EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
AMONG
CORE LABORATORIES N.V.,
SAYBOLT INTERNATIONAL B.V.
AND
THE SHAREHOLDERS OF
THE SAYBOLT INTERNATIONAL B.V.
APRIL 16, 1997
TABLE OF CONTENTS
Page
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ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION..................................................1
1.02 CLOSING..........................................................1
1.03 PURCHASE PRICE...................................................1
1.04 ADJUSTMENT TO CLOSING PURCHASE PRICE.............................2
1.05 DEPOSIT..........................................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
2.01 GOOD TITLE.......................................................2
2.02 AUTHORIZATION AND VALIDITY OF AGREEMENTS.........................3
2.03 NO WITHHOLDING...................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.....................3
3.02 ORGANIZATIONAL DOCUMENTS.........................................4
3.03 CAPITALIZATION...................................................4
3.04 AUTHORITY........................................................5
3.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.......................5
3.06 PERMITS; COMPLIANCE..............................................6
3.07 FINANCIAL STATEMENTS.............................................7
3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS.............................7
3.09 LITIGATION.......................................................8
3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS............................8
3.11 TAXES...........................................................11
3.12 CERTAIN BUSINESS PRACTICES......................................11
3.13 ENVIRONMENTAL MATTERS...........................................12
3.14 UNDISCLOSED LIABILITIES.........................................13
3.15 CERTAIN AGREEMENTS..............................................13
3.16 CONTRACTS AND COMMITMENTS.......................................14
3.17 AFFILIATE INTERESTS.............................................14
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3.18 INTELLECTUAL PROPERTY...........................................14
3.19 BROKERS.........................................................15
3.20 INSURANCE.......................................................15
3.21 PROPERTIES......................................................15
3.22 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS......................16
3.23 MATERIAL SUBSIDIARIES...........................................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.01 ORGANIZATION AND QUALIFICATION..................................16
4.02 AUTHORITY.......................................................16
4.03 NO CONFLICT; REQUIRED FILINGS AND CONSENTS......................17
4.04 LITIGATION......................................................17
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY............................18
5.02 NEGATIVE COVENANTS OF THE COMPANY...............................18
ARTICLE VI
COVENANTS OF THE SHAREHOLDERS
6.01 COVENANTS OF THE SHAREHOLDERS...................................20
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS.................................21
7.02 ACCESS AND INFORMATION..........................................21
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS...........................22
7.04 PUBLIC ANNOUNCEMENTS............................................23
7.05 EXPENSES........................................................23
7.06 BOARD OF SUPERVISORY DIRECTORS; OPERATING COMMITTEE.............24
7.07 STICHTING PARTICIPATIE..........................................24
7.08 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. .......24
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ARTICLE VIII
INDEMNIFICATION
8.01 IN GENERAL......................................................25
8.02 DEDUCTIBLE; TIME LIMIT; FORM OF PAYMENT; CAP; EXCLUSIVITY.......26
8.03 DEFENSE OF THIRD PARTY CLAIMS...................................26
8.04 WAIVER..........................................................27
ARTICLE IX
CONDITIONS
9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY...............27
9.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR.................28
9.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS.........29
ARTICLE X
MISCELLANEOUS
10.01 TERMINATION.....................................................30
10.02 EFFECT OF TERMINATION...........................................30
10.03 WAIVER AND AMENDMENT............................................31
10.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES.....................31
10.05 ASSIGNMENT......................................................31
10.06 CERTAIN DEFINITIONS.............................................31
10.07 NOTICES.........................................................32
10.08 GOVERNING LAW...................................................34
10.09 SEVERABILITY....................................................35
10.10 COUNTERPARTS....................................................35
10.11 HEADINGS........................................................35
10.12 SPECIFIC PERFORMANCE............................................35
10.13 FORUM...........................................................35
EXHIBITS:
Exhibit A -- Form of Escrow Agreement
Exhibit B -- Form of Pluimers Employment Agreement
Exhibit C -- Form of Mead Employment Agreement
Exhibit D -- Form of Heinsbroek Employment Agreement
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into
as of April 16, 1997 by and among Core Laboratories N.V., a Netherlands public
limited liability company ("Acquiror"), Saybolt International B.V., a
Netherlands private limited liability company (the "Company"), and each of the
shareholders of the Company set forth on the signature pages hereto
(collectively, the "Shareholders").
WHEREAS, the Shareholders are the record and (except for Capital
Partnership Nominees Ltd. ("CPNL") and Stichting Participatie Saybolt
International B.V. (the "Stichting")) beneficial owners of all of the issued and
outstanding Class A ordinary shares, par value 1.00 Dutch guilders per share, of
the Company ("Company Class A Shares") and Class B ordinary shares, par value
0.10 Dutch guilders per share, of the Company ("Company Class B Shares" and,
together with the Company Class A Shares, the "Company Shares"); and
WHEREAS, pursuant to the terms and subject to the conditions set forth in
this Agreement, each of the Shareholders desires to sell all the Company Shares
owned by such Shareholder and Acquiror desires to acquire all of the issued and
outstanding Company Shares;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION. Pursuant to the terms and subject to the conditions
set forth in this Agreement, Acquiror agrees to purchase from the Shareholders
all of the issued and outstanding Company Shares (the "Acquisition") for an
aggregate cash purchase price, subject to adjustment as provided in Section
1.04, of U.S. $67 million (the "Purchase Price"). Pursuant to the terms and
subject to the conditions set forth in this Agreement, each of Shareholders
agrees to sell to Acquiror that number of Company Shares set forth opposite such
Shareholder's name on the signature pages to this Agreement for such
Shareholder's pro rata portion of the Purchase Price.
1.02 CLOSING. The Closing (as defined in Section 10.06) shall take place
(a) at 10:00 a.m. on the next business day following the date on which the
conditions set forth in Article IX (other than the conditions set forth in
Sections 9.01(b), 9.02(e), 9.03(c) and 9.03(d) and the delivery of the
certificates described in Sections 9.02(a), 9.02(b), 9.03(a) and 9.03(b)) of
this Agreement have been (or, in the case of Sections 9.02(a), 9.02(b), 9.03(a)
and 9.03(b), would be on such date) satisfied or, if permissible, waived, at the
offices of Nauta Dutilh located at Weena 750, 3014 DA Rotterdam, The Netherlands
or (b) at such other date, place and time as the parties hereto may agree in
writing.
1.03 PURCHASE PRICE. Subject to satisfaction or, if permissible, waiver of
the conditions set forth in Article IX, the Purchase Price shall be paid by
Acquiror at the Closing as follows: (a) U.S. $6 million (the "Escrowed Purchase
Price") shall be delivered to Chase Manhattan Bank, N.A., as escrow agent (the
"Escrow Agent"), pursuant to an escrow agreement substantially in the form of
Exhibit A to this Agreement (the "Escrow Agreement") to secure the obligations
of the
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Shareholders pursuant to Article VIII, (b) U.S. $61 million (as such amount may
be reduced by Section 1.04, the "Closing Purchase Price") shall be paid to the
Shareholders in immediately available funds (each Shareholder to be paid at the
Closing an amount equal to the Closing Purchase Price multiplied by a fraction,
the numerator of which is the number of Company Shares owned by such Shareholder
and the denominator of which is the aggregate number of Company Shares issued
and outstanding on the Closing Date). Each Company Class A Share and each
Company Class B Share shall receive the same proportion of the Closing Purchase
Price on a per share basis.
1.04 ADJUSTMENT TO CLOSING PURCHASE PRICE. If the estimate delivered by
the Company pursuant to Section 9.02(f) of the fees and disbursements of legal
counsel, accountants, investment bankers, brokers or finders and actuaries
incurred by the Company in connection with the negotiation of this Agreement and
that certain Heads of Agreement dated as of January 17, 1997 between the Company
and Acquiror and in connection with the transactions contemplated hereby and
thereby ("Company Transaction Costs") exceeds U.S. $2.1 million, then the
Closing Purchase Price shall be reduced by such excess.
1.05 DEPOSIT. Within two business days after the execution and delivery of
this Agreement, Acquiror shall pay to the Company a deposit of U.S. $1 million
(the "Deposit") in immediately available funds. The Company agrees to pay to
Acquiror the amount of the Deposit plus any accrued interest earned thereon, in
immediately available funds, within two business days following the earlier of
(a) receipt by the Company of Acquiror's written waiver, in a form reasonably
acceptable to the Company, of the conditions set forth in Section 9.02(g) of
this Agreement and a copy of any commitment letters received by Acquiror from
the source or sources of the Financing (as defined in Section 9.02(g))
evidencing a commitment from such source or sources to provide the Financing to
Acquiror, subject to customary conditions, and (b) termination of this Agreement
for any reason other than a termination of this Agreement solely as a result of
the failure to satisfy the conditions set forth is Section 9.02(g) of this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
Each of the Shareholders, severally and not jointly, represents and
warrants (except for CPNL, which represents and warrants only to Section 2.01
and the first sentence of Section 2.02) to Acquiror that:
2.01 GOOD TITLE. Except as set forth in Section 2.01 of the Company
Disclosure Schedule (as hereinafter defined), such Shareholder is the sole
record and (except for CPNL and the Stichting) beneficial owner of, and has good
and valid title to, the number of shares of Company Stock set forth opposite
such Shareholder's name on the signature pages hereto, free and clear of all
liens, claims, encumbrances, options, voting trusts or agreements, proxies or
other claims or charges of any nature whatsoever (other than resulting from this
Agreement). Upon the execution by each of the Shareholders, the Company and
Acquiror of the document referred to in Section 9.02(e), Acquiror shall be the
owner of, and have good and valid title to, the shares of Company Stock
described opposite such Shareholder's name on the signature pages hereto, free
and clear of all liens, claims,
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encumbrances, options, voting trusts or agreements, proxies or other claims or
charges of any nature whatsoever (other than resulting from this Agreement).
2.02 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Such Shareholder has the
full power, legal right, capacity and authority to enter into, execute and
deliver this Agreement and the Escrow Agreement and to carry out and perform the
transactions contemplated hereby and thereby. Each of this Agreement and the
Escrow Agreement constitutes a valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with its terms, (a) except as
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
law now or hereafter in effect relating to or affecting creditors' rights
generally, and without limitation, the effect of statutory or other laws
regarding fraudulent conveyances and preferential transfers, (b) subject to the
limitations imposed by general rules of equity (regardless of whether such
enforceability is considered at law or in equity) and (c) with respect to the
Stichting, subject to Section 9.01(f).
2.03 NO WITHHOLDING. Neither Acquiror nor any of its affiliates are
required to deduct or withhold from the consideration otherwise payable pursuant
to this Agreement or the Escrow Agreement to such Shareholder any amounts under
the Code (as hereinafter defined) or any other provision of federal, state,
local or foreign tax law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Subject to Section 8.02, the Company represents and warrants to Acquiror
that:
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) The Company is a Netherlands private limited liability company,
and each of the Company's subsidiaries (as such term in defined in Section 10.06
herein) is, except as set forth in Section 3.01 of the Company Disclosure
Schedule (as defined below), duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, and each of the Company and its subsidiaries has all requisite
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted and, except as set forth in Section 3.01
of the Company Disclosure Schedule, is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary, other than where the failure to be so duly qualified and in good
standing could not reasonably be expected to have a Company Material Adverse
Effect. The term "Company Material Adverse Effect" as used in this Agreement
shall mean any change or effect that would be materially adverse to the
business, operations or financial condition of the Company and its subsidiaries,
taken as a whole, at the time of such change or effect. Section 3.01 of the
Disclosure Schedule delivered by the Company to Acquiror concurrently with the
execution of this Agreement (the "Company Disclosure Schedule") sets forth, as
of the date of this Agreement, a true and complete list of all the Company's
directly or indirectly owned subsidiaries, together with the jurisdiction of
incorporation or organization of each subsidiary, the jurisdictions in which
each such subsidiary is qualified to conduct business, and the percentage of
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each subsidiary's outstanding capital stock or other equity interests owned by
the Company or another subsidiary of the Company. Such list also indicates which
of such subsidiaries are Material Subsidiaries (as hereinafter defined).
(b) The corporate or other official record books of the Company and
each of its Material Subsidiaries accurately record in all material respects all
material company actions taken by their respective shareholders, directors and
officers. The copies of the minutes of the meetings of the directors of the
Company and each of its Material Subsidiaries, as made available to Acquiror for
review, are true and complete copies of the originals of such documents. The
term "Material Subsidiary" as used in this Agreement shall mean any subsidiary
that in 1996 accounted for 2% or more of the Company's consolidated revenues, 5%
or more of the Company's consolidated net assets or both.
3.02 ORGANIZATIONAL DOCUMENTS. The Company has heretofore furnished or
made available to Acquiror complete and correct copies of the Articles of
Association or the equivalent organizational documents, in each case as amended
or restated to the date hereof, of the Company and each of its subsidiaries.
Neither the Company nor any of its Material Subsidiaries is in violation of any
of the provisions of its Articles of Association (or equivalent organizational
documents).
3.03 CAPITALIZATION.
(a) The authorized share capital of the Company amounts to NLG
2,000,000. There are authorized 1,000,000 Class A Company Shares and 9,990,000
Class B Company Shares. As of the date of this Agreement, there are 504,639
Class A Company Shares and 495,361 Class B Company Shares issued and
outstanding. No Company Shares are held by the Company in its treasury or by the
Company's subsidiaries and no Company Shares are reserved for issuance for any
purpose. Except as set forth above, there are no capital shares (including
preferred shares) of, or other equity interests in, the Company authorized,
issued or outstanding. Each of the issued capital shares of, or other equity
interests in, each of the Company and its subsidiaries is duly authorized,
validly issued and, in the case of capital shares, fully paid and nonassessable,
and has not been issued in violation of (nor, except pursuant to the Saybolt
International B.V. Shareholders' and Subscription Agreement dated June 4, 1992
(a true, correct and complete copy of which has been provided to Acquiror), are
any of the authorized capital shares of, or other equity interests in, the
Company or any of its subsidiaries subject to) any preemptive right, right of
first refusal or similar rights created by statute, the Articles of Association
(or the equivalent organizational documents) of the Company or any of its
subsidiaries, or any agreement to which the Company or any of its subsidiaries
is a party or is bound, and all such issued shares or other equity interests of
the Company's subsidiaries owned by the Company or a subsidiary of the Company
are owned free and clear of all security interests, liens, claims, pledges,
agreements, limitations on the Company's or such subsidiaries' voting rights,
charges or other encumbrances of any nature whatsoever.
(b) No bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into or exchangeable or exercisable for
securities having the right to vote) on any matters on which shareholders may
vote ("Voting Debt") are issued or outstanding.
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(c) Except as set forth in Section 3.03(a) above or in Section
3.03(c) of the Company Disclosure Schedule, there are no outstanding
subscriptions, options, warrants or other rights (including registration
rights), agreements, arrangements or commitments of any character to which the
Company or any of its subsidiaries is a party relating to the issued or unissued
capital stock or other equity interests of the Company or any of its
subsidiaries or obligating the Company or any of its subsidiaries to grant,
issue or sell any shares of capital stock, Voting Debt or other equity interests
of the Company or any of its subsidiaries. Except as set forth in Section
3.03(c) of the Company Disclosure Schedule, there are no obligations, contingent
or otherwise, of the Company or any of its subsidiaries (i) to repurchase,
redeem or otherwise acquire any Company Shares or shares of other capital stock
of the Company or the capital stock or other equity interests of any subsidiary
of the Company or (ii) (other than advances to wholly owned subsidiaries in the
ordinary course of business) to provide material funds to, or to make any
material investment in (in the form of a loan, capital contribution or
otherwise), or to provide any guarantee with respect to the material obligations
of, any person other than a wholly owned subsidiary of the Company. Except (i)
as set forth in Section 3.03(c) of the Company Disclosure Schedule or (ii) for
subsidiaries of the Company set forth in Section 3.01 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries (x) directly or
indirectly owns, (y) has agreed to purchase or otherwise acquire or (z) holds
any interest convertible into or exchangeable or exercisable for, 5% or more of
the capital stock or other equity interest of any corporation, partnership,
joint venture or other business association or entity. Except as set forth in
Section 3.03(c) of the Company Disclosure Schedule, there are no voting trusts,
shareholder agreements, proxies or other agreements or understandings with
respect to the voting of any shares of capital stock or other equity interests
of the Company or any of its subsidiaries.
3.04 AUTHORITY. The Company has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof by Acquiror, constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its terms.
3.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming that all consents, licenses, permits, waivers,
approvals, authorizations, orders, filings and notifications contemplated by the
exceptions to Section 3.05(b) are obtained or made and except as disclosed in
Section 3.05(a) of the Company Disclosure Schedule, the execution and delivery
of this Agreement by the Company does not, and the performance by the Company of
its obligations hereunder, including consummation of the transactions
contemplated hereby, will not (i) conflict with or violate the Articles of
Association, or the equivalent organizational documents, in each case as amended
or restated, of the Company or any of its Material Subsidiaries, (ii) conflict
with or violate any federal, state, foreign (including, but not limited to,
Dutch Law) or local law, statute, ordinance, rule or regulation (collectively,
"Laws") or any judgment, order, writ, injunction, determination, arbitration
award or decree applicable to the
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Company or any of its Material Subsidiaries or by or to which any of their
respective properties is bound or subject or (iii) result in any material breach
of or constitute a material default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation or imposition of a mortgage, pledge, lien,
security interest or other charge or encumbrance on any of the properties or
assets of the Company or any of its Material Subsidiaries pursuant to, any
material note, bond, mortgage, indenture, contract, agreement (other than
pursuant to the provisions of the Company's credit facility as in effect on the
date of this Agreement, a true, correct and complete copy of which has been
provided to Acquiror), lease, license, permit, authorization, franchise or other
instrument or obligation to which the Company or any of its Material
Subsidiaries is a party or by or to which the Company or any of its Material
Subsidiaries or any of their respective properties is bound or subject.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance by the Company of its obligations hereunder, including
consummation of the transactions contemplated hereby, will not, require the
Company to obtain any consent, license, permit, certificate, waiver, approval,
authorization or order of, or to make any filing with or notification to, any
foreign, federal, national, republic, provincial, state, territorial, county,
municipal or city agency, department, commission, board, office, bureau, court,
tribunal or any other political entity, aggregation, or subdivision of any of
the foregoing (each, a "Governmental Entity"), except (i) the applicable
requirements, if any, of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (ii) the filings and notices required pursuant
to Dutch Law, (iii) where the failure to obtain such consents, licenses,
permits, certificates, waivers, approvals, authorizations or orders, or to make
such filings or notifications could not reasonably be expected to cause a
Company Material Adverse Effect or to prevent the Company from performing its
obligations under this Agreement or (iv) as disclosed in Section 3.05(b) of the
Company Disclosure Schedule.
3.06 PERMITS; COMPLIANCE. Except as disclosed in Section 3.06 of the
Company Disclosure Schedule, each of the Company and its Material Subsidiaries
is in possession of all (i) franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates,
identification and registration numbers, approvals and orders necessary to own,
lease and operate its properties and to carry on its business as it is now being
conducted (collectively, the "Company Permits"). Section 3.06 of the Company
Disclosure Schedule sets forth a list of each of the Company Permits and the
jurisdiction issuing the same, all of which are in good standing and, to the
Company's knowledge, not subject to meritorious challenge. Section 3.06 of the
Company Disclosure Schedule also sets forth, as of the date of this Agreement,
all actions, proceedings or investigations pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries that could
reasonably be expected to result in the loss, suspension or revocation of a
Company Permit. Except as set forth in Section 3.06 of the Company Disclosure
Schedule, the Company and its Material Subsidiaries are in material compliance
with, and none of them has received, since December 31, 1994, from any
Governmental Entity any written notice with respect to any material
non-compliance with, (i) any Law applicable to the Company or any of its
subsidiaries or by or to which any of their respective properties is bound or
subject, (ii) any judgment, order, writ, injunction determination, arbitration
award or decree applicable to the Company or any of its subsidiaries or (iii)
any of the Company Permits.
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3.07 FINANCIAL STATEMENTS. The Company has provided Acquiror with true,
correct and complete copies of its consolidated balance sheets as of, and its
income statements and statements of cash flows for the years ended, December 31,
1994, 1995 and 1996, and the notes related thereto (collectively, the "Company
Financial Statements"). Each of the Company Financial Statements (including, in
each case, any related notes thereto) (i) has been audited by Price Waterhouse
L.L.P., (ii) has been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods covered thereby (except (A) to the extent disclosed therein or
required by changes in GAAP, or (B) as may be indicated in the notes thereto)
and (iii) fairly present the consolidated financial position of the Company and
its subsidiaries as of the respective dates thereof and the consolidated results
of operations and cash flows for the periods indicated.
3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by this
Agreement or as set forth in Section 3.08 of the Company Disclosure Schedule,
since December 31, 1995 the Company and its subsidiaries have conducted their
respective businesses only in the ordinary course and in a manner consistent
with past practice, and there has not been: (i) any damage, destruction or loss
with respect to any property, assets or business of the Company or any of its
subsidiaries that, whether or not covered by insurance, would constitute a
Company Material Adverse Effect; (ii) any change by the Company or its
subsidiaries in their accounting methods or practices, credit practices or
collection policies; (iii) except for dividends by a wholly owned subsidiary of
the Company to the Company or to another wholly owned subsidiary of the Company,
any declaration, setting aside or payment of any dividends or distributions in
respect of the Company Shares or shares of stock of, or other equity interests
in, the Company or any subsidiary of the Company or any redemption, purchase or
other acquisition of any of the Company's securities or any of the securities of
any subsidiary of the Company; (iv) any material increase in the benefits under,
or the establishment or amendment of, any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, performance awards
(including, without limitation, the granting of stock appreciation rights or
restricted stock awards), stock purchase or other employee benefit plan, or any
increase in the compensation payable or to become payable to any of the
directors or officers of the Company or the employees of the Company and its
subsidiaries as a group, except in the ordinary course of business and
consistent with past practice or in contemplation of the Acquisition and with
Acquiror's written consent; (v) any purchase, sale or other disposition, or any
agreement or other arrangement for the purchase, sale or other disposition, of
any of the properties or assets of the Company or any of its subsidiaries other
than in the ordinary course of business; (vi) any change in the financial
condition, properties, assets, liabilities, business or operations of the
Company or any of its subsidiaries, which change by itself or in conjunction
with all other such changes, whether or not arising in the ordinary course of
business, would constitute a Company Material Adverse Effect (except that
operating results have been consistent, generally, with the results reflected in
the Company Financial Statements); (vii) any contingent liability incurred by
the Company or any of its subsidiaries as guarantor or otherwise with respect to
the obligations of others or any cancellation of any material debt or claim
owing to, or waiver of any material right of, the Company or any of its
subsidiaries, other than warranties or other similar items incurred in the
ordinary course of business; (viii) any mortgage, encumbrance or lien placed on
any of the properties of the Company or any of its subsidiaries which remains in
existence on the date this representation is made; (ix) any payment or discharge
of a material lien or liability of the Company or any of its subsidiaries which
was not shown in the Company Financial Statements or incurred in the ordinary
course of business thereafter;
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(x) any other Company Material Adverse Effect or (xi) any agreement or
understanding, whether in writing or otherwise, for the Company or any of its
subsidiaries to take any of the actions specified in paragraphs (i) through (x)
above.
3.09 LITIGATION. Except as disclosed in Section 3.09 of the Company
Disclosure Schedule, (a) there is no claim, action, suit, litigation,
proceeding, arbitration or, to the knowledge of the Company, investigation of
any kind, at law or in equity (including actions or proceedings seeking
injunctive relief), pending or, to the knowledge of the Company or any of the
Shareholders, threatened against the Company or any of its subsidiaries or any
properties or rights of the Company or any of its subsidiaries that could
reasonably be expected to have a Company Material Adverse Effect, and (b)
neither the Company nor any of its subsidiaries is subject to any executory
judgment, order, writ, injunction, decree or award of any Governmental Entity,
including without limitation any cease and desist order and any consent decree,
settlement agreement or other similar written agreement with any Governmental
Entity that could reasonably be expected to have a Company Material Adverse
Effect.
3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) COPIES OF BENEFIT PLANS. Section 3.10(a) of the Company
Disclosure Schedule provides a list of each Benefit Plan that is sponsored,
maintained or contributed to by the Company or any of its subsidiaries, or has
been so sponsored, maintained or contributed to within six years prior to the
date of this Agreement. True, correct and complete copies of each of such
Benefit Plans, and related trusts, if applicable, including all amendments
thereto, have been furnished to Acquiror. There have also been furnished to
Acquiror, with respect to each such Benefit Plan required to file such report or
description, the most recent report on Form 5500 and the summary plan
description.
(b) EMPLOYEE BENEFIT PLAN COMPLIANCE.
(i) Except as set forth in Section 3.10(b) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries
contributes to or has an obligation to contribute to, nor has the Company
or any of its subsidiaries at any time within six years prior to the date
of this Agreement contributed to or had an obligation to contribute to, a
"multiemployer plan" within the meaning of Section 3(37) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(ii) All obligations, whether arising by Law or by contract,
required to be performed in connection with the Benefit Plans have been
performed, and there have been no omissions, defaults or violations by any
party with respect to any Benefit Plan or any Law applicable thereto.
(iii) Each Plan (as defined in Section 10.06) that is intended
to be qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), (A) satisfies the requirements of such Section in
all material respects, (B) has received a favorable determination letter
from the Internal Revenue Service (the "IRS") regarding such qualified
status and covering amendments required under the Tax Reform Act of 1986
(the "TRA"), the Unemployment Compensation Amendments of 1992, the Omnibus
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Reconciliation Act of 1993, the final nondiscrimination regulations under
Section 401(a)(4) of the Code and all other amendments required to be
filed within the TRA remedial amendment period described in Internal
Revenue Procedure 95-12 (the "TRA Amendments") (or the TRA Amendments to
such Plans have been timely made and filed with the IRS for such a
determination letter) and (C) has not, since receipt of the most recent
favorable determination letter, been amended or operated in a way that
would materially adversely affect such qualified status.
(iv) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of the Company,
threatened against, or with respect to, any of the Benefit Plans or their
assets, and there is no matter pending (other than routine qualification
determination filings) with respect to any of the Benefit Plans before the
IRS, the Department of Labor, the PBGC or any other Governmental Entity.
(v) As to any Plan subject to Title IV of ERISA, there has
been no event or condition that presents the material risk of Plan
termination, no accumulated funding deficiency, whether or not waived,
within the meaning of Section 302 of ERISA or Section 412 of the Code has
been incurred, no reportable event within the meaning of Section 4043 of
ERISA (for which the disclosure requirements of Regulation ss.2615.3
promulgated by the Pension Benefit Guaranty Corporation (the "PBGC") have
not been waived) has occurred, no notice of intent to terminate the Plan
has been given under Section 4041 of ERISA, no proceeding has been
instituted under Section 4042 of ERISA to terminate the Plan, no liability
to the PBGC has been incurred and the assets of the Plan equal or exceed
the actuarial present value of the benefit liabilities, within the meaning
of Section 4041 of ERISA, under the Plan, based upon reasonable actuarial
assumptions and the asset valuation principles established by the PBGC.
(vi) With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, that is not listed on Schedule 3.10(a)
but which is sponsored, maintained, or contributed to, or has been
sponsored, maintained or contributed to within six years prior to the date
of this Agreement, by any corporation, trade, business or entity under
common control with the Company or any of its subsidiaries, within the
meaning of Section 414(b), (c), (m), or (o) of the Code or Section 4001 of
ERISA ("Commonly Controlled Entity"), (A) no withdrawal liability, within
the meaning of Section 4201 of ERISA, has been incurred, which withdrawal
liability has not been satisfied, (B) no liability to the PBGC has been
incurred by any Commonly Controlled Entity, which liability has not been
satisfied, (C) no accumulated funding deficiency, whether or not waived,
within the meaning of Section 302 of ERISA or Section 412 of the Code has
been incurred and (D) all contributions (including installments) to such
plan required by Section 302 of ERISA and Section 412 of the Code have
been timely made.
(vii) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby (A) contravenes
the terms of any Benefit Plan or any Law related to any Benefit Plan, (B)
will require the Company or any of its subsidiaries to make a larger
contribution to, or pay greater benefits under, any Benefit
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Plan than it otherwise would or (C) will create or give rise to any
additional vested rights or service credits under any Benefit Plan.
(viii) Except for the Retirement Income Plan For Employees of
Saybolt Inc., neither the Company nor any of its subsidiaries (A) sponsors
or maintains any defined benefit pension plan or (B) contributes to or has
or had an obligation to contribute to a retirement plan for which the
contribution is or was calculated either (1) on the basis of actuarial
assumptions and methods or (2) on a basis other than a fixed amount per
month.
(c) NO ADDITIONAL SEVERANCE. Except as set forth in Section 3.10(c)
of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries is a party to any agreement, nor has the Company or any of its
subsidiaries established any policy or practice requiring, nor does any
applicable Law require, it to make a payment or provide any other form of
compensation or benefit to any person performing services for the Company or any
of its subsidiaries upon termination of such services that would not be payable
or provided in the absence of the consummation of the transactions contemplated
by this Agreement.
(d) NO EXCESS PARACHUTE PAYMENTS. In connection with the
consummation of the transactions contemplated by this Agreement, no payments
have or will be made under the Benefit Plans that, in the aggregate, would
result in imposition of the sanctions imposed under Section 280G or Section 4999
of the Code.
(e) AMENDMENT OR TERMINATION OF BENEFIT PLANS. Each Plan may be
unilaterally amended or terminated in its entirety by the Company without
violating the terms of such Benefit Plans or applicable Law and without
liability except as to benefits accrued and vested thereunder prior to or upon
such amendment or termination.
(f) LABOR MATTERS. Except as set forth in Section 3.10(f) of the
Company Disclosure Schedule, there are no collective bargaining or other labor
union contracts to which the Company or its subsidiaries is a party applicable
to persons employed by the Company or its subsidiaries and no collective
bargaining agreement is being negotiated by the Company or any of its
subsidiaries. There is no pending or, to the knowledge of the Company,
threatened labor dispute, strike or work stoppage against the Company or any of
its subsidiaries. Except as disclosed in Section 3.10(f) of the Company
Disclosure Schedule, to the knowledge of the Company, none of the Company, any
of its subsidiaries or any of their respective representatives or employees has
committed any unfair labor practice in connection with the operation of the
respective businesses of the Company or its subsidiaries that could reasonably
be expected to have a Company Material Adverse Effect, and there is no pending
or, to the knowledge of the Company, threatened charge or complaint against the
Company or any of its subsidiaries by the United States National Labor Relations
Board or any other Governmental Entity. The Company and each of its subsidiaries
have each complied in all material respects with the Family and Medical Leave
Act of 1993.
(g) EMPLOYMENT AND OTHER AGREEMENTS. The Company has furnished to
Acquiror true, correct and complete (i) copies of the form of each employment
agreement to which the Company or any of its Material Subsidiaries is a party
and a list of each employee who is a party to each such form of agreement that
includes the compensation level of such employee pursuant to such
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agreement and the termination date of such agreement, (ii) copies of all
employment agreements with senior executives, officers and directors of the
Company and (iii) copies of each other agreement between the Company or any of
its subsidiary and any employee or former employee that provides severance,
health, deferred compensation or other employee benefit. Section 3.10(g) of the
Company Disclosure Schedule lists each such document described in the preceding
sentence.
(h) Section 3.10(h) of the Company Disclosure Schedule sets forth a
list of all employees of the Company and each of its subsidiaries as of
approximately February 28, 1997 and, with respect to each such employee, (i) his
annual salary or annualized hourly rate of pay, (ii) his expected annual bonus,
if any, (iii) whether he is an active or inactive employee and, if applicable,
the reason for inactive status (i.e., short-term disability, long-term
disability, layoff, paid or unpaid leave of absence, or other), (iv) whether he
is a union or nonunion employee and, if applicable, name of applicable
collective bargaining agreement, (v) whether he is full-time (30 or more hours
per week) or part-time (less than 30 hours per week), and (vi) whether he is
subject to or exempt from the provisions of the Fair Labor Standards Act.
3.11 TAXES. Except as set forth in Section 3.11 of the Company Disclosure
Schedule,
(a) (i) all material returns and reports ("Tax Returns") of or with
respect to any Tax (as defined in Section 10.06 hereof) which is required to be
filed with respect to the Company or any its subsidiaries have been duly and
timely filed, (ii) all information provided in each such Tax Return is true,
correct and complete in all material respects, (iii) all Taxes shown as due on
each such Tax Return have been timely paid in full, (iv) all withholding Tax
requirements imposed on or with respect to Company or any of its subsidiaries
have been satisfied in all material respects, and (v) no material penalty,
interest or other charge is or will become due with respect to the late filing
of any such Tax Return or late payment of any such Tax;
(b) there is no claim pending against the Company or any of its
subsidiaries for any material amount of Taxes, and no material assessment,
deficiency or adjustment has been asserted or proposed with respect to any Tax
Return of or with respect to the Company or any of its subsidiaries other than
those disclosed (and to which are attached true and complete copies of all audit
or similar reports) in Section 3.11 of the Company Disclosure Schedule;
(c) except for statutory liens for current Taxes not yet due, no
liens for Taxes exist upon any of the assets of the Company or any of its
Material Subsidiaries; and
(d) none of the transactions contemplated by this Agreement will
result in any Tax liability or the recognition of any item of income or gain to
the Company or any of its subsidiaries.
3.12 CERTAIN BUSINESS PRACTICES. None of the Company, any of its
subsidiaries or any directors, officers, agents or employees of the Company or
any of its subsidiaries (in their capacities as such) has (i) used any funds for
unlawful contributions, gifts, entertainment or other unlawful purposes relating
to political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the United States Foreign Corrupt
Practices Act of 1977, as amended, (iii) consummated any transaction, made any
payment, entered into any agreement or arrangement
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or taken any other action in violation of Section 1128B(b) of the United States
Social Security Act, as amended, or (iv) made any other unlawful payment.
3.13 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Section 3.13 of the Company Disclosure
Schedule, (i) neither the Company nor any of its Material Subsidiaries has ever
generated, transported, used, stored, treated, disposed of, or managed any
Hazardous Waste (as defined below) in material violation of applicable Law nor
has it transported any Hazardous Material (as defined below) in material
violation of applicable Law; (ii) no Hazardous Material has ever been or is
threatened to be Released (as defined below) or disposed of at any property
presently or formerly owned, operated, leased or used by the Company or any of
its Material Subsidiaries or has ever come to be located in the soil, surface
water or groundwater at any such property; and (iii) neither the Company nor any
of its subsidiaries presently owns, operates or leases any property at which
underground storage tanks, pits or sumps are or, to the knowledge of the
Company, were located.
(b) Except as set forth in Section 3.13 of the Company Disclosure
Schedule, (i) neither the Company nor any of its Material Subsidiaries has any
material liability under, nor is the Company or any of its Material Subsidiaries
in violation in any material respect of, any Environmental Law (as defined
below); (ii) each property owned, operated, leased, or used by the Company or
any of its Material Subsidiaries, and any facilities and operations thereon are
presently in compliance in all material respects with all applicable
Environmental Laws; (iii) neither the Company nor any of its Material
Subsidiaries is in receipt of any written request for information, written
notice, demand letter, administrative inquiry, or formal or informal complaint
or claim from any Governmental Entity that gives rise to, or is reasonably
expected to give rise to, any material liability of the Company or any of its
Material Subsidiaries under any applicable Environmental Law related to human or
animal health or safety or the protection, preservation or restoration of the
environment; (iv) neither the Company nor any of its Material Subsidiaries has
any material liability to any non-Governmental Entity under any Environmental
Law arising from exposure to or otherwise in connection with any Release or
threatened Release of any Hazardous Waste or Hazardous Material; and (v) neither
the Company nor any of its subsidiaries has any knowledge that any of the items
enumerated in clause (iii) of this Section 3.13(b) will be forthcoming.
(c) Except as set forth in Section 3.13 of the Company Disclosure
Schedule, to the knowledge of the Company, no property owned, operated, leased,
or used by the Company or any of its Material Subsidiaries contains any asbestos
or asbestos-containing material, any polychlorinated biphenyls (PCBs) or
equipment containing PCBs, radioactive materials or any urea formaldehyde foam
insulation. For purposes of this Section 3.13(c), the Company shall be deemed to
have knowledge of all actions taken by or on behalf of the Company or any of its
subsidiaries.
(d) The Company has provided to Acquiror copies of all significant
documents, records and information (including copies of all "Phase I" audits or
surveys prepared within the last ten years with respect to any property owned,
leased or operated by the Company or any of its subsidiaries during such period)
in the possession of the Company or any of its Material Subsidiaries concerning
any matter related to human or animal health or safety or the environment,
whether generated by the Company or any of its subsidiaries or others,
including, without limitation,
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environmental audits, environmental risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Materials, spill control
plans, and reports, correspondence, permits, licenses, approvals, consents, and
other authorizations issued by any Governmental Entity concerning any matter
related to human or animal health or safety or the environment.
(e) For purposes of this Section 3.13, (i) "Hazardous Material"
shall mean and include any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant, or contaminant,
as defined or regulated under any Environmental Law, or any other substance,
exposure to which is regulated under any Environmental Law, that may pose a
threat to the environment or to human or animal health or safety; (ii)
"Hazardous Waste" shall mean and include any hazardous waste as defined or
regulated under any Environmental Law; (iii) "Environmental Law"shall mean and
include any and all laws, common laws, statutes, ordinances, rules, regulations,
codes, licenses, permits, consents, approvals, authorizations, orders,
judgments, decrees, injunctions, requirements, agreements, or determinations of
any Governmental Entity in any and all jurisdictions in which the Company
presently or formerly owned, operated, leased, or used property, whether
existing as of the date hereof, previously enforced, or subsequently enacted,
that are related to (A) the protection, preservation, or restoration of the
environment (including, without limitation, air, water, vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life, or any other natural resource), or to human and/or animal health or
safety or (B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, Release,
or disposal of any Hazardous Waste or Hazardous Material; (iv) "Release" shall
mean and include any actual spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping or
disposing into the environment in material violation of applicable Law; (v) "the
Company" shall mean and include the Company, its predecessors and all other
entities for whose conduct the Company is or may be held responsible under any
Environmental Law; and (vi) "subsidiary" shall mean and include each subsidiary
of the Company, its predecessors and all other entities for whose conduct such
subsidiary is or may be held responsible under any Environmental Law.
3.14 UNDISCLOSED LIABILITIES. Except (a) for reserves specifically
reflected or accrued for (and only to the extent reflected or accrued for) in
the balance sheet dated as of December 31, 1996 included in the Company
Financial Statements, (b) for liabilities incurred in the ordinary course of
business since December 31, 1996, or (c) as set forth in Section 3.14 of the
Company Disclosure Schedule, none of the Company or any of its subsidiaries has,
and, to the knowledge of the Company, there is no basis for the assertion
against the Company or any of its subsidiaries of, any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
and whether due or to become due.
3.15 CERTAIN AGREEMENTS. None of the Company or any of its subsidiaries is
a party to, or bound by, any contract, agreement or organizational document
which purports to restrict, by virtue of a noncompetition, territorial
exclusivity or other provision covering such subject matter, the scope of the
business or operations of any of the Company or any of its subsidiaries
geographically or otherwise.
-13-
3.16 CONTRACTS AND COMMITMENTS. Section 3.16 of the Company Disclosure
Schedule sets forth (i) a list of each contract, obligation or commitment to
which the Company or any of its subsidiaries is a party or by which its or their
property is bound that involves consideration or other expenditure in excess of
$100,000 ($250,000 in the case of service agreements with the customers of the
Company or its subsidiaries) or performance over a period of more than 12 months
or that is otherwise material to the business or operations of the Company and
its Material Subsidiaries, taken as a whole ("Material Contracts"); (ii) a list
of all real or personal property leases to which any of the Company or any of
its Material Subsidiaries is a party involving consideration or other
expenditure in excess of $50,000 over the term of the lease ("Material Leases");
(iii) a list of guarantees, or agreements to indemnify or be contingently liable
for, the payment or performance by any person or business entity to which any of
the Company or any of its Material Subsidiaries is a party other than guarantees
and agreements entered into in the ordinary course of business ("Guarantees");
and (iv) a list of contracts or other formal or informal understandings or
agreements between the Company or any of its subsidiaries and any of its
officers, directors, employees, consultants, agents or shareholders (or any of
such shareholders' family members or affiliates) ("Affiliate Agreements"). A
true and complete copy of each Material Contract, Material Lease, Guarantee and
Affiliate Agreement has been furnished or made available to Acquiror prior to
the date hereof. Except as specifically disclosed in Section 3.16 of the Company
Disclosure Schedule, each of the Material Contracts, Material Leases, Guarantees
and Affiliate Agreements constitutes the valid and legally binding obligation of
the parties thereto and is in full force and effect without default on the part
of any party thereto. Except as set forth in Section 3.16 of the Company
Disclosure Schedule or for any agreements, arrangements or commitments between
the Company and its wholly owned subsidiaries or between such wholly owned
subsidiaries, there are no agreements, arrangements or commitments of any
character (contingent or otherwise) pursuant to which any person is or may be
entitled to receive any payment based on, or calculated in accordance with, the
revenues or earnings of the Company or any of its subsidiaries.
3.17 AFFILIATE INTERESTS. Except as set forth in Section 3.17 of the
Company Disclosure Schedule, no current or former shareholder, employee,
consultant, officer or director, of the Company or any of its Material
Subsidiaries has any interest in any property, tangible, or intangible,
including, without limitation, patents, trade secrets, other confidential
business information, trademarks, service marks or trade names used in or
pertaining to the business of the Company or any of its Material Subsidiaries,
except (with respect to shareholders) for the normal rights of a shareholder.
3.18 INTELLECTUAL PROPERTY. The Company or one or more of its subsidiaries
own, are licensed or otherwise have the right to use or sublicense, all foreign
and domestic patents, trademarks (common law and registered), trademark
registration applications, service marks (common law and registered), service
mark registration applications, trade names and copyrights, copyright
applications, trade secrets, know-how and other proprietary information as are
necessary for the conduct of the business of the Company and its subsidiaries as
currently conducted. A list of all such intellectual property is set forth in
Section 3.18 of the Company Disclosure Schedule. Neither the Company nor any of
its subsidiaries is currently in receipt of any notice of infringement or notice
of conflict with the asserted rights of others in any patents, trademarks,
service marks, trade names, trade secrets and copyrights owned or held by other
persons, except, in each case, for matters that could not reasonably be expected
to have a Company Material Adverse Effect. Neither the execution
-14-
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will violate or breach the terms of or cause any
cancellation of any material license held by the Company or any of its
subsidiaries with regard to any patent, trademark, service mark, trade name,
trade secret or copyright.
3.19 BROKERS. Except for Credit Suisse First Boston Corporation and North
American Capital Corp. and as disclosed in Section 3.19 of the Company
Disclosure Schedule, no broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee, commission or payment in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has provided
Acquiror with a complete and correct copy of all agreements between the Company
and Credit Suisse First Boston Corporation and North American Capital Corp.
pursuant to which such firm may be entitled to any payment that in any way
relates to the transactions contemplated by this Agreement.
3.20 INSURANCE. Section 3.20 of the Company Disclosure Schedule sets forth
a list of all policies of insurance currently in effect relating to the business
or operations of the Company and its Material Subsidiaries (true and complete
copies of which have been furnished to Acquiror). Such insurance policies are in
full force and effect. The Company and each of its Material Subsidiaries are
presently insured, and during each of the past five calendar years have been
insured, against such risks as companies engaged in the same or substantially
similar business would, in accordance with good business practice, customarily
be insured. The Company and its Material Subsidiaries have given in a timely
manner to their respective insurers all notices required to be given under such
insurance policies with respect to all claims and actions covered by insurance,
and, except as set forth in Section 3.20 of the Company Disclosure Schedule, no
insurer has denied coverage of any such claims or actions or reserved it rights
in respect of or rejected any of such claims. None of the Company or any of its
Material Subsidiaries has received any notice or other communication from any
such insurer canceling or materially amending any of such insurance policies,
and no such cancellation is pending or threatened. The execution of this
Agreement and the consummation of the transactions contemplated hereby will not
cause such insurance policies to lapse, terminate or be canceled and will not
result in any party thereto having the right to terminate or cancel such
insurance policies.
3.21 PROPERTIES. Except as set forth in Section 3.21 of the Company
Disclosure Schedule, the Company and its subsidiaries have good and defensible
title, free and clear of all liens and material restrictions on their use, to
all their material properties and assets whether tangible or intangible, real,
personal or mixed, reflected in the Company Financial Statements as being owned
by the Company and its subsidiaries as of the date thereof, other than (i) any
properties or assets that have been sold or otherwise disposed of in the
ordinary course of business since the date of such financial statements, (ii)
liens disclosed in the notes to such financial statements and (iii) liens
arising in the ordinary course of business. All buildings, fixtures, equipment
and other property and assets that are material to the Company's business on a
consolidated basis that are held under leases or sub-leases by the Company or
any of its subsidiaries are held under valid instruments enforceable in
accordance with their respective terms, subject to applicable laws of
bankruptcy, insolvency or similar laws relating to creditors' rights generally
and to general principles of equity (whether applied in a proceeding in law or
equity). All of the Company's and its Material Subsidiaries'
-15-
equipment in regular use has been reasonably maintained and is in serviceable
condition, reasonable wear and tear excepted.
3.22 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS. The relationships of the
Company and each of its Material Subsidiaries with its customers and suppliers
are good commercial working relationships, except as disclosed in Section 3.22
of the Company Disclosure Schedule. No customer that accounted for more than (a)
5% of the consolidated revenues of the Company and its subsidiaries for the year
ended December 31, 1996 ("Consolidated Revenues"), (b) 10% of the revenues of
any Material Subsidiary (other than a Material Subsidiary that accounted for
less than 5% of Consolidated Revenues) or (c) that is otherwise significant to
the Company and its subsidiaries has canceled or otherwise terminated or
threatened to cancel or otherwise terminate its relationship with the Company or
any of its subsidiaries. No significant supplier of the Company and its
subsidiaries has canceled or otherwise terminated or threatened to cancel or
otherwise terminate its relationship with the Company and its subsidiaries. To
the Company's knowledge, no such customer or supplier has any plan or intention
to terminate, cancel or otherwise materially and adversely modify its
relationship with the Company or any of its subsidiaries.
3.23 MATERIAL SUBSIDIARIES. The Company and the Material Subsidiaries
accounted for in excess of 80% of the consolidated revenues of the Company and
its subsidiaries for the year ended December 31, 1996.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company and the
Shareholders that:
4.01 ORGANIZATION AND QUALIFICATION. Acquiror is a limited liability
company duly organized, validly existing and in good standing under the laws of
The Netherlands. Acquiror has all requisite power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary, other
than where the failure to be so duly qualified and in good standing could not
reasonably be expected to have an Acquiror Material Event. The term "Acquiror
Material Event" as used in this Agreement shall mean any change or effect that
would be materially adverse to Acquiror's ability to comply with the provisions
of this Agreement or to consummate the transactions contemplated hereby.
4.02 AUTHORITY. Acquiror has all requisite corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Acquiror and the performance by Acquiror of its obligations
hereunder, including the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Acquiror are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Acquiror and, assuming the due
authorization, execution and delivery hereof by the
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other parties hereto, constitutes the legal, valid and binding obligation of
Acquiror enforceable in accordance with its terms.
4.03 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming that all consents, licenses, permits, waivers,
approvals, authorizations, orders, filings and notifications contemplated by the
exceptions to Section 4.03(b) are obtained or made and except as otherwise
disclosed in Section 4.03(a) of the Disclosure Schedule delivered by Acquiror to
the Company contemporaneously with the execution and delivery of this Agreement
(the "Acquiror Disclosure Schedule"), the execution and delivery of this
Agreement by Acquiror does not, and performance of its obligations hereunder,
including the consummation of the transactions contemplated hereby, will not (i)
conflict with or violate Acquiror's Articles of Association, (ii) conflict with
or violate any Laws in effect as of the date of this Agreement applicable to
Acquiror or any of Acquiror's subsidiaries or by or to which any of their
properties is bound or subject or (iii) result in any breach of or constitute a
default (or an event that with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or require payment under, or result in the
creation or imposition of a mortgage, pledge, lien, security interest or other
charge or encumbrance on any of the properties or assets of Acquiror or any of
Acquiror's subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, authorization, franchise or other
instrument or obligation to which Acquiror or any of Acquiror's material
subsidiaries is a party or by or to which Acquiror or any of Acquiror's
subsidiaries or any of their respective properties is bound or subject, except,
with respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults, events, rights of termination, amendment, acceleration or
cancellation, payment obligations or liens or encumbrances that could not
reasonably be expected to have an Acquiror Material Event.
(b) The execution and delivery of this Agreement by Acquiror does
not, and the performance of this Agreement by Acquiror will not, including the
consummation of the transactions contemplated hereby, require Acquiror to obtain
any consent, license, permit, certificate, waiver approval, authorization or
order of, or to make any filing with or notification to, any Governmental
Entities, except (i) the applicable requirements, if any, of the HSR Act, the
Exchange Act, the Securities Act, any other applicable state or federal
securities or blue sky laws and the NASD, (ii) the filings and notices required
pursuant to Dutch Law, (iii) where the failure to obtain such consents,
licenses, permits, certificates, waivers, approvals, authorizations or orders,
or to make such filings or notifications could not reasonably be expected to
have an Acquiror Material Event or (iv) as disclosed in Section 4.03(b) of the
Acquiror Disclosure Schedule.
4.04 LITIGATION. There is no claim, action, suit, litigation, proceeding,
arbitration or, to the knowledge of Acquiror, investigation of any kind, at law
or in equity (including actions or proceedings seeking injunctive relief),
pending or, to the knowledge of Acquiror, threatened against Acquiror or any of
its subsidiaries or any properties or rights of Acquiror or any of its
subsidiaries that could be reasonably expected to cause an Acquiror Material
Event, and neither Acquiror nor any of its subsidiaries is subject to any
executory judgment, order, writ, injunction, decree or award of any Governmental
Entity, including without limitation any cease and desist order and any consent
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decree, settlement agreement or other similar written agreement with any
Governmental Entity, that could be reasonably expected to cause an Acquiror
Material Event.
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby covenants
and agrees that, prior to the Closing, unless otherwise expressly contemplated
by this Agreement or consented to in writing by Acquiror (which consent shall
not be unreasonably withheld), the Company will and will cause each of its
subsidiaries to:
(a) operate its business in the usual and ordinary course consistent
with past practices;
(b) use all reasonable efforts to preserve substantially intact its
business organization, maintain its rights and franchises, retain the services
of its respective officers and key employees and maintain its relationships with
its respective customers and suppliers;
(c) maintain and keep its properties and assets in as good repair
and condition as at present, ordinary wear and tear excepted, and maintain
supplies and inventories in quantities consistent with its customary business
practice; and
(d) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to those
currently maintained.
5.02 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly contemplated
by this Agreement or otherwise consented to in writing by Acquiror (which
consent shall not be unreasonably withheld), from the date of this Agreement
until the Closing, the Company will not do, and will not permit any of its
subsidiaries to do, any of the following:
(a) Except pursuant to agreements disclosed in Section 3.10(g) of
the Company Disclosure Schedule, (i) increase the compensation payable to or to
become payable to any director or executive officer; (ii) increase the
compensation payable or pay bonuses to any employees other than in the ordinary
course of business, (iii) grant any severance or termination pay (other than
pursuant to the normal severance practices of the Company or its subsidiaries as
in effect on the date of this Agreement) to, or enter into any employment or
severance agreement with, any director, officer or employee; (iv) establish,
adopt or enter into any employee benefit plan or arrangement or (v) except as
may be required by applicable law, amend, or take any other actions (including,
without limitation, the acceleration of vesting, waiving of performance criteria
or the adjustment of awards or any other actions permitted upon a "change in
control" (as defined in the respective plans) of the Company), with respect to
any of the Benefit Plans or any of the plans, programs, agreements, policies or
other arrangements described in Section 3.10(g) of this Agreement;
(b) declare or pay any dividend on, or make any other distribution
in respect of, outstanding shares of its or any of its subsidiaries' capital
stock or other equity interests, except
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dividends by a wholly owned subsidiary of the Company to the Company or another
wholly owned subsidiary of the Company;
(c) (i) except as described in Section 3.03(c) of the Company
Disclosure Schedule, redeem, purchase or otherwise acquire any shares of its or
any of its subsidiaries' capital stock, any securities or obligations
convertible into or exchangeable for any shares of its or its subsidiaries'
capital stock (other than any such acquisition directly from any wholly owned
subsidiary of the Company in exchange for capital contributions or loans to such
subsidiary), or any options, warrants or conversion or other rights to acquire
any shares of its or its subsidiaries' capital stock or any such securities or
obligations; (ii) effect any reorganization or recapitalization of the Company
or any of its subsidiaries; or (iii) split, combine or reclassify any of its or
its subsidiaries' capital stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of, or in substitution for, shares
of its or its subsidiaries' capital stock;
(d) (i) except as set forth in Section 3.03(a) hereof or as
described in Section 3.03(c) of the Company Disclosure Schedule, issue (whether
upon original issue or out of treasury), sell, grant, award, deliver or limit
the voting rights of any shares of any class of its or its subsidiaries' capital
stock, any securities convertible into or exercisable or exchangeable for any
such shares, or any rights, warrants or options to acquire, any such shares;
(ii) amend or otherwise modify the terms of any such rights, warrants or options
the effect of which shall be to make such terms materially more favorable to the
holders thereof; or (iii) take any action to accelerate the vesting of any of
the stock options;
(e) acquire or agree to acquire, by merging or consolidating with,
by purchasing an equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other person (other than (i) the purchase of assets
from suppliers or vendors in the ordinary course of business and consistent with
past practice and (ii) the purchase of assets for consideration of not in excess
of $100,000 in the aggregate);
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, any of its assets or any assets of any of its
subsidiaries, except for pledges or dispositions of assets in the ordinary
course of business and consistent with past practice;
(g) initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal relating to, or that may reasonably be
expected to lead to, any Competing Transaction (as defined below), or enter into
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to, or endorse, any
Competing Transaction, or authorize any of the officers, directors, employees or
agents of the Company or any of its subsidiaries or any agent, investment
banker, financial advisor, attorney, accountant or other representative retained
by the Company or any of its subsidiaries to take any such action, and the
Company shall promptly notify Acquiror or promptly provide Acquiror with a copy
of all relevant terms of any such inquiries or proposals received by the Company
or any of its subsidiaries. For purposes of this Agreement, the term "Competing
Transaction" shall mean any proposal or offer from any person or entity (other
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than Acquiror or an affiliate of Acquiror) relating to any acquisition or
purchase of all or (other than in the ordinary course of business) any material
portion of the assets of, or any possible disposition or issuance of any Company
Shares or any capital stock or other equity interests in the Company or any of
its subsidiaries (or any rights or securities exercisable for or convertible
into Company Shares or any such capital stock or other equity interests), or any
merger or other business combination with, the Company or any of its
subsidiaries (provided that nothing in this Section 5.02(g) shall prevent the
Company or its directors from informing the Shareholders of a Competing
Transaction if required to do so by Dutch Law);
(h) release any third party from its obligations under any existing
standstill agreement or arrangement relating to a Competing Transaction or
otherwise under any confidentiality or other similar agreement relating to
information material to the Company or any of its subsidiaries;
(i) propose to adopt any amendments to its Articles of Association
that would have an adverse effect on the consummation of the transactions
contemplated by this Agreement;
(j) (i) change any of its significant accounting policies or (ii)
make or rescind any express or deemed election relating to Taxes, settle or
compromise any material claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes, or change
any of its methods of reporting income or deductions for Tax purposes from those
employed in the preparation of Tax returns for the taxable year ending December
31, 1995, except, in the case of clause (i) or clause (ii), as may be required
by any Law or by GAAP;
(k) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or similar
instrument or under any financing lease, whether pursuant to a
sale-and-leaseback transaction or otherwise, except in the ordinary course of
business consistent with past practice;
(l) enter into any material arrangement, agreement or contract with
any third party other than in the ordinary course of business;
(m) take any action that reasonably could be expected to result in
any of the conditions set forth in Article IX not being satisfied; or
(n) agree in writing or otherwise to do any of the foregoing.
ARTICLE VI
COVENANTS OF THE SHAREHOLDERS
6.01 COVENANTS OF THE SHAREHOLDERS. Each of the Shareholders covenants and
agrees that, prior to the Closing, such Shareholder will not:
(a) take any action that reasonably could be expected to result in
any of the conditions set forth in Article IX not being satisfied; or
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(b) initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal relating to, or that may reasonably be
expected to lead to, any Competing Transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to, or endorse, any Competing
Transaction, or authorize agent, investment banker, financial advisor, attorney,
accountant or other representative retained by such Shareholder to take any such
action, and such Shareholder shall promptly notify Acquiror or promptly provide
Acquiror with a copy of all relevant terms of any such inquiries or proposals
received by such Shareholder.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS. The Company and, with respect to
clauses (i) and (ii), each of the Shareholders, as appropriate, shall give
prompt notice to Acquiror, and Acquiror shall give prompt notice to the Company,
orally and in writing, of (i) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any representation or
warranty of the party giving such notice contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Closing, (ii) any
material failure of the party giving such notice to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such person
hereunder within the time specified therefor and (iii) any change or event
having, or which, insofar as can be reasonably foreseen, could have a Company
Material Adverse Effect or an Acquiror Material Event, as the case may be.
7.02 ACCESS AND INFORMATION.
(a) The Company shall, and shall cause its subsidiaries to, (i)
afford to Acquiror and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Acquiror Representatives") access during ordinary business hours and at other
reasonable times, upon reasonable prior notice, to the officers, employees,
accountants, agents, properties, offices and other facilities of the Company and
its subsidiaries and to the books and records thereof and (ii) furnish promptly
to Acquiror and the Acquiror Representatives such information concerning the
business, properties, contracts, records and personnel of the Company and its
subsidiaries (including, without limitation, financial, operating and other data
and information) as may be reasonably requested, from time to time, by Acquiror
or the Acquiror Representatives.
(b) Notwithstanding the foregoing provisions of this Section 7.02,
the Company shall not be required to grant access or furnish information to the
Acquiror Representatives to the extent that such access or the furnishing of
such information is prohibited by any Law or contract. Acquiror acknowledges
that, prior to the execution of this Agreement, it has conducted an
investigation with respect to the affairs of the Company and its subsidiaries to
the extent that Acquiror, in its sole discretion, deemed appropriate.
Notwithstanding the foregoing sentence, no investigation by the parties hereto
made heretofore or hereafter shall affect the representations and
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warranties of the parties that are contained herein, and each such
representation and warranty shall survive such investigation.
(c) The terms and provision of the mutual confidentiality and
non-disclosure agreement, dated December 1, 1996, between Acquiror and the
Company shall remain in full force and effect in accordance with its terms.
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) The Company, Acquiror and, to the extent applicable to a
particular Shareholder, such Shareholder shall each use, and the Company and
Acquiror shall cause each of their respective subsidiaries to use, all
reasonable efforts promptly (i) to take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement, (ii) to obtain from any
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained by the Company, Acquiror or
such Shareholder, respectively, or any of the Company's or Acquiror's respective
subsidiaries, in connection with the authorization, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby and (iii) to make all necessary filings, and thereafter make
any other required submissions, with respect to this Agreement and the
Acquisition required under (A) the Exchange Act, the rules and regulations
thereunder and any other applicable U. S. federal or state or Dutch securities
laws, (B) the HSR Act and (C) any other applicable Law; provided that Acquiror,
the Company and each of the Shareholders shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the nonfiling party and its advisors prior to filing
(except, with respect to the HSR Act, for such documents that are not
customarily provided to the other party) and, if requested, shall accept all
reasonable additions, deletions or changes suggested in connection therewith.
The Company, Acquiror and each of the Shareholders shall furnish all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable Law in connection with the transactions
contemplated by this Agreement.
(b) Acquiror, the Company and, to the extent applicable to a
particular Shareholder, such Shareholder (other than CPNL, which acts only as
nominee for certain Shareholders) agree, and Acquiror and the Company shall
cause each of their respective subsidiaries, to cooperate and to use all
reasonable efforts to contest and resist any action, including legislative,
administrative or judicial action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) (an "Order") that is in effect and that restricts,
prevents or prohibits the consummation of the Acquisition or any other
transactions contemplated by this Agreement, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal
and all available legislative action. Acquiror and the Company also agree to
take all reasonable actions, including, without limitation, the disposition of
assets or the withdrawal from doing business in particular jurisdictions,
required by regulatory authorities as a condition to the granting of any
approvals required in order to permit the consummation of the Acquisition or as
may be required to avoid, lift, vacate or reverse any legislative or judicial
action that would otherwise cause any condition to Closing not to be satisfied;
PROVIDED, HOWEVER, that in no event shall any party take, or be required to
take, any action that could
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reasonably be expected to have a Company Material Adverse Effect or an Acquiror
Material Adverse Effect. The term "Acquiror Material Adverse Effect" as used in
this Agreement shall mean any change or effect that would be materially adverse
to the business, operations or financial condition of Acquiror and its
subsidiaries, taken as a whole, at the time of such change or effect.
(c) The Company, Acquiror and each of the Shareholders shall each
promptly give (or shall cause their respective subsidiaries to give) any notices
regarding the Acquisition, this Agreement or the transactions contemplated
hereby to third parties required by Law or by any contract, license, lease or
other agreement to which such person is a party or by which such person is
bound, and use (and cause its subsidiaries to use) all reasonable efforts to
obtain any third party consents (i) necessary to consummate the transactions
contemplated by this Agreement, (ii) otherwise required under any contracts,
licenses, leases or other agreements in connection with the consummation of the
transactions contemplated by this Agreement or (iii) required to prevent a
Company Material Adverse Effect or an Acquiror Material Adverse Effect,
respectively, from occurring after the Closing.
(d) If the Company or any of its subsidiaries or Acquiror shall fail
to obtain any third party consent described in subsection (c)(i) above, such
party shall use all reasonable efforts, and shall take any such actions
reasonably requested by the other parties, to limit the adverse effect upon the
Company, Acquiror, their respective subsidiaries and businesses and each of the
Shareholders resulting, or which could reasonably be expected to result after
the Closing, from the failure to obtain such consent.
(e) The Company shall, promptly after the date of this Agreement,
take all actions necessary in accordance with applicable law and the Company
Organizational Documents to obtain all necessary approvals with respect to the
Acquisition and the other matters the subject of this Agreement by the Works
Council of the Company (the "Works Council").
(f) Acquiror covenants and agrees that, prior to the Closing,
Acquiror will not take any action that reasonably could be expected to result in
any of the conditions set forth in Article IX not being satisfied.
7.04 PUBLIC ANNOUNCEMENTS. Acquiror and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the Acquisition and shall not issue
any such press release or make any such public statement prior to such
consultation; PROVIDED, HOWEVER, that a party may, without consulting with the
other party, issue such a press release or make such a public statement if
required by applicable Law or the rules of the NASD or a national securities
exchange if such party has used commercially reasonable efforts to consult with
the other party but has been unable to do so in a timely manner.
7.05 EXPENSES. Subject to the provisions of Section 1.04 and Article VIII,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses. Notwithstanding the foregoing, but subject to Section 1.04 and Article
VIII, the Shareholders shall not be responsible for costs and expenses incurred
by the Company for the benefit of the Company in connection with this Agreement
and the transactions contemplated hereby, including the Company Transaction
Costs.
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7.06 BOARD OF SUPERVISORY DIRECTORS; OPERATING COMMITTEE.
(a) Acquiror shall take such action as may be necessary to cause
Eric Pluimers to be appointed or elected to the Board of Supervisory Directors
of Acquiror as a Class II director (resulting in a three year term) as soon as
practicable after the Closing.
(b) Acquiror shall take such action as may be necessary to cause
Erik Pluimers, David H. Mead and Jan W. Heinsbroek (if willing to serve) to be
appointed to the Operating Committee of Acquiror promptly after the Closing. The
purpose of such Operating Committee is to discuss and decide upon both short-
and long-term operating matters.
7.07 STICHTING PARTICIPATIE. The Company shall use all reasonable efforts
to cause the articles and the conditions of administration of the Stichting and
(if required by such entity's organizational documents) each entity to which
Stichting has transferred depositary receipts representing interests in Company
Shares to be amended to enable Stichting and each of such entities as may be
required by Dutch Law or the articles and conditions of administration of the
Stichting and such entities to effect the Acquisition.
7.08 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The certificate of incorporation and the by-laws of each
subsidiary of the Company having provisions covering the indemnification of
current and former officers and directors shall contain the respective
provisions that are set forth, as of the date of this Agreement, in such
certificates of incorporation and by-laws (or similar organizational documents),
and shall not be amended, repealed or otherwise modified for a period of three
years from the Closing Date in any manner that would affect adversely the rights
thereunder of individuals who at or at any time prior to the Closing were
entitled to indemnification thereunder.
(b) Acquiror shall cause to be maintained in effect for three years
from the Closing Date directors' and officers' liability insurance covering
those persons who are currently covered by the Company's directors' and
officers' liability insurance policy set forth in Section 7.08(b) of the Company
Disclosure Schedule on terms comparable to such existing insurance coverage with
respect to claims arising from facts or events that occurred prior to the
Closing; PROVIDED, HOWEVER, that in no event shall Acquiror or the Company be
required to expend more than 200 percent of the current annual premiums paid by
the Company for such insurance; PROVIDED, FURTHER, that if Acquiror or the
Company is unable to obtain insurance for any period for 200 percent of the
current annual premiums, then the obligation of Acquiror and the Company
pursuant hereto shall be to obtain the best coverage reasonably available under
the circumstances subject to the foregoing limitation on premiums.
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ARTICLE VIII
INDEMNIFICATION
8.01 IN GENERAL. Subject to the terms and conditions of this Article VIII,
each of the Shareholders hereby agrees, severally and not jointly, to indemnify,
defend and hold harmless Acquiror and its directors, officers, employees,
consultants, affiliates and controlling persons (hereinafter, including the
Company and its subsidiaries after the Closing, collectively, the "Acquiror
Indemnified Parties") from and against all Claims (as defined below) asserted
against, imposed upon or incurred by Acquiror or any Acquiror Indemnified Party,
directly or indirectly, by reason of, arising out of, or resulting from (a) the
inaccuracy or breach of any representation or warranty of the Company or such
Shareholder contained in or made pursuant to this Agreement; (b) the breach of
any covenant or agreement of the Company or such Shareholder contained in or
made pursuant to this Agreement; (c) the current investigation of the United
States Environmental Protection Agency and the United States Attorney's Office
with respect to the Company or any of its subsidiaries and all "whistle blower"
litigation and claims related thereto or arising therefrom; (d) any of the
matters set forth in Section 3.09, 3.10, 3.11 or 3.13 of the Company Disclosure
Schedule or identified in the "Phase I" audits prepared on behalf of Acquiror
with respect to any of the properties owned, leased or operated by the Company
or any of its subsidiaries (true and correct copies of which Phase I audits have
been provided to the Company on or prior to the date of this Agreement);
PROVIDED, HOWEVER, that if a reserve is specifically set forth for such matter
in Section 8.01 of the Company Disclosure Schedule then indemnification pursuant
to this Section 8.01 shall be limited to the amount by which Claims with respect
to such matter exceed the Reserve Amount (as defined below) for the Reserve
Category (as defined in Section 8.01 of the Company Disclosure Schedule) in
which such matter is included in Section 8.01 of the Company Disclosure
Schedule; or (e) the amount, if any, by which actual Company Transaction Costs
exceeds the sum of U.S. $2.1 million plus the amount of any reduction in the
Closing Purchase Price pursuant to Section 1.04. As used in this Article VIII,
the term "Claim" shall include (i) all debts, liabilities and obligations, (ii)
all losses, damages, reasonable costs and expenses (including, without
limitation, interest (including prejudgment interest in any litigated matter),
but excluding any allocation of overhead costs and expenses of Acquiror or any
of its subsidiaries), penalties, court costs and reasonable attorneys' fees and
expenses, and costs and expenses associated with remedial actions required to
bring a property into compliance with Environmental Laws), and (iii) all
demands, claims, actions, costs of investigation, causes of action, proceedings,
arbitrations, judgments, settlements and assessments, whether or not ultimately
determined to be valid. As used in this Article VIII, the term "Reserve Amount,"
as it relates to a particular Reserve Category, means, as of the date a
particular Claim is made, the amount of the specific reserve set forth in
Section 8.01 of the Company Disclosure Schedule for the matter the subject of
such Claim plus the amount, if any, by which the aggregate of all reserves in
the same Reserve Category as such Claim specifically relating to matters (other
than the matter the subject of such Claim) that have been fully resolved exceeds
the aggregate of (A) the amount of all Claims with respect to such fully
resolved matters and (B) amounts incurred or paid by the Company or any of its
subsidiaries after December 31, 1996 and prior to the Closing with respect to
such fully resolved matters to the extent that the Acquiror Indemnified Parties
are not entitled to indemnification pursuant to this Section 8.01 with respect
to such amounts. All determinations made pursuant to the foregoing sentence
shall be made without giving effect to the proviso in Section 8.01(d) or the
provisions of Section 8.02(a).
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8.02 DEDUCTIBLE; TIME LIMIT; FORM OF PAYMENT; CAP; EXCLUSIVITY.
(a) No indemnification shall be paid pursuant to Sections 8.01(a),
(b) or (d) until the aggregate of all Claims pursuant to Section 8.01(a), (b) or
(d) exceeds $335,000; thereafter indemnification shall be paid as provided for
herein for all Claims in excess of such $335,000 deductible; PROVIDED, HOWEVER,
that any Claim resulting from the inaccuracy or breach of any of the
representations and warranties set forth in Article II of this Agreement shall
not be subject to the foregoing limitations.
(b) All indemnification payments made pursuant to Section 8.01(a),
(b), (c) or (d) (except for those relating to the inaccuracy or breach of any of
the representations and warranties set forth in Article II) to the extent
available, shall be paid only with the assets held by the Escrow Agent to secure
the payment of indemnification pursuant to the Escrow Agreement; PROVIDED,
HOWEVER, that such indemnification payments (and any payments made as described
in the first proviso to Section 8.02(c)) in the aggregate shall not exceed the
amount of the Escrowed Purchase Price.
(c) All indemnification payments made pursuant to Section 8.01(a)
(to the extent that they relate to the inaccuracy or breach of any of the
representations and warranties set forth in Article II) or 8.01(e) shall be paid
by the appropriate Shareholder directly to Acquiror; PROVIDED, HOWEVER, that
Acquiror, in its sole discretion, may elect to have all or part of any such
indemnification pursuant to Section 8.01(e) paid with the assets held by the
Escrow Agent pursuant to the Escrow Agreement. The Acquiror Indemnified Parties
must request the indemnification payments referred to in the preceding sentence
on or prior to the second anniversary of the Closing Date; PROVIDED, HOWEVER,
that no time limitation will apply with respect to indemnification payments made
pursuant 8.01(a) to the extent that they relate to the inaccuracy or breach of
any of the representations and warranties set forth in Section 2.01.
(d) Except with respect to fraud in connection with the negotiation
and execution of this Agreement, this Article VIII shall be, from and after the
Closing, the exclusive remedy of Acquiror for any breach of this Agreement by
the Company or any of the Shareholders.
8.03 DEFENSE OF THIRD PARTY CLAIMS. The obligation of the Shareholders to
indemnify the Acquiror Indemnified Parties under this Article VIII with respect
to Claims relating to or arising from third parties (a "Third Party Claim")
shall be subject to the following terms and conditions:
(a) NOTICE AND DEFENSE. The Acquiror Indemnified Party will give the
repre sentative of the shareholders of the Company set forth in Section 10.07 of
this Agreement (the "Shareholder Representative") prompt written notice of any
such Third Party Claim, and the Shareholder Representative may undertake the
defense thereof by representatives chosen by the Shareholder Representative upon
written notice to the Acquiror Indemnified Party provided within 20 days of
receiving notice of such Third Party Claim (or sooner if the nature of the Third
Party Claim so requires and an extension cannot be obtained with minimal expense
or cost). Failure of the Acquiror Indemnified Party to give such notice shall
not affect the indemnification obligations under this Article VIII, except to
the extent the Shareholder Representative's defense of a Third Party Claim is
prejudiced thereby. The Acquiror Indemnified Party shall make available to the
Shareholder
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Representative or its representatives all records and other materials required
by the Shareholder Representative and in the possession or under the control of
the Acquiror Indemnified Party, for the use of the Shareholder Representative
and its representatives in defending any such clam, and shall in other respects
give reasonable cooperation in such defense. Acquiror shall not be required to
deliver any notice pursuant to this Section 8.03(a) with respect to the matters
described in Sections 8.01(c) and 8.01(d), and the Shareholders hereby agree to
waive any right to undertake the defense of such matters after the Closing.
(b) FAILURE TO DEFEND. If the Shareholder Representative, within 20
days after notice of any such Third Party Claim (or sooner if the nature of any
Third Party Claim so requires), fails to undertake the defense of such Third
Party Claim actively and in good faith, then the Acquiror Indemnified Party will
have the right to undertake the defense, compromise or settlement of such Third
Party Claim, or consent to the entry of a judgment with respect thereto.
(c) ACQUIROR INDEMNIFIED PARTY'S RIGHTS. Anything in this Article
VIII to the contrary notwithstanding, (i) if there is a reasonable probability
that the Third Party Claim may adversely affect the Acquiror Indemnified Party
other than as a result of money damages and such Third Party Claim is reasonably
likely to result in money payments in an aggregate amount of less than $100,000,
the Acquiror Indemnified Party shall have the right to defend, compromise or
settle such Third Party Claim (provided that the Acquiror Indemnified Party
shall not settle such Third Party Claim or consent to any judgment without first
obtaining the written consent of the Shareholder Representative, which shall not
be unreasonably withheld), and (ii) the Shareholder Representative shall not
without the written consent of the Acquiror Indemnified Party, settle or
compromise any Third Party Claim or consent to the entry of any judgment that
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the Acquiror Indemnified Party of an unconditional release from
all liability in respect of such Third Party Claim.
(d) Acquiror agrees to discuss the status of the matters described
in Section 8.01(c) of this Agreement with the Shareholder Representative at such
times as the Shareholder Representative may reasonably request, upon reasonable
prior notice.
8.04 WAIVER. Each of the Shareholders hereby agrees to waive, and to not
assert, any and all rights such Shareholder may have under Dutch or any other
applicable Law or otherwise to make a claim against or otherwise demand or
receive payment from the Company or any of its subsidiaries arising out of or
with respect to the inaccuracy or breach of any representation or warranty of
the Company set forth in this Agreement, the breach by the Company of any
covenant or agreement of the Company set forth in this Agreement or the payment
of any amounts to the Acquiror Indemnified Parties pursuant to this Article VIII
or the Escrow Agreement.
ARTICLE IX
CONDITIONS
9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The respective
obligations of Acquiror and the Shareholders to effect the transactions
contemplated hereby shall be subject to the
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satisfaction at or prior to the Closing of the following conditions, any or all
of which may be waived by the agreement of the parties, in whole or in part, to
the extent permitted by applicable law:
(a) the positive advice of the Works Council with respect to the
Acquisition and any other matter relating to the Acquisition for which positive
advice is required shall have been obtained;
(b) Acquiror, each of the Shareholders and the Escrow Agent shall
each have executed and delivered the Escrow Agreement;
(c) no Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any Law or Order which is in effect and which has the effect
of making the Acquisition or the other transactions contemplated in this
Agreement illegal or otherwise prohibiting consummation of the Acquisition or
such other transactions;
(d) the applicable waiting period under the HSR Act shall have
expired or been terminated;
(e) the applicable waiting period under any competition Law or Order
of any foreign Governmental Entity shall have expired or been terminated;
(f) The Stichting and (if required by such entity's organizational
documents) each entity to which the Stichting has transferred depositary
receipts representing interests in Company Shares shall have amended their
respective articles and conditions of administration to enable them to
consummate the Acquisition and the depositary receipt holders in the Stichting
shall have taken such action necessary to permit the Stichting to sell the
Company Shares held by it; and
(g) the satisfaction of all applicable requirements imposed by Dutch
Law that must be satisfied prior to Closing.
9.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR. The obligations of
Acquiror to effect the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any or all
of which may be waived by Acquiror, in whole or in part, to the extent permitted
by applicable law:
(a) each of the representations and warranties of the Company and
the Shareholders contained in this Agreement shall be true and correct in all
material respects (without duplication of any materiality exception contained in
any individual representation and warranty) as of the date of this Agreement and
as of the Closing as though made again as of the Closing. Acquiror shall have
received a certificate (i) of the President and the Chief Financial Officer of
the Company, dated the Closing Date, to such effect as it relates to the Company
and (ii) from each of the Shareholders, dated the Closing Date, to such effect
as it relates to Article II;
(b) the Company and the Shareholders shall have performed or
complied with all agreements and covenants required by this Agreement to be
performed or complied with by the Company or the Shareholder on or prior to the
Closing. Acquiror shall have received a certificate
-28-
(i) of the President and the Chief Financial Officer of the Company, dated the
Closing Date, to such effect as it relates to the Company and (ii) from each of
the Shareholders, dated the Closing Date, to such effect as it relates to
Article VI;
(c) the resignations, effective at Closing, of each of directors and
officers of the Company shall have been delivered to Acquiror;
(d) Each of the Shareholders, the Company and Acquiror shall have
executed a deed of transfer (or other appropriate documentation) that effects
the valid transfer of title to all of the issued and outstanding Company Shares
to Acquiror;
(e) Acquiror shall have received a certificate of the Chief
Financial Officer of the Company, dated the Closing Date, that sets forth a good
faith estimate of the amount of Company Transaction Costs;
(f) Acquiror shall have obtained commitments for sufficient
financing, in such amounts, on such terms and subject to such conditions as are
satisfactory to it in its reasonable discretion, to enable it to pay the Cash
Purchase Price and other amounts required to be paid by Acquiror hereunder or in
connection herewith and adequate to conduct the business of the Company and its
subsidiaries (including satisfactory working capital financing) (the
"Financing"); all conditions to the availability of the Financing shall have
been met; and the Financing shall be available; and
(g) each of the Shareholders identified on page 39 of this Agreement
shall have become record holders of the Company Class B Shares currently
beneficially owned by them and shall have signed and delivered to the other
signatories to this Agreement such signature pages, whereupon they shall
automatically and without any further action on the part of any party become
Shareholders for all purposes of this Agreement as of the date hereof, except
that their representation in Section 2.01 hereof as to valid title shall be
deemed made as of the date such title was transferred to them by CPNL.
9.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS. The
obligations of the Shareholders to effect the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived by the Shareholders, in whole or
in part, to the extent permitted by applicable law:
(a) each of the representations and warranties of Acquiror contained
in this Agreement shall be true and correct in all material respects (without
duplication of any materiality exception contained in any individual
representation and warranty) as of the date of this Agreement and as of the
Closing as though made again as of the Closing. The Company shall have received
a certificate of the President and the Chief Financial Officer of Acquiror,
dated the Closing Date, to such effect;
(b) Acquiror shall have performed or complied with all agreements
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Closing. The
-29-
Company shall have received a certificate of the President and the Chief
Financial Officer of Acquiror, dated the Closing Date, to such effect;
(c) employment agreements for each of Mr. Pluimers, Mr. Mead and Mr.
Heinsbroek, substantially in the form of Exhibits B, C and D hereto,
respectively, shall have been executed and delivered by the other parties
thereto; and
(d) Acquiror shall have (i) paid the Closing Purchase Price to the
Shareholders and (ii) delivered the Escrowed Purchase Price to the Escrow Agent
pursuant the Escrow Agreement, in each such case as provided in Article I.
ARTICLE X
MISCELLANEOUS
10.01 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual consent of Acquiror, the Company and each of the
Shareholders;
(b) by Acquiror, the Company or any of the Shareholders if the
Closing has not occurred on or before 45 days from the date of this Agreement;
(c) by Acquiror, upon a material breach of any covenant or agreement
on the part of the Company or the Shareholders set forth in this Agreement, or
if any representation or warranty of the Company or the Shareholders shall have
become untrue, in either case such that the conditions set forth in Section
9.02(a) or Section 9.02(b) would not be satisfied (a "Terminating Company
Breach"); PROVIDED THAT, if such Termination Company Breach is curable by the
Company or the Shareholders through the exercise of reasonable efforts and for
so long as the Company or the Shareholders continue to exercise such reasonable
efforts, Acquiror may not terminate this Agreement under this Section 10.01(c);
(d) by the Company or any of the Shareholders, upon a material
breach of any covenant or agreement on the part of Acquiror set forth in this
Agreement, or if any representation or warranty of Acquiror shall have become
untrue, in either case such that the conditions set forth in Section 9.03(a) or
Section 9.03(b) would not be satisfied (a "Terminating Acquiror Breach");
PROVIDED THAT, if such Terminating Acquiror Breach is curable by Acquiror
through the exercise of its reasonable efforts and for so long as Acquiror
continues to exercise such reasonable efforts, the Company may not terminate
this Agreement under this Section 10.02(d);
(e) by Acquiror, the Company or any of the Shareholders, if there
shall be any Order which is final and nonappealable preventing the consummation
of the Acquisition, unless the party relying on such Order has not complied with
its obligations under Section 7.05(b); or
(f) by the Company or any of the Shareholders if the Deposit is not
paid to the Company within two business days after the execution and delivery of
this Agreement.
-30-
10.02 EFFECT OF TERMINATION. In the event of any termination of this
Agreement pursuant to Section 10.01, the Company and Acquiror shall have no
obligation or liability to each other except that (i) the provisions of Sections
1.05, 7.02(c) and 7.05 shall survive any such termination, and (ii) nothing
herein and no termination pursuant hereto will relieve any party from liability
for any breach of this Agreement.
10.03 WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits thereof. This
Agreement may not be amended or supplemented at any time, except by an
instrument in writing signed on behalf of each party hereto. The waiver by any
party hereto of any condition or of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other condition or
subsequent breach.
10.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
(including the Schedules and Exhibits hereto) together with that certain Letter
Agreement dated as of the date hereof by and between Acquiror and the Company
constitute the entire agreement and, except as provided in Section 7.02(c),
supersede all other prior agreements and understandings, both oral and written,
among the parties or any of them, with respect to the subject matter hereof.
Neither this Agreement nor any document delivered in connection with this
Agreement confers upon any person not a party hereto any rights or remedies
hereunder except as provided in Article VIII hereof.
10.05 ASSIGNMENT. This Agreement shall inure to the benefit of and will be
binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Acquiror may, upon notice to the Company,
assign or delegate its rights and obligations under this Agreement or any part
hereof to any direct or indirect wholly owned subsidiary of Acquiror, but no
such assignment shall in any way operate to enlarge, alter or change any
obligation of or due to the Company or the Shareholders or relieve Acquiror of
its obligations hereunder. Except as set forth in this Agreement, this Agreement
shall not be assignable by any party hereto without the consent of the other
parties hereto.
10.06 CERTAIN DEFINITIONS. For the purposes of this Agreement, unless the
context clearly indicates otherwise, the term:
(a) "affiliate" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
(b) "beneficial owner" and words of similar import shall have the
meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
(c) "Benefit Plan" or "Benefit Plans" shall mean each Plan and each
personnel policy, stock option plan, collective bargaining agreement, bonus plan
or arrangement, incentive award plan or arrangement, vacation policy, severance
pay plan, policy or agreement, deferred compensation agreement or arrangement,
executive compensation or supplemental income arrangement, consulting agreement,
employment agreement, and each other employee benefit plan, agreement,
arrangement, program, practice or understanding that is not a Plan and that is
sponsored, maintained or contributed to by the Company or any of its
subsidiaries for the benefit of the
-31-
employees, former employees, independent contractors, or agents of the Company
or any of its subsidiaries, or has been so sponsored, maintained or contributed
to since 1974;
(d) "business day" shall mean any day other than a day on which
banks in Rotterdam, The Netherlands are authorized or obligated to be closed;
(e) "Closing" shall mean a meeting, which shall be held in
accordance with Section 1.02 of this Agreement, of persons interested in the
transactions contemplated by this Agreement at which all documents deemed
necessary by the parties to this Agreement to evidence the fulfillment or waiver
of all conditions precedent to the consummation of the Acquisition are executed
and delivered;
(f) "Closing Date" shall mean the date of the Closing as determined
pursuant to Section 1.02 of this Agreement;
(g) "control" (including the terms "controlled," "controlled by" and
"under common control with") shall mean the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or otherwise;
(h) "person" shall mean an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d) of the Exchange Act);
(i) "Plan" or "Plans" shall mean each "employee benefit plan," as
such term is defined in Section 3(3) of ERISA, including, but not limited to,
any employee benefit plan that may be exempt from some or all of the provisions
of ERISA, that is sponsored, maintained or contributed to by the Company or any
of its subsidiaries for the benefit of the employees, former employees,
independent contractors, or agents of the Company or any of its subsidiaries, or
has been so sponsored, maintained or contributed to since 1974;
(j) "Significant Subsidiary" shall mean any subsidiary of Acquiror
that would constitute a "significant subsidiary" within the meaning of Rule 1-02
of Regulation S-X of the SEC;
(k) "subsidiary" or "subsidiaries" of the Company, Acquiror or any
other person, shall mean any corporation, partnership, joint venture or other
legal entity of which the Company, Acquiror or any such other person, as the
case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity interests
the holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation or other legal
entity;
(l) "Tax" or "Taxes" shall mean any and all taxes, charges, fees,
levies, assessments, duties or other amounts payable to any federal, state,
local or foreign taxing authority or agency, including, without limitation, (i)
income, franchise, profits, gross receipts, minimum, alternative minimum,
estimated, ad valorem, value added, sales, use, service, real or personal
property, capital stock, license, payroll, withholding, disability, employment,
social security, workers
-32-
compensation, unemployment compensation, utility, severance, excise, stamp,
windfall profits, transfer and gains taxes, (ii) customs, duties, imposts,
charges, levies or other similar assessments of any kind, and (iii) interest,
penalties and additions to tax imposed with respect thereto; and
10.07 NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class mail,
postage prepaid, return receipt requested, to the appropriate party at the
following addresses:
if to the Company:
Saybolt International BV
Postbus 151
3000 AD Rotterdam
The Netherlands
Telecopy: (011) 31-10-460-9911
Attn: Erik Pluimers
with copies to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Telecopy: (212) 848-7179
Attention: John A. Marzulli, Jr.
Stibbe Simont Monahan Dehot
P. O. Box 75460
1070 AP Amsterdam
The Netherlands
Telecopy: (011) 31-20-546-0733
Attention: Hector W. L. de Beaufort
if to Acquiror:
Core Laboratories N.V.
Herengracht 424
1017 BZ Amsterdam
The Netherlands
Telecopy: (011) 31-20-627-9886
Attention: Managing Director
-33-
with copies to:
Nauta Dutilh
Postbus 1110
3000 BC Rotterdam
Weena 750
3014 DA Rotterdam
The Netherlands
Telecopy: (011) 31-10-414-8444
Attention: Chris A. Fonteijn
Core Laboratories, Inc.
5295 Hollister Road
Houston, Texas 77040
Telecopy: (713) 690-3947
Attention: John D. Denson
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Telecopy: (713) 615-5531
Attention: T. Mark Kelly
if to the Shareholder Representative:
Stanley Roth
North American Capital Corp.
510 Broad Hollow Road
Melville, New York 11747-3665
Telecopy: (516) 752-9618
with copies to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Telecopy: (212) 848-7179
Attention: John A. Marzulli, Jr.
Stibbe Simont Monahan Dehot
P. O. Box 75460
1070 AP Amsterdam
The Netherlands
Telecopy: (011) 31-20-546-0733
Attention: Hector W. L. de Beaufort
or to such other address as the parties set forth above shall have furnished to
the other parties set forth above by notice given in accordance with this
Section 10.07. Such notices shall be effective
-34-
(i) if delivered in person or by courier, upon actual receipt by the intended
recipient, (ii) if sent by telecopy or facsimile transmission, when the sender
receives telecopier confirmation that such notice was received at the telecopier
number of the addressee, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
10.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE NETHERLANDS, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
10.09 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
10.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
10.11 HEADINGS. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
10.12 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy available at law or in equity.
10.13 FORUM. EXCEPT IN EACH CASE FOR ALL MATTERS RELATING IN ANY RESPECT
TO THE ESCROW AGREEMENT OR THE FUNDS HELD PURSUANT THERETO, INCLUDING THE
DETERMINATION OF ANY AND ALL AMOUNTS TO BE DISTRIBUTED FROM THE FUNDS HELD
PURSUANT THERETO, (WHICH MATTERS SHALL BE GOVERNED BY THE TERMS (INCLUDING THE
ARBITRATION PROVISIONS) OF THE ESCROW AGREEMENT), ACQUIROR, THE COMPANY AND THE
SHAREHOLDERS FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN THE
NETHERLANDS AND AGREE AND CONSENT THAT SERVICE OF PROCESS MAY BE MADE UPON ANY
OF THEM IN ANY LEGAL PROCEEDING ARISING EXCLUSIVELY OUT OF OR IN CONNECTION WITH
THIS AGREEMENT BY SERVICE OF PROCESS AS PROVIDED BY DUTCH LAW (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT THEY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING EXCLUSIVELY
OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS LOCATED IN THE
NETHERLANDS, (C) FOR SUCH PURPOSES IRREVOCABLY WAIVES ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
-35-
INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS WITH
RESPECT TO ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE
MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, TO SUCH PARTY AND ITS COUNSEL AT THEIR ADDRESSES SET FORTH HEREIN, AND
(E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ACQUIROR, THE COMPANY
OR ANY OF THE SHAREHOLDERS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ITS OBLIGATIONS HEREUNDER SHALL, BE BROUGHT IN THE COURTS OF THE NETHERLANDS.
THE SHAREHOLDERS IRREVOCABLY DESIGNATE, APPOINT AND EMPOWER STIBBE SIMONT
MONAHAN DEHOT AS THEIR AUTHORIZED AGENT TO RECEIVE SERVICE OF PROCESS WHICH MAY
BE SERVED AT THE ADDRESS SET FORTH IN SECTION 10.07 OF THIS AGREEMENT IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT. SERVICE IN SUCH MANNER UPON
THE AGENT IS HEREBY ACKNOWLEDGED BY THE SHAREHOLDERS TO BE BINDING UPON THEM IN
EVERY RESPECT. IN THE EVENT THAT, FOR ANY REASON, THE AGENT NAMED ABOVE SHALL NO
LONGER SERVE AS THE AGENT OF THE SHAREHOLDERS TO RECEIVE PROCESS IN THE
NETHERLANDS, THE SHAREHOLDERS SHALL APPOINT A SUCCESSOR SO TO SERVE. NOTHING
HEREIN SHALL EFFECT THE RIGHT OF ANY PARTY TO ATTEMPT TO SERVE PROCESS WITH
RESPECT TO THE MATTERS DESCRIBED ABOVE, EXCEPT FOR ALL MATTERS RELATING IN ANY
RESPECT TO THE ESCROW AGREEMENT OR THE FUNDS HELD PURSUANT THERETO, INCLUDING
THE DETERMINATION OF ANY AND ALL AMOUNTS TO BE DISTRIBUTED FROM THE FUNDS HELD
PURSUANT THERETO, (WHICH MATTERS SHALL BE GOVERNED BY THE TERMS (INCLUDING THE
ARBITRATION PROVISIONS) OF THE ESCROW AGREEMENT), IN ANY OTHER MANNER PERMITTED
BY DUTCH LAW.
-36-
IN WITNESS WHEREOF, Acquiror, the Company and each of the Shareholders
have each executed or caused this Agreement to be executed on its behalf by its
officer thereunto duly authorized, as applicable, all as of the date first above
written.
CORE LABORATORIES N.V.
By: Core Laboratories International B.V.,
its sole managing director
By: ____________________________
Jacobus Schouten
Managing Director
SAYBOLT INTERNATIONAL B.V.
By: ___________________________________
Name: ____________________________
Title: ___________________________
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
57,000 -
------------------------------------
Frerik Pluimers
99,531 21,976 ALPINVEST HOLDING N.V.
By: ________________________________
Name:
Title:
22,115 - HEMERA II & CIE S.C.A
By: ________________________________
Name:
Title:
-37-
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
26,533 - EUROFRANDEV S.A.
By: ________________________________
Name:
Title:
30,960 - PARINDEV PME SA
By: ________________________________
Name:
Title:
263,000 - STICHTING PARTICIPATIE SAYBOLT
INTERNATIONAL B.V.
By: ________________________________
Name:
Title:
5,500 228,024 ABN AMRO PARTICIPATIES B.V.
By: ________________________________
Name:
Title:
- 106,732 CITICORP CAPITAL INVESTORS
EUROPE LTD.
By: ________________________________
Name:
Title:
-38-
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
- 106,732 EUROPENTERPRISE '92 CURACAO N.V.
By: ________________________________
Name:
Title:
CAPITAL PARTNERSHIP NOMINEES LTD.
- 31,897 By: ________________________________
Name:
Title:
-39-
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
______________________________________
Rolly Louis Rudolf Jules van Rappard
______________________________________
Maarten Ruijs
______________________________________
Michael David Cook Smith
______________________________________
Alexander Donald MacKenzie
______________________________________
Corinne Ingeborg Beatrice Koltes-Sulzer
-40-