Exhibit 10.51
 
ASSET PURCHASE AGREEMENT
 
between
 
ALLIANCE DRILLING FLUIDS, LLC
 
and
 
XTREME SPECIALTY PRODUCTS, LLC
 
and
 
PROP-TECH SERVICES, LLC
 
as Sellers,
 
and
 
THE MEMBERS
 
and
 
NEWPARK DRILLING FLUIDS LLC
 
as Buyer,
 
and
 
NEWPARK RESOURCES, INC.
 

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Dated December 28, 2012
 

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TABLE OF CONTENTS
 

   
Page
ARTICLE I DEFINITIONS; INTERPRETATION
1    
1.1
Defined Terms
1
1.2
Interpretations
14
   
ARTICLE II PURCHASE AND SALE
16    
2.1
Purchased Assets
16
2.2
Excluded Assets
17
2.3
Assumption of Liabilities; Excluded Liabilities
18
2.4
Purchase Price
21
2.5
Net Working Capital Price Adjustment.
22
2.6
Payment of Base Purchase Price; Escrow
24
2.7
Time and Place of Closing; Deliveries
24
2.8
Allocation of Purchase Price
28
2.9
Earnout
29
2.10
Condition to Transfer of Contracts; Ongoing Projects.
30
2.11
Rentals, Utilities and Other Adjustments
32
   
ARTICLE III REPRESENTATIONS AND WARRANTIES OF MEMBERS
32
   
3.1
Organization; Qualification
32
3.2
Authorization
32
3.3
Validity of Agreement
32
3.4
Consents and Approvals; No Violations
33
3.5
Solvency.
33
   
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND MEMBERS
33
   
4.1
Organization; Qualification; Subsidiaries.
33
4.2
Authority Relative to this Agreement; Enforceability
34
4.3
Title to Purchased Assets
35
4.4
Consents and Approvals; No Violations
35
4.5
Environmental Matters.
36
4.6
Financial Information; Absence of Undisclosed Liabilities.
38
4.7
Absence of Certain Changes
39
4.8
Compliance with Law; Permits
40
4.9
Real Property
41
4.10
Legal Proceedings
43
4.11
Employee Matters
43
4.12
Contracts
45
4.13
Sufficiency of the Assets
48
4.14
Taxes.
48
4.15
Intellectual Property.
49
4.16
Accounts Receivable
50
4.17
Brokers; Finders and Fees
50

 
 
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4.18
Customers and Vendors
50
4.19
Product and Service Warranties
50
4.20
Insurance
51
4.21
Inventories
51
4.22
Bank Accounts
51
4.23
Solvency.
51
4.24
Affiliated Transactions
51
4.25
Disclaimer of Representations and Warranties
52
   
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
52
   
5.1
Organization; Qualifications
53
5.2
Authority Relative to this Agreement; Enforceability
53
5.3
Consents and Approvals; No Violations
53
5.4
Brokers; Finders and Fees
54
   
ARTICLE VI COVENANTS OF THE PARTIES
54
   
6.1
Access to Information.
54
6.2
Consents; Cooperation.
56
6.3
Confidentiality; Non-Competition; Non-Solicitation.
57
6.4
Tax Matters.
59
6.5
Further Assistance
60
6.6
Accounts Receivable
61
6.7
Conduct of Business.
61
6.8
Employee Matters.
63
6.9
Removal of Names.
65
6.10
Casualty Loss
66
6.11
Exclusivity
66
6.12
Insurance Matters
67
6.13
Publicity
67
   
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE PURCHASE
67
   
7.1
Conditions to Each Party’s Obligations to Consummate the Purchase
67
7.2
Conditions to the Sellers’ and Members’ Obligations
67
7.3
Conditions to the Buyer’s Obligations
68
   
ARTICLE VIII TERMINATION AND ABANDONMENT
69
   
8.1
Termination
69
8.2
Procedure for and Effect of Termination
70
   
ARTICLE IX SURVIVAL AND INDEMNIFICATION
70
   
9.1
Survival Periods
70
9.2
Sellers’ and Members’ Agreement to Indemnify
71
9.3
Buyer’s Agreement to Indemnify.
73
9.4
Indemnification Procedures
74
9.5
Materiality Disregarded
78
9.6
Manner and Timing of Payment
78
9.7
No Duplication
78

 
 
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9.8
Sole Remedy
78
9.9
Punitive Damages
79
   
ARTICLE X ESCROWS
79
   
10.1
Indemnity Escrow Fund
79
10.2
Retention Escrow Funds.
80
10.3
Release From Escrows.
81
   
ARTICLE XI MISCELLANEOUS PROVISIONS
82
   
11.1
Amendment and Modification
82
11.2
Entire Agreement; Assignment; Binding Effect
82
11.3
Severability
82
11.4
Notices
83
11.5
Governing Law.
84
11.6
Descriptive Headings
84
11.7
Counterparts
85
11.8
Fees and Expenses
85
11.9
Third-Party Beneficiaries
85
11.10
Waivers
85
11.11
Incorporation of Exhibits
85
11.12
Specific Performance
85
11.13
Newpark Guaranty.
86

 
EXHIBITS
 
Exhibit A – Form of Bill of Sale, Assignment and Assumption Agreement
Exhibit B – Form of Special Warranty Deed
Exhibit C – Form of Savage Employment Agreement
Exhibit D – Form of Savage Retention Escrow Agreement
Exhibit E – Form of Branch Employment Agreement
Exhibit F – Form of Branch Retention Escrow Agreement
Exhibit G – Form of Indemnity Escrow Agreement
Exhibit H – Form of Agreement of Assignment, Assumption and Consent
Exhibit I  – Form of Mack Energy Agreement
Exhibit J - Form of Transition Services Agreement
Exhibit K - Form of Sublease Agreement
 
 
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ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT, dated December 28, 2012 (this “Agreement”), is by
and among Alliance Drilling Fluids, LLC, a Texas limited liability company
(“Alliance”), Xtreme Specialty Products, LLC, a Texas limited liability company
(“Xtreme”) and Prop-Tech Services, LLC, a Texas limited liability company
(“Prop-Tech,” and collectively with Alliance and Xtreme, the “Sellers”), the
Members (as herein defined) and Newpark Drilling Fluids LLC, a Texas limited
liability company (the “Buyer”).  The Sellers, Members and the Buyer are
hereinafter collectively referred to as the “parties” and each individually as a
“party.”  Newpark Resources, Inc., a Delaware corporation (“Newpark”), joins
this Agreement solely for the purposes of Section 11.13 below.
 
WHEREAS, the Sellers carry on the business of providing customized drilling
fluids, stimulation products (proppants), other specialty chemicals and fluids
and services related thereto to various clients in the oil and natural gas
industry (the “Business”) and all of the assets of the Sellers are used in the
Business and the Business is the sole business of the Sellers;
 
WHEREAS, the Members are the sole record and beneficial owners of all of the
issued and outstanding membership interests in Alliance and Alliance is sole
record and beneficial owner of all of the issued and outstanding membership
interests in each of Xtreme and Prop-Tech; and
 
WHEREAS, upon the terms and subject to the conditions set forth herein, the
Sellers desire to sell and transfer to the Buyer, and the Buyer desires to
purchase from the Sellers, the Purchased Assets (as defined herein) upon the
terms and subject to the conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties agree as follows:
 
ARTICLE I
 
DEFINITIONS; INTERPRETATION
 
1.1           Defined Terms.  For purposes of this Agreement, capitalized terms
have the following meanings:
 
“Accounting Arbitrator” has the meaning set forth in Section 2.5(b).
 
“Accounts Receivable” has the meaning set forth in Section 2.1(d).
 
“Affiliate” means, when used with respect to a specified Person, another Person
that, either directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified; and
the term “control” (and correlative terms, including “controlling” and
“controlled”) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person and any Person that
directly or indirectly owns more than 50% of any class of voting equity
interests of the Person specified shall be deemed to be an Affiliate of such
Person.
 
 
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“Agreement” has the meaning set forth in Preamble.
 
“Annual Earnout Amount” has the meaning set forth in Section 2.9(b).
 
“Annual Earnout Period” means each of the calendar years 2013 and 2014.
 
“Annual Earnout Statement” has the meaning set forth in Section 2.9(a).
 
“Applicable Survival Period” has the meaning set forth in Section 9.1.
 
“Assigned Contracts” has the meaning set forth in Section 2.1(h).
 
“Assigned Leases” has the meaning set forth in Section 2.1(g).
 
“Assignment and Assumption of Lease” has the meaning set forth in Section
2.7(b)(viii).
 
“Assumed Liabilities” has the meaning set forth in Section 2.3(a).
 
“Base Purchase Price” has the meaning set forth in Section 2.4.
 
“Basket” has the meaning set forth in Section 9.2(c)(i).
 
“Benefit Plans” means all written and all material unwritten employee benefit
plans and other benefit arrangements, including all “employee benefit plans” as
defined in Section 3(3) of ERISA, and all other written and material unwritten
employee benefit, bonus, vacation, incentive, deferred compensation, stock
option or other equity-based, severance, termination, separation, salary or wage
continuation or supplementation, retention, employment, consulting, collective
bargaining, change in control, welfare (including, but not limited to,
post-employment medical and life insurance, medical, dental, short-term
disability, long-term disability, life insurance and long-term care) and fringe
benefit plans (including vacation pay or paid sick leave), indemnification,
policies, practices, programs, arrangements or agreements, for the benefit of
any current or former employee, consultant, independent contractor, director,
manager, agent, representative, officer or other service provider or any
beneficiary of any of the foregoing, whether or not subject to ERISA, whether or
not arising under or required by Law, whether or not written, whether formal or
informal, whether legally binding or not and whether or not currently in effect,
and each insurance, funding, trust or service agreement relating to any of the
foregoing.
 
“Books and Records” means all books, records, analyses, correspondence, data,
databases, designs, diagrams, documents, drawings, files, graphs, information,
ledgers, lists, manuals, maps, notes, proposals, sketches, specifications,
studies, records, reports, work papers and other materials (whether stored in
print, magnetic tapes, computer disks, or any other digital or electronic media)
related to the Business, the Purchased Assets, the Assumed Liabilities and/or
the Transferred Employees, including (a) all accounting, auditing, business and
financial books and records, internal financial statements, and copies of Tax
books and records to the extent reasonably requested by the Buyer; (b) records
relating to machinery and equipment maintenance; (c) customer and potential
customer lists and related account and contact information, price lists,
distribution lists, personnel lists, and supplier and potential supplier lists
and related account and contact information; (d) historical sales data,
operations data, quality control records and procedures, customer complaints and
inquiry files, warranty records, sales materials and records (including pricing
history, total sales, terms and conditions of sale, and sales and pricing
policies and practices), and technical records; (e) as-built drawings, site
plans, surveys, soil and substratum surveys, appraisals, electrical and
mechanical plans, environmental studies; and (f) all product, business,
strategic and marketing plans, surveys, materials and research; provided,
however, that the term “Books and Records” shall not include any Excluded Asset.
 
 
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“Branch” means Charles Branch.
 
“Branch Retention Escrow Agreement” means the escrow agreement, substantially in
the form of Exhibit F attached hereto, entered into on or prior to the Closing
by the Buyer, Branch and the Escrow Agent.
 
“Branch Retention Escrow Amount” means $325,000.
 
“Branch Retention Escrow Fund” has the meaning set forth in Section 10.2(a).
 
“Business” has the meaning set forth in Recitals.
 
“Business Day” means any day other than Saturday or Sunday or any U.S. Federal
holiday.
 
“Business Material Adverse Effect” has the meaning set forth in Section 4.1(c).
 
“Buyer” has the meaning set forth in Preamble.
 
“Buyer Benefit Plans” has the meaning set forth in Section 6.8(c).
 
“Buyer Damages” has the meaning set forth in Section 9.2(a).
 
“Buyer Disclosure Letter” has the meaning set forth in Article V.
 
“Buyer Due Diligence Investigations” has the meaning set forth in Section
6.1(a).
 
“Buyer Indemnitees” has the meaning set forth in Section 9.2(a)
 
“Buyer Material Adverse Effect” has the meaning set forth in Section 5.1.
 
“Cap” has the meaning set forth in Section 9.2(c)(ii).
 
“Capital Lease” means the Vehicle Lease and Service Agreement, dated June 1,
2012, between Alliance Drilling Fluids, LLC and Rush Truck Leasing, Inc. and all
schedules thereto.
 
 
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“Cause” shall mean with respect to either Savage or Branch, as applicable, that:
(a) such individual violates the protective covenants (Confidentiality;
Non-Competition; Non-Solicitation) contained in (i) Sections 13, 14, 15 and 16
of the employment agreement between the Buyer and such individual dated December
31, 2012, and (ii) Section 6.3 of this Agreement; (b) such individual habitually
refuses to materially follow the reasonable written directives of the Buyer’s
Board of Directors or President concerning the performance of his duties under
such individual’s Employment Agreement; (c) such individual misappropriates the
Buyer’s assets; (d) such individual intentionally engages in any dishonest,
unethical, or fraudulent act in respect of his duties to the Buyer; or (e) the
conviction of such individual of any felony that materially and adversely
affects the reputation of the Buyer or the utility of his services to the Buyer
in its business; provided, that with respect to each of the foregoing, such
individual receives written notice from the Buyer specifying the particulars of
any such violation and such individual fails to cure any such violation, to the
extent it may be cured, within ten (10) days of such written notice; provided,
however, that if such violation is capable of being cured, the Buyer agrees to
extend such cure period for an additional reasonable period of time (not to
exceed 60 days) so long as such individual is making good faith efforts to cure
such violation.
 
“Claim Notice” has the meaning set forth in Section 9.4(a).
 
“Closing” has the meaning set forth in Section 2.7(a).
 
“Closing Date” has the meaning set forth in Section 2.7(a).
 
“Closing Date Net Working Capital” has the meaning set forth in Section 2.5(b).
 
“Closing Date Receivables” has the meaning set forth in Section 6.6.
 
“COBRA” has the meaning set forth in Section 6.8(h).
 
“Code” has the meaning set forth in Section 4.11(c).
 
“Competing Business” has the meaning set forth in Section 6.3(b).
 
“Competing Transaction” has the meaning set forth in Section 6.11(a).
 
“Confidential Information” means information, knowledge or data not generally
known in the relevant trade or industry that was disclosed to, known by or in
the possession or custody of the Sellers or any of its Affiliates, or to which
the Sellers or its Affiliates otherwise had access, in each case, relating to
any aspect of the Business or any of the Purchased Assets (including the
ownership, use and operation thereof), in any form whatsoever, whether or not
patentable or eligible for copyright, including business methods, business
strategies, procedures, policies and plans, financial forecasts, financial data,
financial statements, financial information, results of operations, assets,
agency and contractor relationships and contact information, nonpublic
information relating to existing or new products and services (including
improvements to existing products or services), service and operation manuals,
advertising, marketing, procurement requirements, pricing schedules, pricing
methodology, lists of the existing, past or prospective customers and contact
information and preferences, data provided by or about such existing, past or
prospective customers, customer service information, data about the terms,
conditions and expiration dates of contracts with customers, the type, quality
and specifications of products or services purchased by such customers, any
other type of customer data, trade or industrial practices, trade secrets,
technology, know-how, formulae, mask works, industrial designs, technological
data or information, research and development, computer programs, source codes,
object and load modules, inventions, discoveries, patent applications, ideas,
designs, drawings, test data, computer programs, software, databases, and any
and all other information relating to any aspect of the ownership, use or
operation of the Business or the Purchased Assets not generally known to the
public or within the industry of the Sellers.
 
 
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“Confidentiality Agreement” has the meaning set forth in Section 6.1(c).
 
“Consent” or ”Consents” has the meaning set forth in Section 3.4.
 
“Contaminant” has the meaning set forth in Section 4.5(h).
 
“Contract” of a Person means any agreement, arrangement, commitment, contract,
purchase order, note, indenture, guarantee or other form of indebtedness, lease,
sublease, license, sublicense or other undertaking, whether written or oral, of
such Person, to which such Person is a party, or by which such Person or its
assets or properties are bound or subject.
 
“Conveyance Documents” has the meaning set forth in Section 2.7(b)(i).
 
“Copyrights” has the meaning set forth in the definition of Intellectual
Property.
 
“Court Instruction” has the meaning set forth in Section 10.3(a)(ii).
 
“Current Assets” has the meaning set forth in Section 2.5(c).
 
“Current Liabilities” has the meaning set forth in Section 2.5(c).
 
“Damages” has the meaning set forth in Section 9.3(a).
 
“Domain Names” has the meaning set forth in the definition of Intellectual
Property.
 
“Earnout Disputed Items” has the meaning set forth in Section 2.9(d).
 
“Earnout Objection Notice” has the meaning set forth in Section 2.9(c).
 
“Effective Time” has the meaning set forth in Section 2.7(a).
 
“Election Period” has the meaning set forth in Section 9.4(b).
 
“Employees” has the meaning set forth in Section 4.11(a).
 
“Employment Date” has the meaning set forth in Section 6.8(b).
 
“Enforcement Restrictions” has the meaning set forth in Section 4.12(b).
 
“Environment” has the meaning set forth in Section 4.5(k).
 
 
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“Environmental Law” has the meaning set forth in Section 4.5(i).
 
“EOG Mud Allowance” means, with respect to the Sellers’ prior business
transactions with EOG Resources, Inc., the inventory to be sold to, and the
account receivable (in the approximate amount of $1,554,771) to be received by
the Sellers from, EOG Resources, Inc., and any and all cash payments therefrom.
 
“Equipment” has the meaning set forth in Section 2.1(b).
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“ERISA Affiliate” means any other Person that, together with the Sellers, would
be considered a single employer under Section 414(b), (c), or (m) of the Code.
 
“Escrow Agent” means JPMorgan Chase Bank, N.A.
 
“Estimated Closing Statement” has the meaning set forth in Section 2.5(a).
 
“Estimated Net Working Capital” has the meaning set forth in Section 2.5(a).
 
“Estimated Net Working Capital Excess Amount” has the meaning set forth in
Section 2.5(a).
 
“Estimated Net Working Capital Deficiency Amount” has the meaning set forth in
Section 2.5(a)
 
“Excluded Account” has the meaning set forth in Section 2.2(l).
 
“Excluded Assets” has the meaning set forth in Section 2.2.
 
“Excluded Liabilities” has the meaning set forth in Section 2.3(b).
 
“Exclusivity Termination Date” has the meaning set forth in Section 6.11(a).
 
“Final Closing Statement” has the meaning set forth in Section 2.5(b).
 
“Final Resolution” means resolution of any dispute by the dismissal with
prejudice, by a final non-appealable judgment of a court of competent
jurisdiction or by final settlement or agreement among the parties thereto
without any further liability or obligations of any named party hereto.
 
“Final Working Capital Adjustment” has the meaning set forth in Section 2.5(c).
 
“Financial Statements” has the meaning set forth in Section 4.6(a).
 
“Fraud Claims” has the meaning set forth in Section 9.1(b).
 
 
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“Fundamental Representations” means the representations and warranties made
(a) by the Sellers and Members in Section 4.2, Section 4.3, Section 4.4(a),
Section 4.14 and Section 4.17, and (b) made by the Buyer in Section 5.2, Section
5.3(a) and Section 5.4.
 
“GAAP” has the meaning set forth in Section 4.1(c).
 
“Good Reason” shall mean, with respect to either Savage or Branch, as
applicable, (a) such individual’s primary place of employment is moved by Buyer
or its Affiliates during the Retention Period more than 30 miles from such
individual’s current primary place of employment (exclusive of temporary
assignments in the ordinary course), without such individual’s consent; (b)
there is a material reduction of such individual’s compensation (which, with
respect to any bonuses, shall be limited to the available bonus opportunity and
shall not include the actual amount of the bonus payment earned and received),
as set forth in such individual’s employment agreement which becomes effective
upon the Closing, without such individual’s consent; (c) there is a material
reduction in such individual’s duties and responsibilities (not including any
change that occurs as a result of the consummation of the transactions
contemplated by this Agreement), without such individual’s consent; or (d) there
is any material breach by Buyer of such employment agreements, which breach is
not cured within thirty (30) calendar days of Buyer’s receipt of notice
thereof.  Notwithstanding the foregoing definition of “Good Reason,” any
assertion by either Savage or Branch of termination of employment based on Good
Reason shall not be effective unless all of the following conditions are
satisfied: (i) the condition described above giving rise to Good Reason must
have arisen without the written consent of Savage or Branch, as applicable; (ii)
Savage or Branch, as the case may be, must provide written notice to Buyer of
such condition within twenty (20) days of the discovery of the initial existence
of condition by Savage or Branch, as the case may be; (iii) the condition
specified in such notice must remain uncorrected for thirty (30) days after
receipt of such notice by the Buyer; and (iv) the date of termination of
employment because of the condition as specified in such notice must occur
within ninety (90) days after the discovery by Savage or Branch, as the case may
be, of the condition as specified in such notice.
 
“Governing Documents” shall mean with respect to any particular entity: (a) if a
corporation, its articles or certificate of incorporation and its bylaws; (b) if
a limited partnership, its limited partnership agreement and its articles or
certificate of limited partnership; (c) if a limited liability company, its
articles of organization or certificate of formation and its limited liability
company agreement or operating agreement; (d) all related equityholders’
agreements, voting agreements, voting trust agreements, joint venture agreements
or registration rights agreements; and (e) any amendment or supplement to any of
the foregoing.
 
“Governmental Entity” means the United States of America and any other federal,
state, tribal, local, municipal or foreign governmental or regulatory authority,
department, agency, commission, body, court or other governmental entity.
 
 
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“Gross Margin” means, with respect to any Annual Earnout Period, the sum of: the
gross profit of the Proppant Business for such Annual Earnout Period, calculated
by taking the total sales of the Proppant Business (net of returns for such
sales), and reducing such sum by the cost of goods sold; provided, that “Gross
Margin” and the components thereof shall (i) be calculated in accordance with
GAAP applied on a basis consistent with the past practices of the Sellers, (ii)
be calculated as if the Proppant Business is a stand-alone entity, and (iii)
exclude any overhead allocations (including, without limitation, corporate
overhead, consulting, administrative, management or advisor fees, charges or
expenses) from Buyer or its Affiliates to the Proppant Business as part of the
cost of goods sold.  In calculating Gross Margin, the intercompany sales and
products of the Proppant Business, if any, to Buyer or its Affiliates shall be
calculated at a gross margin comparable to the gross margin obtained on sales to
unrelated third parties.  Without limiting the foregoing, for purposes of
calculating Gross Margin Buyer shall not allocate or charge to the Proppant
Business (A) any extraordinary, non-recurring expenses, (B) fees, charges and
expenses related to financing arrangements (C) compensation expenses
attributable to equity awards granted to employees of the Buyer or its
Affiliates and other third parties providing services to the Proppant Business,
or (D) any expenses incurred by Newpark and/or its Affiliates (other than Buyer)
in connection with providing services to the Proppant Business; provided,
further, that (1) items of income or expense attributable to the operation of
any portion of the Proppant Business that is acquired by Buyer after the Closing
Date through the purchase of any business enterprise, division or line of
business that would otherwise be included within the calculation of Gross Margin
shall be excluded from the calculation of Gross Margin and any other
calculations contemplated by Section 2.9; (2) if after the Closing Date Buyer
sells, leases, transfers or otherwise disposes of assets (other than sales of
assets in the ordinary course of business) used exclusively in the Proppant
Business, then Buyer and the Sellers shall agree on a fair and reasonable
adjustment to the Gross Margin calculation to reflect the impact of such
transaction (and if unable to agree thereon, the parties shall submit such
matter to the Accounting Arbitrator for resolution, as soon as possible and, if
practicable, prior to the consummation of such transaction, on a basis
consistent with the procedures set forth in Section 2.9(e)); (3) expenses of
integrating the Proppant Business (including travel-related expenses) shall not
be included as expenses of the Proppant Business; and (4) there shall be no
allocation of expenses to the Proppant Business to the extent that such expenses
constitute Buyer Damages and such Buyer Damages, and any costs of recovery
thereof, are fully recovered by any Buyer Indemnitee pursuant to the
indemnification provisions hereunder or reimbursement pursuant to any applicable
insurance policy or by any third party.
 
“Indebtedness” means, with respect to the Sellers, the Business or the Purchased
Assets, whether or not contingent, at a particular time, without duplication:
(a) any indebtedness for borrowed money or issued in substitution for or
exchange of indebtedness for borrowed money; (b) any indebtedness evidenced by
any note, bond, debenture or other debt security; (c) any indebtedness for the
deferred purchase price of properties or services with respect to which any of
the Sellers is liable, contingently or otherwise, as obligor or otherwise (other
than trade payables and other current liabilities incurred in the ordinary
course of business which are not more than six (6) months past due); (d) any
commitment by which any of the Sellers assures a creditor against loss
(including contingent reimbursement obligations with respect to letters of
credit); (e) any indebtedness guaranteed in any manner by the Sellers, the
Business or any of the Purchased Assets (including guarantees in the form of an
agreement to repurchase or reimburse); (f) any obligations under capitalized
leases with respect to which any of the Sellers is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or with respect to which
obligations the Sellers assures a creditor against loss; (g) any indebtedness
secured by a Lien on the Sellers’ properties or assets, including any of the
Purchased Assets; (h) any amounts owed by the Sellers to any other Person under
any non-competition, bonus, consulting  or deferred compensation arrangements
(including agreements entered into in connection with the transactions
contemplated hereby); and (i) any unsatisfied obligation for “withdrawal
liability” to a “multiemployer plan” as such terms are defined under ERISA.  For
purposes of calculating Indebtedness, all interest, prepayment penalties,
premiums, indemnities, letters of credit and bankers’ acceptances and consent
fees, “breakage” costs, “break fees” or similar payments or contractual charges
and other fees and expenses (if any) which would be payable if Indebtedness were
paid in full on the Closing Date shall be treated as Indebtedness.
 
 
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“Indemnified Party” has the meaning set forth in Section 9.4(a).
 
“Indemnifying Party” has the meaning set forth in Section 9.4(a).
 
“Indemnity Claim” has the meaning set forth in Section 9.4(f).
 
“Indemnity Escrow Agreement” means the escrow agreement, substantially in the
form of Exhibit G attached hereto, entered into, on or prior to the Closing by
the Buyer, Sellers, Members and Escrow Agent.
 
“Indemnity Escrow Amount” means $3,885,000.
 
“Indemnity Escrow Period” has the meaning set forth in Section 10.1(b).
 
“Indemnity Notice” has the meaning set forth in Section 9.4(f).
 
“Insolvent” has the meaning set forth in Section 3.5.
 
“Intellectual Property” means all of the following items: (a) all patents,
certificates of invention, and any other indicia of invention ownership issued
or granted by any Governmental Entity, including all provisional applications,
priority and other applications, patent disclosures, continuations (whether in
whole or in part), divisional re-issuances, re-examinations, revisions,
extensions or equivalents or counterparts of any of the foregoing (collectively,
“Patents”), (b) all trademarks, service marks, trade dress, logos, slogans,
trade names, service names, corporate names, fictitious names, telephone numbers
and other indicia of commercial source of origin (whether registered, at common
law, statutory or otherwise), together with all translations, adaptations,
derivations and combinations thereof, and including all goodwill associated
therewith, and all registrations, applications for registration and renewals in
connection therewith anywhere in the world (collectively, “Trademarks”), (c) all
copyrights, copyrightable works, works of authorship (including web pages,
photographs, graphics, text, designs, layouts and other content), rights in
databases, data collections, moral rights, rights in works of authorship and
mask works, and all applications for registration, registrations and renewals in
connection therewith (collectively, “Copyrights”), (d) all computer software and
codes, including source codes, object codes, executable codes, development and
design tools, user interfaces, schematics, firmware and technology, data,
databases and related documentation (collectively, “Software”), (e) all internet
domain names, internet websites, uniform resource locators (URLs) and
alphanumeric designations associated therewith, and all applications for
registration and registrations thereof (collectively, “Domain Names”), (f) all
Confidential Information, (g) all other tangible and intangible proprietary
information, materials and rights relating to any of the foregoing (including
associated goodwill and remedies against infringements thereof and rights of
protection of an interest therein under applicable Law of all jurisdictions),
(h) all documents, records and files relating to design, end user documentation,
manufacturing, quality control, sales, marketing or customer support for all
intellectual property and proprietary rights described in clauses (a) through
(g), (i) copies and all tangible embodiments of all intellectual property and
proprietary rights described in clauses (a) through (g), and (j) all license,
sublicense and similar rights in any third party product or any third party
intellectual property and proprietary rights of the types described in clauses
(a) through (i).
 
 
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“Inventory” has the meaning set forth in Section 2.1(a).
 
“IP Assets” has the meaning set forth in Section 2.1(j).
 
“Joint Indemnity Instructions” has the meaning set forth in Section 10.3(a).
 
“Law” or “Laws” has the meaning set forth in Section 3.4.
 
“Leased Real Property” has the meaning set forth in Section 4.9(b).
 
“Leases” has the meaning set forth in Section 4.9(b).
 
“Legal Proceeding” has the meaning set forth in Section 4.10.
 
“Liens” has the meaning set forth in Section 4.3.
 
“LOA Employees” has the meaning set forth in Section 6.8(a).
 
“Mack Energy Agreement” has the meaning set forth in Section 2.7(b)(x).
 
“Material Contracts” has the meaning set forth in Section 4.12(a)(xvii).
 
“Material Customers” has the meaning set forth in Section 4.18.
 
“Material Vendors” has the meaning set forth in Section 4.18.
 
“Members” means the Persons who own membership interests in Alliance as of the
date of this Agreement, each of whom is executing this Agreement on the
execution pages hereof under the heading “Members.”
 
“Members’ Pro Rata Share” means, with respect to each Member, a percentage equal
to the percentage of the total outstanding membership interests of Alliance
owned by such Member as of the date hereof.
 
“Most Recent Annual Financial Statements” has the meaning set forth in Section
4.6(a).
 
“Most Recent Financial Statements” has the meaning set forth in Section 4.6(a).
 
“Most Recent Fiscal Month End” has the meaning set forth in Section 4.6(a).
 
“Most Recent Fiscal Year End” has the meaning set forth in Section 4.6(a).
 
 
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“MSAs” has the meaning set forth in Section 4.12(a)(i).
 
“Multiemployer Plan” has the meaning set forth in Section 4.11(d)(i).
 
“Net Working Capital” has the meaning set forth in Section 2.5(c).
 
“Non-Assigned Contract” has the meaning set forth in Section 2.10(a).
 
 “Non-Offer Employee” has the meaning set forth in Section 6.9(a).
 
“Ongoing Project” and “Ongoing Projects” have the respective meanings set forth
in Section 2.10(b).
 
“Order” has the meaning set forth in Section 4.10.
 
“Ordinary Course of Business” has the meaning set forth in Section 4.7(a).
 
“Outside Date” has the meaning set forth in Section 8.1(b)(i).
 
“Owned Real Property” has the meaning set forth in Section 4.9(a).
 
“Owners’ Policies” means the Sellers’ existing title insurance policies listed
on Schedule 1.1.
 
“party” or “parties” has the meaning set forth in Preamble.
 
“Patents” has the meaning set forth in the definition of Intellectual Property.
 
“Permit” means any permit, license, certificate, tariff, concession, variance,
exemption, approval, consent, franchise, registration, filing, order,
qualification, authorization or similar rights granted or issued by or of any
Governmental Entity relating to the Business or the Purchased Assets.
 
“Permitted Liens” has the meaning set forth in Section 4.3.
 
“Person” means any individual, partnership, firm, corporation, association,
trust, limited liability company, unincorporated organization, Governmental
Entity or other entity.
 
“Prohibited Names and Marks” has the meaning set forth in Section 6.9(a).
 
“Proppant Business” means the stimulation products business of the Sellers
included within the Business and being acquired by the Buyer, as such Proppant
Business is conducted by the Buyer following the Closing.
 
“Purchase” means the acquisition by the Buyer of the Purchased Assets as
provided herein.
 
“Purchase Price” has the meaning set forth in Section 2.4.
 
 
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“Purchased Assets” has the meaning set forth in Section 2.1.
 
“Real Property” has the meaning set forth in Section 4.9(b).
 
“Release” has the meaning set forth in Section 4.5(j).
 
“Remedial Action” has the meaning set forth in Section 4.5(k).
 
“Restricted Party” has the meaning set forth in Section 6.3(c).
 
“Restricted Period” has the meaning set forth in Section 6.3(b).
 
“Retained Indemnity Escrow Amount” has the meaning set forth in Section 10.1(b).
 
“Retention Escrow Amount” means the sum of the Savage Retention Escrow Amount
and the Branch Retention Escrow Amount.
 
“Retention Escrow Fund” and “Retention Escrow Funds” have the respective
meanings set forth in Section 10.2(a).
 
“Retention Period” has the meaning set forth in Section 10.2(a).
 
“Savage” means Shawn Savage.
 
“Savage Employment Agreement” has the meaning set forth in Section 2.7(b)(ii).
 
“Savage Retention Escrow Agreement” means the escrow agreement, substantially in
the form of Exhibit D attached hereto, entered into on or prior to the Closing
by the Buyer, Savage and the Escrow Agent.
 
“Savage Retention Escrow Amount” means $1,300,000.
 
“Savage Retention Escrow Fund” has the meaning set forth in Section 10.2(a).
 
“Seller” has the meaning set forth in Preamble.
 
“Sellers Benefit Plan” means a Benefit Plan (a) that does or has covered or
provided compensation or any benefit to any current or former employee,
consultant, independent contractor, director, manager, agent, representative,
officer or other service provider of any Seller or any beneficiary of any of the
foregoing, (b) that is or was maintained by, contributed to, or required to be
contributed to by any of the Sellers or any ERISA Affiliate or (c) with respect
to which any of the Sellers has, whether directly or through any ERISA
Affiliate, any actual or contingent liability.
 
“Seller Damages” has the meaning set forth in Section 9.3(a).
 
“Seller Disclosure Letter” has the meaning set forth in Article IV.
 
“Seller Indemnitees” has the meaning set forth in Section 9.3(a).
 
 
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“Software” has the meaning set forth in the definition of Intellectual Property.
 
“Sublease Agreement” has the meaning set forth in Section 2.7(b)(xvii);
 
“Subsidiary” of a Person means any corporation or other entity (including a
limited liability company, partnership or other business association) in which
such Person, directly or indirectly, owns outstanding capital stock or other
voting securities having the power, under ordinary circumstances, to elect a
majority of the directors or similar members of the governing body of such
corporation or other entity, or otherwise to direct the management and policies
of such corporation or other entity.
 
“Tax” or “Taxes” has the meaning set forth in Section 6.4(d).
 
“Tax Return” means any return, declaration, report, claim for refund, property
rendition or information return or statement relating to Taxes, including any
schedule or attachment thereto and including any amendment thereof.
 
“Taxing Authority” has the meaning set forth in Section 6.4(d).
 
“Territory” has the meaning set forth in Section 6.3(b).
 
“Third-Party Claim” has the meaning set forth in Section 9.4.
 
“Trademarks” has the meaning set forth in the definition of Intellectual
Property.
 
“Transaction Documents” means this Agreement, the Conveyance Documents, Savage
Employment Agreement, Branch Employment Agreement, Savage Retention Escrow
Agreement, Branch Retention Escrow Agreement, Indemnity Escrow Agreement,
Assignment and Assumption of Leases, Mack Energy Agreement and any other
Contract among the parties that is contemplated by this Agreement.
 
“Transfer Taxes” has the meaning set forth in Section 6.4(b).
 
“Transferred Employee” has the meaning set forth in Section 6.8(a).
 
“Transition Services Agreement” has the meaning set forth in Section
2.7(b)(xvi).
 
“Treasury Regulations” means the regulations promulgated by the United States
Treasury Department under the Code.
 
“Uncollected Receivables Amount” has the meaning set forth in Section 6.6.
 
“Vehicles” has the meaning set forth in Section 2.1(c).
 
“WARN Act” has the meaning set forth in Section 4.11(i).
 
 
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1.2           Interpretations. Unless expressly provided for elsewhere in this
Agreement, this Agreement shall be interpreted in accordance with the following
provisions:
 
(a)           Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine, or neuter forms,
and the singular form of nouns, pronouns, and verbs shall include the plural and
vice versa.
 
(b)           If a word or phrase is defined, its other grammatical forms have a
corresponding meaning.
 
(c)           The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
 
(d)           All references in this Agreement to articles, sections, or
subdivisions thereof shall refer to the corresponding article, section or
subdivision thereof of this Agreement unless specific reference is made to such
articles, sections, or subdivisions of another document or instrument.
 
(e)           A reference to any agreement or document (including a reference to
this Agreement) is to the agreement or document as amended, varied,
supplemented, novated, or replaced, except to the extent prohibited by this
Agreement or that other agreement or document.
 
(f)            A reference to any party to this Agreement or another agreement
or document includes the party’s permitted successors and assigns.
 
(g)           A reference to legislation or to a provision of legislation
includes a modification or reenactment of it, a legislative provision
substituted for it, and a regulation or statutory instrument issued under it.
 
(h)           A reference to a writing includes a facsimile transmission of it.
 
(i)            The words “hereof,” “herein,” and “hereunder,” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and article,
section, subsection, schedule, and exhibit references are to this Agreement
unless otherwise specified.
 
(j)            The word “including,” “include,” “includes,” and all variations
thereof shall mean “including, without limitation.”
 
(k)           The Exhibits attached to this Agreement are incorporated herein by
reference and made a part of this Agreement.
 
(l)           The parties have participated jointly in the negotiation and
drafting of this Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
 
 
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(m)          The word “or” will have the inclusive meaning represented by the
phrase “and/or.”
 
(n)           “Shall” and “will” have equal force and effect.
 
(o)           Unless otherwise specified, all references to a specific time of
day in this Agreement shall be based upon Central Standard Time or Central
Daylight Saving Time, as applicable on the date in question in Houston, Texas.
 
(p)           References to “$” or to “dollars” shall mean the lawful currency
of the United States of America.
 
(q)           No action shall be required of the parties except on a Business
Day and in the event an action is required on a day which is not a Business Day,
such action shall be required to be performed on the next succeeding day that is
a Business Day.
 
(r)           All references to “day” or “days” shall mean calendar days unless
specified as a “Business Day.”
 
(s)           Time periods within or following which any payment is to be made
or act is to be done shall be calculated by excluding the day on which the time
period commences and including the day on which the time period ends and by
extending the period to the next Business Day following if the last day of the
time period is not a Business Day.
 
(t)           The phrase “Sellers’ knowledge,” “to the knowledge of the Sellers”
or any similar phrase shall mean (i) such facts and other information which as
of the date of this Agreement or as of the Closing Date are actually known to
the managers and officers of each of the Sellers and each of Rex Tippy, Savage
and Branch and (ii) the knowledge or awareness which such officers and
individuals would have obtained in the conduct of his business after making
reasonable inquiry (including by making inquiry of the senior management
employees of Sellers) with respect to the particular matter in question.
 
(u)           All materials or information posted in the electronic data room
maintained for the use and benefit of the Sellers and Members on or before
December 26, 2012, access to which has been afforded to representatives of
Buyer, shall have been deemed to have been “delivered” or “made available” to
Buyer, as such phrases are used herein.
 
 
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ARTICLE II
 
PURCHASE AND SALE
 
2.1           Purchased Assets. Upon the terms and subject to the conditions of
this Agreement, at the Closing, the Sellers are selling, conveying, assigning,
transferring and delivering to the Buyer, free and clear of all Liens other than
Permitted Liens, and the Buyer is purchasing, acquiring and accepting from the
Sellers, all of the following assets, properties and rights of every nature,
kind and description, wherever located, whether tangible or intangible
(including goodwill), whether real, personal or mixed, in each case,
constituting, owned, held or used in the operation of the Business including the
following (but excluding the Excluded Assets) (the “Purchased Assets”).  The
Purchased Assets include all of the Sellers’ right, title and interest in the
following assets of the Business:
 
(a)           all of the inventory of the Business as of the Closing Date, of
every kind and nature and wherever located, including finished goods, work in
progress, spare parts, raw materials, supplies (including consumables supplies
and fuel supplies), prepaid goods (whether or not in transit as of the Closing
Date) that are or are intended to be used by the Business and packaging and
shipping materials (collectively, the “Inventory”);
 
(b)           all of the equipment (including field equipment, office equipment,
telecommunications equipment, data processing equipment), furniture, fixtures,
furnishings, machinery, tools, spare and repair parts, computers, computer
hardware, computer software, computer components and peripherals, and all other
items of tangible personal property of the Sellers as of the Closing Date,
including the items described in Schedule 2.1(b)  (collectively, the
“Equipment”);
 
(c)           all of the vehicles owned, leased, held or used in connection with
the Business (collectively, the “Vehicles”), which are set forth on
Schedule 2.1(c) together with their respective Vehicle Identification Number
(VIN);
 
(d)           (i) all of the trade accounts receivable and other rights to
payment from customers of the Sellers which have accrued as of the Closing Date,
and the full benefit of all security for such accounts or rights to payments,
including all trade accounts receivable representing amounts receivable in
respect of goods shipped, products sold or services rendered to customers of
Sellers, (ii) all other accounts or notes receivable of Sellers and the full
benefit of all security for such accounts or notes and (iii) any claim, remedy
or other right related to any of the foregoing (the “Accounts Receivable”);
 
(e)           all of the Owned Real Property described on Schedule 2.1(e), in
each case along with and subject to the applicable easements, privileges, rights
and appurtenances and rights-of-way set forth in the Owners’ Policies;
 
(f)           [Intentionally left blank]
 
(g)           all of the Leases listed on Schedule 2.1(g) (the “Assigned
Leases”), and all leasehold interests of the Sellers in the Leased Real Property
thereunder;
 
(h)           the Contracts (including the Capital Lease) listed on
Schedule 2.1(h) (together with the Assigned Leases, the “Assigned Contracts”);
 
(i)           all of the Books and Records;
 
(j)           all Intellectual Property used in the Business including that
listed on Schedule 2.1(j) and (i) all goodwill associated therewith, (ii) all
licenses and sublicenses granted to and obtained by Sellers with respect
thereto, (iii) all income, royalties, damages, remedies and payments due or
payable from and after the Closing, including damages, remedies and payments for
past, present or future infringements or misappropriations thereof and the right
to sue and recover for past, present or future infringements or
misappropriations thereof, and (iv) all corresponding rights, including rights
to protection of interests therein, that now or hereafter may be secured
throughout the world under all applicable Law (collectively, the “IP Assets”);
 
 
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(k)           to the extent transferable or assignable, all of the Permits used
in the Business, including the Permits listed on Schedule 2.1(k);
 
(l)           Sellers’ interest, if any, in all telephone numbers and the
facsimile numbers of the Sellers owned, held or used in the Business that are
set forth on Schedule 2.1(l); provided that any mobile telephone numbers
associated with an Employee that is not hired by the Buyer shall be retained by
the Sellers;
 
(m)           all claims, deposits, credits, prepayments (including prepaid
expenses, rentals or premiums), security, refunds, causes of action, rights of
recovery, rights of set-off, rights of recoupment and charges (including any
such item relating to the payment of Taxes), relating to the Business, the
Purchased Assets or the Assumed Liabilities;
 
(n)           the benefit of and all of the Sellers’ rights under any
warranties, indemnities, covenants (including confidentiality, non-competition,
non-solicitation and other restrictive covenants) and all similar rights against
third parties relating to the Business or the Purchased Assets;
 
(o)           all goodwill and the going concern value of the Business;
 
(p)           the names “Alliance Drilling Fluids,” “Xtreme Specialty Products,”
and “Prop-Tech Services” and all translations, transliterations, adaptations,
combinations and derivations thereof;
 
(q)           the bank accounts, deposit accounts, lock boxes and other accounts
and post office boxes of the Sellers listed on Schedule 2.1(q), including all
cash on deposit in such accounts as of the Effective Time; provided that the
Excluded Account and any cash on deposit therein shall be specifically excluded
and shall constitute an Excluded Asset; and
 
(r)           all other property and assets, real or personal, tangible or
intangible, owned, used or held for use in or relating to the Business.
 
2.2           Excluded Assets.  The following assets, properties and rights of
Sellers are not part of the Purchase, are excluded from the Purchased Assets and
shall remain the assets, properties and rights of the Sellers after the Closing
(the “Excluded Assets”):
 
(a)           all Contracts of the Sellers, other than the Assigned Contracts;
 
(b)           the corporate seal and any minute books, stock books and other
records relating to the corporate organization of the Sellers or its Affiliates;
 
 
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(c)           subject to Section 2.1(m), Section 2.1(q) and Section 2.5(c), all
cash, cash equivalents, short-term investments, bank deposits, investment
accounts, corporate credit cards and similar items of the Sellers;
 
(d)           marketable securities;
 
(e)           all insurance policies of the Sellers, rights thereunder and
proceeds therefrom, whether or not related to the Business;
 
(f)           all personnel and other records that any Seller is required by
applicable Law to retain in its possession and any other information described
in clauses (i) and (ii) of Section 6.1(b);
 
(g)           all rights to any refunds (whether by payment, offset, credit or
otherwise) of Taxes for which any of the Sellers is liable under Section 6.4 or
that were paid or prepaid by the Sellers with respect to any period or which
Taxes are the subject of indemnification by the Sellers under this Agreement;
 
(h)           subject to Section 2.1(d), any rights or claims of the Sellers
against or with respect to any of its Affiliates and any other benefit or amount
owed by any such Affiliate to any of the Sellers;
 
(i)           rights of the Sellers in connection with any assets of Sellers
Benefit Plans;
 
(j)           the EOG Mud Allowance;
 
(k)           rights under this Agreement and other agreements and documents
entered into by any of the Sellers in connection with the Purchase; and
 
(l)           the bank account listed on Schedule 2.2(l) (the “Excluded
Account”) and all cash included therein;
 
(m)           the vehicles listed on Schedule 2.2(m); and
 
(n)           all items listed on Schedule 2.2(n).
 
2.3           Assumption of Liabilities; Excluded Liabilities.
 
(a)           Upon the terms and subject to the conditions of this Agreement and
as part of the consideration for the Purchased Assets, at the Closing, the Buyer
shall assume and agree to pay, perform, discharge and satisfy, as and when due,
only the following liabilities and obligations of the Sellers (the “Assumed
Liabilities”), and no other liabilities or obligations:
 
(i)           any liabilities and obligations resulting from or arising out of
the Purchased Assets (other than the Assigned Contracts), but only to the extent
that such liabilities and obligations, whether accrued or unaccrued, absolute or
contingent, known or unknown or otherwise, (A) arise or accrue after the
Effective Time and (B) do not relate to or arise as a result of any failure to
perform, improper performance, breach of warranty or other breach, default or
violation by the Sellers on or prior to the Effective Time;
 
 
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(ii)           any liabilities and obligations resulting from or arising out of
the Assigned Contracts but only to the extent such liabilities and obligations,
whether accrued or unaccrued, absolute or contingent, known or unknown or
otherwise (A) accrue or are to be performed after the Effective Time, and (B) do
not relate to or arise as a result of any failure to perform, improper
performance, breach of warranty or other breach, default or violation by the
Sellers on or prior to the Effective Time;
 
(iii)           subject to Section 6.8, any liabilities and obligations in
respect of claims by any Transferred Employee, but only to the extent such
liabilities and obligations arise after the Effective Time;
 
(iv)           the trade and other accounts payable by the Sellers as of the
Effective Time that are (A) unpaid and not delinquent as of the Closing and
(B) included in the determination of the Estimated Net Working Capital, as
adjusted by the determination of the Closing Date Net Working Capital;
 
(v)           any liability or obligation with respect to customer deposits to
the extent included in the Purchased Assets and included in the determination of
the Estimated Net Working Capital, as adjusted by the determination of the
Closing Date Net Working Capital; and
 
(vi)           any liability or obligation with respect to Taxes set forth in
Texas Tax Code Chapter 152 resulting from the sale and transfer by the Sellers
to the Buyer of the Vehicles constituting Purchased Assets.
 
(b)           Notwithstanding any provision in this Agreement or any other
document or instrument to the contrary, it is expressly agreed that the Buyer
shall not assume, and shall have no liability or obligation (by execution of
this Agreement or any Transaction Document, by operation of Law or otherwise) to
pay, perform, discharge or satisfy, any liabilities and obligations of the
Sellers or any of their Affiliates of any nature, kind or description
whatsoever, whether accrued or unaccrued, absolute or contingent, known or
unknown, asserted or unasserted, matured or unmatured or otherwise, and whether
in existence as of the Closing Date or arising thereafter, other than the
Assumed Liabilities (collectively, the “Excluded Liabilities”), it being
expressly acknowledged and agreed that the Excluded Liabilities shall be
retained, paid, performed, discharged and satisfied solely by the Sellers and
their Affiliates. Without limiting the foregoing, the Excluded Liabilities shall
include the following:
 
(i)           any liabilities and obligations resulting from or arising out of
the Purchased Assets or the Business to the extent that such liabilities or
obligations, whether accrued or unaccrued, absolute or contingent, known or
unknown or otherwise (A) accrue or arise from any events, facts or circumstances
existing or occurring, on or prior to the Effective Time or (B) relate to any
failure to perform, improper performance, breach of warranty or other breach,
default or violation by any of the Sellers on or prior to the Effective Time;
 
 
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(ii)           any liabilities and obligations of the Sellers and any of their
Affiliates arising out of or relating to or in respect of (A) claims by or
benefits to any Employee, or any individual claiming to be or deemed to be an
employee of any of the Sellers (including liabilities and obligations relating
to payroll, vacation, sick leave, workers’ compensation, unemployment benefits,
healthcare benefits or other benefits), (B) any Sellers Benefit Plan, and
(C) the failure of any of the Sellers, through any act or omission to comply
with the requirements of COBRA with respect to any “qualified beneficiary” (as
defined in COBRA), including any Tax liability or obligation relating thereto;
 
(iii)           any liabilities and obligations of the Sellers and any of their
Affiliates under any Contract of the Sellers that is not an Assigned Contract;
 
(iv)           any liabilities and obligations of any of the Sellers and any of
their Affiliates resulting from or arising out of any of the Excluded Assets,
including the EOG Mud Allowance;
 
(v)           any liabilities and obligations of any of the Sellers arising out
of or resulting from any and all Indebtedness (other than the obligations of the
capitalized leases included in the Assigned Contracts) of any of the Sellers or
any of their Affiliates or relating to the Business or any of the Purchased
Assets;
 
(vi)           any liabilities and obligations of any of the Sellers owed to any
of their Affiliates other than the accounts payable as expressly provided in
Section 2.3(a)(iv) above;
 
(vii)           any liability or obligation for any and all Taxes (A) of the
Sellers for any period that ends on or before or is subsequent to the Closing
Date, provided that the Taxes described in this clause (A) shall not include any
Taxes attributable to the Purchased Assets or the Business for any period
subsequent to the Closing Date, (B) of, pertaining to or attributable to the
Business or the Purchased Assets for any period or portion thereof that ends on
or before the Closing Date (including any and all Taxes described in the
immediately preceding clause (A) for which liability is or may be sought to be
imposed on the Buyer under any successor liability, transferee liability or
similar provision of any applicable federal, foreign, state or local Law,
including, but not limited to, Treasury Regulations Section 1.1502-6), and (C)
any and all claims incurred by the Buyer or any Affiliates of the Buyer
attributable to the Taxes described in the immediately preceding clause (A);
 
(viii)           any liability or obligation, including customer warranty
claims, arising out of or relating to products sold or services provided by the
Sellers on or prior to the Closing Date;
 
 
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(ix)           any liability or obligation to pay for any goods, products or
services shipped, delivered or provided to the Sellers and any trade or other
accounts payable by the Sellers except as expressly provided in Section
2.3(a)(iv) above;
 
(x)           any liability or obligation arising out of or relating to any
violation of, or noncompliance with, any applicable Law (including any
Environmental Law) or Order either (A) by the Sellers or any of their Affiliates
or (B) arising out of or relating to the Business or the Purchased Assets, to
the extent occurring or accruing on or prior to the Closing Date;
 
(xi)           any liability or obligation arising out or relating to (A) any
environmental conditions on the Real Property existing on or prior to the
Closing Date; (B) the treatment, storage, transportation, disposal or
arrangement for disposal of any rubbish, garbage, solid waste, paper or
non-Contaminant or Contaminant by or on behalf of the Sellers and occurring on
or prior to the Closing Date (without regard to whether any of the foregoing
then was in violation of any applicable Environmental Law); or (C) any remedial
obligation under any applicable Environmental Law attributable to the Business
or the Purchased Assets on or prior to the Closing Date;
 
(xii)           any liability or obligation of, relating to or attributable to
the Sellers or any of their Affiliates, the Business or the Purchased Assets,
which liabilities or obligations arise out of or relate to any Legal Proceeding
that is (A) pending as of the Closing Date (whether or not described in the
Seller Disclosure Letter) or (B) commenced on or after the Closing Date to the
extent arising out of or relating to any fact, circumstance, occurrence or event
happening on or prior to the Closing Date;
 
(xiii)           any liability or obligation of the Sellers or any of their
Affiliates to indemnify any Person by reason of the fact that such Person was a
director, manager, partner, officer, employee, agent, representative or
Affiliate of the Sellers or any of their Affiliates or was serving at the
request of any of the Sellers or any of their Affiliates as a trustee, director,
manager, partner, officer, employee, agent or representative of any other
Person; and
 
(xiv)           any liability or obligation of the Sellers or any of their
Affiliates arising out of the execution and performance of this Agreement and/or
any of the Transaction Documents.
 
2.4           Purchase Price.  The consideration to be paid by the Buyer to
Sellers for the Purchased Assets shall consist of (a) $46,950,000 in cash,
subject to adjustment as provided in Section 2.5 (the “Base Purchase Price”),
(b) the assumption of the Assumed Liabilities, and (c) any Earnout Consideration
payable pursuant to Section 2.9 (subject to any further adjustments as required
by this Agreement, the “Purchase Price”).
 
 
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2.5           Net Working Capital Price Adjustment.
 
(a)           For the purpose of determining the Purchase Price and the Base
Purchase Price payable at Closing, prior to Closing Sellers shall have prepared
and delivered to Buyer 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 2.5.  To the extent
the Estimated Net Working Capital is greater than $12,950,000 (such difference
being herein referred to as the “Estimated Net Working Capital Excess Amount”),
the Purchase Price, and the Base Purchase Price payable at Closing, shall be
increased by the amount of the Estimated Net Working Capital Excess Amount.  To
the extent the Estimated Net Working Capital is less than $12,950,000 (such
difference being herein referred to as the “Estimated Net Working Capital
Deficiency Amount”), the Purchase Price, and the Base Purchase Price payable at
Closing, shall be reduced by the amount of the Estimated Net Working Capital
Deficiency Amount.
 
(b)           Within ninety (90) days of the Closing Date, the Buyer shall cause
to be prepared and delivered to Sellers 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, Sellers shall have sixty
(60) calendar days following the receipt of the Final Closing Statement to
review the components and calculation of the Closing Date Net Working
Capital.  During such sixty (60) day period, Buyer shall provide Sellers and
their legal and accounting advisors with reasonable access, during normal
business hours to all Books and Records of the Business used in the calculation
of the Closing Date New Working Capital.  The failure of Sellers to object to
the Final Closing Statement within such sixty (60) calendar day period shall be
deemed to be an acceptance by Sellers of the Final Working Capital
Adjustment.  If Buyer and Sellers agree on all matters in the Final Closing
Statement and the calculation of the Closing Date Net Working Capital, or if
Sellers otherwise fail 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
added to and increase the Purchase Price and shall be paid by Buyer to Sellers
within three (3) Business Days of Sellers’ 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 Sellers; 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 Sellers shall pay to Buyer,
within three (3) Business Days of Sellers’ 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 Buyer.
 
 
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In the event Sellers object to the Final Closing Statement as provided in
Section 2.5(b), and the Sellers and Buyer are unable to agree on the
calculations set forth therein, such dispute between Sellers and Buyer with
respect to the calculation of the Closing Date Net Working Capital and the Final
Working Capital Adjustment shall be resolved by a nationally recognized
accounting firm reasonably acceptable to Sellers and Buyer who shall not be
Deloitte & Touche LLP or Sellers’ accounting firm (the “Accounting Arbitrator”),
whose determination shall be final and binding on Buyer and Sellers absent fraud
or manifest error.  Buyer and the Sellers each shall provide the Accounting
Arbitrator with their respective determinations of the Closing Date Net Working
Capital and Final Working Capital Adjustment.  The Accounting Arbitrator shall
make an independent determination of Closing Date Net Working Capital and Final
Working Capital Adjustment, which determination shall be based on whether the
Closing Date Net Working Capital and Final Working Capital Adjustment has been
calculated in accordance with the standards set forth in this Agreement, and the
Accounting Arbitrator is not to make any other determination.  The Accounting
Arbitrator shall make its determination based solely on presentations and
supporting material provided by Buyer and the Sellers and not pursuant to any
independent review.  In no event shall the Accounting Arbitrator’s determination
be outside of the range of amounts claimed by the respective parties with
respect to those items in dispute.  Any required payments by Buyer to Sellers,
on the one hand, or by Sellers to the Buyer, on the other hand, based on such
determination shall be made within three (3) Business Days of the final
resolution of such dispute by the parties, or the Accounting Arbitrator, as
applicable.  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 Buyer and Sellers 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 Sellers 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 Sellers as of the Effective Time comprised of
(i) Accounts Receivable, (net of allowances for doubtful accounts);
(ii) unbilled revenues; (iii) the current portion of any notes or other
receivables; (iv) inventories; (v) prepaid product costs and deposits;
(vi) prepaid expenses assigned to Buyer; and (vii) any cash on deposit as of the
Effective Time in any bank accounts, deposit accounts, lock boxes or other
accounts included in the Purchased Assets pursuant to Section 2.1(q).  “Current
Liabilities” shall mean, subject to the adjustments set forth herein, the
current liabilities of the Sellers as of the Effective Time that are included in
the Assumed Liabilities comprised of (i) accounts payable; (ii) accrued
liabilities; and (iii) customer deposits.  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 Most Recent Annual Financial
Statements.  Notwithstanding the foregoing, for purposes of calculating the Net
Working Capital, the Current Assets and the Current Liabilities shall not
include:
 
 
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(i)           to the extent not incurred in the Ordinary Course of Business,
intercompany receivables and payables between or among any of the Sellers, the
Members and their Affiliates;
 
(ii)           any bank or funded Indebtedness including, without limitation,
(A) any short-term debt and the current portion of any long-term debt of the
Sellers, and (B) any Indebtedness owed or owing by the Sellers under the Capital
Lease assumed by Buyer; and
 
(iii)           any current assets of the Sellers not included in the Purchased
Assets.
 
(d)           The provisions of this Section 2.5 shall not be subject to the
provisions of Article IX  hereof or any limitations of liability set forth
therein.
 
2.6           Payment of Base Purchase Price; Escrow. Subject to the terms and
conditions hereof, at the Closing, the Buyer shall pay the Base Purchase Price,
as adjusted pursuant to Section 2.5, as follows:
 
(i)           the Buyer shall pay the Indemnity Escrow Amount to the Escrow
Agent;
 
(ii)           the Buyer shall pay an amount equal to the Base Purchase Price,
as adjusted pursuant to Section 2.5, minus the sum of the Indemnity Escrow
Amount to or to the order of the Sellers;
 
in each such case, by wire transfer of immediately available funds to an account
or accounts designated in writing to the Buyer.
 
In addition, subject to the terms and conditions hereof, at the Closing, the
Buyer will pay the Retention Escrow Amount to the Escrow Agent by wire transfer
of immediately available funds to the account designated in writing to the
Buyer.
 
2.7           Time and Place of Closing; Deliveries.
 
(a)           The closing of the Purchase (the “Closing”) will take place
remotely via electronic exchange of documents and signatures, at 9:00 a.m. on
December 31, 2012, or at such other date, place or time as the parties may
agree.  The date on which the Closing occurs and the transactions contemplated
hereby are consummated and become effective is referred to herein as the
“Closing Date.”  The parties intend that the Closing shall be deemed effective
at 11:59 p.m. on the Closing Date (the “Effective Time”).
 
 
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(b)           Upon the terms and subject to the conditions of this Agreement, at
the Closing, the Sellers and Members, as applicable, will deliver, or cause to
be delivered, to the Buyer:
 
(i)           a bill of sale, deeds and assignments providing for the
conveyance, assignment and transfer of the Purchased Assets by the Sellers to
the Buyer, subject to the terms of this Agreement, duly executed by the Sellers,
including a Bill of Sale, Assignment and Assumption Agreement substantially in
the form of Exhibit A attached hereto and a special warranty deed substantially
in the form of Exhibit B attached hereto (collectively, the “Conveyance
Documents”);
 
(ii)           a counterpart signature to the Employment Agreement between
Savage and Buyer, substantially in the form attached hereto as Exhibit C (the
“Savage Employment Agreement”), duly executed by Savage;
 
(iii)           a counterpart signature to the Savage Retention Escrow Agreement
duly executed by Savage;
 
(iv)           a counterpart signature to the Employment Agreement between
Branch and Buyer, substantially in the form attached hereto as Exhibit E (the
“Branch Employment Agreement”), duly executed by Branch;
 
(v)           a counterpart signature to the Branch Retention Escrow Agreement
duly executed by Branch;
 
(vi)           a counterpart signature to the Indemnity Escrow Agreement, duly
executed by the Sellers and Members;
 
(vii)           payoff letters or similar releases or confirmations from all
third parties, containing payoff amounts, per diems and wire instructions, that
confirm the satisfaction, release and termination of Sellers’ Indebtedness to
such third parties, and the release of Liens securing the Sellers’ Indebtedness
to such third parties upon payment of the Indebtedness described therein upon
the Closing, each such payoff letter to be in a form reasonably acceptable to
Buyer;
 
(viii)           with respect to each Real Property Lease, an Agreement of
Assignment, Assumption and Consent, substantially in the form attached hereto as
Exhibit H (each an “Assignment and Assumption of Lease”), duly executed by the
relevant Seller and lessor of the respective Leased Real Property;
 
(ix)           a non-foreign person affidavit, dated as of the Closing Date, in
compliance with Treasury Regulations Section 1.445-2(b)(2), stating that
Alliance is not a “foreign person” as defined in Section 1445 of the Code;
 
(x)           a counterpart signature to the Agreement between Mack Energy
Corporation and Buyer, substantially in the form attached hereto as Exhibit I
(the “Mack Energy Agreement”), duly executed by Mack Energy Corporation;
 
 
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(xi)           a certificate, dated the Closing Date and duly executed by the
Secretary of Alliance, certifying (A) that a true, complete and correct copy of
Alliance’s organizational documents, as amended and in effect on the Closing
Date, is attached thereto, (B) that a true, complete and correct copy of the
resolutions of the managers and members of Alliance authorizing the execution,
delivery and performance by Alliance of this Agreement and the Transaction
Documents to which Alliance is a party, and the consummation of the transactions
contemplated hereby and thereby, is attached thereto, and that such resolutions
have not been amended, modified or rescinded and remain in full force and effect
on the Closing Date, and (C) the names and signatures of the officers of
Alliance authorized to execute this Agreement and the Transaction Documents to
which Alliance is a party;
 
(xii)           a certificate, dated the Closing Date and duly executed by the
Secretary of Xtreme, certifying (A) that a true, complete and correct copy of
Xtreme’s organizational documents, as amended and in effect on the Closing Date,
is attached thereto, (B) that a true, complete and correct copy of the
resolutions of the sole member of Xtreme authorizing the execution, delivery and
performance by Xtreme of this Agreement and the Transaction Documents to which
Xtreme is a party, and the consummation of the transactions contemplated hereby
and thereby, is attached thereto, and that such resolutions have not been
amended, modified or rescinded and remain in full force and effect on the
Closing Date, and (C) the names and signatures of the officers of Xtreme
authorized to execute this Agreement and the Transaction Documents to which
Xtreme is a party;
 
(xiii)           a certificate, dated the Closing Date and duly executed by the
Secretary of Prop-Tech, certifying (A) that a true, complete and correct copy of
Prop-Tech’s organizational documents, as amended and in effect on the Closing
Date, is attached thereto, (B) that a true, complete and correct copy of the
resolutions of the sole member of Prop-Tech authorizing the execution, delivery
and performance by Prop-Tech of this Agreement and the Transaction Documents to
which Prop-Tech is a party, and the consummation of the transactions
contemplated hereby and thereby, is attached thereto, and that such resolutions
have not been amended, modified or rescinded and remain in full force and effect
on the Closing Date, and (C) the names and signatures of the officers of
Prop-Tech authorized to execute this Agreement and the Transaction Documents to
which Prop-Tech is a party;
 
(xiv)           a certificate of good standing of each of the Sellers issued by
the Comptroller of the State of Texas, as of a date within ten (10) Business
Days of the Closing Date;
 
(xv)           a certificate, dated the Closing Date and duly signed by an
officer of each of the Sellers, certifying that the conditions set forth in
Sections 7.1 and 7.3 have been satisfied or waived, as the case may be;
 
 
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(xvi)           a Transition Services Agreement by and among the Sellers, Mack
Energy Corporation and the Buyer, substantially in the form attached hereto as
Exhibit J (the “Transition Services Agreement”), duly executed by the Sellers
and Mack Energy Corporation;
 
(xvii)           a Sublease Agreement between Mack Energy Corporation and Buyer,
substantially in the form attached hereto as Exhibit K (the “Sublease
Agreement”), duly executed by Mack Energy Corporation; and
 
(xviii)           the other documents and instruments required to be delivered
by the Sellers or Members at Closing pursuant to this Agreement, and all such
other agreements, certificates, documents and other instruments as the Buyer
reasonably requests in writing and as are reasonably necessary to consummate the
transactions contemplated by this Agreement and/or any of the Transaction
Documents, in each case, in form and substance reasonably satisfactory to the
Buyer and its counsel.
 
(c)           Upon the terms and conditions of this Agreement, at the Closing,
the Buyer will, in addition to paying the Base Purchase Price and making such
other payments in accordance with Section 2.6, deliver to the Sellers:
 
(i)          the Conveyance Documents, the Savage Employment Agreement, the
Branch Employment Agreement, the Savage Retention Escrow Agreement, the Branch
Retention Escrow Agreement, the Indemnity Escrow Agreement, the Assignment and
Assumption of Lease with respect to each Real Property Lease, and the Mack
Energy Agreement, the Transition Services Agreement and the Sublease Agreement,
duly executed by Buyer;
 
(ii)         a certificate, dated as of the Closing Date and duly executed by
the Secretary or Assistant Secretary of the Buyer, certifying (A) that a true,
complete and correct copy the resolutions of the Board of Managers of the Buyer
authorizing the execution, delivery and performance by the Buyer of this
Agreement and the Transaction Documents to which the Buyer is a party, and the
consummation of the transactions contemplated hereby and thereby, is attached
thereto, and that such resolutions have not been amended, modified or rescinded
and remain in full force and effect on the Closing Date, and (B) the names and
signatures of the officer(s) of the Buyer authorized to execute this Agreement
and the Transaction Documents to which the Buyer is a party;
 
(iii)        a certificate, dated as of the Closing Date and duly executed by
the Secretary or Assistant Secretary of Newpark, certifying (A) that a true,
complete and correct copy the resolutions of the Board of Directors of Newpark
authorizing the execution, delivery and performance by Newpark of this Agreement
and the Transaction Documents to which Newpark is a party, and the consummation
of the transactions contemplated hereby and thereby, is attached thereto, and
that such resolutions have not been amended, modified or rescinded and remain in
full force and effect on the Closing Date, and (B) the names and signatures of
the officer(s) of Newpark authorized to execute this Agreement and the
Transaction Documents to which Newpark is a party;
 
 
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(iv)           a certificate of good standing of the Buyer issued by the
Comptroller of State of Texas as of a date within ten (10) Business Days of the
Closing Date;
 
(v)           a certificate, dated the Closing Date and duly signed by an
officer of the Buyer, certifying that the conditions set forth in Sections 7.1
and 7.2 have been satisfied;
 
(vi)           the other documents and instruments required to be delivered by
the Buyer at Closing pursuant to this Agreement, and all such other agreements,
certificates, documents and other instruments as the Sellers reasonably requests
in writing and as are reasonably necessary to consummate the transactions
contemplated by this Agreement and/or any of the Transaction Documents, in each
case, in form and substance reasonably satisfactory to the Sellers and their
counsel.
 
2.8           Allocation of Purchase Price.  The Buyer and the Sellers will
cooperate in good faith and use commercially reasonable efforts to agree, on or
before the 90th day following the Closing, upon an allocation of the Purchase
Price (including the amount of any Assumed Liabilities recognized as part of the
consideration for Tax purposes), among each class of the Purchased Assets, in
compliance with the principles of Code Section 1060 and applicable Treasury
Regulations thereunder.  If the Sellers and the Buyer agree to such allocation,
the Sellers and the Buyer agree to timely and properly prepare, execute and file
with the Internal Revenue Service pursuant to Code Section 1060 an IRS Form 8594
or any successor form thereto regarding the allocation of the Purchase Price in
accordance with such agreed allocation ; provided, however, that (i) the Buyer’s
cost for the Purchased Assets may differ from the total amount allocated
hereunder to reflect the inclusion in the total cost of items (for example,
capitalized acquisition costs) not included in the amount so allocated and (ii)
the amount realized by the Sellers may differ from the total amount allocated
hereunder to reflect transaction costs that reduce the amount realized for
federal income Tax purposes.  Except as required pursuant to applicable Law,
none of the parties, directly or indirectly, through a Subsidiary or Affiliate
or otherwise, will take a position on any Tax Return or in any audit or
examination by, or any judicial proceeding before, any Taxing Authority that is
in any way inconsistent with such agreed allocation; provided, however, that
none of the Sellers, the Buyer or any of their respective Affiliates shall be
obligated to litigate any challenge to such allocation of the Purchase Price by
any Governmental Authority.  If the Sellers and Buyer are unable to agree on an
allocation of the Purchase Price within ninety (90) days following the Closing,
the Buyer and the Sellers may file their respective Tax Returns allocating the
Purchase Price in the manner each such party believes appropriate, provided such
allocation is reasonable and in accordance with applicable Law.  The parties
will promptly inform one another of any challenge by any Taxing Authority to any
allocation made pursuant to this Section 2.8 and agree to consult and keep one
another reasonably informed with respect to the status of, and any discussion,
proposal or submission with respect to, such challenge.
 
 
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2.9           Earnout.  Buyer shall pay to Sellers as additional consideration
for the Purchased Assets and as an adjustment to the Purchase Price, a sum of up
to $4,300,000 subject to the following terms and conditions:
 
(a)           Earnout Statement.  Within ninety (90) days following the last day
of each Annual Earnout Period, Buyer shall deliver a written statement (such
statement being referred to herein as the “Annual Earnout Statement”) to
Alliance which shall set forth (i) the Gross Margin for the Annual Earnout
Period for the Proppant Business and (ii) the Annual Earnout Amount payable in
connection with such Annual Earnout Period.
 
(b)           Earnout Amount.  The amount payable by the Buyer to the Sellers
(the “Annual Earnout Amount”) for the first Annual Earnout Period shall be an
amount equal to the Gross Margin for such Annual Earnout Period multiplied by
forty-five percent (45%); provided, that in no event will the Annual Earnout
Amount for the first Annual Earnout Period exceed an amount equal to
$3,900,000.  The Annual Earnout Amount for the second Annual Earnout Period
shall be an amount equal to the Gross Margin for such Annual Earnout Period
multiplied by forty-five percent (45%); provided, that in no event will the
Annual Earnout Amount for the second Annual Earnout Period exceed an amount
equal to (x) $4,300,000 less (y) the Annual Earnout Amount for the first Annual
Earnout Period multiplied by one hundred ten percent (110%).  In no event shall
the aggregate amount of the Annual Earnout Amounts for the first and second
Annual Earnout Periods exceed $4,300,000.
 
(c)           Objections.  On or prior to the sixtieth (60th) calendar day
following Buyer’s delivery of the Annual Earnout Statement, Alliance may give
Buyer a written notice stating in reasonable detail the Sellers’ objections (an
“Earnout Objection Notice”) to the calculation of the Gross Margin and Annual
Earnout Amount as set forth on such Annual Earnout Statement.  During such sixty
(60) calendar day period, Buyer shall provide the Sellers and their independent
accountants and other authorized representatives with access, at reasonable
times and upon reasonable notice, to the Buyer’s books and records relating to
the Proppant Business and its personnel and accountants.  Any Earnout Objection
Notice shall specify in reasonable detail the dollar amount of any objection and
the reasonable basis therefor.  Any determination set forth on the Annual
Earnout Statement to which the Sellers do not specifically object in the Earnout
Objection Notice shall be deemed acceptable and shall be final and binding upon
the parties upon delivery of the Earnout Objection Notice.  If Alliance does not
give Buyer an Earnout Objection Notice within such sixty (60) day period, then
the Annual Earnout Statement will be conclusive and binding upon the parties.
 
 
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(d)           Objection Resolution.  Following Buyer’s receipt of any Earnout
Objection Notice, the Sellers and Buyer shall attempt to negotiate in good faith
to resolve such dispute.  In the event that the Sellers and Buyer fail to agree
on any of the Sellers’ proposed adjustments set forth in the Earnout Objection
Notice within sixty (60) days after Buyer receives the Earnout Objection Notice,
the Sellers and Buyer agree that an Accounting Arbitrator shall make the final,
binding determination, absent fraud or manifest error, regarding the proposed
adjustments set forth in the Earnout Objection Notice that are not resolved by
the Sellers and Buyer (the “Earnout Disputed Items”).  Buyer and the Sellers
each shall provide the Accounting Arbitrator with their respective
determinations of the Earnout Disputed Items.  The Accounting Arbitrator shall
make an independent determination on the Earnout Disputed Items and the
resultant Gross Margin and Annual Earnout Amount that shall be final and binding
on the Sellers and Buyer.  The determination of the Earnout Disputed Items by
the Accounting Arbitrator shall be based on whether such Earnout Disputed Items
have been calculated in accordance with the standards set forth in this
Agreement, and the Accounting Arbitrator is not to make any other
determination.  The Accounting Arbitrator shall make its determination based
solely on presentations and supporting material provided by Buyer and the
Sellers and not pursuant to any independent review.  In no event shall the
Accounting Arbitrator’s determination be outside of the range of amounts claimed
by the respective parties with respect to those items in dispute.  The fees,
costs and expenses of the Accounting Arbitrator shall be paid by the party whose
proposed Gross Margin is farthest from the final Gross Margin as determined by
the Accounting Arbitrator.
 
(e)           On or before the fifth (5th) Business Day following the date on
which the calculation of the Gross Margin and Annual Earnout Amount for a
particular Annual Earnout Period becomes final, Buyer shall pay to an account
designated by the Sellers an amount (if any), in immediately available funds,
equal to the applicable Annual Earnout Amount as finally determined pursuant to
the provisions of this Section 2.9, which amount will be paid pursuant to wire
instructions delivered to Buyer by Alliance.
 
(f)           All payments required pursuant to this Section 2.9 shall be deemed
to be adjustments for Tax purposes to the aggregate Purchase Price paid by Buyer
pursuant to this Agreement, except as otherwise required by applicable Law.
 
(g)           From the Closing Date until payment of the final Annual Earnout
Amount, unless otherwise agreed to by the Sellers, Buyer agrees to:
 
(i)           continue to operate the Proppant Business on a commercially
reasonable basis;
 
(ii)           maintain separate books and records for the Proppant Business as
necessary to calculate the Gross Margin and Annual Earnout Amounts as required
by this Section 2.9, prepare such books and records in accordance with GAAP, and
permit Sellers to inspect such books and records upon reasonable advance notice,
and not more frequently than once every six (6) months; and
 
(iii)           not cause or permit the sale of any products or services
currently sold or provided by the Proppant Business to be diverted to, made or
provided by, Newpark or any of its Affiliates (other than Buyer).
 
2.10           Condition to Transfer of Contracts; Ongoing Projects.
 
(a)           Notwithstanding anything herein to the contrary and assuming Buyer
waives any condition contained herein that such Consent for assignment be
obtained prior to Closing, the parties acknowledge and agree that at the
Closing, the Sellers are not assigning to the Buyer any Contract otherwise
constituting a Purchased Asset which by its terms requires the Consent of any
other party in order to assign such Contract unless such Consent has been
obtained on or prior to the Closing (a “Non-Assigned Contract”).
 
 
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(b)           Each ongoing or pending project being performed by the Business
pursuant to a Non-Assigned Contract as of the Closing Date is referred to
individually as an “Ongoing Project” and collectively as the “Ongoing
Projects.”  Schedule 2.10 identifies as of the date of this Agreement (i) each
Ongoing Project that the Sellers expect to be ongoing at the Closing Date and
(ii) the respective customer relating to each such Ongoing Project.
 
(c)           The Sellers’ rights relating to the Ongoing Projects and to the
Non-Assigned Contracts are collectively referred to as the “Contract Rights.”
 
(d)           From and after the Effective Time:
 
(i)           The Sellers shall hold each such Non-Assigned Contract for the
exclusive benefit of the Buyer;
 
(ii)            At the request and expense and under the direction of the Buyer,
acting reasonably, the Sellers shall use commercially reasonable efforts to
cause all things to be done that the Buyer, acting reasonably, considers
necessary or desirable to perform the obligations of the Sellers with respect to
Ongoing Projects from and after the Closing under the Non-Assigned Contracts in
a manner that preserves the value of the Contract Rights, ensures that those
Contract Rights will inure to the benefit of the Buyer, and ensures that all
amounts receivable under the Non-Assigned Contracts from and after the Closing
will be received by the Buyer;
 
(iii)           the Buyer agrees to perform and assume, at its sole expense, all
of the obligations and liabilities of the Sellers under the Contract Rights from
and after Closing to the extent such obligations and liabilities pertain to
performance from and after the Effective Time and are not related to any matter,
thing, improper performance, breach of warranty or default existing at, prior to
or as a consequence of Closing;
 
(iv)           the Sellers shall promptly pay over to the Buyer all amounts
collected by the Sellers under the Non-Assigned Contracts;
 
(v)           following the Closing, the Sellers and the Buyer shall make
reasonable efforts and cooperate with each other in good faith to obtain the
necessary Consents to assign the Non-Assigned Contracts to the Buyer; and
 
(vi)           if the Sellers obtain the necessary Consent to assign a
Non-Assigned Contract to the Buyer in form satisfactory to the Buyer, then,
effective as of the date the Buyer receives a copy of that Consent from the
Sellers, that Non-Assigned Contract will be deemed to have been assigned and
transferred by the Sellers to Buyer and the Sellers and the Buyer will be
relieved of any further obligations under any agreement made between them in
respect of that Non-Assigned Contract (including under this Section 2.10(d)).
 
(e)           Nothing in this Section 2.10 will relieve the Sellers of their
obligations under Section 6.2.
 
 
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2.11           Rentals, Utilities and Other Adjustments.  All monthly
installments of rent and other amounts payable to lessors under any Assigned
Contract and all utility charges shall be prorated through the Closing Date and
shall be considered in the determination of Net Working Capital for purposes of
Section 2.5.  All property Taxes imposed on or with respect to the Purchased
Assets for the 2012 tax year shall remain the liability of the Sellers;
provided, that to the extent the amount of any such property Tax is included in
the determination of the Estimated Net Working Capital, as adjusted by the
determination of the Closing Date Net Working Capital, the Buyer will timely pay
such amount to the designated Taxing Authority, provided, further, that Buyer,
by agreeing to make such Tax payment, shall not be deemed to have assumed
Sellers’ liability for such property Taxes.  To the extent any such proration is
not completed or is estimated as of the Closing, then promptly upon receipt of
any final bills or invoices for any such prorated adjustments, the Sellers, on
the one hand, or the Buyer, on the other hand, as appropriate, shall provide the
other with copies of all such final bills or invoices for such items and to the
extent such amounts were not properly reflected in the Final Working Capital
Adjustment, such amount shall be paid by the appropriate party promptly upon
demand.
 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF MEMBERS
 
Each Member, severally and not jointly, hereby represents to Buyer, as of the
date hereof and as of the Closing Date, as follows:
 
3.1           Organization; Qualification.  If the Member is not an individual,
the Member has been duly formed or incorporated and is organized and validly
existing and in good standing under the laws of its jurisdiction of formation or
incorporation.  The Member has the power, authority and capacity to execute and
deliver this Agreement and each of the Transaction Documents to which it is or
is to become a party and to consummate the transactions contemplated by this
Agreement and the Transaction Documents.
 
3.2           Authorization.  If the Member is not an individual, the execution
and delivery by the Member of this Agreement and each of the Transaction
Documents to which it is or is to become a party and the consummation of the
transactions contemplated by this Agreement and such Transaction Documents have
been duly and validly authorized by all necessary corporate, limited liability
company or other action on behalf of the Member.
 
3.3           Validity of Agreement.  This Agreement has been, and each of the
Transaction Documents to which the Member is or is to become a party will at the
Closing be, duly and validly executed and delivered by the Member, and this
Agreement is, and each such Transaction Document will, at the Closing, be, the
legal, valid and binding obligations of the Member, enforceable against the
Member in accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency and other laws affecting the rights of
creditors generally and except that equitable remedies may be granted only it
the discretion of a court of competent jurisdiction.
 
 
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3.4           Consents and Approvals; No Violations.  Neither the execution and
delivery by the Member of this Agreement or any of the Transaction Documents to
which it is to or is become a party nor the consummation by the Member of the
transactions contemplated hereby or thereby do or will (i) conflict with,
violate or result in any breach of any provision of the Governing Documents of
the Member (to the extent the Member is not an individual); (ii) (A) conflict
with or result in a violation or breach of, or (B) constitute (with or without
due notice or lapse of time or both) a default under, or (C) impair the rights
of Member under, any Contract to which such Member is a party (iii) conflict
with or violate any statute, rule, regulation, order, treaty, judgment,
ordinance, injunction, order or decree of any Governmental Entity that is
currently in effect (collectively, “Laws” and, individually, a “Law”) applicable
to the Member, (iv) require, with respect to such Member, any registrations,
qualifications, designations, declarations or filings with, or the obtaining of
any permit, authorization, consent, waiver or approval of, or the giving of any
notice to, in each case, any Governmental Entity, customer, contractual third
party or other Person (collectively, “Consents” and individually, a “Consent”);
or (v) result in the creation of any Lien on the Business or any of the
Purchased Assets.
 
3.5           Solvency.  No Member is insolvent or will be rendered insolvent by
any of the transactions contemplated by this Agreement and the Transaction
Documents.  “Insolvent” means, with respect to any Person, that the sum of the
debts and other probable liabilities of such Person exceeds the present fair
market value of such Persons’ assets.
 
ARTICLE IV
 

 
REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND MEMBERS
 
Concurrently with the execution and delivery of this Agreement, the Sellers and
Members are delivering to the Buyer a disclosure letter (the “Seller Disclosure
Letter”) setting forth items the disclosure of which shall be necessary or
appropriate either in response to an express disclosure requirement contained in
a provision of this Agreement or as an exception to one or more representations
or warranties contained in this Article IV; provided, however, that information
disclosed in or for one section of the Seller Disclosure Letter shall be deemed
disclosed in all other sections of the Seller Disclosure Letter only to the
extent it is reasonably apparent on its face that such information is relevant
to such other section of the Seller Disclosure Letter.
 
Subject to the preceding paragraph, the Sellers and Members jointly and
severally represent and warrant to the Buyer as of the date hereof and as of the
Closing Date, as follows:
 
4.1           Organization; Qualification; Subsidiaries.     Each of the Sellers
(i) is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Texas; (ii) has all requisite limited
liability company power and authority to own, lease and operate the Purchased
Assets and to carry on the Business as now being conducted; and (iii) is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of the Business or the ownership, operation or leasing of the Purchased
Assets makes such qualification necessary, except where the failure to be so
qualified and in good standing would not, individually or in the aggregate, have
a Business Material Adverse Effect.  All of such jurisdictions in which each of
the Sellers is qualified are set forth on Schedule 4.1(a).
 
 
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(b)           Alliance is the sole record and beneficial owner of all the issued
and outstanding equity interest in each of Xtreme and Prop-Tech.  The Sellers do
not own, or hold the right to acquire (contingently or otherwise), any ownership
interest in any other Person except as referred to in this Section 4.1(b).  The
Business is and at all times has been conducted, and the Purchased Assets are
and have at all times been operated, by the Sellers and not through any Person
other than the Sellers.
 
(c)           As used in this Agreement, the term “Business Material Adverse
Effect” shall mean any change, development or effect that, individually or in
the aggregate with all other changes, developments or effects, has, is, or could
reasonably be expected to have, a material adverse effect on, the Purchased
Assets, the Business, the operations, the condition (financial or otherwise),
earnings or results of operations of the Business, but shall not include: (A)
changes, developments or effects (i) generally affecting the principal
industries and geographic areas in which the Business operates (including the
demand for or market price of oil, natural gas or other commodities), to the
extent such changes, developments or effects do not disproportionately impact
the Business, (ii) generally affecting the economy or the financial markets in
the United States or globally (including interest rates), to the extent such
changes, developments or effects do not disproportionately impact the Business,
(iii) generally affecting regulatory or political conditions in the United
States or globally, to the extent such changes, developments or effects do not
disproportionately impact the Business, (iv) resulting from compliance with the
terms of this Agreement (including omissions required by this Agreement),
(v) resulting from the announcement or pendency of the transactions contemplated
by this Agreement; provided that such announcement was made in accordance with
this Agreement, or (vi) resulting from any action or omission of the Buyer and
its Affiliates or taken or omitted to be taken by the Sellers at the written
direction of the Buyer; (B) any adoption, implementation, promulgation, repeal,
modification, reinterpretation or proposal of any Law by any Governmental
Entity; (C) any changes in generally accepted accounting principles in the
United States (“GAAP”) or the interpretation thereof after the date hereof; (D)
weather, natural disasters or meteorological events, including any fire or flood
not isolated to a Business facility and its immediate surroundings; or (E) acts
of terrorism or war.
 
4.2           Authority Relative to this Agreement; Enforceability.  Each of the
Sellers has the limited liability company power and authority to execute and
deliver this Agreement and the Transaction Documents to which it is or is to
become a party, and to consummate the transactions contemplated by this
Agreement and such Transaction Documents.  The execution and delivery of this
Agreement and the Transaction Documents to which each of the Sellers is or is to
become a party, and the consummation of the transactions contemplated by this
Agreement and such Transaction Documents have been duly and validly authorized
by all requisite limited liability company action on the part of each of the
Sellers.  This Agreement has been, and each of the Transaction Documents to
which any of the Sellers is or is to become a party will, at the Closing, be,
duly and validly executed and delivered by each of the Sellers, as appropriate,
and constitutes, or will at the Closing constitute, a valid and binding
agreement of the Sellers, enforceable against each of the Sellers in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency
and other laws affecting the rights of creditors generally and except that
equitable remedies may be granted only in the discretion of a court of competent
jurisdiction.
 
 
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4.3           Title to Purchased Assets.  Except as set forth on Schedule 4.3,
each of the Sellers has, or as of the Closing will have, and at the Closing will
transfer to the Buyer, good and valid title to all of the Purchased Assets, free
and clear of any and all liens (including liens arising under original purchase
price conditional or installment sales Contracts and equipment leases with third
parties), pledges, charges, claims, security interests, voting trusts,
mortgages, deeds of trust, encroachments, options, rights of first offer, rights
of first refusal, imperfections of title, restrictions, adverse interests,
burdens or other encumbrances, whether consensual, statutory or otherwise
(collectively, “Liens”), except for (a) Liens, if any, created or permitted
expressly and in writing to be imposed by the Buyer, (b) mechanics’, carriers’,
workmen’s, repairmen’s or other like Liens imposed by applicable Law arising or
incurred in the Ordinary Course of Business for obligations that are not due and
payable and for which no filing, to the extent necessary to secure or perfect
such liens, has been made, (c) Liens for Taxes and other governmental charges
that are not due and payable, (d) in the case of Leases, Liens created by the
owner of fee title to the land covered thereby, (e) liens securing rental
payments under the Capital Lease, (f) with respect to the Owned Real Property,
the exceptions set forth in Items 1 and 6 of Schedule B of the Owners’ Policies,
excluding any exception for rights of any Person in possession of such Owned
Real Property other than Sellers, and (g) other imperfections of title, licenses
or other Liens, if any, that do not, individually or in the aggregate with all
other imperfections of title, licenses or other Liens, materially impair the
continued use and operation of the Purchased Assets to which they relate as
presently used and operated or as contemplated to be used or operated (clauses
(a) through (g) above collectively, “Permitted Liens”).   Except for the Buyer’s
rights under this Agreement, no Person has any written or oral agreement or
option or any right or privilege capable of becoming an agreement or option for
the purchase from the Sellers of any of the Purchased Assets, except under
purchase orders accepted by the Sellers in the Ordinary Course of the Business,
consistent with past practice.
 
4.4           Consents and Approvals; No Violations.  Except as set forth on
Schedule 4.4 and, as it relates to clause (b) below, except for any failure of
Sellers to obtain any Consent from any third party for the assignment of any
Contract, neither the execution and delivery by the Sellers of this Agreement or
any of the Transaction Documents to which the Sellers are or are to become a
party nor the consummation by the Sellers of the transactions contemplated
hereby or thereby do or will (a) conflict with, violate or result in any breach
of any provision of the Governing Documents of the Sellers; (b) (i) conflict
with or result in a violation or breach of, or (ii) constitute (with or without
due notice or lapse of time or both) a default under, or (iii) impair the rights
of Sellers under, or (iv) give rise to any right of termination, cancellation,
non-renewal, amendment, modification or acceleration under or with respect to,
or (v) result in or give any Person any rights or entitlement to any increased,
additional, accelerated or guaranteed payments under, or (vi) result in any
restriction on the rights under, in each case, any Assigned Contract, any
Material Contact or any Permit held by or of the Sellers; (c) conflict with or
violate any Law applicable to the Sellers, the Business or any of the Purchased
Assets, including any applicable Law of any jurisdiction relating to bulk sales,
bulk transfers or similar transactions; (d) require any Consents under any
Contract or require any Consent of any Governmental Entity, customer,
contractual third-party or other Person; or (e) result in the creation of any
Lien on the Business or any of the Purchased Assets; except, in the case of
clauses (ii), (iii) and (iv) of this Section 4.4, for any such violations,
breaches, defaults, rights of termination, cancellation or acceleration or
requirements which, individually or in the aggregate, would not have a Business
Material Adverse Effect.
 
 
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4.5           Environmental Matters.
 
(a)           Except as set forth on Schedule 4.5(a), the Sellers have not
received any written communication from a Governmental Entity or any other
Person that alleges that in respect of the Business or the Purchased Assets (i)
any of the Sellers is not, or has not been, in compliance in any material
respect with any Environmental Law; (ii) any of the Sellers are potentially
responsible for any Remedial Actions under any Environmental Laws; (iii) any
Contaminant which any of the Sellers has generated, transported or disposed of
has been found at any site at which any Person has conducted a Remedial Action
pursuant to any Environmental Law; or (iv) any of the Sellers is or shall be a
named party to any proceeding arising out of any third party’s incurrence of
Damages of any kind whatsoever in connection with the presence or Release of
Contaminant, except where an allegation under (i), (ii), (iii) or (iv) as
described above would not, individually or in the aggregate, have a Business
Material Adverse Effect.
 
(b)           Each of the Sellers (i) holds and maintains, in full force and
effect, and is in material compliance with, all material Permits required under
applicable Environmental Laws to conduct the Business, all such Permits being
listed on Schedule 4.5(b), and there are no renewals currently required or
pending with respect to any such Permits and (ii) is in material compliance with
all Environmental Laws with respect to the Business and the Purchased Assets.
 
(c)           Except as set forth on Schedule 4.5(c), in connection with the
conduct of the Business and the Purchased Assets, no Seller has entered into or
agreed to any court decree, order or settlement, or is subject to any judgment,
order, directive, decree, fine or other sanction relating to compliance with any
Environmental Law or Remedial Actions under any Environmental Law.
 
(d)           Except as set forth on Schedule 4.5(d), (i) no portion of the
Purchased Assets has been used by the Sellers in the handling, manufacturing,
treatment, processing, storage, use, generation or disposal of Contaminants,
except as is reasonably required for the operation of the Business and in
material compliance with applicable Environmental Laws, and (ii) there have been
no Releases by the Sellers or threatened Releases by the Sellers of Contaminants
on, upon, into or from any Real Property in such a manner that is reasonably
expected to form the basis of an obligation or liability under any Environmental
Law and would have, individually or in the aggregate, a Business Material
Adverse Effect.
 
(e)           Each of the Sellers has delivered or made available to the Buyer
complete, accurate and current copies of each environmental report, study,
analysis, test or monitoring report listed on Schedule 4.5(e) which constitute
all of the material written environmental reports, studies, analyses, tests or
monitoring reports prepared, or that were obtained, by any Seller within the
last two years and which are, or with reasonable efforts could be, within the
possession or control of the Sellers relating to the Business.
 
 
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(f)           Except as set forth on Schedule 4.5(f), to the Sellers’ knowledge
none of the Real Property contains any of the following in material violation of
Environmental Laws or in such a manner that is reasonably expected to form the
basis of an obligation or liability under any Environmental Law: underground
storage tanks; asbestos; polychlorinated biphenyls (PCBs); toxic mold;
underground injection well; radioactive materials; or septic tanks or waste
disposal pits in which process wastewater or any Contaminant have been
discharged or disposed.
 
(g)           To the knowledge of the Sellers, there are no Contaminants
originating from any adjoining or neighboring properties which have, or are
reasonably suspected to be, migrating into or under the Real Property.
 
(h)           For purposes of this Agreement, a “Contaminant” means all
hazardous or toxic substances, all petroleum hydrocarbons, petroleum products
and any components, fractions or derivatives thereof, explosive or radioactive
substances, asbestos and asbestos-containing materials, pollutants and
contaminants and all other substances, whether or not defined as such, that are
regulated pursuant to and that could result in liability under any applicable
Environmental Laws.
 
(i)           For purposes of this Agreement, “Environmental Law” means any Law
relating to pollution or protection of the Environment or public health or
safety, including any Law relating to Releases of Contaminants into the
Environment and any Law relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, recycling or handling of any of
the foregoing, including (i) the federal Clean Air Act, as amended; (ii) the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended; (iii) the Emergency Planning and Community Right-to-Know Act of 1986,
as amended; (iv) the Federal Insecticide, Fungicide & Rodenticide Act, as
amended; (v) the Federal Water Pollution Control Act, as amended; (vi) the Oil
Pollution Act of 1990, as amended; (vii) the Resource Conservation and Recovery
Act, as amended; (viii) the Superfund Amendments and Reauthorization Act of
1986, as amended; and (ix) the Toxic Substances Control Act, as amended; and,
with respect to each of the foregoing clauses (i) through (ix), all similar
state Laws and all successor statutes thereto and the rules and regulations
promulgated thereunder, all as amended and supplemented as of the Closing Date.
 
(j)           For purposes of this Agreement, “Release” means any release,
spill, emission, leaking, pumping, pouring, dumping, emptying, injection,
deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant
on or into the Environment or into or out of any Real Property.
 
 
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(k)           For purposes of this Agreement, “Remedial Action” means all
actions required by any Governmental Entity (i) to clean up, remove, treat or in
any other way remediate or address any Contaminants; (ii) to minimize the
further Release of any Contaminant so it does not migrate or endanger or
threaten to endanger (A) public health or welfare or (B) the soil, land surface
or subsurface, groundwater, surface water, drinking water supply, stream
sediments, ambient air, plant and animal life or any other environmental medium
or natural resource (the items set forth in this clause (B) hereinafter
collectively referred to as the “Environment); (iii) to perform any pre-remedial
studies and investigation or post-remedial monitoring and care; or (iv) to bring
the Owned Real Property or the Leased Real Property and the Sellers’ operations
thereon in compliance with Environmental Laws.
 
4.6           Financial Information; Absence of Undisclosed Liabilities.
 
(a)           Attached hereto as Schedule 4.6 are the following financial
statements of the Business (collectively, the “Financial Statements”): (i) the
consolidated balance sheet and statement of income and statement of cash flow of
Alliance as of and for the fiscal year ended December 31, 2010; (ii) the audited
consolidated balance sheet and the reviewed statement of income and statement of
cash flow of Alliance (the “Most Recent Annual Financial Statements”) as of and
for the fiscal year ended December 31, 2011 (the “Most Recent Fiscal Year End”),
and (iii) unaudited consolidated balance sheet and statement of income and
statement of cash flow of Alliance (the “Most Recent Financial Statements”) as
of and for the year to date period ended October 31, 2012 (the “Most Recent
Fiscal Month End”).  Except as set forth on Schedule 4.6, the Financial
Statements (including the notes thereto, where applicable) (i) are true and
correct in all material respects, (ii) have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby
(except in the case of unaudited Financial Statements, for the absence of
footnotes and for normal year-end adjustments), (iii) were compiled from the
books and records of the Sellers, and (iv) present fairly and accurately in all
material respects the assets, liabilities and financial condition of the Sellers
as of such dates and the results of operations of the Sellers for such periods.
 
(b)           The books of account and other financial records of the
Sellers:  (i) reflect all items of income and expense and all assets and
liabilities required to be reflected therein pursuant to GAAP and (ii) are in
all material respects complete and correct, and do not contain or reflect any
material inaccuracies or discrepancies.
 
(c)           Except as set forth on Schedule 4.6(c), the Sellers have no
Indebtedness.
 
(d)           Each of the Sellers has no liability related to the Business or
the Purchased Assets, except for liabilities (i) expressly set forth on
Schedule 4.6(d), (ii) reflected on or fully reserved against in the Most Recent
Financial Statements, or (iii) incurred since October 31, 2012 in the Ordinary
Course of Business (none of which is a liability for breach of contract, tort,
infringement, claim, lawsuit or warranty).
 
 
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4.7           Absence of Certain Changes.  Since January 1, 2012, (i) there has
not been a Business Material Adverse Effect and (ii) except as set forth on
Schedule 4.7 or to the extent included as an Excluded Asset or Excluded
Liability, with respect to the Business or any of the Purchased Assets, each of
the Sellers:
 
(a)           has operated the Business in the normal and ordinary course of the
Business consistent with past customs and practices, including with respect to
quantity and frequency (“Ordinary Course of Business”), and used commercially
reasonable efforts to preserve the present relationships with other Persons
having material dealings with each of the Sellers, as appropriate, in respect of
the Business;
 
(b)           has taken all commercially reasonable actions to preserve, protect
and maintain all of the Purchased Assets, other than disposable assets, in
customary repair, order and condition (reasonable wear and tear excepted);
 
(c)           has not suffered any theft, damage, destruction, loss or other
casualty, whether or not covered by insurance, with respect to any of the
Purchased Assets having a replacement cost of more than $25,000 for any single
loss or $100,000 for all such losses;
 
(d)           has maintained in good standing all Permits and has filed, when
due, all required renewals for such Permits;
 
(e)           has paid and discharged diligently, in accordance with past
practice and not less than on a timely basis, all of such Seller’s payables,
liabilities and obligations (other than payables, liabilities or obligations
being disputed in good faith for which adequate reserves have been made on the
Financial Statements) to any Person;
 
(f)           has not (i) agreed to award or pay, awarded or paid any bonuses to
Employees with respect to any period after December 31, 2011, or (ii) entered
into or amended any written or material unwritten employment, service,
independent contractor, deferred compensation, severance or similar agreement or
arrangements (except for entering into agreements or arrangements to employ new
Employees on or after January 1, 2012, in exchange for an annual compensation of
less than $50,000 to each such new Employee), or (iii) agreed to increase the
compensation payable or to become payable by the Sellers, as appropriate, to any
officer, director, employee, agent, representative or Affiliate of the Sellers
(except for increases to the compensation payable to Employees who were employed
as of December 31, 2011, by an amount, with respect to each such Employee,
consistent with prior practices in the Ordinary Course of Business), or
(iv) agreed to increase the coverage or benefits available under any severance
pay, termination pay, vacation pay, company awards, salary continuation for
disability, sick leave, deferred compensation, bonus or other incentive
compensation (other than with respect to bonuses or other incentive compensation
in amounts less than $25,000 individually), insurance, pension or any other
Sellers Benefit Plan;
 
(g)           has not made any loans, advances or capital contributions to, or
guarantees for the benefit of, or investments, or paid or reimbursed any fees to
any Person (including any Affiliate of the Sellers), except for advances and
reimbursements for business expenses to Employees in the Ordinary Course of
Business;
 
(h)           has not mortgaged, pledged or subjected to any Lien, other than
Permitted Liens, any of the Purchased Assets;
 
 
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(i)           has not sold, leased, assigned, transferred, conveyed or otherwise
disposed of any of the Purchased Assets, except in the Ordinary Course of
Business;
 
(j)           has not discharged or satisfied any Lien or paid any liability or
obligation, except in the Ordinary Course of Business and which, individually or
in the aggregate, is not and would not be material to the Sellers, the Business
or the Purchased Assets;
 
(k)           has not canceled, settled, compromised or accelerated any
Indebtedness or claim, or amended, canceled, terminated, waived or released any
Contract or right, except in the Ordinary Course of Business and which,
individually or in the aggregate, is not and would not be material to the
Sellers, the Business or the Purchased Assets;
 
(l)           has not instituted, settled or compromised any Legal Proceeding;
 
(m)           except for the Capital Lease and the Leases, has not entered into,
or made any commitments for, any lease of capital equipment or real property, in
each case, involving payments in excess of $50,000 per year;
 
(n)           has not entered into any material transaction or entered into any
transaction with any of its Affiliates, in each case, that was or not in the
Ordinary Course of Business;
 
(o)           has not committed to make any capital expenditures requiring any
payment following the Effective Time in excess of $50,000 individually or
$100,000 in the aggregate; and
 
(p)           has not entered into any Contract or otherwise agreed to do, or
taken any action or made any omission that would reasonably be expected to
result in, anything set forth in this Section 4.7.
 
4.8           Compliance with Law; Permits. Except as relating to environmental,
employee benefit or Tax matters, which are addressed solely in Sections 4.5,
4.11 and 4.14, respectively:
 
(a)           Each of the Sellers is, and at all times since January 1, 2011 has
been, operating the Business and the Purchased Assets in compliance, in all
material respects, with all Laws applicable to the Sellers, the Business or any
of the Purchased Assets or to which it or the Sellers, the Business or the
Purchased Assets are bound or subject.  Since January 1, 2011, except as set
forth on Schedule 4.8(a), none of the Sellers has received any written notice
from any Person concerning alleged violations of, or the occurrence of any
events or conditions resulting in alleged noncompliance with, any Law applicable
to the Sellers, the Business or the Purchased Assets or to which any of the
Sellers, the Business or the Purchased Assets are bound or subject.  Neither the
Sellers nor any of their respective managers, officer, employees, agents,
representatives or Affiliates has made any kickback, bribe, gift or political
contribution in contravention of any applicable Law to or on behalf of any
customer of the Business, or to any officer, director, manager, partner,
trustee, employee, agent, representative or Affiliate of any customer of the
Business, or to any other Person (including a Governmental Entity) in each case
with respect to the Business.
 
 
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(b)           Each of the Sellers has obtained and holds in full force and
effect all Permits that are necessary or required for the operation of the
Business as currently operated or as contemplated to be operated, or the
ownership, lease, use or operation of the Purchased Assets except, in each case,
for any such Permits the failure of which to be obtained would not reasonably be
expected to result in a Business Material Adverse Effect.  Each such Permit is
listed on Schedule 4.8(b).  Each of the Sellers is and has been in compliance,
in all material respects, with the terms of each such Permit. There is no Legal
Proceeding pending or Order outstanding against any of the Sellers, or to the
Sellers’ knowledge, threatened against any of the Sellers that would reasonably
be expected to adversely affect any such Permit in any material
respect.  Additionally, there are no renewals currently required or pending with
respect to any such Permits.
 
4.9           Real Property.
 
(a)           Owned Real Property.  Schedule 4.9(a) sets forth a true, complete
and correct list of all of the real property owned by the Sellers beneficially
or of record  (such real property, together with all buildings, fixtures,
structures and improvements thereon, collectively, the “Owned Real Property”),
including, with respect to each Owned Real Property, the name of the Seller that
owns such Owned Real Property and the address thereof.  The Sellers identified
on Schedule 4.9 as the owner of the Owned Real Property have good and valid fee
simple title to the Owned Real Property, free and clear of all Liens other than
Permitted Liens.
 
(b)           Leased Real Property.  Schedule 4.9(b)(i) sets forth a true,
complete and correct list of all real property (other than the Owned Real
Property) leased, used or occupied by the Sellers in connection with the conduct
of the Business as currently conducted (such real property, together with all
rights, title and interest of the Sellers in and to the leasehold improvements
relating thereto, if any, and the security deposits, reserves or prepaid rents
in connection therewith, if any, collectively, the “Leased Real Property” and,
together with the Owned Real Property, the “Real Property”).  There are no
Contracts (other than Permitted Liens) granting to any Person other than the
Sellers the right of use or occupancy of any such parcel; and, to the Sellers’
knowledge, the lessor of such parcel of Leased Real Property has not granted any
Person other than the Sellers the right to use or occupy such Leased Real
Property. Each of the Sellers has good and valid leasehold interest to the
Leased Real Property, free and clear of all Liens other than Permitted
Liens.  Schedule 4.9(b)(ii) sets forth a true, complete and correct list of all
leases, subleases, licenses, concessions and agreements, including all
amendments, extensions, renewals, options and guaranties with respect thereto,
to which any of the Sellers is a party and pursuant to which any of the Sellers
leases, uses or occupies any Leased Real Property (the “Leases”), including,
with respect to each Lease: (x) the location of the Leased Real Property covered
by such Lease, (y) the name and address of the lessor, and (z) the termination
date, extension periods (if any), current monthly rent and amount of security
deposit (if any) pursuant to such Lease.  The Sellers have delivered to the
Buyer true, complete and correct copies of the Leases.  With respect to each
Lease:
 
 
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(i)           Such Lease is valid, binding, enforceable and in full force and
effect, and the Sellers enjoy peaceful and undisturbed possession of the Leased
Real Property (subject to the provisions of such Lease) covered by such Lease,
and no claim has been asserted against any of the Sellers that is adverse to
such Seller’s rights in such leasehold interests;
 
(ii)           Each Seller party to such Lease is in compliance in all material
respects with all applicable terms of such Lease, and no event or circumstance
has occurred or exists that, with or without the delivery of notice, the passage
of time or both, would constitute a breach or default under such Lease, and each
Seller party to such Lease, has paid all rent and other amounts due and payable
as of the Effective Date under such Lease; and
 
(iii)           The Sellers have not received nor given any notice of any breach
or default under such Lease, or of the occurrence or existence of any event or
circumstance that, with or without the delivery of notice, the  passage of time
or both, would constitute a breach or default under such Lease and, to the
Sellers’ knowledge, no other Person is in breach of or default under such Lease,
and no party to such Lease has exercised or threatened to exercise any
termination, cancellation, amendment or acceleration rights with respect
thereto.
 
(c)           The Sellers have not leased, subleased, assigned or otherwise
granted to any Person (other than a lessor’s right under a Lease) the right to
use or occupy the Real Property or any portion thereof, and there are no
options, rights of first offer, rights of first refusal or similar rights to
purchase the Owned Real Property or any portion thereof or any interest therein.
 
(d)           The (i) Real Property constitutes all of the real property owned,
held or used by the Sellers to conduct the Business as currently conducted,
(ii) buildings, facilities and improvements located on the Real Property have
not suffered any material damage, destruction or loss, whether by fire, flood or
other casualty, to the whole or any portion thereof that remains unremediated to
date and are in good operating condition and in a state of good maintenance and
repair and are suitable for the purposes for which they are currently being used
and (iii) Owned Real Property and the Leased Real Property is adequately
serviced by all utilities and public services necessary for the conduct of the
Business thereon.
 
(e)           Except as set forth on Schedule 4.9(e), since January 1, 2012, the
Sellers have not received any written notice of (i) material violations of
building codes and/or zoning ordinances or other Laws applicable the Real
Property, (ii) existing, pending or threatened condemnation, appropriation,
special assessment or other proceedings affecting or relating to the Real
Property, or (iii) existing, pending or threatened zoning, building code or
other moratorium proceedings, or similar matters, which would reasonably be
expected to adversely affect the ability to operate the Real Property as
currently operated or as contemplated to be operated in any material respect.
 
 
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(f)           Subject to obtaining all Permits and Consents required for
operating the Business, the Buyer will have the right to use the Real Property
after the Closing for its current uses in the manner currently operated by the
Sellers without violating any applicable Law or private restriction in any
material respect, and such current uses are legal conforming uses in all
material respects.
 
(g)           There are no Legal Proceedings or other condemnation,
appropriation, moratorium, special assessments or other proceedings pending or,
to the Sellers’ knowledge, threatened in writing by any Person that (i) relate
to or affect the Real Property, (ii) would result in a change in the allowable
uses, the occupancy or the value of the Real Property, or (iii) would modify the
right of the Buyer to use the Real Property for its current uses or its current
intended uses after the Closing Date.
 
(h)           To each of the Sellers’ knowledge, there is no fact or condition
that would reasonably be expected to result in the termination of any currently
existing vehicular access to or from the Real Property and any public rights of
ways and roads or any existing sewer or other utility facilities servicing,
adjoining or situated on the Real Property and the Real Property has direct
vehicular access to one or more public roads, streets or rights of way.
 
(i)           Except as set forth on Schedule 4.9(i), no Contracts have been
entered into with any Governmental Entity or other Person by the Sellers
relating to the Real Property which would impose an obligation upon the Buyer or
its successors or assigns to make any contribution or dedication of money or of
all or any portion of the Real Property or to construct, install, or maintain
any improvements of a public or private nature on or off the Real Property or
any portion thereof.
 
4.10           Legal Proceedings.  Except as set forth on Schedule 4.10, there
is no action, suit, arbitration, claim, proceeding (including any worker’s
compensation claim or proceeding), hearing or investigation by or before any
Governmental Entity or any arbitration or alternative dispute resolution panel
(each, a “Legal Proceeding”), or any judgment, order, writ, decree, injunction
or other determination, whether preliminary or final, by or of any Governmental
Entity or any other entity or body whose finding, ruling or holding is legally
binding or enforceable as a matter of right (each, an “Order”), pending against
or, to the Sellers’ knowledge, threatened (a) against or affecting the Sellers,
the Business or any of the Purchased Assets, or (b) that would adversely affect
the ability of the Sellers to execute and deliver this Agreement or any of the
Transaction Documents or the consummation of the transactions contemplated
hereby or thereby.
 
4.11           Employee Matters.   Schedule 4.11(a) lists all individuals who
are employed by the Sellers on a full-time, permanent or part-time basis
immediately prior to the Closing Date (including individuals on short-term
disability, long-term disability or approved leave of absence) (the
“Employees”), which list includes each Employee’s name, title or position,
current rate of hourly wage or salary, total annual compensation (including
incentive and similar compensation), date of hire and, in the case of any
Employee paid an hourly wage, whether such Employee is currently active at work
and, in the case of any such Employee who is not active, the scheduled
return-to-work date of such Employee.
 
 
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(b)           Schedule 4.11(b) lists all material Sellers Benefit Plans.
 
(c)           Each Sellers Benefit Plan that is intended to be qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”) and
each trust that is intended to be exempt under Section 501(a) of the Code is so
qualified or exempt, as applicable.  Each Sellers Benefit Plan has been
maintained, administered and operated in all material respects in accordance
with its terms and in compliance in all material respects with the applicable
provisions of ERISA, the Code and other applicable Law.
 
(d)           Each Benefit Plan that is or was subject to Title IV or Section
302 of ERISA, or Section 412 or 4971 of the Code, and that is or was:
 
(i)           a defined benefit plan, other than a “multiemployer plan” within
the meaning of Section 414(f) of the Code (“Multiemployer Plan”), has and has at
all times had a “funding target attainment percentage,” within the meaning of
Section 430 of the Code, of at least 100 percent;
 
(ii)           a money purchase pension plan, meets and has at all times met the
requirements of Section 412(a)(2)(B) of the Code; or
 
(iii)           a Multiemployer Plan does not have, and has not at any time had,
an “accumulated funding deficiency,” within the meaning of Section 431 of the
Code.  No liability exists, or will exist, after the consummation of the
transactions contemplated by this Agreement, in connection with any Sellers
Benefit Plan that is a defined benefit plan or a Multiemployer Plan.
 
(e)           No event or liability or lien on assets as described in Section
4069 of ERISA has occurred or exists in connection with any Sellers Benefit
Plan.
 
(f)           No claims (other than routine claims for benefits), lawsuits,
governmental investigations or audits are pending, and to the knowledge of the
Sellers, none are threatened, involving any Sellers Benefit Plan or, other than
as could not result in any liability to Buyer, with respect to any Benefit Plan.
 
(g)           None of the Purchased Assets or Assumed Liabilities is a “plan
asset” (within the meaning of ERISA Reg. §2510.3-101 or Section 3(42) of ERISA).
 
(h)           Sellers have correctly classified all current employees and
non-employee service providers for purposes of each Sellers Benefit Plan and all
applicable Laws.
 
 
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(i)           Each of the Sellers has been exempt from, or has complied with all
applicable provisions of the Workers Adjustment Retraining and Notification Act
of 1988, as amended (the “WARN Act”) and any other similar state or local Law,
in connection with all past reductions in workforce relating to the
Business.  As of the date hereof, the Sellers have not closed, and do not intend
to close, any plant or facility relating to the Business and have not
effectuated, and do not intend to effectuate, any mass layoff of employees, as
defined under the WARN Act or any other similar state or local Law.  For
purposes of determining the applicability of the WARN Act, since October 1,
2012, the Sellers have not laid off or otherwise terminated the employment of
more than 15 employees within the scope of the Business.
 
(j)           None of the Sellers has agreed to recognize any labor union or
other collective bargaining representative and to the Sellers’ knowledge, no
labor union or collective bargaining representative claims to or is seeking to
represent any Employees.  No Seller is a party to or bound by any collective
bargaining agreement applicable to any Employees.
 
(k)           There is no labor strike or labor dispute, slow down, lockout or
stoppage actually pending or, to Sellers’ Knowledge, threatened against or
affecting the Sellers, and, within the previous two years, none of the Sellers
has experienced any labor strikes or material labor disputes, slowdowns,
lockouts or stoppages.  None of the Sellers is engaged, nor has engaged, in any
unfair labor practices, and has not had any unfair labor practice charges or
complaints before any Governmental Entity pending or, to Sellers’ Knowledge,
threatened against any Seller.  None of the Sellers has any grievances,
arbitrations, or other proceedings arising or asserted to arise out of or under
any employment or similar Contract or individual Contract, pending or, to
Sellers’ Knowledge, threatened, against any of them.
 
(l)           Except as set forth on Schedule 4.11(k), (i) each Employee is an
at-will employee, and (ii) none of the Sellers is a party to any employment
Contract or any consulting or similar Contract for the provision of services to
any Seller or any severance, change of control, retention or other similar
agreement, plan or arrangement with any employee of the Sellers.
 
(m)           The Sellers have paid or properly accrued in the Ordinary Course
of Business all wages and compensation due to their employees, including all
vacations or vacation pay, holidays or holiday pay, sick days or sick pay, and
bonuses.
 
4.12          Contracts.
 
(a)           Schedule 4.12(a) contains a true, complete and correct list of
 
(i)           all master service agreements (“MSAs”) pursuant to which the
Sellers provide products and services to their customers;
 
(ii)           to the extent not identified under clause (i) above, all
Contracts (1) to which any of the Sellers or their Affiliates is a party or by
which any of the Sellers or any of their Affiliates is bound in connection with
the Business, the Purchased Assets or the Assumed Liabilities, or (2) to which
any of the Purchased Assets is bound or subject, in each case that require
payments by or to the Sellers or any of their Affiliates of at least $100,000 in
the aggregate or that have a base term (excluding potential renewals) extending
at least 12 months following the Closing Date (other than contracts cancellable
by the Sellers without penalty on not more than 30 days’ notice);
 
 
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(iii)           all Contracts for the sale or disposition of any of the
Purchased Assets, or for the grant to any Person of any option, right of first
refusal, right of first offer, preferential or similar right to purchase any of
the Purchased Assets;
 
(iv)           all license, royalty or other Contracts under which any of the
Sellers (A) has obtained a license to use the Intellectual Property of another
Person (except for any license implied by the sale of a product and any
perpetual license for commonly available software programs with a value of less
than $5,000 annually under which any of the Sellers is the licensee), or (B) has
granted any other Person a license to use any of the IP Assets;
 
(v)           all bonus, pension, profit sharing, retirement, deferred
compensation, equity purchase, equity option or similar plans or practices,
whether formal or informal, and all severance Contracts;
 
(vi)           all written or material unwritten employment, services,
consulting, independent contractor and subcontractor Contracts with any Person
on a full-time, part-time, consulting or contractor basis, and all severance,
termination, change of control, golden parachute or similar Contracts;
 
(vii)           all indentures, mortgages, notes, installment obligations,
guarantees, agreements and other instruments relating to Indebtedness (other
than intercompany accounts and trade payables incurred in the Ordinary Course of
Business) or otherwise placing a Lien (other than a Permitted Liens) on the
Purchased Assets;
 
(viii)           all Contracts with respect to the lending or investing of the
Sellers’ funds to or in other Persons;
 
(ix)           all Contracts for the purchase or sale of supplies, products or
other personal property or for the furnishing or receipt of services which, when
taken individually, either (A) call for performance over a period of more than
12 months (except if such Contracts do not involve a sum in excess of $50,000
annually) or (B) involves consideration in an amount in excess of $100,000;
 
(x)           all Contracts under which any of the Sellers (A) is a lessee or
sublessee of, or holds, uses or operates, any personal property owned by any
other Person and used in the Business requiring payments in excess of $100,000
annually, or (B) is a lessor or sublessor of, or permits any other Person to
hold, use or operate, any property, whether real or personal or mixed, owned or
controlled by the Sellers and used in the Business;
 
(xi)           all nondisclosure or confidentiality Contracts, and all Contracts
containing terms (A) having the effect of prohibiting any of the Sellers, the
Business or the Purchased Assets from freely operating or conducting business
anywhere in the world during any period of time, (B) requiring exclusive dealing
or (C) relating to “most-favored-nations” status of any party thereto;
 
 
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(xii)           all advertising, agency, brokerage, consulting, dealership,
distribution, finders, franchise, manufacturer’s representative, market
research, marketing, operating, promotion, sales, service, supplier, vendor or
similar Contracts;
 
(xiii)           all settlement, compromise or similar Contracts with any
Governmental Entity or other Person;
 
(xiv)           all written Contracts with any Governmental Entity;
 
(xv)           all joint venture, partnership or similar Contracts relating to
ownership of or investments in any business or enterprise in connection with the
Business;
 
(xvi)           all powers of attorney with respect to the Business or any of
the Purchased Assets; and
 
(xvii)           all other Contracts that are either necessary to continue to
conduct the Business as currently being conducted or that have been entered into
outside the Ordinary Course of Business and not previously disclosed pursuant to
this Section 4.12(a) (the Contracts listed in clauses (i) through (xvii),
together with the Leases set forth on Schedule 4.9(b)(ii), are collectively
referred to as the “Material Contracts”).
 
(b)           Each of the Material Contracts is in full force and effect, is a
valid and binding obligation of each of the Sellers a party thereto, and is
enforceable against each of the Sellers a party thereto and, to such Seller or
Sellers’ knowledge, the counterparties thereto in accordance with its terms
except that (i) such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other similar
laws, now or hereafter in effect, relating to or limiting creditors’ rights
generally and (ii) enforcement, including, among other things, the remedy of
specific performance and injunctive and other forms of equitable relief, may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought (such restrictions on enforcement being
collectively referred to herein as the “Enforcement Restrictions”).  Each of the
Sellers is in compliance with all applicable and material terms of each Material
Contract to which such Seller is a party.  No party to any Material Contract (A)
has provided written notice to any of  the Sellers a party thereto of such
party’s intent to or, to each such Seller’s knowledge has threatened to,
terminate, cancel, refrain from renewing, modify or withdraw its participation
in, or to accelerate any right under, any Material Contract, (B) has terminated,
cancelled, refrained from renewing, modified or withdrawn its participation in,
or accelerated any right under, any Material Contract, or (C) to the knowledge
of any of the Sellers a party thereto, is in breach, violation or default under
any Material Contract, and no event or circumstance has occurred or exists
which, with or without the giving of notice, the passage of time or both, would
constitute such a breach, violation or default. There are no other Contracts
necessary for the operation of the Business or the Purchased Assets as currently
operated other than the Material Contracts. True, correct and complete copies of
each Material Contract (including all amendments, supplements and other
modifications, and all exhibits and schedules, thereto, and any assignments
thereof) have been provided by the Sellers to the Buyer or otherwise made
available to the Buyer.
 
 
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4.13          Sufficiency of the Assets.  The Purchased Assets constitute all of
the material property and assets (tangible and intangible of any nature, kind
and description) and other rights necessary for the operation of the Business in
substantially the same manner as it is being operated on the date of this
Agreement.  The Purchased Assets are adequate for the purposes for which they
are currently owned, used or held, and are in commercially reasonable operating
condition (normal wear and tear excepted) to operate the Business in the
Ordinary Course of Business except to the extent the failure of such Purchased
Assets to be in commercially reasonable operating condition would not,
individually or in the aggregate, cause a Business Material Adverse
Effect.  There are no facts or conditions affecting the Purchased Assets which
would be reasonably expected, individually or in the aggregate, to interfere
with the ownership, use or operation of the Purchased Assets as currently owned,
held or used or their adequacy for such use, except such interference which
would not, individually or in the aggregate, cause a Business Material Effect.
 
4.14          Taxes.
 
Except as set forth on Schedule 4.14:
 
(a)           Each of the Sellers has (i) duly and timely filed or caused to be
filed all material Tax Returns required to be filed by the Sellers with the
appropriate Taxing Authority, and each such Tax Return is true, complete and
correct in all material respects, and (ii) paid all Taxes due or claimed due by
a Taxing Authority (whether or not shown as due on a filed Tax Return).
 
(b)           There are no currently proposed or pending adjustments by any
Taxing Authority in connection with any Tax Returns of the Sellers, and no
waiver or extension of any statute of limitations as to any federal, state,
local or foreign Tax matter has been given by or requested from the Sellers with
respect to any Tax year.
 
(c)           Each of the Sellers has withheld and paid all material Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any Employee, independent contractor, shareholder, member or creditor of such
entity, or other third party, and all forms (including forms W-2 and 1099)
required with respect thereto have been properly completed and timely filed in
all material respects.
 
(d)           The Sellers have not entered into any Tax sharing agreement, Tax
allocation agreement, Tax indemnity agreement, or similar contract or
arrangement or any current or potential contractual obligation to indemnify any
other Person with respect to Taxes that will require any payment by the Buyer
after the date of this Agreement.
 
 
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(e)           There are no Liens for Taxes upon any of the Purchased Assets
except Liens for Taxes not yet due and payable.  Further, all of the assets of
Sellers have been properly listed and described on the property tax rolls for
all periods prior to and including the Closing Date, and no portion of the
assets of the Sellers constitutes omitted property for property Tax purposes.
 
(f)           No written claim has been made within the preceding two years by a
Taxing Authority in a jurisdiction where any of the Sellers do not file Tax
Returns that such Seller or Sellers is or are or may be subject to taxation by
that jurisdiction or the Purchased Assets are or may be subject to such
taxation.
 
(g)           Each of the Sellers has not been a party to a transaction that is
or is substantially similar to a “listed transaction,” within the meaning of
Treasury Regulations Section 1.6011-4(b).
 
(h)           Alliance is not a foreign person within the meaning of Section
1445 of the Code.
 
4.15          Intellectual Property.
 
(a)           Schedule 4.15(a) sets forth a true, complete and correct list of
(i) all Patents, (ii) all Trademarks, (iii) all material Software, (iv) all
material Copyrights, and (v) all Domain Names, in each case, owned, held or used
by a Seller in connection with the Business.  The IP Assets constitute all
licenses or other legally enforceable rights, title and interest to use all
patents, copyrights, trademarks, service marks, trade names, brand marks, brand
names, logos, intellectual property, software object and source code as are
necessary to conduct the Business as currently conducted by the Sellers.
 
(b)           Except as set forth on Schedule 4.15(b): (i) all of the IP Assets
are valid and subsisting and one or more of the Sellers owns and possesses good
and valid legal and beneficial title to, or has a valid and enforceable right to
use pursuant to a written license agreement, all IP Assets together with the
goodwill associated therewith, free and clear of all Liens other than Permitted
Liens; (ii) there is no pending or, to the Sellers’ knowledge, threatened
action, claim or Legal Proceeding by a third Person contesting the validity,
enforceability, use or ownership of any IP Asset and, to the Sellers’ knowledge,
there are no grounds for any of the foregoing; (iii) the operation of the
Business or the Purchased Assets by the Sellers, including the ownership or use
of the IP Assets, is not infringing upon, misappropriating or conflicting with,
and has not infringed upon, misappropriated or conflicted with, the Intellectual
Property or rights thereon of any other Person and, to the Sellers’ knowledge,
the IP Assets are not being and have not been infringed, misappropriated or
conflicted by any third Person; (iv) the Sellers have not received any written
notice of any infringement, misappropriation or conflict of the type described
in the preceding clause.
 
 
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4.16           Accounts Receivable.  Except as set forth Schedule 4.16, the
Accounts Receivable of the Sellers included in the Net Working Capital as of the
Closing Date (a) will be valid and genuine, (b) will have arisen solely out of
bona fide sales and deliverance of goods, performance of services and other
business transactions in the Ordinary Course of Business consistent with past
practice, (c) will not be subject to any material defenses, set-offs or
counterclaims other than the Enforcement Restrictions, (d) will be reasonably
expected to 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, and (e) have not been assigned or pledged to any Person.
 
4.17           Brokers; Finders and Fees.  Except for GulfStar Group, whose fees
will be paid by the Sellers or one of their Affiliates, neither the Sellers nor
any of their respective Affiliates has employed or engaged any investment
banker, broker or finder or incurred any liability for any investment banking,
financial advisory or brokerage fees, commissions or finders’ fees in connection
with this Agreement, any of the Transaction Documents or the transactions
contemplated by this Agreement or any of the Transaction Documents.  Neither
GulfStar Group nor any other Person has or will have, as a result of the
consummation of the transactions contemplated by this Agreement or any of the
Transaction Documents, any right, interest or claim against or upon the Buyer or
any of its Affiliates for any fees, commission or other compensation arising out
of or relating to such Person’s employment or engagement as an investment
banker, finder or broker of the Sellers or any of their respective Affiliates.
 
4.18           Customers and Vendors.  Schedule 4.18 sets forth (a) each of the
ten (10) largest customers of the Business as a percentage of the Sellers’
aggregate total revenue for the twelve (12) month period ended November 30, 2012
(the “Material Customers”) and (b) each of the ten (10) largest vendors,
suppliers and other providers of products, services, supplies or materials to
the Business based on the percentage of the Sellers’ aggregate expenditures
attributable to all vendors, suppliers or providers for the twelve (12) month
period ended November 30, 2012 (the “Material Vendors”).  Except as set forth on
Schedule 4.18, other than actions taken in the Ordinary Course of Business, no
Material Customer or Material Vendor (a) has terminated, cancelled, materially
amended or modified or declined to renew or continue its relationship with any
of the Sellers, or (b) during the twelve (12) month period ended November 30,
2012, has materially decreased (i) its purchase of any of the Sellers’ products
or services, or (ii) its supply or provision of products, services, supplies or
materials to any of the Sellers, as applicable.  Except as set forth on Schedule
4.18, since December 31, 2011, the Sellers have not received any written notice
from any Material Customer that it intends to terminate, cancel, materially
amend or modify or decline to renew or continue its relationship with any of the
Sellers, or that it intends to materially decreased its purchase of any of the
Sellers’ products or services.  Since December 31, 2011, the Sellers have not
received any written notice from any Material Vendor that it intends to
terminate, cancel, materially amend or modify or decline to renew or continue
its relationship with any of the Sellers, or that it intends to materially
decrease its supply or provision of products, services, supplies or materials to
any the Sellers.
 
4.19           Product and Service Warranties.  The Sellers have not made any
warranties or guarantees (express or implied) with respect to the products sold
or services provided by the Business, other than those warranties expressly set
forth in the standard MSAs or the Sellers terms and conditions of sale, copies
of which have been made available to Buyer.
 
 
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4.20           Insurance.  Schedule 4.20 contains a true, complete and correct
list of all insurance policies maintained by or for the benefit of the Sellers,
the Business or the Purchased Assets identifying with respect to each such
policy: (a) the type of insurance; (b) the name of the insurer; and (c) the
policy number.  Each such insurance policy is valid, binding and enforceable and
is and has been in full force and effect since the date of its issuance.  All
premiums due under each such insurance policy on or before the date hereof and
the Closing Date have been paid or will be paid in the Ordinary Course of
Business, and the Sellers have not received any written notice of any
cancellation, non-renewal or termination in respect of any such policy.
 
4.21           Inventories.  The Inventories consist solely of items of tangible
personal property of the kind and quality regularly used or produced in the
Business and are of market value quality and free of any material defect, are
saleable or re-saleable (or useable) in the Ordinary Course of Business for the
purpose for which they were intended, are at a level consistent with the level
of inventories that has been maintained in the operation of the Business prior
to the date of this Agreement in the Ordinary Course of Business. None of the
Inventory is obsolete and no write-down of the Inventory has been made or should
have been made in the period since December 31, 2011, in each case other than an
immaterial amount of the Inventory with an aggregate book value as of the date
hereof equal to $50,000 or less.  The Inventory as reflected in the Final
Closing Statement and the determination of the Closing Date Net Working Capital
shall reflect a write-down of the Inventory as described in the preceding
sentence and shall reflect the value of such Inventory at the lesser of cost or
fair market value.
 
4.22           Bank Accounts.  Schedule 4.22 sets forth the name of each bank in
which each Seller has an account or lock box, the names of all Persons
authorized to draw thereon or to have access thereto, and the account number for
each such bank account of the Sellers.
 
4.23           Solvency.
 
  No Seller is insolvent or will be rendered insolvent by any of the
transactions contemplated by this Agreement and the Transaction Documents.
 
4.24           Affiliated Transactions.  Except as set forth on Schedule 4.24,
no director, officer, equity interest owner, employee, vendor, supplier or
Affiliate of the Sellers, and no Affiliate or family member (whether by blood,
marriage or adoption) of any such Person, is a party to any Contract,
transaction or series of transactions, whether written or oral, with any of the
Sellers, or has any interest in (a) any property or assets that are used by any
of the Sellers in connection with the Business, (b) any business, property or
assets that compete, whether directly or indirectly, with the Business, in each
case except for equity securities listed on any national securities exchange, or
(c) any of the Purchased Assets. Except as set forth on Schedule 4.24, each
Contract, transaction or series of transactions listed on Schedule 4.24 has been
entered in the Ordinary Course of Business and is on terms no less favorable to
the Sellers than those which would be obtainable from an unaffiliated third
party.
 
 
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4.25           Disclaimer of Representations and Warranties.  Except as and to
the extent expressly set forth in this ARTICLE IV or in ARTICLE III (as
qualified by the Seller Disclosure Letter), neither any of the Sellers nor any
of the Members makes any representations or warranties whatsoever to Buyer or
any other Person, and each of the Sellers and Members hereby disclaims all
liability and responsibility for any representation, warranty, statement, or
information made, communicated, or furnished (orally or in writing) to Buyer or
any other Person (including without limitation any opinion, information,
projection, or advice that may have been or may be provided to Buyer or any
other Person by any director, officer, employee, agent, consultant, or
representative of the Sellers or any of the Members) except for the
representations, warranties, statements or information made or included in this
ARTICLE IV or in ARTICLE III (as qualified by the Seller Disclosure
Letter).  Without limiting the generality of the foregoing, except as and to the
extent expressly set forth in this ARTICLE IV (AS QUALIFIED BY THE SELLER
DISCLOSURE LETTER), NEITHER THE SELLERS NOR ANY OF THE MEMBERS MAKES ANY
REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, AS TO (I) THE
CONDITION, REPAIR, MAINTENANCE, DESIGN, OR MARKETABILITY OF THE PURCHASED ASSETS
OR ANY PORTION THEREOF, (II) THE OPERATIONS, RESULTS OF OPERATIONS, CONDITION
(FINANCIAL OR OTHERWISE), OR PROSPECTS OF THE BUSINESS, OR (III) ANY MATERIALS
OR INFORMATION THAT MAY HAVE BEEN OR MAY BE PROVIDED TO BUYER OR ANY OTHER
PERSON IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR
ANY DISCUSSION OR PRESENTATION RELATING THERETO, INCLUDING ANY WARRANTY AS TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, IT BEING EXPRESSLY
UNDERSTOOD AND AGREED BY THE PARTIES HERETO THAT, EXCEPT AS AND TO THE EXTENT
EXPRESSLY SET FORTH IN THIS ARTICLE IV, PURCHASER WILL ACQUIRE THE PURCHASED
ASSETS IN THEIR PRESENT CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE
IS”.  Neither the Sellers nor any of the Members is, directly or indirectly,
making any representations or warranties regarding any pro-forma financial
information, financial projections or other forward-looking statements with
respect to the Sellers or the Business.
 
ARTICLE V
 
REPRESENTATIONS AND WARRANTIES OF BUYER
 
Concurrently with the execution and delivery of this Agreement, the Buyer is
delivering to the Sellers a disclosure letter (the “Buyer Disclosure Letter”)
setting forth items the disclosure of which shall be necessary or appropriate
either in response to an express disclosure requirement contained in a provision
of this Agreement or as an exception to one or more representations or
warranties contained in this Article V; provided, however, that information
disclosed in or for one section of the Buyer Disclosure Letter shall be deemed
disclosed in all other sections of the Buyer Disclosure Letter only to the
extent it is reasonably apparent on its face that such information is relevant
to such other section of the Buyer Disclosure Letter.
 
 
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Subject to the preceding paragraph, the Buyer represents and warrants to the
Sellers as of the date hereof and as of the Closing Date as follows:
 
5.1           Organization; Qualifications.  The Buyer (a) is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Texas; (b) has all requisite limited liability company
power and authority to own, lease and operate its properties and assets and to
carry on its business substantially as now being conducted; and (c) is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of its business or the ownership, operation or leasing of its properties
makes such qualification necessary, except where the failure to be so qualified
or in good standing would not, individually or in the aggregate, have a Buyer
Material Adverse Effect.  As used in this Agreement, the term “Buyer Material
Adverse Effect” shall mean an event, change or circumstance which adversely
affects in any material respect the ability of the Buyer to fund the Purchase at
Closing or otherwise consummate the transactions contemplated by this Agreement,
but shall not include: (a) changes or effects (i) generally affecting the
principal industries and geographic areas in which the Buyer operates (including
the demand for or market price of oil, natural gas or other commodities), to the
extent such changes do not disproportionately impact the Buyer, (ii) generally
affecting the economy or the financial markets in the United States or globally
(including interest rates), to the extent such changes do not disproportionately
impact the Buyer, (iii) generally affecting regulatory or political conditions
in the United States or globally, to the extent such changes do not
disproportionately impact the Buyer, (iv) resulting from compliance with the
terms of this Agreement (including omissions required by this Agreement),
(v) resulting from the announcement or pendency of the transactions contemplated
by this Agreement; provided that such announcement was made in accordance with
this Agreement, or (vi) resulting from any action or omission of the Sellers or
any of their Affiliates or taken or omitted to be taken by the Buyer at the
written direction of the Sellers or any of their Affiliates; (b) any adoption,
implementation, promulgation, repeal, modification, reinterpretation or proposal
of any Law by any Governmental Entity; (c) any changes in GAAP or the
interpretation thereof after the date hereof; (d) weather, natural disasters or
meteorological events; or (e) acts of terrorism or war.
 
5.2           Authority Relative to this Agreement; Enforceability.  The Buyer
has the limited liability company power and authority to execute and deliver
this Agreement and the Transaction Documents to which the Buyer is or is to
become a party, and to consummate the transactions contemplated by this
Agreement and such Transaction Documents.  The execution and delivery of this
Agreement and the Transaction Documents to which the Buyer is or is to become a
party, the consummation of the transactions contemplated by this Agreement and
such Transaction Documents have been duly and validly authorized by all
requisite limited liability company action on the part of the Buyer.  This
Agreement has been, and each of the Transaction Documents to which the Buyer is
or is to become a party will, at the Closing, be, duly and validly executed and
delivered by the Buyer and constitutes, or will at the Closing constitute, a
valid and binding agreement of the Buyer, enforceable against the Buyer in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency and other laws affecting the rights of creditors
generally and except that equitable remedies may be granted only in the
discretion of a court of competent jurisdiction.
 
5.3           Consents and Approvals; No Violations.  Except as set forth on
Schedule 5.3, neither the execution and delivery of this Agreement or any of the
Transaction Documents by the Buyer nor the consummation by the Buyer of the
transactions contemplated hereby or thereby will (a) conflict with, violate or
result in any breach of any provision of the Governing Documents of the Buyer;
(b)(i) conflict with or result in a violation or breach of, or (ii) constitute
(with or without due notice or lapse of time or both) a default under, or (iii)
impair the rights of Buyer under, or (iv) give rise to any right of termination,
cancellation, non-renewal, amendment, modification or acceleration under, or (v)
require any Consent under any Contract of the Buyer; (c) conflict with or
violate any Laws applicable to the Buyer or any of its properties or assets; or
(d) require any Consent of any Governmental Entity, customer, contractual third
party or other Person; except, in the case of clauses (b), (c) or (d) of this
Section 5.3, for any such conflicts, violations, breaches, defaults, rights of
termination, cancellation, non-renewal, amendment, modification or acceleration,
or requirements which, individually or in the aggregate, would not have a Buyer
Material Adverse Effect.
 
 
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5.4           Brokers; Finders and Fees.  Neither the Buyer nor any of its
Affiliates has employed or engaged any investment banker, broker or finder or
incurred any liability for any investment banking, financial advisory or
brokerage fees, commissions or finders’ fees in connection with this Agreement,
any of the Transaction Documents, or the transactions contemplated by this
Agreement or any of the Transaction Documents.
 
ARTICLE VI
 
COVENANTS OF THE PARTIES
 
6.1           Access to Information.
 
(a)           From the date hereof to the Closing, the Sellers (i) shall give
the Buyer and its authorized representatives reasonable access, during regular
business hours and upon reasonable advance notice, to all assets, personnel
(including management-level personnel), books and records, Contracts,
accountants, offices, premises and other facilities and properties of the
Sellers or any of their Affiliates that are related to the Business or the
Purchased Assets, including (A) access to inspect and to conduct as-built and
boundary surveys of the Owned Real Property and (B) access to conduct
Environmental due diligence of the Real Property, including the collection and
analysis of samples of the Environment at, in, under or from the Real Property;
(ii) shall cause officers of the Sellers and their Affiliates and, to the extent
the Sellers or any of their Affiliates has a right to do so, contractors of the
Sellers or their Affiliates, to furnish the Buyer and its authorized
representatives with such financial and operating data and other information
with respect to the Business and/or the Purchased Assets as the Buyer may from
time to time reasonably request, including, with respect to any Real Property:
(A) surveys, plats, title commitments, title policies and title abstracts, (B)
Environmental reports, tests, studies, Remediation plans and notices, Orders and
other communications from any Governmental Entities with respect to Contaminants
and/or Environmental Laws, (C) soil and other geological tests and studies, (D)
property condition reports and studies, (E) unrecorded Leases, licenses and
easements, and (F) all other documents and materials relating to the Real
Property, and (iii) shall permit the Buyer or its authorized representatives to
make copies, inquiries and inspections of the items and Persons set forth in the
preceding clauses (i) and (ii) as the Buyer or its authorized representatives
may reasonably request, in each case, as are reasonably necessary to allow the
Buyer or its authorized representatives to make such investigation, inspection
or review as it or they may reasonably request (all of the actions contemplated
under the foregoing clauses (i), (ii) and (iii), collectively, the “Buyer Due
Diligence Investigations”); provided, however, that the Buyer and its
representatives shall coordinate such access and any requests for information
through GulfStar Group or designated officers of Alliance.  The Sellers shall
have the right to have a representative present at all times during any such
inspections, interviews and examinations constituting the Buyer Due Diligence
Investigations.  Neither the Buyer nor its representatives shall conduct any
materially invasive sampling or testing of any groundwater, soil, building
materials or other media without the prior written consent of the Sellers.
 
 
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(b)           Notwithstanding anything in this Section 6.1 to the contrary, the
Buyer shall have no right of access to, and the Sellers shall have no obligation
to provide to the Buyer, (i) any information that is subject to the consent
requirements of the Health Insurance Portability and Accountability Act or to
restrictions under applicable Law, or (ii) any information that is subject to
attorney-client privilege or other privilege from disclosure or subject to a
confidentiality agreement with a third party.  Any such access as described in
this Section 6.1 shall be at the Buyer’s sole risk and expense and conducted in
such a manner as to maintain the confidentiality of this Agreement and the
transactions contemplated by this Agreement and not to interfere unreasonably
with the operation of the Business.
 
(c)           All such information and access obtained by the Buyer pursuant to
Section 6.1 shall be subject to the terms and conditions of the Confidentiality
Agreement between the Buyer and the Gulfstar Group, acting on behalf of the
Sellers, dated October 18, 2012 (the “Confidentiality Agreement”).
 
(d)           From and after the Closing Date, each of the Buyer and the Sellers
shall, and shall cause their respective Affiliates to: (i) give the other
parties and their respective authorized representatives reasonable access,
during regular business hours, upon reasonable advance notice given by the
relevant requesting party to the relevant requested party, at the sole cost and
expense of such requesting party, and in a manner not unreasonably disruptive to
the business and operations of such requested party, to the books, records,
personnel, accountants, offices and other facilities and properties of such
requested party, its Affiliates and Subsidiaries to the extent relating to the
Purchase Assets or the Business, (ii) permit such requesting party to make such
copies and inspections thereof as such requesting party may reasonably request,
and (iii) cause the officers of such requested party and its Subsidiaries and
Affiliates, as applicable, to furnish such requesting party with such financial
and operating data and other information with respect to the Business and the
Purchased Assets as such requesting party may from time to time reasonably
request to the extent reasonably necessary: (A) to comply with reporting,
disclosure, filing or other requirements imposed on such requesting party
(including under applicable securities Laws) by a Governmental Entity or
regulatory authority having jurisdiction over such requesting party or any of
its Affiliates, (B) for use in connection with the investigation, prosecution,
defense or settlement of any action, suit, claim, proceeding, hearing or
governmental investigation by or against such requesting party, or in order to
satisfy any audit, accounting, claims, regulatory, litigation, subpoena or other
similar requests or requirements by any Taxing Authority or Governmental Entity,
in each case, relating to the Business or the Purchased Assets during periods
prior to or on the Closing Date, except for (1) any information relating to
post-Closing periods that is commercially sensitive, a trade secret, proprietary
or confidential, or (2) any information that is subject to attorney-client
privilege, work product privilege or other privilege from disclosure, or subject
to a confidentiality agreement with a third party, or that otherwise would not
be required to be provided pursuant to subpoena or other civil discovery
procedure); (C) to comply with the obligations of such requesting party or any
of its Affiliates under this Agreement or the Transition Documents, as the case
may be; or (D) to complete any Tax Returns, Tax filings or financial statements
required or appropriate to be made by such requesting party after the Closing
Date.  Each party shall, and shall cause its directors, managers, officers,
employees, agents, representatives and Affiliates to, hold any and all
information provided to or obtained by such party or its authorized
representatives pursuant to this Section 6.1(d), together with any information
derived therefrom, in confidence.
 
 
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(e)           For a period of two years after the Closing Date, the Sellers
shall, and shall cause their respective managers, officers, employees, agents,
representatives or Affiliates to, (i) refrain from destroying or damaging,
whether in whole or in part, any Books and Records in the possession or custody
or within the control of the Sellers without having first offered to deliver the
same to the Buyer, and (ii) notify the Buyer at least 60 days in advance prior
to the destruction of or damage to any Books and Records.
 
6.2           Consents; Cooperation.
 
(a)           Subject to the terms and conditions set forth in this Agreement,
each of the parties hereto shall use its commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable under applicable Law to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable,
including: (i) the obtaining of all necessary actions or non-actions,
expirations or terminations of waiting periods, clearances, and Consents from
Governmental Entities and the making of all necessary registrations and filings
with, and the taking of all steps as may be reasonably necessary to obtain a
Consent from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary Consents from third parties, and (iii) the
defending of any Legal Proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
by this Agreement.
 
(b)           After the Closing, each of the Sellers shall use its commercially
reasonable efforts to obtain all Consents from third Persons that (i) are
necessary to the assignment to the Buyer of the Assigned Contracts and (ii) were
not obtained by the Sellers and delivered to the Buyer on or prior to the
Closing, and the Buyer shall use its commercially reasonable efforts, as
reasonably requested by the Sellers from time to time, to assist the Sellers in
obtaining such Consents; provided, however, that the Buyer shall not be required
to pay any monies or give any other consideration in order to obtain any such
Consent.  In using their respective commercially reasonable efforts to obtain
any such Consents from a third Person, the Sellers shall, upon request of Buyer,
seek to have such third Person novate the Assigned Contract to which such
Consent relates so that such third Person enters into a new Contract with the
Buyer (or one or more of its Affiliates), in form and substance reasonably
satisfactory to the Buyer.
 
 
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(c)           The Sellers’ obligations pursuant to Section 6.2(b) shall
terminate on the earlier of (i) with respect to a particular Assigned Contract,
if the applicable third Person advises in writing that it has determined not to
Consent and (ii) one hundred eighty (180) days after the Closing Date.  In such
event, the Sellers and the Buyer shall cooperate in any lawful arrangement to
provide that Buyer shall receive all benefits under such Assigned Contract,
including the right to receive any monies paid or payable under such Assigned
Contract in respect of periods on or after the Closing.  In addition and without
limiting the foregoing, the Sellers shall use its commercially reasonable
efforts to collect any monies payable under any Assigned Contract not assigned
to the Buyer pursuant to this Agreement in respect of periods on or after the
Closing.  In the event that any of the Sellers receives any payment under any
Assigned Contract following the Closing Date, such Seller shall promptly
transmit such payment to the Buyer.
 
6.3           Confidentiality; Non-Competition; Non-Solicitation.
 
(a)           Each of the Sellers acknowledges that in the course of its
ownership of the Purchased Assets and operation of the Business it has had
access to the Confidential Information.  Each of the Members also acknowledges
that in the course of its ownership of Alliance, such Member, together with its
Affiliates, has had access to the Confidential Information.  Each of the Sellers
and Members agrees that it shall not, and shall not authorize or permit any of
their respective Affiliates, directly or indirectly, at any time, to disclose
any Confidential Information to any other Person or to use any Confidential
Information to the detriment of the Buyer; provided, however, that for purposes
of this Section 6.3(a), Confidential Information shall not be deemed to include
such information as is generally available and known by the public or the
industry through no fault of the Sellers, Members or any of their Affiliates in
breach of the terms hereof; provided, further, that this Section 6.3(a) shall
not prevent the disclosure of Confidential Information by the Sellers or Members
to the extent required in any proceeding between the parties hereto; and,
provided further, that this Section 6.3 shall not restrict Savage or Branch from
using or disclosing Confidential Information in the course of employment with
Buyer.  If any of the Sellers, Members or their respective Affiliates is
compelled to disclose any Confidential Information by any legal proceeding or
the federal securities laws, such Seller or Member shall promptly notify the
Buyer of such required disclosure so that the Buyer may seek, at its sole
expense, a protective order or other appropriate remedy.  If such protective
order or other remedy is not obtained, such Seller or Member agrees to disclose
only that portion of the Confidential Information which is legally required to
be disclosed and to take all reasonable steps to preserve the confidentiality of
the Confidential Information.
 
(b)           Each of the Sellers and Members agrees that it shall not, and
shall not permit any of its Affiliates to, at any time during the five-year
period immediately following the Closing Date (the “Restricted Period”) directly
or indirectly, either individually or on behalf of, or in partnership or
conjunction with, any Person, as owner, officer, manager, director, partner,
investor, employee, agent, shareholder (other than as a holder of not more than
five percent (5%) of the total outstanding equity securities of a
publicly-traded entity) or in any other capacity or manner whatsoever, carry on
or engage in the business of providing customized drilling fluids, stimulation
products (proppants), other specialty chemicals and fluids, and services related
thereto, in the energy industry (the “Competing Business”) in the States of
Texas, New Mexico, Kansas, Oklahoma and Wyoming (the “Territory”).
 
 
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(c)           Each of the Sellers and Members agrees that it shall not, and
shall not permit any of its Affiliates to, at any time during the Restricted
Period, directly or indirectly, either individually or on behalf of, or in
partnership or conjunction with, any Person, as owner, officer, manager,
director, partner, investor, employee, agent, shareholder (other than as a
holder of not more than five percent (5%) of the total outstanding equity
securities of a publicly-traded entity) or in any other capacity or manner
whatsoever, (i) seek, solicit, or attempt to establish a business relationship
within the Competing Business with a Person who (A) was a client, customer,
supplier or vendor of the Business during the twenty-four (24) months preceding
the Closing Date or (ii) was solicited directly by any Seller or an employee of
any Seller during the twelve (12) months preceding the Closing Date to become a
client, customer, supplier or vendor of the Business (each a “Restricted
Party”), or (iii) request, induce or attempt to limit or influence any
Restricted Party or business entity to limit, curtain, cancel or terminate any
business it transacts with, or products it provides to or receives from, any
Seller or the Buyer.  For purposes hereof, a Restricted Party shall include,
without limitation, the Persons listed on Schedule 6.3(c).
 
(d)           During the Restricted Period, each of the Sellers and Members
shall not, and each shall cause its Affiliates not to, without the prior written
consent of the Buyer, directly or indirectly, either individually or on behalf
of, or in partnership or conjunction with, any Person, as owner, officer,
manager, director, partner, investor, employee, agent, shareholder (other than
as a holder of not more than five percent (5%) of the total outstanding equity
securities of a publicly-traded entity) or in any other capacity or manner
whatsoever, (i) hire, solicit or recruit the employment or services of employees
employed with or consultants engaged by the Buyer or any of its Affiliates at
the time of any such actions or within three (3) months prior to such action, or
(ii) induce or attempt to induce any employee or consultant of the Buyer or any
of its Affiliates to terminate, modify or sever his or her employment or
consulting relationship with the Buyer or any of its Affiliates; provided,
however, that (A) the Sellers, Members and their Affiliates may hire any such
person whose employment is terminated by the Buyer or any of its Affiliates; and
(B) nothing in this Section 6.3(d) shall prohibit the Sellers, Members or any of
their Affiliates from engaging in general solicitations to the public or general
advertising not targeted at employees of the Buyer, its Affiliates or the
Business and hiring persons responding thereto provided such persons are in no
way otherwise solicited by them.
 
(e)           Each of the Sellers and Members acknowledges that the Buyer would
be irreparably harmed and the value of the transaction contemplated hereby to
Buyer would be diminished by any violation of Sellers’ and Members’ obligations
under this Section 6.3 and that, in addition to all other rights or remedies
available at law or in equity, if any of the Sellers or Members violates any of
the covenants set forth in this Section 6.3, the Buyer shall be entitled to
injunctive relief or such other relief against such Seller or Member as may be
provided at Law or in equity together with such damages as may be provided at
Law or in equity. The Buyer shall be entitled where provided under applicable
Law to specific performance of the requirements of this Section 6.3 or to
temporary or permanent injunctive relief against any breach of such provisions
of this Agreement by the Sellers or Members, without the necessity of posting a
bond or other security.
 
 
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(f)           Each of the Sellers and Members acknowledges that the goodwill
associated with the Business and its customers, suppliers, vendors and employees
is an integral component of the value of the Business to the Buyer and that the
obligations of the Sellers and Members under this Section 6.3 are a material
inducement to the Buyer’s execution and performance of this Agreement and that
the restrictions contained in this Section 6.3 are reasonable as to time,
geographic area and scope of activity and do not impose a greater restraint than
is necessary to protect the goodwill and other legitimate business interests of
the Buyer.
 
(g)           If the provisions of this Section 6.3 are found by a court of
competent jurisdiction to contain unreasonable limitations as to time,
geographic area or scope of activity, then such court is hereby directed to
reform such provisions to the minimum extent necessary to cause the limitations
contained therein as to time, geographical area and scope of activity to be
reasonable and enforceable.
 
6.4           Tax Matters.
 
(a)           Liability for Taxes.  The Sellers shall be liable for all Taxes
included in the Excluded Liabilities. All property, ad valorem and similar Taxes
and assessments based upon or measured by the value of the assets that are
imposed with respect to the Purchased Assets shall be divided or prorated
between the Sellers and Buyer as of the Effective Time.  Sellers shall retain
responsibility for such Taxes attributable to the period of time on and prior to
the Effective Time and Buyer shall assume responsibility for and bear such Taxes
that are attributable to the period of time after the Effective Time.  Buyer
agrees to pay any property, ad valorem or similar Taxes to the extent such
amounts are included in the determination of the Estimated Net Working Capital,
as adjusted by the determination of the Closing Date Net Working Capital, in
accordance with Section 2.11.
 
(b)           Transfer Taxes.  All excise, sales, use, value added, transfer
(including real property transfer or gains), stamp, documentary, filing,
recordation and other similar taxes, levies, assessments, customs, duties,
imposts, charges or fees, together with any interest, additions or penalties
with respect thereto and any interest in respect of such additions or penalties,
resulting from the sale and transfer by the Sellers to the Buyer of the
Purchased Assets (the “Transfer Taxes”), shall be borne by the Sellers except to
the extent such Taxes set forth in Texas Tax Code Chapter 152 result from the
sale and transfer by the Sellers to the Buyer of the Vehicles constituting
Purchased Assets, which such Taxes shall be borne by the Buyer.
 
 
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(c)           Refunds, Overpayments and Prepayments.  If, after the Closing, the
Buyer receives any refund (whether by payment, offset, credit or otherwise) of,
or the Sellers overpay, Taxes for which the Sellers are liable or which Taxes
are the subject of indemnification by the Sellers under this Agreement, the
Buyer shall promptly transfer, or cause to be transferred, to the Sellers the
entire amount of the refund or overpayment (including interest).  The Buyer
agrees to claim any such refund as soon as possible and to furnish to the
Sellers all information, records and assistance necessary to verify the amount
of the refund or overpayment.
 
(d)           For purposes of this Agreement, “Tax” or “Taxes” shall mean taxes
of any kind, levies or other like assessments, customs, duties, imposts, charges
or fees imposed by any Taxing Authority, including taxes, levies or other like
assessments on income, profits or gains, franchise, privilege, gross receipts,
ad valorem, escheat, value added, customs, excise, import or export, real or
property, asset, sales, use, license, payroll, transaction, capital, net worth,
withholding, estimated, social security, utility, workers’ compensation,
severance, production, unemployment compensation, occupation, premium, windfall
profits, stamp, documentary, filing, recordation, transfer and gains taxes,
levies or otherwise or other governmental taxes imposed or payable to or in any
jurisdiction or country in the world, or any state or county, government or
subdivision or agency thereof (any such authority a “Taxing Authority”),
together with any interest, penalties or additions with respect thereto and any
interest in respect of such additions or penalties.
 
(e)           Tax Treatment of Indemnity Payments.  The Sellers and the Buyer
agree to treat any payment made by or on behalf of the Sellers or the Buyer as
indemnification pursuant to Section 9.2(a) or 9.3(a) or any other provision of
this Agreement as an adjustment to the Purchase Price for Tax purposes, unless
otherwise required by applicable Law.
 
(f)           Cooperation Regarding Tax Matters.  The parties shall, with
respect to any taxable period (or portion thereof) ending on or before the
Closing, communicate with each other and reasonably cooperate (i) in the
preparation and filing of any Tax Return or election with respect to Taxes
related to the Purchased Assets, (ii) to enable each party to more accurately
determine its own Tax liability with respect to the Purchased Assets, and (iii)
in the defense of any audit, examination, administrative appeal or litigation of
any Tax Return or other similar governmental report or form or in the
preparation or filing of a claim or suit for refund with respect Taxes relating
to the Purchased Assets.  The Buyer and the Sellers shall keep all such
information and documents received by them from the other party confidential
unless otherwise required by Law.
 
6.5           Further Assistance.  From time to time after the Closing, each of
the Sellers shall execute and deliver, or cause to be executed and delivered,
any and all instruments or other documents of transfer, conveyance and
assignment, and take such other action as the Buyer may reasonably request, as
may be necessary to effect or evidence the conveyance of, or to vest or perfect
the Buyer’s rights, title and interest in and to, the Business and the Purchased
Assets, as and to the extent contemplated hereby.  From time to time after the
Closing, the Buyer shall execute and deliver, or cause to be executed and
delivered, any and all instruments or other documents of assumption and
acceptance, and take such other action as the Sellers may reasonably request, as
may be necessary to effect or evidence the assumption of the Assumed
Liabilities, as and to the extent contemplated hereby.
 
 
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6.6           Accounts Receivable.  Schedule 6.6 sets forth a complete and
correct list of all Accounts Receivable included in the calculation of the
Estimated Net Working Capital and any adjustment to the Base Purchase Price
pursuant to Section 2.5 (the “Closing Date Receivables”).  The list of the
Closing Date Receivables may be revised in connection with the determination of
the Closing Date Net Working Capital.  The Buyer agrees that it shall use
commercially reasonable efforts to collect the Closing Date Receivables for a
period of not less than one hundred fifty (150) days after the Closing Date (and
an additional 30 days thereafter with respect to Closing Date Receivables that
are existing but unbilled prior to the Closing Date).  If collections by Buyer
with respect to the Closing Date Receivables during the one hundred fifty (150)
day period following the Closing Date (and an additional 30 days thereafter with
respect to Closing Date Receivables that are existing but unbilled prior to the
Closing Date) are less than the amount of the Closing Date Receivables (such
deficit being referred to as the “Uncollected Receivables Amount”), Sellers or
Members shall pay to Buyer an amount equal to the Uncollected Receivables Amount
within ten (10) days of written demand by Buyer.  Buyer’s right to recover the
Uncollected Receivables Amount shall not be subject to the provisions of Article
X or any limitations of liability set forth therein.  Any such payment shall be
deemed an adjustment to the Purchase Price.  Upon receiving payment for the
Uncollected Receivables Amount, Buyer shall assign such Closing Date Receivables
to the Sellers.  If Buyer thereafter receives payment on any such Closing Date
Receivables for which it has previously received payment pursuant to this
Section 6.6, Buyer shall promptly pay to Seller (or Members, as applicable) the
amount received by Buyer for such Closing Date Receivable.  Upon assignment of
any such uncollected Closing Date Receivables to Sellers, Sellers shall have the
right to seek collection of any such Closing Date Receivables; provided, that
Sellers shall provide written notice to Buyer in advance of Sellers initiating
any legal proceedings against the account debtor on any such Closing Date
Receivables.
 
6.7           Conduct of Business.
 
(a)           During the period from the date of this Agreement to the Closing
Date, except as provided below or on Schedule 6.7 or otherwise contemplated by
this Agreement or consented to by the Buyer in writing (which consent shall not
be unreasonably withheld, delayed or conditioned), the Sellers shall, and the
Members shall cause the Sellers to:
 
(i)           conduct and operate the Business and the Purchased Assets in the
Ordinary Course of Business;
 
(ii)           preserve and maintain all Permits required for the conduct of the
Business as currently conducted or for the ownership, use and operation of the
Purchased;
 
(iii)           pay all Indebtedness, Taxes, liabilities and obligations of the
Business when due in the Ordinary Course of Business;
 
 
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(iv)           use commercially reasonable efforts to preserve intact the
Business and the Purchased Assets (reasonable wear and tear excepted);
 
(v)           continue in full force and effect without modification all
insurance policies set forth on Schedule 4.20, except as required by applicable
Law;
 
(vi)           timely and fully perform, discharge or satisfy all of the
agreements, covenants, liabilities and obligations required to be performed,
discharged or satisfied by any of the Sellers on or before the Closing Date
under all Assigned Contracts;
 
(vii)           comply in all material respects with all Laws applicable to the
conduct of the Business or the ownership, use or operation of the Purchased
Assets;
 
(viii)           use commercially reasonable efforts to keep available the
services of the current officers, Employees, agents and representatives of the
Sellers, and maintain the relation and goodwill with all suppliers, customers,
landlords, lessees, creditors, Employees, agents, representatives and other
Persons having business relations with the Business; and
 
(ix)           confer with the Buyer concerning operational matters of a
material nature that will affect the post-Closing ownership, use, conduct or
operation of the Business or the Purchased Assets.
 
(b)           During the period from the date of this Agreement to the Closing
Date, except as provided below or on Schedule 6.7 or otherwise contemplated by
this Agreement or consented to by the Buyer in writing (which consent shall not
be unreasonably withheld, delayed or conditioned), the Sellers shall not, and
the Members shall not permit the Sellers to:
 
(i)           sell, assign, transfer, lease, license, mortgage, pledge or
otherwise encumber or subject to any Lien (other than Permitted Liens) or
otherwise dispose of any of its material properties or assets, including the
Purchased Assets, except in the Ordinary Course of Business;
 
(ii)           terminate or materially amend any Material Contract, except in
the Ordinary Course of Business;
 
(iii)           enter into any new Contract that would constitute a Material
Contract other than customer contracts, service contracts, purchase contracts or
renewals of existing Contracts, in each case, in the Ordinary Course of
Business;
 
(iv)           enter into any written employment agreement with any Employee or
materially increase the compensation of any Employee, except for such increases
as are granted in the Ordinary Course of Business (which shall include normal
periodic performance reviews and related compensation and benefit increases);
 
 
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(v)           adopt, grant, extend or increase the rate or terms of any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
to, for or with any such Employee, except as required by any applicable Law and
except increases in the Ordinary Course of Business; or
 
(vi)           commit to any material capital expenditure or authorize any new
material capital expenditures.
 
(c)           Notwithstanding the foregoing clauses (a) and (b) and any other
representation, warranty, covenant or agreement herein to the contrary, Buyer
acknowledges and agrees that, prior to Closing, Sellers may, at their sole
election, transfer any and all of Sellers’ cash on deposit from the accounts
described in Section 2.1(q) to the Excluded Account and/or distribute such cash
to the Members.  The cash that is so transferred or distributed, if any, will
not be included as a Current Asset in the calculation of the Estimated Net
Working Capital, as adjusted by the determination of the Closing Date Net
Working Capital as set forth in Section 2.5 hereof.
 
6.8           Employee Matters.
 
(a)           On or before the Closing Date, the Buyer will give offers of
employment to each Employee identified on Schedule 6.8(a) (other than those
Employees who are not actively employed due to short-term disability, long-term
disability, workers compensation leave or approved leave of absence
(collectively, the “LOA Employees”) and Non-Offer Employees, as defined below)
which offer shall provide for employment at a level of base salary or hourly
wage at least equal to the that in effect as of November 30, 2012 as previously
disclosed to Buyer and otherwise provide benefits on terms and conditions
comparable to similarly situated employees of Buyer.  All offers of employment
made by the Buyer pursuant to this Section 6.8(a) will be conditioned in all
respects on the occurrence of the Closing.  The Buyer shall notify the Sellers
in writing the names of the Employees identified on Schedule 6.8(a) who have
accepted offers of employment with the Buyer.  Each such Person who becomes
employed by the Buyer pursuant to this Section 6.8(a) is referred to herein as a
“Transferred Employee.”  Employment with the Buyer shall be effective as of the
Effective Time for all Transferred Employees (except as described
below).  Notwithstanding the foregoing, the Buyer shall not be required to make
an offer of employment to an Employee whom the Buyer is prohibited from hiring
by applicable Law or who otherwise fails any applicable screening and testing
policies of Buyer (a “Non-Offer Employee”).  If the Buyer determines that an
Employee is a Non-Offer Employee, the Buyer will promptly notify the Sellers
that such Non-Offer Employee will not be offered employment with the
Buyer.  During the 180 day period following the Closing Date, the Buyer shall
offer employment to each LOA Employee upon his return from short-term
disability, long-term disability or approved leave of absence within 10 Business
Days of the expected return date of each LOA Employee from short-term
disability, long-term disability or an approved leave of absence, but effective
as of, and conditioned upon, the commencement of active employment of such LOA
Employee.  A LOA Employee who receives and accepts an offer of employment from
Buyer shall become a Transferred Employee effective upon the commencement of
such LOA Employee’s active employment with Buyer and shall be treated as an
employee of the Sellers prior to the commencement of active employment for all
purposes (including for purposes of this Section 6.8).
 
 
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(b)           From and after the time the employment of the Transferred
Employees with Buyer becomes effective (the “Employment Date”) the employment of
the Transferred Employees with the Sellers will terminate.  The Buyer shall not
assume any of the Sellers Benefit Plans and shall have no obligations or
liabilities with respect to the Sellers Benefit Plans.  The Sellers will pay to
each Transferred Employee all salary or other compensation or employment
benefits which has accrued to such Transferred Employee prior to the Employment
Date.  To the extent required under the Sellers’ applicable policies,  Sellers
shall also pay to each Transferred Employee an amount equal to the value of all
vacation time accrued and unused by such Transferred Employee immediately prior
to the Employment Date.
 
(c)           Except as required by Section 6.8(d) and Section 6.8(e), beginning
on the Employment Date, the Benefit Plans that the Buyer maintains, contributes
to or participates in (the “Buyer Benefit Plans”) shall be made available to
each Transferred Employee if and when, and on the same terms and conditions,
such Buyer Benefit Plan would be made available to a new employee of the Buyer
who is similarly situated to the Transferred Employee.
 
(d)           Each Transferred Employee shall become eligible to participate in
the group health plan of the Buyer, summaries of which have been provided to
Sellers at least five (5) calendar days prior to the Closing Date, effective as
of his or her Employment Date.  With respect to any group health plan or program
of the Buyer or the Buyer’s Affiliates in which a Transferred Employee becomes
eligible to participate as of his or her Employment Date or thereafter, the
Buyer shall take all reasonable steps to ensure that such Transferred Employee
shall (i) receive credit for any deductibles, co-pays or other out-of-pocket
expenses paid under the corresponding group health plan or program of the
Sellers, and (ii) not be subject to any pre-existing condition limitations to
the extent that such pre-existing condition limitation did not apply to such
Transferred Employee under the corresponding group health plan or program of the
Sellers.
 
(e)           The Buyer and the Buyer’s Affiliates shall credit each Transferred
Employee with the same number of years of service, including partial years of
service, as the Transferred Employee would have been credited by the Buyer and
Buyer’s Affiliates if, solely for the purposes of determining years of service
under Benefit Plans sponsored by the Buyer or any of its Affiliates, the
Transferred Employee’s date of hire with the Buyer was the Transferred
Employee’s date of hire as provided by the Sellers on Schedule 4.11(a), under
the applicable Benefit Plan sponsored by the Buyer or any of its Affiliates,
except as otherwise limited by applicable Law.  The service credit required by
this Section 6.8(e) shall apply for all purposes under any health, retiree
medical, severance, vacation, sick or any similar paid-time off program or other
employee welfare benefit plan (as such term is defined in Section 3(1) of ERISA)
of the Buyer or the Buyer’s Affiliates and for purposes of eligibility to
participate, vesting, eligibility for a particular form or type of benefit, and
benefit accrual (except for benefit accrual under a defined benefit pension
plan) under any pension, retirement, savings, or other employee pension benefit
plan (as such term is defined in Section 3(2) of ERISA) of the Buyer or the
Buyer’s Affiliates; provided, that such service credit shall not require Buyer
to pay any Transferred Employee for, or carryforward, any accrued and unused
vacation time as of the Effective Time.
 
 
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(f)           Claims for workers’ compensation or long-term disability benefits
arising out of occurrences prior to an Employee’s Employment Date shall be the
responsibility of the Sellers.  Claims for workers’ compensation or long-term
disability benefits for a Transferred Employee arising out of occurrences on or
subsequent to the Transferred Employee’s Employment Date shall be the
responsibility of the Buyer and the Buyer’s Affiliates.
 
(g)           The Sellers shall retain all liability for severance and other
benefits (including any notice obligations and liability arising under the WARN
Act) to any Employee who is terminated by Seller (whether as a result of Buyer’s
decision not to hire such individual or due to “constructive termination” or
similar concept under applicable Law) prior to, as of or after the Effective
Time.  The Buyer shall assume all liability arising under the WARN Act with
respect to any Transferred Employee who is terminated by Buyer after the
Transferred Employee’s Employment Date.
 
(h)           The Sellers shall be responsible for compliance with and liability
under Section 4980B of the Code and Sections 601 through 608 of ERISA (“COBRA”)
with respect to all COBRA-qualifying events that occur with respect to Sellers
Benefit Plans. The Buyer shall be responsible for compliance with and liability
under COBRA with respect to any COBRA-qualifying events that occur with respect
to the Buyer Benefit Plans.
 
6.9           Removal of Names.
 
(a)           After Closing, the Sellers, the Members and their Affiliates shall
not be entitled to use and shall not use any service marks, trade names, trade
dress, logos, designs or other indicia of origin of or used by the Sellers prior
to Closing including the words “Alliance Drilling Fluids,” “Xtreme Specialty
Products” and “Prop-Tech Services” or any such items that include such words,
and any variations or derivations of any of the foregoing (collectively, the
“Prohibited Names and Marks”).
 
(b)           In addition, as soon as reasonably practicable following Closing,
but in any event within ninety (90) days following Closing, the Sellers shall
and shall cause each of their Affiliates to remove, obliterate or replace, as
appropriate, all signs, containers, advertisements or other media containing any
such Prohibited Names and Marks located on any Excluded Assets.
 
(c)           Within fifteen (15) Business Days of Closing, each of the Sellers
shall file certificates of amendment or similar amendments to its respective
Governing Documents changing its name to a name that does not contain any of the
Prohibited Names and Marks and that is not confusingly similar to any of the
Prohibited Names and Marks, and deliver to the Buyer photocopies of the
file-stamped certificates of amendment evidencing that those certificates of
amendment or similar amendments have been filed within fifteen (15) Business
Days following the Closing Date.
 
 
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6.10           Casualty Loss.  If, before the Closing Date, all or any portion
of the Purchased Assets are damaged or destroyed, whether in whole or in part,
by fire, flood or other casualty, the Sellers will promptly notify the Buyer in
writing of such fact and, at the Closing, pay to the Buyer, by wire transfer of
immediately available funds to an account or accounts designated by the Buyer in
writing, all proceeds from third-party insurers received by the Sellers, and
assign to the Buyer all of the Sellers’ right, title, and interest in and to any
and all such insurance proceeds received or to be received, in each case, in
compensation for such damage or destruction; provided, however, that nothing in
this Section 6.10 is intended, or shall be construed, to modify or limit the
Buyer’s right to terminate this Agreement pursuant to the terms hereof or
otherwise decline to proceed with the Closing by reason of the fact that the
damage or destruction to all or any portion of the Purchased Asset by fire,
flood or casualty, whether considered individually or in the aggregate, would
have a Business Material Adverse Effect.
 
6.11           Exclusivity.
 
(a)           From the date hereof until the earlier of (i) the Closing Date, or
(ii) the termination of this Agreement pursuant to Article VIII (such earlier
date being referred to herein as the “Exclusivity Termination Date”), the
Sellers and Members shall not, and shall not authorize or permit any of their
respective officers, directors, employees, agents, representatives or Affiliates
to, directly or indirectly: (i) solicit, initiate, encourage, facilitate or (to
the extent within such Person’s control) permit the submission of any proposal,
inquiry, or offer from any Person (other than Buyer or any of its Affiliates)
relating to the direct or indirect disposition, whether by sale, merger or
otherwise, of all or any portion of the Business or the Purchased Assets (a
“Competing Transaction”) other than acquisitions of the Purchased Assets in the
Ordinary Course of Business, or (ii) furnish any information, participate in any
discussions or negotiations, or enter into any Contract, letter of intent, or
other understanding (whether written, oral, binding, non-binding, or otherwise)
regarding a Competing Transaction.
 
(b)           Immediately following the execution of this Agreement, each of the
Sellers and Member will terminate any and all discussions or negotiations with
respect to any Competing Transaction and request each Person that has heretofore
executed a confidentiality agreement in connection with a Competing Transaction
to return all confidential information heretofore furnished to such Person by or
on behalf of, or with respect to, the Sellers, the Business or the Purchased
Assets.
 
(c)           From the date hereof through the Exclusivity Termination Date, if
any of the Sellers and Members receives any inquiry, proposal, or offer relating
to a Competing Transaction, or any request for information relating thereto,
such party will promptly, and in any event within one (1) Business Day, notify
the Buyer in writing of such inquiry, proposal, offer, or request, including the
identity of the Person making such inquiry, proposal, offer, or request, and the
terms and details thereof, including a copy of any writing (including any
electronic mail) relating thereto.
 
 
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(d)           Each of the Sellers and Members hereby acknowledges that any
breach of this Section 6.11 would cause substantial and irreparable damage to
the Buyer for which money damages would be an inadequate remedy and,
accordingly, acknowledges and agrees that the Buyer will be entitled to an
injunction, specific performance or other equitable relief to prevent the breach
of such obligations (in addition to all other rights and remedies to which the
Buyer may be entitled in respect of any such breach), without the necessity of
posting a bond or other security.
 
6.12           Insurance Matters.  On or before the Closing Date, the Sellers
will cause the Buyer to be added as an Additional Insured under the National
American Insurance Company commercial general liability insurance policy of the
Sellers.
 
6.13           Publicity.  Following the execution of this Agreement, Newpark
intends to issue or cause the publication of a press release and the filing of a
Current Report on Form 8-K with respect to this Agreement and the transactions
contemplated herein; provided, however, that Newpark will provide copies thereof
to the Sellers and allow Sellers to comment on such release or announcement in
advance of its issuance.
 
ARTICLE VII
 
CONDITIONS TO CONSUMMATION OF THE PURCHASE
 
7.1           Conditions to Each Party’s Obligations to Consummate the
Purchase.  The respective obligations of each party to consummate the Purchase
and to take the other actions required under this Agreement at Closing are
subject to the satisfaction at or prior to the Closing Date of the condition
that (a) no Law or Order shall have been enacted, entered, promulgated or
enforced by any Governmental Entity that restrains, enjoins, prohibits or makes
illegal the consummation of the Purchase or that materially and adversely
affects the ownership, use, operation or control of the Business or the
Purchased Assets, and (b) there shall be no Legal Proceeding pending or
threatened that challenges the Purchase or seeks monetary, injunctive or other
relief by reason of the consummation of the Purchase.
 
7.2           Conditions to the Sellers’ and Members’ Obligations.  The
obligations of the Sellers and Members to consummate the Purchase and to take
the other actions required to be taken by them under this Agreement or any of
the Transaction Documents at Closing are further subject to satisfaction at or
prior to the Closing Date of the following conditions, any one or more of which
may be waived in writing, in whole or in part, by the Sellers and the Members,
in their sole discretion:
 
(a)           the representations and warranties of the Buyer contained in
Article V that are qualified by materiality or Buyer Material Adverse Effect
shall be true and correct in all respects, and all other representations and
warranties of the Buyer contained in Article V shall be true and correct in all
material respects, in each case, at and as of the date of this Agreement and at
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date
(except for representations and warranties that by their terms are made as of a
specified date or period, which shall be true and correct only as of such
specified date or period);
 
 
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(b)           the Buyer shall have performed and complied in all material
respects with all agreements, covenants, conditions and obligations required by
this Agreement to be performed or complied with by it on or prior to the
Closing; and
 
(c)           the Buyer shall have made the payments as set forth in Section 2.6
and delivered to the Sellers the Transaction Documents and other Closing
deliveries set forth in Section 2.7(c).
 
7.3           Conditions to the Buyer’s Obligations.  The obligations of the
Buyer to consummate the Purchase and to take the other actions required to be
taken by it under this Agreement at Closing are further subject to satisfaction
at or prior to the Closing Date of the following conditions, any one or more of
which may be waived in writing, in whole or in part, by the Buyer in its sole
discretion:
 
(a)           the representations and warranties of the Members contained in
Article III and the Sellers contained in Article IV that are qualified by
materiality or by Business Material Adverse Effect shall be true and correct in
all respects, and all other representations and warranties of the Members
contained in Article III and Sellers contained in Article IV shall be true and
correct in all respects, in each case, at and as of the date of this Agreement
and at and as of the Closing Date with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date
(except for representations and warranties that are made as of a specified date
or period, which shall be true and correct only as of such specified date or
period);
 
(b)           each of the Members and Sellers shall have performed and complied
in all material respects with all agreements, covenants, conditions and
obligations required by this Agreement to be performed or complied with by them
on or prior to the Closing;
 
(c)           each of the Sellers shall have delivered, or caused to be
delivered, to the Buyer the Transaction Documents and other Closing deliveries
set forth in Section 2.7(c);
 
(d)           the Consents described in Schedule 7.3(d) will have been made,
given or obtained by such customer, vendor, contractual third party or other
Person, as applicable, on terms reasonably satisfactory to the Buyer; and
 
(e)           the Buyer shall have received evidence reasonably satisfactory to
the Buyer that all Liens affecting Purchased Assets, other than Permitted Liens,
have been discharged and that good and valid title to all Purchased Assets is
being conveyed to the Buyer, free and clear of all Liens other than Permitted
Liens.
 
 
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ARTICLE VIII

 
TERMINATION AND ABANDONMENT
 
8.1           Termination.  Subject to Section 8.2, this Agreement may be
terminated and the transactions contemplated by this Agreement may be abandoned
at any time prior to the Closing:
 
(a)           by mutual written consent of the Sellers and the Buyer;
 
(b)           by the Sellers, on the one hand, or the Buyer, on the other hand,
by giving written notice to the other party, if:
 
(i)           the Closing shall not have occurred on or before December 31, 2012
or such later day as the Sellers and the Buyer may mutually agree upon in
writing (the “Outside Date”); or
 
(ii)           an injunction, decree, legal restraint, prohibition, judgment or
order of any Governmental Entity shall have been entered permanently enjoining,
restraining or prohibiting the consummation of the transactions provided for in
this Agreement and such injunction, decree, legal restraint, prohibition,
judgment or order shall have become final and non-appealable;
 
(c)           by the Sellers, if the Buyer shall have breached or failed to
perform any of its representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to perform: (i) would
constitute the failure of a condition set forth in Section 7.2(a), 7.2(b) or
7.2(c) and (ii)(A) is not capable of being satisfied or cured by the Outside
Date or (B) if capable of being satisfied or cured, is not satisfied or cured
within fifteen (15) days following receipt by the Buyer of written notice
stating the Sellers’ intention to terminate this Agreement pursuant to this
Section 8.1(c) and the basis for such termination; or
 
(d)           by the Buyer, if any Sellers or Members shall have breached or
failed to perform any of their respective representations, warranties, covenants
or other agreements contained in this Agreement, which breach or failure to
perform:  (i) would constitute the failure of a condition set forth in Section
7.3(a), 7.3(b) or 7.3(c) and (ii)(A) is not capable of being satisfied or cured
by the Outside Date or (B) if capable of being satisfied or cured, is not
satisfied or cured within fifteen (15) days following receipt by the Sellers of
written notice stating the Buyer’s intention to terminate this Agreement
pursuant to this Section 8.1(d) and the basis for such termination;
 
provided, however, that the party seeking termination pursuant to clause (b)(i),
(c) or (d) is not then in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement, which breach would give
rise to the failure of a condition set forth in Section 7.2, if the Buyer is
then seeking termination, or Section 7.3, if the Sellers are then seeking
termination.
 
 
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8.2           Procedure for and Effect of Termination.  In the event of
termination of this Agreement and abandonment of the transactions contemplated
by this Agreement by the parties under Section 8.1, written notice thereof shall
be given by the party so terminating to the other party or parties and, except
as provided in this Section 8.2, this Agreement shall forthwith terminate and
shall become null and void and of no further force or effect, and the
transactions contemplated by this Agreement shall be abandoned without further
action by the Sellers or the Buyer.  If this Agreement is terminated under
Section 8.1 of this Agreement, there shall be no liability or obligation under
this Agreement on the part of the Sellers, Members or the Buyer or any of their
respective directors, officers, employees, Affiliates, controlling Persons,
agents or representatives, except (i) that no such termination shall relieve any
party for liability arising out of its breach of this Agreement and the rights,
remedies or causes of action accrued or resulting therefrom will continue
unimpaired, and (ii) the provisions of this Section 8.2 and Article IX shall
survive any such termination.
 
ARTICLE IX
 
SURVIVAL AND INDEMNIFICATION
 
9.1           Survival Periods.  All representations, warranties, covenants and
agreements of the parties contained in this Agreement shall survive the Closing
for the applicable time periods specified herein.  For purposes of this
Agreement, the term “Applicable Survival Period” shall be two (2) years after
the Closing Date, except that the Applicable Survival Period with respect to the
following shall be as set forth below:
 
(a)           with respect to any Damages arising from or related to a breach of
the representations and warranties set forth in Section 4.3 (Title to Purchased
Assets), Section 4.5 (Environmental Matters), Sections 4.11(b), (c), (d), (e),
(f) and (g) (Sellers Benefit Plans and ERISA) and Section 4.14 (Taxes), the
Applicable Survival Period shall be three (3) months following the expiration of
the statute of limitations applicable to the Damages giving rise to that claim
for indemnification (including any extensions thereto or waivers thereof to the
extent that such statute of limitations may be tolled); and
 
(b)           there shall be no time limit for any claim for indemnification
with respect to any Damages arising from or relating to (i) intentionally
fraudulent acts or omissions (collectively, “Fraud Claims”), (ii) any of the
Excluded Assets or the Excluded Liabilities or (iii) the Assumed Liabilities.
 
In addition to and without limiting the foregoing, the parties further agree
that no claims or causes of action for indemnification under this Agreement may
be brought against the Sellers, Members or the Buyer based upon, directly or
indirectly, a breach or nonperformance of any of the covenants or agreements
contained herein that by their terms are to be performed prior to or at Closing,
unless written notice thereof is delivered to the party against whom
indemnification is sought prior to the date that is three (3) months following
the Closing Date (which period shall be the Applicable Survival Period
therefor).  Notwithstanding anything in this Agreement to the contrary, this
Section 9.1 shall not in any manner limit the survival period for, or any
party’s right or ability to bring any claims for indemnification under this
Agreement with respect to Damages arising from or relating to, a breach or
nonperformance of any covenant or agreement of the parties contained in this
Agreement or any of the Transaction Documents which by its terms contemplates
performance after the Closing.
 
 
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9.2           Sellers’ and Members’ Agreement to Indemnify.
 
(a)           Subject to the terms and conditions set forth herein, from and
after the Closing, the Sellers and Members shall jointly and severally
indemnify, defend and hold harmless the Buyer and its managers, officers,
employees, Subsidiaries, Affiliates, controlling Persons, and agents and their
respective successors and permitted assigns (collectively, the “Buyer
Indemnitees”) from and against, and pay on behalf of or reimburse such Buyer
Indemnitees in respect of, any and all liabilities, obligations, demands,
claims, actions or causes of action, assessments, losses, damages, deficiencies,
Taxes, penalties, fines, fees, costs (including court costs) and expenses
(including reasonable attorneys’ fees and expenses, and all reasonable amounts
paid in connection with the investigation, defense or settlement of any of the
foregoing) (collectively, “Buyer Damages”) asserted against, sustained or
incurred by any Buyer Indemnitee arising out of or resulting from:
 
(i)           a breach of any representation or warranty of the Sellers
contained in Article IV of this Agreement or in any Transaction Document when
made or at and as of the Closing Date (or at and as of such different date or
period specified for such representation or warranty) as though such
representation and warranty were made at and as of the Closing Date (or such
different date or period);
 
(ii)           a breach or nonperformance of any covenant or agreement of the
Seller contained in this Agreement or any of the Transaction Documents to be
performed by the Sellers;
 
(iii)           the Excluded Assets or the Excluded Liabilities; or
 
(iv)           Sellers’ failure to properly file property renditions as
disclosed on Schedule 4.14(E), provided, however, that any Tax liability arising
from such failure will not be limited to the items disclosed on Schedule
4.14(E).
 
(b)           Subject to the terms and conditions set forth herein, from and
after the Closing, the Members shall severally, and not jointly, indemnify,
defend and hold harmless the Buyer Indemnitees from and against, and pay on
behalf of or reimburse such Buyer Indemnitees in respect of, any and all Buyer
Damages asserted against, sustained or incurred by any Buyer Indemnitee arising
out of or resulting from:
 
(i)           a breach of any representation or warranty of such Member
contained in Article III of this Agreement or in any Transaction Document, to
which such Member is a party, when made or at and as of the Closing Date (or at
and as such different date or period specified for such representation or
warranty) as though such representation and warranty were made at and as of the
Closing Date (or such different date or period); or
 
(ii)           a breach or nonperformance of any covenant or agreement of such
Member contained in this Agreement or any Transaction Document, to which such
Member is a party, to be performed by such Member.
 
 
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(c)           The Sellers’ and Members’ obligation to indemnify the Buyer
Indemnitees pursuant to Section 9.2(a) is subject to the following limitations:
 
(i)           no indemnification shall be made by the Sellers or Members
pursuant to Section 9.2(a)(i) unless the aggregate amount of Buyer Damages for
all claims pursuant to Section 9.2(a)(i) exceeds $350,000 (the “Basket”) and, in
such event, indemnification shall be made by the Sellers and Members for Buyer
Damages only to the extent of such excess; provided, however, that the Basket
shall not apply with respect to any breach of any of the Fundamental
Representations made by the Sellers and Members or with respect to any Buyer
Damages arising from or relating to Fraud Claims;
 
(ii)           in no event shall the Sellers’ and Members’ obligation to
indemnify the Buyer Indemnitees pursuant to Section 9.2(a)(i) exceed $8,500,000
(the “Cap”); provided, however, that the Cap shall not apply with respect to any
breach of any of the Fundamental Representation made by the Sellers and Members
or with respect to any Buyer Damages arising from or relating to Fraud Claims;
 
(iii)           the amount of any Buyer Damages shall be reduced by any amount
actually received by a Buyer Indemnitee with respect thereto under any insurance
coverage with respect to, or from any other party alleged to be responsible for,
such Buyer Damages less any reasonable costs and expenses incurred by such Buyer
Indemnitee in connection with the receipt or realization of such amount or
benefit.  If a Buyer Indemnitee actually receives any amount under such
insurance coverage or from such other party with respect to Buyer Damages at any
time subsequent to any indemnification provided by the Sellers pursuant to this
Section 9.2, then such Buyer Indemnitee shall promptly reimburse the Sellers or
Members, as applicable, for any payment made or expense incurred by the Sellers
or Members in connection with providing such indemnification in an amount equal
to the amount actually received by the Buyer Indemnitee (net of reasonable costs
and expenses incurred, whether directly or indirectly, by such Buyer Indemnitee
in connection with the receipt of such amount) and any calculation of the
aggregate Buyer Damages for purposes of Section 9.2(c)(i) shall be re-calculated
as necessary such that the aggregate Buyer Damages does not include such amount
actually received; and
 
(iv)           the Sellers and Members shall be obligated to indemnify the Buyer
Indemnitees pursuant to Section 9.2(a)(i) and Section 9.2(b), as applicable only
for those claims giving rise to Buyer Damages as to which any Buyer Indemnitee
has given the Sellers written notice thereof prior to the end of the Applicable
Survival Period.  Any written notice delivered by any Buyer Indemnitee to the
Sellers with respect to Buyer Damages shall set forth the information required
hereunder to be provided in connection with a Claim Notice or an Indemnity
Notice, as applicable.
 
 
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The Basket and Cap shall not apply to any claims for indemnification by any
Buyer Indemnitee under Sections 9.2(a)(ii) and (iii), and Section 9.2(b).
 
(d)           Notwithstanding Section 9.2(a) or any other provision herein to
the contrary, subject to the other limitations of this ARTICLE IX, the liability
of each Member shall be limited to the amount of any sums or proceeds actually
received by such Member; provided, however, that with respect to Savage and
Branch, each shall be deemed to have received his respective amount of the
Retention Escrow Amount.  In addition, no Member shall be required to make any
payment under Section 9.2(a) with respect to any Buyer Damages in excess of such
Members’ Pro Rata Share of such Buyer Damages; provided, that the foregoing
limitation shall not apply to any Members’ liability under Section 9.2(b).
 
9.3           Buyer’s Agreement to Indemnify.
 
(a)           Subject to the terms and conditions set forth herein, from and
after the Closing, the Buyer shall indemnify, defend and hold harmless the
Sellers and their respective managers, officers, employees, Affiliates,
controlling Persons, agents and representatives and their respective successors
and assigns (collectively, the “Seller Indemnitees”) from and against all
liabilities, obligations, demands, claims, actions or causes of action,
assessments, losses, damages, deficiencies, Taxes, penalties, fines, fees, costs
(including court costs) and expenses (including reasonable attorneys’ fees and
expenses and all reasonable amounts paid in connection with the investigation,
defense or settlement of any of the foregoing) (collectively, “Seller Damages”
and, together with Buyer Damages, “Damages”) asserted against, sustained or
incurred by any Seller Indemnitee to the extent arising out of or resulting
from:
 
(i)           a breach of any representation or warranty of the Buyer contained
in Article V of this Agreement or in any Transaction Document when made or at
and as of the Closing Date (or at and as of such different date or period
specified for such representation or warranty) as though such representation and
warranty were made at and as of the Closing Date (or such different date or
period);
 
(ii)           a breach or nonperformance of any covenant or agreement of the
Buyer contained in this Agreement or any of the Transaction Documents to be
performed by Buyer;
 
(iii)           the Assumed Liabilities.
 
(b)           The Buyer’s obligation to indemnify the Seller Indemnitees
pursuant to Section 9.3(a) is subject to the following limitations:
 
(i)           no indemnification shall be made by the Buyer pursuant to
Section 9.3(a)(i) unless the aggregate amount of Seller Damages for all claims
pursuant to Section 9.3(a)(i) exceeds the Basket and, in such event,
indemnification shall be made by the Buyer for Seller Damages only to the extent
of such excess; provided, however, that the Basket shall not apply with respect
to any breach of any of the Fundamental Representations made by the Buyer or
with respect to any Seller Damages arising from or relating to Fraud Claims;
 
 
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(ii)           in no event shall the Buyer’s aggregate obligation to indemnify
the Seller Indemnitees pursuant to Section 9.3(a)(i) exceed the Cap; provided,
however, that the Cap shall not apply with respect to any breach of any of the
Fundamental Representations made by the Buyer or with respect to any Seller
Damages arising from or relating to Fraud Claims;
 
(iii)           the amount of any Seller Damages shall be reduced by any amount
actually received by a Seller Indemnitee with respect thereto under any
insurance coverage with respect to, or from any other party alleged to be
responsible for, such Seller Damages, less any reasonable costs and expenses
incurred by such Seller Indemnitee in connection with the receipt or realization
of such amount or benefit.  If a Seller Indemnitee actually receives any amount
under insurance coverage or from such other party with respect to Seller Damages
at any time subsequent to any indemnification provided by the Buyer pursuant to
this Section 9.3, then such Seller Indemnitee shall promptly reimburse the Buyer
for any payment made or expense incurred by the Buyer in connection with
providing such indemnification in an amount equal to the amount actually
received by the Seller Indemnitee (net of reasonable costs and expenses incurred
by such Seller Indemnitee in connection with the receipt of such amount); and
 
(iv)           the Buyer shall be obligated to indemnify the Seller Indemnitees
pursuant to Section 9.3(a)(i) only for those claims giving rise to Seller
Damages as to which any Seller Indemnitee has given the Buyer written notice
thereof prior to the end of the Applicable Survival Period.  Any written notice
delivered by any Seller Indemnitee to the Buyer with respect to Seller Damages
shall set forth the information required to be provided hereunder in connection
with a Claim Notice or an Indemnity Notice, as applicable.
 
The Basket and Cap shall not apply to any claims for indemnification by any
Seller Indemnitee under Sections 9.3(a)(ii) and (iii).

9.4           Indemnification Procedures.  The obligations of the Sellers and
Members to indemnify the Buyer Indemnitees under Section 9.2 hereof with respect
to Buyer Damages, and the obligations of the Buyer to indemnify the Seller
Indemnitees under Section 9.3 hereof with respect to Seller Damages, in either
case arising out of or resulting from the assertion of liability or any Legal
Proceeding by third parties who are not Affiliated with a party to this
Agreement (each, as the case may be, a “Third-Party Claim”), will be subject to
the following terms and conditions:
 
 
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(a)           A party claiming indemnification under this Agreement (an
“Indemnified Party”) shall promptly after receiving written notice of any
Third-Party Claim, but in no event later than 30 days thereafter, transmit to
the party or parties from whom indemnification is sought under this Agreement
(the “Indemnifying Party”) a written notice of the Third-Party Claim (a “Claim
Notice”) describing in reasonable detail the nature of the Third-Party Claim,
attaching a copy of all papers served to such Indemnified Party with respect to
such Third-Party Claim (if any), setting forth a reasonable estimate of the
amount of Damages attributable to the Third-Party Claim to the extent feasible
(which estimate shall not be conclusive of the final amount of Damages arising
from or relating to such Third-Party Claim), and describing in reasonable detail
the basis of the Indemnified Party’s request for indemnification under this
Agreement.  Any failure or delay to provide such Claim Notice within such
specified time period shall not release the Indemnifying Party from its
liability under this Article IX or affect the right of an Indemnified Party to
indemnification hereunder, except to the extent (and only to the extent) the
Indemnifying Party is materially prejudiced by such failure or delay.
 
(b)           Within thirty (30) days after receipt of any Claim Notice (the
“Election Period”), the Indemnifying Party shall notify the Indemnified Party
(i) whether the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article IX with respect to such Third-Party Claim
and (ii) whether the Indemnifying Party desires, at its sole cost and expense,
to defend the Indemnified Party against such Third-Party Claim.  If the
Indemnifying Party does not notify the Indemnified Party within such Election
Period that the Indemnifying Party disputes its potential liability with respect
to such Third-Party Claim, any liability with respect to such Third-Party Claim
shall be deemed an admitted liability of the Indemnifying Party hereunder.
 
(c)           If the Indemnifying Party notifies the Indemnified Party within
the Election Period that the Indemnifying Party elects to assume the defense of
the Third-Party Claim, then the Indemnifying Party shall have the right to
defend, at its sole cost and expense, such Third-Party Claim by all appropriate
proceedings with counsel of its choosing (but reasonably satisfactory to the
Indemnified Party), which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 9.4.  The Indemnifying Party
shall have full control of such defense and proceedings, including any
compromise or settlement thereof; provided, however, that the Indemnifying Party
shall obtain the prior written consent of the Indemnified Party before entering
into any compromise or settlement of such Third-Party Claim or ceasing to defend
such Third-Party Claim if, pursuant to or as a result of such compromise,
settlement or cessation, any injunction or other equitable relief shall be
imposed against the Indemnified Party or if such compromise or settlement does
not expressly, unconditionally and fully release the Indemnified Party from any
and all liabilities and obligations with respect to such Third-Party Claim,
without prejudice.  The Indemnified Party is hereby authorized (but shall not be
required) to file, at the sole cost and expense of the Indemnifying Party,
during the Election Period, any motion, answer or other pleadings that the
Indemnified Party shall reasonably deem necessary to protect its interests or
those of the Indemnifying Party and not materially prejudicial to the
Indemnifying Party (it being understood and agreed that if an Indemnified Party
makes any such filing that is materially prejudicial to the Indemnifying Party,
and such filing directly causes a final adjudication that is adverse to the
Indemnifying Party, the Indemnifying Party shall be relieved of its obligations
hereunder with respect to such Third-Party Claim to the extent the Indemnifying
Party was so materially prejudiced).  If reasonably requested by the
Indemnifying Party, the Indemnified Party shall cooperate with the Indemnifying
Party and its counsel in contesting any Third-Party Claim that the Indemnifying
Party elects to contest in good faith, including by providing the Indemnifying
Party with reasonable access during normal business hours of the Indemnified
Party to books, records and personnel of the Indemnified Party (but only to the
extent relevant to such Third-Party Claim), and in making any related
counterclaim against the Person asserting the Third-Party Claim or any
cross-complaint against any Person.  Except as otherwise provided herein, the
Indemnified Party may participate in, but not control, any defense or settlement
of any Third-Party Claim controlled by the Indemnifying Party pursuant to this
Section 9.4, and to retain counsel of the Indemnified Party’s own choice in
connection with such participation, and the Indemnified Party shall bear its own
costs and expenses with respect to such participation (except that the
reasonable fees, costs and expenses of such separate counsel incurred prior to
the date on which the Indemnifying Party effectively assumes control of the
defense of such Third-Party Claim pursuant to this Section 9.4 shall be borne
solely by the Indemnifying Party).
 
 
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(d)           Notwithstanding anything in this Agreement to the contrary, the
Indemnifying Party shall not be entitled to assume control of the defense of
such Third-Party Claim and shall pay the reasonable fees, costs and expenses of
separate counsel retained by the Indemnified Party: (i) if the Indemnifying
Party fails to notify the Indemnified Party within the Election Period that the
Indemnifying Party elects to assume the defense of the Third-Party Claim
pursuant to Section 9.4(b); (ii) if the Indemnifying Party elects to assume the
defense of such Third-Party Claim pursuant to Section 9.4(b) but fails
diligently to prosecute the Legal Proceeding related to such Third-Party Claim
and/or to defend such Third Party Claim as herein provided; (iii) if such
Third-Party Claim seeks an injunction or equitable relief against the
Indemnified Party; and/or (iv) if (A) such Third-Party Claim is against, or if
the defendants in such Third-Party Claim include, both the Indemnified Party and
the Indemnifying Party, and (B) the Indemnified Party reasonably concludes that
there are defenses available to the Indemnified Party that are different or
additional to those available to the Indemnifying Party, or (C) if the interests
of the Indemnified Party may be reasonably deemed to conflict with those of the
Indemnifying Party.  In the event any of the conditions set forth in the
preceding clauses (i) through (iv) are met, the Indemnified Party shall have the
right to defend, at the sole cost and expense of the Indemnifying Party, the
Third-Party Claim by all appropriate proceedings, which proceedings shall be
diligently prosecuted by the Indemnified Party to a final conclusion or settled
at the discretion of the Indemnified Party.  The Indemnified Party shall have
full control of such defense and proceedings, including any compromise or
settlement thereof.  If reasonably requested by the Indemnified Party, the
Indemnifying Party shall cooperate with the Indemnified Party and its counsel
(including by providing the Indemnified Party with reasonable access during
normal business hours of the Indemnifying Party to books, records and personnel
of the Indemnifying Party (but only to the extent relevant to such Third-Party
Claim)) in defending such Third-Party Claim, in contesting any Third-Party Claim
that the Indemnified Party elects to contest in good faith, and in making any
related counterclaim against the Person asserting the Third-Party Claim or any
cross-complaint against any Person.  Notwithstanding the foregoing, if within
the Election Period the Indemnifying Party has delivered a written notice to the
Indemnified Party to the effect that the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article IX with respect
to such Third-Party Claim, and if such dispute is finally and conclusively
resolved by a court of competent jurisdiction in favor of the Indemnifying
Party, the Indemnifying Party shall not be required to bear the costs and
expenses of the Indemnified Party’s defense of such Third-Party Claim pursuant
to this Section 9.4 or of the Indemnifying Party’s participation therein at the
Indemnified Party’s request, and the Indemnified Party shall reimburse the
Indemnifying Party in full for all reasonable attorney’s fees and costs actually
paid by the Indemnifying Party in connection with such participation within
thirty (30) days of receiving an invoice and reasonably sufficient supporting
documentation therefor.  Except as otherwise provided herein, the Indemnifying
Party may participate in, but not control, any defense or settlement of any
Third-Party Claim controlled by the Indemnified Party pursuant to this
Section 9.4, and to retain counsel of the Indemnifying Party’s own choice in
connection with such participation, and the Indemnifying Party shall bear its
own costs and expenses with respect to such participation.
 
 
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(e)           The non-controlling party in the defense of a Third-Party Claim
shall have the right to consult with the party controlling such defense, and the
controlling party shall facilitate such consultation, with respect to the
conduct, status, developments and results of the defense of such Third-Party
Claim and the controlling party’s strategy for addressing the matters that are
the basis of such Third-Party Claim.
 
(f)           In the event any Indemnified Party should have a claim for
indemnification hereunder against any Indemnifying Party that does not involve a
Third-Party Claim (an “Indemnity Claim”), the Indemnified Party shall promptly
transmit to the Indemnifying Party a written notice of such Indemnity Claim (the
“Indemnity Notice”) describing in reasonable detail the nature of the Indemnity
Claim, a reasonable estimate of the amount of Damages attributable to such
Indemnity Claim to the extent feasible (which estimate shall not be conclusive
of the final amount of Damages arising from or relating to such Indemnity Claim)
and the basis of the Indemnified Party’s request for indemnification under this
Agreement.  Any failure or delay to provide such Indemnity Notice shall not
release the Indemnifying Party from its liability under this Article IX or
affect the right of an Indemnified Party to indemnification hereunder, except to
the extent (and only to the extent) the Indemnifying Party is materially
prejudiced by such failure or delay.
 
Within thirty (30) days after receipt of any Indemnity Notice, the Indemnifying
Party shall notify the Indemnified Party whether the Indemnifying Party disputes
its potential liability to the Indemnified Party under this Article IX with
respect to such Indemnity Claim.  If the Indemnifying Party does not notify the
Indemnified Party within thirty (30) days from its receipt of the Indemnity
Notice that the Indemnifying Party disputes such Indemnity Claim, the Indemnity
Claim together with the aggregate amount of Damages therefor specified by the
Indemnified Party in the Indemnity Notice shall be deemed a liability of the
Indemnifying Party hereunder.
 
(g)           The provisions of this Section 9.4 are subject to the limitations
and restrictions of Article IX, unless it is otherwise expressly provided.  The
parties intend that, even though indemnification and other obligations appear in
various sections and articles of this Agreement, the indemnification procedures
contained in this Section 9.4 shall apply to all indemnity and other obligations
of the parties under this Agreement.
 
 
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9.5           Materiality Disregarded.  Notwithstanding anything contained in
this Agreement or any Transaction Document to the contrary, for purposes of
determining the amount of Damages related to a breach or inaccuracy of any
representation or warranty, or any failure to comply with or perform any
covenant or agreement that are the subject matter of a claim for indemnification
hereunder (but not for purposes of determining whether such breach, inaccuracy
or failure has occurred), each representation, warranty, covenant and agreement
contained in this Agreement or any Transaction Document shall be read without
regard and without giving effect to the term “material” or “Material Adverse
Change” or “Material Adverse Effect” or similar phrases contained in such
representation, warranty, covenant or agreement (as if such word was deleted
from such representation, warranty, covenant or agreement).
 
9.6           Manner and Timing of Payment.  Any indemnification of the Buyer
Indemnitees pursuant to this Article IX or Section 6.4 shall be paid, no later
than ten (10) days following the final determination thereof, by wire transfer
of immediately available funds from the Sellers to an account or accounts
designated by the applicable Buyer Indemnitees in writing.  Any indemnification
of the Seller Indemnitees pursuant to this Article IX shall be paid, no later
than ten (10) days following the final determination thereof, by wire transfer
of immediately available funds from the Buyer to an account or accounts
designated by the applicable Seller Indemnitees in writing.
 
9.7           No Duplication.  Any Damages giving rise to liability for
indemnification hereunder shall be determined without duplication of recovery by
reason of the same set of facts giving rise to such Damages constituting a
breach of more than one representation, warranty, covenant or agreement.  Except
as otherwise specifically provided herein, this Article IX shall not apply to
Tax claims to the extent those claims are separately indemnifiable under
Section 6.4. Without limiting the foregoing, no Buyer Indemnitee shall be
entitled to indemnification hereunder for any Buyer Damages to the extent such
Buyer Damages are included in the calculation of Net Working Capital pursuant to
Section 2.5.
 
9.8           Sole Remedy.  AS BETWEEN THE BUYER INDEMNITEES AND SELLERS AND
MEMBERS, ON THE ONE HAND, AND THE SELLER INDEMNITEES AND BUYER, ON THE OTHER,
AFTER CLOSING, OTHER THAN WITH RESPECT TO CLAIMS FOR INTENTIONAL FRAUD REGARDING
THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT AND CLAIMS FOR
INJUNCTIVE OR OTHER EQUITABLE RELIEF AND WITHOUT LIMITING A PARTY’S RIGHTS UNDER
SECTION 11.12, (i) THE PROVISIONS SET FORTH IN THIS ARTICLE IX SHALL BE THE SOLE
AND EXCLUSIVE RIGHTS, OBLIGATIONS AND REMEDIES OF THE PARTIES WITH RESPECT TO
ANY CLAIM FOR, RELATED TO OR ARISING FROM ANY BREACH OF OR NON-COMPLIANCE WITH
THIS AGREEMENT, ANY CLAIM RELATED TO OR ARISING FROM THE EVENTS GIVING RISE
THERETO, AND ANY CLAIM RELATED TO OR ARISING FROM THE TRANSACTIONS PROVIDED FOR
HEREIN OR CONTEMPLATED HEREBY, AND (ii) NO PARTY OR ANY OF ITS SUCCESSORS OR
PERMITTED ASSIGNS SHALL HAVE ANY RIGHTS AGAINST ANY OTHER PARTY OR ITS
AFFILIATES WITH RESPECT TO SUCH CLAIMS OTHER THAN AS IS EXPRESSLY PROVIDED IN
THIS ARTICLE IX.
 
 
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9.9           Punitive Damages.  Under no circumstances shall any Indemnified
Party be entitled to be indemnified for punitive damages.  Without limiting the
foregoing, the Parties agree that no Indemnified Party shall make any claim
under any law, rule, regulation, judgment, order or decree of any Governmental
Entity requesting such damages.
 
ARTICLE X
 
ESCROWS
 
10.1           Indemnity Escrow Fund.
 
(a)           At the Closing, Buyer shall deposit with the Escrow Agent in
accordance with Section 2.6 the Indemnity Escrow Amount (such funds, as held by
the Escrow Agent pursuant to the Indemnity Escrow Agreement, including interest
income thereon, the “Indemnity Escrow Fund”) and the Indemnity Escrow Fund shall
be held and distributed in accordance with the terms of this Section 10.1 and
the Indemnity Escrow Agreement.  The Indemnity Escrow Fund shall be available as
a nonexclusive source of funds to the Buyer to satisfy any claim by Buyer for
Buyer Damages for which the Buyer is entitled pursuant to Article IX; provided,
that the Buyer Indemnitees shall first seek recovery of any Buyer Damages from
the Indemnity Escrow Agreement, to the extent funds are available therein.  The
Indemnity Escrow Fund shall not represent a cap on, or otherwise reduce, limit
or restrict the liabilities or obligations of the Sellers and Members with
respect to any Buyer Damages under Article IX.
 
(b)           The Indemnity Escrow Fund shall be maintained in the escrow
account established pursuant to the Indemnity Escrow Agreement.  The Indemnity
Escrow Fund shall be maintained in the escrow account until the date which is
two (2) years following the Closing Date (the “Indemnity Escrow Period”).  Upon
expiration of the Indemnity Escrow Period, and subject to the terms of this
Article X and the Indemnity Escrow Agreement, the Escrow Agent shall deliver or
cause to be delivered to the Sellers, or their designee, the balance, if any, of
the Indemnity Escrow Fund.  If, upon expiration of the Indemnity Escrow Period,
any Buyer Indemnitees shall have asserted a claim for indemnification in
accordance with Article IX and such claim is pending or unresolved at the time
of the expiration of the Indemnity Escrow Period, the Escrow Agent shall retain
in escrow an amount estimated to equal the value of the asserted claim (the
“Retained Indemnity Escrow Amount”) until Final Resolution of such matter and
such Retained Indemnity Escrow Amount may be distributed in accordance with the
terms and provisions of this Article X and the Indemnity Escrow Agreement.
 
 
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10.2           Retention Escrow Funds.
 
(a)           At the Closing, Buyer shall deposit with the Escrow Agent in
accordance with Section 2.6, (i) the Savage Retention Escrow Amount (such funds,
as held by the Escrow Agent pursuant to the Savage Retention Escrow Agreement,
including interest income thereon, the “Savage Retention Escrow Fund”) and
(ii) the Branch Retention Escrow Amount (such funds, as held by the Escrow Agent
pursuant to the Branch Retention Escrow Agreement, including interest income
thereon, the “Branch Retention Escrow Fund”).  The Savage Retention Escrow Fund
and the Branch Retention Escrow Fund (individually referred to as a “Retention
Escrow Fund” and collectively as the “Retention Escrow Funds”) shall be held and
distributed in accordance with the terms of this Section 10.2 and the respective
Retention Escrow Agreement.  The Retention Escrow Funds have been established to
incentivize Savage and Branch to continue their employment with the Buyer for a
period of three (3) years following the Closing Date (the “Retention Period”)
and to provide a non-exclusive source of funds for the recovery of any damages
and losses that may arise from or be incurred by the Buyer in seeking a
replacement of either Savage or Branch, provided, however, that the Retention
Escrow Funds shall not be used in any case as a source of funds for the recovery
of any damages or losses arising from any representation, warranty, covenant or
agreement contained in this Agreement or in any other Transaction Document.
 
(b)           If Savage is continuously employed by Buyer or any of its
Affiliates from the Closing Date through the Retention Period, Savage shall be
entitled to receive all of the Savage Retention Escrow Fund. If Savage’s
employment with Buyer or any of its Affiliates is terminated at any time during
the Retention Period by reason of (i) death, (ii) disability, (iii) a
termination by Savage for Good Reason, or (iv) a termination by the Buyer or any
of its Affiliates without Cause, then in such event Savage shall, subject to the
terms of this Article X and the Savage Retention Escrow Agreement, be entitled
to receive all of the Savage Retention Escrow Fund.  If Savage’s employment with
Buyer or any of its Affiliates is terminated at any time during the Retention
Period by reason of (i) a termination by Savage without Good Reason, or (ii) a
termination by Buyer or any of its Affiliates for Cause, then in such event the
Buyer shall, subject to the terms of this Article X and the Savage Retention
Escrow Agreement, be entitled to receive all of the Savage Retention Escrow
Funds.
 
(c)           If Branch is continuously employed by Buyer or any of its
Affiliates from the Closing Date through the Retention Period, Branch shall be
entitled to receive all of the Branch Retention Escrow Fund.  If Branch’s
employment with Buyer or any of its Affiliates is terminated at any time during
the Retention Period by reason of (i) death, (ii) disability, (iii) a
termination by Branch for Good Reason, or (iv) a termination by the Buyer or any
of its Affiliates without Cause, then in such event Branch shall, subject to the
terms of this Article X and the Branch Retention Escrow Agreement, be entitled
to receive all of the Branch Retention Escrow Fund.  If Branch’s employment with
Buyer or any of its Affiliates is terminated at any time during the Retention
Period by reason of (i) a termination by Branch without Good Reason, or (ii) a
termination by Buyer or any of its Affiliates for Cause, then in such event the
Buyer shall, subject to the terms of this Article X and the Branch Retention
Escrow Agreement, be entitled to receive all of the Branch Retention Escrow
Funds.
 
 
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10.3           Release From Escrows.
 
(a)           When either the Sellers or the Buyer become entitled to any
distribution of all or any portion of the Indemnity Escrow Fund, the Sellers and
the Buyer shall promptly execute and deliver to the Escrow Agent joint written
instructions setting forth the amounts to be paid to such party from the
Indemnity Escrow Fund (the “Joint Indemnity Instructions”).  In furtherance and
not in limitation of the foregoing:
 
(i)           Sellers and Buyer agree to execute and deliver to the Escrow Agent
the Joint Indemnity Instructions within two (2) Business Days of any Final
Resolution that any party is entitled to a distribution of all or any portion of
the Indemnity Escrow Fund pursuant to Article IX instructing the Escrow Agent to
distribute such portion of the Indemnity Escrow Fund in accordance with such
Final Resolution; and
 
(ii)           If Sellers or Buyer shall fail to execute and deliver to the
Escrow Agent the Joint Indemnity Instructions in accordance with
Section 10.3(a)(i), either Alliance or Buyer, as applicable, shall be entitled
to receive distributions from the Indemnity Escrow Fund from the Escrow Agent
promptly upon delivery to the Escrow Agent of a final written non-appealable
instruction, order or judgment (setting forth the amounts to be paid to such
party) issued or entered by a court of competent jurisdiction (a “Court
Instruction”).
 
(b)           When either Savage or the Buyer become entitled to any
distribution of all or any portion of the Savage Retention Escrow Fund, Savage
and the Buyer shall promptly execute and deliver to the Escrow Agent joint
written instructions setting forth the amounts to be paid to such party from the
Savage Retention Escrow Fund (the “Joint Savage Instructions”).  In furtherance
and not in limitation of the foregoing:
 
(i)           Savage and Buyer agree to execute and deliver to the Escrow Agent
the Joint Savage Instructions within two (2) Business Days of any Final
Resolution that any party is entitled to a distribution of all or any portion of
the Savage Retention Escrow Fund instructing the Escrow Agent to distribute such
portion of the Savage Retention Escrow Fund in accordance with such Final
Resolution; and
 
(ii)           If Savage or Buyer shall fail to execute and deliver to the
Escrow Agent the Joint Savage Instructions in accordance with
Section 10.3(b)(i), either Savage or Buyer, as applicable, shall be entitled to
receive distributions from the Savage Retention Escrow Fund from the Escrow
Agent promptly upon delivery to the Escrow Agent of Court Instruction (setting
forth the amounts to be paid to such party).
 
(c)           When either Branch or the Buyer become entitled to any
distribution of all or any portion of the Branch Retention Escrow Fund, Branch
and the Buyer shall promptly execute and deliver to the Escrow Agent joint
written instructions setting forth the amounts to be paid to such party from the
Branch Retention Escrow Fund (the “Joint Branch Instructions”).  In furtherance
and not in limitation of the foregoing:
 
 
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(i)           Branch and Buyer agree to execute and deliver to the Escrow Agent
the Joint Savage Instructions within two (2) Business Days of any Final
Resolution that any party is entitled to a distribution of all or any portion of
the Branch Retention Escrow Fund instructing the Escrow Agent to distribute such
portion of the Branch Retention Escrow Fund in accordance with such Final
Resolution; and
 
(ii)           If Branch or Buyer shall fail to execute and deliver to the
Escrow Agent the Joint Savage Instructions in accordance with
Section 10.3(c)(i), either Branch or Buyer, as applicable, shall be entitled to
receive distributions from the Branch Retention Escrow Fund from the Escrow
Agent promptly upon delivery to the Escrow Agent of Court Instruction (setting
forth the amounts to be paid to such party).
 
ARTICLE XI

 
MISCELLANEOUS PROVISIONS
 
11.1           Amendment and Modification.  This Agreement may be amended,
modified or supplemented at any time by the parties to this Agreement, under an
instrument in writing signed by all parties.
 
11.2           Entire Agreement; Assignment; Binding Effect.  This Agreement,
together with the Seller Disclosure Letter, the Buyer Disclosure Letter, the
Confidentiality Agreement, the Transaction Documents and all Schedules and
Exhibits hereto, (a) constitutes the entire agreement among the parties
concerning the subject matter hereof and supersedes other prior agreements and
understandings, both written and oral, among the parties concerning the subject
matter of this Agreement and (b) shall not be assigned, by operation of Law or
otherwise, by a party, without the prior written consent of the other
party.  Notwithstanding the preceding clause (b) to the contrary, the Buyer in
its sole discretion may (i) at any time prior to the Closing, assign in whole or
in part its rights and obligations under this Agreement to one or more of its
wholly-owned Subsidiaries, including any such Subsidiaries which may be
organized or acquired after the date hereof; (ii) assign in whole or in part its
rights under this Agreement for collateral security purposes to any lenders
providing financing to the Buyer or any of its  Affiliates, and any such lender
may exercise all of the rights and remedies of the Buyer hereunder, or (iii)
assign in whole or in part the Buyer’s rights under this Agreement to any
subsequent purchaser of all or any portion of the Business or the Purchased
Assets, whether such sale is structured as a sale of stock, a sale of assets, a
merger, a reorganization or otherwise.  Subject to the preceding sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.
 
11.3           Severability.  Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.  If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broadly as is enforceable.
 
 
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11.4           Notices.  Unless otherwise provided in this Agreement, all
notices and other communications under this Agreement shall be in writing and
may be given by any of the following methods:  (a) personal delivery;
(b) electronic mail or facsimile transmission; (c) registered or certified mail,
postage prepaid, return receipt requested; or (d) overnight delivery
service.  Such notices and communications shall be sent to the appropriate party
at its address or facsimile number given below (or at such other address or
facsimile number for such party as shall be specified by notice given under this
Agreement) and shall be deemed given upon receipt by such party or upon actual
delivery to the appropriate address, in case of a facsimile transmission, upon
transmission by the sender and issuance by the transmitting machine of a
confirmation slip that the number of pages constituting the notice have been
transmitted without error; in the case of notices sent by electronic mail or
facsimile transmission, the sender shall contemporaneously mail a copy of the
notice to the addressee at the address provided for above; provided, however,
that such mailing shall in no way alter the time at which the facsimile notice
is deemed received:
 
(a)           if to the Sellers, to:
 
Alliance Drilling Fluids, LLC
125 West Missouri Avenue
Midland, Texas 79701
Facsimile:  (432) 684-0069
Attention:  Shawn Savage, President

with copies, which shall not constitute notice, to:

Murphy Mahon Keffler & Farrier, L.L.P.
Tindall Square Building No. 2
505 Pecan Street, Suite 101
Fort Worth, TX 76102
Facsimile: (817) 877-3668
Attention: Robert J. Keffler

and

Kelly Hart & Hallman LLP
201 Main Street, Suite 2500
Fort Worth, Texas 76102
Facsimile: (817) 878-9759
Attention: S. Benton Cantey
 
 
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(b)           if to the Buyer, to:
 
Newpark Resources Inc.
2700 Research Forest Drive, Suite 100
The Woodlands, TX 77381
Facsimile: 281-362-6801
Attention: Mark J. Airola

with a copy, which shall not constitute notice, to:

Andrews Kurth LLP
10001 Woodloch Forest Drive
Waterway Plaza Two, Suite 200
The Woodlands, Texas 77380
Facsimile: 713-238-7286
Attention:  William McDonald

11.5           Governing Law.
 
(a)           This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of Texas, applicable to contracts executed in and to
be performed entirely within that state.  All actions and proceedings arising
out of or relating to this Agreement shall be heard and determined in any Texas
state or federal court sitting in Houston, Texas, and the parties hereby
irrevocably submit to the exclusive jurisdiction of such courts in any such
action or proceeding and irrevocably waive the defense of an inconvenient forum
to the maintenance of any such action or proceeding. Each party irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to such party at its address specified
in Section 9.4.  The parties agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by applicable Law.  Nothing
in this Section 9.5 shall affect the right of any party to serve legal process
in any other manner permitted by applicable Law.  The consents to jurisdiction
set forth in this Section 9.5 shall not constitute general consents to service
of process in the State of Texas and shall have no effect for any purpose except
as provided in this Section 9.5 and shall not be deemed to confer rights on any
person other than the parties.
 
(b)           EACH OF THE PARTIES (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ON BEHALF OF ITS AFFILIATES) HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
 
11.6           Descriptive Headings.  The descriptive headings used in this
Agreement are inserted for convenience of reference only and shall in no way be
construed to define, limit, describe, explain, modify, amplify, or add to the
interpretation, construction or meaning of any provision of, or scope or intent
of, this Agreement nor in any way affect this Agreement.
 
 
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11.7           Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  An executed counterpart
signature page to this Agreement delivered by facsimile or other means of
electronic transmission shall be deemed to be an original and shall be as
effective for all purposes as delivery of a manually executed counterpart.
 
11.8           Fees and Expenses.  Whether or not this Agreement and the
transactions contemplated by this Agreement are consummated, and except as
otherwise expressly set forth in this Agreement, all costs and expenses
(including legal and financial advisory fees and expenses) incurred in
connection with, or in anticipation of, this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
 
11.9           Third-Party Beneficiaries.  This Agreement is solely for the
benefit of the Sellers and their respective successors and permitted assigns and
the Seller Indemnitees, with respect to the obligations of the Buyer under this
Agreement, and for the benefit of the Buyer and its successors and permitted
assigns and the Buyer Indemnitees, with respect to the obligations of the
Sellers under this Agreement, and this Agreement shall not be deemed to confer
upon or give to any other third party any remedy, claim of liability or
reimbursement, cause of action or other right.
 
11.10           Waivers.  Except as otherwise expressly provided in this
Agreement, no failure to exercise, delay in exercising, or single or partial
exercise of any right, power or remedy by any party, and no course of dealing
between or among the parties, shall constitute a waiver of any such right, power
or remedy.  No waiver by a party of any default, misrepresentation, or breach of
warranty or covenant under this Agreement, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant under this Agreement or affect in any way any
rights arising by virtue of any such prior or subsequent occurrence.  No waiver
shall be valid unless in writing and signed by the party against whom such
waiver is sought to be enforced.
 
11.11           Incorporation of Exhibits.  The disclosure letters and all
exhibits and schedules attached hereto and referred to herein are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein.
 
11.12           Specific Performance.  The parties to this Agreement agree that,
if at any time following the Closing Date any covenants or agreements herein are
not performed in accordance with their specific terms or are otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist and
damages would be difficult to determine, and that the parties shall be entitled
to specific performance of such terms of this Agreement and immediate injunctive
relief, without the necessity of proving the inadequacy of money damages as a
remedy, in addition to any other remedy to which they are entitled at law or in
equity.
 
 
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11.13           Newpark Guaranty.
 
(a)           Newpark hereby unconditionally and irrevocably guarantees to the
Sellers and the Members, as primary obligor and not merely as surety, the
performance of, and compliance with, all agreements, obligations, covenants,
warranties, representations, and undertakings of Buyer contained in this
Agreement when and as the same shall become due after giving effect to all
conditions, restrictions and limitations on any such obligations of the Buyer
hereunder (the “Newpark Guaranty”); provided, that Newpark’s obligations under
the Newpark Guaranty shall be subject to such defenses and counterclaims that
the Buyer may have under this Agreement.  Newpark hereby waives promptness,
diligence, demand, protest and notice as to the obligations and covenants
guaranteed hereby and acceptance of this Parent Guaranty, and subject to
Sellers’ and Members’ agreement to first make demand upon Buyer, the right to
require the Sellers or the Members to exhaust remedies against any other Person
and waives any other circumstance, except as provided above in this Section
11.13(a), which might otherwise constitute a defense available to, or a
discharge of, Newpark as a guarantor.  Newpark hereby waives all claims of
waiver, release, surrender, abstraction or compromise and all set-offs,
counterclaims, cross-claims, recoupments or other defenses that it may have
against the Sellers or the Members with respect to this Parent Guaranty,
provided that Newpark is not hereby waiving any set-offs, counterclaims,
cross-claims, recoupments or other defenses that Buyer may have against the
Sellers or the Members.  Newpark agrees to pay the costs and expenses in
connection with the successful enforcement of this Parent Guaranty.
 
(b)           The obligations of Newpark will not be discharged by: (i) any
modification of, or amendment or supplement to, this Agreement; (ii) any
furnishing or acceptance of security or any exchange or release of any security;
(iii) any waiver, consent or other action or inaction or any exercise or
non-exercise of any right, remedy or power with respect to Buyer or any change
in the structure of Buyer; or (iv) any insolvency, bankruptcy, reorganization,
arrangement, composition, liquidation, dissolution, or similar proceedings with
respect to Buyer.
 
(c)           This Parent Guaranty shall: (i) be binding upon Newpark, its
successors and assigns; (ii) inure to the benefit of, and be enforceable by, the
Sellers and Members and their respective successors and permitted assigns; and
(iii) remain in full force and effect until the performance in full of all
obligations of Buyer and Newpark in accordance with the terms and provisions of
this Agreement at which time the Parent Guaranty shall automatically terminate.
 
[Signature Page Follows.]
 
 
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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
signed as of the date first above written.
 
 
SELLERS:
 
ALLIANCE DRILLING FLUIDS, LLC,
 
a Texas limited liability company
 
 
By:           /s/ Shawn
Savage                                                                
Name: Shawn Savage
Title:  President
 
XTREME SPECIALTY PRODUCTS, LLC,
a Texas limited liability company
 
 
 
By:           /s/ Shawn
Savage                                                                
Name: Shawn Savage
Title:  President
 
 
PROP-TECH SERVICES, LLC,
a Texas limited liability company
 
 
 
By:           /s/ Shawn
Savage                                                               
Name: Shawn Savage
Title:  President
 
 
MEMBERS:
 
 
RADIKIN INVESTMENTS, LLC,
a Texas limited liability company
 
 
 
By:           /s/ Shawn
Savage                                                               
Name: Shawn Savage
Title:  Sole Member
 
Signature Page to Asset Purchase Agreement
 
 
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CHASE VENTURES, LLC,
a New Mexico limited liability company
 
By:           /a/ Robert C.
Chase                                                                
Name: Robert C. Chase
Title:   Member
 
 
TRESCAZA, LLC
a New Mexico limited liability company
 
 
 
 
By:           /s/ Robert C.
Chase                                                                
Name: Robert C. Chase
Title:   Member
 
 
BARBEN INVESTMENTS, LLC
a Texas limited liability company
 
 
 
By:           /s/ Charles
Branch                                                               
Name: Charles Branch
Title:  Sole Member
 

 
 
        /s/ Bradley D.
Bartek                                                               
Bradley D. Bartek, Individually
 
Signature Page to Asset Purchase Agreement
 
 
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BUYER:
 
NEWPARK DRILLING FLUIDS LLC,
a Texas limited liability company
 
 
By:           /s/ Gregg S.
Piontek                                                               
Name:  Gregg S. Piontek
Title:  Vice President
 
 
NEWPARK:
NEWPARK RESOURCES, INC.,
a Delaware corporation
 
 
 
By:           /s/ Gregg S.
Piontek                                                                
Name:  Gregg S. Piontek
Title:  Vice President and
           Chief Financial Officer
 
 
 
Signature Page to Asset Purchase Agreement
 
 
 

 
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