EXHIBIT 2.2
MERGER AGREEMENT AND PLAN OF REORGANIZATION
THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made
and entered into on February 18, 1997, by and among NEWPARK RESOURCES, INC., a
Delaware corporation ("Newpark"), SBM ACQUISITION CORPORATION, a Delaware
corporation ("Newco"), which is a wholly-owned subsidiary of Newpark, XXXXXX
XXXXX XXXXXX DRILLING FLUIDS MANAGEMENT, INC., a Texas corporation (the
"Company"), and each of the stockholders of the Company whose signature appears
on the signature page of this Agreement (each a "Stockholder Party," and
collectively the "Stockholder Parties"), with reference to the following facts:
A. The Stockholder Parties own beneficially and of record
approximately 64.14% of the outstanding capital stock of the Company. The term
"Company Shares," as used herein, means 100% of the outstanding capital stock of
the Company.
B. The Company is a regional Gulf Coast drilling mud company
specializing in engineering, technical and drilling fluids services to the oil
industry.
C. The parties intend that this Agreement shall constitute a plan of
reorganization (the "Plan") of the type described in Sections 368(a)(1)(A) and
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"). The
Plan comprises the merger (the "Merger") of Newco into the Company in accordance
with the applicable provisions of the Texas Business Corporation Act (the
"TBCA") and the Delaware General Corporation Law (the "DGCL"), with Newco
disappearing and the Company surviving, and the conversion of the Company Shares
into 582,000 newly issued shares of Common Stock of Newpark (the "Newpark
Shares").
D. Newpark, Newco, the Company and the Stockholder Parties believe
that it is in their best interests to adopt and consummate the Plan.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. Plan of Reorganization.
1.1 Adoption of Plan. Newpark, Newco, the Company and the
Stockholder Parties hereby adopt the plan of reorganization herein set forth.
1.2 Merger of Newco into the Company. Subject to the provisions of
this Agreement, the TBCA and the DGCL, at the "Effective Time" (as defined in
Section 1.5) Newco will be merged with and into the Company, and the separate
corporate existence of Newco shall cease. The Company, which will retain its
name, will be the surviving corporation in the Merger and shall continue its
corporate existence under the laws of the State of Texas. The Merger will have
the effects set forth in Section 5.06 of the TBCA and Section 259 of the DGCL.
1.3 Conversion of Shares.
1.3.1 At the Effective Time, the Company Shares will be converted
into 582,000 Newpark Shares, subject to adjustment in order to eliminate
fractional shares. Cash equal to the "Closing Value" (as defined in Section 18)
of such eliminated fractional shares will be paid in lieu thereof. Each
stockholder of the Company (each a "Stockholder" and collectively the
"Stockholders") will receive the number of Newpark Shares, subject to the
elimination of fractional shares, determined by dividing 582,000 by the total
number of Company Shares outstanding and multiplying the resulting quotient by
the number of Company Shares held by such stockholder. Certificates
representing the Newpark Shares and checks for fractional shares will be
delivered to the Stockholders upon surrender to Newpark of valid stock
certificates representing their Company Shares. Certificates representing the
Newpark Shares initially will bear the following legend: "THE SHARES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER SAID ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE IN THE
OPINION OF COUNSEL FOR THE ISSUER."
1.3.2 At the Effective Time, each share of Common Stock of Newco
that is issued and outstanding will be converted into one newly issued share of
Common Stock of the Company. From and after the Effective Time, Newpark, as the
sole stockholder of the Company, shall be entitled to receive, upon surrender to
the Company of the certificate or certificates representing such shares, one or
more certificates representing the Common Stock of the Company into which such
shares have been converted.
1.4 Capital Changes. If Newpark shall combine, subdivide or
reclassify its Common Stock, or shall declare any dividend payable in shares of
its Common Stock, or shall take any other action of a similar nature affecting
such shares, as of a record date between the date hereof and the Effective Time,
the number of Newpark Shares to be issued at the Effective Time shall be
adjusted to such extent as may be necessary to prevent dilution or enlargement
of the rights of the Stockholders. Such adjustments shall be made by the
regular independent certified public accountants for Newpark and a written
report thereof, showing the adjustment and the underlying calculations, shall be
sent to each party hereto.
1.5 Effective Time. If all of the conditions precedent to the
parties' obligations to consummate the Merger under this Agreement are satisfied
or waived and this Agreement has not been terminated in accordance with the
provisions hereof, the parties shall cause Articles of Merger (the "Articles of
Merger") in form and substance as set forth in Exhibit 1.5 attached hereto to be
duly executed and filed with the Secretary of State of Texas on the Closing Date
and, concurrently therewith, a Certificate of Merger (the "Delaware Certificate
of Merger") in form and substance as set forth in Exhibit 1.5(a) attached hereto
to be duly executed and filed with the Secretary of State of Delaware. The
Merger shall become effective as of the time the Articles of Merger are accepted
for filing and officially filed in the State of Texas, as evidenced by a
Certificate of Merger issued by the Texas Secretary of State, and the Delaware
Certificate of Merger is accepted for filing and officially filed in the State
of Delaware. The date and time when the Merger becomes effective is referred to
herein as the "Effective Time." This Agreement, the Articles of Merger and the
Delaware Certificate of Merger are sometimes collectively referred to herein as
the "Merger Agreements."
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1.6 Pooling of Interests. From the date hereof through and including
the Effective Time, neither Newpark nor the Company nor any of their respective
subsidiaries or other "Affiliates" (as defined in Section 18) shall (a)
knowingly take any action, or knowingly fail to take any action, that would
jeopardize the treatment of Newpark's acquisition of the Company as a "pooling
of interests" for accounting purposes; (b) knowingly take any action, or
knowingly fail to take any action, that would jeopardize qualification of the
Merger as a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code (and any comparable provision of applicable foreign,
state or local law); or (c) enter into any contract, agreement, commitment or
arrangement with any such effect. Newpark covenants and agrees that after the
Effective Time it will use its best efforts and will cause its Affiliates
(including after the Effective Time, the Company) to use their best efforts to
cause the Merger to qualify as a "pooling of interests" for accounting purposes
and as a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code (and any comparable provision of applicable foreign,
state or local law) and to report the Merger on all regulatory filings, Tax
Returns and other relevant documents in a manner consistent with the treatment
of the Merger as a "pooling of interests" for accounting purposes and as a
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Code (and any comparable provision of applicable foreign, state or local
law).
2. Ancillary Agreements.
2.1 Noncompetition Agreements. On the Closing Date, as a necessary
incident of the Merger, Newpark will execute and deliver noncompetition
agreements substantially as set forth in Exhibit 2.1(a) attached to this
Agreement with the Stockholder Parties and each other Stockholder identified on
Exhibit 2.1 attached to this Agreement, all of which together are referred to
herein as the "Noncompetition Agreements."
2.2 [Intentionally Omitted]
2.3 Registration Rights Agreement. On the Closing Date, Newpark will
execute and deliver an agreement substantially as set forth in Exhibit 2.3
attached to this Agreement (the "Registration Rights Agreement") with each of
the Stockholders.
3. Representations and Warranties of the Company and the Stockholder
Parties.
A. Except as otherwise specifically set forth in a letter ("the
Disclosure Letter") delivered by the Company and the Stockholder Parties to
Newpark and Newco prior to the execution hereof, the Company and each
Stockholder Party warrant and represent the following (jointly and severally as
between the Company and each Stockholder Party and severally only as among the
Stockholder Parties), the truth and accuracy of each of which shall constitute a
condition precedent to Newpark's and Newco's obligations to consummate the
Merger and issue the Newpark Shares:
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3.1 Organization and Good Standing of the Company.
3.1.1 The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas, has full
corporate power and authority to carry on its business as now conducted by it
and is entitled to own or lease and operate its properties and assets now owned
or leased and operated by it. The Company is duly qualified and in good
standing as a foreign corporation in each jurisdiction where the character or
location of the assets owned by the Company or the nature of the business
transacted by the Company require such qualification, except where failure to be
so qualified would not have a "Material Adverse Effect" (as defined in Section
18). The Disclosure Letter includes a list of the jurisdictions in which the
Company is qualified to do business.
3.1.2 The Company has furnished to Newpark complete and correct
copies of the Company's Articles of Incorporation and Bylaws as in effect on the
date hereof.
3.1.3 The Company has heretofore made available to Newpark for its
examination copies of the minute books, stock certificate books and corporate
seal of the Company. Said minute books are accurate in all material respects
and reflect all resolutions adopted and all material actions expressly
authorized or ratified by the stockholders and directors of the Company or any
committees thereof. The stock certificate books reflect all issuances,
transfers and cancellations of capital stock of the Company.
3.2 Capitalization.
3.2.1 The authorized capital stock of the Company consists of
1,000,000 shares of Class A voting common stock, of which 1,000 shares (i.e.,
the Company Shares) are issued and outstanding as of the date hereof. All such
issued and outstanding shares are validly issued, fully paid and nonassessable.
The Disclosure Letter includes the names, addresses and social security numbers
of, and the number of the Company Shares owned of record and beneficially by,
each of the Stockholders.
3.2.2 The Disclosure Letter lists all options, warrants,
subscriptions or other rights outstanding for the purchase of, and all
securities convertible into, capital stock of the Company. No shares of the
Company are held as treasury stock.
3.3 Equity Interests.
The Company does not have a material equity interest in any other
"Person" (as defined in Section 18).
3.4 Authority. The execution and delivery of the Merger Agreements
by the Company and the consummation of the transactions contemplated thereby
have been duly authorized by the Board of Directors of the Company, this
Agreement has been duly executed and delivered by the Company and, when this
Agreement and the Merger have been approved by the Stockholders, no further
corporate action will be necessary on the part of the Company to make this
Agreement valid and binding upon the Company in accordance with its terms,
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subject to the "Bankruptcy Exception," as defined in Section 18. The Board of
Directors of the Company has authorized its management to solicit the
Stockholders to authorize and approve this Agreement and the Merger at the
earliest practicable time. The execution, delivery and performance of the
Merger Agreements by the Company and the Stockholder Parties are not contrary to
the Articles of Incorporation or Bylaws of the Company and will not result in a
violation or breach of any term or provision or constitute a default or give any
party a right to accelerate the due date of any indebtedness under any
indenture, mortgage, deed of trust or other material contract or agreement to
which the Company, the Stockholder Parties or any of them are a party or by
which any of them are bound.
3.5 Financial Statements. The audited balance sheet of the Company
as of October 31, 1994, the unaudited balance sheets of the Company as of
October 31, 1995, and October 31, 1996, and the unaudited statements of income,
stockholders' equity and cash flows for the fiscal years ended on October 31,
1994, October 31, 1995, and October 31, 1996, copies of which have heretofore
been delivered to Newpark (collectively the "Company Financial Statements"),
were prepared in accordance with the books and records of the Company and in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved (except as set forth therein and exclusive of
footnote disclosures) and present fairly the financial position, results of
operations and cash flows of the Company as of the end of and for each of such
periods.
3.6 Properties. The Company has and on the Closing Date will have,
good title to the assets and properties shown in the Company Financial
Statements or acquired since the date of the latest balance sheet included
therein, except as since sold or otherwise disposed of in the ordinary course of
business. At the Closing, such title will be free and clear of all liens,
charges, security interests, encumbrances, leases, covenants, conditions and
restrictions other than "Permitted Liens," as defined in Section 18. The
plants, structures, leasehold improvements, machinery, equipment, furniture and
other tangible assets owned or leased by the Company are in good operating
condition and repair, subject only to ordinary wear and tear, taking into
account the respective ages of the assets involved, and constitute all the fixed
tangible assets necessary for the operation of the business of the Company in
accordance with its current methods of operation in all material respects.
3.7 Contracts.
3.7.1 The Disclosure Letter includes a listing of all oral or
written (a) contracts, commitments, sales orders or purchase orders, whether or
not entered into in the ordinary course of business, which involve future
payments, performance of services or delivery of goods and/or materials, to or
by the Company of an amount or value in excess of $250,000; (b) bonus, incentive
compensation, pension, profit sharing, stock option, group insurance, medical
reimbursement or employee welfare or benefit plans of any nature whatsoever; (c)
collective bargaining agreements or other contracts or commitments to or with
labor unions; (d) leases, con tracts or commitments affecting ownership of,
title to, use of or any material interest in real estate; (e) employment
contracts and other contracts, agreements, or commitments to or with individual
employees, consultants or agents extending for a period of more than six months
from the date hereof or providing for earlier termination only upon payment of a
penalty or the equivalent
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thereof; (f) equipment leases providing (in any one lease or group of related
leases) for payments in excess of $100,000 per year; (g) contracts under which
the performance of any obligation of the Company is guaranteed by a Stockholder
or other third party, including performance bonding arrangements; (h) contracts
or commitments providing for payments based in any manner upon the revenues,
purchases or profits of the Company; (i) bank credit, factoring and loan
agreements, indentures, promissory notes and other documents representing
indebtedness in excess of $100,000 for borrowed money; (j) patent licensing
agreements and all other agreements with respect to patents, patent
applications, trademarks, service marks, trade names, technical assistance,
special processes, know-how, copyright or other like items; and (k) other
contracts and agreements to which the Company is a party and which have not been
fully performed, involving consideration having a value in excess of $100,000
and a remaining period for performance in excess of nine months (all such items
being collectively referred to herein as "Material Contracts"). The Company has
furnished to Newpark true and complete copies of all such Material Contracts.
3.7.2 All Material Contracts are valid and binding obligations of
the Company and, to the best of the "knowledge of the Company" and the
Stockholder Parties, as defined in Section 18, the other parties thereto in
accordance with their respective terms, subject to the Bankruptcy Exception;
there have been no amendments to or modifications to any Material Contract
(except as set forth in the copies furnished to Newpark); no event has occurred
which is, or, following any grace period or required notice, would become a
material default by the Company under the terms of any Material Contract; except
to the extent specifically reserved against on the latest balance sheet included
in the Company Financial Statements, the Company is not a party to any Material
Contract on which it anticipates expenses materially in excess of revenues or
which is otherwise onerous or materially adverse; and the Company has not
expressly waived any material rights under any Material Contract.
3.8 Outstanding Indebtedness. The Disclosure Letter includes a true
and com plete schedule of all notes payable and other indebtedness in excess of
$250,000 for borrowed money owed by the Company, including a description of the
material terms thereof and a description of all properties or assets pledged,
mortgaged or otherwise hypothecated (voluntarily or involuntarily) as security
therefor.
3.9 Absence of Undisclosed Liabilities. Except for liabilities and
obligations reflected on the latest balance sheet included in the Company
Financial Statements or arising in the ordinary course of business since the
date of such balance sheet, none of which latter items, individually or in the
aggregate, have a Materially Adverse Effect: (a) the Company does not have, and
none of its properties are subject to, any debts, liabilities or obligations of
any nature, whether accrued, absolute, contingent or otherwise, which are of a
type which are required to be shown or reflected on financial statements
prepared in a manner consistent with generally accepted accounting principles;
and (b) to the best of the knowledge of the Company and the Stockholder Parties,
the Company does not have, and none of its properties are subject to, any
material debts, liabilities or obligations of any nature, whether accrued,
absolute, contingent or otherwise, whether or not of a type which are required
to be shown or reflected on financial state ments prepared in a manner
consistent with generally accepted accounting principles. The Company is not in
default with respect to any material term or condition of any indebtedness.
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3.10 No Litigation. There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Company) pending or, to the
knowledge of the Company and the Stockholder Parties, threatened against or
affecting the Company, at law or in equity or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. To the best of the knowledge of
the Company and the Stockholder Parties, the Company is not in default with
respect to any judgment, order, writ, injunction, decree, award of any court,
arbitrator, governmental department, commission, bureau, board, agency or
instrumentality.
3.11 Environmental Matters.
3.11.1 Neither the Company nor, to the best of the knowledge
of the Company and the Stockholder Parties, any previous owner, lessee, tenant,
occupant or user of any real property owned or leased on or prior to the date
hereof by the Company (such real property and any and all buildings and other
improvements thereon being herein referred to as the "Property") used,
generated, manufactured, treated, handled, refined, processed, released,
discharged, stored or disposed of any "Hazardous Materials" (as defined in
Section 18) on, under, in or about the Property, or transported any Hazardous
Materials to or from the Property in violation of any "Hazardous Materials Laws"
(as defined in Section 18) in a manner or to an extent that resulted or is
reasonably likely to result in a Material Adverse Effect. To the best of the
knowledge of the Company and the Stockholder Parties, no underground tanks or
Hazardous Materials the existence of which would have a Material Adverse Effect
existed on, under, in or about any Property previously owned or leased by the
Company on or prior to the date that fee or leasehold title to such Property was
transferred to a third party by the Company. To the best of the knowledge of
the Company and the Stockholder Parties, no underground tanks or Hazardous
Materials the existence of which would have a Material Adverse Effect exist on,
under, in or about any Property that is currently owned or leased by the
Company.
3.11.2 While any Property was owned or leased by the Company,
it did not violate to an extent that would have a Material Adverse Effect any
applicable federal, state and local laws, ordinances or regulations, now or
previously in effect, relating to environmental conditions, industrial hygiene
or Hazardous Materials on, under, in or about such Property (including without
limitation the Hazardous Materials Laws).
3.11.3 As of the date hereof, to the best of the knowledge of
the Company and the Stockholder Parties, there are no (1) enforcement, clean-up,
removal, mitigation or other governmental or regulatory actions instituted,
contemplated or threatened pursuant to any Hazardous Materials Laws against the
Company or regarding any Property presently owned or leased by the Company, (2)
claims made or threatened by any Person or governmental body relating to the
Property against the Company or any Property presently owned or leased by the
Company or relating to damage, contribution, cost recovery, compensation, loss
or injury resulting from any Hazardous Materials or (3) any occurrence or
condition known to the Company on any Property that is currently owned or leased
by the Company that can reasonably be expected to subject the Company or such
Property to any material restrictions on occupancy, transferability or use of
any Property under any Hazardous Materials Laws. The Disclosure Letter includes
a list of all complaints, notices of violation and
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claims relating to Hazardous Materials Laws which, to the knowledge of the
Company and the Stockholder Parties, have been received by or asserted against
the Company the existence of which would have a Material Adverse Effect.
3.12 Taxes.
3.12.1 Except as set forth in the Disclosure Letter (1) The
Company has filed all income, franchise and other "Tax Returns" (as defined in
Section 18) required to be filed by it by the date hereof (taking into account
all extensions), and such Tax Returns are correct and complete in all material
respects, and (2) all "Taxes" (as defined in Section 18) imposed by the United
States, the State of Texas and by any other state, municipality, subdivision, or
other taxing authority (including but not limited to sales and use Taxes, Taxes
required to be withheld from the wages of the Company's employees and paid to
the appropriate governmental authority and contributions due from the Company
pursuant to applicable unemployment insurance or compensation laws), which are
due and payable by the Company (a) as of October 31, 1996, have been paid in
full or are adequately provided for by reserves, accruals and provisions
reflected on the latest balance sheet included in the Company Financial
Statements, and (b) as of the Effective Time will have been paid in full or
adequately provided for by such reserves, accruals and provisions, as adjusted
for operations and transactions through the Effective Time in accordance with
the past practice and custom of the Company.
3.12.2 The Company has furnished to Newpark correct and complete
copies of the federal income Tax Returns and comparable state Tax Returns of the
Company covering the last three (3) taxable years of the Company.
3.13 Permits and Licenses. The Company has all licenses, franchises,
permits and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof, and the Company is in compliance in all material respects with all
applicable federal, state and local laws, rules, regulations and orders relating
to their businesses, except where failure to have any such license, franchise,
permit or authorization or failure to comply with any such laws, rules,
regulations and orders would not have a Material Adverse Effect. The execution
and performance of this Agreement and the consummation of the transactions
contemplated hereby will not violate any provision of or constitute a default
under any law, rule or regulation, order, writ, injunction or decree of any
court or other governmental agency or instrumentality applicable to the
Stockholder Parties or the Company, where such violation or default would have a
Material Adverse Effect.
3.14 No Labor Problems. The Company has not been charged with any
unresolved unfair labor practices. There are no material controversies pending
or, to the best knowledge of the Company and the Stockholder Parties, threatened
between the Company and any of its employees. The Company has complied in all
material respects with all laws relating to wages, hours, collective bargaining
and similar employment matters the noncompliance with which would have a
Material Adverse Effect, and the Company is not liable for any arrears or wages
or any material penalties for failure to comply with any of the foregoing.
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3.15 Employee Benefit Plans.
3.15.1 List of Plans. The Disclosure Letter includes a complete and
accurate list of all employee benefit plans ("Plans"), as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and benefit arrangements that are not Plans ("Benefit Arrangements"),
including, but not limited to any (1) employment or consulting agreements, (2)
incentive bonus or deferred bonus arrangements, (3) arrangements providing
termination allowance, severance or similar benefits, (4) equity compensation
plans, (5) deferred compensation plans, (6) cafeteria plans, (7) employee
assistance programs, (8) bonus programs, (9) scholarship programs, (10) vacation
policies, and (11) stock option plans that are currently in effect or were
maintained within three years of the Effective Time, or have been approved
before the Effective Time but are not yet effective, for the benefit of
directors, officers, employees or former employees (or their beneficiaries) of
the Company (Plans and Benefit Arrangements being collectively referred to as
"Designated Plans" herein).
3.15.2 No Title IV Plans or VEBAs. Neither the Company nor any Person
that was at any time during the six years before the Effective Time treated as a
single employer together with the Company under Section 414 of the Code has ever
maintained, had any obligation to contribute to or incurred any liability with
respect to a pension plan that is or was subject to the provisions of Title IV
of ERISA or Section 412 of the Code. Neither the Company nor any Person that was
at any time during the six years before the Effective Time treated as a single
employer together with the Company under Section 414 of the Code has ever
maintained, had an obligation to contribute to, or incurred any liability with
respect to a multiemployer pension plan as defined in Section 3(37) of ERISA.
During six years before the Effective Time, the Company has not maintained, had
an obligation to contribute to or incurred any liability with respect to a
voluntary employees' beneficiary association that is or was intended to satisfy
the requirements of Section 501(c)(9) of the Code.
3.15.3 Designated Plans Documents. With respect to each Designated
Plan, the Company has made available to Newpark, as applicable, true and
complete copies of (1) all written documents comprising such Plan or each
Benefit Arrangement (including amendments and individual agreements relating
thereto), or, where there are no such documents, a full description of such Plan
or Benefit Arrangement; (2) the trust, group annuity contract or other document
that provides for the funding of the Designated Plan or the payment of
Designated Plan benefits; (3) the three most recent annual Form 5500, 990 and
1041 reports (including all schedules thereto) filed with respect to the
Designated Plan; (4) the most recent actuarial report, valuation statement or
other financial statement; (5) the most recent Internal Revenue Service ("IRS")
determination letter; (6) the summary plan description currently in effect and
all material modifications thereto; and (7) all other correspondence from the
IRS or Department of Labor that relates to one or more of the Designated Plans
with respect to any matter, audit or inquiry.
3.15.4 Compliance with Law. To the knowledge of the Company and the
Stockholder Parties, each Designated Plan has been operated in a manner which is
in material compliance with its terms and with all applicable laws, including
all applicable reporting and disclosure requirements.
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3.15.5 Contributions. Full payment has been made of all amounts
which the Company is required, under applicable law or under any Designated Plan
or any agreement related to any Designated Plan to which the Company is a party,
to have paid as contributions thereto as of the last day of the most recent
fiscal year of each Designated Plan ended prior to the date hereof. Benefits
under all Designated Plans are as represented in the governing instruments
provided pursuant to Section 3.15.3 above, and have not been increased
subsequent to the date as of which documents have been provided. The Company
Financial Statements properly reflect all amounts required to be accrued as
liabilities under each Designated Plan.
3.15.6 Tax Qualification. Each Designated Plan that is intended to be
qualified under Sections 401(a) and 501(a) of the Code has been determined to be
so qualified by the IRS, has been submitted to the IRS for a determination with
respect to such qualified status or the remedial amendment period established
under Section 402(b) of the Code with respect to the Designated Plan will not
have expired prior to the Effective Time. To the knowledge of the Company and
the Stockholder Parties, each Designated Plan that is intended to be qualified
under Section 401(a) of the Code has been operated in compliance with Section
401(a) of the Code.
3.15.7 Claims Liability. There is no action, claim or demand
of any kind, other than routine claims for benefits, that has been brought or,
to the knowledge of the Company and the Stockholder Parties, threatened against,
or relating to, any Designated Plan, and the Company and the Stockholder Parties
have no knowledge of any pending investigation or administrative review by any
governmental entity relating to any Designated Plan.
3.15.8 Retiree Welfare Coverage. No Designated Plan provides
any health, life or other welfare coverage to employees of the Company beyond
termination of their employment with the Company by reason of retirement or
otherwise, other than such coverage as may be required under Section 4980B of
the Code or Part 6 of ERISA, or under the continuation of coverage provisions of
the laws of any state or locality.
3.15.9 No Excess Parachute Payments. No amount that could be
received (whether in cash or property or the vesting of property) as a result of
any of transactions contemplated by this Agreement by any employee, officer or
director of the Company who is a "disqualified individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or Designated
Plan currently in effect would be characterized as an "excess parachute payment"
(as such term is defined in Section 280G(b)(1) of the Code).
3.16 Insurance. The Company has furnished to Newpark a complete list
of all insurance policies that the Company maintains, indicating risks insured
against, carrier, policy number, amount of coverage, premiums and expiration
date.
3.17 Tax-Free Reorganization. To the best of the knowledge of the
Company and the Stockholder Parties, there is no plan or intention by any
Stockholder who individually owns five percent (5%) or more of the Company
Shares and, to the best of the knowledge of the
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Company and the Stockholder Parties, there is no plan or intention by the
remaining Stockholders to sell, exchange or otherwise dispose of a number of the
Newpark Shares received in the Merger that would reduce the Stockholders'
ownership of Newpark Shares to a number of shares having a value, as of the date
of the Merger, of less than fifty percent (50%) of the value of all of the
formerly outstanding Company Shares as of the same date.
3.18 Interest in Competitors, Suppliers, etc. Except as set forth in
the Disclosure Letter, neither the Stockholder Parties nor any officer or
director of the Company nor, to the best knowledge of the Company and the
Stockholder Parties, any Family Member of any such Person owns, directly or
indirectly, individually or collectively, any interest in any corporation,
partnership, proprietorship, firm or association which (a) is a competitor,
customer or supplier of the Company, or (b) has an existing contractual
relationship with the Company, including but not limited to lessors of real or
personal property leased to the Company and entities against whom rights or
options are exercisable by the Company.
3.19 Indebtedness with Insiders. Except as set forth in the
Disclosure Letter, and except for accrued salaries for one payroll period,
vacation pay and business expense reimbursements, the Company is not, and, on
the Closing Date, will not be, indebted to any of the Stockholders, directors or
officers of the Company or any Affiliate of any such Person. None of such
Persons is or will be on the Closing Date indebted to the Company.
3.20 Consents. Except for compliance with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), no
authorizations, approvals or consents of any governmental department,
commission, bureau, agency or other public body or authority are required for
consummation of the transactions contemplated by this Agreement.
3.21 Patents, Trademarks and Other Intangibles. The Disclosure Letter
includes a list of all material patents, patent applications, trade names,
trademark registrations and applications therefor, copyrights, licenses,
franchises and other assets of like kind ("Intangible Assets") and all interests
in Intangible Assets which are owned in whole or in part by or registered in the
name of the Company. To the best knowledge of the Company and the Stockholder
Parties, the Company owns or has the right to use all Intangible Assets now used
in the conduct of its business. The Company is not obligated to pay any royalty
or other fee to any licensor or other third party with respect to any Intangible
Assets. The Company has no knowledge of any claim received by it alleging any
conflict between any aspect of the business of the Company and any Intangible
Assets claimed to be owned by others which, if determined adversely to the
Company, would have a Material Adverse Effect. Neither the Stockholder Parties
nor any other officer or director of the Company, and no Person that is an
Affiliate of any such Person, has any interest in any Intangibles Assets which
are presently used by the Company or which infringe upon, conflict with or
relate to improvements or modifications of any Intangible Assets presently used
by the Company.
3.22 Purchases and Sales. Since October 31, 1996, the Company has not
placed any orders for materials, merchandise or supplies in exceptional or
unusual quantities based upon past operating practices and has not entered into
contracts with customers under conditions relating to price, terms of payment,
time of performance or like matters materially different from
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the conditions regularly and usually specified in contracts for similar
engagements from customers similarly situated.
3.23 Brokerage and Finder's Fees. Neither the Company nor the
Stockholder Parties (or any Affiliate of the Stockholder Parties) has incurred
any liability to any broker, finder or agent for any brokerage fees, finder's
fees or commissions for which the Company could be liable with respect to the
transactions contemplated by this Agreement.
3.24 Absence of Certain Changes. Since October 31, 1996, except for
matters of a general economic nature which do not affect the Company uniquely,
the Company has not:
3.24.1 suffered any Material Adverse Effect;
3.24.2 borrowed or agreed to borrow any funds in excess of
$25,000 in a single transaction or $100,000 in the aggregate, except borrowings
under its bank lines of credit in the ordinary course of business, or incurred
or become subject to any obligation or liability (absolute or contingent) in
excess of $25,000 in a single transaction or $100,000 in the aggregate, except
obligations and liabilities incurred in the ordinary course of business;
3.24.3 mortgaged, pledged, hypothecated or otherwise encumbered
any of its properties or assets except for Permitted Liens;
3.24.4 made or agreed to make any distribution of any funds or
assets of any kind whatsoever to any past or present stockholder of the Company
or any Affiliate of any such Person, whether by way of dividend, redemption or
purchase of capital stock, or any other type of distribution on or with respect
to its capital stock, whether or not similar to the foregoing;
3.24.5 made any payment of principal or interest on any
indebtedness owed to any past or present stockholder of the Company or any
Affiliate of any such Person;
3.24.6 sold or agreed to sell any of its assets, properties or
rights having an aggregate value in excess or $100,000 or canceled or agreed to
cancel any debts or claims exceeding $100,000 in the aggregate, except for fair
value in the ordinary course of business;
3.24.7 entered or agreed to enter into any agreement or
arrangement granting any preferential right to purchase a material part of its
assets, properties or rights;
3.24.8 increased the rate of compensation of or paid or
accrued bonuses to or for any of their officers, employees, consultants or
agents, except for normal merit or cost of living increases;
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3.24.9 suffered any damage, destruction or loss in excess of an
aggregate of $100,000, whether or not covered by insurance, adversely affecting
any of their properties;
3.24.10 assigned or agreed to assign any of its Intangible
Assets having a value in excess of $100,000;
3.24.11 suffered any adverse amendment or termination of any
Material Contract (or any contract that would have been a Material Contract if
not amended or terminated) to which it is a party;
3.24.12 paid any commissions or similar fees to brokers or
finders for arranging the transactions contemplated by this Agreement or any
similar proposed transaction with any other party; or
3.24.13 entered into any other material transaction other than
in the ordinary course of business.
3.25 No Material Misstatements or Omissions. No representation or
warranty by the Company and the Stockholder Parties in this Agreement, and no
document, certificate, exhibit or schedule furnished or to be furnished to
Newpark pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated therein or necessary in order to make the statements or facts therein, in
the light of the circumstances under which they were made, not misleading.
3.26 Accuracy of Information for Memorandum. The information relating
to the Company furnished and to be furnished by the Company in writing for
inclusion in the "Memorandum" (as defined in Section 4.8) or in any amendment or
supplement to the Memorandum or in any application or other document ("Blue Sky
application") filed in any state or other jurisdiction in order to register or
qualify the offer and sale of Newpark Shares contemplated hereby under the
securities laws of such state or other jurisdiction shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein in the light
of the circumstances under which they were made not misleading at the time the
Memorandum is furnished to the Stockholders, at the time any such Blue Sky
application becomes effective or at the effective time of any post-effective
amendment or supplement thereto. All representations and warranties contained
in this Agreement with respect to the Company Financial Statements shall apply
to all financial statements furnished by the Company for use in the Memorandum.
B. Except as otherwise set forth in the Disclosure Letter, each
Stockholder Party represents and warrants with respect to himself, severally but
not jointly, the following (the truth and accuracy of each of which shall
constitute a condition precedent to Newpark's and Newco's obligations to
consummate the Merger and issue the Newpark Shares):
3.27 Enforceability. This Agreement has been duly and validly executed
by such Stockholder Party, and this Agreement constitutes a legal, valid, and
binding obligation of such
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Stockholder Party, enforceable against him in accordance with its terms, subject
to the Bankruptcy Exception. Such Stockholder Party has the requisite power to
enter into this Agreement and perform his obligations hereunder (including
without limitation to sell and deliver his Company Shares), and no other
Person's joinder as a party hereto is necessary therefor pursuant to any
community property laws or otherwise, and there is no restriction on the power
of the Stockholder Party to sell and deliver his Company Shares pursuant to any
trust, estate planning or other similar document or any prenuptial or post-
nuptial agreement or arrangement.
3.28 No Litigation. There are no actions pending or, to the knowledge
of such Stockholder Party, threatened in any court or arbitration forum or by or
before any governmental department, commission, bureau, agency or other public
body or authority involving such Stockholder Party relating to or affecting any
of the transactions contemplated by this Agreement.
3.29 Title to Shares. Such Stockholder Party is the holder of record
and owns beneficially that number of Company Shares set forth opposite his name
in the Disclosure Letter. At the Closing, such Stockholder Party will own the
Company Shares set forth in the Disclosure Letter free and clear of all liens,
security interests, encumbrances and restrictions, other than restrictions
contemplated by this Agreement. Except as set forth in the Disclosure Letter,
no Stockholder Party is a party to any voting trust, proxy or other agreement
with respect to the voting of any of such Company Shares.
4. Additional Obligations and Covenants of the Company and the
Stockholder Parties.
Except as otherwise provided in the Disclosure Letter, the Company
and, to the extent their actions or inactions can control or direct the Company,
the Stockholder Parties hereby jointly and severally covenant and agree with
Newpark and Newco as follows (the fulfillment of each such covenant and
agreement is a condition precedent to Newpark's and Newco's obligations to
consummate the Merger and issue the Newpark Shares):
4.1 Conduct of Business. Between the date hereof and the Closing
Date:
4.1.1 The business of the Company shall be conducted diligently
and only in the ordinary course, and the Stockholder Parties and the Company
will use reasonable efforts to preserve the organization of the Company intact,
to keep available to the Company its present key employees and to maintain the
relationships of the Company with its suppliers, customers and others. The
Company will not, without Newpark's prior written approval, increase the rate of
compensation payable or to become payable to any of its officers, employees,
consultants or agents over the rate being paid to them at the date hereof,
except for normal merit or cost of living increases to employees other than
officers of the Company.
4.1.2 Amendment/New Plans. Without Newpark's prior written
approval, except as required by applicable law, no amendment will be made to any
Designated Plan, no commitment will be made to amend any Designated Plan and no
commitment will be made to continue any Designated Plan or to adopt any new
compensatory plan, fund or program for the benefit of any employees of the
Company.
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4.1.3 The Company will not, without Newpark's prior written approval,
enter into any Material Contract other than in the ordinary course of business
or enter into contracts with customers under conditions relating to price, terms
of payment, time of performance or like matters materially different from the
conditions regularly and usually specified in contracts for similar engagements
from customers similarly situated.
4.1.4 The Company will not, without Newpark's prior written
approval, sell or dispose of any of its material properties or assets except for
sales at fair value in the ordinary course of business.
4.1.5 The Company will not, without Newpark's prior written
approval, acquire or enter into any agreement to acquire, by merger,
consolidation, purchase of stock or assets or otherwise, any business or entity.
4.1.6 The Company will use reasonable diligence to maintain its
properties in their condition as of the date of this Agreement, ordinary wear
and tear excepted.
4.1.7 The Company will continue to carry its existing insurance
policies subject only to variations in amounts required by the ordinary
operations of its business. At the request of Newpark and at its sole expense,
the amount and scope of said insurance shall be increased by such amounts and
extended to provide coverage against such risks as Newpark shall specify.
4.2 Access and Information. Subject to the execution by Newpark of a
confidentiality agreement in form and substance reasonably satisfactory to the
Company, the Company and the Stockholder Parties will afford to Newpark and
Newpark's counsel, accountants and other representatives reasonable access,
throughout the period from the date hereof to the Closing Date, to all of the
Company's properties, books, contracts, commitments, and records and shall
furnish Newpark during such period with all information that Newpark reasonably
may request, including copies and/or extracts of pertinent records, documents
and contracts.
4.3 Efforts to Satisfy Conditions. The Company and the Stockholder
Parties agree to use reasonable efforts to satisfy or cause to be satisfied all
of the conditions precedent to Newpark's and Newco's obligations under this
Agreement, to the extent that their action or inaction can control or influence
the satisfaction of such conditions. Without limiting the generality of the
foregoing (a) each of the Stockholder Parties agrees to vote all of the Company
Shares beneficially owned by him or which he has the right to vote in favor of
the Merger and (b) the Stockholder Parties and the Company will refrain from all
negotiations and transactions, the consummation of which would be inconsistent
with the transactions contemplated by this Agreement, including, without
limitation, any transaction providing for the sale of any capital stock of the
Company, any merger or other business combination involving the Company, the
acquisition of a substantial equity interest in the Company by a third party or
the sale of a substantial portion of the assets of the Company.
4.4 Corporate Matters. Between the date hereof and the Closing Date,
the Company will not, without Newpark's prior written approval: (a) amend its
Articles of Incor-
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poration or Bylaws; (b) issue any shares of its capital stock; (c) issue or
create any warrants, obli gations, subscriptions, options, convertible
securities or other commitments under which any additional shares of its capital
stock of any class might be directly or indirectly authorized, issued or
transferred from treasury, or (d) enter into any agreement requiring it to do
any of the foregoing prohibited acts.
4.5 No Distributions to Stockholders. Between the date hereof and
the Closing Date, the Company will not, without Newpark's prior written
approval: (a) declare, set aside or pay any dividend or make any distribution
in respect of its capital stock; (b) directly or indirectly purchase, redeem or
otherwise acquire any shares of its capital stock for consideration; (c) pay or
distribute any cash or property to any Stockholder as a loan or in payment of
principal of or interest on any indebtedness to any Stockholder; or (d) enter
into any agreement requiring it to do any of the foregoing prohibited acts.
4.6 Capital Expenditures. Between the date hereof and the Closing
Date, the Company will not, without Newpark's prior written approval, make any
commitment for capital expenditures in excess of an aggregate of $100,000.
4.7 Indebtedness. Between the date hereof and the Closing Date, the
Company will not, without Newpark's prior written approval: (a) create, incur or
assume any long-term debt (including capital leases that individually involve
annual payments in excess of $100,000) or, except in the ordinary course of
business under existing lines of credit, create, incur or assume any short-term
debt for borrowed money in excess of $25,000 in a single transaction or $100,000
in the aggregate; (b) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person (except in the ordinary course of business and consistent with
past practice); (c) make any loans or advances to any Person except in the
ordinary course of business and consistent with past practice; or (d) make any
capital contributions to, or investments in, any Person except in the ordinary
course of business and consistent with past practice.
4.8 Information for Memorandum. The Company will furnish to Newpark
all information concerning the Company reasonably requested by Newpark for
inclusion in a private placement memorandum (the "Memorandum") to be furnished
to the Stockholders prior to their vote on the Merger. The Company will use
reasonable efforts to facilitate the qualification of the issuance of the
Newpark Shares in connection with the Merger under Rule 506 of the "Rules and
Regulations" (as defined in Section 18) and, if necessary, under the applicable
Blue Sky or securities laws of the various states. The Company will not solicit
approval by the Stockholders of the Merger Agreements and the Merger until
Newpark authorizes it to do so or if Newpark notifies the Company that the
Memorandum must be amended or supplemented prior to its use. The Company will
bear all fees and disbursements of counsel to the Company and the Stockholders
and the expenses of any audits of its financial statements which are incidental
to the performance of its obligations under this Section and Section 4.9.
4.9 Stockholder Approval. At the earliest practicable time,
consistent with applicable state and federal law, the Company shall solicit all
necessary approval by the Stockholders of the Merger Agreements and the Merger
and, through its Board of Directors, shall
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recommend such approval by the Stockholders. The Company will furnish copies of
the Memorandum to each of the Stockholders and will use diligent efforts to
assist Newpark in obtaining evidence reasonably satisfactory to Newpark (i) that
any Stockholder deemed by Newpark to be an "accredited investor" (as that term
is defined in Rule 501 of the Rules and Regulations) is such an accredited
investor, (ii) that any Stockholder who is not deemed to be such an accredited
investor, either alone or with such Stockholder's qualified "purchaser
representative" (as defined in Rule 501 of the Rules and Regulations), has such
knowledge and experience in financial and business matters that he or she is
capable of evaluating the risks and merits of an investment in Newpark Common
Stock and (iii) that each Stockholder is acquiring his or her Newpark Shares in
the Merger for investment and not with a view to the sale thereof other than in
compliance with the requirements of the "Securities Act" (as defined in Section
18) and applicable Blue Sky laws. Upon approval of the Merger by the
Stockholders, the Company shall take all other necessary corporate action
required on its part hereunder to effect the closing of this Agreement and the
consummation of the transactions contemplated hereby, subject to compliance by
Newpark of its obligations hereunder.
4.10 Affiliates. The Company and the Stockholder Parties shall
deliver to Newpark a supplemental letter identifying all Persons who, at the
time the Merger is submitted to a vote of the Stockholders, are "affiliates" of
the Company for purposes of Rule 145 under the "Securities Act" (as defined in
Section 18). The Company shall use reasonable efforts to cause each Person so
identified to deliver to Newpark at or prior to the Effective Time a written
statement, in form and substance satisfactory to Newpark, that such Person will
not offer to sell, transfer or otherwise dispose of any the Newpark Shares
issued to such Person pursuant to the Merger, except (a) in accordance with the
applicable provisions of the Securities Act and the Rules and Regulations and
(b) until such time as financial results covering at least 30 days of combined
operations of Newpark and the Company have been published within the meaning of
Section 201.01 of the Commission's Codification of Financial Reporting Policies.
4.11 Xxxx-Xxxxx-Xxxxxx Notification. The Company will promptly file a
notification form in compliance with the HSR Act, and will respond promptly to
any request for additional information that it receives. The Company will
furnish to Newpark copies of (a) the notification form before it is filed, (b)
any request for additional information that it receives promptly after receiving
it and (c) the additional information to be furnished in response to any such
request before it is filed.
4.12 Audited Financial Statements. Within four business days after
the date hereof, the Company will deliver to Newpark an audited balance sheet as
of October 31, 1996, and audited statements of income, stockholders' equity and
cash flows for the fiscal year ended on October 31, 1996. Such financial
statements shall be included in the "Financial Statements," as defined in
Section 3.5, and the representations and warranties made therein with respect to
the Financial Statements shall apply to such audited financial statements.
5. Representations and Warranties of Newpark and Newco. Newpark and
Newco hereby jointly and severally represent and warrant the following (the
truth and accuracy of each of which shall constitute a condition precedent to
the Company's and the Stockholder Parties' obligations to consummate the
Merger):
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5.1 Organization and Good Standing.
5.1.1 Each of Newpark and Newco is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Newpark has corporate power and authority to carry on its business as presently
conducted and is qualified to do business in every jurisdiction in which the
character and location of the assets owned by it or the nature of the business
transacted by it or both require qualification and failure to be so qualified
would have a Material Adverse Effect. Newco has not engaged in any business.
5.1.2 Newpark has furnished to the Company and the Stockholder
Parties complete and correct copies of Newpark's and Newco's Certificate of
Incorporation and Bylaws as in effect on the date hereof.
5.2 Capital Stock.
5.2.1 The authorized capital stock of Newpark consists of
20,000,000 shares of Common Stock, $.01 par value, of which 14,544,235 shares
were issued and outstanding on February 4, 1997, and 1,000,000 shares of
Preferred Stock, $.01 par value, of which no shares are issued and outstanding.
5.2.2 The authorized capital stock of Newco consists of 1,000
shares of Common Stock, $.01 par value, of which 1,000 shares are issued and
outstanding and held by Newpark on the date hereof.
5.3 Newpark Subsidiaries. Each subsidiary of Newpark that is a
"significant subsidiary," as defined in Rule 1-02(w) of Regulation S-X of the
Rules and Regulations (each a "Newpark Subsidiary" and collectively the "Newpark
Subsidiaries), is duly organized and in good standing under the laws of the
jurisdiction in which it was incorporated or organized, has full corporate power
and authority to carry on its business as now conducted by it and is entitled to
own or lease and operate its properties and assets now owned or leased and
operated by it. Each Newpark Subsidiary is duly qualified and in good standing
as a foreign corporation or other entity in each jurisdiction where the
character or location of the assets owned by it or the nature of the business
transacted by it require such qualification, except where failure to be so
qualified would not have a Material Adverse Effect. All shares of capital stock
of and other equity interests in the Newpark Subsidiaries owned by Newpark and
any Newpark Subsidiary are owned by Newpark or a Newpark Subsidiary free and
clear of all liens, encumbrances and adverse claims.
5.4 Authority. The execution and delivery of the Merger Agreements
by Newpark and the consummation of the transactions contemplated thereby have
been duly authorized by the Board of Directors of Newpark, and the execution and
delivery of the Merger Agreements by Newco and the consummation of the
transactions contemplated thereby have been duly authorized by the Board of
Directors of Newco and by Newpark in its stockholder capacity. This Agreement
has been duly executed and delivered to the Company and the Stockholder Parties
and no vote of the stockholders of Newpark or further corporate action is
necessary on the part of the Newpark or Newco to make this Agreement valid and
binding upon Newpark and Newco in accordance with its terms, subject to the
Bankruptcy Exception. The execution,
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delivery and performance of the Merger Agreements by Newpark and Newco are not
contrary to the Articles of Incorporation or Bylaws of Newpark or Newco and will
not result in a violation or breach of any term or provision or constitute a
default or give any party a right to accelerate the due date of any indebtedness
under any indenture, mortgage, deed of trust or other contract or agreement to
which Newpark or Newco are parties or by which Newpark or Newco are bound.
5.5 Newpark Reports. Newpark has delivered to the Company and the
Stockholder Parties copies of (a) Newpark's Annual Report on Form 10-K for the
years ended December 31, 1993, 1994 and 1995, (b) Newpark's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1996, June 30, 1996, and September
30, 1996, (c) Newpark's definitive Proxy Statement dated May 1, 1996, for its
Annual Meeting of Stockholder Parties held on June 12, 1996, and (d) Newpark's
final Prospectus dated August 6, 1996, with respect to a public offering of its
common stock. All of said documents and all periodic reports filed by Newpark
with the Commission after the date hereof are called the "Newpark Reports"
herein. The Newpark Reports have been or will be duly and timely filed with the
Commission and are or will be when filed in compliance with the Rules and
Regulations. As of their respective dates, none of the Newpark Reports
contained or will contain any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
5.6 Newpark Financial Statements. The financial statements
contained in the Newpark Reports (the "Newpark Financial Statements") filed on
or before the date hereof have been prepared in accordance with the books and
records of Newpark and its subsidiaries and in accordance with generally
accepted accounting principles consistently applied during the periods
indicated, all as more particularly set forth in such financial statements and
the Notes thereto. Each of the balance sheets included in the Newpark Financial
Statements presents fairly as of its date the consolidated financial condition
and assets and liabilities of Newpark and its subsidiaries. Except as and to
the extent reflected or reserved against in such balance sheets (including the
Notes thereto), Newpark (including its subsidiaries) did not have, as of the
dates of such balance sheets, any material liabilities or obligations (absolute
or contingent) of a nature customarily reflected in a balance sheet or the notes
thereto prepared in accordance with generally accepted accounting principles.
The consolidated statements of earnings and stockholders' equity and
consolidated statements of changes in financial position included in the Newpark
Financial Statements present fairly the results of operations and changes in
financial position of Newpark and its subsidiaries for the periods indicated.
5.7 No Litigation. Except as disclosed in the Newpark Reports or
omitted therefrom in accordance with the Rules and Regulations: (a) there are no
actions, suits or proceedings (whether or not purportedly on behalf of Newpark
or any Newpark Subsidiary) pending or, to the "knowledge of Newpark" (as defined
in Section 18), threatened against or affecting the Newpark or any Newpark
Subsidiary, at law or in equity or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind; and (b) to the best of the knowledge of
Newpark, neither Newpark nor any Newpark Subsidiary is in default with respect
to any judgment, order,
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writ, injunction, decree, award of any court, arbitrator, governmental
department, commission, bureau, board, agency or instrumentality.
5.8 Newpark Benefit Plans. Newpark has provided to the Company and
the Stockholder Parties a true and complete copy of the ERISA summary plan
description and any other summary of plan provisions provided to participants or
beneficiaries, if applicable, for each Plan or Benefit Arrangement (as defined
in Section 3.15.1, substituting "Newpark" for "the Company") maintained by
Newpark.
5.9 Environmental Matters.
5.9.1 Newpark and the Newpark Subsidiaries have complied in all
material respects with all Hazardous Materials Laws applicable to its properties
and business. Neither Newpark nor, to the best of Newpark's knowledge, any
Newpark Subsidiary has received any complaint, order or similar notice that it
is not in compliance with any Hazardous Materials Laws or that any public
authority is investigating its compliance with any Hazardous Materials Laws,
except as disclosed in the Newpark Reports or omitted therefrom in accordance
with the Rules and Regulations and except for routine inspections and
investigations in connection with applications by Newpark and the Newpark
Subsidiaries for additional permits or authorizations. Newpark has no knowledge
of any material violation of any Hazardous Materials Laws on or about its
properties or the properties of any Newpark Subsidiary.
5.9.2 Except as disclosed by Newpark in writing to Stockholder
Parties, all Hazardous Materials generated or transported by Newpark and the
Newpark Subsidiaries have been transported, stored, treated and disposed of by
carriers or treatment, storage and disposal facilities authorized or maintaining
valid permits under all applicable Environmental Laws, except as would not have
a Material Adverse Effect.
5.9.3 Except as disclosed by Newpark in writing to the Stockholder
Parties, neither Newpark nor any of the Newpark Subsidiaries have been named as
a Potentially Responsible Party in any site listed on the National Priorities
List under the Comprehensive Environmental Response, Compensation, and Liability
Act or any similar state law.
5.10 Absence of Certain Changes. Since September 30, 1996, there has
not been any material adverse change in the results of operations, financial
condition, liquidity, assets, properties or business of Newpark and its
subsidiaries, taken as a whole.
5.11 Consents. Except for compliance with the HSR Act, no
authorizations, approvals or consents of any governmental department,
commission, bureau, agency or other public body or authority are required for
consummation by Newpark and Newco of the transactions contemplated by the Merger
Agreements, except such qualifications as may be required under state securities
or Blue Sky laws relating to the Newpark Shares.
5.12 No Material Misstatements or Omissions. No representation or
warranty by Newpark and Newco in this Agreement, and no document, certificate,
exhibit or schedule furnished or to be furnished to the Company and the
Stockholder Parties and, in the case of the
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Memorandum, to the Stockholders, pursuant hereto contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact required to be stated therein or necessary to make the statements or facts
contained therein not misleading.
5.13 Permits and Licenses. Newpark and the Newpark Subsidiaries have
all licenses, franchises, permits and other governmental authorizations that are
legally required to enable them to conduct their business in all material
respects as described in the Newpark Reports, and Newpark and the Newpark
Subsidiaries are in compliance in all material respects with all applicable
federal, state and local laws, rules, regulations and orders relating to their
businesses, except where failure to have any such license, franchise, permit or
authorization or failure to comply with any such laws, rules, regulations and
orders would not have a Material Adverse Effect. The execution and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not violate any provision of or constitute a default under any law, rule or
regulation, order, writ, injunction or decree of any court or other governmental
agency or instrumentality applicable to Newpark or the Newpark Subsidiaries
where such violation or default would have a Material Adverse Effect.
5.14 No Labor Problems. Except as disclosed in the Newpark Reports,
neither Newpark nor any Newpark Subsidiary has been charged with any unresolved
unfair labor practices. Except as disclosed in the Newpark Reports, there are
no material controversies pending or, to the best knowledge of Newpark,
threatened between Newpark or any Newpark Subsidiary and any of its employees.
Except as disclosed in the Newpark Reports, Newpark and each Newpark Subsidiary
has complied in all material respects with all laws relating to wages, hours,
collective bargaining and similar employment matters the noncompliance with
which would have a Material Adverse Effect, and Newpark and each Newpark
Subsidiary has paid all social security and similar Taxes that are due and
payable and is not liable for any arrears or wages or any Taxes or material
penalties for failure to comply with any of the foregoing.
6. Additional Obligations and Covenants of Newpark and Newco.
Newpark and Newco, jointly and severally, hereby covenant and agree
with the Stockholder Parties and the Company as follows (the fulfillment of each
such covenant and agreement is a condition precedent to the Company's and the
Stockholder Parties's obligations to consummate the Merger):
6.1 Efforts. Newpark and Newco agree to use reasonable efforts to
satisfy or cause to be satisfied all of the conditions precedent to the
Company's and the Stockholder Parties's obligations under this Agreement, to the
extent that their action or inaction can control or influence the satisfaction
of such conditions.
6.2 Access and Information. Subject to the execution by the Company
and the Stockholder Parties of a confidentiality agreement in form and substance
reasonably satisfactory to Newpark, Newpark will afford to the Stockholder
Parties and the Company and their counsel, accountants and other representatives
reasonable access, throughout the period from the date hereof to the Closing
Date, to all of the Newpark's properties, books, contracts, commitments, and
records and shall furnish the Stockholder Parties and the Company during such
period with all
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information that the Stockholder Parties and the Company reasonably may request,
including copies and/or extracts of pertinent records, documents and contracts.
6.3 Issuance and Listing of Stock. Newpark has reserved for
issuance, and, as and when required by the provisions of the Merger Agreements,
will issue the Newpark Shares, and the Newpark Shares, when so issued, will be
validly issued, fully paid and nonassessable. Newpark will use its best efforts
to list the Newpark Shares on the New York Stock Exchange.
6.4 Exemption for Issuance of Newpark Shares. Newpark will use
diligent efforts to qualify the issuance of the Newpark Shares in connection
with the Merger under Rule 506 of the Rules and Regulations and, if necessary,
to qualify the issuance thereof pursuant to all applicable state securities or
Blue Sky laws. Newpark will prepare the Memorandum in accordance with the
informational requirements of Regulation D of the Rules and Regulations.
Newpark will furnish to the Company copies of the Memorandum, which the Company
shall use in connection with the solicitation of the approval of the
Stockholders referred to in Section 4.9. In addition, Newpark will make
available to each Stockholder prior to the vote on the Merger the opportunity to
ask questions and receive answers concerning the terms and conditions of the
Merger and to obtain any additional information that Newpark is required to
furnish under Regulation D of the Rules and Regulations. Except as provided in
the last sentence of Section 4.8, all expenses incident to the preparation of
the Memorandum and the qualification or registration of the Newpark Shares under
the securities or Blue Sky laws of any state or other jurisdiction shall be
borne by Newpark.
6.5 Xxxx-Xxxxx-Xxxxxx Notification. Newpark will promptly file a
notification form in compliance with the HSR Act and will respond promptly to
any request for additional information that it receives. Newpark will furnish
to the Company copies of (a) the notification form before it is filed, (b) any
request for additional information that it receives promptly after receiving it
and (c) the additional information to be furnished in response to any such
request before it is filed.
6.6 Continuing Employees. Each employee of the Company who continues
immediately after the Effective Time as an employee of the Company, Newpark, or
any of its subsidiaries ("Continuing Employee") shall be treated under Newpark's
compensation, benefit plans and employment policies and practices on a basis
which Newpark deems no less favorable than an employee of Newpark who performs
comparable duties and responsibilities for Newpark on an equally satisfactory
basis. Each Continuing Employee shall receive service credit for all purposes
(including, but not limited to, vesting, eligibility and benefit accrual) under
Newpark's "Benefit Plans" (as defined in Section 3.15.1, substituting "Newpark"
for "the Company") and under any Benefit Plan adopted in the future for service
completed with the Company as if such service had been completed with Newpark
except that (a) no such employee shall receive such past service credit under a
future Benefit Plan except on the same basis that Newpark's employees also
receive past service credit under such plan, and (b) no such past service credit
will be provided under a plan if the Internal Revenue Service determines that
such credit would adversely affect the tax qualified status of such plan under
Section 401 of the Code.
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7. Conditions to Each Party's Obligations.
The respective obligations of each party to consummate the Merger
under this Agreement shall be subject to the satisfaction on or before the
Closing Date of each of the following conditions except to the extent the
parties may waive any of such conditions in writing:
7.1 Securities Laws. All applicable Blue Sky and state securities
laws shall have been complied with in connection with the issuance of the
Newpark Shares, and no stop order suspending the qualification or registration
of the Newpark Shares under the Blue Sky laws of any jurisdiction shall have
been issued and no proceeding for that purpose shall have been initiated or
shall be threatened by the authorities of any such jurisdiction.
7.2 Company Stockholder Approval. The Merger and this Agreement
shall have been approved at the stockholders' meeting of the Company duly called
and held in accordance with the TBCA by the holders of a majority (or such
greater percentage as the TBCA may require) of the Company Stock outstanding and
entitled to vote thereon.
7.3 Consents. All consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement shall have been obtained or made, except for
filing of the Articles of Merger, the Delaware Certificate of Merger and any
other documents required to be filed at or after the Effective Time and except
where the failure to have obtained or made any such consent, authorization,
order, approval, filing or registration would not have a Material Adverse Effect
following the Effective Time.
7.4 HSR Act. Early termination shall have been granted or applicable
waiting periods shall have expired under the HSR Act.
7.5 Injunction. At the Effective Time there shall be no effective
injunction, writ or preliminary restraining order or any order of any nature
issued by a court or governmental agency of competent jurisdiction to the effect
that the Merger may not be consummated as herein provided, no proceeding or
lawsuit shall have been commenced by any governmental or regulatory agency for
the purpose of obtaining any such injunction, writ or preliminary restraining
order and no written notice shall have been received from any such agency
indicating an intent to restrain, prevent, materially delay or restructure the
transactions contemplated by this Agreement.
7.6 Tax Opinion. The Stockholders, the Company and Newpark shall
each have received a written opinion of Xxxxx, Xxxxx & Xxxxxx LLP, in form and
substance reasonably satisfactory to the Stockholder Parties, the Company and
Newpark (the "Tax Opinion"), to the effect that, for federal income tax
purposes, (a) the Merger will constitute a reorganization within the meaning of
Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code, (ii) no gain or loss will be
recognized by the Stockholders upon the receipt by them of Newpark Shares
pursuant to the Merger, (c) the tax basis of Newpark Shares received pursuant to
the Merger by a Stockholder will be the same as the tax basis of the Company
Shares surrendered in exchange for such Newpark Shares, and (d) the holding
period for Newpark Shares received in the Merger by a
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Stockholder will include the holding period during which the Company Shares
surrendered in exchange therefor were held. In connection with such tax
opinion, Xxxxx, Xxxxx & Xxxxxx LLP shall be entitled to rely upon
representations as to certain facts and circumstances and to make such
assumptions as are customary in similar tax opinions, and such representations
and assumptions shall be confirmed by certificates signed by responsible
officers of the Company and Newpark.
7.7 Pooling. The Company and Newpark shall have been advised in
writing, as of the Effective Time, by Deloitte & Touche LLP that, in accordance
with generally accepted accounting principles, the Merger qualifies to be
treated as a "pooling of interests" for accounting purposes.
7.8 Listing of Newpark Shares. The Newpark Shares shall have been
listed on the New York Stock Exchange, subject to official notice of issuance.
8. Conditions Precedent to Obligations of Newpark and Newco.
The obligations of Newpark and Newco to consummate the Merger and
issue the Newpark Shares are subject to the satisfaction of each of the
additional following conditions at or prior to the Closing, unless waived in
writing by Newpark:
8.1 Investigation of the Company. Newpark shall have made an
investigation of the business, properties (tangible and intangible), products,
customers, plants, contracts and financial condition of the Company and shall
have been satisfied with the results of such investigation. This condition
shall be deemed satisfied unless Newpark notifies the Company in writing within
fifteen (15) days of the date hereof that it is dissatisfied with the results of
such investigation.
8.2 Accuracy of Warranties and Representations. The
representations and warranties of the Company and the Stockholder Parties herein
shall be true and correct in all material respects on and as of the Closing
Date, with the same force and effect, except as to transactions permitted herein
or to which Newpark may have consented in writing and changes occurring in the
ordinary course of business after the date of this Agreement and not materially
adversely affecting the Company, or its properties, prospects, or financial
condition, as though such representations and warranties had been made on and as
of the Closing Date, and the Company and the Stockholder Parties shall have
performed in all material respects all covenants required by this Agreement to
be performed by them at or prior to the Closing.
8.3 Authorization of Merger. All corporate action necessary by the
Company to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby shall have been
duly and validly taken.
8.4 No Material Adverse Change. There shall have been no changes
after the date of this Agreement in the results of operations, assets,
liabilities, financial condition or affairs of the Company which have had a
Material Adverse Effect on the Company.
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8.5 Officers' Certificate. The Company and the Stockholder Parties
shall have delivered to Newpark a certificate, dated the Closing Date, executed
by the President and the Chief Financial Officer of the Company and by each of
the Stockholder Parties, individually, stating that, to the best knowledge of
each, (a) all the representations and warranties of the Company and the
Stockholder Parties contained in this Agreement are true and accurate, (b) all
of the conditions precedent to the obligations of Newpark and Newco hereunder
have been fulfilled and (c) the Company and the Stockholder Parties have duly
performed all obligations and covenants to be performed by them hereunder.
8.6 Material Contracts. The Company shall have received consents to
assignment of all Material Contracts or written waivers of the provisions of any
Material Contracts requiring the consents of third parties as set forth in the
Disclosure Letter.
8.7 Dissenters. Holders of not more than 5% of the Company Shares
shall have elected to exercise appraisal rights under the TBCA and shall have
not voted in favor of the Merger.
8.8 Opinion of the Company's Counsel. Newpark and Newco shall have
received an opinion of Xxxxxxxxxx & xxxXxxx, counsel to the Company, dated the
Closing Date, substantially in the form attached hereto as Exhibit 8.8., and an
opinion from each counsel to the Stockholder Parties, dated the Closing Date,
substantially in the form attached hereto as Exhibit 8.8(a).
8.9 Suitability of Financial Statements. Newpark shall have been
advised in writing by Deloitte & Touche LLP (a copy of which shall be sent to
the Company and the Stockholder Parties) that the Company Financial Statements
can be audited in accordance with generally accepted auditing standards without
unreasonable expense and that, when audited, they will be suitable or readily
adaptable for incorporation in registration statements and annual and other
reports to be filed by Newpark with the Commission.
8.10 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for Newpark, and there shall have been furnished to such counsel by the
Company certified copies of such corporate records of the Company (including
Board of Directors and stockholder resolutions approving the Merger Agreements)
and copies of such other documents as such counsel may reasonably have requested
for such purpose.
8.11 Amendment of Shareholder Agreement. All agreements among the
stockholder of the Company or any group thereof shall have been amended to
provide that Newpark is not bound by any agreement among the stockholder parties
thereto contained therein.
9. Conditions Precedent to Obligation of the Company and the Stockholder
Parties.
The obligations of the Company and the Stockholder Parties to
consummate the Merger are subject to the satisfaction of each of the following
additional conditions at or prior to the Closing, unless waived in writing by
the Stockholder Parties:
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9.1 Accuracy of Warranties and Representations. The representations
and warranties of Newpark and Newco contained in this Agreement shall be true
and correct in all material respects on and as of the Closing Date, with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date, and Newpark and Newco shall have performed
in all material respects all of the covenants required by this Agreement to be
performed by them on or before the Closing.
9.2 Authorization of Merger. All corporate action necessary by
Newpark and Newco to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby shall
have been duly and validly taken.
9.3 No Material Adverse Change. There shall have been no changes
after the date of this Agreement in the results of operations, assets,
liabilities, financial condition or affairs of Newpark and the Newpark
Subsidiaries which have had a Material Adverse Effect on Newpark.
9.4 Officers' Certificate of Newpark. Newpark shall have delivered
to the Company and the Stockholder Parties a certificate dated the Closing Date,
executed by the President and Chief Financial Officer of Newpark and stating
that, to the best knowledge of each, (a) all the representations and warranties
of the Newpark and Newco contained in this Agreement are true and accurate, (b)
all of the conditions precedent to the obligations of the Company and the
Stockholder Parties hereunder have been fulfilled and (c) Newpark and Newco have
duly per formed all obligations and covenants to be performed by them hereunder.
9.5 Opinion of the Newpark's Counsel. The Company and the
Stockholder Parties shall have received an opinion of Xxxxx, Xxxxx & Xxxxxx LLP,
dated the Closing Date, substantially in the form attached hereto as Exhibit
9.5.
9.6 Other Legal Matters. All legal matters in connection with this
Agreement and the transactions contemplated hereby shall have been approved by
counsel for the Company and the Stockholder Parties, and there shall have been
furnished to such counsel by Newpark certified copies of such corporate records
of Newpark (including Board of Directors resolutions approving the Merger
Agreements) and copies of such other documents as such counsel may reasonably
have requested for such purpose.
10. Closing.
The closing ("Closing") of the transactions covered by this Agreement
shall take place at 10:00 a.m., on February 28, 1997, at the offices of Newpark,
0000 Xxxxx Xxxxxxxx, Xxxxx 0000, Xxxxxxxx, XX 00000. Regardless of the actual
time of the Closing, the Closing shall be deemed to have occurred effective at
the opening of business on the day the Closing occurs. In the event that the
conditions specified in this Agreement have not been fulfilled by that date, any
party may postpone the Closing for the minimum reasonably necessary period or
periods, in any event not exceeding an aggregate of 45 days, by written notice
to the other parties. Any party exercising such right shall deliver written
notice to the other parties specifying in reasonable detail the condition which
has not been fulfilled, and the other parties will have the right to cure
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or correct the matter within the 45-day period. The term "Closing Date" herein
shall mean the last date fixed by mutual agreement or otherwise under this
Section.
11. Survival of Representations.
All representations and warranties made by the Company or Newco under
or in connection with this Agreement shall terminate at the Effective Time and
shall be of no further force or effect thereafter. All representations,
warranties and indemnifications made by Stockholder Parties or Newpark under or
in connection with this Agreement (including any representations and warranties
set forth in the certificates delivered pursuant to Sections 8.5 and 9.4) shall
survive the Closing until the earlier to occur of (a) one year after the
Effective Time and (b) the date when Newpark's independent accountants issue an
audit report on their audit of the financial statements containing combined
operations of Newpark and the Company for the period ending December 31, 1997.
A party hereto shall have no liability or obligation for any misrepresentation
by it or breach of its warranties unless written notice thereof is given to such
party within the applicable survival period for such representation or warranty
setting forth in reasonable detail and specifying the nature of the claim being
asserted. The provisions of this Section and Section 13.3.3 apply only to
claims arising under this Agreement and do not affect any other claims that any
party may have at any time against any other party.
12. Post-Closing Covenants.
12.1 Cooperation and Assistance. Upon request, each of the parties
hereto shall cooperate with the other to the extent reasonably requested, at the
requesting party's expense, in furnishing information, testimony and other
assistance in connection with any actions, proceedings, arrangements or disputes
involving the Stockholder Parties, the Company, Newpark or Newco which are based
upon contracts, arrangements or acts of the Stockholder Parties or the Company
or both which were in effect or occurred on or prior to the Closing.
12.2 Access to Records. The Stockholder Parties shall be entitled,
after the Closing, upon reasonable notice and during the regular business hours
of Newpark, to have access to and to make copies of the business records of the
Company which relate to periods prior to the Closing. Newpark shall retain such
business records for a period of five (5) years following the Closing Date (or
longer if required by Section 12.3.5 or by any applicable statute of
limitations), after which time Newpark may destroy or otherwise dispose of such
business records without the Stockholder Parties' consent.
12.3 Tax Matters.
12.3.1 Control of Tax Proceedings. Whenever any taxing
authority proposes any adjustment, questions the treatment of any item, asserts
a claim, makes an assessment, or otherwise disputes the amount of any Taxes for
any period or portion thereof ending on or before the Closing Date, which
adjustment, question, claim, assessment or dispute could, if pursued
successfully, result in or give rise to a claim against any Stockholder Party
under this Agreement (a "Tax Claim"), Newpark shall promptly inform the
Stockholder Parties in
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writing of such Tax Claim. The provisions of Section 13 shall apply to the
handling of any Tax Claim.
12.3.2 Current Tax Returns. The Stockholder Parties shall be
responsible for the preparation of all Tax Returns of the Company for all
taxable periods that end or ended on or before the Closing Date and are not
required to be filed (taking into account all extensions) on or before the
Closing Date. Newpark will make available to the Stockholder Parties, without
charge, the services of its personnel and the personnel of the Company to assist
the Stockholder Parties in the preparation of such Tax Returns. Such Tax
Returns shall be reasonably satisfactory to Newpark in form and substance.
Provided such Tax Returns are delivered to Newpark, in form and substance
reasonably satisfactory to Newpark, at least five business days before the due
dates thereof (taking into account any and all extensions), Newpark will timely
file such Tax Returns or cause the Company to timely file such Tax Returns and
shall timely pay or cause the Company to pay the amounts of any Taxes shown as
due thereon.
12.3.3 Refunds and Credits. Any refunds of Taxes and credits
against Taxes (together in each case with any interest received or credited on
or with respect to such refund or credit) attributable to any taxable period or
portion thereof ending on or before the Closing Date shall be for the account of
the Company; provided, however, that, to the extent that any such refund, credit
or interest thereon exceeds the amount of such refund, credit or interest, if
any, accrued on the books of the Company as of the Effective Time, the
Stockholder Parties shall receive credit in an amount equal to the amount of
such excess against any liability they may have under Section 13.
12.3.4 Cooperation. Newpark and the Stockholder Parties shall
cooperate in good faith with each other in a timely manner in the preparation
and filing of any Tax Returns of the Company and the handling of any Tax Claims
and other Tax matters to which this Agreement relates, other than Tax Claims and
Tax matters solely involving Newpark and its Subsidiaries other than the
Company. Each party shall execute and deliver such powers of attorney and make
available such other documents and such personnel as are necessary to carry out
the intent of this Section 12.3.4. Each party agrees to promptly notify the
other parties of any such Tax Claim that does not result in Tax liability but
can be reasonably expected to affect any Tax Returns of any of the other
parties.
12.3.5 Retention of Records. Newpark shall (i) retain
records, documents, accounting data and other information (including computer
data) necessary for the preparation and filing of all Tax Returns of the Company
and the handling of any Tax Claims and other Tax matters to which this Agreement
relates, and (ii) give to the Stockholder Parties reasonable access to such
records, documents, accounting data and other information (including computer
data) and to its personnel (insuring their cooperation) and premises, for the
purpose of the preparation and review of such Tax Returns and the handling of
any Tax Claims and other Tax matters to which this Agreement relates, to the
extent necessary in connection with any Taxes to which this Agreement relates or
any obligation or liability of a party under this Agreement.
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12.4 Transfer of Shares. Subject to compliance with Section 4.10 and
with applicable securities laws, if any stockholder of SBM which is a
partnership or a limited liability company distributes to its partners or
members the Newpark Shares received by such entity pursuant to this Agreement,
Newpark will issue new certificates to such partners and members reflecting such
distribution, which certificates shall be legended pursuant to Section 1.3
hereof, and such shares shall be otherwise subject to the terms and provisions
of this Agreement.
13. Indemnifications.
13.1 Indemnification by the Stockholder Parties. Subject to the
provisions of Sections 11 and 13.3, each Stockholder Party, severally, hereby
agree to indemnify, defend, protect and hold harmless Newpark against all
damages, losses, liabilities, costs and expenses (including reasonable
attorneys' fees) resulting from any breach of any warranty or representation
made by him or it or by him or it and the Company in this Agreement. Such
indemnification shall be solely the responsibility of the Stockholder Parties,
and they shall not have any right to recover any portion of their liability from
the Company, whether by right of indemnification, contribution or otherwise.
13.2 Indemnification by Newpark. Subject to the provisions of
Sections 11 and 13.3, Newpark hereby agrees to indemnify, defend, protect and
hold harmless the Stockholders against all damages, losses, liabilities, costs
and expenses (including reasonable attorneys' fees) resulting from any breach of
any warranty or representation made by Newpark and Newco in this Agreement. The
rights to such indemnification shall accrue solely to the Stockholders, and the
Company shall have no interest therein.
13.3 Indemnification Procedures and Limitations. The following
provisions shall apply to all indemnification and hold harmless provisions of
this Agreement:
13.3.1 No party shall be required to indemnify another
pursuant hereto unless the party seeking indemnification (the "Indemnitee")
shall, with reasonable promptness, provide the other party (the "Indemnitor")
with copies of any claims or other documents received and shall otherwise make
available to the Indemnitor all material relevant information. The Indemnitor
shall have the right to defend any such claim at its expense, with counsel of
its choosing, and the Indemnitee shall have the right, at its expense, using
counsel of its choosing, to join in the defense of any such claim. The
Indemnitee's failure to give prompt notice or to provide copies of documents or
to furnish relevant data shall not constitute a defense in whole or in part to
any claim by the Indemnitee against the Indemnitor except to the extent that
such failure by the Indemnitee shall result in a material prejudice to the
Indemnitor.
13.3.2 Except as hereinafter provided, neither party shall
settle or compromise any such claim unless it shall first obtain the written
consent of the other, which shall not be unreasonably withheld or delayed. The
foregoing notwithstanding, if suit shall have been instituted against the
Indemnitee and the Indemnitor shall have failed, after the lapse of a reasonable
time after written notice to it of such suit, to take action to defend the same,
the Indemnitee shall have the right to defend the claim (without limiting the
right of the Indemnitor to participate in the defense) and to charge the
Indemnitor with the reasonable cost of any such
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defense, including reasonable attorneys' fees, and the Indemnitee shall have the
right, after notifying but without consulting the Indemnitor, to settle or
compromise such claim on any terms reasonably approved by the Indemnitee.
13.3.3 Neither Newpark nor the Stockholder Parties shall have
any liability for breach or warranty or representation hereunder except to the
extent that the amount of all valid claims for breach of warranty or
representation against it or him hereunder exceeds an aggregate of $200,000. In
no event shall the liability of any of the Stockholder Parties for any breach of
warranty or representation hereunder exceed $1,000,000. To the fullest extent
permitted by law, and to the extent the Stockholder Party continues to own
shares of Newpark Common Stock, each Stockholder Party shall satisfy his
liability hereunder by delivering to Newpark some or all of such Newpark Shares,
valued at their Market Value as of the date of delivery, and Newpark shall
satisfy its liability by issuing additional Newpark Shares valued at their
Market Value as of the date of issuance. Nothing contained herein shall relieve
any of the Stockholder Parties or Newpark of any liability he or it may have for
any intentional breach of representation or warranty.
13.3.4 The amount of any damage, loss, liability, cost or
expense claimed by Newpark against any Stockholder Party hereunder shall be
reduced by any net Tax benefit or other benefit actually realized or received by
Newpark and its subsidiaries attributable to such damage, loss, liability, cost
or expense or derived therefrom in the same or any past or subsequent taxable
period, and increased to the extent necessary to take into account any Tax
actually incurred by Newpark as a result of the realization or receipt of any
payment from such Stockholder Party and any such other benefit.
13.3.5 The rights and obligations of the parties under this
Article 13 shall be the exclusive rights and obligations of the parties with
respect to any breach of any representation, warranty or covenant in this
Agreement and shall be in lieu of any other rights or remedies to which the
party entitled to indemnification hereunder would otherwise be entitled as a
result of such breach under this Agreement.
13.4 Dispute Resolution; Arbitration.
13.4.1 The parties desire to finally resolve any and all
issues and disputes arising out of or related to this Agreement or its alleged
breach as promptly as practicable and, in any event, before Newpark's
independent accountants issue an audit report on their audit of the financial
statements containing combined operations of Newpark and the Company for the
period ending December 31, 1997. Newpark and the Stockholder Parties shall
first attempt diligently to resolve any such issue or dispute. They may, if
they desire, attempt to mediate the dispute and shall, if they choose, do so in
accordance with the Commercial Mediation Rules of the American Arbitration
Association ("AAA"), either as written or as modified by mutual agreement. A
written agreement to undertake mediation may be made at any time. If
arbitration proceedings have been instituted, they shall be stayed until the
mediation process is terminated. Any dispute arising out of or related to this
Agreement or its alleged breach that cannot be resolved by mutual agreement
(including mutually agreed mediation) shall be resolved exclusively by final and
binding arbitration, conducted as expeditiously as possible in
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the City of Houston, Texas, in accordance with the provisions of this Agreement
and, to the extent not inconsistent with such provisions, the Commercial
Arbitration Rules of the American Arbitration Association. To the extent
lawful, the arbitrators, in their discretion, may shorten any time periods or
notice periods specified by law, in the interest of timely completing
arbitration and issuing their award.
13.4.2 The Stockholder Parties, as one party, or Newpark may
initiate arbitration of a dispute by giving the other party written notice of
arbitration, which shall specify with reasonable detail (a) the issue in
dispute, (b) the claims asserted and (c) the remedy sought by the party invoking
arbitration. The arbitration shall be conducted before a single neutral
arbitrator if the parties are able to agree on one arbitrator. If they are
unable so to agree and do not agree otherwise, arbitration shall be conducted by
a panel of three neutral arbitrators. None of the arbitrators shall be
affiliated in any way with either of the parties or have any direct or indirect
financial interest in the outcome of the arbitration. If the parties fail to
reach agreement upon a single arbitrator within 10 business days following
receipt by one party of the other party's notice of arbitration, the initiating
party shall submit in writing to the other party the name of a neutral
arbitrator selected by the initiating party. Within 10 business days after such
name is submitted, the other party shall submit to the initiating party in
writing the name of a neutral arbitrator selected by such other party and may
submit an answering statement. Within 20 days after appointment of the second
arbitrator, the two arbitrators appointed by the parties shall select a third
neutral arbitrator; the three arbitrators so selected shall finally resolve the
dispute. If the two arbitrators appointed by the parties fail before the end of
said 20 day period to agree on a third arbitrator, the Judicial District Court
of Xxxxxx County, Houston Division shall, upon the filing of a petition by any
of the parties hereto select the third arbitrator from a list of five
individuals obtained by the Court from the Houston Office of the American
Arbitration Association. If the non-initiating party shall fail to appoint an
arbitrator within 20 days after the name of the arbitrator selected by the
initiating party is submitted, the arbitrator appointed by the initiating party
shall be empowered to proceed to arbitrate and determine the matter in
controversy as the sole arbitrator. All references to "the arbitrators" in the
following Sections shall be deemed to refer to the sole arbitrator, if there is
only one arbitrator. The arbitrators shall, at the earliest possible date, set
dates for a hearing and establish any pre-hearing conferences or procedural
schedules that the arbitrators deem appropriate. The arbitrators may authorize
depositions and issue subpoenas and make other decisions provided for in Section
13.4.3 below. All decisions of the arbitrators shall be by a majority of the
arbitrators, unless the parties agree otherwise.
13.4.3 It is the mutual intention of the parties that
discovery, if any, shall be limited in nature and scope and, to the extent
possible, shall be handled informally and by agreement. Any dispute regarding
discovery shall be submitted promptly to the arbitrators and shall be resolved
by them. If necessary, any decision of the arbitrators respecting discovery may
be enforced by any court of competent jurisdiction in the same manner as a final
award under this Section, including an order for specific performance.
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13.4.4 The arbitrators shall diligently, expeditiously and in good
faith decide the matter under consideration in accordance with the laws of the
State of Texas, excluding its choice of law rules. The arbitrators shall use
their best efforts to make their award before the expiration of the period
specified in the introduction to Section 13.4.1. If there is only one
arbitrator, his decision shall be final, conclusive and binding on all parties;
if there are three arbitrators, the agreed decision of any two of them shall be
final, conclusive and binding on all parties. The arbitrators shall prepare an
award in writing which reflects the final decision of the arbitrators and a copy
of such award shall be delivered to each party to the arbitration. Judicial
confirmation of the decision of the arbitrators shall be sought only in the
Judicial District Court of Xxxxxx County, Houston Division.
13.4.5 The arbitrators' compensation shall be agreed upon by
the parties and the arbitrators. The terms of compensation for each of the
arbitrators shall be identical. Newpark, on the one hand, and the Stockholder
Parties (in proportion to their interest), on the other hand, shall share
equally the cost of the arbitration proceedings, including the fees and expenses
of the arbitrators and the cost of the stenographic record, provided that the
arbitrators shall have discretion to charge such costs to the parties in such
different proportions as they determine to be appropriate.
13.4.6 If any other provision of this Agreement should be or
become invalid or unenforceable by force of law, the provisions of this Section
13.4 shall not be affected but shall remain in full force and effect. Any
obligation to arbitrate which is established by this Section shall remain in
full force and effect. Any obligation to arbitrate which is established by this
Section shall not be extinguished upon the termination or expiration of this
Agreement but shall survive that event.
14. Destruction of Assets.
All risk of loss with respect to the assets and business of the
Company shall be borne by the Company until the Closing to the extent set forth
in this Section 14. If on the Closing Date any assets of the Company shall have
suffered loss or damage on account of fire, flood, accident, act of war, civil
commotion, or any other cause or event beyond the reasonable power and control
of the Company (whether or not similar to the foregoing) to an extent which
materially affects the value to Newpark of the Company Shares, Newpark shall
have the right at its election to complete the acquisition (in which event, as
Newpark's sole and exclusive remedy with respect to the consequences of such
loss or damage, all claims of the Company with respect to such loss or damage
and all insurance proceeds arising therefrom shall be for the account of
Newpark), or, if it does not so elect, it shall have the right, which shall be
in lieu of any other right or remedy whatsoever, to terminate this Agreement.
In the latter event, all parties shall be released from liability hereunder.
15. Termination.
In addition to any party's right to terminate this Agreement if any
condition precedent to its obligations is not satisfied on the Closing Date,
subject to the provisions of this Agreement relating to the postponement of the
Closing Date, either Newpark or the Company
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and the Stockholder Parties may forthwith terminate this Agreement: (a) subject
to clause (b) below, without liability to the other of them if a bona fide
action or proceeding (by and at the sole instance of a party or parties not an
Affiliate or Affiliates of Newpark or the Company) shall be pending against
either party on the Closing Date wherein an unfavorable judgment, decree or
order would prevent or make unlawful the carrying out of the transactions
contemplated by this Agreement; or (b) without prejudice to other rights and
remedies which either party may have, if a material default shall be made by the
other of them in the observance or in the due and timely performance of its
covenants and agreements herein contained, or if there shall have been a
material breach of the warranties and representations herein contained.
16. Notices.
Any and all notices, demands, requests or other communications
hereunder shall be in writing and shall be deemed duly given when personally
delivered to or transmitted by overnight express delivery or by facsimile to and
received by the party to whom such notice is intended, or in lieu of such
personal delivery or overnight express delivery or facsimile transmission, 48
hours after deposit in the United States mail, first-class, certified or
registered, postage prepaid, return receipt requested, addressed to the
applicable party at the address provided below. The parties may change their
respective addresses for the purpose of this Section 16 by giving notice of such
change to the other party in the manner which is provided in this Section 16.
Stockholder Parties Xxxxxx Bilbo Xxxxxx Drilling Fluids
or the Company: Management, Inc.
00000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxx xxxXxxx, Esq.
Xxxxxxxxxx & xxxXxxx
000 Xxxxx Xxx Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Newpark or Newco: c/o Newpark Resources, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxx, Xxxxx & Xxxxxx LLP
0000 Xxxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
17. Assignment.
Rights hereunder shall not be assignable and duties hereunder shall
not be delegable by the Company, the Stockholder Parties, Newpark or Newco
without the prior written consent of the other; consent may be withheld for any
reason or without reason. Nothing contained in or implied from this Agreement
is intended to confer any rights or remedies upon any Person other than the
parties hereto and their successors in interest and permitted assignees, unless
expressly stated herein to the contrary.
18. Certain Definitions.
As used herein, the following terms (whether used in the singular or
the plural) have the following meanings:
"Affiliate" or "affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person and, without limiting the generality of the foregoing,
includes (a) any director or officer of such Person or of any Affiliate of such
Person, (b) any such director's or officer's Family Members, (c) any group,
acting in concert, of one or more of such directors, officers or Family Members,
and (d) any Person controlled by any such director, officer, Family Member or
group which beneficially owns or holds 50% or more of any class of equity
securities or profits interest. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise.
"Bankruptcy Exception" means the limitation on enforceability imposed
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, whether enforcement is sought in equity or
at law.
"Closing Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the ten trading days immediately preceding the third trading day
prior to the Closing Date.
"Commission" means the U.S. Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Family Member" means, in the case of a Person who is an individual,
any parent, spouse or lineal descendant (including legally adopted descendants)
of such Person, or the spouse of any such descendant.
"Hazardous Material Laws" means any and all federal, state and local
laws in effect at or before the Effective Time that relate to or impose
liability or standards of conduct concerning the environment, as now or
hereafter in effect and as have been or hereafter may be amended or
reauthorized, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. (S) 9601, et seq.), the
Hazardous Materials Transportation Act (42 U.S.C. (S) 1802, et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901, et seq.), the
Federal Water Pollution Control Act (33 U.S.C. (S) 1251, et seq.), the Toxic
Substances Control Act (14 U.S.C. (S) 2601, et seq.), the Clean Air Act (42
U.S.C., (S) 7901 et seq.), the National Environmental Policy Act (42 U.S.C. (S)
4231, et seq.), the Refuse Act (33 U.S.C. (S) 407, et seq.), the Safe Drinking
Water Act (42 U.S.C. (S) 300(f), et seq.), and all rules, regulations, codes,
ordinances and guidance documents promulgated or published thereunder, and the
provisions of any licenses, permits, orders and decrees issued pursuant to any
of the foregoing.
"Hazardous Materials," means any flammable explosives, radioactive
materials, asbestos, compounds known as polychlorinated byphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
"Knowledge of the Company" (and similar terms such as "to the best of
the knowledge of the Company") means the actual knowledge of the Stockholder
Parties or any other executive officer of the Company obtained without
investigation other than through the exercise of such person's normal duties.
"Knowledge of Newpark" (and similar terms such as "to the best of the
knowledge of Newpark") means the actual knowledge of any executive officer of
Newpark obtained without investigation other than through the exercise of such
person's normal duties.
"Market Value" means the average of the closing prices of Newpark's
Common Stock on the New York Stock Exchange, as reported in The Wall Street
Journal, for the ten trading days immediately preceding the third trading day
prior to the date of determination.
"Material Adverse Effect" means a material adverse effect on the
financial condition, results of operations, business or prospects of the entity
referred to (i.e., the Company or Newpark) and its subsidiaries (i.e., the
Newpark Subsidiaries), taken as a whole.
"Permitted Lien(s)" means (a) all liens and encumbrances disclosed in
the Disclosure Letter, (b) landlords', mechanics', carriers', workers' and
similar statutory liens arising in the ordinary course of business for sums not
delinquent, for which adequate reserves or other appropriate provisions have
been made in the Company Financial Statements, (c) deed restrictions and similar
exceptions to clear title not incurred in connection with indebtedness that do
not
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materially impair the existing use or materially detract from the value of the
assets or property subject thereto, and (d) liens for current Taxes and
assessments not yet delinquent and Taxes and assessments the validity of which
are being contested in good faith by appropriate proceedings, for which adequate
reserves or other appropriate provisions required by generally accepted
accounting principles have been made in the Company Financial Statements.
"Person" or "person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or any agency or instrumentality
thereof.
"Rules and Regulations" means the rules and regulations adopted by the
Commission under the Securities Act and the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Tax" (including with correlative meaning, the term "Taxes") means any
income, gross receipts, ad valorem, premium, excise, value-added, sales, use,
transfer, franchise, license, severance, stamp, occupation, service, lease,
withholding, employment, payroll, premium, property or windfall profits tax,
alternative or add-on-minimum tax, or other tax or assessment, together with any
interest and any penalty, addition to tax or additional amount imposed by any
governmental authority responsible for the imposition of any such tax.
"Tax Return" means any return, report, statement, information
statement and the like required to be filed with any authority with respect to
Taxes.
19. Applicable Law; Jurisdiction.
The provisions of this Agreement and all rights and obligations
hereunder and under all documents, instruments and agreements executed under or
in connection with this Agreement shall be governed and construed in accordance
with the internal laws of the State of Texas applicable to contracts made and to
be wholly performed within said State.
20. Remedies Not Exclusive.
Except as provided in Section 13.3.5 and Section 14, (a) no remedy
conferred by any of the specific provisions of this Agreement is intended to be
exclusive of any other remedy, (b) each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law, in equity, or otherwise and (c) the election of any one or more
remedies by either party hereto shall not constitute a waiver of the right to
pursue other available remedies.
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21. Attorneys' Fees.
In any litigation relating to this Agreement, including litigation
with respect to any instrument, document or agreement made under or in
connection with this Agreement, the prevailing party shall be entitled to
recover its costs and reasonable attorneys' fees.
22. Payment of Expenses. Whether or not the Merger is consummated,
Newpark will pay and be responsible for all costs and expenses incurred by
Newpark and Newco in connection with this Agreement and the transactions
contemplated hereby, and the Company will pay and be responsible for all costs
and expenses incurred by the Company and the Stockholders in connection with
this Agreement and the transactions contemplated hereby, except for personal
counsel retained by individual Stockholders which shall be at their expense.
23. Successors and Assigns.
All covenants, representations, warranties and agreements of the
parties contained herein shall be binding upon and inure to the benefit of the
parties, their respective heirs, personal representatives and permitted
successors and assigns.
24. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
25. Headings; Severability.
Captions and section headings used herein are for convenience only and
are not a part of this Agreement and shall not be used in construing it. The
provisions of this Agreement are severable, and, if any one or more provisions
may be determined to be judicially unenforceable, in whole or in part, the
remaining provisions, and any partially unenforceable provisions, to the extent
enforceable, shall nevertheless be binding and enforceable upon the parties
hereto.
26. Amendments.
No provision or term of this Agreement or any agreement contemplated
herein between the parties hereto may be supplemented, amended, modified, waived
or terminated except in a writing duly executed by the party to be charged.
This Agreement may be amended by the corporate parties hereto by or pursuant to
action taken by their respective Boards of Directors at any time before or after
the approval of the Merger by their stockholders, but after such approval, no
amendment or modification shall be made that reduces the amount or changes the
form of the consideration to be paid to Stockholders or that in any way
materially adversely affects the rights of the Stockholders or Newpark without
the further approval of the adversely affected Stockholders.
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27. Waivers.
At any time prior to the Effective Time, the parties hereto, may, to
the extent legally permitted: (i) extend the time for the performance of any of
the obligations or other acts or any other party; (ii) waive any inaccuracies in
the representations or warranties of any other party contained in this Agreement
or in any document or certificate delivered pursuant hereto; (iii) waive
compliance or performance by any other party with any of the covenants,
agreements or obligations of such party contained herein; and (iv) waive the
satisfaction of any condition that is precedent to the performance by the party
so waiving of any of its obligations hereunder. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party. A waiver by one party
of the performance of any covenant, agreement, obligation, condition,
representation or warranty shall not be construed as a waiver of any other
covenant, agreement, obligation, condition, representation or warranty. A
waiver by any party of the performance of any act shall not constitute a waiver
of the performance of any other act or an identical act required to be performed
at a later time.
28. Entire Agreement.
The Disclosure Letter and all schedules, exhibits and financial
statements provided for herein are a part of this Agreement. This Agreement and
the other agreements and documents provided for in this Agreement comprise the
entire agreement of the parties and supersede all earlier understandings of the
parties with respect to the subject matter hereof, except that the
Confidentiality Agreement shall continue in effect in accordance with its terms.
Each of the parties hereto acknowledges that in making the decision to enter
into this Agreement and to consummate the transactions contemplated hereby, such
party has relied solely on its own independent investigation and on the express
written representations, warranties, and covenants in this Agreement. Without
diminishing the scope of the express written representations, warranties and
covenants contained in this Agreement and without affecting or impairing a
party's right to rely thereon, each of the parties hereto acknowledges that the
other parties have not made, AND SUCH OTHER PARTIES HEREBY EXPRESSLY DISCLAIM
AND NEGATE, ANY OTHER REPRESENTATIONS OR WARRANTIES EXPRESSED OR IMPLIED,
RELATING TO THE ASSETS AND OPERATIONS OF THE COMPANY OR NEWPARK (INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED OR EXPRESSED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY OR CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS).
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
THE COMPANY: NEWPARK:
XXXXXX XXXXX XXXXXX DRILLING NEWPARK RESOURCES, INC.
FLUIDS MANAGEMENT, INC.
By:/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxx
------------------------------ ----------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxx
Title: CEO Title: President
NEWCO: STOCKHOLDER PARTIES:
SBM ACQUISITION CORPORATION /s/ Xxxxx X. Xxxxxx
-------------------------------
XXXXX X. XXXXXX
By: /s/ Xxxxx X. Xxxx /s/ Xxxxx X. Xxxxxx
------------------------------- -------------------------------
Xxxxx X. Xxxx, President XXXXX X. XXXXXX
/s/ Xxxxx Xxxxxx
-------------------------------
XXXXX XXXXXX
/s/ Xxxxxx X. Xxxxxx
-------------------------------
XXXXXX X. XXXXXX
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