<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1997
REGISTRATION NO. 333-39265
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
CORE LABORATORIES N.V.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
THE NETHERLANDS NOT APPLICABLE
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
HERENGRACHT 424 JOHN D. DENSON
1017 BZ AMSTERDAM 5295 HOLLISTER ROAD
THE NETHERLANDS HOUSTON, TEXAS 77040
(31-20) 624-3699 (713) 329-7404
(Address, including zip code, and telephone (Name, address, including zip code, and
number, including area code, of registrant's telephone number, including area code, of agent
principal executive offices) for service)
</TABLE>
Copies to:
<TABLE>
<C> <C> <C>
JOHN D. DENSON T. MARK KELLY CHRISTOPHER S. COLLINS
CORE LABORATORIES INC. VINSON & ELKINS L.L.P. ANDREWS & KURTH L.L.P.
5295 HOLLISTER ROAD 2300 FIRST CITY TOWER 4200 TEXAS COMMERCE TOWER
HOUSTON, TEXAS 77040 1001 FANNIN STREET 600 TRAVIS
(713) 329-7404 HOUSTON, TEXAS 77002-6760 HOUSTON, TEXAS 77002
(713) 939-8295 (FAX) (713) 758-2222 (713) 220-4200
(713) 758-2346 (FAX) (713) 220-4285 (FAX)
</TABLE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT PRICE REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common shares................ (1) (1) $180,020,000 $54,552
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</TABLE>
(1) Omitted pursuant to Rule 457(o).
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION
NOVEMBER 20, 1997
3,754,278 SHARES
[CORE LABORATORIES LOGO]
CORE LABORATORIES N.V.
COMMON SHARES
------------------
Of the 3,754,278 Common Shares, par value NLG 0.03 per share (the "Common
Shares"), offered hereby (the "Offering"), 1,400,000 shares are being offered by
Core Laboratories N.V., a Netherlands corporation ("Core Laboratories" or the
"Company"), and 2,354,278 shares are being sold by certain shareholders of the
Company (the "Selling Shareholders"). The Company will not receive any of the
proceeds from the sale of shares by the Selling Shareholders. See "Principal and
Selling Shareholders" and "Underwriting."
The Common Shares are quoted on the Nasdaq Stock Market under the symbol
"CRLBF." On November 19, 1997, the last reported sale price of the Common Shares
on the Nasdaq Stock Market was $37.125 per share. See "Price Range of Common
Shares."
------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN THE COMMON SHARES.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=======================================================================================================================
PRICE UNDERWRITING
TO DISCOUNTS AND PROCEEDS TO PROCEEDS TO SELLING
PUBLIC COMMISSIONS COMPANY(1) SHAREHOLDERS(2)
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<S> <C> <C> <C> <C>
Per Share.............................. $ $ $ $
- -----------------------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $ $
=======================================================================================================================
</TABLE>
(1) Before deducting expenses payable by the Company estimated at $960,000.
(2) Before deducting expenses payable by one of the Selling Shareholders
estimated at $5,000.
(3) The Company and one of the Selling Shareholders have granted to the
Underwriters an option exercisable within 30 days after the date of this
Prospectus to purchase up to an additional 225,257 Common Shares from the
Company and 337,885 Common Shares from such Selling Shareholder on the same
terms as set forth above, at the Price to Public, less the Underwriting
Discounts and Commissions, solely for the purpose of covering
over-allotments, if any. If such option were exercised in full, the total
Price to Public, total Underwriting Discounts and Commissions, total
Proceeds to Company and total Proceeds to Selling Shareholders would be
$ , $ , $ and $ , respectively. See
"Underwriting."
------------------
The Common Shares are offered by the several Underwriters, subject to prior
sale, when, as and if delivered to and accepted by them, subject to the right of
the Underwriters to reject any order in whole or in part. It is expected that
delivery of the Common Shares will be made at the offices of BT Alex. Brown
Incorporated, Baltimore, Maryland, on or about , 1997.
BT ALEX. BROWN
CREDIT SUISSE FIRST BOSTON
BEAR, STEARNS & CO. INC.
MORGAN KEEGAN & COMPANY, INC.
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 3
[ARTWORK]
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E
of the Securities Exchange Act of 1934 (the "Exchange Act"). All statements
other than statements of historical facts included or incorporated by reference
in this Prospectus, including, without limitation, statements regarding the
Company's financial position, business strategy, budgets, and plans and
objectives of management for future operations are forward-looking statements.
In addition, the words "anticipate," "estimate," "expect," and similar
expressions are intended to identify forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from the Company's expectations ("Cautionary Statements") are
disclosed under "Risk Factors" and elsewhere in this Prospectus and the
documents incorporated by reference herein. All subsequent written and oral
forward-looking statements attributable to the Company, or persons acting on its
behalf, are expressly qualified in their entirety by the Cautionary Statements.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON SHARES.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THIS OFFERING
AND MAY BID FOR AND PURCHASE THE COMMON SHARES IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON SHARES ON
THE NASDAQ STOCK MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE
"UNDERWRITING."
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<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in this Prospectus or incorporated by reference
herein and by the consolidated financial statements, including the notes
thereto, incorporated by reference in this Prospectus. Unless otherwise
indicated, (i) the information in this Prospectus assumes the Underwriters'
over-allotment option with respect to the sale of the Common Shares will not be
exercised and (ii) no share or per share information in this Prospectus has been
adjusted to give effect to the two-for-one split of the Common Shares which is
payable on December 19, 1997 to shareholders of record as of the close of
business on December 1, 1997. References to "Core Laboratories" or the "Company"
in this Prospectus include Core Laboratories N.V. and, unless the context
otherwise requires, its subsidiaries.
THE COMPANY
GENERAL
The Company is one of the leading providers of petroleum reservoir
description data and production management services for maximizing hydrocarbon
recovery from new and existing fields. The Company's customers include major,
independent, national and international oil and gas producers. The Company is
the world's largest provider of petroleum reservoir rock and fluids analyses and
multidisciplinary reservoir description studies. The Company is also a leading
provider of field services evaluating the efficiencies of well completions and
the effectiveness of enhanced oil recovery projects. In addition, the Company
manufactures and sells petroleum reservoir rock and fluid analysis
instrumentation and other integrated systems. The Company also provides
analytical and field services to characterize properties of crude oil and
petroleum products to the oil industry.
The business of the Company was established in 1936 and was operated as a
division of Western Atlas International, Inc. ("WAII") from 1987 to 1994. In
1994, the Company's initial shareholders, including 14 members of management,
purchased the business and substantially all of the assets of the Company from
WAII because of their belief in the potential opportunities for expansion of the
Core Laboratories business. The Company is incorporated under the laws of The
Netherlands, and its principal executive offices are located at Herengracht 424,
1017 BZ Amsterdam, The Netherlands, and its telephone number is (31-20)
624-3699.
BUSINESS STRATEGY
The Company's business strategy is to continue the expansion of its
operations through (i) continued development of proprietary hydrocarbon
production enhancement technologies, services and products through client-driven
research and development, (ii) expanded technology services and product lines
offered throughout the Company's global infrastructure, and (iii) acquisition of
complementary businesses that add key technologies or market presence and
enhance existing products and services.
Client-Driven Research and Development
The Company's research and development strategy is designed to maintain and
enhance its market leadership position in its principal businesses by
emphasizing the development of technology, services and products to meet the
needs of its customers who are continually seeking to lower their costs of
finding, developing, producing and refining hydrocarbons. The Company's strategy
reflects the trend towards increased utilization of advanced technologies to
enhance the efficiency of development drilling, reduce the costs associated with
production of known reserves, maximize the efficiency of secondary and tertiary
recovery techniques and reduce finding and development costs for new reserves.
While the aggregate number of wells being drilled per year has remained
relatively constant in recent years, oil and gas producers have increased
expenditures on high-technology
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services, including advanced reservoir rock and fluids analyses, that assist in
the development of more complete and comprehensive analyses of reservoir
characteristics and hydrocarbon fluids. The Company will continue to concentrate
its efforts on technologies that enhance development and production
efficiencies, as opposed to those related to the more volatile exploration
sector of the oil and gas industry.
International Expansion of Services and Products
Another component of the Company's business strategy is to broaden the
spectrum of services and products offered to its clients internationally. This
goal is expected to be accomplished through the integration of the services and
products acquired by the Company through the transactions described below into
many of the Company's over 70 offices located in more than 50 different
countries. Management believes this integration will expand the related markets
served by ProTechnics, Scott Pickford, Saybolt (each as defined herein) and
other businesses acquired in the future.
Acquisitions
The Company continually reviews potential acquisition possibilities in
existing or related business areas to add key technologies, enhance market
presence or complement existing businesses. The recent acquisitions of
ProTechnics, Scott Pickford and Saybolt and the anticipated acquisition of
Stim-Lab reflect the Company's desire to broaden the services offered to its
clients.
ProTechnics Merger. On December 31, 1996, the Company issued approximately
1.1 million Common Shares in exchange for substantially all of the outstanding
capital stock of ProTechnics Company. ProTechnics Company and its subsidiaries
("ProTechnics"), headquartered in Houston, Texas, is one of the leading
providers of services that measure the effectiveness of well stimulations and
completions utilizing its proprietary ZeroWash(R) and SpectraScan(R)
technologies. ProTechnics, supported by measured petrophysical and fluid data
sets generated by Core Laboratories, is also the leader in determining the
efficiencies of enhanced recovery projects through field tracer surveys.
Scott Pickford Acquisition. On March 1, 1997, the Company acquired control
of a majority of the outstanding shares of Scott Pickford plc and its
subsidiaries ("Scott Pickford"). The Company has since acquired the remaining
shares; the total consideration paid for Scott Pickford was approximately $15.1
million. Scott Pickford provides petroleum reservoir management, geoscience,
geophysical and engineering services to its customers by utilizing petrophysical
and phase behavior data sets measured by Core Laboratories and ProTechnics.
Scott Pickford specializes in large field studies and equity determinations
primarily in the North Sea.
Saybolt Acquisition. On May 12, 1997, the Company consummated the
acquisition of all the outstanding shares of Saybolt International B.V., a
privately held Netherlands company, for $67 million in cash and the assumption
of $5 million of net debt. Saybolt International B.V. and its subsidiaries
("Saybolt") operates in over 50 countries and provides analytical and field
services to characterize properties of crude oil and petroleum products for the
oil industry. These services complement phase behavior data sets measured on
reservoir fluids by Core Laboratories. Saybolt has an existing presence in the
Commonwealth of Independent States which provides the operating experience and
base from which Core Laboratories can offer reservoir description and production
management services.
Impact of Business Strategy
The Company believes that the implementation of these strategies has
already contributed to the significant increase in income before interest
expense, income tax and extraordinary item to $17.7 million for the nine months
ended September 30, 1997, from $9.4 million for the nine months ended September
30, 1996, and $7.4 million for the nine months ended September 30, 1995.
4
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RECENT DEVELOPMENTS
Pending Stim-Lab Merger
On October 22, 1997, the Company signed a letter of intent to acquire the
outstanding shares of Stim-Lab, Inc., a privately-held Duncan, Oklahoma oilfield
services company ("Stim-Lab") in exchange for approximately 230,000 Common
Shares. Stim-Lab, with additional offices in Houston, Texas and Edinburgh,
Scotland, is a leading provider of analytical and field services used to
maximize the efficiencies and effectiveness of petroleum reservoir stimulations.
Currently, Stim-Lab heads four industry consortia which evaluate fracture
proppants, gels, acid stimulations and horizontal well completions. Both Core
Laboratories and ProTechnics utilize results from these consortia to better
design well completion and stimulation programs.
Two-for-One Stock Split
On October 22, 1997, the Company announced a two-for-one split of the
outstanding Common Shares, payable on December 19, 1997 to shareholders of
record as of the close of business on December 1, 1997.
THE OFFERING
Common Shares offered:
By the Company.................... 1,400,000
By the Selling Shareholders....... 2,354,278
Common Shares to be outstanding
after the Offering(1)............... 12,022,612
Use of proceeds..................... Repayment of a portion of the debt
outstanding under the Credit Facility,
including debt associated with the
acquisitions of Saybolt and Scott
Pickford. See "Use of Proceeds."
Nasdaq Stock Market symbol.......... CRLBF
- ---------------
(1) Based upon shares outstanding as of September 30, 1997, and does not include
650,000 Common Shares reserved, as of September 30, 1997, for the exercise
of outstanding options granted pursuant to the Company's stock option plans.
5
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SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(in thousands, except per share data)
The following table presents certain consolidated financial data for the
Company for the periods indicated. The following information should be read
together with the consolidated financial statements of the Company, including
the notes thereto, incorporated by reference in this Prospectus. Results for any
interim period are not necessarily indicative of results for a full year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------- ------------------
1997(1) 1996(2) 1996(2) 1995(2)
----------- ----------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
SERVICES AND SALES.............................. $142,887 $76,883 $105,368 $87,593
OPERATING EXPENSES:
Costs of services and sales................... 113,865 61,787 84,643 71,786
General and administrative expenses........... 4,359 2,717 3,559 2,719
Depreciation and amortization................. 7,170 3,340 4,600 3,262
Transaction costs associated with merger(3)... -- -- 355 --
Other income, net............................. (169) (406) (603) (130)
-------- ------- -------- -------
Total operating expenses.............. 125,225 67,438 92,554 77,637
Income before interest expense, income tax and
extraordinary item......................... 17,662 9,445 12,814 9,956
INTEREST EXPENSE................................ 4,132 1,104 1,418 3,000
-------- ------- -------- -------
Income before income tax and extraordinary
item....................................... 13,530 8,341 11,396 6,956
INCOME TAX EXPENSE.............................. 4,059 2,720 3,719 2,174
-------- ------- -------- -------
Income before extraordinary item.............. 9,471 5,621 7,677 4,782
EXTRAORDINARY ITEM(4)........................... -- -- -- (911)
-------- ------- -------- -------
NET INCOME...................................... 9,471 5,621 7,677 3,871
LESS -- Net income applicable to preferred loan
stock......................................... -- -- -- (334)
-------- ------- -------- -------
NET INCOME APPLICABLE TO COMMON SHARES.......... $ 9,471 $ 5,621 $ 7,677 $ 3,537
======== ======= ======== =======
PER SHARE DATA:
Income before extraordinary item.............. $ 0.87 $ 0.53 $ 0.72 $ 0.52
Extraordinary item............................ -- -- -- (0.11)
-------- ------- -------- -------
Net income.................................... $ 0.87 $ 0.53 $ 0.72 $ 0.41
======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING............. 10,884 10,667 10,691 8,594
======== ======= ======== =======
BALANCE SHEET DATA(5):
Working capital................................. $ 38,015 $24,652 $ 25,205 $24,459
Total assets.................................... 227,669 74,168 79,691 71,379
Long-term debt, including current maturities.... 112,840 17,391 16,024 16,269
Shareholders' equity............................ 57,067 45,271 47,411 39,665
</TABLE>
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(1) Includes the operations of Scott Pickford beginning on March 1, 1997 and
Saybolt beginning on May 1, 1997, the acquisitions of which were accounted
for as purchases.
(2) Historical results have been restated to reflect the operations of
ProTechnics, the acquisition of which on December 31, 1996 was accounted for
as a pooling-of-interests.
(3) Transaction costs associated with the merger of ProTechnics.
(4) Extraordinary loss due to write-off of deferred debt costs and prepayment
penalties related to retirement of debt using proceeds from the initial
public offering.
(5) At end of period.
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RISK FACTORS
Prospective purchasers of the Common Shares offered hereby should carefully
consider the following risk factors in addition to the other information
presented or incorporated by reference in this Prospectus.
RELIANCE ON THE OIL AND GAS INDUSTRY
The Company's business and operations are substantially dependent upon the
condition of the global oil and gas industry. The oil and gas industry is highly
cyclical and has been subject to significant economic downturns at various times
as a result of numerous factors affecting the supply of and demand for oil and
natural gas, including the level of drilling activity, worldwide economic
conditions, interest rates and the cost of capital, environmental regulation,
tax policies, political requirements of national governments, coordination by
the Organization of Petroleum Exporting Countries (OPEC), the cost of producing
oil and natural gas, and technological advances. There can be no assurance that
any future downturns in the oil and gas industry, or in the oilfield reservoir
rock and fluids analyses business, will not be severe or that any such downturn
will not have a material adverse effect on the Company's financial condition or
results of operations. See "Business."
RELIANCE ON NEW PRODUCT DEVELOPMENT AND POSSIBLE TECHNOLOGICAL OBSOLESCENCE
The market for the Company's products and services is characterized by
changing technology. As a result, the Company's success is dependent upon its
ability to develop new products and services on a cost-effective basis and to
introduce them into the marketplace in a timely manner. The Company intends to
continue committing substantial financial resources and effort to the
development of new products and services. There can be no assurance that the
Company will successfully differentiate itself from its competitors, that the
market will consider the Company's proposed products and services to be superior
to its competitors' products and services or that the Company will be able to
adapt to evolving markets and technologies, develop new products, or achieve and
maintain technological advantages. See "Business -- Operations."
RELIANCE ON PATENTS, PROPRIETARY TECHNOLOGIES AND LICENSES
The Company's success depends in part on its ability to obtain patents,
licenses and other intellectual property rights covering its products and
services. To that end, the Company has obtained certain patents and intends to
continue to seek patents on its inventions and services. The process of seeking
patent protection can be long and expensive, and there can be no assurance that
patents will issue from currently pending or future applications or, if patents
are issued, that they will be of sufficient scope or strength to provide
meaningful protection or any commercial advantage to the Company. In addition,
effective copyright and trade secret protection may be unavailable or limited in
certain countries. Litigation, which could demand financial and management
resources, may be necessary to enforce patents or other intellectual property
rights of the Company. Also, there can be no assurance that the Company can
obtain licenses or other rights to necessary intellectual property on acceptable
terms. See "Business -- Patents and Trademarks."
DEPENDENCE ON INTERNATIONAL OPERATIONS
The Company operates facilities in over 50 countries. Non-U.S. operations
accounted for approximately 55% of the Company's revenues during the nine months
ended September 30, 1997. The Company's business is subject to various risks
beyond its control, such as instability of foreign economies and governments,
currency fluctuations, potential income tax liabilities in multiple
jurisdictions and changes in laws and policies affecting trade and investment.
Any of such factors might cause facilities in some countries to become
unprofitable, possibly resulting in the closing of such facilities. The Company
attempts to limit its exposure to foreign currency fluctuations by limiting the
amount by which its foreign contracts are denominated in a currency other than
U.S.
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dollars to an amount generally equal to expenses expected to be incurred in such
foreign currency. The Company has not historically engaged in and does not
currently intend to engage in any significant hedging or currency trading
transactions designed to compensate for adverse currency fluctuations.
RISKS OF ACQUISITION STRATEGY
As a key component of its business strategy, the Company has pursued and
intends to continue to pursue acquisitions of complementary assets and
businesses. Certain risks are inherent in any acquisition strategy, such as
increasing leverage and debt service requirements and combining disparate
company cultures and facilities, which could adversely affect the Company's
operating results. The success of any completed acquisition will depend in part
on the Company's ability to integrate effectively the acquired business into the
Company. The process of integrating such acquired businesses may involve
unforeseen difficulties and may require a disproportionate amount of
management's attention and the Company's financial and other resources. Possible
future acquisitions may be for purchase prices significantly higher than those
paid for recent and pending acquisitions. No assurance can be given that the
Company will be able to continue to identify additional suitable acquisition
opportunities, negotiate acceptable terms, obtain financing for acquisitions on
satisfactory terms or successfully acquire identified targets. The Company's
failure to achieve consolidation savings, to incorporate the acquired businesses
and assets into its existing operations successfully or to minimize any
unforeseen operational difficulties could have a material adverse effect on the
Company's financial condition and results of operations. See "Business --
Business Strategy -- Acquisitions."
ENVIRONMENTAL REGULATION
The Company is subject to a variety of governmental regulations relating to
the use, storage, discharge and disposal of chemicals and gases used in its
analytical and manufacturing processes. Environmental claims or the failure to
comply with present or future regulations could result in the assessment of
damages or imposition of fines against the Company or the suspension or
cessation of operations. New regulations could require the Company to acquire
costly equipment or to incur other significant expenses. Any failure by the
Company to control the use of, or adequately restrict the discharge of,
hazardous substances could subject it to future material liabilities. In
addition, public interest in the protection of the environment has increased
dramatically in recent years and the Company anticipates that the trend of more
expansive and stricter environmental laws and regulations will continue, the
occurrence of which may result in increased capital expenditures or operating
expenses by the Company.
COMPETITION
The businesses in which the Company operates are highly competitive.
Several of the Company's competitors are divisions or subsidiaries of companies
that are substantially larger and have greater financial and other resources
than the Company. See "Business -- Competition."
UNCERTAINTY IN SERVICE OF PROCESS AND ENFORCING UNITED STATES JUDGMENTS AGAINST
NETHERLANDS CORPORATIONS, DIRECTORS AND OTHERS
The Company is a Netherlands company and a substantial portion of the
Company's assets are located outside the United States. In addition, members of
the Supervisory Board of the Company and certain Selling Shareholders named
herein are residents of countries other than the United States. As a result, it
may not be possible for investors to effect service of process within the United
States upon such persons or to enforce against such persons or the Company
judgments of courts of the United States predicated upon civil liabilities under
the United States federal securities laws. Because there is no treaty between
the United States and The Netherlands providing for the reciprocal recognition
and enforcement of judgments, United States judgments are not automatically
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enforceable in The Netherlands. However, a final judgment of the payment of
money obtained in a United States court and not rendered by default, which is
not subject to appeal or any other means of contestation and is enforceable in
the United States, would in principle be upheld and be regarded by a Netherlands
court of competent jurisdiction as conclusive evidence when asked to render a
judgment in accordance with such final judgment by a United States court,
without substantive re-examination or relitigation on the merits of the subject
matter thereof, provided that such judgment has been rendered by a court of
competent jurisdiction, in accordance with rules of proper procedure, that it
has not been rendered in proceedings of a penal or revenue nature and that its
content and possible enforcement are not contrary to public policy or public
order of The Netherlands. Notwithstanding the foregoing, there can be no
assurance that United States investors will be able to enforce against the
Company, or members of the Supervisory Board, certain Selling Shareholders, or
certain experts named herein who are residents of The Netherlands or countries
other than the United States, any judgments in civil and commercial matters,
including judgments under the federal securities laws. In addition, there is
doubt as to whether a Netherlands court would impose civil liability on the
Company or on the members of the Supervisory Board in an original action
predicated solely upon the federal securities laws of the United States brought
in a court of competent jurisdiction in The Netherlands against the Company or
such members.
POSSIBLE ANTITAKEOVER EFFECTS
The Company's Amended and Restated Articles of Association and the
applicable law of The Netherlands contain provisions that may be deemed to have
anti-takeover effects. Among other things, these provisions establish the
authority of the Company's Supervisory Board to designate certain rights
(including conversion rights) applicable to preference shares, par value NLG
0.03 per share, of the Company ("Preference Shares") and to approve the issuance
of Preference Shares upon a fractional payment of the aggregate par value
thereof (with the balance of the aggregate par value to be paid by the holder
only after it is called in by the Company). In addition, the Company's
Supervisory Board is classified into three classes, with the directors of each
class having staggered three-year terms. Such provisions may delay, defer or
prevent a takeover attempt that a shareholder might consider in the
shareholder's best interest. See "Description of Share Capital -- Preference
Shares" and "Management."
NO ANTICIPATED DIVIDENDS ON COMMON SHARES
The Company's Supervisory Board does not presently anticipate authorizing
the payment of dividends in the foreseeable future. See "Dividend Policy."
USE OF PROCEEDS
The net proceeds to the Company from the Offering are estimated to be
approximately $ million, after deducting underwriting discounts and
commissions and estimated offering expenses. The Company intends to use all of
such net proceeds to repay a portion of its indebtedness under its bank credit
facility (the "Credit Facility"). See "Capitalization" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."
The Company will not receive any proceeds from the sale of the Common
Shares by the Selling Shareholders. See "Underwriting."
9
<PAGE> 11
CAPITALIZATION
The following table sets forth the short-term debt and capitalization of
the Company at September 30, 1997 and as adjusted to give effect to (i) the sale
by the Company of the 1,400,000 Common Shares offered hereby, and (ii) the
application of the estimated net proceeds to the Company therefrom as described
under "Use of Proceeds." This table should be read in conjunction with the
consolidated financial statements of the Company, including the notes thereto,
incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
----------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Total short-term debt and current portion of long-term
debt...................................................... $ 1,698 $
======== ========
Long-term debt, less current portion:
Borrowings under Credit Facility.......................... $107,000 $
Other long-term debt...................................... 4,494
-------- --------
Total long-term debt.............................. 111,494
-------- --------
Shareholders' equity:
Preference Shares, NLG 0.03 par value; 3,000,000 shares
authorized; no shares issued and outstanding........... -- --
Common Shares, NLG 0.03 par value; 30,000,000 shares
authorized; 10,622,612 shares issued and outstanding at
stated value (actual); 12,022,612 shares issued and
outstanding at stated value (as adjusted).............. 186
Additional paid-in capital................................ 35,685
Retained earnings......................................... 21,196
-------- --------
Total shareholders' equity........................ 57,067
-------- --------
Total capitalization.............................. $170,249 $
======== ========
</TABLE>
The Credit Facility provides for (i) a term loan of $55 million, (ii) a
term loan denominated in British pounds having a U.S. dollar equivalency of $15
million, (iii) a committed revolving debt facility of $50 million, and (iv) a
Netherlands guilder denominated revolving debt facility with U.S. dollar
equivalency of $5 million. Loans under the Credit Facility will generally bear
interest from LIBOR plus 0.75% to a maximum of LIBOR plus 1.75%. The term loans
require quarterly principal payments beginning March 31, 1999, with the final
principal payment due June 30, 2002. The revolving debt facilities require
interest payments only, until maturity on June 30, 2002. The indebtedness
incurred under the Credit Facility was used to finance the acquisitions of
Saybolt and Scott Pickford, as well as to refinance a previous credit facility.
10
<PAGE> 12
PRICE RANGE OF COMMON SHARES
The Company's Common Shares have been trading on the Nasdaq Stock Market
under the symbol "CRLBF" since the Company's initial public offering in
September 1995. The following table sets forth the high and low sales prices per
share of the Common Shares as reported on the Nasdaq Stock Market for the
periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
Year ended December 31, 1995:
Third Quarter (from initial public offering date of
September 21 to September 30, 1995).................... $13.750 $11.375
Fourth Quarter............................................ 12.625 9.500
Year ended December 31, 1996:
First Quarter............................................. $13.000 $ 9.750
Second Quarter............................................ 16.000 11.750
Third Quarter............................................. 16.500 13.625
Fourth Quarter............................................ 17.250 15.250
Year ending December 31, 1997:
First Quarter............................................. $22.000 $16.750
Second Quarter............................................ 26.125 16.375
Third Quarter............................................. 36.875 24.000
Fourth Quarter (through November 19, 1997)................ 45.750 35.000
</TABLE>
On November 19, 1997, the closing sale price of the Common Shares as
reported on the Nasdaq Stock Market was $37.125 per share.
DIVIDEND POLICY
The Company has never paid dividends on its Common Shares and currently has
no plans to pay dividends on the Common Shares. The Company expects that it will
retain all available earnings generated by its operations for the development
and growth of its business. Any future determination as to the payment of
dividends will be made in the discretion of the Company's Supervisory Board and
will depend upon the Company's operating results, financial condition, capital
requirements, general business conditions and such other factors as the
Supervisory Board deems relevant. Because the Company is a holding company that
conducts substantially all of its operations through subsidiaries, the ability
of the Company to pay cash dividends on the Common Shares is dependent upon the
ability of its subsidiaries to pay cash dividends or otherwise distribute or
advance funds to the Company and on the terms and conditions of its existing and
future credit arrangements as may exist from time to time. In addition, under
the terms of the Credit Facility, the Company is prohibited from paying cash
dividends on the Common Shares without the prior written consent of the lenders
thereunder. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."
11
<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)
The following table sets forth selected consolidated financial data for the
periods indicated. The selected consolidated financial data should be read in
conjunction with the Company's consolidated financial statements, including the
notes thereto, incorporated by reference herein. The selected consolidated
financial data for the years ended December 31, 1996 and 1995 have been derived
from the consolidated financial statements of the Company which are incorporated
herein by reference. The selected consolidated financial data for the nine
months ended September 30, 1997 and 1996 have been derived from the unaudited
interim financial statements of the Company, which, in the opinion of
management, include all adjustments (which consist of only normal recurring
adjustments) necessary for a fair presentation of the financial condition and
results of operations of the Company for those periods. Results for any interim
period are not necessarily indicative of the results for a full year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------ ------------------
1997(1) 1996(2) 1996(2) 1995(2)
-------- ------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
REVENUES:
Services.................................................. $122,286 $58,728 $ 80,503 $62,478
Sales..................................................... 20,601 18,155 24,865 25,115
-------- ------- -------- -------
Total revenues..................................... 142,887 76,883 105,368 87,593
OPERATING EXPENSES:
Costs of services......................................... 95,166 46,920 64,853 51,018
Costs of sales............................................ 18,699 14,867 19,790 20,768
General and administrative expenses....................... 4,359 2,717 3,559 2,719
Depreciation and amortization............................. 7,170 3,340 4,600 3,262
Transaction costs associated with merger(3)............... -- -- 355 --
Other income, net......................................... (169) (406) (603) (130)
-------- ------- -------- -------
Total operating expenses........................... 125,225 67,438 92,554 77,637
Income before interest expense, income tax and
extraordinary item...................................... 17,662 9,445 12,814 9,956
INTEREST EXPENSE............................................ 4,132 1,104 1,418 3,000
-------- ------- -------- -------
Income before income tax and extraordinary item........... 13,530 8,341 11,396 6,956
INCOME TAX EXPENSE.......................................... 4,059 2,720 3,719 2,174
-------- ------- -------- -------
Income before extraordinary item.......................... 9,471 5,621 7,677 4,782
EXTRAORDINARY ITEM(4)....................................... -- -- -- (911)
-------- ------- -------- -------
NET INCOME.................................................. 9,471 5,621 7,677 3,871
LESS -- Net income applicable to preferred loan stock....... -- -- -- (334)
-------- ------- -------- -------
NET INCOME APPLICABLE TO COMMON SHARES...................... $ 9,471 $ 5,621 $ 7,677 $ 3,537
======== ======= ======== =======
PER SHARE DATA:
Income before extraordinary item.......................... $ 0.87 $ 0.53 $ 0.72 $ 0.52
Extraordinary item........................................ -- -- -- (0.11)
-------- ------- -------- -------
Net income................................................ $ 0.87 $ 0.53 $ 0.72 $ 0.41
======== ======= ======== =======
WEIGHTED AVERAGE SHARES OUTSTANDING......................... 10,884 10,667 10,691 8,594
======== ======= ======== =======
BALANCE SHEET DATA(5):
Working capital............................................. $ 38,015 $24,652 $ 25,205 $24,459
Total assets................................................ 227,669 74,168 79,691 71,379
Long-term debt, including current maturities................ 112,840 17,391 16,024 16,269
Shareholders' equity........................................ 57,067 45,271 47,411 39,665
</TABLE>
- ---------------
(1) Includes the operations of Scott Pickford beginning on March 1, 1997 and
Saybolt beginning on May 1, 1997, the acquisitions of which were accounted
for as purchases.
(2) Historical results have been restated to reflect the operations of
ProTechnics, the acquisition of which on December 31, 1996 was accounted for
as a pooling-of-interests.
(3) Transaction costs associated with the merger of ProTechnics.
(4) Extraordinary loss due to write-off of deferred debt costs and prepayment
penalties related to retirement of debt using proceeds from the initial
public offering.
(5) At end of period.
12
<PAGE> 14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the financial
statements and notes thereto incorporated by reference herein.
RESULTS OF OPERATIONS
The following table sets forth certain percentage relationships based on
the Company's consolidated statements of operations for the periods indicated;
such table reflects the merger of ProTechnics on December 31, 1996 (accounted
for as a pooling-of-interests) and the results of the acquisitions of Scott
Pickford beginning March 1, 1997 and Saybolt beginning May 1, 1997 (accounted
for as purchases). See "Business -- Acquisitions."
<TABLE>
<CAPTION>
% INCREASE (DECREASE)
----------------------------
NINE MONTHS NINE MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
------------- ------------- ------------- ------------
1997 1996 1996 1995 1997 VS 1996 1996 VS 1995
----- ----- ----- ----- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Services........................................ 85.6% 76.4% 76.4% 71.3% 108.2 28.9
Sales........................................... 14.4 23.6 23.6 28.7 13.5 (1.0)
----- ----- ----- -----
Total revenues............................ 100.0% 100.0% 100.0% 100.0% 85.9 20.3
===== ===== ===== =====
Operating expenses:
Costs of services............................... 66.6% 61.0% 61.5% 58.2% 102.8 27.1
Costs of sales.................................. 13.1 19.3 18.8 23.7 25.8 (4.7)
General and administrative expenses............. 3.1 3.5 3.4 3.1 60.4 30.9
Depreciation and amortization................... 4.9 4.4 4.4 3.7 114.7 41.0
Transaction costs associated with merger ....... -- -- 0.3 -- * *
Other income, net............................... (0.1) (0.5) (0.6) (0.1) (58.4) *
----- ----- ----- -----
Total operating expenses.................. 87.6 87.7 87.8 88.6 85.7 19.2
Income before interest expense, income tax and
extraordinary item.............................. 12.4 12.3 12.2 11.4 87.0 28.7
Interest expense.................................. 2.9 1.5 1.4 3.4 274.3 (52.7)
----- ----- ----- -----
Income before income tax and extraordinary item... 9.5 10.8 10.8 8.0 62.2 63.8
Income tax expense................................ 2.9 3.5 3.5 2.5 49.2 71.1
----- ----- ----- -----
Income before extraordinary item.................. 6.6% 7.3% 7.3% 5.5% 68.5 60.5
===== ===== ===== =====
</TABLE>
- ---------------
* Percentage not meaningful.
Nine Months Ended September 30, 1997 and 1996
Services revenue for the nine-month period ended September 30, 1997
increased 108.2% to $122.3 million. The increase was primarily due to (i)
increased worldwide demand for reservoir core and fluids analysis and (ii)
additional revenue attributable to the March 1, 1997 acquisition of Scott
Pickford and the May 12, 1997 acquisition of Saybolt.
Sales revenue for the nine month period ended September 30, 1997 was up
13.5% to $20.6 million compared to the prior year. The increase was primarily
attributed to the acquisition of Scott Pickford's manufacturing division and was
slightly off-set by decreased sales of integrated octane-measuring and process
analyzer systems due to a weaker U.S. refining market.
Costs of services as a percentage of services revenue for the nine months
ended September 30, 1997 improved slightly compared to a year ago, due to
improved cost savings and efficiencies.
Costs of sales as a percentage of sales revenue for the nine months ended
September 30, 1997 weakened compared to a year ago due to increased sales of
lower margin products.
General and administrative expenses for the nine months ended September 30,
1997 increased $1.6 million as compared to the corresponding period in 1996. The
increase was primarily due to increased personnel costs and administrative
expenses due to the Company's growth through
13
<PAGE> 15
acquisitions; however, such expenses decreased as a percent of revenues. The
Company's ongoing program to maintain tight controls over expenses has resulted
in maintaining general and administrative expenses as a percentage of sales
under 4%.
Depreciation and amortization expense for the nine months ended September
30, 1997 increased $3.8 million as compared to the same period in 1996, due
primarily to the acquisitions of Scott Pickford and Saybolt.
Interest expense for the nine months ended September 30, 1997 increased
$3.0 million as compared to 1996. The increase was primarily due to the
additional borrowings used to finance the Saybolt and Scott Pickford
acquisitions.
The Company's effective income tax rate was approximately 30% for the nine
months ended September 30, 1997 as compared to 32.6% for the nine months ended
September 30, 1996.
Years Ended December 31, 1996 and 1995
Total revenue for 1996 was $105.4 million, an increase of 20.3% from $87.6
million in the prior year. Revenue gains of 28.9% were realized by the Company's
services operations for 1996 compared to 1995. Services revenue primarily
increased as a result of (i) increased demand for reservoir core and fluids
analysis, (ii) increased demand for tracing and logging services and (iii)
additional revenue from the December 1995 acquisition of PACE Incorporated
analytical laboratories ("PACE") and the January 1996 acquisition of Gulf States
Analytical, Inc. ("GSAI"). Sales revenue for 1996 was comparable to 1995.
The combined cost of services and sales as a percentage of revenue for 1996
improved slightly compared to the previous year due to improved cost savings and
efficiencies.
General and administrative expenses increased $0.8 million in 1996 to $3.6
million. The increase was primarily attributable to costs associated with being
a publicly traded company and increased personnel costs due to growth. The
Company's ongoing program to maintain tight controls over expenses has resulted
in maintaining general and administrative expenses as a percentage of sales
under 4%. As a percentage of net sales, general and administrative expenses were
3.4% and 3.1% for 1996 and 1995, respectively.
Depreciation and amortization expense for 1996 increased to $4.6 million
from $3.3 million in 1995 primarily due to capital expenditures for new
equipment and the acquisitions of Pastech, Inc., PACE and GSAI.
Transaction costs totaling $0.4 million associated with the ProTechnics
merger, which was accounted for as a pooling-of-interests, were expensed in the
fourth quarter of 1996 and primarily consist of legal, accounting and investment
banking fees.
Other income for 1996 increased $0.5 million from 1995 due primarily to (i)
remuneration of $0.3 million from the State of California for property taken
through rights of eminent domain in connection with road construction and (ii)
exchange gains on transactions denominated in foreign currencies.
Interest expense decreased 52.7% to $1.4 million for 1996 compared to $3.0
million in 1995, due to a reduction in debt after the Company's initial public
offering of 2.8 million Common Shares in September 1995.
The Company's effective income tax rate was 32.6% and 31.3% in 1996 and
1995, respectively. The Company's tax rate is less than the statutory rate of
35% in The Netherlands, primarily as a result of lower tax rates and export
sales benefits in countries where the Company operated through subsidiaries, and
is partially offset by state and provincial taxes.
14
<PAGE> 16
LIQUIDITY AND CAPITAL RESOURCES
On May 12, 1997 the Company entered into the Credit Facility, which was
used to finance the acquisitions of Saybolt and Scott Pickford, as well as
refinance a previous credit facility. The Credit Facility provides for (i) a
term loan of $55 million, (ii) a term loan denominated in British pounds having
a U.S. dollar equivalency of $15 million, (iii) a committed revolving debt
facility of $50 million and (iv) a Netherlands guilder denominated revolving
debt facility with a U.S. dollar equivalency of $5 million. Loans under the
Credit Facility will generally bear interest from LIBOR plus 0.75% to a maximum
of LIBOR plus 1.75%. The term loans require quarterly principal payments
beginning March 31, 1999 with the final principal payment due June 30, 2002. The
revolving debt facilities require interest payments only, until maturity on June
30, 2002. The terms of the Credit Facility require the Company to meet certain
financial covenants, including certain minimum equity and cash flow tests.
The Company has generally funded its activities from cash flow from
operations, although the Company financed substantially all of the purchase
price for the acquisitions of Saybolt and Scott Pickford with borrowings under
the Credit Facility. At September 30, 1997, the Company had working capital of
$38.0 million (of which $8.8 million was cash and short-term investments) and a
current ratio of 1.8 to 1.0 compared to working capital of $25.2 million (of
which $2.9 million was cash and short-term investments) and a current ratio of
2.5 to 1.0 at December 31, 1996. The Company is a holding company that conducts
substantially all of its operations through subsidiaries. Consequently, the
Company's cash flow is wholly dependent upon the ability of its subsidiaries to
pay cash dividends or otherwise distribute or advance funds to the Company. All
of the Company's material subsidiaries are guarantors or co-borrowers under the
Credit Facility.
The Company expects to fund any future acquisitions primarily through a
combination of working capital, cash flow from operations, bank borrowings
(including the Credit Facility) and issuance of additional equity. Although the
Credit Facility imposes certain limitations on the incurrence of additional
indebtedness, in general the Company will be permitted to assume, among other
things, indebtedness of acquired businesses, subject to compliance with the
financial covenants of the Credit Facility.
The Company anticipates that its cash flow from operations will provide
cash in excess of the Company's normal working capital needs and planned capital
expenditures for property, plant and equipment. Capital expenditures for the
first nine months of 1997 were $10.4 million and for 1996 totaled $6.3 million.
The Company used existing cash and borrowed approximately $107 million under the
Credit Facility to fund (i) $67.0 million paid in connection with the Saybolt
Acquisition, and (ii) to retire approximately $31.1 million of its existing
indebtedness ($15.1 million of which had been incurred in connection with the
Company's acquisition of Scott Pickford). The Company issued 1.1 million Common
Shares in December 1996 to consummate the ProTechnics merger.
Due to the relatively low levels of inflation experienced in 1995, 1996 and
1997 inflation has not had a significant effect on the Company's results of
operations in recent periods.
OTHER MATTERS
The Company believes that the occurrence of the year 2000 will not cause
any material operating problem or liability for the Company or any of its
subsidiaries and that its software is "year 2000 compliant" in all material
respects.
15
<PAGE> 17
BUSINESS
GENERAL
The Company is one of the leading providers of petroleum reservoir
description data and production management services for maximizing hydrocarbon
recovery from new and existing fields. The Company's customers include major,
independent, national and international oil and gas producers. The Company is
the world's largest provider of petroleum reservoir rock and fluids analyses and
multidisciplinary reservoir description studies. The Company is also a leading
provider of field services evaluating the efficiencies of well completions and
the effectiveness of enhanced oil recovery projects. In addition, the Company
manufactures and sells petroleum reservoir rock and fluid analysis
instrumentation and other integrated systems. Currently, the Company operates
over 70 facilities in over 50 countries and has approximately 3,000 employees.
BACKGROUND
The Company was established in 1936 and operated as a division of WAII from
1987 to 1994. On September 30, 1994, a group of investors, including 14 members
of management, purchased the business and substantially all of the assets of the
Core Laboratories division from WAII. In September 1995, the Company issued
2,800,000 Common Shares at $12.00 per share in an initial public offering and
commenced trading on the Nasdaq Stock Market.
BUSINESS STRATEGY
The Company's business strategy is to continue the expansion of its
operations through (i) continued development of proprietary hydrocarbon
production enhancement technologies, services and products through client-driven
research and development, (ii) expanded technology services and product lines
offered throughout the Company's global infrastructure, and (iii) acquisition of
complementary businesses that add key technologies or market presence and
enhance existing products and services.
Client-Driven Research and Development
The Company's research and development strategy is designed to maintain and
enhance its market leadership position in its principal businesses by
emphasizing the development of technology, services and products to meet the
needs of its customers, who are continually seeking to lower their costs of
finding, developing, producing and refining hydrocarbons. The Company's strategy
reflects the trend towards increased utilization of advanced technologies to
enhance the efficiency of development drilling, reduce the costs associated with
production of known reserves, maximize the efficiency of secondary and tertiary
recovery techniques, and reduce finding and development costs for new reserves.
While the aggregate number of wells being drilled per year has remained
relatively constant in recent years, oil and gas producers have increased
expenditures on high-technology services, including advanced reservoir rock and
fluids analyses, that assist in the development of more complete and
comprehensive analyses of reservoir characteristics and hydrocarbon fluids. The
Company will continue to concentrate on developing technologies related more to
development and production efficiencies, as opposed to those related to the more
volatile exploration sector of the oil and gas industry.
International Expansion of Services and Products
Another component of the Company's business strategy is to broaden the
spectrum of services and products offered to its clients internationally. This
goal is expected to be accomplished through the integration of the services and
products acquired by the Company through the transactions described below into
many of the Company's over 70 offices located in more than 50 different
16
<PAGE> 18
countries. Management believes this integration will expand the related markets
served by ProTechnics, Scott Pickford, Saybolt and other businesses acquired in
the future.
Acquisitions
The Company continually reviews potential acquisition possibilities in
existing or related business areas to add key technologies, enhance market
presence or complement existing businesses. The recent acquisitions of
ProTechnics, Scott Pickford and Saybolt and the anticipated acquisition of
Stim-Lab reflect the Company's desire to broaden the services offered to its
clients.
ProTechnics Merger. On December 31, 1996, the Company issued approximately
1.1 million Common Shares in exchange for substantially all of the outstanding
stock of ProTechnics. ProTechnics, headquartered in Houston, Texas, is one of
the leading providers of services that measure the effectiveness of well
stimulations and completions utilizing its proprietary ZeroWash(R) and
SpectraScan(R) technologies. ProTechnics is also the leader in determining the
efficiencies of enhanced recovery projects through field tracer surveys.
ProTechnics revenues totaled $11.6 million, $7.5 million and $6.5 million for
fiscal 1996, 1995, and 1994, respectively.
Scott Pickford Acquisition. On March 1, 1997, the Company acquired control
of a majority of the outstanding shares of Scott Pickford. The Company has since
acquired the remaining shares; the total consideration paid for Scott Pickford
was approximately $15.1 million. Scott Pickford provides petroleum reservoir
management, geoscience, geophysical and engineering services to its customers.
Scott Pickford reported revenues of $13.2 million, $13.3 million and $7.5
million for its fiscal years ended March 31, 1996, 1995, and 1994, respectively.
The acquisition was financed through borrowings, accounted for using the
purchase method of accounting and resulted in approximately $12.2 million of
goodwill which is being amortized over a 40-year period. Scott Pickford's
results of operations are included with those of the Company beginning March 1,
1997.
Saybolt Acquisition. On May 12, 1997, the Company consummated the Saybolt
acquisition for $67 million in cash and the assumption of $5 million of net
debt. Saybolt provides analytical and field services to characterize properties
of crude oil and petroleum products to the oil industry. Saybolt operates in
over 50 countries, including an existing presence in the Commonwealth of
Independent States, which will provide the operating experience and base from
which the Company can offer reservoir description and production management
services. Saybolt reported revenues of $105.4 million, $97.8 million and $90.3
million in 1996, 1995 and 1994, respectively. The transaction was accounted for
using the purchase method which resulted in approximately $60.6 million of
goodwill which is being amortized over a 40-year period. Financing for the
transaction was provided through the Credit Facility (see "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources"). Saybolt's results of operations
are included with those of the Company beginning on May 1, 1997.
Impact of Business Strategy
The Company believes that the implementation of these strategies has
already contributed to the significant increase in income before interest
expense, income tax and extraordinary item to $17.7 million for the nine months
ended September 30, 1997 from $9.4 million for the nine months ended September
30, 1996, and $7.4 million for the nine months ended September 30, 1995.
RECENT DEVELOPMENTS
Pending Stim-Lab, Inc. Merger
On October 22, 1997, the Company signed a letter of intent to acquire the
outstanding shares of Stim-Lab in exchange for approximately 230,000 Common
Shares. Stim-Lab, with additional offices in Houston, Texas and Edinburgh,
Scotland, is a leading provider of analytical and field services used to
maximize the efficiencies and effectiveness of petroleum reservoir stimulations.
Currently,
17
<PAGE> 19
Stim-Lab heads four industry consortia which evaluate fracture proppants, gels,
acid stimulations and horizontal well completions. Both Core Laboratories and
ProTechnics utilize results from these consortia to better design well
completion and stimulation programs.
Two-for-One Stock Split
On October 22, 1997, the Company announced a two-for-one split of the
outstanding Common Shares, payable on December 19, 1997 to shareholders of
record as of the close of business on December 1, 1997.
OPERATIONS
The Company derives its revenues from services and sales to customers
primarily in one industry segment, the oil and gas industry, and conducts its
business through two closely related operations:
Services
The Company provides reservoir rock and fluids analyses; field services to
evaluate the effectiveness of well completions, stimulations and enhanced oil
recovery projects; geological and geophysical engineering; and analysis of
water, soil and air samples for organic and inorganic contaminants. Typically,
rock and fluids samples are collected from wells drilled into known or potential
petroleum reservoirs and sent to the Company for analyses. These analyses
accurately measure the petrophysical properties of the rocks and
pressure-volume-temperature relationships of the reservoir fluids to help
determine the commercial viability of the hydrocarbon accumulation, and to
develop a production program that maximizes ultimate hydrocarbon recovery. The
data also are used to calibrate and validate wireline logs that may be used to
estimate certain properties of the reservoir. Without measured calibration data,
wireline log estimates can produce erroneous values which could lead to
incorrect decisions regarding the development or abandonment of hydrocarbon
accumulations.
The data generated by the Company's analyses are used during all stages of
the well cycle from exploration to primary and secondary production and
decisions concerning the abandonment of a property. Recent advances in drilling
and coring technologies have significantly reduced the cost of retrieving core
samples from reservoirs. The Company expects these developments to lead to
increased use of reservoir data obtained from rock core sample analyses. The
data generated by the Company's analyses also provide information that is used
to improve the processing and interpretation of 2-D and 3-D seismic programs and
management believes such data will be used as a component of reservoir
production management based on emerging 4-D seismic technologies. Oil and gas
producers have been increasing expenditures for analytical services to reduce
their risks in developing and producing oil and gas reservoirs, and lower their
costs of finding, developing and producing oil and gas.
The most basic analyses of rock properties provided by the Company measure
porosity and permeability, which determine the storage and flow capacities of
potential reservoirs. In addition to basic measurements, which are made at
surface conditions, the Company is increasingly providing technologically
advanced analyses of reservoir rock and fluids involving the simulation of the
reservoir's actual subsurface conditions. The Company also performs advanced
analyses of reservoir
18
<PAGE> 20
fluids at varying pressure and temperature conditions to determine their
physical and chemical properties at various points during the producing life of
a field.
As a result of the ProTechnics merger, the Company provides field services
used to design and measure the effectiveness of well completion and stimulation
programs and to maximize the hydrocarbon yields of enhanced recovery projects.
The services offered by ProTechnics are field extensions of the laboratory
studies of reservoir rocks and fluids conducted by Core Laboratories. As a
result of the Scott Pickford acquisition, the Company provides solutions from
designing the well completion, stimulation or enhanced recovery project to
measuring the performance in the field. Demand for these services has been
increasing, especially internationally, as oil and gas companies put more
emphasis on producing incremental amounts of hydrocarbons from established
fields.
ProTechnics is one of the leading providers of services that measure the
effectiveness of well stimulations and completions utilizing its proprietary
ZeroWashH and SpectraScanH technologies. ProTechnics is also the leader in
determining the efficiencies of enhanced recovery projects through field tracer
surveys. The Company is currently developing electromagnetic wireless
communication tools that can be used to monitor various bottom hole well
conditions during completion or production operations, as well as measurement
while drilling (MWD) systems. ProTechnics has won Special Meritorious
Engineering Awards for its innovative technologies in three of the past four
years at the annual Offshore Technology Conference (OTC). Core Laboratories
employs these new technologies to complement laboratory services associated with
the prevention of formation damage, phase behavior relationships of downhole
reservoir fluids, and better design of water or miscible floods for enhanced
recovery projects.
The Company also provides analytical testing of petroleum products,
including octane testing and the analysis of crude oil, natural gas, lubricants,
greases and other petroleum products and chemicals. The Company's services
operation serves a diverse customer base including oil and gas exploration and
production companies; petroleum refineries and processors; and engineering and
consulting firms.
The Company adheres to the strict quality standards that are demanded by
various in-house and proprietary procedures, as well as standards established by
the American Society of Testing and Materials (ASTM), which are used in a
variety of petroleum services analyses. Management believes the Company
demonstrates its commitment to quality by providing resources, money, time and
education to maintain its reputation as a high-quality provider of
high-technology analytical and consulting services. All of the Company's
laboratories participate in its internal quality improvement process, which is
designed to ensure that customer and regulatory requirements are met.
Ongoing research and development is an important part of the Company's
services operations. The Company has in the past committed significant resources
to research and development and anticipates that it will continue to do so in
the future. Over the years, the Company has made a number of technological
advances, including the development of key technologies utilized in the
Company's laboratories. Substantially all of the new technologies have resulted
from requests and guidance from the Company's clients, especially major oil
companies.
Services are offered worldwide through the Company's technology network of
over 70 sales, service and laboratory facilities located in over 50 countries.
Services accounted for approximately 86%, 76%, 76% and 71% of the Company's
total revenues for the nine months ended September 30, 1997 and 1996 and the
fiscal years ended December 31, 1996 and 1995, respectively.
Sales
The Company's sales operation complements its services operation. The
Company designs and manufactures a wide range of laboratory instrumentation and
equipment for reservoir rock and fluids analyses, including a majority of the
proprietary equipment used in the Company's services facilities. The sale of the
Company's proprietary equipment to non-competing customers has generated
19
<PAGE> 21
additional revenues for its services operation by maintaining and enhancing
customer relations and generating demand for complementary services. The Company
is the world's leading supplier of integrated octane measurement systems,
equipment and services for refineries and laboratories. The Company has no
significant competitor in this market. The full range of products and services
includes on-line process and laboratory equipment, engineering services, and
education programs to refineries throughout the world.
The Company also provides process analyzer systems that are used for the
measurement, analysis and monitoring of various process streams in the refining,
petrochemical and chemical industries. The Company's process analyzer systems
are provided on a turnkey basis, which includes engineering and design, material
procurement, assembly, piping/tubing, wiring, testing and documentation. On-site
field installation, startup/commissioning, and customer training are provided by
the Company's experienced technical representatives.
The Company currently offers its products worldwide through 11 domestic and
international facilities, including five that perform manufacturing operations.
Sales revenue accounted for approximately 14%, 24%, 24% and 29% of the Company's
total revenues for the nine months ended September 30, 1997 and 1996 and the
fiscal years ended December 31, 1996 and 1995, respectively.
The sales backlog at September 30, 1997 was approximately $14.0 million
compared with $9.6 million and $9.3 million at December 31, 1996 and 1995,
respectively.
MARKETING AND SALES
The Company markets and sells its services and products through a
combination of print advertising, technical seminars and trade shows, sales
personnel and representatives. Print advertising is placed on a regular basis in
trade and technical magazines targeted to the Company's customers. Direct sales
and marketing are carried out by the Company's integrated sales force and
operating managers and enhanced by sales representatives and distributors in
various markets where the Company does not have offices.
RESEARCH AND DEVELOPMENT
The market for the Company's products and services is characterized by
changing technology. As a result, the Company's success is dependent upon its
ability to develop new products and services on a cost-effective basis and to
introduce them into the marketplace in a timely manner. The Company intends to
continue committing substantial financial resources and effort to the
development of new products and services.
PATENTS AND TRADEMARKS
The Company believes its patents, trademarks and other intellectual
property rights are an important factor in maintaining its technological
advantage. Typically, the Company will seek to protect its intellectual
technology in all jurisdictions where the Company believes the cost of such
protection is warranted.
INTERNATIONAL OPERATIONS
The Company operates facilities in over 50 countries. The Company's
non-U.S. operations accounted for approximately 55%, 36% and 40% of the
Company's revenues during the nine months ended September 30, 1997 and fiscal
years ended December 31, 1996 and 1995, respectively. The Company's business is
subject to various risks beyond its control, such as instability of foreign
economies and governments, currency fluctuations, overlap of different tax
structures, and changes in laws and policies affecting trade and investment. Any
of such factors might cause facilities in some countries to become unprofitable,
possibly resulting in the closing of such facilities. The Company attempts to
limit its exposure to foreign currency fluctuations by limiting the amount which
its
20
<PAGE> 22
foreign contracts are denominated in a currency other than U.S. dollars to an
amount generally equal to expenses expected to be incurred in such foreign
currency. The Company has not historically engaged in and does not currently
intend to engage in any significant hedging or currency trading transactions
designed to compensate for adverse currency fluctuations.
ENVIRONMENTAL REGULATION
The Company's operations use many chemicals and gases and the Company is
subject to a variety of federal, state, local and foreign laws and regulations
related to the use, storage, discharge and disposal of such chemicals and gases
and other emissions and wastes. Consistent with the Company's quality assurance
and control principles, the Company has established proactive environmental
policies with respect to the handling and disposal of such chemicals, gases,
emissions and waste materials from its operations. The Company has engaged
outside consultants to audit its environmental activities and has implemented
health and safety education and training programs. The Company has not suffered
material environmental claims in the past. Management believes that the
Company's operations are in substantial compliance with applicable environmental
laws and regulations, and that continued compliance with existing requirements
will not have a material adverse effect on the Company. However, public interest
in the protection of the environment has increased dramatically in recent years
and the Company anticipates that the trend of more expansive and stricter
environmental laws and regulations will continue, the occurrence of which may
result in increased capital expenditures or operating expenses by the Company.
COMPETITION
The businesses in which the Company operates are highly competitive.
Several of the Company's competitors are divisions or subsidiaries of companies
that are substantially larger and have greater financial and other resources
than the Company. While no one company competes with the Company in all of its
product and service lines, the Company faces significant competition, primarily
from independent, regional companies. The Company competes in different product
and service lines to various degrees on the basis of price, technical
performance, availability, quality, and technical support. The Company's ability
to compete successfully depends on elements both within and outside of its
control, including successful and timely development of new products and
services, performance and quality, customer service, pricing, industry trends,
and general economic trends.
EMPLOYEES
As of September 30, 1997, the Company had approximately 3,000 employees.
The Company does not have any material collective bargaining agreements and
considers relations with its employees to be good.
21
<PAGE> 23
MANAGEMENT
The Company's Amended and Restated Articles of Association (the "Articles
of Association") provide for one or more Supervisory Directors. The Company's
Supervisory Board is classified into three classes, with the directors of each
class having staggered three-year terms. The members of the Supervisory Board
are proposed by the Supervisory Board and elected at the general shareholders'
meeting by a majority of the votes cast at the meeting. The shareholders may
override the proposal of the Supervisory Board by vote of two-thirds of the
votes cast at the meeting if more than one-half of the outstanding share capital
is present or represented. The members of the Supervisory Board appoint a
chairman of the Supervisory Board from among the members of the Supervisory
Board. Resolutions of the Supervisory Board generally require the approval of a
majority of its members. The Supervisory Board meets upon request by its
Chairman or two or more of its members.
Members of the Supervisory Board must retire no later than at the ordinary
general meeting of shareholders held after a period of three years following
their appointment, but may be re-elected. In addition, as required by
Netherlands laws, a member of the Supervisory Board must retire at the ordinary
general meeting of shareholders held in the year in which he reaches the age of
72. The Company currently has nine Supervisory Directors. Pursuant to the
Articles of Association, members of the Supervisory Board may be suspended or
dismissed by the general meeting of shareholders. The Supervisory Board may make
a proposal to the general meeting of shareholders for the suspension or
dismissal of one or more of its members. The members of the Supervisory Board
may receive such compensation as may be authorized by the Supervisory Board.
The information set forth below includes the names, ages, principal
occupations and length of service of each of the Supervisory Directors and
executive officers, as well as any other directorships held by them.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Bob G. Agnew................... 66 Supervisory Director
Richard L. Bergmark............ 44 Chief Financial Officer, Treasurer and Supervisory Director
David M. Demshur............... 42 President, Chief Executive Officer and Supervisory Director
John D. Denson................. 40 Vice President, General Counsel and Secretary
Joseph R. Perna................ 54 Senior Vice President and Supervisory Director
Frerik Pluimers................ 50 Supervisory Director
Timothy J. Probert............. 45 Supervisory Director
James A. Read.................. 47 Supervisory Director
Jacobus Schouten............... 44 Supervisory Director
Stephen D. Weinroth............ 58 Chairman of the Supervisory Board and Supervisory Director
</TABLE>
Bob G. Agnew was, until his retirement in January of 1994, Manager of
Drilling for International Operations for Exxon Company International (a
division of Exxon Corporation) and a member of the Production Advisory Committee
of Exxon Production Research Company. Mr. Agnew is a member of the Society of
Petroleum Engineers and has served on its Drilling Technical Committee. He has
served as a Supervisory Director since 1995.
Richard L. Bergmark joined WAII as Treasurer in 1987. In 1991, he became
the Area Manager for Finance and Administration for Europe, Africa and the
Middle East operations of Western Geophysical, and in 1994 he became Chief
Financial Officer of the Company. Mr. Bergmark presently serves as Chief
Financial Officer, Treasurer and a Supervisory Director of the Company. He has
served as a Supervisory Director since 1995.
David M. Demshur joined the Company in 1979 and has held various operating
positions since that date, including Manager of Geological Sciences, Vice
President of Europe, Africa and the Middle East in 1989, Senior Vice President
of Petroleum Services in 1991 and President in 1994. Mr. Demshur presently
serves as President, Chief Executive Officer and a Supervisory Director of the
Company. He has served as a Director since 1994. Mr. Demshur is a member of the
Society of
22
<PAGE> 24
Petroleum Engineers, the American Association of Petroleum Geologists, Petroleum
Exploration Society of Great Britain and the Society of Core Analysts Section of
the Society of Professional Well Loggers Association.
John D. Denson joined WAII as Division Counsel in 1992, with responsibility
for the Core Laboratories division. Mr. Denson presently serves as Vice
President, General Counsel and Secretary of the Company and is a member of the
State Bar of Texas.
Joseph R Perna joined the Company as General Manager in 1985 and has held
various operating positions since that date. In 1991, he was promoted to Senior
Vice President, with responsibility for certain Laboratory Services operations
and the Technology Products Division. Mr. Perna presently serves as Senior Vice
President and a Supervisory Director of the Company. He has served as a
Supervisory Director since 1995.
Frerik Pluimers joined Saybolt in 1973 as Laboratory Manager of one of its
subsidiaries. In 1978, he became General Manager of such subsidiary. In 1982, he
became Managing Director of a different Saybolt subsidiary, and in 1992 he
became the President and Chief Executive Officer of Saybolt, the title he
maintains as of the date hereof. Mr. Pluimers also serves as Honorary Consul of
the Republic of Gambia in The Netherlands. He has served as a Supervisory
Director since May 1997.
Timothy J. Probert has served as the President of Baker Hughes, Inteq (a
business unit of Baker Hughes Inc., a diversified oil service company ("Baker
Hughes")) since September 1996 and Vice President of Baker Hughes since March
1994. He joined Baker Hughes in 1972, where he has held various management
positions, including Vice President of Drilling and Evaluation Technology for
Baker Hughes Inteq, President of Eastman Teleco, President of Millwork Drilling
Fluids and Vice President of Marketing for Baker Sand Control. Mr. Probert has
served as a Supervisory Director since 1995.
James A. Read is a member of the board of directors of Mezzanine Management
Limited, the firm which serves as the investment advisor to First Britannia
Mezzanine N.V. ("First Britannia") since First Britannia's formation in 1988.
First Britannia is an investment company whose funds are provided by
institutional investors, and it has been a mezzanine lender to, and investor in,
the Company since the purchase of the Company from WAII in 1994. Mr. Read has
been a Director of the Company since the purchase from WAII and is also a member
of the board of directors of The British Printing Company Limited, CB Holdings
SA, Page One Ltd., Western Sky, Inc., ITEQ, Inc., JJI, Inc. and Wellington
Holdings Plc.
Jacobus Schouten has been an executive officer of First Britannia since
1989. Mr. Schouten has been a Director of the Company since 1994, and he is a
member of the board of directors of various European companies, including CB
Holdings SA.
Stephen D. Weinroth is a Partner of Andersen, Weinroth & Co., L.P., an
investment firm, and a Managing Director of First Britannia, which position he
has held since its inception in 1988. From 1993 to 1995, he served as
Co-Chairman and Co-Executive Officer of VETTA Sports, Inc., an international
bicycle parts and accessories producer and distributor. Mr. Weinroth has been a
Director since 1994, the Chairman of the Supervisory Board since 1995 and is a
member of the board of directors of Hovnanian Enterprises, Inc., a
publicly-traded homebuilder, and Norbank.
23
<PAGE> 25
DESCRIPTION OF SHARE CAPITAL
Core Laboratories was organized under the law of The Netherlands by Deed of
Association dated August 4, 1994. Set forth below is a summary of certain
provisions contained in the Articles of Association and the law of The
Netherlands. Such summary does not purport to be complete statements of the
Articles of Association and the law of The Netherlands and is qualified in its
entirety by reference to the Articles of Association and such law.
The authorized share capital of Core Laboratories is NLG 990,000,
consisting of 30,000,000 Common Shares, each with a par value of NLG 0.03, and
3,000,000 Preference Shares, each with a par value of NLG 0.03 (Common Shares
and Preference Shares are sometimes collectively referred to herein as
"Shares"). As of September 30, 1997, 10,622,612 Common Shares were outstanding.
Common Shares and Preference Shares will be issued in registered form only. The
Transfer Agent and Registrar for the Common Shares is American Stock Transfer
Company.
COMMON SHARES
Each shareholder of record is entitled to one vote for each Common Share
held on every matter submitted to a vote of shareholders. In the event of the
liquidation, dissolution or winding up of the Company, and subject to the
liquidation preference of holders of Preference Shares, if any, holders of
Common Shares are entitled to receive, on a pro rata basis, all assets of the
Company remaining available for distribution to the holders of Common Shares.
The Articles of Association make no provision for cumulative voting and, as a
result, the holders of a majority of the Company's voting power will have the
power to elect all members of the Supervisory Board.
PREFERENCE SHARES
No Preference Shares are outstanding. The Supervisory Board has the
authority to issue Preference Shares from time to time for a period of five
years from the date of the consummation of the offering, which period may be
extended. If such Preference Shares are issued, holders thereof will be entitled
to receive, when, as and if declared by the Supervisory Board, dividends at a
rate to be determined by the Supervisory Board prior to any payment of dividends
to the holders of Common Shares. In addition, the holders of Preference Shares
may be entitled to a liquidation preference, payable in the event of any
liquidation, dissolution or winding up of the Company after satisfaction of any
indebtedness but before any distribution of assets is made to holders of Common
Shares.
Holders of Preference Shares will have a right to one vote for each
Preference Share held on every matter submitted to a vote of shareholders and
such holders will vote as a class on matters to be determined by the Supervisory
Board. If issued, the Supervisory Board may designate that the Preference Shares
may be converted into Common Shares under certain specified circumstances. Under
Netherlands law, the Supervisory Board may also authorize the issuance of
Preference Shares with payment to the Company of up to 75% of the par value of
such Preference Shares being deferred until such time as it is called by the
Company. Such issuance of Preference Shares may adversely affect, among other
things, the voting, dividend and liquidation rights of holders of Common Shares.
The issuance of Preference Shares may have the effect of delaying, deferring or
preventing a change of control of the Company. The Supervisory Board has no
present plans to issue any such Preference Shares.
SUMMARY OF CERTAIN OTHER MATTERS
Issue of Shares
The Company's shareholders have approved the issuance of up to an aggregate
of 1,537,000 authorized but unissued Common Shares upon exercise of options in
connection with the Company's 1995 Long-Term Incentive Plan, as amended, and the
Company's 1995 Nonemployee
24
<PAGE> 26
Director Stock Option Plan, as amended. Options have been granted under the 1995
Long-Term Incentive Plan to approximately 120 key employees.
Preemptive Rights
The Company's shareholders have also authorized the Supervisory Board to
issue such additional authorized but unissued Common Shares as the Supervisory
Board shall determine. Under the law of The Netherlands, such authorization can
only be granted for a five-year period and will expire May 28, 2002, subject to
future extension(s). Subject to the foregoing, under the Articles of
Association, each holder of Common Shares shall generally have a preemptive
right to subscribe with regard to any issue of Common Shares pro rata to the
shareholder's existing holdings of Common Shares, except for certain issuances
to employees and issuances for noncash consideration.
Repurchase of Common Shares
Subject to certain restrictions contained in the law of The Netherlands and
the Articles of Association, the Company currently has the authority to acquire
its own fully paid shares in an amount not to exceed 10% of the outstanding
shares at any time in open market purchases at any price not to exceed $50.00
per share or its equivalent in other currencies. Such authorization, which has
been granted by the shareholders, may not be granted for more than 18 months, is
currently valid through November 28, 1999. No such authorization will be
required if the Company acquires shares in its own capital for the purpose of
transferring the same to employees of the Company or of a group company under a
scheme applicable to such employees, provided that such shares are officially
listed on an exchange (including the Nasdaq Stock Market).
25
<PAGE> 27
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of Common Shares as of September 30, 1997, and as adjusted to give
effect to the sale of the Common Shares offered hereby, by (i) each person known
to the Company to be the beneficial owner of 5% or more of the outstanding
Common Shares, (ii) each of the Company's supervisory directors, (iii) all of
the Company's Supervisory Directors and executive officers as a group and (iv)
each of the Selling Shareholders. Unless otherwise indicated, each person has
sole voting and dispositive power over the Common Shares listed. See
"Underwriting."
<TABLE>
<CAPTION>
COMMON SHARES COMMON SHARES
OWNED PRIOR TO OWNED AFTER
OFFERING OFFERING(1)
-------------------- --------------------
NUMBER OF NUMBER OF NUMBER OF
SUPERVISORY DIRECTORS AND COMMON SHARES COMMON
EXECUTIVE OFFICERS SHARES PERCENT OFFERED(1) SHARES PERCENT
------------------------- --------- ------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
Stephen D. Weinroth(2)................. 300,425(3) 2.8 -- 300,425(3) 2.5
David M. Demshur....................... 219,417(4) 2.1 -- 219,417(4) 1.8
Joseph R. Perna........................ 135,375(5) 1.3 -- 135,375(5) 1.1
Richard L. Bergmark.................... 99,806(6) * -- 99,806(6) *
John D. Denson......................... 11,499(7) * -- 11,499(7) *
Timothy J. Probert..................... 3,000(3) * -- 3,000(3) *
Bob G. Agnew........................... 2,300(3) * -- 2,300(3) *
Frerik Pluimers........................ 2,000 * -- 2,000 *
James A. Read.......................... 2,000(3) * -- 2,000(3) *
Jacobus Schouten....................... -- * -- -- *
All Supervisory Directors and executive
officers as a group.................. 775,822(8) 7.3 -- 775,822(8) 6.5
SELLING SHAREHOLDERS
First Britannia Mezzanine N.V.......... 4,201,267 39.6% 2,100,000 2,101,267 17.5%
Juliet Challenger, Inc.(9)............. 376,678 3.5% 188,339 188,339 1.6%
HCC Investments, Inc.(9)............... 58,449 * 29,224 29,225 *
ProTechnics II (Nevada), Inc.(10)...... 219,289 2.1% 19,000 200,289 1.7%
The Trustees of Grinnell College....... 6,470 * 6,470 -- --
Roger N. Samdahl....................... 4,741 * 4,741 -- --
Robert Hurst(11)....................... 2,744 * 2,744 -- --
Richard Lee Heine...................... 3,994 * 1,000 2,994 *
Banner Partners........................ 814 * 814 -- --
Bryco Investments...................... 814 * 814 -- --
Hubert L. Brown, Jr.................... 412 * 412 -- --
Greg T. Boser.......................... 3,994 * 300 3,664 *
The Brown Children Trust #2(12)........ 200 * 200 -- --
Brown Testamentary Trust(13)........... 200 * 200 -- --
Hillman 1985 Limited Partnership(9).... 20 * 20 -- --
</TABLE>
- ---------------
* Does not exceed 1.0%
(1) Assuming that the Underwriters' over-allotment option is not exercised.
(2) Mr. Weinroth, a Managing Director of First Britannia Mezzanine N.V.,
disclaims beneficial ownership of the Common Shares owned by such company.
(3) Includes 2,000 shares which may be acquired within 60 days pursuant to
outstanding stock options.
(4) Includes 11,911 shares held in Mr. Demshur's 401(k) plan and 7,500 shares
which may be acquired within 60 days pursuant to outstanding stock options.
26
<PAGE> 28
(5) Includes 15,688 shares held in Mr. Perna's 401(k) plan and 6,250 shares
which may be acquired within 60 days pursuant to outstanding stock options.
(6) Includes 13,137 shares held in Mr. Bergmark's 401(k) plan and 5,000 shares
which may be acquired within 60 days pursuant to outstanding stock options.
(7) Includes 832 shares held in Mr. Denson's 401(k) plan and 4,000 shares which
may be acquired within 60 days pursuant to outstanding stock options.
(8) Includes 30,750 shares which may be acquired within 60 days pursuant to
outstanding stock options.
(9) Juliet Challenger, Inc., HCC Investments, Inc. and the sole general partner
of Hillman 1985 Limited Partnership are each indirect, wholly-owned
subsidiaries of The Hillman Company, a private corporation engaged in
diversified investments and operations. The Hillman Company is controlled
by Henry L. Hillman, Elsie Hilliard Hillman and C.G. Grefenstette, Trustees
of the Henry L. Hillman Trust, which Trustees share voting and dispositive
power over the assets of The Hillman Company and its subsidiaries.
(10) ProTechnics II is owned by John W. Chisholm, who had been President and a
Director of ProTechnics until the time of its acquisition by the Company on
December 31, 1996, following which, he was appointed Vice President, Sales
and Marketing of the Company's Petroleum Services Division and has
continued to serve as President of ProTechnics.
(11) Mr. Hurst was a director of ProTechnics until December 31, 1996, following
which, he has held no position with the Company.
(12) The Brown Children Trust #2, Hubert L. Brown, Jr., Trustee.
(13) Bayard H. Friedman, Mary Jane Johndroe and Hubert L. Brown, Jr., Trustees
under the Will of H.L. Brown.
27
<PAGE> 29
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), through their representatives, BT
Alex. Brown Incorporated, Credit Suisse First Boston Corporation, Bear, Stearns
& Co. Inc. and Morgan Keegan & Company, Inc. (together, the "Representatives"),
have severally agreed to purchase from the Company and the Selling Shareholders
the following respective number of Common Shares at the public offering price
less the underwriting discounts and commissions set forth on the cover page of
this Prospectus.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
BT Alex. Brown Incorporated.................................
Credit Suisse First Boston Corporation......................
Bear, Stearns & Co. Inc.....................................
Morgan Keegan & Company, Inc................................
---------
Total............................................. 3,754,278
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all of the Common Shares offered hereby if any of
such shares are purchased.
The Company and the Selling Shareholders have been advised by the
Representatives that the Underwriters propose to offer the Common Shares to the
public at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $0. per share. The Underwriters may allow, and such dealers may
re-allow, a concession not in excess of $0. per share to certain other
dealers. After the Offering, the offering price and other selling terms may be
changed by the Underwriters.
The Company and First Britannia have granted the Underwriters an option,
exercisable not later than 30 days after the date of this Prospectus, to
purchase up to 563,142 additional Common Shares at the public offering price
less the underwriting discounts and commissions set forth on the cover page of
this Prospectus. To the extent that the Underwriters exercise such option, each
of the Underwriters will have a firm commitment to purchase approximately the
same percentage thereof that the number of Common Shares purchased by it in the
above table bears to 3,754,278, and the Company and the Selling Shareholders
will be obligated, pursuant to the option, to sell such shares to the
Underwriters. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the Common Shares offered
hereby. If purchased, the Underwriters will offer such additional shares on the
same terms as those on which the 3,754,278 shares are being offered.
The Company the Selling Shareholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.
The Company and the Selling Shareholders have agreed that they will not
sell or offer any Common Shares or options, rights or warrants to acquire any
Common Shares for a period of 90 days after the date of this Prospectus without
the prior written consent of the Representatives, except for shares issued by
the Company (i) in connection with acquisitions and (ii) pursuant to the
exercise of options granted under employee stock plans. Further, the Company's
Supervisory Directors and executive officers who beneficially own 775,822 shares
in the aggregate have agreed not to directly or indirectly sell or offer for
sale or otherwise dispose of any Common Shares for a period of 90 days after the
date of this Prospectus without the prior written consent of the
Representatives.
In connection with the Offering, the Underwriters may purchase and sell the
Common Shares in the open market. These transactions may include overallotment
and stabilizing transactions, "passive" market making and purchases to cover
syndicate short positions created in connection
28
<PAGE> 30
with the Offering. Stabilizing transactions consist of certain bids or purchases
for the purpose of preventing or retarding a decline in the market price of the
Common Shares and syndicate short positions involve the sale by the Underwriters
of a greater number of shares of Common Shares than they are required to
purchase from the Company in the Offering. The Underwriters also may impose a
penalty bid, whereby selling concessions allowed to syndicate members or other
broker-dealers in respect of the Common Shares sold in the Offering for their
account may be reclaimed by the syndicate if such Common Shares are repurchased
by the syndicate in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the Common Shares,
which may be higher than the price that might otherwise prevail in the open
market; and these activities, if commenced, may be discontinued at any time.
These transactions may be effected on the Nasdaq Stock Market, in the
over-the-counter market or otherwise.
As permitted by Rule 103 under the Exchange Act, certain Underwriters (and
selling group members, if any) that are market makers ("passive market makers")
in the Common Shares may make bids for or purchases of the Common Shares in the
Nasdaq Stock Market until such time, if any, when a stabilizing bid for such
securities has been made. Rule 103 generally provides that (1) a passive market
maker's net daily purchases of the Common Shares may not exceed 30% of its
average daily trading volume in such securities for the two full consecutive
calendar months (or any 60 consecutive days ending within the 10 days)
immediately preceding the filing date of the registration statement of which
this Prospectus forms a part, (2) a passive market maker may not effect
transactions or display bids for the Common Shares at a price that exceeds the
highest independent bid for the Common Shares by persons who are not passive
market makers and (3) bids made by passive market makers must be identified as
such.
Bankers Trust Company, an affiliate of BT Alex. Brown Incorporated, is a
lender and the administrative agent under the Credit Facility and has received
customary fees in connection therewith. The net proceeds of this Offering will
be used to repay a portion of the Company's indebtedness under the Credit
Facility. If the amount to be paid to Bankers Trust Company under the Credit
Facility is equal to or exceeds 10% of the net proceeds of this Offering to the
Company, the Offering will be conducted in accordance with Rule 2710(c)(8) of
the National Association of Securities Dealers, Inc.'s Conduct Rules. See "Use
of Proceeds."
LEGAL MATTERS
Certain legal matters in connection with the offering made hereby will be
passed upon for the Company by Vinson & Elkins L.L.P., Houston, Texas, U.S.
counsel to the Company. The validity of the Common Shares offered hereby is
being passed upon for the Company by Nauta Dutilh, Rotterdam, The Netherlands,
Netherlands counsel to the Company. Andrews & Kurth L.L.P., Houston, Texas, will
serve as counsel to the Underwriters.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this Prospectus, to the extent and for the periods indicated in
their report, have been audited by Arthur Andersen LLP, independent public
accountants. In that report, that firm states that with respect to a certain
subsidiary, its opinion is based on the report of other independent public
accountants, namely Grant Thornton LLP. The consolidated financial statements
referred to above have been incorporated by reference herein in reliance upon
the authority of those firms as experts in giving said reports. The financial
statements of Saybolt International B.V. incorporated in this Prospectus by
reference to the Current Report on Form 8-K/A of Core Laboratories N.V. dated
July 21, 1997 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
29
<PAGE> 31
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Midwest Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and Northeast Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material also can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates, or from
the site maintained by the Commission on the Internet World Wide Web at
http://www.sec.gov. In addition, copies of reports filed with the Commission may
be inspected at the Nasdaq Stock Market, 80 Merritt Boulevard, Trumbull,
Connecticut 06611.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Common Shares
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is made
to the Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the Common Shares offered hereby.
Any statements contained herein concerning the provisions of any document filed
as an exhibit to the Registration Statement or otherwise filed with the
Commission or incorporated by reference herein are not necessarily complete, and
in each instance reference is made to the copy of such document so filed for a
more complete description of the matter involved. Each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed with the Commission by the Company pursuant
to the Exchange Act, are incorporated herein by reference and made a part of
this Prospectus:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, its Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997 and its Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(iii) the Company's Current Report on Form 8-K filed May 23, 1997; and
(iv) the Company's Current Report on Form 8-K/A filed July 21, 1997.
Each document filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of this Offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such document. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any other subsequently filed document that also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
30
<PAGE> 32
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A COPY OF
THIS PROSPECTUS IS DELIVERED, ON THE REQUEST OF ANY SUCH PERSON, A COPY OF ANY
OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED HEREIN BY REFERENCE, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE IN SUCH DOCUMENTS). WRITTEN OR TELEPHONE REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO JACOBUS SCHOUTEN, CORE LABORATORIES N.V., HERENGRACHT 424,
1017 BZ AMSTERDAM, THE NETHERLANDS, TELEPHONE (31-20) 420-3191.
31
<PAGE> 33
======================================================
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED IN CONNECTION WITH ANY
OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING SHAREHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF THE
COMMON SHARES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 9
Capitalization........................ 10
Price Range of Common Shares.......... 11
Dividend Policy....................... 11
Selected Consolidated Financial
Data................................ 12
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 13
Business.............................. 16
Management............................ 22
Description of Share Capital.......... 24
Principal and Selling Shareholders.... 26
Underwriting.......................... 28
Legal Matters......................... 29
Experts............................... 29
Available Information................. 30
Incorporation of Certain Documents by
Reference........................... 30
</TABLE>
======================================================
======================================================
3,754,278 SHARES
[CORE LAB LOGO]
CORE LABORATORIES N.V.
COMMON SHARES
-------------------
PROSPECTUS
-------------------
BT ALEX. BROWN
CREDIT SUISSE FIRST BOSTON
BEAR, STEARNS & CO. INC.
MORGAN KEEGAN & COMPANY, INC.
, 1997
======================================================
<PAGE> 34
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Company or the
Selling Shareholders in connection with the issuance and distribution of the
Common Shares registered hereby, other than underwriting discounts and
commissions. The Selling Shareholders will pay only the legal fees and expenses
of their counsel. All the amounts shown are estimates, except the registration
and NASD filing fees.
<TABLE>
<S> <C>
Registration fee............................................ $ 59,394
NASD filing fee............................................. 18,502
Netherlands Stock Issuance Tax.............................. $560,000
Fees and expenses of accountants............................ 60,000
Fees and expenses of legal counsel of the Company........... 120,000
Fees and expenses of legal counsel of the Selling
Shareholders.............................................. 20,000
NASDAQ Stock Market Listing Fee............................. 17,500
Printing and engraving expenses............................. 55,000
Blue Sky fees and expenses (including counsel).............. 2,000
Miscellaneous............................................... 52,604
--------
Total............................................. $965,000
========
</TABLE>
- ---------------
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Certain of the Company's directors and executive officers have entered into
indemnity agreements with the Company. The agreements provide, to the fullest
extent permitted by the law of The Netherlands, that the Company will indemnify
the directors and executive officers against any costs and expenses, judgments,
settlements and fines incurred in connection with any claim involving a director
or an executive officer by reason of his position as director or officer. A form
of indemnity agreement containing such standards of conduct is included as an
exhibit to the Company's Registration Statement of which this Prospectus is a
part.
The Articles of Association provide that the Company will, to the full
extent permitted by the law of The Netherlands, as amended from time to time,
indemnify, and advance expenses to, each of its now acting and former board
members, officers, employees and agents, whenever any such person is made a
party, or threatened to be made a party, in any action, suit or proceeding by
reason of his service with the Company. The Articles of Association also provide
that the Company may purchase and maintain directors' and officers' liability
insurance.
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
below:
<TABLE>
<CAPTION>
INCORPORATED BY
EXHIBIT REFERENCE FROM THE
NUMBER EXHIBIT TITLE FOLLOWING DOCUMENTS
------- ------------- -------------------
<C> <S> <C>
**1.1 -- Form of Underwriting Agreement..................
3.1 -- Articles of Association of the Company, as
amended (including English translation)......... Form F-1, September 20, 1995
4.1 -- Form of certificate representing Common
Shares.......................................... Form F-1, September 20, 1995
</TABLE>
II-1
<PAGE> 35
<TABLE>
<CAPTION>
INCORPORATED BY
EXHIBIT REFERENCE FROM THE
NUMBER EXHIBIT TITLE FOLLOWING DOCUMENTS
------- ------------- -------------------
<C> <S> <C>
**5.1 -- Opinion of Nauta Dutilh.........................
10.1 -- Core Laboratories N.V. 1995 Long-Term Incentive
Plan (As Amended and Restated Effective as of
May 29, 1997)................................... Proxy Statement dated May 2,
1997 for Annual Meeting of
Shareholders
10.2 -- Core Laboratories N.V. 1995 Nonemployee Director
Stock Option Plan (As Amended and Restated
Effective as of May 29, 1997)................... Proxy Statement dated May 2,
1997 for Annual Meeting of
Shareholders
10.3 -- Form of Registration Rights Agreement entered
into by the Company and certain of its
shareholders, dated September 15, 1995.......... Form 10-Q, November 10, 1995
10.4 -- Purchase and Sale Agreement between Core
Holdings B.V. and Western Atlas International,
Inc., Western Atlas International, Nigeria Ltd.,
Western Atlas de Venezuela, C.A., Western Atlas
Canada Ltd. and Core Laboratories Australia Pty.
Ltd. dated as of September 30, 1994............. Form F-1, September 20, 1995
10.5 -- Non-competition Agreement between Western Atlas
International, Inc. and Core Holdings B.V. dated
as of September 30, 1994........................ Form F-1, September 20, 1995
10.6 -- Form of Indemnification Agreement entered into
by the Company and certain of its directors and
officers........................................ Form F-1, September 20, 1995
10.7 -- Indemnification Agreements, each dated as of
October 20, 1995, between the Company and each
of its directors and executive officers......... Form 10-Q, November 10, 1995
*10.8 -- Amended and Restated Credit Agreement among Core
Laboratories N.V., Core Laboratories Inc., Core
Laboratories (U.K.) Limited, Bankers Trust
Company, Nationsbank, N.A. and CIBC Inc., dated
as of July 18, 1997.............................
**23.1 -- Consent of Arthur Andersen LLP..................
**23.2 -- Consent of Grant Thornton LLP...................
**23.3 -- Consent of Price Waterhouse LLP.................
**23.4 -- Consent of Nauta Dutilh......................... Contained in Exhibit 5.1
*24.1 -- Powers of Attorney.............................. Included on the signature
page to this Registration
Statement
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
II-2
<PAGE> 36
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(b) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefits plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to any charter provision, by-law, contract, arrangement,
statute, or otherwise, the registrant has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted against the registrant by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 37
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Amsterdam, The Netherlands, on the 19th day of
November, 1997.
CORE LABORATORIES N.V.
BY: CORE LABORATORIES INTERNATIONAL
B.V.
By /s/ JACOBUS SCHOUTEN
--------------------------------------
Jacobus Schouten
Managing Director
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ DAVID M. DEMSHUR President, Chief Executive November 19, 1997
- ----------------------------------------------------- Officer and Supervisory Director
David M. Demshur (Principal Executive Officer and
Authorized Representative in the
United States)
/s/ JOSEPH R. PERNA Senior Vice President and November 19, 1997
- ----------------------------------------------------- Supervisory Director
Joseph R. Perna
/s/ RICHARD L. BERGMARK Chief Financial Officer, November 19, 1997
- ----------------------------------------------------- Treasurer and Supervisory
Richard L. Bergmark Director (Principal Financial
and Accounting Officer)
* Supervisory Director November 19, 1997
- -----------------------------------------------------
Stephen D. Weinroth
Supervisory Director
- -----------------------------------------------------
James A. Read
* Supervisory Director November 19, 1997
- -----------------------------------------------------
Jacobus Schouten
* Supervisory Director November 19, 1997
- -----------------------------------------------------
Timothy J. Probert
Supervisory Director
- -----------------------------------------------------
Bob G. Agnew
* Supervisory Director November 19, 1997
- -----------------------------------------------------
Frerik Pluimers
*By: /s/ RICHARD L. BERGMARK
-------------------------------------------------
Richard L. Bergmark
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 38
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
INCORPORATED BY
EXHIBIT REFERENCE FROM THE
NUMBER EXHIBIT TITLE FOLLOWING DOCUMENTS
------- ------------- -------------------
<C> <S> <C>
**1.1 -- Form of Underwriting Agreement..................
3.1 -- Articles of Association of the Company, as
amended (including English translation)......... Form F-1, September 20, 1995
4.1 -- Form of certificate representing Common
Shares.......................................... Form F-1, September 20, 1995
**5.1 -- Opinion of Nauta Dutilh.........................
10.1 -- Core Laboratories N.V. 1995 Long-Term Incentive
Plan (As Amended and Restated Effective as of
May 29, 1997)................................... Proxy Statement dated May 2,
1997 for Annual Meeting of
Shareholders
10.2 -- Core Laboratories N.V. 1995 Nonemployee Director
Stock Option Plan (As Amended and Restated
Effective as of May 29, 1997)................... Proxy Statement dated May 2,
1997 for Annual Meeting of
Shareholders
10.3 -- Form of Registration Rights Agreement entered
into by the Company and certain of its
shareholders, dated September 15, 1995.......... Form 10-Q, November 10, 1995
10.4 -- Purchase and Sale Agreement between Core
Holdings B.V. and Western Atlas International,
Inc., Western Atlas International, Nigeria Ltd.,
Western Atlas de Venezuela, C.A., Western Atlas
Canada Ltd. and Core Laboratories Australia Pty.
Ltd. dated as of September 30, 1994............. Form F-1, September 20, 1995
10.5 -- Non-competition Agreement between Western Atlas
International, Inc. and Core Holdings B.V. dated
as of September 30, 1994........................ Form F-1, September 20, 1995
10.6 -- Form of Indemnification Agreement entered into
by the Company and certain of its directors and
officers........................................ Form F-1, September 20, 1995
10.7 -- Indemnification Agreements, each dated as of
October 20, 1995, between the Company and each
of its directors and executive officers......... Form 10-Q, November 10, 1995
*10.8 -- Amended and Restated Credit Agreement among Core
Laboratories N.V., Core Laboratories Inc., Core
Laboratories (U.K.) Limited, Bankers Trust
Company, Nationsbank, N.A. and CIBC Inc., dated
as of July 18, 1997.............................
**23.1 -- Consent of Arthur Andersen LLP..................
**23.2 -- Consent of Grant Thornton LLP...................
**23.3 -- Consent of Price Waterhouse LLP.................
**23.4 -- Consent of Nauta Dutilh......................... Contained in Exhibit 5.1
*24.1 -- Powers of Attorney.............................. Included on the signature
page to this Registration
Statement
</TABLE>
- ---------------
* Previously filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 1.1
3,754,278 Shares
CORE LABORATORIES N.V.
Common Shares
(par value NLG 0.03 per share)
EQUITY UNDERWRITING AGREEMENT
-----------------------------
November __, 1997
BT Alex. Brown Incorporated
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
Morgan Keegan & Company, Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Brown Incorporated
One South Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Core Laboratories N.V., a Netherlands Naamloze Vennootschap (the
"Company"), and certain shareholders of the Company (the "Selling
Shareholders") propose to sell to the several underwriters named in Schedule I
hereto (the "Underwriters") for whom you are acting as representatives (the
"Representatives") an aggregate of 3,754,278 shares of the Company's Common
Shares, par value NLG 0.03 per share (the "Firm Shares"), of which 1,400,000
shares will be sold by the Company and 2,354,278 shares will be sold by the
Selling Shareholders. The respective amounts of the Firm Shares to be so
purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto, and the respective amounts to be sold by the Selling
Shareholders are set forth opposite their names in Schedule II hereto. The
Company and the Selling Shareholders are sometimes referred to herein
collectively as the "Sellers." The Company and certain of the Selling
Shareholders have granted to the Underwriters an option to purchase up to an
additional 563,142 Common Shares (the "Option Shares). The respective amounts of
the Option Shares to be sold by
<PAGE> 2
the Company and certain of the Selling Shareholders upon exercise in full of
such option are set forth opposite their names on Schedule III hereto.
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata
portion of the Option Shares if you elect to exercise the over-allotment option
in whole or in part for the accounts of the several Underwriters. The Firm
Shares and the Option Shares (to the extent the aforementioned option is
exercised) are herein collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
SHAREHOLDERS.
(a) The Company represents and warrants to each of the Underwriters,
as of the date hereof, as of the Closing Date (as defined below) and as of the
Option Closing Date (as defined below), as follows:
(i) A registration statement on Form S-3 (File No. 333-39265)
with respect to the Shares has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission. The
Company has complied with the conditions for the use of Form S-3.
Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the
Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to the Representatives. Such
registration statement, together with any registration statement filed
by the Company pursuant to Rule 462(b) of the Act, is herein referred
to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below. The Registration
Statement has become effective under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date
of this Agreement. "Prospectus" means the form of prospectus first
filed with the Commission pursuant to Rule 424 of the Rules and
Regulations. Each preliminary prospectus included in the Registration
Statement prior to the time it becomes effective is herein referred to
as a "Preliminary Prospectus." Any reference herein to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents incorporated by
reference therein and, in the case of any reference herein to any
Prospectus, also shall be deemed to include any documents incorporated
by reference therein, and any supplements or amendments thereto, filed
with the
2
<PAGE> 3
Commission after the date of filing of the Prospectus under Rules 424
or 430A, and prior to the termination of the offering of the Shares by
the Underwriters.
(ii) The Company is a Naamloze Vennootschap duly incorporated
and validly existing in good standing under the laws of The
Netherlands, with corporate power and authority to own or lease and
operate its properties and to conduct its business as described in the
Registration Statement. The Company is duly qualified to transact
business in all jurisdictions in which the conduct of its business
requires such qualification other than where the failure to be so
qualified could not reasonably be expected to have a material adverse
effect on the earnings, business, properties, assets, rights,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole or to prevent the consummation of the
transactions contemplated hereby.
(iii) The outstanding shares of Common Shares of the Company,
including all Shares to be sold by the Selling Shareholders, have been
duly authorized and validly issued and are fully paid and
non-assessable; the Shares to be issued and sold by the Company have
been duly authorized and when issued and paid for as contemplated
herein will be validly issued, fully paid and non-assessable. No
preemptive rights of shareholders exist with respect to any of the
Shares or the issue and sale thereof. Neither the filing of the
Registration Statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights, other than
those that have been waived or satisfied, for or relating to the
registration of any shares of Common Shares.
(iv) There are no outstanding securities of the Company
convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of capital stock of the Company and there
are no outstanding or authorized options, warrants or rights of any
character obligating the Company to issue any shares of its capital
stock (except (i) as described in or contemplated by the Prospectus
with respect to the two-for-one stock split of the outstanding Common
Shares, payable on December 19, 1997 to shareholders of record as of
the close of business on December 1, 1997, (ii) with respect to
options to purchase 74,896 Common Shares held by former holders of
options to purchase capital stock of ProTechnics Company and (iii)
with respect to outstanding options issued pursuant to the Company's
stock option plans) or any securities convertible or exchangeable into
or evidencing the right to purchase or subscribe for any shares of
such stock. In connection with this offering, the Company has not
offered and will not offer its Common Shares or any other securities
convertible into or exchangeable or exercisable for Common Shares in a
manner in violation of the Act. The Company has not distributed and
will not distribute any offering material other than the Prospectus in
connection with the offer and sale of the Shares.
(v) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct in all material
respects. All of the Shares conform in all material respects to the
description thereof contained in the Registration Statement. The form
of certificates for the Shares conforms in all material respects to
the corporate law of the jurisdiction of the
3
<PAGE> 4
Company's organization and, when executed and delivered in definitive
form, will be sufficient to convey the interest in the Company
purported to be evidenced thereby.
(vi) Each of the subsidiaries of the Company as listed in
Exhibit A hereto (collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as an entity in good standing
under the laws of the jurisdiction of its organization, with all power
and authority to own or lease and operate its properties and to
conduct its business as described in the Registration Statement. The
Subsidiaries are the only "significant subsidiaries" (as such term is
defined in the Rules and Regulations), direct or indirect, of the
Company. Each of the Subsidiaries is duly qualified to transact
business in all jurisdictions in which the conduct of such
Subsidiary's business requires such qualification other than where the
failure to be so qualified could not reasonably be expected to have a
material adverse effect on the earnings, business, properties, assets,
rights, operations or condition (financial or otherwise) of the Company
and its Subsidiaries taken as a whole or to prevent the consummation of
the transactions contemplated hereby. The outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company
or another Subsidiary free and clear of all security interests, liens,
encumbrances, equities and other claims, except as otherwise indicated
in Exhibit A hereto; no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Commission has not issued an order preventing or
suspending the use of the Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains, and the Prospectus and any amendments
or supplements thereto will contain, all statements that are required
to be stated therein by the requirements of the Act and the Rules and
Regulations; and the Registration Statement conforms, and the
Prospectus will conform, in all material respects to the requirements
of the Act and the Rules and Regulations. The documents incorporated
by reference in the Registration Statement and the Prospectus, at the
time filed with the Commission, conformed in all material respects to
the requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations of the Commission
thereunder, or the Act and the Rules and Regulations, as applicable.
The Registration Statement does not contain, and any amendment to the
Registration Statement will not contain, any untrue statement of a
material fact and does not omit, and will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus does not contain,
and any amendments or supplements to the Prospectus will not contain,
any untrue statement of material fact and does not omit, and will not
omit, to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
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<PAGE> 5
however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or
the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Company
by or on behalf of any Underwriter through the Representatives or by
or on behalf of the Selling Shareholders, specifically for use in the
preparation thereof.
(ix) There are no contracts or other documents that are
required by the Act or by the Rules and Regulations to be filed as
exhibits to the Registration Statement that have not been so filed.
The description in the Prospectus of material contracts and other
documents is accurate in all material respects; to the knowledge of
the Company, all material contracts described in or filed as exhibits
to the Registration Statement are in full force and effect on the date
hereof and are enforceable by the Company in accordance with their
respective terms; and neither the Company nor any of its Subsidiaries,
nor, to the Company's knowledge, any other party, is in breach of or
default under any such contracts.
(x) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules as
incorporated by reference in the Registration Statement, present
fairly the financial position and the results of operations and cash
flows of the Company and the consolidated Subsidiaries, at the
indicated dates and for the indicated periods. Such financial
statements and related schedules have been prepared in accordance with
generally accepted principles of accounting, consistently applied
throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such
periods have been made. The summary financial and statistical data
included or incorporated by reference in the Registration Statement
presents in all material respects the information shown therein and
such data has been compiled on a basis consistent with the financial
statements presented therein and the books and records of the Company.
The pro forma financial statements and other pro forma financial
information incorporated by reference in the Registration Statement
and the Prospectus present fairly the information shown therein, have
been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein, and, in the opinion
of the Company, the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions or circumstances referred to therein.
(xi) Arthur Anderson LLP, who have certified certain of the
financial statements filed with the Commission and incorporated by
reference in the Registration Statement, are independent public
accountants as required by the Act and the Rules and Regulations.
Grant Thornton LLP, who have certified the financial statements of
certain of the Subsidiaries that were used in preparing certain of the
financial statements referred to in the preceding sentence, are
independent public accountants as required by the Act and the Rules
and Regulations.
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<PAGE> 6
(xii) There is no action, suit, claim or proceeding pending
or, to the knowledge of the Company, threatened against the Company or
any of the Subsidiaries before any court or administrative agency or
otherwise that if determined adversely to the Company or any of its
Subsidiaries might result in any material adverse change in the
earnings, business, properties, assets, rights, operations or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole or to prevent the consummation of the transactions contemplated
hereby.
(xiii) The Company and the Subsidiaries have good and
indefeasible title to all of the properties and assets reflected in
the financial statements described in clause (x) above (or as
described in the Registration Statement), subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements (or as described in the
Registration Statement or in a document filed as an exhibit to the
Registration Statement) or that are not material in amount. The
Company and the Subsidiaries occupy their leased properties under
valid and binding leases.
(xiv) The Company and the Subsidiaries have filed all federal
state, local and foreign tax returns that have been required to be
filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith and for
which an adequate reserve for accrual has been established in
accordance with generally accepted accounting principles and except for
such taxes the nonpayment of which would not have a material adverse
affect on the earnings, business, properties, assets, rights,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole. All tax liabilities have been adequately
provided for in the financial statements of the Company, and the
Company does not know of any actual or proposed additional material tax
assessments.
(xv) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any
development involving a prospective material adverse change in or
affecting the earnings, business, properties, assets, rights,
operations or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material transaction
entered into or any material transaction that is probable of being
entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and changes and
transactions described in the Registration Statement, as it may be
amended or supplemented. The Company and the Subsidiaries have no
material contingent obligations that are required to be disclosed in
the Company's financial statements included or incorporated by
reference in the Registration Statement and are not so disclosed.
(xvi) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time, or both, will be in
violation of or in default under its charter, by-laws or other
governing documents or under any agreement, lease, contract,
indenture or other instrument
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<PAGE> 7
or obligation to which it is a party or by which it, or any of its
properties, is bound except for such violations or defaults that would
not reasonably be expected to have a material adverse effect on the
business, properties, assets, rights, operations or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (1) violate or conflict with
any provision of the charter, by-laws or other governing documents of
the Company or any of its Subsidiaries, (2) conflict with or result in
a breach of any of the terms or provisions of, or constitute a default
(or an event that, with the giving of notice or lapse of time, or both,
would constitute a default) under, or require, except for such consents
as have been obtained and are currently in effect, consent under, or
result in the creation or imposition of any lien, charge, security
interest or encumbrance upon any property or assets of the Company or
any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, franchise, license, permit or other agreement,
understanding or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them or their respective
properties or assets may be bound or (3) violate or conflict with any
judgment, decree, order, statute, rule or regulation applicable to the
Company or any Subsidiary of any court or of any public, governmental
or regulatory body or agency having jurisdiction over the Company or
any of its Subsidiaries or any of their respective properties or
assets, except for any such violation, conflict, breach, default or
lien specified in clause (1), (2) or (3) above as would, in the
aggregate, not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
(xvii) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD") or such
additional steps as may be necessary to qualify the Shares for public
offering by the Underwriters under state securities or Blue Sky laws)
has been obtained or made and is in full force and effect.
(xviii) The Company has timely filed all reports required to
be filed under the Act and the Rules and Regulations and the Exchange
Act and the rules and regulations promulgated thereunder; and all such
reports, and any amendments or supplements thereto, complied at the
time filed in all material respects with the provisions, as
appropriate, of the Act and the Rules and Regulations or the Exchange
Act and the rules and regulations promulgated thereunder.
(xix) The Company and each of its Subsidiaries own or possess
adequate rights to use all patents, trademarks, trademark
registrations, service marks, service mark registrations, trade names,
mask works, copyrights, licenses, inventions, trade secrets and rights
necessary for the conduct of their business as described in the
Prospectus, and the Company is not aware of any claim to the contrary
or any challenge by any other person to the rights of the
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<PAGE> 8
Company and each of its Subsidiaries with respect to the foregoing. To
the knowledge of the Company, the business of the Company and each of
the Subsidiaries as now conducted does not infringe or conflict with,
in any material respect, patents, trademarks, service marks, trade
names, mask works, copyrights, licenses, inventions, trade secrets or
other intellectual property or franchise rights of any person or
entity which infringement or conflict has not been resolved. No claim
has been made alleging the infringement by the Company or any
Subsidiary of any patent, trademark, service mark, trade name, mask
work, copyright, license, invention, trade secret or other
intellectual property or franchise right of any person or entity. The
Company or one of its Subsidiaries has clear title to its patents and
patent applications reflected in the financial statements described in
clause (x) above or discussed in the Registration Statement or the
Prospectus. The Company knows of no material infringement by others of
patents, trademarks, service marks, trade names, mask works,
copyrights, licenses, inventions, trade secrets or other intellectual
property or franchise rights owned by or licensed to the Company or
one of its Subsidiaries.
(xx) Neither the Company, nor to the Company's knowledge, any
of its Subsidiaries, has taken or may take, directly or indirectly,
any action designed to cause or result in, or that has constituted or
that might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Shares to facilitate
the sale or resale of the Shares. The Company acknowledges that the
Underwriters may engage in passive market making transactions in the
Shares on The NASDAQ Stock Market in accordance with Regulation M
under the Exchange Act.
(xxi) Neither the Company nor any Subsidiary is an
"investment company" within the meaning of such term under the
Investment Company Act of 1940, (as amended, the "1940 Act") and the
rules and regulations of the Commission thereunder.
(xxii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (1)
transactions are executed in accordance with management's general or
specific authorization; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and
(4) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiii) The Company and each of its Subsidiaries carry, or
are covered by, insurance issued by insurers of recognized financial
responsibility against such losses and risks and in such amounts as is
customary for companies of comparable size engaged in a similar
business; and neither the Company nor any such Subsidiary has any
reason to believe that it will not be able to renew its existing
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in any material adverse change
in the earnings, business, properties, assets, rights, operations or
condition (financial or otherwise) of the
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<PAGE> 9
Company and its Subsidiaries taken as a whole or to prevent the
consummation of the transactions contemplated hereby.
(xxiv) The Company and each of its Subsidiaries are in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company or any of its Subsidiaries would have any material
liability; neither the Company nor any of its Subsidiaries has
incurred or expects to incur material liability under (1) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (2) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any of its Subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, that would cause the loss of
such qualification.
(xxv) To the Company's knowledge, there are no affiliations
or associations between any member of the NASD and any of the
Company's officers, directors or 5% or greater securityholders.
(xxvi) To the Company's knowledge, no labor problem exists or
is imminent with respect to the Company's employees or employees of any
of the Subsidiaries that could reasonably be expected to have a
material adverse effect on the earnings, business, properties, assets,
rights, operations or condition (financial or otherwise) of the Company
and its Subsidiaries taken as a whole or to prevent the consummation of
the transactions contemplated hereby.
(xxvii) Neither the Company nor any of its Subsidiaries nor,
to the Company's knowledge, any officer or director purporting to act
on behalf of the Company or any of its Subsidiaries has at any time:
(1) made any contributions to any candidate for political office, or
failed to disclose fully any such contributions, in violation of law;
or (2) made any payment to any state, federal or foreign governmental
officer or official or other person charged with similar public or
quasi-public duties, other than payments required or allowed by
applicable law.
(xviii) Neither the Company nor any of its Subsidiaries is
required to register as a "broker" or "dealer" in accordance with the
provisions of the Exchange Act or the rules and regulations
promulgated thereunder.
(xxix) The Company and each of the Subsidiaries have complied
and will comply with all the provisions of Florida Statutes, Section
517.075 (Chapter 92-198, Laws of Florida). Neither the Company nor any
of its Subsidiaries does business with the government of Cuba or any
person or affiliate located in Cuba.
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<PAGE> 10
(xxx) Neither the Company nor any of its Subsidiaries is in
violation of (1) any applicable foreign, federal, state, provincial or
local laws or regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants, including, without limitation, the United
States Environmental Protection Act, the United States Toxic Substances
Control Act and the United States Occupational Safety and Health Act
(or their foreign equivalents) ("Environmental Laws"); (2) any
applicable foreign, federal, state, provincial or local laws or
regulations relating to discrimination in the hiring, promoting or
paying of employees; or (3) any applicable foreign, federal, state,
provincial or local wages and hours laws or regulations; which, in each
case, could reasonably be expected to have a material adverse effect on
the earnings, business, properties, assets, rights, operations or
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole or to prevent the consummation of the transactions
contemplated hereby.
(xxxi) The Company and each of its Subsidiaries have such
permits, licenses, certificates, franchises and authorizations of
governmental or regulatory authorities ("permits"), including, without
limitation, under any applicable Environmental Law, as are necessary to
own or lease and operate their properties and to conduct their
business, except for those permits, the absence of which could not
reasonably be expected to have a material adverse effect on the
earnings, business, properties, assets, rights, operations or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole or to prevent the consummation of the transactions contemplated
hereby; the Company and each of its Subsidiaries have fulfilled and
performed all material obligations with respect to such permits and no
event has occurred that allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit; and
such permits contain no restrictions that are burdensome to the Company
or any of its Subsidiaries, except for such restrictions that could not
reasonably be expected to have a material adverse effect on the
business or condition (financial or otherwise) of the Company or any of
its Subsidiaries taken as a whole.
(b) Each of the Selling Shareholders, severally and not jointly,
represents and warrants to each of the Underwriters, as of the date hereof, as
of the Closing Date and as of the Option Closing Date (with respect to those
Selling Shareholders offering Option Shares), as follows:
(i) Such Selling Shareholder has all requisite power,
authority, authorizations, approvals, orders and consents to enter
into this Agreement and the Letter of Transmittal and Custody
Agreement referred to below and to carry out the provisions and
conditions hereof and thereof.
(ii) This Agreement and the Letter of Transmittal and Custody
Agreement referred to below have been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder and each
constitutes a legal, valid and binding agreement of such Selling
Shareholder and is enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance,
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<PAGE> 11
moratorium or similar laws relating to or affecting creditors' rights
generally and by general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law)
and except as rights to indemnity and contribution hereunder may be
limited under applicable law.
(iii) All information pertaining to such Selling Shareholder
furnished in writing by the Selling Shareholder expressly for use in
the Registration Statement or the Prospectus did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading.
(iv) Such Selling Shareholder has and will have good and
valid title to the Firm Shares and any Option Shares to be sold by
such Selling Shareholder pursuant hereto, free and clear of all
security interests, liens, encumbrances, equities and other claims,
and full right, power and authority to effect the sale and delivery of
such Firm Shares and Option Shares; and upon the delivery of, against
payment for, such Firm Shares and Option Shares pursuant to this
Agreement, the Selling Shareholder will deliver to the Underwriters
good and valid title thereto, free and clear of all security
interests, liens, encumbrances, equities and other claims.
(v) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or that has
constituted, or that might reasonably be expected to cause or result
in the stabilization or manipulation of the price of the Common Shares
of the Company and, other than as permitted by the Act, the Selling
Shareholder will not distribute any prospectus or other offering
material in connection with the offering of the Shares.
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<PAGE> 12
2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Sellers
agree to sell to the Underwriters and each Underwriter agrees, severally and
not jointly, to purchase, at a price of $_____ per share, the number of Firm
Shares set forth opposite the name of each Underwriter in Schedule I hereof,
subject to adjustments in accordance with Section 9 hereof. The number of Firm
Shares to be purchased by each Underwriter from each Seller shall be as nearly
as practicable in the same proportion to the total number of Firm Shares being
sold by each Seller as the number of Firm Shares being purchased by each
Underwriter bears to the total number of Firm Shares to be sold hereunder. The
obligations of the Company and of each of the Selling Shareholders shall be
several and not joint.
(b) Certificates in negotiable form for the total number of the Shares
to be sold hereunder by the Selling Shareholders have been placed in custody
with Richard L. Bergmark as custodian (the "Custodian") pursuant to that
certain letter of transmittal and agreement between the Selling Shareholders
and the Custodian (the "Letter of Transmittal and Custody Agreement") executed
by each Selling Shareholder for delivery of all Firm Shares and any Option
Shares to be sold hereunder by the Selling Shareholders. Each of the Selling
Shareholders specifically agrees that the Firm Shares and any Option Shares
represented by the certificates held in custody for the Selling Shareholders
under the Letter of Transmittal and Custody Agreement are subject to the
interests of the Underwriters hereunder, that the arrangements made by the
Selling Shareholders for such custody are irrevocable to that extent, and that
the obligations of the Selling Shareholders hereunder shall not be terminable
by any act or deed of the Selling Shareholders (or by any other person, firm or
corporation including the Company, the Custodian or the Underwriters) or by
operation of law (including the death of an individual Selling Shareholder or
the dissolution of a corporate Selling Shareholder) or by the occurrence of any
other event or events, except as set forth in the Letter of Transmittal and
Custody Agreement. If any such event should occur prior to the delivery to the
Underwriters of the Firm Shares or the Option Shares hereunder, certificates
for the Firm Shares or the Option Shares, as the case may be, shall be
delivered by the Custodian in accordance with the terms and conditions of this
Agreement as if such event has not occurred. The Custodian is authorized to
receive and acknowledge receipt of the proceeds of sale of the Shares held by
it against delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made in
federal (same day) funds to an account designated by the Company for the shares
to be sold by it and to an account designated by the Custodian for the shares
to be sold by the Selling Shareholders, in each case against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of BT
Alex. Brown Incorporated at 10:00 a.m., New York time, on the third business
day after the date of this Agreement or at such other time and date not later
than five business days thereafter as the Representatives and the Company shall
agree upon, such time and date being herein referred to as the "Closing Date."
(As used herein, "business day" means a day on which the New York Stock
Exchange is open for trading and on which banks in New York are open for
business and not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such denominations and in
such registrations as the Representatives request in writing not later than the
second full business day prior
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<PAGE> 13
to the Closing Date, and will be made available for inspection by the
Representatives at least one business day prior to the Closing Date.
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and certain of the Selling Shareholders listed on Schedule III hereto
hereby grant an option to the several Underwriters to purchase the Option
Shares at the price per share as set forth in paragraph (a) of this Section 2.
The maximum number of Option Shares to be sold by the Company and the Selling
Shareholders is set forth opposite their respective names on Schedule III
hereto. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only
once thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company, the
Attorney-in-Fact and the Custodian setting forth the number of Option Shares as
to which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time and
date at which such certificates are to be delivered. If the option granted
hereby is exercised in part, the respective number of Option Shares to be sold
by the Company and each of the Selling Shareholders listed in Schedule III
hereto shall be determined on a pro rata basis in accordance with the
percentages set forth opposite their names on Schedule III hereto, adjusted by
you in such manner as to avoid fractional shares. The time and date at which
certificates for Option Shares are to be delivered shall be determined by the
Representatives but shall not be earlier than three nor later than 10 full
business days after the exercise of such option, nor in any event prior to the
Closing Date (such time and date being herein referred to as the "Option
Closing Date"). If the date of exercise of the option is three or more days
before the Closing Date, the notice of exercise shall set the Closing Date as
the Option Closing Date. The number of Option Shares to be purchased by each
Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters. You, as Representatives of the
several Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company and the
Attorney-in-Fact. To the extent, if any, that the option is exercised, payment
for the Option Shares shall be made on the Option Closing Date in federal (same
day) funds to an account designated by the Company for the shares to be sold by
it and to an account designated by the Custodian for the shares to be sold by
the Selling Shareholders, in each case against delivery of certificates
therefor at the offices of BT Alex. Brown Incorporated on the Option Closing
Date.
(e) If on the Closing Date or Option Closing Date, as the case may be,
any Selling Shareholder fails to sell the Firm Shares or Option Shares that
such Selling Shareholder has agreed to sell on such date as set forth in
Schedule II or Schedule III hereto, as applicable, the Company agrees that it
will sell or arrange for the sale of that number of shares of Common Shares to
the Underwriters that represents Firm Shares or the Option Shares that such
Selling Shareholder has failed to so sell, as set forth in Schedule II or
Schedule III hereto, as applicable, or such lesser number as may be requested
by the Representatives.
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3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for
the Underwriters in the offering and sale of the Shares in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.
(a) The Company covenants and agrees with each of the Underwriters
that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in
Rule 430A of the Rules and Regulations is followed, to prepare and
timely file with the Commission under Rule 424 of the Rules and
Regulations a Prospectus in a form approved by the Representatives
containing information previously omitted at the time of effectiveness
of the Registration Statement in reliance on Rule 430A of the Rules
and Regulations, (B) not file any amendment to the Registration
Statement or supplement to the Prospectus or document incorporated by
reference therein of which the Representatives shall not previously
have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or that is
not in compliance with the Rules and Regulations and (C) file on a
timely basis all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and prior to the termination
of the offering of the Shares by the Underwriters.
(ii) The Company will advise the Representatives promptly (A)
when the Registration Statement or any post-effective amendment
thereto shall have become effective, (B) of receipt of any comments
from the Commission, (C) of any request of the Commission for
amendment of the Registration Statement or for supplement to the
Prospectus or for any additional information and (D) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the use of the Prospectus or of the
institution of any proceedings for that purpose. The Company will use
its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as
soon as possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws
of such jurisdictions as the Representatives may reasonably have
designated in writing and will make such applications, file such
documents,
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<PAGE> 15
and furnish such information as may be reasonably required for that
purpose, provided the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction where it is not now so qualified or required to
file such a consent. The Company will, from time to time, prepare and
file such statements, reports, and other documents, as are or may be
required to continue such qualifications in effect for so long a
period as the Representatives may reasonably request for distribution
of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company
will deliver to, or upon the order of, the Representatives during the
period when delivery of a Prospectus is required under the Act, as
many copies of the Prospectus in final form, or as thereafter amended
or supplemented, as the Representatives may reasonably request. The
Company will deliver to the Representatives at or before the Closing
Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will
deliver to the Representatives such number of copies of the
Registration Statement (including such number of copies of the
exhibits filed therewith that may reasonably be requested), including
documents incorporated by reference therein, and of all amendments
thereto, as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of
the Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur
as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at
any time to amend or supplement the Prospectus to comply with any law,
the Company promptly will either (1) prepare and file with the
Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus or (2) prepare and file with the
Commission an appropriate filing under the Exchange Act that shall be
incorporated by reference in the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with the law.
(vi) The Company will make generally available to its
security holders, as soon as it is practicable to do so, but in any
event not later than 15 months after the effective date of the
Registration Statement, an earning statement (which need not be
audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the
Registration Statement, which earning statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations.
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(vii) Prior to the Closing Date, the Company will furnish to
the Underwriters, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim financial
statements of the Company for any period subsequent to the period
covered by the most recent financial statements included or
incorporated by reference in the Registration Statement or the
Prospectus.
(viii) The Company will not, for a period of 90 days
following the date of this Agreement, otherwise than hereunder or with
the prior written consent of BT Alex. Brown Incorporated, offer, sell
or contract to sell or otherwise dispose of, directly or indirectly,
any Common Shares of the Company or any securities convertible into,
or exchangeable or exercisable for, Common Shares, except for Common
Shares issued to certain persons in connection with Company
acquisitions, provided such persons agree to be bound by the terms
hereof.
(ix) The Company will use its best efforts to list, subject
to notice of issuance, the Shares on The NASDAQ Stock Market.
(x) The Company has caused the Company's Supervisory
Directors, executive officers and certain shareholders who in the
aggregate beneficially own 775,822 shares to furnish to the
Representatives, on or prior to the date of this Agreement, a letter
or letters, in form and substance satisfactory to the Underwriters,
pursuant to which each such person shall agree not to offer, sell or
contract to sell or otherwise dispose of, directly or indirectly, any
Common Shares of the Company, or any securities convertible into, or
exchangeable or exercisable for Common Shares, owned by such person or
request the registration for the offer or sale of any of the foregoing
(or as to which such person has the right to direct the disposition
of) for a period of 90 days following the date of this Agreement,
except with the prior written consent of BT Alex. Brown Incorporated
("Lockup Agreements").
(xi) The Company shall apply the net proceeds of its sale of
the Shares as set forth in the Prospectus.
(xii) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a
manner as would require the Company or any of the Subsidiaries to
register as an investment company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of organization of the Company, a
registrar for the Common Shares.
(xiv) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company to
facilitate the sale or resale of the Shares.
(b) Each of the Selling Shareholders covenants and agrees with each
of the Underwriters that:
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<PAGE> 17
(i) Such Selling Shareholder will not, for a period of 90
days following the date of this Agreement, otherwise than hereunder or
with the prior written consent of BT Alex. Brown Incorporated, offer,
sell or contract to sell or otherwise dispose of, directly or
indirectly, or request the registration for the offer or sale of any
of the foregoing (or as to which the Selling Shareholder has the right
to direct the disposition of) any Common Shares of the Company or any
securities convertible into, or exchangeable or exercisable for,
Common Shares.
(ii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax
Compliance Act of 1983 with respect to the transactions herein
contemplated, each of the Selling Shareholders agrees to deliver to
the Representatives prior to or at the Closing Date a properly
completed and executed United States Treasury Department Form W-8 or
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or
indirectly, any action designed to cause or result in, or that has
constituted or might reasonably be expected to constitute, the
stabilization or manipulation of the price of any securities of the
Company to facilitate the sale or resale of the Shares.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Company under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting
fees of the Company; the fees and disbursements of counsel for the Company and
the Selling Shareholders (except for the fees and disbursements of counsel for
First Britannia Mezzanine N.V.); the cost of printing and delivering to, or as
requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement, the Underwriters'
Invitation Letter, the Blue Sky Survey and any supplements or amendments
thereto; the filing fees of the Commission; the filing fees and expenses
(including reasonable fees and disbursements of counsel for the Underwriters)
incident to securing any required review by the NASD of the terms of the sale
of the Shares; the Listing Fee of the NASDAQ Stock Market; and the expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters, incurred in connection with the qualification of the Shares under
state securities or Blue Sky laws. To the extent, if at all, that any of the
Selling Shareholders engage special legal counsel to represent them in
connection with this offering, the fees and expenses of such counsel shall be
borne by such Selling Shareholder. If this Agreement shall not be consummated
because the conditions in Section 6 hereof are not satisfied, or because this
Agreement is terminated by the Representatives pursuant to Sections 11(a)(i),
11(a)(vi) and 11(b) hereof, or by reason of any failure, refusal or inability
on the part of the Company or the Selling Shareholders to perform any
undertaking or satisfy any condition of this Agreement or to comply with any of
the terms hereof on their part to be performed, unless such failure to satisfy
said condition or to comply with said terms be due to the default or omission
of any Underwriter, then the Company shall reimburse the several Underwriters
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<PAGE> 18
for reasonable out-of-pocket expenses, including reasonable fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company and the Selling Shareholders shall
not in any event be liable to any of the several Underwriters for damages on
account of loss of anticipated profits from the sale by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm
Shares on the Closing Date and the Option Shares, if any, on the Option Closing
Date are subject to the accuracy, as of the Closing Date or the Option Closing
Date, as the case may be, of the representations and warranties of the Company
and the Selling Shareholders contained herein, and to the performance by the
Company and the Selling Shareholders of their covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule
424 and Rule 430A of the Rules and Regulations shall have been made, and any
request of the Commission for additional information (to be included in the
Registration Statement or otherwise) shall have been disclosed to the
Representatives and complied with to their reasonable satisfaction. No stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
shall have been taken or, to the knowledge of the Company or the Selling
Shareholders, shall be contemplated by the Commission and no injunction,
restraining order, or order of any nature by a federal or state court of
competent jurisdiction shall have been issued as of the Closing Date that would
prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinions of Nauta Dutilh, special
Netherlands counsel to the Company, dated the Closing Date or the Option
Closing Date, as the case may be, addressed to the Underwriters (and stating
that it may be relied upon by Vinson & Elkins L.L.P., special U.S. counsel to
the Company, and by Andrews & Kurth L.L.P., counsel to the Underwriters) to
the effect that:
(i) The Company has been duly organized and is validly
existing as a Naamloze Vennootschap in good standing under the laws of
The Netherlands, with full corporate power and authority to own or
lease and operate its properties and to conduct its business as
described in the Registration Statement;
(ii) Each of Core Laboratories International B.V.
("CLI B.V.") and Saybolt International B.V. ("SI B.V.") has been duly
organized and is validly existing as a Besloten Vennootschap in good
standing under the laws of The Netherlands, with full corporate power
and authority to own or lease and operate its properties and to
conduct its business as described in the Registration Statement;
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<PAGE> 19
(iii) All the outstanding shares of capital stock of CLI
B.V. and SI B.V. have been duly authorized and validly issued and are
fully paid and non-assessable and, except as otherwise set forth in
the Registration Statement or Exhibit A to this Agreement, all
outstanding shares of capital stock of each of CLI B.V. and SI B.V.
are owned, directly or indirectly, by the Company free and clear of
security interests, liens, encumbrances, equities or other claims;
(iv) Except as disclosed or incorporated by reference in the
Registration Statement, there are no preemptive or other rights to
subscribe for or to purchase shares of capital stock of the Company
pursuant to any applicable statute, the Articles of Association or
other constituent documents of the Company or, to such counsel's
knowledge, any agreement or other instrument to which the Company is a
party as to which any person can successfully maintain an action, suit
or proceeding against the Company for violation of his or her
preemptive rights with respect to the issuance of any shares of
capital stock of the Company;
(v) All of the Company's issued and outstanding capital stock
has been duly authorized, validly issued and is fully paid and
non-assessable as of the date hereof and the capitalization of the
Company conforms in all material respects to the descriptions thereof
and the statements made with respect thereto in the Registration
Statement;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company and the Company has full corporate power and
authority to enter into the Agreement;
(vii) No consent, approval, authorization or order of any
court or governmental agency or body is required in connection with
the sale of the Shares pursuant to this Agreement, except such as may
be required under the securities and Blue Sky laws of any jurisdiction
in connection with the purchase and distribution of the Shares by the
Underwriters and such other approvals (specified in such opinion) as
have been obtained;
(viii) None of the execution and delivery of this Agreement,
the consummation of any other of the transactions herein contemplated,
or the fulfillment of the terms hereof, will result in a breach of, or
constitute a default under (a) any law, statute, rule, order,
regulation, consent or memorandum of understanding of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of the
Subsidiaries of which such counsel is aware and that is known by such
counsel to be applicable to the Company or any of the Subsidiaries
(where such conflict, breach or default would have a material adverse
effect on the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of
the Company and its Subsidiaries taken as a whole) or (b) the Articles
of Association of the Company;
(ix) The Shares have been duly and validly authorized by the
Company for issuance and the Company has full corporate power and
authority to issue, sell and deliver the Shares; and, when the Shares
are issued and delivered against payment therefor as provided in this
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<PAGE> 20
Agreement, the Shares will have been validly issued and will be fully
paid and non-assessable, and the issuance of such Shares will not be
subject to any statutory preemptive rights or similar statutory rights
or, to such counsel's knowledge, any other preemptive or similar
rights;
(x) The certificates for the Shares are in due and proper
form under the laws of The Netherlands and the Articles of Association
of the Company and conform with the form of certificates duly
authorized by the Board of Supervisory Directors of the Company. The
form of certificates for the Shares conforms to the corporate law of
the jurisdiction of the Company's organization and, when executed and
delivered in definitive form, will be sufficient to convey the
interest in the Company purported to be evidenced thereby;
(xi) The Shares, when issued, will conform in all material
respects to the description thereof contained in the Prospectus under
the caption "Description of Share Capital";
(xii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no outstanding
securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of
capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating the
Company to issue any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the right to purchase
or subscribe for any shares of such stock; and except as described in
the Prospectus, to the knowledge of such counsel, no holder of any
securities of the Company or any other person has the right,
contractual or otherwise, that has not been satisfied or effectively
waived, to cause the Company to sell or otherwise issue to them, or to
permit them to underwrite the sale of, any of the Shares or the right
to have any Common Shares or other securities of the Company included
in the Registration Statement or the right, as a result of the filing
of the Registration Statement, to require registration under the Act
of any shares of Common Shares or other securities of the Company; and
(xiii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
by the Selling Shareholders of the transactions on their part
contemplated by this Agreement in connection with the Shares to be
sold by the Selling Shareholders hereunder, except such as have been
obtained under the Act and such as may be required under the Blue Sky
laws of any jurisdiction in connection with the purchase and
distribution of such Shares by the Underwriters.
The opinions of such counsel may relate solely to, be based solely upon and be
limited exclusively to the laws of The Netherlands.
(c) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinions of Vinson & Elkins
L.L.P., counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, addressed to the Underwriters (and
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<PAGE> 21
stating that it may be relied upon by Andrews & Kurth L.L.P., counsel to the
Underwriters) to the effect that:
(i) Each of Core Laboratories, Inc., a Delaware corporation
("CLI"), and Saybolt Inc., a Delaware corporation ("SI"), has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its organization, with
corporate power and authority to own or lease and operate its
properties and conduct its business as described in the Registration
Statement;
(ii) All the outstanding shares of capital stock of CLI and
SI have been duly authorized and validly issued and are fully paid and
non-assessable, all outstanding shares of capital stock of CLI and SI
are owned, directly or indirectly, by the Company free and clear of
security interests, liens, encumbrances, equities or other claims,
except as otherwise set forth in the Registration Statement or Exhibit
A to this Agreement; and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligations into any shares of capital stock or of
ownership interests in CLI or SI are outstanding;
(iii) Each of CLI and SI is duly registered and qualified to
transact business in all jurisdictions in which the conduct of its
business requires such qualification, or in which the failure to
qualify would have a materially adverse effect upon the business of the
Company and the Subsidiaries taken as a whole;
(iv) The Registration Statement has become effective under
the Act and, to the best of the knowledge of such counsel, no stop
order proceedings with respect thereto have been instituted or are
pending or threatened under the Act;
(v) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by reference in
the Registration Statement or described in the Registration Statement
that are not so filed, incorporated by reference or described as
required;
(vi) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries required to be disclosed in the Prospectus that is not
adequately disclosed in the Prospectus;
(vii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not (1) violate or
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<PAGE> 22
conflict with any provision of the charter, by-laws or other governing
documents of the Company or any of its Subsidiaries, (2) conflict with
or result in a breach of any of the terms or provisions of, or
constitute a default (or an event that, with the giving of notice or
lapse of time, or both, would constitute a default) under, or require,
except for such consents as have been obtained and are currently in
effect, consent under, or result in the creation or imposition of any
lien, charge, security interest or encumbrance upon any property or
assets of the Company or any of its Subsidiaries pursuant to the terms
of any material indenture, mortgage, deed of trust, franchise,
license, permit or other agreement, understanding or instrument to
which the Company or any of its Subsidiaries is a party or by which
any of them or their respective properties or assets may be bound
which are identified on a schedule attached to such opinion or (3)
violate or conflict with any judgment, decree, order, statute, rule or
regulation of the United States, the State of Texas or the State of
Delaware applicable to the Company or any Subsidiary of any court or
of any public, governmental or regulatory body or agency having
jurisdiction over the Company or any of its Subsidiaries or any of
their respective properties or assets, which violation, conflict,
breach, default or lien would, in the aggregate, have a material
adverse effect on the Company and its Subsidiaries taken as a whole;
provided that no opinion is required to be given pursuant to this
subparagraph (viii) regarding federal or state securities laws;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body of the United States, the State of Texas or
the State of Delaware is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by the
NASD or as required by state securities and Blue Sky laws as to which
such counsel need express no opinion) except such as have been
obtained or made, specifying the same; and
(x) The Company is not, and will not become, as a result of
the consummation of the transactions contemplated by this Agreement,
and application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that such counsel is of the opinion that the
Registration Statement and the Prospectus (except the financial statements and
other information of an accounting, financial or statistical nature) appear on
their face to comply as to form in all material respects with the requirements
of the Act. In passing upon the form of the Registration Statement and the
Prospectus, such counsel may state that they have necessarily assumed the
correctness and completeness of the statements made therein and that, because
the primary purpose of our engagement was not to establish or confirm factual
matters of financial, accounting or statistical matters or related data and
because of the wholly or partially nonlegal character of many of the statements
contained in the Registration Statement and the Prospectus,
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<PAGE> 23
they are not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus. Such counsel may state that they have
not independently verified the accuracy, completeness or fairness of such
statements and, that without limiting the foregoing, they assume no
responsibility for and have not independently verified the accuracy,
completeness or fairness of the financial statements and supporting schedules
and other financial, accounting or statistical data and related data included
in the Registration Statement (or the exhibits to the Registration Statement,
as to which they have not been asked to comment), and that they have not
examined the accounting or financial records from which such financial
statements, schedules and related data are derived. Such counsel may note that,
although certain portions of the Registration Statement (including financial
statements and supporting schedules, and related data) have been included
therein on the authority of "experts" within the meaning of the Securities Act,
they are not experts with respect to any portion of the Registration Statement,
including, without limitation, such financial statements and supporting
schedules and related data and other financial, accounting or statistical data
included therein. Such counsel shall state, however, that they have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent
accountants of the Company and with representatives of the Underwriters, at
which the contents of the Registration Statement and Prospectus and related
matters were discussed, that they have also reviewed certain corporate
documents furnished to them by the Company, and, based on such participation
and review (relying as to materiality to a large extent upon the officers and
other representatives of the Company and upon representatives of the
Underwriters), no information has come to such counsel's attention that causes
them to believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, at its date or at
the date hereof, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they made,
not misleading.
(d) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinions of (1) Brown, Parker &
Leahy, L.L.P. and (2) Nauta Dutilh, each counsel for certain of the
Selling Shareholders, dated the Closing Date or the Option Closing Date, as the
case may be, addressed to the Underwriters (and stating that it may be relied
upon by Andrews & Kurth L.L.P., counsel to the Underwriters) to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Shareholders;
(ii) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by
state securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the portion
of the Shares to be sold by such Selling Shareholder;
(iii) The Letter of Transmittal and Custody Agreement
executed and delivered by each Selling Shareholder is valid and
binding; and
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<PAGE> 24
(iv) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code) have
acquired good and marketable title to the Shares being sold by each
Selling Shareholder on the Closing Date, and the Option Closing Date,
as the case may be, free and clear of all security interests, liens,
encumbrances, equities and other claims.
(e) The Representatives shall have received from Andrews & Kurth
L.L.P., counsel for the Underwriters, a favorable opinion dated the Closing
Date or the Option Closing Date, as the case may be, with respect to such
matters as may be reasonably requested by the Underwriters. In rendering such
opinion, Andrews & Kurth L.L.P. may rely as to all matters governed other than
by the general corporate laws of the State of Delaware and the laws of the
States of New York, Maryland and Texas or federal laws of the United States on
the opinions of counsel referred to in Paragraphs (b), (c) and (d) of this
Section 6. In addition, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel that leads them
to believe that (i) the Registration Statement, or any amendment thereto, as of
the time it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the Act) as of
the Closing Date or the Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) the Prospectus, or any supplement thereto, on the date it
was filed pursuant to the Rules and Regulations and as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact, necessary in order to make
the statements, in the light of the circumstances under which they are made,
not misleading (except that such counsel need express no view as to financial
statements, schedules and statistical information therein). With respect to
such statement, Andrews & Kurth L.L.P. may state that their belief is based
upon the procedures set forth therein, but is without independent check and
verification.
(f) The Representatives shall have received at or prior to the Closing
Date from Andrews & Kurth L.L.P. a memorandum or summary, in form and substance
satisfactory to the Representatives, with respect to the qualification for
offering and sale by the Underwriters of the Shares under state securities or
Blue Sky laws of such jurisdictions as the Representatives may reasonably have
designated to the Company.
(g) The Representatives shall have received, on each of the dates
hereof, the Closing Date and the Option Closing Date, as the case may be, a
letter dated the date hereof, the Closing Date or the Option Closing Date, as
the case may be, in form and substance reasonably satisfactory to you, of
Arthur Anderson LLP confirming that they are independent public accountants
within the meaning of the Act and the applicable Rules and Regulations
thereunder and stating that in their opinion the financial statements and
schedules examined by them and included or incorporated by reference in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as are
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and statistical
information included or incorporated by reference in the Registration Statement
or the Prospectus.
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(h) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Chief Executive Officer and the Chief Financial Officer of the Company to the
effect that, as of the Closing Date or the Option Closing Date, as the case may
be, each of them severally represents as follows:
(1) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have
been taken or are, to his knowledge, contemplated by the Commission.
(2) The representations and warranties of the Company
contained in Section 1 hereof are true and correct as of the Closing
Date or the Option Closing Date, as the case may be.
(3) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made.
(4) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, in his or her
opinion, there has not been any material adverse change or any
development involving a prospective material adverse change in or
affecting the condition (financial or otherwise) of the Company and
its Subsidiaries taken as a whole or the earnings, business,
properties, assets, rights, operations or condition (financial or
otherwise) of the Company and the Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business.
(i) The Company and the Selling Shareholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Representatives may reasonably have requested.
(j) The Firm Shares and Option Shares have been approved for listing
upon notice of issuance on the NASDAQ Stock Market.
(k) The Lockup Agreements described in Section 4(x) are in full force
and effect.
The opinions and certificates mentioned in this Agreement shall be
deemed to be in compliance with the provisions hereof only if they are in all
material respects satisfactory to the Representatives and to Andrews & Kurth
L.L.P., counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6
shall not have been fulfilled when and as required by this Agreement to be
fulfilled, the obligations of the Underwriters hereunder may be terminated by
the Representatives by notifying the Company and the Selling Shareholders of
such termination in writing or by telegram at or prior to the Closing Date or
the Option Closing Date, as the case may be. In such event, the Selling
Shareholders, the Company and
25
<PAGE> 26
the Underwriters shall not be under any obligation to each other (except to the
extent provided in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company agrees:
(1) to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of the
Act, and each Selling Shareholder and each person, if any, who
controls any Selling Shareholder within the meaning of the Act,
against any losses, claims, damages or liabilities to which such
Underwriter, such Selling Shareholder or any such controlling person
may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto, or (ii) the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading any
act or failure to act; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or
such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof;
provided, further, that the foregoing indemnity obligation with respect
to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages and liabilities purchased shares, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or
supplemented) was not sent or given by or on behalf of such Underwriter
to such person and if the Prospectus (as so amended or
26
<PAGE> 27
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities.
(2) to reimburse each Underwriter, each Selling Shareholder
and each such controlling person upon demand for any legal or other
out-of-pocket expenses reasonably incurred by such Underwriter, such
Selling Shareholder or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental
inquiry related to the offering of the Shares, whether or not such
Underwriter, such Selling Shareholder or controlling person is a party
to any action or proceeding. In the event that it is finally
judicially determined that the Underwriters, the Selling Shareholders
or such controlling persons were not entitled to receive payments for
legal and other expenses pursuant to this subparagraph, the
Underwriters, the Selling Shareholders or such controlling persons
will promptly return all sums that had been advanced pursuant hereto.
This indemnity obligation will be in addition to any liability that the Company
may otherwise have.
(b) Each Selling Shareholder agrees to indemnify the Underwriters and
each person, if any, who controls any Underwriter within the meaning of the
Act, and the Company and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages or liabilities to
which such Underwriter, the Company or controlling person may become subject
under the Act or otherwise insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof), arise out of or are
based on any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto or caused by any omission or
alleged omission to state therein, a material fact required to be stated therein
and necessary to make the statements therein not misleading, but only with
reference to information relating to such Selling Shareholder furnished to the
Underwriters or the Company in writing by such Selling Shareholder expressly for
use therein. In no event, however, shall the liability of any Selling
Shareholder for indemnification under this Section 8(a) exceed the proceeds,
less underwriting discounts and before expenses, received by such Selling
Shareholder from the Underwriters in the offering. This indemnity obligation
will be in addition to any liability that such Selling Shareholder and the
Company may otherwise have.
(c) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Shareholders, and each person,
if any, who controls the Company or the Selling Shareholders within the meaning
of the Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer, Selling Shareholder or controlling
person may become subject under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, any
Preliminary Prospectus, the Prospectus or any amendment or supplement thereto,
or (ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
27
<PAGE> 28
will reimburse any legal or other expenses reasonably incurred by the Company
or any such director, officer, Selling Shareholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each Underwriter will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives specifically for use in the preparation thereof. This indemnity
obligation will be in addition to any liability that such Underwriter may
otherwise have.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a), (b) or (c) shall be available to any party who shall fail to give notice
as provided in this Section 8(d) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability that it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a), (b) or (c). In
case any such proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party and shall pay as incurred the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel at its own expense.
Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or
within 30 days of presentation) the fees and expenses of the counsel retained
by the indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel,
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due
to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
reasonably acceptable to the indemnified party within a reasonable period of
time after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. Such
firm shall be designated in writing by the Representatives in the case of
parties indemnified pursuant to Section 8(a) or (b) and by the Company and the
Selling Shareholders in the case of parties indemnified pursuant to Section
8(c). The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. In addition, the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of
28
<PAGE> 29
which indemnification may be sought hereunder (whether or not any indemnified
party is an actual or potential party to such claim, action or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action
or proceeding.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Selling Shareholders on the one hand and the Underwriters on the other from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters on
the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Shareholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Selling Shareholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
8(e) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to above in
this Section 8(e). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 8(e) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts
and commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation, and (iii) no Selling Shareholder
shall be required to contribute any amount in excess of the proceeds, less
underwriting discounts and before expenses, received by such Selling
Shareholder from the
29
<PAGE> 30
Underwriters in the offering. The Underwriters' obligations in this Section
8(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any United States court having jurisdiction
over any other contributing party, agrees that process issuing from such court
may be served upon him or it by any other contributing party and consents to
the service of such process and agrees that any other contributing party may
join him or it as an additional defendant in any such proceeding in which such
other contributing party is a party. Solely for purposes of this Section 8(f),
the Company's United States agent for service of process is John D. Denson,
Core Laboratories Inc., 5295 Hollister Road, Houston, Texas 77040, or such
other person as is designated in writing by the Company.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company and the Selling Shareholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Company, its directors or officers
or any persons controlling the Company, or the Selling Shareholders or any
person controlling any Selling Shareholder (ii) acceptance of any Shares and
payment therefor hereunder, and (iii) the closing of the transactions
contemplated by this Agreement. A successor to any Underwriter, or to the
Company, its directors or officers, or any person controlling the Company, shall
be entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 8.
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be,
any Underwriter shall fail to purchase and pay for the portion of the Shares
that such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company or a
Selling Shareholder), you, as Representatives of the Underwriters, shall use
your reasonable efforts to procure within 36 hours thereafter one or more of
the other Underwriters, or any others, to purchase from the Company and the
Selling Shareholders such amounts as may be agreed upon and upon the terms set
forth herein, the Firm Shares or Option Shares, as the case may be, that the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, that they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
that such defaulting Underwriter or
30
<PAGE> 31
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the Company and the Selling Shareholders or you as
the Representatives of the Underwriters will have the right, by written notice
given within the next 36-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company or of the Selling Shareholders except to the
extent provided in Section 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing Date
or Option Closing Date, as the case may be, may be postponed for such period,
not exceeding seven days, as you, as Representatives, may determine in order
that the required changes in the Registration Statement or in the Prospectus or
in any other documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as
otherwise provided herein, will be mailed, delivered, telecopied or telegraphed
and confirmed as follows: if to the Underwriters, to BT Alex. Brown
Incorporated, One South Street, Baltimore, Maryland 21202, Attention: General
Counsel; with a copy to BT Alex. Brown Incorporated, One Bankers Trust Plaza,
130 Liberty Street, New York, New York 10006, Attention: General Counsel; if to
the Company, to Core Laboratories N.V. c/o Core Laboratories, Inc., 5295
Hollister Road, Houston, Texas 77040, Attention: General Counsel; or, if sent
to the Selling Shareholders, at their respective addresses set forth on
Schedule II hereto.
11. TERMINATION.
(a) This Agreement may be terminated by you, as Representatives, by
notice to the Company and the Sellers at any time prior to the Closing Date if
any of the following has occurred: (i) since the respective dates as of which
information is given in the Registration Statement, any material adverse change
or any development involving a prospective material adverse change in or
affecting the condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole or the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole, whether or not
arising in the ordinary course of business; (ii) any outbreak or escalation of
hostilities or declaration of war or national emergency or other national or
international calamity or crisis or change in economic or political conditions
if the effect of such outbreak, escalation, declaration, emergency, calamity,
crisis or change on the financial markets of the United States would, in your
reasonable judgment, make it impracticable or inadvisable to market the Shares
or to enforce contracts for the sale of the Shares; (iii) suspension of trading
in securities generally on the New York Stock Exchange or the American Stock
Exchange or limitation on prices (other than limitations on hours or numbers of
days of trading) for securities on either such Exchange; (iv) the enactment,
publication, decree or other promulgation of any statute, regulation, rule or
order of any court or other governmental authority that in your
31
<PAGE> 32
reasonable judgment materially and adversely affects or may materially and
adversely affect the business or operations of the Company; (v) declaration of
a banking moratorium by United States or New York State authorities; (vi) the
suspension of trading of the Company's Common Shares by the NASDAQ Stock
Market, the Commission or any other governmental authority; or (vii) the taking
of any action by any governmental body or agency in respect of its monetary or
fiscal affairs that in your reasonable opinion has a material adverse effect on
the securities markets in the United States; or
(b) as provided in Sections 6 of this Agreement; or
(c) as provided in Section 9 of this Agreement.
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company and the Selling Shareholders and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign merely because of such
purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Selling Shareholders and the Underwriters acknowledge
and agree that the only information furnished or to be furnished by any
Underwriter to the Company for inclusion in the Registration Statement consists
of the information set forth in the last paragraph on the front cover page
(insofar as such information relates to the Underwriters) of the Prospectus,
legends required by Item 502(d) of Regulation S-K under the Act and the
information in the third, seventh, eighth, ninth and tenth paragraphs under the
caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements
contained in this Agreement and the representations, warranties and covenants
in this Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of
any Underwriter or controlling person thereof, or by or on behalf of the
Company or its directors or officers or the Selling Shareholders and (c)
delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.
32
<PAGE> 33
If the foregoing letter is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders,
the Company and the several Underwriters in accordance with its terms.
33
<PAGE> 34
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Shareholder represents by so doing that he has been duly
appointed as Attorney-in-Fact by such Selling Shareholder pursuant to a validly
existing and binding power of attorney that authorizes such Attorney-in-Fact to
take such action.
Very truly yours,
CORE LABORATORIES N.V.
By:-------------------------------
David M. Demshur, President
Selling Shareholders listed on Schedule II
By:
[Attorney-in-Fact]
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
BT ALEX. BROWN INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, STEARNS & CO. INC.
MORGAN KEEGAN & COMPANY, INC.
As Representatives of the several
Underwriters listed on Schedule I
By: BT Alex. Brown Incorporated
By:
-----------------------------
Authorized Officer
34
<PAGE> 35
SCHEDULE I
----------
SCHEDULE OF UNDERWRITERS
<TABLE>
<CAPTION>
Number of Firm Shares
Underwriter to be Purchased
-----------
---------------------
<S> <C>
BT Alex. Brown Incorporated
Credit Suisse First Boston Corporation
Bear, Stearns & Co. Inc.
Morgan Keegan & Company, Inc.
----------
3,754,278
Total ----------
</TABLE>
Schedule I
<PAGE> 36
<TABLE>
<CAPTION>
SCHEDULE II
-----------
SCHEDULE OF SELLING SHAREHOLDERS
Number of Firm Shares
Selling Shareholder to be Sold
------------------- ---------------------
<S> <C>
First Britannia Mezzanine N.V. 2,100,000
de Ruyterkade 62
Curacuo, Netherlands Antilles
Juliet Challenger, Inc. 188,339
c/o Darlene Clarke
824 Market Street, Suite 900
Wilmington, Delaware 19801
cc: Russell Ayres
1900 Grant Building
Pittsburgh, Pennsylvania 15219
HCC Investments, Inc. 29,224
c/o Darlene Clarke
824 Market Street, Suite 900
Wilmington, Delaware 19801
cc: Russell Ayres
1900 Grant Building
Pittsburgh, Pennsylvania 15219
ProTechnics II (Nevada), Inc. 19,000
One East First Street
Suite 1404
Reno, Nevada 89503
Trustees of Grinnel College 6,470
1103 Park Street
Grinnel, Iowa 50112
Attention: David Clay, Treasurer
</TABLE>
Schedule II-1
<PAGE> 37
<TABLE>
<CAPTION>
SCHEDULE OF SELLING SHAREHOLDERS
(continued)
Number of Firm Shares
Selling Shareholder to be Sold
------------------- ---------------------
<S> <C>
4,471
Roger Samdahl
4130 Beebe Circle
San Jose, California 95135
Robert Hurst 2,744
322 South Colgate
Perryton, Texas 79070
Richard Lee Heine 1,000
2001 Commerce Street
Midland, Texas 79703
Banner Partners 814
c/o Bryan & Edwards
3000 Sand Hill Road
Building 1, Suite 190
Menlo Park, California 94025
Attention: Alan R. Brudos
Bryco Investments 814
c/o Bryan & Edwards
3000 Sand Hill Road
Building 1, Suite 190
Menlo Park, California 94025
Attention: Alan R. Brudos
Hubert L. Brown, Jr. 412
300 West Louisiana
Midland, Texas 79701
Greg T. Boser 300
406,206 7th Avenue S.W.
Calgary, Alberta T2P 0W7
</TABLE>
Schedule II-2
<PAGE> 38
<TABLE>
<CAPTION>
SCHEDULE OF SELLING SHAREHOLDERS
(continued)
Number of Firm Shares
Selling Shareholder to be Sold
------------------- ---------------------
<S> <C>
The Brown Children Trust #2 200
Elizabeth M. Brown, Trustee
c/o Hubert L. Brown, Jr.
300 West Louisiana
Midland, Texas 79701
Elizabeth Marie Brown, Hubert L. Brown, Jr. and
John F. Flynn, Trustees Under the Will of H.L. Brown 200
Elizabeth M. Brown, Trustee
c/o Hubert L. Brown, Jr.
300 West Louisiana
Midland, Texas 79701
Hillman 1985 Limited Partnership 20
c/o Darlene Clarke
824 Market Street, Suite 900
Wilmington, Delaware 19801
cc: Russell Ayres
1900 Grant Building
Pittsburgh, Pennsylvania 15219
TOTAL [ 2,354,278 ]
-------------------------
</TABLE>
Schedule II-3
<PAGE> 39
<TABLE>
<CAPTION>
SCHEDULE III
SCHEDULE OF OPTION SHARES
Maximum Number Percentage of
of Option Shares Total Number of
Name of Seller to be Sold Option Shares
- -------------- ---------------- ---------------
<S> <C>
Core Laboratories N.V. 225,257 40%
First Britannia Mezzanine N.V. 337,885 60%
---------------- --
TOTAL 563,142 100%
---------------- ---
</TABLE>
Schedule III
<PAGE> 40
EXHIBIT A
---------
SUBSIDIARIES
Subsidiary
- ----------
Core Laboratories, Inc.
Core Laboratories International B.V.
Saybolt International B.V.
Saybolt, Inc.
ProTechnics Company
Exhibit A
<PAGE> 1
[NAUTA DUTILH LETTERHEAD]
November 19, 1997
Core Laboratories N.V.
5295 Hollister Road
Houston, Texas 77040
Attention: John D. Denson, Esq.
Re: Core Laboratories N.V. ("the Company")
Dear Sirs:
At your request we have, as your legal counsel in The Netherlands, advised
on matters of Netherlands law in connection with the registration statement on
Form S-3 (Registration No. 333-39265) filed by the Company with the Securities
and Exchange Commission (the "Commission") on October 31, 1997 (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, as amended, of 4,439,221 common shares in the capital
of the Company ("Common Shares"), each such shares with a par value of NLG 0.03.
Capitalized terms used but not defined herein shall have the same meetings
as in the Registration Statement.
For the purposes of this opinion, we have examined and relied only on the
following documents:
(a) a faxed copy of the Registration Statement;
(b) a faxed copy of the prospectus included in such Registration Statement
(the "Prospectus"); and
(c) copies of the following documents in relation to the Company;
1. the deed of incorporation of the Company as a private company
with limited liability under Netherlands law ("besloten vennootscap met
beperkte aansprakelijkheid") under the name of Core Holdings B.V. with its
corporate seat at Amsterdam, The Netherlands, dated 8 August 1994,
incorporating the articles of association (statuten) of the Company;
<PAGE> 2
2. a notarial deed providing for the amendment of the articles
of association of the Company, dated 6 April 1995;
3. a notarial deed dated 31 August 1995, providing for the
conversion of the Company (following such conversion known as: "Core
Laboratories N.V.") into a company limited by shares ("naamloze
vennootschap") and embodying the new articles of association of the
Company;
4. written statements from all shareholders in the Company,
together constituting a unanimous resolution of the general meeting of
shareholders of the Company in favor of the contents of the notarial deed
mentioned in item 3 above;
5. a certificate, dated 31 August 1995, signed by Arthur
Andersen confirming that on the basis of their work, Arthur Andersen are
of the opinion that at 30 June 1995 the Company's (at that time Core
Holdings B.V.'s) shareholders' equity was at least equal to the paid-in
and called-up share capital, such certificate -- by virtue of the
provisions in Section 2:72 of the Dutch Civil Code -- having been attached
to the deed mentioned in item 3 above); and
6. a faxed copy of the resolutions adopted by the Board of
Supervisory Directors of the Company at a meeting held on 30 October 1997
authorizing, inter alia, the issue of the Common Shares (as defined in
such resolutions).
The documents referred to in paragraphs (a) and (b) inclusive above are
hereinafter referred to as the "Documents") and the documents referred to in
paragraph (c) above as the "Certificates."
In connection with such examination and in giving this opinion, we have
assumed:
(i) the genuineness of all signatures to all Documents and Certificates,
the authenticity and completion of all Documents and Certificate submitted
to us as originals, the completeness and the conformity to the original
documents of all Documents and Certificates submitted to us as faxed
copies or photocopies and the authenticity of such original documents;
(ii) the legal capacity ("handelingsbekwaamheid") of the natural
persons acting on behalf of any of the parties, the due incorporation and
valid existence of, the power, authority and legal rights of, and the due
authorization and execution of each of the Documents by, each of the
parties thereto (other than the Company) under any applicable law to
execute the Documents, to which it is a party and to perform its
obligations thereunder;
(iii) the due compliance with all matters of, and the validity,
binding effect and enforceability of, each of the Documents under, any
applicable law other than Netherlands law;
(iv) the accuracy, validity and binding effect of the
Certificates and the matters certified or evidenced thereby at the date
hereof and any other relevant date;
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(v) that payment for the Common Shares issued by the Company will not
be made by the Company or a Dutch subsidiary of the Company;
(vi) that the shares to be issued by the Company have been accepted;
and
(vii) that the resolutions referred to in item (c) 6 above are in
full force and effect.
This opinion shall be governed by and construed in accordance with
Netherlands law and is given only with respect to Netherlands law in effect on
the date of this opinion. We have not investigated the laws of any jurisdiction
other than The Netherlands, any representations or warranties made by the
parties to the Documents, any matters of fact, tax law, anti-trust law or
international law, including, without limitation, the law of the European
Community.
Based on and subject to the foregoing, and subject to the qualifications
set forth below, we express the following opinion:
The shares in the capital of the Company to be issued by the Company
or sold by the selling shareholders referred to in the Registration
Statement, as reflected in the Registration Statement, consisting of a
maximum of 4,439,221 common shares, when issued by the Company or sold by
the said selling shareholders, as applicable, in the manner and on the
terms as referred to in the Registration Statement and the Prospectus, will
be duly and validly issued and, subject to payment for such shares issued
by the Company, such shares will be fully paid and non-assessable.
The opinion expressed above is subject to the following qualifications:
We have assumed that any foreign law which may apply with respect to
the Documents or the transactions contemplated thereby would not be
such as to affect the opinion expressed herein.
We consent to the inclusion of this opinion as an Exhibit to the
Registration Statement. We further consent to all references to us in the
Registration Statement, the Prospectus and any amendments or supplements
thereto.
Very truly yours,
NAUTA DUTILH
By: ______________________________
C.A. Fonteijn
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EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 25,
1997, included in the Core Laboratories N.V. Form 10-K for the year ended
December 31, 1996 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Houston, Texas
November 18, 1997
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EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated July 19, 1996 accompanying the consolidated
financial statements of ProTechnics Company and subsidiaries as of and for the
years ended March 31, 1996 and 1995. The consolidated financial statements of
ProTechnics Company and subsidiaries are not presented separately, but are
included in the financial statements in the Annual Report on Form 10-K of Core
Laboratories N.V. for the year ended December 31, 1996. We consent to the
incorporation by reference in the Registration Statement of the aforementioned
report and to the use of our name as it appears under the caption "Experts."
GRANT THORNTON LLP
Houston, Texas
November 18, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the Incorporation by reference in the Prospectus on
Form S-3 of Core Laboratories N.V. of our report dated April 1, 1997 relating to
the consolidated financial statements of Saybolt International B.V., which
appears in the Current Report on Form 8-K/A of Core Laboratories N.V. dated July
21, 1997. We also consent to the reference to us under the heading "Experts" in
such Prospectus.
PRICE WATERHOUSE LLP
Morristown, NJ
November 18, 1997
