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EXHIBIT 4.2
AGREEMENT
BETWEEN NEWPARK RESOURCES, INC.
AND FLETCHER INTERNATIONAL, LTD.
DATED AS OF DECEMBER 27, 2000
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AGREEMENT
This Agreement (this "Agreement") dated as of December 27,
2000 is entered into by and between Newpark Resources, Inc., a corporation
organized under the laws of Delaware (together with its successors, "Newpark"),
and Fletcher International, Ltd., a company organized under the laws of Bermuda
(together with its successors, "Fletcher").
The parties hereto agree as follows:
1. Purchase and Sale. In consideration of and upon the basis
of the representations, warranties and agreements and subject to the terms and
conditions set forth in this Agreement:
a. Fletcher agrees to purchase from Newpark, and
Newpark agrees to sell to Fletcher on the Closing Date (as defined
below), in accordance with Section 2 below, 120,000 shares (the
"Preferred Shares") of Newpark's Series C Convertible Preferred Stock,
liquidation preference $250 per share (the "Series C Preferred Stock"),
having the terms and conditions set forth in the Certificate of Rights
and Preferences attached hereto as Annex A (the "Certificate of Rights
and Preferences"), at an aggregate purchase price of $30,000,000.
Fletcher shall have the right to convert the outstanding Preferred
Shares into shares of Common Stock in the manner, and subject to the
terms, specified in this Agreement and in the Certificate of Rights and
Preferences, respectively.
b. The closing (the "Closing") of the sale of the
Preferred Shares shall occur on the Trading Day following the
satisfaction or, if applicable, waiver of the conditions set forth in
Sections 13 and 14 hereof, or at such other date and time as Fletcher
and Newpark shall mutually agree (such date, the "Closing Date"). As
used herein, the term "Common Shares" means the shares of Common Stock
issued and/or issuable under this Agreement, including shares issuable
upon conversion of or as dividends under the Preferred Shares and all
other shares issuable under the Certificate of Rights and Preferences
or this Agreement; the term "Investment Securities" means the Preferred
Shares issued hereunder and all Common Shares; the term "Trading Day"
means any day on which the Common Stock may be traded on the NYSE; and
the term "NYSE" means the New York Stock Exchange, but if the New York
Stock Exchange is not then the principal U.S. trading market for the
Common Stock, then "NYSE" shall be deemed to mean the principal U.S.
national securities exchange (as defined in the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) on which the Common Stock is
then traded, or if such Common Stock is not then listed or admitted to
trading on any national securities exchange but is designated as a
national market system security or a Nasdaq SmallCap Market Security by
the NASD, then such market system,
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or if such Common Stock is not listed or quoted on any of the
foregoing, then the OTC Bulletin Board.
2. Closing. The Closing shall take place initially via
facsimile on the Closing Date in the manner set forth below; provided that
original certificates representing shares of Series C Preferred Stock shall be
delivered via Federal Express on the second Trading Day following the Closing
Date to Fletcher as Fletcher instructs in writing, and provided, further, that
each original preferred stock certificate issued in accordance with this Section
2 shall represent 20,000 shares of Series C Preferred Stock (except that to the
extent the number of shares of Series C Preferred Stock to be delivered at any
given time is not evenly divisible by 20,000, one stock certificate shall
represent the remaining shares). At the Closing, the following deliveries shall
be made:
a. Series C Preferred Stock. Newpark shall deliver to
Fletcher six (6) stock certificates, each representing 20,000 shares of
Series C Preferred Stock duly registered on the books of Newpark as
instructed by Fletcher.
b. Purchase Price. Fletcher shall cause to be wire
transferred to Newpark, in accordance with the instructions set forth
in Section 19, the aggregate purchase price of $30,000,000 in
immediately available United States dollars.
c. Closing Documents. The closing documents required
by Sections 13 and 14 shall be delivered to Fletcher and Newpark,
respectively.
d. Delivery Notice. An executed copy of the delivery
notice in the form attached hereto as Annex B shall be delivered to
Fletcher.
The deliveries specified in this Section 2 shall be deemed to occur
simultaneously as part of a single transaction, and no delivery shall be deemed
to have been made until all such deliveries have been made.
3. Representations and Warranties of Newpark. Newpark hereby
represents and warrants to Fletcher as of the date hereof and on the Closing
Date, as follows:
a. Newpark has been duly incorporated and is validly
existing in good standing under the laws of Delaware or, after the
Closing Date, if another entity has succeeded Newpark in accordance
with the terms hereof, under the laws of one of the states of the
United States.
b. The execution, delivery and performance of this
Agreement and the Certificate of Rights and Preferences by Newpark
(including the issuance of the Investment Securities) have been duly
authorized by all requisite corporate action and no
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further consent or authorization of Newpark, its Board of Directors or
its shareholders is required, except as otherwise contemplated by this
Agreement.
c. This Agreement has been duly executed and
delivered by Newpark and, when this Agreement is duly authorized,
executed and delivered by Fletcher, will be a valid and binding
agreement enforceable against Newpark in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
d. Newpark has full corporate power and authority
necessary to execute and deliver this Agreement and to perform its
obligations hereunder and under the Certificate of Rights and
Preferences (including the issuance of the Investment Securities).
e. No consent, approval, authorization or order of
any court, governmental agency or other body is required for execution
and delivery by Newpark of this Agreement or the performance by Newpark
of any of its obligations hereunder and under the Certificate of Rights
and Preferences other than such as may already have been received,
except as otherwise contemplated by this Agreement.
f. Neither the execution and delivery by Newpark of
this Agreement nor the performance by Newpark of any of its obligations
hereunder and under the Certificate of Rights and Preferences:
(i) violates, conflicts with, results in a
breach of, or constitutes a default (or an event which with
the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the
certificates of incorporation or by-laws of Newpark or any of
its subsidiaries, (B) any decree, judgment, order, law,
treaty, rule, regulation or determination of which Newpark is
aware (or would be aware after due inquiry) of any court,
governmental agency or body, or arbitrator having jurisdiction
over Newpark or any of its subsidiaries or any of their
respective properties or assets, (C) the terms of any bond,
debenture, note or any other evidence of indebtedness, or any
agreement, stock option or other similar plan, indenture,
lease, mortgage, deed of trust or other instrument to which
Newpark or any of its subsidiaries is a party, by which
Newpark or any of its subsidiaries is bound, or to which any
of the properties or assets of Newpark or any of its
subsidiaries is subject, (D) the terms of any "lock-up" or
similar provision of any underwriting or similar agreement to
which Newpark or any of its subsidiaries is a party or (E) any
rule or regulation of the National Association of Securities
Dealers, Inc. or the NYSE (subject to obtaining the Required
Consents under circumstances contemplated by Section 6(b) of
this Agreement) or any rule or regulation of the markets where
Newpark's securities are publicly traded applicable to Newpark
or the transactions contemplated here by; or
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(ii) results in the creation or imposition
of any lien, charge or encumbrance upon any Investment
Securities or upon any of the properties or assets of Newpark
or any of its subsidiaries.
g. Newpark has validly reserved for issuance to
Fletcher 120,000 shares of Series C Preferred Stock pursuant to this
Agreement and 6,100,000 shares of Common Stock (or such greater number
as may be required by Section 9(g)) for issuance upon conversion of the
Preferred Shares. When issued to Fletcher against payment therefor,
each Investment Security:
(1) will have been duly and validly
authorized, duly and validly issued, fully paid and
non-assessable;
(2) will be free and clear of any security
interests, liens, claims or other encumbrances (other
than security interests, liens, claims or other
encumbrances created solely by Fletcher); and
(3) will not have been issued or sold in
violation of any preemptive or other similar rights
of the holders of any securities of Newpark.
h. Newpark satisfies all maintenance criteria of the
New York Stock Exchange or, after the Closing Date, has a valid
exemption from such criteria of which it has previously notified
Fletcher in writing. No present set of facts or circumstances will
(with the passage of time or the giving of notice or both or neither)
cause any of the Common Stock to be delisted from the New York Stock
Exchange. All of the Covered Securities (as defined in Section 4(b))
will, when issued, be duly listed and admitted for trading on all of
the markets where shares of Common Stock are traded, including the New
York Stock Exchange within five (5) days of the Closing.
i. There is no pending or, to the best knowledge of
Newpark, threatened action, suit, proceeding or investigation before
any court, governmental agency or body, or arbitrator having
jurisdiction over Newpark or any of its affiliates that would affect
the execution by Newpark of, or the performance by Newpark of its
obligations under, this Agreement or the Certificate of Rights and
Preferences.
j. Since December 31, 1997, none of Newpark's filings
with the United States Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Securities Act") or
under Section 13(a) or 15(d) of the Exchange Act (each an "SEC Filing")
contained any untrue statement of a material fact or
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omitted to state any material fact necessary in order to make the
statements, in the light of the circumstances under which they were
made, not misleading. Since the date of Newpark's most recent SEC
Filing, there has not been, and Newpark is not aware of, any
development that is reasonably likely to result in any material adverse
change in the condition, financial or otherwise, or in the business
affairs or prospects of Newpark, whether or not arising in the ordinary
course of business.
k. The offer and sale of the Investment Securities to
Fletcher pursuant to this Agreement will, subject to compliance by
Fletcher with the applicable representations and warranties contained
in Section 7 hereof and with the applicable covenants and agreements
contained in Section 11 hereof, be made in accordance with the
provisions and requirements of Securities Act Section 4(2) or
Regulation D promulgated under the Securities Act and any applicable
state law.
l. As of the date hereof, the authorized capital
stock of Newpark consists of 100,000,000 shares of Common Stock and
1,000,000 shares of preferred stock, par value $0.01 ("Preferred
Stock"). As of December 19, 2000, (A) 69,562,429 shares of Common Stock
and 270,000 shares of Preferred Stock were issued and outstanding, (B)
9,980,587 shares of Common Stock and no shares of Preferred Stock are
currently reserved and subject to issuance upon the exercise of
outstanding stock options, warrants or other convertible rights (other
than shares of Common Stock issuable upon the conversion of outstanding
Preferred Stock), (C) 668 shares of Common Stock are held in the
treasury of Newpark, (D) up to 3,378,911 additional shares of Common
Stock may be issued under the 1993 Non-Employee Directors' Stock Option
Plan, the Amended and Restated Newpark Resources, Inc. 1995 Incentive
Stock Option Plan (including shares that may be issued as a result of
subsequent annual increases permitted under this plan), the Newpark
Resources, Inc. Cash and Stock Incentive Plan and the 1999 Employee
Stock Purchase Plan (collectively, the "Benefit Plans"), (E) 187,330
shares of Common Stock reserved for issuance as dividends on the Series
A Cumulative Perpetual Preferred Stock, (F) 523,070 shares of Common
Stock reserved for issuance as dividends on the Series B Convertible
Preferred Stock and (G) 5,500,000 shares of Common Stock reserved for
issuance upon conversion of the currently outstanding Series B
Convertible Preferred Stock and a presently indeterminate number of
shares of Common Stock reserved for issuance upon conversion of the
currently outstanding Series A Cumulative Perpetual Preferred Stock.
All of the outstanding shares of Common Stock are, and all shares of
capital stock which may be issued pursuant to stock options, warrants
or other convertible rights will be, when issued and paid for in
accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and non-assessable and free of any preemptive rights
in respect thereof. As of the date hereof, except as set forth above,
and except for shares of Common Stock or other securities issued upon
conversion, exchange, exercise or purchase associated with the
securities, options, warrants, rights and other instruments referenced
above, no shares of capital stock or other voting securities of Newpark
were outstanding, no equity equivalents, interests in the ownership
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or earnings of Newpark or other similar rights were outstanding, and
there were no existing options, warrants, calls, subscriptions or other
rights or agreements or commitments relating to the capital stock of
Newpark or any of its subsidiaries or obligating Newpark or any of its
subsidiaries to issue, transfer, sell or redeem any shares of capital
stock, or other equity interest in, Newpark or any of its subsidiaries
or obligating Newpark or any of its subsidiaries to grant, extend or
enter into any such option, warrant, call, subscription or other right,
agreement or commitment. Attached hereto as Schedule 3(l) is a true and
correct list as of the date of this Agreement of all outstanding
options, warrants, calls, subscriptions and other rights or agreements
or commitments relating to the issuance of additional shares of capital
stock of Newpark and with respect to each a description of the number
and class of securities and the exercise price thereof; provided that
with respect to Benefit Plans, such schedule may summarize the total
number of shares subject to, the range of exercise prices under and the
average exercise prices of such options, warrants, calls, or other
rights issued under the Benefit Plans.
m. Solvency. The sum of the assets of Newpark, both
at a fair valuation and at present fair salable value, exceeds its
liabilities, including contingent liabilities, Newpark has sufficient
capital with which to conduct its business as presently conducted and
as proposed to be conducted and Newpark has not incurred debts, and
does not intend to incur debts, beyond its ability to pay such debts as
they mature. For purposes of this paragraph, "debt" means any liability
on a claim, and "claim" means (x) a right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured, or (y) a right to an equitable remedy for breach
of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured, or
unsecured. With respect to any such contingent liabilities, such
liabilities are computed at the amount which, in light of all the facts
and circumstances existing at the time, represents the amount which can
reasonably be expected to become an actual or matured liability.
n. Audited Financials. Attached hereto as Annex C is
a true, correct and complete copy of (i) the report of Deloitte &
Touche LLP to the board of directors and shareholders of Newpark dated
March 26, 1999 (March 27, 2000 as to Note D thereto), together with the
accompanying consolidated financial statements and schedules of Newpark
at December 31, 1998 and the results of Newpark's operations and cash
flows for each of the two (2) years in the period ended December 31,
1998 (ii) the report of Arthur Andersen LLP dated March 27, 2000,
together with the accompanying consolidated financial statements and
schedules of Newpark at December 31, 1999 and the results of Newpark's
operations and cash flows for the year ended December 31, 1999, as such
report appears in the Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 filed by Newpark with the SEC (the "Auditor
Report") and (iii) the written consent of Arthur Andersen LLP to the
inclusion of its report described in clause (ii) herein.
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o. Equivalent Value. As of the date hereof, the
consideration that Newpark is receiving from Fletcher is equivalent in
value to the consideration Fletcher is receiving from Newpark pursuant
to this Agreement. As of the date hereof, under the terms of this
Agreement, Newpark is receiving fair consideration from Fletcher for
the agreements, covenants, representations and warranties made by
Newpark to Fletcher.
p. No Non-Public Information. Fletcher has not
requested from Newpark, and Newpark has not furnished to Fletcher, any
material non-public information concerning Newpark or its subsidiaries.
4. Registration Provisions.
a. Newpark shall as soon as practicable and at its
own expense, but in no event later than thirty (30) days after the
Closing Date, file a Registration Statement (as defined below) under
the Securities Act covering the resale of all of the Common Shares and
shall use its best efforts to cause such Registration Statement to be
declared effective not later than the 75th day following the Closing
Date (the "Required Registration Date"). The obligations to have the
Registration Statement declared effective and to maintain such
effectiveness as provided in this Section 4 (subject to any Blackout
Period that does not constitute a Blackout Violation) are referred to
herein as the "Registration Requirement." Pursuant to the preceding
sentence, Newpark shall register pursuant to such Registration
Statement not less than the number of shares of Common Stock equal at
least to 1.5 times the total number of Common Shares issued or issuable
under this Agreement (including all shares issued or issuable under the
Preferred Shares, whether upon conversion, as dividends within the year
following such date (assuming that all dividends are made as required
in the Certificate of Rights and Preferences and are made in Common
Stock) or otherwise on an as-converted basis as of such date) (the
"Registrable Amount"). Newpark shall promptly amend such Registration
Statement (or, if necessary, file a new Registration Statement) at any
time that the number of Common Shares issued and issuable under this
Agreement exceeds eighty percent (80%) of the number of shares then
registered so that the Registrable Amount (as determined on such date)
of Common Shares shall be registered and freely tradable.
b. Each Common Share is a "Covered Security" and the
registration statement filed or required to be filed under the
Securities Act in accordance with Section 4(a) hereof is referred to as
the "Registration Statement". Newpark shall provide prompt written
notice to Fletcher when the Registration Statement has been declared
effective by the SEC.
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c. Newpark will use its best efforts to: (A) keep the
Registration Statement effective until the earlier of (x) the later of
(i) the second anniversary of the issuance of the last Covered Security
that may be issued, or (ii) such time as all of the Covered Securities
issued or issuable to Fletcher can be sold by Fletcher or any of its
affiliates within a three (3)-month period without compliance with the
registration requirements of the Securities Act pursuant to Rule 144
under the Securities Act ("Rule 144") or (y) the date all of the
Covered Securities issued or issuable shall have been sold by Fletcher;
(B) prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection with
the Registration Statement (as so amended and supplemented from time to
time, the "Prospectus") as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
Covered Securities by Fletcher or any of its affiliates; (C) furnish
such number of Prospectuses and other documents incident thereto,
including any amendment of or supplement to the Prospectus, as Fletcher
from time to time may reasonably request; (D) cause all Covered
Securities to be listed on each securities exchange and quoted on each
quotation service on which similar securities issued by Newpark are
then listed or quoted; (E) provide a transfer agent and registrar for
all Covered Securities and a CUSIP number for all Covered Securities;
(F) otherwise comply with all applicable rules and regulations of the
SEC, the New York Stock Exchange and any other exchange or quotation
service on which the Covered Securities are obligated to be listed or
quoted under this Agreement; and (G) file the documents required of
Newpark and otherwise obtain and maintain requisite blue sky clearance
in (x) New York, Delaware and all other jurisdictions in which any of
the shares of Common Stock were originally sold and (y) all other
states specified in writing by Fletcher, provided, however, that as to
this clause (y), Newpark shall not be required to qualify to do
business or consent to service of process in any state in which it is
not now so qualified or has not so consented. Fletcher shall have the
right to approve the description of the plan of distribution and all
other references to Fletcher contained in any Registration Statement
and any Prospectus.
d. Newpark shall furnish to Fletcher upon request a
reasonable number of copies of a supplement to or an amendment of any
Prospectus as may be necessary in order to facilitate the public sale
or other disposition of all or any of the Covered Securities by
Fletcher or any of its affiliates pursuant to the Registration
Statement.
e. With a view to making available to Fletcher and
its affiliates the benefits of Rule 144 and Form S-3 under the
Securities Act, Newpark covenants and agrees to: (A) make and keep
available adequate current public information (within the meaning of
Rule 144(c)) concerning Newpark, until the earlier of (x) the second
anniversary of the issuance of the last Covered Security to be issued
or (y) such date as all of the Covered Securities shall have been
resold by Fletcher or any of its affiliates; and (B) furnish to
Fletcher upon request, as long as Fletcher owns any Covered Securities,
(x)
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a written statement by Newpark that it has complied with the reporting
requirements of the Securities Act and the Exchange Act, (y) a copy of
the most recent annual or quarterly report of Newpark, and (z) such
other information as may be reasonably requested in order to avail
Fletcher and its affiliates of Rule 144 or Form S-3 with respect to
such Covered Securities.
f. Notwithstanding anything else in this Section 4,
if, at any time during which a Prospectus is required to be delivered
in connection with the sale of any Covered Security, Newpark determines
in good faith that a development has occurred or a condition exists as
a result of which the Registration Statement or the Prospectus contains
a material misstatement or omission, or that a material transaction in
which Newpark is engaged or proposes to engage would require an
amendment to the Registration Statement or a supplement to the
Prospectus and the disclosure of such transaction would be premature or
injurious to the consummation of the transaction, Newpark will
immediately notify Fletcher thereof by telephone and in writing. Upon
receipt of such notification, Fletcher and its affiliates will
immediately suspend all offers and sales of any Covered Security
pursuant to the Registration Statement. In such event, Newpark will
amend or supplement the Registration Statement as promptly as
practicable and will use its best efforts to take such other steps as
may be required to permit sales of the Covered Securities thereunder by
Fletcher and its affiliates in accordance with applicable federal and
state securities laws. Newpark will promptly notify Fletcher after it
has determined in good faith that such sales have become permissible in
such manner and will promptly deliver copies of the Registration
Statement and the Prospectus (as so amended or supplemented) to
Fletcher in accordance with paragraphs (c) and (d) of this Section 4.
Notwithstanding the foregoing, (A) under no circumstances shall Newpark
be entitled to exercise its right to suspend sales of any Covered
Securities pursuant to the Registration Statement more than twice in
any twelve (12)-month period, (B) the period during which such sales
may be suspended (each a "Blackout Period") shall not exceed thirty
(30) days, and (C) no Blackout Period may commence less than thirty
(30) days after the end of the preceding Blackout Period. If any
Blackout Period shall exceed the duration or frequency limits set forth
in clause (A) or (B) (a "Blackout Violation"), then from the first day
of such Blackout Violation until the first anniversary of the last day
of the Blackout Period causing such Blackout Violation, the Conversion
Price under the Certificate of Rights and Preferences shall decrease by
two and one-half percent (2.5%). If a second Blackout Violation occurs
before (or if the original Blackout Violation shall continue on) the
first anniversary of the first day of the original Blackout Violation,
then the Conversion Price under the Preferred Shares shall decrease by
an additional two and one-half percent (2.5%). Each subsequent Blackout
Violation occurring on or before the anniversary of the first day of
such Blackout Violation shall cause the Conversion Price to decrease by
two and one-half percent (2.5%) in addition to all prior decreases,
provided that not more than one such additional decrease shall take
effect in any twelve (12)-month period. All such adjustments in the
Conversion Price shall continue until twelve (12) months shall have
passed without a Blackout Violation.
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Upon the commencement of a Blackout Period pursuant to this
Section 4, Fletcher will notify Newpark of any contract to sell,
assign, deliver or otherwise transfer any Covered Security (each a
"Sales Contract") that Fletcher or any of its affiliates has entered
into prior to the commencement of such Blackout Period and that would
require delivery of such Covered Securities during such Blackout
Period, which notice will contain the aggregate sale price and volume
of Covered Securities pursuant to such Sales Contract. Upon receipt of
such notice, Newpark will immediately notify Fletcher of its election
either (i) to terminate the Blackout Period and, as promptly as
practicable, amend or supplement the Registration Statement or the
Prospectus in order to correct the material misstatement or omission
and deliver to Fletcher copies of such amended or supplemented
Registration Statement and Prospectus in accordance with paragraphs (c)
and (d) of this Section 4, or (ii) to continue the Blackout Period in
accordance with this paragraph. If Newpark elects to continue the
Blackout Period (and, in any case, if a Blackout Violation occurs), and
Fletcher or any of its affiliates are therefore unable to consummate
the sale of Covered Securities pursuant to the Sales Contract, Newpark
will promptly indemnify each Fletcher Indemnified Party (as such term
is defined in Section 17(a) below) against any Proceeding (as such term
is defined in Section 17(a) below) that each Fletcher Indemnified Party
may incur arising out of or in connection with Fletcher's breach or
alleged breach of any such Sales Contract, and Newpark shall reimburse
each Fletcher Indemnified Party for any reasonable costs or expenses
(including reasonable legal fees) incurred by such party in
investigating or defending any such Proceeding (collectively, the
"Indemnification Amount").
g. In addition to any other remedies available to
Fletcher under this Agreement, if the Registration Statement has not
been declared effective by the Required Registration Date or such
Registration Statement is not available with respect to all Covered
Securities (except during a Blackout Period or a Blackout Violation),
then the Conversion Price (as defined in the Certificate of Rights and
Preferences) shall be permanently decreased by two and one-half percent
(2.5%) for each month (or portion thereof), compounded monthly, that
such Registration Statement shall not have been declared effective or
such Registration Statement is not available with respect to all
Covered Securities (except during a Blackout Period or a Blackout
Violation); provided that any adjustment in this Section 4(g) caused by
a Registration Statement that is available with respect to fewer than
all of the Covered Securities shall affect all Covered Securities
unless such Registration Statement is unavailable for less than 5,000
shares of Covered Securities, in which case such adjustment shall only
affect such lesser number of Covered Securities.
h. Nothing in this Section 4 shall be construed to
impose an obligation upon Newpark to register the Preferred Shares.
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5. "Market Stand-Off" Agreement. If requested by Newpark and
an underwriter in a firm commitment underwritten public offering of Common Stock
with net proceeds of at least $25,000,000 to Newpark, after underwriter's
discounts or commissions and other fees or expenses, Fletcher shall not sell or
otherwise transfer or dispose of any Common Stock (other than Common Stock
included in the registration) during the ninety (90) day period (or such shorter
period, if so notified by Newpark in writing) following the effective date of a
registration statement of Newpark filed under the Securities Act, provided that:
a. such agreement shall only apply to registration
statements of Newpark including securities to be sold on its behalf to
the public in an underwritten offering where the effective date of any
such registration statement shall not occur before the first
anniversary of the effective date of the immediately prior registration
statement with respect to which Fletcher was required to provide such
agreement;
b. all officers and directors of Newpark, all
purchasers or subsequent holders of Offered Shares (other than
subsequent holders who acquire such securities through bona fide
purchases in the public market) and all holders of Newpark Series A
Cumulative Perpetual Preferred Stock are bound by and have entered into
similar agreements; and
c. Newpark shall (and shall cause such underwriter
to) use best efforts to cause such stand-off period not to exist or, if
it does exist, to terminate at the earliest practicable date.
The obligations described in this Section 5 shall not apply to a registration
relating solely to employee benefit plans on Form S-1 or Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a transaction on Form S-4 or similar forms that may be promulgated in the
future.
6. Conversion of Preferred Shares; Dividends.
a. Preferred Shares are convertible into Common
Shares in accordance with the terms and conditions set forth in Section
6 of the Certificate of Rights and Preferences. The form of the
"Preferred Stock Conversion Notice" to be executed and delivered by
Fletcher to Newpark as specified therein is attached hereto as Annex D
and the form of the "Preferred Stock Conversion Delivery Notice" to be
executed and delivered by Newpark to Fletcher as specified therein is
attached hereto as Annex E.
b. In the event the number of Common Shares issued
and/or issuable on any date (a "Trigger Date") together with any Common
Shares issuable as dividends within one (1) year following such date
pursuant to this Agreement, assuming that all such dividends are paid
in Common Stock and are paid as they accrue, in each case
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without regard to any 65 Day Notice requirements, would result in
Fletcher receiving more than seventeen and one-half percent (17.5%) of
the shares of Common Stock outstanding as of the date of this Agreement
(the "Original Number"), Newpark (A) shall not issue Common Shares (the
"Issuance Blockage") to the extent that the total number of Common
Shares issued hereunder would exceed nineteen and ninety-nine
one-hundredths percent (19.99%) of the Original Number and such
circumstance would require the approval (the "Required Consent") of the
holders of Common Stock pursuant to the listing requirements or rules
of the New York Stock Exchange (or such other U.S. national securities
exchange on which Common Stock is then listed), (B) shall notify
Newpark's stockholders of a stockholder meeting for the purpose of
voting on the Required Consent within twenty (20) Trading Days from the
Trigger Date, which meeting shall be held on or before the 60th
calendar day after the Trigger Date, and (C) shall otherwise use its
best efforts to obtain, on or before the 60th day after the Trigger
Date, the Required Consent for the issuance of all Common Shares issued
or issuable under this Agreement (including, but not limited to, all
previously issued Common Shares and all unconverted Preferred Shares
and all shares that may become issuable as dividends under the
Preferred Shares, assuming that all such dividends are paid in Common
Stock and are paid as they accrue) including, but not limited to,
recommending to Newpark's stockholders that such stockholders give the
Required Consent and not withdrawing such recommendation. If the
Required Consent has not been obtained within such sixty (60)-day
period, or Newpark otherwise does not have sufficient authorized shares
to fulfill its obligation, Fletcher shall have the right to convert up
to that amount of the Preferred Shares, the conversion of which would
result in the total number of shares issued hereunder exceeding
nineteen and ninety-nine one-hundredths percent (19.99%) of the
Original Number or that number which is unavailable for issuance, as
the case may be, into the rights described herein (the "Excess
Rights"). Fletcher shall exercise such right to obtain Excess Rights by
delivering one or more written notices in the form attached hereto as
Annex F (an "Excess Rights Notice") to Newpark from time to time. The
date an Excess Rights Notice is delivered shall be an "Excess Notice
Date." The stated value of the Excess Rights shall be an amount equal
to the product of (A) the Average Price on the Excess Notice Date and
(B) the number of Common Shares that would be issuable in respect of
such conversion but for the Issuance Blockage (without regard to any
requirement to deliver a 65 Day Notice). From creation until the first
anniversary of the date on which the Required Consent is obtained,
Excess Rights may, in whole or in part, from time to time, be converted
into additional Preferred Shares (identical in all respects to the
Preferred Shares originally issued hereunder, provided that such shares
may bear a different name (e.g., "Series C-1 Convertible Preferred
Stock")) at the ratio of $250 of stated value of Excess Rights to one
Preferred Share.
c. The aggregate number of Common Shares issuable
under this Agreement and the Agreement by and between Fletcher and
Newpark dated as of May 30, 2000 (the "May 30, 2000 Agreement") shall
not exceed the Maximum Number of shares of Common Stock. The "Maximum
Number" equals the sum of 6,782,337 plus the
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<PAGE> 14
Exercisable Number. The "Exercisable Number" is initially zero and
thereafter may be increased upon expiration of a sixty-five (65) day
period (the "Notice Period") after either (i) Fletcher delivers a
notice (a"65 Day Notice") to Newpark designating an aggregate number of
Common Shares in excess of the Maximum Number which shall be issuable
upon conversion of the Preferred Shares and the Series B Convertible
Preferred Stock and the warrant issued under the May 30, 2000
Agreement, or (ii) Newpark delivers a notice (an "Increase Notice")
stating the increase, if any (the "Increase"), in the aggregate number
of Common Shares outstanding as of the last day of the preceding month
over the number outstanding as of the last day of the second preceding
month, or in the case of the last day of the month immediately
following the Closing Date, the number of shares outstanding specified
in Section 3(l), in which event the Exercisable Number shall be
automatically increased by the number which is nine and three-quarters
percent (9.75%) of the Increase. A 65 Day Notice may be given at any
time. Unless expressly waived by Fletcher, Newpark shall deliver an
Increase Notice to Fletcher on or before the 10th day of every calendar
month from and including the Closing Date. From time to time following
the Notice Period, Common Stock may be issued to Fletcher on any
Business Day for any quantity of Common Stock, such that the aggregate
number of shares of Common Stock issued hereunder is less than or equal
to the Maximum Number. Nothing in this Section 6(c) shall limit or
apply to the creation or conversion of Excess Rights under Section
6(b).
d. Newpark shall use best efforts to obtain from the
Newpark stockholders, if required, the requisite authority to issue
Common Shares to Fletcher in accordance with the terms of this
Agreement.
e. By the second Trading Day before the designated
Dividend Payment Date (as defined and set forth in the Certificate of
Rights and Preferences), the holder of record of the Series C Preferred
Stock (the "Holder") shall provide to Newpark a report of Bloomberg,
L.P. or a summary thereof, or an excerpt thereof prepared by the
Holder, which shall include the daily Market Prices (as defined and set
forth in the Certificate of Rights and Preferences) of the Common Stock
for the five Trading Days ending on and including the third Trading Day
before the designated Dividend Payment Date. On the second Trading Day
before such designated Dividend Payment Date, the Dividend Committee of
the board of directors of Newpark shall determine the number of shares
of Common Stock to be issued as a dividend on such Dividend Payment
Date (the "Dividend Shares"). On the Business Day following such
Dividend Payment Date, the Holder shall (i) provide to Newpark a report
of Bloomberg, L.P. or a summary thereof, or an excerpt thereof prepared
by the Holder, which shall include the volume-weighted average price of
the Common Stock on the Dividend Payment Date ("Dividend Payment Market
Value"), and (ii) transfer to Newpark by wire transfer of immediately
available funds an amount (the "Withholding") equal to thirty percent
(30%) of the amount determined by multiplying the number of Dividend
Shares by the Dividend Payment Market Value. On or before the third
Business Day following such Dividend Payment Date, Newpark shall remit
the Withholding to the United States Internal Revenue Service
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<PAGE> 15
("I.R.S."), along with a completed Federal Deposit Tax Form 8109 (or
any successor form thereto). In addition, Newpark shall file Forms 1042
and 1042S (or any successor forms thereto) with the I.R.S. and provide
a copy of the Form 1042S to the Holder. Provided, that no failure by
the Holder to take any of the actions set forth in this section shall
modify Newpark's obligations under the Certificate of Rights and
Preferences or Newpark's right to withhold pursuant to Section 3(a) of
the Certificate of Rights and Preferences; provided further that the
Withholding payment under this Section 6(e) shall be in place of, and
not in addition to, Newpark's withholding right under Section 3(a) of
the Certificate of Rights and Preferences.
f. Floor and Ceiling Adjustment.
(1) If at any time after the Closing Date
Newpark sells, transfers, issues or otherwise
obligates itself to deliver to any person or entity
(but excluding (i) issuances of shares, options or
other securities pursuant to a Benefit Plan; (ii)
transactions in which Newpark acquires the stock or
assets of another company for bona fide strategic
purposes and not for the purpose of circumventing
this Section 6(f); and (iii) issuances of shares upon
the conversion or exercise of any of the securities
set forth in Section 3(l) hereof or Schedule 3(l)
hereto) (each, a "Future Issuance") Common Stock of
Newpark, or options, warrants, convertible
debentures, convertible preferred stock or other
rights that are convertible or exchangeable into
Common Stock of Newpark (with or without the payment
of a conversion or exercise price) (each, "Future
Issuance Securities"), then (i) if, under the terms
of the Future Issuance or the Future Issuance
Securities, it is possible under any set of facts or
circumstances (including, but not limited to, any
market or other price of any of Newpark's securities
on any date or set of dates, but excluding
adjustments for stock splits, stock dividends,
reverse stock splits or other, similar events) for
the holder thereof or any third party to acquire,
directly or indirectly, Common Stock of Newpark for
aggregate consideration less than the Floor Price (as
such term is defined in the Certificate of Rights and
Preferences) per share of Common Stock, then on or
before the date of such Future Issuance, Newpark
shall amend the Certificate of Rights and Preferences
to reduce the Floor Price (as such term is defined in
the Certificate of Rights and Preferences) to such
lower price.
(2) If Newpark makes a Future Issuance
(excluding (i) issuances of shares, options or other
securities pursuant to a Benefit Plan; (ii)
transactions in which Newpark acquires the stock or
assets of another company for bona fide strategic
purposes and not for the purpose of circumventing
this Section 6(f); (iii) issuances of shares upon the
conversion or exercise of any of the securities set
forth in Section 3(l)
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<PAGE> 16
hereof or Schedule 3(l) hereto; (iv) a sale of Common
Stock at a fixed price; and (v) a sale or other
issuance of Preferred Stock convertible at a fixed
price, the full consideration for which is paid upon
issuance thereof) and under the terms of the Future
Issuance Securities the maximum aggregate
consideration paid in cash or other separately
allocated consideration (provided that such
allocation is made in good faith) for such Future
Issuance Securities per underlying share of Common
Stock upon such Future Issuance plus the
consideration payable per share of Common Stock upon
exercise or conversion of such Future Issuance
Securities (assuming any market or other price of any
of Newpark's securities on any date or set of dates,
but excluding adjustments for stock splits, stock
dividends, reverse stock splits or other, similar
events) is less than the Ceiling Price (as such term
is defined in the Certificate of Rights and
Preferences), then on or before the date of such
Future Issuance, Newpark shall amend the Certificate
of Rights and Preferences to reduce the Ceiling Price
(as such term is defined in the Certificate of Rights
and Preferences) to such lower price. No further
adjustments to the Ceiling Price shall be made on or
after the date immediately following the thirtieth
(30th) consecutive Trading Day on which the Market
Price (as that term is defined in the Certificate of
Rights and Preferences) exceeds the Ceiling Price if
the Registration Statement is available with respect
to all Covered Securities on each such Trading Day.
(3) Newpark shall notify Fletcher
immediately upon the occurrence of any Future
Issuance and any adjustment made under this Section
6(f).
7. Representations and Warranties of Fletcher. Fletcher hereby
represents and warrants to Newpark on the Closing Date:
a. Fletcher has been duly incorporated and is validly
existing in good standing under the laws of Bermuda.
b. The execution, delivery and performance of this
Agreement by Fletcher have been duly authorized by all requisite
corporate action and no further consent or authorization of Fletcher,
its Board of Directors or its shareholders is required. This Agreement
has been duly executed and delivered by Fletcher and, when duly
authorized, executed and delivered by Newpark, will be a valid and
binding agreement enforceable against Fletcher in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
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<PAGE> 17
c. Fletcher understands that no United States federal
or state agency has passed on, reviewed or made any recommendation or
endorsement of the Investment Securities.
d. Subject to Section 4 hereof, Fletcher understands
that the Investment Securities have not been registered under the
Securities Act and may not be re-offered or resold in the United States
other than pursuant to registration thereunder or an available
exemption therefrom.
e. Fletcher is an "accredited investor" as such term
is defined in Regulation D promulgated under the Securities Act.
f. Fletcher is purchasing the Investment Securities
for its own account for investment only and not with a view to, or for
resale in connection with, the public sale or distribution thereof in
the United States, except pursuant to sales registered under the
Securities Act or an exemption therefrom.
g. Fletcher understands that the Investment
Securities are being or will be offered and sold to it in reliance on
specific exemptions from the registration requirements of United States
federal securities laws and that Newpark is relying on the truth and
accuracy of, and Fletcher's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of Fletcher
set forth herein in order to determine the availability of such
exemptions and the eligibility of Fletcher to acquire the Investment
Securities.
h. As of the date of this Agreement, the
consideration that Newpark is receiving from Fletcher is equivalent in
value to the consideration Fletcher is receiving from Newpark pursuant
to this Agreement. As of the date of this Agreement, under the terms of
this Agreement, Newpark is receiving fair consideration from Fletcher
for the agreements, covenants, representations and warranties made by
Newpark to Fletcher.
i. Fletcher has had access to documents publicly
filed with the SEC by Newpark, and has been given a reasonable
opportunity to ask questions of Newpark's officers regarding publicly
available information concerning Newpark.
8. Right of First Refusal. Subject to the terms and conditions
specified in this Section 8, Newpark hereby grants to (i) Fletcher, (ii) any
wholly-owned subsidiary or affiliate of Fletcher, or (iii) any of Fletcher's
designees, which designee, along with the entities in clauses (i) and (ii)
above, then holds not less than one-half of the number of shares of Series C
Preferred Stock originally issued pursuant to this Agreement (the "First Refusal
Stockholders"), a right of first offer, with respect to future sales by Newpark
of its Offered Shares (as hereinafter defined), which right of first offer shall
not become effective until the right of first refusal of the Series B
Convertible Preferred Stockholders pursuant to Section 8 of the May 30, 2000
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<PAGE> 18
Agreement is of no further force or effect pursuant to Section 8(e) of the May
30, 2000 Agreement. Each time Newpark has a bona fide proposal from a third
party to acquire any shares of, or securities convertible into or exercisable or
exchangeable for any shares of, any class of its capital stock ("Offered
Shares") and Newpark wishes to sell the Offered Shares to such third party,
Newpark shall first offer such Offered Shares to the First Refusal Stockholders
in accordance with the following provisions:
a. Newpark shall deliver a notice in accordance with
Section 19 of this Agreement ("Offer Notice") to Fletcher stating (i)
its bona fide intention to offer such Offered Shares, (ii) the number
of such Offered Shares to be offered, (iii) the price and terms, if
any, upon which it proposes to offer such Offered Shares, and (iv) the
identity of the proposed purchasers of such shares and, if requested by
Fletcher, such purchasers' affiliates and associates.
b. For ten (10) Trading Days after delivery of the
Offer Notice, Newpark shall negotiate exclusively and in good faith
with the First Refusal Stockholders with respect to the proposed sale
of Offered Shares and Newpark shall not enter into or continue
negotiations with, respond to, furnish information to, or consummate
any transaction with any person or entity concerning any transaction
regarding any shares of, or securities convertible into or exercisable
or exchangeable for any shares of, any class of its capital stock.
c. Within ten (10) Trading Days after delivery of the
Offer Notice, the First Refusal Stockholders may elect by delivering a
written notice to Newpark, to purchase or obtain, at the price and on
the terms specified in the Offer Notice (or on terms that are
substantially similar to, or more favorable to Newpark than, the terms
contained in the Offer Notice), all (and not less than all unless a
third party agrees to purchase the remainder of such securities on
terms that are substantially similar to, or more favorable to Newpark
than, the terms contained in the Offer Notice) of the Offered Shares.
If the Offer Notice specifies consideration other than cash is to be
paid for the Offered Securities, the First Refusal Stockholders may, at
their sole option, (if they choose to purchase such Offered Shares)
deliver either of (i) such consideration or (ii) cash equal to the fair
market value of such consideration on the date and at the time such
offer is accepted. The closing of any such transaction shall occur not
later than ten (10) Trading Days after Newpark receives written notice
of such election. If the First Refusal Stockholders do not so elect
within ten (10) days after delivery of the Offer Notice, then Newpark
may sell the Offered Shares to any Person at the price and on terms
that are no less favorable to Newpark than the terms contained in the
Offer Notice within seventy (70) days after the date of the Offer
Notice.
d. The right of first offer in this Section 8 shall
not be applicable to any issuance or sale of any of the following
securities:
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<PAGE> 19
(i) Common Stock issued as consideration for
the acquisition of at least fifty percent (50%) of the voting
capital stock or assets of a bona fide operating company in a
similar or complementary line of business to that of Newpark,
as determined reasonably and in good faith by Newpark's board
of directors whether through purchase, merger, consolidation,
tender offer or otherwise, provided that the purpose of
Newpark entering into any such transaction shall not be to
raise capital, directly or indirectly, or otherwise to avoid
the requirements of this Section 8,
(ii) Common Stock issued pursuant to any
stock split, dividend or distribution payable in additional
shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive
directly or indirectly, additional shares of Common Stock
without payment of any consideration by such holder,
(iii) Common Stock issuable or issued to
employees, consultants or directors of Newpark directly or
pursuant to a stock option plan, employee stock purchase plan
or restricted stock plan, or other similar arrangements
related to compensation for services in effect on the date of
this Agreement or approved by Newpark's stockholders, in each
case in the ordinary course of business consistent with
Newpark's past practice,
(iv) Common Stock issued in a bona fide firm
commitment underwritten offering to the public with net
proceeds of at least $25,000,000 to Newpark, after
underwriter's discounts or commissions and other fees or
expenses,
(v) Common Stock issued as dividends on, or
upon conversion of, Newpark's Series A Cumulative Perpetual
Preferred Stock and Series B Convertible Preferred Stock, in
each case outstanding as of the date of this Agreement;
(vi) Common Stock issuable under the warrant
issued pursuant to the May 30, 2000 Agreement or the warrant
issued to SCF-IV, L.P.; or
(vii) Common Stock issued in connection with
a Combination.
(e) The right of first offer hereunder shall be of no
further force or effect from and after the first day upon which the
Registrable Amount when added to the Registrable Number (as that term
is defined in the May 30, 2000 Agreement) is less than five percent
(5%) of the Original Number, as such numbers may be adjusted for stock
splits, stock dividends, reverse stock splits, recapitalizations or
other, similar adjustments.
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<PAGE> 20
9. Covenants of Newpark. Newpark covenants and agrees with
Fletcher as follows:
a. For so long as Fletcher owns any Investment
Securities, and in any case for a period of one (1) year thereafter,
Newpark will use its best efforts to (i) maintain the eligibility of
the Common Stock for listing on the New York Stock Exchange and (ii)
regain the eligibility of the Common Stock for listing or quotation on
all markets and exchanges including the New York Stock Exchange in the
event that the Common Stock is delisted by the New York Stock Exchange
or any other applicable market or exchange; and will use commercially
reasonable efforts to (iii) cause the representations and warranties
contained in Section 3 to be and remain true and correct.
b. Newpark will provide Fletcher with an opportunity
to review and comment on any public disclosure by Newpark of
information regarding this Agreement and the transactions contemplated
hereby, prior to such public disclosure. Beginning on the date hereof
and for so long as Fletcher owns any Investment Securities and for a
period of ninety (90) days thereafter, Newpark will (i) promptly notify
Fletcher immediately following any public disclosure by Newpark of
material information regarding Newpark or its financial condition,
prospects or results of operation and (ii) provide Fletcher with copies
of all SEC filings.
c. As soon as such information is available (but in
no event later than two weeks after the Closing Date), Newpark shall
deliver to Fletcher a written notice stating the number of outstanding
shares of Common Stock as of the Closing Date.
d. Newpark will make all filings required by law with
respect to the transactions contemplated hereby;
e. Newpark will comply with the terms and conditions
of the Preferred Shares as set forth in the Certificate of Rights and
Preferences, and will not amend the Certificate of Rights and
Preferences without Fletcher's express written consent.
f. Prior to the filing of each of its quarterly
reports on Form 10-Q with the SEC, Newpark shall cause Arthur Andersen
LLP to deliver to Fletcher a review report relating to the final
consolidated unaudited financial statements contained therein, prepared
in accordance with Statements of Auditing Standard No. 71.
g. If on any date the Registrable Amount exceeds
eighty percent (80%) of the number of Common Shares then reserved for
issuance, then Newpark shall reserve for issuance within three (3)
Trading Days of such date a number of Common Shares not less than the
Registrable Amount.
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<PAGE> 21
h. Newpark shall use its best efforts to ensure that
all Common Shares issued and issuable under this Agreement (including
all shares issued or issuable under the Preferred Shares on an
as-converted basis) become listed and/or quoted and admitted for
trading as soon as practicable and thereafter remain listed and/or
quoted. Moreover, Newpark will immediately notify Fletcher in writing,
pursuant to Section 19, once such shares are duly listed or quoted or
in the event that any such shares are delisted or removed from
quotation. If any such shares are delisted or removed from quotation,
Newpark shall use its best efforts to cause such shares to again be
listed or quoted at the earliest possible date.
i. Newpark shall use commercially reasonable efforts
to maintain the eligibility of the Common Shares for book-entry
transfer through The Depository Trust Company (or any successor
thereto) as soon as practicable after the date of this Agreement.
10. Consolidation, Merger, Etc. In case Newpark shall be a
party to any transaction with any other entity or entities (the "Acquirer")
providing for (i) any acquisition of Newpark by means of merger or other form of
corporate reorganization in which outstanding shares of Newpark are exchanged
for securities or other consideration issued, or caused to be issued, by the
acquiring entity or its subsidiary or (ii) a sale of all or substantially all of
the assets of Newpark (on a consolidated basis) in a single transaction or
series of related transactions or (iii) any other transaction or series of
related transactions by Newpark in which the power to cast the majority of the
eligible votes at a meeting of Newpark's stockholders at which directors are
elected is transferred to a single entity or group acting in concert (each of
the foregoing being referred to as a "Combination"), Fletcher and its assigns
shall have the rights set forth in the Certificate of Rights and Preferences
regarding Combinations in addition to the rights contained in this Agreement.
Newpark agrees that it will not enter into an agreement with an Acquirer for a
Combination unless such agreement expressly obligates the Acquirer to assume all
of Newpark's obligations under this Agreement and the Certificate of Rights and
Preferences and to give Fletcher written notice that the Acquirer has assumed
such obligations. Newpark shall provide Fletcher with written notice of any
proposed Combination as soon as the existence of a proposed Combination is made
public by any person, and shall notify Fletcher promptly of any material
developments with respect to such Combination, including reasonable advance
notice of the date the Combination is expected to become effective.
11. Covenants of Fletcher. Fletcher hereby covenants and
agrees with Newpark that:
a. Neither Fletcher nor any of its affiliates nor any
person acting on its or their behalf will at any time offer or sell any
Investment Securities other than pursuant to registration under the
Securities Act or pursuant to an available exemption therefrom.
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<PAGE> 22
b. Fletcher shall not engage an underwriter for an
underwritten public offering of Common Shares, unless such underwriter
shall be reasonably satisfactory to Newpark.
12. Legend. Subject to Section 4, Fletcher understands that
the certificates or other instruments representing the Investment Securities
shall bear a restrictive legend in the following form (and a stop transfer order
may be placed against transfer of such certificates or other instruments):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED UNLESS (1) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT COVERING SUCH SECURITIES, OR (2) THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 OR ANOTHER APPLICABLE EXEMPTION UNDER THE
SECURITIES ACT.
The legend set forth above shall be removed and Newpark shall
issue a certificate without such legend to any holder of Investment Securities
if, unless otherwise required by state securities laws, (a) such shares are sold
pursuant to an effective Registration Statement under the Securities Act, or (b)
such holder provides Newpark with an opinion of counsel reasonably satisfactory
to Newpark that such shares may be publicly sold pursuant to an exemption from
such registration requirements without restriction.
13. Conditions Precedent to Fletcher's Obligations. The
obligations of Fletcher hereunder are subject to the performance by Newpark of
its obligations hereunder and to the satisfaction of the following additional
conditions precedent, unless expressly waived in writing by Fletcher:
a. On the Closing Date, (i) the representations and
warranties made by Newpark in this Agreement shall be true and correct;
(ii) Newpark shall have complied fully with all of the covenants and
agreements in this Agreement; and (iii) Fletcher shall have received a
certificate of the Chief Executive Officer and the Chief Financial
Officer of Newpark dated such date and to such effect.
b. On the Closing Date, Newpark shall have delivered
to Fletcher an opinion of Ervin, Cohen & Jessup LLP reasonably
satisfactory to Fletcher, dated the date of delivery, confirming in
substance the matters covered in paragraphs (a), (b), (c), (d), (e) and
(f) of Section 3 hereof and to the effect that the offer and sale of
the Investment Securities to Fletcher hereunder do not require
registration under the Securities Act.
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<PAGE> 23
c. On the Closing Date, Fletcher shall have received
a letter from Arthur Andersen LLP to the effect that, as of such date,
it consents to the inclusion in this Agreement of its portion of the
Auditor Report.
14. Conditions Precedent to Newpark's Obligations. The
obligations of Newpark hereunder are subject to the performance by Fletcher of
its obligations hereunder and to the satisfaction (unless expressly waived in
writing by Newpark) of the additional conditions precedent that, on the Closing
Date: (i) the representations and warranties made by Fletcher in this Agreement
shall be true and correct; (ii) Fletcher shall have complied fully with all the
covenants and agreements in this Agreement; (iii) Newpark shall have received on
such date a certificate of an appropriate officer or director of Fletcher dated
such date and to such effect; and (iv) Newpark shall have received on such date
from the sole stockholder of Series B Convertible Preferred Stock a waiver in
the form of Annex G.
15. Fees and Expenses. Each of Fletcher and Newpark agrees to
pay its own expenses incident to the performance of its obligations hereunder,
including, but not limited to the fees, expenses and disbursements of such
party's counsel, except as is otherwise expressly provided in this Agreement.
16. Non-Performance. If on the Closing Date Newpark shall fail
to deliver the Investment Securities to Fletcher required to be delivered
pursuant to this Agreement for any reason other than the failure of any
condition precedent to Newpark's obligations hereunder or the failure by
Fletcher to comply with its obligations hereunder, then Newpark shall:
a. indemnify and hold Fletcher harmless against any
loss, claim or damage (including without limitation, incidental and
consequential damages) arising from or as a result of such failure by
Newpark; and
b. reimburse Fletcher for all of its reasonable
out-of-pocket expenses, including, without limitation, fees and
disbursements of its counsel, incurred by Fletcher in connection with
this Agreement and the transactions contemplated herein and therein.
17. Indemnification.
a. Indemnification of Fletcher. Newpark hereby agrees
to indemnify Fletcher and each of its officers, directors, employees,
agents and affiliates and each person that controls (within the meaning
of Section 20 of the Exchange Act) any of the foregoing persons (each a
"Fletcher Indemnified Party") against any claim, demand, action,
liability, damages, loss, cost or expense (including, without
limitation, reasonable legal fees and expenses) (a "Proceeding"), that
it may incur in connection with any of the transactions contemplated
hereby arising out of or based upon:
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<PAGE> 24
(1) any untrue or alleged untrue statement
of a material fact in any Registration Statement, the
Prospectus or any SEC Filing incorporated by
reference into a Registration Statement or any SEC
Filing made after the date of this Agreement and
before any Registration Statement is filed with the
SEC or this Agreement by Newpark or any of its
affiliates or any person acting on its or their
behalf or omission or alleged omission to state
therein or herein any material fact necessary in
order to make the statements, in the light of the
circumstances under which they were made, not
misleading by Newpark or any of its affiliates or any
person acting on its or their behalf;
(2) any of the representations or warranties
made by Newpark herein or under the Certificate of
Rights and Preferences being untrue or incorrect at
the time such representation or warranty was made;
and
(3) any breach or non-performance by Newpark
of any of its covenants, agreements or obligations
under this Agreement;
and Newpark hereby agrees to reimburse each Fletcher Indemnified Party
for any reasonable legal or other expenses incurred by such Fletcher
Indemnified Party in investigating or defending any such Proceeding;
provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of or is based upon the
gross negligence or wilful misconduct of Fletcher in connection
therewith. Furthermore, the foregoing indemnity rights will not take
effect unless or until the total amount of the indemnification in the
aggregate is $10,000 or greater.
b. Indemnification of Newpark. Fletcher hereby agrees
to indemnify Newpark and each of its officers, directors, employees,
agents and affiliates and each person that controls (within the meaning
of Section 20 of the Exchange Act) any of the foregoing persons (each a
"Newpark Indemnified Party") against any Proceeding, that it may incur
in connection with any of the transactions contemplated hereby arising
out of or based upon:
(1) any untrue or alleged untrue statement
of a material fact by Fletcher or any of its
affiliates or any person acting on its or their
behalf or omission or alleged omission to state any
material fact necessary in order to make the
statements, in the light of the circumstances under
which they were made, not misleading by Fletcher or
any of its affiliates or any person acting on its or
their behalf;
(2) any of the representations or warranties
made by Fletcher herein being untrue or incorrect at
the time such representation or warranty was made;
and
23
<PAGE> 25
(3) any breach or non-performance by
Fletcher of any of its covenants, agreements or
obligations under this Agreement;
and Fletcher hereby agrees to reimburse each Newpark Indemnified Party
for any reasonable legal or other expenses incurred by such Newpark
Indemnified Party in investigating or defending any such Proceeding;
provided, however, that the foregoing indemnity shall not apply to any
Proceeding to the extent that it arises out of or is based upon the
gross negligence or wilful misconduct of Newpark in connection
therewith. Furthermore, the foregoing indemnity rights will not take
effect unless or until the total amount of the indemnification in the
aggregate is $10,000 or greater.
c. Conduct of Claims.
(1) Whenever a claim for indemnification
shall arise under this Section 17, the party seeking
indemnification (the "Indemnified Party"), shall
notify the party from whom such indemnification is
sought (the "Indemnifying Party") in writing of the
Proceeding and the facts constituting the basis for
such claim in reasonable detail;
(2) Upon delivery of such notice, such
Indemnified Party shall have a duty to take all
reasonable steps to mitigate any losses, liabilities,
costs, charges and expenses relating to any such
Proceeding;
(3) Such Indemnifying Party shall have the
right to retain the counsel of its choice in
connection with such Proceeding and to participate at
its own expense in the defense of any such
Proceeding; provided, however, that counsel to the
Indemnifying Party shall not (except with the consent
of the relevant Indemnified Party) also be counsel to
such Indemnified Party. In no event shall the
Indemnifying Party be liable for fees and expenses of
more than one counsel (in addition to any local
counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action
or separate but similar or related actions in the
same jurisdiction arising out of the same general
allegations or circumstances; and
(4) No Indemnifying Party shall, without the
prior written consent of the Indemnified Parties
(which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any
investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification could
be sought under this Section unless such settlement,
compromise or consent (A)
24
<PAGE> 26
includes an unconditional release of each Indemnified
Party from all liability arising out of such
litigation, investigation, proceeding or claim and
(B) does not include a statement as to or an
admission of fault, culpability or a failure to act
by or on behalf of any Indemnified Party.
18. Survival of the Representations, Warranties, etc. The
respective representations, warranties, and agreements made herein by or on
behalf of the parties hereto shall remain in full force and effect, regardless
of any investigation made by or on behalf of the other party to this Agreement
or any officer, director or employee of, or person controlling or under common
control with, such party and will survive delivery of and payment for any
Investment Securities issuable hereunder.
19. Notices. All communications hereunder shall be in writing
and delivered as set forth below.
a. If sent to Fletcher, all communications shall be
delivered by hand, sent by reputable overnight courier or transmitted
and confirmed by facsimile to Fletcher, unless otherwise notified in
writing of a substitute address, at:
Fletcher International, Ltd.
c/o A. S. & K. Services Ltd.
Cedar House
41 Cedar Avenue
Hamilton HM EX
Bermuda
Attention: Felicity Holmes, Corporate
Administrator
Telephone: 441-295-2244
Facsimile: 441-292-8666
with a copy to:
Fletcher Asset Management
22 East 67th Street
New York, NY 10021
Attention: Peter Zayfert
Telephone: (212) 284-4800
Facsimile: (212) 284-4801
25
<PAGE> 27
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
Attention: Stephen W. Hamilton, Esq.
Telephone: (202) 371-7010
Facsimile: (202) 393-5760
To the extent that any funds shall be delivered to Fletcher by wire
transfer, unless otherwise instructed by Fletcher, such funds should be
delivered in accordance with the following wire instructions:
Fletcher International, Ltd.
Bank: HSBC Bank USA, New York, NY
ABA Number: 021-001-088
For the benefit of: Lehman Brothers Inc.
Account Number: 140-094-221
For credit to: Fletcher International, Ltd.
Account Number: 134-705-874
b. If sent to Newpark, all communications shall be
delivered by hand, sent by reputable overnight courier or transmitted
and confirmed by facsimile to Newpark, unless otherwise notified in
writing of a substitute address, at:
Newpark Resources, Inc.
3850 North Causeway Boulevard
Suite 1770
Metairie, Louisiana 70002
Attention: Matthew W. Hardey
Telephone: (504) 838-8222
Facsimile: (504) 833-9506
26
<PAGE> 28
with a copy to:
Ervin, Cohen & Jessup LLP
9401 Wilshire Boulevard
Ninth Floor
Beverly Hills, California 90212
Attention: Bertram K. Massing, Esq.
Telephone: (310) 273-6333
Facsimile: (310) 859-2325
To the extent that any funds shall be delivered to Newpark by wire
transfer, unless otherwise instructed by Newpark, such funds should be
delivered in accordance with the following wire instructions:
Newpark Resources, Inc.
Account Number: 552-700-16-9870-1
ABA Number: 065400137
Bank: Bank One Louisiana NA
Account Name: Newpark Resources, Inc.
20. Miscellaneous.
a. This Agreement may be executed in one or more
counterparts and it is not necessary that signatures of all parties
appear on the same counterpart, but such counterparts together shall
constitute but one and the same agreement.
b. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, their respective successors and
assigns and, with respect to Section 17 hereof, shall inure to the
benefit of their respective officers, directors, employees, agents,
affiliates and controlling persons, and no other person shall have any
right or obligation hereunder. Newpark may not assign this Agreement.
Fletcher may assign, pledge, hypothecate or transfer any of the rights
and associated obligations contemplated by this Agreement (including,
but not limited to, the Preferred Shares and the Common Shares), in
whole or in part, at its sole discretion (including, but not limited
to, assignments, pledges, hypothecations and transfers in connection
with hedging transactions with respect to this Agreement, the Preferred
Shares and the Common Shares), provided that any such assignment,
pledge, hypothecation or transfer must comply with applicable federal
and state securities laws. No Person acquiring Common Stock from
Fletcher pursuant to a public market purchase shall thereby obtain any
of the rights contained in this Agreement.
c. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York, and
each of the parties hereto hereby
27
<PAGE> 29
submits to the non-exclusive jurisdiction of any State or Federal court
in the State of New York and any court hearing any appeal therefrom,
over any suit, action or proceeding against it arising out of or based
upon this Agreement (a "Related Proceeding"). Each of the parties
hereto hereby waives any objection to any Related Proceeding in such
courts whether on the grounds of venue, residence or domicile or on the
ground that the Related Proceeding has been brought in an inconvenient
forum.
d. The parties shall take all actions reasonably
necessary to cause the transactions contemplated hereby to be
consummated in accordance with the terms hereof.
e. The headings of the sections of this document have
been inserted for convenience of reference only and shall not be deemed
to be a part of this Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties hereto with respect to the
subject matter of this Agreement. Except as provided in Section 20(b),
this Agreement is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
f. Each party represents and acknowledges that, in
the negotiation and drafting of this Agreement and the other
instruments and documents required or contemplated hereby, it has been
represented by and relied upon the advice of counsel of its choice.
Each party hereby affirms that its counsel has had a substantial role
in the drafting and negotiation of this Agreement and such other
instruments and documents. Therefore, each party agrees that no rule of
construction to the effect that any ambiguities are to be resolved
against the drafter shall be employed in the interpretation of this
Agreement and such other instruments and documents.
g. Without prejudice to other rights or remedies
hereunder (including any specified interest rate), and except as
otherwise expressly set forth herein, interest shall be due on any
amount that is due pursuant to this Agreement and has not been paid
when due, calculated for the period from and including the due date to
but excluding the date on which such amount is paid at the prime rate
of U.S. money center banks as published in The Wall Street Journal (or
if The Wall Street Journal does not exist or publish such information,
then the average of the prime rates of three U.S. money center banks
agreed to by the parties) plus two percent (2%).
h. Fletcher and Newpark stipulate that the remedies
at law of the parties hereto in the event of any default or threatened
default by the either party in the performance of or compliance with
any of the terms of this Agreement and the Certificate of Rights and
Preferences are not and will not be adequate and that, to the fullest
extent permitted by law, such terms may be specifically enforced by a
decree for the specific
28
<PAGE> 30
performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
i. Any and all remedies set forth in this Agreement
and the Certificate of Rights and Preferences: (i) shall be in addition
to any and all other remedies Fletcher or Newpark may have at law or in
equity, (ii) shall be cumulative, and (iii) may be pursued successively
or concurrently as each of Fletcher and Newpark may elect. The exercise
of any remedy by Fletcher or Newpark shall not be deemed an election of
remedies or preclude Fletcher or Newpark, respectively, from exercising
any other remedies in the future.
21. HSR Act Notification. If in the event that filings are
required under the Hart-Scott-Rodino Improvements Act of 1976, as amended (the
"HSR Act") so that Fletcher may acquire the Investment Securities, Newpark will
upon the written request of Fletcher, and Fletcher will upon the written request
of Newpark, (i) file or cause to be filed, as promptly as practicable after the
receipt of such notice and in no event later than fifteen Business Days after
the receipt of such notice, with the Federal Trade Commission and the United
States Department of Justice, all reports and other documents required to be
filed by such party under the HSR Act concerning the transactions contemplated
in such notice, (ii) promptly comply with or cause to be complied with any
requests by the Federal Trade Commission or the United States Department of
Justice for additional information so that the waiting period applicable thereto
under the HSR Act shall expire as soon as practicable, and (iii) cooperate with
the other parties in requesting early termination of any applicable waiting
period under the HSR Act. Each of Fletcher and Newpark shall pay half of the
filing fees required in connection with any such filing. Each party shall bear
its own legal and other expenses incurred in connection with any such filing.
22. Newpark's Obligations. Newpark agrees that the parties
have negotiated in good faith and at arms' length concerning the transactions
contemplated herein, and that Fletcher would not have agreed to the terms of
this Agreement without each and every of the terms, conditions, protections and
remedies provided herein and in the Certificate of Rights and Preferences.
Except as specifically provided otherwise in this Agreement or in the
Certificate of Rights and Preferences, Newpark's obligations to indemnify and
hold Fletcher harmless in accordance with Section 17 of this Agreement are
obligations of Newpark that Newpark promises to pay to Fletcher when and if they
become due. Newpark shall record any such obligations on its books and records
in accordance with Generally Accepted Accounting Principles.
23. Time of Essence. Time shall be of the essence in this
Agreement.
[SIGNATURE PAGE FOLLOWS]
29
<PAGE> 31
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement, all as of the day and year first above written.
NEWPARK RESOURCES, INC.
By: /s/ Matthew W. Hardey
---------------------------------
Name: Matthew W. Hardey
Title: V.P. Finance and CFO
FLETCHER INTERNATIONAL, LTD.,
by its duly authorized investment advisor,
FLETCHER ASSET MANAGEMENT, INC.
By: /s/ Mei-Ying Tsai
---------------------------------
Name: Mei-Ying Tsai
Title: Chief Financial Officer
By: /s/ Denis J. Kielg
---------------------------------
Name: Denis J. Kielg
Title: Deputy CEO
[AGREEMENT SIGNATURE PAGE]
<PAGE> 32
ANNEX A
[FORM OF CERTIFICATE OF RIGHTS AND PREFERENCES
OF CLASS C CONVERTIBLE PREFERRED STOCK OF
NEWPARK RESOURCES, INC.]
A-1
<PAGE> 33
ANNEX B
[FORM OF DELIVERY NOTICE]
[date]
Fletcher International, Ltd.
c/o Fletcher Asset Management
22 East 67th Street
New York, NY 10021
Attn: Peter Zayfert
Telephone: (212) 284-4800
Facsimile: (212) 284-4801
Ladies and Gentlemen:
Reference is made to the Agreement (the "Agreement") dated as of
December 27, 2000 by and between Newpark Resources, Inc. ("Newpark") and
Fletcher International, Ltd. ("Fletcher"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.
Attached are copies of the front and back of the six (6) original stock
certificates, each representing 20,000 shares of Series C Preferred Stock,
purchased by Fletcher on the date hereof, together with a copy of the overnight
courier air bill which will be used to ship such stock certificates. We have the
executed original stock certificates and other documents required to be
delivered in connection with the Closing Date. Upon our confirmation of the
payment of the $30,000,000 aggregate purchase price therefor, we will send the
original stock certificates by overnight courier to the following address:
Ms. Michelle Hogan
c/o Lehman Brothers Inc.
Three World Financial Center
New York, NY 10285
Telephone: (212) 526-9040
B-1
<PAGE> 34
and we will send the other original documents by overnight courier to the
following address:
Fletcher International, Ltd.
c/o A. S. & K. Services Ltd.
Cedar House
41 Cedar Avenue
Hamilton HM EX
Bermuda
Attention: Felicity Holmes, Corporate Administrator
Telephone: 441-295-2244
Facsimile: 441-292-8666
with a copy to:
Fletcher International, Ltd.
c/o Fletcher Asset Management
22 East 67th Street
New York, NY 10021
Attn: Peter Zayfert
Attached hereto as Exhibit 1 is a true, correct and complete copy of
the most recent report of Arthur Andersen LLP to the Board of Directors and
Shareholders of Newpark, together with the accompanying consolidated financial
statements and schedules of Newpark, as such report appears in the most recent
Annual Report on Form 10-K filed by Newpark with the SEC, as well as all
Quarterly Reports on Form 10-Q filed by Newpark with the SEC since the date of
such Form 10-K, together with all amendments thereto.
NEWPARK RESOURCES, INC.
By:
-----------------------------------
Name:
Title:
B-2
<PAGE> 35
EXHIBIT 1
AUDITOR REPORT
[see attached]
B-3
<PAGE> 36
ANNEX C
Auditor Report
C-1
<PAGE> 37
ANNEX D
[FORM OF PREFERRED STOCK CONVERSION NOTICE]
[date]
Newpark Resources, Inc.
Suite 1770
3850 North Causeway Boulevard
Metairie, Louisiana 70002
Attention: [Chief Financial Officer]
Telephone:
Facsimile:
Ladies and Gentlemen:
Reference is made to the Agreement (the "Agreement") dated as of
December 27, 2000 by and between Newpark Resources, Inc. ("Newpark") and
Fletcher International, Ltd. ("Fletcher"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.
Fletcher hereby elects to convert _________ shares of Series C
Preferred Stock into ________ shares of Common Stock at a Conversion Price (as
defined in the Certificate of Rights and Preferences) of ____________. In
accordance with Section 6 of the Certificate of Rights and Preferences, such
shares of Common Stock shall be delivered to Fletcher [in uncertificated form by
book-entry transfer] [in certificated form at the address specified below:]
[delivery address to be added, if applicable:
Lehman Brothers Inc.
Three World Financial Center
New York, NY 10285
Attn: Michelle Hogan
Telephone: (212) 526-9040]
FLETCHER INTERNATIONAL, LTD.,
by its duly authorized investment advisor,
FLETCHER ASSET MANAGEMENT, INC.
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
AGREED AND ACKNOWLEDGED:
NEWPARK RESOURCES, INC.
By:
--------------------------------
Name:
Title:
D-1
<PAGE> 38
ANNEX E
[FORM OF PREFERRED STOCK CONVERSION DELIVERY NOTICE]
[date]
Fletcher International, Ltd.
c/o Fletcher Asset Management
22 East 67th Street
New York, NY 10021
Attn: Peter Zayfert
Telephone: (212) 284-4800
Facsimile: (212) 284-4801
Ladies and Gentlemen:
Reference is made to the Agreement (the "Agreement") dated as of
December 27, 2000 by and between Newpark Resources, Inc. ("Newpark") and
Fletcher International, Ltd. ("Fletcher"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.
This notice confirms that _________ shares of Series C Preferred Stock
have been converted by Fletcher into ________ shares of Common Stock at a
Conversion Price (as defined in the Certificate of Rights and Preferences) of
____________. [If the shares are being delivered by book entry transfer, insert
the following -- Such shares of Common Stock have been delivered to Fletcher in
uncertificated form by book-entry transfer.] [If the shares are being delivered
in physical form to the holder, insert the following -- Attached are copies of
the front and back of the ____ original stock certificates, each representing
______ shares of Common Stock, together with a copy of the overnight courier air
bill which will be used to ship such stock certificates. We will send the
original stock certificates by overnight courier to the following address:
Lehman Brothers Inc.
Three World Financial Center
New York, NY 10285
Attn: Michelle Hogan
Telephone: (212) 526-9040
E-1
<PAGE> 39
with a copy to:
Fletcher International, Ltd.
c/o Fletcher Asset Management
22 East 67th Street
New York, NY 10021
Attn: Peter Zayfert
Telephone: (212) 284-4800
Facsimile: (212) 284-4801
[If Preferred Stock certificates tendered by Fletcher are not being
fully converted, insert the following-Also attached are copies of the front and
back of the original stock certificate representing ______ shares of Series C
Preferred Stock, representing the unconverted portion of the tendered Series C
Preferred Stock certificates, together with a copy of the overnight courier air
bill which will be used to ship such stock certificate. We will send the
original stock certificate by overnight courier to Lehman Brothers Inc. at the
address set forth in the previous paragraph.]
NEWPARK RESOURCES, INC.
By:
----------------------------------------
Name:
Title:
E-2
<PAGE> 40
ANNEX F
[FORM OF EXCESS RIGHTS NOTICE]
-------------, --
Newpark Resources, Inc.
Suite 1770
3850 North Causeway Boulevard
Metairie, Louisiana 70002
Attention: [Chief Financial Officer]
Ladies and Gentlemen:
Fletcher International, Ltd. ("Fletcher") hereby elects to exercise its
right to convert some or all of its Preferred Shares (as defined in the
Agreement (the "Agreement")) dated as of December 27, 2000 by and between
Newpark Resources, Inc. ("Newpark") and Fletcher and, in lieu of receipt of
________ Common Shares upon conversion of _______ Preferred Shares, hereby
requests creation of Excess Rights with a stated value of $________ in
accordance with the terms of the Agreement. Capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.
FLETCHER INTERNATIONAL, LTD.,
by its duly authorized investment advisor,
FLETCHER ASSET MANAGEMENT, INC.
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
AGREED AND ACKNOWLEDGED:
NEWPARK RESOURCES, INC.
By:
-----------------------------------
Name:
Title:
F-1
<PAGE> 41
ANNEX G
[FORM OF WRITTEN CONSENT]
The undersigned, being the sole stockholder of the Series B Convertible
Preferred Stock of NEWPARK RESOURCES, INC., a Delaware corporation ("Newpark"),
hereby consents, pursuant to Section 5(E) of the Certificate of Rights and
Preferences of Series B Convertible Preferred Stock of Newpark, to (i) the
creation of a new series of Preferred Stock to be designated "Series C
Convertible Preferred Stock" with terms as set forth in the attached Certificate
of Rights and Preferences of Series C Convertible Preferred Stock of Newpark and
(ii) the issuance of such stock in each case as set forth in the Agreement dated
as of December 27, 2000, by and between Newpark and Fletcher International,
Ltd., provided that such consent shall be limited to the issuance specifically
provided for therein. The undersigned further agrees that neither the issuance
of the Series C Convertible Preferred Stock pursuant to the terms of said
Agreement, nor any conversion of the Series C Convertible Preferred Stock, shall
result in any adjustment in the number of shares of Common Stock the undersigned
shall be entitled to receive upon exercise or the exercise price under the terms
of the Warrant Certificate, dated June 1, 2000 issued to the undersigned, the
undersigned hereby waiving the provisions of Section 2 of said Warrant
Certificate solely with respect to such issuance.
[SIGNATURE PAGE FOLLOWS]
G-1
<PAGE> 42
IN WITNESS WHEREOF, the undersigned has executed this Written Consent
as of the _______ day of December, 2000.
FLETCHER INTERNATIONAL LIMITED,
by its duly authorized investment advisor,
FLETCHER ASSET MANAGEMENT, INC.
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
G-2
