AMENDMENT NO. 1
TO THE
MEMBERSHIP INTERESTS PURCHASE AGREEMENT
This Amendment No. 1 to the Membership
Interests Purchase Agreement (this “ Amendment
”), dated as of June 30, 2008, is entered into by and
among Newpark Resources, Inc., a Delaware corporation (“
Newpark ”), Newpark Drilling Fluids LLC, a Texas
limited liability company and a direct wholly-owned subsidiary of
Newpark (“ DFI ”), Newpark Texas, L.L.C., a
Louisiana limited liability company and an indirect wholly-owned
subsidiary of Newpark (“ Newpark Texas ”), CCS
Inc., an Alberta corporation (“ CCS ”), and CCS
Midstream Services, LLC, a Louisiana limited liability company
(“ Purchaser ”), and an Affiliate of
CCS.
A. Reference is herein made to that certain
Membership Interests Purchase Agreement by and among Newpark, DFI,
Newpark Texas, CCS, and Purchaser, dated April 16, 2008 (the
“ Purchase Agreement ”). Terms used but not
defined herein shall have the meanings set forth in the Purchase
Agreement.
B. The parties to the Purchase Agreement
acknowledge that each of Newpark and CCS has fulfilled its initial
obligations under Section 5.2(a) of the Purchase Agreement as
originally written to file, or cause to be filed, on or before
May 1, 2008 with the Department of Justice (“ DOJ
”) and the Federal Trade Commission (“ FTC
”) the notification and report form required for the
transactions contemplated in the Purchase Agreement by the HSR Act,
requesting early termination of the waiting period
thereunder.
C. Newpark, DFI, Newpark Texas, CCS, and Purchaser,
who constitute all of the parties to the Purchase Agreement, desire
to amend the Purchase Agreement as set forth herein in accordance
with Section 11.8 of the Purchase Agreement.
NOW, THEREFORE , in consideration of the mutual promises set
forth herein and in the Purchase Agreement, and other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the parties
hereby agree as follows:
Section 1. Amendment Format . In
connection with each amendment to the Purchase Agreement and the
Newpark Disclosure Schedule as set forth herein or attached hereto
that is not being deleted or added in its entirety (i) the
text of the language in the Purchase Agreement or the Newpark
Disclosure Schedule which is being deleted by such amendment is
stricken through, and (ii) the text of the language in the
Purchase Agreement or the Newpark Disclosure Schedule which is
being added is double-underlined and boldfaced.
Section 2. Amendment to Defined
Terms . The Parties to the Purchase Agreement acknowledge that
Purchaser changed its name to “CCS Midstream Services,
LLC” on June 5, 2008. Therefore, the definition of
“Purchaser” in the Preamble of the Purchase Agreement
is hereby amended to mean CCS Midstream Services, LLC.
Section 3. Amendment to
Section 2.4(c) . Section 2.4(c) of the Purchase
Agreement is amended and restated in its entirety as
follows:
(c) For purposes of this Agreement,
“Net Working Capital” shall (i) be calculated as
of the Effective Time on an aggregate basis among the Transferred
Entities and (ii) mean the amount equal to the Current Assets
minus Current Liabilities. “Current Assets” shall mean,
subject to the adjustments set forth below, the current assets of
the Transferred Entities as of the Effective Time comprised of
accounts receivable, whether billed or unbilled (net of allowances
for doubtful accounts); costs and estimated earnings in excess of
billings on uncompleted contracts; the current portion of any notes
or other receivables; inventories; and prepaid expenses.
“Current Liabilities” shall mean, subject to the
adjustments set forth herein, the current liabilities of the
Transferred Entities as of the Effective Time comprised of accounts
payable; accrued liabilities; the current portion of any Capital
Leases; billings in excess of costs and estimated earnings on
uncompleted contracts; and, payroll, accrued incentive compensation
and bonuses, accrued vacation benefits and related taxes and
withholdings payable. Subject to the adjustments set forth below,
Current Assets and Current Liabilities shall be computed in
accordance with GAAP on a basis consistent with the
December 31, 2007 combined balance sheet of NESI.
Notwithstanding the foregoing, for purposes of calculating the Net
Working Capital, the Current Assets and the Current Liabilities
shall not include:
(i) to the extent not incurred in the
ordinary course of business, intercompany receivables and payables
between or among any of the Transferred Entities, Newpark and its
other Affiliates;
(ii) any bank or funded Indebtedness
including, without limitation, any short-term debt and the current
portion of any long-term debt that has been or will be paid in full
by the Transferred Entities, Newpark and its other Affiliates prior
to the Effective Time;
(iii) any liability for income Taxes
payable by any of the Transferred Entities that are actually paid
or payable, when due, by Newpark or one of its Affiliates other
than the Transferred Entities; and
(iv) any proceeds from the transfer of the
owned barges pursuant to Section 5.18.
Section 4. Amendment to Section 3.8
of the Newpark Disclosure Schedule . Section 3.8 of the
Newpark Disclosure Schedule is amended and restated in its entirety
to read as set forth on Schedule 3.8 attached
hereto.
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Section 5. Amendment to
Section 3.16 and Section 3.16 of the Newpark Disclosure
Schedule .
5.1 The final paragraph of Section 3.16 of
the Purchase Agreement is amended and restated in its entirety by
the following:
Except as set forth in Section 3.16 of the
Newpark Disclosure Schedule, each Contract required to be disclosed
pursuant to this Section 3.16 (collectively, the “
Material Contracts ”), whether written or oral, is in
full force and effect and is a valid and binding agreement of the
Transferred Entity, as the case may be, and, to Newpark’s
knowledge, of each other party thereto. Except as set forth in
Section 3.16 of the Newpark Disclosure Schedule, none of the
Transferred Entities or, to the knowledge of Newpark, any other
party thereto is in default or breach in any material respect under
the terms of any such Material Contract and neither any Transferred
Entity, Newpark, DFI nor Newpark Texas has received any notice of
termination or threatened termination of any Material Contract or
is aware of any facts or circumstances that either currently or
with the passage of time could result in a breach or default under
or give rise to a right to terminate any Material Contract,
including, without limitation, any Transportation Contract. Newpark
has made available to the Purchaser complete and correct copies of
each Material Contract.
5.2 Section 3.16 of the Newpark Disclosure
Schedule is amended and restated in its entirety to read as set
forth on Schedule 3.16 attached hereto.
Section 6. Amendment to
Section 5.1(a) . Section 5.1(a) of the Purchase
Agreement is amended and restated in its entirety by the
following:
(a) After the date of this Agreement until
the earlier of the Closing or the termination of this Agreement,
Newpark shall, and shall cause each of the Transferred Entities and
their respective representatives to (i) afford Purchaser and
its representatives access, at reasonable times during normal
business hours after first obtaining the consent of Newpark, to the
books, records, properties and personnel of the Transferred
Entities; (ii) furnish Purchaser and its representatives with
such additional financial, operating and other data and information
within the control of Newpark and/or the Transferred Entities as
Purchaser may reasonably request; and (iii) otherwise
cooperate with the investigation by Purchaser and its
representatives of the Transferred Entities; provided, however,
that if the Outside Date is extended past July 15, 2008,
Newpark may limit Purchaser’s access to the personnel of the
Transferred Entities if Newpark determines, in its reasonable
discretion, that such access would be disruptive to Newpark’s
business. Any expenses related to the furnishing of such
information which is within the control of Newpark and/or the
Transferred Entities shall be paid by Newpark. The foregoing shall
not require Newpark, DFI, Newpark Texas or any Transferred Entity
to permit any inspecti
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