Exhibit 10.1
MEMBERSHIP INTERESTS
PURCHASE AGREEMENT
BY AND AMONG
NEWPARK RESOURCES, INC.,
NEWPARK DRILLING FLUIDS LLC,
NEWPARK TEXAS, L.L.C.,
TRINITY TLM ACQUISITIONS, LLC,
AND
TRINITY STORAGE SERVICES, L.P.
Dated as of October 10, 2007

 

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TABLE OF CONTENTS

              ARTICLE I DEFINITIONS; INTERPRETATION     1  
 
           
     1.1
  Defined Terms     1  
     1.2
  Other Definitions     7  
     1.3
  Interpretation; Absence of Presumption     10  
     1.4
  Headings; Definitions     10  
 
            ARTICLE II THE SALE     11  
 
           
     2.1
  Agreement to Purchase and Sell; Non-assumed Liabilities     11  
     2.2
  Consideration     12  
     2.3
  Closing     13  
     2.4
  Working Capital Price Adjustment     15  
     2.5
  Earn-Out Consideration     17  
     2.6
  Purchase Price Allocation     21  
     2.7
  Further Assurances     21  
 
            ARTICLE III REPRESENTATIONS AND WARRANTIES OF NEWPARK     22  
 
           
     3.1
  Organization and Qualification     22  
     3.2
  Capitalization of the Transferred Entities     22  
     3.3
  Authority Relative to This Agreement     23  
     3.4
  Consents and Approvals; No Violations     23  
     3.5
  Compliance with Law     24  
     3.6
  Financial Statements; Liabilities     24  
     3.7
  Absence of Certain Changes or Events     25  
     3.8
  Litigation     26  
     3.9
  Permits     26  
     3.10
  Employee Benefits; Labor Matters     26  
     3.11
  Brokers     29  
     3.12
  Taxes     29  
     3.13
  Environmental Matters     29  
     3.14
  Title; Condition and Sufficiency of Assets     30  
     3.15
  Intellectual Property     31  
     3.16
  Material Contracts     31  
     3.17
  Real Property     32  
     3.18
  Inventory     33  
     3.19
  Accounts Receivable     33  
     3.20
  Insurance     33  
     3.21
  Customers and Suppliers     34  
     3.22
  No Other Representations or Warranties     34  
 
            ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER     34  
 
           
     4.1
  Organization and Qualification     34  
     4.2
  Authority Relative to This Agreement     34  
     4.3
  Consents and Approvals; No Violations     35  
     4.4
  Financing     35  
     4.5
  Brokers     35  

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     4.6
  Acquisition of Transferred Interests     36  
     4.7
  Limitation of Newpark’s Warranties     36  
 
            ARTICLE V COVENANTS     36  
 
           
     5.1
  Access     36  
     5.2
  Efforts     37  
     5.3
  Further Assurances     38  
     5.4
  Conduct of Business     38  
     5.5
  Consents     40  
     5.6
  Public Announcements     40  
     5.7
  No Shop     40  
     5.8
  Intercompany Accounts     40  
     5.9
  Termination of Intercompany Agreements     40  
     5.10
  Use of Names, etc.     41  
     5.11
  Litigation Support     41  
     5.12
  Noncompetition; Nonsolicitation     41  
     5.13
  Labor Matters     42  
     5.14
  Environmental Inspection     42  
     5.15
  Post-Closing Covenants     45  
 
            ARTICLE VI EMPLOYEE MATTERS COVENANTS     46  
 
           
     6.1
  Employees and Compensation     46  
     6.2
  Welfare Benefits Plans     46  
     6.3
  Miscellaneous Employee Issues     48  
 
            ARTICLE VII TAX MATTERS     48  
 
           
     7.1
  Liability for Taxes and Related Matters     48  
     7.2
  Transfer Taxes     50  
 
            ARTICLE VIII CONDITIONS TO OBLIGATIONS TO CLOSE     51  
 
           
     8.1
  Conditions to Obligation of Each Party to Close     51  
     8.2
  Conditions to Purchaser’s Obligation to Close     51  
     8.3
  Conditions to DFI’s and Newpark Texas’ Obligations to Close     52  
 
            ARTICLE IX TERMINATION     53  
 
           
     9.1
  Termination     53  
     9.2
  Notice of Termination     54  
     9.3
  Effect of Termination     54  
 
            ARTICLE X SURVIVAL AND INDEMNIFICATION     55  
 
           
     10.1
  Survival Periods     55  
     10.2
  Indemnification by Newpark, DFI and Newpark Texas     55  
     10.3
  Indemnification by Purchaser and Trinity     56  
     10.4
  Third-Party Claims     56  
     10.5
  Limitations     57  
     10.6
  Disregard of Materiality     58  
     10.7
  Mitigation; Additional Indemnification Provisions     58  

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     10.8
  Exclusive Remedies     58  
     10.9
  Tax Indemnification Matters     59  
 
            ARTICLE XI MISCELLANEOUS     59  
 
           
     11.1
  Counterparts     59  
     11.2
  Governing Law; Jurisdiction and Forum; Waiver of Jury Trial     59  
     11.3
  Entire Agreement     59  
     11.4
  Expenses     60  
     11.5
  Notices     60  
     11.6
  Successors and Assigns     60  
     11.7
  Third-Party Beneficiaries     60  
     11.8
  Amendments and Waivers     60  
     11.9
  Severability     60  

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SCHEDULES

         
Schedule 1.3
  –   Knowledge of Newpark
Schedule 3.2(a)
  –   Liens
Schedule 3.2(c)
  –   Capitalization of Transferred Entities
Schedule 3.4
  –   Consents and Approvals
Schedule 3.6(a)
  –   Financial Statements
Schedule 3.6(b)
  –   Interim Financial Statements
Schedule 3.6(d)
  –   Internal Controls
Schedule 3.7
  –   Absence of Certain Changes and Events
Schedule 3.8
  –   Litigation
Schedule 3.9
  –   Permits
Schedule 3.10(a)
  –   Employee Benefits
Schedule 3.10(b)
  –   Compliance with ERISA and Code Section 409A
Schedule 3.10(c)
  –   Contributions or Payments
Schedule 3.10(f)
  –   Transferred Employees
Schedule 3.10(j)
  –   Claims
Schedule 3.12
  –   Tax Matters
Schedule 3.13(a)
  –   Environmental Matters
Schedule 3.13(b)
  –   Environmental Permits
Schedule 3.13(d)
  –   Third Party Disposal Sites
Schedule 3.14(a)
  –   Title
Schedule 3.14(b)
  –   Condition of Assets
Schedule 3.15(a)
  –   Transferred Intellectual Property
Schedule 3.15(c)
  –   Infringement Matters
Schedule 3.16
  –   Material Contracts
Schedule 3.17(a)
  –   Owned Real Property
Schedule 3.17(b)
  –   Leased Real Property
Schedule 3.19
  –   Accounts Receivable
Schedule 3.20
  –   Insurance Policies
Schedule 3.21
  –   Customers and Suppliers
Schedule 5.4
  –   Conduct of Business
Schedule 5.9
  –   Intercompany Agreements
Schedule 5.12(c)
  –   Nonsolicitation for Employees
Schedule 5.15(b)
  –   Fourchon Sublease Agreement
Schedule 6.1(b)
  –   Excluded Post-Closing Benefits
Schedule 6.2(f)
  –   Severance Benefits
Schedule 8.2(g)
  –   Lafayette Sublease Agreement
Schedule 8.2(i)
  –   Additional Conditions
Schedule 10.2(d)
  –   Indemnification

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MEMBERSHIP INTERESTS PURCHASE AGREEMENT
     This MEMBERSHIP INTERESTS PURCHASE AGREEMENT (this “Agreement”), dated as
of October 10, 2007, 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”), Trinity Storage Services,
L.P., a Texas limited partnership (“Trinity”), and Trinity TLM Acquisitions,
LLC, a Texas limited liability company (“Purchaser”), and an Affiliate of
Trinity.
RECITALS
     WHEREAS, DFI owns all of the outstanding membership interests of Newpark
Environmental Services, LLC, a Texas limited liability company (“NESI”);
     WHEREAS, NESI owns (i) all of the outstanding membership interests of
Newpark Environmental Management Company, L.L.C., a Louisiana limited liability
company (“NESI Management”), and (ii) all of the outstanding limited partner
interests in Newpark Environmental Services Mississippi, L.P., a Mississippi
limited partnership (“NESI Mississippi”);
     WHEREAS, Newpark Texas owns all of the outstanding general partner interest
in NESI Mississippi;
     WHEREAS, NESI and its Subsidiaries are engaged in the business of
receiving, transferring, processing and disposal of non-hazardous exploration
and production waste generated in the oil and gas industry and the processing
and disposal of non-hazardous industrial waste generated by refiners,
manufacturers, service companies and industrial municipalities located primarily
in the United States Gulf Coast area;
     WHEREAS, DFI desires to sell and transfer all of its interest in NESI and
Newpark Texas desires to sell and transfer all of its general partner interest
in NESI Mississippi;
     WHEREAS, Purchaser desires to purchase from DFI all of its interest in NESI
and from Newpark Texas all of its interest in NESI Mississippi; and
     WHEREAS, the parties desire to make certain representations, warranties,
covenants and agreements in connection with this Agreement.
     NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth 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:
ARTICLE I
DEFINITIONS; INTERPRETATION
     1.1 Defined Terms. For the purposes of this Agreement, the following terms
shall have the following meanings:

 

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     (a) “Acquired Interests” shall mean all of the outstanding (i) membership
interests in NESI, and (ii) general partner interests in NESI Mississippi.
     (b) “Action” shall mean any action, claim, suit, arbitration, litigation,
proceeding or investigation by any Person or by or before any Governmental
Entity.
     (c) “Affiliate” shall mean, with respect to any Person, any other Person
that directly, or through one or more intermediaries, controls or is controlled
by or is under common control with such Person; provided, that, after the
Closing, (i) none of the Transferred Entities shall be considered an Affiliate
of Newpark or any of Newpark’s Affiliates and (ii) none of Newpark or any of
Newpark’s Affiliates shall be considered an Affiliate of any Transferred Entity.
For purposes of this Agreement, “control” shall mean, as to any Person, the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise (and the terms “controlled by” and “under common control with” shall
have correlative meanings).
     (d) “Benefit Plan” shall mean any “employee benefit plan,” as defined in
Section 3(3) of ERISA (whether or not subject to ERISA), and any other plan,
policy, program, practice, agreement, understanding or arrangement (whether
written or oral) providing compensation or other benefits to any current or
former director, officer, manager, member, employee or consultant (or to any
dependent or beneficiary thereof) of a Transferred Entity, which is now (or was
within the past six (6) years) maintained, sponsored or contributed to by
Newpark or its Subsidiaries, under which any Transferred Entity has any present
or future significant obligation or liability, whether actual or contingent,
including but not limited to all profit-sharing, bonus, stock option, stock
purchase, stock appreciation, restricted stock, phantom stock, or other stock or
equity-based compensation, pension, retirement, severance, deferred
compensation, excess benefit, supplemental unemployment, post-retirement medical
or life insurance, welfare, flexible benefit, cafeteria, incentive, sick leave,
long-term disability, medical, hospitalization, life insurance, other insurance
or employee benefit plan.
     (e) “Business” shall collectively mean the business conducted by the
Transferred Entities relating to (x) the receiving, transferring, processing and
disposal of non-hazardous exploration and production wastes generated in the oil
and gas industry that is exempt from RCRA, including waste that is contaminated
with naturally occurring radioactive materials (“NORM”), primarily for
generators in the United States Gulf Coast and Permian Basin areas, and (y) the
processing and disposal of non-hazardous industrial wastes generated by
refiners, manufacturers, service companies and industrial municipalities located
primarily in the United States Gulf Coast.
     (f) “Business Day” shall mean any day that is not a Saturday, a Sunday or
other day on which commercial banks in the City of Houston, Texas, are required
or authorized by Law to be closed.
     (g) “COBRA Continuation Coverage” shall mean the continuation coverage
requirements under Code Section 4980B and Part 6 of Title I of ERISA, or
comparable provisions of state and local Law.

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     (h) “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.
     (i) “Confidentiality Agreement” shall mean the Confidentiality Agreement
dated March 22, 2007, by and among Newpark, Trinity and Moss Bluff Property, LP.
     (j) “Contract” shall mean any agreement, indenture, deed of trust, note,
bond, mortgage, lease, license, commitment, guarantee, purchase order, contract,
obligation or undertaking (whether written or oral and whether express or
implied).
     (k) “Environmental Laws” shall mean any Law relating to pollution or the
protection of the environment or natural resources; to releases, discharges,
emissions or disposals to air, water, land or groundwater of Hazardous
Materials; to the use, handling, transport, release or disposal of
polychlorinated biphenyls, asbestos or urea formaldehyde or any other Hazardous
Material; to the treatment, storage, disposal or management of Hazardous
Materials; including the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. 9601, et seq. (“CERCLA”), the Resource Conservation and
Recovery Act, 42 U.S.C. 6901, et seq. (“RCRA”), the Toxic Substances Control
Act, 15 U.S.C. 2601, et seq. (“TSCA”), the Clean Air Act, 42 U.S.C. 7401, et
seq., the Federal Water Pollution Control Act, 33 U.S.C. 1251, et seq., the Safe
Drinking Water Act, 42 U.S.C. 300f, et seq., the Emergency Planning and
Community Right to Know Act, 42 U.S.C. 11001, et seq. (“EPCRA”); and other
comparable foreign, state and local Laws, including the Texas Natural Resources
Code (only insofar as it relates to pollution or the protection of the
environment or natural resources), and all rules, regulations and guidance
documents promulgated pursuant thereto or published thereunder.
     (l) “Environmental Permits” means all Permits issued by Governmental
Entities that are required under Environmental Laws in connection with the
Business.
     (m) “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended.
     (n) “Former Employee” shall mean an individual who, as of immediately prior
to the Closing, is not a current employee of Newpark or any of its Affiliates
(including the Transferred Entities, DFI and Newpark Texas) in any capacity but
who, during any period prior to the Closing, was primarily employed by the
Transferred Entities, Newpark Texas, DFI, Newpark or its other Subsidiaries in
connection with the Business (as opposed to the other businesses of Newpark, its
Subsidiaries or Affiliates).
     (o) “GAAP” shall mean generally accepted accounting principles in the
United States as in effect at the time the applicable financial statements were
prepared.
     (p) “Governmental Entity” shall mean any court, administrative agency,
commission or other governmental authority, body or instrumentality, federal,
state, local, domestic or foreign governmental or regulatory authority or any
self-regulatory authority or arbitral or similar forum.
     (q) “Hazardous Materials” shall mean each and every element, compound,
chemical mixture, contaminant, pollutant, material, waste or other substance
which is defined, determined or identified as hazardous or toxic under
Environmental Laws or the release of which is

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regulated under Environmental Laws. Without limiting the generality of the
foregoing, the term includes: “hazardous substances” as defined in CERCLA;
“extremely hazardous substances” as defined in EPCRA; “hazardous waste” as
defined in RCRA; crude oil, petroleum products or any fraction thereof;
radioactive materials including source, byproduct or special nuclear materials;
asbestos or asbestos-containing materials; chlorinated fluorocarbons; and radon.
     (r) “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
     (s) “Indebtedness” means, without duplication: (i) the principal of and
premium (if any) in respect of all indebtedness for borrowed money, including
accrued interest, (ii) bank overdrafts (excluding undrawn lines) and outstanding
checks to the extent treated as negative cash, accounts payable, bank overdrafts
or otherwise included as debt in the financial statements of the Transferred
Entities (it being understood that only the amount of such bank overdraft or the
portion of the check that is treated as negative cash, accounts payable, bank
overdraft or debt shall be treated as “Indebtedness”), and (iii) lease
obligations that are properly classified as a capital lease on a balance sheet
in accordance with GAAP (“Capital Leases”); provided, that “Indebtedness” shall
not include (A) trade payables, accrued expenses and intercompany or
intracompany liabilities arising in the ordinary course of business, or (B) any
liability for Taxes.
     (t) “Intellectual Property” means all U.S. and foreign or multinational
intellectual property, including all trademarks, service marks and trade names
(“Trademarks”), mask works, inventions, patents, copyrights and copyrightable
works, trade secrets and know-how (including any registrations or applications
for registration of any of the foregoing) and all other similar types of
proprietary intellectual property rights arising under the Laws of any country
or jurisdiction.
     (u) “Inventory” means all inventory of each of the Transferred Entities,
wherever located, including raw materials, works-in-progress, finished goods,
consigned goods, supplies, scrap, wrappings, supply and packaging terms,
containers and spare parts.
     (v) “Law” shall mean any federal, state, local or foreign law (including
common law), statute, ordinance, rule, regulation, judgment, code, order,
injunction, decree, arbitration award, agency requirement, license or permit of
any Governmental Entity.
     (w) “Liens” shall mean all liens, pledges, charges, claims, security
interests, purchase agreements, options, title defects, restrictions on
transfer, imperfections of title, easements, encroachments, options, rights of
first refusal, rights of first offer or other encumbrances and agreements of any
nature whatsoever, whether consensual, statutory or otherwise; provided, that,
with respect to the Transferred Interests, “Liens” shall not include any of the
foregoing as set forth in the Organizational Documents of any of the Transferred
Entities.
     (x) “Losses” shall mean all losses, costs, charges, expenses (including
interest and penalties due and payable with respect thereto and reasonable
attorneys’ and other professional fees and expenses in connection with any
Action whether involving a third-party claim or any claim solely between the
parties hereto), obligations, liabilities, settlement payments, awards,
judgments, fines, penalties, damages, demands, claims, assessments or
deficiencies.

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     (y) “Material Adverse Effect” shall mean any event, circumstance, change or
effect that has or would reasonably be expected to have a material adverse
effect on the Business, results of operations or financial condition of the
Transferred Entities, taken as a whole; provided, however, that no change or
effect arising out of or resulting from any of the following shall be deemed by
itself or by themselves, either alone or in combination, to constitute or
contribute to a Material Adverse Effect:
     (i) general changes affecting the industries or markets in which the
Business operates, provided, that any such change does not have or cause a
disproportionate effect on the Transferred Entities;
     (ii) general political or economic conditions or changes therein (including
the commencement, continuation or escalation of a war, material armed
hostilities or other material international or national calamity or acts of
terrorism or earthquakes, hurricanes, other natural disasters or acts of God),
provided that with respect to earthquakes, hurricanes, other natural disasters
or acts of God, any such events do not have or cause a disproportionate effect
on the Transferred Entities;
     (iii) general financial or capital market conditions, including interest
rates or currency exchange rates, or changes therein;
     (iv) any changes in applicable Law or GAAP or other accounting standards,
or authoritative interpretations thereof, from and after the date of this
Agreement, provided, that any such change in Law does not make it illegal for
the Transferred Entities to continue to conduct the Business in substantially
the same manner in which it is conducted on the date of this Agreement;
     (v) the announcement of the potential sale of the Business; the
negotiation, execution, announcement or existence of this Agreement or the
consummation of the transactions contemplated by this Agreement; or changes or
actions directly resulting from any of the foregoing, including any change in
the relationships of the Transferred Entities with their respective customers,
suppliers or employees; and
     (vi) any action or omission required pursuant to the terms of this
Agreement, or pursuant to the express written request of Purchaser.
     (z) “Measurement Period” shall mean a twelve (12) month period ending
December 31; provided, however, that if the Closing occurs in 2008, the initial
Measurement Period shall commence on the first day of the calendar month
immediately following the Closing and end on December 31, 2008.
     (aa) “Newpark Change of Control” shall mean (i) a merger or consolidation
of Newpark with or into any other corporation or other entity or Person or
(ii) a sale, lease, exchange or other transfer in one transaction or series of
related transactions of all or substantially all of Newpark’s outstanding
securities or all or substantially all of Newpark’s assets; provided, that the
following events shall not constitute a “Newpark Change of Control”: (A) a
merger or consolidation of Newpark in which the holders of the voting securities
of Newpark immediately prior to the merger or consolidation hold at least a
majority of the voting

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securities in the successor corporation immediately after the merger or
consolidation; (B) a sale, lease, exchange or other transfer in one transaction
or a series of related transactions of all or substantially all of Newpark’s
assets to a wholly-owned subsidiary; or (C) the reincorporation of Newpark.
     (bb) “Newpark Group Health Plan” shall mean the benefit programs under
Newpark’s group benefits plan providing health, medical, prescription drug,
dental and vision benefits other than through a Section 125 health care flexible
spending account.
     (cc) “Organizational Documents” of any Person means, as applicable, the
following documents or equivalent governing documents: (i) the articles of
incorporation and bylaws of any Person that is a corporation, (ii) the
certificate of formation and company agreement of any Person that is a limited
liability company, or (iii) the certificate of formation and partnership
agreement of any Person that is a partnership, including any amendments to any
of the foregoing documents.
     (dd) “Permitted Liens” means the following Liens: (a) Liens for Taxes,
assessments or other governmental charges or levies that are not yet due or
payable or that are being contested in good faith by appropriate proceedings or
that may thereafter be paid without penalty if, to the extent required by GAAP,
adequate reserves with respect thereto are maintained on the books of the
Transferred Entities in accordance with GAAP; (b) statutory Liens of landlords
and Liens of carriers, warehousemen, mechanics, materialmen, workmen, repairmen
and other similar Liens imposed by Law and on a basis consistent with past
practice; (c) Liens incurred or deposits made in the ordinary course of business
and on a basis consistent with past practice in connection with workers’
compensation, unemployment insurance or other types of social security;
(d) defects or imperfections of title, easements, covenants, rights-of-way,
restrictions and other similar non-monetary charges or encumbrances not
materially detracting from the value of or materially interfering with the use
or operation of the affected property within the ordinary conduct of the
Business; (e) Liens incurred in the ordinary course of business and on a basis
consistent with past practice and the provisions of Section 5.4 hereof securing
obligations or liabilities that are not material to the Transferred Entities or
the Transferred Interests; and (f) easements, covenants, rights-of-way and other
similar conditions and restrictions (i) recorded in the applicable real property
records of the county in which the affected property is located, (ii) that may
reasonably be shown or identified by survey or physical inspection of the
affected property, or (iii) set forth in applicable zoning, building and other
similar regulations, so long as no such matter identified in clauses (i),
(ii) or (iii) prevents or materially hinders or interferes with the use of such
affected property substantially as currently used for the purposes of the
Business.
     (ee) “Permits” means all franchises, approvals, consents, permits,
authorizations, licenses, orders, registrations, certificates, variances or
other similar rights obtained from any Governmental Entity.
     (ff) “Person” shall mean a person, group (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended),
corporation, partnership, limited liability company, joint venture, trust or
other entity or organization, including a Governmental Entity.

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     (gg) “Subsidiary” shall mean, with respect to any Person, any corporation,
entity or other organization whether incorporated or unincorporated, of which
(i) such first Person directly or indirectly owns or controls at least a
majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others performing
similar functions or (ii) such first Person is a general partner, manager or
managing member.
     (hh) “Tax” shall mean any tax of any kind, including any federal, state,
local and foreign (including any political subdivision thereof) income, profits,
license, severance, occupation, windfall profits, capital gains, capital stock,
transfer, registration, social security (or similar), production, franchise,
gross receipts, margin, payroll, sales, employment, use, property, excise, value
added, estimated, stamp, alternative or add-on minimum, environmental,
withholding and any other tax or assessment, together with all interest,
penalties and additions imposed with respect to such amounts.
     (ii) “Tax Benefit” shall mean any decrease in Taxes paid or increase in a
refund due, including any interest with respect thereto.
     (jj) “Tax Return” shall mean any return, declaration, report, claim for
refund or information return or statement filed or required to be filed with any
taxing authority relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.
     (kk) “Transferred Employee” shall mean an individual who is, at the time of
the Closing, employed by any of the Transferred Entities. “Transferred Employee”
shall also include any employee of any Transferred Entity at the time of Closing
who is on short-term disability, sick leave or other authorized leave of absence
or military leave.
     (ll) “Transferred Entities” shall mean NESI, NESI Management and NESI
Mississippi.
     (mm) “Transferred Interests” shall collectively mean (i) the Acquired
Interests, (ii) all of the outstanding membership interests in NESI Management,
and (iii) all of the outstanding limited partnership interests of NESI
Mississippi.
     (nn) “Treasury Regulations” shall mean the Treasury Regulations promulgated
under the Code.
     (oo) “Welfare Plan” shall mean any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA, any short-term disability program classified
as a “payroll practice,” any group health plan within the meaning of Code
Section 105, any cafeteria plan within the meaning of Code Section 125, any
dependent care assistance program within the meaning of Code Section 129, any
adoption assistance plan within the meaning of Code Section 137, any tuition
assistance plan within the meaning of Code Section 127, and any qualified
transportation plan within the meaning of Code Section 132, other than any
severance plan.
     1.2 Other Definitions. The following terms shall have the meanings defined
in the Section indicated:

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Accelerated Earn-Out Payment
  Section 2.5(e)
Accounting Arbitrator
  Section 2.4(b)
Acquired Business
  Section 5.12(b)
Acquired Company
  Section 5.12(b)
Acquisition Transaction
  Section 5.7
Act
  Section 3.2(a)
Agreement
  Preamble
Alleged Recognized Environmental Condition
  Section 5.14(b)
Alleged Recognized Environmental Cost
  Section 5.14(c)(i)
Allocation Statement
  Section 2.6
Annual Financial Statements
  Section 3.6(a)
ASTM E1527-05
  Section 5.14(a)
Baseline EBITDA
  Section 2.5(c)
Capital Leases
  Section 1.1(s)
CERCLA
  Section 1.1(k)
Claim
  Section 2.2(b)
Closing
  Section 2.1(a)
Closing Date
  Section 2.3(a)
Closing Date Net Working Capital
  Section 2.4(b)
Corporate Guaranty
  Section 5.15(a)
Covered Business
  Section 5.12(a)
Credit Agreement
  Section 2.1(b)(v)
Current Assets
  Section 2.4(c)
Current Liabilities
  Section 2.4(c)
Deductible
  Section 10.5(a)
DFI
  Preamble
Divestiture Threshold
  Section 5.12(b)
Due Date
  Section 7.1(e)
Earn-Out Consideration
  Section 2.5
Earn-Out Dispute Notice
  Section 2.5(d)(ii)
Effective Time
  Section 2.3(a)
Environmental Dispute
  Section 5.14(d)
Environmental Inspection Period
  Section 5.14(b)
Environmental Report
  Section 5.14(c)
EPCRA
  Section 1.1(k)
EPCRS
  Section 3.10(a)
Escrow Account
  Section 2.2(b)
Escrow Agent
  Section 2.2(b)
Escrow Agreement
  Section 2.2(b)
Estimated Baseline EBITDA
  Section 2.5(c)
Estimated Closing Statement
  Section 2.4(a)
Estimated Net Working Capital
  Section 2.4(a)
Estimated Net Working Capital Deficiency Amount
  Section 2.4(a)(ii)
Estimated Net Working Capital Excess Amount
  Section 2.4(a)(ii)
Final Closing Statement
  Section 2.4(b)
Final Working Capital Adjustment
  Section 2.4(b)

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Fourchon Sublease
  Section 5.15(b)
Holdback Funds
  Section 2.2(b)
Indemnified Parties
  Section 10.3
Indemnifying Party
  Section 10.4
Initial Closing Consideration
  Section 2.2(a)
Interim Financial Statements
  Section 3.6(b)
IRS
  Section 3.10(a)
Lafayette Sublease Agreement
  Section 8.2(g)
Leased Real Property
  Section 3.17(b)
Management
  Section 3.13(c)
Material Contracts
  Section 3.16
Maximum Earn-Out Amount
  Section 2.5(a)
MBP
  Section 2.5(b)
Measurement Period Earn-Out Payment
  Section 2.5(a)
Minimum Claim Amount
  Section 10.5(a)
NESI
  Recitals
NESI Management
  Recitals
NESI Mississippi
  Recitals
Net Working Capital
  Section 2.4(c)
Newpark
  Preamble
Newpark Breach
  Section 9.1(d)
Newpark Disclosure Schedule
  Article III
Newpark Indemnified Parties
  Section 10.3
Newpark Texas
  Preamble
NMIS
  Section 8.2(g)
Non-assumed Liabilities
  Section 2.1(b)
NORM
  Section 1.1(e)
Notice of Alleged Recognized Environmental Conditions
  Section 5.14(b)
Order
  Section 3.8
Outside Date
  Section 9.1(b)
Owned Real Property
  Section 3.17(a)
Phase I Report
  Section 5.14(b)
Phase II Report
  Section 5.14(b)
Post-Closing EBITDA
  Section 2.5(b)
Post-Closing Period
  Section 7.1(b)
Pre-Closing Period
  Section 7.1(a)
Predecessor Entities
  Section 3.1(b)
Purchase Price
  Section 2.2(a)
Purchaser
  Preamble
Purchaser Breach
  Section 9.1(c)
Purchaser Indemnified Parties
  Section 10.2
RCRA
  Section 1.1(k)
Real Property Lease
  Section 3.17(b)
Recapitalization
  Section 2.5(e)
Remaining Alleged Recognized Environmental Conditions
  Section 5.14(c)(iii)
Restricted Period
  Section 5.12(a)

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Sale
  Section 2.1(a)
Selected Alleged Recognized Environmental Conditions
  Section 5.14(c)(iii)
Straddle Period
  Section 7.1(a)
Surviving Covenants
  Section 10.1
Tax Contest
  Section 7.1(f)
Termination Fee
  Section 9.3(b)
Trademarks
  Section 1.1(t)
Transferred Intellectual Property
  Section 3.15(a)
Transportation Contract
  Section 3.16(i)
Trinity
  Preamble
Trinity Change of Control
  Section 2.5(e)
Trinity Earn-Out Statement
  Section 2.5(d)(i)
TSCA
  Section 1.1(k)
WARN Act
  Section 5.13(a)

     1.3 Interpretation; Absence of Presumption.
     (a) For the purposes of this Agreement, “to the knowledge of Newpark” shall
mean the actual knowledge, without independent investigation, of the individuals
identified in Section 1.3 of the Newpark Disclosure Schedule.
     (b) For the purposes of this Agreement, (i) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other gender as the context requires, (ii) the terms “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Article, Section and paragraph
references are to the Articles, Sections and paragraphs to this Agreement unless
otherwise specified, (iii) the word “including” and words of similar import when
used in this Agreement shall mean “including without limitation” unless the
context otherwise requires or unless otherwise specified, (iv) the word “or”
shall not be exclusive, (v) all pronouns and any variations thereof refer to the
masculine, feminine or neuter, single or plural, as the context may require and
(vi) all references to any period of days shall be deemed to be to the relevant
number of calendar days unless otherwise specified.
     (c) This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.
     1.4 Headings; Definitions. The Section and Article headings contained in
this Agreement are inserted for convenience of reference only and will not
affect the meaning or interpretation of this Agreement. All capitalized terms
defined in this Agreement are equally applicable to both the singular and plural
forms of such terms.

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ARTICLE II
THE SALE
     2.1 Agreement to Purchase and Sell; Non-assumed Liabilities.
     (a) Agreement to Purchase and Sell. Upon the terms and subject to the
conditions set forth in this Agreement, at the closing of the transactions
contemplated by this Agreement (the “Closing”), DFI and Newpark Texas shall
sell, transfer, convey and assign to Purchaser, and Purchaser shall purchase and
acquire from DFI and Newpark Texas, all of DFI’s and Newpark Texas’ respective
rights, title and interest in and to the Acquired Interests, free and clear of
all Liens other than Permitted Liens (the “Sale”).
     (b) Non-Assumption of Liabilities. Neither Purchaser nor any of its
Affiliates or Subsidiaries (other than the Transferred Entities following the
Closing, but subject in all respects to Purchaser’s and its Affiliates’
(including the Transferred Entities’) right to indemnification pursuant to
Section 10.2(c) for the Non-assumed Liabilities) shall, by the execution and
performance of this Agreement, by operation of law or otherwise, assume, become
responsible for or incur any liability or obligation of any nature of the
Transferred Entities, whether legal or equitable, matured or contingent, known
or unknown, foreseen or unforeseen, ordinary or extraordinary, patent or latent,
asserted prior to, at or after the date of this Agreement, relating to the
following:
     (i) any severance pay obligation of any of the Transferred Entities or of
Newpark Texas, DFI, Newpark or any of its other Affiliates or Subsidiaries with
respect to any Former Employee;
     (ii) any Benefit Plan (other than (A) the Change of Control Agreements
listed in Section 3.16(h)(ii) of the Newpark Disclosure Schedule between NESI
and the Transferred Employees listed therein, and (B) the liabilities and
obligations of any Transferred Entity under any Benefit Plan to the extent of
any amounts with respect thereto are recorded as a liability in the calculation
of the Estimated Net Working Capital, as adjusted by the Closing Date Net
Working Capital, for which Purchaser shall be responsible post-Closing),
including, without limitation, the Newpark Group Health Plan, and any other
employee benefit plan (within the meaning of Section 3(3) of ERISA) or any other
fringe benefit program maintained or sponsored by Newpark or any of its
Subsidiaries or Affiliates or to which Newpark or any of its Subsidiaries or
Affiliates contributes or any contributions, benefits or liabilities therefor or
any liability for the withdrawal or partial withdrawal from or termination of
any such plan or program by Newpark or any of its Subsidiaries or Affiliates;
     (iii) the litigation described in Section A of Section 3.8 of the Newpark
Disclosure Schedule;
     (iv) any closure, post-closure, monitoring, testing, analyzing, clean-up or
remediation obligations relating to the site or facility known as the Guillory
Landfarm near Eunice, Louisiana; and

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     (v) any Indebtedness of Newpark Texas, Newpark or its other Affiliates or
Subsidiaries, including, without limitation, that arising under the current
$150,000,000.00 Term Credit Agreement dated August 18, 2006 between Newpark and
JPMorgan Chase Bank, NA, as administrative agent, Wilmington Trust Company as
collateral agent and the Loan Parties and Lenders identified therein or its
predecessor or successor credit agreements (collectively, the “Credit
Agreement”) and any obligations or liabilities of the Transferred Entities
arising out of or in connection with their guaranteeing of the Credit Agreement
or pledging their assets as security for the Credit Agreement. Notwithstanding
the foregoing, Capital Leases of the Transferred Entities shall not be
considered a Non-assumed Liability.
Each and all of the foregoing are hereinafter referred to as the “Non-assumed
Liabilities.”
     (c) Transferred Entities’ Liabilities. The provisions of Section 2.1(b)
above shall not in any manner adversely affect, diminish or otherwise relieve
the Transferred Entities from their respective obligations to pay, discharge,
perform or otherwise satisfy, as the case may be, any and all liabilities,
commitments or obligations of the Transferred Entities, subject in all respects
to Purchaser’s right to seek indemnification with respect thereto under
Article X.
     2.2 Consideration.
     (a) In consideration for the Acquired Interests, Purchaser shall pay an
aggregate amount equal to the sum of (i) $81,500,000, subject to the adjustments
in Section 2.4(a) and Section 5.14(c) (the “Initial Closing Consideration”),
plus (ii) if earned, the Earn-Out Consideration (the foregoing aggregate amount,
as adjusted pursuant to the terms of this Agreement, being referred to as the
“Purchase Price”), payable as described below. The Earn-Out Consideration, if
earned, shall be calculated and paid in accordance with Section 2.5.
     (b) Newpark agrees that the sum of $6,112,500 (the “Holdback Funds”)
otherwise payable to Newpark as part of the Purchase Price at Closing shall be
delivered by Purchaser to an escrow agent mutually agreed upon by Newpark and
Purchaser (the “Escrow Agent”) pursuant to an escrow agreement mutually
acceptable to Newpark, Purchaser and the Escrow Agent (the “Escrow Agreement”)
to be held by the Escrow Agent in an interest bearing account (the “Escrow
Account”) as required by the terms of the Escrow Agreement and this provision.
Newpark shall be entitled to all interest earned on the Escrow Account except as
specifically provided in this Section 2.2(b). The Holdback Funds shall be
applied towards any claims made by a Purchaser Indemnified Party pursuant to
Article X below and in accordance with the terms of the Escrow Agreement. The
Purchaser Indemnified Parties shall first seek reimbursement for any Losses for
which they are entitled to receive indemnification under this Agreement out of
the funds deposited in the Escrow Account, pursuant to the terms of the Escrow
Agreement, until such funds are exhausted or released from the Escrow Account.
On the first anniversary of the Closing, the Holdback Amount shall be reduced to
an amount equal to the lesser of: (i) $3,056,250, or (ii) the remaining funds
held in the Escrow Account, and any amounts in excess of $3,056,250 shall be
released to Newpark, unless prior to that date Purchaser advises the Escrow
Agent and Newpark in writing that any claim for indemnification (each, a
“Claim”) by any Purchaser Indemnified Party is pending. Any such notice shall
specify the total amount of the pending Claim(s). If such notice is timely
received by the Escrow Agent, the Escrow Agent

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shall release only that part of the Escrow Account that is eligible to be
released pursuant to the preceding sentence that exceeds the total amount of any
Claim(s) received, with the remaining funds to be held in the Escrow Account
until such Claim(s) are resolved. On the second anniversary of the Closing, the
remaining funds held in the Escrow Account shall be released to Newpark, unless
any Claim(s) have been made and are not resolved, in which event the Escrow
Agent shall release only that part, if any, of the Escrow Account that exceeds
the total amount of unresolved Claim(s), with the remaining funds relevant to
the unresolved Claim(s) to be held in escrow until such Claim(s) are resolved.
     2.3 Closing.
     (a) The Closing shall take place at the offices of Andrews Kurth LLP, 10001
Woodloch Forest Drive, Suite 200, The Woodlands, Texas 77380 at 10:00 a.m.,
Houston, Texas time, on the date (the “Closing Date”) that is one Business Day
following the satisfaction or waiver of the conditions set forth in Article VIII
(other than those conditions that by their nature are to be satisfied or waived
at the Closing, but subject to the satisfaction or waiver of those conditions)
or at such other place, time or date as may be mutually agreed upon in writing
by Newpark and Purchaser. Notwithstanding the foregoing, the parties hereto
intend that such Closing shall be deemed to be effective, and the transactions
contemplated by this Agreement shall be deemed to occur simultaneously, at
11:59 p.m., Central Daylight Time, on the Closing Date (the “Effective Time”).
     (b) At the Closing:
     (i) DFI and Newpark Texas, as applicable, shall deliver or cause to be
delivered to or for the benefit of the Purchaser, in the case of documents, duly
executed by each applicable party, the following:
     (A) certificates evidencing the Acquired Interests to the extent that such
Acquired Interests are in certificate form, duly endorsed in blank or with stock
powers duly executed in proper form for transfer, and with any required stock
transfer stamps affixed thereto;
     (B) to the extent that the Acquired Interests are not in certificate form,
such documents evidencing the transfer, assignment, conveyance and sale of the
Acquired Interests by DFI and Newpark Texas to Purchaser, as Purchaser may
reasonably require;
     (C) resignation letters, effective as of the Effective Time, of those
managers, directors or officers of the Transferred Entities as Purchaser may
request in writing no less than five (5) Business Days prior to the Closing
Date;
     (D) all minute books, formation, organizational, governance and similar
“corporate” documents and records and all other files, documents, data,
information, papers, personnel and employment records and other records of the
Transferred Entities, relating to the conduct of the Business and the ownership,
use and possession of the assets of the Transferred Entities in connection
therewith, in the possession of Newpark or any of its Affiliates, other than (A)
any

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books and records that Newpark or any of its Affiliates is required by Law to
retain the originals of, in which case copies thereof shall be made available to
Purchaser; and (B) personnel and employment records for employees and Former
Employees of Newpark or any of its Affiliates who are not Transferred Employees;
provided, that Newpark and its Subsidiaries shall have the right to retain a
copy of all such books and records to the extent reasonably necessary for, and
for use in connection with, Tax, regulatory, litigation or other legitimate,
non-competitive purposes;
     (E) an acknowledgement from DFI and Newpark Texas of the receipt of the
Initial Closing Consideration, less the Holdback Funds;
     (F) evidence, reasonably satisfactory to Purchaser, of the release of the
Liens and releases of liability of the Transferred Entities with respect to the
payment of the funded Indebtedness as required pursuant to Section 8.2(d);
     (G) the certificate required by Section 8.2(c) hereof;
     (H) a legal opinion of counsel to Newpark, DFI and Newpark Texas, dated as
of the Closing, addressed to Purchaser in the form and substance reasonably
satisfactory to Purchaser, which shall expressly entitle Purchaser’s lenders to
rely thereon;
     (I) the Escrow Agreement;
     (J) a resolution or other document reasonably satisfactory to Purchaser
evidencing the withdrawal as of the Effective Time of NESI, and any of the other
Transferred Entities that are “Adopting Employers” as defined in the Newpark
Resources, Inc. Savings and Incentive Plan, from said plan; and
     (K) such other documents and certificates required to be delivered by DFI
or Newpark Texas pursuant to the terms of this Agreement.
     (ii) The Purchaser shall deliver or cause to be delivered to or for the
benefit of DFI or Newpark Texas, as applicable, in the case of documents, duly
executed, the following:
     (A) the Initial Closing Consideration, less the amount of the Holdback
Funds, in cash by wire transfer of immediately available funds into an account
or accounts designated by Newpark not less than two (2) Business Days prior to
the Closing;
     (B) the Holdback Funds in cash by wire transfer of immediately available
funds to the Escrow Agent;
     (C) the certificate required by Section 8.3(c) hereof;
     (D) the Escrow Agreement; and

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     (E) such other documents and certificates required to be delivered by the
Purchaser pursuant to the terms of this Agreement.
     2.4 Working Capital Price Adjustment.
     (a) (i) For the purpose of determining the Initial Closing Consideration,
at least five (5) Business Days prior to the Closing Date, Newpark shall cause
to be prepared and delivered to Purchaser a statement (the “Estimated Closing
Statement”) setting forth a good faith estimate of the Net Working Capital (the
“Estimated Net Working Capital”) and the components and calculation thereof, as
of the Effective Time, determined in accordance with this Section 2.4. The
Estimated Closing Statement shall be subject to the review and agreement of
Purchaser, and Newpark and the Purchaser shall cooperate and negotiate in good
faith to resolve any dispute regarding the Estimated Closing Statement prior to
the Closing; provided, however, that if any item of dispute regarding the
Estimated Closing Statement and the calculation of the Estimated Net Working
Capital is not resolved by agreement in writing between Newpark and the
Purchaser by the second Business Day prior to the Closing Date, then Newpark’s
estimate of such disputed item, together with the resolved disputed items, shall
be deemed final solely for purposes of determining the Estimated Net Working
Capital.
     (ii) To the extent the Estimated Net Working Capital is greater than
$5,250,000 (such difference being herein referred to as the “Estimated Net
Working Capital Excess Amount”), the Initial Closing Consideration shall be
increased by the amount of the Estimated Net Working Capital Excess Amount as
provided in Section 2.2. To the extent the Estimated Net Working Capital is less
than $5,250,000 (such difference being herein referred to as the “Estimated Net
Working Capital Deficiency Amount”), the Initial Closing Consideration shall be
reduced by the amount of the Estimated Net Working Capital Deficiency Amount as
provided in Section 2.2.
     (b) Within sixty (60) calendar days of the Closing Date, the Purchaser
shall cause to be prepared and delivered to Newpark a statement (the “Final
Closing Statement”) setting forth the actual Net Working Capital as of the
Effective Time (the “Closing Date Net Working Capital”), the components and
calculation thereof, and the difference, if any, between the Estimated Net
Working Capital and the Closing Date Net Working Capital (the amount of such
difference being referred to as the “Final Working Capital Adjustment”). If the
Final Closing Statement reflects a difference between the Estimated Net Working
Capital and the amount of the Closing Date Net Working Capital, Newpark shall
have thirty (30) calendar days following the receipt of the Final Closing
Statement to review the components and calculation of the Closing Date Net
Working Capital. The failure of Newpark to object to the Final Closing Statement
within such thirty (30) calendar day period shall be deemed to be an acceptance
by Newpark of the Final Working Capital Adjustment. If Purchaser and Newpark
agree on all matters in the Final Closing Statement and the calculation of the
Closing Date Net Working Capital, or if Newpark otherwise fails to timely object
to such matters, then:
     (i) if the Closing Date Net Working Capital is greater than the Estimated
Net Working Capital, the Final Working Capital Adjustment shall be paid by
Purchaser to Newpark within three (3) Business Days of Newpark’s acceptance, or
deemed acceptance, of the Final Working Capital Adjustment, with such funds paid
via wire transfer of immediately available funds to the account designated by
Newpark; and

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acceptance, of the Final Working Capital Adjustment, with such funds paid via
wire transfer of immediately available funds to the account designated by
Newpark; and
     (ii) if the Closing Date Net Working Capital is less than the Estimated Net
Working Capital, the Final Working Capital Adjustment shall be deducted from and
reduce the Purchase Price and Newpark shall pay to Purchaser, within three
(3) Business Days of Newpark’s acceptance, or deemed acceptance, of the Final
Working Capital Adjustment, an amount equal to the Final Working Capital
Adjustment, with such amount paid via wire transfer of immediately available
funds to the account designated by Purchaser.
If Newpark and Purchaser are unable to agree on any component or the calculation
of the Closing Date Net Working Capital and the Final Working Capital
Adjustment, such dispute shall be resolved by a nationally recognized accounting
firm reasonably acceptable to Newpark and Purchaser who shall not be Ernst &
Young, L.L.P. or Purchaser’s accounting firm (the “Accounting Arbitrator”),
whose determination shall be final and binding on Purchaser and Newpark, and any
required payments by Purchaser to Newpark, on the one hand, or by Newpark to the
Purchaser, on the other hand, shall be made within three (3) Business Days of
the final resolution of such dispute. All fees and expenses of the Accounting
Arbitrator shall be paid by the party whose proposed Closing Date Net Working
Capital is farthest from the final Closing Date Net Working Capital as
determined by such Accounting Arbitrator. Any dispute as to which party’s
proposed Closing Date Net Working Capital is closest to the final Closing Date
Net Working Capital shall be resolved by the Accounting Arbitrator and shall be
specified in the final report prepared by such Accounting Arbitrator. Each of
Purchaser and Newpark shall pay their respective advisor’s fees, charges and
expenses incurred by such Person in connection with the dispute.
     (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, 2006 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;

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     (ii) any bank or funded Indebtedness including, without limitation, any
short-term debt and the current portion of any long-term debt; and
     (iii) any liability for income taxes payable by any of the Transferred
Entities.
     (d) The provisions of this Section 2.4 shall not be subject to the
provisions of Article X hereof or any limitations of liability set forth
therein.
     2.5 Earn-Out Consideration. Subject to the terms and conditions of this
Section 2.5, DFI and Newpark Texas shall be entitled to receive the following
additional consideration (the “Earn-Out Consideration”), if earned.
     (a) Payment of Earn-Out Consideration. For each of the first five
Measurement Periods, in the event the Post-Closing EBITDA exceeds the Baseline
EBITDA for an individual Measurement Period, Purchaser and/or Trinity will pay
to DFI and Newpark Texas additional aggregate consideration (a “Measurement
Period Earn-Out Payment”) of Fifty Cents ($0.50) for each One Dollar ($1.00)
that the Post-Closing EBITDA for any individual Measurement Period exceeds the
Baseline EBITDA; provided, however, that in no event shall the total Earn-Out
Consideration payable hereunder exceed $8,000,000, subject to adjustment as
provided in Section 5.14(c) (as adjusted, the “Maximum Earn-Out Amount”). If the
Closing occurs during 2008, for purposes of calculating the Measurement Period
Earn-Out Payment for the initial Measurement Period, the Baseline EBITDA shall
be proportionately reduced to an amount equal to the Baseline EBITDA multiplied
by a fraction, the numerator of which is the number of full calendar months in
2008 following the Closing and the denominator of which is twelve (12).
     (b) Post-Closing EBITDA. For purposes of this Agreement, “Post-Closing
EBITDA” means the combined net income of Trinity, Moss Bluff Property, L.P.
(“MBP”) and Purchaser for the relevant Measurement Period, calculated in
accordance with GAAP consistently applied, plus interest expenses, federal,
state and local taxes based on income, depreciation and amortization and subject
to the adjustments as provided in this Section 2.5(b). In calculating
Post-Closing EBITDA, the parties agree to the following adjustments: (i) all
legal, accounting, broker and advisory fees and expenses directly related to the
acquisition of the Transferred Entities and Escrow Agreement expenses shall be
disregarded; (ii) management fees payable to Affiliates of Trinity and/or
Purchaser shall be disregarded; (iii) asset impairments and similar non-cash
charges shall be disregarded; and (iv) any extraordinary, non-recurring or
unusual gains, losses or expenses on sales of assets or businesses (including
sales other than in the ordinary course of business) shall be disregarded.
     (c) Baseline EBITDA. For purposes of this Agreement, the “Baseline EBITDA”
means an amount equal to (i) the combined net income, calculated in accordance
with GAAP consistently applied, plus interest expenses, federal, state and local
taxes based on income, depreciation and amortization and subject to the
adjustments as provided in this Section 2.5(c), of (A) Trinity and MBP, on a
combined basis, and (B) the Transferred Entities, on a combined basis, for the
twelve (12) calendar month period ending with the month immediately preceding
the month in which the Closing occurs, less (ii) the sum of $500,000; provided,
however, that the Baseline EBITDA, for purposes of calculating the Measurement
Period Earn-Out Payment for any Measurement Period, shall not be less than
$17,694,000. (For the avoidance of doubt, if the

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Closing occurs in December 2007, the Baseline EBITDA shall be determined for the
period of December 1, 2006 through November 30, 2007.) In calculating Baseline
EBITDA, the parties agree to the following adjustments: (i) all legal,
accounting, broker and advisory fees and expenses directly related to the
acquisition of the Transferred Entities and Escrow Agreement expenses shall be
disregarded; (ii) general administrative and overhead expenses shall be
disregarded with respect to the Transferred Entities, except that direct costs
of Newpark and its Affiliates related to the Business prior to the Closing shall
be considered for purposes of calculating Baseline EBITDA; (iii) management fees
payable to Affiliates of Trinity and/or MBP shall be disregarded with respect to
Trinity and MBP; (iv) asset impairments and similar non-cash charges shall be
disregarded; and (v) any extraordinary, non-recurring or unusual gains, losses
or expenses on sales of assets or businesses (including sales other than in the
ordinary course of business) shall be disregarded. Within five (5) Business Days
of the execution of this agreement the parties shall jointly prepare an estimate
of the Baseline EBITDA, calculated on a pro forma basis in accordance with the
foregoing provisions as if the Closing occurred in December 2007 (the “Estimated
Baseline EBITDA”). Not less than five (5) Business Days prior to the Closing
Date, Newpark and Purchaser shall deliver to the other a statement setting forth
such party’s respective input into the calculation of the actual Baseline
EBITDA. The actual Baseline EBITDA shall be calculated in a manner consistent
with the calculation of the Estimated Baseline EBITDA. Newpark and Purchaser
shall attempt, in good faith, to mutually agree upon the actual Baseline EBITDA
on or before the Closing Date. Each such party shall provide to the other access
to all relevant books, records and personnel as may be reasonably requested for
purposes of determining the final Baseline EBITDA. If Newpark and Purchaser are
unable to mutually agree upon the final Baseline EBITDA prior to the Closing
Date, such dispute shall be resolved promptly following the Closing by an
Accounting Arbitrator, who shall be selected in the same process described in
Section 2.4(b), whose decision shall be final and binding on the parties hereto.
All fees and expenses of the Accounting Arbitrator shall be paid by the party
whose proposed Baseline EBITDA is farthest from the final Baseline EBITDA as
determined by the Accounting Arbitrator. Any dispute as to which party’s
proposed Baseline EBITDA is closest to the final Baseline EBITDA shall be
resolved by the Accounting Arbitrator and shall be specified in the final report
prepared by such Accounting Arbitrator. Each of Newpark and Purchaser shall pay
their respective advisor’s fees, charges and expenses incurred by such Person in
connection with the dispute. At the Closing, unless a dispute exists with
respect to the calculation of the actual Baseline EBITDA (which shall be
resolved by the Accounting Arbitrator post-Closing), the parties shall execute a
written acknowledgment of the actual Baseline EBITDA as finally determined in
accordance with this Section 2.5(c).
     (d) Procedures for Calculating Post-Closing EBITDA and Measurement Period
Earn-Out Payments.
     (i) Within one hundred twenty (120) days following the end of each of the
first five (5) Measurement Periods, Purchaser will deliver to Newpark a
statement in writing setting forth Purchaser’s determination of the Post-Closing
EBITDA for such Measurement Period, and a calculation of the resulting
Measurement Period Earn-Out Payment to be made by Purchaser and/or Trinity for
such Measurement Period (each such statement, a “Trinity Earn-Out Statement”).
Trinity or Purchaser shall provide to Newpark prior to March 1 of each calendar
year following each of the first five (5) Measurement Periods a preliminary
non-binding estimate of the Post-Closing EBITDA

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and Measurement Period Earn-Out Payment relating to the immediately preceding
Measurement Period. During each of the first five (5) Measurement Periods, upon
reasonable request by Newpark, Trinity or Purchaser shall provide quarterly
estimates of the Post-Closing EBITDA for any such Measurement Period for
purposes of Newpark’s financial reporting obligations.
     (ii) Newpark shall have a period of up to thirty (30) days following its
receipt of a Trinity Earn-Out Statement to review Purchaser’s calculation of
Post-Closing EBITDA and the applicable Measurement Period Earn-Out Payment. In
connection with the review of the Trinity Earn-Out Statement, Purchaser shall,
and shall cause Trinity and MBP to, provide to Newpark reasonable access to all
relevant books and records and personnel of Purchaser, Trinity, MPB and their
Affiliates. If, as a result of such review, Newpark disagrees with the
calculation of Post-Closing EBITDA and the respective Measurement Period
Earn-Out Payment, Newpark shall deliver to Purchaser a written notice of
disagreement (an “Earn-Out Dispute Notice”) prior to the expiration of such
thirty (30) day review setting forth the basis of such dispute. Upon Purchaser’s
receipt of an Earn-Out Dispute Notice, Purchaser and Newpark agree to negotiate
in good faith to resolve the dispute set forth in the Earn-Out Dispute Notice.
If Purchaser and Newpark have not resolved the dispute within thirty (30) days
following Purchaser’s receipt of the Earn-Out Dispute Notice (or such longer
period of time as Purchaser and Newpark may mutually agree), then Newpark and
Purchaser agree to finally resolve such dispute in accordance with
Section 2.5(d)(iii) below.
     (iii) If Purchaser and Newpark cannot reach agreement as described in
Section 2.5(d)(ii) above, then the dispute shall be promptly referred to an
Accounting Arbitrator, who shall be selected in the same process described in
Section 2.4(b), for binding resolution. The Accounting Arbitrator shall
determine the Post-Closing EBITDA for the respective Measurement Period and the
applicable Measurement Period Earn-Out Payment in accordance with the provisions
of this Agreement as promptly as may be reasonably practicable and shall
endeavor to complete such process within a period of no more than sixty
(60) days following appointment of the Accounting Arbitrator. A determination of
the Accounting Arbitrator, absent manifest error, shall be final and binding on
the parties, effective as of the date the Accounting Arbitrator’s written
opinion is received by Purchaser and Newpark. Purchaser and Newpark shall each
pay their own respective costs and expenses in connection with the foregoing
dispute resolution process, but all fees and expenses of the Accounting
Arbitrator shall be paid by the party whose proposed Post-Closing EBITDA and
Measurement Period Earn-Out Payment is farthest from the final Post-Closing
EBITDA and Measurement Period Earn-Out Payment as determined by such Accounting
Arbitrator. Any dispute as to which party’s proposed Post-Closing EBITDA and
Measurement Period Earn-Out Payment is closest to the final Post-Closing EBITDA
and Measurement Period Earn-Out Payment shall be resolved by the Accounting
Arbitrator and shall be specified in the final report prepared by such
Accounting Arbitrator.
     (iv) Prior to the date that is the earlier of (A) ten (10) days following
the final determination of the Measurement Period Earn-Out Payment in accordance
with this Section 2.5(d) (whether by failure of Newpark to deliver an Earn-Out
Dispute Notice

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within the required time period, by agreement of the parties, or by receipt of
an opinion of the Accounting Arbitrator), and (B) one hundred fifty (150) days
following the end of the relevant Measurement Period, Trinity and/or Purchaser
shall pay to Newpark an amount in cash equal to the Measurement Period Earn-Out
Payment as finally determined in accordance with this Section 2.5(d); provided,
however, that if payment is to be made pursuant to clause (B) and the
Measurement Period Earn-Out Payment shall not have been finally determined as of
the date which is one hundred fifty (150) days following the end of the relevant
Measurement Period, Trinity and/or Purchaser shall pay to Newpark the
Measurement Period Earn-Out Payment as proposed in the Trinity Earn-Out
Statement and within ten (10) days following the final determination of the
Measurement Period Earn-Out Payment, (x) Trinity and/or Purchaser shall pay to
Newpark any additional amounts which may be payable for such Measurement Period,
or (y) Newpark shall return to Trinity and/or Purchaser, as the case may be, any
excess amount received by Newpark for such Measurement Period.
     (e) Accelerated Earn-Out Payment. Notwithstanding anything herein to the
contrary, if during any of the first five (5) Measurement Periods (1) Trinity,
MBP or the Purchaser undergoes a Trinity Change of Control, or (2) Trinity, MPB
or the Purchaser undertakes a Recapitalization, Trinity and/or Purchaser shall
pay to DFI and Newpark Texas an aggregate amount equal to the Maximum Earn-Out
Amount less the aggregate amount of any Measurement Period Earn-Out Payments
paid to Newpark, DFI, and Newpark Texas prior to such Recapitalization or
Trinity Change in Control (such difference, the “Accelerated Earn-Out Payment”).
The Accelerated Earn-Out Payment shall be payable concurrently with the
consummation of the Trinity Change of Control or Recapitalization. For purposes
of this Agreement, a “Trinity Change of Control” shall mean (A) a merger or
consolidation of Trinity, MBP or Purchaser with or into any other corporation or
other entity or Person or (B) a sale, lease, exchange or other transfer in one
transaction or series of related transactions of all or substantially all of
Trinity’s, MBP’s or Purchaser’s outstanding securities or all or substantially
all of Trinity’s, MBP’s or Purchaser’s assets; provided, that the following
events shall not constitute a “Trinity Change of Control”: (i) a merger or
consolidation of Trinity, MBP or Purchaser in which the holders of the voting
securities of such entity immediately prior to the merger or consolidation hold
at least a majority of the voting securities in the successor corporation
immediately after the merger or consolidation; (ii) a sale, lease, exchange or
other transfer in one transaction or a series of related transactions of all or
substantially all of Trinity’s, MBP’s or Purchaser’s assets to a wholly-owned
subsidiary of Trinity; (iii) in the case of Trinity and/or MBP, any merger,
consolidation, contribution by or reorganization of Trinity and/or MBP in which
all of such entity’s operating assets are merged into, consolidated with or
otherwise contributed to Purchaser or any Affiliate of Purchaser; or (iv) the
reincorporation of Trinity, MBP or Purchaser. For purposes of this Agreement, a
“Recapitalization” shall mean a transaction or series of related transactions
pursuant to which Trinity, MBP or Purchaser receives additional debt and/or
equity financing (other than additional draws pursuant to their respective
credit facilities) in an aggregate amount equal to or in excess of $15,000,000.
     (f) By execution of this Agreement, Trinity acknowledges and agrees that
Trinity is, together with Purchaser, primarily liable for the payment of any
Earn-Out Consideration that may be payable to Newpark pursuant to this
Section 2.5 and that Newpark, DFI and Newpark Texas may proceed directly against
Trinity for the recovery of any Earn-Out Consideration that

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may be payable pursuant to this Section 2.5; provided, however, that nothing in
this Section 2.5 shall prohibit or prevent any merger, consolidation,
contribution by or reorganization of Trinity in which (i) all of Trinity’s
operating assets are merged into, consolidated with or otherwise contributed to
Purchaser or any Affiliate of Purchaser, and (ii) all of Trinity’s rights and
liabilities under this Agreement are assigned to such successor in interest to
Trinity’s assets in accordance with the provisions of Section 11.6 hereof. The
provisions of this Section 2.5 shall not be subject to the provisions of
Article X hereof or any limitations of liability set forth therein.
     2.6 Purchase Price Allocation. The parties agree to allocate the Purchase
Price (including, for purposes of this Section 2.6, any other consideration
treated for U.S. federal income tax purposes as being paid to Newpark, including
any applicable liabilities assumed or taken subject to) among the assets of the
Transferred Entities in accordance with an allocation schedule to be prepared by
Purchaser in accordance with this Section 2.6. Within thirty (30) days of the
final determination of the Closing Date Net Working Capital and Final Working
Capital Adjustment, Purchaser shall deliver to Newpark an allocation statement
setting forth Purchaser’s allocation of the Purchase Price pursuant to
Section 1060 of the Code and any other applicable Tax Laws (as the same may be
revised pursuant to this Section 2.6, the “Allocation Statement”). Within
forty-five (45) days following its receipt of the Allocation Statement, Newpark
shall have the right to dispute any such proposed allocation; otherwise, such
proposed allocation shall become final. If Newpark so disputes any such
allocation and Purchaser and Newpark are unable to resolve their disagreement
within the forty-five (45) days following notification of such dispute, the
dispute shall be submitted to the Accounting Arbitrator, whose expense shall be
borne equally by Purchaser and Newpark, for resolution within forty-five
(45) days of such submission. The decision of the Accounting Arbitrator with
respect to such dispute shall be binding upon Purchaser and Newpark. Purchaser
and Newpark (i) shall be bound by the allocations determined pursuant to this
Section 2.6 for purposes of determining any Taxes; (ii) shall prepare and file
all Tax Returns (such as IRS Form 8594 or other Tax Returns required by
Section 1060 of the Code) to be filed with any Tax authority in a manner
consistent with such allocation; and (iii) shall take no position inconsistent
with such allocations in any Tax Return, any proceeding before any Tax authority
or otherwise. In the event that any such allocation is disputed by any Tax
authority, the party receiving notice of such dispute shall promptly notify and
consult with the other party hereto concerning resolution of such dispute.
     2.7 Further Assurances. At any time and from time to time after the Closing
Date, each party hereto shall, at the request of another party and at such
requesting party’s sole cost and expense, execute and deliver such other
instruments of conveyance and transfer and take such other actions as such other
party may reasonably request in order to more effectively consummate the
transactions contemplated hereby and to vest in the Purchaser title to all of
the rights, title and interest of DFI and Newpark Texas, as applicable, in and
to the Transferred Interests. The parties hereto acknowledge that the
transaction shall be treated as an asset sale for federal and state income tax
purposes and that all federal and state tax net operating losses will be
retained by Newpark.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NEWPARK
     Except as set forth in the corresponding Section of the disclosure schedule
delivered to Purchaser concurrently with the execution of this Agreement (the
“Newpark Disclosure Schedule”) (it being agreed that disclosure of any item on
the Newpark Disclosure Schedule in any one or more Sections of the Newpark
Disclosure Schedule shall be deemed disclosure with respect to other sections of
this Agreement if the relevance of such disclosure to a representation or
warranty is reasonably apparent), Newpark represents and warrants to Purchaser
as follows:
     3.1 Organization and Qualification.
     (a) Each of DFI and Newpark Texas and each Transferred Entity is (i) a
corporation or other legal entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization and has all
requisite corporate or other organizational power and authority to carry on its
businesses as now being conducted and (ii) qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the conduct of
its business requires such qualification, except, in the case of clause (ii),
where the failure to be so qualified or in good standing, would not reasonably
be expected to have a Material Adverse Effect.
     (b) Except for (i) the conversion of Newpark Environmental Services of
Texas, LP, a Texas limited partnership, into NESI, and (ii) the merger of each
of NID, LP, a Texas limited partnership, NES Permian Basin, LP, a Texas limited
partnership, and Newpark Environmental Services, LLC, a Louisiana limited
liability company (collectively, the “Predecessor Entities”) into NESI, no
entity has since January 1, 2006 been merged into or otherwise consolidated
with, and no entity has been converted into, a Transferred Entity, any of the
Predecessor Entities or Newpark Environmental Services of Texas, LP.
     3.2 Capitalization of the Transferred Entities.
     (a) The Transferred Interests constitute the entire membership or
partnership interests, as applicable, in the Transferred Entities and are
collectively wholly owned by DFI, Newpark Texas or NESI, as applicable, free and
clear of all Liens other than the Liens described in Section 3.2(a) of the
Newpark Disclosure Schedule and have not been issued in violation of any
preemptive or similar rights. Except for the Transferred Interests, there are no
other equity interests of any Transferred Entities reserved, issued or
outstanding, and except as set forth in the Organizational Documents of any
Transferred Entity, there are no preemptive or other outstanding rights,
options, warrants, equity appreciation rights, redemption rights, repurchase
rights, convertible, exercisable, or exchangeable securities or other agreements
of any character relating to the issued or unissued ownership interest in any of
the Transferred Entities or any other securities or obligations convertible or
exchangeable into or exercisable for, or giving any Person a right to subscribe
for or acquire, any securities or other equity interests of any Transferred
Entity or which obligate any of the Transferred Entities to issue any of its
membership or partnership interests, as applicable, or other securities or which
otherwise relate to the sale or transfer by any Transferred Entity of any of its
ownership interests or securities (whether debt or equity). Except as set forth
in the Organizational Documents of any Transferred Entity, no Transferred Entity
has an obligation (contingent or otherwise) to purchase,

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redeem or otherwise acquire any of its securities or ownership interests or to
pay any dividend or make any distribution in respect thereof. Neither Newpark,
DFI, Newpark Texas nor any of the Transferred Entities have agreed to register
any ownership interests in or securities of the Transferred Entities under the
Securities Act of 1933, as amended (the “Act”), or under any state securities
Law.
     (b) Except as set forth in the Organizational Documents of any Transferred
Entity, there are no voting trusts or other agreements or understandings to
which any Transferred Entity is a party with respect to the voting of the
Transferred Interests.
     (c) All Transferred Entities and their respective jurisdictions of
organization, and for each Transferred Entity the number of outstanding units or
percentage interests or other equity interests in such Transferred Entity and
the identity of the holders of such units or interests are identified in
Section 3.2(c) of the Newpark Disclosure Schedule.
     (d) Except for NESI’s ownership of interests in NESI Management and NESI
Mississippi, no Transferred Entity owns or controls, directly or indirectly, any
capital stock, membership interests, security or other equity interest in any
other Person.
     3.3 Authority Relative to This Agreement. Newpark, DFI and Newpark Texas
each has all necessary corporate or limited liability company power and
authority, and has taken all corporate or limited liability company action
necessary, to execute, deliver and perform this Agreement and any agreements
ancillary hereto and to consummate the transactions contemplated by this
Agreement in accordance with the terms of this Agreement. This Agreement has
been duly and validly executed and delivered by Newpark, DFI and Newpark Texas
and, assuming the due authorization, execution and delivery of this Agreement by
Purchaser, constitutes a valid, legal and binding agreement of Newpark, DFI
and/or Newpark Texas (as applicable) enforceable against each in accordance with
its terms. As of the Closing, each ancillary document hereto will be duly and
validly executed by Newpark, DFI and/or Newpark Texas (as applicable) and,
assuming the due authorization, execution and delivery of any such ancillary
agreements hereto by Purchaser (as applicable), will constitute the valid, legal
and binding agreement of Newpark, DFI and/or Newpark Texas (as applicable),
enforceable against each in accordance with their terms.
     3.4 Consents and Approvals; No Violations. No filing with or notice to, and
no permit, authorization, registration, consent or approval of, any Governmental
Entity is required on the part of Newpark, DFI, Newpark Texas or any Transferred
Entity for the execution, delivery and performance by Newpark, DFI or Newpark
Texas of this Agreement or the consummation by Newpark, DFI or Newpark Texas of
the transactions contemplated by this Agreement, except (i) compliance with any
applicable requirements of the HSR Act, (ii) as may be required with respect to
the state or federal licenses or permits relating to the Business set forth on
Section 3.9 and Section 3.13(b) of the Newpark Disclosure Schedule, or (iii) as
set forth in Section 3.4 of the Newpark Disclosure Schedule. Assuming compliance
with the items described in clauses (i) through (iii) of the preceding sentence,
and except as set forth in Section 3.4 of the Newpark Disclosure Schedule,
neither the execution, delivery and performance of this Agreement by Newpark,
DFI or Newpark Texas nor the consummation by Newpark, DFI or Newpark Texas of
the transactions contemplated by this Agreement will

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(A) conflict with or result in any breach, violation or infringement of any
provision of the respective Organizational Documents of Newpark, DFI, Newpark
Texas or any Transferred Entity, (B) result in a breach, violation or
infringement of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to the creation of any Lien, except for Permitted
Liens, or any right of termination, amendment, modification, cancellation or
acceleration) or require the consent of or other action by any Person under, any
of the terms, conditions or provisions of any Contract or Order, arbitration
award, judgment or decree or other instrument binding on Newpark, DFI, Newpark
Texas or any Transferred Entities, or (C) violate or infringe any Law applicable
to Newpark, DFI, Newpark Texas or any Transferred Entity or any of their
respective properties or assets, except for breaches, violations, infringements,
defaults, Liens or other rights that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
     3.5 Compliance with Law. Except with respect to the subject matter of
Section 3.10 (Employee Benefits; Labor Matters), Section 3.12 (Taxes) and
Section 3.13 (Environmental Matters), which constitute the sole and exclusive
representations and warranties of Newpark with respect to compliance with Tax
Laws, employee benefits and labor Laws, and Environmental Laws, the operations
of the Transferred Entities and the conduct of the Business are, and have been,
conducted in all material respects in accordance with all applicable Laws,
regulations, orders or other requirements of all Governmental Entities having
jurisdiction over the Transferred Entities or the Business. None of Newpark or
any Transferred Entity has received notice of any violation by the Transferred
Entities of any such Law, regulation, order or other legal requirement relating
to violations pending as of the date hereof, and no Transferred Entity is
currently in default with respect to any order, writ, judgment, award,
injunction or decree of any Governmental Entity applicable to the Transferred
Entities or the Business, except for any violation, breach or default which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
     3.6 Financial Statements; Liabilities.
     (a) Section 3.6(a) of the Newpark Disclosure Schedule contains the combined
unaudited balance sheet and statement of operations of the Transferred Entities
as of and for the fiscal year ended December 31, 2006 (collectively, with any
notes thereto, the “Annual Financial Statements”). The Annual Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis (except as may be noted therein), and present fairly, in all material
respects, the combined financial position and the combined results of operations
of the Transferred Entities as of the dates set forth therein, except that the
Annual Financial Statements do not include footnotes that would be required by
GAAP and do not include a statement of cash flows. Except as set forth on
Section 3.6(a) of the Newpark Disclosure Schedule, since December 31, 2006, none
of the Transferred Entities has (i) made any material change in its accounting
policies or (ii) effected any prior period adjustment to, or other restatement
of, its financial statements for any period covered by the Annual Financial
Statements. The Annual Financial Statements have been prepared from and are
consistent in all material respects with the books and records of the
Transferred Entities (which books and records are correct and complete in all
material respects).

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     (b) Section 3.6(b) of the Newpark Disclosure Schedule contains the combined
unaudited balance sheet and statement of operations of the Transferred Entities
as of and for the eight (8) month period ended August 31, 2007 (collectively,
with any notes thereto, the “Interim Financial Statements”). The Interim
Financial Statements have been prepared in accordance with GAAP applied on a
consistent basis (except as may be noted therein), and present fairly, in all
material respects, the combined financial position and the combined results of
operations of the Transferred Entities as of August 31, 2007, except that the
Interim Financial Statements do not include footnotes that would be required by
GAAP and do not include a statement of cash flows. The Interim Financial
Statements have been prepared from and are consistent, in all material respects,
with the financial books and records of the Transferred Entities (which
financial books and records are correct and complete in all material respects).
     (c) There are no liabilities or obligations of the Transferred Entities of
any nature, whether or not accrued, contingent or otherwise, that would be
required by GAAP to be reflected on a balance sheet or the notes thereto of the
Transferred Entities, other than those that (i) are reflected or reserved
against on the respective balance sheets included in the Interim Financial
Statements; (ii) have been incurred in the ordinary course of business since
August 31, 2007 consistent with prior practice; or (iii) are permitted or
expressly contemplated by this Agreement.
     (d) Newpark has devised and maintained, or has caused the Transferred
Entities to devise and maintain, systems of internal accounting controls
sufficient to provide reasonable assurance that all transactions by the
Transferred Entities are recorded as necessary to permit the preparation of the
Transferred Entities’ financial statements in accordance with GAAP, and to
maintain proper accountability for items. Notwithstanding the foregoing, the
following filings by Newpark with the SEC pursuant to the Securities Exchange
Act of 1934, and the rules promulgated thereunder, the pertinent provisions of
which are set forth in Section 3.6(d) of the Newpark Disclosure Schedule, set
forth certain disclosures regarding Newpark’s internal controls: Amendment No. 2
to the Annual Report on Form 10-K/A for the year ended December 31, 2005;
Quarterly Report on Form 10-Q for the quarterly periods ending March 31, 2006,
June 30, 2006 and September 30, 2006; Annual Report on Form 10-K for the year
ended December 31, 2006; and Quarterly Report on Form 10-Q for the quarterly
periods ending March 31, 2007 and June 30, 2007.
     3.7 Absence of Certain Changes or Events. Except as contemplated by this
Agreement or as set forth in Section 3.7 of the Newpark Disclosure Schedule,
since December 31, 2006, the Business has been conducted, in all material
respects, in the ordinary course consistent with past practice and there has not
been with respect to the Transferred Entities (i) any event, development or
state of circumstances that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (ii) any damage,
destruction, loss or casualty to property or assets that are material to the
Business, (iii) any increase in compensation payable or benefits to directors,
officers, managers or key employees of the Transferred Entities other than in
the ordinary course of business, (iv) any single capital expenditure or
commitment in excess of $175,000 for additions to property or equipment, or
aggregate capital expenditures and commitments in excess of $375,000 (on a
consolidated basis) for additions to property or equipment, (v) any incurrence
of any Indebtedness by the Transferred Entities, (vi) any material payments,
discount activity or any other consideration to customers or suppliers, other
than in the ordinary course of business consistent with past

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practice, (vii) any failure to pay or satisfy when due any material liability of
any Transferred Entity, or (viii) any commitment or agreement to do any of the
foregoing.
     3.8 Litigation. As of the date of this Agreement, (i) except as set forth
in Section 3.8 of the Newpark Disclosure Schedule, there is no Action pending
or, to the knowledge of Newpark, threatened against any Transferred Entity with
respect to the Business, and (ii) no Transferred Entity is subject to any
outstanding order, judgment, writ, injunction, stipulation, award or decree
(“Order”). Since January 1, 2003, neither Newpark nor any of the Transferred
Entities has received any written claim from a holder of a mineral interest or
right seeking the recovery of royalties resulting from the operations conducted
in the Business nor, to the knowledge of Newpark, has any such holder threatened
to bring any such claim.
     3.9 Permits. Except with respect to the subject matter of Section 3.13
(Environmental Matters), which constitutes the sole and exclusive
representations and warranties of Newpark with respect to Environmental Permits,
the Transferred Entities have all material Permits necessary to conduct the
Business as currently conducted and to operate, own, lease or otherwise hold the
assets of the Transferred Entities. All such Permits are (i) listed in
Section 3.9 of the Newpark Disclosure Schedule and (ii) in full force and
effect, and there are no proceedings pending or, to the knowledge of Newpark,
threatened, that seek the revocation, cancellation, suspension or any adverse
modification of any such Permits.
     3.10 Employee Benefits; Labor Matters.
     (a) Section 3.10(a) of the Newpark Disclosure Schedule sets forth a true
and complete list of all Benefit Plans. With respect to each Benefit Plan,
Newpark and/or Newpark Texas has made available to Purchaser true and correct
copies of (i) each Benefit Plan (or, if not written, a written summary of its
material terms), including without limitation all plan documents, trust
agreements, insurance contracts or other funding vehicles and all amendments
thereto, (ii) all current summary plan descriptions, (iii) the most recent
annual report (Form 5500 series) filed with the Internal Revenue Service (“IRS”)
with respect to such Benefit Plan, (iv) the most recent actuarial report or
other financial statement relating to such Benefit Plan, (v) the most recent
determination or opinion letter, if any, issued by the IRS with respect to any
Benefit Plan and any pending request for such a determination, (vi) the most
recent nondiscrimination tests performed under the Code (including 401(k) and
401(m) tests) for each Benefit Plan, (vii) all material filings, other than
routine tax filings, made with any Governmental Entity, including without
limitation any filings under the Employee Plan Compliance Resolution System
(“EPCRS”) or the Department of Labor Voluntary Delinquent Filer or Voluntary
Fiduciary Correction Programs during the past twelve (12) months.
     (b) With respect to the Benefit Plans identified in Section 3.10(a) of the
Newpark Disclosure Schedule, as applicable, and except as set forth in
Section 3.10(b) of the Newpark Disclosure Schedule, (i) each has been operated
in all material respects in accordance with its terms and in compliance with
applicable Laws, including applicable provisions of ERISA, the Code and other
applicable Law; (ii) each that is intended to be qualified within the meaning of
Section 401(a) of the Code has received a favorable determination letter as to
its qualification; (iii) no “reportable event” (as such term is defined in
Section 4043 of ERISA) that would reasonably be expected to result in material
liability, no nonexempt “prohibited transaction” (as

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such term is defined in Section 406 of ERISA and Section 4975 of the Code) or
“accumulated funding deficiency” (as such term is defined in Section 302 of
ERISA and Section 412 of the Code (whether or not waived) has occurred with
respect to any such plan that is subject to ERISA; (iv) no suit, administrative
proceeding, action or other litigation is pending, or to the knowledge of
Newpark or Newpark Texas is threatened, against or with respect to any such
Benefit Plan, including any audit or inquiry by the IRS or United States
Department of Labor (other than routine benefits claims), which could continue
to be a liability of a Transferred Entity after the Effective Time, (v) no
Transferred Entity has any liability under ERISA Section 502, (vi) all
contributions and payments to such Benefit Plan are deductible and have been
deductible under Code Sections 162 or 404, and (vii) no Transferred Entity has
any liability for an excise tax under Chapter 43 of the Code.
     (c) Except as set forth in Section 3.10(c) of the Newpark Disclosure
Schedule, all contributions or payments required to be made or accrued before
the Effective Time under the terms of any Benefit Plan in which any Transferred
Employees participate will have been made or accrued by the Effective Time,
except where the failure to make any such contribution or payment would not,
individually or in the aggregate, have a Material Adverse Effect. No Benefit
Plan is subject to Title IV of ERISA or Section 412 of the Code. No Transferred
Entity has incurred or reasonably is expected to incur any liability to the
Pension Benefit Guaranty Corporation with respect to any Benefit Plan. No
Benefit Plan is a “multiemployer plan” (as defined in Section 3(37) of ERISA).
     (d) Except as required by Law, no Benefit Plan provides any of the
following retiree or post-employment benefits to any Person: medical, disability
or life insurance benefits. No Benefit Plan is a voluntary employee beneficiary
association under Section 501(a)(9) of the Code. Newpark and its Subsidiaries
are in material compliance with (i) the requirements of the applicable health
care continuation and notice provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and the regulations (including proposed
regulations) thereunder and any similar state Law and (ii) the applicable
requirements of the Health Insurance Portability and Accountability Act of 1996,
as amended, and the regulations (including the proposed regulations) thereunder.
     (e) No payment or benefit provided pursuant to any Benefit Plan between a
Transferred Entity and any “service provider” (as such term is defined in
Section 409A of the Code and the Treasury Regulations and IRS guidance
thereunder) will or may provide for the deferral of compensation subject to
Section 409A of the Code, whether pursuant to the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby (either
alone or upon the occurrence of any additional or subsequent events) or
otherwise.
     (f) Section 3.10(f) of the Newpark Disclosure Schedule lists all current
employees of the Transferred Entities as of October 3, 2007 and their hourly
rates of compensation or base salaries (as applicable) and their respective
accrued vacation, sick leave and other paid time off days. In addition, to the
extent any current employee of a Transferred Entity is on a leave of absence as
of October 3, 2007, Section 3.10(f) of the Newpark Disclosure Schedule indicates
the nature of such leave of absence and each such employee’s anticipated date of
return to active employment. The Transferred Entities currently comply in all
material respects and during the past three (3) years have continuously complied
in all material respects, with all Laws relating to

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the hiring, employment and termination of workers, including, but not limited
to, Laws relating to the classification of workers, wages, hours, overtime,
employment taxes, equal employment opportunity, non-discrimination, medical
leave, military leave, and immigration and with all Laws governing occupational
health and safety.
     (g) None of the Transferred Entities is delinquent in payments to, or on
behalf of, any employees for any wages, salaries, commissions, bonuses or other
direct compensation for any services performed by employees to date or amounts
required to be reimbursed to such employees. None of the Transferred Entities is
delinquent in payments of any employment taxes on behalf of any employees with
respect to services provided through the Closing Date. There has been no charge
of discrimination filed or, to the knowledge of Newpark, threatened, against any
of the Transferred Entities with the Equal Employment Opportunity Commission or
similar Governmental Entity. There is no pending or, to the knowledge of
Newpark, threatened administrative or judicial proceeding or material
investigation under the Fair Labor Standards Act, the Family and Medical Leave
Act, the Americans with Disabilities Act, the Age Discrimination in Employment
Act, Title VII of the Civil Rights Act of 1964, the Occupational Safety and
Health Act, the National Labor Relations Act, ERISA, the Code, or any other
federal or state Law relating to the employees of the Transferred Entities.
     (h) None of the Transferred Entities is a party to or otherwise bound by
any collective bargaining agreement or other contract or agreement with any
labor organization, nor is any such contract or agreement presently being
negotiated. There is no pending or, to the knowledge of Newpark, threatened
(i) material unfair labor practice, labor dispute (other than routine individual
grievances), labor arbitration proceeding or Action pertaining to labor issues
or matters against the Transferred Entities relating to the Business, by or on
behalf of any employee, prospective employee, former employee, labor
organization or Governmental Entity, (ii) material activity or proceeding by a
labor union or representative thereof to organize any employees of the
Transferred Entities, or (iii) lockouts, strikes, material slowdowns, material
work stoppages or other material labor controversies by or with respect to
employees of the Transferred Entities.
     (i) None of Newpark, Newpark Texas or any Transferred Entity has received
any notice of any violation of any immigration and naturalization Laws relating
to employment and employees, and each of Newpark, Newpark Texas and any
Transferred Entity has properly completed and maintained all applicable
immigration and naturalization forms as required by Law (including, where
applicable but not limited to, I-9 forms) with respect to the past and present
employees of the Business. Newpark, Newpark Texas and the Transferred Entities
are in compliance with all such immigration and naturalization Laws and there
are no citations, investigations, administrative proceedings or formal
complaints or violations of the immigration or naturalization Laws pending or,
to Newpark’s knowledge, threatened before any Governmental Entity involving any
past or present employees of the Business.
     (j) Section 3.10(j) of the Newpark Disclosure Schedule sets forth a true,
complete and correct description of (i) all pending or, to the knowledge of
Newpark, threatened claims as of the date hereof and immediately prior to the
Closing of past or present employees of the Business for compensation for
injury, disability or illness arising out of such employee’s

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employment in the Business, and (ii) any accident that occurred within the past
two years in which any employee of the Business was injured within the course
and scope of employment.
     3.11 Brokers. No broker, finder or investment banker is entitled to any
brokerage or finder’s fee or other commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Newpark, DFI, Newpark Texas or the Transferred Entities. Newpark
shall solely be responsible for the fees of its financial advisors under any
arrangement made by on or on behalf of Newpark, DFI, Newpark Texas or the
Transferred Entities.
     3.12 Taxes.
     (a) Except as set forth in Section 3.12 of the Newpark Disclosure Schedule
(i) all Tax Returns required to be filed on or prior to the date of this
Agreement by, or with respect to any activities of, the Transferred Entities
have been filed, and all Taxes due with respect to such Tax Returns (whether or
not shown to be due on such Tax Returns) have been paid, except to the extent
any failure to file such Tax Return or pay such Taxes could not be expected to
have a Material Adverse Effect; (ii) all such Tax Returns were correct and
complete in all material respects; (iii) there is no action, suit, proceeding,
investigation, audit or claim outstanding, pending or, to the knowledge of
Newpark, threatened with respect to any Taxes of the Transferred Entities;
(iv) none of the Transferred Entities has granted any extension or waiver of the
statute of limitations applicable to any Tax Return, which period (after giving
effect to any extension or waiver) has not yet expired; (v) each of the
Transferred Entities has complied, in all material respects, with all applicable
Laws relating to the payment and withholding of Taxes and has duly and timely
withheld and paid over to the appropriate taxing authorities all amounts
required to be so withheld and paid over; and (vi) none of the Transferred
Entities is a party to, is bound by or has any obligation under any Tax sharing
or Tax indemnity agreement or similar contract or arrangement with Newpark or a
Subsidiary of Newpark which will remain in effect as to such Transferred Entity
after the Closing.
     (b) Neither DFI nor Newpark Texas is a “foreign person” within the meaning
of Section 1445(f)(3) of the Code.
     (c) NESI and NESI Management are each classified as disregarded entities
for federal tax purposes. NESI Mississippi is classified as a partnership for
federal tax purposes. With respect to any entity classification elections (using
IRS Form 8832 or otherwise) made by the Transferred Entities during 2007, such
entities were (i) eligible to make such elections and (ii) accurately completed
and timely filed such elections prior to the date hereof.
     (d) Notwithstanding any other provision of this Agreement to the contrary,
it is agreed and understood that no representation or warranty is made by
Newpark in respect of Tax matters, other than the representations and warranties
set forth in Section 3.10 and this Section 3.12.
     3.13 Environmental Matters.
     (a) Except as set forth in Section 3.13(a) of the Newpark Disclosure
Schedule, each of the Transferred Entities hold and are in compliance, in all
material respects, with all

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Environmental Permits necessary to conduct the Business as currently conducted
and to own, lease or otherwise hold the assets of the Transferred Entities, and
all of such Environmental Permits are in full force and effect, except where any
failure to hold or be in compliance with any such Environmental Permit or the
failure of any such Environmental Permit to be in full force and effect would
not reasonably be expected to result in a Material Adverse Effect, and there are
no proceedings pending, or to the knowledge of Newpark, threatened that seek
revocation, cancellation, suspension, penalties or any adverse modification of
such Environmental Permits.
     (b) All such Environmental Permits (including any pending application
therefor) are listed in Section 3.13(b) of the Newpark Disclosure Schedule, and
any that are not transferable pursuant to this transaction are so designated.
     (c) Each of the Transferred Entities is in compliance, in all material
respects, with all Environmental Laws, and no unresolved written notice, request
for information, claim, demand, summons or order has been received or, to the
knowledge of Newpark, threatened by any Governmental Entity (i) with respect to
any alleged violation of any Environmental Law in connection with the Business;
or (ii) with respect to any alleged failure to have any Environmental Permit
required for the Business; or (iii) with respect to any use, possession,
generation, treatment, storage, recycling, processing, transportation or
disposal (collectively, “Management”) or exposure of or to any Hazardous
Materials by any of the Transferred Entities.
     (d) Section 3.13(d) of the Newpark Disclosure Schedule lists all third
party facilities where any of the Transferred Entities has, since January 1,
2000, delivered, or arranged for disposal of, (i) any third party customer’s
waste products, and (ii) any storm water from barges, as well as a general
description of the type of waste product delivered to such facility.
     (e) In the event Purchaser provides any Notice of Alleged Recognized
Environmental Condition under Section 5.14 hereof, Newpark shall be permitted to
update the disclosures referenced in this Section 3.13 to reflect such Alleged
Recognized Environmental Condition and for all purposes of this Agreement, the
disclosure set forth in such revised Newpark Disclosure Schedules shall modify
the representations and warranties contained in this Section 3.13 as if
disclosed in connection with the execution of this Agreement.
     (f) Notwithstanding any other provision of this Agreement to the contrary,
the representations and warranties included in this Section 3.13 shall
constitute the sole and exclusive representations and warranties of Newpark and
the Transferred Entities relating to environmental matters, including any
matters arising under Environmental Laws or related to Hazardous Materials.
     3.14 Title; Condition and Sufficiency of Assets.
     (a) Except as set forth in Section 3.14(a) of the Newpark Disclosure
Schedule, each of the Transferred Entities has good and marketable title to, or
a valid leasehold interest in, all of its respective properties and assets, in
each case free and clear of all Liens, except for Permitted Liens.

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     (b) Except as set forth in Section 3.14(b) of the Newpark Disclosure
Schedule, the buildings, machinery, equipment, tools, furniture, improvements
and other tangible assets of the Business included in the assets of the
Transferred Entities are, in all material respects, in reasonably good operating
condition and repair, normal wear and tear excepted, and sufficient to permit
their use in the continuing operations of the Business as such operations are
currently conducted or have been conducted consistent with past practices.
     (c) Except as provided in Section 3.14(a) of the Newpark Disclosure
Schedule, the Transferred Entities’ assets constitute all of the assets, rights,
contracts, and other properties necessary for the Purchaser to operate the
Business in all material respects in the manner as it is now being conducted by
the Transferred Entities. The Fannett Cavern injection well has been completed
and is operational.
     3.15 Intellectual Property.
     (a) Section 3.15(a) of the Newpark Disclosure Schedule contains a list of
all material Intellectual Property that is currently owned by any Transferred
Entity (“Transferred Intellectual Property”) that has been issued or registered
or is the subject of a pending application for issuance or registration. To the
knowledge of Newpark, all such Transferred Intellectual Property is subsisting,
is not expired or abandoned, and is valid and enforceable.
     (b) No Transferred Intellectual Property is subject to any outstanding
judgment, injunction, order, decree or agreement materially restricting the use
thereof by any Transferred Entity or materially restricting the licensing
thereof by any Transferred Entity to any Person.
     (c) Except as set forth in Section 3.15(c) of the Newpark Disclosure
Schedule, to the knowledge of Newpark, (i) no Transferred Entity has infringed,
misappropriated or otherwise violated, in any material respect, any Intellectual
Property of any other Person, and (ii) the Intellectual Property material to the
Business is not being infringed, misappropriated or otherwise violated by any
other Person.
     3.16 Material Contracts. Section 3.16 of the Newpark Disclosure Schedule
includes a true and complete list of the following Contracts to which any of the
Transferred Entities is a party or is bound:
     (a) Contracts that are material to the Business (i) for the furnishing to
any of the Transferred Entities of materials, supplies, goods, services or
equipment or (ii) concerning Intellectual Property (other than off-the-shelf,
commercially available licenses to software);
     (b) any Contract obligating any of the Transferred Entities to deliver
materials, goods, products, supplies, services or equipment that has annual
payments (or under which such payments are reasonably expected) in excess of
$100,000 per year, excluding any such Contracts which are terminable by such
Transferred Entity without penalty on not more than sixty (60) calendar days
notice;
     (c) any equity partnership, equity joint venture or other similar agreement
between a Transferred Entity and another Person;

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     (d) any agreement relating to the acquisition or disposition of any
business (whether by merger, sale of stock, sale of assets or otherwise)
relating to the Business or any Transferred Entity, (i) entered into by Newpark,
Newpark Texas or any Transferred Entity after December 31, 2005 or (ii) under
which any of the Transferred Entities will have any obligation with respect to
an “earn-out,” contingent purchase price or similar contingent payment
obligation;
     (e) any agreement which restricts any Transferred Entity from competing
with any other Person or any Person from conducting the Business in any
geographic area;
     (f) any collective bargaining agreement or other Contract with a labor
union, labor organization, workers council or similar body regarding any
Transferred Employees;
     (g) any loan agreements, indentures, mortgages, letters of credit, Capital
Leases, security agreements or other agreements or commitments for the borrowing
of money for use in the Business or the subjecting of any assets of the
Transferred Entities to a Lien (other than Permitted Liens);
     (h) any (i) Contract with Newpark or any Affiliate of Newpark other than
the Transferred Entities, or (ii) any written Contract with any current or
former officer, director or employee of any Transferred Entity or any Affiliate
of such individual, in each of cases (i) and (ii), that are material to the
Transferred Entities, taken as a whole, and the conduct of the Business; and
     (i) to the extent not included in Section 3.16(a) above, any Contract with
a provider of tugs or barges (“Transportation Contract”).
     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.
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.
     3.17 Real Property. Except as set forth in Section 3.17 of the Newpark
Disclosure Schedule and as set forth below in Section 3.22 below:
     (a) Section 3.17(a) of the Newpark Disclosure Schedule sets forth, as of
the date hereof, the fee owner and address of all real property owned by any
Transferred Entity (the “Owned Real Property”). With respect to each parcel of
Owned Real Property (i) each owner thereof has good and marketable title to such
Owned Real Property, free and clear of all Liens, except for Permitted Liens;
and (ii) there does not exist any actual, pending or, to the knowledge of
Newpark, threatened condemnation or eminent domain proceedings that affect any
Owned Real Property.

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     (b) Section 3.17(b) of the Newpark Disclosure Schedule sets forth, as of
the date hereof, a description of each lease, sublease and other agreement
pursuant to which any Transferred Entity holds a leasehold or subleasehold
estate or has otherwise granted a leasehold or subleasehold estate, including
any surface leases, drilling rights or other surface-use rights that may have
been granted to or from any Transferred Entity (or Affiliate thereof) to any
third party with respect to the Transferred Entities’ Owned Real Property and
the non-owned real property (the “Leased Real Property”). Complete and correct
copies of all agreements pertaining to the Leased Real Property (each a “Real
Property Lease,” collectively, the “Real Property Leases”) have been made
available to Purchaser prior to the date hereof. With respect to each of the
Real Property Leases (i) each Real Property Lease is in full force and effect
and is valid and enforceable in accordance with its terms; (ii) there is no
default under any Real Property Lease by any Transferred Entity or, to the
knowledge of Newpark, by any other party thereto; (iii) no Transferred Entity
has received or delivered a written notice of default or objection to any party
to any Real Property Lease to pay and perform its obligations, and, to the
knowledge of Newpark, no event has occurred or circumstance exists which, with
the delivery of notice, the passage of time or both, would constitute a material
breach or default, or permit the termination, modification or acceleration of
rent under such Real Property Lease; and (iv) if a Transferred Entity is the
lessee under a Real Property Lease, then the applicable Transferred Entity holds
a good and valid leasehold interest in such Leased Real Property as set forth
therein.
     3.18 Inventory. Except as would not reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect, the Inventories consist of
materials and goods of a quality which are usable or salable in the normal
course of the Business. The Inventories reflected on the balance sheets included
in the Interim Financial Statements are valued in accordance with the normal
inventory valuation policies of the Transferred Entities for stating items of
inventory at the lower of cost or market value in accordance with GAAP.
     3.19 Accounts Receivable. Except as set forth in Section 3.19 of the
Newpark Disclosure Schedule, the accounts receivable of the Business included in
the Net Working Capital as of the Effective Time (i) will be valid and genuine;
(ii) will have arisen solely out of bona fide sales and deliveries of goods,
performance of services and other business transactions in the ordinary course
of business consistent with past practices; and (iii) will be collectible in the
ordinary course of business consistent with past practice (net of any reserve
for doubtful accounts set forth in the Net Working Capital).
     3.20 Insurance. Section 3.20 of the Newpark Disclosure Schedule lists all
material insurance policies, Contracts or programs of self-insurance owned or
held by or for the benefit of any Transferred Entity on the date of this
Agreement which cover the Business and/or the Transferred Entities. All such
insurance policies, Contracts and programs of self-insurance are in full force
and effect and are valid and enforceable. All premiums due thereunder have been
paid, and neither Newpark, Newpark Texas nor any of the Transferred Entities has
received notice of cancellation or termination with respect to such insurance
policies, Contracts and programs of self-insurance, other than in connection
with normal renewals of any such insurance policies, Contracts and programs of
self-insurance. There is no claim by or with respect to any Transferred Entity
pending under any such policies as to which coverage has been questioned, denied
or disputed by the underwriters of such policies or in respect of which such
underwriters

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have reserved their rights. To the knowledge of Newpark, there is no threatened
termination of, premium increase with respect to, or alteration of coverage
under, any of such policies.
     3.21 Customers and Suppliers. Section 3.21 of the Newpark Disclosure
Schedule sets forth the ten largest suppliers and ten largest customers of the
Business during the twelve (12) month period ending July 31, 2007. Except as set
forth in Section 3.21 of the Newpark Disclosure Schedule, Newpark has no
knowledge that any such supplier or customer has or intends to cancel or
otherwise substantially modify its relationship with any Transferred Entity, as
applicable, or to decrease materially or limit its services, supplies or
materials, or its usage or purchase of services or products from any Transferred
Entity.
     3.22 No Other Representations or Warranties. EXCEPT FOR THE REPRESENTATIONS
AND WARRANTIES EXPRESSLY CONTAINED IN THIS AGREEMENT, THE ASSETS OF THE
TRANSFERRED ENTITIES ARE BEING ACQUIRED BY PURCHASER “AS IS” AND “WHERE IS,” AND
NONE OF NEWPARK, DFI, NEWPARK TEXAS, NOR ANY OF THEIR RESPECTIVE AGENTS,
AFFILIATES, OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES, OR REPRESENTATIVES, NOR
ANY OTHER PERSON, MAKES OR SHALL BE DEEMED TO MAKE ANY REPRESENTATION OR
WARRANTY TO PURCHASER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, ON BEHALF OF
NEWPARK, DFI, NEWPARK TEXAS, OR ANY AFFILIATE THEREOF, AND NEWPARK, DFI, NEWPARK
TEXAS, AND EACH OF THEIR RESPECTIVE AFFILIATES BY THIS AGREEMENT DISCLAIM ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS, IMPLIED, AT COMMON
LAW, STATUTORY OR OTHERWISE, AS TO THE LIABILITIES, OPERATIONS OF THE BUSINESS
OR THE TRANSFERRED ENTITIES, THE TITLE, CONDITION, VALUE OR QUALITY OF THE
ASSETS OF THE TRANSFERRED ENTITIES AND EACH OF NEWPARK, DFI, NEWPARK TEXAS AND
THEIR RESPECTIVE AFFILIATES SPECIFICALLY DISCLAIM ANY REPRESENTATION OR WARRANTY
OF MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO ANY OF THE ASSETS OF THE TRANSFERRED ENTITIES.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Purchaser represents and warrants to Newpark as follows:
     4.1 Organization and Qualification. Each of Purchaser and Trinity is a
limited liability company or limited partnership, respectively, duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
organization, has all requisite power and authority to own, lease and operate
its properties and assets and to carry on its business as now being conducted
and is qualified to do business and is in good standing as a foreign limited
liability company or foreign limited partnership in each jurisdiction where the
ownership, leasing or operation of its properties or assets or conduct of its
business requires such qualification.
     4.2 Authority Relative to This Agreement. Purchaser and Trinity each has
all necessary limited liability company or limited partnership power and
authority, and has taken all

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action necessary, to execute, deliver and perform this Agreement and any
agreements ancillary hereto to which it is a party and to consummate the
transactions contemplated by this Agreement in accordance with the terms of this
Agreement. This Agreement has been duly and validly executed and delivered by
Purchaser and Trinity and, assuming the due authorization, execution and
delivery of this Agreement by Newpark, DFI and Newpark Texas constitutes a
valid, legal and binding agreement of Purchaser and Trinity, enforceable against
Purchaser and Trinity in accordance with its terms. As of the Closing, each
ancillary document hereto will be duly and validly executed by Purchaser and
Trinity (as applicable) and, assuming the due authorization, execution and
delivery of any such ancillary agreements hereto by Newpark, DFI or Newpark
Texas (as applicable), will constitute the valid, legal and binding agreement of
Purchaser and Trinity, enforceable against Purchaser and Trinity in accordance
with their terms.
     4.3 Consents and Approvals; No Violations. No filing with or notice to, and
no permit, authorization, registration, consent or approval of, any Governmental
Entity is required on the part of Purchaser or Trinity for the execution,
delivery and performance by Purchaser or Trinity of this Agreement or the
consummation by Purchaser or Trinity of the transactions contemplated by this
Agreement, except compliance with the applicable requirements of the HSR Act.
Assuming compliance with the item described in the preceding sentence, neither
the execution, delivery and performance of this Agreement by Purchaser or
Trinity nor the consummation by Purchaser or Trinity of the transactions
contemplated by this Agreement will (A) conflict with or result in any breach,
violation or infringement of any provision of the respective Organizational
Documents of Purchaser or Trinity, (B) result in a breach, violation or
infringement of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to the creation of any Lien or any right of
termination, amendment, cancellation or acceleration) under, any of the terms,
conditions or provisions of any Contract to which Purchaser, Trinity or any of
their respective Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound or (C) violate or infringe any Law applicable
to Purchaser, Trinity or any of their respective Subsidiaries or any of their
respective properties or assets, except in the cases of clauses (B) and (C), for
such breaches, violations, infringements or Liens that would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the ability of Purchaser to timely consummate the transactions contemplated by
this Agreement.
     4.4 Financing. Purchaser has available, or will have available at the
Closing, sufficient funds, available lines of credit or other sources of
immediately available funds to enable Purchaser to purchase the Acquired
Interests on the terms and conditions of this Agreement. The obligations of
Purchaser hereunder are not subject to any conditions regarding Purchaser’s
ability to obtain financing for the consummation of the transactions
contemplated herein.
     4.5 Brokers. No broker, finder or investment banker is entitled to any
brokerage or finder’s fee or other commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser. Purchaser shall solely be responsible for the fees of
its financial advisors under any arrangement made by on or on behalf of
Purchaser.

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     4.6 Acquisition of Transferred Interests. Purchaser has such knowledge and
experience in financial and business matters, and is capable of evaluating the
merits and risks of its purchase of the Transferred Interests. Purchaser
confirms that Newpark has made available to Purchaser and its agents the
opportunity to ask questions of the officers and management employees of Newpark
and of the Transferred Entities as well as access to the documents, information
and records relating to the Transferred Interests, and to acquire additional
information about the business and financial condition of the Transferred
Interests. Purchaser is acquiring the Transferred Interests for investment and
not with a view toward or for sale in connection with any distribution thereof,
or with any present intention of distributing or selling the Transferred
Interests. Purchaser acknowledges that the Transferred Interests have not been
registered under the Securities Act or any state securities Laws, and agrees
that the Transferred Interests may not be sold, transferred, offered for sale,
pledged, hypothecated or otherwise disposed of without registration under the
Securities Act, except pursuant to an exemption from such registration available
under the Securities Act, and without compliance with foreign securities Laws,
in each case, to the extent applicable.
     4.7 Limitation of Newpark’s Warranties. Purchaser acknowledges that Newpark
makes no representations with respect to the Business or the Transferred
Entities except as expressly set forth in this Agreement.
ARTICLE II
COVENANTS
     5.1 Access.
     (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 as Purchaser may reasonably request; and
(iii) otherwise cooperate with the investigation by Purchaser and its
representatives of the Transferred Entities. The foregoing shall not require
Newpark, DFI, Newpark Texas or any Transferred Entity to permit any inspection,
or to disclose any information, that in the reasonable judgment of Newpark is
reasonably likely to result in the disclosure of any trade secrets to third
parties, violate any of its obligations with respect to confidentiality or
disclose information that does not relate exclusively to the Business. All
information provided to Purchaser and its representatives in accordance with
this Section 5.1 or otherwise pursuant to this Agreement shall, prior to the
Closing, be held by Purchaser and its representatives in accordance with, shall
be considered “Evaluation Material” under, and shall be subject to the terms of,
the Confidentiality Agreement. All requests for information made pursuant to
this Section 5.1(a) shall be directed to a designated officer of Newpark or such
other individual as may be designated by Newpark, and shall not be granted to
the extent deemed inconsistent with any Law.
     (b) At and after the Closing Date, Purchaser shall and shall cause its
Affiliates and each of their respective representatives to afford Newpark and
its representatives access, at

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reasonable times during normal business hours after first obtaining the consent
of Purchaser, to the books, records, properties and personnel of the Transferred
Entities and furnish Newpark and its representatives with such additional
financial, operating and other data and information as Newpark may reasonably
request in order to prepare its Tax Returns and other documents and reports
required to be filed by it with Governmental Entities, in its financial
statements or in connection with any Action against or investigation by, any
Governmental Entity of, or in connection with any Tax examination of, Newpark.
All requests for information made pursuant to this Section 5.1(b) shall be
directed to a designated officer of Purchaser or such other individual as may be
designated by Purchaser.
     5.2 Efforts.
     (a) Each of the parties agrees to use its reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and to cooperate
with the other in connection with the foregoing, including using its reasonable
best efforts (i) to make promptly any filings that may be required under any
antitrust Law or by any Governmental Entity, and to supply promptly any
additional information or documentary material that may be requested by a
Governmental Entity, if any, (ii) to obtain all other consents, approvals and
authorizations that are required to be obtained under any federal, state, local
or foreign Law or regulation, (iii) to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to this Agreement to consummate the transactions contemplated by this Agreement,
(iv) to effect as promptly as practicable all necessary registrations, filings
and responses to requests for additional information or documentary material
from a Governmental Entity, if any, and (v) to fulfill all conditions to this
Agreement.
     (b) Further, and without limiting the generality of the rest of this
Section 5.2, each of the parties shall promptly (i) furnish to the other such
necessary information and reasonable assistance as the other party may request
in connection with the foregoing, (ii) inform the other of any communication
from any Governmental Entity regarding any of the transactions contemplated by
this Agreement, and (iii) provide counsel for the other party with copies of all
filings made by such party, and all correspondence between such party (and its
advisors) with any Governmental Entity and any other information supplied by
such party to a Governmental Entity or received from a Governmental Entity in
connection with the transactions contemplated by this Agreement; provided,
however, that materials may be redacted (x) to remove any references concerning
the valuation of the Business and the Transferred Entities, and (y) as necessary
to comply with contractual arrangements. Each party shall, subject to applicable
Law, permit counsel for the other party to review in advance, and consider in
good faith the views of the other party in connection with, any proposed written
communication to any Governmental Entity in connection with the transactions
contemplated by this Agreement. The parties agree not to participate in any
substantive meeting or discussion, either in person or by telephone, with any
Governmental Entity in connection with the transactions contemplated by this
Agreement unless it consults with the other party in advance and, to the extent
not prohibited by such Governmental Entity, gives the other party the
opportunity to attend and participate.

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     (c) Further, and without limiting the generality of the rest of this
Section 5.2, Purchaser shall take any and all steps necessary to avoid or
eliminate each and every impediment under any antitrust, competition, or trade
regulation Law that may be asserted by any Governmental Entity with respect to
this Agreement so as to make effective as promptly as practicable the
transactions contemplated by this Agreement and to avoid any suit or proceeding
which would otherwise have the effect of preventing or delaying the Closing. The
steps involved in the preceding sentence shall include (i) at the request of
Newpark and subject to the rights of Newpark to terminate this Agreement
pursuant to Section 9.1(b) hereof, defending through litigation on the merits,
including appeals, any claim asserted in any court or other proceeding by any
party, (ii) proposing, negotiating, committing to or effecting, by consent
decree, hold separate order or otherwise, the sale, divestiture or disposition
of such assets or businesses of Purchaser (including its Affiliates and
Subsidiaries) or the Transferred Entities, including entering into customary
ancillary agreements on commercially reasonable terms relating to any such sale,
divestiture or disposition of such assets or businesses, (iii) agreeing to any
limitation on the conduct of Purchaser (including its Subsidiaries) or the
Transferred Entities, or (iv) agreeing to take any other action as may be
required by a Governmental Entity in order to (A) obtain all necessary consents,
approvals and authorizations as soon as reasonably possible, (B) avoid the entry
of, or to effect the dissolution of, any injunction, temporary restraining order
or other order in any suit or proceeding, or (C) effect the expiration or
termination of any waiting period which would otherwise have the effect of
preventing or delaying the Closing. At the request of Purchaser, Newpark shall
agree to take, or cause the Transferred Entities to take, in Newpark’s sole
discretion, any action with respect to the Transferred Entities as set forth in
the two preceding sentences, provided that any such action is conditioned upon
(and shall not be completed prior to) the consummation of the transactions
contemplated by this Agreement.
     5.3 Further Assurances. The parties hereto agree that, from time to time,
whether before, at or after the Closing Date, each of them will execute and
deliver such further instruments of conveyance and transfer and take such other
action as may be necessary to carry out the purposes and intents of this
Agreement.
     5.4 Conduct of Business. From the date of this Agreement through the
earlier of the Closing or the termination of this Agreement, except as otherwise
expressly contemplated by this Agreement, required by Law or disclosed in
Section 5.4 of the Newpark Disclosure Schedule, Newpark shall cause each of the
Transferred Entities to (i) conduct the Business in the ordinary course of
business, and (ii) use commercially reasonable efforts to preserve intact the
Transferred Entities’ respective business organizations and goodwill, keep
available the services of their respective present senior officers and key
employees, and preserve the goodwill and business relationships with customers,
suppliers and others having business relationships with them. From the date of
this Agreement through the earlier of the Closing or the termination of this
Agreement, except as otherwise contemplated by this Agreement, required by Law
or disclosed in Section 5.4 of the Newpark Disclosure Schedule, without
Purchaser’s written consent (which shall not be unreasonably withheld or
delayed), Newpark shall cause each Transferred Entity to:
     (a) not (i) amend or propose to amend their respective Organizational
Documents, (ii) split, subdivide, combine or reclassify their outstanding equity
interest, (iii) declare, set aside or pay any non-cash distribution, or
(iv) purchase, redeem or otherwise acquire or dispose directly or indirectly any
equity interests or securities of any Transferred Entity;

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     (b) not issue, sell, transfer, pledge, dispose of, encumber or agree to
issue, sell, transfer, pledge, dispose of, or encumber, any additional equity
securities, or any options, warrants or rights of any kind with respect thereto;
     (c) not sell, lease, license, pledge, dispose of or encumber any assets,
properties (whether real, personal, tangible or intangible), rights or
businesses, other than sales or dispositions of assets in the ordinary course of
business consistent with past practice that do not constitute a sale of a
business, product line, business unit or business operation;
     (d) not enter into any transaction for, or make, any acquisition of any
businesses, material assets, product lines, business units, business operations,
stock or other properties, other than acquisitions in the ordinary course of
business in connection with the operation of the Business;
     (e) not adopt, enter into or amend any employment, severance, special pay
arrangement or other similar arrangements or agreements with any employee
(including any Former Employee or Transferred Employee) except (i) as required
by applicable Law, (ii) as required by contractual arrangements in effect as of
the date of this Agreement, or (iii) arrangements or agreements that are entered
into or amended in the ordinary course of business consistent with past
practice;
     (f) not increase the compensation or benefits of any Transferred Employee,
except (i) as required pursuant to contractual arrangements in effect as of the
date of this Agreement or as required or permitted under this Agreement, (ii) as
required by applicable Law, or (iii) in the ordinary course of business
consistent with past practice;
     (g) not adopt a plan or agreement of complete or partial liquidation,
dissolution, restructuring, merger, consolidation, recapitalization or other
reorganization of any of the Transferred Entities;
     (h) not settle, release, waive or compromise any Actions in any manner
that, post-Closing, restricts the operation of the Business as currently
conducted or for consideration in excess of $1,000,000 individually; or settle
release, waive or compromise any right or claim with a fair market value in
excess of $1,000,000 individually;
     (i) not make any change to an accounting method for Tax purposes for any of
the Transferred Entities or make any Tax election for any Transferred Entity
other than in accordance with past practice, except in each case as required in
accordance with GAAP or applicable Law;
     (j) except as may be required as a result of a change in Law or in GAAP,
not change any of the financial accounting principles or practices;
     (k) not enter into any Contract which would constitute a Material Contract
outside of the ordinary course of business, or terminate or waive any material
provision of, amend or otherwise modify any material provision of a Material
Contract; and

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     (l) not authorize any of, or commit to do or enter into any binding
Contract with respect to any of the foregoing actions in clauses (a) through
(k).
     Notwithstanding anything to the contrary, Newpark and its Subsidiaries
shall have the right to remove from any Transferred Entity all cash and cash
equivalents in the manner as determined by Newpark (including by means of
dividends, the creation or repayment of intercompany debt or otherwise) subject
to the provisions of Section 2.4.
     5.5 Consents. Newpark and Purchaser shall cooperate with each other to
obtain any consents required from third parties in connection with the
consummation of the transactions contemplated by this Agreement.
     5.6 Public Announcements. Except as otherwise required by Law, any listing
agreement with any securities exchange or any securities exchange regulation,
each of Newpark and Purchaser will consult with the other and obtain the consent
of the other (which consent shall not be unreasonably withheld or delayed)
before issuing any press releases or any public statements with respect to this
Agreement and the transactions contemplated by this Agreement.
     5.7 No Shop. From and after the date hereof until the earlier of the
termination of this Agreement or the Closing Date, Newpark shall not, and shall
cause its Affiliates not to (and use its reasonable best efforts to cause its
directors, officers, employees, representatives and agents not to) do any of the
following, directly or indirectly, with any third party (other than with
Purchaser regarding the transactions contemplated by this Agreement):
(i) discuss, negotiate, authorize, assist, participate in, recommend, propose or
enter into, either as the proposed surviving, merged, acquiring or acquired
corporation, any transaction involving a merger, consolidation, business
combination, purchase or disposition of (A) the Business or a material amount of
the assets of the Transferred Entities, or (B) any membership, partnership or
other equity interest in any of the Transferred Entities (any such transaction,
an “Acquisition Transaction”), (ii) facilitate, encourage, solicit or initiate
discussions, negotiations or submissions of proposals or offers from any third
party in respect of an Acquisition Transaction, or (iii) furnish or cause to be
furnished to any third party any information concerning the Business or the
Transferred Entities in connection with an Acquisition Transaction.
     5.8 Intercompany Accounts. On or prior to the Closing Date, all
intercompany accounts between (i) the Transferred Entities, on one hand, and
(ii) Newpark and its other Affiliates, on the other hand, shall be settled or
otherwise eliminated, except for those accounts included in the Estimated Net
Working Capital, as adjusted by the Closing Date Net Working Capital.
     5.9 Termination of Intercompany Agreements. Effective at the Closing, all
Contracts, including all obligations to provide goods, services or other
benefits, between Newpark and/or any of its Subsidiaries (other than any
Transferred Entity), on the one hand, and any of the Transferred Entities, on
the other hand, shall be terminated without any party having any continuing
obligation to the other, except for (i) this Agreement, and (ii) other Contracts
listed in Section 5.9 of the Newpark Disclosure Schedule.

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     5.10 Use of Names, etc. Within 30 days after the Closing Date, Purchaser
shall cause the Transferred Entities to file amendments to their Organizational
Documents with the applicable Governmental Entities changing the names of the
Transferred Entities to names that do not include the words “Newpark” or any
name confusingly or misleadingly similar thereto, such amendments to be
effective as soon as practicable following the Closing Date. For the avoidance
of doubt, Purchaser and its Affiliates may use the name “Newpark” and all other
Trademarks owned or licensed by Newpark or its Affiliates and used in connection
with the Business as of the Closing on any materials distributed or available to
customers for the later of (i) 90 days after the Closing Date or (ii) the
exhaustion of inventory in existence as of the Closing Date, subject to
applicable Law, in each case, in a mutually agreed transitional manner.
Thereafter, Purchaser shall not use such Trademarks, other than (i) in a
neutral, non-trademark sense to discuss the history of the Business, or (ii) as
required by applicable Law.
     5.11 Litigation Support. In the event and for so long as each party
actively is prosecuting, contesting or defending any Action by a third party in
connection with (a) any transactions contemplated under this Agreement or
(b) any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction
involving the Business or the Transferred Entities, and any of the foregoing
require the other party’s cooperation due to such party’s ownership of the
Business or the Transferred Entities at a relevant time, the requested party
shall, and shall cause its Subsidiaries and controlled Affiliates to, cooperate
reasonably with the requesting party and its counsel, at the requesting party’s
expense for any out-of-pocket expenses, in the prosecution, contest or defense,
make available its personnel, and provide such testimony and access to its books
and records as shall be reasonably necessary in connection with the prosecution,
contest or defense, subject to appropriate confidentiality measures.
     5.12 Noncompetition; Nonsolicitation.
     (a) For the period commencing on the Closing Date and ending on the earlier
of (i) the fifth anniversary of the Closing Date, or (ii) a Newpark Change of
Control (the “Restricted Period”) neither Newpark nor any of its Subsidiaries
shall, except as permitted by this Section 5.12, engage in the business of
providing environmental services in the oil and gas industry in the United
States and Gulf of Mexico including, without limitation, waste management and
disposal services and the processing and disposal of non-Hazardous Materials and
NORM for generators in the United States including refiners, manufacturers,
service companies and industrial municipalities as conducted by the Business as
of the Closing Date (the “Covered Business”); provided, that the Covered
Business shall not include the processing and disposal of environmental wastes
and the providing and performance of waste management, reclamation and disposal
services in a manner substantially similar to those which are currently provided
by Newpark and its Subsidiaries (other than the Transferred Entities), which
includes but is not limited to (i) the collection and disposal of oil and gas
industry water (typically salt water contaminated with oil) that is exempt from
RCRA, with operations in Oklahoma and the panhandle of Texas which are currently
part of Newpark’s Fluids Systems and Engineering segment, operating under the
name of Mid-Continent Completion Fluids, and (ii) the management of
environmental waste utilizing pits and other earth structures, land farming,
annular injection and offsite disposal of pit waste including the handling of
NORM for the oil and gas industry which is currently part of Newpark’s Mats and
Integrated Service segment,

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which was historically known as Soloco. This Section 5.12(a) shall cease to be
applicable to any Person at such time as it is no longer an Affiliate or
Subsidiary of Newpark.
     (b) Notwithstanding the provisions of Section 5.12(a), nothing in this
Agreement shall preclude, prohibit or restrict Newpark or any of its Affiliates
or Subsidiaries from (i) acquiring, owning or holding up to 10% of the
outstanding securities of any entity whose securities are listed and traded on a
national securities exchange or market or any securities required to be
registered under the Securities Exchange Act of 1934; or (ii) engaging in any
manner in any business activity that would otherwise violate this Section 5.12
that is acquired from any Person (an “Acquired Business”) or is carried on by
any Person that is acquired by or combined with Newpark or a Subsidiary of
Newpark at any time during the Restricted Period (an “Acquired Company”);
provided, that, if the aggregate consolidated revenues of the Acquired Business
or the Acquired Company for the fiscal year ending prior to the completion of
such purchase or acquisition is in excess of 5% of the consolidated revenues of
Newpark and its Subsidiaries for the fiscal year ending prior to such purchase
or acquisition (the “Divestiture Threshold”), then, as soon as promptly
practicable, Newpark or such Subsidiary shall dispose or agree to dispose of all
or a portion of the Acquired Business or the Acquired Company so that the
aggregate consolidated revenues for the fiscal year ending prior to the
completion of such purchase or acquisition of the remaining portion of the
Acquired Business or the Acquired Company shall be less than the Divestiture
Threshold.
     (c) During the Restricted Period, neither Newpark nor any of its
Subsidiaries shall, directly or indirectly, solicit for employment or employ any
Transferred Employee (other than any Person set forth in Section 5.12(c) of the
Newpark Disclosure Schedule); provided, however, that this Section 5.12(c) shall
not prohibit Newpark or any of its Subsidiaries from making general
solicitations not specifically targeted at the Transferred Employees and employ
persons in connection with such general solicitations or, on and after the first
anniversary of the Closing Date, from employing or hiring any person who
initiates discussions regarding employment without any solicitation by Newpark
or any of its Subsidiaries.
     5.13 Labor Matters.
     (a) Following the Closing until ninety (90) days thereafter, neither the
Purchaser, the Transferred Entities nor any Affiliates thereof shall cause any
“employment losses” (as that term is defined in the Worker Adjustment and
Retraining Notification Act (“WARN Act”)) that would give rise to any
obligations or liabilities of Newpark or its Affiliates under the WARN Act.
     (b) Newpark, Newpark Texas and the Purchaser shall cooperate in connection
with any required notification to, or any required consultation with, the
employees, employee representatives, work councils, unions, labor boards and
relevant Governmental Entities concerning the transactions contemplated by this
Agreement.
     5.14 Environmental Inspection.
     (a) Promptly following the execution of this Agreement, Purchaser shall
commence its review of the environmental condition of the assets of the
Transferred Entities. The parties agree that the environmental site assessment
shall be performed for each of the Owned Real

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Property and Leased Real Property sites as Purchaser may determine and that such
assessment shall conform, in all material respects, to the standard of the
“Standard Practice for Environmental Site Assessments: Phase I Environmental
Site Assessment Process,” known as ASTM E1527-05 (“ASTM E1527-05”). In
connection with such environmental site assessment, Newpark shall, and shall
cause each of the Transferred Entities to, reasonably cooperate with Purchaser
and provide to Purchaser and its representatives copies of such records and
documents (in addition to the “helpful documents” as defined below) as may be
reasonably requested. Newpark shall identify a “key site manager” with “good
knowledge of the uses and physical characteristics of the property,” both as
defined in ASTM E1527-05, for purposes of the required interview with respect to
the Owned Real Property and Leased Real Property. Interviewees shall be as
specific as reasonably possible to the extent of their knowledge, and shall
answer in good faith to the extent of their knowledge pursuant to and as defined
in ASTM E1527-05. The key site manager shall promptly identify and provide the
Purchaser and its representatives all “helpful documents” (as defined in ASTM
E1527-05) that are within the possession or control of such key site manager.
     (b) As soon as reasonably practicable, but in any event no later than sixty
(60) days following the execution of this Agreement (the “Environmental
Inspection Period”), Purchaser shall (i) provide to Newpark a copy of each
environmental report received by Purchaser relating to the Phase I environmental
site assessments (individually, a “Phase I Report” and collectively, the “Phase
I Reports”), and (ii) notify Newpark in writing of any alleged “recognized
environmental conditions” (as defined in ASTM E1527-05) adversely affecting any
Owned Real Property or Leased Real Property (any environmental conditions
reflected in a Phase I Report or identified in such notice is referred to as an
“Alleged Recognized Environmental Condition”). The notice (“Notice of Alleged
Recognized Environmental Conditions”) shall include a description and reasonably
detailed explanation (including all reports and other supporting documentation)
of each Alleged Recognized Environmental Condition being claimed, and a value
that Purchaser, in good faith, attributes to each Alleged Recognized
Environmental Condition. Except as otherwise provided in this Section 5.14(b),
Newpark and Purchaser shall promptly meet in an attempt to mutually agree upon a
proposed resolution of any such Alleged Recognized Environmental Conditions and
the costs related thereto. If Purchaser and Newpark are not able to agree upon a
proposed resolution of any Alleged Recognized Environmental Condition and the
costs related thereto on or before the date that is five (5) days prior to the
Outside Date, such dispute shall be resolved by arbitration in accordance with
Section 5.14(d) below. If as a result of any Phase I Report facts are revealed
that would reasonably necessitate a Phase II environmental site assessment that
includes the sampling and analysis of soil, groundwater and/or other
environmental media to evaluate any Alleged Recognized Environmental Condition
(individually, a “Phase II Report” and collectively, the “Phase II Reports”),
Purchaser may require the completion of any such Phase II Report before
Purchaser is required to meet with Newpark as hereinabove provided to agree upon
a proposed resolution of any Alleged Recognized Environmental Condition. Any
such Phase II Report shall be completed within sixty (60) days following the
date of the Phase I Report relating to the subject property, but in no event
later than one hundred twenty (120) days following the execution of this
Agreement. Newpark and Purchaser shall promptly meet following the completion of
any Phase II Reports in an attempt to mutually agree upon a proposed resolution
of any Alleged Recognized Environmental Conditions and the costs related
thereto. If Purchaser and Newpark

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are not able to agree upon a proposed resolution within five (5) days, such
dispute shall be resolved by arbitration in accordance with Section 5.14(d)
below.
     (c) In the event a Phase I Report or a Phase II Report (collectively, an
“Environmental Report”) shall identify an Alleged Recognized Environmental
Condition and/or Purchaser shall provide Newpark a Notice of Alleged Recognized
Environmental Condition in accordance with Section 5.14(b), the following
provisions shall apply:
     (i) If the aggregate cost to resolve any and all Alleged Recognized
Environmental Conditions as finally determined in accordance with this
Section 5.14 (the “Alleged Recognized Environmental Cost”) is less than
$1,000,000, (A) Purchaser shall assume all risks and responsibilities with
respect to such Alleged Recognized Environmental Conditions and shall have no
right to seek indemnification under Article X with respect thereto, (B) the
total amount of the Earn-Out Consideration payable pursuant to Section 2.5 shall
be reduced by an amount equal to the Alleged Recognized Environmental Cost,
(C) the Initial Closing Consideration shall not be adjusted as a result of any
such Alleged Recognized Environmental Cost, and (D) Purchaser shall have no
right to terminate this Agreement as a result of such Alleged Recognized
Environmental Conditions.
     (ii) If the Alleged Recognized Environmental Cost is equal to or greater
than $1,000,000 and less than $2,000,000, (A) Purchaser shall assume all risks
and responsibilities with respect to such Alleged Recognized Environmental
Conditions and shall have no right to seek indemnification under Article X with
respect thereto, (B) the total amount of the Earn-Out Consideration payable
pursuant to Section 2.5 shall be reduced by the amount of $1,000,000, (C) the
Initial Closing Consideration shall be reduced by the amount of the Alleged
Recognized Environmental Cost in excess of $1,000,000, and (D) Purchaser shall
have no right to terminate this Agreement as a result of such Alleged Recognized
Environmental Conditions.
     (iii) If the Alleged Recognized Environmental Cost is equal to or greater
than $2,000,000, Newpark shall have the option to cure or otherwise remediate,
at its sole cost and expense, a portion of the Alleged Recognized Environmental
Conditions in accordance with this Section 5.14(c)(iii) by providing Purchaser
written notice thereof within five (5) days of the final determination of the
Alleged Recognized Environmental Costs pursuant to this Section 5.14. If Newpark
fails to timely exercise its option as herein provided, Purchaser shall have the
right to terminate this Agreement upon written notice to Newpark. If Newpark
does exercise its option to cure or remediate under this Section 5.14(c)(iii),
Newpark shall undertake to cure or remediate one or more of the Alleged
Recognized Environmental Conditions selected by Newpark (the “Selected Alleged
Recognized Environmental Conditions”) so that the aggregate Alleged Recognized
Environmental Cost for the remaining Alleged Recognized Environmental Conditions
(the “Remaining Alleged Recognized Environmental Conditions”) does not equal or
exceed $2,000,000. Newpark shall complete the cure or remediation of the
Selected Alleged Recognized Environmental Conditions as soon as practicable but
in any event not later than six (6) months following the date Newpark delivers
Purchaser notice of Newpark’s election to exercise the option herein to cure or
remediate the Selected

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Alleged Recognized Environmental Conditions. If, following the cure or
remediation of the Selected Alleged Recognized Environmental Conditions, the
Alleged Recognized Environmental Cost of the Remaining Alleged Recognized
Environmental Conditions is more than $1,000,000 but less than $2,000,000,
(A) Purchaser shall assume all risks and responsibilities with respect to such
Remaining Alleged Recognized Environmental Conditions and shall have no right to
seek indemnification under Article X with respect thereto, (B) the total amount
of the Earn-Out Consideration payable pursuant to Section 2.5 shall be reduced
by the amount of $1,000,000, (C) the Initial Closing Consideration shall be
reduced by the amount of the Alleged Recognized Environmental Cost for the
Remaining Alleged Recognized Environmental Conditions in excess of $1,000,000,
and (D) Purchaser shall have no right to terminate this Agreement as a result of
such Remaining Alleged Recognized Environmental Conditions. If, following the
cure or remediation of the Selected Alleged Environmental Conditions, the
Alleged Recognized Environmental Cost of the Remaining Alleged Recognized
Environmental Conditions is less than $1,000,000, (A) Purchaser shall assume all
risks and responsibilities with respect to such Remaining Alleged Recognized
Environmental Conditions and shall have no right to seek indemnification under
Article X with respect thereto, (B) the total amount of the Earn-Out
Consideration payable pursuant to Section 2.5 shall be reduced by an amount
equal to the Alleged Recognized Environmental Cost of the Remaining Alleged
Recognized Environmental Conditions, (C) the Initial Closing Consideration shall
not be adjusted as a result of any such Alleged Recognized Environmental Cost,
and (D) Purchaser shall have no right to terminate this Agreement as a result of
such Remaining Alleged Recognized Environmental Conditions.
     (d) Any dispute relating to an Alleged Recognized Environmental Condition
and the cost of any proposed or acceptable resolution thereof (an “Environmental
Dispute”), shall be settled by binding arbitration. Any such arbitration
proceeding shall be conducted by one arbitrator mutually agreeable to Newpark
and Purchaser. In the event that within ten (10) Business Days after submission
of any Environmental Dispute to arbitration, Newpark and Purchaser cannot
mutually agree on one arbitrator, Newpark and Purchaser shall each select one
arbitrator, and the two arbitrators so selected shall select a third arbitrator
who will arbitrate the Environmental Dispute on his own. The decision of the
arbitrator shall be binding and conclusive upon the parties to this Agreement.
Such decision shall be written and shall be supported by written findings of
fact and conclusions which shall set forth the determination of such arbitrator.
Any such arbitration shall be held in Houston, Texas, under the commercial rules
then in effect of the American Arbitration Association. Newpark and Purchaser
shall equally share the fees of the arbitrator and applicable administrative
fees and shall otherwise pay their respective costs and expenses in connection
therewith.
     5.15 Post-Closing Covenants.
     (a) Not later than sixty (60) days following the Closing, Purchaser shall
either (i) cause Newpark to be fully and unconditionally released in a writing
reasonably satisfactory to Newpark from all obligations of Newpark under that
certain Corporate Guaranty dated December 23, 2005 by and between Newpark and
General Electric Capital Corporation (the “Corporate Guaranty”), or (ii) fully
satisfy and discharge all obligations to which the Corporate Guaranty relates
and provide Newpark with evidence thereof satisfactory to Newpark.

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     (b) Promptly following the Closing, Newpark and Purchaser shall cooperate
in good faith to obtain the consent of the Greater LaFourche Port Commission to
the sublease of that certain tract of land described in Section 5.15(b) of the
Newpark Disclosure Schedule by NESI to DFI and upon receipt of such consent,
Purchaser (or NESI) and DFI shall enter into a sublease agreement (the “Fourchon
Sublease”) consistent with the terms and provisions set forth in Section 5.15(b)
of the Newpark Disclosure Schedule and otherwise in a form mutually acceptable
to Newpark and Purchaser.
ARTICLE VI
EMPLOYEE MATTERS COVENANTS
     6.1 Employees and Compensation.
     (a) Newpark shall update Section 3.10(f) of the Newpark Disclosure Schedule
as of two (2) Business Days prior to the Closing Date to reflect the Transferred
Employees as of the Closing Date.
     (b) Except as set forth on Schedule 6.1(b) of the Newpark Disclosure
Schedule, from the Closing Date through the first anniversary of the Closing
Date, Purchaser shall provide, or shall cause the Transferred Entities to
provide, the Transferred Employees with compensation (including bonuses,
commissions and/or other annual incentive opportunities) and employee benefits
that in the aggregate are not substantially less favorable than the compensation
and benefits provided by Newpark and its Affiliates as of immediately prior to
the Closing Date and as set forth in Sections 3.10(a), 3.10(f) and 6.2(f) of the
Newpark Disclosure Schedule. Nothing in the foregoing provision or otherwise
shall in any way alter the “at will” nature of the employment relationship
between any Transferred Employee, on the one hand, and any Transferred Entity,
on the other hand.
     6.2 Welfare Benefits Plans.
     (a) Effective as of the Effective Time and to the extent permitted by
applicable Law, Purchaser shall permit each Transferred Employee to enroll in
Welfare Plans provided by Purchaser or its Affiliates to their employees on the
Closing Date which are consistent with Section 6.1(b).
     (b) Subject to the provisions of Section 6.2(a) and the conditions stated
below, with respect to the coverage of the Transferred Employees under the group
health plans provided by Purchaser or its Affiliates, (i) each such employee’s
credited service with Newpark and its Affiliates shall be credited against any
waiting period applicable to eligibility for enrollment of new employees under
Purchaser’s group health plans; (ii) limitations on benefits due to pre-existing
conditions shall be waived (or, if such a waiver is not otherwise required by
applicable Laws, Purchaser shall use commercially reasonable efforts to have
them waived), to the extent waived under the corresponding Benefit Plan for any
Transferred Employee enrolled in any group health plan maintained by Newpark and
its Affiliates as of the Closing Date; and (iii) any out of pocket annual
maximums and deductibles taken into account under the Newpark group health plan
for any Transferred Employee from and after March 1, 2007 to the Closing Date,
shall to the extent permitted under Purchaser’s group health plans, be credited
under said group

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health plans. Notwithstanding anything to the contrary herein, Purchaser’s
obligations in this Section 6.2(b) are subject to and conditioned upon
satisfaction of all of the following conditions: (i) copies of all group health
plan records pertaining to out of pocket annual maximums, deductibles and
similar costs incurred by Transferred Employees under the Newpark group health
plans shall be provided to the insurance carriers providing group health
benefits to employees of Purchaser or its Affiliates; (ii) only expenses
incurred from and after March 1, 2007 through the end of the current plan year
for Purchaser’s group health plans, or February 28, 2008, will be credited; and
(iii) the insurance carriers that provide group health benefits to Purchaser’s
employees shall receive certificates of creditable coverage for all of the
Transferred Employees and their dependents.
     (c) Purchaser shall be responsible for providing the notices and making
available COBRA Continuation Coverage for all Transferred Employees and their
respective covered dependents whose qualifying events (as defined in Code
Section 4980B) occur on or after the Closing Date. Newpark shall continue to be
responsible for providing the notices and making available COBRA Continuation
Coverage, for all of the Former Employees and their respective covered
dependents whose qualifying events (as defined in Code Section 4980B) occur
prior to the Closing Date.
     (d) Notwithstanding anything in this Agreement to the contrary, if any
Transferred Employee has become disabled (within the meaning of the applicable
Welfare Plan maintained by Newpark or its Affiliates that provides short-term or
long-term disability benefits) prior to the Closing Date, Newpark and/or its
Affiliates will retain liability for the provision of disability benefits
payable to such Transferred Employee under Newpark’s Welfare Plans, if any, with
respect to such disability (but not with respect to any reoccurrence of such a
disability after such Transferred Employee returns to active service on or
following the Closing Date). From and after the Closing Date, any right to
reemployment for any Transferred Employees who are on short-term or long-term
disability as of immediately prior to the Effective Time shall be the obligation
of Purchaser and its Affiliates and not of Newpark and its Affiliates.
     (e) From and after the Effective Time, (i) Purchaser shall assume and honor
or shall cause the Transferred Entities to assume and honor, all unpaid vacation
or other paid time off days of the Transferred Employees that accrued prior to
the Effective Time, and (ii) Purchaser shall sponsor a vacation and paid time
off policy that applies to each Transferred Employee and shall take into account
service with Newpark and its Affiliates as provided in Section 6.3(a).
     (f) Subject to the limitations set forth in Section 2.1(b)(ii), Purchaser
shall provide Transferred Employees whose employment is terminated during the
six-month period immediately following the Closing Date severance pay and
benefits on the terms and conditions set forth in Section 6.2(f) of the Newpark
Disclosure Schedule. Notwithstanding the foregoing, Purchaser and the
Transferred Entities shall not be under any obligation to continue the
employment of any individual for any period of time following the Closing as a
result of any provision of this Agreement.

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     6.3 Miscellaneous Employee Issues.
     (a) For all purposes under the employee benefit plans, practices or
arrangements of Purchaser and its Affiliates (including the Transferred
Entities) providing benefits to any Transferred Employee after the Closing Date,
each Transferred Employee shall be credited with all years of service for which
such Transferred Employee was credited before the Effective Time under any
similar employee benefit plans, practices or arrangements of Newpark and its
Affiliates.
     (b) No provision of this Agreement shall create any third party beneficiary
or other rights in any employee (including any beneficiary or dependent thereof)
or any other persons in respect of continued employment with any of Newpark,
Newpark Texas, Purchaser or the Transferred Entities or any of their respective
Affiliates, and no provision of this Agreement shall create any such rights in
any such persons with respect to any benefits that may be provided, directly or
indirectly, under any Plan, policy or arrangement which may be established or
maintained by Newpark, Newpark Texas, the Transferred Entities or Purchaser.
     (c) Notwithstanding anything to the contrary herein, Newpark and its
Affiliates hereby covenant and agree that, following the Closing, any
confidentiality provision in any agreement between Newpark or any Affiliate and
any Transferred Employee, together with any confidentiality obligation of any
Transferred Employee arising under the Law in favor of Newpark and its
Affiliates, shall not prohibit any such Transferred Employee’s use,
post-Closing, of any confidential information solely relating to the Business
and for the benefit of the Transferred Entities and their Affiliates. In
addition, Newpark and its Affiliates hereby covenant and agree that any
non-competition provision in any agreement between Newpark or any Affiliate and
any Transferred Employee shall not prohibit a Transferred Employee’s activities,
post-Closing, solely relating to the Business and for the benefit of the
Transferred Entities and their Affiliates. Any Transferred Employee that, in the
absence of this Agreement, would be bound by any such confidentiality or
non-competition provisions in favor of Newpark and its Affiliates post-Closing,
shall be a third-party beneficiary of this Agreement solely with respect to this
Section 6.3(c).
ARTICLE VII
TAX MATTERS
     7.1 Liability for Taxes and Related Matters.
     (a) Newpark Liability for Taxes. Except for the amounts recorded as a
liability in the calculation of the Estimated Net Working Capital, as adjusted
by the Closing Date Net Working Capital, Newpark shall be liable for and
indemnify Purchaser for all Taxes imposed on or due from the Transferred
Entities (i) for any taxable year or period that ends on or before the Closing
Date (a “Pre-Closing Period”), and (ii) with respect to any taxable year or
period beginning before and ending after the Closing Date (a “Straddle Period”),
the portion of such taxable year ending on and including the Closing Date.
Newpark shall be entitled to any refund of Taxes of the Transferred Entities
received for any Pre-Closing Period and any portion of a Straddle Period ending
on and including the Closing Date.

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     (b) Purchaser Liability for Taxes. Purchaser shall be liable for and
indemnify Newpark for all Taxes imposed on or due from the Transferred Entities
for any taxable year or period that begins after the Closing Date (a
“Post-Closing Period”) and, with respect to any Straddle Period, the portion of
such taxable year beginning after the Closing Date.
     (c) Taxes for Straddle Periods. To the extent permitted by Law or
administrative practice, the taxable year of the Transferred Entities shall be
closed at the Effective Time. To the extent that the taxable year of the
Transferred Entities is not closed pursuant to the previous sentence and it is
therefore necessary to determine the liability for Taxes for a Straddle Period,
the determination of the Taxes for the portion of the year or period ending on,
and for the portion of the year or period beginning after, the Closing Date
shall be determined by assuming that the Transferred Entities had a taxable year
or period which ended at the Effective Time, except that exemptions, allowances
or deductions that are calculated on an annual basis (other than net operating
losses and tax credits carried forward from years ending prior to the Closing
Date), shall be prorated on the basis of the number of days in the annual period
elapsed through the Closing Date as compared to the number of days in the annual
period elapsing after the Closing Date. Net operating losses and tax credits
carried forward from years ending prior to the Closing shall be allocated first,
to the extent that they can be utilized, to the taxable year or period ending on
the Closing Date.
     (d) Adjustment to Purchase Price. Any payment by Purchaser or Trinity, on
the one hand, or Newpark, on the other hand, pursuant to Section 2.4,
Section 2.5 or Article X and any Tax indemnification payment pursuant to this
Section 7.1 will be treated as an adjustment to the Purchase Price for all Tax
purposes. The indemnification obligations contained in Sections 7.1(a) and
7.1(b) above shall survive the Closing Date until seventy-five (75) days
following the expiration of the statutory periods of limitations (including any
extensions to such limitations periods agreed to by Newpark or the Purchaser, as
the case may be).
     (e) Tax Returns. Newpark shall file, or cause to be filed, when due all Tax
Returns that are required to be filed by or for the Transferred Entities for
taxable years or periods ending on or before the Effective Time, and Purchaser
shall file, or cause to be filed, when due all Tax Returns that are required to
be filed by or for the Transferred Entities for taxable years or periods ending
after the Effective Time. If Newpark could be liable for any Taxes with respect
to any Tax Return filed by Purchaser, Purchaser shall (i) cause such Tax Return
to be prepared on a basis which is consistent with the Transferred Entities’ Tax
Returns previously filed and in accordance with past practices unless otherwise
required (rather than permitted) by the Code and/or Treasury Regulations at such
time, (ii) deliver a copy of such Tax Return along with accompanying work papers
to Newpark not less than thirty (30) days prior to the due date (as extended, if
applicable) for the filing of such Tax Return (the “Due Date”), (iii) if, at any
time prior to the Due Date, Newpark notifies Purchaser that Newpark objects to
any item reflected on such Tax Return which item may affect Newpark’s liability
for Taxes, Purchaser shall, prior to the Due Date, make any and all changes to
such item or items reasonably requested by Newpark and Purchaser shall not file
any such Tax Return until it has made such reasonable changes and received
Newpark’s agreement thereto (not to be unreasonably withheld). If Purchaser has
fully complied with this Section 7.1(e) with respect to a Tax Return to be filed
by Purchaser, Newpark shall pay Purchaser the Taxes for which Newpark is liable
pursuant to Section 7.1(a) but which are payable with such Tax Return within
five (5) Business Days (x) prior to the Due Date for the

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filing of such Tax Returns or (y) after the date that Purchaser has provided
Newpark with the revised Tax Return referred to in clause (iii) of the previous
sentence, whichever is later. If Purchaser fails to satisfy any of its
obligations pursuant to this Section 7.1(e) with respect to any Tax Return,
Newpark shall, in addition to any other remedies available to Newpark, have no
obligation to indemnify Purchaser for any Taxes reflected on such Tax Return.
     (f) Contest Provisions. Purchaser shall promptly notify Newpark in writing
upon receipt by Purchaser, any of its Affiliates or the Transferred Entities of
notice of any pending, proposed, threatened or actual Tax audit or Tax
deficiency, assessment or other claim which may affect the Taxes for any
Pre-Closing Period or any Straddle Period for which Newpark would be liable
pursuant to Section 7.1(a). Newpark shall promptly notify Purchaser in writing
upon receipt by Newpark, Newpark Texas or any of their Affiliates of notice of
any pending, proposed, threatened or actual Tax audit or Tax deficiency,
assessment or other claim which may affect the Taxes for any Straddle Period for
which Purchaser would be liable pursuant to Section 7.1(b). Newpark shall have
the sole right to control the defense in any Tax audit or administrative court
proceeding (a “Tax Contest”) relating to any Pre-Closing Period and to employ
counsel and other advisors of its choice at its expense, provided that Purchaser
(together with its counsel and other advisors) shall be entitled, at its sole
cost, to participate in (but not control) any proceeding relating to any such
Pre-Closing Period. In the event Newpark shall have the right to control any
such Tax Contest, Purchaser shall, upon request of Newpark, execute any such
document and take such other action as may be reasonably requested by Newpark to
obtain an extension of the period during which the taxable year or period to
which such Tax Contest relates remains subject to further audit or examination.
In the event of any Tax Contest relating to a Straddle Period of the Transferred
Entities, (i) to the extent the issues can be separated into those for which
Newpark would be liable under Section 7.1(a) and those for which Purchaser would
be liable under Section 7.1(b), then each of Newpark, on the one hand, and
Purchaser, on the other, shall control the defense of those issues for which it
would be liable, employing counsel and other advisors of its own choice, at its
expense, (ii) with respect to all other issues, Purchaser shall be entitled to
control the defense employing counsel and other advisors of its choice at its
expense, provided that Newpark (along with counsel and other advisors of its
choice) shall be entitled to participate in the defense of and to take over such
defense if Purchaser is not prosecuting the defense diligently, vigorously and
professionally. Neither Purchaser nor the Transferred Entities may agree to
settle any Tax claim which may affect the Taxes for which Newpark or its
Affiliates would be liable under Section 7.1(a) without the prior written
consent of Newpark, which consent shall not be unreasonably withheld. Further,
neither Newpark nor any of its Affiliates may agree to settle any Tax claim
which may affect the Taxes for which Purchaser or the Transferred Entities would
be liable under Section 7.1(b) without the prior written consent of Purchaser,
which consent shall not be unreasonably withheld.
     7.2 Transfer Taxes. Any transfer taxes (excluding income taxes or capital
gain taxes) arising from the sale of the Acquired Interests shall be borne by
Purchaser.

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ARTICLE VIII
CONDITIONS TO OBLIGATIONS TO CLOSE
     8.1 Conditions to Obligation of Each Party to Close. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing Date of the following conditions:
     (a) HSR Act. Any waiting period (and any extension thereof) applicable to
the consummation of the transactions contemplated by this Agreement under the
HSR Act shall have expired or been terminated.
     (b) No Injunctions. No injunction or other order issued by any court of
competent jurisdiction preventing the consummation of the Sale shall be in
effect.
     (c) No Illegality. No Law shall have been enacted, entered, promulgated and
remain in effect that prohibits or makes illegal consummation of the Sale.
     8.2 Conditions to Purchaser’s Obligation to Close. The obligations of
Purchaser to effect the transactions contemplated by this Agreement shall be
subject to the satisfaction or waiver by Purchaser on or prior to the Closing
Date of all of the following conditions:
     (a) Representations and Warranties. The representations and warranties of
Newpark set forth in this Agreement that are qualified as to materiality shall
be true and correct and the representations and warranties of Newpark set forth
in this Agreement and that are not so qualified shall be true and correct in all
material respects, in each case on the date of this Agreement and on the Closing
Date as though made on the Closing Date, except those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time, which need only be true and correct (or
true and correct in all material respects, as applicable) as of such date or
with respect to such period; provided, however, that a breach of any of the
foregoing representations and warranties shall not constitute the
non-fulfillment of the foregoing condition if such breach is capable of cure,
and such breach is actually cured, by the earlier of (i) thirty (30) calendar
days after written notice thereof from Purchaser and (ii) the Outside Date.
     (b) Covenants and Agreements. The covenants and agreements of Newpark, DFI
and Newpark Texas to be performed or complied with on or before the Closing Date
in accordance with this Agreement including, without limitation, the delivery of
the items described in Section 2.3(b)(i), shall have been duly performed or
complied with in all material respects.
     (c) Officer’s Certificate. Purchaser shall have received a certificate,
dated as of the Closing Date and signed on behalf of Newpark by an executive
officer of Newpark, stating that the conditions specified in Section 8.2(a) and
Section 8.2(b) have been satisfied.
     (d) Releases of Liens and Indebtedness. The Purchaser shall have received
reasonable evidence that (i) the Transferred Interests and all assets held by
the Transferred Entities shall have been released from any and all Liens (other
than Permitted Liens), and (ii) the Transferred Entities shall have been
released from all guaranties or other liability with respect to Newpark’s funded
Indebtedness.

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     (e) No Material Adverse Effect. No Material Adverse Effect shall have
occurred, nor shall any event or circumstance have occurred which would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
     (f) FIRPTA. Newpark shall deliver to Purchaser at the Closing a duly
executed and acknowledged certificate, in customary form and substance
reasonably acceptable to Purchaser and in compliance with the Code and Treasury
Regulations, certifying such facts as to establish that the sale of the Acquired
Interests is exempt from withholding pursuant to Section 1445 of the Code.
     (g) Lafayette Sublease. Newpark Mats and Integrated Services LLC (“NMIS”)
and NESI shall have entered into a sublease (the “Lafayette Sublease Agreement”)
of the office space described in Section 8.2(g) of the Newpark Disclosure
Schedule on terms and provisions consistent with those set forth on
Section 8.2(g) of the Newpark Disclosure Schedule and otherwise in a form
mutually acceptable to Newpark and Purchaser. Newpark shall also deliver to
Purchaser at the Closing evidence of the consent, if any, required from the
lessor in a form reasonably acceptable to Purchaser.
     (h) Environmental Reports. The environmental site assessments contemplated
by Section 5.14 hereof shall have been completed and Purchaser shall have
received the Environmental Reports contemplated by Section 5.14. For the
avoidance of doubt, the condition represented by this Section 8.2(h) is limited
to the completion of the environmental site assessments and delivery of the
Environmental Reports and does not include Purchaser’s acceptance of the
Environmental Reports or any Alleged Recognized Environmental Conditions
identified therein. The parties acknowledge that the provisions of Section 5.14
shall control with respect to the resolution of any Alleged Recognized
Environmental Conditions and Purchaser’s right to terminate this Agreement as a
result of any such Alleged Recognized Environmental Conditions.
     (i) Other. Purchaser shall have received reasonable evidence of the
satisfaction of any additional conditions to Purchaser’s obligations to close as
set forth in Section 8.2(i) of the Newpark Disclosure Schedule.
     8.3 Conditions to DFI’s and Newpark Texas’ Obligations to Close. The
obligations of DFI and Newpark Texas to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction or waiver by Newpark on
or prior to the Closing Date of all of the following conditions:
     (a) Representations and Warranties. The representations and warranties of
Purchaser set forth in this Agreement that are qualified as to materiality shall
be true and correct and the representations and warranties of Purchaser set
forth in this Agreement and that are not so qualified shall be true and correct
in all material respects, in each case on the date of this Agreement and on the
Closing Date as though made on the Closing Date, except those representations
and warranties that address matters only as of a particular date or only with
respect to a specific period of time, which need only be true and correct (or
true and correct in all material respects, as applicable) as of such date or
with respect to such period; provided, however, that a breach of any of the
foregoing representations and warranties shall not constitute

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the non-fulfillment of the foregoing condition if such breach is capable of cure
and such breach is actually cured, by the earlier of (i) thirty (30) calendar
days after written notice thereof from Newpark and (ii) the Outside Date.
     (b) Covenants and Agreements. The covenants and agreements of Purchaser to
be performed or complied with on or before the Closing Date in accordance with
this Agreement including, without limitation, the delivery of the items
described in Section 2.3(b)(ii), shall have been duly performed or complied with
in all material respects.
     (c) Officer’s Certificate. Newpark shall have received a certificate, dated
as of the Closing Date and signed on behalf of Purchaser by an executive officer
of Purchaser, stating that the conditions specified in Section 8.3(a) and
Section 8.3(b) have been satisfied.
ARTICLE IX
TERMINATION
     9.1 Termination. This Agreement may be terminated at any time prior to the
Closing:
     (a) by mutual written consent of Newpark and Purchaser;
     (b) by either Newpark, on the one hand, or Purchaser, on the other hand, if
the Closing shall not have occurred on or before December 15, 2007 (the “Outside
Date”); provided, however, that (i) either Newpark or Purchaser may, at its sole
discretion, extend the Outside Date on one or more occasions for an aggregate
period not to exceed forty-five (45) days if all other conditions to
consummation of the transactions contemplated by this Agreement are satisfied or
capable of then being satisfied, and the sole reason that such transactions have
not been consummated by such date is that the condition set forth in
Section 8.1(a) has not been satisfied, (ii) either Newpark or Purchaser may, at
its sole discretion, extend the Outside Date up to sixty (60) days if a Phase II
Report shall be required pursuant to Section 5.14(b) and such Phase II Report
shall not have been completed, (iii) either Newpark or Purchaser may, at its
sole discretion, extend the Outside Date (as same may have been extended
pursuant to the preceding clause (ii)) on one or more occasions for an aggregate
period not to exceed forty-five (45) days if one or more Environmental Disputes
shall have been submitted to arbitration in accordance with Section 5.14(d),
provided, that the Outside Date shall not be extended for a period in excess of
five (5) Business Days following the date upon which the arbitrator shall have
delivered his written decision with respect to such Environmental Disputes,
(iv) either Newpark or Purchaser may, at its sole discretion, extend the Outside
Date (as same may have been extended) up to six (6) months if Newpark exercises
its option under Section 5.14(c)(iii) to cure or remediate the Selected Alleged
Recognized Environmental Conditions, and (v) the right to terminate this
Agreement under this Section 9.1(b) shall not be available to any party to this
Agreement whose failure to comply or perform in any material respect with such
party’s representations, warranties, covenants or other agreements contained in
this Agreement has been the cause of or resulted in the failure of the
transactions contemplated by this Agreement to occur on or before the Outside
Date. In the event (A) any Environmental Report required pursuant to
Section 5.14 hereof shall not have been completed on or before the Outside Date
as it may have been extended pursuant to clause (ii) above, or (B) any
Environmental Dispute shall not have been

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resolved by arbitration or otherwise on or before the Outside Date as it may
have been extended pursuant to clause (iii) above, Newpark shall have the right,
at its discretion, to terminate this Agreement on the Outside Date (as same may
have been extended). In the event Newpark shall not have completed the cure or
remediation of the Selected Alleged Recognized Environmental Conditions on or
before the Outside Date as it may have been extended pursuant to clause (iv)
above, Purchaser shall have the right, at its discretion, to terminate this
Agreement on the Outside Date (as the same may have been extended);
     (c) by Newpark at any time if (i) the representations and warranties of
Purchaser in this Agreement that are qualified as to materiality were not true
and correct or the representations and warranties of Purchaser in this Agreement
that are not so qualified were not true and correct in all material respects
when made or at any time thereafter, or (ii) Purchaser is in breach in any
material respect of any of its covenants or other agreements in this Agreement
(clauses (i) and (ii) collectively, a “Purchaser Breach”), and such Purchaser
Breach continues uncured for thirty (30) calendar days after written notice
thereof by Newpark; provided, however, that such thirty (30) day period shall
not be extended past the Outside Date;
     (d) by Purchaser at any time if (i) the representations and warranties of
Newpark in this Agreement that are qualified as to materiality were not true and
correct or the representations and warranties of Newpark in this Agreement that
are not so qualified were not true and correct in all material respects when
made or at any time thereafter, or (ii) any one of Newpark, DFI or Newpark Texas
are in breach in any material respect of any of their respective covenants or
other agreements in this Agreement (clauses (i) and (ii) collectively, a
“Newpark Breach”), and such Newpark Breach continues uncured for thirty
(30) calendar days after written notice thereof by Purchaser; provided, however,
that such thirty (30) day period shall not be extended past the Outside Date; or
     (e) by Purchaser pursuant to Section 5.14(c)(iii).
     9.2 Notice of Termination. In the event of termination of this Agreement by
Newpark, on the one hand, or Purchaser, on the other hand, pursuant to
Section 9.1, written notice of such termination shall be given by the
terminating party to the other parties to this Agreement.
     9.3 Effect of Termination.
     (a) In the event of the termination of this Agreement pursuant to
Section 9.1, this Agreement shall terminate and become void and have no effect,
and the transactions contemplated by this Agreement shall be abandoned without
further action by the parties to this Agreement, except that the provisions of
Sections 5.1(a) (as they relate to the Confidentiality Agreement), 9.3, 11.2 and
11.4 shall survive the termination of this Agreement; provided, however, that
such termination shall not relieve any party to this Agreement of any liability
for breach of this Agreement and the terminating party’s right to pursue all
legal remedies will survive such termination.
     (b) Notwithstanding anything in this Agreement to the contrary, if this
Agreement is terminated pursuant to Section 9.1(b) (other than as a result of
Newpark’s failure to complete the

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cure or remediation of the Selected Alleged Recognized Environmental Conditions
on or before the Outside Date as extended pursuant to clause (iv) of
Section 9.1(b)) or Section 9.1(c), then Purchaser shall pay or cause to be paid
to Newpark $1,000,000 (the “Termination Fee”) in immediately available funds as
promptly as reasonably practicable (and in any event within two (2) Business
Days following such termination) by wire transfer of same-day funds. The parties
acknowledge and agree that if this Agreement is terminated pursuant to
Section 9.1(b), except as provided above, or Section 9.1(c), Newpark’s damages
would be difficult or impossible to quantify with reasonable certainty, and
accordingly the payment of the Termination Fee provided for in this
Section 9.3(b) is a payment of liquidated damages (and not penalties) which is
based upon the parties’ estimate of the damages Newpark will suffer or incur as
a result of the event giving rise to such payment and the resulting termination
of this Agreement, and the payment of such Termination Fee by Purchaser as
herein provided shall be the sole and exclusive remedy of Newpark in the event
of any such termination.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
     10.1 Survival Periods. Regardless of any investigation at any time made by
or on behalf of any party hereto, or of any information any party may have in
respect thereof, all representations and warranties, and all covenants that
contemplate or may involve actions to be taken or obligations in effect prior to
the Closing, in each case contained in this Agreement or in any Schedule to this
Agreement, or in any certificate, document or other instrument delivered in
connection with this Agreement, shall survive the Closing as herein provided;
provided, however, that the right to commence any claim with respect thereto
under Section 10.2(a), 10.2(b), 10.3(a) and 10.3(b), shall terminate and cease
to be of further force and effect as of the date which is twenty-four (24)
months following the Closing Date; and provided, further that (i) the
representations and warranties set forth in Section 3.2 (Capitalization of the
Transferred Entities), Section 3.3 (Authority Relative to this Agreement),
Section 3.10 (Employee Benefits; Labor Matters), Section 3.11 (Brokers),
Section 3.13 (Environmental Matters), Section 4.2 (Authority Relative to this
Agreement), Section 4.5 (Brokers) and Section 4.6 (Acquisition of Transferred
Interests), and the right to commence any claim with respect thereto under
Section 10.2(a) and 10.3(a), shall survive the execution and delivery of this
Agreement until the fifth anniversary of the Closing Date, and (ii) the
representations and warranties set forth in Section 3.12 (Taxes), and the right
to commence any claim with respect thereto under Section 10.2(a), shall survive
until the sixth anniversary of the Closing Date. Those covenants that
contemplate or may involve actions to be taken or obligations in effect after
the Closing shall survive in accordance with their terms (the “Surviving
Covenants”). Notwithstanding the foregoing, any covenant, agreement,
representation, warranty or other matter in respect of which indemnity may be
sought under this Agreement shall survive the time at which it would otherwise
terminate pursuant to this Section 10.1, if notice of the inaccuracy or breach
thereof or other matter giving rise to such right of indemnity shall have been
given to the party against whom such indemnity may be sought prior to such time.
     10.2 Indemnification by Newpark, DFI and Newpark Texas. Subject to the
terms and conditions of this Article X including the limitations set forth in
Section 10.1 and Section 10.5 and the provisions of Section 5.14(c) relating to
Alleged Recognized Environmental Costs, from and after the Closing Date,
Newpark, DFI and Newpark Texas shall jointly and

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severally indemnify and hold harmless Purchaser and its Affiliates, and each of
their respective directors, officers, employees and agents (collectively, the
“Purchaser Indemnified Parties”) from and against any and all Losses to the
extent resulting from or arising out of:
     (a) any breach or inaccuracy of any representation or warranty of Newpark
contained in this Agreement, other than those which have been waived in writing
by Purchaser prior to the Closing;
     (b) any breach of any Surviving Covenant contained in this Agreement to be
performed by Newpark, DFI or Newpark Texas after the Closing;
     (c) any Non-assumed Liabilities; or
     (d) the matters described in Section 10.2(d) of the Newpark Disclosure
Schedule.
     10.3 Indemnification by Purchaser and Trinity. Subject to the terms and
conditions of this Article X including the limitations set forth in Section 10.1
and Section 10.5, from and after the Closing Date, Purchaser and Trinity shall
jointly and severally indemnify and hold harmless Newpark and its Affiliates,
and each of their respective directors, officers, employees and agents,
(collectively, the “Newpark Indemnified Parties” and together with Purchaser
Indemnified Parties the “Indemnified Parties”) from and against any and all
Losses resulting from or arising out of:
     (a) any breach or inaccuracy of any representation or warranty of Purchaser
contained in this Agreement, other than those which have been waived in writing
by Newpark, DFI and Newpark Texas prior to the Closing;
     (b) any breach of any Surviving Covenant contained in this Agreement to be
performed by Purchaser or Trinity after the Closing; or
     (c) other than any Loss indemnifiable by Newpark, DFI or Newpark Texas
under Section 10.2, any Losses of any Transferred Entity resulting from a claim
of a third party arising out of or in connection with any of the businesses,
properties, assets, operations or activities of any Transferred Entity or any of
its Affiliates, heretofore, currently or hereafter owned or conducted, as the
case may be.
     10.4 Third-Party Claims. If a claim by a third party is made against an
Indemnified Party, and if such party intends to seek indemnity with respect
thereto under this Article X, such Indemnified Party, shall promptly notify, in
writing, Purchaser, if a Newpark Indemnified Party, or Newpark, if a Purchaser
Indemnified Party (Purchaser and Trinity, or Newpark, DFI and Newpark Texas, as
the case may be, the “Indemnifying Party”), of such claims. The failure to
provide such written notice shall not result in a waiver of any right to
indemnification hereunder except to the extent that the Indemnifying Party is
actually and materially prejudiced by such failure. The Indemnifying Party shall
have twenty (20) days after receipt of such notice to elect to undertake,
conduct and control, through counsel of its own choosing and at its own expense,
the settlement or defense thereof, and the Indemnified Party shall cooperate
with it in connection therewith. Notwithstanding the foregoing, an Indemnified
Party shall have the right to employ separate counsel at the Indemnifying
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defense if the named parties to any such proceeding include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that a conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party. Notwithstanding the foregoing, in no event shall an Indemnifying Party be
required to pay the expenses of more than one (1) separate counsel. The
Indemnified Party shall not pay or settle any claim without the prior written
consent of the Indemnifying Party (which consent shall not be unreasonably
withheld). Notwithstanding the foregoing, the Indemnified Party shall have the
right to pay or settle any such claim; provided, that, in such event, it shall
waive any right to indemnity therefor by the Indemnifying Party. The
Indemnifying Party shall not, except with the consent of the Indemnified Party,
(i) enter into any settlement that does not include, as an unconditional term
thereof, the giving by the person or persons asserting such claim to all
Indemnified Parties of an unconditional release from all liability with respect
to such claim, or (ii) consent to entry of any judgment that imposes injunctive
or equitable relief.
     10.5 Limitations.
     (a) No indemnity shall be payable to the Purchaser Indemnified Parties
under Section 10.2(a) with respect to any claim resulting from any breach or
inaccuracy of any representation or warranty, unless and until the aggregate of
all Losses due from Newpark, DFI and/or Newpark Texas exceeds $1,500,000 (the
“Deductible”), in which event all Losses so due in excess of the Deductible
shall be paid in the aggregate by Newpark, DFI and/or Newpark Texas; provided,
that the aggregate amount payable by Newpark, DFI and Newpark Texas for all
claims arising under this Agreement shall not exceed 33% of the Initial Closing
Consideration. Notwithstanding anything to the contrary contained in this
Agreement, neither Newpark, DFI nor Newpark Texas shall be required to indemnify
any Purchaser Indemnified Party with respect to any Loss (or series of related
Losses) incurred by or asserted by reason of any breach of any representation or
warranty contained in this Agreement if the Loss (or series of related Losses)
from such breach is less than (i) $75,000, if such Loss is incurred before such
time as the aggregate amount of all Losses due from Newpark exceeds the
Deductible, and (ii) $50,000 if such Loss is incurred after such time as the
aggregate amount of all Losses due from Newpark exceeds the Deductible (the
“Minimum Claim Amount”), nor shall any Losses less than the Minimum Claim Amount
be included for purposes of calculating whether the Deductible has been
exceeded. The limitations set forth in this Section 10.5(a) shall not apply with
respect to (i) any amounts payable under Section 2.4, Section 2.5 or Losses
arising under Section 10.2(b), Section 10.2(c), or Section 10.2(d) (except as
otherwise indicated in Section 10.2(d) of the Newpark Disclosure Schedule),
(ii) any breach of Section 5.12, and/or (iii) any acts of willful misconduct or
fraud.
     (b) No indemnity shall be payable to the Newpark Indemnified Parties under
Section 10.3(a) with respect to any claim resulting from any breach or
inaccuracy of any representation or warranty, unless and until the aggregate of
all Losses due from Purchaser and Trinity exceeds the Deductible, in which event
all Losses so due in excess of the Deductible shall be paid in full by Purchaser
and/or Trinity; provided, that the aggregate amount payable by Purchaser and
Trinity for all claims arising under this Agreement shall not exceed 33% of the
Initial Closing Consideration. Notwithstanding anything to the contrary
contained in this Agreement, neither Purchaser nor Trinity shall be required to
indemnify any Newpark

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Indemnified Party with respect to any Loss (or series of related Losses)
incurred by or asserted by reason of any breach of any representation or
warranty contained in this Agreement if the Loss (or series of related Losses)
from such breach is less than the Minimum Claim Amount, nor shall any Losses
less than the Minimum Claim Amount be included for purposes of calculating
whether the Deductible has been exceeded. The limitations set forth in this
Section 10.5(b) shall not apply with respect to (i) any amounts payable under
Section 2.4, Section 2.5 or Losses arising under Section 10.3(b) or
Section 10.3(c), and/or (ii) any acts of willful misconduct or fraud.
     10.6 Disregard of Materiality. For purpose of this Article X, all
qualifications and exceptions in Article III or Article IV of this Agreement
relating to materiality or words of similar impact (including “Material Adverse
Effect”) or substantiality or any qualification or requirement that a matter be
or not be “reasonably expected to occur” shall be disregarded for purposes of
determining whether there has been a breach or inaccuracy of any such
representation or warranty pursuant to Section 10.2(a) or Section 10.3(a).
     10.7 Mitigation; Additional Indemnification Provisions. Each Indemnified
Party shall use commercially reasonable efforts to mitigate any claim or
liability that an Indemnified Party asserts under this Article X. For purposes
of this Agreement, Losses shall be decreased by any actually realized Tax
Benefit resulting from the payment or accrual of such Losses; provided, however,
that Tax Benefits shall only be taken into account for such purpose to the
extent that they are actually realized within three (3) years of the Closing
Date. For purposes of this Agreement, Losses shall be calculated after giving
effect to any amounts recovered from third parties, including amounts recovered
under insurance policies with respect to such Losses, net of any costs to
recover such amounts. Any Indemnified Party having a claim under these
indemnification provisions shall make a good-faith effort to recover all losses,
costs, damages and expenses from insurers of such Indemnified Party under
applicable insurance policies so as to reduce the amount of any Losses
hereunder; provided, that actual recovery of any insurance shall not be a
condition to the Indemnifying Party’s obligation to make indemnification
payments to the Indemnified Party in accordance with the terms of this
Agreement. If the Indemnifying Party receives any amounts under applicable
insurance policies, or from any other Person alleged to be responsible for a
Loss, after an indemnification payment by the Indemnifying Party has been made
for such Loss, then the Indemnified Party shall promptly reimburse the
Indemnifying Party for such indemnification payment up to the amount so received
or realized by the Indemnified Party. No Indemnified Party will, in any event,
be entitled to any incidental, indirect, consequential, special, exemplary or
punitive damages (other than any such damages payable to third parties or in the
event of fraud, willful misconduct, or Newpark’s breach of Section 5.12). The
Indemnifying Party shall not be liable under Section 10.2 for any Loss relating
to any matter to the extent that the amount of such Loss is reflected in the
calculation of the Closing Date Net Working Capital.
     10.8 Exclusive Remedies. Excluding any claim for injunctive relief or
equitable relief relating to any breach of Section 5.12 or as otherwise
expressly provided herein, the parties hereto acknowledge and agree that,
following the Closing, the indemnification provisions of Sections 10.2 and 10.3
shall be the sole and exclusive remedies of the parties hereto (other than in
the case of fraud or willful misconduct), respectively, for any Losses arising
out of this Agreement or the transactions contemplated hereby.

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     10.9 Tax Indemnification Matters. Notwithstanding anything to the contrary
in this Article X, the above provisions of this Article X shall not apply to tax
indemnification matters of Sections 7.1(a) and 7.1(b) with respect to the
Pre-Closing Period, Straddle Period or Post-Closing Period, which shall instead
be governed by Article VII.
ARTICLE XI
MISCELLANEOUS
     11.1 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
     11.2 Governing Law; Jurisdiction and Forum; Waiver of Jury Trial.
     (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS APPLICABLE TO CONTRACTS EXECUTED AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE AND WITHOUT REFERENCE TO THE CHOICE-OF-LAW
PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF A DIFFERENT
JURISDICTION.
     (b) EACH PARTY TO THIS AGREEMENT IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY TEXAS STATE OR FEDERAL COURT IN ANY ACTION ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE OR FEDERAL COURT. EACH
PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT
MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION. THE PARTIES FURTHER AGREE, TO THE EXTENT PERMITTED BY LAW, THAT
FINAL AND UNAPPEALABLE JUDGMENT AGAINST ANY OF THEM IN ANY ACTION CONTEMPLATED
ABOVE SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION WITHIN
OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A CERTIFIED COPY OF WHICH
SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND AMOUNT OF SUCH JUDGMENT.
     (c) EACH PARTY TO THIS AGREEMENT WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY TO THIS
AGREEMENT CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR
INSTRUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET
FORTH ABOVE IN THIS SECTION 11.2.
     11.3 Entire Agreement. This Agreement (including the Schedules to this
Agreement) together with the Confidentiality Agreement, contain the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede any prior discussion, negotiation, term sheet,
agreement, understanding or arrangement and there are no agreements,

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     understandings, representations or warranties between the parties other
than those set forth or referred to in this Agreement.
     11.4 Expenses. Except as set forth in this Agreement, whether the
transactions contemplated by this Agreement are consummated or not, all legal
and other costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such costs and expenses unless expressly otherwise contemplated in this
Agreement. The parties acknowledge and agree that the filing fees required to be
paid to the Federal Trade Commission in connection with the notification filings
under the HSR Act shall be split equally between Newpark and Purchaser up to an
aggregate of $150,000, after which amount Purchaser shall be solely responsible
for all such filing fees in excess of $150,000.
     11.5 Notices. All notices and other communications to be given to any party
hereunder shall be sufficiently given for all purposes hereunder if in writing
and delivered by hand, courier or overnight delivery service or three days after
being mailed by certified or registered mail, return receipt requested, with
appropriate postage prepaid, or when received in the form of a telegram or
facsimile and shall be directed to the address set forth below (or at such other
address or facsimile number as such party shall designate by like notice):

         
 
  If to Newpark:   Newpark Resources, Inc.
2700 Research Forest Drive, Suite 100
The Woodlands, Texas 77381
Attention: Mark J. Airola
Fax No: (281) 362-6801
 
       
 
  with a copy to:   Andrews Kurth LLP
10001 Woodloch Forest Drive, Suite 200
The Woodlands, Texas 77380
Attention: William C. McDonald
Fax No: (713) 238-7286
 
       
 
  If to Purchaser or Trinity:   Trinity TLM Acquisitions, LLC
13443 Highway 71 West
Austin, Texas 78738
Attention: Daniel Porter
Fax No: (512) 421-8521
 
       
 
  with a copy to:   Graves, Dougherty, Hearon & Moody, P.C.
401 Congress Avenue, Suite 2200
Austin, Texas 78701
Attention: Rod Edens, Jr. and Thomas I. Queen, Jr.
Fax No: (512) 480-5841

     11.6 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties to this Agreement and their respective successors
and permitted assigns; provided, however, that no party to this Agreement will
assign its rights or delegate any or all of its obligations under this Agreement
without the express prior written consent of each other party to this Agreement,
except that (i) each of Newpark, DFI, Newpark Texas and Purchaser may assign
their respective rights and obligations under this Agreement to an Affiliate of
Newpark and/or Purchaser, as the case may be; provided, that no such assignment
shall release Newpark, Newpark Texas and/or Purchaser from any liability or
obligation under this Agreement, (ii) Trinity, as part of any merger,
consolidation, contribution by or reorganization of Trinity in which all of
Trinity’s operating assets are merged into, consolidated with or otherwise
contributed to Purchaser or any Affiliate of Purchaser, may assign all of its
respective rights and obligations under this Agreement to such successor in
interest to Trinity’s assets and Trinity shall thereafter have no further
liability or obligation under this Agreement, and (iii) DFI and Newpark Texas
shall have the right to assign all, but not less than all, of their right to
receive the Earn-Out Consideration to any purchaser of all or substantially all
of the assets of Newpark. Any attempted assignment in violation of this
Section 11.6 shall be void.
     11.7 Third-Party Beneficiaries. Except for the narrow purpose set forth in
the last sentence of Section 6.3(c), this Agreement is not intended to confer
upon any Person not a party to this Agreement (and their successors and assigns)
any rights or remedies hereunder.
     11.8 Amendments and Waivers
     . This Agreement may not be modified or amended except by an instrument or
instruments in writing signed by each of the parties hereto. Any party to this
Agreement may, only by an instrument in writing, waive compliance by the other
parties to this Agreement with any term or provision of this Agreement on the
part of such other parties to this Agreement to be performed or complied with.
The waiver by any party to this Agreement of a breach of any term or provision
of this Agreement shall not be construed as a waiver of any subsequent breach.
     11.9 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.
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     IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of each
of the parties as of the day first above written.

                  NEWPARK RESOURCES, INC.
 
           
 
  By:   /s/ James E. Braun    
 
           
 
  Name:   James E. Braun    
 
  Title:   VP & CFO    
 
                NEWPARK DRILLING FLUIDS LLC
 
           
 
  By:   /s/ James E. Braun    
 
           
 
  Name:   James E. Braun    
 
  Title:   VP         NEWPARK TEXAS, L.L.C.
 
           
 
  By:   /s/ James E. Braun    
 
           
 
  Name:   James E. Braun    
 
  Title:   VP    

            TRINITY TLM ACQUISITIONS, LLC
      By:   /s/ Daniel B. Porter     Name:   Daniel B. Porter    Title:  
President      TRINITY STORAGE SERVICES, L.P.

By: CCBS, Inc., its general partner
      By:   /s/ Daniel B. Porter       Name:   Daniel B. Porter        Title:  
Chairman and Chief Executive Officer