliance with which would have a Material Adverse
Effect, and the Company has paid all social security and similar Taxes that are
due and payable and is not liable for any arrears or wages or any Taxes or
material penalties for failure to comply with any of the foregoing.
3.15 Employee Benefit Plans.
3.15.1 Definition of Benefit Plans. For purposes of this Section
3.15, the term "Benefit Plan" means any plan, program, arrangement, practice or
contract which provides benefits or compensation to or on behalf of employees or
former employees of the Company or any "ERISA Affiliate" (as hereinafter
defined), whether formal or informal, whether or not written, including but not
limited to the following:
(a) Arrangements - any bonus, incentive compensation, stock option,
deferred compensation, commission, severance, golden parachute or other
compensation plan, rabbi trust, program, contract, arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as defined in Section
3(3) of ERISA), including, but not limited to, any "multi-employer plan" (as
defined in Section 3(37) and Section 4001(a)(3) of ERISA), defined benefit
pension plan, profit sharing plan, money purchase pension plan, 401(k) plan,
savings or thrift plan, stock bonus plan, employee stock ownership plan, or any
plan, fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability, or
life insurance benefits; and
(c) Other Employee Fringe Benefits - any stock purchase, vacation,
scholarship, day care, prepaid legal services, severance pay or other fringe
benefit plan, program, arrangement, contract or practice.
3.15.2 ERISA Affiliate. For purposes of this Section 3.15, the
term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Company is treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.15.3 Identification of Benefit Plans. The Company does not
maintain, and has not at any time established or maintained, nor has at any time
been obligated to make contributions to or under or otherwise participate in any
Benefit Plan.
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3.15.4 MEPPA Liability/Post-Retirement Medical Benefits/ Defined
Benefit Plans/Supplemental Retirement Plans. Neither the Company nor any ERISA
Affiliate maintains, or has at any time established or maintained, or has at any
time been obligated to make contributions to or under any multi-employer plan.
Neither the Company nor any ERISA Affiliate maintains, or has at any time
established or maintained, or has at any time been obligated to make
contributions to or under (i) any plan which provides post-retirement medical or
health benefits, (ii) any organization described in Sections 501(c)(9) or
501(c)(20) of the Code, (iii) any defined benefit pension plan subject to Title
IV of ERISA or (iv) any plan which provides retirement benefits in excess of the
limitations of Section 415 of the Code.
3.15.5 Liabilities. The execution and performance of the
transactions contemplated by this Agreement will not create, accelerate or
increase any obligation to make any payment which, as an "excess parachute
payment" under Section 280G of the Code, would not be deductible.
3.16 Insurance. The Stockholders have furnished to Newpark a complete
list of all insurance policies that the Company maintains, indicating risks
insured against, carrier, policy number, amount of coverage, premiums and
expiration date.
3.17 Tax-Free Reorganization. Neither of the Stockholders plans or
intends to sell, exchange or otherwise dispose of a number of the Newpark Shares
that would reduce the Stockholders' ownership of Newpark Shares to a number of
shares having a value, as of the Closing Date, of less than fifty percent (50%)
of the value of all of the formerly outstanding Company Shares as of the same
date.
3.18 Interest in Competitors, Suppliers, etc. Except as set forth
in the Disclosure Letter, neither of the Stockholders and no officer or director
of the Company or any Family Member of any such Person owns, directly or
indirectly, individually or collectively, any interest in any corporation,
partnership, proprietorship, firm or association which (a) is a competitor,
customer or supplier of the Company, or (b) has an existing contractual
relationship with the Company, including but not limited to lessors of real or
personal property leased to the Company and entities against whom rights or
options are exercisable by the Company. On the Closing Date the Company will
own, free and clear and without payment of any royalty or fee, all interests in
the assets, profits or business of the Company that are held by any Affiliate of
the Company, including the Stockholders and their Family Members.
3.19 Indebtedness with Insiders. Except as set forth in the
Disclosure Letter, and except for accrued salaries for one payroll period,
vacation pay and business expense reimbursements, the Company is not, and, on
the Closing Date, will not be, indebted to any of the stockholders, directors or
officers of the Company or any Affiliate of any such Person. None of such
Persons is or will be on the Closing Date indebted to the Company.
3.20 Consents. No authorizations, approvals or consents of any
Government Body are required for consummation of the transactions contemplated
by this Agreement or the subsequent operation of the business of the Company.
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3.21 Patents, Trademarks and Other Intangibles. The Disclosure
Letter includes a list of all material patents, patent applications, trade
names, trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. The Company owns or has the right to use all Intangible
Assets now used in the conduct of its business. Such Intangible Assets include
all of the proprietary products and formulations developed by the Company or
used by it in its business. The Company is not obligated to pay any royalty or
other fee to any licensor or other third party with respect to any Intangible
Assets. The Stockholders have no knowledge of any claim received by the Company
alleging any conflict between any aspect of the business of the Company and any
Intangible Assets claimed to be owned by others which, if determined adversely
to the Company, would have a Material Adverse Effect. Neither the Stockholders
nor any other officer or director of the Company, and no Person that is an
Affiliate of any such Person has any interest in any Intangibles Assets which
are presently used by the Company or which infringe upon, conflict with or
relate to improvements or modifications of any Intangible Assets presently used
by the Company.
3.22 Purchases and Sales. Since December 31, 1996, the Company has
not placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and has not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from the conditions
regularly and usually specified in contracts for similar engagements from
customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Company nor the
Stockholders (or any Affiliate of the Stockholders) has incurred any liability
to any broker, finder or agent for any brokerage fees, finder's fees or
commissions for which the Company could be liable with respect to the
transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since December 31, 1996, except for
matters of a general economic nature which do not affect the Company uniquely,
the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess of $25,000
in a single transaction or $100,000 in the aggregate, except borrowings under
its bank lines of credit in the ordinary course of business, or incurred or
become subject to any obligation or liability (absolute or contingent) in excess
of $25,000 in a single transaction or $100,000 in the aggregate, except
obligations and liabilities incurred in the ordinary course of business;
3.24.3 mortgaged, pledged, hypothecated or otherwise encumbered any
of its properties or assets except for Permitted Liens;
3.24.4 made or agreed to make any distribution of any funds or
assets of any kind whatsoever to any past or present stockholder of the Company
or any Affiliate of any such Person, whether by way of dividend, redemption or
purchase of capital stock, or any other
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type of distribution on or with respect to its capital stock, whether or not
similar to the foregoing, except dividends in an amount that is not in excess of
the federal income Tax liability of the Stockholders related to the income, net
of deductions, for 1996 that is allocable to them for as a result of the
Company's status as an S Corporation;
3.24.5 made any payment of principal or interest on any
indebtedness owed to any past or present stockholder of the Company or any
Affiliate of any such Person;
3.24.6 sold or agreed to sell any of its assets, properties or
rights having an aggregate value in excess or $100,000 or canceled or agreed to
cancel any debts or claims exceeding $100,000 in the aggregate, except for fair
value in the ordinary course of business;
3.24.7 entered or agreed to enter into any agreement or arrangement
granting any preferential right to purchase a material part of its assets,
properties or rights;
3.24.8 increased the rate of compensation of or paid or accrued
bonuses to or for any of its officers, employees, consultants or agents, except
for normal merit or cost of living increases;
3.24.9 suffered any damage, destruction or loss in excess of an
aggregate of $100,000, whether or not covered by insurance, adversely affecting
any of its properties;
3.24.10 assigned or agreed to assign any of its Intangible
Assets having a value in excess of $100,000;
3.24.11 suffered any adverse amendment or termination of any Material
Contract (or any contract that would have been a Material Contract if not
amended or terminated) to which it is a party;
3.24.12 paid any commissions or similar fees to brokers or finders
for arranging the transactions contemplated by this Agreement or any similar
proposed transaction with any other party; or
3.24.13 entered into any other material transaction other than
in the ordinary course of business.
3.25 No Material Misstatements or Omissions. No representation or
--------------------------------------
warranty by the Stockholders in this Agreement, and no document, statement,
certificate, exhibit or schedule furnished or to be furnished to Newpark
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated therein or necessary in
order to make the statements or facts therein, in the light of the circumstances
under which they were made, not misleading.
B. Except as otherwise set forth in the Disclosure Letter, each
Stockholder represents and warrants with respect to himself, severally but not
jointly, the following (the truth
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and accuracy of each of which shall constitute a condition precedent to
Newpark's obligations to consummate the Exchange and issue the Newpark Shares):
3.26 Investment Representations. Either such Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the "Rules and
Regulations" (as defined in Section 18) or such Stockholder, either alone or
with such Stockholder's qualified "purchaser representative" (as defined in Rule
501 of the Rules and Regulations), has such knowledge and experience in
financial and business matters that he is capable of evaluating the risks and
merits of an investment in Newpark Common Stock. Such Stockholder is acquiring
his Newpark Shares in the Exchange for investment and not with a view to the
sale thereof other than in compliance with the requirements of the "Securities
Act" (as defined in Section 18) and applicable Blue Sky laws. At the request
of Newpark, each Stockholder will furnish to Newpark evidence reasonably
satisfactory to Newpark that the foregoing representations are true.
3.27 Enforceability. This Agreement has been duly and validly executed
by such Stockholder, and this Agreement constitutes a legal, valid, and binding
obligation of such Stockholder, enforceable against him in accordance with its
terms, subject to the Bankruptcy Exception. Such Stockholder has the requisite
power to enter into this Agreement and perform his obligations hereunder
(including without limitation to sell and deliver his Company Shares), and no
other Person's joinder as a party hereto is necessary therefor pursuant to any
community property laws or otherwise, and there is no restriction on the power
of the Stockholder to sell and deliver his Company Shares pursuant to any trust,
estate planning or other similar document or any prenuptial or post-nuptial
agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the knowledge
of the Stockholders, threatened in any court or arbitration forum or by or
before any Government Body involving the Company or such Stockholder relating to
or affecting any of the transactions contemplated by this Agreement.
3.29 Title to Shares. Each Stockholder is the holder of record and
owns beneficially that number of Company Shares set forth opposite his name in
the Disclosure Letter. At the Closing, each Stockholder will own the Company
Shares set forth in the Disclosure Letter free and clear of all liens, security
interests, encumbrances and restrictions, other than restrictions contemplated
by this Agreement. Except as set forth in the Disclosure Letter, no Stockholder
is a party to any voting trust, proxy or other agreement with respect to the
voting of any of such Company Shares.
4. Additional Obligations and Covenants of the Stockholders.
Except as otherwise provided in the Disclosure Letter, the
Stockholders hereby jointly and severally covenant and agree with Newpark as
follows (the fulfillment of each such covenant and agreement is a condition
precedent to Newpark's obligations to consummate the Exchange and issue the
Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the Closing
Date, the Stockholders will and will cause the Company to comply with the
following:
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4.1.1 The business of the Company shall be conducted diligently and
only in the ordinary course, and the Stockholders will use reasonable efforts to
preserve the organization of the Company intact, to keep available to the
Company its present key employees and to maintain the relationships of the
Company with its suppliers, customers and others. The Company will not, without
Newpark's prior written approval, increase the rate of compensation payable or
to become payable to any of its officers, employees, consultants or agents over
the rate being paid to them at the date hereof, except for normal merit or cost
of living increases to employees other than officers of the Company.
4.1.2 Without Newpark's prior written approval, the Company will
not adopt any Benefit Plan for the benefit of any employees of the Company or
any ERISA Affiliate.
4.1.3 The Company will not, without Newpark's prior written
approval, enter into any Material Contract other than in the ordinary course of
business or enter into contracts with customers under conditions relating to
price, terms of payment, time of performance or like matters materially
different from the conditions regularly and usually specified in contracts for
similar engagements from customers similarly situated.
4.1.4 The Company will not, without Newpark's prior written
approval, sell or dispose of any of its material properties or assets except for
sales at fair value in the ordinary course of business.
4.1.5 The Company will not, without Newpark's prior written
approval, acquire or enter into any agreement to acquire, by merger,
consolidation, purchase of stock or assets or otherwise, any business or entity.
4.1.6 The Company will use reasonable diligence to maintain its
properties in their condition as of the date of this Agreement, ordinary wear
and tear excepted.
4.1.7 The Company will continue to carry its existing insurance
policies subject only to variations in amounts required by the ordinary
operations of its business. At the request of Newpark and at its sole expense,
the amount and scope of said insurance shall be increased by such amounts and
extended to provide coverage against such risks as Newpark shall specify.
4.2 Access and Information. Subject to the execution by Newpark of a
confidentiality agreement in form and substance reasonably satisfactory to the
Stockholders, Stockholders will afford to Newpark and Newpark's counsel,
accountants and other representatives reasonable access, throughout the period
from the date hereof to the Closing Date, to all of the Company's properties,
books, contracts, commitments, and records and shall furnish Newpark during such
period with all information that Newpark reasonably may request, including
copies and/or extracts of pertinent records, documents and contracts.
4.3 Efforts to Satisfy Conditions. The Stockholders agree to use
reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to Newpark's obligations under this Agreement, to the extent that
their action or inaction can control or influence the
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satisfaction of such conditions. Without limiting the generality of the
foregoing the Stockholders will and will cause the Company to refrain from all
negotiations and transactions, the con summation of which would be inconsistent
with the transactions contemplated by this Agreement, including, without
limitation, any transaction providing for the sale of any capital stock of the
Company, any merger or other business combination involving the Company, the
acquisition of a substantial equity interest in the Company by a third party or
the sale of a substantial portion of the assets of the Company.
4.4 Corporate Matters. Between the date hereof and the Closing Date,
the Stockholders will cause the Company not to, without Newpark's prior written
approval: (a) amend its Articles of Incorporation or Bylaws; (b) issue any
shares of its capital stock; (c) issue or create any warrants, obligations,
subscriptions, options, convertible securities or other commitments under which
any additional shares of its capital stock of any class might be directly or
indirectly authorized, issued or transferred from treasury, or (d) enter into
any agreement requiring it to do any of the foregoing prohibited acts.
4.5 No Distributions to Stockholders. Between the date hereof and
the Closing Date, the Stockholders will cause the Company not to, without
Newpark's prior written approval: (a) declare, set aside or pay any dividend or
make any distribution in respect of its capital stock, except that the Company
may declare and pay a dividend (the "Tax Dividend") to the Stockholders on or
before the Closing Date, in an amount equal to the Stockholders' estimated
liability for federal income Tax (the "Short Period Income Taxes") on income,
net of deductions allocated to them by reason of the Company's status as an S
Corporation, for the period from December 31, 1996, to and including the day
before the Closing Date (the "Short Period"); (b) directly or indirectly
purchase, redeem or otherwise acquire any shares of its capital stock for
consideration; (c) pay or distribute any cash or property to any Stockholder as
a loan or in payment of principal of or interest on any indebtedness to any
Stockholder (except however, the existing commission arrangements between the
Company and Jones as an individual, and between the Company and Eisenman
Enterprises, Inc., which arrangements shall terminate as of the Closing Date);
or (d) enter into any agreement requiring it to do any of the foregoing
prohibited acts.
4.6 Capital Expenditures. Between the date hereof and the Closing
Date, the Stockholders will cause the Company not to, without Newpark's prior
written approval, make any commitment for capital expenditures in excess of an
aggregate of $50,000.
4.7 Indebtedness. Between the date hereof and the Closing Date, the
Stockholders will cause the Company not to, without Newpark's prior written
approval: (a) create, incur or assume any long-term debt (including capital
leases that individually involve annual payments in excess of $50,000) or,
except in the ordinary course of business under existing lines of credit,
create, incur or assume any short-term debt for borrowed money in excess of
$25,000 in a single transaction or $50,000 in the aggregate; (b) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person (except in
the ordinary course of business and consistent with past practice); (c) make any
loans or advances to any Person except in the ordinary course of business and
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consistent with past practice; or (d) make any capital contributions to, or
investments in, any Person except in the ordinary course of business and
consistent with past practice.
4.8 Limit on Sale of Newpark Shares. Each Stockholder hereby agrees
that he will not offer to sell, transfer or otherwise dispose of any of the
Newpark Shares issued to him pursuant to the Exchange, except (a) in accordance
with the applicable provisions of the Securities Act and the Rules and
Regulations and (b) until such time as financial results covering at least 30
days of combined operations of Newpark and the Company have been published
within the meaning of Section 201.01 of the Commission's Codification of
Financial Reporting Policies.
5. Representations and Warranties of Newpark.
Newpark hereby represents and warrants the following (the truth and
accuracy of each of which shall constitute a condition precedent to the
Stockholders' obligations to consummate the Exchange):
5.1 Organization and Good Standing.
5.1.1 Newpark is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Newpark has
corporate power and authority to carry on its business as presently conducted
and is qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it or both require qualification and failure to be so qualified would have a
Material Adverse Effect.
5.1.2 Newpark has furnished to the Stockholders complete and
correct copies of Newpark's Certificate of Incorporation and Bylaws as in effect
on the date hereof.
5.2 Capital Stock. The authorized capital stock of Newpark consists
of 20,000,000 shares of Common Stock, $.01 par value, of which 15,175,438 shares
were issued and outstanding on March 24, 1997, and 1,000,000 shares of Preferred
Stock, $.01 par value, of which no shares are issued and outstanding. Newpark's
Board of Directors and stockholders have approved amendments to Newpark's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock to 80,000,000 and to effect a two-for-one split of the Common
Stock, both to take effect on May 30, 1997.
5.3 Newpark Subsidiaries. Each subsidiary of Newpark that is a
"significant subsidiary," as defined in Rule 1-02(w) of Regulation S-X of the
Rules and Regulations (each a "Newpark Subsidiary" and collectively the "Newpark
Subsidiaries), is duly organized and in good standing under the laws of the
jurisdiction in which it was incorporated or organized, has full corporate power
and authority to carry on its business as now conducted by it and is entitled to
own or lease and operate its properties and assets now owned or leased and
operated by it. Each Newpark Subsidiary is duly qualified and in good standing
as a foreign corporation or other entity in each jurisdiction where the
character or location of the assets owned by it or the nature of the business
transacted by it require such qualification, except where failure to be so
qualified would not have a Material Adverse Effect.
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5.4 Authority. The execution and delivery of this Agreement by
Newpark and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of Newpark. This Agreement has been
duly executed and delivered to the Stockholders and no vote of the stockholders
of Newpark or further corporate action is necessary on the part of Newpark to
make this Agreement valid and binding upon Newpark in accordance with its terms,
subject to the Bankruptcy Exception. The execution, delivery and performance of
this Agreement by Newpark are not contrary to the Certificate of Incorporation
or By-Laws of Newpark and will not result in a violation or breach of any term
or provision or constitute a default or give any party a right to accelerate the
due date of any indebtedness under any indenture, mortgage, deed of trust or
other contract or agreement to which Newpark is a party or by which Newpark is
bound.
5.5 Newpark Reports. Newpark has delivered to the Stockholders
copies of Newpark's Annual Reports on Form 10-K for the years ended December 31,
1994, 1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997, and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the Commission
after the date hereof are called the "Newpark Reports" herein. The Newpark
Reports have been or will be duly and timely filed with the Commission and are
or will be when filed in compliance with the Rules and Regulations. As of their
respective dates, none of the Newpark Reports contained or will contain any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
5.6 Newpark Financial Statements. The financial statements
contained in the Newpark Reports (the "Newpark Financial Statements") filed on
or before the date hereof have been prepared in accordance with the books and
records of Newpark and its subsidiaries and in accordance with generally
accepted accounting principles consistently applied during the periods
indicated, all as more particularly set forth in such financial statements and
the Notes thereto. Each of the balance sheets included in the Newpark Financial
Statements presents fairly as of its date the consolidated financial condition
and assets and liabilities of Newpark and its subsidiaries. Except as and to
the extent reflected or reserved against in such balance sheets (including the
Notes thereto), Newpark (including its subsidiaries) did not have, as of the
dates of such balance sheets, any material liabilities or obligations (absolute
or contingent) of a nature customarily reflected in a balance sheet or the notes
thereto prepared in accordance with generally accepted accounting principles.
The consolidated statements of earnings and stockholders' equity and
consolidated statements of changes in financial position included in the Newpark
Financial Statements present fairly the results of operations and changes in
financial position of Newpark and its subsidiaries for the periods indicated.
5.7 No Litigation. Except as disclosed in the Newpark Reports or
omitted therefrom in accordance with the Rules and Regulations: (a) there are no
actions, suits or proceedings (whether or not purportedly on behalf of Newpark
or any Newpark Subsidiary) pending or, to the "knowledge of Newpark" (as defined
in Section 18), threatened against or affecting Newpark or any Newpark
Subsidiary, at law or in equity or before or by any
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Government Body or before any arbitrator of any kind; and (b) to the best of the
knowledge of Newpark, neither Newpark nor any Newpark Subsidiary is in default
with respect to any judgment, order, writ, injunction, decree, award of any
court, arbitrator or Government Body.
5.8 Newpark Benefit Plans. Newpark has made available to the
Stockholders a true and complete copy of the ERISA summary plan description and
any other summary of plan provisions provided to participants or beneficiaries,
if applicable, for each Benefit Plan (as defined in Section 3.15.1, substituting
"Newpark" for "the Company") maintained by Newpark.
5.9 Environmental Matters. Newpark and the Newpark Subsidiaries have
complied in all material respects with all Hazardous Materials Laws applicable
to their properties and business. Neither Newpark nor, to the best of Newpark's
knowledge, any Newpark Subsidiary has received any complaint, order or similar
notice that it is not in compliance with any Hazardous Materials Laws or that
any Government Body is investigating its compliance with any Hazardous Materials
Laws, except as disclosed in the Newpark Reports or omitted therefrom in
accordance with the Rules and Regulations and except for routine inspections and
investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.10 Absence of Certain Changes. Since December 31, 1996, there has
not been any material adverse change in the results of operations, financial
condition, liquidity, assets, properties or business of Newpark and its
subsidiaries, taken as a whole.
5.11 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except such qualifications as may be required
under state securities or Blue Sky laws relating to the Newpark Shares.
5.12 No Material Misstatements or Omissions. No representation or
warranty by Newpark in this Agreement, and no document, statement, certificate,
exhibit or schedule furnished or to be furnished to the Stockholders pursuant
hereto, or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact required to be stated therein or necessary to make the
statements or facts contained therein not misleading.
6. Additional Obligations and Covenants of Newpark.
Newpark hereby covenants and agrees with the Stockholders as follows
(the fulfillment of each such covenant and agreement is a condition precedent to
the Stockholders' obligations to consummate the Exchange):
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6.1 Efforts. Newpark agrees to use reasonable efforts to satisfy or
cause to be satisfied all of the conditions precedent to the Stockholders'
obligations under this Agreement, to the extent that its action or inaction can
control or influence the satisfaction of such conditions.
6.2 Additional Information. Newpark will make available to each
Stockholder the opportunity to ask questions and receive answers concerning the
terms and conditions of the Exchange and to obtain any additional information
that Newpark is required to furnish under Regulation D of the Rules and
Regulations.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of this Agreement, will
issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use all
reasonable efforts to qualify the issuance of the Newpark Shares in connection
with the Exchange under Rule 506 of the Rules and Regulations and, if necessary,
to qualify the issuance thereof pursuant to all applicable state securities or
Blue Sky laws.
6.5 Continuing Employees. Each employee of the Company who continues
immediately after the Closing Date as an employee of the Company, Newpark, or
any of its subsidiaries ("Continuing Employee") shall be treated under Newpark's
compensation, benefit plans and employment policies and practices on a basis
which Newpark deems no less favorable than an employee of Newpark who performs
comparable duties and responsibilities for Newpark on an equally satisfactory
basis. Each Continuing Employee shall receive service credit for all purposes
(including, but not limited to, vesting, eligibility and benefit accrual) under
Newpark's "Benefit Plans" (as defined in Section 3.15.1, substituting "Newpark"
for "the Company") and under any Benefit Plan adopted in the future for service
completed with the Company as if such service had been completed with Newpark
except that (a) no such employee shall receive such past service credit under a
future Benefit Plan except on the same basis that Newpark's employees also
receive past service credit under such plan, and (b) no such past service credit
will be provided under a plan if the Internal Revenue Service determines that
such credit would adversely affect the tax qualified status of such plan under
Section 401 of the Code.
6.6 Stockholder Guarantees. Subject to consummation of the Exchange,
Newpark agrees that, after the Closing Date, it will cause the Company to
discharge in accordance with its terms all indebtedness of the Company as to
which the Stockholders have executed personal guarantees, as disclosed in the
Disclosure Letter.
7. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the Exchange
under this Agreement shall be subject to the satisfaction on or before the
Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
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7.1 Securities Laws. All applicable Blue Sky and state securities
laws shall have been complied with in connection with the issuance of the
Newpark Shares, and no stop order suspending the qualification or registration
of the Newpark Shares under the Blue Sky laws of any jurisdiction shall have
been issued and no proceeding for that purpose shall have been initiated or
shall be threatened by the authorities of any such jurisdiction.
7.2 Additional Agreements Executed. The Additional Agreements shall
have been executed and delivered.
7.3 Government Body Consents. All consents, authorizations, orders
and approvals of (or filings or registrations with) any Government Body required
in connection with the execution, delivery and performance of this Agreement or
the operation of the business of the Company following the Closing Date shall
have been obtained or made, except where the failure to have obtained or made
any such consent, authorization, order, approval, filing or registration would
not have a Material Adverse Effect following the Closing Date.
7.4 Injunction. At the Closing Date there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the Exchange may not be consummated as herein provided, no proceeding or
lawsuit shall have been commenced by any Government Body for the purpose of
obtaining any such injunction, writ or preliminary restraining order and no
written notice shall have been received from any Government Body indicating an
intent to restrain, prevent, materially delay or restructure the transactions
contemplated by this Agreement.
7.5 Tax Opinion. The Stockholders and Newpark shall each have
received a written opinion of Ervin, Cohen & Jessup, in form reasonably
satisfactory to the Stockholders and Newpark (the "Tax Opinion"), to the effect
that (a) the Exchange will constitute a reorganization within the meaning of
Section 368(a)(1)(B) of the Code, (b) the exchange of the Company Shares for
Newpark Shares will not give rise to gain or loss to the Stockholders, (c) the
basis of Newpark Shares received in the Exchange by a Stockholder will be the
same as the basis of such Stockholder in Company Shares which were exchanged for
such Newpark Shares, and (d) the holding period for Newpark Shares received in
the Exchange by a Stockholder will include the holding period of such
Stockholder in Company Shares which were exchanged for such Newpark Shares. In
connection with such tax opinion, Ervin, Cohen & Jessup shall be entitled to
make factual assumptions as are customary in similar tax opinions, and such
factual assumptions shall be confirmed by certificates signed by the
Stockholders and by responsible officers of the Company and Newpark.
7.6 Pooling. The Stockholders and Newpark shall have been advised in
writing, as of the Closing Date, by Deloitte & Touche that, in accordance with
generally accepted accounting principles, the Exchange qualifies to be treated
as a "pooling of interests" for accounting purposes, and that they are not aware
of any conditions that would preclude the utilization of pooling of interest
accounting.
7.7 Listing of Newpark Shares. The Newpark Shares shall have been
listed on the New York Stock Exchange, subject to official notice of issuance.
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8. Conditions Precedent to Obligations of Newpark.
The obligations of Newpark to consummate the Exchange and issue the
Newpark Shares are subject to the satisfaction of each of the additional
following conditions at or prior to the Closing, unless waived in writing by
Newpark:
8.1 Accuracy of Warranties and Representations. The
representations and warranties of the Stockholders herein shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect, except as to transactions permitted herein or to which Newpark
may have consented in writing and changes occurring in the ordinary course of
business after the date of this Agreement and not materially adversely affecting
the Company, or its properties, prospects, or financial condition, as though
such representations and warranties had been made on and as of the Closing Date,
and the Stockholders shall have performed in all material respects all covenants
required by this Agreement to be performed by them at or prior to the Closing.
8.2 No Adverse Change. There shall have been no changes after the
date of this Agreement in the results of operations, assets, liabilities,
financial condition or affairs of the Company which in their total effect have a
Materially Adverse Effect on the Company.
8.3 Stockholders' Certificate. The Stockholders shall have delivered
to Newpark a certificate, dated as of the Closing Date, executed by each of the
Stockholders, individually, stating that, to the best knowledge of each, (a) all
the representations and warranties of the Stockholders contained in this
Agreement are true and accurate, (b) all of the conditions precedent to the
obligations of Newpark hereunder have been fulfilled and (c) the Stockholders
have duly performed all obligations and covenants to be performed by them
hereunder.
8.4 Material Contracts. The Company shall have received consents to
assignment of all Material Contracts or written waivers of the provisions of any
Material Contracts requiring the consents of third parties as set forth in the
Disclosure Letter, except where the failure to have obtained any such consent or
written waiver would not have a Material Adverse Effect following the Closing
Date.
8.5 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for Newpark, and there shall have been furnished to such counsel by the
Stockholders certified copies of such corporate records of the Company and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
8.6 Opinion of the Stockholders' Counsel. Newpark shall have
received an opinion of Paul P. Bazelides, Esq., dated the Closing Date,
substantially in the form attached hereto as Exhibit 8.6.
8.7 Directors of the Company. The number of authorized directors of
the Company shall have been increased to five, and James D. Cole, Wm. Thomas
Ballantine and Matthew W. Hardey shall have been elected to serve as directors,
along with Stockholders.
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9. Conditions Precedent to Obligation of the Stockholders.
The obligations of the Stockholders to consummate the Exchange are
subject to the satisfaction of each of the following additional conditions at or
prior to the Closing, unless waived in writing by the Stockholders:
9.1 Accuracy of Warranties and Representations. The representations
and warranties of Newpark contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date, and Newpark shall have performed in all material respects all
of the covenants required by this Agreement to be performed by it on or before
the Closing.
9.2 Authorization of Exchange. All corporate action necessary by
Newpark to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
9.3 No Material Adverse Change. There shall have been no changes
since December 31, 1996, in the results of operations, financial condition,
liquidity, assets, properties or business of Newpark and its subsidiaries, taken
as a whole, which, in their total effect, have a Material Adverse Effect on
Newpark and its subsidiaries.
9.4 Officers' Certificate of Newpark. Newpark shall have delivered
to the Stockholders a certificate dated the Closing Date, signed by the
President and Chief Financial Officer of Newpark and stating that, to the best
knowledge of each, (a) all the representations and warranties of Newpark
contained in this Agreement are true and accurate, (b) all of the conditions
precedent to the obligations of the Stockholders hereunder have been fulfilled
and (c) Newpark has duly performed all obligations and covenants to be performed
by it hereunder.
9.5 Opinion of Newpark's Counsel. The Stockholders shall have
received an opinion of Ervin, Cohen & Jessup, dated the Closing Date,
substantially in the form attached hereto as Exhibit 9.5.
9.6 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for the Stockholders, and there shall have been furnished to such
counsel by Newpark certified copies of such corporate records of Newpark
(including Board of Directors resolutions approving the Exchange Agreements) and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
10. Closing.
The closing ("Closing") of the transactions covered by this Agreement
shall take place at 1:30 p.m., on May 28, 1997, at the offices of Paul P.
Bazelides, 9821 Katy Freeway, Suite 550, Houston, Texas 77024. In the event
that the conditions specified in this Agreement have not been fulfilled by that
date, any party may postpone the Closing for the minimum
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reasonably necessary period or periods, in any event not exceeding an aggregate
of 45 days, by written notice to the other parties. Any party exercising such
right shall deliver written notice to the other parties specifying in reasonable
detail the condition which has not been fulfilled, and the other parties will
have the right to cure or correct the matter within the 45-day period. The term
"Closing Date" herein shall mean the last date fixed by mutual agreement or
otherwise under this Section.
11. Survival of Representations.
All representations, warranties and indemnifications made by
Stockholders or Newpark under or in connection with this Agreement (including
any representations and warranties set forth in the certificates delivered
pursuant to Sections 8.4 and 9.4) shall survive the Closing until the earlier of
(a) one year after the Closing Date and (b) the date when Newpark's independent
accountants issue an audit report on their audit of the financial statements
containing combined operations of Newpark and the Company for the period ending
December 31, 1997. Neither party shall be entitled to recover against the other
for any misrepresentation or breach of warranty except to the extent that
written notice of any such claim has been delivered to the party against whom
recovery is sought within the applicable period setting forth in reasonable
detail and specifying the nature of the claim being asserted. The provisions of
this Section and Section 13.3.3 apply only to claims arising under this
Agreement and do not affect any other claims that any party may have at any time
against any other party, including but not limited to claims that may arise
under Hazardous Material Laws.
12. Post-Closing Covenants.
12.1 Cooperation and Assistance. Upon request, each of the parties
hereto shall cooperate with the other to the extent reasonably requested, at the
requesting party's expense, in furnishing information, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
involving the Stockholders and Newpark which are based upon contracts,
arrangements or acts of the Stockholders or the Company or both which were in
effect or occurred on or prior to the Closing.
12.2 Access to Records. The Stockholders shall be entitled, after
the Closing, upon reasonable notice and during the regular business hours of
Newpark, to have access to and to make copies of the business records of the
Company which relate to periods prior to the Closing. Newpark shall retain such
business records for a period of five (5) years following the Closing Date,
after which time Newpark may destroy or otherwise dispose of such business
records without the Stockholders's consent.
12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing authority
asserts a claim, makes an assessment, or otherwise disputes the amount of Taxes
for any period prior to the Closing Date Newpark shall promptly inform the
Stockholders. The provisions of Section 13 shall apply to the defense of any
such claim, assessment or dispute.
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12.3.2 Current Tax Returns. The Stockholders shall be responsible
for the preparation and filing of all Tax Returns for all taxable periods that
end or ended on or before the Closing Date. Newpark will make available to the
Stockholders, without charge, the services of its personnel and the personnel of
the Company to assist the Stockholders in the preparation of such Tax Returns.
Such Tax Returns shall be reasonably satisfactory to Newpark in form and
substance. The Stockholders shall pay the Short Period Income Taxes. If, based
on the Company's federal income Tax Return as filed for the Short Period or as
adjusted as a result of any federal tax audit of such income Tax Return, the
Short Period Income Taxes are greater than the amount of the Tax Dividend, the
Stockholders will pay the excess, and Newpark will issue to the Stockholders
additional Newpark Shares, valued at their Closing Value, in an equivalent
amount; if the Short Period Income Taxes are less than the amount of the Tax
Dividend, the Stockholders will refund the excess to the Company by delivering
Newpark Shares, valued at their Closing Value, in an equivalent amount, if the
Stockholders then hold Newpark Shares; otherwise, they shall refund the excess
in cash.
12.3.3 Refunds and Credits. Subject to the provisions of Section
12.3.2 above, any refunds and credits of federal income Taxes attributable to
any taxable year ending on or before the Closing Date shall be for the account
of the Stockholders, and any refunds and credit of other Taxes attributable to
any taxable year ending on or before the Closing Date shall be for the account
of the Company; to the extent that any such refund of Taxes other than federal
income Taxes exceeds the amount, if any, accrued on the books of the Company
with respect to the period for which the refund is received, the Stockholders
shall receive credit against any liability they may have under Section 13.
12.3.4 Cooperation. Newpark and the Stockholders shall cooperate
with each other in a timely manner in the preparation and filing of any Tax
Returns, payment of any Taxes in accordance with this Agreement, and the conduct
of any audit or other proceeding. Each party shall execute and deliver such
powers of attorney and make available such other documents as are necessary to
carry out the intent of this Section 12.3.4. Each party agrees to notify the
other party of any audit adjustments that do not result in Tax liability but can
be reasonably expected to affect Tax Returns of the other party.
12.3.5 Retention of Records. Newpark shall (i) retain records,
documents, accounting data and other information (including computer data)
necessary for the preparation and filing of all Tax Returns or the audit of such
returns, and (ii) give to the Stockholders reasonable access to such records,
documents, accounting data and other information (including computer data) and
to its personnel (insuring their cooperation) and premises, for the purpose of
the review or audit of such returns to the extent relevant to an obligation or
liability of a party under this Agreement.
13. Indemnifications.
13.1 Indemnification by the Stockholders. Subject to the provisions
of Sections 11 and 13.3, the Stockholders, jointly and severally, hereby agree
to indemnify, defend, protect and hold harmless Newpark against all damages,
losses, liabilities, costs and expenses (including reasonable attorneys' fees)
resulting from any breach of any warranty or representation
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made by them under or in connection with this Agreement. Such indemnification
shall be solely the responsibility of the Stockholders, and they shall not have
any right to recover any portion of their liability from the Company, whether by
right of indemnification, contribution or otherwise.
13.2 Indemnification by Newpark. Subject to the provisions of
Sections 11 and 13.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless Stockholders against all damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) resulting from any breach of any
warranty or representation made by Newpark under or in connection with this
Agreement. The rights to such indemnification shall accrue solely to
Stockholders, and the Company shall have no interest therein.
13.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
13.3.1 No party shall be required to indemnify another pursuant
hereto unless the party seeking indemnification (the "Indemnitee") shall, with
reasonable promptness, provide the other party (the "Indemnitor") with copies of
any claims or other documents received and shall otherwise make available to the
Indemnitor all material relevant information. The Indemnitor shall have the
right to defend any such claim at its expense, with counsel of its choosing, and
the Indemnitee shall have the right, at its expense, using counsel of its
choosing, to join in the defense of any such claim. The Indemnitee's failure to
give prompt notice or to provide copies of documents or to furnish relevant data
shall not constitute a defense in whole or in part to any claim by the
Indemnitee against the Indemnitor except to the extent that such failure by the
Indemnitee shall result in a material prejudice to the Indemnitor.
13.3.2 Except as hereinafter provided, neither party shall settle
or compromise any such claim unless it shall first obtain the written consent of
the other, which shall not be unreasonably withheld. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including reasonable attorneys'
fees, and the Indemnitee shall have the right, after notifying but without
consulting the Indemnitor, to settle or compromise such claim on any terms
reasonably approved by the Indemnitee.
13.3.3 Neither Newpark nor the Stockholders shall have any
liability for breach of warranty or representation hereunder except to the
extent that the amount of all valid claims for breach of warranty or
representation against it or them hereunder exceeds an aggregate of $50,000. In
no event shall the liability of any of the Stockholders for any breach of
warranty or representation hereunder exceed the value of the Newpark Shares for
which his Company Shares are exchanged in the Exchange, for which purpose they
shall be valued at their Closing Value. To the fullest extent permitted by law,
Stockholders shall satisfy their liability hereunder by delivering to Newpark
some or all of such Newpark Shares, valued at their Closing Value, and Newpark
shall satisfy its liability by issuing additional Newpark Shares valued at their
Closing
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Value. Nothing contained herein shall relieve any of the Stockholders or
Newpark of any liability he or it may have for any intentional breach of
representation or warranty.
13.3.4 In determining the amount of any damage, loss, liability,
cost or expense suffered by Newpark which gives rise to liability of
Stockholders hereunder, there shall be taken into account the amount of any Tax
benefits actually realized by Newpark and its subsidiaries attributable to such
damage, loss, liability, cost or expense or derived therefrom in the same or any
past or subsequent taxable period, also taking into account the Tax treatment of
the receipt by Newpark of any payment from Stockholders.
13.4 Dispute Resolution; Arbitration.
13.4.1 The parties desire to finally resolve any and all issues and
disputes arising out of or related to this Agreement or its alleged breach as
promptly as practicable and, in any event, before Newpark's independent
accountants issue an audit report on their audit of the financial statements
containing combined operations of Newpark and the Company for the period ending
December 31, 1997. Newpark and the Stockholders shall first attempt diligently
to resolve any such issue or dispute. They may, if they desire, attempt to
mediate the dispute and shall, if they choose, do so in accordance with the
Commercial Mediation Rules of the American Arbitration Association ("AAA"),
either as written or as modified by mutual agreement. A written agreement to
undertake mediation may be made at any time. If arbitration proceedings have
been instituted, they shall be stayed until the mediation process is terminated.
Any dispute arising out of or related to this Agreement or its alleged breach
that cannot be resolved by mutual agreement (including mutually agreed
mediation) shall be resolved exclusively by final and binding arbitration,
conducted as expeditiously as possible in the City of Houston, Texas, in
accordance with the provisions of this Agreement and, to the extent not
inconsistent with such provisions, the Commercial Arbitration Rules of the
American Arbitration Association. To the extent lawful, the arbitrators, in
their discretion, may shorten any time periods or notice periods specified by
law, in the interest of timely completing arbitration and issuing their award.
13.4.2 The Stockholders, as one party, or Newpark may initiate
arbitration of a dispute by giving the other party written notice of
arbitration, which shall specify with reasonable detail (a) the issue in
dispute, (b) the claims asserted and (c) the remedy sought by the party invoking
arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the arbitrators shall be
affiliated in any way with either of the parties or have any direct or indirect
financial interest in the outcome of the arbitration. If the parties fail to
reach agreement upon a single arbitrator within 5 business days following
receipt by one party of the other party's notice of arbitration, the initiating
party shall submit in writing to the other party the name of a neutral
arbitrator selected by the initiating party. Within 5 business days after such
name is submitted, the other party shall submit to the initiating party in
writing the name of a neutral arbitrator selected by such other party and may
submit an answering statement. Within 10 days after appointment of the second
arbitrator, the two arbitrators appointed by the parties shall select a third
neutral arbitrator; the three arbitrators so selected shall finally resolve the
dispute. If the two arbitrators appointed by the parties fail before the end of
said 10 day period to agree on a
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third arbitrator, the Judicial District Court of 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 10 days after
the name of the arbitrator selected by the initiating party is submitted, the
arbitrator appointed by the initiating party shall be empowered to proceed to
arbitrate and determine the matter in controversy as the sole arbitrator. All
references to "the arbitrators" in the following Sections shall be deemed to
refer to the sole arbitrator, if there is only one arbitrator. The arbitrators
shall, at the earliest possible date, set dates for a hearing and establish any
pre-hearing conferences or procedural schedules that the arbitrators deem
appropriate. The arbitrators may authorize depositions and issue subpoenas and
make other decisions provided for in Section 13.4.3 below. All decisions of the
arbitrators shall be by a majority of the arbitrators, unless the parties agree
otherwise.
13.4.3 It is the mutual intention of the parties that discovery, if
any, shall be limited in nature and scope and, to the extent possible, shall be
handled informally and by agreement. Any dispute regarding discovery shall be
submitted promptly to the arbitrators and shall be resolved by them. If
necessary, any decision of the arbitrators respecting discovery may be enforced
by any court of competent jurisdiction in the same manner as a final award under
this Section, including an order for specific performance.
13.4.4 The arbitrators shall diligently, expeditiously and in good
faith decide the matter under consideration in accordance with the laws of the
State of Texas, excluding its choice of law rules. The arbitrators shall use
their best efforts to make their award before the expiration of the period
specified in the introduction to Section 13.4.1. If there is only one
arbitrator, his decision shall be final, conclusive and binding on all parties;
if there are three arbitrators, the agreed decision of any two of them shall be
final, conclusive and binding on all parties. The arbitrators shall prepare an
award in writing which reflects the final decision of the arbitrators and a copy
of such award shall be delivered to each party to the arbitration. Judicial
confirmation of the decision of the arbitrators shall be sought only in the
Judicial District Court of 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. The parties shall share equally the cost of the
arbitration proceedings, including the fees and expenses of the arbitrators and
the cost of the stenographic record, provided that the arbitrators shall have
discretion to charge such costs to the parties in such different proportions as
they determine to be appropriate.
13.4.6 If any other provision of this Agreement should be or become
invalid or unenforceable by force of law, the provisions of this Section 13.4
shall not be affected but shall remain in full force and effect. Any obligation
to arbitrate which is established by this Section shall remain in full force and
effect. Any obligation to arbitrate which is established by this Section shall
not be extinguished upon the termination or expiration of this Agreement but
shall survive that event.
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14. Destruction of Assets.
All risk of loss with respect to the assets and business of the
Company shall be borne by the Stockholders until the Closing to the extent set
forth in this Section 14. If on the Closing Date any assets of the Company
shall have suffered loss or damage on account of fire, flood, accident, act of
war, civil commotion, or any other cause or event beyond the reasonable power
and control of the Company (whether or not similar to the foregoing) to an
extent which materially affects the value to Newpark of the Company Shares,
Newpark shall have the right at its election to complete the acquisition (in
which event, as Newpark's sole and exclusive remedy with respect to the
consequences of such loss or damage, all claims of the Company with respect to
such loss or damage and all insurance proceeds arising therefrom shall be for
the account of the Company), or, if it does not so elect, it shall have the
right, which shall be in lieu of any other right or remedy whatsoever, to
terminate this Agreement. In the latter event, all parties shall be released
from liability hereunder.
15. Termination.
In addition to any party's right to terminate this Agreement if any
condition precedent to its obligations is not satisfied on the Closing Date,
subject to the provisions of this Agreement relating to the postponement of the
Closing Date, either Newpark or the Stockholders may forthwith terminate this
Agreement: (a) subject to clause (b) below, without liability to the other of
them if a bona fide action or proceeding (by and at the sole instance of a party
or parties not an Affiliate or Affiliates of Newpark or the Stockholders) shall
be pending against either party on the Closing Date wherein an unfavorable
judgment, decree or order would prevent or make unlawful the carrying out of the
transactions contemplated by this Agreement; or (b) without prejudice to other
rights and remedies which either party may have, if a material default shall be
made by the other of them in the observance or in the due and timely performance
of its covenants and agreements herein contained, or if there shall have been a
material breach of the warranties and representations herein contained.
16. Notices.
Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, 48
hours after deposit in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address provided below. The parties may change their
respective addresses for the purpose of this Section 16 by giving notice of such
change to the other party in the manner which is provided in this Section 16.
Stockholders: Mr. Thomas E. Eisenman
Mr. Robert E. Jones
P.O. Box 1178
Channelview, Texas 77530
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Facsimile No.: (713) 455-9928
With a copy to:
Paul P. Bazelides, Esq.
9821 Katy Freeway, Suite 550
Houston, Texas 77024
Facsimile No.: (713) 722-0009
Newpark: c/o Newpark Resources, Inc.
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
17. Assignment.
Rights hereunder shall not be assignable and duties hereunder shall
not be delegable by the Stockholders or Newpark without the prior written
consent of the other; consent may be withheld for any reason or without reason.
Nothing contained in or implied from this Agreement is intended to confer any
rights or remedies upon any Person other than the parties hereto and their
successors in interest and permitted assignees, unless expressly stated herein
to the contrary.
18. Certain Definitions.
As used herein, the following terms (whether used in the singular or
the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 25% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
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direction of the management and policies of an entity, whether through the
ownership of voting securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the five trading days immediately preceding the third trading day
prior to the Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the Closing Date that relate to or impose liability
or standards of conduct concerning the environment, as now or hereafter in
effect and as have been or hereafter may be amended or reauthorized, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601, et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. (S) 1802, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901, et seq.), the Federal Water Pollution Control
Act (33 U.S.C. (S) 1251, et seq.), the Toxic Substances Control Act (14 U.S.C.
(S) 2601, et seq.), the Clean Air Act (42 U.S.C., (S) 7901 et seq.), the
National Environmental Policy Act (42 U.S.C. (S) 4231, et seq.), the Refuse Act
(33 U.S.C. (S) 407, et seq.), the Safe Drinking Water Act (42 U.S.C. (S) 300(f),
et seq.), and all rules, regulations, codes, ordinances and guidance documents
promulgated or published thereunder, and the provisions of any licenses,
permits, orders and decrees issued pursuant to any of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
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"Knowledge of the Stockholders" (and similar terms such as "to the
best of the knowledge of the Stockholders") means the actual knowledge of the
Stockholders or any other executive officer of the Company.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not materially impair the existing use or materially detract from the value of
the assets or property subject thereto, and (d) liens for current taxes not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any governmental authority responsible for the imposition of any such
tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
19. Applicable Law; Jurisdiction.
The provisions of this Agreement and all rights and obligations
hereunder and under all documents, instruments and agreements executed under or
in connection with this Agreement shall be governed and construed in accordance
with the internal laws of the State of Texas applicable to contracts made and to
be wholly performed within said State.
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20. Remedies Not Exclusive.
Except as provided in Section 14, (a) no remedy conferred by any of
the specific provisions of this Agreement is intended to be exclusive of any
other remedy, (b) each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, or otherwise and (c) the election of any one or more remedies by
either party hereto shall not constitute a waiver of the right to pursue other
available remedies.
21. Accountants' and Attorneys' Fees.
Newpark, the Company and the Stockholders shall each pay their own
accountants' and attorneys' fees related to the consummation of the Exchange.
In any litigation or arbitration relating to this Agreement, including
litigation or arbitration with respect to any instrument, document or agreement
made under or in connection with this Agreement, the prevailing party shall be
entitled to recover its costs and reasonable attorneys' fees.
22. Payment of Expenses. Whether or not the Exchange is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark in connection with this Agreement and the transactions contemplated
hereby, and the Stockholders will pay and be responsible for all costs and
expenses incurred by the Company and the Stockholders in connection with this
Agreement and the transactions contemplated hereby.
23. Successors and Assigns.
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
24. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
25. Headings; Severability.
Captions and section headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. The
provisions of this Agreement are severable, and, if any one or more provisions
may be determined to be judicially unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provisions, to the extent
enforceable, shall nevertheless be binding and enforceable upon the parties
hereto.
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26. Amendments.
No provision or term of this Agreement or any agreement contemplated
herein between the parties hereto may be supplemented, amended, modified, waived
or terminated except in a writing duly executed by the party to be charged.
27. Waivers.
At any time prior to the Closing Date, the parties hereto, may, to the
extent legally permitted: (i) extend the time for the performance of any of the
obligations or other acts or any other party; (ii) waive any inaccuracies in the
representations or warranties of any other party contained in this Agreement or
in any document or certificate delivered pursuant hereto; (iii) waive compliance
or performance by any other party with any of the covenants, agreements or
obligations of such party contained herein; and (iv) waive the satisfaction of
any condition that is precedent to the performance by the party so waiving of
any of its obligations hereunder. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. A waiver by one party of
the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A
waiver by any party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed
at a later time.
28. Entire Agreement.
The Disclosure Letter and all schedules, exhibits and financial
statements provided for herein are a part of this Agreement. This Agreement and
the other agreements and documents provided for in this Agreement comprise the
entire agreement of the parties and supersede all earlier understandings of the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
STOCKHOLDERS: NEWPARK:
NEWPARK RESOURCES, INC.
/s/ Thomas E. Eisenman By:/s/ James D. Cole
- ---------------------- ------------------------
Thomas E. Eisenman Name: James D. Cole
Title: President
/s/ Robert E. Jones
- ----------------------
Robert E. Jones
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EXHIBIT 2.2
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered
into this 28th day of May, 1997, by and between _____________________
("Covenantor") and NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"),
ancillary to and as required by the Agreement and Plan of Reorganization (the
"Exchange Agreement") dated May 28, 1997, by and among Newpark, EXCALIBAR
MINERALS INC., a Texas corporation (the "Company"), and the "Stockholders" so
identified in the Exchange Agreement (including Covenantor), pursuant to which
Newpark will exchange 166,667 shares of the Common Stock of Newpark, $.01 par
value (the "Common Stock") for 100% of the capital stock of the Company (the
"Exchange"). Unless otherwise provided herein all terms used in this Agreement
that are defined in the Exchange Agreement shall have the same meanings herein
as in the Exchange Agreement.
In consideration of the foregoing, and in order to satisfy a condition
precedent to the consummation of the Exchange, 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: grinding and
milling of barite and other industrial minerals and selling, marketing, or
dealing in or with or otherwise soliciting orders for such services or the
output therefrom.
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.
The Territory - All or any part of the following: the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico.
<PAGE>
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 anywhere in the Territory, 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 in the Territory 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 in the Territory to terminate his or
her employment or engagement, perform any services for a Competitor or do
anything contrary to the best interests of the Company; 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. Term. The term of this Agreement commences on the date hereof and
shall continue throughout the term of that certain Employment Agreement dated as
of May 28, 1997, by and between the Company and Covenantor, including any
amendments thereto and extensions thereof (the "Employment Agreement"), plus
twelve (12) months commencing upon the termination of the Employment Agreement.
Covenantor hereby acknowledges the receipt and sufficiency of full consideration
for this Agreement.
4. 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.
5. Severability. Covenantor acknowledges that he has carefully read
and considered the provisions of Paragraphs 1 through 3 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, any of the provisions of Paragraphs 1 through 3 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 3 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
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<PAGE>
deemed to become and thereafter shall be the maximum time periods and areas
which such court deems reasonable and enforceable.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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 10 by giving notice of such change to
the other party in the manner which is provided in this Paragraph 10.
Covenantor: ___________________________
___________________________
___________________________
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<PAGE>
Newpark: Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: Secretary
Facsimile No.: (504) 833-9506
11. 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 /s/ James D. Cole
________________________________ -------------------------
James D. Cole, President
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EXHIBIT 2.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
May 28, 1997, by and between EXCALIBAR MINERALS INC., a Texas corporation
("Employer"), and THOMAS E. EISENMAN ("Employee"), with reference to the
following facts:
A. Employee has been employed by Employer as its President.
B. On the date of this Agreement, Employer has become a wholly-owned
subsidiary of NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark").
Employer desires to assure itself of the continued services of Employee for a
term expiring no sooner than June 30, 2000, and the parties are entering into
this Agreement for that purpose and in order to set forth the terms of the
employment of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment.
Employer hereby continues the employment of Employee, and Employee
hereby accepts continued employment with Employer, for a period commencing on
the date hereof and, except as otherwise provided herein, expiring June 30,
2000, provided, however, that, each time neither party terminates this Agreement
by written notice given at least sixty (60) days prior to the expiration of the
employment term as last renewed or extended, it shall be automatically renewed
for an additional twelve month period. As used herein, the phrase "employment
term" refers to the entire period that Employee shall be employed hereunder,
whether for the initial period provided above, or whether this Agreement is
terminated earlier or extended automatically as provided herein or by mutual
agreement between Employer and Employee. This Agreement supersedes all
agreements and understandings between Employer and Employee relating to
compensation of Employee existing on the date hereof, including but not limited
to salary, commission, bonus and other arrangements, and all such existing
agreements and understandings are hereby terminated.
2. Duties of Employee.
2.1 Employee shall serve as President of Employer and shall do
and perform all services, acts and things necessary or advisable in that
capacity in connection with the conduct of the business of Employer, subject to
the instructions of and policies and limitations set by its Board of Directors.
It is contemplated that Employee's role initially will be substantially the same
as his role with Employer immediately prior to the date hereof.
2.2 Employee shall devote such productive time, ability and
attention to the business of Employer during the employment term as is
reasonably required for the performance of his duties hereunder. Employee may
devote time and effort to personal activities to the extent that such activities
do not materially interfere with the performance of his duties hereunder. If
Employer advises Employee that, in its good faith judgment, such activities are
materially interfering with the performance of Employee's duties hereunder,
Employee will
<PAGE>
promptly take steps to appropriately limit such activities. Subject to the
foregoing, Employee shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior written consent of the
Board of Directors of Employer.
2.3 Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices as an officer, director or
member of any committee of the Board of Directors of Employer or of any direct
or indirect subsidiary of Employer.
3. Compensation of Employee.
3.1 As compensation for his services hereunder, Employee shall
receive a salary at the annual rate of $110,000, payable in equal installments
on Employer's regular payroll dates for executive employees. Employer's Board
of Directors will review Employee's salary annually, and, with the approval of
Newpark's Board of Directors or Compensation Committee, may (but shall be under
no obligation to) increase such salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his salary, a
bonus in such amount, if any, as may be determined by the Board of Directors or
Compensation Committee of Newpark, in its sole discretion.
4. Benefits.
Employee shall be entitled to participate in and receive benefits
under all bonus plans, profit-sharing plans, pension plans, group medical plans
and other plans for payment of additional compensation or benefits to employees
of Employer which Employer at any time maintains for executive employees. To
the extent permitted by law, and provided that such participation does not
result in duplicate payments to Employee, Employee shall also participate in
such benefits plans as Newpark makes available to its executive employees and
the executive employees of its subsidiaries.
5. Business Expenses.
Employee is authorized to incur reasonable expenses for promoting and
conducting the business of Employer, including expenditures for entertainment
and travel. Employer shall reimburse Employee monthly for all such business
expenses upon presentation of reasonable documentation establishing the amount,
date, place and essential character of the expenditures.
6. Disability.
6.1 If Employee becomes disabled by reason of sickness, physical
or mental disability or any other cause which materially impairs his ability to
perform his duties under this Agreement with reasonable accommodation for a
period of six consecutive months or for nine months in any twelve-month period,
Employer shall have the option to terminate this
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<PAGE>
Agreement effective immediately by giving written notice of termination to
Employee within a reasonable time following the end of such period of
disability. If Employee becomes temporarily disabled by reason of sickness,
physical or mental disability, or any other cause so that he is unable to
perform efficiently his duties hereunder with reasonable accommodation, he shall
be entitled to compensation as provided for herein until the total period of
such temporary disability shall equal an aggregate of three consecutive months
or an aggregate of six months during any period of twelve consecutive months.
As to any subsequent periods of disability during said twelve month period,
Employee shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant
to the provisions of Paragraph 6.1 above, Employee shall be entitled to salary
and discretionary bonus earned by him prior to the date of termination as
provided for in this Agreement computed pro rata up to and including that date;
but he shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
7.1 This Agreement and the employment of Employee hereunder may
be terminated at any time prior to the expiration of the term of this Agreement
as follows:
(a) By Employer as a result of disability of Employee as
provided in Paragraph 6.1 above, or the death of Employee;
(b) upon the mutual agreement of the parties;
(c) by Employer in the event of: (i) conviction of Employee
of a major felony (whether or not committed in the course of his employment)
from which no appeal has been made, or, if an appeal has been made, upon a final
determination adverse to Employee; or (ii) gross misconduct by Employee causing
material harm to Employer, but only if (x) Employee shall not have discontinued
such gross misconduct within ten days after receiving written notice from
Employer that it will consider the continuation of such gross misconduct cause
for termination of this Agreement, or (y) the gross misconduct is of such a
nature that Employer would be materially prejudiced thereby whether or not
Employee discontinues such gross misconduct;
(d) by Employee if Employer shall fail to cure a material or
default by it under any of the terms of this Agreement within thirty days after
written notice of such breach or default is given by Employee;
(e) by Employer if Employee shall fail to cure a material
breach or default by him under this Agreement within thirty days after written
notice of such breach or default is given by Employer; and
(f) by Employee upon thirty days' written notice given
during the thirty-day period commencing eleven months after a "Change in
Control" of Employer. As
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<PAGE>
used herein, the term Change in Control shall mean consummation of any one or
more of the following:
(1) any transaction as a result of which Newpark ceases to
beneficially own, directly or indirectly through one or more subsidiaries,
capital stock or other equity interests of Employer having a majority of the
voting power of the outstanding capital stock or other equity interests of
Employer;
(2) any transaction as a result of which Newpark ceases to control,
directly or indirectly through one or more subsidiaries, including Employer,
substantially all of the assets of Employer used in its business from time to
time, except for financing transactions; and
(3) any of the following transactions or events effecting a change in
ownership or control of Newpark:
(A) a merger or consolidation in which Newpark is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state in which Newpark is incorporated;
(B) The sale, transfer or other disposition of all or
substantially all of the assets of Newpark;
(C) Any merger or reverse merger in which Newpark ceases to
exist as an independent corporation or becomes the subsidiary of another
corporation; or
(D) If any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934) who is not such beneficial
owner on the date hereof becomes the "beneficial owner" (as defined in Rule
13(d)-3 under said Act), of securities possessing more than a majority of the
total combined voting power of the Newpark's outstanding securities.
7.2 Except as provided herein, this Agreement shall not be
terminated by any merger or consolidation where Employer is not the consolidated
or surviving corporation or by any transfer of all or substantially all of the
assets of Employer. In the event of any such merger or consolidation or
transfer of assets, the surviving or resulting corporation or the transferee of
the assets of Employer shall be bound by and shall have the benefit of the
provisions of this Agreement; and Employer shall take all actions necessary to
ensure that such corporation or transferee is bound by the provisions of this
Agreement.
7.3 Upon termination of this Agreement for any reason
whatsoever, Employee shall return to Employer all automobiles, equipment, books,
records, customer lists, catalogs, invoices, correspondence and other property
which was acquired from or otherwise belongs to Employer, including any property
or documentation developed by Employee in the course of his employment.
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<PAGE>
8. Proprietary Information.
8.1 During the employment term and thereafter, Employee agrees
to keep secret and retain in confidence, and to refrain from using for the
benefit of any person or entity other than Employer, all confidential
information concerning the business of Employer 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 Employer and its affiliates
relating to the business of Employer learned by Employee as a result of prior
and current business relationships with Employer 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
Employee, (b) was available to Employee on a non-confidential basis prior to its
disclosure to the Employee by Employer or (c) becomes available to Employee on a
non-confidential basis from a source other than Employer, provided that such
source is not bound by a confidentiality agreement with Employer known to
Employee. The provisions of this Paragraph shall survive any termination of
this Agreement.
8.2 Concurrently with the execution and delivery of this Agreement,
Employee (as Covenantor) has entered into a Noncompetition Agreement with
Newpark. The provisions of Paragraph 8 of this Agreement are in addition to and
are intended to supplement the provisions of said Noncompetition Agreement.
8.3 Employee agrees that in the event of any breach by Employee of any
provision of Paragraph 8.1, Employer shall be entitled, in addition to other
remedies, to immediate injunctive relief if necessary to avoid irreparable harm
and injury.
9. General Provisions.
9.1 Any notices to be given hereunder by either party to the
other shall be in writing and may be effected either by personal delivery or by
mail, registered or certified, return receipt requested, postage prepaid.
Mailed notices shall be addressed to the parties at the addresses appearing
opposite their respective signatures below and shall be deemed effective 24
hours after being deposited in the U.S. mails, postage prepaid and property
addressed. Each party may change its address by written notice in accordance
with this Paragraph.
9.2 This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee and contains all of the covenants and agreements between
the parties with respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of this
Agreement which is in conflict with any applicable statute, rule, or other law
shall be deemed,
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<PAGE>
if possible, to be modified or altered to conform thereto or, if not possible,
to be omitted from this Agreement. The invalidity of any portion hereof shall
not affect the force or effect of the remaining portions hereof.
9.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, and the Judicial District Court of Harris
County, Texas, Houston Division, shall be the only proper forum for disputes
hereunder.
9.5 The rights and obligations of Employer under this Agreement shall
enure to the benefit of and shall be binding on the successors and assigns of
Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
EXCALIBAR MINERALS INC. ("Employer") Address:
P.O. Box 1178
Channelview, Texas 77530
By:/s/ Robert E. Jones
-----------------------------
Robert E. Jones, Vice President
Address:
/s/ Thomas E. Eisenman
- --------------------------------
Thomas E. Eisenman ("Employee") P.O. Box 1178
Channelview, Texas 77530
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<PAGE>
EXHIBIT 2.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
May 28, 1997, by and between EXCALIBAR MINERALS INC., a Texas corporation
("Employer"), and ROBERT E. JONES ("Employee"), with reference to the
following facts:
A. Employee has been employed by Employer as its President.
B. On the date of this Agreement, Employer has become a wholly-owned
subsidiary of NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark").
Employer desires to assure itself of the continued services of Employee for a
term expiring no sooner than June 30, 2000, and the parties are entering into
this Agreement for that purpose and in order to set forth the terms of the
employment of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment.
Employer hereby continues the employment of Employee, and
Employee hereby accepts continued employment with Employer, for a period
commencing on the date hereof and, except as otherwise provided herein, expiring
June 30, 2000, provided, however, that, each time neither party terminates this
Agreement by written notice given at least sixty (60) days prior to the
expiration of the employment term as last renewed or extended, it shall be
automatically renewed for an additional twelve month period. As used herein, the
phrase "employment term" refers to the entire period that Employee shall be
employed hereunder, whether for the initial period provided above, or whether
this Agreement is terminated earlier or extended automatically as provided
herein or by mutual agreement between Employer and Employee. This Agreement
supersedes all agreements and understandings between Employer and Employee
relating to compensation of Employee existing on the date hereof, including but
not limited to salary, commission, bonus and other arrangements, and all such
existing agreements and understandings are hereby terminated.
2. Duties of Employee.
2.1 Employee shall serve as President of Employer and shall do
and perform all services, acts and things necessary or advisable in that
capacity in connection with the conduct of the business of Employer, subject to
the instructions of and policies and limitations set by its Board of Directors.
It is contemplated that Employee's role initially will be substantially the same
as his role with Employer immediately prior to the date hereof.
2.2 Employee shall devote such productive time, ability and
attention to the business of Employer during the employment term as is
reasonably required for the performance of his duties hereunder. Employee may
devote time and effort to personal activities to the extent that such activities
do not materially interfere with the performance of his duties hereunder. If
Employer advises Employee that, in its good faith judgment, such activities are
materially interfering with the performance of Employee's duties hereunder,
Employee will
<PAGE>
promptly take steps to appropriately limit such activities. Subject to the
foregoing, Employee shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior written consent of the
Board of Directors of Employer.
2.3 Employee agrees to serve without additional compensation,
if elected or appointed thereto, in one or more offices as an officer, director
or member of any committee of the Board of Directors of Employer or of any
direct or indirect subsidiary of Employer.
3. Compensation of Employee.
3.1 As compensation for his services hereunder, Employee shall
receive a salary at the annual rate of $110,000, payable in equal installments
on Employer's regular payroll dates for executive employees. Employer's Board
of Directors will review Employee's salary annually, and, with the approval of
Newpark's Board of Directors or Compensation Committee, may (but shall be under
no obligation to) increase such salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his salary, a
bonus in such amount, if any, as may be determined by the Board of Directors or
Compensation Committee of Newpark, in its sole discretion.
4. Benefits.
Employee shall be entitled to participate in and receive benefits
under all bonus plans, profit-sharing plans, pension plans, group medical plans
and other plans for payment of additional compensation or benefits to employees
of Employer which Employer at any time maintains for executive employees. To
the extent permitted by law, and provided that such participation does not
result in duplicate payments to Employee, Employee shall also participate in
such benefits plans as Newpark makes available to its executive employees and
the executive employees of its subsidiaries.
5. Business Expenses.
Employee is authorized to incur reasonable expenses for promoting
and conducting the business of Employer, including expenditures for
entertainment and travel. Employer shall reimburse Employee monthly for all such
business expenses upon presentation of reasonable documentation establishing the
amount, date, place and essential character of the expenditures.
6. Disability.
6.1 If Employee becomes disabled by reason of sickness,
physical or mental disability or any other cause which materially impairs his
ability to perform his duties under this Agreement with reasonable accommodation
for a period of six consecutive months or for nine months in any twelve-month
period, Employer shall have the option to terminate this
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<PAGE>
Agreement effective immediately by giving written notice of termination to
Employee within a reasonable time following the end of such period of
disability. If Employee becomes temporarily disabled by reason of sickness,
physical or mental disability, or any other cause so that he is unable to
perform efficiently his duties hereunder with reasonable accommodation, he shall
be entitled to compensation as provided for herein until the total period of
such temporary disability shall equal an aggregate of three consecutive months
or an aggregate of six months during any period of twelve consecutive months.
As to any subsequent periods of disability during said twelve month period,
Employee shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant
to the provisions of Paragraph 6.1 above, Employee shall be entitled to salary
and discretionary bonus earned by him prior to the date of termination as
provided for in this Agreement computed pro rata up to and including that date;
but he shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
7.1 This Agreement and the employment of Employee hereunder may
be terminated at any time prior to the expiration of the term of this Agreement
as follows:
(a) By Employer as a result of disability of Employee as
provided in Paragraph 6.1 above, or the death of Employee;
(b) upon the mutual agreement of the parties;
(c) by Employer in the event of: (i) conviction of Employee
of a major felony (whether or not committed in the course of his employment)
from which no appeal has been made, or, if an appeal has been made, upon a final
determination adverse to Employee; or (ii) gross misconduct by Employee causing
material harm to Employer, but only if (x) Employee shall not have discontinued
such gross misconduct within ten days after receiving written notice from
Employer that it will consider the continuation of such gross misconduct cause
for termination of this Agreement, or (y) the gross misconduct is of such a
nature that Employer would be materially prejudiced thereby whether or not
Employee discontinues such gross misconduct;
(d) by Employee if Employer shall fail to cure a material
or default by it under any of the terms of this Agreement within thirty days
after written notice of such breach or default is given by Employee;
(e) by Employer if Employee shall fail to cure a material
breach or default by him under this Agreement within thirty days after written
notice of such breach or default is given by Employer; and
(f) by Employee upon thirty days' written notice given
during the thirty-day period commencing eleven months after a "Change in
Control" of Employer. As
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<PAGE>
used herein, the term Change in Control shall mean consummation of any one or
more of the following:
(1) any transaction as a result of which Newpark ceases to
beneficially own, directly or indirectly through one or more subsidiaries,
capital stock or other equity interests of Employer having a majority of the
voting power of the outstanding capital stock or other equity interests of
Employer;
(2) any transaction as a result of which Newpark ceases to
control, directly or indirectly through one or more subsidiaries, including
Employer, substantially all of the assets of Employer used in its business from
time to time, except for financing transactions; and
(3) any of the following transactions or events effecting a
change in ownership or control of Newpark:
(A) a merger or consolidation in which Newpark is not
the surviving entity, except for a transaction the principal purpose of which is
to change the state in which Newpark is incorporated;
(B) The sale, transfer or other disposition of all or
substantially all of the assets of Newpark;
(C) Any merger or reverse merger in which Newpark
ceases to exist as an independent corporation or becomes the subsidiary of
another corporation; or
(D) If any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934) who is not such
beneficial owner on the date hereof becomes the "beneficial owner" (as defined
in Rule 13(d)-3 under said Act), of securities possessing more than a majority
of the total combined voting power of the Newpark's outstanding securities.
7.2 Except as provided herein, this Agreement shall not be
terminated by any merger or consolidation where Employer is not the consolidated
or surviving corporation or by any transfer of all or substantially all of the
assets of Employer. In the event of any such merger or consolidation or
transfer of assets, the surviving or resulting corporation or the transferee of
the assets of Employer shall be bound by and shall have the benefit of the
provisions of this Agreement; and Employer shall take all actions necessary to
ensure that such corporation or transferee is bound by the provisions of this
Agreement.
7.3 Upon termination of this Agreement for any reason
whatsoever, Employee shall return to Employer all automobiles, equipment, books,
records, customer lists, catalogs, invoices, correspondence and other property
which was acquired from or otherwise belongs to Employer, including any property
or documentation developed by Employee in the course of his employment.
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<PAGE>
8. Proprietary Information.
8.1 During the employment term and thereafter, Employee agrees
to keep secret and retain in confidence, and to refrain from using for the
benefit of any person or entity other than Employer, all confidential
information concerning the business of Employer 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 Employer and its affiliates
relating to the business of Employer learned by Employee as a result of prior
and current business relationships with Employer 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
Employee, (b) was available to Employee on a non-confidential basis prior to its
disclosure to the Employee by Employer or (c) becomes available to Employee on a
non-confidential basis from a source other than Employer, provided that such
source is not bound by a confidentiality agreement with Employer known to
Employee. The provisions of this Paragraph shall survive any termination of
this Agreement.
8.2 Concurrently with the execution and delivery of this
Agreement, Employee (as Covenantor) has entered into a Noncompetition Agreement
with Newpark. The provisions of Paragraph 8 of this Agreement are in addition to
and are intended to supplement the provisions of said Noncompetition Agreement.
8.3 Employee agrees that in the event of any breach by Employee
of any provision of Paragraph 8.1, Employer shall be entitled, in addition to
other remedies, to immediate injunctive relief if necessary to avoid irreparable
harm and injury.
9. General Provisions.
9.1 Any notices to be given hereunder by either party to the
other shall be in writing and may be effected either by personal delivery or by
mail, registered or certified, return receipt requested, postage prepaid.
Mailed notices shall be addressed to the parties at the addresses appearing
opposite their respective signatures below and shall be deemed effective 24
hours after being deposited in the U.S. mails, postage prepaid and property
addressed. Each party may change its address by written notice in accordance
with this Paragraph.
9.2 This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee and contains all of the covenants and agreements between
the parties with respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of this
Agreement which is in conflict with any applicable statute, rule, or other law
shall be deemed,
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if possible, to be modified or altered to conform thereto or, if not possible,
to be omitted from this Agreement. The invalidity of any portion hereof shall
not affect the force or effect of the remaining portions hereof.
9.4 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and the Judicial District Court
of Harris County, Texas, Houston Division, shall be the only proper forum for
disputes hereunder.
9.5 The rights and obligations of Employer under this Agreement
shall enure to the benefit of and shall be binding on the successors and assigns
of Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
EXCALIBAR MINERALS INC. ("Employer") Address:
By: /s/ Thomas E. Eisenman, President P.O. Box 1178
_____________________________________ Channelview, Texas 77530
Thomas E. Eisenman, President
Address:
By: /s/ Robert E. Jones P.O. Box 1178
_____________________________________ Channelview, Texas 77530
Robert E. Jones, ("Employee")
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EXHIBIT 2.5
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") dated as of May 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 166,667 shares (the
"Shares") of Newpark's common stock, $.01 par value (the "Common Stock"), upon
the exchange (the "Exchange") of 100% of the shares of the capital stock of
EXCALIBAR MINERALS, INC., a Texas corporation (the "Company") pursuant to the
Agreement and Plan of Reorganization (the "Exchange Agreement") among Newpark,
the Company and the "Stockholders" so identified in the Exchange 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 Exchange, 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.
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
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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.
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 and the Exchange Agreement, if, during the period commencing
during the month of August 1997 if the Closing Date (as defined in the Exchange
Agreement) is on or before May 31, 1997, or during the month of November 1997 if
the Closing Date is after May 31, 1997, but on or before August 31, 1997, and
continuing for 180 days, one or more Holders request in writing to Newpark that
Newpark effect the registration under the Securities Act of up to thirty-three
percent (33%) 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.
(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
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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) Only One Demand Registration. Holders shall not be entitled to
make a request pursuant to this Paragraph 2 more than one time, provided that
the registration so requested 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 and the Exchange 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 up to 33%
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)
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
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<PAGE>
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) The total number of Shares that Holders are entitled to have
registered by Newpark under the Securities Act pursuant to Paragaraph 2(a) and
Paragraph 3(a) combined is 33% of the Shares, so that, if 33% of the Shares have
been effectively registered under the Securities Act pursuant to Paragraph 2(a),
Holders will not be entitled to have Shares registered pursuant to Paragraph
3(a), and vice versa. If the aggregate number of Shares that Holders propose to
have registered exceeds 33% of the Shares, the number of Holders' shares
eligible to be registered 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 33%, 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.
(b) 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 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:
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(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 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
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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 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
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Holders or any such underwriter, attorney, accountant or agent in connection
with such registration statement.
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,
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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 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
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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 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
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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. 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. 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 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 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
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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:
Paul P. Bazelides, Esq.
9821 Katy Freeway, Suite 550
Houston, Texas 77024
Facsimile No.: (713) 722-0009
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
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.
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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
HOLDERS
/s/ Thomas E. Eisenman
-----------------------------------
Thomas E. Eisenman
/s/ Robert E. Jones
-----------------------------------
Robert E. Jones
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EXHIBIT A
LIST OF HOLDERS
Thomas E. Eisenman
P.O. Box 1178
Channelview, Texas 77530
Robert E. Jones
P.O. Box 1178
Channelview, Texas 77530
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EXHIBIT 2.6
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of May 28, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), MARK L. PHILLIPS ("Mark"), JERRY L. MILLER
("Jerry") and JAMES A. MILLER ("James") (Mark, Jerry and James being sometimes
referred to herein collectively as the "Stockholders"), with reference to the
following facts:
A. The Stockholders own beneficially and of record 100% of the
outstanding capital stock (the "Target Shares") of SUPREME CONTRACTORS, INC., a
Louisiana corporation ("Contractors"), and SUPREME CONTRACTORS INTERNATIONAL,
INC., a Delaware corporation ("International") (each a "Company," and, together,
the "Companies"). Each reference to "the Companies" means either or both of
them or, with respect to negative statements, neither nor both of them.
B. The Companies are engaged together in providing construction and
site preparation services to the oil and gas industry in the Gulf Coast region.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the "Code"). The Plan comprises the
acquisition by Newpark of the Target Shares (including the goodwill of the
Companies associated therewith) from Stockholders solely in exchange for 122,222
(subject to adjustment as provided herein) newly issued shares of voting Common
Stock of Newpark (the "Newpark Shares"). Such transaction is sometimes referred
to herein as the "Exchange."
D. Newpark and the Stockholders believe that it is in their best
interests to adopt the Plan and consummate the Exchange.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Plan of Reorganization.
1.1 Adoption of Plan. Newpark and the
Stockholders hereby adopt the plan of reorganization herein set forth.
1.2 Exchange of Shares. Subject to the provisions of this
Agreement, on the "Closing Date" (as defined in Section 10) the Stockholders
hereby agree to deliver to Newpark one or more certificates representing all of
the Target Shares, duly endorsed for transfer to Newpark or accompanied by
separate stock powers so endorsed, and Newpark will issue and deliver
certificates representing the Newpark Shares to the Stockholders, in proportion
to their ownership of the Target Shares. No fractional Newpark Shares will be
issued; if fractional shares otherwise would issue, the Stockholders shall
instruct Newpark at least five business days before the Closing Date as to the
rounding of such shares.
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1.3 Legend on Newpark Shares. Certificates representing the Newpark
Shares initially will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER SAID ACT OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE IN THE OPINION OF COUNSEL FOR THE ISSUER."
1.4 Adjustment Based on Closing Value. If the "Closing Value" (as
defined in Section 18) is between $40.50 and $49.50, no adjustment will be made
in the number of Newpark Shares. If the Closing Value falls outside that range,
the number of Newpark Shares will be adjusted as follows: If the Closing Value
is less than $40.50, the number of Newpark Shares to be issued will be
determined by dividing $4,950,000 (90% of $5,500,000) by the Closing Value. If,
for example, the Closing Value is $40.00, the number of Newpark Shares will be
123,750 ($4,950,000 divided by $40.00). If the Closing Value is greater than
$49.50, the number of Newpark Shares to be issued will be determined by dividing
$6,050,000 (110% of $5,500,000) by the Closing Value. If, for example, the
Closing Value is $50.00, the number of Newpark Shares will be 121,000
($6,050,000 divided by $50.00). In no event will the number of Newpark Shares
be less than 107,222 or greater than 137,222.
1.5 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Closing Date,
the number of Newpark Shares to be issued at the Closing Date shall be adjusted
to such extent as may be necessary to prevent dilution or enlargement of the
rights of the Stockholders. Such adjustments shall be made by the regular
independent certified public accountants for Newpark and a written report
thereof, showing the adjustment and the underlying calculations, shall be sent
to each party hereto.
1.6 368(a)(1)(B) Reorganization. Between the date hereof and the
Closing Date, neither Newpark nor the Stockholders or any of their "Affiliates"
(as defined in Section 18) shall (a) knowingly take any action, or knowingly
fail to take any action, that would jeopardize qualification of the Exchange as
a reorganization within the meaning of Section 368(a)(1)(B) of the Code; (b)
enter into any contract, agreement, commitment or arrangement with any such
effect; or (c) cause or permit the Companies to take any such action or fail to
take any such action. Following the Closing Date, Newpark shall use its best
efforts to conduct the business of the Companies and shall cause the Companies
to use their best efforts to conduct their business in a manner that would not
jeopardize the characterization of the Exchange as a reorganization within the
meaning of Section 368(a)(1)(B) of the Code.
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2. Ancillary Agreements.
2.1 Noncompetition Agreements. On the Closing Date, as a necessary
incident of the Exchange, Newpark and the Stockholders will execute and deliver
noncompetition agreements substantially as set forth in Exhibit 2.1 attached to
this Agreement (the "Noncompetition Agreements").
2.2 Registration Rights Agreement. On the Closing Date, Newpark will
execute and deliver an agreement substantially as set forth in Exhibit 2.2
attached to this Agreement (the "Registration Rights Agreement") with each of
the Stockholders.
3. Representations and Warranties of the Stockholders.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Stockholders to Newpark prior to the
execution hereof, the Stockholders hereby jointly and severally warrant and
represent the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's obligations to consummate the
Exchange and issue the Newpark Shares):
3.1 Organization and Good Standing of the Companies.
3.1.1 Each Company is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation, 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 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 such Company or the nature of the business
transacted by such 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, for each Company, a list of the
jurisdictions in which it is qualified to do business.
3.1.2 The Stockholders have furnished to Newpark complete and
correct copies of each Company's Certificate of Incorporation or Articles of
Incorporation and Bylaws as in effect on the date hereof.
3.1.3 The Stockholders have heretofore made available to Newpark
for its examination copies of the minute books, stock certificate books and
corporate seal of each Company. The minute books of each Company 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
such Company. The stock certificate books of each Company reflect all issu
ances, transfers and cancellations of capital stock of such Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of Contractors consists of
10,000 shares of common stock, $1.00 par value per share, of which 600 shares of
common stock are issued and
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outstanding as of the date hereof. The authorized capital stock of International
consists of 1,000 shares of common stock, without par value, of which 60 shares
of common stock 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 Target Shares owned by, each of the Stockholders.
3.2.2 There are no options, warrants, subscriptions or other
rights outstanding for the purchase of, or any securities convertible into,
capital stock of the Companies. Except as set forth in the Disclosure Letter,
no shares of the Companies are held as treasury stock.
3.3 Equity Interests. The Companies do not have a material equity
interest in any other "Person" (as defined in Section 18).
3.4 No Violation. The execution, delivery and performance of this
Agreement by the Stockholders are not contrary to the Articles of Incorporation,
Certificate of Incorporation or By-Laws of the Companies 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 Companies, the Stockholders or any of them are a party or by which any
of them are bound.
3.5 Financial Statements. The balance sheets of each Company as of
December 31, 1994, December 31, 1995 and December 31, 1996, and the related
statements of income, stockholders' equity and cash flows for the years ended
December 31, 1994, December 31, 1995 and December 31, 1996, accompanied by the
reports and opinions of Delhomme & Associates, independent certified public
accountants, and the unaudited consolidated balance sheet of each Company as of
March 31, 1997, and the related statements of income, stockholders' equity and
cash flows for the three month period ended on said date, certified by the
principal financial officer of each Company, subject to year-end audit
adjustments, copies of which have heretofore been delivered to Newpark
(collectively the "Company Financial Statements"), were prepared in accordance
with the books and records of such Company in accordance with generally accepted
accounting principles (except for the absence of footnotes from the March 31,
1997, financial statements) consistently applied throughout the periods involved
(except as otherwise noted therein) and present fairly the consolidated
financial position, results of operations and cash flows of each Company for and
as of the end of each of such periods.
3.6 Properties. The Companies have and on the Closing Date will have
good title to the assets and properties shown in the Companies' 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 Companies 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
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necessary for the operation of the business of the Companies in accordance with
their current methods of operation in all material respects.
3.7 Contracts.
3.7.1 The Disclosure Letter includes a listing with respect to
each Company 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 such Company of an amount or value in excess of
$100,000; (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 or other employee groups; (d)
leases, contracts or commitments affecting ownership of, title to, use of or any
material interest in real estate; (e) employment contracts and other contracts,
agreements, or commitments to or with individual employees, consultants or
agents extending for a period of more than six months from the date hereof or
providing for earlier termination only upon payment of a penalty or the
equivalent thereof; (f) equipment leases providing (in any one lease or group of
related leases) for payments in excess of $25,000 per year; (g) contracts under
which the performance of any obligation of such 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 such Company; (i) bank credit, factoring and
loan agreements, indentures, promissory notes and other documents representing
indebtedness in excess of $25,000 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 such Company is a party and which have not
been fully performed, involving consideration having a value in excess of
$100,000 and a remaining period for performance in excess of nine months (all
such items being collectively referred to herein as "Material Contracts"). The
Stockholders have furnished to Newpark true and complete copies of all such
Material Contracts.
3.7.2 All Material Contracts are valid and binding obligations of
the contracting Company listed in the Disclosure Letter and, to the "best of the
knowledge" (as defined in Section 18) of the Stockholders, the other parties
thereto in accordance with their respective terms, subject to the "Bankruptcy
Exception" (as defined in Section 18); there have been no amendments to or
modifications to any Material Contract (except as set forth in the copies
furnished to Newpark); no event has occurred which is, or, following any grace
period or required notice, would become, a material default by such Company
under the terms of any Material Contract; except to the extent specifically
reserved against on the latest balance sheet included in the Companies'
Financial Statements, neither of the Companies is a party to any Material
Contract on which the Stockholders anticipate expenses materially in excess of
revenues or which is otherwise onerous or materially adverse; and the Companies
have 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
$25,000 for borrowed
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money owed by the Companies, 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 Companies'
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 Companies do not have, and
none of their 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 Stockholders, the Companies do not
have, and none of their properties are subject to, any material debts,
liabilities or obligations of any nature, whether accrued, absolute, contingent
or otherwise, whether or not of a type which are required to be shown or
reflected on financial statements prepared in a manner consistent with generally
accepted accounting principles. The Companies are not in default with respect
to any material term or condition of any indebtedness.
3.10 No Litigation. There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Companies) pending or, to the
knowledge of the Stockholders, threatened against or affecting the Companies, at
law or in equity or before or by any "Government Body" (as defined in Section
18) or before any arbitrator of any kind. To the best of the knowledge of the
Stockholders, the Companies are not in default with respect to any judgment,
order, writ, injunction, decree or award of any Government Body.
3.11 Environmental Matters.
3.11.1 Neither the Companies nor, to the best of the knowledge of
the Stockholders, any previous owner, lessee, tenant, occupant or user of any
real property owned or leased on or prior to the date hereof by the Companies
(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. Except as set forth in the Disclosure Letter, to the
best of the knowledge of the Stockholders, no underground tanks or underground
deposits or Hazardous Materials the existence of which would have a Material
Adverse Effect existed on, under, in or about any Property previously owned or
leased by the Companies on or prior to the date that fee or leasehold title to
such Property was transferred to a third party by the Companies. Except as set
forth in the Disclosure Letter, to the best of the knowledge of the
Stockholders, no underground tanks or underground deposits or Hazardous
Materials the existence of which would have a Material Adverse Effect exist on,
under, in or about any Property that is currently owned or leased by the
Companies.
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3.11.2 While any Property was owned or leased by the Companies,
they did not violate to an extent that would have a Material Adverse Effect any
applicable federal, state and local laws, ordinances or regulations, now or
previously in effect, relating to environmental conditions, industrial hygiene
or Hazardous Materials on, under, in or about such Property (including without
limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge of the
Stockholders, there are no (1) enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Companies or any Property
presently owned or leased by the Companies, (2) claims made or threatened by any
Person or Government Body relating to the Property against the Companies or any
Property presently owned or leased by the Companies 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 Stockholders
on any Property that is currently owned or leased by the Companies that can
reasonably be expected to subject the Companies or such Property to any material
restrictions on occupancy, transferability or use of any Property under any
Hazardous Materials Laws. The Disclosure Letter includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of the Stockholders, have been received by or asserted
against the Companies.
3.12 Taxes.
3.12.1 The Companies have filed all income, franchise and other
"Tax Returns" (as defined in Section 18) required to be filed by it by the date
hereof. All "Taxes" (as defined in Section 18) imposed by the United States,
the State of Louisiana and by any other state, municipality, subdivision, or
other taxing authority, which are due and payable by the Companies have been
paid in full or are adequately provided for by reserves reflected on the latest
balance sheet included in the Companies' Financial Statements. International is
an S Corporation under Subchapter S of the Code for federal income Tax purposes
and has maintained its status as an S corporation continuously since inception.
The Stockholders have paid all income Taxes required to be paid by them with
respect to all items of income, net of all deductions, allocable to them for
federal income tax purposes by reason of International's status as an S
Corporation, for each taxable year ended on or before December 31, 1996.
3.12.2 All contributions due from the Companies pursuant to any
unemployment insurance or workers compensation laws and all sales or use Taxes
which are due or payable by the Companies have been paid in full and will be so
paid through the Closing Date. The Companies have withheld and paid to, or will
cause to be paid to, the appropriate taxing authorities all amounts required to
be withheld from the wages of their employees under state law and the applicable
provisions of the Code, and the Companies will continue to do so with respect to
all wages paid by them through the Closing Date.
3.12.3 The Stockholders have furnished to Newpark true and
complete copies of the federal income Tax Returns and comparable state Tax
Returns of the Companies covering the years ended December 31, 1993, December
31, 1994 and December 31, 1995, constituting complete and accurate
representations in all material respects of the Tax liabilities
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of the Companies for the relevant periods stated therein and accurately setting
forth all relevant material items, including the Tax bases of all assets, where
required to be set forth in such Tax Returns.
3.13 Permits and Licenses. The Companies 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
conducted on the date hereof, and the Companies are in compliance in all
material respects with all applicable federal, state and local laws, rules,
regulations and orders relating to their business, except where failure to have
any such license, franchise, permit or authorization or failure to comply with
any such laws, rules, regulations and orders would not have a Material Adverse
Effect. The execution and performance of this Agreement and the consummation of
the transactions contemplated hereby will not cause the termination or
suspension of any license, franchise, permit or governmental authorization or
violate any provision of or constitute a default under any law, rule or
regulation, order, writ, injunction or decree of any Government Body applicable
to the Stockholders or the Companies, where such violation or default would have
a Material Adverse Effect.
3.14 No Labor Problems. The Companies have not been charged with any
unresolved unfair labor practices. There are no material controversies pending
or threatened between the Companies and any of their employees. The Companies
have 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 Companies have paid all
social security and similar Taxes that are due and payable and are not liable
for any arrears or wages or any Taxes or material penalties for failure to
comply with any of the foregoing.
3.15 Employee Benefit Plans.
3.15.1 Definition of Benefit Plans. For purposes of this Section
3.15, the term "Benefit Plan" means any plan, program, arrangement, practice or
contract which provides benefits or compensation to or on behalf of employees or
former employees of the Companies or any "ERISA Affiliate" (as hereinafter
defined), whether formal or informal, whether or not written, including but not
limited to the following:
(a) Arrangements - any bonus, incentive compensation, stock
option, deferred compensation, commission, severance, golden parachute or other
compensation plan, rabbi trust, program, contract, arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any "multi-employer plan"
(as defined in Section 3(37) and Section 4001(a)(3) of ERISA), defined benefit
pension plan, profit sharing plan, money purchase pension plan, 401(k) plan,
savings or thrift plan, stock bonus plan, employee stock ownership plan, or any
plan, fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability, or
life insurance benefits; and
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(c) Other Employee Fringe Benefits - any stock purchase,
vacation, scholarship, day care, prepaid legal services, severance pay or other
fringe benefit plan, program, arrangement, contract or practice.
3.15.2 ERISA Affiliate. For purposes of this Section 3.15, the
term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Companies are treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.15.3 Identification of Benefit Plans. Except as set forth in the
Disclosure Letter and except for Benefit Plans which have been terminated and
with respect to which neither the Companies nor any ERISA Affiliate has any
liability or obligation, the Companies do not maintain, and have not at any time
established or maintained, nor have at any time been obligated to make
contributions to or under or otherwise participate in any Benefit Plan.
3.15.4 MEPPA Liability/Post-Retirement Medical Benefits/ Defined
Benefit Plans/Supplemental Retirement Plans. Except as set forth in the
Disclosure Letter, neither the Companies nor any ERISA Affiliate maintains, or
has at any time established or maintained, or has at any time been obligated to
make contributions to or under any multi-employer plan. Except as set forth in
the Disclosure Letter, neither the Companies nor any ERISA Affiliate maintains,
or has at any time established or maintained, or has at any time been obligated
to make contributions to or under (i) any plan which provides post-retirement
medical or health benefits, (ii) any organization described in Sections
501(c)(9) or 501(c)(20) of the Code, (iii) any defined benefit pension plan
subject to Title IV of ERISA or (iv) any plan which provides retirement benefits
in excess of the limitations of Section 415 of the Code.
3.15.5 Documentation. The Stockholders have made available to
Newpark a true and complete copy of the following documents, if applicable, with
respect to each Benefit Plan identified in the Disclosure Letter: (1) all
documents, including any insurance contracts and trust agreements, setting forth
the terms of the Benefit Plan, or if there are no such documents evidencing the
Benefit Plan, a full description of the Benefit Plan, (2) the ERISA summary plan
description and any other summary of plan provisions provided to participants or
beneficiaries for each such Benefit Plan, (3) the annual reports filed for the
most recent three plan years and most recent financial statements or periodic
accounting of related plan assets with respect to each Benefit Plan, (4) each
favorable determination letter, opinion or ruling from the IRS for each Benefit
Plan which is intended to satisfy the requirements of Section 401(a) or Section
501 of the Code or which is dependent on such letter, ruling or opinion to avoid
current federal come tax to the beneficiaries of such Benefit Plan, and in (5)
each opinion or ruling from the Department of Labor or the Pension Benefit
Guaranty Corporation ("PBGC") with respect to such Benefit Plans.
3.15.6 Qualified Status. Each Benefit Plan that is funded through
a trust or insurance contract and is intended to satisfy the requirements of
Section 401(a) of the Code, has at all times satisfied in all material respects,
by its terms and to the best knowledge of the Stockholders in its operation, all
applicable requirements under Section 401(a) and related sections of the Code,
and any such trust has been and, at the Closing Date, shall be exempt from
federal income taxation under Section 501(a) of the Code. All such plans have
been operated to the best
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knowledge of the Stockholders in all material respects in accordance with the
applicable requirements of the Tax Reform Act of 1986 and subsequent applicable
legislation.
3.15.7 Compliance. Each Benefit Plan maintained by the Companies
or any ERISA Affiliate has at all times been maintained, to the best knowledge
of the Stockholders, by its terms and in operation, in accordance with all
applicable laws in all material respects, including ERISA and (to the extent
applicable) Code Section 4980B. Further, there has been no failure to comply
with applicable ERISA or other requirements concerning the filing of reports,
documents and notices with the Secretary of Labor and Secretary of Treasury or
the furnishing of such documents to participants or beneficiaries that could
subject any Benefit Plan, the Companies or any ERISA Affiliate to any material
civil or any criminal sanction or could require any such Person to indemnify any
other Person for such a sanction. There are no claims known to the Stockholders
which are pending or threatened against any Benefit Plan except claims for
benefits made in the ordinary course of the operation of such plans.
3.15.8 Funding. The Companies and each ERISA Affiliate have made
full and timely payment of all amounts required to be contributed under the
terms of each Benefit Plan and applicable law or required to be paid as expenses
under such Benefit Plan including, but not limited to, PBGC premiums and amounts
required to be contributed under Section 412 of the Code, and no excise taxes
are assessable as a result of any nondeductible or other contributions made or
not made to a Benefit Plan. With respect to any Benefit Plan that is subject to
Title IV of ERISA, (i) the present value of all accrued benefits under such
Benefit Plan does not exceed the value of the assets of such Benefit Plan
allocated to such accrued benefits, (ii) no amount is due or owing from the
Companies or any ERISA Affiliate to the PBGC or to any multi-employer plan on
account of any withdrawal therefrom, (iii) no such Benefit Plan has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of the
Code, whether or not waived, since the effective date of such Section 412, (iv)
since September 2, 1974, no such Benefit Plan has been completely or partially
terminated, nor has any notice of intent to terminate been filed or given, other
than in accordance with ERISA or at a time when such Benefit Plan was not
sufficiently funded, (v) there has been no "reportable event" as such term is
defined in Section 4043(b) of ERISA, (vi) there has been no withdrawal by the
Companies or any ERISA Affiliate that is a "substantial employer" from a Benefit
Plan that is a single employer plan that has two or more contributing sponsors,
at least two of whom are not under common control, as referred to in Section
4063(b) of ERISA, and (vii) there has been no cessation by the Companies or any
ERISA Affiliate of operations at a facility causing more than 20% of a Benefit
Plan's participants to be separated from employment, as referred to in Section
4062(f) of ERISA. There are no liens against the property of the Companies or
any ERISA Affiliate under Section 412(n) of the Code or Sections 302(f) or 4068
of ERISA. The Companies' Financial Statements properly reflect all amounts
required to be accrued as liabilities under each Benefit Plan. To the best
knowledge of the Stockholders, the most recent actuarial valuations of the
Companies' Benefit Plans were based on accurate facts and information, and the
Stockholders have no reason to believe that the conclusions set forth in such
valuations are incorrect.
3.15.9 Liabilities. Neither the Companies nor any ERISA Affiliate
is subject to any material liability, tax or penalty whatsoever to any Person
whomsoever as a result of engaging in a prohibited transaction under ERISA or
the Code, and neither the Companies
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nor any ERISA Affiliate has any knowledge of any circumstances which reasonably
might result in any such material liability, tax or penalty, including but not
limited to a penalty under Section 502 of ERISA, as a result of a breach of and
duty under ERISA or any other applicable law. Other than routine claims for
benefits under the Benefit Plans, there are no pending or threatened
investigations, proceedings, claims, lawsuits, disputes, actions, audits or
controversies involving the Benefit Plans, or the fiduciaries, administrators,
or trustees of any of the Benefit Plans, or the Companies or any ERISA Affiliate
as the employer or sponsor under any Benefit Plan, with any of the Internal
Revenue Service, Department of Labor, Pension Benefit Guaranty Corporation, any
participant in or beneficiary of the Benefit Plans or any other Person
whatsoever. The Stockholders know of no reasonable basis for any such claim,
lawsuit, dispute, action or controversy. Except as set forth in the Disclosure
Letter, the execution and performance of the transactions contemplated by this
Agreement will not create, accelerate or increase any obligations under any
Benefit Plan, including any obligation to make any payment which would not be
deductible as an "excess parachute payment" under Section 280G of the Code.
3.16 Insurance. The Stockholders have furnished to Newpark a complete
list of all insurance policies that the Companies maintain, indicating risks
insured against, carrier, policy number, amount of coverage, premiums and
expiration date.
3.17 Tax-Free Reorganization. None of the Stockholders plans or
intends to sell, exchange or otherwise dispose of a number of the Newpark Shares
that would reduce the Stockholders' ownership of Newpark Shares to a number of
shares having a value, as of the Closing Date, of less than fifty percent (50%)
of the value of all of the formerly outstanding Target Shares as of the same
date.
3.18 Interest in Competitors, Suppliers, etc. Except as set forth in
the Disclosure Letter, none of the Stockholders and no officer or director of
the Companies or any "Family Member" (as defined in Section 18) 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 Companies, or (b) has an existing
contractual relationship with the Companies, including but not limited to
lessors of real or personal property leased to the Companies and entities
against whom rights or options are exercisable by the Companies. On the Closing
Date the Companies will own, free and clear and without payment of any royalty
or fee, all interests in the assets, profits or business of the Companies that
are held by any Affiliate of the Companies, including the Stockholders and their
Family Members.
3.19 Indebtedness with Insiders. Except as set forth in the
Disclosure Letter, and except for accrued salaries for one payroll period,
vacation pay and business expense reimbursements, the Companies are not, and, on
the Closing Date, will not be, indebted to any of the stockholders, directors or
officers of the Companies or any Affiliate of any such Person. None of such
Persons is or will be on the Closing Date indebted to the Companies.
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3.20 Consents. No authorizations, approvals or consents of any
Government Body are required for consummation of the transactions contemplated
by this Agreement or the subsequent operation of the business of the Company.
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 Companies. The Companies own or have the right to use all
Intangible Assets now used in the conduct of their business. Such Intangible
Assets include all of the proprietary products and formulations developed by
each Company or used by it in its business. The Companies are not obligated to
pay any royalty or other fee to any licensor or other third party with respect
to any Intangible Assets. The Stockholders have no knowledge of any claim
received by the Companies alleging any conflict between any aspect of the
business of the Companies and any Intangible Assets claimed to be owned by
others which, if determined adversely to the Companies, would have a Material
Adverse Effect. Neither the Stockholders nor any other officer or director of
the Companies, and no Person that is an Affiliate of any such Person, has any
interest in any Intangibles Assets which are presently used by the Companies or
which infringe upon, conflict with or relate to improvements or modifications of
any Intangible Assets presently used by the Companies.
3.22 Purchases and Sales. Since December 31, 1996, the Companies have
not placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and have not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from the conditions
regularly and usually specified in contracts for similar engagements from
customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Companies nor the
Stockholders (or any Affiliate of the Stockholders) has incurred any liability
to any broker, finder or agent for any brokerage fees, finder's fees or
commissions for which the Companies could be liable with respect to the
transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since December 31, 1996, except for
matters of a general economic nature which do not affect the Companies uniquely,
the Companies have 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 their 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;
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3.24.3 mortgaged, pledged, hypothecated or otherwise encumbered
any of their 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
Companies 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 their capital stock, whether or not similar to the foregoing,
except as described in Section 4.5;
3.24.5 made any payment of principal or interest on any
indebtedness owed to any past or present stockholder of the Companies or any
Affiliate of any such Person;
3.24.6 sold or agreed to sell any of their 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;
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 their 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 the Companies are a party;
3.24.12 paid any commissions or similar fees to brokers or
finders for arranging the transactions contemplated by this Agreement or any
similar proposed transaction with any other party; or
3.24.13 entered into any other material transaction other than
in the ordinary course of business.
3.25 No Material Misstatements or Omissions. No representation or
warranty by the Stockholders in this Agreement, and no document, statement,
certificate, exhibit or schedule furnished or to be furnished to Newpark
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated therein or necessary in
order
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to make the statements or facts therein, in the light of the circumstances under
which they were made, not misleading.
B. Except as otherwise set forth in the Disclosure Letter, each
Stockholder represents and warrants with respect to himself, severally but not
jointly, the following (the truth and accuracy of each of which shall constitute
a condition precedent to Newpark's obligations to consummate the Exchange and
issue the Newpark Shares):
3.26 Investment Representations. Either such Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the "Rules and
Regulations" (as defined in Section 18) or such Stockholder, either alone or
with such Stockholder's qualified "purchaser representative" (as defined in Rule
501 of the Rules and Regulations), has such knowledge and experience in
financial and business matters that he is capable of evaluating the risks and
merits of an investment in the Newpark Shares. Such Stockholder is acquiring
his Newpark Shares in the Exchange for investment and not with a view to the
sale thereof other than in compliance with the requirements of the "Securities
Act" (as defined in Section 18) and applicable Blue Sky laws. At the request of
Newpark, each Stockholder will furnish to Newpark evidence reasonably
satisfactory to Newpark that the foregoing representations are true.
3.27 Enforceability. This Agreement has been duly and validly executed
by such Stockholder, and this Agreement constitutes a legal, valid, and binding
obligation of such Stockholder, enforceable against him in accordance with its
terms, subject to the Bankruptcy Exception. Such Stockholder has the requisite
power to enter into this Agreement and perform his obligations hereunder
(including without limitation to sell and deliver his Target Shares), and no
other Person's joinder as a party hereto is necessary therefor pursuant to any
community property laws or otherwise, and there is no restriction on the power
of the Stockholder to sell and deliver his Target Shares pursuant to any trust,
estate planning or other similar document or any prenuptial or post-nuptial
agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the knowledge
of the Stockholders, threatened in any court or arbitration forum or by or
before any Government Body involving the Companies or such Stockholder relating
to or affecting any of the transactions contemplated by this Agreement.
3.29 Title to Shares. Each Stockholder is the holder of record and
owns beneficially that number of Target Shares set forth opposite his name in
the Disclosure Letter. At the Closing, each Stockholder will own the Target
Shares set forth in the Disclosure Letter free and clear of all liens, security
interests, encumbrances and restrictions, other than restrictions contemplated
by this Agreement. Except as set forth in the Disclosure Letter, no Stockholder
is a party to any voting trust, proxy or other agreement with respect to the
voting of any of such Target Shares.
4. Additional Obligations and Covenants of the Stockholders.
Except as otherwise provided in the Disclosure Letter, the
Stockholders hereby jointly and severally covenant and agree with Newpark as
follows (the fulfillment of each such
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covenant and agreement is a condition precedent to Newpark's obligations to
consummate the Exchange and issue the Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the Closing
Date, the Stockholders will and will cause the Companies to comply with the
following:
4.1.1 The business of the Companies shall be conducted diligently
and only in the ordinary course, and the Stockholders will use reasonable
efforts to preserve the organization of the Companies intact, to keep available
to the Companies their present key employees and to maintain the Companies'
relationships with their suppliers, customers and others. The Companies will
not, without Newpark's prior written approval, increase the rate of compensation
payable or to become payable to any of their 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
Companies.
4.1.2 Without Newpark's prior written approval, no amendment will
be made to any Benefit Plan, no commitment will be made to amend any Benefit
Plan and no commitment will be made to continue any Benefit Plan or to adopt any
new compensatory plan, fund or program for the benefit of any employees of the
Companies or any ERISA Affiliate.
4.1.3 The Companies 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 Companies will not, without Newpark's prior written
approval, sell or dispose of any of their material properties or assets except
for sales at fair value in the ordinary course of business.
4.1.5 The Companies 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 Companies will use reasonable diligence to maintain
their properties in their condition as of the date of this Agreement, ordinary
wear and tear excepted.
4.1.7 The Companies will continue to carry their existing
insurance policies subject only to variations in amounts required by the
ordinary operations of their business. At the request of Newpark and at its
sole expense, the amount and scope of said insurance shall be increased by such
amounts and extended to provide coverage against such risks as Newpark shall
specify.
4.2 Access and Information. Subject to the execution by Newpark of a
confidentiality agreement in form and substance reasonably satisfactory to the
Stockholders, the Stockholders will afford to Newpark and Newpark's counsel,
accountants and other representatives
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reasonable access, throughout the period from the date hereof to the Closing
Date, to all of the Companies' 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. The Stockholders will furnish to Newpark
copies of the Companies' state and federal income Tax Returns for the year ended
December 31, 1996, as soon they are available; the representations and
warranties contained in Paragraph 3.12.3 above will apply to such Tax Returns.
4.3 Efforts to Satisfy Conditions. The Stockholders agree to use
reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to Newpark's obligations under this Agreement, to the extent that
their action or inaction can control or influence the satisfaction of such
conditions. Without limiting the generality of the foregoing the Stockholders
will and will cause the Companies to refrain from all negotiations and
transactions, the con summation of which would be inconsistent with the
transactions contemplated by this Agreement, including, without limitation, any
transaction providing for the sale of any capital stock of the Companies, any
merger or other business combination involving the Companies, the acquisition of
a substantial equity interest in the Companies by a third party or the sale of a
substantial portion of the assets of the Companies.
4.4 Corporate Matters. Between the date hereof and the Closing Date,
the Stockholders will cause the Companies not to, without Newpark's prior
written approval: (a) amend their Articles of Incorporation, Certificate of
Incorporation or Bylaws; (b) issue any shares of its capital stock; (c) issue or
create any warrants, obligations, subscriptions, options, convertible securities
or other commitments under which any additional shares of their capital stock of
any class might be directly or indirectly authorized, issued or transferred from
treasury; or (d) enter into any agreement requiring them to do any of the
foregoing prohibited acts.
4.5 No Distributions to Stockholders. Between the date hereof and
the Closing Date, the Stockholders will cause the Companies not to, without
Newpark's prior written approval: (a) declare, set aside or pay any dividend or
make any distribution in respect of their capital stock, except that
International may make a distribution (the "Distribution") to the Stockholders
on or before the Closing Date, payable after the Closing Date, in an amount
equal to 39.6% of each Stockholders' prorata share of the net profits of the
International from January 1, 1997 through April 30, 1997 (the "Short Period
Income Taxes"); (b) directly or indirectly purchase, redeem or otherwise acquire
any shares of their 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 Stockholders will cause the Companies not to, 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
Stockholders will cause the Companies not to, without Newpark's prior written
approval: (a) create, incur or assume any long-term debt (including capital
leases that individually involve
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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.
5. Representations and Warranties of Newpark.
Newpark hereby represents and warrants the following (the truth and
accuracy of each of which shall constitute a condition precedent to the
Stockholders' obligations to consummate the Exchange):
5.1 Organization and Good Standing.
5.1.1 Newpark is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Newpark has
corporate power and authority to carry on its business as presently conducted
and is qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it or both require qualification and failure to be so qualified would have a
Material Adverse Effect.
5.1.2 Newpark has furnished to the Stockholders complete and
correct copies of Newpark's Certificate of Incorporation and Bylaws as in effect
on the date hereof.
5.2 Capital Stock. The authorized capital stock of Newpark consists
of 20,000,000 shares of Common Stock, $.01 par value, of which 15,175,438 shares
were issued and outstanding on March 24, 1997, and 1,000,000 shares of Preferred
Stock, $.01 par value, of which no shares are issued and outstanding. Newpark's
Board of Directors and stockholders have approved amendments to Newpark's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock to 80,000,000 and to effect a two-for-one split of the Common
Stock, both to take effect on May 30, 1997.
5.3 Newpark Subsidiaries. Each subsidiary of Newpark that is a
"significant subsidiary," as defined in Rule 1-02(w) of Regulation S-X of the
Rules and Regulations (each a "Newpark Subsidiary" and collectively the "Newpark
Subsidiaries), is duly organized and in good standing under the laws of the
jurisdiction in which it was incorporated or organized, has full corporate power
and authority to carry on its business as now conducted by it and is entitled to
own or lease and operate its properties and assets now owned or leased and
operated by it. Each Newpark Subsidiary is duly qualified and in good standing
as a foreign corporation or other entity in each jurisdiction where the
character or location of the assets owned by it or the nature of the business
transacted by it require such qualification, except where failure to be so
qualified would not have a Material Adverse Effect.
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5.4 Authority. The execution and delivery of this Agreement by
Newpark and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of Newpark. This Agreement has been
duly executed and delivered to the Stockholders and no vote of the stockholders
of Newpark or further corporate action is necessary on the part of Newpark to
make this Agreement valid and binding upon Newpark in accordance with its terms,
subject to the Bankruptcy Exception. The execution, delivery and performance of
this Agreement by Newpark are not contrary to the Certificate of Incorporation
or Bylaws of Newpark and will not result in a violation or breach of any term or
provision or constitute a default or give any party a right to accelerate the
due date of any indebtedness under any indenture, mortgage, deed of trust or
other contract or agreement to which Newpark is a party or by which Newpark is
bound.
5.5 Newpark Reports. Newpark has delivered to the Stockholders
copies of Newpark's Annual Reports on Form 10-K for the years ended December 31,
1994, 1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997 and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the
"Commission" (as defined in Section 18) after the date hereof are called the
"Newpark Reports" herein. The Newpark Reports have been or will be duly and
timely filed with the Commission and are or will be when filed in compliance
with the Rules and Regulations. As of their respective dates, none of the
Newpark Reports contained or will contain any untrue statement of a material
fact or omitted or will omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
5.6 Newpark Financial Statements. The financial statements contained
in the Newpark Reports (the "Newpark Financial Statements") filed on or before
the date hereof have been prepared in accordance with the books and records of
Newpark and its subsidiaries and in accordance with generally accepted
accounting principles consistently applied during the periods indicated, all as
more particularly set forth in such financial statements and the Notes thereto.
Each of the balance sheets included in the Newpark Financial Statements presents
fairly as of its date the consolidated financial condition and assets and
liabilities of Newpark and its subsidiaries. Except as and to the extent
reflected or reserved against in such balance sheets (including the Notes
thereto), Newpark (including its subsidiaries) did not have, as of the dates of
such balance sheets, any material liabilities or obligations (absolute or
contingent) of a nature customarily reflected in a balance sheet or the notes
thereto prepared in accordance with generally accepted accounting principles.
The consolidated statements of earnings and stockholders' equity and
consolidated statements of changes in financial position included in the Newpark
Financial Statements present fairly the results of operations and changes in
financial position of Newpark and its subsidiaries for the periods indicated.
5.7 No Litigation. Except as disclosed in the Newpark Reports or
omitted therefrom in accordance with the Rules and Regulations: (a) there are no
actions, suits or proceedings (whether or not purportedly on behalf of Newpark
or any Newpark Subsidiary) pending or, to the "knowledge of Newpark" (as defined
in Section 18), threatened against or affecting Newpark or any Newpark
Subsidiary, at law or in equity or before or by any
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Government Body or before any arbitrator of any kind; and (b) to the best of the
knowledge of Newpark, neither Newpark nor any Newpark Subsidiary is in default
with respect to any judgment, order, writ, injunction, decree, award of any
court, arbitrator or Government Body.
5.8 Newpark Benefit Plans. Newpark has made available to the
Stockholders a true and complete copy of the ERISA summary plan description and
any other summary of plan provisions provided to participants or beneficiaries,
if applicable, for each Benefit Plan (as defined in Section 3.15.1, substituting
"Newpark" for "the Companies") maintained by Newpark.
5.9 Environmental Matters. Newpark and the Newpark Subsidiaries have
complied in all material respects with all Hazardous Materials Laws applicable
to their properties and business. Neither Newpark nor, to the best of Newpark's
knowledge, any Newpark Subsidiary has received any complaint, order or similar
notice that it is not in compliance with any Hazardous Materials Laws or that
any Government Body is investigating its compliance with any Hazardous Materials
Laws, except as disclosed in the Newpark Reports or omitted therefrom in
accordance with the Rules and Regulations and except for routine inspections and
investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.10 Absence of Certain Changes. Since December 31, 1996, there has
not been any material adverse change in the results of operations, financial
condition, liquidity, assets, properties or business of Newpark and its
subsidiaries, taken as a whole, which, in the aggregate, have a Material Adverse
Effect.
5.11 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except such qualifications as may be required
under state securities or Blue Sky laws relating to the Newpark Shares.
5.12 No Material Misstatements or Omissions. No representation or
warranty by Newpark in this Agreement, and no document, statement, certificate,
exhibit or schedule furnished or to be furnished to the Stockholders pursuant
hereto, or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact required to be stated therein or necessary to make the
statements or facts contained therein not misleading.
6. Additional Obligations and Covenants of Newpark.
Newpark hereby covenants and agrees with the Stockholders as follows
(the fulfillment of each such covenant and agreement is a condition precedent to
the Stockholders' obligations to consummate the Exchange):
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6.1 Efforts. Newpark agrees to use reasonable efforts to satisfy or
cause to be satisfied all of the conditions precedent to the Stockholders'
obligations under this Agreement, to the extent that its action or inaction can
control or influence the satisfaction of such conditions.
6.2 Additional Information. Newpark will make available to each
Stockholder the opportunity to ask questions and receive answers concerning the
terms and conditions of the Exchange and to obtain any additional information
that Newpark is required to furnish under Regulation D of the Rules and
Regulations.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of this Agreement, will
issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use all
reasonable efforts to qualify the issuance of the Newpark Shares in connection
with the Exchange under Rule 506 of the Rules and Regulations and, if necessary,
to qualify the issuance thereof pursuant to all applicable state securities or
Blue Sky laws.
6.5 Continuing Employees. Each employee of the Companies who
continues immediately after the Closing Date as an employee of the Companies,
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 Companies") and under any Benefit Plan adopted
in the future for service completed with the Companies as if such service had
been completed with Newpark except that (a) no such employee shall receive such
past service credit under a future Benefit Plan except on the same basis that
Newpark's employees also receive past service credit under such plan, and (b) no
such past service credit will be provided under a plan if the Internal Revenue
Service determines that such credit would adversely affect the tax qualified
status of such plan under Section 401 of the Code.
6.6 Stockholder Guarantees. Subject to consummation of the Exchange,
Newpark agrees that, after the Closing Date, it will cause the Companies to
discharge in accordance with its terms all indebtedness of the Companies as to
which the Stockholders have executed personal guarantees, as disclosed in the
Disclosure Letter.
7. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the Exchange
under this Agreement shall be subject to the satisfaction on or before the
Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
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7.1 Securities Laws. All applicable Blue Sky and state securities
laws shall have been complied with in connection with the issuance of the
Newpark Shares, and no stop order suspending the qualification or registration
of the Newpark Shares under the Blue Sky laws of any jurisdiction shall have
been issued and no proceeding for that purpose shall have been initiated or
shall be threatened by the authorities of any such jurisdiction.
7.2 Government Body Consents. All consents, authorizations, orders
and approvals of (or filings or registrations with) any Government Body required
in connection with the execution, delivery and performance of this Agreement or
the operation of the business of the Company following the Closing Date shall
have been obtained or made, except where the failure to have obtained or made
any such consent, authorization, order, approval, filing or registration would
not have a Material Adverse Effect following the Closing Date.
7.3 Injunction. At the Closing Date there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the Exchange may not be consummated as herein provided, no proceeding or
lawsuit shall have been commenced by any Government Body for the purpose of
obtaining any such injunction, writ or preliminary restraining order and no
written notice shall have been received from any Government Body indicating an
intent to restrain, prevent, materially delay or restructure the transactions
contemplated by this Agreement.
7.4 Tax Opinion. The Stockholders and Newpark shall each have
received a written opinion of Ervin, Cohen & Jessup LLP, in form reasonably
satisfactory to the Stockholders and Newpark (the "Tax Opinion"), to the effect
that (a) the Exchange will constitute a reorganization within the meaning of
Section 368(a)(1)(B) of the Code, (b) the exchange of the Target Shares for
Newpark Shares will not give rise to gain or loss to the Stockholders, (c) the
basis of Newpark Shares received in the Exchange by a Stockholder will be the
same as the basis of such Stockholder in Target Shares which were exchanged for
such Newpark Shares, and (d) the holding period for Newpark Shares received in
the Exchange by a Stockholder will include the holding period of such
Stockholder in Target Shares which were exchanged for such Newpark Shares. In
connection with such tax opinion, Ervin, Cohen & Jessup LLP shall be entitled to
make factual assumptions as are customary in similar tax opinions, and such
factual assumptions shall be confirmed by certificates signed by the
Stockholders and by responsible officers of the Companies and Newpark.
7.5 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.
The obligations of Newpark to consummate the Exchange and issue the
Newpark Shares are subject to the satisfaction of each of the additional
following conditions at or prior to the Closing, unless waived in writing by
Newpark:
8.1 Investigation of the Companies. Newpark shall have made an
investigation of the business, properties (tangible and intangible), products,
customers, plants, contracts and
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financial condition of the Companies and shall have been satisfied with the
results of such investigation. This condition shall be deemed satisfied unless
Newpark notifies the Stockholders in writing within thirty (30) 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 Stockholders herein shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect, except as to transactions permitted herein or to which Newpark
may have consented in writing and changes occurring in the ordinary course of
business after the date of this Agreement and not materially adversely affecting
the Companies, or their properties, prospects, or financial condition, as though
such representations and warranties had been made on and as of the Closing Date,
and the Stockholders shall have performed in all material respects all covenants
required by this Agreement to be performed by them at or prior to the Closing.
8.3 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 the Companies which in their
total effect have been materially adverse to the Companies.
8.4 Stockholders' Certificate. The Stockholders shall have delivered
to Newpark a certificate, dated the Closing Date, executed by each of the
Stockholders, individually, stating that, to the best knowledge of each, (a) all
the representations and warranties of the Stockholders contained in this
Agreement are true and accurate, (b) all of the conditions precedent to the obli
gations of Newpark hereunder have been fulfilled and (c) the Companies and the
Stockholders have duly performed all obligations and covenants to be performed
by them hereunder.
8.5 Material Contracts. The Companies shall have received consents
to assignment of all Material Contracts or written waivers of the provisions of
any Material Contracts requiring the consents of third parties as set forth in
the Disclosure Letter, except where the failure to have obtained any such
consent or written waiver would not have a Material Adverse Effect following the
Closing Date.
8.6 Opinion of the Stockholders' Counsel. Newpark shall have
received an opinion of Beyt & Beyt, dated the Closing Date, substantially in the
form attached hereto as Exhibit 8.6.
8.7 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for Newpark, and there shall have been furnished to such counsel by the
Stockholders certified copies of such corporate records of the Companies and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
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9. Conditions Precedent to Obligation of the Stockholders.
The obligations of the Stockholders to consummate the Exchange are
subject to the satisfaction of each of the following additional conditions at or
prior to the Closing, unless waived in writing by the Stockholders:
9.1 Accuracy of Warranties and Representations. The representations
and warranties of Newpark contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date, and Newpark shall have performed in all material respects all
of the covenants required by this Agreement to be performed by it on or before
the Closing.
9.2 Authorization of Exchange. All corporate action necessary by
Newpark to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
9.3 No Material Adverse Change. There shall have been no changes
since December 31, 1996, in the results of operations, financial condition,
liquidity, assets, properties or business of Newpark and its subsidiaries, taken
as a whole.
9.4 Officers' Certificate of Newpark. Newpark shall have delivered
to the Stockholders a certificate dated the Closing Date, signed by the
President and Chief Financial Officer of Newpark and stating that, to the best
knowledge of each, (a) all the representations and warranties of Newpark
contained in this Agreement are true and accurate, (b) all of the conditions
precedent to the obligations of the Stockholders hereunder have been fulfilled
and (c) Newpark has duly performed all obligations and covenants to be performed
by it hereunder.
9.5 Opinion of Newpark's Counsel. The Stockholders shall have
received an opinion of 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 Stockholders, and there shall have been furnished to such
counsel by Newpark certified copies of such corporate records of Newpark
(including Board of Directors resolutions approving the Exchange Agreements) and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
10. Closing.
The closing ("Closing") of the transactions covered by this Agreement
shall take place at 10:00 a.m., on May 29, 1997, at the offices of Newpark, 3850
North Causeway, Suite 1770, Metairie, LA 70002. If 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
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parties. Any party exercising such right shall deliver written notice to the
other parties specifying in reasonable detail the condition which has not been
fulfilled, and the other parties will have the right to cure or correct the
matter within the 45-day period. The term "Closing Date" herein shall mean the
last date fixed by mutual agreement or otherwise under this Section.
11. Survival of Representations.
Except as otherwise provided herein, all representations, warranties
and indemnifications made by the Stockholders or Newpark under or in connection
with this Agreement (including any representations and warranties set forth in
the certificates delivered pursuant to Sections 8.4 and 9.4) shall survive the
Closing until 24 months after the Closing Date. The representations and
warranties of the Stockholders set forth in Paragraphs 3.11, 3.12, 3.15 and 3.29
shall survive until the expiration of the applicable statute of limitations.
Neither party shall be entitled to recover against the other for any
misrepresentation or breach of warranty except to the extent that written notice
of any such claim has been delivered to the party against whom recovery is
sought within the applicable period setting forth in reasonable detail and
specifying the nature of the claim being asserted. The provisions of this
Section and Section 13.3.3 apply only to claims arising under this Agreement and
do not affect any other claims that any party may have at any time against any
other party, including but not limited to claims that may arise under "Hazardous
Material Laws" (as defined in Section 18).
12. Post-Closing Covenants.
12.1 Cooperation and Assistance. Upon request, each of the parties
hereto shall cooperate with the other to the extent reasonably requested, at the
requesting party's expense, in furnishing information, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
involving the Stockholders and Newpark which are based upon contracts,
arrangements or acts of the Stockholders or the Companies or both which were in
effect or occurred on or prior to the Closing.
12.2 Access to Records. The Stockholders shall be entitled, after
the Closing, upon reasonable notice and during the regular business hours of
Newpark, to have access to and to make copies of the business records of the
Companies which relate to periods prior to the Closing. Newpark shall retain
such business records for a period of five (5) years following the Closing Date,
after which time Newpark may destroy or otherwise dispose of such business
records without the Stockholders' consent.
12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing authority
asserts a claim, makes an assessment, or otherwise disputes the amount of Taxes
for any period prior to the Closing Date Newpark shall promptly inform the
Stockholders. The provisions of Section 13 shall apply to the defense of any
such claim, assessment or dispute.
12.3.2 Current Tax Returns. The Stockholders shall be responsible
for the preparation and filing of all Tax Returns for all taxable periods that
end or ended on or before
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the Closing Date. Newpark will make available to the Stockholders, without
charge, the services of its personnel and the personnel of the Companies to
assist the Stockholders in the preparation of such Tax Returns. Such Tax
Returns shall be reasonably satisfactory to Newpark in form and substance. The
Stockholders shall each pay their prorata portion of the Short Period Income
Taxes.
12.3.3 Refunds and Credits. Subject to the provisions of Section
12.3.2 above, any refunds and credits of federal income Taxes paid by
Contractors attributable to any taxable year ending on or before the Closing
Date shall be for the account of Contractors, and any refunds and credits of
federal income Taxes paid by the Stockholders with respect to International that
is attributable to any taxable year ending on or before the Closing Date shall
be for the account of the Stockholders; any refunds and credits of other Taxes
attributable to any taxable year ending on or before the Closing Date for either
Contractors or International shall be for the account of such Company; to the
extent that any such refund of Taxes that is for the account of a Company
exceeds the amount, if any, accrued on the books of such Company with respect to
the period for which the refund is received, the Stockholders shall receive
credit against any liability they may have under Section 13.
12.3.4 Cooperation. Newpark and the Stockholders shall cooperate
with each other in a timely manner in the preparation and filing of any Tax
Returns, payment of any Taxes in accordance with this Agreement, and the conduct
of any audit or other proceeding. Each party shall execute and deliver such
powers of attorney and make available such other documents as are necessary to
carry out the intent of this Section 12.3.4. Each party agrees to notify the
other party of any audit adjustments that do not result in Tax liability but can
be reasonably expected to affect Tax Returns of the other party.
12.3.5 Retention of Records. Newpark shall (i) retain records,
documents, accounting data and other information (including computer data)
necessary for the preparation and filing of all Tax Returns or the audit of such
returns, and (ii) give to the Stockholders reasonable access to such records,
documents, accounting data and other information (including computer data) and
to its personnel (insuring their cooperation) and premises, for the purpose of
the review or audit of such returns to the extent relevant to an obligation or
liability of a party under this Agreement.
13. Indemnifications.
13.1 Indemnification by the Stockholders. Subject to the provisions
of Sections 11 and 13.3, the Stockholders, jointly and severally, hereby agree
to indemnify, defend, protect and hold harmless Newpark against:
(a) all damages, losses, liabilities, costs and expenses (including
reasonable attorneys' fees) resulting from any and all breaches of warranty or
representation made by them under or in connection with this Agreement; and
(b) all damages, losses, liabilities, costs and expenses (including
reasonable attorneys' fees) resulting from the claims listed in Item 3.10 of the
Disclosure Schedule, all claims
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for personal injury or workers' compensation benefits that were asserted against
the Companies before the Closing Date and are not listed in the Disclosure
Letter and all claims for personal injury or workers' compensation benefits that
are asserted against the Company on or after the Closing Date for occurrences
and conditions attributable to any period prior to the Closing Date, but only to
the extent that such damages, losses, liabilities, costs and expenses paid after
May 15, 1997, exceed $200,000.
Such indemnification shall be solely the responsibility of the Stockholders, and
they shall not have any right to recover any portion of their liability from the
Companies, 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 under or in connection with this
Agreement. The rights to such indemnification shall accrue solely to the
Stockholders, and the Companies shall have no interest therein.
13.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
13.3.1 No party shall be required to indemnify another pursuant
hereto unless the party seeking indemnification (the "Indemnitee") shall, with
reasonable promptness, provide the other party (the "Indemnitor") with copies of
any claims or other documents received and shall otherwise make available to the
Indemnitor all material relevant information. The Indemnitor shall have the
right to defend any such claim at its expense, with counsel of its choosing, and
the Indemnitee shall have the right, at its expense, using counsel of its
choosing, to join in the defense of any such claim. The Indemnitee's failure to
give prompt notice or to provide copies of documents or to furnish relevant data
shall not constitute a defense in whole or in part to any claim by the
Indemnitee against the Indemnitor except to the extent that such failure by the
Indemnitee shall result in a material prejudice to the Indemnitor.
13.3.2 Except as hereinafter provided, neither party shall settle
or compromise any such claim unless it shall first obtain the written consent of
the other, which shall not be unreasonably withheld. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including reasonable attorneys'
fees, and the Indemnitee shall have the right, after notifying but without
consulting the Indemnitor, to settle or compromise such claim on any terms
reasonably approved by the Indemnitee.
13.3.3 Neither Newpark nor the Stockholders shall have any
liability for breach of warranty or representation hereunder except to the
extent that the amount of all valid claims for breach of warranty or
representation against it or them hereunder exceeds an aggregate
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of $50,000. This $50,000 floor does not apply to the Stockholders' liability
under Paragraph 13.1(b). In no event shall the liability of any of the
Stockholders for any breach of warranty or representation hereunder exceed the
value of the Newpark Shares for which his Target Shares are exchanged in the
Exchange, for which purpose they shall be valued at their Closing Value. To the
fullest extent permitted by law, Stockholders shall satisfy their liability
hereunder by delivering to Newpark some or all of such Newpark Shares, valued at
their Closing Value, and Newpark shall satisfy its liability by issuing
additional Newpark Shares valued at their Closing Value. Nothing contained
herein shall relieve any of the Stockholders or Newpark of any liability he or
it may have for any intentional breach of representation or warranty.
13.3.4 In determining the amount of any damage, loss, liability,
cost or expense suffered by Newpark which gives rise to liability of the
Stockholders hereunder, there shall be taken into account the amount of any Tax
benefits actually realized by Newpark and its subsidiaries attributable to such
damage, loss, liability, cost or expense or derived therefrom in the same or any
past or subsequent taxable period, also taking into account the Tax treatment of
the receipt by Newpark of any payment from the Stockholders.
13.4 Dispute Resolution; Arbitration.
13.4.1 The parties desire to finally resolve any and all issues
and disputes arising out of or related to this Agreement or its alleged breach
as promptly as practicable. Newpark and the Stockholders shall first attempt
diligently to resolve any such issue or dispute. They may, if they desire,
attempt to mediate the dispute and shall, if they choose, do so in accordance
with the Commercial Mediation Rules of the American Arbitration Association
("AAA"), either as written or as modified by mutual agreement. A written
agreement to undertake mediation may be made at any time. If arbitration
proceedings have been instituted, they shall be stayed until the mediation
process is terminated. Any dispute arising out of or related to this Agreement
or its alleged breach that cannot be resolved by mutual agreement (including
mutually agreed mediation) shall be resolved exclusively by final and binding
arbitration, conducted as expeditiously as possible in the City of Lafayette,
Louisiana, in accordance with the provisions of this Agreement and, to the
extent not inconsistent with such provisions, the Commercial Arbitration Rules
of the American Arbitration Association. To the extent lawful, the arbitrators,
in their discretion, may shorten any time periods or notice periods specified by
law, in the interest of timely completing arbitration and issuing their award.
13.4.2 The Stockholders, as one party, or Newpark may initiate
arbitration of a dispute by giving the other party written notice of
arbitration, which shall specify with reasonable detail (a) the issue in
dispute, (b) the claims asserted and (c) the remedy sought by the party invoking
arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the arbitrators shall be
affiliated in any way with either of the parties or have any direct or indirect
financial interest in the outcome of the arbitration. If the parties fail to
reach agreement upon a single arbitrator within 5 business days following
receipt by one party of the other party's notice of arbitration, the initiating
party shall submit in writing to the other party the name of a neutral
arbitrator selected by the initiating party. Within 5 business days after such
name is submitted,
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the other party shall submit to the initiating party in writing the name of a
neutral arbitrator selected by such other party and may submit an answering
statement. Within 10 days after appointment of the second arbitrator, the two
arbitrators appointed by the parties shall select a third neutral arbitrator;
the three arbitrators so selected shall finally resolve the dispute. If the two
arbitrators appointed by the parties fail before the end of said 10 day period
to agree on a third arbitrator, the 15th Judicial District Court, Parish of
Lafayette, State of Louisiana, 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 New Orleans office of the American Arbitration
Association. If the non-initiating party shall fail to appoint an arbitrator
within 10 days after the name of the arbitrator selected by the initiating party
is submitted, the arbitrator appointed by the initiating party shall be
empowered to proceed to arbitrate and determine the matter in controversy as the
sole arbitrator. All references to "the arbitrators" in the following Sections
shall be deemed to refer to the sole arbitrator, if there is only one
arbitrator. The arbitrators shall, at the earliest possible date, set dates for
a hearing and establish any pre-hearing conferences or procedural schedules that
the arbitrators deem appropriate. The arbitrators may authorize depositions and
issue subpoenas and make other decisions provided for in Section 13.4.3 below.
All decisions of the arbitrators shall be by a majority of the arbitrators,
unless the parties agree otherwise.
13.4.3 It is the mutual intention of the parties that discovery,
if any, shall be limited in nature and scope and, to the extent possible, shall
be handled informally and by agreement. Any dispute regarding discovery shall be
submitted promptly to the arbitrators and shall be resolved by them. If
necessary, any decision of the arbitrators respecting discovery may be enforced
by any court of competent jurisdiction in the same manner as a final award under
this Section, including an order for specific performance.
13.4.4 The arbitrators shall diligently, expeditiously and in
good faith decide the matter under consideration in accordance with the laws of
the State of Louisiana, excluding its choice of law rules. 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 15th
Judicial District Court, Parish of Lafayette, State of Louisiana.
13.4.5 The arbitrators' compensation shall be agreed upon by the
parties and the arbitrators. The terms of compensation for each of the
arbitrators shall be identical. The parties shall share equally the cost of the
arbitration proceedings, including the fees and expenses of the arbitrators and
the cost of the stenographic record, provided that the arbitrators shall have
discretion to charge such costs to the parties in such different proportions as
they determine to be appropriate.
13.4.6 If any other provision of this Agreement should be or
become invalid or unenforceable by force of law, the provisions of this Section
13.4 shall not be affected but shall remain in full force and effect. Any
obligation to arbitrate which is established by this
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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
Companies shall be borne by the Stockholders until the Closing to the extent set
forth in this Section 14. If on the Closing Date any assets of the Companies
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 Companies (whether or not similar to the foregoing) to an
extent which materially affects the value to Newpark of the Target 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 Companies with respect to
such loss or damage and all insurance proceeds arising therefrom shall be for
the account of the Companies), or, if it does not so elect, it shall have the
right, which shall be in lieu of any other right or remedy whatsoever, to
terminate this Agreement. In the latter event, all parties shall be released
from liability hereunder.
15. Termination.
In addition to any party's right to terminate this Agreement if any
condition precedent to its obligations is not satisfied on the Closing Date,
subject to the provisions of this Agreement relating to the postponement of the
Closing Date, either Newpark or the Stockholders may forthwith terminate this
Agreement: (a) subject to clause (b) below, without liability to the other of
them if a bona fide action or proceeding (by and at the sole instance of a party
or parties not an Affiliate or Affiliates of Newpark or the Stockholders) shall
be pending against either party on the Closing Date wherein an unfavorable
judgment, decree or order would prevent or make unlawful the carrying out of the
transactions contemplated by this Agreement; or (b) without prejudice to other
rights and remedies which either party may have, if a material default shall be
made by the other of them in the observance or in the due and timely performance
of its covenants and agreements herein contained, or if there shall have been a
material breach of the warranties and representations herein contained.
16. Notices.
Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, 48
hours after deposit in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address provided below. The parties may change their
respective addresses for the purpose of this Section 16 by giving notice of such
change to the other party in the manner which is provided in this Section 16.
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Stockholders: Mr. Mark L. Phillips
Mr. Jerry L. Miller
Mr. James A. Miller
c/o Supreme Contractors, Inc.
110 Emerald Drive
Lafayette, LA 70506
Facsimile No.: (318) 233-7789
With a copy to:
Raymond Beyt, Esq.
Beyt & Beyt, a Professional Corporation
700 E. University Avenue
Lafayette, LA 70505
Facsimile No.: (318) 233-6773
Newpark: c/o Newpark Resources, Inc.
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
17. Assignment.
Rights hereunder shall not be assignable and duties hereunder shall
not be delegable by the Stockholders or Newpark without the prior written
consent of the other; consent may be withheld for any reason or without reason.
Nothing contained in or implied from this Agreement is intended to confer any
rights or remedies upon any Person other than the parties hereto and their
successors in interest and permitted assignees, unless expressly stated herein
to the contrary.
18. Certain Definitions.
As used herein, the following terms (whether used in the singular or
the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and,
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without limiting the generality of the foregoing, includes (a) any director or
officer of such Person or of any Affiliate of such Person, (b) any such
director's or officer's Family Members, (c) any group, acting in concert, of one
or more of such directors, officers or Family Members, and (d) any Person
controlled by any such director, officer, Family Member or group which
beneficially owns or holds 25% or more of any class of equity securities or
profits interest. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity, whether through the ownership of voting securities, by
contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the five trading days ending three trading days prior to the
Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the Closing Date that relate to or impose liability
or standards of conduct concerning the environment, as now or hereafter in
effect and as have been or hereafter may be amended or reauthorized, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601, et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. (S) 1802, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901, et seq.), the Federal Water Pollution Control
Act (33 U.S.C. (S) 1251, et seq.), the Toxic Substances Control Act (14 U.S.C.
(S) 2601, et seq.), the Clean Air Act (42 U.S.C., (S) 7901 et seq.), the
National Environmental Policy Act (42 U.S.C. (S) 4231, et seq.), the Refuse Act
(33 U.S.C. (S) 407, et seq.), the Safe Drinking Water Act (42 U.S.C. (S) 300(f),
et seq.), and all rules, regulations, codes, ordinances and guidance documents
promulgated or published thereunder, and the provisions of any licenses,
permits, orders and decrees issued pursuant to any of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition
31
<PAGE>
of "hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
"Knowledge of the Stockholders" (and similar terms such as "to the
best of the knowledge of the Stockholders") means the actual knowledge of the
Stockholders or any other executive officer of the Companies.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Companies 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 Companies' Financial Statements, (c) deed restrictions and
similar exceptions to clear title not incurred in connection with indebtedness
that do not materially impair the existing use or materially detract from the
value of the assets or property subject thereto, and (d) liens for current taxes
not delinquent, for which adequate reserves or other appropriate provisions have
been made in the Companies' Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any Government Body 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 Louisiana applicable to contracts made
and to be wholly performed within said State.
32
<PAGE>
20. Remedies Not Exclusive.
Except as provided in Section 14, (a) no remedy conferred by any of
the specific provisions of this Agreement is intended to be exclusive of any
other remedy, (b) each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, or otherwise and (c) the election of any one or more remedies by
either party hereto shall not constitute a waiver of the right to pursue other
available remedies.
21. Attorneys' Fees.
In any litigation or arbitration relating to this Agreement, including
litigation or arbitration with respect to any instrument, document or agreement
made under or in connection with this Agreement, the prevailing party shall be
entitled to recover its costs and reasonable attorneys' fees.
22. Payment of Expenses. Whether or not the Exchange is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark in connection with this Agreement and the transactions contemplated
hereby, and the Stockholders will pay and be responsible for all costs and
expenses incurred by the Companies and the Stockholders in connection with this
Agreement and the transactions contemplated hereby.
23. Successors and Assigns.
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
24. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
25. Headings; Severability.
Captions and section headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. The
provisions of this Agreement are severable, and, if any one or more provisions
may be determined to be judicially unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provisions, to the extent
enforceable, shall nevertheless be binding and enforceable upon the parties
hereto.
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.
33
<PAGE>
27. Waivers.
At any time prior to the Closing Date, the parties hereto, may, to the
extent legally permitted: (i) extend the time for the performance of any of the
obligations or other acts or any other party; (ii) waive any inaccuracies in the
representations or warranties of any other party contained in this Agreement or
in any document or certificate delivered pursuant hereto; (iii) waive compliance
or performance by any other party with any of the covenants, agreements or
obligations of such party contained herein; and (iv) waive the satisfaction of
any condition that is precedent to the performance by the party so waiving of
any of its obligations hereunder. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. A waiver by one party of
the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A
waiver by any party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed
at a later time.
28. Entire Agreement.
The Disclosure Letter and all schedules, exhibits and financial
statements provided for herein are a part of this Agreement. This Agreement and
the other agreements and documents provided for in this Agreement comprise the
entire agreement of the parties and supersede all earlier understandings of the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
NEWPARK: STOCKHOLDERS:
NEWPARK RESOURCES, INC.
By: /s/ James D. Cole /s/ Mark L. Phillips
------------------------------ ------------------------------
Name: James D. Cole Mark L. Phillips
Title: President and Chief
Financial Officer
/s/ Jerry L. Miller
------------------------------
Jerry L. Miller
/s/ James A. Miller
-------------------------------
James A. Miller
34
<PAGE>
EXHIBIT 2.7
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered
into this 29th day of May, 1997, by and between __________________________
("Covenantor") and NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"),
ancillary to and as required by the Agreement and Plan of Reorganization (the
"Exchange Agreement") dated May 28, 1997, by and among Newpark and the
"Stockholders" so identified in the Exchange Agreement (including Covenantor),
pursuant to which Newpark will exchange (the "Exchange") 122,222 shares of the
Common Stock of Newpark, $.01 par value (the "Common Stock") for 100% of the
capital stock of SUPREME CONTRACTORS, a Louisiana corporation, and SUPREME
CONTRACTORS INTERNATIONAL, INC., a Delaware corporation (together, the
"Company"). Unless otherwise provided herein all terms used in this Agreement
that are defined in the Exchange Agreement shall have the same meanings herein
as in the Exchange Agreement.
In consideration of the foregoing, and in order to satisfy a condition
precedent to the consummation of the Exchange, 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.
The Territory - All or any part of the following: the geographical
limits of the parishes in the State of Louisiana identified on Exhibit A
attached hereto and incorporated herein by this reference, the States of Texas,
Mississippi and Alabama and the Gulf of Mexico.
<PAGE>
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 The Nasdaq Stock Market.
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 a period of two (2) years. 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. If, notwithstanding the foregoing,
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. If any provision of Paragraphs 1 through
-2-
<PAGE>
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: ________________________________
________________________________
________________________________
Facsimile No.: ( ) -
-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:/s/ James D. Cole
----------------------------
James D. Cole, President
-4-
<PAGE>
EXHIBIT A
LIST OF PARISHES
ACADIA
ALLEN
ASCENSION
ASSUMPTION
AVOYELLES
BEAUREGARD
CALCASIEU
CAMERON
EAST BATON ROUGE
EVANGELINE
IBERIA
IBERVILLE
JEFFERSON
JEFFERSON DAVIS
LAFAYETTE
LAFOURCHE
LIVINGSTON
ORLEANS
PLAQUEMINES
POINTE COUPEE
RAPIDES
ST. BERNARD
ST. CHARLES
ST. HELENA
ST. JAMES
ST. JOHN THE BAPTIST
ST. LANDRY
ST. MARTIN
ST. MARY
ST. TAMMANY
TANGIPAHOA
TERREBONNE
THIBODEAUX
UNION
VERMILLION
VERNON
WEST BATON ROUGE
-5-
<PAGE>
EXHIBIT 2.8
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
May 29, 1997, by and between SUPREME CONTRACTORS, INC., a Louisiana corporation
("Employer"), and MARK L. PHILLIPS ("Employee"), with reference to the following
facts:
A. Employee has been employed as a senior executive of Employer.
B. On the date of this Agreement, Employer has become a wholly-owned
subsidiary of NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark").
Employer desires to assure itself of the continued services of Employee for a
term expiring no sooner than June 30, 2000, and the parties are entering into
this Agreement for that purpose and in order to set forth the terms of the
employment of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment.
------------------
Employer hereby continues the employment of Employee, and Employee
hereby accepts continued employment with Employer, for a period commencing on
the date hereof and, except as otherwise provided herein, expiring June 30,
2000, provided, however, that, each time neither party terminates this Agreement
by written notice given at least sixty (60) days prior to the expiration of the
employment term as last renewed or extended, it shall be automatically renewed
for an additional twelve month period. As used herein, the phrase "employment
term" refers to the entire period that Employee shall be employed hereunder,
whether for the initial period provided above, or whether this Agreement is
terminated earlier or extended automatically as provided herein or by mutual
agreement between Employer and Employee.
2. Duties of Employee.
------------------
2.1 Employee shall serve as President of Employer and shall do and
perform all services, acts and things necessary or advisable in that capacity in
connection with the conduct of the business of Employer, subject to the
instructions of and policies and limitations set by its Board of Directors. It
is contemplated that Employee's role initially will be substantially the same as
his role with Employer immediately prior to the date hereof.
2.2 Employee shall devote his entire productive time, ability and
attention to the business of Employer during the employment term, except that
Employee may devote time and effort to personal activities to the extent that
such activities do not materially interfere with the performance of his duties
hereunder. If Employer advises Employee that, in its good faith judgment, such
activities are materially interfering with the performance of Employee's duties
hereunder, Employee will promptly take steps to appropriately limit such
activities. Subject to the foregoing, Employee shall not directly or indirectly
render any services of a business, commercial or professional nature to any
other person or organization, whether for
<PAGE>
compensation or otherwise, without the prior written consent of the Board of
Directors of Employer.
2.3 Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices as an officer, director or
member of any committee of the Board of Directors of Employer or of any direct
or indirect subsidiary of Employer.
3. Compensation of Employee.
------------------------
3.1 As compensation for his services hereunder, Employee shall
receive a salary at the annual rate of $87,000, payable in equal installments on
Employer's regular payroll dates for executive employees. Employer's Board of
Directors will review Employee's salary annually, and, with the approval of
Newpark's Board of Directors or Compensation Committee, may (but shall be under
no obligation to) increase such salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his salary, a
bonus in such amount, if any, as may be determined by the Board of Directors or
Compensation Committee of Newpark, in its sole discretion.
4. Benefits.
--------
Employee shall be entitled to participate in and receive benefits
under all profit-sharing plans, pension plans, group medical plans and other
plans for payment of additional compensation or benefits to employees of
Employer which Employer at any time maintains for executive employees. To the
extent permitted by law, and provided that such participation does not result in
duplicate payments to Employee, Employee shall also participate in such benefits
plans as Newpark makes available to its executive employees and the executive
employees of its subsidiaries.
5. Business Expenses.
-----------------
Employee is authorized to incur reasonable expenses for promoting and
conducting the business of Employer, including expenditures for entertainment
and travel. Employer shall reimburse Employee monthly for all such business
expenses upon presentation of reasonable documentation establishing the amount,
date, place and essential character of the expenditures.
6. Disability.
----------
6.1 If Employee becomes disabled by reason of sickness, physical or
mental disability or any other cause which materially impairs his ability to
perform his duties under this Agreement with reasonable accommodation for a
period of six consecutive months or for nine months in any twelve-month period,
Employer shall have the option to terminate this Agreement effective immediately
by giving written notice of termination to Employee within a reasonable time
following the end of such period of disability. If Employee becomes temporarily
-2-
<PAGE>
disabled by reason of sickness, physical or mental disability, or any other
cause so that he is unable to perform efficiently his duties hereunder with
reasonable accommodation, he shall be entitled to compensation as provided for
herein until the total period of such temporary disability shall equal an
aggregate of three months during any period of twelve consecutive months. As to
any subsequent periods of disability during said twelve month period, Employee
shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant to
the provisions of Paragraph 6.1 above, Employee shall be entitled to salary and
discretionary bonus earned by him prior to the date of termination as provided
for in this Agreement computed pro rata up to and including that date; but he
shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
-------------------------
7.1 This Agreement and the employment of Employee hereunder may be
terminated at any time prior to the expiration of the term of this Agreement as
follows:
(a) By Employer as a result of disability of Employee as provided
in Paragraph 6.1 above, or the death of Employee;
(b) upon the mutual agreement of the parties;
(c) by Employer in the event of: (i) conviction of Employee of a
major felony (whether or not committed in the course of his employment) from
which no appeal has been made, or, if an appeal has been made, upon a final
determination adverse to Employee; or (ii) gross misconduct by Employee causing
material harm to Employer, but only if (x) Employee shall not have discontinued
such gross misconduct within ten days after receiving written notice from
Employer that it will consider the continuation of such gross misconduct cause
for termination of this Agreement, or (y) the gross misconduct is of such a
nature that Employer would be materially prejudiced thereby whether or not
Employee discontinues such gross misconduct;
(d) by Employee if Employer shall fail to cure a material or
default by it under any of the terms of this Agreement within thirty days after
written notice of such breach or default is given by Employee;
(e) by Employer if Employee shall fail to cure a material breach
or default by him under this Agreement within thirty days after written notice
of such breach or default is given by Employer.
7.2 This Agreement shall not be terminated by any merger or
consolidation where Employer is not the consolidated or surviving corporation or
by any transfer of all or substantially all of the assets of Employer. In the
event of any such merger or consolidation or transfer of assets, the surviving
or resulting corporation or the transferee of the assets of Employer shall be
bound by and shall have the benefit of the provisions of this
-3-
<PAGE>
Agreement; and Employer shall take all actions necessary to ensure that such
corporation or transferee is bound by the provisions of this Agreement.
7.3 Upon termination of this Agreement for any reason whatsoever,
Employee shall return to Employer all automobiles, equipment, books, records,
customer lists, catalogs, invoices, correspondence and other property which was
acquired from or otherwise belongs to Employer, including any property or
documentation developed by Employee in the course of his employment.
8. Proprietary Information and Non-Competition.
-------------------------------------------
8.1 Employee recognizes and acknowledges that the performance of
his services hereunder will necessarily result in disclosure to him of certain
trade secrets and confidential information, including source of supply
information, sales information, customer lists, customer information and
pricing, all of which are special and unique assets and trade secrets of
Employer's business. For the purpose of this Agreement, such information shall
be referred to and is acknowledged as "proprietary information of the Employer."
In view of the foregoing, in addition to and not in limitation of the provisions
of the Noncompetition Agreement executed concurrently herewith by Newpark and
Employee, Employee agrees that:
8.1.1 During and after the employment term, Employee will not
disclose or use any proprietary information of Employer, except for the purpose
of carrying out his duties hereunder, unless such use or disclosure is
specifically consented to in writing by Employer.
8.1.2 For the period of one year after the employment term, Employee
will not in any way, directly or indirectly, for himself or on behalf of any
other person or entity, associate in business as an employer, employee or
otherwise, with any employee, officer or agent of Employer until such person has
terminated employment with Employer for a period of one year.
8.1.3 During the employment term and thereafter, Employee will not,
directly or indirectly, for himself or on behalf of any other person or entity,
induce or attempt to induce any of Employer's personnel to terminate their
relationship with Employer, nor will Employee induce or attempt to induce any of
Employer's personnel to do anything contrary to the best interests of Employer.
8.2 Employee agrees that in the event of any breach by Employee of
any covenant in this Paragraph 8, Employer shall be entitled, in addition to
other remedies, to immediate injunctive relief if necessary to avoid irreparable
harm and injury.
9. General Provisions.
------------------
9.1 Any notices to be given hereunder by either party to the other
shall be in writing and may be effected either by personal delivery or by mail,
registered or certified, return receipt requested, postage prepaid. Mailed
notices shall be addressed to the parties at the
-4-
<PAGE>
addresses appearing opposite their respective signatures below and shall be
deemed effective 24 hours after being deposited in the U.S. mails, postage
prepaid and property addressed. Each party may change its address by written
notice in accordance with this Paragraph.
9.2 This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee and contains all of the covenants and agreements between
the parties with respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of this
Agreement which is in conflict with any applicable statute, rule, or other law
shall be deemed, if possible, to be modified or altered to conform thereto or,
if not possible, to be omitted from this Agreement. The invalidity of any
portion hereof shall not affect the force or effect of the remaining portions
hereof.
9.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of Louisiana, and the 15th Judicial District Court,
Parish of Lafayette, State of Louisiana, shall be the only proper forum for
disputes hereunder.
9.5 The rights and obligations of Employer under this Agreement
shall enure to the benefit of and shall be binding on the successors and assigns
of Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
SUPREME CONTRACTORS, INC. ("Employer") Address:
110 Emerald Drive
Lafayette, LA 70505
By:/s/ James D. Cole
-----------------------------
Name and Ttile: James D. Cole, President
Address:
- --------------------------------
("Employee")
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EXHIBIT 2.9
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") dated as of
May 29, 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 122,222 shares (the
"Shares") of Newpark's common stock, $.01 par value (the "Common Stock"), upon
the exchange (the "Exchange") of 100% of the shares of the capital stock of
SUPREME CONTRACTORS, INC., a Louisiana corporation, and 100% of the shares of
capital stock of SUPREME CONTRACTORS INTERNATIONAL, INC., a Delaware corporation
(together, the "Company") pursuant to the Agreement and Plan of Reorganization
(the "Exchange Agreement") among Newpark and the "Stockholders" so identified in
the Exchange 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 Exchange, 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.
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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.
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 and the Exchange Agreement, if, during the period commencing
August 1, 1997 and continuing for 180 days, one or more Holders request in
writing to Newpark that Newpark effect the registration under the Securities Act
of up to 30,000 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.
(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
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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) Only One Demand Registration. Holders shall not be entitled to
make a request pursuant to this Paragraph 2 more than one time, provided that
the registration so requested 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 and the Exchange 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 up to
30,000 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)
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
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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) The total number of Shares that Holders are entitled to have
registered by Newpark under the Securities Act pursuant to Paragraph 2(a) and
Paragraph 3(a) combined is 30,000, so that if 30,000 Shares have been
effectively registered under the Securities Act pursuant to Paragraph 2(a),
Holders will not be entitled to have Shares registered pursuant to Paragraph
3(a), and vice versa. If the aggregate number of Shares that Holders propose to
have registered exceeds 30,000 Shares, the number of Holders' shares eligible to
be registered 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 30,000 Shares 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.
(b) 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 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:
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(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 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
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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 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
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Holders or any such underwriter, attorney, accountant or agent in connection
with such registration statement.
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)
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arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any 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 based upon any statement or alleged statement in or omission or
alleged omission from such
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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 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
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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. 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. 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 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 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
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<PAGE>
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:
Raymond A. Beyt
Beyt & Beyt, a Professional Corporation
700 E. University Ave.
Lafayette, LA 70503
Facsimile No.: (318) 233-6773
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
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.
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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
HOLDERS
/s/ Mark L. Phillips
___________________________________
Mark L. Phillips
/s/ Jerry L. Miller
___________________________________
Jerry L. Miller
/s/ James A. Miller
___________________________________
James A. Miller
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EXHIBIT A
LIST OF HOLDERS
Mark L. Phillips
110 Emerald Drive
P.O. Box 52164
Lafayette, LA 70505
Jerry L. Miller
518 East Academy
Jennings, LA 70546
James A. Miller
618 Comfort Lane
Jennings, LA 70546
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EXHIBIT 2.10
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of June 3, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), PERRY BENNETT ("Bennett"), KENTNER SHELL
("Shell"), RAY BENNETT ("Ray") and BOB HILL ("Hill") (Bennett, Shell, Ray and
Hill being sometimes referred to herein collectively as the "Stockholders"),
with reference to the following facts:
A. The Stockholders own beneficially and of record 100% of the
outstanding capital stock (the "Company Shares") of CHEMICAL TECHNOLOGIES, INC.,
a Texas corporation (the "Company").
B. The Company is a regional Gulf Coast drilling mud company
specializing in the distribution and sale of oil based drilling fluid components
to the oil industry.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended (the "Code"). The Plan comprises the
acquisition by Newpark of the Company Shares from the Stockholders solely in
exchange for 186,666 newly issued shares of voting Common Stock of Newpark (the
"Newpark Shares"). Such transaction is sometimes referred to herein as the
"Exchange."
D. Newpark and the Stockholders believe that it is in their best
interests to adopt the Plan and consummate the Exchange.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Plan of Reorganization.
1.1 Adoption of Plan. Newpark and the Stockholders hereby adopt
the plan of reorganization herein set forth.
1.2 Exchange of Shares. Subject to the provisions of this
Agreement, on the "Closing Date" (as defined in Section 10) the Stockholders
hereby agree to deliver to Newpark one or more certificates representing all of
the Company Shares, duly endorsed for transfer to Newpark or accompanied by
separate stock powers so endorsed, and Newpark will issue and deliver
certificates representing the Newpark Shares to the Stockholders, in proportion
to their ownership of the Company Shares. No fractional Newpark Shares will be
issued; if fractional shares otherwise would issue, the Stockholders shall
instruct Newpark at least five business days before the Closing Date as to the
rounding of such shares.
1.3 Legend on Newpark Shares. Certificates representing the
Newpark Shares initially will bear the following legend:
<PAGE>
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER SAID ACT OR UNLESS AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE IN THE OPINION OF COUNSEL FOR THE ISSUER."
1.4 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Closing Date,
the number of Newpark Shares to be issued at the Closing Date shall be adjusted
to such extent as may be necessary to prevent dilution or enlargement of the
rights of the Stockholders. Such adjustments shall be made by the regular
independent certified public accountants for Newpark and a written report
thereof, showing the adjustment and the underlying calculations, shall be sent
to each party hereto.
1.5 368(a)(1)(B) Reorganization. Between the date hereof and the
Closing Date, neither Newpark nor the Stockholders or any of their "Affiliates"
(as defined in Section 18) shall (a) knowingly take any action, or knowingly
fail to take any action, that would jeopardize qualification of the Exchange as
a reorganization within the meaning of Section 368(a)(1)(B) of the Code; (b)
enter into any contract, agreement, commitment or arrangement with any such
effect; or (c) cause or permit the Company to take any such action or fail to
take any such action. Following the Closing Date, Newpark shall use its best
efforts to conduct the business of the Company and shall cause the Company to
use its best efforts to conduct its business in a manner that would not
jeopardize the characterization of the Exchange as a reorganization within the
meaning of Section 368(a)(1)(B) of the Code.
1.6 Concurrent Transaction. Concurrently with the execution and
delivery of this Agreement, Newpark, the Stockholders and other interested
parties are executing and delivering an agreement (the "Related Agreement")
pursuant to which Newpark intends to acquire (the "Related Acquisition") on the
Closing Date, solely in exchange for 35,554 newly issued shares of voting Common
Stock of Newpark, 100% of the outstanding equity interests in FMI WHOLESALE
DRILLING FLUIDS, U.S.A, L.P., a Texas limited partnership. The consummation of
the Related Acquisition on or before the Closing Date is a condition precedent
to each party's obligations under this Agreement unless waived in writing by
such party.
2. Ancillary Agreements.
On the Closing Date, as a necessary incident of the Exchange,
Newpark and the Stockholders will execute and deliver (i) noncompetition
agreements substantially as set forth in Exhibit 2.1 attached to this Agreement
and (ii) a Registration Rights Agreement substantially as set forth in Exhibit
2.2 attached to this Agreement.
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3. Representations and Warranties of the Stockholders.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Stockholders to Newpark prior to the
execution hereof, the Stockholders hereby jointly and severally warrant and
represent the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's obligations to consummate the
Exchange and issue the Newpark Shares):
3.1 Organization and Good Standing of the Company.
3.1.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the character or
location of the assets owned by the Company or the nature of the business
transacted by the Company require such qualification, except where failure to be
so qualified would not have a "Material Adverse Effect" (as defined in Section
18). The Disclosure Letter includes a list of the jurisdictions in which the
Company is qualified to do business.
3.1.2 The Stockholders have furnished to Newpark complete
and correct copies of the Company's Articles of Incorporation and Bylaws as in
effect on the date hereof.
3.1.3 The Stockholders have heretofore made available to
Newpark for its examination copies of the minute books, stock certificate books
and corporate seal of the Company. Said minute books are accurate in all
material respects and reflect all resolutions adopted and all material actions
expressly authorized or ratified by the stockholders and directors of the
Company. The stock certificate books reflect all issuances, transfers and
cancellations of capital stock of the Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of the Company consists
of 1,000 common shares, $0.10 par value per share, 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 by, each of the Stockholders.
3.2.2 There are no options, warrants, subscriptions or
other rights outstanding for the purchase of, or any 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).
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3.4 No Violation. The execution, delivery and performance of
this Agreement by the Stockholders are not contrary to the Articles of
Incorporation or By-Laws of the Company and will not result in a violation or
breach of any term or provision or constitute a default or give any party a
right to accelerate the due date of any indebtedness under any indenture,
mortgage, deed of trust or other material contract or agreement to which the
Company, the Stockholders or any of them are a party or by which any of them are
bound.
3.5 Financial Statements. The unaudited balance sheets of the
Company as of December 31, 1996, January 31, 1997, February 28, 1997, and March
31, 1997, and the related unaudited statements of income, stockholders' equity
and cash flows for the seven months ended December 31, 1996, the months ended
January 31, 1997, February 28, 1997, and March 31, 1997, and for the period from
January 1, 1997, to the end of each such month, 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 otherwise noted therein) 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 $50,000; (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 thereof; (f) equipment leases providing (in any one
lease or group of related leases) for payments in excess of $50,000 per year;
(g) contracts under which the performance of any obligation of the
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<PAGE>
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 $50,000 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 $50,000 and a remaining period for performance in excess of nine
months (all such items being collectively referred to herein as "Material
Contracts"). The Stockholders have furnished to Newpark true and complete
copies of all such Material Contracts.
3.7.2 All Material Contracts are valid and binding
obligations of the Company and, to the "best of the knowledge" (as defined in
Section 18) of the Stockholders, the other parties thereto in accordance with
their respective terms, subject to the "Bankruptcy Exception" (as defined in
Section 18); there have been no amendments to or modifications to any Material
Contract (except as set forth in the copies furnished to Newpark); no event has
occurred which is, or, following any grace period or required notice, would
become, a material default by the Company under the terms of any Material
Contract; except to the extent specifically reserved against on the latest
balance sheet included in the Company Financial Statements, the Company is not a
party to any Material Contract on which any of the Stockholders 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 $10,000 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 Stockholders, the Company does not
have, and none of its properties are subject to, any material debts, liabilities
or obligations of any nature, whether accrued, absolute, contingent or
otherwise, whether or not of a type which are required to be shown or reflected
on financial statements prepared in a manner consistent with generally accepted
accounting principles. The Company is not in default with respect to any
material term or condition of any indebtedness.
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<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 Stockholders, threatened against or affecting the Company, at
law or in equity or before or by any "Government Body" (as defined in Section
18) or before any arbitrator of any kind. To the best of the knowledge of the
Stockholders, the Company is not in default with respect to any judgment, order,
writ, injunction, decree or award of any Government Body.
3.11 Environmental Matters.
3.11.1 Neither the Company nor, to the best of the
knowledge of the Stockholders, any previous owner, lessee, tenant, occupant or
user of any real property owned or leased on or prior to the date hereof by the
Company (such real property and any and all buildings and other improvements
thereon being herein referred to as the "Property") used, generated,
manufactured, treated, handled, refined, processed, released, discharged, stored
or disposed of any "Hazardous Materials" (as defined in Section 18) on, under,
in or about the Property, or transported any Hazardous Materials to or from the
Property in violation of any "Hazardous Materials Laws" (as defined in Section
18) in a manner or to an extent that resulted or is reasonably likely to result
in a Material Adverse Effect. To the best of the knowledge of the Stockholders,
no underground tanks or underground deposits or Hazardous Materials the
existence of which would have a Material Adverse Effect existed on, under, in or
about any Property previously owned or leased by the Company on or prior to the
date that fee or leasehold title to such Property was transferred to a third
party by the Company. To the best of the knowledge of the Stockholders, no
underground tanks or underground deposits or Hazardous Materials the existence
of which would have a Material Adverse Effect exist on, under, in or about any
Property that is currently owned or leased by the Company.
3.11.2 While any Property was owned or leased by the
Company, it did not violate to an extent that would have a Material Adverse
Effect any applicable federal, state and local laws, ordinances or regulations,
now or previously in effect, relating to environmental conditions, industrial
hygiene or Hazardous Materials on, under, in or about such Property (including
without limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge
of the Stockholders, there are no (1) enforcement, clean-up, removal, mitigation
or other governmental or regulatory actions instituted, contemplated or
threatened pursuant to any Hazardous Materials Laws against the Company or any
Property presently owned or leased by the Company, (2) claims made or threatened
by any Person or Government Body relating to the Property against the Company or
any Property presently owned or leased by the Company or relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials or (3) any occurrence or condition known to the Stockholders
on any Property that is currently owned or leased by the Company that can
reasonably be expected to subject the Company or such Property to any material
restrictions on occupancy, transferability or use of any Property under any
Hazardous Materials Laws. The Disclosure Letter includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of the Stockholders, have been received by or asserted
against the Company.
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3.12 Taxes.
3.12.1 Except as set forth in the Disclosure Letter, the
Company has filed all income, franchise and other "Tax Returns" (as defined in
Section 18) required to be filed by it by the date hereof. All "Taxes" (as
defined in Section 18) imposed by the United States, the State of Texas and by
any other state, municipality, subdivision, or other taxing authority, which are
due and payable by the Company have been paid in full or are adequately provided
for by reserves reflected on the latest balance sheet included in the Company
Financial Statements. The Company is an S Corporation under Subchapter S of the
Code for federal income Tax purposes and has maintained its status as an S
corporation continuously since inception.
3.12.2 All contributions due from the Company pursuant to
any unemployment insurance or workers compensation laws and all sales or use
Taxes which are due or payable by the Company have been paid in full and will be
so paid through the Closing Date. The Company has withheld and paid to, or will
cause to be paid to, the appropriate taxing authorities all amounts required to
be withheld from the wages of its employees under state law and the applicable
provisions of the Code, and the Company will continue to do so with respect to
all wages paid by it through the Closing Date.
3.12.3 The Company has furnished to Newpark true and
complete copies of the federal income Tax Returns and comparable state Tax
Returns of the Company covering all taxable periods ended since the inception of
the Company and constituting complete and accurate representations in all
material respects of the Tax liabilities of the Company for the relevant periods
stated therein and accurately setting forth all relevant material items,
including the Tax bases of all assets, where required to be set forth in such
Tax Returns.
3.13 Permits and Licenses. The Company has all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof, and the Company is in compliance in all material
respects with all applicable federal, state and local laws, rules, regulations
and orders relating to its business, except where failure to have any such
license, franchise, permit or authorization or failure to comply with any such
laws, rules, regulations and orders would not have a Material Adverse Effect.
The execution and performance of this Agreement and the consummation of the
transactions contemplated hereby will not cause the termination or suspension of
any license, franchise, permit or governmental authorization or violate any
provision of or constitute a default under any law, rule or regulation, order,
writ, injunction or decree of any Government Body applicable to the Stockholders
or the Company, where such violation or default would have a Material Adverse
Effect.
3.14 No Labor Problems. The Company has not been charged with
any unresolved unfair labor practices. There are no material controversies
pending or threatened between the Company and any of its employees. The Company
has complied in all material respects with all laws relating to wages, hours,
collective bargaining and similar employment matters the noncompliance with
which would have a Material Adverse Effect, and the Company is not liable for
any arrears, wages or material penalties for failure to comply with any of the
foregoing.
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3.15 Employee Benefit Plans.
3.15.1 Definition of Benefit Plans. For purposes of this
Section 3.15, the term "Benefit Plan" means any plan, program, arrangement,
practice or contract which provides benefits or compensation to or on behalf of
employees or former employees of the Company or any "ERISA Affiliate" (as
hereinafter defined), whether formal or informal, whether or not written,
including but not limited to the following:
(a) Arrangements - any bonus, incentive
compensation, stock option, deferred compensation, commission, severance, golden
parachute or other compensation plan, rabbi trust, program, contract,
arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as
defined in Section 3(3) of ERISA), including, but not limited to, any "multi-
employer plan" (as defined in Section 3(37) and Section 4001(a)(3) of ERISA),
defined benefit pension plan, profit sharing plan, money purchase pension plan,
401(k) plan, savings or thrift plan, stock bonus plan, employee stock ownership
plan, or any plan, fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident, sickness,
disability or life insurance benefits; and
(c) Other Employee Fringe Benefits - any stock
purchase, vacation, scholarship, day care, prepaid legal services, severance pay
or other fringe benefit plan, program, arrangement, contract or practice.
3.15.2 ERISA Affiliate. For purposes of this Section 3.15,
the term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Company is treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.15.3 Identification of Benefit Plans. Except as set
forth in the Disclosure Letter and except for Benefit Plans which have been
terminated and with respect to which neither the Company nor any ERISA Affiliate
has any liability or obligation, the Company does not maintain, and has not at
any time established or maintained, nor has at any time been obligated to make
contributions to or under or otherwise participate in any Benefit Plan.
3.15.4 MEPPA Liability/Post-Retirement Medical Benefits/
Defined Benefit Plans/Supplemental Retirement Plans. Except as set forth in the
Disclosure Letter, neither the Company nor any ERISA Affiliate maintains, or has
at any time established or maintained, or has at any time been obligated to make
contributions to or under any multi-employer plan. Except as set forth in the
Disclosure Letter, neither the Company nor any ERISA Affiliate maintains, or has
at any time established or maintained, or has at any time been obligated to make
contributions to or under (i) any plan which provides post-retirement medical or
health benefits, (ii) any organization described in Sections 501(c)(9) or
501(c)(20) of the Code, (iii) any defined benefit pension plan subject to Title
IV of ERISA or (iv) any plan which provides retirement benefits in excess of the
limitations of Section 415 of the Code.
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3.15.5 Documentation. The Stockholders have made available
to Newpark a true and complete copy of the following documents, if applicable,
with respect to each Benefit Plan identified in the Disclosure Letter: (1) all
documents, including any insurance contracts and trust agreements, setting forth
the terms of the Benefit Plan, or if there are no such documents evidencing the
Benefit Plan, a full description of the Benefit Plan, (2) the ERISA summary plan
description and any other summary of plan provisions provided to participants or
beneficiaries for each such Benefit Plan, (3) the annual reports filed for the
most recent three plan years and most recent financial statements or periodic
accounting of related plan assets with respect to each Benefit Plan, (4) each
favorable determination letter, opinion or ruling from the IRS for each Benefit
Plan which is intended to satisfy the requirements of Section 401(a) or Section
501 of the Code or which is dependent on such letter, ruling or opinion to avoid
current federal come tax to the beneficiaries of such Benefit Plan, and in (5)
each opinion or ruling from the Department of Labor or the Pension Benefit
Guaranty Corporation ("PBGC") with respect to such Benefit Plans.
3.15.6 Qualified Status. Each Benefit Plan that is funded
through a trust or insurance contract and is intended to satisfy the
requirements of Section 401(a) of the Code, has at all times satisfied in all
material respects, by its terms and to the best knowledge of the Stockholders in
its operation, all applicable requirements under Section 401(a) and related
sections of the Code, and any such trust has been and, at the Closing Date,
shall be exempt from federal income taxation under Section 501(a) of the Code.
All such plans have been operated to the best knowledge of the Stockholders in
all material respects in accordance with the applicable requirements of the Tax
Reform Act of 1986 and subsequent applicable legislation.
3.15.7 Compliance. Each Benefit Plan maintained by the
Company or any ERISA Affiliate has at all times been maintained, to the best
knowledge of the Stockholders, by its terms and in operation, in accordance with
all applicable laws in all material respects, including ERISA and (to the extent
applicable) Code Section 4980B. Further, there has been no failure to comply
with applicable ERISA or other requirements concerning the filing of reports,
documents and notices with the Secretary of Labor and Secretary of Treasury or
the furnishing of such documents to participants or beneficiaries that could
subject any Benefit Plan, the Company or any ERISA Affiliate to any material
civil or any criminal sanction or could require any such Person to indemnify any
other Person for such a sanction. There are no claims known to the Stockholders
which are pending or threatened against any Benefit Plan except claims for
benefits made in the ordinary course of the operation of such plans.
3.15.8 Funding. The Company and each ERISA Affiliate has
made full and timely payment of all amounts required to be contributed under the
terms of each Benefit Plan and applicable law or required to be paid as expenses
under such Benefit Plan including, but not limited to, PBGC premiums and amounts
required to be contributed under Section 412 of the Code, and no excise taxes
are assessable as a result of any nondeductible or other contributions made or
not made to a Benefit Plan. With respect to any Benefit Plan that is subject to
Title IV of ERISA, (i) the present value of all accrued benefits under such
Benefit Plan does not exceed the value of the assets of such Benefit Plan
allocated to such accrued benefits, (ii) no amount is due or owing from the
Company or any ERISA Affiliate to the PBGC or to any multi-employer plan on
account of any withdrawal therefrom, (iii) no such Benefit Plan has
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incurred any "accumulated funding deficiency", as such term is defined in
Section 412 of the Code, whether or not waived, since the effective date of such
Section 412, (iv) since September 2, 1974, no such Benefit Plan has been
completely or partially terminated, nor has any notice of intent to terminate
been filed or given, other than in accordance with ERISA or at a time when such
Benefit Plan was not sufficiently funded, (v) there has been no "reportable
event" as such term is defined in Section 4043(b) of ERISA, (vi) there has been
no withdrawal by the Company or any ERISA Affiliate that is a "substantial
employer" from a Benefit Plan that is a single employer plan that has two or
more contributing sponsors, at least two of whom are not under common control,
as referred to in Section 4063(b) of ERISA, and (vii) there has been no
cessation by the Company or any ERISA Affiliate of operations at a facility
causing more than 20% of a Benefit Plan's participants to be separated from
employment, as referred to in Section 4062(f) of ERISA. There are no liens
against the property of the Company or any ERISA Affiliate under Section 412(n)
of the Code or Sections 302(f) or 4068 of ERISA. The Company Financial
Statements properly reflect all amounts required to be accrued as liabilities
under each Benefit Plan. To the best knowledge of the Stockholders, the most
recent actuarial valuations of the Company's Benefit Plans were based on
accurate facts and information, and the Stockholders have no reason to believe
that the conclusions set forth in such valuations are incorrect.
3.15.9 Liabilities. Neither the Company nor any ERISA
Affiliate is subject to any material liability, tax or penalty whatsoever to any
Person whomsoever as a result of engaging in a prohibited transaction under
ERISA or the Code, and neither the Company nor any ERISA Affiliate has any
knowledge of any circumstances which reasonably might result in any such
material liability, tax or penalty, including but not limited to a penalty under
Section 502 of ERISA, as a result of a breach of and duty under ERISA or any
other applicable law. Other than routine claims for benefits under the Benefit
Plans, there are no pending or threatened investigations, proceedings, claims,
lawsuits, disputes, actions, audits or controversies involving the Benefit
Plans, or the fiduciaries, administrators, or trustees of any of the Benefit
Plans, or the Company or any ERISA Affiliate as the employer or sponsor under
any Benefit Plan, with any of the Internal Revenue Service, Department of Labor,
PBGC, any participant in or beneficiary of the Benefit Plans or any other Person
whatsoever. The Stockholders know of no reasonable basis for any such claim,
lawsuit, dispute, action or controversy. Except as set forth in the Disclosure
Letter, the execution and performance of the transactions contemplated by this
Agreement will not create, accelerate or increase any obligations under any
Benefit Plan, including any obligation to make any payment which would not be
deductible as an "excess parachute payment" under Section 280G of the Code.
3.16 Insurance. The Stockholders have furnished to Newpark a
complete list of all insurance policies that the Company maintains, indicating
risks insured against, carrier, policy number, amount of coverage, premiums and
expiration date.
3.17 Tax-Free Reorganization. None of the Stockholders plans or
intends to sell, exchange or otherwise dispose of a number of the Newpark Shares
that would reduce the Stockholders' ownership of Newpark Shares to a number of
shares having a value, as of the Closing Date, of less than fifty percent (50%)
of the value of all of the formerly outstanding Company Shares as of the same
date.
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3.18 Interest in Competitors, Suppliers, etc. Except as set
forth in the Disclosure Letter, none of the Stockholders, and no officer or
director of the Company or any "Family Member" (as defined in Section 18) of any
such Person, owns, directly or indirectly, individually or collectively, any
interest in any corporation, partnership, proprietorship, firm or association
which (a) is a competitor, customer or supplier of the Company, or (b) has an
existing contractual relationship with the Company, including but not limited to
lessors of real or personal property leased to the Company and entities against
whom rights or options are exercisable by the Company. On the Closing Date the
Company will own, free and clear and without payment of any royalty or fee, all
interests in the assets, profits or business of the Company that are held by any
Affiliate of the Company, including the Stockholders and their Family Members.
3.19 Indebtedness with Insiders. Except as set forth in the
Disclosure Letter, and except for accrued salaries for one payroll period,
vacation pay and business expense reimbursements, the Company is not, and, on
the Closing Date, will not be, indebted to any of the stockholders, directors or
officers of the Company or any Affiliate of any such Person. None of such
Persons is or will be on the Closing Date indebted to the Company.
3.20 Consents. No authorizations, approvals or consents of any
Government Body are required for consummation of the transactions contemplated
by this Agreement.
3.21 Patents, Trademarks and Other Intangibles. The Disclosure
Letter includes a list of all material patents, patent applications, trade
names, trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. The Company owns or has the right to use all Intangible
Assets now used in the conduct of its business. Such Intangible Assets include
all of the proprietary products and formulations developed by the Company or
used by it in its business. The Company is not obligated to pay any royalty or
other fee to any licensor or other third party with respect to any Intangible
Assets. The Stockholders have no knowledge of any claim received by the Company
alleging any conflict between any aspect of the business of the Company and any
Intangible Assets claimed to be owned by others which, if determined adversely
to the Company, would have a Material Adverse Effect. Neither the Stockholders
nor any other officer or director of the Company, and no Person that is an
Affiliate of any such Person, has any interest in any Intangibles Assets which
are presently used by the Company or which infringe upon, conflict with or
relate to improvements or modifications of any Intangible Assets presently used
by the Company.
3.22 Purchases and Sales. Since December 31, 1996, the Company
has not placed any orders for materials, merchandise or supplies in exceptional
or unusual quantities based upon past operating practices and has not entered
into contracts with customers under conditions relating to price, terms of
payment, time of performance or like matters materially different from the
conditions regularly and usually specified in contracts for similar engagements
from customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Company nor the
Stockholders (or any Affiliate of the Stockholders) has incurred any liability
to any broker, finder or agent for
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any brokerage fees, finder's fees or commissions for which the Company could be
liable with respect to the transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since December 31, 1996, except
for matters of a general economic nature which do not affect the Company
uniquely, the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess
of $10,000 in a single transaction or $25,000 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,
except as described in Section 4.5;
3.24.5 made any payment of principal or interest on any
indebtedness owed to any past or present stockholder of the Company or any
Affiliate of any such Person;
3.24.6 sold or agreed to sell any of its assets,
properties or rights having an aggregate value in excess or $100,000 or canceled
or agreed to cancel any debts or claims exceeding $100,000 in the aggregate,
except for fair value in the ordinary course of business;
3.24.7 entered or agreed to enter into any agreement or
arrangement granting any preferential right to purchase a material part of its
assets, properties or rights;
3.24.8 increased the rate of compensation of or paid or
accrued bonuses to or for any of its officers, employees, consultants or agents,
except for normal merit or cost of living increases;
3.24.9 suffered any damage, destruction or loss in excess
of an aggregate of $100,000, whether or not covered by insurance, adversely
affecting any of its properties;
3.24.10 assigned or agreed to assign any of its Intangible
Assets having a value in excess of $100,000;
3.24.11 suffered any adverse amendment or termination of
any Material Contract (or any contract that would have been a Material Contract
if not amended or terminated) to which it is a party;
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3.24.12 paid any commissions or similar fees to brokers or
finders for arranging the transactions contemplated by this Agreement or any
similar proposed transaction with any other party; or
3.24.13 entered into any other material transaction other
than in the ordinary course of business.
3.25 No Material Misstatements or Omissions. No representation
or warranty by the Stockholders in this Agreement, and no document, statement,
certificate, exhibit or schedule furnished or to be furnished to Newpark
pursuant hereto, or in connection with the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated therein or necessary in
order to make the statements or facts therein, in the light of the circumstances
under which they were made, not misleading.
B. Except as otherwise set forth in the Disclosure Letter,
each Stockholder represents and warrants with respect to himself, severally but
not jointly, the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's obligations to consummate the
Exchange and issue the Newpark Shares):
3.26 Investment Representations. Either such Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the "Rules and
Regulations" (as defined in Section 18) or such Stockholder, either alone or
with such Stockholder's qualified "purchaser representative" (as defined in Rule
501 of the Rules and Regulations), has such knowledge and experience in
financial and business matters that he is capable of evaluating the risks and
merits of an investment in the Newpark Shares. Such Stockholder is acquiring
his Newpark Shares in the Exchange for investment and not with a view to the
sale thereof other than in compliance with the requirements of the "Securities
Act" (as defined in Section 18) and applicable Blue Sky laws. At the request of
Newpark, each Stockholder will furnish to Newpark evidence reasonably
satisfactory to Newpark that the foregoing representations are true.
3.27 Enforceability. This Agreement has been duly and validly
executed by such Stockholder, and this Agreement constitutes a legal, valid, and
binding obligation of such Stockholder, enforceable against him in accordance
with its terms, subject to the Bankruptcy Exception. Such Stockholder has the
requisite power to enter into this Agreement and perform his obligations
hereunder (including without limitation to sell and deliver his Company Shares),
and no other Person's joinder as a party hereto is necessary therefor pursuant
to any community property laws or otherwise, and there is no restriction on the
power of the Stockholder to sell and deliver his Company Shares pursuant to any
trust, estate planning or other similar document or any prenuptial or post-
nuptial agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the
knowledge of such Stockholder, threatened in any court or arbitration forum or
by or before any Government Body involving the Company or such Stockholder
relating to or affecting any of the transactions contemplated by this Agreement.
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3.29 Title to Shares. Such Stockholder is the holder of record
and owns beneficially that number of Company Shares set forth opposite his name
in the Disclosure Letter. At the Closing, such Stockholder will own the Company
Shares set forth in the Disclosure Letter free and clear of all liens, security
interests, encumbrances and restrictions, other than restrictions contemplated
by this Agreement. Except as set forth in the Disclosure Letter, no Stockholder
is a party to any voting trust, proxy or other agreement with respect to the
voting of any of such Company Shares.
4. Additional Obligations and Covenants of the Stockholders.
Except as otherwise provided in the Disclosure Letter, the
Stockholders hereby jointly and severally covenant and agree with Newpark as
follows (the fulfillment of each such covenant and agreement is a condition
precedent to Newpark's obligations to consummate the Exchange and issue the
Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the
Closing Date, the Stockholders will and will cause the Company to comply with
the following:
4.1.1 The business of the Company shall be conducted
diligently and only in the ordinary course, and the Stockholders will use
reasonable efforts to preserve the organization of the Company intact, to keep
available to the Company its present key employees and to maintain the
relationships of the Company with its suppliers, customers and others. The
Company will not, without Newpark's prior written approval, increase the rate of
compensation payable or to become payable to any of its officers, employees,
consultants or agents over the rate being paid to them at the date hereof,
except for normal merit or cost of living increases to employees other than
officers of the Company.
4.1.2 Without Newpark's prior written approval, no
amendment will be made to any Benefit Plan, no commitment will be made to amend
any Benefit Plan and no commitment will be made to continue any Benefit Plan or
to adopt any new compensatory plan, fund or program for the benefit of any
employees of the Company or any ERISA Affiliate.
4.1.3 The Company will not, without Newpark's prior
written approval, enter into any Material Contract other than in the ordinary
course of business or enter into contracts with customers under conditions
relating to price, terms of payment, time of performance or like matters
materially different from the conditions regularly and usually specified in
contracts for similar engagements from customers similarly situated.
4.1.4 The Company will not, without Newpark's prior
written approval, sell or dispose of any of its material properties or assets
except for sales at fair value in the ordinary course of business.
4.1.5 The Company will not, without Newpark's prior
written approval, acquire or enter into any agreement to acquire, by merger,
consolidation, purchase of stock or assets or otherwise, any business or entity.
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4.1.6 The Company will use reasonable diligence to
maintain its properties in their condition as of the date of this Agreement,
ordinary wear and tear excepted.
4.1.7 The Company will continue to carry its existing
insurance policies subject only to variations in amounts required by the
ordinary operations of its business. At the request of Newpark and at its sole
expense, the amount and scope of said insurance shall be increased by such
amounts and extended to provide coverage against such risks as Newpark shall
specify.
4.2 Access and Information. Subject to the execution by Newpark
of a confidentiality agreement in form and substance reasonably satisfactory to
the Stockholders, the Stockholders will afford to Newpark and Newpark's counsel,
accountants and other representatives reasonable access, throughout the period
from the date hereof to the Closing Date, to all of the Company's properties,
books, contracts, commitments, and records and shall furnish Newpark during such
period with all information that Newpark reasonably may request, including
copies and/or extracts of pertinent records, documents and contracts.
4.3 Efforts to Satisfy Conditions. The Stockholders agree to
use reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to Newpark's obligations under this Agreement, to the extent that
their action or inaction can control or influence the satisfaction of such
conditions. Without limiting the generality of the foregoing, the Stockholders
will and will cause the Company to refrain from all negotiations and
transactions, the con summation of which would be inconsistent with the
transactions contemplated by this Agreement, including, without limitation, any
transaction providing for the sale of any capital stock of the Company, any
merger or other business combination involving the Company, the acquisition of a
substantial equity interest in the Company by a third party or the sale of a
substantial portion of the assets of the Company.
4.4 Corporate Matters. Between the date hereof and the Closing
Date, the Stockholders will cause the Company not to, without Newpark's prior
written approval: (a) amend its Articles of Incorporation or Bylaws; (b) issue
any shares of its capital stock; (c) issue or create any warrants, obligations,
subscriptions, options, convertible securities or other commitments under which
any additional shares of its capital stock of any class might be directly or
indirectly authorized, issued or transferred from treasury; or (d) enter into
any agreement requiring it to do any of the foregoing prohibited acts.
4.5 No Distributions to Stockholders. Between the date hereof
and the Closing Date, the Stockholders will cause the Company not to, without
Newpark's prior written approval: (a) declare, set aside or pay any dividend or
make any distribution in respect of its capital stock, except that the Company
may declare a distribution (the "Distribution") to the Stockholders on or before
the Closing Date, payable after the Closing Date, in an amount equal to 39.6% of
each Stockholders' prorated share of the net profits of the Company from January
1, 1997 through the Closing Date (the "Short Period Income Taxes"); (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
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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 Stockholders will cause the Company not to, without Newpark's
prior written approval, make any commitment for capital expenditures in excess
of an aggregate of $10,000.
4.7 Indebtedness. Between the date hereof and the Closing Date,
the Stockholders will cause the Company not to, without Newpark's prior written
approval: (a) create, incur or assume any long-term debt (including capital
leases that individually involve annual payments in excess of $50,000) or,
except in the ordinary course of business under existing lines of credit,
create, incur or assume any short-term debt for borrowed money in excess of
$25,000 in a single transaction or $10,000 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.
5. Representations and Warranties of Newpark.
Newpark hereby represents and warrants the following (the truth
and accuracy of each of which shall constitute a condition precedent to the
Stockholders' obligations to consummate the Exchange):
5.1 Organization and Good Standing.
5.1.1 Newpark is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Newpark
has corporate power and authority to carry on its business as presently
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it or both require qualification and failure to be so qualified
would have a Material Adverse Effect.
5.1.2 Newpark has furnished to the Company and the
Stockholders com plete and correct copies of Newpark's Certificate of
Incorporation and Bylaws as in effect on the date hereof.
5.2 Capital Stock. The authorized capital stock of Newpark
consists of 80,000,000 shares of Common Stock, $.01 par value, of which
30,414,618 shares were issued and outstanding on May 8, 1997 (as adjusted for a
two-for-one stock split effective May 30, 1997), and 1,000,000 shares of
Preferred Stock, $.01 par value, of which no shares are issued and outstanding.
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
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"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.
5.4 Authority. The execution and delivery of this Agreement by
Newpark and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of Newpark. This Agreement has been
duly executed and delivered to the Stockholders and no vote of the stockholders
of Newpark or further corporate action is necessary on the part of Newpark to
make this Agreement valid and binding upon Newpark in accordance with its terms,
subject to the Bankruptcy Exception. The execution, delivery and performance of
this Agreement by Newpark are not contrary to the Certificate of Incorporation
or Bylaws of Newpark and will not result in a violation or breach of any term or
provision or constitute a default or give any party a right to accelerate the
due date of any indebtedness under any indenture, mortgage, deed of trust or
other contract or agreement to which Newpark is a party or by which Newpark is
bound.
5.5 Newpark Reports. Newpark has delivered to the Stockholders
copies of Newpark's Annual Reports on Form 10-K for the years ended December 31,
1994, 1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997, and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the
"Commission" (as defined in Section 18) 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
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consolidated statements of changes in financial position included in the Newpark
Financial Statements present fairly the results of operations and changes in
financial position of Newpark and its subsidiaries for the periods indicated.
5.7 No Litigation. Except as disclosed in the Newpark Reports
or omitted therefrom in accordance with the Rules and Regulations: (a) there are
no actions, suits or proceedings (whether or not purportedly on behalf of
Newpark or any Newpark Subsidiary) pending or, to the "knowledge of Newpark" (as
defined in Section 18), threatened against or affecting Newpark or any Newpark
Subsidiary, at law or in equity or before or by any Government Body or before
any arbitrator of any kind; and (b) to the best of the knowledge of Newpark,
neither Newpark nor any Newpark Subsidiary is in default with respect to any
judgment, order, writ, injunction, decree, award of any court, arbitrator or
Government Body.
5.8 Newpark Benefit Plans. Newpark has made available to the
Stockholders a true and complete copy of the ERISA summary plan description and
any other summary of plan provisions provided to participants or beneficiaries,
if applicable, for each Benefit Plan (as defined in Section 3.15.1, substituting
"Newpark" for "the Company") maintained by Newpark.
5.9 Environmental Matters. Newpark and the Newpark Subsidiaries
have complied in all material respects with all Hazardous Materials Laws
applicable to their properties and business. Neither Newpark nor, to the best of
Newpark's knowledge, any Newpark Subsidiary has received any complaint, order or
similar notice that it is not in compliance with any Hazardous Materials Laws or
that any Government Body is investigating its compliance with any Hazardous
Materials Laws, except as disclosed in the Newpark Reports or omitted therefrom
in accordance with the Rules and Regulations and except for routine inspections
and investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.10 Absence of Certain Changes. Since December 31, 1996, there
has not been any material adverse change in the results of operations, financial
condition, liquidity, assets, properties or business of Newpark and its
subsidiaries, taken as a whole.
5.11 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except such qualifications as may be required
under state securities or Blue Sky laws relating to the Newpark Shares.
5.12 No Material Misstatements or Omissions. No representation
or warranty by Newpark in this Agreement, and no document, statement,
certificate, exhibit or schedule furnished or to be furnished to the
Stockholders pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact required to be stated
therein or necessary to make the statements or facts contained therein not
misleading.
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6. Additional Obligations and Covenants of Newpark.
Newpark hereby covenants and agrees with the Stockholders as
follows (the fulfillment of each such covenant and agreement is a condition
precedent to the Stockholders' obligations to consummate the Exchange):
6.1 Efforts. Newpark agrees to use reasonable efforts to
satisfy or cause to be satisfied all of the conditions precedent to the
Stockholders' obligations under this Agreement, to the extent that its action or
inaction can control or influence the satisfaction of such conditions.
6.2 Additional Information. Newpark will make available to each
Stockholder the opportunity to ask questions and receive answers concerning the
terms and conditions of the Exchange and to obtain any additional information
that Newpark is required to furnish under Regulation D of the Rules and
Regulations.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of this Agreement, will
issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use
all reasonable efforts to qualify the issuance of the Newpark Shares in
connection with the Exchange under Rule 506 of the Rules and Regulations and, if
necessary, to qualify the issuance thereof pursuant to all applicable state
securities or Blue Sky laws.
6.5 Continuing Employees. Each employee of the Company who
continues immediately after the Closing Date as an employee of the Company,
Newpark, or any of its subsidiaries ("Continuing Employee") shall be treated
under Newpark's compensation, benefit plans and employment policies and
practices on a basis which Newpark deems no less favorable than an employee of
Newpark who performs comparable duties and responsibilities for Newpark on an
equally satisfactory basis. Each Continuing Employee shall receive service
credit for all purposes (including, but not limited to, vesting, eligibility and
benefit accrual) under Newpark's "Benefit Plans" (as defined in Section 3.15.1,
substituting "Newpark" for "the Company") and under any Benefit Plan adopted in
the future for service completed with the Company as if such service had been
completed with Newpark except that (a) no such employee shall receive such past
service credit under a future Benefit Plan except on the same basis that
Newpark's employees also receive past service credit under such plan, and (b) no
such past service credit will be provided under a plan if the Internal Revenue
Service determines that such credit would adversely affect the tax qualified
status of such plan under Section 401 of the Code.
6.6 Stockholder Guarantees. Subject to consummation of the
Exchange, Newpark agrees that, after the Closing Date, it will cause the Company
to discharge in accordance with its terms all indebtedness of the Company as to
which the Stockholders have executed personal guarantees, as disclosed in the
Disclosure Letter.
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7. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the
Exchange under this Agreement shall be subject to the satisfaction on or before
the Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
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 Related Acquisition Consummated. The Related Acquisition
shall have been consummated.
7.3 Government Body Consents. All consents, authorizations,
orders and approvals of (or filings or registrations with) any Government Body
required in connection with the execution, delivery and performance of this
Agreement or the operation of the business of the Company following the Closing
Date shall have been obtained or made, except where the failure to have obtained
or made any such consent, authorization, order, approval, filing or registration
would not have a Material Adverse Effect following the Closing Date.
7.4 Injunction. At the Closing Date there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the Exchange may not be consummated as herein provided, no proceeding or
lawsuit shall have been commenced by any Government Body for the purpose of
obtaining any such injunction, writ or preliminary restraining order and no
written notice shall have been received from any Government Body indicating an
intent to restrain, prevent, materially delay or restructure the transactions
contemplated by this Agreement.
7.5 Tax Opinion. The Stockholders and Newpark shall each have
received a written opinion of Ervin, Cohen & Jessup LLP, in form and substance
reasonably satisfactory to the Stockholders and Newpark (the "Tax Opinion"), to
the effect that (a) the Exchange will constitute a reorganization within the
meaning of Section 368(a)(1)(B) of the Code, (b) the exchange of the Company
Shares for Newpark Shares will not give rise to gain or loss to the
Stockholders, (c) the tax basis of Newpark Shares received in the Exchange by a
Stockholder will be the same as the tax basis of such Stockholder in Company
Shares which were exchanged for such Newpark Shares, and (d) the holding period
for Newpark Shares received in the Exchange by a Stockholder will include the
holding period of such Stockholder in Company Shares which were exchanged for
such Newpark Shares. In connection with such tax opinion, Ervin, Cohen & Jessup
LLP shall be entitled to make factual assumptions as are customary in similar
tax opinions, and such factual assumptions shall be based on and confirmed by
certificates signed by the Stockholders and by responsible officers of the
Company and Newpark.
7.6 Listing of Newpark Shares. The Newpark Shares shall have
been listed on the New York Stock Exchange, subject to official notice of
issuance.
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8. Conditions Precedent to Obligations of Newpark.
The obligations of Newpark to consummate the Exchange and issue
the Newpark Shares are subject to the satisfaction of each of the additional
following conditions at or prior to the Closing, unless waived in writing by
Newpark:
8.1 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 Stockholders in writing
within thirty (30) 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 Stockholders herein shall be true and
correct in all material respects on and as of the Closing Date, with the same
force and effect, except as to transactions permitted herein or to which Newpark
may have consented in writing and changes occurring in the ordinary course of
business after the date of this Agreement and not materially adversely affecting
the Company, or its properties, prospects, or financial condition, as though
such representations and warranties had been made on and as of the Closing Date,
and the Stockholders shall have performed in all material respects all covenants
required by this Agreement to be performed by them at or prior to the Closing.
8.3 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 the Company which in their total
effect have a Material Adverse Effect on the Company.
8.4 Stockholders' Certificate. The Stockholders shall have
delivered to Newpark a certificate, dated the Closing Date, executed by each of
the Stockholders, individually, stating that, to the best knowledge of each, (a)
all the representations and warranties of the Stockholders contained in this
Agreement are true and accurate, (b) all of the conditions precedent to the obli
gations of Newpark hereunder have been fulfilled and (c) the Company and the
Stockholders have duly performed all obligations and covenants to be performed
by them hereunder.
8.5 Material Contracts. The Company shall have received
consents to assignment of all Material Contracts or written waivers of the
provisions of any Material Contracts requiring the consents of third parties as
set forth in the Disclosure Letter, except where the failure to have obtained
any such consent or written waiver would not have a Material Adverse Effect
following the Closing Date.
8.6 Opinion of the Stockholders' Counsel. Newpark shall have
received an opinion of Farnsworth & vonBerg, dated the Closing Date,
substantially in the form attached hereto as Exhibit 8.6.
8.7 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
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there shall have been furnished to such counsel by the Stockholders certified
copies of such corporate records of the Company and copies of such other
documents as such counsel may reasonably have requested for such purpose.
9. Conditions Precedent to Obligation of the Stockholders.
The obligations of the Stockholders to consummate the Exchange
are subject to the satisfaction of each of the following additional conditions
at or prior to the Closing, unless waived in writing by the Stockholders:
9.1 Accuracy of Warranties and Representations. The
representations and warranties of Newpark contained in this Agreement shall be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date, and Newpark shall have performed in all
material respects all of the covenants required by this Agreement to be
performed by it on or before the Closing.
9.2 Authorization of Exchange. All corporate action necessary
by Newpark to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby shall
have been duly and validly taken.
9.3 No Material Adverse Change. There shall have been no
changes since December 31, 1996, in the results of operations, assets,
liabilities, financial condition or affairs of Newpark and its subsidiaries,
taken as a whole, which, in their total effect, have a Material Adverse Effect
on Newpark and its subsidiaries.
9.4 Officers' Certificate of Newpark. Newpark shall have
delivered to the Stockholders a certificate dated the Closing Date, signed by
the President and Chief Financial Officer of Newpark and stating that, to the
best knowledge of each, (a) all the representations and warranties of Newpark
contained in this Agreement are true and accurate, (b) all of the conditions
precedent to the obligations of the Stockholders hereunder have been fulfilled
and (c) Newpark has duly performed all obligations and covenants to be performed
by it hereunder.
9.5 Opinion of Newpark's Counsel. The Stockholders shall have
received an opinion of 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 Stockholders, and there shall have been furnished to such
counsel by Newpark certified copies of such corporate records of Newpark
(including Board of Directors resolutions approving the Exchange Agreements) and
copies of such other documents as such counsel may reasonably have requested for
such purpose.
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10. Closing.
The closing ("Closing") of the transactions covered by this
Agreement shall take place at 10:00 a.m., on June 4, 1997, at the offices of
Newpark, 3850 North Causeway, Suite 1770, Metairie, LA 70002. If 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 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.
Except as otherwise provided herein, all representations,
warranties and indemnifications made by the Stockholders or Newpark under or in
connection with this Agreement (including any representations and warranties set
forth in the certificates delivered pursuant to Sections 8.4 and 9.4) shall
survive the Closing until 24 months after the Closing Date. The representations
and warranties of the Stockholders set forth in Paragraphs 3.11, 3.12, 3.15 and
3.29 shall survive until the expiration of the applicable statute of
limitations. Neither party shall be entitled to recover against the other for
any misrepresentation or breach of warranty except to the extent that written
notice of any such claim has been delivered to the party against whom recovery
is sought within the applicable period setting forth in reasonable detail and
specifying the nature of the claim being asserted. The provisions of this
Section and Section 13.3.3 apply only to claims arising under this Agreement and
do not affect any other claims that any party may have at any time against any
other party, including but not limited to claims that may arise under "Hazardous
Material Laws" (as defined in Section 18).
12. Post-Closing Covenants.
12.1 Cooperation and Assistance. Upon request, each of the
parties hereto shall cooperate with the other to the extent reasonably
requested, at the requesting party's expense, in furnishing information,
testimony and other assistance in connection with any actions, proceedings,
arrangements or disputes involving the Stockholders and Newpark which are based
upon contracts, arrangements or acts of the Stockholders or the Company or both
which were in effect or occurred on or prior to the Closing.
12.2 Access to Records. The Stockholders shall be entitled,
after the Closing, upon reasonable notice and during the regular business hours
of Newpark, to have access to and to make copies of the business records of the
Company which relate to periods prior to the Closing. Newpark shall retain such
business records for a period of five (5) years following the Closing Date,
after which time Newpark may destroy or otherwise dispose of such business
records without the Stockholders' consent.
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12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing
authority asserts a claim, makes an assessment, or otherwise questions or
disputes the amount of Taxes of the Company for any period prior to the Closing
Date, Newpark shall promptly inform the Stockholders in writing of such fact.
The provisions of Section 13 shall apply to the defense of any such claim,
assessment or dispute.
12.3.2 Current Tax Returns. The Stockholders shall be
responsible for the preparation and filing of all Tax Returns for all taxable
periods that end or ended on or before the Closing Date and which have not been
filed or are not required to be filed by the Closing Date. The Company shall pay
any and all Taxes due with respect to such returns. Newpark will make available
to the Stockholders, without charge, the services of its personnel and the
personnel of the Company to assist the Stockholders in the preparation of such
Tax Returns. Such Tax Returns shall be reasonably satisfactory to Newpark in
form and substance. The Stockholders shall each pay their prorata portion of the
Short Period Income Taxes.
12.3.3 Refunds and Credits. Subject to the provisions of
Section 12.3.2 above, any refunds and credits of federal income Taxes
attributable to any taxable year ending on or before the Closing Date shall be
for the account of the Stockholders, and any refunds and credit of other Taxes
attributable to any taxable year ending on or before the Closing Date shall be
for the account of the Company; to the extent that any such refund of Taxes
other than federal income Taxes exceeds the amount, if any, accrued on the books
of the Company with respect to the period for which the refund is received, the
Stockholders shall receive credit against any liability they may have under
Section 13.
12.3.4 Cooperation. Newpark and the Stockholders shall
cooperate with each other in a timely manner in the preparation and filing of
any Tax Returns and the conduct of any audit or any other inquiry or proceeding
with respect to any Tax Return. Each party shall execute and deliver such powers
of attorney and make available such other documents as are necessary to carry
out the intent of this Section 12.3.4. Each party agrees to notify the other
party of any adjustments that do not result in Tax liability but can be
reasonably expected to affect any Tax Return of the other party.
12.3.5 Retention of Records. Newpark shall (i) retain
records, documents, accounting data and other information (including computer
data) necessary for the preparation and filing of all Tax Returns or the audit
of such returns, and (ii) give to the Stockholders reasonable access to such
records, documents, accounting data and other information (including computer
data) and to its personnel (insuring their cooperation) and premises, for the
purpose of the review or audit of such returns to the extent relevant to an
obligation or liability of a party under this Agreement.
13. Indemnifications.
13.1 Indemnification by the Stockholders. Subject to the
provisions of Sections 11 and 13.3, the Stockholders, jointly and severally (but
severally with respect to their
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individual representations and warranties set forth in paragraphs 3.26, 3.27,
3.28 and 3.29), 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 and all breaches of any warranty
or representation made by them in this Agreement or any schedule or agreement
delivered pursuant to this Agreement. Such indemnification shall be solely the
responsibility of the Stockholders, and they shall not have any right to recover
any portion of their liability from the Company, whether by right of
indemnification, contribution or otherwise.
13.2 Indemnification by Newpark. Subject to the provisions of
Sections 11 and 13.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless 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 in this Agreement or any schedule
or agreement delivered pursuant to 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. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including reasonable attorneys'
fees, and the Indemnitee shall have the right, after notifying but without
consulting the Indemnitor, to settle or compromise such claim on any terms
reasonably approved by the Indemnitee.
13.3.3 Neither Newpark nor the Stockholders shall have any
liability for breach of warranty or representation hereunder except to the
extent that the amount of all valid claims for breach of warranty or
representation against it or them hereunder exceeds an aggregate of $50,000. In
no event shall the liability of any of the Stockholders for any breach of
warranty or representation hereunder exceed the value of the Newpark Shares for
which his Company
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Shares are exchanged in the Exchange, for which purpose they shall be valued at
their "Closing Value" (as defined in Section 18). To the fullest extent
permitted by law, and to the extent that such Stockholder continues to own any
of the Newpark Shares, each Stockholder shall satisfy his liability hereunder by
delivering to Newpark some or all of such Newpark Shares, valued at their
Closing Value, and Newpark shall satisfy its liability by issuing additional
Newpark Shares valued at their Closing Value. Nothing contained herein shall
relieve any of the Stockholders or Newpark of any liability he or it may have
for any intentional breach of representation or warranty.
13.3.4 In determining the amount of any damage, loss,
liability, cost or expense suffered by Newpark which gives rise to liability of
the Stockholders hereunder, there shall be taken into account the amount of any
Tax benefits actually realized by Newpark and its subsidiaries attributable to
such damage, loss, liability, cost or expense or derived therefrom in the same
or any past or subsequent taxable period, also taking into account the Tax
treatment of the receipt by Newpark of any payment from the Stockholders.
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 or warranty 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. Newpark and the Stockholders shall first
attempt diligently to resolve any such issue or dispute. They may, if they
desire, attempt to mediate the dispute and shall, if they choose, do so in
accordance with the Commercial Mediation Rules of the American Arbitration
Association ("AAA"), either as written or as modified by mutual agreement. A
written agreement to undertake mediation may be made at any time. If arbitration
proceedings have been instituted, they shall be stayed until the mediation
process is terminated. Any dispute arising out of or related to this Agreement
or its alleged breach that cannot be resolved by mutual agreement (including
mutually agreed mediation) shall be resolved exclusively by final and binding
arbitration, conducted as expeditiously as possible in the City of Houston,
Texas, in accordance with the provisions of this Agreement and, to the extent
not inconsistent with such provisions, the Commercial Arbitration Rules of the
American Arbitration Association. To the extent lawful, the arbitrators, in
their discretion, may shorten any time periods or notice periods specified by
law, in the interest of timely completing arbitration and issuing their award.
13.4.2 The Stockholders, as one party, or Newpark may
initiate arbitration of a dispute by giving the other party written notice of
arbitration, which shall specify with reasonable detail (a) the issue in
dispute, (b) the claims asserted and (c) the remedy sought by the party invoking
arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the
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arbitrators shall be affiliated in any way with either of the parties or have
any direct or indirect financial interest in the outcome of the arbitration. If
the parties fail to reach agreement upon a single arbitrator within 5 business
days following receipt by one party of the other party's notice of arbitration,
the initiating party shall submit in writing to the other party the name of a
neutral arbitrator selected by the initiating party. Within 5 business days
after such name is submitted, the other party shall submit to the initiating
party in writing the name of a neutral arbitrator selected by such other party
and may submit an answering statement. Within 10 days after appointment of the
second arbitrator, the two arbitrators appointed by the parties shall select a
third neutral arbitrator; the three arbitrators so selected shall finally
resolve the dispute. If the two arbitrators appointed by the parties fail
before the end of said 10 day period to agree on a 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 10 days after the name of the arbitrator selected
by the initiating party is submitted, the arbitrator appointed by the initiating
party shall be empowered to proceed to arbitrate and determine the matter in
controversy as the sole arbitrator. All references to "the arbitrators" in the
following Sections shall be deemed to refer to the sole arbitrator, if there is
only one arbitrator. The arbitrators shall, at the earliest possible date, set
dates for a hearing and establish any pre-hearing conferences or procedural
schedules that the arbitrators deem appropriate. The arbitrators may authorize
depositions and issue subpoenas and make other decisions provided for in Section
13.4.3 below. All decisions of the arbitrators shall be by a majority of the
arbitrators, unless the parties agree otherwise.
13.4.3 It is the mutual intention of the parties that
discovery, if any, shall be limited in nature and scope and, to the extent
possible, shall be handled informally and by agreement. Any dispute regarding
discovery shall be submitted promptly to the arbitrators and shall be resolved
by them. If necessary, any decision of the arbitrators respecting discovery may
be enforced by any court of competent jurisdiction in the same manner as a final
award under this Section, including an order for specific performance.
13.4.4 The arbitrators shall diligently, expeditiously and
in good faith decide the matter under consideration in accordance with the laws
of the State of Texas, excluding its choice of law rules. 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. The parties shall share equally the cost of the
arbitration proceedings, including the fees and expenses of the arbitrators and
the cost of the stenographic record, provided that the arbitrators shall have
discretion to charge such costs to the parties in such different proportions as
they determine to be appropriate.
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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 Stockholders until the Closing to the extent set
forth in this Section 14. If on the Closing Date any assets of the Company
shall have suffered loss or damage on account of fire, flood, accident, act of
war, civil commotion, or any other cause or event beyond the reasonable power
and control of the Company (whether or not similar to the foregoing) to an
extent which materially affects the value to Newpark of the Company Shares,
Newpark shall have the right at its election to complete the acquisition (in
which event, as Newpark's sole and exclusive remedy with respect to the
consequences of such loss or damage, all claims of the Company with respect to
such loss or damage and all insurance proceeds arising therefrom shall be for
the account of the Company), or, if it does not so elect, it shall have the
right, which shall be in lieu of any other right or remedy whatsoever, to
terminate this Agreement. In the latter event, all parties shall be released
from liability hereunder.
15. Termination.
In addition to any party's right to terminate this Agreement if
any condition precedent to its obligations is not satisfied on the Closing Date,
subject to the provisions of this Agreement relating to the postponement of the
Closing Date, either Newpark or the Stockholders may forthwith terminate this
Agreement: (a) subject to clause (b) below, without liability to the other of
them if a bona fide action or proceeding (by and at the sole instance of a party
or parties not an Affiliate or Affiliates of Newpark or the Stockholders) shall
be pending against either party on the Closing Date wherein an unfavorable
judgment, decree or order would prevent or make unlawful the carrying out of the
transactions contemplated by this Agreement; or (b) without prejudice to other
rights and remedies which either party may have, if a material default shall be
made by the other of them in the observance or in the due and timely performance
of its covenants and agreements herein contained, or if there shall have been a
material breach of the warranties and representations herein contained.
16. Notices.
Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, 48
hours after deposit in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address provided below. The parties may change their
respective addresses for the purpose of this Section 16
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by giving notice of such change to the other party in the manner which is
provided in this Section 16.
Stockholders: c/o Chemical Technologies, Inc.
11767 Katy Freeway, Suite 330
Houston, Texas 77079
Facsimile No.: (713) 988-7267
With a copy to:
Mary Frances vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway, Suite 300
Houston, Texas 77060
Facsimile No.: (281) 931-6032
Newpark: c/o Newpark Resources, Inc.
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
17. Assignment.
Rights hereunder shall not be assignable and duties hereunder
shall not be delegable by the Stockholders or Newpark without the prior written
consent of the other; consent may be withheld for any reason or without reason.
Nothing contained in or implied from this Agreement is intended to confer any
rights or remedies upon any Person other than the parties hereto and their
successors in interest and permitted assignees, unless expressly stated herein
to the contrary.
18. Certain Definitions.
As used herein, the following terms (whether used in the singular
or the plural) have the following meanings:
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"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 25% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the five trading days immediately preceding the third trading day
prior to the Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the Closing Date that relate to or impose liability
or standards of conduct concerning the environment, as now or hereafter in
effect and as have been or hereafter may be amended or reauthorized, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601, et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. (S) 1802, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901, et seq.), the Federal Water Pollution Control
Act (33 U.S.C. (S) 1251, et seq.), the Toxic Substances Control Act (14 U.S.C.
(S) 2601, et seq.), the Clean Air Act (42 U.S.C., (S) 7901 et seq.), the
National Environmental Policy Act (42 U.S.C. (S) 4231, et seq.), the Refuse Act
(33 U.S.C. (S) 407, et seq.), the Safe Drinking Water Act (42 U.S.C. (S) 300(f),
et seq.), and all rules, regulations, codes, ordinances and guidance documents
promulgated or published thereunder, and the provisions of any licenses,
permits, orders and decrees issued pursuant to any of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer
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<PAGE>
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 Stockholders" (and similar terms such as "to the
best of the knowledge of the Stockholders") means the actual knowledge of the
Stockholders or any other executive officer of the Company.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not materially impair the existing use or materially detract from the value of
the assets or property subject thereto, and (d) liens for current taxes not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any Government Body 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.
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<PAGE>
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 Sections 13 and 14, (a) no remedy conferred
by any of the specific provisions of this Agreement is intended to be exclusive
of any other remedy, (b) each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law, in equity, or otherwise and (c) the election of any one or more remedies
by either party hereto shall not constitute a waiver of the right to pursue
other available remedies.
21. Attorneys' Fees.
In any litigation or arbitration relating to this Agreement,
including litigation or arbitration with respect to any instrument, document or
agreement made under or in connection with this Agreement, the prevailing party
shall be entitled to recover its costs and reasonable attorneys' fees.
22. Payment of Expenses.
Whether or not the Exchange is consummated, Newpark will pay and
be responsible for all costs and expenses incurred by Newpark in connection with
this Agreement and the transactions contemplated hereby, and the Stockholders
will pay and be responsible for all costs and expenses incurred by the Company
and the Stockholders in connection with this Agreement and the transactions
contemplated hereby.
23. Successors and Assigns.
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
24. Counterparts.
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
25. Headings; Severability.
Captions and section headings used herein are for convenience
only and are not a part of this Agreement and shall not be used in construing
it. The provisions of this Agreement
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<PAGE>
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.
27. Waivers.
At any time prior to the Closing Date, the parties hereto, may,
to the extent legally permitted: (i) extend the time for the performance of any
of the obligations or other acts or any other party; (ii) waive any inaccuracies
in the representations or warranties of any other party contained in this
Agreement or in any document or certificate delivered pursuant hereto; (iii)
waive compliance or performance by any other party with any of the covenants,
agreements or obligations of such party contained herein; and (iv) waive the
satisfaction of any condition that is precedent to the performance by the party
so waiving of any of its obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. A waiver by one party
of the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A waiver
by any party of the performance of any act shall not constitute a waiver of the
performance of any other act or an identical act required to be performed at a
later time.
28. Entire Agreement.
The Disclosure Letter and all schedules, exhibits and financial
statements provided for herein are a part of this Agreement. This Agreement and
the other agreements and documents provided for in this Agreement comprise the
entire agreement of the parties and supersede all earlier understandings of the
parties with respect to the subject matter hereof.
(Signatures set forth on the following page)
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
NEWPARK: THE STOCKHOLDERS:
NEWPARK RESOURCES, INC.
/s/ Perry Bennett
_________________________________
Perry Bennett
By:/s/ James D. Cole
_________________________________
Name: James D. Cole /s/ Kentner Shell
Title: President _________________________________
Kentner Shell
/s/ Ray Bennett
_________________________________
Ray Bennett
/s/ Bob Hill
_________________________________
Bob Hill
-34-
<PAGE>
EXHIBIT 2.11
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered
into as of June 4, 1997, by and between _______________ ("Covenantor") and
NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"), ancillary to and as
required by the Agreement and Plan of Reorganization (the "Exchange Agreement"),
dated June 3, 1997, by and among Newpark and the "Stockholders" so identified in
the Exchange Agreement (including Covenantor), pursuant to which Newpark has
acquired 100% of the capital stock of CHEMICAL TECHNOLOGIES, INC., a Texas
corporation (the "Company"). Unless otherwise provided herein all terms used in
this Agreement that are defined in the Exchange Agreement shall have the same
meanings herein as in the Exchange Agreement.
In consideration of the foregoing, and in order to satisfy a condition
precedent to the consummation of the Exchange, 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.
The Territory - All or any part of the following: the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico.
<PAGE>
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 a period of sixty months. 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. If, notwithstanding the foregoing,
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. If any provision of Paragraphs 1 through 4
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<PAGE>
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: ______________________________________
______________________________________
______________________________________
Facsimile No.: ( ) -
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<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 /s/ James D. Cole, President
_________________________________
James D. Cole, President
-4-
<PAGE>
EXHIBIT 2.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
June 4, 1997, by and between CHEMICAL TECHNOLOGIES, INC., a Texas corporation
("Employer"), and PERRY BENNETT ("Employee"), with reference to the following
facts:
A. Employee has been employed by Employer as its President.
B. On the date of this Agreement, Employer has become a wholly-owned
subsidiary of NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark").
Employer desires to assure itself of the continued services of Employee for a
term expiring no sooner than June 30, 2000, and the parties are entering into
this Agreement for that purpose and in order to set forth the terms of the
employment of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment.
Employer hereby continues the employment of Employee, and
Employee hereby accepts continued employment with Employer, for a period
commencing on the date hereof and, except as otherwise provided herein, expiring
June 30, 2000, provided, however, that, each time neither party terminates this
Agreement by written notice given at least sixty (60) days prior to the
expiration of the employment term as last renewed or extended, it shall be
automatically renewed for an additional twelve month period. As used herein, the
phrase "employment term" refers to the entire period that Employee shall be
employed hereunder, whether for the initial period provided above, or whether
this Agreement is terminated earlier or extended automatically as provided
herein or by mutual agreement between Employer and Employee.
2. Duties of Employee.
2.1 Employee shall serve as a senior executive officer of
Employer and shall do and perform all services, acts and things necessary or
advisable in that capacity in connection with the conduct of the business of
Employer, subject to the instructions of and policies and limitations set by its
Board of Directors. It is contemplated that Employee's role will be
substantially the same as his role with Employer immediately prior to date
hereof.
2.2 Employee shall devote his entire productive time, ability
and attention to the business of Employer during the employment term, except
that Employee may devote time and effort to personal activities to the extent
that such activities do not materially interfere with the performance of his
duties hereunder. If Employer advises Employee that, in its good faith
judgment, such activities are materially interfering with the performance of
Employee's duties hereunder, Employee will promptly take steps to appropriately
limit such activities. Subject to the foregoing, Employee shall not directly or
indirectly render any services of a business, commercial or professional nature
to any other person or organization, whether for
<PAGE>
compensation or otherwise, without the prior written consent of the Board of
Directors of Employer.
2.3 Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices as an officer, director or
member of any committee of the Board of Directors of Employer or of any direct
or indirect subsidiary of Employer.
3. Compensation of Employee.
3.1 As compensation for his services hereunder, Employee shall
receive a salary at the annual rate of $108,000, payable in equal installments
on Employer's regular payroll dates for executive employees. Employer's Board
of Directors will review Employee's salary annually, and, with the approval of
Newpark's Board of Directors or Compensation Committee, may (but shall be under
no obligation to) further increase such salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his salary, a
bonus in such amount, if any, as may be determined by the Board of Directors or
Compensation Committee of Newpark, in its sole discretion.
4. Benefits.
Employee shall be entitled to participate in and receive benefits
under all profit-sharing plans, pension plans, group medical plans and other
plans for payment of additional compensation or benefits to employees of
Employer which Employer at any time maintains for executive employees. To the
extent permitted by law, and provided that such participation does not result in
duplicate payments to Employee, Employee shall also participate in such benefits
plans as Newpark makes available to its executive employees and the executive
employees of its subsidiaries.
5. Business Expenses.
Employee is authorized to incur reasonable expenses for promoting
and conducting the business of Employer, including expenditures for
entertainment and travel. Employer shall reimburse Employee monthly for all such
business expenses upon presentation of reasonable documentation establishing the
amount, date, place and essential character of the expenditures.
6. Disability.
6.1 If Employee becomes disabled by reason of sickness, physical
or mental disability or any other cause which materially impairs his ability to
perform his duties under this Agreement with reasonable accommodation for a
period of six consecutive months or for nine months in any twelve-month period,
Employer shall have the option to terminate this Agreement effective immediately
by giving written notice of termination to Employee within a reasonable time
following the end of such period of disability. If Employee becomes temporarily
-2-
<PAGE>
disabled by reason of sickness, physical or mental disability, or any other
cause so that he is unable to perform efficiently his duties hereunder with
reasonable accommodation, he shall be entitled to compensation as provided for
herein until the total period of such temporary disability shall equal an
aggregate of three months during any period of twelve consecutive months. As to
any subsequent periods of disability during said twelve month period, Employee
shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant
to the provisions of Paragraph 6.1 above, Employee shall be entitled to salary
and discretionary bonus earned by him prior to the date of termination as
provided for in this Agreement computed pro rata up to and including that date;
but he shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
7.1 This Agreement and the employment of Employee hereunder may
be terminated at any time prior to the expiration of the term of this Agreement
as follows:
(a) By Employer as a result of disability of Employee as
provided in Paragraph 6.1 above, or the death of Employee;
(b) Upon the mutual agreement of the parties;
(c) by Employer in the event of: (i) conviction of Employee of a
major felony (whether or not committed in the course of his employment) from
which no appeal has been made, or, if an appeal has been made, upon a final
determination adverse to Employee; or (ii) gross misconduct by Employee causing
material harm to Employer, but only if (x) Employee shall not have discontinued
such gross misconduct within ten days after receiving written notice from
Employer that it will consider the continuation of such gross misconduct cause
for termination of this Agreement, or (y) the gross misconduct is of such a
nature that Employer would be materially prejudiced thereby whether or not
Employee discontinues such gross misconduct;
(d) by Employee if Employer shall fail to cure a material or
default by it under any of the terms of this Agreement within thirty days after
written notice of such breach or default is given by Employee;
(e) by Employer if Employee shall fail to cure a material breach
or default by him under this Agreement within thirty days after written notice
of such breach or default is given by Employer.
7.2 This Agreement shall not be terminated by any merger or
consolidation where Employer is not the consolidated or surviving corporation or
by any transfer of all or substantially all of the assets of Employer. In the
event of any such merger or consolidation or transfer of assets, the surviving
or resulting corporation or the transferee of the assets of Employer shall be
bound by and shall have the benefit of the provisions of this
-3-
<PAGE>
Agreement; and Employer shall take all actions necessary to ensure that such
corporation or transferee is bound by the provisions of this Agreement.
7.3 Upon termination of this Agreement for any reason
whatsoever, Employee shall return to Employer all automobiles, equipment, books,
records, customer lists, catalogs, invoices, correspondence and other property
which was acquired from or otherwise belongs to Employer, including any property
or documentation developed by Employee in the course of his employment.
8. Proprietary Information and Non-Competition.
8.1 Employee recognizes and acknowledges that the performance of
his services hereunder will necessarily result in disclosure to him of certain
trade secrets and confidential information, including source of supply
information, sales information, customer lists, customer information and
pricing, all of which are special and unique assets and trade secrets of
Employer's business. For the purpose of this Agreement, such information shall
be referred to and is acknowledged as "proprietary information of the Employer."
In view of the foregoing, in addition to and not in limitation of the provisions
of the Noncompetition Agreement executed concurrently herewith by Newpark and
Employee, Employee agrees that:
8.1.1 During and after the employment term, Employee
will not disclose or use any proprietary information of Employer, except for the
purpose of carrying out his duties hereunder, unless such use or disclosure is
specifically consented to in writing by Employer.
8.1.2 For the period of one year after the employment
term, Employee will not in any way, directly or indirectly, for himself or on
behalf of any other person or entity, associate in business as an employer,
employee or otherwise, with any employee, officer or agent of Employer until
such person has terminated employment with Employer for a period of one year.
8.1.3 During the employment term and thereafter,
Employee will not, directly or indirectly, for himself or on behalf of any other
person or entity, induce or attempt to induce any of Employer's personnel to
terminate their relationship with Employer, nor will Employee induce or attempt
to induce any of Employer's personnel to do anything contrary to the best
interests of Employer.
8.2 Employee agrees that in the event of any breach by Employee
of any covenant in this Paragraph 8, Employer shall be entitled, in addition to
other remedies, to immediate injunctive relief if necessary to avoid irreparable
harm and injury.
9. General Provisions.
9.1 Any notices to be given hereunder by either party to the
other shall be in writing and may be effected either by personal delivery or by
mail, registered or certified, return receipt requested, postage prepaid.
Mailed notices shall be addressed to the parties at the
-4-
<PAGE>
addresses appearing opposite their respective signatures below and shall be
deemed effective 24 hours after being deposited in the U.S. mails, postage
prepaid and property addressed. Each party may change its address by written
notice in accordance with this Paragraph.
9.2 This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee and contains all of the covenants and agreements between
the parties with respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of this
Agreement which is in conflict with any applicable statute, rule, or other law
shall be deemed, if possible, to be modified or altered to conform thereto or,
if not possible, to be omitted from this Agreement. The invalidity of any
portion hereof shall not affect the force or effect of the remaining portions
hereof.
9.4 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and the Judicial District Court
of Harris County, Texas, Houston Division, shall be the only proper forum for
disputes hereunder.
9.5 The rights and obligations of Employer under this Agreement
shall enure to the benefit of and shall be binding on the successors and assigns
of Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
CHEMICAL TECHNOLOGIES, INC. ("Employer") Address:
11767 Katy Freeway, Suite 330
Houston, Texas 77079
By: /s/ Perry Bennett, President
_____________________________
Name and Title
/s/ Perry Bennett Address:
________________________________ 2122 Greencove Lane
Perry Bennett ("Employee") Sugar Land, Texas 77479
-5-
<PAGE>
EXHIBIT 2.13
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") dated as of
June 4, 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 186,666 shares (the
"Shares") of Newpark's common stock, $.01 par value (the "Common Stock"), upon
the exchange (the "Exchange") of 100% of the shares of the capital stock of
CHEMICAL TECHNOLOGIES, INC., a Texas corporation (the "Company"), pursuant to
the Agreement and Plan of Reorganization (the "Exchange Agreement") among
Newpark and the "Stockholders" so identified in the Exchange 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 Exchange, 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.
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
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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.
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 and the Exchange Agreement, if, during the period commencing
August 1, 1997 and continuing for 180 days, one or more Holders request in
writing to Newpark that Newpark effect the registration under the Securities Act
of up to twenty percent (20%) 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.
(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
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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) Only One Demand Registration. Holders shall not be entitled to
make a request pursuant to this Paragraph 2 more than one time, provided that
the registration so requested 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 and the Exchange 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 up to
twenty percent (20%) 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) 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
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(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) The total number of Shares that Holders are entitled to have
registered by Newpark under the Securities Act pursuant to Paragraph 2(a) and
Paragraph 3(a) combined is twenty percent (20%) so that if twenty percent (20%)
of the Shares have been effectively registered under the Securities Act pursuant
to Paragraph 2(a), Holders will not be entitled to have Shares registered
pursuant to Paragraph 3(a), and vice versa. If the aggregate number of Shares
that Holders propose to have registered exceeds twenty percent (20%) of the
Shares, the number of Holders' shares eligible to be registered 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 twenty percent (20%) of the Shares 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.
(b) 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 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
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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 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
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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 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.
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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 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
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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 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
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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 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
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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. 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. 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 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 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.
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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:
Mary Frances vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway, Suite 300
Houston, TX 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
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.
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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, President
__________________________________
James D. Cole, President
HOLDERS
/s/ Perry Bennett
______________________________________
Perry Bennett
/s/ Kentner Shell
______________________________________
Kentner Shell
/s/ Ray Bennett
______________________________________
Ray Bennett
/s/ Bob Hill
______________________________________
Bob Hill
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<PAGE>
EXHIBIT A
LIST OF HOLDERS
Perry Bennett
2122 Greencove Lane
Sugar Land, Texas 77479
Kentner Shell
1906 Rock Fence
Richmond, Texas 77469
Ray Bennett
2220 93rd Place
Lubbock, Texas 79423
Bob Hill
12323 Buckhorn
Littleton, Colorado 80127
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EXHIBIT 2.14
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of June 3, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), NEWPARK HOLDINGS, INC., a Louisiana
corporation ("Holdings"), NEWPARK TEXAS L.L.C., a Louisiana limited liability
company ("Newpark Texas") (Newpark, Holdings and Newpark Texas being sometimes
referred to herein collectively as "Buyers"), FMI WHOLESALE DRILLING FLUIDS,
INC., a Texas corporation ("FMI"), GENERAL SUPPLY CO., an Oklahoma corporation
("Supply"), AMERICAN POLYMER, INC., an Oklahoma corporation ("American"), and
PERRY BENNETT ("Bennett") (Supply, American and Bennett being sometimes referred
to herein collectively as the "Limited Partners" and, together with FMI, the
"Partners"), with reference to the following facts:
A. FMI owns beneficially and of record 100% of the general
partnership interests (the "General Partner Interest") in FMI WHOLESALE DRILLING
FLUIDS, U.S.A., L.P., a Texas limited partnership (the "Company"), and the
Limited Partners own beneficially and of record 100% of the outstanding limited
partnership interests (the "Limited Partner Interests") in the Company. The
General Partner Interest and the Limited Partner Interests being hereinafter
collectively referred to as the Interests.
B. The Company is a regional Gulf Coast drilling mud company
specializing in the distribution and sale of oil based drilling fluid components
to the oil industry.
C. The parties believe that it is in their best interests to provide
for the acquisition by Holdings of the General Partner Interest from FMI and the
acquisition by Newpark Texas of the Limited Partner Interests from the Limited
Partners solely in exchange for an aggregate of 35,556 newly issued shares of
voting Common Stock of Newpark (the "Newpark Shares"). Such transaction is
sometimes referred to herein as the "Exchange."
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Transfer and Exchange of Interests.
----------------------------------
1.1 Exchange of Interests. Subject to the provisions of this
Agreement, on the "Closing Date" (as defined in Section 10) (i) FMI hereby
agrees to sell, transfer and assign to Holdings good and marketable title in and
to the General Partner Interest and (ii) the Limited Partners hereby agree to
sell, transfer and assign to Newpark Texas good and marketable title in and to
the Limited Partner Interests, and Newpark will issue and deliver certificates
representing the Newpark Shares to the Partners, in proportion to their
ownership of the Interests. No fractional Newpark Shares will be issued; if
fractional shares otherwise would issue, the Partners shall instruct Newpark at
least five business days before the Closing Date as to the rounding of such
shares.
1.2 Legend on Newpark Shares. Certificates representing the Newpark
Shares initially will bear the following legend:
<PAGE>
"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 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Closing Date,
the number of Newpark Shares to be issued at the Closing Date shall be adjusted
to such extent as may be necessary to prevent dilution or enlargement of the
rights of the Partners. 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.
1.4 Concurrent Transaction. Concurrently with the execution and
delivery of this Agreement, Newpark, certain of the Partners and other
interested parties are executing and delivering an agreement (the "Related
Agreement") pursuant to which Newpark intends to acquire (the "Related
Acquisition") on the Closing Date, solely in exchange for 186,666 newly issued
shares of voting Common Stock of Newpark, 100% of the outstanding equity
interests in CHEMICAL TECHNOLOGIES, INC., a Texas corporation. The consummation
of the Related Acquisition on or before the Closing Date is a condition
precedent to each party's obligations under this Agreement unless waived in
writing by such party.
2. Ancillary Agreements.
--------------------
On the Closing Date, as a necessary incident of the Exchange, Newpark
and the Partners will execute and deliver (i) noncompetition agreements
substantially as set forth in Exhibit 2.1 attached to this Agreement and (ii) a
Registration Rights Agreement substantially as set forth in Exhibit 2.2 attached
to this Agreement.
3. Representations and Warranties of the Partners.
----------------------------------------------
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by FMI to Buyers prior to the execution hereof,
FMI hereby warrants and represents the following (the truth and accuracy of each
of which shall constitute a condition precedent to Buyers' obligations to
consummate the Exchange and issue the Newpark Shares):
3.1 Organization and Good Standing.
------------------------------
3.1.1 FMI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and 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.
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3.1.2 The Company is a limited partnership duly formed and validly
existing under the laws of the State of Texas and has full partnership 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 in good standing 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.
3.1.3 FMI has furnished to Newpark a complete and correct copy of
the Company's Agreement of Limited Partnership as in effect on the date hereof
(the "Partnership Agreement").
3.1.4 FMI has heretofore made available to Newpark for its
examination copies of the records of all the proceeding of the Partners. Said
records are accurate in all material respects and reflect all resolutions
adopted and all material actions expressly authorized or ratified by the
partners of the Company.
3.2 Capitalization.
--------------
3.2.1 The Partners are the owners of 100% of the Partnership
Interests, and the Disclosure Letter includes the names, addresses and social
security numbers of, and the percentage interest in the Company owned by, each
of the Partners. All of the Partnership Interests have been validly issued.
3.2.2 Except as set forth in the Disclosure Letter, the Company
has not issued and is not subject to any securities or other instruments
representing an interest in the capital, net profits or net losses of the
Company, and there are no options, warrants, subscriptions or other rights
outstanding for the purchase of, or any securities convertible into, any
securities or other instruments representing an interest in the capital, net
profits or net losses of the Company.
3.3 Equity Interests. The Company does not have a material equity interest
in any other "Person" (as defined in Section 18).
3.4 No Violation. The execution, delivery and performance of this Agreement
by the Partners are not contrary to the Partnership Agreement 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 Partners or any of them are a party or by which any of
them are bound.
3.5 Financial Statements. The unaudited balance sheets of the Company as of
December 31, 1996, January 31, 1997, February 28, 1997, March 31, 1997, and
April 30, 1997, and the related unaudited statements of income, partner equity
and cash flows for the seven
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<PAGE>
months ended December 31, 1996, the months ended January 31, 1997, February 28,
1997, March 31, 1997, and April 30, 1997, and for the period from January 1,
1997, to the end of each such month, 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 otherwise noted therein) 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 $50,000; (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 thereof; (f) equipment leases providing (in any one
lease or group of related leases) for payments in excess of $50,000 per year;
(g) contracts under which the performance of any obligation of the Company is
guaranteed by a Partner 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 $50,000 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 $50,000 and
a remaining period for performance in
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<PAGE>
excess of nine months (all such items being collectively referred to herein as
"Material Contracts"). FMI 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" (as defined in Section 18) of
FMI, the other parties thereto in accordance with their respective terms,
subject to the "Bankruptcy Exception" (as defined in Section 18); there have
been no amendments to or modifications to any Material Contract (except as set
forth in the copies furnished to Newpark); no event has occurred which is, or,
following any grace period or required notice, would become, a material default
by the Company under the terms of any Material Contract; except to the extent
specifically reserved against on the latest balance sheet included in the
Company Financial Statements, the Company is not a party to any Material
Contract on which FMI 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 $10,000
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 FMI, the Company does not have, and none
of its properties are subject to, any material debts, liabilities or obligations
of any nature, whether accrued, absolute, contingent or otherwise, whether or
not of a type which are required to be shown or reflected on financial
statements prepared in a manner consistent with generally accepted accounting
principles. The Company is not in default with respect to any material term or
condition of any indebtedness.
3.10 No Litigation. There are no actions, suits or proceedings (whether or
not purportedly on behalf of the Company) pending or, to the knowledge of FMI,
threatened against or affecting the Company, at law or in equity or before or by
any "Government Body" (as defined in Section 18) or before any arbitrator of any
kind. To the best of the knowledge of FMI, the Company is not in default with
respect to any judgment, order, writ, injunction, decree or award of any
Government Body.
3.11 Environmental Matters.
---------------------
3.11.1 Neither the Company nor, to the best of the knowledge of
FMI, any previous owner, lessee, tenant, occupant or user of any real property
owned or leased on or prior
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<PAGE>
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 FMI, no underground tanks or underground deposits or Hazardous
Materials the existence of which would have a Material Adverse Effect existed
on, under, in or about any Property previously owned or leased by the Company on
or prior to the date that fee or leasehold title to such Property was
transferred to a third party by the Company. To the best of the knowledge of
FMI, no underground tanks or underground deposits or Hazardous Materials the
existence of which would have a Material Adverse Effect exist on, under, in or
about any Property that is currently owned or leased by the Company.
3.11.2 While any Property was owned or leased by the Company, it
did not violate to an extent that would have a Material Adverse Effect any
applicable federal, state and local laws, ordinances or regulations, now or
previously in effect, relating to environmental conditions, industrial hygiene
or Hazardous Materials on, under, in or about such Property (including without
limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge of FMI,
there are no (1) enforcement, clean-up, removal, mitigation or other
governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Company or any Property
presently owned or leased by the Company, (2) claims made or threatened by any
Person or Government Body relating to the Property against the Company or any
Property presently owned or leased by the Company or relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials or (3) any occurrence or condition known to FMI on any
Property that is currently owned or leased by the Company that can reasonably be
expected to subject the Company or such Property to any material restrictions on
occupancy, transferability or use of any Property under any Hazardous Materials
Laws. The Disclosure Letter includes a list of all complaints, notices of
violation and claims relating to Hazardous Materials Laws which, to the
knowledge of FMI, have been received by or asserted against the Company.
3.12 Taxes.
-----
3.12.1 Except as set forth in the Disclosure Letter, the Company
has filed all income, franchise and other "Tax Returns" (as defined in Section
18) required to be filed by it by the date hereof. All "Taxes" (as defined in
Section 18) imposed by the United States, the State of Texas and by any other
state, municipality, subdivision, or other taxing authority, which are due and
payable by the Company have been paid in full or are adequately provided for by
reserves reflected on the latest balance sheet included in the Company Financial
Statements. The Company is a partnership for federal income Tax purposes and
has maintained its status as a partnership continuously since inception.
-6-
<PAGE>
3.12.2 All contributions due from the Company pursuant to any
unemployment insurance or workers compensation laws and all sales or use Taxes
which are due or payable by the Company have been paid in full and will be so
paid through the Closing Date. The Company has withheld and paid to, or will
cause to be paid to, the appropriate taxing authorities all amounts required to
be withheld from the wages of its employees under state law and the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Company will continue to do so with respect to all wages paid by it through
the Closing Date.
3.12.3 The Company has furnished to Newpark true and complete
copies of the federal income Tax Returns and comparable state Tax Returns of the
Company covering all taxable periods ended since the inception of the Company
and constituting complete and accurate representations in all material respects
of the Tax liabilities of the Company for the relevant periods stated therein
and accurately setting forth all relevant material items, including the Tax
bases of all assets, where required to be set forth in such Tax Returns.
3.13 Permits and Licenses. The Company has all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof, and the Company is in compliance in all material respects with all
applicable federal, state and local laws, rules, regulations and orders relating
to its business, except where failure to have any such license, franchise,
permit or authorization or failure to comply with any such laws, rules,
regulations and orders would not have a Material Adverse Effect. The execution
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not cause the termination or suspension of any license,
franchise, permit or governmental authorization or violate any provision of or
constitute a default under any law, rule or regulation, order, writ, injunction
or decree of any Government Body applicable to the Partners 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 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, wages or material penalties for failure to comply with any of the
foregoing.
3.15 Employee Benefit Plans.
----------------------
3.15.1 Definition of Benefit Plans. For purposes of this Section
3.15, the term "Benefit Plan" means any plan, program, arrangement, practice or
contract which provides benefits or compensation to or on behalf of employees or
former employees of the Company or any "ERISA Affiliate" (as hereinafter
defined), whether formal or informal, whether or not written, including but not
limited to the following:
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(a) Arrangements - any bonus, incentive compensation, stock option,
deferred compensation, commission, severance, golden parachute or other
compensation plan, rabbi trust, program, contract, arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as defined in Section
3(3) of ERISA), including, but not limited to, any "multi-employer plan" (as
defined in Section 3(37) and Section 4001(a)(3) of ERISA), defined benefit
pension plan, profit sharing plan, money purchase pension plan, 401(k) plan,
savings or thrift plan, stock bonus plan, employee stock ownership plan, or any
plan, fund, program, arrangement or practice providing for medical (including
post-retirement medical), hospitalization, accident, sickness, disability or
life insurance benefits; and
(c) Other Employee Fringe Benefits - any stock purchase, vacation,
scholarship, day care, prepaid legal services, severance pay or other fringe
benefit plan, program, arrangement, contract or practice.
3.15.2 ERISA Affiliate. For purposes of this Section 3.15, the
term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Company is treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.15.3 Identification of Benefit Plans. Except as set forth in the
Disclosure Letter and except for Benefit Plans which have been terminated and
with respect to which neither the Company nor any ERISA Affiliate has any
liability or obligation, the Company does not maintain, and has not at any time
established or maintained, nor has at any time been obligated to make
contributions to or under or otherwise participate in any Benefit Plan.
3.15.4 MEPPA Liability/Post-Retirement Medical Benefits/ Defined
Benefit Plans/Supplemental Retirement Plans. Except as set forth in the
Disclosure Letter, neither the Company nor any ERISA Affiliate maintains, or has
at any time established or maintained, or has at any time been obligated to make
contributions to or under any multi-employer plan. Except as set forth in the
Disclosure Letter, neither the Company nor any ERISA Affiliate maintains, or has
at any time established or maintained, or has at any time been obligated to make
contributions to or under (i) any plan which provides post-retirement medical or
health benefits, (ii) any organization described in Sections 501(c)(9) or
501(c)(20) of the Code, (iii) any defined benefit pension plan subject to Title
IV of ERISA or (iv) any plan which provides retirement benefits in excess of the
limitations of Section 415 of the Code.
3.15.5 Documentation. FMI has made available to Newpark a true and
complete copy of the following documents, if applicable, with respect to each
Benefit Plan identified in the Disclosure Letter: (1) all documents, including
any insurance contracts and trust agreements, setting forth the terms of the
Benefit Plan, or if there are no such documents evidencing the Benefit Plan, a
full description of the Benefit Plan, (2) the ERISA summary plan description and
any other summary of plan provisions provided to participants or beneficiaries
for each such Benefit Plan, (3) the annual reports filed for the most recent
three plan years and most recent financial statements or periodic accounting of
related plan assets with respect to each Benefit Plan, (4) each favorable
determination letter, opinion or ruling from the IRS for each Benefit Plan which
is intended to satisfy the requirements of Section 401(a) or Section 501 of the
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<PAGE>
Code or which is dependent on such letter, ruling or opinion to avoid current
federal come tax to the beneficiaries of such Benefit Plan, and in (5) each
opinion or ruling from the Department of Labor or the Pension Benefit Guaranty
Corporation ("PBGC") with respect to such Benefit Plans.
3.15.6 Qualified Status. Each Benefit Plan that is funded through
a trust or insurance contract and is intended to satisfy the requirements of
Section 401(a) of the Code, has at all times satisfied in all material respects,
by its terms and to the best knowledge of FMI in its operation, all applicable
requirements under Section 401(a) and related sections of the Code, and any such
trust has been and, at the Closing Date, shall be exempt from federal income
taxation under Section 501(a) of the Code. All such plans have been operated to
the best knowledge of FMI in all material respects in accordance with the
applicable requirements of the Tax Reform Act of 1986 and subsequent applicable
legislation.
3.15.7 Compliance. Each Benefit Plan maintained by the Company or
any ERISA Affiliate has at all times been maintained, to the best knowledge of
FMI, by its terms and in operation, in accordance with all applicable laws in
all material respects, including ERISA and (to the extent applicable) Code
Section 4980B. Further, there has been no failure to comply with applicable
ERISA or other requirements concerning the filing of reports, documents and
notices with the Secretary of Labor and Secretary of Treasury or the furnishing
of such documents to participants or beneficiaries that could subject any
Benefit Plan, the Company or any ERISA Affiliate to any material civil or any
criminal sanction or could require any such Person to indemnify any other Person
for such a sanction. There are no claims known to FMI which are pending or
threatened against any Benefit Plan except claims for benefits made in the
ordinary course of the operation of such plans.
3.15.8 Funding. The Company and each ERISA Affiliate has made full
and timely payment of all amounts required to be contributed under the terms of
each Benefit Plan and applicable law or required to be paid as expenses under
such Benefit Plan including, but not limited to, PBGC premiums and amounts
required to be contributed under Section 412 of the Code, and no excise taxes
are assessable as a result of any nondeductible or other contributions made or
not made to a Benefit Plan. With respect to any Benefit Plan that is subject to
Title IV of ERISA, (i) the present value of all accrued benefits under such
Benefit Plan does not exceed the value of the assets of such Benefit Plan
allocated to such accrued benefits, (ii) no amount is due or owing from the
Company or any ERISA Affiliate to the PBGC or to any multi-employer plan on
account of any withdrawal therefrom, (iii) no such Benefit Plan has incurred any
"accumulated funding deficiency", as such term is defined in Section 412 of the
Code, whether or not waived, since the effective date of such Section 412, (iv)
since September 2, 1974, no such Benefit Plan has been completely or partially
terminated, nor has any notice of intent to terminate been filed or given, other
than in accordance with ERISA or at a time when such Benefit Plan was not
sufficiently funded, (v) there has been no "reportable event" as such term is
defined in Section 4043(b) of ERISA, (vi) there has been no withdrawal by the
Company or any ERISA Affiliate that is a "substantial employer" from a Benefit
Plan that is a single employer plan that has two or more contributing sponsors,
at least two of whom are not under common control, as referred to in Section
4063(b) of ERISA, and (vii) there has been no cessation by the Company or any
ERISA Affiliate of operations at a facility causing more than 20% of a
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Benefit Plan's participants to be separated from employment, as referred to in
Section 4062(f) of ERISA. There are no liens against the property of the
Company or any ERISA Affiliate under Section 412(n) of the Code or Sections
302(f) or 4068 of ERISA. The Company Financial Statements properly reflect all
amounts required to be accrued as liabilities under each Benefit Plan. To the
best knowledge of FMI, the most recent actuarial valuations of the Company's
Benefit Plans were based on accurate facts and information, and FMI has no
reason to believe that the conclusions set forth in such valuations are
incorrect.
3.15.9 Liabilities. Neither the Company nor any ERISA Affiliate is
subject to any material liability, tax or penalty whatsoever to any Person
whomsoever as a result of engaging in a prohibited transaction under ERISA or
the Code, and neither the Company nor any ERISA Affiliate has any knowledge of
any circumstances which reasonably might result in any such material liability,
tax or penalty, including but not limited to a penalty under Section 502 of
ERISA, as a result of a breach of and duty under ERISA or any other applicable
law. Other than routine claims for benefits under the Benefit Plans, there are
no pending or threatened investigations, proceedings, claims, lawsuits,
disputes, actions, audits or controversies involving the Benefit Plans, or the
fiduciaries, administrators, or trustees of any of the Benefit Plans, or the
Company or any ERISA Affiliate as the employer or sponsor under any Benefit
Plan, with any of the Internal Revenue Service, Department of Labor, PBGC, any
participant in or beneficiary of the Benefit Plans or any other Person
whatsoever. FMI knows of no reasonable basis for any such claim, lawsuit,
dispute, action or controversy. Except as set forth in the Disclosure Letter,
the execution and performance of the transactions contemplated by this Agreement
will not create, accelerate or increase any obligations under any Benefit Plan,
including any obligation to make any payment which would not be deductible as an
"excess parachute payment" under Section 280G of the Code.
3.16 Insurance. FMI 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 Interest in Competitors, Suppliers, etc. Except as set forth in the
Disclosure Letter, none of the Partners, and no officer or director of the
Company or any "Family Member" (as defined in Section 18) of any such Person,
owns, directly or indirectly, individually or collectively, any interest in any
corporation, partnership, proprietorship, firm or association which (a) is a
competitor, customer or supplier of the Company, or (b) has an existing
contractual relationship with the Company, including but not limited to lessors
of real or personal property leased to the Company and entities against whom
rights or options are exercisable by the Company. On the Closing Date the
Company will own, free and clear and without payment of any royalty or fee, all
interests in the assets, profits or business of the Company that are held by any
"Affiliate" (as defined in Section 18) of the Company, including the Partners
and their Family Members.
3.18 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
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the Partners, 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.
3.19 Consents. No authorizations, approvals or consents of any Government
Body are required for consummation of the transactions contemplated by this
Agreement.
3.20 Patents, Trademarks and Other Intangibles. The Disclosure Letter
includes a list of all material patents, patent applications, trade names,
trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. The Company owns or has the right to use all Intangible
Assets now used in the conduct of its business. Such Intangible Assets include
all of the proprietary products and formulations developed by the Company or
used by it in its business. The Company is not obligated to pay any royalty or
other fee to any licensor or other third party with respect to any Intangible
Assets. FMI has no knowledge of any claim received by the Company alleging any
conflict between any aspect of the business of the Company and any Intangible
Assets claimed to be owned by others which, if determined adversely to the
Company, would have a Material Adverse Effect. Neither FMI nor any other Partner
or Affiliate 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.
3.21 Purchases and Sales. Since December 31, 1996, the Company has not
placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and has not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from the conditions
regularly and usually specified in contracts for similar engagements from
customers similarly situated.
3.22 Brokerage and Finder's Fees. Neither the Company nor the Partners (or
any Affiliate of the Partners) 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.
3.23 Absence of Certain Changes. Since December 31, 1996, except for
matters of a general economic nature which do not affect the Company uniquely,
the Company has not:
3.23.1 suffered any Material Adverse Effect;
3.23.2 borrowed or agreed to borrow any funds in excess of $10,000 in
a single transaction or $25,000 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;
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3.23.3 mortgaged, pledged, hypothecated or otherwise encumbered any of
its properties or assets except for Permitted Liens;
3.23.4 made or agreed to make any distribution of any funds or assets
of any kind whatsoever to any past or present partner of the Company or any
Affiliate of any such Person, except as described in Section 4.5;
3.23.5 made any payment of principal or interest on any indebtedness
owed to any past or present partner of the Company or any Affiliate of any such
Person;
3.23.6 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;
3.23.7 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;
3.23.8 increased the rate of compensation of or paid or accrued
bonuses to or for any of its officers, employees, consultants or agents, except
for normal merit or cost of living increases;
3.23.9 suffered any damage, destruction or loss in excess of an
aggregate of $100,000, whether or not covered by insurance, adversely affecting
any of its properties;
3.23.10 assigned or agreed to assign any of its Intangible Assets
having a value in excess of $100,000;
3.23.11 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;
3.23.12 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
3.23.13 entered into any other material transaction other than in the
ordinary course of business.
B. Except as otherwise set forth in the Disclosure Letter, each Partner
represents and warrants with respect to itself or himself, as the case may be,
severally but not jointly, the following (the truth and accuracy of each of
which shall constitute a condition precedent to Buyers' obligations to
consummate the Exchange and issue the Newpark Shares):
3.24 Investment Representations. Either such Partner is an "accredited
investor", as that term is defined in Rule 501 of the "Rules and Regulations"
(as defined in Section 18) or such Partner, either alone or with such Partner's
qualified "purchaser representative" (as defined
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in Rule 501 of the Rules and Regulations), has such knowledge and experience in
financial and business matters that such Partner is capable of evaluating the
risks and merits of an investment in the Newpark Shares. Such Partner is
acquiring the Newpark Shares in the Exchange for investment and not with a view
to the sale thereof other than in compliance with the requirements of the
"Securities Act" (as defined in Section 18) and applicable Blue Sky laws. At
the request of Newpark, each Partner will furnish to Newpark evidence reasonably
satisfactory to Newpark that the foregoing representations are true.
3.25 Authority of Corporate Partners. The execution and delivery of this
Agreement by a Partner that is a corporation (a "Corporate Partner") and the
consummation of the transactions contemplated hereby have been duly authorized
by the Board of Directors and the stockholders of such Corporate Partner. This
Agreement has been duly executed and delivered to Newpark and no further
corporate action is necessary on the part of such Corporate Partner to make this
Agreement valid and binding upon such Corporate Partner in accordance with its
terms, subject to the Bankruptcy Exception. The execution, delivery and
performance of this Agreement by the Corporate Partner are not contrary to the
Articles of Incorporation or Bylaws of such Corporate Partner 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
such Corporate Partner is a party or by which such Corporate Partner is bound.
3.26 Authority of Individual Partners. This Agreement has been duly and
validly executed by each Partner that is an individual, and this Agreement
constitutes a legal, valid, and binding obligation of such Partner, enforceable
against him in accordance with its terms, subject to the Bankruptcy Exception.
Such Partner has the requisite power to enter into this Agreement and perform
his obligations hereunder (including without limitation to sell and deliver such
Partner's Interest), 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 such Partner to sell and deliver his
Interest pursuant to any trust, estate planning or other similar document or any
prenuptial or post-nuptial agreement or arrangement.
3.27 No Litigation. There are no actions pending or, to the knowledge of
such Partner, threatened in any court or arbitration forum or by or before any
Government Body involving the Company or such Partner relating to or affecting
any of the transactions contemplated by this Agreement.
3.28 Title to Interest. Such Partner is the holder of record and owns
beneficially the Interest in the Company set forth opposite such Partner's name
in the Disclosure Letter. At the Closing, such Partner will own the Interest 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 Partner is a party
to any voting trust, proxy or other agreement with respect to the voting of any
of such Interest.
3.29 No Material Misstatements or Omissions. No representation or warranty
by the Partners in this Agreement, and no document, statement, certificate,
exhibit or schedule furnished or to be furnished to Newpark pursuant hereto, or
in connection with the transactions
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contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary in order to make the statements or facts therein, in the
light of the circumstances under which they were made, not misleading.
4. Additional Obligations and Covenants of the Partners.
----------------------------------------------------
Except as otherwise provided in the Disclosure Letter, the Partners
hereby jointly and severally covenant and agree with Buyers as follows (the
fulfillment of each such covenant and agreement is a condition precedent to
Buyers' obligations to consummate the Exchange and issue the Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the Closing
Date, the Partners will and will cause the Company to comply with the following:
4.1.1 The business of the Company shall be conducted diligently
and only in the ordinary course, and the Partners will use reasonable efforts to
preserve the organization of the Company intact, to keep available to the
Company its present key employees and to maintain the relationships of the
Company with its suppliers, customers and others. The Company will not, without
Newpark's prior written approval, increase the rate of compensation payable or
to become payable to any of its officers, employees, consultants or agents over
the rate being paid to them at the date hereof, except for normal merit or cost
of living increases to employees other than officers of the Company.
4.1.2 Without Newpark's prior written approval, no amendment
will be made to any Benefit Plan, no commitment will be made to amend any
Benefit Plan and no commitment will be made to continue any Benefit Plan or to
adopt any new compensatory plan, fund or program for the benefit of any
employees of the Company or any ERISA Affiliate.
4.1.3 The Company will not, without Newpark's prior written
approval, enter into any Material Contract other than in the ordinary course of
business or enter into contracts with customers under conditions relating to
price, terms of payment, time of performance or like matters materially
different from the conditions regularly and usually specified in contracts for
similar engagements from customers similarly situated.
4.1.4 The Company will not, without Newpark's prior written
approval, sell or dispose of any of its material properties or assets except for
sales at fair value in the ordinary course of business.
4.1.5 The Company will not, without Newpark's prior written
approval, acquire or enter into any agreement to acquire, by merger,
consolidation, purchase of stock or assets or otherwise, any business or entity.
4.1.6 The Company will use reasonable diligence to maintain its
properties in their condition as of the date of this Agreement, ordinary wear
and tear excepted.
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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 FMI,
FMI 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 Partners agree to use
reasonable efforts to satisfy or cause to be satisfied all of the conditions
precedent to Buyers' 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, the Partners will and will
cause the Company to 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 or acquisition of any interest in the capital, net profits or net
losses of the Company, any business combination involving the Company or the
sale of a substantial portion of the assets of the Company.
4.4 Partnership Matters. Between the date hereof and the Closing
Date, the Partners will cause the Company not to, without Newpark's prior
written approval: (a) amend the Partnership Agreement; (b) issue any interest in
the capital, net profits or net losses of the Company; (c) issue or create any
warrants, obligations, subscriptions, options, convertible securities or other
commitments under which any interest in its capital, net profits or net losses
might be directly or indirectly authorized, issued or transferred; or (d) enter
into any agreement requiring it to do any of the foregoing prohibited acts.
4.5 No Distributions to Partners. Between the date hereof and the
Closing Date, the Partners will cause the Company not to, without Newpark's
prior written approval: (a) declare, set aside or pay any distribution in
respect of any of the Interests, except that the Company may authorize a
distribution (the "Tax Distribution") to the Partners on or before the Closing
Date, payable after the Closing Date, in an amount equal to 39.6% of each
Partner's prorated share of the net profits of the Company from January 1, 1997
through the Closing Date (the "Short Period Income Taxes"); (b) directly or
indirectly purchase, redeem or otherwise acquire any shares of the Interests for
consideration; (c) pay or distribute any cash or property to any Partner as a
loan or in payment of principal of or interest on any indebtedness to any
Partner; 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 Partners will cause the Company not to, without Newpark's prior
written approval, make any commitment for capital expenditures in excess of an
aggregate of $10,000.
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4.7 Indebtedness. Between the date hereof and the Closing Date, the
Partners will cause the Company not to, without Newpark's prior written
approval: (a) create, incur or assume any long-term debt (including capital
leases that individually involve annual payments in excess of $50,000) or,
except in the ordinary course of business under existing lines of credit,
create, incur or assume any short-term debt for borrowed money in excess of
$25,000 in a single transaction or $10,000 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.
5. Representations and Warranties of Newpark.
-----------------------------------------
Newpark hereby represents and warrants the following (the truth and
accuracy of each of which shall constitute a condition precedent to the
Partners' obligations to consummate the Exchange):
5.1 Organization and Good Standing.
------------------------------
5.1.1 Newpark is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Newpark has
corporate power and authority to carry on its business as presently conducted
and is qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it or both require qualification and failure to be so qualified would have a
Material Adverse Effect.
5.1.2 Newpark has furnished to the Company and the Partners
complete and correct copies of Newpark's Certificate of Incorporation and Bylaws
as in effect on the date hereof.
5.2 Capital Stock. The authorized capital stock of Newpark consists
of 80,000,000 shares of Common Stock, $.01 par value, of which 30,414,618 shares
were issued and outstanding on May 8, 1997 (as adjusted for a two-for-one stock
split effective May 30, 1997), and 1,000,000 shares of Preferred Stock, $.01 par
value, of which no shares are issued and outstanding.
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
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business transacted by it require such qualification, except where failure to be
so qualified would not have a Material Adverse Effect.
5.4 Authority. The execution and delivery of this Agreement by
Newpark and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of Newpark. This Agreement has been
duly executed and delivered to the Partners and no vote of the stockholders of
Newpark or further corporate action is necessary on the part of Newpark to make
this Agreement valid and binding upon Newpark in accordance with its terms,
subject to the Bankruptcy Exception. The execution, delivery and performance of
this Agreement by Newpark are not contrary to the Certificate of Incorporation
or Bylaws of Newpark and will not result in a violation or breach of any term or
provision or constitute a default or give any party a right to accelerate the
due date of any indebtedness under any indenture, mortgage, deed of trust or
other contract or agreement to which Newpark is a party or by which Newpark is
bound.
5.5 Newpark Reports. Newpark has delivered to the Partners copies of
Newpark's Annual Reports on Form 10-K for the years ended December 31, 1994,
1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the
"Commission" (as defined in Section 18) 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
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proceedings (whether or not purportedly on behalf of Newpark or any Newpark
Subsidiary) pending or, to the "knowledge of Newpark" (as defined in Section
18), threatened against or affecting Newpark or any Newpark Subsidiary, at law
or in equity or before or by any Government Body or before any arbitrator of any
kind; and (b) to the best of the knowledge of Newpark, neither Newpark nor any
Newpark Subsidiary is in default with respect to any judgment, order, writ,
injunction, decree, award of any court, arbitrator or Government Body.
5.8 Newpark Benefit Plans. Newpark has made available to the
Partners a true and complete copy of the ERISA summary plan description and any
other summary of plan provisions provided to participants or beneficiaries, if
applicable, for each Benefit Plan (as defined in Section 3.15.1, substituting
"Newpark" for "the Company") maintained by Newpark.
5.9 Environmental Matters. Newpark and the Newpark Subsidiaries have
complied in all material respects with all Hazardous Materials Laws applicable
to their properties and business. Neither Newpark nor, to the best of Newpark's
knowledge, any Newpark Subsidiary has received any complaint, order or similar
notice that it is not in compliance with any Hazardous Materials Laws or that
any Government Body is investigating its compliance with any Hazardous Materials
Laws, except as disclosed in the Newpark Reports or omitted therefrom in
accordance with the Rules and Regulations and except for routine inspections and
investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.10 Absence of Certain Changes. Since December 31, 1996, there has
not been any material adverse change in the results of operations, financial
condition, liquidity, assets, properties or business of Newpark and its
subsidiaries, taken as a whole.
5.11 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except such qualifications as may be required
under state securities or Blue Sky laws relating to the Newpark Shares.
5.12 No Material Misstatements or Omissions. No representation or
warranty by Newpark in this Agreement, and no document, statement, certificate,
exhibit or schedule furnished or to be furnished to the Partners pursuant
hereto, or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact required to be stated therein or necessary to make the
statements or facts contained therein not misleading.
6. Additional Obligations and Covenants of Newpark.
-----------------------------------------------
Newpark hereby covenants and agrees with the Partners as follows (the
fulfillment of each such covenant and agreement is a condition precedent to the
Partners' obligations to consummate the Exchange):
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6.1 Efforts. Newpark agrees to use reasonable efforts to satisfy or
cause to be satisfied all of the conditions precedent to the Partners'
obligations under this Agreement, to the extent that its action or inaction can
control or influence the satisfaction of such conditions.
6.2 Additional Information. Newpark will make available to each
Partner the opportunity to ask questions and receive answers concerning the
terms and conditions of the Exchange and to obtain any additional information
that Newpark is required to furnish under Regulation D of the Rules and
Regulations.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of this Agreement, will
issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use all
reasonable efforts to qualify the issuance of the Newpark Shares in connection
with the Exchange under Rule 506 of the Rules and Regulations and, if necessary,
to qualify the issuance thereof pursuant to all applicable state securities or
Blue Sky laws.
6.5 Continuing Employees. Each employee of the Company who continues
immediately after the Closing Date as an employee of the Company, Newpark, or
any of its subsidiaries ("Continuing Employee") shall be treated under Newpark's
compensation, benefit plans and employment policies and practices on a basis
which Newpark deems no less favorable than an employee of Newpark who performs
comparable duties and responsibilities for Newpark on an equally satisfactory
basis. Each Continuing Employee shall receive service credit for all purposes
(including, but not limited to, vesting, eligibility and benefit accrual) under
Newpark's "Benefit Plans" (as defined in Section 3.15.1, substituting "Newpark"
for "the Company") and under any Benefit Plan adopted in the future for service
completed with the Company as if such service had been completed with Newpark
except that (a) no such employee shall receive such past service credit under a
future Benefit Plan except on the same basis that Newpark's employees also
receive past service credit under such plan, and (b) no such past service credit
will be provided under a plan if the Internal Revenue Service determines that
such credit would adversely affect the tax qualified status of such plan under
Section 401 of the Code.
6.6 Supply Indebtedness. Subject to consummation of the Exchange,
Newpark agrees that, after the Closing Date, it will cause the Company to repay
the indebtedness of the Company to Supply as described in the Disclosure Letter.
7. Conditions to Each Party's Obligations.
--------------------------------------
The respective obligations of each party to consummate the Exchange
under this Agreement shall be subject to the satisfaction on or before the
Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
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
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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 Related Acquisition Consummated. The Related Acquisition shall
have been consummated.
7.3 Government Body Consents. All consents, authorizations, orders
and approvals of (or filings or registrations with) any Government Body required
in connection with the execution, delivery and performance of this Agreement or
the operation of the business of the Company following the Closing Date shall
have been obtained or made, except where the failure to have obtained or made
any such consent, authorization, order, approval, filing or registration would
not have a Material Adverse Effect following the Closing Date.
7.4 Injunction. At the Closing Date there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the Exchange may not be consummated as herein provided, no proceeding or
lawsuit shall have been commenced by any Government Body for the purpose of
obtaining any such injunction, writ or preliminary restraining order and no
written notice shall have been received from any Government Body indicating an
intent to restrain, prevent, materially delay or restructure the transactions
contemplated by this Agreement.
7.5 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 Buyers.
---------------------------------------------
The obligations of Buyers to consummate the Exchange and issue the
Newpark Shares are subject to the satisfaction of each of the additional
following conditions at or prior to the Closing, unless waived in writing by
Buyers:
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 Partners in writing within
thirty (30) 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 Partners 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 Partners shall have performed in all
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material respects all covenants required by this Agreement to be performed by
them at or prior to the Closing.
8.3 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 the Company which in their total
effect have a Material Adverse Effect on the Company.
8.4 Partners' Certificate. The Partners shall have delivered to
Buyers a certificate, dated the Closing Date, executed by each of the Partners,
individually, stating that, to the best knowledge of each, (a) all the
representations and warranties of the Partners contained in this Agreement are
true and accurate, (b) all of the conditions precedent to the obligations of
Buyers hereunder have been fulfilled and (c) the Company and the Partners have
duly performed all obligations and covenants to be performed by them hereunder.
8.5 Material Contracts. The Company shall have received consents to
assignment of all Material Contracts or written waivers of the provisions of any
Material Contracts requiring the consents of third parties as set forth in the
Disclosure Letter, except where the failure to have obtained any such consent or
written waiver would not have a Material Adverse Effect following the Closing
Date.
8.6 Opinion of the Partners' Counsel. Newpark shall have received an
opinion of Farnsworth & vonBerg, dated the Closing Date, substantially in the
form attached hereto as Exhibit 8.6.
8.7 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
Partners certified copies of such records of the Company and copies of such
other documents as such counsel may reasonably have requested for such purpose.
9. Conditions Precedent to Obligation of the Partners.
--------------------------------------------------
The obligations of the Partners to consummate the Exchange are subject
to the satisfaction of each of the following additional conditions at or prior
to the Closing, unless waived in writing by the Partners:
9.1 Accuracy of Warranties and Representations. The representations
and warranties of Newpark contained in this Agreement shall be true and correct
in all material respects on and as of the Closing Date, with the same force and
effect as though such representations and warranties had been made on and as of
the Closing Date, and Newpark shall have performed in all material respects all
of the covenants required by this Agreement to be performed by it on or before
the Closing.
9.2 Authorization of Exchange. All corporate action necessary by
Newpark to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
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9.3 No Material Adverse Change. There shall have been no changes
since December 31, 1996, in the results of operations, assets, liabilities,
financial condition or affairs of Newpark and its subsidiaries, taken as a
whole, which, in their total effect, have a Material Adverse Effect on Newpark
and its subsidiaries.
9.4 Officers' Certificate of Newpark. Newpark shall have delivered
to the Partners a certificate dated the Closing Date, signed by the President
and Chief Financial Officer of Newpark and stating that, to the best knowledge
of each, (a) all the representations and warranties of Newpark contained in this
Agreement are true and accurate, (b) all of the conditions precedent to the
obligations of the Partners hereunder have been fulfilled and (c) Newpark has
duly performed all obligations and covenants to be performed by it hereunder.
9.5 Opinion of Newpark's Counsel. The Partners 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 Partners, and there shall have been furnished to such counsel by
Newpark certified copies of such corporate records of Newpark (including Board
of Directors resolutions approving the Exchange Agreements) and copies of such
other documents as such counsel may reasonably have requested for such purpose.
10. Closing.
-------
The closing ("Closing") of the transactions covered by this Agreement
shall take place at 10:00 a.m., on June 4, 1997, at the offices of Newpark, 3850
North Causeway, Suite 1770, Metairie, LA 70002. If 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 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.
---------------------------
Except as otherwise provided herein, all representations, warranties
and indemnifications made by the Partners or Newpark under or in connection with
this Agreement (including any representations and warranties set forth in the
certificates delivered pursuant to Sections 8.4 and 9.4) shall survive the
Closing until 24 months after the Closing Date. The representations and
warranties of the Partners set forth in Paragraphs 3.11, 3.12, 3.15 and 3.28
shall survive until the expiration of the applicable statute of limitations.
Neither party shall be entitled to recover against the other for any
misrepresentation or breach of warranty except to the extent that written notice
of any such claim has been delivered to the party against whom recovery is
sought within the applicable period setting forth in reasonable detail and
specifying
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the nature of the claim being asserted. The provisions of this Section and
Section 13.3.3 apply only to claims arising under this Agreement and do not
affect any other claims that any party may have at any time against any other
party, including but not limited to claims that may arise under "Hazardous
Material Laws" (as defined in Section 18).
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 Partners and Buyers which are based upon contracts, arrangements
or acts of the Partners or the Company or both which were in effect or occurred
on or prior to the Closing.
12.2 Access to Records. The Partners shall be entitled, after the
Closing, upon reasonable notice and during the regular business hours of
Newpark, to have access to and to make copies of the business records of the
Company which relate to periods prior to the Closing. Newpark shall retain such
business records for a period of five (5) years following the Closing Date,
after which time Newpark may destroy or otherwise dispose of such business
records without the Partners' consent.
12.3 Tax Matters.
-----------
12.3.1 Control of Tax Proceedings. Whenever any taxing authority
asserts a claim, makes an assessment, or otherwise questions or disputes the
amount of Taxes of the Company for any period prior to the Closing Date, Newpark
shall promptly inform the Partners in writing of such fact. The provisions of
Section 13 shall apply to the defense of any such claim, assessment or dispute.
12.3.2 Current Tax Returns. The Partners shall be responsible for
the preparation and filing of all Tax Returns for all taxable periods that end
or ended on or before the Closing Date and which have not been filed or are not
required to be filed by the Closing Date. The Company shall pay any and all
Taxes due with respect to such returns. Buyers will make available to the
Partners, without charge, the services of its personnel and the personnel of the
Company to assist the Partners in the preparation of such Tax Returns. Such Tax
Returns shall be reasonably satisfactory to Newpark in form and substance. The
Partners shall pay their pro rata portion of the Short Period Income Taxes.
12.3.3 Refunds and Credits. Subject to the provisions of Section
12.3.2 above, any refunds and credits of federal income Taxes attributable to
any taxable year ending on or before the Closing Date shall be for the account
of the Partners, and any refunds and credit of other Taxes attributable to any
taxable year ending on or before the Closing Date shall be for the account of
the Company; to the extent that any such refund of Taxes other than federal
income Taxes exceeds the amount, if any, accrued on the books of the Company
with respect to the period for which the refund is received, the Partners shall
receive credit against any liability they may have under Section 13.
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12.3.4 Cooperation. Buyers and the Partners shall cooperate with
each other in a timely manner in the preparation and filing of any Tax Returns
and the conduct of any audit or any other inquiry or proceeding with respect to
any Tax Return. Each party shall execute and deliver such powers of attorney
and make available such other documents as are necessary to carry out the intent
of this Section 12.3.4. Each party agrees to notify the other party of any
adjustments that do not result in Tax liability but can be reasonably expected
to affect any Tax Return of the other party.
12.3.5 Retention of Records. Newpark shall (i) retain records,
documents, accounting data and other information (including computer data)
necessary for the preparation and filing of all Tax Returns or the audit of such
returns, and (ii) give to the Partners reasonable access to such records,
documents, accounting data and other information (including computer data) and
to its personnel (insuring their cooperation) and premises, for the purpose of
the review or audit of such returns to the extent relevant to an obligation or
liability of a party under this Agreement.
13. Indemnifications.
----------------
13.1 Indemnification by the Partners. Subject to the provisions of
Sections 11 and 13.3, the Partners, jointly and severally (but severally with
respect to their individual representations and warranties set forth in
paragraphs 3.24, 3.25, 3.26, 3.27, 3.28 and 3.29), hereby agree to indemnify,
defend, protect and hold harmless Buyers against all damages, losses,
liabilities, costs and expenses (including reasonable attorneys' fees) resulting
from any and all breaches of any warranty or representation made by them in this
Agreement or any schedule or agreement delivered pursuant to this Agreement.
Such indemnification shall be solely the responsibility of the Partners, 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 Partners against all damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) resulting from any breach of any
warranty or representation made by Newpark in this Agreement or any schedule or
agreement delivered pursuant to this Agreement. The rights to such
indemnification shall accrue solely to the Partners, 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
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or in part to any claim by the Indemnitee against the Indemnitor except to the
extent that such failure by the Indemnitee shall result in a material prejudice
to the Indemnitor.
13.3.2 Except as hereinafter provided, neither party shall
settle or compromise any such claim unless it shall first obtain the written
consent of the other, which shall not be unreasonably withheld. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including reasonable attorneys'
fees, and the Indemnitee shall have the right, after notifying but without
consulting the Indemnitor, to settle or compromise such claim on any terms
reasonably approved by the Indemnitee.
13.3.3 Neither Newpark nor the Partners shall have any liability
for breach of warranty or representation hereunder except to the extent that the
amount of all valid claims for breach of warranty or representation against it
or them hereunder exceeds an aggregate of $50,000. In no event shall the
liability of any of the Partners for any breach of warranty or representation
hereunder exceed the value of the Newpark Shares for which such Partner's
Interests are exchanged in the Exchange, for which purpose they shall be valued
at their "Closing Value" (as defined in Section 18). To the fullest extent
permitted by law, and to the extent that such Partner continues to own any of
the Newpark Shares, each Partner shall satisfy such Partner's liability
hereunder by delivering to Newpark some or all of such Newpark Shares, valued at
their Closing Value, and Newpark shall satisfy its liability by issuing
additional Newpark Shares valued at their Closing Value. Nothing contained
herein shall relieve any of the Partners or Newpark of any liability he or it
may have for any intentional breach of representation or warranty.
13.3.4 In determining the amount of any damage, loss, liability,
cost or expense suffered by Newpark which gives rise to liability of the
Partners hereunder, there shall be taken into account the amount of any Tax
benefits actually realized by Newpark and its subsidiaries attributable to such
damage, loss, liability, cost or expense or derived therefrom in the same or any
past or subsequent taxable period, also taking into account the Tax treatment of
the receipt by Newpark of any payment from the Partners.
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 or warranty 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. Buyers and the Partners shall first attempt
diligently to resolve any such issue or dispute. They
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may, if they desire, attempt to mediate the dispute and shall, if they choose,
do so in accordance with the Commercial Mediation Rules of the American
Arbitration Association ("AAA"), either as written or as modified by mutual
agreement. A written agreement to undertake mediation may be made at any time.
If arbitration proceedings have been instituted, they shall be stayed until the
mediation process is terminated. Any dispute arising out of or related to this
Agreement or its alleged breach that cannot be resolved by mutual agreement
(including mutually agreed mediation) shall be resolved exclusively by final and
binding arbitration, conducted as expeditiously as possible in the City of
Houston, Texas, in accordance with the provisions of this Agreement and, to the
extent not inconsistent with such provisions, the Commercial Arbitration Rules
of the American Arbitration Association. To the extent lawful, the arbitrators,
in their discretion, may shorten any time periods or notice periods specified by
law, in the interest of timely completing arbitration and issuing their award.
13.4.2 The Partners, as one party, or Buyers, as the other
party, may initiate arbitration of a dispute by giving the other party written
notice of arbitration, which shall specify with reasonable detail (a) the issue
in dispute, (b) the claims asserted and (c) the remedy sought by the party
invoking arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the arbitrators shall be
affiliated in any way with either of the parties or have any direct or indirect
financial interest in the outcome of the arbitration. If the parties fail to
reach agreement upon a single arbitrator within 5 business days following
receipt by one party of the other party's notice of arbitration, the initiating
party shall submit in writing to the other party the name of a neutral
arbitrator selected by the initiating party. Within 5 business days after such
name is submitted, the other party shall submit to the initiating party in
writing the name of a neutral arbitrator selected by such other party and may
submit an answering statement. Within 10 days after appointment of the second
arbitrator, the two arbitrators appointed by the parties shall select a third
neutral arbitrator; the three arbitrators so selected shall finally resolve the
dispute. If the two arbitrators appointed by the parties fail before the end of
said 10 day period to agree on a 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 10 days after the name of the arbitrator selected by the
initiating party is submitted, the arbitrator appointed by the initiating party
shall be empowered to proceed to arbitrate and determine the matter in
controversy as the sole arbitrator. All references to "the arbitrators" in the
following Sections shall be deemed to refer to the sole arbitrator, if there is
only one arbitrator. The arbitrators shall, at the earliest possible date, set
dates for a hearing and establish any pre-hearing conferences or procedural
schedules that the arbitrators deem appropriate. The arbitrators may authorize
depositions and issue subpoenas and make other decisions provided for in Section
13.4.3 below. All decisions of the arbitrators shall be by a majority of the
arbitrators, unless the parties agree otherwise.
13.4.3 It is the mutual intention of the parties that discovery,
if any, shall be limited in nature and scope and, to the extent possible, shall
be handled informally and by agreement. Any dispute regarding discovery shall be
submitted promptly to the arbitrators and
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shall be resolved by them. If necessary, any decision of the arbitrators
respecting discovery may be enforced by any court of competent jurisdiction in
the same manner as a final award under this Section, including an order for
specific performance.
13.4.4 The arbitrators shall diligently, expeditiously and in
good faith decide the matter under consideration in accordance with the laws of
the State of Texas, excluding its choice of law rules. 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. The parties shall share equally the cost of the
arbitration proceedings, including the fees and expenses of the arbitrators and
the cost of the stenographic record, provided that the arbitrators shall have
discretion to charge such costs to the parties in such different proportions as
they determine to be appropriate.
13.4.6 If any other provision of this Agreement should be or
become invalid or unenforceable by force of law, the provisions of this Section
13.4 shall not be affected but shall remain in full force and effect. Any
obligation to arbitrate which is established by this Section shall remain in
full force and effect. Any obligation to arbitrate which is established by this
Section shall not be extinguished upon the termination or expiration of this
Agreement but shall survive that event.
14. Destruction of Assets.
---------------------
All risk of loss with respect to the assets and business of the
Company shall be borne by the Partners 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 Buyers of the Interests, Buyers shall have the
right at their election to complete the acquisition (in which event, as Buyers'
sole and exclusive remedy with respect to the consequences of such loss or
damage, all claims of the Company with respect to such loss or damage and all
insurance proceeds arising therefrom shall be for the account of the Company),
or, if they do not so elect, they 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
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Agreement relating to the postponement of the Closing Date, either Buyers or the
Partners 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 Buyers or the Partners) 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.
Partners: c/o FMI Wholesale Drilling Fluids, Inc.
Highway 359 West
Loredo, Texas 78042
Facsimile No.: (___) ___-____
With a copy to:
Mary Frances vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway, Suite 300
Houston, Texas 77060
Facsimile No.: (281) 931-6032
Buyers: c/o Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: Secretary
Facsimile No.: (504) 833-9506
With a copy to:
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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 Partners or Buyers without the prior written consent of
the other; consent may be withheld for any reason or without reason. Nothing
contained in or implied from this Agreement is intended to confer any rights or
remedies upon any Person other than the parties hereto and their successors in
interest and permitted assignees, unless expressly stated herein to the
contrary.
18. Certain Definitions.
-------------------
As used herein, the following terms (whether used in the singular or
the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 25% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the five trading days immediately preceding the third trading day
prior to the Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"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.
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"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the Closing Date that relate to or impose liability
or standards of conduct concerning the environment, as now or hereafter in
effect and as have been or hereafter may be amended or reauthorized, including
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. (S) 9601, et seq.), the Hazardous Materials
Transportation Act (42 U.S.C. (S) 1802, et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901, et seq.), the Federal Water Pollution Control
Act (33 U.S.C. (S) 1251, et seq.), the Toxic Substances Control Act (14 U.S.C.
(S) 2601, et seq.), the Clean Air Act (42 U.S.C., (S) 7901 et seq.), the
National Environmental Policy Act (42 U.S.C. (S) 4231, et seq.), the Refuse Act
(33 U.S.C. (S) 407, et seq.), the Safe Drinking Water Act (42 U.S.C. (S) 300(f),
et seq.), and all rules, regulations, codes, ordinances and guidance documents
promulgated or published thereunder, and the provisions of any licenses,
permits, orders and decrees issued pursuant to any of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
"Knowledge of FMI" (and similar terms such as "to the best of the
knowledge of FMI") means the actual knowledge of any executive officer of the
Company, FMI, General Supply Co. and Fluids Management, Inc., including, without
limitation, Gene McElvany and Perry Bennett.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not materially impair the existing use or materially detract from the value of
the assets or property subject thereto, and (d) liens for current taxes not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements.
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"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any Government Body 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 Sections 13 and 14, (a) no remedy conferred by
any of the specific provisions of this Agreement is intended to be exclusive of
any other remedy, (b) each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law, in equity, or otherwise and (c) the election of any one or more remedies by
either party hereto shall not constitute a waiver of the right to pursue other
available remedies.
21. Attorneys' Fees.
---------------
In any litigation or arbitration relating to this Agreement, including
litigation or arbitration with respect to any instrument, document or agreement
made under or in connection with this Agreement, the prevailing party shall be
entitled to recover its costs and reasonable attorneys' fees.
22. Payment of Expenses.
-------------------
Whether or not the Exchange is consummated, Buyers will pay and be
responsible for all costs and expenses incurred by Buyers in connection with
this Agreement and the transactions contemplated hereby, and the Partners will
pay and be responsible for all costs and
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expenses incurred by the Company and the Partners in connection with this
Agreement and the transactions contemplated hereby.
23. Successors and Assigns.
----------------------
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
24. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
25. Headings; Severability.
----------------------
Captions and section headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. The
provisions of this Agreement are severable, and, if any one or more provisions
may be determined to be judicially unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provisions, to the extent
enforceable, shall nevertheless be binding and enforceable upon the parties
hereto.
26. Amendments.
----------
No provision or term of this Agreement or any agreement contemplated
herein between the parties hereto may be supplemented, amended, modified, waived
or terminated except in a writing duly executed by the party to be charged.
27. Waivers.
-------
At any time prior to the Closing Date, the parties hereto, may, to the
extent legally permitted: (i) extend the time for the performance of any of the
obligations or other acts or any other party; (ii) waive any inaccuracies in the
representations or warranties of any other party contained in this Agreement or
in any document or certificate delivered pursuant hereto; (iii) waive compliance
or performance by any other party with any of the covenants, agreements or
obligations of such party contained herein; and (iv) waive the satisfaction of
any condition that is precedent to the performance by the party so waiving of
any of its obligations hereunder. Any agreement on the part of a party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. A waiver by one party of
the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A
waiver by any party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed
at a later time.
-32-
<PAGE>
28. Entire Agreement.
----------------
The Disclosure Letter and all schedules, exhibits and financial
statements provided for herein are a part of this Agreement. This Agreement and
the other agreements and documents provided for in this Agreement comprise the
entire agreement of the parties and supersede all earlier understandings of the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
BUYERS: THE PARTNERS:
Newpark Resources, Inc. FMI Wholesale Drilling Fluids, Inc.
By:/s/ James D. Cole By:/s/ Gene McElvaney
----------------------------- -------------------------------
Name: James D. Cole Gene McElvaney, President
Title: President
Newpark Holdings, Inc. General Supply Co.
By:/s/ Matthew W. Hardey By:/s/ Gene McElvaney
----------------------------- -------------------------------
Name: Matthew W. Hardey Gene McElvaney, President
Title: Vice President of Finance
Newpark Texas L.L.C. American Polymer, Inc.
By:/s/ Matthew W. Hardey By:/s/ Gene McElvaney
------------------------------ -------------------------------
Name: Matthew W. Hardey Gene McElvaney, President
Title: Vice President of Finance
/s/ Perry Bennett
-----------------------------------
Perry Bennett
-33-
<PAGE>
EXHIBIT 2.15
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered
into as of June 4, 1997, by and between ____________________________
("Covenantor") and NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"),
ancillary to and as required by the Agreement and Plan of Reorganization (the
"Exchange Agreement"), dated June 3, 1997, by and among Newpark, certain
subsidiaries of Newpark and the "Partners" so identified in the Exchange
Agreement (including Covenantor), pursuant to which Newpark has acquired 100% of
the equity interests in FMI WHOLESALE DRILLING FLUIDS, U.S.A., L.P., a Texas
limited partnership (the "Company"). Unless otherwise provided herein all terms
used in this Agreement that are defined in the Exchange Agreement shall have the
same meanings herein as in the Exchange Agreement.
In consideration of the foregoing, and in order to satisfy a condition
precedent to the consummation of the Exchange, 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.
The Territory - All or any part of the following: the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico.
<PAGE>
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 a period of sixty months. 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. If, notwithstanding the foregoing,
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. If any provision of Paragraphs 1 through
-2-
<PAGE>
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: __________________
__________________
Facsimile No.: ( ) -
-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 /s/ James D. Cole
------------------------------
James D. Cole, President
-4-
<PAGE>
EXHIBIT 2.16
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered
into as of June 4, 1997, by and between _________________________, an Oklahoma
corporation ("Covenantor") and NEWPARK RESOURCES, INC., a Delaware corporation
("Newpark"), ancillary to and as required by the Agreement and Plan of
Reorganization (the "Exchange Agreement"), dated June 3, 1997, by and among
Newpark, certain subsidiaries of Newpark and the "Partners" so identified in the
Exchange Agreement (including Covenantor), pursuant to which Newpark has
acquired 100% of the equity interests in FMI WHOLESALE DRILLING FLUIDS, U.S.A.,
L.P., a Texas limited partnership (the "Company"). Unless otherwise provided
herein all terms used in this Agreement that are defined in the Exchange
Agreement shall have the same meanings herein as in the Exchange Agreement.
In consideration of the foregoing, and in order to satisfy a condition
precedent to the consummation of the Exchange, 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 within the Territory to the
Covered Customers.
Competitor - Any Person that, directly or indirectly, engages in any
aspect of the Business within any portion of the Territory.
Covered Customers - TransTexas Gas Corporation, Enron, Columbus Energy
and Conoco.
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 State of Texas, but excluding
the territory in Texas described on Exhibit A attached hereto.
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 a period of twenty-four months. 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. If, notwithstanding the foregoing,
any of the
-2-
<PAGE>
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. If 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: _________________________
_________________________
_________________________
Facsimile No.: ( ) -
-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 /s/ James D. Cole
-------------------------------
James D. Cole, President
-4-
<PAGE>
EXHIBIT A
The Panhandle of Texas, defined as being that part of the State of Texas
north of the following line: from the beginning point of the border of Texas
with the State of New Mexico at Highway 2290, east along Highway 2290 to the
town of Bovina, continuing from there east along Highway 86 to the town of
Estelline; continuing from there east along the Prairie Dog Town Fork of the Red
River to the border of Texas with the State of Oklahoma.
-5-
<PAGE>
EXHIBIT 2.17
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (the "Agreement") dated as of June 4,
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 35,556 shares (the
"Shares") of Newpark's common stock, $.01 par value (the "Common Stock"), upon
the exchange (the "Exchange") of 100% of the equity interests in FMI WHOLESALE
DRILLING FLUIDS, U.S.A., L.P., a Texas limited partnership (the "Company"),
pursuant to the Agreement and Plan of Reorganization (the "Exchange Agreement")
among Newpark, certain Newpark subsidiaries identified in the Exchange
Agreement, and the "Partners" so identified in the Exchange 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 Exchange, 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.
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
<PAGE>
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.
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 and the Exchange Agreement, if, during the period commencing
August 1, 1997 and continuing for 180 days, one or more Holders request in
writing to Newpark that Newpark effect the registration under the Securities Act
of up to fifty-one percent (51%) 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.
(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
-2-
<PAGE>
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) Only One Demand Registration. Holders shall not be entitled to
make a request pursuant to this Paragraph 2 more than one time, provided that
the registration so requested 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 and the Exchange 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 up to
fifty-one percent (51%) 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) 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
-3-
<PAGE>
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) The total number of Shares that Holders are entitled to have
registered by Newpark under the Securities Act pursuant to Paragraph 2(a) and
Paragraph 3(a) combined is fifty-one percent (51%) so that if fifty-one percent
(51%) of the Shares have been effectively registered under the Securities Act
pursuant to Paragraph 2(a), Holders will not be entitled to have Shares
registered pursuant to Paragraph 3(a), and vice versa. If the aggregate number
of Shares that Holders propose to have registered exceeds fifty-one percent
(51%) of the Shares, the number of Holders' shares eligible to be registered
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 fifty-one percent (51%) of the Shares 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.
(b) 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 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:
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(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 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
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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 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
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Holders or any such underwriter, attorney, accountant or agent in connection
with such registration statement.
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)
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<PAGE>
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any 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 based upon any statement or alleged statement in or omission or
alleged omission from such
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<PAGE>
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 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
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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. 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. 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 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 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
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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:
Mary Frances vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway, Suite 300
Houston, TX 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
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.
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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: HOLDERS:
Newpark Resources, Inc. FMI Wholesale Drilling Fluids, Inc.
By:/s/ James D. Cole By:/s/ Gene McElvaney
---------------------------- ------------------------------
James D. Cole, President Name: Gene McElvaney
Title: President
General Supply Co.
By:/s/ Gene McElvaney
------------------------------
Name: Gene McElvaney
Title: President
American Polymer, Inc.
By:/s/ Gene McElvaney
------------------------------
Name: Gene McElvaney
Title: President
/s/ Perry Bennett
---------------------------------
Perry Bennett
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EXHIBIT A
LIST OF HOLDERS
FMI Wholesale Drilling Fluids, Inc.
4704 North Rockwell
Bethany, Oklahoma 77038
General Supply Co.
P.O. Box 22477
Oklahoma City, Oklahoma 73123
American Polymer, Inc.
P.O. Box 22477
Oklahoma City, Oklohoma 73123
Perry Bennett
2122 Greencove Lane
Sugar Land, Texas 77479
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EXHIBIT 2.18
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of July 24, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), SAMPEY BILBO MESCHI DRILLING FLUIDS
MANAGEMENT, INC., a Texas corporation and a wholly-owned subsidiary of Newpark
("SBM"), SMITHEY, INC., a Texas corporation (the "Company"), and C. M. SMITHEY
("Stockholder"), with reference to the following facts:
A. Stockholder owns beneficially and of record 100% of the
outstanding capital stock (the "Company Shares") of the Company.
B. The Company provides drilling fluids and related products and
services to the oil and gas industry.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Section 368(a)(1)(A) and
Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the
"Code") and that the Plan will qualify for "pooling of interests" accounting
treatment under generally accepted accounting principles. The Plan comprises
(a) the merger (the "Merger") of the Company into SBM, with SBM continuing as
the surviving corporation, pursuant to this Agreement and the Agreement of
Merger in the form attached hereto as Exhibit "A" (the "Agreement of Merger"),
on the terms contained herein and in accordance with the applicable provisions
of the Texas Business Corporation Act (the "BCA"), and (b) the conversion of all
the outstanding shares of capital stock of the Company into 70,000 newly issued
shares of voting Common Stock of Newpark (the "Newpark Shares"). The
consummation of the Plan in accordance with the terms of this Agreement and the
Agreement of Merger is sometimes referred to herein as the "Closing."
D. Newpark, SBM, the Company and Stockholder 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, SBM, the Company and Stockholder
hereby adopt the plan of reorganization herein set forth.
1.2 Merger of the Company into SBM. Subject to the provisions of
this Agreement and the BCA, at the "Effective Time" (as defined in paragraph
1.3), the Company shall be merged with and into SBM, and the separate corporate
existence of the Company shall cease. SBM shall be the surviving corporation in
the Merger (hereinafter sometimes called the "Surviving Corporation") and shall
continue its corporate existence under the laws of the State of Texas. The
Merger shall have the effects set forth in Article 5.06 of the BCA. In
connection with the Merger, the Articles of Incorporation of SBM shall be
amended to change the name of the Surviving Corporation to "Newpark Drilling
Fluids, Inc."
<PAGE>
1.3 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, the parties shall cause
the Agreement of Merger to be duly executed and filed with the Secretary of
State of Texas. The Merger shall become effective as of the time the Agreement
of Merger is accepted for filing and officially filed. The date and time when
the Merger becomes effective is referred to herein as the "Effective Time".
This Agreement and the Agreement of Merger are hereinafter collectively referred
to as the "Merger Agreements".
1.4 Conversion of Shares. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder thereof:
1.4.1 The shares of Common Stock of SBM which are issued and
outstanding immediately prior to the Effective Time shall not be changed or
converted as a result of the Merger, but shall remain outstanding as shares of
the Surviving Corporation.
1.4.2 All of the outstanding shares of capital stock of the Company
issued and outstanding immediately prior to the Effective Time (i.e., the
Company Shares) shall be converted (in the aggregate) into the right to receive
70,000 shares of Newpark Common Stock (i.e., the Newpark Shares).
1.5 Surrender of Shares.
-------------------
1.5.1 Stockholder, as the holder of all of the Company Shares, upon
the surrender to Newpark of the certificate or certificates which, immediately
prior to the Effective Time, represented the Company Shares, shall be entitled
to receive in exchange therefor certificates representing the number of shares
of Newpark Common Stock into which the shares of capital stock of the Company
theretofore represented by the certificate or certificates so surrendered shall
have been converted pursuant to the provisions of paragraph 1.4.2.
1.5.2 Until surrendered and exchanged as herein provided, each
outstanding certificate which, prior to the Effective Time, represented capital
stock of the Company shall represent for all purposes only the right to receive
the consideration provided in paragraph 1.4.2. Certificates representing the
Newpark Shares shall be delivered to Stockholder as soon as practicable
following the Effective Time.
1.6 Securities Act Legend on Newpark Shares. Stockholder hereby
agrees that he will not offer to sell, transfer or otherwise dispose of any of
the Newpark Shares issued to him in the Merger, except in accordance with the
applicable provisions of the "Securities Act" and the "Rules and Regulations"
(as such terms are defined in Section 15). 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."
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1.7 Pooling of Interests Restriction. Stockholder hereby agrees
that he will not offer to sell, transfer or otherwise dispose of any of the
Newpark Shares issued to him pursuant to the Merger until such time as financial
results covering at least 30 days of combined operations of Newpark, SBM and the
Company have been published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies.
2. Noncompetition Agreement. At the Closing, as a necessary incident of
the Plan, Newpark and Stockholder will execute and deliver a noncompetition
agreement substantially as set forth in Exhibit 2 attached to this Agreement
(the "Noncompetition Agreement").
3. Representations and Warranties of the Company and Stockholder.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Company and Stockholder to Newpark prior to
the execution hereof, the Company and Stockholder hereby jointly and severally
warrant and represent the following (the truth and accuracy of each of which
shall constitute a condition precedent to Newpark's obligations to consummate
the Plan and issue the Newpark Shares):
3.1 Organization and Good Standing of the Company.
3.1.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the character or
location of the assets owned by the Company or the nature of the business
transacted by the Company require such qualification, except where failure to be
so qualified would not have a "Material Adverse Effect" (as defined in Section
15). 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. 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 capital stock, $1.00 par value per share, of which 2,500
shares, i.e., the Company Shares, are issued and outstanding as of the date
hereof. All such issued and outstanding shares
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are validly issued, fully paid and nonassessable. The Disclosure Letter
includes the address and social security number of Stockholder.
3.2.2 There are no options, warrants, subscriptions or other
rights outstanding for the purchase of, and all securities convertible into,
capital stock of the Company. No shares of the Company are held as treasury
stock.
3.3 Authority. The Company has the full corporate power and
authority to execute and deliver the Merger Agreements, to perform the
obligations and covenants set forth therein and to consummate the Merger and the
other transactions contemplated thereby. 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 and by Stockholder in his capacity as the sole stockholder of the
Company, and no further corporate action is necessary on the part of the Company
to make the Merger Agreements binding upon the Company in accordance with their
terms. This Agreement has been duly executed and delivered by the Company and
Stockholder and constitutes the valid and binding agreement of each of them,
enforceable against them in accordance with its terms, and, when the Agreement
of Merger has been duly executed and delivered, it will constitute the valid and
binding Agreement of the Company, enforceable against the Company in accordance
with its terms, in each case subject to the "Bankruptcy Exception" (as defined
in Section 15).
3.4 Equity Interests. The Company does not have a material equity
interest in any other "Person" (as defined in Section 15).
3.5 No Violation. The execution, delivery and performance of this
Agreement by the Company and Stockholder 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, Stockholder or both are a party or by which either or both of them are
bound.
3.6 Financial Statements. The unaudited balance sheets of the
Company as of December 31, 1994, December 31, 1995 and December 31, 1996, and
the related unaudited statements of income, stockholders' equity and cash flows
for the years ended December 31, 1994, December 31, 1995 and December 31, 1996,
and the unaudited balance sheet of the Company as of April 30, 1997, and the
related statements of income, stockholders' equity and cash flows for the four
month period ended on said date, in each case certified by the principal
financial officer of the Company, subject to year-end audit adjustments, copies
of which have heretofore been delivered to Newpark (collectively the "Company
Financial Statements"), were prepared in accordance with the books and records
of the Company in accordance with generally accepted accounting principles
(except for the absence of footnotes from the April 30, 1997, financial
statements) consistently applied throughout the periods involved (except as
otherwise noted therein) and present fairly the financial position, results of
operations and cash flows of the Company for and as of the end of each of such
periods.
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3.7 Properties. The Company has 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. Such title is free and clear of
all liens, charges, security interests, encumbrances, leases, covenants,
conditions and restrictions other than "Permitted Liens" (as defined in Section
15). 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.
3.8 Contracts.
3.8.1 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 $25,000; (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 or other employee groups; (d) leases, contracts or commitments
affecting ownership of, title to, use of or any material interest in real
estate; (e) employment contracts and other contracts, agreements, or commitments
to or with individual employees, consultants or agents extending for a period of
more than six months from the date hereof or providing for earlier termination
only upon payment of a penalty or the equivalent thereof; (f) equipment leases
providing (in any one lease or group of related leases) for payments in excess
of $10,000 per year; (g) contracts under which the performance of any obligation
of the Company is guaranteed by 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 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
$25,000 or 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.
3.8.2 All Material Contracts are valid and binding obligations of
the Company and, to the "best of the knowledge of the Company" (as defined in
Section 15), 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
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balance sheet included in the Company Financial Statements, the Company is not a
party to any Material Contract on which the Company or Stockholder 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.
3.9 Outstanding Indebtedness. The Disclosure Letter includes a true
and complete schedule of all notes payable and other indebtedness 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.
3.10 Absence of Undisclosed Liabilities. Except as disclosed in the
Disclosure Letter and except for liabilities and obligations reflected on the
latest balance sheet included in the Company Financial Statements or arising in
the ordinary course of business since the date of such balance sheet, none of
which latter items, individually or in the aggregate, have a Materially Adverse
Effect: (a) the Company does not have, and none of its properties are subject
to, any debts, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, which are of a type which are required to be
shown or reflected on financial statements prepared in a manner consistent with
generally accepted accounting principles; and (b) to the best of the knowledge
of the Company, the Company does not have, and none of its properties are
subject to, any material debts, liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, whether or not of a type
which are required to be shown or reflected on financial statements prepared in
a manner consistent with generally accepted accounting principles. The Company
is not in default with respect to any material term or condition of any
indebtedness.
3.11 No Litigation. Except as disclosed in the Disclosure Letter,
there are no actions, suits or proceedings (whether or not purportedly on behalf
of the Company) pending or, to the knowledge of the Company, threatened against
or affecting the Company, at law or in equity or before or by any "Government
Body" (as defined in Section 15) or before any arbitrator of any kind. To the
best of the knowledge of the Company, the Company is not in default with respect
to any judgment, order, writ, injunction, decree, award of any Government Body.
3.12 Environmental Matters.
3.12.1 Neither the Company nor, to the best of the knowledge of the
Company, 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 15) 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 15) 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, no
underground tanks or underground deposits or Hazardous Materials the existence
of which would have a Material Adverse Effect existed on, under, in or about any
Property
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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, no underground tanks or
underground deposits or Hazardous Materials the existence of which would have a
Material Adverse Effect exist on, under, in or about any Property that is
currently owned or leased by the Company.
3.12.2 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).
3.12.3 As of the date hereof, to the best of the knowledge of the
Company, there are no (1) enforcement, clean-up, removal, mitigation or other
governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Company or any Property
presently owned or leased by the Company, (2) claims made or threatened by any
Person or Government Body relating to the Property against the Company or any
Property presently owned or leased by the Company or relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials or (3) any occurrence or condition known to the Company or
Stockholder on any Property that is currently owned or leased by the Company
that can reasonably be expected to subject the Company or such Property to any
material restrictions on occupancy, transferability or use of any Property under
any Hazardous Materials Laws. The Disclosure Letter includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of the Company, have been received by or asserted
against the Company.
3.13 Taxes.
3.13.1 The Company has filed all income, franchise and other "Tax
Returns" (as defined in Section 15) required to be filed by it by the date
hereof. All "Taxes" (as defined in Section 15) imposed by the United States,
the State of Texas and by any other state, municipality, subdivision, or other
taxing authority, which are due and payable by the Company have been paid in
full or are adequately provided for by reserves reflected on the latest balance
sheet included in the Company Financial Statements. The Company is an S
Corporation under Subchapter S of the Code for federal income Tax purposes. To
the knowledge of the Company, Stockholder has paid all income Taxes required to
be paid by him with respect to all items of income, net of all deductions,
allocable to him for federal income tax purposes by reason of the Company's
status as an S Corporation, for each taxable year ended on or before December
31, 1996.
3.13.2 All contributions due from the Company pursuant to any
unemployment insurance or workers compensation laws and all sales or use Taxes
which are due or payable by the Company have been paid in full. The Company has
withheld and paid to, or will cause to be paid to, the appropriate taxing
authorities all amounts required to be withheld from the wages of its employees
under state law and the applicable provisions of the Code.
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3.13.3 The Company has furnished to Newpark true and complete copies
of the federal income Tax Returns and comparable state Tax Returns of the
Company covering the years ended December 31, 1994, December 31, 1995 and
December 31, 1996, constituting complete and accurate representations in all
material respects of the Tax liabilities of the Company for the relevant periods
stated therein and accurately setting forth all relevant material items,
including the Tax bases of all assets, where required to be set forth in such
Tax Returns.
3.14 Permits and Licenses. The Company has all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof, and the Company is in compliance in all material respects with all
applicable federal, state and local laws, rules, regulations and orders relating
to its business, except where failure to have any such license, franchise,
permit or authorization or failure to comply with any such laws, rules,
regulations and orders would not have a Material Adverse Effect. The execution
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not cause the termination or suspension of any license,
franchise, permit or governmental authorization or violate any provision of or
constitute a default under any law, rule or regulation, order, writ, injunction
or decree of any Government Body applicable to Stockholder or the Company, where
such violation or default would have a Material Adverse Effect.
3.15 No Labor Problems. The Company has not been charged with any
unresolved unfair labor practices and there are no material controversies
pending or threatened between the Company and any of its employees. The Company
has complied in all material respects with all laws relating to wages, hours,
collective bargaining and similar employment matters the noncompliance with
which would have a Material Adverse Effect, and the Company has paid all social
security and similar Taxes that are due and payable and is not liable for any
arrears or wages or any Taxes or material penalties for failure to comply with
any of the foregoing.
3.16 Employee Benefit Plans.
3.16.1 Definition of Benefit Plans. For purposes of this Section
3.15, the term "Benefit Plan" means any plan, program, arrangement, practice or
contract which provides benefits or compensation to or on behalf of employees or
former employees of the Company or any "ERISA Affiliate" (as hereinafter
defined), whether formal or informal, whether or not written, including but not
limited to the following:
(a) Arrangements - any bonus, incentive compensation, stock option,
deferred compensation, commission, severance, golden parachute or other
compensation plan, rabbi trust, program, contract, arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as defined in Section
3(3) of ERISA), including, but not limited to, any "multi-employer plan" (as
defined in Section 3(37) and Section 4001(a)(3) of ERISA), defined benefit
pension plan, profit sharing plan, money purchase pension plan, 401(k) plan,
savings or thrift plan, stock bonus plan, employee stock ownership plan, or any
plan, fund, program, arrangement or practice providing for medical
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(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits; and
(c) Other Employee Fringe Benefits - any stock purchase, vacation,
scholarship, day care, prepaid legal services, severance pay or other fringe
benefit plan, program, arrangement, contract or practice.
3.16.2 ERISA Affiliate. For purposes of this Section 3.15, the
term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Company is treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.16.3 Identification of Benefit Plans. The Company does not
maintain, and has not at any time established or maintained, nor has at any time
been obligated to make contributions to or under or otherwise participate in any
Benefit Plan.
3.16.4 MEPPA Liability/Post-Retirement Medical Benefits/ Defined
Benefit Plans/Supplemental Retirement Plans. Neither the Company nor any ERISA
Affiliate maintains, or has at any time established or maintained, or has at any
time been obligated to make contributions to or under any multi-employer plan.
Neither the Company nor any ERISA Affiliate maintains, or has at any time
established or maintained, or has at any time been obligated to make
contributions to or under (i) any plan which provides post-retirement medical or
health benefits, (ii) any organization described in Sections 501(c)(9) or
501(c)(20) of the Code, (iii) any defined benefit pension plan subject to Title
IV of ERISA or (iv) any plan which provides retirement benefits in excess of the
limitations of Section 415 of the Code.
3.16.5 Liabilities. The execution and performance of the
transactions contemplated by this Agreement will not create, accelerate or
increase any obligation to make any payment which, as an "excess parachute
payment" under Section 280G of the Code, would not be deductible.
3.17 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.
3.18 Interest in Competitors, Suppliers, etc. Except as set forth
in the Disclosure Letter, neither Stockholder nor any officer or director of the
Company or any Family Member of any such Person owns, directly or indirectly,
individually or collectively, any interest in any corporation, partnership,
proprietorship, firm or association which (a) is a competitor, customer or
supplier of the Company, or (b) has an existing contractual relationship with
the Company, including but not limited to lessors of real or personal property
leased to the Company and entities against whom rights or options are
exercisable by the Company. The Company owns, free and clear and without
payment of any royalty or fee, all interests in the assets, profits or business
of the Company that have previously been held by any Affiliate of the Company,
including Stockholder and his Family Members.
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3.19 Indebtedness with Insiders. Except for accrued salaries for one
payroll period, vacation pay and business expense reimbursements, the Company is
not indebted to any of the stockholders, directors or officers of the Company or
any Affiliate of any such Person. None of such Persons is indebted to the
Company.
3.20 Consents. No authorizations, approvals or consents of any
Government Body are required for consummation of the transactions contemplated
by this Agreement or the subsequent operation of the business of the Company,
except for the filing of the Agreement of Merger as required by the BCA.
3.21 Patents, Trademarks and Other Intangibles. The Disclosure Letter
includes a list of all material patents, patent applications, trade names,
trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. The Company owns or has the right to use all Intangible
Assets now used in the conduct of its business. Such Intangible Assets include
all of the proprietary products and formulations developed by the Company or
used by it in its business. The Company is not obligated to pay any royalty or
other fee to any licensor or other third party with respect to any Intangible
Assets. Neither the Company nor Stockholder has knowledge of any claim received
by the Company alleging any conflict between any aspect of the business of the
Company and any Intangible Assets claimed to be owned by others which, if
determined adversely to the Company, would have a Material Adverse Effect.
Neither Stockholder nor any other officer or director of the Company, and no
Person that is an Affiliate of any such Person has any interest in any
Intangibles Assets which are presently used by the Company or which infringe
upon, conflict with or relate to improvements or modifications of any Intangible
Assets presently used by the Company.
3.22 Purchases and Sales. Since December 31, 1996, the Company has
not placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and has not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from the conditions
regularly and usually specified in contracts for similar engagements from
customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Company nor Stockholder
(or any Affiliate of Stockholder) has incurred any liability to any broker,
finder or agent for any brokerage fees, finder's fees or commissions for which
the Company could be liable with respect to the transactions contemplated by
this Agreement.
3.24 Absence of Certain Changes. Since December 31, 1996, except for
matters of a general economic nature which do not affect the Company uniquely,
the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess of $25,000
in the aggregate or incurred or become subject to any obligation or liability
(absolute or contingent) in
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excess of $25,000 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, except dividends
in an amount equal to 39% of the income, net of deductions, that is allocable to
him as a result of the Company's status as an S Corporation for 1996 and for the
period from January 1, 1997 to and including the day before the date hereof (the
"Short Period Income Taxes");
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 $10,000 or canceled or agreed to
cancel any debts or claims exceeding $10,000 in the aggregate, except for fair
value in the ordinary course of business;
3.24.7 entered or agreed to enter into any agreement or arrangement
granting any preferential right to purchase a material part of its assets,
properties or rights;
3.24.8 increased the rate of compensation of or paid or accrued
bonuses to or for any of its officers, employees, consultants or agents, except
for normal merit or cost of living increases;
3.24.9 suffered any damage, destruction or loss in excess of an
aggregate of $100,000, whether or not covered by insurance, adversely affecting
any of its properties;
3.24.10 assigned or agreed to assign any of its Intangible Assets;
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.
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3.25 No Material Misstatements or Omissions. No representation or
warranty by the Company or Stockholder in this Agreement, and no document,
statement, certificate, exhibit or schedule furnished or to be furnished to
Newpark or SBM pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact required to be stated
therein or necessary in order to make the statements or facts contained herein
or therein, in the light of the circumstances under which they were made, not
misleading.
3.26 Investment Representations. Either Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the Rules and
Regulations or Stockholder, either alone or with his qualified "purchaser
representative" (as defined in Rule 501 of the Rules and Regulations), has such
knowledge and experience in financial and business matters that he is capable of
evaluating the risks and merits of an investment in Newpark Common Stock.
Stockholder is acquiring his 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 and applicable Blue Sky laws. At the request of Newpark,
Stockholder will furnish to Newpark evidence reasonably satisfactory to Newpark
that the foregoing representations are true. Stockholder acknowledges that
Newpark has made available to him the opportunity to ask questions and receive
answers concerning the terms and conditions of the Plan and to obtain any
additional information that Newpark is required to furnish under Regulation D of
the Rules and Regulations.
3.27 No Joinder. Stockholder has the requisite power to enter into
this Agreement and perform his obligations hereunder (including without
limitation to sell and deliver his Company Shares), and no other Person's
joinder as a party hereto is necessary therefor pursuant to any community
property laws or otherwise, and there is no restriction on the power of
Stockholder to sell and deliver his Company Shares pursuant to any trust, estate
planning or other similar document or any prenuptial or post-nuptial agreement
or arrangement.
3.28 No Litigation. There are no actions pending or, to the knowledge
of the Company, threatened in any court or arbitration forum or by or before any
Government Body involving the Company or Stockholder relating to or affecting
any of the transactions contemplated by this Agreement.
3.29 Title to Shares. Stockholder is the holder of record and owns
beneficially all of the Company Shares, free and clear of all liens, security
interests, encumbrances and restrictions, other than restrictions contemplated
by this Agreement. Stockholder is not a party to any voting trust, proxy or
other agreement with respect to the voting of any of his Company Shares.
4. Representations and Warranties of Newpark. Newpark hereby represents
and warrants the following (the truth and accuracy of each of which shall
constitute a condition precedent to the Company's and Stockholder's obligations
to consummate the Plan):
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4.1 Organization and Good Standing.
4.1.1 Newpark is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Newpark has
corporate power and authority to carry on its business as presently conducted
and is qualified to do business in every jurisdiction in which the character and
location of the assets owned by it or the nature of the business transacted by
it or both require qualification and failure to be so qualified would have a
Material Adverse Effect.
4.1.2 SBM is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas. SBM 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.
4.1.3 Newpark has furnished to Stockholder complete and correct
copies of Newpark's Certificate of Incorporation and Bylaws as in effect on the
date hereof and SBM's Articles of Incorporation and Bylaws as in effect on the
date hereof.
4.2 Capital Stock. The authorized capital stock of Newpark consists
of 80,000,000 shares of Common Stock, $.01 par value, of which 31,367,874 shares
were issued and outstanding on June 30, 1997, and 1,000,000 shares of Preferred
Stock, $.01 par value, of which no shares are issued and outstanding. The
authorized capital stock of SBM consists of 1,000,000 shares of Class A voting
common stock, of which 1,000 shares are issued and outstanding and held by
Newpark on the date hereof.
4.3 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.
4.4 Authority. The execution and delivery of this Agreement by
Newpark and the consummation of the transactions contemplated hereby have been
duly authorized by the Boards of Directors of Newpark and SBM and by Newpark in
its capacity as the sole stockholder of SBM. This Agreement has been duly
executed and delivered to the Company and Stockholder and no vote of the
stockholders of Newpark or further corporate action is necessary on the part of
Newpark or SBM to make this Agreement valid and binding upon Newpark and SBM in
accordance with its terms, subject to the Bankruptcy Exception. The execution,
delivery and performance of this Agreement by Newpark and SBM (a) are not
contrary to the Certificate
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of Incorporation or Bylaws of Newpark, (b) are not contrary to the Articles of
Incorporation or Bylaws of SBM and (c) 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 SBM is a party or by
which Newpark or SBM is bound.
4.5 Newpark Reports. Newpark has delivered to Stockholder copies of
Newpark's Annual Reports on Form 10-K for the years ended December 31, 1994,
1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the Commission
after the date hereof are called the "Newpark Reports" herein. The Newpark
Reports have been or will be duly and timely filed with the Commission and are
or will be when filed in compliance with the Rules and Regulations. As of their
respective dates, none of the Newpark Reports contained or will contain any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
4.6 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.
4.7 Absence of Certain Changes. Since March 31, 1997, 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.
4.8 Issuance and Listing of Stock. Newpark has reserved for issuance
the Newpark Shares, and the Newpark Shares, when issued in accordance with this
Agreement, will be validly issued, fully paid and nonassessable.
4.9 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except for the
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filing of the Agreement of Merger as required by the BCA and such qualifications
as may be required under state securities or Blue Sky laws relating to the
Newpark Shares.
4.10 No Material Misstatements or Omissions. No representation or
warranty by Newpark or SBM in this Agreement, and no document, statement,
certificate, exhibit or schedule furnished or to be furnished to the Company or
Stockholder pursuant hereto, or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact required to be stated therein or
necessary to make the statements or facts contained herein or therein, in the
light of the circumstances under which they were made, not misleading.
5. Conditions to Each Party's Obligations. The respective obligations of
each party to consummate the Plan under this Agreement shall be subject to the
satisfaction on or before the date hereof of each of the following conditions
except to the extent the parties may waive any of such conditions in writing:
5.1 Government Body Consents. All consents, authorizations, orders
and approvals of (or filings or registrations with) any Government Body required
in connection with the execution, delivery and performance of this Agreement,
including the Merger and the issuance of the Newpark Shares, or the operation of
the business of the Company following the Merger shall have been obtained or
made, except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not have a Material
Adverse Effect following the Closing.
5.2 Injunction. 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 Plan may
not be consummated as herein provided, no proceeding or lawsuit shall have been
commenced by any Government Body for the purpose of obtaining any such
injunction, writ or preliminary restraining order and no written notice shall
have been received from any Government Body indicating an intent to restrain,
prevent, materially delay or restructure the transactions contemplated by this
Agreement.
5.3 Listing of Newpark Shares. The Newpark Shares shall have been
listed on the New York Stock Exchange, subject to official notice of issuance.
6. Conditions Precedent to Obligations of Newpark and SBM. The
obligations of Newpark and SBM to consummate the Plan and issue the Newpark
Shares are subject to the satisfaction of each of the additional following
conditions at or prior to the date hereof, unless waived in writing by Newpark:
6.1 Accuracy of Warranties and Representations. The
representations and warranties of the Company and Stockholder herein shall be
true and correct in all material respects, and the Company and Stockholder shall
perform or shall have performed in all material respects all covenants required
by this Agreement to be performed by them at or prior to the Closing.
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6.2 No Material Adverse Change. There shall have been no changes
after December 31, 1996, in the results of operations, assets, liabilities,
financial condition or affairs of the Company which in their total effect have a
Materially Adverse Effect on the Company.
6.3 Material Contracts. The Company shall have received consents to
assignment of all Material Contracts or written waivers of the provisions of any
Material Contracts requiring the consents of third parties as set forth in the
Disclosure Letter, except where the failure to have obtained any such consent or
written waiver would not have a Material Adverse Effect following the Closing.
6.4 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 and copies of
such other documents as such counsel may reasonably have requested for such
purpose.
6.5 Opinion of the Company's and Stockholder's Counsel. Newpark
shall have received an opinion of Farnsworth & vonBerg, counsel to the Company
and Stockholder, dated the date of the Closing, substantially in the form
attached hereto as Exhibit 6.5.
6.6 Merger of Chem-Energy Management, Inc.. Chem-Energy Management,
Inc., a Texas corporation, shall have been merged with and into the Company.
7. Conditions Precedent to Obligation of the Company and Stockholder.
The obligations of the Company and Stockholder to consummate the Plan are
subject to the satisfaction of each of the following additional conditions at or
prior to the date hereof, unless waived in writing by the Company and
Stockholder:
7.1 Accuracy of Warranties and Representations. The representations
and warranties of Newpark contained in this Agreement shall be true and correct
in all material respects, and Newpark shall perform or shall have performed in
all material respects all of the covenants required by this Agreement to be
performed by it on or before the Closing.
7.2 Authorization of Plan. All corporate action necessary by Newpark
to authorize the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken.
7.3 No Material Adverse Change. There shall have been no changes
since March 31, 1997, in the results of operations, financial condition,
liquidity, assets, properties or business of Newpark and its subsidiaries, taken
as a whole, which, in their total effect, have a Material Adverse Effect on
Newpark and its subsidiaries.
7.4 Opinion of Newpark's Counsel. The Company and Stockholder shall
have received an opinion of Ervin, Cohen & Jessup LLP, dated the date of the
Closing, substantially in the form attached hereto as Exhibit 7.4.
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7.5 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 Stockholder, 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.
8. Survival of Representations. All representations and warranties made
by the Company or SBM 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 or
Newpark under or in connection with this Agreement shall survive the
consummation of the Merger until the later of (a) one year after the Closing or
(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. No party shall
be entitled to recover against any other party for any misrepresentation or
breach of warranty except to the extent that written notice of any such claim
has been delivered to the party against whom recovery is sought within the
applicable period setting forth in reasonable detail and specifying the nature
of the claim being asserted. The provisions of this Section and Section 10.3.3
apply only to claims arising under this Agreement and do not affect any other
claims that any party may have at any time against any other party, including
but not limited to claims that may arise under Hazardous Material Laws.
9. Post-Closing Covenants.
9.1 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 Company, Stockholder, Newpark or SBM which are based upon
contracts, arrangements or acts of Stockholder or the Company or both which were
in effect or occurred on or prior to the Closing.
9.2 Access to Records. Stockholder 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, after
which time Newpark may destroy or otherwise dispose of such business records
without Stockholder's consent.
9.3 Tax Matters.
9.3.1 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 date hereof, which adjustment,
question, claim, assessment or dispute could, if pursued successfully, result in
or give rise to a claim against Stockholder under this
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Agreement (a "Tax Claim"), Newpark shall promptly inform Stockholder in writing
of such Tax Claim. The provisions of Section 10 shall apply to the handling of
any Tax Claim.
9.3.2 Current Tax Returns. Stockholder 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 date hereof and are not required to be filed
(taking into account all extensions) on or before the date hereof. Newpark will
make available to Stockholder, without charge, the services of its personnel and
the personnel of the Company to assist Stockholder in the preparation of such
Tax Returns. Such Tax Returns shall be reasonably satisfactory to Newpark in
form and substance. Stockholder shall pay the Short Period Income Taxes.
9.3.3 Refunds and Credits. Subject to the provisions of Section
9.3.2, any refunds and credits (together in each case with any interest received
or credited on or with respect to such refund or credit) of federal income Taxes
attributable to any taxable period ending on or before the date hereof shall be
for the account of Stockholder, and any refunds and credits (together in each
case with any interest received or credited on or with respect to such refund or
credit) of other Taxes attributable to any taxable period ending on or before
the date hereof shall be for the account of the Company; provided, however,
that, to the extent that any such refund of Taxes other than federal income
Taxes exceeds the amount or such refund, credit or interest, if any, accrued on
the books of the Company as of the date hereof, Stockholder shall receive credit
in an amount equal to the amount of such excess against any liability he may
have under Section 10.
9.3.4 Cooperation. Newpark and Stockholder 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 9.3.4. 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.
9.3.5 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 Stockholder 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.
9.4 Stockholder Guarantees. Subject to consummation of the Merger,
Newpark agrees that it will cause the Company to discharge in accordance with
its terms all indebtedness
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of the Company as to which Stockholder has executed personal guarantees, as
disclosed in the Disclosure Letter.
10. Indemnifications.
10.1 Indemnification by Stockholder. Subject to the provisions of
Sections 8 and 10.3, Stockholder hereby agrees to indemnify, defend, protect and
hold harmless Newpark against all damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) resulting from (i) any breach of
any warranty or representation made by the Company and Stockholder under or in
connection with this Agreement and (ii) the presence on, under, in or about the
Property of any Hazardous Materials as of the Effective Time or the
noncompliance by the Company with any Hazardous Materials Laws on or before the
Effective Time, whether or not disclosed in the Disclosure Letter. Such
indemnification shall be solely the responsibility of Stockholder, and he shall
not have any right to recover any portion of his liability from the Company,
whether by right of indemnification, contribution or otherwise.
10.2 Indemnification by Newpark. Subject to the provisions of
Sections 8 and 10.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless Stockholder against all damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) resulting from any breach of any
warranty or representation made by Newpark under or in connection with this
Agreement. The rights to such indemnification shall accrue solely to
Stockholder, and the Company shall have no interest therein.
10.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
10.3.1 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.
10.3.2 Except as hereinafter provided, neither party shall settle
or compromise any such claim unless it shall first obtain the written consent of
the other, which shall not be unreasonably withheld. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including reasonable attorneys'
fees, and the Indemnitee shall have the right, after notifying but without
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consulting the Indemnitor, to settle or compromise such claim on any terms
reasonably approved by the Indemnitee.
10.3.3 Neither Newpark nor Stockholder shall have any liability for
breach of warranty or representation hereunder except to the extent that the
amount of all valid claims for breach of warranty or representation against it
or him hereunder exceeds an aggregate of $10,000. In no event shall the
liability of Stockholder for any breach of warranty or representation hereunder
exceed the lesser of (i) $1,000,000 or (ii) the value of the Newpark Shares for
which his Company Shares are exchanged in the Merger, for which purpose they
shall be valued at their Closing Value. To the fullest extent permitted by law,
Stockholder shall satisfy his liability hereunder by delivering to Newpark some
or all of such Newpark Shares, valued at their Closing Value, and Newpark shall
satisfy its liability by issuing additional Newpark Shares valued at their
Closing Value. Nothing contained herein shall relieve Stockholder or Newpark of
any liability he or it may have for any intentional breach of representation or
warranty or for breach of any covenants or agreements made herein by such party.
10.3.4 In determining the amount of any damage, loss, liability,
cost or expense suffered by Newpark which gives rise to liability of Stockholder
hereunder, there shall be taken into account the amount of any Tax benefits
actually realized by Newpark and its subsidiaries attributable to such damage,
loss, liability, cost or expense or derived therefrom in the same or any past or
subsequent taxable period, also taking into account the Tax treatment of the
receipt by Newpark of any payment from Stockholder.
10.4 Dispute Resolution; Arbitration. 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,
within the survival period specified in Section 8. Newpark and Stockholder
shall first attempt diligently to resolve any such issue or dispute. They may,
if they desire, attempt to mediate the dispute and shall, if they choose, do so
in accordance with the Commercial Mediation Rules of the American Arbitration
Association ("AAA"), either as written or as modified by mutual agreement. A
written agreement to undertake mediation may be made at any time. If
arbitration proceedings have been instituted, they shall be stayed until the
mediation process is terminated. Any dispute arising out of or related to this
Agreement or its alleged breach that cannot be resolved by mutual agreement
(including mutually agreed mediation) shall be resolved exclusively by final and
binding arbitration, conducted as expeditiously as possible in the City of
Houston, Texas, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The decision of the arbitrator or arbitrators
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.
11. 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 11. If on the date hereof 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
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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
Merger (in which event, as Newpark's sole and exclusive remedy with respect to
the consequences of such loss or damage, all claims of the Company with respect
to such loss or damage and all insurance proceeds arising therefrom shall be for
the account of the Company), or, if it does not so elect, it shall have the
right, which shall be in lieu of any other right or remedy whatsoever, to
terminate this Agreement. In the latter event, all parties shall be released
from liability hereunder.
12. Termination. In addition to any party's right to terminate this
Agreement if any condition precedent to its obligations is not satisfied at or
before the Closing, either Newpark or the Company and Stockholder 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 date hereof 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.
13. 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 13 by giving notice
of such change to the other party in the manner which is provided in this
Section 13.
The Company: Smithey, Inc.
718 North Drennan
Houston, Texas 77003
Facsimile No.: (713) 229-8589
Stockholder: Mr. C. M. Smithey
2310 Colonial Court
Missouri City, Texas 77459
Copy to: Mary Frances vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway, Suite 300
Houston, Texas 77060
Facsimile No.: (281) 931-6032
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Newpark: c/o Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: Secretary
Facsimile No.: (504) 833-9506
Copy to: Bertram K. Massing, Esq.
Ervin, Cohen & Jessup LLP
9401 Wilshire Boulevard, 9th Floor
Beverly Hills, CA 90212
Facsimile No.: (310) 859-2325
14. Assignment. Rights hereunder shall not be assignable and duties
hereunder shall not be delegable by the Company, Stockholder, Newpark or SBM
without the prior written consent of the other; consent may be withheld for any
reason or without reason; provided, however, Newpark may, in its sole
discretion, assign any or all of its rights under this Agreement to any of its
Affiliates; provided, further, however, that no such assignment shall relieve
Newpark of any obligation or liability hereunder. 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.
15. Certain Definitions. As used herein, the following terms (whether
used in the singular or the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 25% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the five trading days immediately preceding the third trading day
prior to the date of this Agreement.
"Commission" means the U.S. Securities and Exchange Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the date hereof 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 Stockholder or any
other executive officer of the Company.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not materially impair the existing use or materially detract from the value of
the assets or property
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<PAGE>
subject thereto, and (d) liens for current taxes not delinquent, for which
adequate reserves or other appropriate provisions have been made in the Company
Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any governmental authority responsible for the imposition of any such
tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
16. Disclaimer Concerning Tax Consequences. Although the parties intend
that the Plan will be a tax-free reorganization, no party makes any express or
implied warranty to any other party as to the Tax consequences of the Plan, and
all such warranties are hereby expressly disclaimed.
17. 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.
18. Remedies Not Exclusive. Except as provided in Section 11, (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.
19. Accountants' and Attorneys' Fees. Newpark, the Company and
Stockholder shall each pay their own accountants' and attorneys' fees related to
the consummation of the Plan. In any litigation or arbitration relating to this
Agreement, including litigation or arbitration with respect to any instrument,
document or agreement made under or in connection with this Agreement, the
prevailing party shall be entitled to recover its costs and reasonable
attorneys' fees.
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<PAGE>
20. Payment of Expenses. Whether or not the Merger is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark in connection with this Agreement and the transactions contemplated
hereby, and the Company will pay and be responsible for all costs and expenses
incurred by the Company and Stockholder in connection with this Agreement and
the transactions contemplated hereby.
21. 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.
22. 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.
23. 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.
24. 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.
25. Waivers. At any time prior to the Closing, 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.
26. 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.
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
THE COMPANY: NEWPARK:
SMITHEY, INC. NEWPARK RESOURCES, INC.
By:/s/ C. M. Smithey By:/s/ Matthew W. Hardey
----------------------------- ----------------------------------
C. M. Smithey, President Matthew W. Hardey, Chief Financial
Officer
STOCKHOLDER: SBM:
SAMPEY BILBO MESCHI DRILLING FLUIDS
MANAGEMENT, INC.
/s/ C. M. Smithey
- --------------------------------
C. M. SMITHEY
By:/s/ Matthew W. Hardey
--------------------------------------
Matthew W. Hardey, Vice President
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<PAGE>
EXHIBIT 2.19
NONCOMPETITION AGREEMENT
------------------------
This Noncompetition Agreement (the "Agreement") is made and entered into as
of July 24, 1997, by and between C. M. SMITHEY ("Covenantor") and NEWPARK
RESOURCES, INC., a Delaware corporation ("Newpark"), ancillary to and as
required by the Agreement and Plan of Reorganization (the "Merger Agreement") of
even date herewith by and among Newpark, SAMPEY BILBO MESCHI DRILLING FLUIDS
MANAGEMENT, INC., a Texas corporation which is a wholly-owned subsidiary of
Newpark ("SBM"), SMITHEY, INC., a Texas corporation (the "Company") and
Covenantor, pursuant to which the Company is merging into SBM. 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 SBM 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.
The Territory - All or any part of the following: the States of Louisiana,
Texas, Mississippi and Alabama and the Gulf of Mexico.
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<PAGE>
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 until July 31, 2000. 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. If, notwithstanding the foregoing,
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. If any provision of Paragraphs 1 through
-2-
<PAGE>
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: C. M. Smithey
2310 Colonial Court
Missouri City, Texas 77459
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<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:
/s/ C.M. Smithey
---------------------------------------
C. M. SMITHEY
NEWPARK RESOURCES, INC.
By /s/ Matthew W. Hardey
------------------------------------
Matthew W. Hardey
Chief Financial Officer
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<PAGE>
EXHIBIT 2.20
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of July 24, 1997, by and between NEWPARK DRILLING FLUIDS, INC., a Texas
corporation formerly known as Sampey Bilbo Meschi Drilling Fluids Management,
Inc. ("Employer"), and C. M. SMITHEY ("Employee"), with reference to the
following facts:
A. Employer is a wholly-owned subsidiary of NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark").
B. Employee has been employed by Smithey, Inc., a Texas corporation (the
"Company"), as its President.
C. On the date of this Agreement, the Company has been merged with and
into Employer, with Employer continuing as the surviving corporation. Employer
desires to assure itself of the continued services of Employee for a term
expiring no sooner than July 31, 2000, and the parties are entering into this
Agreement for that purpose and in order to set forth the terms of the employment
of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment. Employer hereby employs Employee, and
Employee hereby accepts employment with Employer, for a period commencing on the
date hereof and, except as otherwise provided herein, expiring July 31, 2000,
provided, however, that, each time neither party terminates this Agreement by
written notice given at least sixty (60) days prior to the expiration of the
employment term as last renewed or extended, it shall be automatically renewed
for an additional twelve month period. As used herein, the phrase "employment
term" refers to the entire period that Employee shall be employed hereunder,
whether for the initial period provided above, or whether this Agreement is
terminated earlier or extended automatically as provided herein or by mutual
agreement between Employer and Employee. This Agreement supersedes all
agreements and understandings between Employer and Employee and Employee and the
Company relating to compensation of Employee existing on the date hereof,
including but not limited to salary, commission, bonus and other arrangements,
and all such existing agreements and understandings are hereby terminated.
2. Duties of Employee.
2.1 Employee shall serve as Vice President of Employer and shall do
and perform all services, acts and things necessary or advisable in that
capacity in connection with the conduct of the business of Employer, subject to
the instructions of and policies and limitations set by its Board of Directors.
2.2 Employee shall devote such productive time, ability and attention
to the business of Employer during the employment term as is reasonably required
for the performance of his duties hereunder. Employee may devote time and
effort to personal activities to the extent that such activities do not
materially interfere with the performance of his duties hereunder. If
<PAGE>
Employer advises Employee that, in its good faith judgment, such activities are
materially interfering with the performance of Employee's duties hereunder,
Employee will promptly take steps to appropriately limit such activities.
Subject to the foregoing, Employee shall not directly or indirectly render any
services of a business, commercial or professional nature to any other person or
organization, whether for compensation or otherwise, without the prior written
consent of the Board of Directors of Employer.
2.3 Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices as an officer, director or
member of any committee of the Board of Directors of Employer or of any direct
or indirect subsidiary of Employer.
3. Compensation of Employee.
3.1 As compensation for his services hereunder, Employee shall
receive a base salary at the annual rate of $85,000, payable in equal
installments on Employer's regular payroll dates for executive employees.
Employer's Board of Directors will review Employee's base salary annually, and,
with the approval of Newpark's Board of Directors or Compensation Committee, may
(but shall be under no obligation to) increase such base salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his base salary,
a bonus in an amount equal to 20% of his then current base salary.
4. Benefits. Employee shall be entitled to participate in and
receive benefits under all bonus plans, profit-sharing plans, pension plans,
group medical plans and other plans for payment of additional compensation or
benefits to employees of Employer which Employer at any time maintains for
executive employees. To the extent permitted by law, and provided that such
participation does not result in duplicate payments to Employee, Employee shall
also participate in such benefits plans as Newpark makes available to its
executive employees and the executive employees of its subsidiaries.
5. Business Expenses. Employee is authorized to incur reasonable
expenses for promoting and conducting the business of Employer, including
expenditures for entertainment and travel. Employer shall reimburse Employee
monthly for all such business expenses upon presentation of reasonable
documentation establishing the amount, date, place and essential character of
the expenditures.
6. Disability.
6.1 If Employee becomes disabled by reason of sickness, physical or
mental disability or any other cause which materially impairs his ability to
perform his duties under this Agreement with reasonable accommodation for a
period of six consecutive months or for nine months in any twelve-month period,
Employer shall have the option to terminate this Agreement effective immediately
by giving written notice of termination to Employee within a reasonable time
following the end of such period of disability. If Employee becomes temporarily
disabled by reason of sickness, physical or mental disability, or any other
cause so that he is unable to
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<PAGE>
perform efficiently his duties hereunder with reasonable accommodation, he shall
be entitled to compensation as provided for herein until the total period of
such temporary disability shall equal an aggregate of three consecutive months
or an aggregate of six months during any period of twelve consecutive months.
As to any subsequent periods of disability during said twelve month period,
Employee shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant to the
provisions of Paragraph 6.1 above, Employee shall be entitled to salary and
discretionary bonus earned by him prior to the date of termination as provided
for in this Agreement computed pro rata up to and including that date; but he
shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
7.1 This Agreement and the employment of Employee hereunder may be
terminated at any time prior to the expiration of the term of this Agreement as
follows:
7.1.1 By Employer as a result of disability of Employee as
provided in Paragraph 6.1 above, or the death of Employee;
7.1.2 upon the mutual agreement of the parties;
7.1.3 by Employer in the event of: (i) conviction of Employee of
a major felony (whether or not committed in the course of his employment) from
which no appeal has been made, or, if an appeal has been made, upon a final
determination adverse to Employee; or (ii) gross misconduct by Employee causing
material harm to Employer, but only if (x) Employee shall not have discontinued
such gross misconduct within ten days after receiving written notice from
Employer that it will consider the continuation of such gross misconduct cause
for termination of this Agreement, or (y) the gross misconduct is of such a
nature that Employer would be materially prejudiced thereby whether or not
Employee discontinues such gross misconduct;
7.1.4 by Employee if Employer shall fail to cure a material or
default by it under any of the terms of this Agreement within thirty days after
written notice of such breach or default is given by Employee;
7.1.5 by Employer if Employee shall fail to cure a material
breach or default by him under this Agreement within thirty days after written
notice of such breach or default is given by Employer; and
7.2 This Agreement shall not be terminated by any merger or
consolidation where Employer is not the consolidated or surviving corporation or
by any transfer of all or substantially all of the assets of Employer. In the
event of any such merger or consolidation or transfer of assets, the surviving
or resulting corporation or the transferee of the assets of Employer shall be
bound by and shall have the benefit of the provisions of this Agreement; and
Employer shall take all actions necessary to ensure that such corporation or
transferee is bound by the provisions of this Agreement.
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<PAGE>
7.3 Upon termination of this Agreement for any reason whatsoever,
Employee shall return to Employer all automobiles, equipment, books, records,
customer lists, catalogs, invoices, correspondence and other property which was
acquired from or otherwise belongs to Employer, including any property or
documentation developed by Employee in the course of his employment.
8. Proprietary Information and Non-Competition.
8.1 Employee recognizes and acknowledges that the performance of his
services hereunder will necessarily result in disclosure to him of certain trade
secrets and confidential information, including source of supply information,
sales information, customer lists, customer information and pricing, all of
which are special and unique assets and trade secrets of Employer's business.
For the purpose of this Agreement, such information shall be referred to and is
acknowledged as "proprietary information of the Employer." In view of the
foregoing, in addition to and not in limitation of the provisions of the
Noncompetition Agreement executed concurrently herewith by Newpark and Employee,
Employee agrees that:
8.1.1 During and after the employment term, Employee will not
disclose or use any proprietary information of Employer, except for the purpose
of carrying out his duties hereunder, unless such use or disclosure is
specifically consented to in writing by Employer.
8.1.2 For the period of one year after the employment term,
Employee will not in any way, directly or indirectly, for himself or on behalf
of any other person or entity, associate in business as an employer, employee or
otherwise, with any employee, officer or agent of Employer until such person has
terminated employment with Employer for a period of one year.
8.1.3 During the employment term and thereafter, Employee will
not, directly or indirectly, for himself or on behalf of any other person or
entity, induce or attempt to induce any of Employer's personnel to terminate
their relationship with Employer, nor will Employee induce or attempt to induce
any of Employer's personnel to do anything contrary to the best interests of
Employer.
8.2 Employee agrees that in the event of any breach by Employee of
any covenant in this Paragraph 8, Employer shall be entitled, in addition to
other remedies, to immediate injunctive relief if necessary to avoid irreparable
harm and injury.
9. General Provisions.
9.1 Any notices to be given hereunder by either party to the other
shall be in writing and may be effected either by personal delivery, by
facsimile, by overnight express delivery or by mail, registered or certified,
return receipt requested, postage prepaid. Mailed notices shall be addressed to
the parties at the addresses appearing opposite their respective signatures
below and shall be deemed effective 24 hours after being deposited in the U.S.
mails, postage prepaid and property addressed. Each party may change its
address by written notice in accordance with this Paragraph.
-4-
<PAGE>
9.2 This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee and contains all of the covenants and agreements between
the parties with respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of this
Agreement which is in conflict with any applicable statute, rule, or other law
shall be deemed, if possible, to be modified or altered to conform thereto or,
if not possible, to be omitted from this Agreement. The invalidity of any
portion hereof shall not affect the force or effect of the remaining portions
hereof.
9.4 This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, and the Judicial District Court of Harris
County, Texas, Houston Division, shall be the only proper forum for disputes
hereunder.
9.5 The rights and obligations of Employer under this Agreement shall
enure to the benefit of and shall be binding on the successors and assigns of
Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
NEWPARK DRILLING FLUIDS, INC. ("Employer") Address:
15810 Park Ten Place, Suite 300
Houston, Texas 77084
By /s/ Matthew W. Hardey
----------------------------------
Matthew W. Hardey, Vice President
/s/ C. M. Smithey Address:
- -------------------------------------
C. M. Smithey ("Employee")
2310 Colonial Court
Missouri City, Texas 77459
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<PAGE>
EXHIBIT 2.21
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made and
entered into as of July 24, 1997, by and among (a) NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), (b) NEWPARK DRILLING FLUIDS, INC., a Texas
corporation formerly known as Sampey Bilbo Meschi Drilling Fluids Management,
Inc. and a wholly-owned subsidiary of Newpark ("Fluids"), (c) ADVANCED CHEMICAL
TECHNOLOGIES, INC., a Texas corporation (the "Company"), and (d) JOHN V. FILECIA
and S. KIM TILLERY (each a "Stockholder" and, together, the "Stockholders"),
with reference to the following facts:
A. The Stockholders own beneficially and of record 100% of the
outstanding capital stock (the "Company Shares") of the Company.
B. The Company provides drilling fluids and related products and
services to the oil and gas industry.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Section 368(a)(1)(A) and
Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the
"Code") and that the Plan will qualify for "pooling of interests" accounting
treatment under generally accepted accounting principles. The Plan comprises
(a) the merger (the "Merger") of the Company into Fluids, with Fluids continuing
as the surviving corporation, pursuant to this Agreement and the Agreement of
Merger in the form attached hereto as Exhibit "A" (the "Agreement of Merger"),
on the terms contained herein and in accordance with the applicable provisions
of the Texas Business Corporation Act (the "BCA"), and (b) the conversion of all
the outstanding shares of capital stock of the Company into 60,000 newly issued
shares of voting Common Stock of Newpark (the "Newpark Shares"). The
consummation of the Plan in accordance with the terms of this Agreement and the
Agreement of Merger is sometimes referred to herein as the "Closing."
D. Newpark and the Stockholders believe that it is in their best
interests to adopt the Plan 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, Fluids, the Company and the
Stockholders hereby adopt the plan of reorganization herein set forth.
1.2 Merger of the Company into Fluids. Subject to the provisions
of this Agreement and the BCA, at the "Effective Time" (as defined in paragraph
1.3), the Company shall be merged with and into Fluids, and the separate
corporate existence of the Company shall cease. Fluids shall be the surviving
corporation in the Merger (hereinafter sometimes called the "Surviving
Corporation") and shall continue its corporate existence under the laws of the
State of Texas. The Merger shall have the effects set forth in Article 5.06 of
the BCA.
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1.3 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, the parties shall cause
the Agreement of Merger to be duly executed and filed with the Secretary of
State of Texas. The Merger shall become effective as of the time the Agreement
of Merger is accepted for filing and officially filed. The date and time when
the Merger becomes effective is referred to herein as the "Effective Time".
This Agreement and the Agreement of Merger are hereinafter collectively referred
to as the "Merger Agreements".
1.4 Conversion of Shares. As of the Effective Time, by virtue of
the Merger and without any action on the part of any holder thereof:
1.4.1 The shares of Common Stock of Fluids which are issued
and outstanding immediately prior to the Effective Time shall not be changed or
converted as a result of the Merger, but shall remain outstanding as shares of
the Surviving Corporation.
1.4.2 All of the outstanding shares of capital stock of the
Company issued and outstanding immediately prior to the Effective Time (i.e.,
the Company Shares) shall be converted (in the aggregate) into the right to
receive 60,000 shares of Newpark Common Stock (i.e., the Newpark Shares). Each
Stockholder will receive the number of Newpark Shares determined by dividing
60,000 by the total number of Company Shares outstanding and multiplying the
resulting quotient by the number of Company Shares held by such Stockholder. No
fractional shares shall be issued; if fractional shares otherwise would issue,
the Stockholders shall instruct Newpark at least five business days before the
Closing as to the rounding of such shares.
1.5 Surrender of Shares.
1.5.1 The Stockholders, as the holders of all of the
Company Shares, upon the surrender to Newpark of the certificate or certificates
which, immediately prior to the Effective Time, represented the Company Shares,
shall be entitled to receive in exchange therefor certificates representing the
number of shares of Newpark Common Stock into which the shares of capital stock
of the Company theretofore represented by the certificate or certificates so
surrendered shall have been converted pursuant to the provisions of paragraph
1.4.2.
1.5.2 Until surrendered and exchanged as herein provided,
each outstanding certificate which, prior to the Effective Time, represented
capital stock of the Company shall represent for all purposes only the right to
receive the consideration provided in paragraph 1.4.2. Certificates representing
the Newpark Shares shall be delivered to the Stockholders as soon as practicable
following the Effective Time.
1.6 Securities Act Legend on Newpark Shares. Each Stockholder
hereby agrees that he will not offer to sell, transfer or otherwise dispose of
any of the Newpark Shares issued to him in the Merger, except in accordance with
the applicable provisions of the "Securities Act" and the "Rules and
Regulations" (as such terms are defined in Section 15). Certificates
representing the Newpark Shares initially will bear the following legend:
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"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."
1.7 Pooling of Interests Restriction. Each Stockholder hereby
agrees that he will not offer to sell, transfer or otherwise dispose of any of
the Newpark Shares issued to him pursuant to the Merger until such time as
financial results covering at least 30 days of combined operations of Newpark,
Fluids and the Company have been published within the meaning of Section 201.01
of the Commission's Codification of Financial Reporting Policies.
2. Noncompetition Agreements. At the Closing, as a necessary
incident of the Plan, Newpark and the Stockholders will execute and deliver
noncompetition agreements substantially as set forth in Exhibit 2 attached to
this Agreement, all of which together are referred to herein as the
"Noncompetition Agreements."
3. Representations and Warranties of the Company and the
Stockholders.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Company and the Stockholders to Newpark
prior to the execution hereof, the Company and the Stockholders hereby jointly
and severally warrant and represent the following (the truth and accuracy of
each of which shall constitute a condition precedent to Newpark's obligations to
consummate the Plan and issue the Newpark Shares):
3.1 Organization and Good Standing of the Company.
3.1.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. The Company is duly qualified and in good standing
as a foreign corporation in each jurisdiction where the character or location of
the assets owned by the Company or the nature of the business transacted by the
Company require such qualification, except where failure to be so qualified
would not have a "Material Adverse Effect" (as defined in Section 15). The
Disclosure Letter includes a list of the jurisdictions in which the Company is
qualified to do business.
3.1.2 The Company has have furnished to Newpark complete
and correct copies of the Company's Articles of Incorporation and Bylaws as in
effect on the date hereof.
3.1.3 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. The
stock certificate books reflect all issuances, transfers and cancellations of
capital stock of the Company.
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3.2 Capitalization.
3.2.1 The authorized capital stock of the Company consists
of 100,000 shares of common stock, $1.00 par value per share, of which 6,163
shares, i.e., the Company Shares, are issued and outstanding as of the date
hereof. All such issued and outstanding shares are validly issued, fully paid
and nonassessable. The Disclosure Letter includes the names, addresses and
social security numbers of, and the number of the Company Shares owned by, each
of the Stockholders.
3.2.2 There are no options, warrants, subscriptions or
other rights outstanding for the purchase of, and all securities convertible
into, capital stock of the Company. No shares of the Company are held as
treasury stock.
3.3 Authority. The Company has the full corporate power and
authority to execute and deliver the Merger Agreements, to perform the
obligations and covenants set forth therein and to consummate the Merger and the
other transactions contemplated thereby. 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 and by the Stockholders in their capacity as the stockholders of the
Company, and no further corporate action is necessary on the part of the Company
to make the Merger Agreements binding upon the Company in accordance with their
terms. This Agreement has been duly executed and delivered by the Company and
the Stockholders and constitutes the valid and binding agreement of each of
them, enforceable against them in accordance with its terms, and, when the
Agreement of Merger has been duly executed and delivered, it will constitute the
valid and binding Agreement of the Company, enforceable against the Company in
accordance with its terms, in each case subject to the "Bankruptcy Exception"
(as defined in Section 15).
3.4 Equity Interests. The Company does not have a material
equity interest in any other "Person" (as defined in Section 15).
3.5 No Violation. The execution, delivery and performance of
this Agreement by the Company and the Stockholders 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 Stockholders or any of them are a party or by which any
of them are bound.
3.6 Financial Statements. The unaudited balance sheets of the
Company as of December 31, 1994, December 31, 1995 and December 31, 1996, and
the related unaudited statements of income, stockholders' equity and cash flows
for the years ended December 31, 1994, December 31, 1995 and December 31, 1996,
and the unaudited balance sheet of the Company as of April 30, 1997, and the
related statements of income, stockholders' equity and cash flows for the four
month period ended on said date, in each case certified by the principal
financial officer of the Company, subject to year-end audit adjustments, copies
of which have heretofore been delivered to Newpark (collectively the "Company
Financial Statements"), were prepared in accordance with the books and records
of the Company in accordance with generally accepted
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accounting principles (except for the absence of footnotes from the
April 30, 1997, financial statements) consistently applied throughout the
periods involved (except as otherwise noted therein) and present fairly the
financial position, results of operations and cash flows of the Company for and
as of the end of each of such periods.
3.7 Properties. The Company has 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. Such title is free and clear of
all liens, charges, security interests, encumbrances, leases, covenants,
conditions and restrictions other than "Permitted Liens," as defined in Section
15. 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.
3.8 Contracts.
3.8.1 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 $25,000; (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 or other employee groups; (d) leases, contracts or commitments
affecting ownership of, title to, use of or any material interest in real
estate; (e) employment contracts and other contracts, agreements, or commitments
to or with individual employees, consultants or agents extending for a period of
more than six months from the date hereof or providing for earlier termination
only upon payment of a penalty or the equivalent thereof; (f) equipment leases
providing (in any one lease or group of related leases) for payments in excess
of $10,000 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 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
$25,000 or 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.
3.8.2 All Material Contracts are valid and binding
obligations of the Company and, to the "best of the knowledge of the Company"
(as defined in Section 15), the
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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 the Company or either or both of the
Stockholders anticipate expenses materially in excess of revenues or which is
otherwise onerous or materially adverse; and the Company has not expressly
waived any material rights under any Material Contract.
3.9 Outstanding Indebtedness. The Disclosure Letter includes a
true and com plete schedule of all notes payable and other indebtedness 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.
3.10 Absence of Undisclosed Liabilities. Except as disclosed in
the Disclosure Letter and except for liabilities and obligations reflected on
the latest balance sheet included in the Company Financial Statements or arising
in the ordinary course of business since the date of such balance sheet, none of
which latter items, individually or in the aggregate, have a Materially Adverse
Effect: (a) the Company does not have, and none of its properties are subject
to, any debts, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, which are of a type which are required to be
shown or reflected on financial statements prepared in a manner consistent with
generally accepted accounting principles; and (b) to the best of the knowledge
of the Company, the Company does not have, and none of its properties are
subject to, any material debts, liabilities or obligations of any nature,
whether accrued, absolute, contingent or otherwise, whether or not of a type
which are required to be shown or reflected on financial statements prepared in
a manner consistent with generally accepted accounting principles. The Company
is not in default with respect to any material term or condition of any
indebtedness.
3.11 No Litigation. Except as disclosed in the Disclosure
Letter, there are no actions, suits or proceedings (whether or not purportedly
on behalf of the Company) pending or, to the knowledge of the Company,
threatened against or affecting the Company, at law or in equity or before or by
any "Government Body" (as defined in Section 15) or before any arbitrator of any
kind. To the best of the knowledge of the Company, the Company is not in default
with respect to any judgment, order, writ, injunction, decree, award of any
Government Body.
3.12 Environmental Matters.
3.12.1 Neither the Company nor, to the best of the
knowledge of the Company, 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 15) on, under,
in or about the
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Property, or transported any Hazardous Materials to or from the Property in
violation of any "Hazardous Materials Laws" (as defined in Section 15) 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, no
underground tanks or underground deposits or Hazardous Materials the existence
of which would have a Material Adverse Effect existed on, under, in or about any
Property previously owned or leased by the Company on or prior to the date that
fee or leasehold title to such Property was transferred to a third party by the
Company. To the best of the knowledge of the Company, no underground tanks or
underground deposits or Hazardous Materials the existence of which would have a
Material Adverse Effect exist on, under, in or about any Property that is
currently owned or leased by the Company.
3.12.2 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).
3.12.3 As of the date hereof, to the best of the knowledge
of the Company, there are no (1) enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions instituted, contemplated or threatened
pursuant to any Hazardous Materials Laws against the Company or any Property
presently owned or leased by the Company, (2) claims made or threatened by any
Person or Government Body relating to the Property against the Company or any
Property presently owned or leased by the Company or relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials or (3) any occurrence or condition known to the Company or
Stockholders on any Property that is currently owned or leased by the Company
that can reasonably be expected to subject the Company or such Property to any
material restrictions on occupancy, transferability or use of any Property under
any Hazardous Materials Laws. The Disclosure Letter includes a list of all
complaints, notices of violation and claims relating to Hazardous Materials Laws
which, to the knowledge of the Company, have been received by or asserted
against the Company.
3.13 Taxes.
3.13.1 The Company has filed all income, franchise and
other "Tax Returns" (as defined in Section 15) required to be filed by it by the
date hereof. All "Taxes" (as defined in Section 15) imposed by the United
States, the State of Texas and by any other state, municipality, subdivision, or
other taxing authority, which are due and payable by the Company have been paid
in full or are adequately provided for by reserves reflected on the latest
balance sheet included in the Company Financial Statements.
3.13.2 All contributions due from the Company pursuant to
any unemployment insurance or workers compensation laws and all sales or use
Taxes which are due or payable by the Company have been paid in full. The
Company has withheld and paid to, or will cause to be paid to, the appropriate
taxing authorities all amounts required to be withheld from the wages of its
employees under state law and the applicable provisions of the Code.
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3.13.3 The Company has furnished to Newpark true and
complete copies of the federal income Tax Returns and comparable state Tax
Returns of the Company covering the years ended December 31, 1994, December 31,
1995 and December 31, 1996, constituting complete and accurate representations
in all material respects of the Tax liabilities of the Company for the relevant
periods stated therein and accurately setting forth all relevant material items,
including the Tax bases of all assets, where required to be set forth in such
Tax Returns.
3.14 Permits and Licenses. The Company has all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof, and the Company is in compliance in all material
respects with all applicable federal, state and local laws, rules, regulations
and orders relating to its business, except where failure to have any such
license, franchise, permit or authorization or failure to comply with any such
laws, rules, regulations and orders would not have a Material Adverse Effect.
The execution and performance of this Agreement and the consummation of the
transactions contemplated hereby will not cause the termination or suspension of
any license, franchise, permit or governmental authorization or violate any
provision of or constitute a default under any law, rule or regulation, order,
writ, injunction or decree of any Government Body applicable to the Stockholders
or the Company, where such violation or default would have a Material Adverse
Effect.
3.15 No Labor Problems. The Company has not been charged with
any unresolved unfair labor practices and there are no material controversies
pending or threatened between the Company and any of its employees. The Company
has complied in all material respects with all laws relating to wages, hours,
collective bargaining and similar employment matters the noncompliance with
which would have a Material Adverse Effect, and the Company has paid all social
security and similar Taxes that are due and payable and is not liable for any
arrears or wages or any Taxes or material penalties for failure to comply with
any of the foregoing.
3.16 Employee Benefit Plans.
3.16.1 Definition of Benefit Plans. For purposes of this
Section 3.15, the term "Benefit Plan" means any plan, program, arrangement,
practice or contract which provides benefits or compensation to or on behalf of
employees or former employees of the Company or any "ERISA Affiliate" (as
hereinafter defined), whether formal or informal, whether or not written,
including but not limited to the following:
(a) Arrangements - any bonus, incentive
compensation, stock option, deferred compensation, commission, severance, golden
parachute or other compensation plan, rabbi trust, program, contract,
arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" (as
defined in Section 3(3) of ERISA), including, but not limited to, any "multi-
employer plan" (as defined in Section 3(37) and Section 4001(a)(3) of ERISA),
defined benefit pension plan, profit sharing plan, money purchase pension plan,
401(k) plan, savings or thrift plan, stock bonus plan, employee stock ownership
plan, or any plan, fund, program, arrangement or practice providing for medical
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(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits; and
(c) Other Employee Fringe Benefits - any stock
purchase, vacation, scholarship, day care, prepaid legal services, severance pay
or other fringe benefit plan, program, arrangement, contract or practice.
3.16.2 ERISA Affiliate. For purposes of this Section 3.15,
the term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Company is treated as single employer
under Section 414(b), (c), (m) or (o) of the Code.
3.16.3 Identification of Benefit Plans. The Company does
not maintain, and has not at any time established or maintained, nor has at any
time been obligated to make contributions to or under or otherwise participate
in any Benefit Plan.
3.16.4 MEPPA Liability/Post-Retirement Medical Benefits/
Defined Benefit Plans/Supplemental Retirement Plans. Neither the Company nor any
ERISA Affiliate maintains, or has at any time established or maintained, or has
at any time been obligated to make contributions to or under any multi-employer
plan. Neither the Company nor any ERISA Affiliate maintains, or has at any time
established or maintained, or has at any time been obligated to make
contributions to or under (i) any plan which provides post-retirement medical or
health benefits, (ii) any organization described in Sections 501(c)(9) or
501(c)(20) of the Code, (iii) any defined benefit pension plan subject to Title
IV of ERISA or (iv) any plan which provides retirement benefits in excess of the
limitations of Section 415 of the Code.
3.16.5 Liabilities. The execution and performance of the
transactions contemplated by this Agreement will not create, accelerate or
increase any obligation to make any payment which, as an "excess parachute
payment" under Section 280G of the Code, would not be deductible.
3.17 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.
3.18 Interest in Competitors, Suppliers, etc. Except as set
forth in the Disclosure Letter, none of the Stockholders and no officer or
director of the Company or any Family Member of any such Person owns, directly
or indirectly, individually or collectively, any interest in any corporation,
partnership, proprietorship, firm or association which (a) is a competitor,
customer or supplier of the Company, or (b) has an existing contractual
relationship with the Company, including but not limited to lessors of real or
personal property leased to the Company and entities against whom rights or
options are exercisable by the Company. The Company owns, free and clear and
without payment of any royalty or fee, all interests in the assets, profits or
business of the Company that have previously been held by any Affiliate of the
Company, including the Stockholders and their Family Members.
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3.19 Indebtedness with Insiders. Except for accrued salaries for
one payroll period, vacation pay and business expense reimbursements, the
Company is not indebted to any of the stockholders, directors or officers of the
Company or any Affiliate of any such Person. None of such Persons is indebted to
the Company.
3.20 Consents. No authorizations, approvals or consents of any
Government Body are required for consummation of the transactions contemplated
by this Agreement or the subsequent operation of the business of the Company,
except for the filing of the Agreement of Merger as required by the BCA.
3.21 Patents, Trademarks and Other Intangibles. The Disclosure
Letter includes a list of all material patents, patent applications, trade
names, trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. The Company owns or has the right to use all Intangible
Assets now used in the conduct of its business. Such Intangible Assets include
all of the proprietary products and formulations developed by the Company or
used by it in its business. The Company is not obligated to pay any royalty or
other fee to any licensor or other third party with respect to any Intangible
Assets. Neither the Company nor any of the Stockholders has knowledge of any
claim received by the Company alleging any conflict between any aspect of the
business of the Company and any Intangible Assets claimed to be owned by others
which, if determined adversely to the Company, would have a Material Adverse
Effect. None of the Stockholders, no other officer or director of the Company,
and no Person that is an Affiliate of any such Person has any interest in any
Intangibles Assets which are presently used by the Company or which infringe
upon, conflict with or relate to improvements or modifications of any Intangible
Assets presently used by the Company.
3.22 Purchases and Sales. Since December 31, 1996, the Company
has not placed any orders for materials, merchandise or supplies in exceptional
or unusual quantities based upon past operating practices and has not entered
into contracts with customers under conditions relating to price, terms of
payment, time of performance or like matters materially different from the
conditions regularly and usually specified in contracts for similar engagements
from customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Company nor the
Stockholders (or any Affiliate of the Stockholders) has incurred any liability
to any broker, finder or agent for any brokerage fees, finder's fees or
commissions for which the Company could be liable with respect to the
transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since December 31, 1996, except
for matters of a general economic nature which do not affect the Company
uniquely, the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess of
$25,000 in the aggregate or incurred or become subject to any obligation or
liability (absolute or contingent) in
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excess of $25,000 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 $10,000 or canceled
or agreed to cancel any debts or claims exceeding $10,000 in the aggregate,
except for fair value in the ordinary course of business;
3.24.7 entered or agreed to enter into any agreement or
arrangement granting any preferential right to purchase a material part of its
assets, properties or rights;
3.24.8 increased the rate of compensation of or paid or
accrued bonuses to or for any of its officers, employees, consultants or agents,
except for normal merit or cost of living increases;
3.24.9 suffered any damage, destruction or loss in excess
of an aggregate of $100,000, whether or not covered by insurance, adversely
affecting any of its properties;
3.24.10 assigned or agreed to assign any of its Intangible
Assets;
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 or the Stockholders in this Agreement, and no
document, statement, certificate, exhibit or schedule furnished or to be
furnished to Newpark or Fluids pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required to be
stated
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therein or necessary in order to make the statements or facts contained herein
or therein, in the light of the circumstances under which they were made, not
misleading.
B. Except as otherwise set forth in the Disclosure Letter,
each Stockholder represents and warrants with respect to himself, severally but
not jointly, the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's obligations to consummate the
Merger and issue the Newpark Shares):
3.26 Investment Representations. Either such Stockholder is an
"accredited investor", as that term is defined in Rule 501 of the Rules and
Regulations or such Stockholder, either alone or with such Stockholder's
qualified "purchaser representative" (as defined in Rule 501 of the Rules and
Regulations), has such knowledge and experience in financial and business
matters that he is capable of evaluating the risks and merits of an investment
in Newpark Common Stock. Such Stockholder is acquiring his Newpark Shares in
the Merger for investment and not with a view to the sale thereof other than in
compliance with the requirements of the Securities Act and applicable Blue Sky
laws. At the request of Newpark, each Stockholder will furnish to Newpark
evidence reasonably satisfactory to Newpark that the foregoing representations
are true. Such Stockholder acknowledges that Newpark has made available to him
the opportunity to ask questions and receive answers concerning the terms and
conditions of the Plan and to obtain any additional information that Newpark is
required to furnish under Regulation D of the Rules and Regulations.
3.27 No Joinder. Such Stockholder has the requisite power to
enter into this Agreement and perform his obligations hereunder (including
without limitation to sell and deliver his Company Shares), and no other
Person's joinder as a party hereto is necessary therefor pursuant to any
community property laws or otherwise, and there is no restriction on the power
of the Stockholder to sell and deliver his Company Shares pursuant to any trust,
estate planning or other similar document or any prenuptial or post-nuptial
agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the
knowledge of the Company, threatened in any court or arbitration forum or by or
before any Government Body involving the Company or such Stockholder relating to
or affecting any of the transactions contemplated by this Agreement.
3.29 Title to Shares. Such Stockholder is the holder of record
and owns beneficially that number of Company Shares set forth opposite his name
in the Disclosure Letter and owns such Company Shares free and clear of all
liens, security interests, encumbrances and restrictions, other than
restrictions contemplated by this Agreement. Such Stockholder is not a party to
any voting trust, proxy or other agreement with respect to the voting of any of
his Company Shares.
4. Representations and Warranties of Newpark. Newpark hereby
represents and warrants the following (the truth and accuracy of each of which
shall constitute a condition precedent to the Company's and the Stockholders'
obligations to consummate the Plan):
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4.1 Organization and Good Standing.
4.1.1 Newpark is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Newpark
has corporate power and authority to carry on its business as presently
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it or both require qualification and failure to be so qualified
would have a Material Adverse Effect.
4.1.2 Fluids is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas. Fluids 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.
4.1.3 Newpark has furnished to the Stockholders complete
and correct copies of Newpark's Certificate of Incorporation and Bylaws as in
effect on the date hereof and Fluids' Articles of Incorporation and Bylaws as in
effect on the date hereof.
4.2 Capital Stock. The authorized capital stock of Newpark
consists of 80,000,000 shares of Common Stock, $.01 par value, of which
31,367,874 shares were issued and outstanding on June 30, 1997, and 1,000,000
shares of Preferred Stock, $.01 par value, of which no shares are issued and
outstanding. The authorized capital stock of Fluids consists of 1,000,000 shares
of Class A voting common stock, of which 1,000 shares are issued and outstanding
and held by Newpark on the date hereof.
4.3 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.
4.4 Authority. The execution and delivery of this Agreement by
Newpark and the consummation of the transactions contemplated hereby have been
duly authorized by the Boards of Directors of Newpark and Fluids and by Newpark
in its capacity as the sole stockholder of Fluids. This Agreement has been duly
executed and delivered to the Company and the Stockholders, and no vote of the
stockholders of Newpark or further corporate action is necessary on the part of
Newpark or Fluids to make this Agreement valid and binding upon Newpark and
Fluids in accordance with its terms, subject to the Bankruptcy Exception. The
execution, delivery and performance of this Agreement by Newpark and Fluids (a)
are not contrary to the Certificate
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of Incorporation or Bylaws of Newpark, (b) are not contrary to the Articles of
Incorporation of Bylaws of Fluids and (c) 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
Fluids is a party or by which Newpark is bound.
4.5 Newpark Reports. Newpark has delivered to the Stockholders
copies of Newpark's Annual Reports on Form 10-K for the years ended December 31,
1994, 1995 and 1996 (as amended), Newpark's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997, and Newpark's definitive Proxy Statement dated
April 4, 1997, for its Annual Meeting of Stockholders held on May 14, 1997. All
of said documents and all periodic reports filed by Newpark with the Commission
after the date hereof are called the "Newpark Reports" herein. The Newpark
Reports have been or will be duly and timely filed with the Commission and are
or will be when filed in compliance with the Rules and Regulations. As of their
respective dates, none of the Newpark Reports contained or will contain any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
4.6 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.
4.7 Absence of Certain Changes. Since March 31, 1997, 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.
4.8 Issuance and Listing of Stock. Newpark has reserved for
issuance the Newpark Shares, and the Newpark Shares, when issued in accordance
with this Agreement, will be validly issued, fully paid and nonassessable.
4.9 Consents. No authorizations, approvals or consents of any
governmental department, commission, bureau, agency or other public body or
authority are required for consummation by Newpark of the transactions
contemplated by this Agreement, except for the
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filing of the Agreement of Merger as required by the BCA and such qualifications
as may be required under state securities or Blue Sky laws relating to the
Newpark Shares.
4.10 No Material Misstatements or Omissions. No representation
or warranty by Newpark or Fluids in this Agreement, and no document, statement,
certificate, exhibit or schedule furnished or to be furnished to the Company or
the Stockholders pursuant hereto, or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact required to be stated
therein or necessary to make the statements or facts contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
5. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the Plan
under this Agreement shall be subject to the satisfaction on or before the date
hereof of each of the following conditions except to the extent the parties may
waive any of such conditions in writing:
5.1 Government Body Consents. All consents, authorizations,
orders and approvals of (or filings or registrations with) any Government Body
required in connection with the execution, delivery and performance of this
Agreement, including Merger and the issuance of the Newpark Shares, or the
operation of the business of the Company following the Merger shall have been
obtained or made, except where the failure to have obtained or made any such
consent, authorization, order, approval, filing or registration would not have a
Material Adverse Effect following the Closing.
5.2 Injunction. 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 Plan may
not be consummated as herein provided, no proceeding or lawsuit shall have been
commenced by any Government Body for the purpose of obtaining any such
injunction, writ or preliminary restraining order and no written notice shall
have been received from any Government Body indicating an intent to restrain,
prevent, materially delay or restructure the transactions contemplated by this
Agreement.
5.3 Listing of Newpark Shares. The Newpark Shares shall have
been listed on the New York Stock Exchange, subject to official notice of
issuance.
6. Conditions Precedent to Obligations of Newpark and SBM. The
obligations of Newpark and SBM to consummate the Plan and issue the Newpark
Shares are subject to the satisfaction of each of the additional following
conditions at or prior to the date hereof, unless waived in writing by Newpark:
6.1 Accuracy of Warranties and Representations. The
representations and warranties of the Company and the Stockholders herein shall
be true and correct in all material respects, and the Company and the
Stockholders shall perform or shall have performed in all material respects all
covenants required by this Agreement to be performed by them at or prior to the
Closing.
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6.2 No Material Adverse Change. There shall have been no
changes after December 31, 1996, in the results of operations, assets,
liabilities, financial condition or affairs of the Company which in their total
effect have a Materially Adverse Effect on the Company.
6.3 Material Contracts. The Company shall have received
consents to assignment of all Material Contracts or written waivers of the
provisions of any Material Contracts requiring the consents of third parties as
set forth in the Disclosure Letter, except where the failure to have obtained
any such consent or written waiver would not have a Material Adverse Effect
following the Closing.
6.4 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 and copies
of such other documents as such counsel may reasonably have requested for such
purpose.
6.5 Opinion of the Company's and the Stockholders' Counsel.
Newpark shall have received an opinion of Farnsworth & vonBerg, counsel to the
Company and the Stockholders, dated the date of the Closing, substantially in
the form attached hereto as Exhibit 6.5.
6.6 Director Resignations. All of the directors of the Company
shall have resigned.
7. Conditions Precedent to Obligation of the Company and the
Stockholders. The obligations of the Company and the Stockholders to consummate
the Merger are subject to the satisfaction of each of the following additional
conditions at or prior to the date hereof, unless waived in writing by the
Company and the Stockholders:
7.1 Accuracy of Warranties and Representations. The
representations and warranties of Newpark contained in this Agreement shall be
true and correct in all material respects, and Newpark shall perform or shall
have performed in all material respects all of the covenants required by this
Agreement to be performed by it on or before the Closing.
7.2 Authorization of Plan. All corporate action necessary by
Newpark to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
7.3 No Material Adverse Change. There shall have been no
changes since March 31, 1997, in the results of operations, financial condition,
liquidity, assets, properties or business of Newpark and its subsidiaries, taken
as a whole, which, in their total effect, have a Material Adverse Effect on
Newpark and its subsidiaries.
7.4 Opinion of Newpark's Counsel. The Company and the
Stockholders shall have received an opinion of Ervin, Cohen & Jessup LLP,
counsel to Newpark, dated the date of the Closing, substantially in the form
attached hereto as Exhibit 7.4.
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7.5 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 Stockholders, and there shall have been
furnished to such counsel by Newpark certified copies of such corporate records
of Newpark (including Board of Directors resolutions approving the Merger
Agreements) and copies of such other documents as such counsel may reasonably
have requested for such purpose.
8. Survival of Representations. All representations and warranties
made by the Company or Fluids 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
Stockholders or Newpark under or in connection with this Agreement shall survive
the consummation of the Merger until the later of (a) one year after the Closing
or (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. No party shall
be entitled to recover against any other party for any misrepresentation or
breach of warranty except to the extent that written notice of any such claim
has been delivered to the party against whom recovery is sought within the
applicable period setting forth in reasonable detail and specifying the nature
of the claim being asserted. The provisions of this Section and Section 10.3.3
apply only to claims arising under this Agreement and do not affect any other
claims that any party may have at any time against any other party, including
but not limited to claims that may arise under Hazardous Material Laws.
9. Post-Closing Covenants.
9.1 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 Company, the Stockholders, Newpark or
Fluids which are based upon contracts, arrangements or acts of the Stockholders
or the Company or both which were in effect or occurred on or prior to the
Closing.
9.2 Access to Records. The Stockholders shall be entitled,
after the Closing, upon reasonable notice and during the regular business hours
of Newpark, to have access to and to make copies of the business records of the
Company which relate to periods prior to the Closing. Newpark shall retain such
business records for a period of five (5) years following the Closing Date,
after which time Newpark may destroy or otherwise dispose of such business
records without the Stockholders' consent.
9.3 Tax Matters.
9.3.1 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 date hereof, which
adjustment, question, claim, assessment or dispute could, if pursued
successfully, result in or give rise to a claim against the Stockholders under
this
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Agreement (a "Tax Claim"), Newpark shall promptly inform the Stockholders in
writing of such Tax Claim. The provisions of Section 10 shall apply to the
handling of any Tax Claim.
9.3.2 Current Tax Returns. The Stockholders 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 date hereof and are not
required to be filed (taking into account all extensions) on or before the date
hereof. Newpark will make available to the Stockholders, without charge, the
services of its personnel and the personnel of the Company to assist the
Stockholders in the preparation of such Tax Returns. Such Tax Returns shall be
reasonably satisfactory to Newpark in form and substance. 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 cause the Company to timely
file such Tax Returns and to pay the amounts of any Taxes shown as due thereon.
9.3.3 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 date hereof 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 Stockholders shall receive credit in an amount equal to the
amount of such excess against any liability they may have under Section 10.
9.3.4 Cooperation. Newpark and the Stockholders 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 9.3.4. 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.
9.3.5 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 Stockholders reasonable access to such records,
documents, accounting data and other information (including computer data) and
to its personnel (insuring their cooperation) and premises, for the purpose of
the 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.
9.4 Stockholder Guarantees. Subject to consummation of the
Merger, Newpark agrees that it will cause the Company to discharge in accordance
with its terms all indebtedness
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of the Company as to which the Stockholders have executed personal guarantees,
as disclosed in the Disclosure Letter.
10. Indemnifications.
10.1 Indemnification by the Stockholders. Subject to the
provisions of Sections 8 and 10.3, the Stockholders, jointly and severally,
hereby agree to indemnify, defend, protect and hold harmless Newpark against all
damages, losses, liabilities, costs and expenses (including reasonable
attorneys' fees) resulting from (i) any breach of any warranty or representation
made by the Company or the Stockholders under or in connection with this
Agreement, (ii) the presence on, under, in or about the Property of any
Hazardous Materials as of the Effective Time or the noncompliance by the Company
with any Hazardous Materials Laws on or before the Effective Time, whether or
not disclosed in the Disclosure Letter and (iii) the creation, maintenance or
termination of any Benefit Plan, whether or not disclosed in the Disclosure
Letter. Such indemnification shall be solely the responsibility of the
Stockholders, and they shall not have any right to recover any portion of their
liability from the Company, whether by right of indemnification, contribution or
otherwise.
10.2 Indemnification by Newpark. Subject to the provisions of
Sections 8 and 10.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless Stockholders against all damages, losses, liabilities, costs and
expenses (including reasonable attorneys' fees) resulting from any breach of any
warranty or representation made by Newpark under or in connection with this
Agreement. The rights to such indemnification shall accrue solely to
Stockholders, and the Company shall have no interest therein.
10.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
10.3.1 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.
10.3.2 Except as hereinafter provided, neither party shall
settle or compromise any such claim unless it shall first obtain the written
consent of the other, which shall not be unreasonably withheld. The foregoing
notwithstanding, if suit shall have been instituted against the Indemnitee and
the Indemnitor shall have failed, after the lapse of a reasonable time after
written notice to it of such suit, to take action to defend the same, the
Indemnitee shall have the right to defend the claim (without limiting the right
of the Indemnitor to participate in the defense) and to charge the Indemnitor
with the reasonable cost of any such defense, including
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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.
10.3.3 Except as herein provided, neither Newpark nor the
Stockholders shall have any liability for breach of warranty or representation
hereunder except to the extent that the amount of all valid claims for breach of
warranty or representation against it or them hereunder exceeds an aggregate of
$10,000. Except as herein provided, the liability of any of the Stockholders for
any breach of warranty or representation hereunder shall not exceed the lesser
of (i) $1,000,000 or (ii) value of the Newpark Shares for which his Company
Shares are exchanged in the Merger, for which purpose they shall be valued at
their Closing Value. To the fullest extent permitted by law, Stockholders shall
satisfy their liability hereunder by delivering to Newpark some or all of such
Newpark Shares, valued at their Closing Value, and Newpark shall satisfy its
liability by issuing additional Newpark Shares valued at their Closing Value.
Notwithstanding the foregoing, the limitations contained in the first two
sentence of this Section shall not apply to the indemnification obligations of
the Stockholders under clause (iii) of Section 10.1 and nothing contained herein
shall relieve any of the Stockholders or Newpark of any liability he or it may
have for any intentional breach of representation or warranty or for breach of
any covenants or agreements made herein by such party.
10.3.4 In determining the amount of any damage, loss,
liability, cost or expense suffered by Newpark which gives rise to liability of
Stockholders hereunder, there shall be taken into account the amount of any Tax
benefits actually realized by Newpark and its subsidiaries attributable to such
damage, loss, liability, cost or expense or derived therefrom in the same or any
past or subsequent taxable period, also taking into account the Tax treatment of
the receipt by Newpark of any payment from Stockholders.
10.4 Dispute Resolution; Arbitration. 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, within the survival period specified in Section 8. Newpark and the
Stockholders shall first attempt diligently to resolve any such issue or
dispute. They may, if they desire, attempt to mediate the dispute and shall, if
they choose, do so in accordance with the Commercial Mediation Rules of the
American Arbitration Association ("AAA"), either as written or as modified by
mutual agreement. A written agreement to undertake mediation may be made at any
time. If arbitration proceedings have been instituted, they shall be stayed
until the mediation process is terminated. Any dispute arising out of or related
to this Agreement or its alleged breach that cannot be resolved by mutual
agreement (including mutually agreed mediation) shall be resolved exclusively by
final and binding arbitration, conducted as expeditiously as possible in the
City of Houston, Texas, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. The decision of the arbitrator or
arbitrators 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.
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11. 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 11. If on the date hereof 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
Merger (in which event, as Newpark's sole and exclusive remedy with respect to
the consequences of such loss or damage, all claims of the Company with respect
to such loss or damage and all insurance proceeds arising therefrom shall be for
the account of the Company), or, if it does not so elect, it shall have the
right, which shall be in lieu of any other right or remedy whatsoever, to
terminate this Agreement. In the latter event, all parties shall be released
from liability hereunder.
12. Termination. In addition to any party's right to terminate this
Agreement if any condition precedent to its obligations is not satisfied at or
before the Closing, either Newpark or the Company and the Stockholders may
forthwith terminate this Agreement: (a) subject to clause (b) below, without
liability to the other of them if a bona fide action or proceeding (by and at
the sole instance of a party or parties not an Affiliate or Affiliates of
Newpark or the Company) shall be pending against either party on the date hereof
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.
13. 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 13 by giving notice
of such change to the other party in the manner which is provided in this
Section 13.
The Company: Advanced Chemical Technologies, Inc.
650 North Sam Houston Parkway East, Suite 200
Houston, Texas 77060-5916
Facsimile No.: (713) 847-2556
The Stockholders: Mr. John V. Filecia
3822 Lakewood
Montgomery, Texas 77356
Mr. S. Kim Tillery
1000 Robley Drive, Suite 134
Lafayette, LA 70506y
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Copy to: Mary Frances vonBerg, Esq.
Farnsworth & vonBerg
333 North Sam Houston Parkway, Suite 300
Houston, Texas 77060
Facsimile No.: (281) 931-6032
Newpark: c/o Newpark Resources, Inc.
3850 North Causeway, Suite 1770
Metairie, LA 70002
Attention: Secretary
Facsimile No.: (504) 833-9506
Copy to: Bertram K. Massing, Esq.
Ervin, Cohen & Jessup LLP
9401 Wilshire Boulevard, 9th Floor
Beverly Hills, CA 90212
Facsimile No.: (310) 859-2325
14. Assignment. Rights hereunder shall not be assignable and duties
hereunder shall not be delegable by the Company, Stockholders, Newpark or Fluids
without the prior written consent of the other; consent may be withheld for any
reason or without reason; provided, however, Newpark may, in its sole
discretion, assign any or all of its rights under this Agreement to any of its
Affiliates; provided, further, however, that no such assignment shall relieve
Newpark of any obligation or liability hereunder. 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.
15. Certain Definitions. As used herein, the following terms (whether
used in the singular or the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 25% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the 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.
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<PAGE>
"Closing Value" means the average of the closing prices of
Newpark's Common Stock on the New York Stock Exchange, as reported in The Wall
Street Journal, for the five trading days immediately preceding the third
trading day prior to the date of this Agreement.
"Commission" means the U.S. Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Family Member" means, in the case of a Person who is an
individual, any parent, spouse or lineal descendant (including legally adopted
descendants) of such Person, or the spouse of any such descendant.
"Government Body" means any domestic or foreign federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, or other body exercising or entitled to exercise any
administrative, executive, judicial, legislative, police, regulatory or taxing
authority or power of any nature.
"Hazardous Material Laws" means any and all federal, state and
local laws in effect at or before the date hereof 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
Stockholders or any other executive officer of the Company.
"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.
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<PAGE>
"Permitted Lien(s)" means (a) all liens and encumbrances
disclosed in the Disclosure Letter, (b) landlords', mechanics', carriers',
workers' and similar statutory liens arising in the ordinary course of business
for sums not delinquent, for which adequate reserves or other appropriate
provisions have been made in the Company Financial Statements, (c) deed
restrictions and similar exceptions to clear title not incurred in connection
with indebtedness that do not materially impair the existing use or materially
detract from the value of the assets or property subject thereto, and (d) liens
for current taxes not delinquent, for which adequate reserves or other
appropriate provisions have been made in the Company Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a Government Body.
"Rules and Regulations" means the rules and regulations adopted
by the Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the terms "Taxes" and
"Taxable") means any income, gross receipts, ad valorem, premium, excise, value-
added, sales, use, transfer, franchise, license, severance, stamp, occupation,
service, lease, withholding, employment, payroll, premium, property or windfall
profits tax, alternative or add-on-minimum tax, or other tax, fee or assessment,
together with any interest and any penalty, addition to tax or additional amount
imposed by any governmental authority responsible for the imposition of any such
tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
16. Disclaimer Concerning Tax Consequences. Although the parties
intend that the Plan will be a tax-free reorganization, no party makes any
express or implied warranty to any other party as to the Tax consequences of the
Plan, and all such warranties are hereby expressly disclaimed.
17. 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.
18. Remedies Not Exclusive. Except as provided in Section 11, (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.
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<PAGE>
19. Accountants' and Attorneys' Fees. Newpark, the Company and the
Stockholders shall each pay their own accountants' and attorneys' fees related
to the consummation of the Plan. In any litigation or arbitration relating to
this Agreement, including litigation or arbitration with respect to any
instrument, document or agreement made under or in connection with this
Agreement, the prevailing party shall be entitled to recover its costs and
reasonable attorneys' fees.
20. Payment of Expenses. Whether or not the Plan is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark in connection with this Agreement and the transactions contemplated
hereby, and the 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.
21. 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.
22. 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.
23. 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.
24. 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.
25. Waivers. At any time prior to the Closing, 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.
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<PAGE>
26. Entire Agreement. The Disclosure Letter and all schedules,
exhibits and financial statements provided for herein are a part of this
Agreement. This Agreement and the other agreements and documents provided for in
this Agreement comprise the entire agreement of the parties and supersede all
earlier understandings of the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
THE COMPANY: NEWPARK:
Advanced Chemical Technologies, Inc. Newpark Resources, Inc.
By: /s/ John V. Filecia By: /s/ Matthew W. Hardey
________________________________ _________________________________
John V. Filecia, Chairman of the Matthew W. Hardey, Chief
Board and President Financial Officer
THE STOCKHOLDERS: FLUIDS
Newpark Drilling Fluids, Inc.
/s/ John V. Filecia
___________________________________
John V. Filecia
By: /s/ Matthew W. Hardey
_________________________________
/s/ S. Kim Tillery Matthew W. Hardey, Vice President
___________________________________
S. Kim Tillery
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<PAGE>
EXHIBIT 2.22
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is made and entered
into as of July 24, 1997, by and between _________________ ("Covenantor") and
NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"), ancillary to and as
required by the Agreement and Plan of Reorganization (the "Merger Agreement"),
dated July 24, 1997, by and among Newpark, NEWPARK DRILLING FLUIDS, INC., a
Texas corporation and a wholly-owned subsidiary of Newpark ("Fluids"), ADVANCED
CHEMICAL TECHNOLOGIES, INC., a Texas corporation (the "Company") and the
"Stockholders" so identified in the Merger Agreement (including Covenantor),
pursuant to which the Company is merging into Fluids. 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 consummation of the obligations of Newpark and Fluids 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.
The Territory - All or any part of the following: the States of
Louisiana, Texas, Mississippi and Alabama and the Gulf of Mexico.
<PAGE>
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 until July 31, 2000. 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. If, notwithstanding the foregoing,
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. If any provision of Paragraphs 1 through 4
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<PAGE>
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:
________________________________
________________________________
________________________________
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<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 /s/ Matthew W. Hardey
_____________________________
Matthew W. Hardey, Chief
Financial Officer
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<PAGE>
EXHIBIT 2.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of July 24, 1997, by and between NEWPARK DRILLING FLUIDS, INC., a Texas
corporation ("Employer"), and JOHN V. FILECIA ("Employee"), with reference to
the following facts:
A. Employer is a wholly-owned subsidiary of
NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark").
B. Employee has been employed by ADVANCED CHEMICAL TECHNOLOGIES,
INC., a Texas corporation (the "Company") as its Chairman of the Board and
President.
C. On the date of this Agreement, the Company has been merged with
and into Employer, with Employer continuing as the surviving corporation.
Employer desires to assure itself of the continued services of Employee for a
term expiring no sooner than July 31, 2000, and the parties are entering into
this Agreement for that purpose and in order to set forth the terms of the
employment of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment. Employer hereby employs Employee, and
Employee hereby accepts employment with Employer, for a period commencing on the
date hereof and, except as otherwise provided herein, expiring July 31, 2000,
provided, however, that, each time neither party terminates this Agreement by
written notice given at least sixty (60) days prior to the expiration of the
employment term as last renewed or extended, it shall be automatically renewed
for an additional twelve month period. As used herein, the phrase "employment
term" refers to the entire period that Employee shall be employed hereunder,
whether for the initial period provided above, or whether this Agreement is
terminated earlier or extended automatically as provided herein or by mutual
agreement between Employer and Employee. This Agreement supersedes all
agreements and understandings between Employer and Employee and Employee and the
Company relating to compensation of Employee existing on the date hereof,
including but not limited to salary, commission, bonus and other arrangements,
and all such existing agreements and understandings are hereby terminated.
2. Duties of Employee.
2.1 Employee shall serve as Vice President of Employer and shall
do and perform all services, acts and things necessary or advisable in that
capacity in connection with the conduct of the business of Employer, subject to
the instructions of and policies and limitations set by its Board of Directors.
2.2 Employee shall devote such productive time, ability and
attention to the business of Employer during the employment term as is
reasonably required for the performance of his duties hereunder. Employee may
devote time and effort to personal activities to the extent that such activities
do not materially interfere with the performance of his duties hereunder. If
Employer advises Employee that, in its good faith judgment, such activities are
materially
<PAGE>
interfering with the performance of Employee's duties hereunder, Employee will
promptly take steps to appropriately limit such activities. Subject to the
foregoing, Employee shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior written consent of the
Board of Directors of Employer.
2.3 Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices as an officer, director or
member of any committee of the Board of Directors of Employer or of any direct
or indirect subsidiary of Employer.
3. Compensation of Employee.
3.1 As compensation for his services hereunder, Employee shall
receive a salary at the annual rate of $85,000, payable in equal installments on
Employer's regular payroll dates for executive employees. Employer's Board of
Directors will review Employee's salary annually, and, with the approval of
Newpark's Board of Directors or Compensation Committee, may (but shall be under
no obligation to) increase such salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his salary, a
bonus in such amount, if any, as may be determined by the Board of Directors or
Compensation Committee of Newpark, in its sole discretion.
4. Benefits. Employee shall be entitled to participate in and
receive benefits under all bonus plans, profit-sharing plans, pension plans,
group medical plans and other plans for payment of additional compensation or
benefits to employees of Employer which Employer at any time maintains for
executive employees. To the extent permitted by law, and provided that such
participation does not result in duplicate payments to Employee, Employee shall
also participate in such benefits plans as Newpark makes available to its
executive employees and the executive employees of its subsidiaries.
5. Business Expenses. Employee is authorized to incur reasonable
expenses for promoting and conducting the business of Employer, including
expenditures for entertainment and travel. Employer shall reimburse Employee
monthly for all such business expenses upon presentation of reasonable
documentation establishing the amount, date, place and essential character of
the expenditures.
6. Disability.
6.1 If Employee becomes disabled by reason of sickness, physical
or mental disability or any other cause which materially impairs his ability to
perform his duties under this Agreement with reasonable accommodation for a
period of six consecutive months or for nine months in any twelve-month period,
Employer shall have the option to terminate this Agreement effective immediately
by giving written notice of termination to Employee within a reasonable time
following the end of such period of disability. If Employee becomes temporarily
disabled by reason of sickness, physical or mental disability, or any other
cause so that he is unable to
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<PAGE>
perform efficiently his duties hereunder with reasonable accommodation, he shall
be entitled to compensation as provided for herein until the total period of
such temporary disability shall equal an aggregate of three consecutive months
or an aggregate of six months during any period of twelve consecutive months.
As to any subsequent periods of disability during said twelve month period,
Employee shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant to
the provisions of Paragraph 6.1 above, Employee shall be entitled to salary and
discretionary bonus earned by him prior to the date of termination as provided
for in this Agreement computed pro rata up to and including that date; but he
shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
7.1 This Agreement and the employment of Employee hereunder
may be terminated at any time prior to the expiration of the term of this
Agreement as follows:
7.1.1 By Employer as a result of disability of
Employee as provided in Paragraph 6.1 above, or the death of Employee;
7.1.2 upon the mutual agreement of the parties;
7.1.3 by Employer in the event of: (i) conviction of Employee of
a major felony (whether or not committed in the course of his employment) from
which no appeal has been made, or, if an appeal has been made, upon a final
determination adverse to Employee; or (ii) gross misconduct by Employee causing
material harm to Employer, but only if (x) Employee shall not have discontinued
such gross misconduct within ten days after receiving written notice from
Employer that it will consider the continuation of such gross misconduct cause
for termination of this Agreement, or (y) the gross misconduct is of such a
nature that Employer would be materially prejudiced thereby whether or not
Employee discontinues such gross misconduct;
7.1.4 by Employee if Employer shall fail to cure a material or
default by it under any of the terms of this Agreement within thirty days after
written notice of such breach or default is given by Employee;
7.1.5 by Employer if Employee shall fail to cure a material
breach or default by him under this Agreement within thirty days after written
notice of such breach or default is given by Employer; and
7.2 This Agreement shall not be terminated by any merger or
consolidation where Employer is not the consolidated or surviving corporation or
by any transfer of all or substantially all of the assets of Employer. In the
event of any such merger or consolidation or transfer of assets, the surviving
or resulting corporation or the transferee of the assets of Employer shall be
bound by and shall have the benefit of the provisions of this Agreement; and
Employer shall take all actions necessary to ensure that such corporation or
transferee is bound by the provisions of this Agreement.
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<PAGE>
7.3 Upon termination of this Agreement for any reason whatsoever,
Employee shall return to Employer all automobiles, equipment, books, records,
customer lists, catalogs, invoices, correspondence and other property which was
acquired from or otherwise belongs to Employer, including any property or
documentation developed by Employee in the course of his employment.
8. Proprietary Information and Non-Competition.
8.1 Employee recognizes and acknowledges that the performance
of his services hereunder will necessarily result in disclosure to him of
certain trade secrets and confidential information, including source of supply
information, sales information, customer lists, customer information and
pricing, all of which are special and unique assets and trade secrets of
Employer's business. For the purpose of this Agreement, such information shall
be referred to and is acknowledged as "proprietary information of the Employer."
In view of the foregoing, in addition to and not in limitation of the provisions
of the Noncompetition Agreement executed concurrently herewith by Newpark and
Employee, Employee agrees that:
8.1.1 During and after the employment term, Employee will not
disclose or use any proprietary information of Employer, except for the purpose
of carrying out his duties hereunder, unless such use or disclosure is
specifically consented to in writing by Employer.
8.1.2 For the period of one year after the employment term,
Employee will not in any way, directly or indirectly, for himself or on behalf
of any other person or entity, associate in business as an employer, employee or
otherwise, with any employee, officer or agent of Employer until such person has
terminated employment with Employer for a period of one year.
8.1.3 During the employment term and thereafter, Employee will
not, directly or indirectly, for himself or on behalf of any other person or
entity, induce or attempt to induce any of Employer's personnel to terminate
their relationship with Employer, nor will Employee induce or attempt to induce
any of Employer's personnel to do anything contrary to the best interests of
Employer.
8.2 Employee agrees that in the event of any breach by Employee of
any covenant in this Paragraph 8, Employer shall be entitled, in addition to
other remedies, to immediate injunctive relief if necessary to avoid irreparable
harm and injury.
9. General Provisions.
9.1 Any notices to be given hereunder by either party to the
other shall be in writing and may be effected either by personal delivery,
facsimile, overnight express delivery or mail, registered or certified, return
receipt requested, postage prepaid. Mailed notices shall be addressed to the
parties at the addresses appearing opposite their respective signatures below
and shall be deemed effective 24 hours after being deposited in the U.S. mails,
postage prepaid and property addressed. Each party may change its address by
written notice in accordance with this Paragraph.
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<PAGE>
9.2 This Agreement supersedes and any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Employee and contains all of the covenants and agreements
between the parties with respect to such employment. Each party acknowledges
that no representations, inducements, promises or agreements, oral or otherwise,
have been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of
this Agreement which is in conflict with any applicable statute, rule, or other
law shall be deemed, if possible, to be modified or altered to conform thereto
or, if not possible, to be omitted from this Agreement. The invalidity of any
portion hereof shall not affect the force or effect of the remaining portions
hereof.
9.4 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and the Judicial District Court
of Harris County, Texas, Houston Division, shall be the only proper forum for
disputes hereunder.
9.5 The rights and obligations of Employer under this
Agreement shall enure to the benefit of and shall be binding on the successors
and assigns of Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
NEWPARK DRILLING FLUIDS, INC. Address:
15810 Park Ten Place, Suite 300
Houston, Texas 77084
By: /s/ Matthew W. Hardey
_________________________________
Matthew W. Hardey, Vice President
/s/ John V. Filecia Address:
____________________________________ 3822 Lakewood
John V. Filecia ("Employee") Montgomery, Texas 77356
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<PAGE>
EXHIBIT 2.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of July 24, 1997, by and between NEWPARK DRILLING FLUIDS, INC., a Texas
corporation ("Employer"), and S. KIM TILLERY ("Employee"), with reference to the
following facts:
A. Employer is a wholly-owned subsidiary of NEWPARK RESOURCES, INC.,
a Delaware corporation ("Newpark").
B. Employee has been employed by ADVANCED CHEMICAL TECHNOLOGIES,
INC., a Texas corporation (the "Company") as its Vice President of Operations.
C. On the date of this Agreement, the Company has been merged with
and into Employer, with Employer continuing as the surviving corporation.
Employer desires to assure itself of the continued services of Employee for a
term expiring no sooner than July 31, 2000, and the parties are entering into
this Agreement for that purpose and in order to set forth the terms of the
employment of Employee.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, the parties agree as follows:
1. Term of Employment. Employer hereby employs Employee, and
Employee hereby accepts employment with Employer, for a period commencing on the
date hereof and, except as otherwise provided herein, expiring July 31, 2000,
provided, however, that, each time neither party terminates this Agreement by
written notice given at least sixty (60) days prior to the expiration of the
employment term as last renewed or extended, it shall be automatically renewed
for an additional twelve month period. As used herein, the phrase "employment
term" refers to the entire period that Employee shall be employed hereunder,
whether for the initial period provided above, or whether this Agreement is
terminated earlier or extended automatically as provided herein or by mutual
agreement between Employer and Employee. This Agreement supersedes all
agreements and understandings between Employer and Employee and Employee and the
Company relating to compensation of Employee existing on the date hereof,
including but not limited to salary, commission, bonus and other arrangements,
and all such existing agreements and understandings are hereby terminated.
2. Duties of Employee.
2.1 Employee shall serve as Vice President of Employer and shall
do and perform all services, acts and things necessary or advisable in that
capacity in connection with the conduct of the business of Employer, subject to
the instructions of and policies and limitations set by its Board of Directors.
2.2 Employee shall devote such productive time, ability and
attention to the business of Employer during the employment term as is
reasonably required for the performance of his duties hereunder. Employee may
devote time and effort to personal activities to the extent that such activities
do not materially interfere with the performance of his duties hereunder. If
Employer advises Employee that, in its good faith judgment, such activities are
materially
<PAGE>
interfering with the performance of Employee's duties hereunder, Employee will
promptly take steps to appropriately limit such activities. Subject to the
foregoing, Employee shall not directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization,
whether for compensation or otherwise, without the prior written consent of the
Board of Directors of Employer.
2.3 Employee agrees to serve without additional compensation, if
elected or appointed thereto, in one or more offices as an officer, director or
member of any committee of the Board of Directors of Employer or of any direct
or indirect subsidiary of Employer.
3. Compensation of Employee.
3.1 As compensation for his services hereunder, Employee shall
receive a salary at the annual rate of $70,000, payable in equal installments on
Employer's regular payroll dates for executive employees. Employer's Board of
Directors will review Employee's salary annually, and, with the approval of
Newpark's Board of Directors or Compensation Committee, may (but shall be under
no obligation to) increase such salary.
3.2 For each full or partial fiscal year of Employer during the
employment term, Employer shall pay to Employee, in addition to his salary, a
bonus in such amount, if any, as may be determined by the Board of Directors or
Compensation Committee of Newpark, in its sole discretion.
4. Benefits. Employee shall be entitled to participate in and
receive benefits under all bonus plans, profit-sharing plans, pension plans,
group medical plans and other plans for payment of additional compensation or
benefits to employees of Employer which Employer at any time maintains for
executive employees. To the extent permitted by law, and provided that such
participation does not result in duplicate payments to Employee, Employee shall
also participate in such benefits plans as Newpark makes available to its
executive employees and the executive employees of its subsidiaries.
5. Business Expenses. Employee is authorized to incur reasonable
expenses for promoting and conducting the business of Employer, including
expenditures for entertainment and travel. Employer shall reimburse Employee
monthly for all such business expenses upon presentation of reasonable
documentation establishing the amount, date, place and essential character of
the expenditures.
6. Disability.
6.1 If Employee becomes disabled by reason of sickness, physical
or mental disability or any other cause which materially impairs his ability to
perform his duties under this Agreement with reasonable accommodation for a
period of six consecutive months or for nine months in any twelve-month period,
Employer shall have the option to terminate this Agreement effective immediately
by giving written notice of termination to Employee within a reasonable time
following the end of such period of disability. If Employee becomes temporarily
disabled by reason of sickness, physical or mental disability, or any other
cause so that he is unable to
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<PAGE>
perform efficiently his duties hereunder with reasonable accommodation, he shall
be entitled to compensation as provided for herein until the total period of
such temporary disability shall equal an aggregate of three consecutive months
or an aggregate of six months during any period of twelve consecutive months.
As to any subsequent periods of disability during said twelve month period,
Employee shall not be entitled to compensation.
6.2 In the event of the termination of this Agreement pursuant
to the provisions of Paragraph 6.1 above, Employee shall be entitled to salary
and discretionary bonus earned by him prior to the date of termination as
provided for in this Agreement computed pro rata up to and including that date;
but he shall not be entitled to compensation after the date of termination.
7. Termination of Employment.
7.1 This Agreement and the employment of Employee hereunder may
be terminated at any time prior to the expiration of the term of this Agreement
as follows:
7.1.1 By Employer as a result of disability of Employee as
provided in Paragraph 6.1 above, or the death of Employee;
7.1.2 upon the mutual agreement of the parties;
7.1.3 by Employer in the event of: (i) conviction of
Employee of a major felony (whether or not committed in the course of his
employment) from which no appeal has been made, or, if an appeal has been made,
upon a final determination adverse to Employee; or (ii) gross misconduct by
Employee causing material harm to Employer, but only if (x) Employee shall not
have discontinued such gross misconduct within ten days after receiving written
notice from Employer that it will consider the continuation of such gross
misconduct cause for termination of this Agreement, or (y) the gross misconduct
is of such a nature that Employer would be materially prejudiced thereby whether
or not Employee discontinues such gross misconduct;
7.1.4 by Employee if Employer shall fail to cure a
material or default by it under any of the terms of this Agreement within thirty
days after written notice of such breach or default is given by Employee;
7.1.5 by Employer if Employee shall fail to cure a
material breach or default by him under this Agreement within thirty days after
written notice of such breach or default is given by Employer; and
7.2 This Agreement shall not be terminated by any merger or
consolidation where Employer is not the consolidated or surviving corporation or
by any transfer of all or substantially all of the assets of Employer. In the
event of any such merger or consolidation or transfer of assets, the surviving
or resulting corporation or the transferee of the assets of Employer shall be
bound by and shall have the benefit of the provisions of this Agreement; and
Employer shall take all actions necessary to ensure that such corporation or
transferee is bound by the provisions of this Agreement.
-3-
<PAGE>
7.3 Upon termination of this Agreement for any reason
whatsoever, Employee shall return to Employer all automobiles, equipment, books,
records, customer lists, catalogs, invoices, correspondence and other property
which was acquired from or otherwise belongs to Employer, including any property
or documentation developed by Employee in the course of his employment.
8. Proprietary Information and Non-Competition.
8.1 Employee recognizes and acknowledges that the performance of
his services hereunder will necessarily result in disclosure to him of certain
trade secrets and confidential information, including source of supply
information, sales information, customer lists, customer information and
pricing, all of which are special and unique assets and trade secrets of
Employer's business. For the purpose of this Agreement, such information shall
be referred to and is acknowledged as "proprietary information of the Employer."
In view of the foregoing, in addition to and not in limitation of the provisions
of the Noncompetition Agreement executed concurrently herewith by Newpark and
Employee, Employee agrees that:
8.1.1 During and after the employment term, Employee will
not disclose or use any proprietary information of Employer, except for the
purpose of carrying out his duties hereunder, unless such use or disclosure is
specifically consented to in writing by Employer.
8.1.2 For the period of one year after the employment
term, Employee will not in any way, directly or indirectly, for himself or on
behalf of any other person or entity, associate in business as an employer,
employee or otherwise, with any employee, officer or agent of Employer until
such person has terminated employment with Employer for a period of one year.
8.1.3 During the employment term and thereafter, Employee
will not, directly or indirectly, for himself or on behalf of any other person
or entity, induce or attempt to induce any of Employer's personnel to terminate
their relationship with Employer, nor will Employee induce or attempt to induce
any of Employer's personnel to do anything contrary to the best interests of
Employer.
8.2 Employee agrees that in the event of any breach by Employee
of any covenant in this Paragraph 8, Employer shall be entitled, in addition to
other remedies, to immediate injunctive relief if necessary to avoid irreparable
harm and injury.
9. General Provisions.
9.1 Any notices to be given hereunder by either party to the
other shall be in writing and may be effected either by personal delivery,
facsimile, overnight express delivery or mail, registered or certified, return
receipt requested, postage prepaid. Mailed notices shall be addressed to the
parties at the addresses appearing opposite their respective signatures below
and shall be deemed effective 24 hours after being deposited in the U.S. mails,
postage prepaid and property addressed. Each party may change its address by
written notice in accordance with this Paragraph.
-4-
<PAGE>
9.2 This Agreement supersedes and any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of Employee and contains all of the covenants and agreements between
the parties with respect to such employment. Each party acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, which are not embodied herein, and that no other
agreement, statement or promise not contained in this Agreement shall be valid
or binding. Any modification of this Agreement will be effective only if it is
in writing signed by the party to be charged.
9.3 Any paragraph, sentence, phrase, or other provision of this
Agreement which is in conflict with any applicable statute, rule, or other law
shall be deemed, if possible, to be modified or altered to conform thereto or,
if not possible, to be omitted from this Agreement. The invalidity of any
portion hereof shall not affect the force or effect of the remaining portions
hereof.
9.4 This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and the Judicial District Court
of Harris County, Texas, Houston Division, shall be the only proper forum for
disputes hereunder.
9.5 The rights and obligations of Employer under this Agreement
shall enure to the benefit of and shall be binding on the successors and assigns
of Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
NEWPARK DRILLING FLUIDS, INC. Address:
15810 Park Ten Place, Suite 300
Houston, Texas 77084
By: /s/ Matthew W. Hardey
__________________________________
Matthew W. Hardey, Vice President
/s/ S. Kim Tillery Address:
_____________________________________
S. Kim Tillery ("Employee") 1000 Robley Drive, Suite 134
Lafayette, LA 70506
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<PAGE>
EXHIBIT 5.1
[ERVIN, COHEN & JESSUP LLP LETTERHEAD APPEARS HERE]
August 18, 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 260,465 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 considered
advisable, we are of the opinion that the 260,465 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 May 14, 1997, appearing
in Amendment No. 1 to the Annual Report on Form 10-K/A of Newpark Resources,
Inc. for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
August 15, 1997
