Exhibit 10.1
TERMINATION, RELEASE
AND TRANSACTION FEE AGREEMENT
This Termination, Release and Transaction Fee Agreement (this “Agreement”),
dated as of April 10, 2008, is entered into by and among (i) 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” and, together with
Newpark and DFI, the “Newpark Parties”), and (ii) Trinity Storage Services,
L.P., a Texas limited partnership (“Trinity”) and Trinity TLM Acquisitions, LLC,
a Texas limited liability company (“TLM”) and Moss Bluff Property, L.P., a Texas
limited partnership (“MBP” and, together with Trinity and TLM, the “Trinity
Parties”). Each Newpark Party and each Trinity Party are referred to herein from
time to time collectively as the “Parties” and individually as a “Party”.
R E C I T A L S
WHEREAS, the Newpark Parties and the Trinity Parties (collectively, the
“Purchase Agreement Parties”) have entered into that certain Membership
Interests Purchase Agreement (the “Purchase Agreement”) dated as of October 10,
2007 providing for the purchase and sale of the Acquired Interests (capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Purchase Agreement);
WHEREAS, the Outside Date has been extended in accordance with the terms of the
Purchase Agreement, and the Newpark Parties have notified the Trinity Parties of
their willingness to effect the Closing contemplated by the Purchase Agreement;
WHEREAS, the Trinity Parties have requested, and the Newpark Parties have
agreed, to a termination of the Purchase Agreement subject to, and in accordance
with, the terms and provisions of this Agreement; and
WHEREAS, the Parties desire to enter into this Agreement to evidence the terms
and conditions of their mutual agreement to terminate the Purchase Agreement.
NOW, THEREFORE, in consideration of the provisions contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:
1. Termination of Purchase Agreement; Release of Obligations under Purchase
Agreement.
Subject to the following provisions of this Section 1 and pursuant to Section
9.1(a) of the Purchase Agreement, the Purchase Agreement Parties agree to and do
hereby terminate the Purchase Agreement and the Purchase Agreement Parties’
obligations to effect the Closing of the transactions contemplated therein;
provided, however, that the termination shall not affect the obligations of the
Purchase Agreement Parties under the provisions of Section 5.1(a) (as they
relate to the Confidentiality Agreement), Section 11.2 and Section 11.4 of the
Purchase Agreement (the “Surviving Provisions”), which shall survive the
termination of the Purchase Agreement. For the avoidance of doubt, the
provisions of Section 9.3 of the Purchase Agreement shall not survive the
termination of the Purchase Agreement hereunder except for the obligation of TLM
to pay Newpark the Termination Fee in the event of any material breach by the
Trinity Parties of the provisions of Section 4 below, and in the event of any
such material breach by the Trinity Parties, the foregoing statement in this
Section 1 that the Purchase Agreement was terminated pursuant to Section 9.1(a)
thereof shall not adversely affect Newpark’s right to receive the Termination
Fee. By executing this Agreement, each Purchase Agreement Party acknowledges and
agrees that, except for the Surviving Provisions and the Trinity Parties’
obligation to pay Newpark the Termination Fee upon a material breach by the
Trinity Parties of the provisions of Section 4 below, its respective rights,
obligations and liabilities under the Purchase Agreement are hereby terminated
and extinguished and that the Purchase Agreement is null and void and of no
further force or effect. Notwithstanding anything to the contrary contained
herein, the Purchase Agreement Parties agree that the Confidentiality Agreement
shall remain in full force and effect in accordance with its terms.

 

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2. Release by the Newpark Parties.
(a) Except with respect to the Newpark Excluded Claims (defined below) and
subject to the provisions of Section 2(f) below, each Newpark Party, on behalf
of itself and all its officers, directors, employees, equityholders,
subsidiaries, parent entities, affiliates, successors and assigns (together with
each Newpark Party, each a “Newpark Releasing Party” and collectively the
“Newpark Releasing Parties”), as applicable, hereby waives, discharges and
releases (the “Newpark Release”) the Trinity Parties, and their respective
affiliates, subsidiaries, parent entities, employees, consultants, agents,
heirs, executors, successors, assigns, officers, directors, advisors and
equityholders (together with the Trinity Parties, each a “Trinity Released
Party” and collectively the “Trinity Released Parties”), from any and all
claims, actions, causes of actions, demands, damages, liens, agreements,
contracts, covenants, actions, suits, obligations, controversies, debts, costs,
fees, dues, expenses, judgments, orders and all other claims and liabilities of
every nature and description, known or unknown, matured or unmatured, at law or
equity, and whether or not contingent (collectively, “Claims”) that any Newpark
Releasing Party ever had, now has or may have against any of the Trinity
Released Parties in connection with, arising from, or that may arise from the
Purchase Agreement (collectively, the “Newpark Released Claims”).
Notwithstanding the foregoing, the Newpark Released Claims do not include, and
there shall be no release hereby with respect to, (i) the obligations of the
Trinity Parties under the Surviving Provisions, (ii) any liability of the
Trinity Parties for any violation or breach of the Confidentiality Agreement, or
(iii) any liability of the Trinity Parties for any material breach of or failure
to perform any of the covenants or obligations of the Trinity Parties under
Section 4 below (collectively, the “Newpark Excluded Claims”).
(b) Subject to the provisions of Section 2(f) below, it is the intention of the
Newpark Parties in executing this Agreement (and granting the Newpark Release
contained herein) that this Agreement (and the Newpark Release contained herein)
shall be effective as a bar to the Newpark Released Claims, and the Newpark
Parties hereby knowingly and voluntarily waive any and all Newpark Released
Claims. The Newpark Parties expressly consent that this Agreement (and the
Newpark Release contained herein) shall be given full force and effect according
to each and all of its express terms and provisions, including as to any Newpark
Released Claims that are, as of the date of this Agreement, unknown, unsuspected
and unanticipated (notwithstanding any federal, state, local or foreign law
(statutory or decisional) that may expressly or impliedly limit the
effectiveness of this Agreement (and the Newpark Release contained herein) to
bar any such unknown, unsuspected and unanticipated Newpark Released Claims).

 

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(c) Each Newpark Party acknowledges that it has executed this Agreement (and the
Newpark Release contained herein) freely and without coercion, that it has been
advised by counsel and that it has been provided with a reasonable period of
time to consider the terms of this Agreement (and the Newpark Release contained
herein).
(d) The Newpark Parties further acknowledge and understand that the actual facts
and circumstances to which this Agreement (and the Newpark Release contained
herein) relates may hereafter turn out to be other than or different from the
facts now believed to be known by the Parties and circumstances now perceived by
the Parties. The Newpark Parties assume such risk and agree that this Agreement
(and the Newpark Release contained herein) shall be in all respects effective
and shall not be subject to termination or rescission by reason of such
different facts or circumstances.
(e) This Agreement (and the Newpark Release contained herein) is not intended,
and shall not be construed, as an admission that any of the Trinity Released
Parties has violated any federal, state, local or foreign law (statutory or
decisional), ordinance or regulation, has breached any contract or has committed
any wrong whatsoever against any Newpark Releasing Party.
(f) The Trinity Parties acknowledge that the covenants and obligations of the
Trinity Parties set forth in Section 4 below constitute a material inducement
and consideration for the Newpark Parties’ execution of this Agreement and the
Newpark Release contained herein. The Newpark Release is conditioned upon the
Trinity Parties’ performance in all material respects of their respective
obligations contained in this Agreement including, without limitation, the
covenants and obligations set forth in Section 4 below. If the Trinity Parties
fail to comply in all material respects with the terms and obligations of this
Agreement including, without limitation, the covenants contained in Section 4
below, the Newpark Release shall no longer be effective and the Newpark Parties
shall be entitled to pursue any and all rights they may have hereunder and under
the Purchase Agreement including the recovery of the Termination Fee.

 

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3. Release by the Trinity Parties.
(a) Except with respect to the Trinity Excluded Claims (defined below) and
subject to the provisions of Section 3(f) below, each Trinity Party, on behalf
of itself and all its officers, directors, employees, equityholders,
subsidiaries, parent entities, affiliates, heirs, successors and assigns
(together with each Trinity Party, each a “Trinity Releasing Party” and
collectively the “Trinity Releasing Parties”), as applicable, hereby waives,
discharges and releases (the “Trinity Release”), the Newpark Parties and their
respective affiliates, subsidiaries, parent entities, employees, consultants,
agents, heirs, executors, successors, assigns, officers, directors, advisors and
equityholders (together with the Newpark Parties, each a “Newpark Released
Party” and collectively the “Newpark Released Parties”) from any and all Claims
that any Trinity Releasing Party ever had, now has or may have against any of
the Newpark Released Parties in connection with, arising from or that may arise
from the Purchase Agreement, including, without limitation, any Claim arising
from or that may arise from any discussions, conversations, communications or
negotiations between the Newpark Parties and representatives of either or both
of Kinderhook Industries, LLC and its affiliates (collectively, “KH”) and CCS
Corporation and its affiliates (collectively, “CCS”) (collectively, the “Trinity
Released Claims”). Notwithstanding the foregoing the Trinity Released Claims do
not include, and there shall be no release hereby with respect to, (i) the
obligations of the Newpark Parties under the Surviving Provisions, (ii) any
liability of the Newpark Parties for any violation or breach of the
Confidentiality Agreement, or (iii) any liability of the Newpark Parties for any
material breach of or failure to perform any of the covenants or obligations of
the Newpark Parties under Section 5 below (the “Trinity Excluded Claims”).
(b) Subject to the provisions of Section 3(f) below, it is the intention of the
Trinity Parties in executing this Agreement (and granting the Trinity Release
contained herein) that this Agreement (and the Trinity Release contained herein)
shall be effective as a bar to the Trinity Released Claims, and the Trinity
Parties hereby knowingly and voluntarily waive any and all Trinity Released
Claims. The Trinity Parties expressly consent that this Agreement (and the
Trinity Release contained herein) shall be given full force and effect according
to each and all of its express terms and provisions, including as to any Trinity
Released Claims that are, as of the date of this Agreement, unknown, unsuspected
and unanticipated (notwithstanding any federal, state, local or foreign law
(statutory or decisional) that may expressly or impliedly limit the
effectiveness of this Agreement (and the Trinity Release contained herein) to
bar any such unknown, unsuspected and unanticipated Trinity Released Claims).
(c) Each Trinity Party acknowledges that it has executed this Agreement (and the
Trinity Release contained herein) freely and without coercion, that it has been
advised by counsel and that it has been provided with a reasonable period of
time to consider the terms of this Agreement (and the Trinity Release contained
herein).
(d) The Trinity Parties further acknowledge and understand that the actual facts
and circumstances to which this Agreement (and the Trinity Release contained
herein) relates may hereafter turn out to be other than or different from the
facts now believed to be known by the Parties and circumstances now perceived by
the Parties. The Trinity Parties assume such risk and agree that this Agreement
(and the Trinity Release contained herein) shall be in all respects effective
and shall not be subject to termination or rescission by reason of such
different facts or circumstances.
(e) This Agreement (and the Trinity Release contained herein) is not intended,
and shall not be construed, as an admission that any Newpark Released Party has
violated any federal, state, local or foreign law (statutory or decisional),
ordinance or regulation, has breached any contract or has committed any wrong
whatsoever against any Trinity Releasing Party.

 

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(f) The Newpark Parties acknowledge that the covenants and obligations of the
Newpark Parties set forth in Section 5 below constitute a material inducement
and consideration of the Trinity Parties’ execution of this Agreement and the
Trinity Release contained herein. The Trinity Release is conditioned upon the
Newpark Parties’ performance in all material respects of their respective
obligations contained in this Agreement including, without limitation, the
covenants and obligations set forth in Section 5 below. If the Newpark Parties
fail to comply in all material respects with the terms and obligations of this
Agreement including, without limitation, the covenants contained in Section 5
below, the Trinity Release shall no longer be effective and the Trinity Parties
shall be entitled to pursue any and all rights they may have hereunder and under
the Purchase Agreement.
4. Covenants of Trinity Parties.
(a) The Trinity Parties hereby expressly agree that each of KH and CCS shall no
longer be bound by or subject to any noncircumvention or other exclusivity
arrangement with the Trinity Parties with respect to an Acquisition Transaction
and that each of KH and CCS shall have the right, independently of the Trinity
Parties, (i) to negotiate with the Newpark Parties concerning an Acquisition
Transaction, (ii) to consummate an Acquisition Transaction, (iii) to negotiate
with potential lenders and other financing sources that were introduced to KH or
CCS, as the case may be, by the Trinity Parties with respect to the financing of
an Acquisition Transaction, and (iv) to secure financing as needed from such
lenders or other financing sources.
(b) The Trinity Parties shall, and shall cause each of their respective
employees, consultants, agents, officers, directors and advisors to (i) afford
to each of KH and CCS, and their respective representatives, reasonable access
to the Trinity Parties’ due diligence materials relating to the proposed
acquisition by TLM of the Acquired Interests including, without limitation, all
Environmental Reports obtained by the Trinity Parties and reasonable access
during normal business hours to the Trinity Parties’ personnel and
representatives to make reasonable inquiry of such personnel and representatives
regarding such materials; (ii) furnish each of KH and CCS with such financial,
operating and other data concerning the Transferred Entities that the Trinity
Parties may have obtained or prepared in connection with their due diligence
review of the Transferred Entities; and (iii) otherwise reasonably cooperate
with each of KH and CCS in their investigation of the Transferred Entities. The
Trinity Parties shall authorize Terracon Consultants, Inc. (“Terracon”) to make
available to each of KH and CCS all Environmental Reports previously prepared by
Terracon under the direction of the Trinity Parties, and the Trinity Parties
shall take such further actions as may be necessary and within Trinity’s control
so that each entity may rely upon such Environmental Reports. Any fee payable to
Terracon with respect thereto shall be paid by the Trinity Parties, KH and CCS
as they shall mutually agree. The foregoing shall not require the Trinity
Parties to permit any inspection, or disclose any information, that is
reasonably likely to result in the disclosure of any confidential or proprietary
information relating to the operations of the Trinity Parties or of any
information subject to attorney-client privilege. In the event that the Trinity
Parties receive written notice from Newpark that Newpark has entered into an
exclusive agreement with any third party with respect to an Acquisition
Transaction, then the Trinity Parties shall have no further obligations under
this Section 4 with respect to either or both of CCS and KH unless CCS or KH, as
the case may be, is a party to the exclusive agreement with Newpark. Further,
the Trinity Parties shall have no further obligations under this Section 4 if
the Trinity Parties receive written notice from Newpark that Newpark has
terminated negotiations with each of CCS and KH with respect to a potential
Acquisition Transaction.

 

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5. Covenants of the Newpark Parties.
(a) Subject to the conditions set forth in Section 5(b) below, if the Newpark
Parties consummate and close an Acquisition Transaction with either KH or CCS,
and/or any of their respective affiliates, subsidiaries, parent entities or
equityholders, on or before December 31, 2008, Trinity or its designee shall be
entitled to receive a transaction fee from Newpark as follows:

  (i)  
if the Acquisition Transaction is completed with KH, and/or any of its
affiliates, subsidiaries, parent entities or equityholders (together with KH,
each a “KH Party” and collectively the “KH Parties”), Trinity or its designee
shall be entitled to receive the sum of $5,000,000 (the “KH Transaction Fee”);
and
    (ii)  
if the Acquisition Transaction is completed with CCS, and/or any of its
affiliates, subsidiaries, parent entities or equityholders (together with CCS,
each a “CCS Party” and collectively the “CCS Parties”), Trinity or its designee
shall be entitled to receive the sum of $2,500,000 (the “CCS Transaction Fee”)
(the KH Transaction Fee and CCS Transaction Fee may each be referred to as the
“Transaction Fee”).

If earned, the Newpark Parties shall pay or cause to be paid to Trinity or its
designee the applicable Transaction Fee by wire transfer of immediately
available funds to an account specified by Trinity or its designee.
(b) Trinity’s right to receive the applicable Transaction Fee, and the Newpark
Parties’ obligation to pay (or cause to be paid) the applicable Transaction Fee,
is subject to the following conditions:

  (i)  
the Trinity Parties shall have complied in all material respects with the
provisions of Section 4 above; and
    (ii)  
the closing of the Acquisition Transaction must be with a KH Party or CCS Party
and must occur on or before December 31, 2008.

(c) The CCS Transaction Fee shall only be payable to Trinity or its designee if
CCS and the Trinity Parties shall not have completed a transaction,
simultaneously with or prior to the completion by any CCS Party of an
Acquisition Transaction, pursuant to which any CCS Party shall have acquired all
or substantially all of the business operations and assets of the Trinity
Parties (whether by merger, consolidation, business combination, asset or equity
purchase, or other transaction) (the “CCS/Trinity Transaction”).

 

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(d) Assuming the conditions set forth in subsection (b) have been satisfied, the
KH Transaction Fee, if applicable, shall be payable promptly (within two
Business Days) following the closing of the Acquisition Transaction.
(e) Assuming the conditions set forth in subsections (b) and (c) have been
satisfied, the CCS Transaction Fee, if applicable, shall be payable promptly
(within two Business Days) following the closing of the Acquisition Transaction.
If Trinity or its designee receives a CCS Transaction Fee, and thereafter the
Trinity Parties and the CCS Parties consummate a CCS/Trinity Transaction on or
before December 31, 2008, the Trinity Parties will pay or cause to be paid to
Newpark or its designee an amount that is equal to the CCS Transaction Fee
actually received by Trinity or its designee hereunder. Trinity agrees to use
commercially reasonable efforts to include in any definitive agreement for the
CCS/Trinity Transaction an undertaking by CCS to pay directly to Newpark from
the consideration payable in the CCS/Trinity Transaction an amount equal to the
CCS Transaction Fee if the CCS/Trinity Transaction is consummated on or before
December 31, 2008. Any such payment by CCS shall be in full satisfaction of
Trinity’s obligations in this Section 5(e).
(f) Notwithstanding the termination of the Purchase Agreement, the Trinity
Parties may continue to seek financing to complete any Acquisition Transaction
independent of CCS and/or KH, and the Newpark Parties will continue to negotiate
with the Trinity Parties with respect to any Acquisition Transaction unless and
until the Newpark Parties enter into an exclusivity agreement with a third party
pertaining to one or more potential Acquisition Transactions or otherwise notify
the Trinity Parties that they are terminating negotiations with the Trinity
Parties concerning the Acquisition Transactions.
6. Further Assurances by the Parties.
Each Party hereto agrees to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper or advisable to give immediate
effect to the agreements contained herein.
7. Miscellaneous.
(a) Complete Agreement; Assignment. This Agreement (i) embodies the complete
agreement and understanding among the Parties and, except as otherwise provided
herein, supersedes and preempts any prior understandings, agreements or
representations (including, without limitation, the Purchase Agreement) by or
among the Parties, written or oral, that may have related to the subject matter
hereof in any way and (ii) shall not be assigned by any Party (whether by
operation of law or otherwise) without the prior written consent of the other
Parties and any attempted assignment without such consent shall be null and
void.
(b) Amendment; Waiver. No part of this Agreement may be changed except in
writing executed by each of the Parties. No breach of any provision of this
Agreement may be waived unless such waiver is in writing and signed by the Party
or the Parties hereto waiving such breach. The waiver of a breach of any
provision of this Agreement shall not be deemed to be a waiver of any other
breach hereof.

 

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(c) Counterparts. This Agreement may be executed in separate counterparts and
may be delivered by facsimile or by electronic mail in “portable document
format,” each of which (including any facsimile or portable document format copy
that has been delivered) is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of and be enforceable by the Parties and
their respective successors and permitted assigns. Each Trinity Released Party
and Newpark Released Party that has not executed this Agreement is a third-party
beneficiary of this Agreement. With respect to the covenants and obligations of
the Trinity Parties set forth in Section 4 hereof, each of KH and CCS is a
third-party beneficiary of the provisions set forth therein.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without giving any effect to any
choice of law or conflict of law provision or rule (whether of the State of
Texas or any other jurisdiction) that would cause the application of the law of
any jurisdiction other than the State of Texas.
(f) Headings. The headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
(g) Interpretation. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provisions will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of, or
further limiting the scope of, this Agreement.
(h) Specific Performance. Any person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement, and to exercise all other rights granted by
law. All such rights and remedies shall be cumulative and non exclusive, and may
be exercised singularly or concurrently.
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IN WITNESS WHEREOF, the parties hereto have executed this Termination, Release
and Transaction Fee Agreement as of the date first written above.

                  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:   President
 
                MOSS BLUFF PROPERTY, L.P.
 
                By: MBP GP, L.L.C.
Its: General Partner
 
           
 
  By:   /s/ Ray Welch          
 
      Name:   Ray Welch
 
      Title:   President

 

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                  NEWPARK RESOURCES, INC.
 
           
 
  By:   /s/ Paul L. Howes          
 
      Name:   Paul L. Howes
 
      Title:   President and Chief Executive Officer
 
                NEWPARK DRILLING FLUIDS LLC
 
           
 
  By:   /s/ Mark J. Airola          
 
      Name:   Mark J. Airola
 
      Title:   Vice President
 
                NEWPARK TEXAS, L.L.C.
 
           
 
  By:   /s/ Mark J. Airola          
 
      Name:   Mark J. Airola
 
      Title:   Vice President

 

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