================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 12, 1997
CORE LABORATORIES N.V.
(Exact name of registrant as specified in its charter)
THE NETHERLANDS NOT APPLICABLE
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
0-26710
(Commission File Number)
HERENGRACHT 424
1017 BZ AMSTERDAM
THE NETHERLANDS NOT APPLICABLE
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (31-20) 420-3191
================================================================================
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 12, 1997, Core Laboratories N.V. (the "Company") consummated the
acquisition of Saybolt International B.V. for $67 million in cash and the
assumption of approximately $5 million of net debt. Saybolt International B.V.,
and its subsidiaries ("Saybolt") provide analytical and field services to
characterize and test crude oil and petroleum products to the oil industry.
Saybolt operates in over 40 countries and has approximately 1,650 employees.
Saybolt reported revenues of $105,358,000, $97,803,000 and $90,258,000 in 1996,
1995 and 1994, respectively. The transaction was accounted for under the
purchase method and financed using additional borrowings. Accordingly, due to
the acquisition exceeding 20% of the Company's assets at December 31, 1996, as
required in Rule 3-05 of Regulation S-X, the Company will file within 60 days
certain required financial statements and proforma information.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
The Company will file within sixty (60) days the required financial
statements of the acquired business.
(b) Pro forma financial information.
The Company will file within sixty (60) days the required pro forma
financial statements.
(c) Exhibits.
The following exhibits are filed herewith:
10.1 Credit Agreement among Core Laboratories N.V., Core Laboratories,
Inc., Core Laboratories (U.K.) Limited, Bankers Trust Company, and
NationsBank, N.A., dated as of May 12, 1997.
10.2 Stock Purchase Agreement among Core Laboratories N.V., Saybolt
International B.V. and the shareholders of Saybolt International
B.V., dated as of April 16, 1997.
10.3 Employment agreement among Saybolt Netherlands B.V. and Frerik
Pluimers dated as of May 12, 1997.
10.4 Escrow Agreement among Core Laboratories N.V., each of the
shareholders of Saybolt International B.V. and Chase Manhattan Bank
dated as of May 12, 1997.
99.1 News Release of Core Laboratories N.V. regarding the acquisition of
Saybolt dated May 12, 1997.
1
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CORE LABORATORIES N.V.
by: Core Laboratories International B.V.
Dated: May 23, 1997 By: /s/ RICHARD L. BERGMARK
Richard L. Bergmark
Chief Financial Officer and Treasurer
(Principal Financial Officer and
Chief Accounting Officer)
EXHIBIT 10.1
CREDIT AGREEMENT
$55,000,000.00 TERM LOAN, $30,000,000 REVOLVING CREDIT LOAN AND
$5,000,000 DUTCH GUILDER EQUIVALENT REVOLVING LOAN TO
CORE LABORATORIES N.V.,
$20,000,000 REVOLVING CREDIT LOAN TO
CORE LABORATORIES, INC.,
AND
$15,000,000 BRITISH POUNDS STERLING EQUIVALENT TERM LOAN TO
CORE LABORATORIES (U.K.) LIMITED,
AS BORROWERS,
THE BANKS NAMED HEREIN,
AND
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT
AND
NATIONSBANK, N.A.
AS SYNDICATION AGENT AND ISSUING BANK
DATED AS OF MAY 12, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
PRELIMINARY STATEMENT..........................................................1
ARTICLE I DEFINITIONS, ETC.........................................1
Section 1.01. Certain Defined Terms...................................1
Section 1.02. Accounting Terms........................................1
Section 1.03. Computation of Time Periods.............................2
Section 1.04. References, Etc.........................................2
ARTICLE II COMMITMENTS AND TERMS OF CREDIT..........................3
Section 2.01. Commitments.............................................3
Section 2.02. Borrowing Procedures; Conversions.......................5
Section 2.03. Issuing and Reimbursing the Letters of Credit...........7
Section 2.04. The Notes..............................................11
Section 2.05. Reduction of the Commitments...........................11
Section 2.06. Mandatory Repayment of Loans...........................12
Section 2.07. Interest Accrual, Payments.............................14
Section 2.08. Optional Prepayments...................................16
Section 2.09. Payments, Notice of Certain Repayments and
Computations.........................................16
Section 2.10. Fees...................................................18
Section 2.11. Setoff, Counterclaims and Taxes........................19
Section 2.12. Funding Losses.........................................22
Section 2.13. Change of Law..........................................22
Section 2.14. Increased Costs........................................23
Section 2.15. Claims Certificate.....................................24
ARTICLE III CONDITIONS OF CREDIT.............................26
Section 3.01. Conditions Precedent to Effectiveness, the
Initial Borrowing....................................26
Section 3.02. Conditions Precedent to All Letters of Credit
and Loans............................................28
ARTICLE IV REPRESENTATIONS AND WARRANTIES..........................29
Section 4.01. Corporate Existence....................................29
Section 4.02. Corporate Authority; Binding Obligations...............29
Section 4.03. No Conflict............................................29
Section 4.04. No Consent.............................................30
Section 4.05. No Defaults or Violations of Law.......................30
Section 4.06. Financial Position.....................................30
Section 4.07. Litigation.............................................31
Section 4.08. Use of Proceeds........................................31
Section 4.09. Governmental Regulation................................31
-i-
<PAGE>
Section 4.10. Disclosure.............................................32
Section 4.11. ERISA..................................................32
Section 4.12. Payment of Taxes.......................................33
Section 4.13. Title and Liens........................................33
Section 4.14. Patents and Intellectual Property. ....................33
Section 4.15. Environmental Matters..................................33
Section 4.16. Security Interests.....................................34
Section 4.17. Labor Relations........................................34
Section 4.18. No Material Adverse Change.............................34
Section 4.19. Credit Parties as Percentage of Consolidated Entity....35
ARTICLE V AFFIRMATIVE COVENANTS...................................36
Section 5.01. Reporting Requirements.................................36
Section 5.02. Taxes; Claims..........................................39
Section 5.03. Compliance with Laws...................................39
Section 5.04. Insurance..............................................39
Section 5.05. Existence..............................................39
Section 5.06. Inspections............................................40
Section 5.07. Maintenance of Properties..............................40
Section 5.08. Accounting Systems.....................................40
Section 5.09. Use of Loans...........................................40
Section 5.10. Additional Guarantees and Stock Pledges................40
Section 5.11. Further Assurances in General..........................41
ARTICLE VI NEGATIVE COVENANTS......................................42
Section 6.01. Indebtedness Restriction...............................42
Section 6.02. Lien Restriction.......................................43
Section 6.03. Derivatives............................................44
Section 6.04. Financial Covenants....................................44
Section 6.05. Sales of Assets........................................45
Section 6.06. Consolidation and Mergers..............................45
Section 6.07. Restricted Disbursements...............................45
Section 6.08. Lines of Business......................................46
Section 6.09. Transactions with Affiliates...........................46
Section 6.10. Restrictions on Subsidiaries...........................47
ARTICLE VII DEFAULT AND REMEDIES....................................48
Section 7.01. Events of Default......................................48
Section 7.02. Setoff in Event of Default.............................51
Section 7.03. No Waiver; Remedies....................................51
Section 7.04. Enforcement............................................51
-ii-
<PAGE>
ARTICLE VIII THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT AND THE ISSUING BANK..................52
Section 8.01. Authorization and Action...............................52
Section 8.02. Reliance, Etc..........................................52
Section 8.03. Agents, Affiliates and Other Activities................53
Section 8.04. Bank Credit Decision...................................54
Section 8.05. Indemnification........................................54
Section 8.06. Employees..............................................55
Section 8.07. Successor Administrative Agent.........................55
Section 8.08. Successor Syndication Agent and Issuing Bank...........56
Section 8.09. Notice of Default......................................57
Section 8.10. Execution of Loan Documents............................57
ARTICLE IX GUARANTY................................................58
Section 9.01. Guaranty...............................................58
Section 9.02. Guaranty Absolute......................................58
Section 9.03. Waiver.................................................59
Section 9.04. Subrogation............................................60
Section 9.05. Continuing Guaranty....................................60
Section 9.06. Effect of Bankruptcy Proceeding........................60
Section 9.07. Further Responsibilities...............................61
Section 9.08. Subordination..........................................61
ARTICLE X MISCELLANEOUS...........................................62
Section 10.01. Amendments, Etc.......................................62
Section 10.02. Participation Agreements and Assignments;
Inter-Creditor Matters...............................62
Section 10.03. Notices...............................................65
Section 10.04. Costs and Expenses....................................67
Section 10.05. Successors and Assigns................................68
Section 10.06. Survival of Representations and Warranties............68
Section 10.07. Separability..........................................68
Section 10.08. Captions..............................................68
Section 10.09. Counterparts and Facsimile Signatures.................68
Section 10.10. Governing Law.........................................69
Section 10.11. Waiver of Jury Trial..................................69
Section 10.12. Submission to Jurisdiction............................69
Section 10.13. Limitation on Interest................................70
Section 10.14. Indemnification.......................................71
Section 10.15. Confidentiality.......................................72
Section 10.16. Judgment..............................................73
Section 10.17. Final Agreement of the Parties........................73
-iii-
<PAGE>
ANNEXES; EXHIBITS AND SCHEDULES
Annex A Definitions
Exhibit 1.01-C Form of Subordination Agreement
Exhibit 2.02 Form of Borrowing Request
Exhibit 2.02 Form of Conversion Notice
Exhibit 2.03 Form of Letter of Credit Request
Exhibit 2.04(a) Form of Tranche A Note
Exhibit 2.04(b) Form of Tranche B Note
Exhibit 2.04(c) Form of Revolving Note
Exhibit 2.04(d) Form of Guilder Note
Exhibit 3.01(f) Letter of Termination
Exhibit 3.01(n) Form of Contribution and Indemnity Agreement
Exhibit 10.02 Form of Assignment and Acceptance Agreement
Schedule 1.01-A Agent Account
Schedule 1.01-B Borrower Account
Schedule 1.01-C Existing Letters of Credit
Schedule 4.01 Subsidiaries of the Parent and Related Information
Schedule 4.07 Litigation
Schedule 4.15 Environmental Disclosures
Schedule 5.10 Additional Guarantors
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.07(j) Existing Investments
Schedule 10.12 Address of Guarantors
-iv-
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of May 12, 1997 is among CORE
LABORATORIES N.V., a Netherlands limited liability company (the "PARENT"), CORE
LABORATORIES, INC., a Delaware corporation (the "US BORROWER"), CORE
LABORATORIES (U.K.) LIMITED, a company organized under the laws of England and
Wales (the "UK BORROWER" and, together with the Parent and the US Borrower, the
"BORROWERS"), the banks named on the signature pages hereto (together with their
respective successors and assigns in such capacity, the "BANKS"), BANKERS TRUST
COMPANY, as administrative agent for the Banks (together with its successors and
assigns in such capacity, the "ADMINISTRATIVE AGENT") and NATIONSBANK, N.A., as
syndication agent for the Banks (together with its successors and assigns in
such capacity, the "SYNDICATION AGENT"), as the issuing bank with respect to the
Letters of Credit issued hereunder (together with its successors and assigns in
such capacity, the "ISSUING BANK"). Unless otherwise defined herein, all
capitalized terms used herein and defined in ARTICLE I are used herein as so
defined.
PRELIMINARY STATEMENT
The Borrowers have requested that the Banks provide (a) the
Parent with: (i) a $55,000,000 term loan facility, (ii) a $5,000,000 Equivalent
Dutch Guilder revolving credit facility and (iii) a $30,000,000 revolving credit
facility, (b) the US Borrower with a $20,000,000 revolving credit facility
providing for letters of credit and revolving loans, and (c) the UK Borrower
with a $15,000,000 Equivalent Pounds Sterling term loan facility, each of which
will be used as specified herein. The Banks have agreed to provide the Borrowers
with such credit facilities upon the terms and conditions set forth in this
Agreement.
Accordingly, in consideration of the foregoing and the mutual
covenants set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS, ETC.
Section 1.01. CERTAIN DEFINED TERMS. Capitalized terms used in
this Agreement and not otherwise defined herein, shall have the respective
meanings set forth in ANNEX A (such meanings to be equally applicable to both
singular and plural forms of the terms defined).
Section 1.02. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed, and all financial calculations
shall be made, in accordance with GAAP consistent with those applied in the
preparation of the consolidated financial statements referred to in SECTION
4.06, PROVIDED, if any accounting changes made by any Borrower that are allowed
or required by GAAP result in the calculations that are utilized to compute the
compliance with
-1-
<PAGE>
SECTION 6.04 being inconsistent with such prior calculations, the affected
Borrower agrees to negotiate in good faith with the Administrative Agent and the
Syndication Agent to re-establish appropriate, meaningful ratios and covenants.
Section 1.03. COMPUTATION OF TIME PERIODS. In this Agreement in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each means "to but excluding."
Section 1.04. REFERENCES, ETC. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement or any Annex
or Exhibit attached hereto shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. All references herein to Articles,
Sections, Annexes, Exhibits and Schedules shall, unless the context requires a
different construction, be deemed to be references to the Articles and Sections
of this Agreement and the Annexes, Exhibits and Schedules attached hereto and
made a part hereof. In this Agreement, unless a clear contrary intention
appears, the word "including" (and with correlative meaning "include") means
including, without limiting the generality of any description preceding such
term. No provision of this Agreement shall be interpreted or construed against
any Person solely because that Person or its legal representative drafted such
provision.
-2-
<PAGE>
ARTICLE II
COMMITMENTS AND TERMS OF CREDIT
Section 2.01. COMMITMENTS. (a) TRANCHE A LOAN. Each Bank
severally agrees, on the terms and conditions hereinafter set forth, to make a
term loan to the Parent (a "TRANCHE A LOAN") on or promptly after the Effective
Date in an amount not to exceed such Bank's Tranche A Commitment. Each Tranche A
Loan shall be made as a Base Rate Loan or a Eurocurrency Rate Loan and as part
of a maximum of two Tranche A Borrowing made by the Banks ratably according to
their respective Commitment Percentages. Tranche A Loans, once repaid, may not
be reborrowed. Funding and maintenance of the Tranche A Loans shall be in
Dollars.
(b) TRANCHE B LOAN. Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make a term loan to the UK Borrower (a
"TRANCHE B LOAN") on or promptly after the Effective Date in an amount not to
exceed the Pounds Sterling Equivalent of such Bank's Tranche B Commitment as of
the Date of Determination. Each Tranche B Loan shall be made as a Eurocurrency
Rate Loan and as part of a maximum of two Tranche B Borrowing made by the Banks
ratably according to their respective Commitment Percentages. Tranche B Loans,
once repaid, may not be reborrowed. Subject to SECTION 2.13(A), funding and
maintenance of the Tranche B Loans shall be in Pounds Sterling.
(c) DOLLAR REVOLVING LOANS. (i) Each Bank severally agrees, on
the terms and conditions hereinafter set forth, to make one or more loans (each
a "DOLLAR REVOLVING LOAN") to the Parent and US Borrower from time to time on
any Business Day during the period from the Effective Date up to, but excluding,
the Termination Date in an aggregate amount outstanding for such Bank not to
exceed at any time an amount equal to such Bank's Dollar Revolving Commitment;
PROVIDED HOWEVER, that the portion of the Total Dollar Revolving Commitment
allocated to the Parent shall be $30,000,000 and the portion of the Total Dollar
Revolving Commitment allocated to the US Borrower shall be $20,000,000; and
neither such Borrower may borrow Dollar Revolving Loans if the aggregate amount
of all such Dollar Revolving Loans would be in excess of its allocated portion
of the Total Dollar Revolving Commitment. Each Dollar Revolving Loan shall be
made as either a Base Rate Loan or a Eurocurrency Rate Loan and as part of a
single Borrowing made on the same day by the Banks ratably according to their
respective Commitment Percentages. Each Base Rate Borrowing of Dollar Revolving
Loans shall be in an aggregate amount not less than $1,000,000, and in integral
multiples of $200,000 in excess thereof or, if less, the entire unfunded portion
of the Total Dollar Revolving Commitment. Each Eurocurrency Rate Borrowing of
Dollar Revolving Loans shall be in an aggregate amount not less than $1,000,000
and, in an integral multiple of $200,000 in excess thereof. Within the limits
set forth above and subject to the terms and conditions of this Agreement, the
Parent and the US Borrower may borrow, repay pursuant to SECTION 2.06 or prepay
pursuant to SECTION 2.08 and reborrow under this SECTION 2.01(C). All funding
and maintenance of the Dollar Revolving Loans shall be in Dollars.
-3-
<PAGE>
(ii) The Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue standby or commercial letters of credit for the
account of the US Borrower, on behalf of it or any of its Affiliates and for the
benefit of any obligee of payment obligations of the US Borrower or any of its
Affiliates (the "LETTERS OF CREDIT") from time to time on any Business Day
during the period from the Effective Date up to, but excluding, the Termination
Date in an aggregate amount for all Outstanding Letters of Credit not exceeding
at any time the Letter of Credit Sublimit. Subject to SECTION 2.01(C)(III), a
Letter of Credit shall be denominated in any currency requested by the US
Borrower and agreeable to the Issuing Bank, shall expire no later than the date
set forth in SECTION 2.03(A), and shall be in such form as approved from time to
time by the Issuing Bank and the US Borrower. Each Bank severally agrees, on the
terms and conditions hereinafter set forth, to purchase participations in the
Letters of Credit issued by the Issuing Bank pursuant to this Agreement in an
amount equal to such Bank's Commitment Percentage in respect of the Total Dollar
Revolving Commitment of the face amount of such Letter of Credit. Upon the
issuance of each Letter of Credit and as of the Effective Date with respect to
the Existing Letters of Credit, the Issuing Bank shall be deemed, without
further action by any party hereto, to have sold to each Bank, and each Bank
shall be deemed, without further action by any party hereto, to have purchased
from the Issuing Bank, a participation, to the extent of such Bank's Commitment
Percentage in respect of the Total Dollar Revolving Commitment, in such Letter
of Credit and the Existing Letters of Credit, the obligations of the Issuing
Bank thereunder and in the reimbursement obligations of the US Borrower due in
respect of drawings made under such Letter of Credit or the Existing Letters of
Credit. The Banks will execute any other documents the Issuing Bank may
reasonably request to evidence the purchase of such participation. On each day
during the period commencing with the issuance by the Issuing Bank of any Letter
of Credit and as of the Effective Date with respect to the Existing Letters of
Credit and ending on the date when such Letter of Credit or Existing Letters of
Credit shall have expired or been terminated, and, irrespective of whether such
Letter of Credit or Existing Letters of Credit have expired or terminated if
such Letter of Credit or Existing Letters of Credit have been drawn upon and the
amount so drawn has not been reimbursed to the Issuing Bank, the Dollar
Revolving Commitment of each Bank shall be deemed to be utilized for all
purposes hereof in an amount equal to such Bank's Commitment Percentage in
respect of the Total Dollar Revolving Commitment of the Outstanding Letters of
Credit.
(iii) In regard to any Letter of Credit issued in a currency
other than Dollars, the following shall apply: (x) any presentation thereof
resulting in payments by the Issuing Bank thereunder shall be repaid to said
Issuing Bank, at the option of the US Borrower, in the currency in which said
payments were made by the Issuing Bank or in Dollars calculated on the date of
US Borrower's repayment thereof, (y) if the US Borrower tenders Dollars for the
Reimbursement Amount, then, unless such tender results in the actual receipt by
the Issuing Bank (acting reasonably and in good faith in converting such Dollars
into the currency in which said payments were made by the Issuing Bank) of the
Reimbursement Amount, the US Borrower shall also promptly pay to the Issuing
Bank an additional amount in Dollars as may be necessary to compensate and
indemnify the Issuing Bank for such shortfall (and if, for any reason, the
amount in Dollars so received exceeds the Reimbursement Amount, the Issuing Bank
will refund such excess), and (z) all calculations required by SECTION
2.01(C)(IV) shall be made, calculating the Dollar Equivalent of such non-Dollar
-4-
<PAGE>
Outstanding Letters of Credit as of the date of each such Borrowing Request or
Letter of Credit Request.
(iv) Notwithstanding any other term or provision hereof (A) no
Dollar Revolving Loan shall be made and no Letter of Credit shall be issued if
after giving effect thereto the aggregate amount of the Dollar Revolving Credit
Outstanding (not including Letters of Credit issued under SECTION 6.01(G)) would
exceed the Total Dollar Revolving Commitment; and (B) no Letter of Credit shall
be issued if, after giving effect thereto the aggregate amount of Outstanding
Letters of Credit would exceed the Letter of Credit Sublimit.
(d) GUILDER REVOLVING LOANS. Each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make one or more loans (each a
"GUILDER REVOLVING LOAN") to the Parent from time to time on any Business Day,
during the period from the Effective Date up to but excluding the Termination
Date, in an aggregate amount outstanding for such Bank not to exceed at any
time, such Bank's Guilder Revolving Commitment, determined by reference to the
Equivalent thereof in Dollars on the relevant Date of Determination. Each
Guilder Revolving Loan shall be made as a Eurocurrency Rate Loan and as part of
a single Borrowing made on the same day by the Banks ratably according to their
respective Commitment Percentages. Each Borrowing of Guilder Revolving Loans
shall be in an aggregate amount not less than the Equivalent in Dutch Guilders
of $800,000 as of the Date of Determination and, in an integral multiple of the
Equivalent in Dutch Guilders of $200,000 in excess thereof. Within the limits
set forth above and subject to the terms and conditions of this Agreement, the
Parent may borrow, repay pursuant to SECTION 2.06 or prepay pursuant to SECTION
2.08 and reborrow under this SECTION 2.01(D). Subject to SECTION 2.13(A),
funding and maintenance of Guilder Revolving Loans shall be in Dutch Guilders.
(e) All Existing Letters of Credit, whether or not issued by the
Issuing Bank, shall be deemed to be Letters of Credit hereunder. Upon the
expiration of any Existing Letter of Credit, same shall be reissued only by the
Issuing Bank (or may be issued or reissued by another financial institution in
accordance with SECTION 6.01(G)) in accordance with the provisions of this
Agreement.
(f) Loans of more than one Type and, in the case of Revolving
Loans, in more than one currency, may be outstanding at the same time, but the
Borrowers shall not be entitled to request any Borrowing or to Convert Loans
comprising any Borrowing into Loans of another Type, if after giving effect to
such Borrowing or Conversion, as the case may be, any Bank would have
outstanding at any one time more than (i) two (2) different Types of Tranche A
Loans, (ii) two (2) different Types of Tranche B Loans, (iii) six (6) different
Types of Dollar Revolving Loans, and (iv) two (2) different Types of Guilder
Revolving Loans.
Section 2.02. BORROWING PROCEDURES; CONVERSIONS. (a) Each
Borrowing shall be made upon the written, telecopied or facsimile transmitted
request of the relevant Borrower, given to the Administrative Agent not later
than 11:00 a.m. (New York time) on (i) the third Business Day prior to the
proposed Borrowing Date in the case of a Eurocurrency Rate Borrowing denominated
in Dollars or Pounds Sterling, (ii) the fourth Business Day prior to the
proposed Borrowing Date in
-5-
<PAGE>
the case of a Eurocurrency Rate Borrowing denominated in Dutch Guilders, or
(iii) the Business Day prior to the proposed Borrowing Date in the case of a
Base Rate Borrowing. The Administrative Agent shall give each other member of
the Bank Group prompt notice of such request by telecopier, telex or cable. Each
request for a Borrowing (a "BORROWING REQUEST") shall specify therein (A) the
Borrowing Date for such Borrowing, (B) the requested Type of Loans comprising
such Borrowing, (C) the aggregate amount of such Borrowing, (D) in the case of a
Eurocurrency Rate Borrowing, the Interest Period for the Loans comprising such
Borrowing and (E) in the case of a Revolving Loan, whether such Revolving Loan
is to be a Dollar Revolving Loan or a Guilder Revolving Loan. Each Borrowing
Request shall be substantially in the form of EXHIBIT 2.02(A). Each Bank shall,
before 12:00 Noon (New York time) on the date of such Borrowing, make available
for the account of its Applicable Lending Office to the Administrative Agent at
the applicable Agent Account in same day funds, such Bank's Commitment
Percentage of such Borrowing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in ARTICLE
III, the Administrative Agent will, not later than 3:00 p.m. (New York time) on
the date of such Borrowing, make such funds available to the relevant Borrowing
at the applicable Borrower Account as is reasonably acceptable to the
Administrative Agent and as such Borrower shall have specified in the related
Borrowing Request. Each Borrowing Request shall be irrevocable and binding on
the Borrower delivering the same.
(b) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's Commitment Percentage of such
Borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this SECTION 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower requesting
such Borrowing on such date a corresponding amount. If and to the extent that
such Bank shall not have so made its Commitment Percentage of such Borrowing
available to the Administrative Agent, such Bank and the Borrower requesting
such Borrowing severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to such Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of such
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Bank, the Federal Funds Rate. If such
Bank shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Bank's Loan as part of such Borrowing for
purposes of this Agreement, and such Borrower shall be relieved of the
obligation to repay such amount under this SECTION 2.02(B). The failure of any
Bank to make the Loan to be made by it as part of any Borrowing shall not
relieve any other Bank of its obligation, if any, hereunder to make its Loan on
the date of such Borrowing or any subsequent Borrowing Date, but no Bank shall
be responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on the date of any Borrowing.
(c) Each Borrower may, subject to the terms of this Agreement,
upon written, telecopied or facsimile transmitted notice (a "CONVERSION NOTICE")
to the Administrative Agent, given not later than the times specified below on
any Business Day on which no Default or Event
-6-
<PAGE>
of Default has occurred and is continuing, Convert all Loans comprising one or
more Borrowings from its credit facility hereunder into one or more Borrowings
comprised of Loans from the same credit facility so long as, after giving effect
to any such Conversion, each Borrowing resulting from such Conversion is
comprised of Loans denominated in the same currency and, in the case of each
Borrowing comprised of Eurocurrency Rate Loans, having not more than two (2)
separate Interest Periods for each such Loan. The Administrative Agent shall
promptly transmit the contents of such Conversion Notice to each other member of
the Bank Group by telecopier, telex or cable. Notwithstanding any other term or
provision hereof, after giving effect to any such Conversion, the size of all
Borrowings outstanding hereunder, and the number of different Types of Loans
outstanding hereunder, shall conform to the requirements of SECTION 2.01. In the
event of any Conversion of Eurocurrency Rate Loans on any day other than the
last day of the Interest Period applicable thereto, the Borrower requesting the
same shall be obligated, if necessary, to reimburse the Banks in respect thereof
pursuant to SECTION 2.12. Each Conversion Notice must be given not later than
11:00 a.m. (New York time) on (i) the third Business Day prior to the proposed
Conversion Date in the case of a Conversion of Dollar denominated Base Rate
Loans into Dollar denominated Eurocurrency Rate Loans or of Dollar denominated
Eurocurrency Rate Loans of one Interest Period into Dollar denominated
Eurocurrency Rate Loans of another Interest Period, or (ii) the fourth Business
Day prior to the date of the proposed Conversion in the case of a Conversion of
Foreign Currency denominated Eurocurrency Rate Loans of one Interest Period into
Foreign Currency denominated Eurocurrency Rate Loans of another Interest Period,
or (iii) the Business Day immediately preceding the proposed Conversion Date in
the case of a Conversion of Eurocurrency Rate Loans denominated in Dollars into
Base Rate Loans. Each notice of a Conversion given by a Borrower shall specify
(A) the Conversion Date for such Conversion, (B) the Loans to be Converted, (C)
the Type of Loans to which such Loans are to be Converted, (D) the currency of
the Loans to be Converted and (E) in the case of a Conversion into Eurocurrency
Rate Loans, the Interest Period for such Converted Loans, and shall be in
substantially the form of EXHIBIT 2.02(C). If a Borrower shall fail to give a
timely Conversion Notice conforming to the requirements of this Agreement with
respect to any Eurocurrency Rate Loans denominated in Dollars prior to the
expiration of the Interest Period applicable thereto, such Eurocurrency Rate
Loans shall, automatically on the last day of such Interest Period, be Converted
into Base Rate Loans. If a Borrower shall fail to give a timely Conversion
Notice conforming to the requirements of this Agreement with respect to any
Eurocurrency Rate Loans denominated in a Foreign Currency prior to the
expiration of the Interest Period applicable thereto, such Eurocurrency Rate
Loans shall, automatically on the last day of such Interest Period, be converted
into a Eurocurrency Rate Loan with an Interest Period of one month. Each
Conversion Notice shall be irrevocable and binding on the Borrower requesting
such Conversion.
Section 2.03. ISSUING AND REIMBURSING THE LETTERS OF CREDIT. (a)
Each Letter of Credit shall, subject to the terms of this Agreement, be issued
upon the written, facsimile transmitted request (an original of which shall be
immediately forwarded by overnight courier to the Issuing Bank) or such other
computerized issuance or application procedure, instituted from time to time by
the Issuing Bank and agreed to by the US Borrower, of the US Borrower given to
the Issuing Bank not later than 12:00 noon (New York time) on the third Business
Day prior to the proposed date of
-7-
<PAGE>
issuance of such Letter of Credit. Each such request for a Letter of Credit (a
"LETTER OF CREDIT REQUEST") made by the US Borrower shall be substantially in
the form of EXHIBIT 2.03 hereto and shall specify the Business Day on which such
Letter of Credit is to be issued, the currency of such Letter of Credit, the
beneficiary of such Letter of Credit, the amount of such Letter of Credit, the
draw conditions applicable thereto and the Person on whose behalf the Letter of
Credit is to be issued, and shall provide for an expiry date which is not later
than thirty (30) months from the issuance date and each Letter of Credit which
is self-extending beyond its expiration date must be cancelable upon at least
thirty (30) days notice given by the Issuing Bank to the beneficiary of such
Letter of Credit. Such request shall also include any documents that the Issuing
Bank has specified in writing to the US Borrower that it customarily requires in
connection therewith to the extent such documents are applicable. No Letter of
Credit may have an expiry date later than twelve (12) months after the
Termination Date.
(b) Upon satisfaction of the applicable terms and conditions set
forth in ARTICLE III, the Issuing Bank shall issue such Letter of Credit to the
specified beneficiary not later than the close of business (New York time) on
the date so specified. The Issuing Bank shall promptly provide to the Agent for
distribution to, or directly to, each other member of the Bank Group a summary
report of all Outstanding Letters of Credit issued by the Issuing Bank upon the
issuance of each Letter of Credit, at the end of each calendar month or at such
other times as reasonably requested by a member of the Bank Group, but any
failure of the Issuing Bank to provide such Persons with a copy of such report
or Letter of Credit shall not in any way affect the US Borrower's obligation to
reimburse the Issuing Bank for any amount paid by the Issuing Bank under any
Letter of Credit or the Banks' obligations to reimburse the Issuing Bank for
such amount, to the extent provided herein, in the event the US Borrower fails
to do so. Each such Letter of Credit shall (i) provide for the payment of drafts
or other forms of demand to be presented for honor thereunder by the beneficiary
in accordance with the terms thereof, at sight when accompanied by the documents
described therein; and (ii) be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, (or any subsequent revisions thereof approved by a Congress
of the International Chamber of Commerce and adhered to by the Issuing Bank)
(the "UCP"); and (iii) as to matters not governed by the UCP, be governed by,
and construed and interpreted in accordance with, the governing law specified in
this Agreement.
(c) Upon presentment to the Issuing Bank of any demand for honor
under any Letter of Credit by the beneficiary thereof and the determination by
the Issuing Bank that such demand is in order, the Issuing Bank shall give
prompt notice (a "REIMBURSEMENT NOTICE") to the US Borrower of (i) the Letter of
Credit to which such Reimbursement Notice relates, (ii) the amounts and the
currency to be paid on account of such demand (the "REIMBURSEMENT AMOUNT") and
(iii) the date on which such amounts are to be paid (the "REIMBURSEMENT DATE"),
but any failure to so notify the US Borrower shall not in any way affect the US
Borrower's obligations to reimburse the Issuing Bank for any amount paid by the
Issuing Bank under any Letter of Credit. In determining whether to pay under any
Letter of Credit, the Issuing Bank shall not have any obligation relative to the
US Borrower and the Banks other than the obligations imposed on issuing banks
under the UCP and
-8-
<PAGE>
applicable law. Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct (as determined by a court of
competent jurisdiction by final and non-appealable judgment), shall not create
for the Issuing Bank any resulting liability to the US Borrower or the Banks, IT
BEING UNDERSTOOD THAT ANY ACT OR OMISSION CONSTITUTING ORDINARY NEGLIGENCE
(WHETHER SOLE OR CONTRIBUTORY) SHALL NOT RESULT IN ANY RESULTING LIABILITY FOR
THE ISSUING BANK.
(d) Upon receipt of any Reimbursement Notice, the US Borrower
shall reimburse the Issuing Bank by forthwith paying to the Administrative Agent
for the benefit of the Issuing Bank (who shall promptly notify the Issuing Bank
of such payment) no later than 10:00 a.m. (New York time) on the Reimbursement
Date specified in such Reimbursement Notice an amount equal to the Reimbursement
Amount specified in such Reimbursement Notice, together with interest from such
Reimbursement Date until such reimbursement is made by the US Borrower at a
fluctuating rate per annum equal to the lesser of (i) the Highest Lawful Rate
and (ii) the Base Rate in effect during the time such reimbursement obligation
remains unpaid PLUS the Applicable Margin for Base Rate Loans from such
Reimbursement Date until the third day immediately following the delivery of
such Reimbursement Notice by the Issuing Bank to the US Borrower and thereafter,
the Default Rate. To the extent availability may then exist, and upon compliance
with the relevant terms and conditions of this Agreement, the US Borrower may
repay any or all of the obligations described in this paragraph by requesting a
Borrowing and applying the proceeds thereof accordingly, together with any
amounts owed under SECTION 2.01(C)(III)(Y).
(e) If the US Borrower shall fail to reimburse the Issuing Bank
for any payment by the Issuing Bank under a Letter of Credit by 12:00 noon. (New
York time) on the Reimbursement Date specified in the Reimbursement Notice
related thereto, the Administrative Agent shall give prompt notice thereof to
each other member of the Bank Group. Upon receipt of such notice, each Bank
shall, notwithstanding any other provision of this Agreement (including the
occurrence and continuance of a Default or an Event of Default), make available
to the Administrative Agent for the benefit of the Issuing Bank an amount equal
to its Commitment Percentage of the Reimbursement Amount and in the same
currency as specified in the related Reimbursement Notice no later than the
close of business on such Reimbursement Date. If such Reimbursement Amount is
not in fact made available to the Administrative Agent by such Bank on such
Reimbursement Date, such Bank shall pay to the Administrative Agent for the
account of the Issuing Bank, on demand made by the Issuing Bank, in addition to
such Reimbursement Amount, interest on such amount for the number of days that
elapse from such Reimbursement Date to the date on which the amount equal to
such Bank's Commitment Percentage of such Reimbursement Amount becomes
immediately available to the Issuing Bank at a rate per annum equal to the
average daily Federal Funds Rate for such days. Any amount received by the
Administrative Agent or the Issuing Bank from the US Borrower in respect of a
demand honored under a Letter of Credit after one or more of the Banks have made
funds available for the payment of such demand pursuant to this paragraph shall
be paid over by the Administrative Agent or the Issuing Bank, as the case may
be, to such Banks, pro rata according to the amounts so made available by such
Banks, promptly upon receipt by the Administrative Agent
-9-
<PAGE>
or the Issuing Bank of such amount. Nothing in this Agreement shall diminish the
US Borrower's obligation under this Agreement to provide the funds for the
payment of, or on demand to reimburse the Issuing Bank for payment of, any
demand presented to, and duly honored by, the Issuing Bank under any Letter of
Credit.
(f) In order to induce the issuance of Letters of Credit by the
Issuing Bank and the purchase of participations therein by the Banks, the US
Borrower irrevocably agrees (i) that the obligation of the US Borrower to
reimburse the Issuing Bank for amounts paid by the Issuing Bank under any Letter
of Credit, including accrued interest thereon, as set forth herein is absolute
and unconditional, (ii) that no member of the Bank Group shall be responsible or
liable for, and the US Borrower's unconditional obligation to reimburse the
Issuing Bank through the Administrative Agent for amounts paid by the Issuing
Bank on account of demands duly honored under the Letters of Credit shall not be
affected by, any circumstance, act or omission whatsoever relating to any Letter
of Credit, whether or not known to any member of the Bank Group, unless such
circumstance, act or omission results in the wrongful payment of any Letter of
Credit and such circumstance, act or omission constitutes the gross negligence
or willful misconduct (as determined by a court of competent jurisdiction by
final and non-appealable judgment) on the part of such member of the Bank Group,
(iii) that any action taken or omitted to be taken by any member of the Bank
Group under or in connection with any Letter of Credit or any related demand,
document or property shall be binding on the US Borrower and shall not put any
member of the Bank Group under any resulting liability to the US Borrower,
unless such action or omission results in the wrongful payment of any Letter of
Credit and such action or omission constitutes the gross negligence or willful
misconduct (as determined by a court of competent jurisdiction by final and
non-appealable judgment) on the part of such member of the Bank Group and (iv)
to indemnify, defend and hold each member of the Bank Group harmless from and
against any and all liabilities, damages, claims or reasonable expenses
(including reasonable attorneys' fees and amounts paid in settlement) arising
out of or based on any Letter of Credit, except to the extent the same is the
result of the wrongful payment of any Letter of Credit and such wrongful payment
constitutes gross negligence or willful misconduct (as determined by a court of
competent jurisdiction by final and non-appealable judgment) on the part of the
Person seeking indemnity hereunder, IT BEING THE EXPRESS INTENTION OF THE US
BORROWER THAT EACH MEMBER OF THE BANK GROUP SHALL BE INDEMNIFIED AND HELD
HARMLESS AGAINST AND SHALL NOT HAVE ANY LIABILITY OR OBLIGATION FOR ANY AND ALL
LIABILITIES, CLAIMS, OR REASONABLE EXPENSES ARISING OUT OF OR RESULTING FROM THE
ORDINARY NEGLIGENCE (WHETHER SOLE, CONCURRENT, OR CONTRIBUTORY) OF SUCH MEMBER
OF THE BANK GROUP. The US Borrower hereby waives presentment for payment and
notice of dishonor, protest and notice of protest with respect to demands
honored under the Letters of Credit.
(g) The provisions of this Agreement and the other Loan Documents
concerning collateral, timing of payments, interest rates applicable to any
reimbursement obligation relating to any Letter of Credit, any representations,
warranties, covenants, events of default, remedies and governing law shall
supersede in their entirety the provisions of any Letter of Credit application
-10-
<PAGE>
relating to such matters. In the event any other provision of any Letter of
Credit application is inconsistent with, or in conflict of any provision of this
Agreement or any Loan Documents, the provisions of this Agreement or the Loan
Documents shall govern.
Section 2.04. THE NOTES. (a) The Tranche A Loans made by each
Bank shall be evidenced by a single Tranche A Note issued to such Bank by the
Parent, (i) dated the date of this Agreement (or such other date as may be
specified in SECTION 10.02), (ii) payable to the order of such Bank and (iii)
otherwise duly completed.
(b) The Tranche B Loans made by each Bank shall be evidenced by a
single Tranche B Note issued to such Bank by the UK Borrower, (i) dated the date
of this Agreement (or such other date as may be specified in SECTION 10.02),
(ii) payable to the order of such Bank and (iii) otherwise duly completed.
(c) The Dollar Revolving Loans made by each Bank shall be
evidenced by Dollar Revolving Notes issued to such Bank by each of the Parent
and the US Borrower, (i) dated the date of this Agreement (or such other date as
may be specified in SECTION 10.02), (ii) payable to the order of such Bank and
(iii) otherwise duly completed. Each Dollar Revolving Loan made by a Bank to the
Parent or the US Borrower and all payments made on account of the principal
amount thereof shall be entered by such Bank in its records or on the schedule
(or a continuation thereof) attached to the appropriate Dollar Revolving Note of
such Bank, PROVIDED, that prior to any transfer of any such Dollar Revolving
Note, such Bank shall endorse the amount and maturity of any outstanding Dollar
Revolving Loans on the schedule (or a continuation thereof) attached to such
Dollar Revolving Note.
(d) The Guilder Revolving Loans made by each Bank shall be
evidenced by a single Guilder Revolving Note issued to such Bank by the Parent,
(i) dated the date of this Agreement (or such other date as may be specified in
SECTION 10.02), (ii) payable to the order of such Bank and (iii) otherwise duly
completed. Each Guilder Revolving Loan made by a Bank to the Parent and all
payments made on account of the principal amount thereof shall be entered by
such Bank in its records or on the schedule (or a continuation thereof) attached
to the Guilder Revolving Note of such Bank, PROVIDED, that prior to any transfer
of any such Guilder Revolving Note, such Bank shall endorse the amount and
maturity of any outstanding Guilder Revolving Loans on the schedule (or a
continuation thereof) attached to such Guilder Revolving Note.
Section 2.05. REDUCTION OF THE COMMITMENTS. (a) The Parent or the
US Borrower shall have the right, upon at least three Business Days' notice to
the Administrative Agent to terminate in whole or reduce ratably in part the
unused portion of the Total Dollar Revolving Commitment; PROVIDED, that each
partial reduction in the Total Dollar Revolving Commitment shall be in the
aggregate amount of $2,000,000 or an integral multiple of $1,000,000 in excess
thereof. Any such reduction or termination shall be irrevocable.
-11-
<PAGE>
(b) The Parent shall have the right, upon at least three Business
Days' notice to the Administrative Agent to terminate in whole or reduce ratably
in part the unused portion of the Total Guilder Revolving Commitment; PROVIDED,
that each partial reduction in the Total Guilder Revolving Commitment shall be
in the aggregate amount of $1,000,000 or an integral multiple thereof. Any such
reduction or termination shall be irrevocable.
(c) Immediately following the funding of the Tranche A Loans, the
Tranche A Commitment of each Bank shall terminate and no further Tranche A Loans
shall be funded. If the Tranche A Loans have not been funded by May 16, 1997,
the Tranche A Commitment of each Bank shall terminate.
(d) Immediately following the funding of the Tranche B Loans, the
Tranche B Commitment of each Bank shall terminate and no further Tranche B Loans
shall be funded. If the Tranche B Loans have not been funded by May 30, 1997,
the Tranche B Commitment of each Bank shall terminate.
Section 2.06. MANDATORY REPAYMENT OF LOANS. (a) On each Scheduled
Payment Date, (i) the Parent shall repay the Tranche A Loans in an amount equal
to the Repayment Percentage for such Scheduled Payment Date of the aggregate
amount of Tranche A Loans funded pursuant to SECTION 2.01(A), rounded upward to
the nearest $50,000, and (ii) the UK Borrower shall repay the Tranche B Loans in
an amount equal to the Repayment Percentage for such Scheduled Payment Date of
the aggregate amount of Tranche B Loans funded pursuant to SECTION 2.01(B),
rounded upward to the nearest $50,000. Any prepayments of Tranche A Loans or
Tranche B Loans shall be applied against the remaining scheduled installments
required under this Section 2.06(a) on a pro rata basis. As used herein,
"REPAYMENT PERCENTAGE" means, for any Scheduled Payment Date, the percentage
specified below for such Scheduled Payment Date:
Scheduled Payment Date Repayment Percentage
---------------------- --------------------
March 31, 1999 5%
June 30, 1999 5%
September 30, 1999 5%
December 31, 1999 5%
March 31, 2000 7.5%
June 30, 2000 7.5%
September 30, 2000 7.5%
December 31, 2000 7.5%
March 31, 2001 7.5%
June 30, 2001 7.5%
September 30, 2001 7.5%
December 31, 2001 7.5%
March 31, 2002 10%
June 30, 2002 10%
-12-
<PAGE>
(b) (i) The US Borrower or the Parent, as applicable, shall from
time to time repay (or, in the case of Outstanding Letters of Credit (other than
those outstanding pursuant to SECTION 6.01(G)), provide Cover) for any Dollar
Revolving Credit Outstanding (other than Letters of Credit issued under SECTION
6.01(G)) or any amount outstanding under a Guilder Revolving Loan in such
amounts as shall be necessary so that at all times the Dollar Revolving Credit
Outstanding (not including Letters of Credit issued under SECTION 6.01(G)) shall
not be in excess of the Total Dollar Revolving Commitment and the amounts
outstanding under the Guilder Revolving Loans shall not exceed the Total Guilder
Revolving Commitment.
(ii) If a Default has occurred and is continuing, then the US
Borrower shall immediately, following a request therefor, provide Cover
for any Outstanding Letter of Credit (other than Letters of Credit
issued under SECTION 6.01(G)) necessary so that at all times the
Outstanding Letters of Credit (other than those outstanding under
SECTION 6.01(G)) shall not be in excess of the Letter of Credit
Sublimit. Any repayment or Cover required by this SECTION 2.06(B) shall
be due and payable on the date such repayment or Cover obligation
accrues pursuant to the preceding subparagraphs.
(c) (i) Any Net Sales Proceeds or Casualty Proceeds received by
or on behalf of any Borrower shall be utilized: (A) to make an investment in
other assets to be used in said Borrower's business with the proceeds thereof or
to rebuild or replace the asset sold, destroyed, damaged or taken, with such
rebuilding or replacement to commence within 180 days of the loss or sale and be
pursued diligently thereafter, or (B) if no such rebuilding or replacement is to
occur, and the amount of such proceeds is in excess of $250,000, all of said
proceeds (not merely the excess over $250,000) shall be used to reduce all
remaining scheduled payments of the Loans of the Borrower owning such asset on a
pro rata basis. If said Borrower is the Parent, the Loan reduced shall be the
Tranche A Loan;
(ii) any Net Sales Proceeds, Debt Proceeds or Casualty Proceeds
received by or on behalf of any non-Borrower Credit Party may be
utilized in the same manner described in subparagraph (c)(i) above, or,
if not so utilized shall be applied on a pro rata basis, first, to
reduce payments due on the Tranche A Loan, second, to reduce payments
due on the Tranche B Loan, in each case, pro-rata on the remaining
installments due, and third, to reduce amounts outstanding on either of
the Revolving Credit Loans as the Parent may elect subject to the
provisions of SECTION 9.01(B); and
(iii) any Debt Proceeds shall be utilized to reduce payments due
of the Loans of the Borrower receiving same pro-rata on the remaining
installments due, and, if said Borrower is the Parent, the Loan reduced
shall be the Tranche A Loan.
(d) In the event that the US Borrower shall be required pursuant
to this SECTION 2.06 to repay or provide Cover for Dollar Revolving Credit
Outstanding, the US Borrower
-13-
<PAGE>
shall make such repayment and provide such Cover in the following order: (i)
first, to pay the amount of all unreimbursed drawings under any Letters of
Credit, (ii) second, to repay the principal of any of its Base Rate Loans, (iii)
third, to repay the principal of any of its Eurocurrency Rate Loans, (iv)
fourth, to provide Cover for the undrawn portion of any Letters of Credit. Any
cash delivered as Cover pursuant to this SECTION 2.06(D) shall be placed in an
interest bearing account, for the benefit of the US Borrower, selected by the
Administrative Agent; and so long as no Default has occurred and is continuing,
any accrued interest or dividends paid on all Cover shall be distributed monthly
to the US Borrower, PROVIDED, such distribution shall be suspended during a
period in which a Default has occurred and is continuing.
(e) All outstanding Loans shall be fully due and payable on the
Termination Date.
(f) Each repayment of Loans required by this SECTION 2.06 shall
be accompanied by payment of accrued interest to the date of such payment on the
principal amount paid. In the event of any payment of a Eurocurrency Rate Loan,
the Borrower making such payment shall be obligated to reimburse the Banks for
funding losses, if any, pursuant to SECTION 2.12.
(g) Any Borrowing under a Loan shall be repaid in the same
currency in which said Borrowing was advanced.
Section 2.07. INTEREST ACCRUAL, PAYMENTS. (a) ACCRUAL AND
PAYMENT. Subject to the provisions of SECTION 10.13, each Borrower shall pay
interest on the unpaid principal amount of each Loan made by each Bank to such
Borrower from the Borrowing Date of such Loan until such principal amount shall
be paid in full, on the dates and at the rates per annum specified as follows:
(i) BASE RATE LOANS. If such Loan is a Base Rate Loan, a rate per
annum equal at all times to the lesser of (A) the Highest Lawful Rate
and (B) the Base Rate in effect from time to time PLUS the Applicable
Margin in effect from time to time for Base Rate Loans, and unpaid
accrued interest on such Loans shall be due and payable on each Payment
Date and on the date such Base Rate Loan shall be paid in full or
Converted.
(ii) EUROCURRENCY RATE LOANS. If such Loan is a Eurocurrency Rate
Loan, a rate per annum equal at all times during the Interest Period for
such Loan to the lesser of (A) the Highest Lawful Rate and (B) the sum
of the Eurocurrency Rate for such Interest Period PLUS the Applicable
Margin in effect as of the first day of such Interest Period for
Eurocurrency Rate Loans, and unpaid accrued interest on such Loans shall
be due and payable the last day of such Interest Period and, in the case
of an Interest Period longer than three months, on the date occurring
every three months after the first day of such Interest Period, and on
the date such Eurocurrency Rate Loan shall be paid in full or Converted.
Any amount of principal or, to the extent permitted by applicable law, interest
which is not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, at a rate per annum equal at all times
-14-
<PAGE>
to the lesser of (A) the Highest Lawful Rate and (B) the Base Rate in effect
from time to time during the applicable period PLUS the Applicable Margin in
effect from time to time during such period PLUS two percent (2%) (the "DEFAULT
RATE"), payable on demand.
(b) DETERMINATION OF INTEREST RATES. (i) The Administrative Agent
shall give prompt notice to each Borrower and each other member of the Bank
Group of the applicable interest rate determined by the Administrative Agent
hereunder for each Borrowing. Each determination by the Administrative Agent of
an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(ii) If the Majority Banks shall, at least one Business Day
before the date of any requested Eurocurrency Rate Borrowing, notify the
Administrative Agent that the Eurocurrency Rate applicable to such Borrowing
will not adequately reflect the cost to such Banks of making, funding or
maintaining their respective Eurocurrency Rate Loans for such Borrowing in the
currency requested, the right of the Borrowers to select Eurocurrency Rate Loans
for such Borrowing in such currency or any subsequent Borrowing in such currency
shall be suspended until the Administrative Agent shall notify the Borrowers and
each other member of the Bank Group that the circumstances causing such
suspension no longer exist, and each Loan denominated in Dollars comprising such
Borrowing shall be made as, or Converted into, as applicable, a Base Rate Loan
and each Loan denominated in a Foreign Currency shall be exchanged for the
Equivalent thereof in Dollars and converted into Base Rate Loans.
(c) As used herein, "APPLICABLE MARGIN" means, and "Commitment
Fee," means, for any day, (subject to SECTION 2.10), at such time as the Margin
Ratio is in one of the following ranges, the percentage per annum set forth
opposite such Margin Ratio:
<TABLE>
<CAPTION>
Commitment Fee
Subsequent to
Margin Ratio Eurocurrency Margin Base Rate Margin December 31, 1997
------------ ------------------- ---------------- -----------------
<S> <C> <C> <C>
Less than 2.0 to 1.0 .75% 0% .25%
Equal to or greater than 2.0 to 1.0
but less than 2.5 to 1.0 1.00% 0% .25%
Equal to or greater than 2.5 to 1.0
but less than 3.0 to 1.0 1.25% .25% .375%
Equal to or greater than 3.0 to 1.0
but less than 3.5 to 1.0 1.50% .50% .375%
Equal to or greater than 3.5 to 1.0 1.75% .75% .375%
</TABLE>
(d) For purposes hereof, "MARGIN RATIO" means, as of any date,
the ratio of (i) the Parent's total consolidated Indebtedness as of the calendar
quarter ending on such date, to (ii) its consolidated EBITDA for the twelve
month period ending on the last day of such calendar quarter.
The Margin Ratio set forth in the most recent Margin Ratio
Certificate delivered to the Administrative Agent shall, for purposes of
determining the Applicable Margin, be in effect from
-15-
<PAGE>
the second business day after the date such Margin Ratio Certificate is
delivered (or is required to be delivered), until the second business day after
the next such Margin Ratio Certificate is delivered (or is required to be
delivered), with the following exceptions: (a) if the Administrative Agent in
good faith determines that the calculations of the Margin Ratio reflected in any
Margin Ratio Certificate are not accurate, the Administrative Agent may correct
any error and calculate the appropriate Margin Ratio (and promptly give the
Borrowers notice thereof with supporting documentation and calculations), (b) if
the Parent fails to deliver any Margin Ratio Certificate when due, the Margin
Ratio shall be deemed to be greater than 3.5 to 1.0 until such Margin Ratio
Certificate is delivered, and (c) for the period commencing on the Execution
Date and ending on the date the first Margin Ratio Certificate is due hereunder,
the Margin Ratio shall be deemed to be 3.5 to 1.0.
Section 2.08. OPTIONAL PREPAYMENTS. (a) Each Borrower may, from
time to time on any Business Day, upon notice to the Administrative Agent
stating the proposed date and aggregate principal amount thereof, and if such
notice is given such Borrower shall, prepay the outstanding principal amount of
the Base Rate Loans made to such Borrower and comprising part of the same
Borrowing in whole or ratably in part; PROVIDED, that any partial prepayment of
such Base Rate Loans shall be in an aggregate principal amount of not less than
$2,000,000. Each Borrower may from time to time upon at least three Business
Days' notice to the Administrative Agent stating the proposed date and the
aggregate principal amount thereof, and if such notice is given such Borrower
shall, prepay the outstanding principal amount of the Eurocurrency Rate Loans
made to such Borrower and comprising part of the same Borrowing in whole or
ratably in part; PROVIDED, that any partial prepayment of such Eurocurrency Rate
Loans shall be in an aggregate principal amount of not less than $2,000,000 or
an integral multiple of $1,000,000 in excess thereof (or, in the case of Foreign
Currency denominated Loans, the Equivalent thereof in Dollars as of the Date of
Determination).
(b) Each prepayment of Loans made pursuant to this SECTION 2.08
shall be accompanied by a payment of accrued interest to the date of such
prepayment on the principal amount prepaid. In the event of any prepayment of a
Eurocurrency Rate Loan, the Borrower making such prepayment shall be obligated
to reimburse the Banks for funding losses, if any, pursuant to SECTION 2.12.
Section 2.09. PAYMENTS, NOTICE OF CERTAIN REPAYMENTS AND
COMPUTATIONS. (a) Except with respect to principal of, interest on and other
amounts arising from, or incurred in respect of, Loans or Letters of Credit
denominated in a Foreign Currency, all payments of principal, interest,
commitment fees and other amounts hereunder, under the Notes and the other Loan
Documents shall be made in Dollars to the Administrative Agent at the applicable
Agent Account in immediately available funds not later than 11:00 a.m. (New York
time) on the date when due. Unless otherwise specified herein, all payments of
principal, interest and other amounts hereunder, under the Notes and the other
Loan Documents denominated in a Foreign Currency shall be made in the same
Foreign Currency to the Administrative Agent (or the Issuing Bank with respect
to Letters of Credit) at the applicable Agent Account in immediately available
funds not later than 11:00 a.m. (at
-16-
<PAGE>
the time of the jurisdiction in which the applicable Agent's Account for such
Foreign Currency is located) on the date when due. Upon receipt of such
payments, the Administrative Agent will promptly cause to be distributed like
funds and in like currencies relating to the payment of principal or interest or
commitment fees ratably (other than amounts payable pursuant to SECTION 2.11,
SECTION 2.12, SECTION 2.13 or SECTION 2.14) to the Banks, for the account of
their respective Applicable Lending Offices, and like funds in like currencies
relating to the payment of any other amount payable to any Bank, to such Bank
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.
(b) Unless the Administrative Agent shall have received notice
from the Borrower required to make any payment hereunder prior to the date on
which any payment is due to the Banks under the Loan Documents that such
Borrower will not make such payment in full, the Administrative Agent may assume
that such Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent such Borrower shall not have
made such payment in full to the Administrative Agent, each Bank shall repay to
the Administrative Agent forthwith on demand such amount distributed to such
Bank, together with interest thereon for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent at the Federal Funds Rate.
(c) All payments by the Borrowers of the fees payable to the
Administrative Agent or the Issuing Bank shall be made in Dollars directly to
such Person at its address specified in SECTION 10.03 in immediately available
funds not later than 11:00 a.m. (New York time) on the date when due.
(d) All computations of interest based on the Prime Rate shall be
made on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurocurrency Rate or the Federal Funds
Rate shall be made on the basis of a year of 360 days (unless use of a 360 day
year would cause the interest contracted for, charged or received hereunder to
exceed the Highest Lawful Rate, in which case such computations shall be made on
the basis of a year of 365 or 366 days, as the case may be), in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
(e) Whenever any payment under the Loan Documents shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
PROVIDED, if such extension would cause payment of interest on or principal of
Eurocurrency Rate Loans to be made in the next following calendar month, such
payment shall be made on the immediately preceding Business Day.
-17-
<PAGE>
(f) If any Bank shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of setoff, or otherwise) on
account of the Loans made by it (other than pursuant to SECTION 2.11, SECTION
2.12, SECTION 2.13 or SECTION 2.14), or payments by the Issuing Bank made
pursuant to SECTION 2.03, in excess of its ratable share of payments on account
of the Loans or payments by the Issuing Bank made pursuant to SECTION 2.03,
obtained by all the Banks, such Bank shall forthwith purchase from the other
Banks such participations in the Loans made by such other Banks, or the
reimbursement obligations in respect of the payments by the Issuing Bank made
pursuant to SECTION 2.03, as the case may be, as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of them. The
Borrowers agree that any Bank so purchasing a participation from another Bank
pursuant to this SECTION 2.09(F) may exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Bank were the direct creditor of the Borrowers in the amount of such
participation.
(g) To the extent that the Administrative Agent receives funds
for application to the amounts owing by any Borrower under or in respect of this
Agreement or any Note in currencies other than the currency or currencies
required to enable the Administrative Agent to distribute funds to the Banks in
accordance with the terms of this SECTION 2.09, the Administrative Agent shall
be entitled to convert or exchange such funds into Dollars or into a Foreign
Currency or from Dollars to a Foreign Currency, as the case may be, to the
extent necessary to enable the Administrative Agent to distribute such funds in
accordance with the terms of this SECTION 2.09; PROVIDED that if such conversion
results in the receipt by the Administrative Agent (acting reasonably and in
good faith in making such conversion) of an insufficient amount of the currency
required to be distributed, the applicable Borrower shall pay promptly such
additional amount as may be necessary to compensate and indemnify the
Administrative Agent for such shortfall.
Section 2.10. FEES. (a) Subject to the provisions of SECTION
10.13, the US Borrower and the Parent each agree to pay to each Bank, on their
respective pro rata share of the Available Revolving Commitment, a commitment
fee equal to (i) 0.375% per annum of the Available Revolving Commitment of such
Bank in effect from time to time for the period from the Execution Date until
December 31, 1997 and, (ii) thereafter to, but excluding, the Termination Date
(or if earlier, the termination in full of such Bank's Dollar Revolving
Commitment and Guilder Revolving Commitment) at the rate set forth in the Margin
Ratio grid in SECTION 2.07(C). Accrued commitment fees shall be due and payable
in arrears on each Payment Date in each year, on the date of any reduction or
termination of the Dollar Revolving Commitment and Guilder Revolving Commitment
of such Bank and on the Termination Date (or if earlier, the termination in full
of such Bank's Dollar Revolving Commitment and Guilder Revolving Commitment);
and shall be computed for the period commencing with the day to which such fee
was last paid (or, in the case of the first commitment fee payment date, for the
period commencing with and including the Execution Date) to the date such fee is
due and payable. All commitment fees shall be paid in immediately available
funds, and shall be based on a 360-day year and actual days elapsed.
(b) (i) The US Borrower agrees to pay the Administrative Agent,
for the account of the Banks, a fee in respect of each Letter of Credit issued
for the account of the US Borrower (the
-18-
<PAGE>
"L/C FEES") for the period from the date of issuance of such Letter of Credit to
and including the expiry of such Letter of Credit computed at a rate per annum
equal to the greater of: (i) $500 or (ii) the Applicable Margin for Eurocurrency
Loans multiplied by the face amount of such Letter of Credit. For any Letter of
Credit issued with a face amount denominated in a currency other than Dollars,
the L/C Fees will be converted into the Equivalent thereof in Dollars as of the
issuance date of such Letter of Credit, and thereafter as of the first day of
each calendar quarter. All L/C Fees shall be paid in immediately available funds
and shall based on a 360 day year and actual days elapsed. Accrued L/C Fees for
each Letter of Credit shall be due and payable in arrears on each Payment Date
(or if earlier, the termination in full of the Dollar Revolving Commitments);
PROVIDED, if the L/C Fee is the $500 minimum, such $500 shall be paid in full on
the first Payment Date after the issuance of such Letter of Credit. No
additional fees shall be payable hereunder from any of the Borrowers or to any
of the Banks in respect of Existing Letters of Credit, if the minimum fee in
effect at the time of issuance of such Existing Letters of Credit has previously
been paid.
(ii) In addition to the L/C Fees, the US Borrower agrees to pay
the Issuing Bank, solely for the Issuing Bank's account, a per annum fee in
respect of each Letter of Credit issued by the Issuing Bank for the account of
the US Borrower (the "FACING FEES"), equal to the greater of: (i) $500 or (ii)
1/8% of the face amount of such Letter of Credit. For any Letter of Credit
issued with a face amount denominated in a currency other than Dollars, the
Facing Fees will be converted into the Equivalent thereof in Dollars as of the
issuance date of such Letter of Credit, and thereafter as of the first day of
each calendar quarter. All Facing Fees shall be paid in immediately available
funds. Accrued Facing Fees for each Letter of Credit shall be due and payable in
arrears on each Payment Date (or if earlier, the termination in full of the
Dollar Revolving Commitments); PROVIDED, if the Facing Fee is the $500 minimum,
such $500 shall be paid in full on the first Payment Date after the issuance of
such Letter of Credit. In addition to the Facing Fees, the US Borrower shall pay
the Issuing Bank, solely for the Issuing Bank's account, its customary service
charges relating to the amendment to, and transfer of any Letters of Credit.
Such amounts to be due and payable when such services are rendered by the
Issuing Bank. No Facing Fees shall be due and payable in connection with the
Existing Letters of Credit.
(iii) The Administrative Agent shall distribute all L/C Fees
collected during the quarterly period then ended to the Banks ratably according
to their respective Commitment Percentages.
(c) Subject to the provisions of SECTION 10.13, the Borrowers
shall pay the Administrative Agent, solely for the Administrative Agent's
account, or to the Syndication Agent for the Syndication Agent's account, as
applicable, such other fees as agreed to in writing among the Borrowers, the
Administrative Agent and the Syndication Agent, when and as due.
Section 2.11. SETOFF, COUNTERCLAIMS AND TAXES. (a) All payments
of principal, interest, expenses, reimbursements, compensation, commitment fees,
letter of credit fees, facing fees, arrangement fees or administration fees and
any other amount from time to time due under the Notes, this Agreement or any
other Loan Document shall be made by the relevant Borrowers without setoff
-19-
<PAGE>
or counterclaim and shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each member of the Bank Group, taxes imposed on its income or gross receipts,
and franchise taxes imposed on it, by the jurisdiction under the laws of which
such member of the Bank Group is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction of such Bank's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "TAXES"). If any Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Loan Document to any
member of the Bank Group, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 2.11) such member of
the Bank Group receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Borrower shall make such deductions and
(iii) such Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, each Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under the Notes
or the other Loan Documents or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement, the Notes or the other Loan
Documents (hereinafter referred to as "OTHER TAXES").
(c) Each Borrower will indemnify each member of the Bank Group
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
SECTION 2.11) paid, by such member of the Bank Group (whether paid on its own
behalf or on behalf of any other member of the Bank Group) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 10 days from the date such
member of the Bank Group makes written demand therefor; PROVIDED that no
Borrower shall be obligated to indemnify any member of the Bank Group for any
Taxes incurred as the result of a material inaccuracy of the representations and
warranties made by it under SECTION 2.11(F) (unless such inaccuracy is the
result of a change in an applicable Requirement of Law) or the failure by such
Person to comply with its obligations in SECTION 2.11(F).
(d) Within 30 days after the date of any payment of Taxes, the
relevant Borrower will furnish to the Administrative Agent, at its address
referred to in SECTION 10.03, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this SECTION 2.11 shall survive the payment in full of the Credit
Outstanding and all other amounts owing under the other
-20-
<PAGE>
Loan Documents. The provisions of this SECTION 2.11 are in all respects subject
to SECTION 10.13 hereof.
(f) Each Bank shall (i) promptly after the Effective Date or
promptly after the date of the Assignment and Acceptance, pursuant to which it
became a Bank in the case of each other Bank and (ii) from time to time
thereafter upon the obsolescence or expiration of any previously delivered form
or certificate (but only so long as such Bank remains lawfully able to do so),
provide the Borrowers and the Administrative Agent with any form or certificate
that is required by any taxing authority, including, if applicable, two original
Internal Revenue Service forms 1001 or 4224, as appropriate (or any successor
form or other form prescribed by the Internal Revenue Service), an original
Internal Revenue Service form W-9 (or any successor form), or such other forms
as shall be appropriate to establish, subject to the last sentence of this
SECTION 2.11(F), that such Bank is (y) exempt from Home Jurisdiction Withholding
Taxes on payments pursuant to this Agreement, the Notes or any other Loan
Document (or, in the case of a Bank that becomes a party to this Agreement
pursuant to SECTION 10.02(A) and (z) exempt from or entitled to a reduced rate
of Home Jurisdiction Withholding Taxes on payments pursuant to this Agreement,
the Notes or any other Loan Document that is no greater than the rate to which
the assigning Bank was entitled). Each member of the Bank Group represents and
warrants that such information is true and complete in all material respects as
of the date it is delivered. Each Bank shall promptly notify the Borrowers and
the Administrative Agent if, because of any change in the jurisdiction of
organization or an Applicable Lending Office of such Bank, (A) it is required to
withdraw or cancel any form or certificate previously submitted by it or any
form or certificate has otherwise become ineffective or inaccurate or (B)
payments to it are or will be subject to withholding of any Home Jurisdiction
Withholding Tax to a greater or lesser extent than the extent to which payments
to it pursuant to this Agreement, the Notes or any other Loan Document were
previously subject. If any form or document referred to in this SECTION 2.11(F)
requires the disclosure of information, other than information necessary to
compute the tax payable and information required on the date hereof by Internal
Revenue Service form 1001 or 4224, that the Bank reasonably considers to be
confidential, the Bank shall give notice thereof to the Borrowers and the
Administrative Agent and shall not be obligated to include in such form or
document such confidential information; PROVIDED, HOWEVER, such form or document
will state that such confidential information may be requested directly from the
Bank.
(g) If a Bank shall receive a refund of any Taxes paid by a
Borrower pursuant to this SECTION 2.11 by reason of the fact that such Taxes
were not correctly or legally asserted, the Bank shall within 90 days after
receipt of such refund pay to such Borrower the amount of such refund along with
any interest actually received by such Bank thereon, if any; PROVIDED, HOWEVER,
that such payments shall be required only to the extent any Bank can determine,
in its good faith judgment, that such refunds are attributable to payments made
by or on behalf of such Borrower; and PROVIDED, FURTHER, that no Bank shall have
any obligation under this Agreement to claim or otherwise seek to obtain any
such refund, but agrees to use reasonable efforts to assist a Borrower in doing
so.
-21-
<PAGE>
Section 2.12. FUNDING LOSSES. Each of the Borrowers hereby
indemnifies each Bank against any loss or reasonable expense (including, but not
limited to, any loss or reasonable expense sustained or incurred or to be
sustained or incurred in liquidating or reemploying deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a Eurocurrency
Rate Loan) which such Bank may sustain or incur as a consequence of (a) any
failure by any of the Borrowers to fulfill on the date of any Borrowing the
applicable conditions set forth in ARTICLE III, (b) any failure by any of the
Borrowers to borrow hereunder, to Convert Loans hereunder after a Borrowing
Request or Conversion Notice, respectively, has been given by such Borrower, (c)
any payment, prepayment or Conversion of a Eurocurrency Rate Loan required or
permitted by any other provisions of this Agreement, including, without
limitation, payments made due to the acceleration of the maturity of the Notes
pursuant to SECTION 7.01, or otherwise made on a date other than the last day of
the applicable Interest Period, (d) any default in the payment or prepayment of
the principal amount of any Loan or any part thereof or interest accrued
thereon, as and when due and payable (at the due date thereof, by notice of
prepayment or otherwise) or (e) the occurrence of an Event of Default. Such loss
or reasonable expense shall include, without limitation, an amount equal to the
excess, if any, as determined by each Bank of (i) its cost of obtaining the
funds for the Loan being paid, prepaid or Converted or not borrowed or Converted
(based on the Eurocurrency Rate applicable thereto) for the period from the date
of such payment, prepayment or Conversion or failure to borrow or Convert to the
last day of the Interest Period for such Loan (or, in the case of a failure to
borrow or Convert, the Interest Period for the Loan which would have commenced
on the date of such failure to borrow or Convert) over (ii) the amount of
interest (as estimated by such Bank) that would be realized by such Bank in
reemploying the funds so paid, prepaid or Converted or not borrowed or Converted
for such period or Interest Period, as the case may be. Each Borrower shall pay
to the Administrative Agent for the account of each Bank the amount shown as due
on any certificate received by it under SECTION 2.15 within ten (10) days after
its receipt of the same. Notwithstanding the foregoing, in no event shall any
Bank be permitted to receive any compensation hereunder constituting interest in
excess of the Highest Lawful Rate. Without prejudice to the survival of any
other obligations of the Borrowers hereunder, but subject to the last sentence
of SECTION 2.15, the obligations of the Borrowers under this SECTION 2.12 shall
survive the termination of this Agreement and/or the payment or assignment of
any of the Notes.
Section 2.13. CHANGE OF LAW. (a) If at any time after the
Effective Date any Bank determines in good faith (which determination shall be
presumed correct) that any change in any applicable Requirement of Law, or in
the interpretation, application or administration thereof makes it unlawful, or
any central bank or other Governmental Authority asserts that it is unlawful,
for such Bank or its Eurocurrency Lending Office to fund or maintain any
Eurocurrency Rate Loan in a particular currency (any of the foregoing
determinations being a "EUROCURRENCY EVENT"), then, such Bank, at its option,
may: (i) declare that Eurocurrency Rate Loans in such currency will no longer be
made or maintained by such Bank, whereupon the right of the Borrowers to select
Eurocurrency Rate Loans in such currency for any Borrowing shall be suspended
until such Bank shall notify the Administrative Agent that the circumstances
causing such Eurocurrency Event no longer exist; (ii) with respect to any
Eurocurrency Rate Loans in such currency of such Bank then outstanding, require
that (A) if such Eurocurrency Rate Loans are denominated in Dollars, such
affected Loans
-22-
<PAGE>
shall be Converted to Base Rate Loans and (B) if such Eurocurrency Loans are
denominated in a Foreign Currency, such affected Loans shall be exchanged for
the Equivalent thereof in Dollars and converted to Base Rate Loans, in which
event all such Eurocurrency Rate Loans shall automatically be Converted into
Base Rate Loans on the effective date of such notice and all payments or
prepayments of principal that would have otherwise been applied to repay such
Converted Eurocurrency Rate Loans shall instead be applied to repay the Base
Rate Loans resulting from such Conversion; and/or (iii) with respect to any
Eurocurrency Rate Loans in such currency requested of such Bank but not yet made
as or Converted into such, require that such Eurocurrency Rate Loans in such
currency be made as or Converted into, as applicable, Base Rate Loans.
(b) Upon the occurrence of any Eurocurrency Event, and at any
time thereafter so long as such Eurocurrency Event shall continue, such Bank may
exercise its aforesaid option by giving written notice thereof to the
Administrative Agent and the Borrowers, such notice to be effective upon receipt
thereof by the Borrowers. Any Conversion of any Eurocurrency Rate Loan which is
required under this SECTION 2.13 shall be made, together with accrued and unpaid
interest and all other amounts payable to such Bank under this Agreement with
respect to such Converted Loan (including, without limitation, amounts payable
pursuant to SECTION 2.12 hereof), on the date stated in the notice to the
Borrowers referred to above.
Section 2.14. INCREASED COSTS. (a) If, due to either (i) any
Requirement of Law or (ii) the compliance with any guideline by any central bank
or other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to any Bank of agreeing to make or making,
funding or maintaining Eurocurrency Rate Loans, then the Borrowers shall from
time to time, subject to the provisions of SECTION 2.15 and SECTION 10.13, pay
to the Administrative Agent for the account of such Bank additional amounts
sufficient to compensate such Bank for such increased cost within 10 days after
the receipt by any of the Borrowers of a certificate received under SECTION 2.15
showing the amount due.
(b) If any Bank shall have determined in good faith that any law,
rule, regulation or guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and Capital
Standards" or that the adoption of any applicable law, rule, regulation or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Bank (or any Applicable Lending Office of such
Bank) with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority or comparable
agency, increases the amount of capital required or expected to be maintained by
such Bank or any corporation controlling such Bank from the level required as of
the Effective Date, then the Borrowers shall from time to time, subject to the
provisions of SECTION 2.15 and SECTION 10.13, pay to such Bank additional
amounts sufficient to compensate such Bank or such corporation in the light of
such circumstances, to the extent that such Bank reasonably determines such
increase in capital to be allocable to the existence of such Bank's Commitment
hereunder.
-23-
<PAGE>
(c) If any law, executive order or regulation is adopted or
interpreted by any central bank or other Governmental Authority so as to affect
any of the Borrowers' obligations or the compensation to any Bank or the Issuing
Bank in respect of the Letters of Credit or the cost to such Bank or the Issuing
Bank of establishing and/or maintaining the Letters of Credit (or any
participation therein), then the affected Borrower shall from time to time,
subject to the provisions of SECTION 2.15 and SECTION 10.13, reimburse or
indemnify such Bank or the Issuing Bank, as the case may be, with respect
thereto so that such Bank or the Issuing Bank, as the case may be, shall be in
the same position as if there had been no such adoption or interpretation. The
protection of this SECTION 2.14 shall be available to the Issuing Bank and the
Banks regardless of any possible contention of invalidity or inapplicability of
law, regulation or condition which shall have been imposed.
Section 2.15. CLAIMS CERTIFICATE. (a) Each Bank or the Issuing
Bank, as the case may be, will notify the Borrowers of any event occurring after
the date of this Agreement which will entitle such Bank or the Issuing Bank, as
the case may be, to compensation or indemnification pursuant to SECTION 2.11
through SECTION 2.14 as promptly as practicable after such Bank obtains actual
knowledge of the occurrence of such event, and, in any event, within 180 days
thereof. A certificate of such Bank or the Issuing Bank, as the case may be,
setting forth in reasonable detail (i) such amount or amounts as shall be
necessary to compensate such Bank (or participating banks or other entities
pursuant to SECTION 10.02) or the Issuing Bank, as the case may be, as specified
above and (ii) the calculation of such amount or amounts shall be delivered to
the Borrowers (with a copy to the Administrative Agent) and shall be conclusive
absent manifest error. The Borrowers shall pay to such Bank or to the Issuing
Bank, as the case may be, the amount shown as due on any such certificate within
ten (10) days after its receipt of the same. Subject to the last sentence of
this SECTION 2.15, the failure of any Bank or the Issuing Bank to demand any
such compensation or indemnification shall not constitute a waiver of the right
of such Bank, any other Bank or the Issuing Bank, to demand any such
compensation or indemnification as such rights are set forth herein.
(b) In the event any Bank gives a notice to a Borrower pursuant
to Section 2.07(b), SECTIONS 2.11 through 2.14 that it cannot fund certain Loans
or that such funding will be at an increased cost or a higher interest rate, or
is unable to deliver the forms as required by SECTION 2.11, the affected
Borrower may give notice in response, with copies to the Administrative Agent,
that it wishes to seek one or more banks to replace such Bank in accordance with
the provisions set forth in SECTION 10.02. Each Bank giving such a notice agrees
that, at the request of such Borrower, it will assign all of its interests
hereunder and under the Notes and the Commitment to a designated, Eligible
Assignee for the full amount then owing to it, all in accordance with SECTION
10.02. Thereafter, said assignee shall have all of the rights hereunder and
obligations of the assigning Bank (except as otherwise expressly set forth
herein) and such Bank shall have no further obligations to any Borrower
hereunder. Unless otherwise agreed by the Majority Banks, any such assignment of
one Borrower's Loans shall only be made if all other Borrowers' Loans to such
Bank are likewise assigned.
-24-
<PAGE>
(c) Any notice given pursuant to this Section 2.15 shall be
deemed to contain a representation by the Bank issuing such notice that: (i)
such Bank has used reasonable efforts to minimize said costs or charges but
cannot, in its sole judgment, do so at reasonable expense, and (ii) the
increased costs and charges are common to substantially all of the comparable
loan customers of such Bank and are not unique to the Borrowers.
-25-
<PAGE>
ARTICLE III
CONDITIONS OF CREDIT
Section 3.01. CONDITIONS PRECEDENT TO EFFECTIVENESS, THE INITIAL
BORROWING OR LETTER OF CREDIT. The obligation of each Bank to make its initial
Loan on the occasion of the initial Borrowing hereunder or the obligation of the
Issuing Bank to issue the initial Letter of Credit hereunder, as the case may
be, is subject to the conditions precedent that the Administrative Agent shall
have received on or before the date of such initial Borrowing or initial Letter
of Credit issuance, all of the following, each in form and substance reasonably
satisfactory to the Bank Group and in such number of counterparts as may be
reasonably requested by the Administrative Agent:
(a) The following Loan Documents duly executed by the Persons
indicated below:
(i) this Agreement executed by each Borrower and each member of
the Bank Group,
(ii) the Notes executed by the relevant Borrower,
(iii) the Pledge Agreements executed by each Person owning stock
to be pledged thereunder (except with respect to the certificates of
Scott Pickford plc and Protechnics Company, which will be delivered
within ten (10) days after the Execution Date), and
(iv) the Guaranty Agreements executed by each Guarantor in the
form of ARTICLE IX.
(b) Evidence that the Liens created by the Pledge Agreements have
been duly perfected and constitute valid first priority Liens, which shall
include, without limiting the generality of the foregoing: (i) the delivery to
the Administrative Agent of such financing statements under the Uniform
Commercial Code for filing in such jurisdictions as the Administrative Agent may
require; and (ii) delivery of certificates representing the "Pledged Shares"
described in the Pledge Agreements and related stock powers executed in blank to
the extent such shares are evidenced by certificates and (iii) the opinion and
related back-up material described in SECTION 3.01(J).
(c) A certificate of the secretary or an assistant secretary of
each Borrower certifying, INTER ALIA, (i) to the extent required under the
jurisdiction of its formation, true and correct copies of resolutions adopted by
the Board of Directors or other appropriate body of each Borrower (A)
authorizing the execution, delivery and performance by such Borrower of the Loan
Documents to which it is or will be a party and the consummation of the
transactions contemplated thereby, and (B) authorizing officers of such Borrower
to negotiate, execute and deliver the Loan Documents to which it is or will be a
party and any related documents, including, without limitation, any agreement
-26-
<PAGE>
contemplated by this Agreement, (ii) true and correct copies of the articles of
incorporation and bylaws (or other similar charter documents) of such Borrower
and (iii) the incumbency and, if such officer is an individual, the specimen
signatures of the officers of such Borrower executing any Loan Documents to
which it is a party.
(d) A certificate of the secretary or an assistant secretary of
each Guarantor certifying, INTER ALIA, (i) to the extent required under the
jurisdiction of its formation, true and correct copies of resolutions adopted by
the Board of Directors or other appropriate body of such Person (A) authorizing
the execution, delivery and performance by such Person of the Loan Documents to
which it is or will be a party and the consummation of the transactions
contemplated thereby, and (B) authorizing officers of such Person to execute and
deliver the Loan Documents to which it is or will be a party and any related
documents, including, without limitation, any agreement contemplated by this
Agreement, (ii) true and correct copies of the articles of incorporation and
bylaws (or other similar charter documents) of such Person and (iii) the
incumbency and, if such officer is an individual, the specimen signatures of the
officers of such Person executing any Loan Documents to which it is a party
(PROVIDED, that such certificates in respect of a Guarantor being acquired as of
the Effective Date may be delivered on the day following such acquisition).
(e) Extracts from the Dutch Commercial Register or other
certificates of appropriate public officials as to the existence and good
standing of each Borrower and each Guarantor in its jurisdiction of
incorporation, and, in the case of the US Borrower, as to its authority to do
business in all locations in which its operations makes such certificates
necessary.
(f) Evidence that all Indebtedness (other than the Existing
Letters of Credit) owed by the US Borrower to NationsBank of Texas, N.A. and
Bank of America Texas, N.A. has been (or with the proceeds of the initial
Borrowing, will be) paid in full and the underlying credit facility and all
commitments thereunder have been canceled, said evidence to consist of a letter
substantially in the form of EXHIBIT 3.01(F) or other evidence satisfactory to
the Administrative Agent.
(g) A report from Johnson & Higgins of Texas, Inc. (or other
insurance consultants acceptable to the Administrative Agent) addressing the
scope of the insurance coverage of the Parent and its Subsidiaries, all in form
and substance reasonably satisfactory to the Administrative Agent; and a
certificate of the Parent certifying as to the insurance coverages maintained by
each of Saybolt and Scott Pickford.
(h) Copies of the purchase agreements and all documentation
related thereto (including disclosure schedules, if any) related to the
acquisitions of Saybolt and Scott Pickford and (i) in the case of Scott
Pickford, notice from the Share Transfer Agent/Registrar for Scott Pickford that
the Parent has consummated the acquisition of not less than 90% of its issued
and outstanding shares, and (ii) in the case of Saybolt, evidence that all
conditions precedent thereto have been fulfilled other than the funding, all in
form and substance satisfactory to the Administrative Agent.
-27-
<PAGE>
(i) A certificate signed by a Responsible Officer of each of the
Borrowers certifying as to the satisfaction of the conditions specified in
SECTION 3.02.
(j) The favorable, signed opinions of John D. Denson, General
Counsel of the Borrowers, Vinson & Elkins L.L.P., special New York counsel to
the Borrowers and the Guarantors, Norton Rose, special English counsel to the UK
Borrower and Guarantors in the United Kingdom, and Nauta Dutilh, Dutch counsel
to the Parent and Guarantors in the Netherlands, each addressed to the
Administrative Agent and the Bank Group, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.
(k) A written confirmation from the Process Agent of its
appointment and acceptance as process agent for each Borrower and each
Guarantor.
(l) The payment to the Bank Group of the fees due to them as of
such date under the Loan Documents.
(m) Subordination Agreements reasonably satisfactory to the
Administrative Agent subordinating all inter-company indebtedness among the
Credit Parties to the Obligations.
(n) Contribution and Indemnity Agreements among the Guarantors
apportioning the rights and obligations of each Guarantor in the form of EXHIBIT
3.01(N).
(o) Such other documents, certificates and opinions as the
Administrative Agent may reasonably request relating to this Agreement and the
other Loan Documents.
Section 3.02. CONDITIONS PRECEDENT TO ALL LETTERS OF CREDIT AND
LOANS. The obligation of the Issuing Bank to issue any Letter of Credit, and of
each Bank to make any Loan, shall be subject to the further conditions precedent
that (a) on the Borrowing Date of such Loan or the issuance date of such Letter
of Credit, as the case may be, the following statements shall be true, and by
virtue of delivery of a Borrowing Request or a Letter of Credit Request, as
applicable, by any Borrower, each Borrower shall be deemed to have certified to
the Bank Group as of such date that (i) the representations and warranties
contained in ARTICLE IV are true and correct on and as of such date, before and
after giving effect to such Loan or Letter of Credit, as the case may be, and as
though made on and as of such date, unless they relate expressly to a prior
date, (ii) no Default or Event of Default has occurred and is continuing, or
would result from such Loan or Letter of Credit, as the case may be, and (iii)
no event has occurred that could reasonably be expected to have a Material
Adverse Effect on any Borrower and (b) the Administrative Agent shall not have
received any notice under SECTION 5.01(E), SECTION 5.01(F), SECTION 5.01(G), or
SECTION 5.01(H).
-28-
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Bank Group to enter into this Agreement,
each Borrower hereby represents and warrants to the Bank Group as follows:
Section 4.01. CORPORATE EXISTENCE. Each of the Borrowers and its
Subsidiaries is a corporation (or other Person) duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization, and is duly qualified or licensed to transact business as a
foreign corporation (or other Person) and is in good standing under the laws of
each jurisdiction in which the conduct of its operations or the ownership or
leasing of its properties requires such qualification or licensing, except where
the failure to be so qualified or licensed could not reasonably be expected to
have a Material Adverse Effect. SCHEDULE 4.01 is a complete list of all of the
direct or indirect Subsidiaries of the Parent as of the Effective Date
(subsequent to the Saybolt acquisition) indicating the name of its parent.
SCHEDULE 4.01 will be supplemented within fifteen (15) days from the Execution
Date by adding thereto, for each Subsidiary, (i) the jurisdiction in which it
was incorporated, and (ii) the location of its chief executive office or the
office at which it has the majority of its staff, equipment or inventory.
Section 4.02. CORPORATE AUTHORITY; BINDING OBLIGATIONS. Each
Credit Party has all requisite corporate power and authority to conduct its
business, to own, operate and encumber its Property, and to execute, deliver and
perform all of its obligations under the Loan Documents executed by, or to be
executed by, such Person. The execution, delivery and performance of each of the
Loan Documents to which any Credit Party is a party and the consummation of the
transactions contemplated thereby have been duly authorized by all necessary
corporate action (or comparable action, in the case of a Credit Party that is
not a corporation). Each of the Loan Documents to which any Credit Party is a
party has been duly executed and delivered by such Person, is in full force and
effect and constitutes the legal, valid and binding obligation of such Person,
enforceable against it in accordance with its terms, except (a) as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws or judicial decisions affecting the enforcement
of creditor's rights generally and general principles of equity, and (b) that
(i) the rights and remedies afforded the Bank Group under the Security Documents
relating to the Collateral and (ii) the rights and duties of the issuer of any
of the Collateral, in the case of either clauses (i) and (ii) with respect to
(A) registration of transfer, (B) the effectiveness of registration of transfer,
(C) duties of the issuer to adverse claimants and (D) assertion of adverse
claims, may be limited by the laws of the jurisdiction in which the issuer of
such Collateral was organized.
Section 4.03. NO CONFLICT. The execution, delivery and
performance by each Credit Party of each Loan Document to which such Person is a
party and the consummation of each of the transactions contemplated thereby do
not and shall not, by the lapse of time, the giving of notice or
-29-
<PAGE>
otherwise: (a) constitute a violation of any Requirement of Law or a breach of
any provision contained in the articles or certificate of incorporation or
bylaws or other applicable governance documents of such Person, or any
shareholder agreement pertaining to such Person, or contained in any material
agreement, instrument or document to which it is now a party or by which it or
its properties is bound, except for such violations or breaches that could not
reasonably be expected to have a Material Adverse Effect; or (b) result in or
require the creation or imposition of any Lien whatsoever upon any of the
Properties of any Credit Party or its Subsidiaries (other than Liens arising
pursuant to the Loan Documents).
Section 4.04. NO CONSENT. Except for those filings and consents
required from time to time to comply with and perform obligations of the Parent
and its Subsidiaries under this Agreement and the other Loan Documents to which
such Persons are a party, such as filings and consents related to environmental
matters, ERISA matters, Taxes and intellectual property, filings required to
maintain corporate and similar standing and existence, filings pursuant to the
Uniform Commercial Code and other security filings and recordings, filings
required by the SEC, routine filings in the ordinary course of business, and
filings required in connection with the exercise by the Bank Group of remedies
in connection with the Loan Documents, no authorization, consent, approval,
license, or exemption of or filing or registration with, any Governmental
Authority or any other Person, which has not been obtained, was, is or will be
necessary for (a) the valid execution, delivery or performance by any Credit
Party of any of the Loan Documents to which it is a party, (b) the legality,
validity, binding effect or enforceability of any of the Loan Documents, or (c)
the ownership, use or operation by the Credit Parties and their respective
Subsidiaries of any of their Properties other than those that could not
reasonably be expected to have a Material Adverse Effect.
Section 4.05. NO DEFAULTS OR VIOLATIONS OF LAW. No Default or
Event of Default has occurred and is continuing. No default (or event or
circumstance occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default) has occurred and is continuing with
respect to any note, indenture, loan agreement, mortgage, lease, deed or other
agreement to which any Borrower or its Subsidiaries is a party or by which any
of them or their Properties is bound, except for such defaults that could not
reasonably be expected to have a Material Adverse Effect. Neither the Borrowers
nor any of their Restricted Subsidiaries is in violation of any applicable
Requirement of Law except for such violations that could not reasonably be
expected to have a Material Adverse Effect.
Section 4.06. FINANCIAL POSITION. (a) Prior to the Execution
Date, the Parent has furnished to the Bank Group the consolidated balance sheet
of the Parent as at December 31, 1996, and the related consolidated statements
of operations, shareholders' equity and cash flows for the fiscal year then
ended, audited by Arthur Andersen LLP, independent certified public accountants
and comparable items for Saybolt prepared by Price Waterhouse L.L.P. as of
December 31, 1996 and for Scott Pickford prepared by Crane & Partners, as of
March 31, 1996. The financial statements referred to in the previous sentence
have been prepared in accordance with GAAP (except for that in respect of Scott
Pickford, which was prepared in accordance with GAAP as in effect in the United
Kingdom) consistently applied throughout the periods involved and present fairly
in all material
-30-
<PAGE>
respects the consolidated financial condition of the Persons named therein as of
the date thereof and the results of its operations for the periods then ended.
No event has occurred since December 31, 1996, or in the case of Scott Pickford
since March 31, 1996, that could reasonably be expected to have a Material
Adverse Effect in respect of any of said Persons.
(b) Except as fully reflected in the audited financial statements
referred to in paragraph (a) of this SECTION 4.06, as of the Execution Date,
there are no liabilities or obligations of the Borrowers or any of their
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
could reasonably be expected to have a Material Adverse Effect.
(c) On and as of the Effective Date, on a PRO FORMA basis after
giving effect to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith, (x)
the sum of the assets, at a fair valuation, of each Credit Party will exceed its
debts, (y) no Credit Party will have incurred or intended to, or believe that
they will, incur debts beyond their ability to pay such debts as such debts
mature and (z) no Credit Party will have unreasonably small capital with which
to conduct its business.
Section 4.07. LITIGATION. Except as disclosed in SCHEDULE 4.07,
there are no actions, suits or proceedings pending or, to the knowledge of any
Borrower, threatened against or affecting any Borrower or its Subsidiaries, or
the Properties of any such Person, before or by any Governmental Authority or
other Person, which could reasonably be expected to have a Material Adverse
Effect, PROVIDED, with respect to actions, suits or proceedings involving
Saybolt or Scott Pickford, this representation and warranty is limited to the
extent of the actual knowledge of any Borrower in regard thereto.
Section 4.08. USE OF PROCEEDS. (a) Each Borrower's uses of the
proceeds of the Loans made to it, and, in the case of the US Borrower, of the
Letters of Credit are, and will continue to be, legal and proper corporate uses,
and such uses do not violate and are otherwise consistent with the terms of the
Loan Documents, including, without limitation, SECTION 5.09, and all
Requirements of Law (including Regulations G, T, U and X).
(b) None of the Borrowers nor any of their respective
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U), and no
part of the proceeds of any Loan or Letter of Credit will be used, directly or
indirectly, (i) to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock or (ii) for
the purpose of purchasing, carrying or trading in any securities under such
circumstances as to involve the Borrowers or any of their respective
Subsidiaries in a violation of Regulation X.
Section 4.09. GOVERNMENTAL REGULATION. None of the Borrowers nor
any of their respective Subsidiaries is subject to regulation under the Public
Utility Holding Company Act, as amended, the Investment Company Act of 1940, as
amended, or any other Requirement of Law such
-31-
<PAGE>
that the ability of any such Person to incur Indebtedness is limited or its
ability to consummate the transactions contemplated by this Agreement or the
other Loan Documents is impaired.
Section 4.10. DISCLOSURE. The schedules, documents, exhibits,
reports, certificates and other written statements and information furnished by
or on behalf of the Borrowers to the Bank Group do not contain any Material
misstatement of fact, or omit to state a Material fact necessary in order to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading. None of the Borrowers nor any of their
respective Subsidiaries has withheld any fact known to it which has or could
reasonably be expected to have a Material Adverse Effect.
Section 4.11. ERISA. (a) The US Borrower and each ERISA Affiliate
have operated and administered each Pension Plan and Other Benefit Plan in
compliance with all applicable laws, except for such instances of noncompliance
as have not resulted in and could not reasonably be expected to result in a
Material Adverse Effect. Neither the US Borrower nor any ERISA Affiliate has
incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Internal Revenue Code relating to employee benefit
plans (as defined in Section 3 of ERISA); and no event, transaction or condition
has occurred or exists or is threatened that could reasonably be expected to
result in the incurrence of any such liability by the US Borrower or any ERISA
Affiliate, or in the imposition of any Lien on any of the Properties of the US
Borrower or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Internal Revenue Code, other than such liabilities or Liens as could
not be reasonably expected to have a Material Adverse Effect.
(b) The present value of the aggregate benefit liabilities under
each Pension Plan subject to Title IV of ERISA, determined as of the end of such
Pension Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Pension Plan's most recent
actuarial valuation report, did not exceed the aggregate current value of the
assets of such Pension Plan allocable to such benefit liabilities by an amount
that is Material. The term "benefit liabilities" has the meaning specified in
section 4001 of ERISA and the terms "current value" and "present value" have the
meaning specified in Section 3 of ERISA.
(c) The US Borrower and its ERISA Affiliates do not currently and
have never had any liability or obligation with respect to any Material
liabilities (and are not subject to Material contingent withdrawal liabilities)
under section 4201 or 4204 of ERISA with respect to any Multiemployer Plan.
(d) The expected post-retirement benefit obligation (determined
as of the last day of the US Borrower's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106, without
regard to liabilities attributable to continuation coverage mandated by section
4980B of the Internal Revenue Code ("COBRA")) of the US Borrower and its ERISA
Affiliates is not Material and, except as modified by COBRA, such
-32-
<PAGE>
obligations can be unilaterally terminated at any time by the US Borrower, or
its ERISA Affiliates without any Material liability.
Section 4.12. PAYMENT OF TAXES. Each Borrower has filed, and has
caused each of its Subsidiaries to file, all federal, state and local tax
returns and other reports and all other tax returns required to be filed,
whether in the United States or in any foreign jurisdiction, that such Borrower
and each such Subsidiary are required by law to file and have paid all taxes and
other similar charges that are due and payable pursuant to such returns and
reports, except (a) to the extent any of the same are being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted,
and with respect to which adequate reserves have been set aside on the books of
such Person in accordance with GAAP, or (b) to the extent the failure to file
such taxes could not reasonably be expected to have a Material Adverse Effect,
PROVIDED, with respect to matters pertaining to Saybolt or Scott Pickford, this
representation and warranty is limited to the extent of the actual knowledge of
any Borrower in regard thereto.
Section 4.13. TITLE AND LIENS. Each Borrower and each of its
Subsidiaries have good title to all of its Material Properties, free and clear
of all Liens except Liens permitted by SECTION 6.02. All Material agreements
necessary for the conduct of the business of each Borrower and its Subsidiaries
are valid and subsisting, in full force and effect and, to the knowledge of any
Borrower, there exists no default or event or circumstance which with the giving
of notice or the passage of time or both would give rise to a default under any
such agreement, which would affect in any Material respect the conduct of the
business of each Borrower and its Subsidiaries.
Section 4.14. PATENTS AND INTELLECTUAL PROPERTY. Each Borrower
and its Subsidiaries has obtained all Material patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, that are necessary
for the operation of their businesses taken as a whole as presently conducted.
Section 4.15. ENVIRONMENTAL MATTERS. Except as disclosed in
SCHEDULE 4.15 hereto, (a) (i) each Borrower and its Subsidiaries possess all
Material environmental, health and safety licenses, permits, authorizations,
registrations, approvals and similar rights necessary under law or otherwise for
such Person to conduct its operations as now being conducted, (ii) each of such
licenses, permits, authorizations, registrations, approvals and similar rights
is valid and subsisting, in full force and effect and enforceable by such
Person, and (iii) such Person is in compliance with all terms, conditions or
other provisions of such permits, authorizations, registrations, approvals and
similar rights, except, in each case covered by clauses (a)(i), (ii) and (iii),
to the extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect; (b) none of the Borrowers nor any of their respective
Subsidiaries has received any notices of any violation of, noncompliance with,
or remedial obligation under, Requirements of Environmental Laws, and there are
no writs, injunctions, decrees, orders or judgments outstanding, or lawsuits,
claims, proceedings, investigations or inquiries pending or, to the knowledge of
any Borrower, threatened, relating to the ownership, use, condition,
maintenance, or operation of, or conduct of business related to, any Property
owned, leased or operated by such Borrower or any of its Subsidiaries, other
than those
-33-
<PAGE>
violations, instances of noncompliance, obligations, writs, injunctions,
decrees, orders, judgments, lawsuits, claims, proceedings, investigations or
inquiries that could not reasonably be expected to have a Material Adverse
Effect; (c) there are no Material obligations, undertakings or liabilities
arising out of or relating to Environmental Laws to which any Borrower or its
Subsidiaries has agreed to, assumed or retained, or by which such Borrower or
its Subsidiaries is adversely affected, by contract or otherwise; (d) there are
no facts, circumstances or conditions on or related to any Property of any
Borrower or its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect or cause any such Property to be subject to any material
restrictions on its ownership, use, occupancy or transferability to the extent
such restrictions could reasonably be expected to have a Material Adverse
Effect, and (e) none of the Borrowers nor any of their respective Subsidiaries
has received a written notice or claim to the effect that such Person is or may
be liable to any Person as the result of a release or threatened release of a
hazardous material or solid waste that could reasonably be expected to have a
Material Adverse Effect, PROVIDED, with respect to matters pertaining to Saybolt
or Scott Pickford, this representation and warranty is limited to the extent of
the actual knowledge of any Borrower in regard thereto..
Section 4.16. SECURITY INTERESTS. Each of the Pledge Agreements
creates, as security for the Obligations purported to be secured thereby, a
valid and enforceable perfected, first priority security interest in and Lien on
all of the Collateral subject thereto, in favor of the Administrative Agent for
the benefit of the Bank Group. No filings or recordings are required in order to
perfect the security interests created under any Pledge Agreement except for
filings or recordings required in connection with any such Pledge Agreement
which shall have been made upon or prior to (or are the subject of arrangements,
satisfactory to the Administrative Agent, for filing on or promptly after the
date of) the execution and delivery thereof.
Section 4.17. LABOR RELATIONS. None of the Borrowers nor any of
their respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a Material Adverse Effect. There is (a) no unfair
labor practice compliant pending against any Borrower or any of its Subsidiaries
or threatened against any of them, before the National Labor Relations Board,
and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against any Borrower or any of its
Subsidiaries or, to the best of any Borrower's knowledge, threatened against any
of them, (b) no strike, labor dispute, slowdown or stoppage pending against any
Borrower or any of its Subsidiaries or, to the best of the Borrower's knowledge,
threatened against any Borrower or any of its Subsidiaries and (c) no union
representation petition existing with respect to the employees of any Borrower
or any of its Subsidiaries and no union organizing activities are taking place,
except with respect to any matter specified in clause (a), (b) or (c) above,
either individually or in the aggregate, such as could not reasonably be
expected to have a Material Adverse Effect, PROVIDED, with respect to matters
pertaining to Saybolt or Scott Pickford, this representation and warranty is
limited to the extent of the actual knowledge of any Borrower in regard thereto.
Section 4.18. NO MATERIAL ADVERSE CHANGE. There has occurred no
event or effect that has had or could reasonably be expected to have a Material
Adverse Effect.
-34-
<PAGE>
Section 4.19. CREDIT PARTIES AS PERCENTAGE OF CONSOLIDATED
ENTITY. As of the Execution Date, the Credit Parties have at least sixty percent
(60%) of the total assets and total revenues of the Parent on a consolidated
basis.
-35-
<PAGE>
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Letter of Credit remains outstanding, any
principal amount of any Loan, any principal amount of any reimbursement
obligation in respect of any Letter of Credit, any amount of interest accrued
under the Notes or in respect of any Letter of Credit, or any commitment or
other fee, expense, compensation or any other amount payable to any member of
the Bank Group under the Loan Documents shall remain unpaid or outstanding or
any Bank shall have any Commitment hereunder:
Section 5.01. REPORTING REQUIREMENTS. The Parent shall deliver or
cause to be delivered to the Administrative Agent (with sufficient copies for
the Administrative Agent to distribute the same to the other members of the Bank
Group):
(a) As soon as available and in any event within sixty (60) days
after the end of each of the first three fiscal quarters of each fiscal year of
the Parent:
(i) copies of the unaudited consolidated and consolidating
balance sheets of the Parent as of the end of such period, and unaudited
consolidated and consolidating statements of operations, shareholders'
equity and cash flows of the Parent for that period and for the portion
of the year ending with such period, in each case setting forth in
comparative form (on a consolidated basis) the figures for the
corresponding period of the preceding fiscal year, all in reasonable
detail; and
(ii) a certificate of a Responsible Officer of the Parent (1)
stating that (A) such financial statements fairly present in all
material respects the consolidated and consolidating financial position
and results of operations of the Parent in accordance with GAAP
consistently applied, subject to year-end adjustments and the absence of
notes and (B) no Default or Event of Default has occurred and is
continuing and the Parent is not aware of any event or condition which
could reasonably be expected to create a Default or Event of Default or,
if any such event has occurred and is continuing, the action the Parent
is taking or proposes to take with respect thereto, and (2) setting
forth calculations demonstrating compliance with SECTION 6.04 and (3)
stating that the Borrowers are in compliance with the provisions of
SECTION 5.10.
(b) As soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of the Parent:
(i) copies of the audited consolidated balance sheets of
the Parent as of the close of such fiscal year and audited consolidated
statements of operations, shareholders' equity and cash flows of the
Parent for such fiscal year, accompanied by an opinion thereon (which
-36-
<PAGE>
shall not be qualified) of independent accountants of recognized
national standing selected by the Parent and reasonably satisfactory to
the Majority Banks, to the effect that such consolidated financial
statements have been prepared in accordance with GAAP consistently
applied (except for changes with which such accountants concur) and that
such audit has been made in accordance with generally accepted auditing
standards, and the corresponding unaudited consolidating statements in
each case setting forth in comparative form (on a consolidated basis)
the figures for the preceding fiscal year, all in reasonable detail; and
(ii) a certificate of a Responsible Officer of the Parent
(A) setting forth calculations demonstrating compliance with SECTION
6.04, (B) stating that no Default or Event of Default has occurred and
is continuing or, if any such event has occurred and is continuing, the
action the Parent is taking or proposes to take with respect thereto,
and (C) stating that the Borrowers are in compliance with SECTION 5.10.
(c) As soon as available and in any event with in sixty (60) days
after the end of each calendar quarter, a certificate of a Responsible Officer
of the Parent setting forth a calculation of the Margin Ratio (a "MARGIN RATIO
CERTIFICATE") as of the end of such calendar quarter.
(d) Within ten (10) Business Days after the sending or filing
thereof, copies of all definitive reports and shareholder information which a
Borrower or any of its Subsidiaries sends to its shareholders or the SEC, or
otherwise makes available to the public.
(e) Immediately after a Borrower or any of its Subsidiaries
becomes aware of the occurrence or the likelihood of an occurrence of a Default
or Event of Default, a certificate of a Responsible Officer of such Borrower
setting forth details of such Default or Event of Default and the action which
has been taken or is to be taken with respect thereto.
(f) As soon as reasonably possible and in any event within five
(5) Business Days after a Borrower or any of its Subsidiaries becomes aware
thereof, written notice from a Responsible Officer of such Borrower of (i) the
institution of or overt threat of, any action, suit, proceeding, governmental
investigation or arbitration by any Governmental Authority or other Person
against or affecting such Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect and that has not been
previously disclosed in writing to the Bank Group pursuant to this SECTION 5.01
or (ii) any Material development in any action, suit, proceeding, governmental
investigation or arbitration already disclosed to the Bank Group pursuant to
this SECTION 5.01.
(g) As soon as reasonably possible and in any event within five
(5) Business Days after a Borrower or any of its Subsidiaries becomes aware
thereof, written notice from a Responsible Officer of such Borrower of (i) any
violation of, noncompliance with, or remedial obligations under, Requirements of
Environmental Laws that could reasonably be expected to have a Material Adverse
Effect, (ii) any release or threatened release affecting any Property owned,
leased or operated by a Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse
-37-
<PAGE>
Effect, (iii) the amendment or revocation of any permit, authorization,
registration, approval or similar right that could reasonably be expected to
have a Material Adverse Effect or (iv) changes to Requirements of Environmental
Laws that could reasonably be expected to have a Material Adverse Effect.
(h) Promptly, and in any event within five (5) Business Days
after becoming aware of any of the following, a written notice setting forth the
nature thereof and the action, if any, that a Borrower or an ERISA Affiliate
proposes to take with respect thereto: (i) with respect to any Pension Plan, any
Reportable Event, for which notice thereof has not been waived pursuant to
applicable regulations as in effect on the date hereof; or (ii) the taking by
the PBGC of steps to institute, or the threatening by the PBGC of the
institution of, proceedings under section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan, or the receipt
by a Borrower or any ERISA Affiliate of a notice from a Multiemployer Plan that
such action has been taken by the PBGC with respect to such Multiemployer Plan;
or (iii) any event, transaction or condition that could result in the incurrence
of any Material liability by a Borrower or any ERISA Affiliate pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Internal Revenue
Code relating to employee benefit plans, or in the imposition of any Lien on any
of the rights, properties or assets of a Borrower or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax provisions; or
(iv) the inability or failure of a Borrower or any ERISA Affiliate to make
timely any payment or contribution to or with respect to any Pension Plan,
Multiemployer Plan or Other Benefit Plan, if such failure, either separately or
together with all other such failures could reasonably be expected to be
Material; or (v) any event with respect to any Pension Plan, Multiemployer Plan
and/or Other Benefit Plan, individually or in the aggregate, that could
reasonably be expected to result in a Material liability.
(i) In addition, on or before April 15 of each year commencing
April 15, 1998, the Parent will deliver to the Administrative Agent a report
prepared by the Parent's independent insurance broker which report (i) lists all
insurance policies and programs then in effect with respect to the Properties of
the Borrowers and their respective Subsidiaries, (ii) specifies for each such
policy and program, (A) the amount thereof, (B) the risks insured against
thereby, (C) the name of the insurer and each insured party thereunder and (D)
the policy or other identification number thereof, and (iii) certifies that all
such policies and programs are in full force and effect, accompanied by a report
from the Parent certifying that such policies are placed with such insurance
companies, underwriters or associations, in such amounts, against such risks,
and in such form, as are normally issued against by Persons of similar size and
established reputation engaged in the same or similar businesses and similarly
situated, and conform with the requirements of this Agreement.
(j) Within sixty (60) days of the end of each fiscal quarter
ending March 31st, June 30th and September 30th and within one hundred twenty
(120) days of the fiscal quarter ending December 31st, a schedule by each
actively operating legal entity listing total assets, total revenues and EBITDA
of such legal entity.
-38-
<PAGE>
(k) Promptly upon receipt thereof and following such time as the
appropriate officers of the Parent shall have had reasonable time to respond
thereto, a copy of each formal report or "management letter" submitted to the
Parent by its independent accountants in connection with any annual, interim or
special audit made by it of the books of the Parent.
(l) Such other information as any member of the Bank Group may
from time to time reasonably request respecting the business, Properties,
operations or condition, financial or otherwise, of the Borrowers or any of
their Subsidiaries.
Section 5.02. TAXES; CLAIMS. Each Borrower will pay and
discharge, and will cause each of its Subsidiaries to pay and discharge, all
taxes, assessments and governmental charges or levies imposed upon such Person
or upon its income or profits, or upon any Properties belonging to such Person,
prior to the date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a Lien upon any Properties of such Person, other
than (a) any such tax, assessment, charge, levy or claim which is being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and with respect to which adequate reserves are set aside
on the books of such Person in accordance with GAAP, or (b) if the failure to
file such taxes could not reasonably be expected to have a Material Adverse
Effect.
Section 5.03. COMPLIANCE WITH LAWS. Each Borrower will comply,
and will cause each of its Subsidiaries to comply, with all applicable
Requirements of Law imposed by, any Governmental Authority, if non-compliance
with such Requirement of Law could reasonably be expected to have a Material
Adverse Effect. Without limitation of the foregoing, each Borrower shall, and
shall cause each of its Subsidiaries to, comply with all Requirements of
Environmental Laws, operate Properties and conduct its business in accordance
with good environmental practices, and handle, treat, store and dispose of
hazardous materials or solid waste in accordance with such practices, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
Section 5.04. INSURANCE. Each Borrower will maintain, and will
cause each of its Subsidiaries to maintain insurance, with financially sound and
reputable insurance companies or associations, against such risks and in such
amounts (and with co-insurance and deductibles), as are usually insured against
by Persons of similar size and established reputation engaged in the same or
similar businesses and similarly situated, including insurance against fire,
casualty, business interruption, injury to Persons or property and other normal
hazards normally insured against.
Section 5.05. EXISTENCE. Each Borrower will preserve and
maintain, and will cause each of its Subsidiaries to preserve and maintain, its
existence, rights, franchises and privileges in the jurisdiction of its
incorporation or organization, and qualify and remain qualified, and cause each
of its Subsidiaries to qualify and remain qualified, as a foreign corporation in
each jurisdiction in which such qualification is material to the business and
operations of such Person or the ownership or leasing of the Properties of such
Person except to the extent that a Subsidiary merges or
-39-
<PAGE>
consolidates in compliance with SECTION 6.06 or ceases to be a Subsidiary of any
Borrower if such cessation is permitted under this Agreement.
Section 5.06. INSPECTIONS. Upon at least one (1) Business Day
advance notice, each Borrower will permit, and will cause each of its
Subsidiaries to permit, any agents or representatives of the Administrative
Agent or its designee to from time to time examine and make copies of and
abstracts from the records and books of account of, and visit the Properties of
any of the Borrowers and their Subsidiaries and to discuss any of the affairs,
finances and accounts of any such Person that in any way relate to this
Agreement or the performance or ability to perform hereunder of any Credit
Party, with any of said Person's independent public accountants, officers or
directors during normal business hours. If an Event of Default has occurred and
is continuing, Borrowers will pay for all such examinations; prior thereto the
examining Bank will pay for same.
Section 5.07. MAINTENANCE OF PROPERTIES. Each Borrower will
maintain and preserve, and will cause each of its Subsidiaries to maintain and
preserve, all of its Property necessary for the proper conduct of its business
in good repair, good working order and condition, ordinary wear and tear
excepted, and make all necessary and proper repairs, replacements, additions and
improvements thereto to the extent and in the manner customary in the industry
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
Section 5.08. ACCOUNTING SYSTEMS. Each Borrower will keep, and
will cause each of its Subsidiaries to keep, adequate records and books of
account in which complete entries will be made in accordance with GAAP
consistently applied (subject to year end adjustments), reflecting all financial
transactions of such Person. Each Borrower shall maintain or cause to be
maintained a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP, and each of the financial statements described herein
shall be prepared from such system and records.
Section 5.09. USE OF LOANS AND LETTERS OF CREDIT. All Letters of
Credit shall be issued for general corporate purposes consistent with the terms
of this Agreement and all Requirements of Law. The Parent will use the proceeds
of the Tranche A Loans solely to finance or refinance the acquisitions of
Saybolt and its related Subsidiaries and Affiliates and the UK Borrower will use
the proceeds of the Tranche B Loans solely to finance or refinance the
acquisition of Scott Pickford, and, in each case in a manner consistent with the
terms of this Agreement and all Requirements of Law. The US Borrower and the
Parent will use the proceeds of all Dollar Revolving Loans and the Parent will
use the proceeds of the Guilder Revolving Loans for working capital and other
general corporate purposes consistent with the terms of this Agreement and all
Requirements of Law.
Section 5.10. ADDITIONAL GUARANTEES AND STOCK PLEDGES. (a) Within
ten (10) days from the Execution Date, the Borrowers shall identify such
Subsidiaries it intends to cause to become Credit Parties as are necessary to
modify SECTION 4.19 such that the figure in said section becomes seventy five
percent (75%) instead of sixty percent (60%). Within thirty (30) days, the
-40-
<PAGE>
Borrowers shall cause such Subsidiaries to become Credit Parties and will cause
all of the capital stock of said Persons to be pledged to the Administrative
Agent as security for the Obligations all as more fully described in SECTION
5.10(B).
(b) In the event any Borrower or any of their Subsidiaries
acquires any Subsidiary subsequent to the Execution Date, or if any current
Subsidiary (other than Core Laboratories Sales N.V. or Saybolt Nederland B.V.,
which shall be excluded herefrom) that is not a Credit Party changes in such a
manner that said Subsidiary: (i) has total revenue constituting five percent
(5%) or more of the pro forma consolidated total revenues, or (ii) has five
percent (5%) of the pro forma consolidated total assets, of the Parent and all
of its Subsidiaries on a consolidated basis (in the case of both (i) and (ii),
after the acquisitions of Saybolt and Scott Pickford), such Subsidiary shall
execute and deliver to the Administrative Agent a Guaranty Agreement
guaranteeing the Obligations on the same basis as the other Guarantors and the
Parent shall (or shall cause the relevant Subsidiary to) execute and deliver to
the Administrative Agent an amendment and supplement to the Pledge Agreement, in
form and substance reasonably satisfactory to the Administrative Agent, pledging
100% of the capital stock of such Subsidiary as security for the Obligations
along with such financing statements, stock powers, legal opinions and other
documents or certificates related thereto as the Administrative Agent may
reasonably request. In addition, subsequent to the Execution Date, if the
Borrowers and all of the Subsidiaries that are Guarantors do not have total
revenue and total assets equal to both seventy-five percent (75%) of the
consolidated total revenue and the total assets, respectively, of the Parent and
all of its Subsidiaries on a consolidated basis, as shown by the reports
required under SECTION 5.01(J), the Parent will pledge, or cause to be pledged,
the stock of such Subsidiaries as the Majority Banks may reasonably request to
attain each of said seventy-five percent (75%) levels and will cause such
Persons to become Guarantors, all with appropriate supporting documentation as
referenced above.
Section 5.11. FURTHER ASSURANCES IN GENERAL. Each Borrower shall,
and shall cause each of its Subsidiaries to, protect and perfect the Liens
contemplated by the Pledge Agreements. Each Borrower at its expense shall, and
shall cause each of its Subsidiaries to, promptly execute and deliver all such
other and further documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements of a Borrower or any of its
Subsidiaries in the Loan Documents, including, without limitation, the
accomplishment of any condition precedent that may have been waived by the Banks
prior to the initial Borrowing or Letter of Credit or any subsequent Borrowings
or Letters of Credit.
-41-
<PAGE>
ARTICLE VI
NEGATIVE COVENANTS
So long as any Letter of Credit remains outstanding, any
principal amount of any reimbursement obligation in respect of any Letter of
Credit, any principal amount of any Loan, any amount of interest accrued under
the Notes or in respect of any Letter of Credit, or any commitment, facility or
other fee, expense, compensation or any other amount payable to any member of
the Bank Group under the Loan Documents shall remain unpaid or outstanding or
any Bank shall have any Commitment hereunder:
Section 6.01. INDEBTEDNESS RESTRICTION. Each Borrower will not,
and will not permit any of its Subsidiaries to, create, incur, assume or suffer
to exist, any Indebtedness other than:
(a) Indebtedness of the Borrowers and the Guarantors under the
Loan Documents;
(b) Indebtedness of the Borrowers or their Subsidiaries in
respect of any Derivatives permitted by SECTION 6.03;
(c) Indebtedness existing on the Execution Date and described on
SCHEDULE 6.01;
(d) subject to the limitations of SECTION 6.07, unsecured
Indebtedness owing to a Borrower by any of its Subsidiaries or owing by a
Borrower to any of its Subsidiaries, PROVIDED any such Indebtedness in excess of
$5,000,000 shall be evidenced by a subordinated promissory note in a form
reasonably satisfactory to the Administrative Agent, and shall be pledged to the
Administrative Agent for the benefit of the Banks as security for the
Obligations;
(e) Other Indebtedness of up to $2,000,000 (or its Equivalent)
outstanding at any one time and any Guaranties thereof;
(f) Other unsecured Indebtedness consisting of funded debt in the
form of money market lines of credit or similar arrangements not to exceed
$5,000,000 (or its Equivalent) outstanding at any one time and any Guaranties
thereof;
(g) Other unsecured Indebtedness (contingent or direct) not to
exceed $5,000,000 outstanding at any one time in respect of letters of credit
issued for the account of any of the Credit Parties in the conduct of their
business in the ordinary course and any Guaranties thereof; and
(h) Indebtedness in existence (but not incurred or created in
connection with such acquisition) on the date on which a Person is acquired
(after the Execution Date) by the Parent or any of its Subsidiaries and for
which Indebtedness: (i) neither the Parent nor any of its other Subsidiaries has
any obligation with respect to such Indebtedness, and (ii) none of the
Properties of
-42-
<PAGE>
the Parent or any of its other Subsidiaries is bound (and any extensions,
renewals, modifications or refinancings thereof which do not increase the
principal amount thereof or shorten the respective maturities thereof or
increase the collateral therefor), not to exceed $10,000,000 outstanding at any
one time.
Section 6.02. LIEN RESTRICTION. Each Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume or suffer to be
created, assumed or incurred or to exist, any Lien upon any of such Person's
Property, whether now owned or hereafter acquired, other than the following
Liens ("EXCEPTED LIENS"):
(a) Liens created pursuant to this Agreement or any other Loan
Document;
(b) statutory Liens for taxes or other assessments that are not
yet delinquent (or that, if delinquent, are being contested in good faith by
appropriate proceedings and for which the Borrowers or their Subsidiaries have
set aside on their books adequate reserves in accordance with GAAP consistently
applied);
(c) Liens imposed by law which were incurred in the ordinary
course of business, such as carriers', warehousemen's and mechanics' liens,
statutory landlord's liens and other similar liens arising in the ordinary
course of business, and (x) which do not in the aggregate Materially detract
from the value of such Property or Materially impair the use thereof in the
operation of the business of any Borrower or its Subsidiaries or (y) which are
being contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the Property subject to such
Lien or procuring the release of the Property subject to such lien from arrest
or detention;
(d) Liens on any real property which do not secure Indebtedness
and do not in the aggregate Materially detract from the value of such Property
or Materially impair the use thereof in the operation of the business of any
Borrower or its Subsidiaries;
(e) Liens existing on the Execution Date and listed on SCHEDULE
6.02, without giving effect to any subsequent extensions or renewals thereof;
(f) Liens on cash and Cash Equivalents in an aggregate amount not
to exceed $500,000.00 to secure performance of bids, trade contracts, leases and
other similar obligations incurred in the ordinary course of business;
(g) Liens securing any purchase money Indebtedness or Capital
Leases allowed under SECTION 6.01(E) on the property or assets acquired in
connection with the incurrence of such purchase money Indebtedness;
(h) Liens on Property of the Person acquired as contemplated
under SECTION 6.01(H) to secure Indebtedness permitted by SECTION 6.01(H); and
-43-
<PAGE>
(i) Liens upon any Property hereafter acquired by the Parent or
any of its Subsidiaries to secure Indebtedness in existence on the date of such
acquisition (but not incurred or created in connection with such acquisition),
which indebtedness is assumed by such Person simultaneously with such
acquisition, which Liens extend only to the Property so acquired and which is
otherwise non-recourse to the Parent and its Subsidiaries.
Section 6.03. DERIVATIVES. The Borrowers shall not, and shall not
permit any of their Subsidiaries to, enter into any Derivatives other than
interest rate and foreign exchange Derivatives entered into for purposes of
hedging bona fide interest and foreign exchange risk and not for speculation,
PROVIDED that any such arrangements entered into with any of the Banks shall be
secured by the Collateral on a last-out basis.
Section 6.04. FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. As of the last day of any month,
the Parent will not permit the ratio of (i) its consolidated EBITDA for the
twelve (12) month period then ended calculated on a rolling twelve (12) month
basis to (ii) its consolidated Fixed Charges for such twelve month period to be
less than that shown as follows for the periods indicated
From To Minimum Ratio
-------------- -------- -------------
Effective Date 12/31/97 1.4 to 1.0
1/1/98 12/31/98 1.5 to 1.0
1/1/99 3/31/99 1.4 to 1.0
4/1/99 6/30/99 1.3 to 1.0
7/1/99 9/30/99 1.2 to 1.0
10/1/99 12/31/99 1.1 to 1.0
1/1/00
and thereafter 1.0 to 1.0
(b) INDEBTEDNESS-TO-EBITDA RATIO. As of any date of
determination, the Parent will not permit the ratio of (i) its total
consolidated Indebtedness as of the last day of the fiscal quarter immediately
preceding the date of determination to (ii) its consolidated EBITDA for the
twelve month period ending on the last day of the quarter immediately preceding
the date of determination, calculated on a rolling twelve (12) month basis, to
be greater than (A) 4.0 to 1.0 from the Effective Date through December 31,
1997, (B) 3.5 to 1.0 from January 1, 1998 through June 30, 1998, (C) 3.0 to 1.0
from July 1, 1998 through June 30, 1999, (D) 2.75 to 1.0 from July 1, 1999
through June 30, 2000, and (E) 2.5 to 1.0 from July 1, 2000 through the
Termination Date.
-44-
<PAGE>
(c) MINIMUM NET WORTH. The Parent will not permit consolidated
Net Worth to at any time be less than the sum of (i) $39,500,000.00 plus (ii)
fifty percent (50%) of Net Income for any fiscal quarter ending after the
Effective Date (excluding any such fiscal quarter in which Net Income is a
negative number), plus (iii) 100% of the proceeds of any equity offering or
similar capital infusion after the Effective Date.
(d) MINIMUM CURRENT RATIO. The Parent will not permit the ratio
of (i) its Current Assets to (ii) its Current Liabilities at the end of any
fiscal quarter to be less than 1.0 to 1.0.
Section 6.05. SALES OF ASSETS. Each Borrower will not, and will
not permit any of its Subsidiaries to (a) sell, transfer, assign or otherwise
dispose of the capital stock of any Credit Party or (b) sell, transfer, assign
or otherwise dispose of any Property (except for sales or other dispositions of
inventory and surplus or obsolete equipment in the ordinary course of business).
Section 6.06. CONSOLIDATION AND MERGERS. Each Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly, dissolve
or consolidate with or merge into any Person or permit any Person to consolidate
with or merge into it, except that: (i) any Subsidiary of the Parent may merge
into or consolidate with any other Subsidiary of the Parent (PROVIDED that if
either of such Subsidiaries is a Borrower, such Borrower shall be the surviving
entity), (ii) any Subsidiary of the Parent (other than the UK Borrower or the US
Borrower) may merge into or consolidate with the Parent (so long as the Parent
is the surviving entity), and (iii) any Subsidiary may dissolve after
transferring substantially all of its assets to the Parent or another Credit
Party PROVIDED in each case that immediately after giving effect and pro forma
effect thereto, no event shall occur and be continuing which constitutes either
a Default or an Event of Default.
Section 6.07. RESTRICTED DISBURSEMENTS. Each Borrower will not,
and will not permit any of its Subsidiaries to approve, make, incur or commit to
incur any Restricted Disbursements after the Execution Date other than:
(a) advances or extensions of credit on terms customary in the
industry involved in the form of accounts receivable incurred, and investments,
loans, and advances made in settlement of such accounts receivable, all in the
ordinary course of business;
(b) investments in cash or Cash Equivalents;
(c) dividends paid by any direct or indirect Subsidiary of the
Parent to the Parent directly or indirectly
(d) Indebtedness between the Parent and its Subsidiaries to the
extent permitted by SECTION 6.01;
(e) investments in any Credit Party;
-45-
<PAGE>
(f) Capital Expenditures (including Capital Leases) of not more
than (i) $7,500,000 during the remainder of calendar year 1997; (ii) $16,500,000
for calendar year 1998; and (iii) one hundred ten percent (110%) of the total
for the prior calendar year for each calendar year after 1998 during the term
hereof;
(g) acquisitions by the Parent or any of its Subsidiaries of
capital stock or other equity interests in any other Person the consideration
for which is: (y) common stock of the Parent or (z) cash of not more than
$7,500,000.00 in any single transaction or $22,500,000.00 in the aggregate (in
each case, including assumption of debt) during the term hereof; PROVIDED that
no Default exists or would occur as a result of such acquisition;
(h) investments in or loans to non-Credit Party Subsidiaries of
not more than $5,000,000.00 (or its Equivalent thereof in Dollars) in excess of
the investments or loans outstanding on the Execution Date outstanding in the
aggregate at any one time; PROVIDED, that if any Person in which such Investment
is made becomes a Credit Party, the actual amount of the dollar Investment in
such Person shall no longer be considered an Investment under this SECTION
6.07(H);
(i) other Restricted Disbursements of investments in capital
stock of a Borrower in respect of pension plans, cash paid in connection with
stock option programs, employee stock buybacks, and similar items not to exceed
$500,000.00 per fiscal year of the Parent;
(j) investments currently shown on SCHEDULE 6.07(J);
(k) other investments of not more than $500,000 in the aggregate
per fiscal year of the Parent; and
(l) investments acquired incidentally to and in conjunction with
acquisitions of assets permitted by this Section 6.07; PROVIDED that such
investments do not constitute more than five percent (5%) of the total
consideration paid for such acquisition.
Section 6.08. LINES OF BUSINESS. Each Borrower will not, and will
not permit any of its Subsidiaries to, materially alter the character of the
business of such Borrower and its Subsidiaries taken as a whole from that
conducted on the Effective Date.
Section 6.09. TRANSACTIONS WITH AFFILIATES. None of the Borrowers
nor any of their respective Subsidiaries, will enter into any transaction with
an Affiliate other than transactions entered into in the ordinary course of
business and upon terms no less favorable than those that such Borrower or its
Subsidiary, as applicable, could obtain in an arms length transaction with a
Person that is not an Affiliate. No Credit Party will transfer assets or funds
to any Affiliate or Subsidiary that is not a Credit Party except for value, as
permitted under SECTION 6.06 or as an investment permitted under SECTION 6.07.
-46-
<PAGE>
Section 6.10. RESTRICTIONS ON SUBSIDIARIES. Each Borrower will
not, and will not permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist any encumbrance or restriction which prohibits or otherwise
restricts (a) the ability of any Subsidiary to (i) pay dividends or make other
distributions or pay any Indebtedness owed to any Credit Party, (ii) make loans
or advances to any Credit Party, or (iii) transfer any of its Properties to any
Borrower or (b) the ability of any Borrower or any Subsidiary of such Borrower
to create, incur, assume or suffer to exist any Lien upon its Property to secure
the Obligations or to become a guarantor of the Obligations, other than
prohibitions or restrictions existing under or by reason of: (1) this Agreement
and the other Loan Documents; (2) applicable law; (3) Liens, prohibitions or
restrictions permitted by SECTION 6.02 and any documents or instruments
governing the terms of any Indebtedness or other obligations secured by any such
Liens, PROVIDED that such prohibitions or restrictions apply only to the
Property subject to such Liens; and (4) prohibitions or restrictions contained
in any document or instrument governing the terms of the Indebtedness permitted
by SECTION 6.01(H).
-47-
<PAGE>
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) any Borrower shall fail to pay when due any installment of
principal of the Notes or any reimbursement obligation in respect of any Letter
of Credit; or
(b) any Borrower shall fail to pay any interest on any Loan or
any arrangement fee, commitment fee, administration fee, funding fee, L/C Fee,
Facing Fee, commission, expense, compensation, reimbursement or other amount
when due and such default shall continue for a period of five (5) days which
shall, in no event, be less than three (3) Business Days; or
(c) any Borrower shall fail to perform any term, covenant or
agreement contained in ARTICLE VI or SECTION 5.01(E) of this Agreement; or
(d) any Borrower shall fail to perform any term, covenant or
agreement contained in this Agreement (other than those referenced in
subsections (a), (b) and (c) of this SECTION 7.01) and such failure shall not
have been remedied within thirty (30) days of: (y) any Borrower's obtaining
knowledge thereof or (z) written notice thereof having been delivered to any
Borrower by the Administrative Agent, whichever comes first; or
(e) any Credit Party shall fail to perform any term, covenant or
agreement contained in any Loan Document (other than those referenced in
subsections (a), (b), (c) and (d) of this SECTION 7.01) and such failure shall
not have been remedied within thirty (30) days of: (y) any Borrower's obtaining
knowledge thereof or (z) written notice thereof having been delivered to any
Borrower by the Administrative Agent, whichever comes first; or
(f) any representation or warranty made by a Borrower or any
Guarantor or any of their respective officers, in any Loan Document or in any
certificate, agreement, instrument or statement contemplated by or delivered
pursuant to, or in connection with, any Loan Document shall prove to have been
incorrect in any Material respect when made; or
(g) a Borrower or any of its Subsidiaries shall (i) fail to pay
Indebtedness having a principal amount in excess of $500,000.00 (or its
Equivalent if in a currency other than Dollars) in the aggregate (other than the
amounts referred to in subsections (a) and (b) of this SECTION 7.01) owing by
such Person, or any interest or premium thereon, when due (or, if permitted by
the terms of the relevant document, within any applicable grace period), whether
such Indebtedness shall become due by scheduled maturity, by required
prepayment, by acceleration, by demand or otherwise; or (ii) fail to perform any
term, covenant or condition on its part to be performed under any agreement or
instrument evidencing, securing or relating to any such Indebtedness, when
required to be performed, and such failure shall continue after the applicable
grace period, if any,
-48-
<PAGE>
specified in such agreement or instrument, if the effect of such failure is to
accelerate or to permit the holder or holders of such Indebtedness to
accelerate, the maturity of such Indebtedness; or
(h) any Loan Document shall (other than with the consent of the
Majority Banks), at any time after its execution and delivery for any reason,
cease to be in full force and effect or to provide the Liens contemplated
thereby, or shall be declared to be null and void, or the validity or any
enforceability thereof or of the Liens contemplated thereby shall be contested
by any Credit Party or any Credit Party shall deny in writing that it has any or
further liability or obligation under any such Loan Document; or
(i) a Borrower or any of its Subsidiaries shall be adjudicated
insolvent, or shall generally not pay, or admit in writing its inability to pay,
its debts as they mature, or make a general assignment for the benefit of
creditors, or any proceeding shall be instituted by any such Person seeking to
adjudicate it insolvent, seeking liquidation, winding-up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its Property, or a Borrower or any of its Subsidiaries shall take any action
in furtherance of any of the actions set forth above in this SECTION 7.01(I); or
(j) any proceeding of the type referred to in SECTION 7.01(I) is
filed, or any such proceeding is commenced against a Borrower or any of its
Subsidiaries or any such Person by any act indicates its approval thereof,
consent thereto or acquiescence therein, or an order for relief is entered in an
involuntary case under the bankruptcy law of the United States, or an order,
judgment or decree is entered appointing a trustee, receiver, custodian,
liquidator or similar official or adjudicating any such Person insolvent, or
approving the petition in any such proceedings, and such order, judgment or
decree remains in effect for sixty (60) days; or
(k) a final judgment or order for the payment of money in excess
of $500,000.00 (or its Equivalent if in a currency other than Dollars) (net of
acknowledged, uncontested insurance coverage) shall be rendered against any
Credit Party which has not been discharged, vacated or reversed and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) a stay of enforcement of such judgment or order by
reason of a pending appeal or otherwise, shall not be in effect for any period
of thirty (30) consecutive days; or
(l) if (i) any Pension Plan shall fail to satisfy the minimum
funding standards of ERISA or the Internal Revenue Code for any plan year or
part thereof or a waiver of such standards or extension of any amortization
period is sought or granted under section 412 of the Internal Revenue Code, (ii)
a notice of intent to terminate any Pension Plan shall have been or is
reasonably expected to be filed with the PBGC (other than in connection with a
termination under Section 4041(b) of ERISA) or the PBGC shall have instituted
proceedings under Section 4042 of ERISA to terminate or appoint a trustee to
administer any Pension Plan or the PBGC shall have notified a Borrower or any
ERISA Affiliate that a Pension Plan may become a subject to any such
proceedings,
-49-
<PAGE>
(iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning
of Section 4001(a)(18) of ERISA) under all Pension Plans, determined in
accordance with Title IV of ERISA, shall exceed $500,000, (iv) a Borrower or any
ERISA Affiliate shall have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA, the penalty or excise tax
provisions of the Internal Revenue Code relating to employee benefit plans
and/or other liability with respect to one or more Other Benefit Plans, (v) a
Borrower or any ERISA Affiliate withdraws from any Multiemployer Plan, (vi) a
Borrower or any ERISA Affiliate fails to make any contribution due, or payment
to, any Pension Plan, Multiemployer Plan and/or Other Benefit Plan, or (vii) a
Borrower or any ERISA Affiliate establishes or amends any employee welfare
benefit plan that provides post- employment welfare benefits in a manner that
would increase the liability of a Borrower or any ERISA Affiliate thereunder,
and any such event or events described in clauses (i) through (vii) above,
either individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect; or
(m) a Change of Control shall occur; or
(n) the stock of the Parent is involuntarily delisted by the
NASDAQ or other public exchange on which it is traded;
then, (i) upon the occurrence of any Event of Default described in SECTION
7.01(I) or SECTION 7.01(J), (A) the Commitments shall automatically terminate
and (B) the entire unpaid principal amount of all Loans, all interest accrued
and unpaid thereon, and all other amounts payable by the Borrowers under this
Agreement, the Notes and, the other Loan Documents shall automatically become
immediately due and payable, without presentment for payment, demand, protest,
notice of intent to accelerate, notice of acceleration or further notice of any
kind, all of which are hereby expressly waived by each Borrower, and the
Administrative Agent may direct the beneficiary of any outstanding Letter of
Credit to make a drawing under such Letter of Credit in an amount equal to the
full amount available thereunder and require from the US Borrower immediate
reimbursement for payments made pursuant to such drawing, or the Administrative
Agent, to the extent Cover had not already been provided, may direct the US
Borrower to deposit with the Administrative Agent cash equal to the aggregate
amount of all Outstanding Letters of Credit as security for the US Borrower's
obligations in respect of such Letters of Credit, and (ii) upon the occurrence
of any other Event of Default, the Administrative Agent may, and upon the
direction of the Majority Banks shall, by notice to each Borrower (A) declare
the Commitments to be terminated, whereupon the same shall forthwith terminate,
(B) declare the entire unpaid principal amount of all Loans, all interest
accrued and unpaid thereon, and all other amounts payable by the Borrowers under
this Agreement, the Notes, and the other Loan Documents, to be forthwith due and
payable, whereupon all such amounts shall become and be forthwith due and
payable, without presentment for payment, demand, protest, notice of intent to
accelerate, notice of acceleration or further notice of any kind, all of which
are hereby expressly waived by each Borrower, (C) direct the beneficiary of any
outstanding Letter of Credit to make a drawing under such Letter of Credit in an
amount equal to the full amount available thereunder and require from the US
Borrower immediate reimbursement for payments made pursuant to such drawing, or,
to the extent Cover had not already been provided, may direct the US
-50-
<PAGE>
Borrower to deposit with the Administrative Agent cash equal to the aggregate
amount of all Outstanding Letters of Credit as security for the US Borrower's
obligations in respect of such Letters of Credit, (D) setoff any amounts held by
it against any of the Obligations, as hereafter provided and (E) exercise any
other right or remedy available to it hereunder under any of the other Loan
Documents or at law or in equity.
Section 7.02. SETOFF IN EVENT OF DEFAULT. Upon the occurrence and
during the continuance of any Event of Default, each member of the Bank Group is
hereby authorized, at any time and from time to time, without notice to any
Borrower (any such notice being expressly waived by each Borrower) and to the
fullest extent permitted by applicable law, to setoff and apply any and all
deposits at any time held and other indebtedness at any time owing by such
member of the Bank Group (or any branch, Subsidiary or Affiliate of such member
of the Bank Group) to or for the credit or the account of any Borrower against
any and all of the obligations of any Borrower or any other Person, now or
hereafter existing under this Agreement, the Notes or the other Loan Documents,
irrespective of whether or not such member of the Bank Group shall have made any
demand for satisfaction of such obligations and although such obligations may be
unmatured. Any member of the Bank Group exercising such right agrees to notify
the relevant Borrower promptly after any such setoff and application made by
such Person; PROVIDED, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Bank Group under this
SECTION 7.02 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Bank Group may have hereunder or
under any applicable law.
Section 7.03. NO WAIVER; REMEDIES. No failure on the part of any
member of the Bank Group to exercise, or any delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided in any of the other Loan
Documents or by law.
Section 7.04. ENFORCEMENT. The amounts payable by the Borrowers
under the Loan Documents to each Bank shall be a separate and independent debt,
but no Bank shall be entitled to enforce any right arising out of any Loan
Document except through the Administrative Agent acting for and on behalf of all
Banks unless otherwise agreed by the Majority Banks.
-51-
<PAGE>
ARTICLE VIII
THE ADMINISTRATIVE AGENT, THE
SYNDICATION AGENT AND THE ISSUING BANK
Section 8.01. AUTHORIZATION AND ACTION. Each Bank hereby appoints
and authorizes the Administrative Agent, the Syndication Agent and the Issuing
Bank to take such action in such capacity on such Bank's behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent, the Syndication Agent or the Issuing Bank by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes or of
amounts owing under the other Loan Documents), neither the Administrative Agent,
the Syndication Agent nor the Issuing Bank shall be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks, and such instructions shall be
binding upon all Banks and any other holders of Notes; PROVIDED, HOWEVER, that
neither the Administrative Agent, the Syndication Agent nor the Issuing Bank
shall be required to take any action which exposes it to personal liability or
which is contrary to the Loan Documents or applicable law. Each of the
Administrative Agent, the Syndication Agent and the Issuing Bank is hereby
expressly authorized on behalf of the other members of the Bank Group, without
hereby limiting any implied authority, (a) to receive on behalf of each of the
other members of the Bank Group any payment of principal of or interest on the
Loans outstanding hereunder, any Letters of Credit and all other amounts accrued
hereunder paid to such Persons, and promptly to distribute to each other member
of the Bank Group its proper share of all payments so received; (b) to give
notice within a reasonable time on behalf of each other member of the Bank Group
to the Borrowers of any Default or Event of Default specified in this Agreement
of which the Administrative Agent has actual knowledge as provided in SECTION
8.09; (c) to distribute to the other members of the Bank Group copies of all
notices, agreements and other material as provided for in this Agreement as
received by such Person; and (d) to distribute to the Borrowers any and all
requests, demands and approvals received by such Person from any other member of
the Bank Group. Nothing herein contained shall be construed to constitute the
Administrative Agent, the Syndication Agent or the Issuing Bank as a trustee for
any holder of the Notes or of a participation therein, nor to impose on the
Administrative Agent, the Syndication Agent or the Issuing Bank any duties or
obligations other than those expressly provided for in the Loan Documents.
Section 8.02. RELIANCE, ETC. None of the Administrative Agent,
the Syndication Agent, the Issuing Bank, their Affiliates and their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct (as
determined by a court of competent jurisdiction by final and non-appealable
judgment). Without limitation of the generality of the foregoing, the
Administrative Agent, the Syndication Agent and the Issuing Bank: (a) may treat
the payee of any Note as the holder thereof until the Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the Bank which
is the payee of
-52-
<PAGE>
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
SECTION 10.02; (b) may consult with legal counsel (including counsel for the
Borrowers), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Bank and shall not be responsible to
any Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or the other Loan Documents;
(d) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
other Loan Documents on the part of the Borrowers or any other Person or to
inspect the property (including the books and records) of the Borrowers or any
other Person; (e) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of any
Loan Document, any collateral provided for therein, or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram, cable or
telex) believed by it to be genuine and signed or sent by the proper party or
parties. None of the Administrative Agent, the Syndication Agent, the Issuing
Bank, their Affiliates and their respective directors, officers, employees or
agents shall have any responsibility to the Borrowers on account of the failure
or delay in performance or breach by any Bank of any of its obligations
hereunder or to any Bank on account of the failure of or delay in performance or
breach by any other Bank or any Borrower of any of its obligations hereunder or
in connection herewith; PROVIDED that the foregoing does not relieve the
Administrative Agent, the Syndication Agent or the Issuing Bank of any of its
respective obligations in its capacity as a Bank.
Section 8.03. AGENTS, AFFILIATES AND OTHER ACTIVITIES. Without
limiting the right of any other Bank to engage in any business transactions with
the Borrowers or any of their Affiliates, with respect to its Commitment, the
Loans made by it, the Notes issued to it and its interest in the Outstanding
Letters of Credit, the Administrative Agent and the Syndication Agent shall each
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though they were not such Agents; and the term "Bank" or
"Banks" shall, unless otherwise expressly indicated, include said Person in its
individual capacity. Each of said Agents, or any of their Affiliates, may be
engaged in, or may hereafter engage in, one or more loan, Letter of Credit,
leasing, derivative or other financing activities not the subject of the Loan
Documents (collectively, the "OTHER FINANCINGS") with the Borrowers or any of
their Affiliates, or may act as trustee on behalf of, or depositary for, or
otherwise engage in other business transactions with the Borrowers or any of
their Affiliates (all Other Financings and other such business transactions
being collectively, the "OTHER ACTIVITIES") with no responsibility to account
therefor to the Banks. Without limiting the rights and remedies of the Banks
specifically set forth in the Loan Documents, no other Bank shall have any
interest in (a) any Other Activities, (b) any present or future guarantee by or
for the account of the Borrowers not contemplated or included in the Loan
Documents, (c) any present or future offset exercised by said Agents in respect
of any such Other Activities, (d) any present or future Property taken as
security for any such Other Activities or (e) any Property now or hereafter in
the possession or control of said Agents which may be or become security for the
obligations of the Borrowers under the Loan Documents by reason of the general
description of indebtedness secured,
-53-
<PAGE>
or of Property, contained in any other agreements, documents or instruments
related to such Other Activities; PROVIDED, that if any payment in respect of
such guarantees or such Property or the proceeds thereof shall be applied to
reduction of the obligations evidenced hereunder and by the Notes, then each
Bank shall be entitled to share in such application according to its pro rata
portion of such obligations.
Section 8.04. BANK CREDIT DECISION. Each Bank acknowledges that
it has, independently and without reliance upon any other member of the Bank
Group and based on the financial statements referred to in SECTION 4.06 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon any other
member of the Bank Group and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.
Section 8.05. INDEMNIFICATION. The Banks agree to indemnify each
of the Administrative Agent, the Syndication Agent and the Issuing Bank, their
Affiliates or any of their respective directors, officers, agents or employees
(to the extent not reimbursed by the Borrowers), ratably according to its
Commitment Percentage, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against any such Person in any way relating to or arising out of
this Agreement or the other Loan Documents or any action taken or omitted by any
such Person under this Agreement or the other Loan Documents, PROVIDED, that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Person's gross negligence or willful misconduct (as
determined by a court of competent jurisdiction by final and non-appealable
judgment). IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE ISSUING BANK AND THEIR
AFFILIATES AND THEIR DIRECTORS, OFFICERS, AGENTS OR EMPLOYERS SHALL BE
INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND ARISING OUT OF OR RESULTING FROM THE ORDINARY
NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OF SUCH PERSON. Neither the
Administrative Agent, the Syndication Agent nor the Issuing Bank shall be
required to do any act hereunder or under any other document or instrument
delivered hereunder or in connection herewith or take any action toward the
execution or enforcement of the agencies hereby created, or to prosecute or
defend any suit in respect of this Agreement or the Loan Documents or any
Collateral, unless indemnified to its satisfaction by the holders of the Notes
against loss, cost, liability, and expense. If any indemnity furnished to the
Administrative Agent, the Syndication Agent and the Issuing Bank for any purpose
is, in the opinion of such Person insufficient or becomes impaired, such Person
may call for additional indemnity and not commence or cease to do the acts
indemnified against until such additional indemnity is furnished. Without
limitation of the foregoing, each Bank agrees to reimburse the Administrative
Agent, the Syndication Agent and the Issuing Bank promptly upon
-54-
<PAGE>
demand for its ratable share of any out-of-pocket expenses (including counsel
fees) incurred by such Person in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and the other Loan
Documents, to the extent that the Administrative Agent, the Syndication Agent or
the Issuing Bank is not reimbursed for such expenses by the Borrowers.
Section 8.06. EMPLOYEES. Each of the Administrative Agent, the
Syndication Agent and the Issuing Bank may execute any of their respective
duties under this Agreement, the other Loan Documents and any instrument,
agreement or document executed, issued or delivered pursuant hereto or thereto
or in connection herewith or therewith, by or through employees, agents and
attorneys-in-fact, and shall not be answerable for the default or misconduct of
any such employee, agent or attorney-in-fact selected by it with reasonable
care. Each of the Administrative Agent, the Syndication Agent and the Issuing
Bank may, and upon the written instruction of the Majority Banks shall, enforce
on behalf of the Banks any claims which the Administrative Agent and/or the
Banks may have against any such employee, agent or attorney-in-fact, and any
recovery therefrom shall be applied for the pro rata benefit of the Banks.
Section 8.07. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving written notice thereof to the other
members of the Bank Group and the Borrower. Upon any such resignation, the
Majority Banks shall have the right to appoint a successor Administrative Agent.
If no successor Administrative Agent shall have been so appointed by the
Majority Banks, and shall have accepted such appointment, within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Banks, appoint a
successor Administrative Agent, which shall be a commercial bank or corporation
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. So long as
no Default exists, the Borrowers shall have the right to approve each successor
Administrative Agent, which approval shall not be unreasonably withheld. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under this Agreement,
subject to the requirement that such retiring Administrative Agent will execute
such documents and take such actions as may be necessary or desirable to cause
the successor Administrative Agent to be vested with all such rights, powers,
privileges and duties. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this ARTICLE VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. All reasonable costs and
expenses incurred by the Bank Group in connection with any amendments or other
documentation required by this SECTION 8.07 shall be paid by the Borrowers
pursuant to SECTION 10.04.
-55-
<PAGE>
Section 8.08. SUCCESSOR SYNDICATION AGENT AND ISSUING BANK. (a)
The Syndication Agent may resign at any time by giving written notice thereof to
the other members of the Bank Group and the Borrowers. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Syndication Agent. If no successor Syndication Agent shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Syndication Agent's giving of notice
of resignation, then the retiring Syndication Agent may, on behalf of the Banks,
appoint a successor Syndication Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000. So long as
no Default exists, the Borrowers shall have the right to approve each successor
Syndication Agent, which approval shall not be unreasonably withheld. Upon the
acceptance of any appointment as Syndication Agent hereunder by a successor
Syndication Agent, such successor Syndication Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Syndication Agent, and the retiring Syndication Agent shall be
discharged from its duties and obligations under this Agreement, subject to the
requirement that such retiring Syndication Agent will execute such documents and
take such actions as may be necessary or desirable to cause the successor
Syndication Agent to be vested with all such rights, powers, privileges and
duties. After any retiring Syndication Agent's resignation hereunder as
Syndication Agent, the provisions of this ARTICLE VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Syndication Agent under this Agreement. All reasonable costs and expenses
incurred by the Bank Group in connection with any amendments or other
documentation required by this SECTION 8.08(A) shall be paid by the Borrowers
pursuant to SECTION 10.04.
(b) The Issuing Bank may resign at any time by giving written
notice thereof to the other members of the Bank Group and the Borrowers. Upon
any such resignation, the Majority Banks shall have the right to appoint a
successor Issuing Bank. If no successor Issuing Bank shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Issuing Bank's giving of notice of
resignation, then the retiring Issuing Bank may, on behalf of the Banks, appoint
a successor Issuing Bank, which shall be a commercial bank or corporation
organized under the laws of the United States of America or of any state thereof
and having a combined capital and surplus of at least $500,000,000. So long as
no Default exists, the US Borrower shall have the right to approve each
successor Issuing Bank, which approval shall not be unreasonably withheld. Upon
the acceptance of any appointment as Issuing Bank hereunder by a successor
Issuing Bank, such successor Issuing Bank shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Issuing Bank, and the retiring Issuing Bank shall be discharged from its duties
and obligations under this Agreement, subject to the requirement that such
retiring Issuing Bank will execute such documents and take such actions as may
be necessary or desirable to cause the successor Issuing Bank to be vested with
all such rights, powers, privileges and duties. Without limiting the generality
of the foregoing, the US Borrower, the retiring Issuing Bank and the successor
Issuing Bank will cause each Letter of Credit issued by the retiring Issuing
Bank to be terminated and replaced by a Letter of Credit issued by the successor
Issuing Bank. After any retiring Issuing Bank's resignation hereunder as Issuing
Bank, the provisions of this ARTICLE VIII shall inure to its benefit as to any
-56-
<PAGE>
actions taken or omitted to be taken by it while it was Issuing Bank under this
Agreement. All reasonable costs and expenses incurred by the Bank Group in
connection with any amendments or other documentation required by this SECTION
8.08(B) shall be paid by the Borrowers pursuant to SECTION 10.04.
Section 8.09. NOTICE OF DEFAULT. The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless it shall have received notice from a Bank or a
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default" or "notice of
event of default," as applicable. If the Administrative Agent receives such a
notice from a Borrower, the Administrative Agent shall give notice thereof to
the other members of the Bank Group and, if such notice is received from a Bank,
the Administrative Agent shall give notice thereof to the other members of the
Bank Group and the Borrowers. The Administrative Agent shall be entitled to take
action or refrain from taking action with respect to such Default or Event of
Default as provided in this ARTICLE VIII.
Section 8.10. EXECUTION OF LOAN DOCUMENTS. Each member of the
Bank Group hereby authorizes and directs the Administrative Agent, the
Syndication Agent and the Issuing Bank to execute and deliver on its behalf each
Loan Document to be executed by the Administrative Agent pursuant to the terms
of this Agreement.
-57-
<PAGE>
ARTICLE IX
GUARANTY
Section 9.01. GUARANTY. (a) In consideration of, and in order to
induce the Banks to make Loans under this Agreement and to induce the Issuing
Bank to issue Letters of Credit under this Agreement, each Guarantor, including
each Borrower, hereby jointly, severally, unconditionally and irrevocably,
guarantees, as primary obligor, and not merely as surety, the punctual payment
and performance when due, whether at stated maturity, as an installment, by
required or optional prepayment or by demand, acceleration or otherwise, of all
Obligations of the Borrowers now or hereafter existing, except as hereinafter
provided. If any or all of the Obligations becomes due and payable hereunder,
the Guarantors jointly and severally unconditionally promise to pay such
Obligations to the Administrative Agent, or order, on demand, together with any
and all expenses (including reasonable counsel fees and expenses) which may be
incurred by the Bank Group in collecting any of the Obligations and in
connection with the protection, defense or enforcement of any rights under this
Agreement or any Loan Document; PROVIDED that notwithstanding anything contained
herein or in any of the Loan Documents to the contrary, the maximum liability of
each Guarantor hereunder shall never exceed the maximum amount which said
Guarantor could pay without having such payment set aside as a fraudulent
transfer or fraudulent conveyance or similar action under the U.S. Bankruptcy
Code or applicable state or foreign law, PROVIDED FURTHER, each Guarantor shall
be unconditionally required to pay all amounts demanded of it hereunder prior to
any determination of such maximum liability and the recipient of such payment,
if so required by a final non-appealable order of a court of competent
jurisdiction by final and non-appealable judgment, shall then be liable for the
refund of any excess amounts. If any such rebate or refund is ever required, all
other Guarantors (and the Borrowers) shall be fully liable for the repayment
thereof to the maximum extent allowed by applicable law.
(b) Notwithstanding any provisions of SECTION 9.01(A), the
Guarantor, Scott Pickford, shall not guaranty the Tranche B Loan, nor shall the
Guarantors Saybolt International B.V. or Saybolt Eastern Hemisphere B.V.
guaranty either: (i) the Tranche A Loan or (ii) the Dollar Revolving Loan to the
Parent in the principal amount of $30,000,000.00.
(c) The Guaranty of each of Saybolt International B.V., Saybolt
North America, Inc., Saybolt, Inc. and Saybolt Eastern Hemisphere B.V. shall be
effective only upon the acquisition of Saybolt by the Parent, as referenced in
SECTION 3.01(H). Until such acquisition, such Guaranty by said Persons shall not
be effective, notwithstanding said Persons' execution of this agreement,
PROVIDED, such Guaranty shall automatically become effective without the need
for further action of any kind by any Person at the time such acquisition is
effective.
Section 9.02. GUARANTY ABSOLUTE. Subject to SECTION 9.01, each of
the Guarantors hereby unconditionally guarantees that the Obligations will be
paid strictly in accordance with the terms of this Agreement, the Notes and the
other Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any member of the Bank Group with respect thereto. The liability of
each Guarantor under this
-58-
<PAGE>
ARTICLE IX shall constitute a guaranty of payment and not of collection and
shall be absolute and unconditional irrespective of, and each Guarantor waives
any and all defenses that may arise out of, any of the following: (a) any lack
of validity or enforceability of the Obligations, this Agreement, the Notes, or
any other Loan Document or any other agreement, security document or instrument
relating hereto or thereto; (b) any extension, renewal, modification,
settlement, compromise, waiver or release or any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to departure from this
Agreement, the Notes or any other Loan Document or any other agreement or
instrument relating thereto or executed in connection therewith or pursuant
thereto; (c) any taking, exchange, release or non-perfection of any Collateral,
or any release or amendment or waiver of or consent to departure from any other
Guaranty Agreement, for all or any of the Obligations; (d) any manner of
application of collateral, or proceeds thereof, to all or any of the
Obligations, or any manner of sale or other disposition of any Collateral for
all or any of the Obligations or any other assets of the Borrowers or any other
Person (including any other Guarantor); (e) any change, restructuring or
termination of the corporate structure or existence of any of the Borrowers or
any other Person; (f) any manner of application of payments on the Obligations,
whether at the direction of any of the Borrowers or any other Person; (g) any
other similar circumstances which might otherwise constitute a defense available
to, or a discharge of, any of the Borrowers or any other Person (including any
other Guarantor) of all or part of the Obligations; or (h) any of said
Guarantor's obligations as a Borrower hereunder in respect of any other Loan.
The obligations of the Guarantors under this guaranty shall not be subject to
reduction, termination or other impairment by reason of any setoff, recoupment,
counterclaim or defense or for any other reason. This guaranty is to be in
addition to and is not to prejudice or be prejudiced by any other securities or
guaranties (including any guaranty signed by any other Guarantor) which any
member of the Bank Group may now or hereafter hold from or on account of any of
the Borrowers and is to be binding on each Guarantor as a continuing security
notwithstanding any payments from time to time made to any member of the Bank
Group or any settlement of account or disability or incapacity affecting such
Guarantor or any other thing whatsoever.
Section 9.03. WAIVER. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any liability to which this Agreement applies
or may apply, and waives presentment, demand of payment, notice of intent to
accelerate, notice of acceleration, notice of dishonor or nonpayment, and any
requirement that any member of the Bank Group institute suit, collection
proceedings or take any other action to collect the Obligations, including any
requirement that any member of the Bank Group protect, secure, perfect or insure
any security interest or Lien against any Property subject thereto or exhaust
any right or take any action against the Borrowers or any other Person
(including the other Guarantor) or any Collateral (it being the intention of the
Bank Group and each Guarantor that the obligations of such Guarantor under this
ARTICLE IX are to be a guaranty of payment and not of collection) or that any
Borrower or any other Person (including the any other Guarantor) be joined in
any action hereunder. Each Guarantor hereby expressly waives, to the extent it
is located in Texas or otherwise entitled to the benefits thereof, each and
every right to which it may be entitled by virtue of the suretyship laws of the
State of Texas, including, without limitation, any and all rights
-59-
<PAGE>
it may have pursuant to Rule 31 or Rule 32, Texas Rules of Civil Procedure,
Section 17.001 of the Texas Civil Practice and Remedies Code and Chapter 34 of
the Texas Business and Commerce Code. Each Guarantor hereby waives marshaling of
assets and liabilities, sale in inverse order of alienation, notice by any
member of the Bank Group of the creation of any Indebtedness or liability to
which it applies or may apply, any amounts received by any member of the Bank
Group, notice of disposition or substitution of Collateral and of the creation,
advancement, increase, existence, extension, renewal, rearrangement and/or
modification of the Obligations.
Section 9.04. SUBROGATION. Subject to SECTION 9.06, each
Guarantor hereby irrevocably agrees that until the Obligations have been paid in
full and all the Commitments have been canceled, it will not exercise any rights
to which it may be entitled, by operation of law or otherwise, upon making any
payment hereunder (a) to be subrogated to the rights of any member of the Bank
Group against any of the Borrowers with respect to such payment, (b) to be
reimbursed, indemnified or exonerated by any of the Borrowers in respect
thereof, (c) to receive any payment, in the nature of contribution or for any
other reason, from any of the Borrowers with respect to such payment, (d) to
enforce any remedy which such Guarantor now has or may hereafter have against
the Borrowers or (e) to receive any benefit of, or right to participate in, any
security now or hereafter held by or for the benefit of any member of the Bank
Group. Each Guarantor agrees that if any amount shall be paid to such Guarantor
on account of any such rights at any time while such rights are restricted
pursuant to the preceding sentence, such amount shall be held in trust for the
benefit of the Bank Group and shall forthwith be paid to the Administrative
Agent to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement.
Section 9.05. CONTINUING GUARANTY. This guaranty is a continuing
guaranty and shall remain in full force and effect until payment in full of the
Obligations.
Section 9.06. EFFECT OF BANKRUPTCY PROCEEDING. This guaranty
shall continue to be effective, or be automatically reinstated, as the case may
be, if at any time payment, in whole or in part, of any of the Obligations is
rescinded or must otherwise be restored or returned by any member of the Bank
Group upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any of the Borrowers, any Guarantor or any other Person, or
upon or as a result of the appointment of a custodian, receiver, trustee or
other officer with similar powers with respect to any of the Borrowers, any
Guarantor or any other Person, or any substantial part of their Property, or
otherwise, all as though such payments had not been made. If an Event of Default
shall at any time have occurred and be continuing and declaration of such Event
of Default shall at such time be prevented by reason of the pendency against any
of the Borrowers of a case or proceeding under a bankruptcy or insolvency law,
each Guarantor agrees that, for purposes of this Agreement and its obligations
hereunder, the Obligations shall be deemed to have been accelerated with the
same effect as if the Obligations had been accelerated in accordance with the
terms hereof, and each Guarantor shall forthwith pay the Obligations specified
by the Administrative Agent to be paid hereunder without further notice or
demand.
-60-
<PAGE>
Section 9.07. FURTHER RESPONSIBILITIES. It is not necessary for
any member of the Bank Group to inquire into the capacity or powers of the
Borrowers or the officers, directors, partners or agents acting or purporting to
act on their behalf, and any Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder. Each Guarantor
assumes all responsibility for being and keeping itself informed of the other
Borrowers' financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks which each Guarantor assumes and incurs hereunder, and
agrees that no member of the Bank Group shall have any duty to advise either
Guarantor of information known to them regarding such circumstances or risks.
Section 9.08. SUBORDINATION. Each Borrower and Guarantor hereby
subordinates all indebtedness owing to it from any other Borrower or Guarantor
to the Obligations, and agrees that upon the occurrence and during the
continuance of a Default or an Event of Default, it shall not accept any payment
on the same until payment in full of the Obligations, and shall in no
circumstance whatsoever attempt to set off or reduce any obligations hereunder
because of such Indebtedness.
-61-
<PAGE>
ARTICLE X
MISCELLANEOUS
Section 10.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, any Note or any other Loan Document, or consent to
any departure by any Person herefrom or therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Borrowers and
the Majority Banks, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; PROVIDED,
that no amendment, waiver or consent shall, unless in writing and signed by all
the Banks, do any of the following: (a) waive any of the conditions specified in
ARTICLE III, (b) increase the Commitments of the Banks, (c) reduce the principal
of, or interest on, the Notes, the reimbursement obligations in respect of the
Letters of Credit or any fees or other amounts payable hereunder, (d) postpone
any date fixed for any payment of principal of, or interest on, the Notes, the
reimbursement obligations in respect of the Letters of Credit or any fees or
other amounts payable hereunder, (e) release a Credit Party or any other Person
from its payment obligations to the Bank Group, regardless of whether such
obligations are those of a primary obligor, a guarantor or surety, or otherwise,
(f) authorize the Administrative Agent to release Liens against any Collateral
covered by the Security Documents, (g) take action which expressly requires the
signing of all the Banks pursuant to the terms of this Agreement, (h) reduce the
Commitment Percentages or the aggregate unpaid principal amount of the Notes, or
the number of Banks, as the case may be, required for the Administrative Agent,
the Syndication Agent, the Issuing Bank or the Banks or any of them to take any
action under this Agreement or change the definition of Majority Banks or (i)
amend this SECTION 10.01; PROVIDED, FURTHER, that no amendment, waiver or
consent shall (i) unless in writing and signed by the Borrowers and the
Administrative Agent in addition to the Banks required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document, (ii) unless in writing and signed by the
Borrowers and the Syndication Agent in addition to the Banks required above to
take such action, affect the rights or duties of the Syndication Agent under
this Agreement or any other Loan Document and (iii) unless in writing and signed
by the Borrowers and the Issuing Bank in addition to the Banks required above to
take such action, affect the rights or duties of the Issuing Bank under this
Agreement, the Letters of Credit, Letter of Credit Applications, or any other
Loan Document. Any amendment, waiver or consent that becomes effective in
accordance with this SECTION 10.01 shall be binding on all of the Banks and upon
each future holder of any Note and upon each Credit Party without regard to
whether such Note has been marked to indicate such amendment, waiver or consent.
Section 10.02. PARTICIPATION AGREEMENTS AND ASSIGNMENTS;
INTER-CREDITOR MATTERS. (a) Each Bank may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and the Loans
owing to it, the Note or the Notes held by it, its interest in the Outstanding
Letters of Credit and the other Loan Documents); PROVIDED, that (i) each such
assignment shall be of a constant; and not a varying, percentage of all rights
and obligations of the assignor under this Agreement and the other Loan
Documents, (ii) the amount of the Commitment or Loans of the assigning Bank
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and
-62-
<PAGE>
Acceptance with respect to such assignment) shall, unless otherwise agreed to by
the Administrative Agent or unless such assignment is to a member of the Bank
Group, in no event be less than $5,000,000.00 in respect of all Loans assigned
(or, if in a Foreign Currency, in its Equivalent thereof in Dollars), (iii) each
such assignment to an Eligible Assignee who is not a member of the Bank Group
must be approved by the Parent, the Administrative Agent and the Issuing Bank
(which approval shall not be unreasonably withheld), and (iv) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance,
together with any Note subject to such assignment and a recordation fee in the
amount of $3,500 for processing such assignment. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations under the Loan Documents have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Bank under the Loan Documents, (y) the assigning Bank
thereunder shall, to the extent that rights and obligations under the Loan
Documents have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from further obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Bank's rights and obligations under this
Agreement, such Bank shall cease to be a party hereto) and (z) the assignee
thereunder shall be deemed to have made, as of such effective date, to the
Administrative Agent and the Borrowers the representations and warranties set
forth in SECTION 2.11(F).
(b) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Borrower or any other Person or the performance or observance by any Borrower or
any other Person of any of its obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement and the other Loan Documents,
together with copies of the financial statements referred to in SECTION 4.06 and
SECTION 5.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon any member of the Bank Group (including such assigning Bank) and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent,
the Syndication Agent and the Issuing Bank, to take such action on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to such Person by the terms thereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with
-63-
<PAGE>
their terms all of the obligations which by the terms of this Agreement and the
other Loan Documents are required to be performed by it as a Bank.
(c) The Administrative Agent shall maintain at its address
referred to in SECTION 10.03 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks and the Commitment of, and principal amount of the Loans
owing to, each Bank from time to time (the "REGISTER"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers and each member of the Bank Group may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrowers
or any member of the Bank Group at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Bank and an assignee representing that it is an Eligible Assignee,
together with any Notes subject to such assignment and the administrative fee
payable to the Administrative Agent for such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of EXHIBIT 10.02 hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrowers. Within five (5) Business Days
after its receipt of such notice, the Borrowers, at their own expense, shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Notes, new Notes to the order of such Eligible Assignee in an amount
corresponding to the relevant Commitment and Loans assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained any Commitment and Loans hereunder, new Notes to the order of the
assigning Bank in an amount corresponding to the relevant Commitment and Loans
retained by it hereunder. Such new Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Notes shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form prescribed by SECTION 2.04 hereto. The
Administrative Agent shall promptly return such surrendered Notes to the Parent
marked "canceled" or otherwise defaced.
(e) Each Bank may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Loans owing to it and its interest in the Outstanding Letters
of Credit); PROVIDED, that (i) such Bank's obligations under this Agreement
(including, without limitation, its Commitment to the Borrowers hereunder) and
the other Loan Documents shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, and the participating banks or other entities shall not be
considered a "Bank" for purposes of the Loan Documents, (iii) the participating
banks or other entities shall be entitled to the cost protection provisions
contained in SECTION 2.11 through SECTION 2.14 to the same extent that the Bank
from which such participating bank or other entity acquired its participation
would be entitled to the benefit of such cost protection provisions so long as
such Borrower is not obligated to pay any amount under such Sections in excess
of the amount that would have been due
-64-
<PAGE>
to such Bank under such Sections if no participations had been made by such
Bank, and (iv) the Borrowers and the other members of the Bank Group shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement and the other Loan Documents,
and such Bank shall retain the sole right to enforce the obligations of the
Borrowers relating to the Loans and the Letters of Credit to the extent
permitted hereby and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
with respect to the amounts of any fees payable hereunder or the amount of
principal of or the rate at which interest is payable on the Loans or the amount
of any reimbursement obligations payable with respect to any Letter of Credit or
the dates fixed for payments of principal or interest on the Loans or
reimbursement obligations in respect of any Letters of Credit).
(f) Any Bank may at any time pledge or assign all or any portion
of its rights under this Agreement and the other Loan Documents to any Federal
Reserve Bank without notice to or consent of the Borrowers. No such pledge or
assignment shall release the assigning Bank from its obligations hereunder.
(g) The Administrative Agent, the Syndication Agent, the Issuing
Bank and each Bank may furnish any information concerning a Borrower or its
Subsidiaries in its possession from time to time to Affiliates of the
Administrative Agent, the Syndication Agent, the Issuing Bank or such Bank
(including without limitation, in the case of BTCo, BT Securities Corporation
and its employees, to the extent necessary for the purposes contemplated by this
Agreement, including, without limitation, the syndication of the credit
facilities contemplated hereby) and, in the case of each Bank, to assignees and
participants (including prospective assignees and participants) of such Bank;
PROVIDED such recipient agrees to be bound by the terms of SECTION 10.15. If
requested by the Parent, such Bank will identify prospective assignees and
participants that have received such information.
Section 10.03. NOTICES. All correspondence, statements, notices,
requests and demands (collectively "COMMUNICATIONS") shall be in writing
(including telegraphic Communications) and mailed, telegraphed, telecopied,
facsimile transmitted or delivered as follows:
if to the Parent --
Core Laboratories N.V.
Herengracht 424
1017 BZ Amsterdam
The Netherlands
Telecopier: 011-31-20-627-9886
-65-
<PAGE>
if to the US Borrower --
Core Laboratories, Inc.
5295 Hollister Road
Houston, Texas 77040
Attn: Richard L. Bergmark
Telecopier: (713) 690-3947
Telephone: (713) 460-9600
if to the U.K. Borrower --
Core Laboratories (U.K.) Limited
Howe Moss Drive
Dyce Aberdeen
AB 2 OES
Scotland, United Kingdom
Telecopier: 011-44-1224-723-303
in the case of each notice to any Borrower, with a copy to --
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin St.
Houston, Texas 77002
Attn: T. Mark Kelly
Telecopier: (713) 615-5531
and to:
John D. Denson
General Counsel, Core Laboratories
5295 Hollister Road
Houston, Texas 77040
Telecopier: (713) 690-3947
if to the Administrative Agent --
Bankers Trust Company
130 Liberty Street, 14th Floor
New York, New York 10006
Attention: James T. Cullen
Telecopier: (212) 250-6029 or (212) 250-7351
-66-
<PAGE>
with a copy to --
Bankers Trust Company
909 Fannin Street, Suite 3000
Houston, Texas 77010
Attention: Roberta K. Bohn
Telecopier: (713) 759-6708
and to --
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: Thomas J. Perich
Telecopier: (713) 220-4285
if to the Syndication Agent or the Issuing Bank --
NationsBank, N.A.
700 Louisiana, 7th Floor
Houston, Texas 77002
Attention: Craig S. Wall or Jennifer Textus
Telecopier: (713) 247-7748
and to --
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: Thomas J. Perich
Telecopier: (713) 220-4285
if to any Bank, at its Domestic Lending Office, or as to each such party, at
such other address as such party shall designate in a written Communication to
each of the other parties hereto. All such Communications shall be effective, in
the case of written or telegraphed Communications, when deposited in the mails
or delivered to the telegraph company, respectively, and, in the case of a
Communication by telecopy or facsimile transmission, when telecopied or
transmitted against receipt of a confirmation, in each case addressed as
aforesaid, except that Communications to any member of the Bank Group pursuant
to ARTICLE II and ARTICLE VIII shall not be effective until received by such
Persons.
Section 10.04. COSTS AND EXPENSES. Each Borrower agrees to pay
promptly (a) all reasonable costs and expenses (including fees and expenses of
legal counsel) of the Administrative
-67-
<PAGE>
Agent, the Syndication Agent and the Issuing Bank incurred in connection with
the preparation, execution, delivery, filing, administration and recording of
the Loan Documents and the primary syndication of this Agreement in the course
of the initial syndication period (both before and after the date hereof) and
(b) all reasonable costs and expenses of any member of the Bank Group incurred
in connection with the enforcement of the Loan Documents including, but not
limited to, the reasonable fees and out-of-pocket expenses of counsel for any
member of the Bank Group, and local counsel who may be retained by such counsel,
with respect thereto, and the costs and expenses in connection with the custody,
preservation, or the sale of, or collection from, or other realization upon the
sale of, or collection from, or other realization upon any Collateral covered by
any of the Loan Documents. The agreements of any of the Borrowers contained in
this SECTION 10.04 shall survive the termination of the Commitments and the
payment of all other amounts owing under any of the Loan Documents.
Section 10.05. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Borrowers, the Bank Group and their
respective successors and assigns, except that no Borrower may assign or
transfer its rights hereunder without the prior written consent of the Banks.
Section 10.06. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement and the other Loan
Documents or made in writing by the Borrowers or any Guarantor in connection
herewith or therewith, shall survive the execution and delivery of this
Agreement, the Notes and the other Loan Documents. Any investigation by any
member of the Bank Group shall not diminish in any respect whatsoever its right
to rely on such representations and warranties.
Section 10.07. SEPARABILITY. Should any clause, sentence,
paragraph, subsection, Section or Article of this Agreement be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement. The parties
hereto agree that the part or parts of this Agreement so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom by the
parties hereto, and the remainder will have the same force and effectiveness as
if such stricken part or parts had never been included herein.
Section 10.08. CAPTIONS. The captions in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.
Section 10.09. COUNTERPARTS AND FACSIMILE SIGNATURES. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original, and all of which taken together shall constitute one and the
same agreement. Counterparts executed by facsimile shall be binding and
enforceable against the party forwarding same and all other parties hereto,
PROVIDED each party hereto
-68-
<PAGE>
agrees to use reasonable efforts to provide original signatures to all other
parties as soon as practicable.
Section 10.10. GOVERNING LAW. THIS AGREEMENT (INCLUDING THE
VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
Section 10.12. SUBMISSION TO JURISDICTION. (A) EACH BORROWER
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK
STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, CITY AND STATE OF NEW YORK, OR
ANY FEDERAL COURT LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS TO WHICH IT IS A PARTY, AND EACH BORROWER AND EACH GUARANTOR
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT; PROVIDED,
NOTHING IN THIS SECTION 10.12 IS INTENDED TO WAIVE THE RIGHT OF ANY MEMBER OF
THE BANK GROUP TO REMOVE ANY SUCH ACTION OR PROCEEDING COMMENCED IN ANY SUCH NEW
YORK STATE COURT TO AN APPROPRIATE NEW YORK FEDERAL COURT TO THE EXTENT THE
BASIS FOR SUCH REMOVAL EXISTS UNDER APPLICABLE LAW. EACH BORROWER AND EACH
GUARANTOR HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK
10019, AS ITS AGENT TO RECEIVE ON BEHALF OF IT AND ITS PROPERTIES SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY SENDING BY CERTIFIED
MAIL OR COURIER DELIVERY SERVICE A COPY OF SUCH PROCESS TO SUCH BORROWER OR SUCH
GUARANTOR IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS,
WITH A COPY TO SUCH BORROWER OR SUCH GUARANTOR AT ITS ADDRESS SPECIFIED HEREIN
AND EACH BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS
THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD
OF SERVICE, EACH BORROWER
-69-
<PAGE>
AND EACH GUARANTOR ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE SENDING BY CERTIFIED MAIL OR
COURIER DELIVERY SERVICE OF COPIES OF SUCH PROCESS TO IT AT ITS ADDRESS
SPECIFIED HEREIN. FOR ALL NON-BORROWER GUARANTORS, THE ADDRESS MAY BE THAT SHOWN
ON SCHEDULE 10.12 EACH BORROWER AND EACH GUARANTOR AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS SECTION 10.12 SHALL AFFECT THE RIGHT OF ANY MEMBER OF THE
BANK GROUP TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
THE RIGHT OF ANY MEMBER OF THE BANK GROUP TO BRING ANY ACTION OR PROCEEDING
AGAINST A BORROWER, A GUARANTOR OR ITS PROPERTIES, IN THE COURTS OF ANY OTHER
JURISDICTION.
(B) TO THE EXTENT THAT ANY BORROWER OR ANY GUARANTOR HAS OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY (SOVEREIGN OR OTHERWISE) FROM ANY LEGAL ACTION, SUIT OR
PROCEEDING, FROM JURISDICTION OF ANY COURT OR FROM SET-OFF OR ANY LEGAL PROCESS
(WHETHER SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OF JUDGMENT, EXECUTION OF JUDGMENT OR OTHERWISE) WITH RESPECT TO
ITSELF OR ANY OF ITS PROPERTY, SUCH BORROWER OR GUARANTOR HEREBY IRREVOCABLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. EACH BORROWER AND
EACH GUARANTOR HEREBY AGREES THAT THE WAIVERS SET FORTH IN THIS SECTION 10.12
SHALL HAVE THE FULLEST EXTENT PERMITTED UNDER THE FOREIGN SOVEREIGN IMMUNITIES
ACT OF 1976 OF THE UNITED STATES OF AMERICA AND ARE INTENDED TO BE IRREVOCABLE
AND NOT SUBJECT TO WITHDRAWAL FOR PURPOSES OF SUCH ACT.
Section 10.13. LIMITATION ON INTEREST. Each provision in this
Agreement and each other Loan Document is expressly limited so that in no event
whatsoever shall the amount paid, or otherwise agreed to be paid, by a Borrower
for the use, forbearance or detention of the money to be loaned under this
Agreement or any other Loan Document or otherwise (including any sums paid as
required by any covenant or obligation contained herein or in any other Loan
Document which is for the use, forbearance or detention of such money), exceed
that amount of money which would cause the effective rate of interest to exceed
the Highest Lawful Rate, and all amounts owed under this Agreement and each
other Loan Document shall be held to be subject to reduction to the effect that
such amounts so paid or agreed to be paid which are for the use, forbearance or
detention of money under this Agreement or such Loan Document shall in no event
exceed that amount of money which would cause the effective rate of interest to
exceed the Highest Lawful Rate. To the extent that the Highest Lawful Rate
applicable to a Bank is at any time determined by Texas law, such rate
-70-
<PAGE>
shall be the "indicated rate ceiling" described in Section (a)(1) of Article
1.04 of Chapter 1, Subtitle 1, Title 79, of the Revised Civil Statutes of Texas,
1925, as amended; PROVIDED, to the extent permitted by such Article, the Banks
from time to time by notice from the Administrative Agent to the Borrowers may
revise the aforesaid election of such interest rate ceiling as such ceiling
affects the then-current or future balances of the Loans outstanding under the
Notes. Notwithstanding any provision in this Agreement or any other Loan
Document to the contrary, if the maturity of the Notes or the obligations in
respect of the other Loan Documents are accelerated for any reason, or in the
event of prepayment of all or any portion of the Notes or the obligations in
respect of the other Loan Documents by a Borrower or in any other event, earned
interest on the Loans and such other obligations of such Borrower may never
exceed the maximum amount permitted by applicable law, and any unearned interest
otherwise payable under the Notes or the obligations in respect of the other
Loan Documents that is in excess of the maximum amount permitted by applicable
law shall be canceled automatically as of the date of such acceleration or
prepayment or other such event and, if theretofore paid, shall be credited on
the principal of the relevant Notes or, if the principal of the relevant Notes
has been paid in full, held as collateral for any contingent or unmatured
obligation of such Borrower, or, if there are no contingent or unmatured
obligations of such Borrower then outstanding, refunded to such Borrower. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Borrowers and the Banks shall,
to the maximum extent permitted by applicable law, amortize, prorate, allocate
and spread, in equal parts during the period of the actual term of this
Agreement, all interest at any time contracted for, charged, received or
reserved in connection with this Agreement. Chapter 15, Subtitle 3, Title 79, of
the Revised Civil Statutes of Texas, 1925, as amended (relating to revolving
loans and revolving triparty accounts), shall not apply to this Agreement or the
Notes or the transactions contemplated hereby.
Section 10.14. INDEMNIFICATION. Each Borrower agrees to
indemnify, defend and hold each member of the Bank Group, their Affiliates and
their officers, employees, agents, directors, shareholders and Affiliates
(collectively, "INDEMNIFIED PERSONS") harmless from and against any and all
loss, liability, damage, judgment, claim, deficiency or expense (including
interest, penalties, reasonable attorneys' fees and amounts paid in settlement)
incurred by or asserted against any Indemnified Person arising out of, in any
way connected with, or as a result of (i) the execution and delivery of this
Agreement and the other Loan Documents, the performance by the parties hereto
and thereto of its obligations hereunder and thereunder (including but not
limited to the making of the Commitments of each Bank) and consummation of the
transactions contemplated hereby and thereby, (ii) the actual or proposed use of
the Letters of Credit or the proceeds of the Loans, (iii) any violation by a
Borrower or any of its Subsidiaries of any Requirement of Law, including but not
limited to Environmental Laws, (iv) ownership by the Bank Group of any Property
following foreclosure under the Security Documents, to the extent such losses,
liabilities, damages, judgments, claims, deficiencies or expenses arise out of
or result from the presence, disposal or release of any hazardous materials or
solid waste in, on or under such property during the period owned, leased or
operated by a Borrower or any of its Subsidiaries, including, without
limitation, losses, liabilities, damages, judgments, claims, deficiencies or
expenses which are imposed under Environmental Laws upon Persons by virtue of
their ownership, (v) any member of the Bank Group being deemed an
-71-
<PAGE>
operator of any such real or personal property in circumstances in which no
member of the Bank Group is generally operating or generally exercising control
over such Property, to the extent such losses, liabilities, damages, judgments,
claims, deficiencies or expenses arise out of or result from any hazardous
materials or solid waste located in, on or under such property or (vi) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnified Person is a party thereto; PROVIDED that such
indemnity shall not apply to any such losses, claims, damages, liabilities or
related expenses that are determined by a court of competent jurisdiction by
final and non-appealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. WITHOUT LIMITING ANY PROVISION OF
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, IT IS THE EXPRESS INTENTION
OF THE BORROWERS THAT EACH INDEMNIFIED PERSON SHALL BE INDEMNIFIED AND HELD
HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DEFICIENCIES,
JUDGMENTS OR REASONABLE EXPENSES ARISING OUT OF OR RESULTING FROM THE ORDINARY
NEGLIGENCE (WHETHER SOLE, CONCURRENT OR CONTRIBUTORY) OF SUCH INDEMNIFIED
PERSON. THE OBLIGATIONS OF THE BORROWERS UNDER THIS SECTION 10.14 SHALL SURVIVE
THE TERMINATION OF THIS AGREEMENT.
Section 10.15. CONFIDENTIALITY. In the event that a Borrower or
any of its Subsidiaries provides any member of the Bank Group with written
confidential information belonging to such Borrower or any of its Subsidiaries,
that has been identified in writing at the time of delivery as "confidential",
each member of the Bank Group severally agrees to thereafter maintain such
information in confidence in accordance with the standards of care and diligence
that each utilizes in maintaining its own confidential information. This
obligation of confidence shall not apply to such portions of the information
which (i) are in the public domain, (ii) hereafter become part of the public
domain, (iii) are previously known by the Bank Group from some source other than
a Borrower, (iv) are hereafter obtained by or available to any member of the
Bank Group from a third party who owes no obligation of confidence to the
Borrowers with respect to such information or through any other means, (vi) are
disclosed with a Borrower's consent, (vii) must be disclosed either pursuant to
any Requirements of Law or to Persons regulating the activities of any member of
the Bank Group, or (viii) as may be required by law or regulation or order of
any Governmental Authority in any judicial, arbitration or governmental
proceeding. Further, any member of the Bank Group may disclose any such
information to any other Bank, any consultants, any independent certified public
accountants, any legal counsel employed by such Person in connection with this
Agreement or any other Loan Document, including without limitation, the
enforcement or exercise of all rights and remedies thereunder, or any assignee
or participant (including prospective assignees and participants) in the Loans;
PROVIDED, HOWEVER, that the member of the Bank Group disclosing such information
imposes on the Person to whom such information is disclosed the same obligation
to maintain the confidentiality of such information as is imposed upon it
hereunder. Notwithstanding anything to the contrary provided herein, this
obligation of confidence shall cease three (3) years from the date the
information was furnished, unless such Borrower requests, in writing at least
thirty (30) days prior to the expiration of such three year period, that the
Bank Group maintain the confidentiality of such information for an additional
three year period. Each Borrower
-72-
<PAGE>
waives any and all other rights it may have to confidentiality as against the
Bank Group arising by contract, agreement, statute or law except as expressly
stated in this SECTION 10.15.
Section 10.16. JUDGMENT. (a) RATE OF EXCHANGE. If, for the
purpose of obtaining judgment in any court, it is necessary to convert a sum due
under any Loan Document in another currency into Dollars or into a Foreign
Currency, as the case may be, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be that at
which, in accordance with normal banking procedures, a Bank could purchase such
other currency with Dollars or with such Foreign Currency, as the case may be,
in New York City, New York at the close of business on the Business Day
immediately preceding the day on which final judgment is given, together with
any premiums and costs of exchange payable in connection with such purchase.
(b) INDEMNITY. The obligation of each Borrower in respect of any
sum due from it to the Administrative Agent or any Bank under any Loan Document
shall, notwithstanding any judgment in a currency other than Dollars or a
Foreign Currency, as the case may be, be discharged only to the extent that on
the Business Day next succeeding receipt by the Administrative Agent or such
Bank of any sum adjudged to be so due in such other currency, the Administrative
Agent or such Bank may, in accordance with normal banking procedures, purchase
Dollars or such Foreign Currency, as the case may be, with such other currency.
If the Dollars or such Foreign Currency so purchased are less than the sum
originally due to such Administrative Agent or such Bank in Dollars or in such
Foreign Currency, each Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such
Bank against such loss, and if the Dollars or such Foreign Currency so purchased
exceed the sum originally due to the Administrative Agent or any Bank in Dollars
or in such Foreign Currency, as the case may be, the Administrative Agent or
such Bank agrees to remit to such Borrower such excess.
Section 10.17. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
-73-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by its officers thereunto duly authorized as of the date first
above written.
BORROWERS:
CORE LABORATORIES N.V. BY: CORE
LABORATORIES INTERNATIONAL B.V., ITS SOLE
MANAGING DIRECTOR
By: /s/ JACOBUS SCHOUTEN
Jacobus Schouten
Managing Director
CORE LABORATORIES, INC.
By: /s/ RICHARD L. BERGMARK
Richard L. Bergmark
Chief Financial Officer and Treasurer
CORE LABORATORIES (U.K.) LIMITED
By: /s/ KEN GUEST
Ken Guest
President
ADMINISTRATIVE AGENT:
BANKERS TRUST COMPANY, as
Administrative Agent
By: /s/ CALLIE HAYES
Callie Hayes
Managing Director
<PAGE>
SYNDICATION AGENT:
NATIONSBANK, N.A., as
Syndication Agent and as Issuing Bank
By: /s/ CRAIG S. WALL
Craig S. Wall
Senior Vice President
GUARANTORS:
CORE LABORATORIES N.V. BY: CORE
LABORATORIES INTERNATIONAL B.V., ITS SOLE
MANAGING DIRECTOR
By: /s/ JACOBUS SCHOUTEN
Jacobus Schouten
Managing Director
CORE LABORATORIES, INC.
By: /s/ RICHARD L. BERGMARK
Richard L. Bergmark
Chief Financial Officer and Treasurer
PROTECHNICS COMPANY
By: /s/ RICHARD L. BERGMARK
Richard L. Bergmark
Treasurer
<PAGE>
CORE LABORATORIES
INTERNATIONAL B.V.
By: /s/ JACOBUS SCHOUTEN
Jacobus Schouten
Managing Director
CORE LABORATORIES (U.K.) LIMITED
By: /s/ KEN GUEST
Ken Guest
President
SCOTT PICKFORD PLC
By: /s/ KEN GUEST
Ken Guest
Managing Director
SAYBOLT INTERNATIONAL B.V.
SAYBOLT EASTERN HEMISPHERE B.V.
By: /s/ FRERIK PLUIMERS
Frerik Pluimers
Managing Director
SAYBOLT, INC.
SAYBOLT NORTH AMERICA, INC.
By: /s/ DAVID MEAD
David Mead
President
<PAGE>
BANKS:
Tranche A Commitment: BANKERS TRUST COMPANY
$27,500,000.00
Tranche B Commitment:
$7,500,000.00 By: /s/ CALLIE HAYES
Dollar Revolving Commitment Callie Hayes
(a) to Parent - Managing Director
$15,000,000.00
(b) to US Borrower -
$10,000,000.00
Total - $25,000,000.00
Guilder Revolving ADDRESS:
Commitment: $2,500,000
Equivalent 130 Liberty Street, 14th Floor
New York, New York 10006
Telecopy No.: (212) 250-6029
DOMESTIC LENDING OFFICE:
Bankers Trust Company
130 Liberty Street, 14th Floor
New York, New York 10006
EUROCURRENCY LENDING OFFICE:
Bankers Trust Company
130 Liberty Street, 14th Floor
New York, New York 10006
<PAGE>
Tranche A Commitment: NATIONSBANK, N.A.
$27,500,000.00
Tranche B Commitment:
$7,500,000.00 By: /s/ CRAIG S. WALL
Dollar Revolving Commitment Craig S. Wall
(a) to Parent - Senior Vice President
$15,000,000.00
(b) to US Borrower -
$10,000,000.00
Total - $25,000,000.00
Guilder Revolving ADDRESS:
Commitment: $2,500,000
Equivalent 700 Louisiana, 7th Floor
Houston, Texas 77002
Telecopy No.: (713) 247-7748
DOMESTIC LENDING OFFICE:
NationsBank, N.A.
Attn: Jennifer Textus
700 Louisiana
Houston, Texas 77002
Telecopy No.: (713) 247-7748
EUROCURRENCY LENDING OFFICE:
NationsBank, N.A.
Attn: Jennifer Textus
700 Louisiana
Houston, Texas 77002
Telecopy No.: (713) 247-7748
EXHIBIT 10.2
STOCK PURCHASE AGREEMENT
AMONG
CORE LABORATORIES N.V.,
SAYBOLT INTERNATIONAL B.V.
AND
THE SHAREHOLDERS OF
THE SAYBOLT INTERNATIONAL B.V.
APRIL 16, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION..................................................1
1.02 CLOSING..........................................................1
1.03 PURCHASE PRICE...................................................1
1.04 ADJUSTMENT TO CLOSING PURCHASE PRICE.............................2
1.05 DEPOSIT..........................................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
2.01 GOOD TITLE.......................................................2
2.02 AUTHORIZATION AND VALIDITY OF AGREEMENTS.........................3
2.03 NO WITHHOLDING...................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.....................3
3.02 ORGANIZATIONAL DOCUMENTS.........................................4
3.03 CAPITALIZATION...................................................4
3.04 AUTHORITY........................................................5
3.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.......................5
3.06 PERMITS; COMPLIANCE..............................................6
3.07 FINANCIAL STATEMENTS.............................................7
3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS.............................7
3.09 LITIGATION.......................................................8
3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS............................8
3.11 TAXES...........................................................11
3.12 CERTAIN BUSINESS PRACTICES......................................11
3.13 ENVIRONMENTAL MATTERS...........................................12
3.14 UNDISCLOSED LIABILITIES.........................................13
3.15 CERTAIN AGREEMENTS..............................................13
3.16 CONTRACTS AND COMMITMENTS.......................................14
3.17 AFFILIATE INTERESTS.............................................14
-i-
<PAGE>
3.18 INTELLECTUAL PROPERTY...........................................14
3.19 BROKERS.........................................................15
3.20 INSURANCE.......................................................15
3.21 PROPERTIES......................................................15
3.22 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS......................16
3.23 MATERIAL SUBSIDIARIES...........................................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.01 ORGANIZATION AND QUALIFICATION..................................16
4.02 AUTHORITY.......................................................16
4.03 NO CONFLICT; REQUIRED FILINGS AND CONSENTS......................17
4.04 LITIGATION......................................................17
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY............................18
5.02 NEGATIVE COVENANTS OF THE COMPANY...............................18
ARTICLE VI
COVENANTS OF THE SHAREHOLDERS
6.01 COVENANTS OF THE SHAREHOLDERS...................................20
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS.................................21
7.02 ACCESS AND INFORMATION..........................................21
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS...........................22
7.04 PUBLIC ANNOUNCEMENTS............................................23
7.05 EXPENSES........................................................23
7.06 BOARD OF SUPERVISORY DIRECTORS; OPERATING COMMITTEE.............24
7.07 STICHTING PARTICIPATIE..........................................24
7.08 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE. .......24
-ii-
<PAGE>
ARTICLE VIII
INDEMNIFICATION
8.01 IN GENERAL......................................................25
8.02 DEDUCTIBLE; TIME LIMIT; FORM OF PAYMENT; CAP; EXCLUSIVITY.......26
8.03 DEFENSE OF THIRD PARTY CLAIMS...................................26
8.04 WAIVER..........................................................27
ARTICLE IX
CONDITIONS
9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY...............27
9.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR.................28
9.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS.........29
ARTICLE X
MISCELLANEOUS
10.01 TERMINATION.....................................................30
10.02 EFFECT OF TERMINATION...........................................30
10.03 WAIVER AND AMENDMENT............................................31
10.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES.....................31
10.05 ASSIGNMENT......................................................31
10.06 CERTAIN DEFINITIONS.............................................31
10.07 NOTICES.........................................................32
10.08 GOVERNING LAW...................................................34
10.09 SEVERABILITY....................................................35
10.10 COUNTERPARTS....................................................35
10.11 HEADINGS........................................................35
10.12 SPECIFIC PERFORMANCE............................................35
10.13 FORUM...........................................................35
EXHIBITS:
Exhibit A -- Form of Escrow Agreement
Exhibit B -- Form of Pluimers Employment Agreement
Exhibit C -- Form of Mead Employment Agreement
Exhibit D -- Form of Heinsbroek Employment Agreement
-iii-
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into
as of April 16, 1997 by and among Core Laboratories N.V., a Netherlands public
limited liability company ("Acquiror"), Saybolt International B.V., a
Netherlands private limited liability company (the "Company"), and each of the
shareholders of the Company set forth on the signature pages hereto
(collectively, the "Shareholders").
WHEREAS, the Shareholders are the record and (except for Capital
Partnership Nominees Ltd. ("CPNL") and Stichting Participatie Saybolt
International B.V. (the "Stichting")) beneficial owners of all of the issued and
outstanding Class A ordinary shares, par value 1.00 Dutch guilders per share, of
the Company ("Company Class A Shares") and Class B ordinary shares, par value
0.10 Dutch guilders per share, of the Company ("Company Class B Shares" and,
together with the Company Class A Shares, the "Company Shares"); and
WHEREAS, pursuant to the terms and subject to the conditions set forth in
this Agreement, each of the Shareholders desires to sell all the Company Shares
owned by such Shareholder and Acquiror desires to acquire all of the issued and
outstanding Company Shares;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION. Pursuant to the terms and subject to the conditions
set forth in this Agreement, Acquiror agrees to purchase from the Shareholders
all of the issued and outstanding Company Shares (the "Acquisition") for an
aggregate cash purchase price, subject to adjustment as provided in Section
1.04, of U.S. $67 million (the "Purchase Price"). Pursuant to the terms and
subject to the conditions set forth in this Agreement, each of Shareholders
agrees to sell to Acquiror that number of Company Shares set forth opposite such
Shareholder's name on the signature pages to this Agreement for such
Shareholder's pro rata portion of the Purchase Price.
1.02 CLOSING. The Closing (as defined in Section 10.06) shall take place
(a) at 10:00 a.m. on the next business day following the date on which the
conditions set forth in Article IX (other than the conditions set forth in
Sections 9.01(b), 9.02(e), 9.03(c) and 9.03(d) and the delivery of the
certificates described in Sections 9.02(a), 9.02(b), 9.03(a) and 9.03(b)) of
this Agreement have been (or, in the case of Sections 9.02(a), 9.02(b), 9.03(a)
and 9.03(b), would be on such date) satisfied or, if permissible, waived, at the
offices of Nauta Dutilh located at Weena 750, 3014 DA Rotterdam, The Netherlands
or (b) at such other date, place and time as the parties hereto may agree in
writing.
1.03 PURCHASE PRICE. Subject to satisfaction or, if permissible, waiver of
the conditions set forth in Article IX, the Purchase Price shall be paid by
Acquiror at the Closing as follows: (a) U.S. $6 million (the "Escrowed Purchase
Price") shall be delivered to Chase Manhattan Bank, N.A., as escrow agent (the
"Escrow Agent"), pursuant to an escrow agreement substantially in the form of
Exhibit A to this Agreement (the "Escrow Agreement") to secure the obligations
of the
-1-
<PAGE>
Shareholders pursuant to Article VIII, (b) U.S. $61 million (as such amount may
be reduced by Section 1.04, the "Closing Purchase Price") shall be paid to the
Shareholders in immediately available funds (each Shareholder to be paid at the
Closing an amount equal to the Closing Purchase Price multiplied by a fraction,
the numerator of which is the number of Company Shares owned by such Shareholder
and the denominator of which is the aggregate number of Company Shares issued
and outstanding on the Closing Date). Each Company Class A Share and each
Company Class B Share shall receive the same proportion of the Closing Purchase
Price on a per share basis.
1.04 ADJUSTMENT TO CLOSING PURCHASE PRICE. If the estimate delivered by
the Company pursuant to Section 9.02(f) of the fees and disbursements of legal
counsel, accountants, investment bankers, brokers or finders and actuaries
incurred by the Company in connection with the negotiation of this Agreement and
that certain Heads of Agreement dated as of January 17, 1997 between the Company
and Acquiror and in connection with the transactions contemplated hereby and
thereby ("Company Transaction Costs") exceeds U.S. $2.1 million, then the
Closing Purchase Price shall be reduced by such excess.
1.05 DEPOSIT. Within two business days after the execution and delivery of
this Agreement, Acquiror shall pay to the Company a deposit of U.S. $1 million
(the "Deposit") in immediately available funds. The Company agrees to pay to
Acquiror the amount of the Deposit plus any accrued interest earned thereon, in
immediately available funds, within two business days following the earlier of
(a) receipt by the Company of Acquiror's written waiver, in a form reasonably
acceptable to the Company, of the conditions set forth in Section 9.02(g) of
this Agreement and a copy of any commitment letters received by Acquiror from
the source or sources of the Financing (as defined in Section 9.02(g))
evidencing a commitment from such source or sources to provide the Financing to
Acquiror, subject to customary conditions, and (b) termination of this Agreement
for any reason other than a termination of this Agreement solely as a result of
the failure to satisfy the conditions set forth is Section 9.02(g) of this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
Each of the Shareholders, severally and not jointly, represents and
warrants (except for CPNL, which represents and warrants only to Section 2.01
and the first sentence of Section 2.02) to Acquiror that:
2.01 GOOD TITLE. Except as set forth in Section 2.01 of the Company
Disclosure Schedule (as hereinafter defined), such Shareholder is the sole
record and (except for CPNL and the Stichting) beneficial owner of, and has good
and valid title to, the number of shares of Company Stock set forth opposite
such Shareholder's name on the signature pages hereto, free and clear of all
liens, claims, encumbrances, options, voting trusts or agreements, proxies or
other claims or charges of any nature whatsoever (other than resulting from this
Agreement). Upon the execution by each of the Shareholders, the Company and
Acquiror of the document referred to in Section 9.02(e), Acquiror shall be the
owner of, and have good and valid title to, the shares of Company Stock
described opposite such Shareholder's name on the signature pages hereto, free
and clear of all liens, claims,
-2-
<PAGE>
encumbrances, options, voting trusts or agreements, proxies or other claims or
charges of any nature whatsoever (other than resulting from this Agreement).
2.02 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Such Shareholder has the
full power, legal right, capacity and authority to enter into, execute and
deliver this Agreement and the Escrow Agreement and to carry out and perform the
transactions contemplated hereby and thereby. Each of this Agreement and the
Escrow Agreement constitutes a valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with its terms, (a) except as
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
law now or hereafter in effect relating to or affecting creditors' rights
generally, and without limitation, the effect of statutory or other laws
regarding fraudulent conveyances and preferential transfers, (b) subject to the
limitations imposed by general rules of equity (regardless of whether such
enforceability is considered at law or in equity) and (c) with respect to the
Stichting, subject to Section 9.01(f).
2.03 NO WITHHOLDING. Neither Acquiror nor any of its affiliates are
required to deduct or withhold from the consideration otherwise payable pursuant
to this Agreement or the Escrow Agreement to such Shareholder any amounts under
the Code (as hereinafter defined) or any other provision of federal, state,
local or foreign tax law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Subject to Section 8.02, the Company represents and warrants to Acquiror
that:
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) The Company is a Netherlands private limited liability company,
and each of the Company's subsidiaries (as such term in defined in Section 10.06
herein) is, except as set forth in Section 3.01 of the Company Disclosure
Schedule (as defined below), duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, and each of the Company and its subsidiaries has all requisite
power and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted and, except as set forth in Section 3.01
of the Company Disclosure Schedule, is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary, other than where the failure to be so duly qualified and in good
standing could not reasonably be expected to have a Company Material Adverse
Effect. The term "Company Material Adverse Effect" as used in this Agreement
shall mean any change or effect that would be materially adverse to the
business, operations or financial condition of the Company and its subsidiaries,
taken as a whole, at the time of such change or effect. Section 3.01 of the
Disclosure Schedule delivered by the Company to Acquiror concurrently with the
execution of this Agreement (the "Company Disclosure Schedule") sets forth, as
of the date of this Agreement, a true and complete list of all the Company's
directly or indirectly owned subsidiaries, together with the jurisdiction of
incorporation or organization of each subsidiary, the jurisdictions in which
each such subsidiary is qualified to conduct business, and the percentage of
-3-
<PAGE>
each subsidiary's outstanding capital stock or other equity interests owned by
the Company or another subsidiary of the Company. Such list also indicates which
of such subsidiaries are Material Subsidiaries (as hereinafter defined).
(b) The corporate or other official record books of the Company and
each of its Material Subsidiaries accurately record in all material respects all
material company actions taken by their respective shareholders, directors and
officers. The copies of the minutes of the meetings of the directors of the
Company and each of its Material Subsidiaries, as made available to Acquiror for
review, are true and complete copies of the originals of such documents. The
term "Material Subsidiary" as used in this Agreement shall mean any subsidiary
that in 1996 accounted for 2% or more of the Company's consolidated revenues, 5%
or more of the Company's consolidated net assets or both.
3.02 ORGANIZATIONAL DOCUMENTS. The Company has heretofore furnished or
made available to Acquiror complete and correct copies of the Articles of
Association or the equivalent organizational documents, in each case as amended
or restated to the date hereof, of the Company and each of its subsidiaries.
Neither the Company nor any of its Material Subsidiaries is in violation of any
of the provisions of its Articles of Association (or equivalent organizational
documents).
3.03 CAPITALIZATION.
(a) The authorized share capital of the Company amounts to NLG
2,000,000. There are authorized 1,000,000 Class A Company Shares and 9,990,000
Class B Company Shares. As of the date of this Agreement, there are 504,639
Class A Company Shares and 495,361 Class B Company Shares issued and
outstanding. No Company Shares are held by the Company in its treasury or by the
Company's subsidiaries and no Company Shares are reserved for issuance for any
purpose. Except as set forth above, there are no capital shares (including
preferred shares) of, or other equity interests in, the Company authorized,
issued or outstanding. Each of the issued capital shares of, or other equity
interests in, each of the Company and its subsidiaries is duly authorized,
validly issued and, in the case of capital shares, fully paid and nonassessable,
and has not been issued in violation of (nor, except pursuant to the Saybolt
International B.V. Shareholders' and Subscription Agreement dated June 4, 1992
(a true, correct and complete copy of which has been provided to Acquiror), are
any of the authorized capital shares of, or other equity interests in, the
Company or any of its subsidiaries subject to) any preemptive right, right of
first refusal or similar rights created by statute, the Articles of Association
(or the equivalent organizational documents) of the Company or any of its
subsidiaries, or any agreement to which the Company or any of its subsidiaries
is a party or is bound, and all such issued shares or other equity interests of
the Company's subsidiaries owned by the Company or a subsidiary of the Company
are owned free and clear of all security interests, liens, claims, pledges,
agreements, limitations on the Company's or such subsidiaries' voting rights,
charges or other encumbrances of any nature whatsoever.
(b) No bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into or exchangeable or exercisable for
securities having the right to vote) on any matters on which shareholders may
vote ("Voting Debt") are issued or outstanding.
-4-
<PAGE>
(c) Except as set forth in Section 3.03(a) above or in Section
3.03(c) of the Company Disclosure Schedule, there are no outstanding
subscriptions, options, warrants or other rights (including registration
rights), agreements, arrangements or commitments of any character to which the
Company or any of its subsidiaries is a party relating to the issued or unissued
capital stock or other equity interests of the Company or any of its
subsidiaries or obligating the Company or any of its subsidiaries to grant,
issue or sell any shares of capital stock, Voting Debt or other equity interests
of the Company or any of its subsidiaries. Except as set forth in Section
3.03(c) of the Company Disclosure Schedule, there are no obligations, contingent
or otherwise, of the Company or any of its subsidiaries (i) to repurchase,
redeem or otherwise acquire any Company Shares or shares of other capital stock
of the Company or the capital stock or other equity interests of any subsidiary
of the Company or (ii) (other than advances to wholly owned subsidiaries in the
ordinary course of business) to provide material funds to, or to make any
material investment in (in the form of a loan, capital contribution or
otherwise), or to provide any guarantee with respect to the material obligations
of, any person other than a wholly owned subsidiary of the Company. Except (i)
as set forth in Section 3.03(c) of the Company Disclosure Schedule or (ii) for
subsidiaries of the Company set forth in Section 3.01 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries (x) directly or
indirectly owns, (y) has agreed to purchase or otherwise acquire or (z) holds
any interest convertible into or exchangeable or exercisable for, 5% or more of
the capital stock or other equity interest of any corporation, partnership,
joint venture or other business association or entity. Except as set forth in
Section 3.03(c) of the Company Disclosure Schedule, there are no voting trusts,
shareholder agreements, proxies or other agreements or understandings with
respect to the voting of any shares of capital stock or other equity interests
of the Company or any of its subsidiaries.
3.04 AUTHORITY. The Company has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof by Acquiror, constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its terms.
3.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming that all consents, licenses, permits, waivers,
approvals, authorizations, orders, filings and notifications contemplated by the
exceptions to Section 3.05(b) are obtained or made and except as disclosed in
Section 3.05(a) of the Company Disclosure Schedule, the execution and delivery
of this Agreement by the Company does not, and the performance by the Company of
its obligations hereunder, including consummation of the transactions
contemplated hereby, will not (i) conflict with or violate the Articles of
Association, or the equivalent organizational documents, in each case as amended
or restated, of the Company or any of its Material Subsidiaries, (ii) conflict
with or violate any federal, state, foreign (including, but not limited to,
Dutch Law) or local law, statute, ordinance, rule or regulation (collectively,
"Laws") or any judgment, order, writ, injunction, determination, arbitration
award or decree applicable to the
-5-
<PAGE>
Company or any of its Material Subsidiaries or by or to which any of their
respective properties is bound or subject or (iii) result in any material breach
of or constitute a material default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation or imposition of a mortgage, pledge, lien,
security interest or other charge or encumbrance on any of the properties or
assets of the Company or any of its Material Subsidiaries pursuant to, any
material note, bond, mortgage, indenture, contract, agreement (other than
pursuant to the provisions of the Company's credit facility as in effect on the
date of this Agreement, a true, correct and complete copy of which has been
provided to Acquiror), lease, license, permit, authorization, franchise or other
instrument or obligation to which the Company or any of its Material
Subsidiaries is a party or by or to which the Company or any of its Material
Subsidiaries or any of their respective properties is bound or subject.
(b) The execution and delivery of this Agreement by the Company does
not, and the performance by the Company of its obligations hereunder, including
consummation of the transactions contemplated hereby, will not, require the
Company to obtain any consent, license, permit, certificate, waiver, approval,
authorization or order of, or to make any filing with or notification to, any
foreign, federal, national, republic, provincial, state, territorial, county,
municipal or city agency, department, commission, board, office, bureau, court,
tribunal or any other political entity, aggregation, or subdivision of any of
the foregoing (each, a "Governmental Entity"), except (i) the applicable
requirements, if any, of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (ii) the filings and notices required pursuant
to Dutch Law, (iii) where the failure to obtain such consents, licenses,
permits, certificates, waivers, approvals, authorizations or orders, or to make
such filings or notifications could not reasonably be expected to cause a
Company Material Adverse Effect or to prevent the Company from performing its
obligations under this Agreement or (iv) as disclosed in Section 3.05(b) of the
Company Disclosure Schedule.
3.06 PERMITS; COMPLIANCE. Except as disclosed in Section 3.06 of the
Company Disclosure Schedule, each of the Company and its Material Subsidiaries
is in possession of all (i) franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates,
identification and registration numbers, approvals and orders necessary to own,
lease and operate its properties and to carry on its business as it is now being
conducted (collectively, the "Company Permits"). Section 3.06 of the Company
Disclosure Schedule sets forth a list of each of the Company Permits and the
jurisdiction issuing the same, all of which are in good standing and, to the
Company's knowledge, not subject to meritorious challenge. Section 3.06 of the
Company Disclosure Schedule also sets forth, as of the date of this Agreement,
all actions, proceedings or investigations pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries that could
reasonably be expected to result in the loss, suspension or revocation of a
Company Permit. Except as set forth in Section 3.06 of the Company Disclosure
Schedule, the Company and its Material Subsidiaries are in material compliance
with, and none of them has received, since December 31, 1994, from any
Governmental Entity any written notice with respect to any material
non-compliance with, (i) any Law applicable to the Company or any of its
subsidiaries or by or to which any of their respective properties is bound or
subject, (ii) any judgment, order, writ, injunction determination, arbitration
award or decree applicable to the Company or any of its subsidiaries or (iii)
any of the Company Permits.
-6-
<PAGE>
3.07 FINANCIAL STATEMENTS. The Company has provided Acquiror with true,
correct and complete copies of its consolidated balance sheets as of, and its
income statements and statements of cash flows for the years ended, December 31,
1994, 1995 and 1996, and the notes related thereto (collectively, the "Company
Financial Statements"). Each of the Company Financial Statements (including, in
each case, any related notes thereto) (i) has been audited by Price Waterhouse
L.L.P., (ii) has been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods covered thereby (except (A) to the extent disclosed therein or
required by changes in GAAP, or (B) as may be indicated in the notes thereto)
and (iii) fairly present the consolidated financial position of the Company and
its subsidiaries as of the respective dates thereof and the consolidated results
of operations and cash flows for the periods indicated.
3.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by this
Agreement or as set forth in Section 3.08 of the Company Disclosure Schedule,
since December 31, 1995 the Company and its subsidiaries have conducted their
respective businesses only in the ordinary course and in a manner consistent
with past practice, and there has not been: (i) any damage, destruction or loss
with respect to any property, assets or business of the Company or any of its
subsidiaries that, whether or not covered by insurance, would constitute a
Company Material Adverse Effect; (ii) any change by the Company or its
subsidiaries in their accounting methods or practices, credit practices or
collection policies; (iii) except for dividends by a wholly owned subsidiary of
the Company to the Company or to another wholly owned subsidiary of the Company,
any declaration, setting aside or payment of any dividends or distributions in
respect of the Company Shares or shares of stock of, or other equity interests
in, the Company or any subsidiary of the Company or any redemption, purchase or
other acquisition of any of the Company's securities or any of the securities of
any subsidiary of the Company; (iv) any material increase in the benefits under,
or the establishment or amendment of, any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, performance awards
(including, without limitation, the granting of stock appreciation rights or
restricted stock awards), stock purchase or other employee benefit plan, or any
increase in the compensation payable or to become payable to any of the
directors or officers of the Company or the employees of the Company and its
subsidiaries as a group, except in the ordinary course of business and
consistent with past practice or in contemplation of the Acquisition and with
Acquiror's written consent; (v) any purchase, sale or other disposition, or any
agreement or other arrangement for the purchase, sale or other disposition, of
any of the properties or assets of the Company or any of its subsidiaries other
than in the ordinary course of business; (vi) any change in the financial
condition, properties, assets, liabilities, business or operations of the
Company or any of its subsidiaries, which change by itself or in conjunction
with all other such changes, whether or not arising in the ordinary course of
business, would constitute a Company Material Adverse Effect (except that
operating results have been consistent, generally, with the results reflected in
the Company Financial Statements); (vii) any contingent liability incurred by
the Company or any of its subsidiaries as guarantor or otherwise with respect to
the obligations of others or any cancellation of any material debt or claim
owing to, or waiver of any material right of, the Company or any of its
subsidiaries, other than warranties or other similar items incurred in the
ordinary course of business; (viii) any mortgage, encumbrance or lien placed on
any of the properties of the Company or any of its subsidiaries which remains in
existence on the date this representation is made; (ix) any payment or discharge
of a material lien or liability of the Company or any of its subsidiaries which
was not shown in the Company Financial Statements or incurred in the ordinary
course of business thereafter;
-7-
<PAGE>
(x) any other Company Material Adverse Effect or (xi) any agreement or
understanding, whether in writing or otherwise, for the Company or any of its
subsidiaries to take any of the actions specified in paragraphs (i) through (x)
above.
3.09 LITIGATION. Except as disclosed in Section 3.09 of the Company
Disclosure Schedule, (a) there is no claim, action, suit, litigation,
proceeding, arbitration or, to the knowledge of the Company, investigation of
any kind, at law or in equity (including actions or proceedings seeking
injunctive relief), pending or, to the knowledge of the Company or any of the
Shareholders, threatened against the Company or any of its subsidiaries or any
properties or rights of the Company or any of its subsidiaries that could
reasonably be expected to have a Company Material Adverse Effect, and (b)
neither the Company nor any of its subsidiaries is subject to any executory
judgment, order, writ, injunction, decree or award of any Governmental Entity,
including without limitation any cease and desist order and any consent decree,
settlement agreement or other similar written agreement with any Governmental
Entity that could reasonably be expected to have a Company Material Adverse
Effect.
3.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) COPIES OF BENEFIT PLANS. Section 3.10(a) of the Company
Disclosure Schedule provides a list of each Benefit Plan that is sponsored,
maintained or contributed to by the Company or any of its subsidiaries, or has
been so sponsored, maintained or contributed to within six years prior to the
date of this Agreement. True, correct and complete copies of each of such
Benefit Plans, and related trusts, if applicable, including all amendments
thereto, have been furnished to Acquiror. There have also been furnished to
Acquiror, with respect to each such Benefit Plan required to file such report or
description, the most recent report on Form 5500 and the summary plan
description.
(b) EMPLOYEE BENEFIT PLAN COMPLIANCE.
(i) Except as set forth in Section 3.10(b) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries
contributes to or has an obligation to contribute to, nor has the Company
or any of its subsidiaries at any time within six years prior to the date
of this Agreement contributed to or had an obligation to contribute to, a
"multiemployer plan" within the meaning of Section 3(37) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(ii) All obligations, whether arising by Law or by contract,
required to be performed in connection with the Benefit Plans have been
performed, and there have been no omissions, defaults or violations by any
party with respect to any Benefit Plan or any Law applicable thereto.
(iii) Each Plan (as defined in Section 10.06) that is intended
to be qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), (A) satisfies the requirements of such Section in
all material respects, (B) has received a favorable determination letter
from the Internal Revenue Service (the "IRS") regarding such qualified
status and covering amendments required under the Tax Reform Act of 1986
(the "TRA"), the Unemployment Compensation Amendments of 1992, the Omnibus
-8-
<PAGE>
Reconciliation Act of 1993, the final nondiscrimination regulations under
Section 401(a)(4) of the Code and all other amendments required to be
filed within the TRA remedial amendment period described in Internal
Revenue Procedure 95-12 (the "TRA Amendments") (or the TRA Amendments to
such Plans have been timely made and filed with the IRS for such a
determination letter) and (C) has not, since receipt of the most recent
favorable determination letter, been amended or operated in a way that
would materially adversely affect such qualified status.
(iv) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of the Company,
threatened against, or with respect to, any of the Benefit Plans or their
assets, and there is no matter pending (other than routine qualification
determination filings) with respect to any of the Benefit Plans before the
IRS, the Department of Labor, the PBGC or any other Governmental Entity.
(v) As to any Plan subject to Title IV of ERISA, there has
been no event or condition that presents the material risk of Plan
termination, no accumulated funding deficiency, whether or not waived,
within the meaning of Section 302 of ERISA or Section 412 of the Code has
been incurred, no reportable event within the meaning of Section 4043 of
ERISA (for which the disclosure requirements of Regulation ss.2615.3
promulgated by the Pension Benefit Guaranty Corporation (the "PBGC") have
not been waived) has occurred, no notice of intent to terminate the Plan
has been given under Section 4041 of ERISA, no proceeding has been
instituted under Section 4042 of ERISA to terminate the Plan, no liability
to the PBGC has been incurred and the assets of the Plan equal or exceed
the actuarial present value of the benefit liabilities, within the meaning
of Section 4041 of ERISA, under the Plan, based upon reasonable actuarial
assumptions and the asset valuation principles established by the PBGC.
(vi) With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, that is not listed on Schedule 3.10(a)
but which is sponsored, maintained, or contributed to, or has been
sponsored, maintained or contributed to within six years prior to the date
of this Agreement, by any corporation, trade, business or entity under
common control with the Company or any of its subsidiaries, within the
meaning of Section 414(b), (c), (m), or (o) of the Code or Section 4001 of
ERISA ("Commonly Controlled Entity"), (A) no withdrawal liability, within
the meaning of Section 4201 of ERISA, has been incurred, which withdrawal
liability has not been satisfied, (B) no liability to the PBGC has been
incurred by any Commonly Controlled Entity, which liability has not been
satisfied, (C) no accumulated funding deficiency, whether or not waived,
within the meaning of Section 302 of ERISA or Section 412 of the Code has
been incurred and (D) all contributions (including installments) to such
plan required by Section 302 of ERISA and Section 412 of the Code have
been timely made.
(vii) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby (A) contravenes
the terms of any Benefit Plan or any Law related to any Benefit Plan, (B)
will require the Company or any of its subsidiaries to make a larger
contribution to, or pay greater benefits under, any Benefit
-9-
<PAGE>
Plan than it otherwise would or (C) will create or give rise to any
additional vested rights or service credits under any Benefit Plan.
(viii) Except for the Retirement Income Plan For Employees of
Saybolt Inc., neither the Company nor any of its subsidiaries (A) sponsors
or maintains any defined benefit pension plan or (B) contributes to or has
or had an obligation to contribute to a retirement plan for which the
contribution is or was calculated either (1) on the basis of actuarial
assumptions and methods or (2) on a basis other than a fixed amount per
month.
(c) NO ADDITIONAL SEVERANCE. Except as set forth in Section 3.10(c)
of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries is a party to any agreement, nor has the Company or any of its
subsidiaries established any policy or practice requiring, nor does any
applicable Law require, it to make a payment or provide any other form of
compensation or benefit to any person performing services for the Company or any
of its subsidiaries upon termination of such services that would not be payable
or provided in the absence of the consummation of the transactions contemplated
by this Agreement.
(d) NO EXCESS PARACHUTE PAYMENTS. In connection with the
consummation of the transactions contemplated by this Agreement, no payments
have or will be made under the Benefit Plans that, in the aggregate, would
result in imposition of the sanctions imposed under Section 280G or Section 4999
of the Code.
(e) AMENDMENT OR TERMINATION OF BENEFIT PLANS. Each Plan may be
unilaterally amended or terminated in its entirety by the Company without
violating the terms of such Benefit Plans or applicable Law and without
liability except as to benefits accrued and vested thereunder prior to or upon
such amendment or termination.
(f) LABOR MATTERS. Except as set forth in Section 3.10(f) of the
Company Disclosure Schedule, there are no collective bargaining or other labor
union contracts to which the Company or its subsidiaries is a party applicable
to persons employed by the Company or its subsidiaries and no collective
bargaining agreement is being negotiated by the Company or any of its
subsidiaries. There is no pending or, to the knowledge of the Company,
threatened labor dispute, strike or work stoppage against the Company or any of
its subsidiaries. Except as disclosed in Section 3.10(f) of the Company
Disclosure Schedule, to the knowledge of the Company, none of the Company, any
of its subsidiaries or any of their respective representatives or employees has
committed any unfair labor practice in connection with the operation of the
respective businesses of the Company or its subsidiaries that could reasonably
be expected to have a Company Material Adverse Effect, and there is no pending
or, to the knowledge of the Company, threatened charge or complaint against the
Company or any of its subsidiaries by the United States National Labor Relations
Board or any other Governmental Entity. The Company and each of its subsidiaries
have each complied in all material respects with the Family and Medical Leave
Act of 1993.
(g) EMPLOYMENT AND OTHER AGREEMENTS. The Company has furnished to
Acquiror true, correct and complete (i) copies of the form of each employment
agreement to which the Company or any of its Material Subsidiaries is a party
and a list of each employee who is a party to each such form of agreement that
includes the compensation level of such employee pursuant to such
-10-
<PAGE>
agreement and the termination date of such agreement, (ii) copies of all
employment agreements with senior executives, officers and directors of the
Company and (iii) copies of each other agreement between the Company or any of
its subsidiary and any employee or former employee that provides severance,
health, deferred compensation or other employee benefit. Section 3.10(g) of the
Company Disclosure Schedule lists each such document described in the preceding
sentence.
(h) Section 3.10(h) of the Company Disclosure Schedule sets forth a
list of all employees of the Company and each of its subsidiaries as of
approximately February 28, 1997 and, with respect to each such employee, (i) his
annual salary or annualized hourly rate of pay, (ii) his expected annual bonus,
if any, (iii) whether he is an active or inactive employee and, if applicable,
the reason for inactive status (i.e., short-term disability, long-term
disability, layoff, paid or unpaid leave of absence, or other), (iv) whether he
is a union or nonunion employee and, if applicable, name of applicable
collective bargaining agreement, (v) whether he is full-time (30 or more hours
per week) or part-time (less than 30 hours per week), and (vi) whether he is
subject to or exempt from the provisions of the Fair Labor Standards Act.
3.11 TAXES. Except as set forth in Section 3.11 of the Company Disclosure
Schedule,
(a) (i) all material returns and reports ("Tax Returns") of or with
respect to any Tax (as defined in Section 10.06 hereof) which is required to be
filed with respect to the Company or any its subsidiaries have been duly and
timely filed, (ii) all information provided in each such Tax Return is true,
correct and complete in all material respects, (iii) all Taxes shown as due on
each such Tax Return have been timely paid in full, (iv) all withholding Tax
requirements imposed on or with respect to Company or any of its subsidiaries
have been satisfied in all material respects, and (v) no material penalty,
interest or other charge is or will become due with respect to the late filing
of any such Tax Return or late payment of any such Tax;
(b) there is no claim pending against the Company or any of its
subsidiaries for any material amount of Taxes, and no material assessment,
deficiency or adjustment has been asserted or proposed with respect to any Tax
Return of or with respect to the Company or any of its subsidiaries other than
those disclosed (and to which are attached true and complete copies of all audit
or similar reports) in Section 3.11 of the Company Disclosure Schedule;
(c) except for statutory liens for current Taxes not yet due, no
liens for Taxes exist upon any of the assets of the Company or any of its
Material Subsidiaries; and
(d) none of the transactions contemplated by this Agreement will
result in any Tax liability or the recognition of any item of income or gain to
the Company or any of its subsidiaries.
3.12 CERTAIN BUSINESS PRACTICES. None of the Company, any of its
subsidiaries or any directors, officers, agents or employees of the Company or
any of its subsidiaries (in their capacities as such) has (i) used any funds for
unlawful contributions, gifts, entertainment or other unlawful purposes relating
to political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the United States Foreign Corrupt
Practices Act of 1977, as amended, (iii) consummated any transaction, made any
payment, entered into any agreement or arrangement
-11-
<PAGE>
or taken any other action in violation of Section 1128B(b) of the United States
Social Security Act, as amended, or (iv) made any other unlawful payment.
3.13 ENVIRONMENTAL MATTERS.
(a) Except as set forth in Section 3.13 of the Company Disclosure
Schedule, (i) neither the Company nor any of its Material Subsidiaries has ever
generated, transported, used, stored, treated, disposed of, or managed any
Hazardous Waste (as defined below) in material violation of applicable Law nor
has it transported any Hazardous Material (as defined below) in material
violation of applicable Law; (ii) no Hazardous Material has ever been or is
threatened to be Released (as defined below) or disposed of at any property
presently or formerly owned, operated, leased or used by the Company or any of
its Material Subsidiaries or has ever come to be located in the soil, surface
water or groundwater at any such property; and (iii) neither the Company nor any
of its subsidiaries presently owns, operates or leases any property at which
underground storage tanks, pits or sumps are or, to the knowledge of the
Company, were located.
(b) Except as set forth in Section 3.13 of the Company Disclosure
Schedule, (i) neither the Company nor any of its Material Subsidiaries has any
material liability under, nor is the Company or any of its Material Subsidiaries
in violation in any material respect of, any Environmental Law (as defined
below); (ii) each property owned, operated, leased, or used by the Company or
any of its Material Subsidiaries, and any facilities and operations thereon are
presently in compliance in all material respects with all applicable
Environmental Laws; (iii) neither the Company nor any of its Material
Subsidiaries is in receipt of any written request for information, written
notice, demand letter, administrative inquiry, or formal or informal complaint
or claim from any Governmental Entity that gives rise to, or is reasonably
expected to give rise to, any material liability of the Company or any of its
Material Subsidiaries under any applicable Environmental Law related to human or
animal health or safety or the protection, preservation or restoration of the
environment; (iv) neither the Company nor any of its Material Subsidiaries has
any material liability to any non-Governmental Entity under any Environmental
Law arising from exposure to or otherwise in connection with any Release or
threatened Release of any Hazardous Waste or Hazardous Material; and (v) neither
the Company nor any of its subsidiaries has any knowledge that any of the items
enumerated in clause (iii) of this Section 3.13(b) will be forthcoming.
(c) Except as set forth in Section 3.13 of the Company Disclosure
Schedule, to the knowledge of the Company, no property owned, operated, leased,
or used by the Company or any of its Material Subsidiaries contains any asbestos
or asbestos-containing material, any polychlorinated biphenyls (PCBs) or
equipment containing PCBs, radioactive materials or any urea formaldehyde foam
insulation. For purposes of this Section 3.13(c), the Company shall be deemed to
have knowledge of all actions taken by or on behalf of the Company or any of its
subsidiaries.
(d) The Company has provided to Acquiror copies of all significant
documents, records and information (including copies of all "Phase I" audits or
surveys prepared within the last ten years with respect to any property owned,
leased or operated by the Company or any of its subsidiaries during such period)
in the possession of the Company or any of its Material Subsidiaries concerning
any matter related to human or animal health or safety or the environment,
whether generated by the Company or any of its subsidiaries or others,
including, without limitation,
-12-
<PAGE>
environmental audits, environmental risk assessments, site assessments,
documentation regarding off-site disposal of Hazardous Materials, spill control
plans, and reports, correspondence, permits, licenses, approvals, consents, and
other authorizations issued by any Governmental Entity concerning any matter
related to human or animal health or safety or the environment.
(e) For purposes of this Section 3.13, (i) "Hazardous Material"
shall mean and include any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant, or contaminant,
as defined or regulated under any Environmental Law, or any other substance,
exposure to which is regulated under any Environmental Law, that may pose a
threat to the environment or to human or animal health or safety; (ii)
"Hazardous Waste" shall mean and include any hazardous waste as defined or
regulated under any Environmental Law; (iii) "Environmental Law"shall mean and
include any and all laws, common laws, statutes, ordinances, rules, regulations,
codes, licenses, permits, consents, approvals, authorizations, orders,
judgments, decrees, injunctions, requirements, agreements, or determinations of
any Governmental Entity in any and all jurisdictions in which the Company
presently or formerly owned, operated, leased, or used property, whether
existing as of the date hereof, previously enforced, or subsequently enacted,
that are related to (A) the protection, preservation, or restoration of the
environment (including, without limitation, air, water, vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life, or any other natural resource), or to human and/or animal health or
safety or (B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, Release,
or disposal of any Hazardous Waste or Hazardous Material; (iv) "Release" shall
mean and include any actual spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping or
disposing into the environment in material violation of applicable Law; (v) "the
Company" shall mean and include the Company, its predecessors and all other
entities for whose conduct the Company is or may be held responsible under any
Environmental Law; and (vi) "subsidiary" shall mean and include each subsidiary
of the Company, its predecessors and all other entities for whose conduct such
subsidiary is or may be held responsible under any Environmental Law.
3.14 UNDISCLOSED LIABILITIES. Except (a) for reserves specifically
reflected or accrued for (and only to the extent reflected or accrued for) in
the balance sheet dated as of December 31, 1996 included in the Company
Financial Statements, (b) for liabilities incurred in the ordinary course of
business since December 31, 1996, or (c) as set forth in Section 3.14 of the
Company Disclosure Schedule, none of the Company or any of its subsidiaries has,
and, to the knowledge of the Company, there is no basis for the assertion
against the Company or any of its subsidiaries of, any liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
and whether due or to become due.
3.15 CERTAIN AGREEMENTS. None of the Company or any of its subsidiaries is
a party to, or bound by, any contract, agreement or organizational document
which purports to restrict, by virtue of a noncompetition, territorial
exclusivity or other provision covering such subject matter, the scope of the
business or operations of any of the Company or any of its subsidiaries
geographically or otherwise.
-13-
<PAGE>
3.16 CONTRACTS AND COMMITMENTS. Section 3.16 of the Company Disclosure
Schedule sets forth (i) a list of each contract, obligation or commitment to
which the Company or any of its subsidiaries is a party or by which its or their
property is bound that involves consideration or other expenditure in excess of
$100,000 ($250,000 in the case of service agreements with the customers of the
Company or its subsidiaries) or performance over a period of more than 12 months
or that is otherwise material to the business or operations of the Company and
its Material Subsidiaries, taken as a whole ("Material Contracts"); (ii) a list
of all real or personal property leases to which any of the Company or any of
its Material Subsidiaries is a party involving consideration or other
expenditure in excess of $50,000 over the term of the lease ("Material Leases");
(iii) a list of guarantees, or agreements to indemnify or be contingently liable
for, the payment or performance by any person or business entity to which any of
the Company or any of its Material Subsidiaries is a party other than guarantees
and agreements entered into in the ordinary course of business ("Guarantees");
and (iv) a list of contracts or other formal or informal understandings or
agreements between the Company or any of its subsidiaries and any of its
officers, directors, employees, consultants, agents or shareholders (or any of
such shareholders' family members or affiliates) ("Affiliate Agreements"). A
true and complete copy of each Material Contract, Material Lease, Guarantee and
Affiliate Agreement has been furnished or made available to Acquiror prior to
the date hereof. Except as specifically disclosed in Section 3.16 of the Company
Disclosure Schedule, each of the Material Contracts, Material Leases, Guarantees
and Affiliate Agreements constitutes the valid and legally binding obligation of
the parties thereto and is in full force and effect without default on the part
of any party thereto. Except as set forth in Section 3.16 of the Company
Disclosure Schedule or for any agreements, arrangements or commitments between
the Company and its wholly owned subsidiaries or between such wholly owned
subsidiaries, there are no agreements, arrangements or commitments of any
character (contingent or otherwise) pursuant to which any person is or may be
entitled to receive any payment based on, or calculated in accordance with, the
revenues or earnings of the Company or any of its subsidiaries.
3.17 AFFILIATE INTERESTS. Except as set forth in Section 3.17 of the
Company Disclosure Schedule, no current or former shareholder, employee,
consultant, officer or director, of the Company or any of its Material
Subsidiaries has any interest in any property, tangible, or intangible,
including, without limitation, patents, trade secrets, other confidential
business information, trademarks, service marks or trade names used in or
pertaining to the business of the Company or any of its Material Subsidiaries,
except (with respect to shareholders) for the normal rights of a shareholder.
3.18 INTELLECTUAL PROPERTY. The Company or one or more of its subsidiaries
own, are licensed or otherwise have the right to use or sublicense, all foreign
and domestic patents, trademarks (common law and registered), trademark
registration applications, service marks (common law and registered), service
mark registration applications, trade names and copyrights, copyright
applications, trade secrets, know-how and other proprietary information as are
necessary for the conduct of the business of the Company and its subsidiaries as
currently conducted. A list of all such intellectual property is set forth in
Section 3.18 of the Company Disclosure Schedule. Neither the Company nor any of
its subsidiaries is currently in receipt of any notice of infringement or notice
of conflict with the asserted rights of others in any patents, trademarks,
service marks, trade names, trade secrets and copyrights owned or held by other
persons, except, in each case, for matters that could not reasonably be expected
to have a Company Material Adverse Effect. Neither the execution
-14-
<PAGE>
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will violate or breach the terms of or cause any
cancellation of any material license held by the Company or any of its
subsidiaries with regard to any patent, trademark, service mark, trade name,
trade secret or copyright.
3.19 BROKERS. Except for Credit Suisse First Boston Corporation and North
American Capital Corp. and as disclosed in Section 3.19 of the Company
Disclosure Schedule, no broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee, commission or payment in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has provided
Acquiror with a complete and correct copy of all agreements between the Company
and Credit Suisse First Boston Corporation and North American Capital Corp.
pursuant to which such firm may be entitled to any payment that in any way
relates to the transactions contemplated by this Agreement.
3.20 INSURANCE. Section 3.20 of the Company Disclosure Schedule sets forth
a list of all policies of insurance currently in effect relating to the business
or operations of the Company and its Material Subsidiaries (true and complete
copies of which have been furnished to Acquiror). Such insurance policies are in
full force and effect. The Company and each of its Material Subsidiaries are
presently insured, and during each of the past five calendar years have been
insured, against such risks as companies engaged in the same or substantially
similar business would, in accordance with good business practice, customarily
be insured. The Company and its Material Subsidiaries have given in a timely
manner to their respective insurers all notices required to be given under such
insurance policies with respect to all claims and actions covered by insurance,
and, except as set forth in Section 3.20 of the Company Disclosure Schedule, no
insurer has denied coverage of any such claims or actions or reserved it rights
in respect of or rejected any of such claims. None of the Company or any of its
Material Subsidiaries has received any notice or other communication from any
such insurer canceling or materially amending any of such insurance policies,
and no such cancellation is pending or threatened. The execution of this
Agreement and the consummation of the transactions contemplated hereby will not
cause such insurance policies to lapse, terminate or be canceled and will not
result in any party thereto having the right to terminate or cancel such
insurance policies.
3.21 PROPERTIES. Except as set forth in Section 3.21 of the Company
Disclosure Schedule, the Company and its subsidiaries have good and defensible
title, free and clear of all liens and material restrictions on their use, to
all their material properties and assets whether tangible or intangible, real,
personal or mixed, reflected in the Company Financial Statements as being owned
by the Company and its subsidiaries as of the date thereof, other than (i) any
properties or assets that have been sold or otherwise disposed of in the
ordinary course of business since the date of such financial statements, (ii)
liens disclosed in the notes to such financial statements and (iii) liens
arising in the ordinary course of business. All buildings, fixtures, equipment
and other property and assets that are material to the Company's business on a
consolidated basis that are held under leases or sub-leases by the Company or
any of its subsidiaries are held under valid instruments enforceable in
accordance with their respective terms, subject to applicable laws of
bankruptcy, insolvency or similar laws relating to creditors' rights generally
and to general principles of equity (whether applied in a proceeding in law or
equity). All of the Company's and its Material Subsidiaries'
-15-
<PAGE>
equipment in regular use has been reasonably maintained and is in serviceable
condition, reasonable wear and tear excepted.
3.22 RELATIONSHIPS WITH CUSTOMERS AND SUPPLIERS. The relationships of the
Company and each of its Material Subsidiaries with its customers and suppliers
are good commercial working relationships, except as disclosed in Section 3.22
of the Company Disclosure Schedule. No customer that accounted for more than (a)
5% of the consolidated revenues of the Company and its subsidiaries for the year
ended December 31, 1996 ("Consolidated Revenues"), (b) 10% of the revenues of
any Material Subsidiary (other than a Material Subsidiary that accounted for
less than 5% of Consolidated Revenues) or (c) that is otherwise significant to
the Company and its subsidiaries has canceled or otherwise terminated or
threatened to cancel or otherwise terminate its relationship with the Company or
any of its subsidiaries. No significant supplier of the Company and its
subsidiaries has canceled or otherwise terminated or threatened to cancel or
otherwise terminate its relationship with the Company and its subsidiaries. To
the Company's knowledge, no such customer or supplier has any plan or intention
to terminate, cancel or otherwise materially and adversely modify its
relationship with the Company or any of its subsidiaries.
3.23 MATERIAL SUBSIDIARIES. The Company and the Material Subsidiaries
accounted for in excess of 80% of the consolidated revenues of the Company and
its subsidiaries for the year ended December 31, 1996.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company and the
Shareholders that:
4.01 ORGANIZATION AND QUALIFICATION. Acquiror is a limited liability
company duly organized, validly existing and in good standing under the laws of
The Netherlands. Acquiror has all requisite power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary, other
than where the failure to be so duly qualified and in good standing could not
reasonably be expected to have an Acquiror Material Event. The term "Acquiror
Material Event" as used in this Agreement shall mean any change or effect that
would be materially adverse to Acquiror's ability to comply with the provisions
of this Agreement or to consummate the transactions contemplated hereby.
4.02 AUTHORITY. Acquiror has all requisite corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Acquiror and the performance by Acquiror of its obligations
hereunder, including the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary corporate action, and no other
corporate proceedings on the part of Acquiror are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Acquiror and, assuming the due
authorization, execution and delivery hereof by the
-16-
<PAGE>
other parties hereto, constitutes the legal, valid and binding obligation of
Acquiror enforceable in accordance with its terms.
4.03 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Assuming that all consents, licenses, permits, waivers,
approvals, authorizations, orders, filings and notifications contemplated by the
exceptions to Section 4.03(b) are obtained or made and except as otherwise
disclosed in Section 4.03(a) of the Disclosure Schedule delivered by Acquiror to
the Company contemporaneously with the execution and delivery of this Agreement
(the "Acquiror Disclosure Schedule"), the execution and delivery of this
Agreement by Acquiror does not, and performance of its obligations hereunder,
including the consummation of the transactions contemplated hereby, will not (i)
conflict with or violate Acquiror's Articles of Association, (ii) conflict with
or violate any Laws in effect as of the date of this Agreement applicable to
Acquiror or any of Acquiror's subsidiaries or by or to which any of their
properties is bound or subject or (iii) result in any breach of or constitute a
default (or an event that with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or require payment under, or result in the
creation or imposition of a mortgage, pledge, lien, security interest or other
charge or encumbrance on any of the properties or assets of Acquiror or any of
Acquiror's subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, authorization, franchise or other
instrument or obligation to which Acquiror or any of Acquiror's material
subsidiaries is a party or by or to which Acquiror or any of Acquiror's
subsidiaries or any of their respective properties is bound or subject, except,
with respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults, events, rights of termination, amendment, acceleration or
cancellation, payment obligations or liens or encumbrances that could not
reasonably be expected to have an Acquiror Material Event.
(b) The execution and delivery of this Agreement by Acquiror does
not, and the performance of this Agreement by Acquiror will not, including the
consummation of the transactions contemplated hereby, require Acquiror to obtain
any consent, license, permit, certificate, waiver approval, authorization or
order of, or to make any filing with or notification to, any Governmental
Entities, except (i) the applicable requirements, if any, of the HSR Act, the
Exchange Act, the Securities Act, any other applicable state or federal
securities or blue sky laws and the NASD, (ii) the filings and notices required
pursuant to Dutch Law, (iii) where the failure to obtain such consents,
licenses, permits, certificates, waivers, approvals, authorizations or orders,
or to make such filings or notifications could not reasonably be expected to
have an Acquiror Material Event or (iv) as disclosed in Section 4.03(b) of the
Acquiror Disclosure Schedule.
4.04 LITIGATION. There is no claim, action, suit, litigation, proceeding,
arbitration or, to the knowledge of Acquiror, investigation of any kind, at law
or in equity (including actions or proceedings seeking injunctive relief),
pending or, to the knowledge of Acquiror, threatened against Acquiror or any of
its subsidiaries or any properties or rights of Acquiror or any of its
subsidiaries that could be reasonably expected to cause an Acquiror Material
Event, and neither Acquiror nor any of its subsidiaries is subject to any
executory judgment, order, writ, injunction, decree or award of any Governmental
Entity, including without limitation any cease and desist order and any consent
-17-
<PAGE>
decree, settlement agreement or other similar written agreement with any
Governmental Entity, that could be reasonably expected to cause an Acquiror
Material Event.
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby covenants
and agrees that, prior to the Closing, unless otherwise expressly contemplated
by this Agreement or consented to in writing by Acquiror (which consent shall
not be unreasonably withheld), the Company will and will cause each of its
subsidiaries to:
(a) operate its business in the usual and ordinary course consistent
with past practices;
(b) use all reasonable efforts to preserve substantially intact its
business organization, maintain its rights and franchises, retain the services
of its respective officers and key employees and maintain its relationships with
its respective customers and suppliers;
(c) maintain and keep its properties and assets in as good repair
and condition as at present, ordinary wear and tear excepted, and maintain
supplies and inventories in quantities consistent with its customary business
practice; and
(d) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to those
currently maintained.
5.02 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly contemplated
by this Agreement or otherwise consented to in writing by Acquiror (which
consent shall not be unreasonably withheld), from the date of this Agreement
until the Closing, the Company will not do, and will not permit any of its
subsidiaries to do, any of the following:
(a) Except pursuant to agreements disclosed in Section 3.10(g) of
the Company Disclosure Schedule, (i) increase the compensation payable to or to
become payable to any director or executive officer; (ii) increase the
compensation payable or pay bonuses to any employees other than in the ordinary
course of business, (iii) grant any severance or termination pay (other than
pursuant to the normal severance practices of the Company or its subsidiaries as
in effect on the date of this Agreement) to, or enter into any employment or
severance agreement with, any director, officer or employee; (iv) establish,
adopt or enter into any employee benefit plan or arrangement or (v) except as
may be required by applicable law, amend, or take any other actions (including,
without limitation, the acceleration of vesting, waiving of performance criteria
or the adjustment of awards or any other actions permitted upon a "change in
control" (as defined in the respective plans) of the Company), with respect to
any of the Benefit Plans or any of the plans, programs, agreements, policies or
other arrangements described in Section 3.10(g) of this Agreement;
(b) declare or pay any dividend on, or make any other distribution
in respect of, outstanding shares of its or any of its subsidiaries' capital
stock or other equity interests, except
-18-
<PAGE>
dividends by a wholly owned subsidiary of the Company to the Company or another
wholly owned subsidiary of the Company;
(c) (i) except as described in Section 3.03(c) of the Company
Disclosure Schedule, redeem, purchase or otherwise acquire any shares of its or
any of its subsidiaries' capital stock, any securities or obligations
convertible into or exchangeable for any shares of its or its subsidiaries'
capital stock (other than any such acquisition directly from any wholly owned
subsidiary of the Company in exchange for capital contributions or loans to such
subsidiary), or any options, warrants or conversion or other rights to acquire
any shares of its or its subsidiaries' capital stock or any such securities or
obligations; (ii) effect any reorganization or recapitalization of the Company
or any of its subsidiaries; or (iii) split, combine or reclassify any of its or
its subsidiaries' capital stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of, or in substitution for, shares
of its or its subsidiaries' capital stock;
(d) (i) except as set forth in Section 3.03(a) hereof or as
described in Section 3.03(c) of the Company Disclosure Schedule, issue (whether
upon original issue or out of treasury), sell, grant, award, deliver or limit
the voting rights of any shares of any class of its or its subsidiaries' capital
stock, any securities convertible into or exercisable or exchangeable for any
such shares, or any rights, warrants or options to acquire, any such shares;
(ii) amend or otherwise modify the terms of any such rights, warrants or options
the effect of which shall be to make such terms materially more favorable to the
holders thereof; or (iii) take any action to accelerate the vesting of any of
the stock options;
(e) acquire or agree to acquire, by merging or consolidating with,
by purchasing an equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other person (other than (i) the purchase of assets
from suppliers or vendors in the ordinary course of business and consistent with
past practice and (ii) the purchase of assets for consideration of not in excess
of $100,000 in the aggregate);
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, any of its assets or any assets of any of its
subsidiaries, except for pledges or dispositions of assets in the ordinary
course of business and consistent with past practice;
(g) initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal relating to, or that may reasonably be
expected to lead to, any Competing Transaction (as defined below), or enter into
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to, or endorse, any
Competing Transaction, or authorize any of the officers, directors, employees or
agents of the Company or any of its subsidiaries or any agent, investment
banker, financial advisor, attorney, accountant or other representative retained
by the Company or any of its subsidiaries to take any such action, and the
Company shall promptly notify Acquiror or promptly provide Acquiror with a copy
of all relevant terms of any such inquiries or proposals received by the Company
or any of its subsidiaries. For purposes of this Agreement, the term "Competing
Transaction" shall mean any proposal or offer from any person or entity (other
-19-
<PAGE>
than Acquiror or an affiliate of Acquiror) relating to any acquisition or
purchase of all or (other than in the ordinary course of business) any material
portion of the assets of, or any possible disposition or issuance of any Company
Shares or any capital stock or other equity interests in the Company or any of
its subsidiaries (or any rights or securities exercisable for or convertible
into Company Shares or any such capital stock or other equity interests), or any
merger or other business combination with, the Company or any of its
subsidiaries (provided that nothing in this Section 5.02(g) shall prevent the
Company or its directors from informing the Shareholders of a Competing
Transaction if required to do so by Dutch Law);
(h) release any third party from its obligations under any existing
standstill agreement or arrangement relating to a Competing Transaction or
otherwise under any confidentiality or other similar agreement relating to
information material to the Company or any of its subsidiaries;
(i) propose to adopt any amendments to its Articles of Association
that would have an adverse effect on the consummation of the transactions
contemplated by this Agreement;
(j) (i) change any of its significant accounting policies or (ii)
make or rescind any express or deemed election relating to Taxes, settle or
compromise any material claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes, or change
any of its methods of reporting income or deductions for Tax purposes from those
employed in the preparation of Tax returns for the taxable year ending December
31, 1995, except, in the case of clause (i) or clause (ii), as may be required
by any Law or by GAAP;
(k) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or similar
instrument or under any financing lease, whether pursuant to a
sale-and-leaseback transaction or otherwise, except in the ordinary course of
business consistent with past practice;
(l) enter into any material arrangement, agreement or contract with
any third party other than in the ordinary course of business;
(m) take any action that reasonably could be expected to result in
any of the conditions set forth in Article IX not being satisfied; or
(n) agree in writing or otherwise to do any of the foregoing.
ARTICLE VI
COVENANTS OF THE SHAREHOLDERS
6.01 COVENANTS OF THE SHAREHOLDERS. Each of the Shareholders covenants and
agrees that, prior to the Closing, such Shareholder will not:
(a) take any action that reasonably could be expected to result in
any of the conditions set forth in Article IX not being satisfied; or
-20-
<PAGE>
(b) initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal relating to, or that may reasonably be
expected to lead to, any Competing Transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to, or endorse, any Competing
Transaction, or authorize agent, investment banker, financial advisor, attorney,
accountant or other representative retained by such Shareholder to take any such
action, and such Shareholder shall promptly notify Acquiror or promptly provide
Acquiror with a copy of all relevant terms of any such inquiries or proposals
received by such Shareholder.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS. The Company and, with respect to
clauses (i) and (ii), each of the Shareholders, as appropriate, shall give
prompt notice to Acquiror, and Acquiror shall give prompt notice to the Company,
orally and in writing, of (i) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any representation or
warranty of the party giving such notice contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Closing, (ii) any
material failure of the party giving such notice to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by such person
hereunder within the time specified therefor and (iii) any change or event
having, or which, insofar as can be reasonably foreseen, could have a Company
Material Adverse Effect or an Acquiror Material Event, as the case may be.
7.02 ACCESS AND INFORMATION.
(a) The Company shall, and shall cause its subsidiaries to, (i)
afford to Acquiror and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Acquiror Representatives") access during ordinary business hours and at other
reasonable times, upon reasonable prior notice, to the officers, employees,
accountants, agents, properties, offices and other facilities of the Company and
its subsidiaries and to the books and records thereof and (ii) furnish promptly
to Acquiror and the Acquiror Representatives such information concerning the
business, properties, contracts, records and personnel of the Company and its
subsidiaries (including, without limitation, financial, operating and other data
and information) as may be reasonably requested, from time to time, by Acquiror
or the Acquiror Representatives.
(b) Notwithstanding the foregoing provisions of this Section 7.02,
the Company shall not be required to grant access or furnish information to the
Acquiror Representatives to the extent that such access or the furnishing of
such information is prohibited by any Law or contract. Acquiror acknowledges
that, prior to the execution of this Agreement, it has conducted an
investigation with respect to the affairs of the Company and its subsidiaries to
the extent that Acquiror, in its sole discretion, deemed appropriate.
Notwithstanding the foregoing sentence, no investigation by the parties hereto
made heretofore or hereafter shall affect the representations and
-21-
<PAGE>
warranties of the parties that are contained herein, and each such
representation and warranty shall survive such investigation.
(c) The terms and provision of the mutual confidentiality and
non-disclosure agreement, dated December 1, 1996, between Acquiror and the
Company shall remain in full force and effect in accordance with its terms.
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) The Company, Acquiror and, to the extent applicable to a
particular Shareholder, such Shareholder shall each use, and the Company and
Acquiror shall cause each of their respective subsidiaries to use, all
reasonable efforts promptly (i) to take, or cause to be taken, all appropriate
action, and do, or cause to be done, all things necessary, proper or advisable
under applicable Law or otherwise to consummate and make effective the
transactions contemplated by this Agreement, (ii) to obtain from any
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained by the Company, Acquiror or
such Shareholder, respectively, or any of the Company's or Acquiror's respective
subsidiaries, in connection with the authorization, execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby and (iii) to make all necessary filings, and thereafter make
any other required submissions, with respect to this Agreement and the
Acquisition required under (A) the Exchange Act, the rules and regulations
thereunder and any other applicable U. S. federal or state or Dutch securities
laws, (B) the HSR Act and (C) any other applicable Law; provided that Acquiror,
the Company and each of the Shareholders shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the nonfiling party and its advisors prior to filing
(except, with respect to the HSR Act, for such documents that are not
customarily provided to the other party) and, if requested, shall accept all
reasonable additions, deletions or changes suggested in connection therewith.
The Company, Acquiror and each of the Shareholders shall furnish all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable Law in connection with the transactions
contemplated by this Agreement.
(b) Acquiror, the Company and, to the extent applicable to a
particular Shareholder, such Shareholder (other than CPNL, which acts only as
nominee for certain Shareholders) agree, and Acquiror and the Company shall
cause each of their respective subsidiaries, to cooperate and to use all
reasonable efforts to contest and resist any action, including legislative,
administrative or judicial action, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other order (whether temporary,
preliminary or permanent) (an "Order") that is in effect and that restricts,
prevents or prohibits the consummation of the Acquisition or any other
transactions contemplated by this Agreement, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial appeal
and all available legislative action. Acquiror and the Company also agree to
take all reasonable actions, including, without limitation, the disposition of
assets or the withdrawal from doing business in particular jurisdictions,
required by regulatory authorities as a condition to the granting of any
approvals required in order to permit the consummation of the Acquisition or as
may be required to avoid, lift, vacate or reverse any legislative or judicial
action that would otherwise cause any condition to Closing not to be satisfied;
PROVIDED, HOWEVER, that in no event shall any party take, or be required to
take, any action that could
-22-
<PAGE>
reasonably be expected to have a Company Material Adverse Effect or an Acquiror
Material Adverse Effect. The term "Acquiror Material Adverse Effect" as used in
this Agreement shall mean any change or effect that would be materially adverse
to the business, operations or financial condition of Acquiror and its
subsidiaries, taken as a whole, at the time of such change or effect.
(c) The Company, Acquiror and each of the Shareholders shall each
promptly give (or shall cause their respective subsidiaries to give) any notices
regarding the Acquisition, this Agreement or the transactions contemplated
hereby to third parties required by Law or by any contract, license, lease or
other agreement to which such person is a party or by which such person is
bound, and use (and cause its subsidiaries to use) all reasonable efforts to
obtain any third party consents (i) necessary to consummate the transactions
contemplated by this Agreement, (ii) otherwise required under any contracts,
licenses, leases or other agreements in connection with the consummation of the
transactions contemplated by this Agreement or (iii) required to prevent a
Company Material Adverse Effect or an Acquiror Material Adverse Effect,
respectively, from occurring after the Closing.
(d) If the Company or any of its subsidiaries or Acquiror shall fail
to obtain any third party consent described in subsection (c)(i) above, such
party shall use all reasonable efforts, and shall take any such actions
reasonably requested by the other parties, to limit the adverse effect upon the
Company, Acquiror, their respective subsidiaries and businesses and each of the
Shareholders resulting, or which could reasonably be expected to result after
the Closing, from the failure to obtain such consent.
(e) The Company shall, promptly after the date of this Agreement,
take all actions necessary in accordance with applicable law and the Company
Organizational Documents to obtain all necessary approvals with respect to the
Acquisition and the other matters the subject of this Agreement by the Works
Council of the Company (the "Works Council").
(f) Acquiror covenants and agrees that, prior to the Closing,
Acquiror will not take any action that reasonably could be expected to result in
any of the conditions set forth in Article IX not being satisfied.
7.04 PUBLIC ANNOUNCEMENTS. Acquiror and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the Acquisition and shall not issue
any such press release or make any such public statement prior to such
consultation; PROVIDED, HOWEVER, that a party may, without consulting with the
other party, issue such a press release or make such a public statement if
required by applicable Law or the rules of the NASD or a national securities
exchange if such party has used commercially reasonable efforts to consult with
the other party but has been unable to do so in a timely manner.
7.05 EXPENSES. Subject to the provisions of Section 1.04 and Article VIII,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses. Notwithstanding the foregoing, but subject to Section 1.04 and Article
VIII, the Shareholders shall not be responsible for costs and expenses incurred
by the Company for the benefit of the Company in connection with this Agreement
and the transactions contemplated hereby, including the Company Transaction
Costs.
-23-
<PAGE>
7.06 BOARD OF SUPERVISORY DIRECTORS; OPERATING COMMITTEE.
(a) Acquiror shall take such action as may be necessary to cause
Eric Pluimers to be appointed or elected to the Board of Supervisory Directors
of Acquiror as a Class II director (resulting in a three year term) as soon as
practicable after the Closing.
(b) Acquiror shall take such action as may be necessary to cause
Erik Pluimers, David H. Mead and Jan W. Heinsbroek (if willing to serve) to be
appointed to the Operating Committee of Acquiror promptly after the Closing. The
purpose of such Operating Committee is to discuss and decide upon both short-
and long-term operating matters.
7.07 STICHTING PARTICIPATIE. The Company shall use all reasonable efforts
to cause the articles and the conditions of administration of the Stichting and
(if required by such entity's organizational documents) each entity to which
Stichting has transferred depositary receipts representing interests in Company
Shares to be amended to enable Stichting and each of such entities as may be
required by Dutch Law or the articles and conditions of administration of the
Stichting and such entities to effect the Acquisition.
7.08 DIRECTORS' AND OFFICERS' INDEMNIFICATION AND INSURANCE.
(a) The certificate of incorporation and the by-laws of each
subsidiary of the Company having provisions covering the indemnification of
current and former officers and directors shall contain the respective
provisions that are set forth, as of the date of this Agreement, in such
certificates of incorporation and by-laws (or similar organizational documents),
and shall not be amended, repealed or otherwise modified for a period of three
years from the Closing Date in any manner that would affect adversely the rights
thereunder of individuals who at or at any time prior to the Closing were
entitled to indemnification thereunder.
(b) Acquiror shall cause to be maintained in effect for three years
from the Closing Date directors' and officers' liability insurance covering
those persons who are currently covered by the Company's directors' and
officers' liability insurance policy set forth in Section 7.08(b) of the Company
Disclosure Schedule on terms comparable to such existing insurance coverage with
respect to claims arising from facts or events that occurred prior to the
Closing; PROVIDED, HOWEVER, that in no event shall Acquiror or the Company be
required to expend more than 200 percent of the current annual premiums paid by
the Company for such insurance; PROVIDED, FURTHER, that if Acquiror or the
Company is unable to obtain insurance for any period for 200 percent of the
current annual premiums, then the obligation of Acquiror and the Company
pursuant hereto shall be to obtain the best coverage reasonably available under
the circumstances subject to the foregoing limitation on premiums.
-24-
<PAGE>
ARTICLE VIII
INDEMNIFICATION
8.01 IN GENERAL. Subject to the terms and conditions of this Article VIII,
each of the Shareholders hereby agrees, severally and not jointly, to indemnify,
defend and hold harmless Acquiror and its directors, officers, employees,
consultants, affiliates and controlling persons (hereinafter, including the
Company and its subsidiaries after the Closing, collectively, the "Acquiror
Indemnified Parties") from and against all Claims (as defined below) asserted
against, imposed upon or incurred by Acquiror or any Acquiror Indemnified Party,
directly or indirectly, by reason of, arising out of, or resulting from (a) the
inaccuracy or breach of any representation or warranty of the Company or such
Shareholder contained in or made pursuant to this Agreement; (b) the breach of
any covenant or agreement of the Company or such Shareholder contained in or
made pursuant to this Agreement; (c) the current investigation of the United
States Environmental Protection Agency and the United States Attorney's Office
with respect to the Company or any of its subsidiaries and all "whistle blower"
litigation and claims related thereto or arising therefrom; (d) any of the
matters set forth in Section 3.09, 3.10, 3.11 or 3.13 of the Company Disclosure
Schedule or identified in the "Phase I" audits prepared on behalf of Acquiror
with respect to any of the properties owned, leased or operated by the Company
or any of its subsidiaries (true and correct copies of which Phase I audits have
been provided to the Company on or prior to the date of this Agreement);
PROVIDED, HOWEVER, that if a reserve is specifically set forth for such matter
in Section 8.01 of the Company Disclosure Schedule then indemnification pursuant
to this Section 8.01 shall be limited to the amount by which Claims with respect
to such matter exceed the Reserve Amount (as defined below) for the Reserve
Category (as defined in Section 8.01 of the Company Disclosure Schedule) in
which such matter is included in Section 8.01 of the Company Disclosure
Schedule; or (e) the amount, if any, by which actual Company Transaction Costs
exceeds the sum of U.S. $2.1 million plus the amount of any reduction in the
Closing Purchase Price pursuant to Section 1.04. As used in this Article VIII,
the term "Claim" shall include (i) all debts, liabilities and obligations, (ii)
all losses, damages, reasonable costs and expenses (including, without
limitation, interest (including prejudgment interest in any litigated matter),
but excluding any allocation of overhead costs and expenses of Acquiror or any
of its subsidiaries), penalties, court costs and reasonable attorneys' fees and
expenses, and costs and expenses associated with remedial actions required to
bring a property into compliance with Environmental Laws), and (iii) all
demands, claims, actions, costs of investigation, causes of action, proceedings,
arbitrations, judgments, settlements and assessments, whether or not ultimately
determined to be valid. As used in this Article VIII, the term "Reserve Amount,"
as it relates to a particular Reserve Category, means, as of the date a
particular Claim is made, the amount of the specific reserve set forth in
Section 8.01 of the Company Disclosure Schedule for the matter the subject of
such Claim plus the amount, if any, by which the aggregate of all reserves in
the same Reserve Category as such Claim specifically relating to matters (other
than the matter the subject of such Claim) that have been fully resolved exceeds
the aggregate of (A) the amount of all Claims with respect to such fully
resolved matters and (B) amounts incurred or paid by the Company or any of its
subsidiaries after December 31, 1996 and prior to the Closing with respect to
such fully resolved matters to the extent that the Acquiror Indemnified Parties
are not entitled to indemnification pursuant to this Section 8.01 with respect
to such amounts. All determinations made pursuant to the foregoing sentence
shall be made without giving effect to the proviso in Section 8.01(d) or the
provisions of Section 8.02(a).
-25-
<PAGE>
8.02 DEDUCTIBLE; TIME LIMIT; FORM OF PAYMENT; CAP; EXCLUSIVITY.
(a) No indemnification shall be paid pursuant to Sections 8.01(a),
(b) or (d) until the aggregate of all Claims pursuant to Section 8.01(a), (b) or
(d) exceeds $335,000; thereafter indemnification shall be paid as provided for
herein for all Claims in excess of such $335,000 deductible; PROVIDED, HOWEVER,
that any Claim resulting from the inaccuracy or breach of any of the
representations and warranties set forth in Article II of this Agreement shall
not be subject to the foregoing limitations.
(b) All indemnification payments made pursuant to Section 8.01(a),
(b), (c) or (d) (except for those relating to the inaccuracy or breach of any of
the representations and warranties set forth in Article II) to the extent
available, shall be paid only with the assets held by the Escrow Agent to secure
the payment of indemnification pursuant to the Escrow Agreement; PROVIDED,
HOWEVER, that such indemnification payments (and any payments made as described
in the first proviso to Section 8.02(c)) in the aggregate shall not exceed the
amount of the Escrowed Purchase Price.
(c) All indemnification payments made pursuant to Section 8.01(a)
(to the extent that they relate to the inaccuracy or breach of any of the
representations and warranties set forth in Article II) or 8.01(e) shall be paid
by the appropriate Shareholder directly to Acquiror; PROVIDED, HOWEVER, that
Acquiror, in its sole discretion, may elect to have all or part of any such
indemnification pursuant to Section 8.01(e) paid with the assets held by the
Escrow Agent pursuant to the Escrow Agreement. The Acquiror Indemnified Parties
must request the indemnification payments referred to in the preceding sentence
on or prior to the second anniversary of the Closing Date; PROVIDED, HOWEVER,
that no time limitation will apply with respect to indemnification payments made
pursuant 8.01(a) to the extent that they relate to the inaccuracy or breach of
any of the representations and warranties set forth in Section 2.01.
(d) Except with respect to fraud in connection with the negotiation
and execution of this Agreement, this Article VIII shall be, from and after the
Closing, the exclusive remedy of Acquiror for any breach of this Agreement by
the Company or any of the Shareholders.
8.03 DEFENSE OF THIRD PARTY CLAIMS. The obligation of the Shareholders to
indemnify the Acquiror Indemnified Parties under this Article VIII with respect
to Claims relating to or arising from third parties (a "Third Party Claim")
shall be subject to the following terms and conditions:
(a) NOTICE AND DEFENSE. The Acquiror Indemnified Party will give the
repre sentative of the shareholders of the Company set forth in Section 10.07 of
this Agreement (the "Shareholder Representative") prompt written notice of any
such Third Party Claim, and the Shareholder Representative may undertake the
defense thereof by representatives chosen by the Shareholder Representative upon
written notice to the Acquiror Indemnified Party provided within 20 days of
receiving notice of such Third Party Claim (or sooner if the nature of the Third
Party Claim so requires and an extension cannot be obtained with minimal expense
or cost). Failure of the Acquiror Indemnified Party to give such notice shall
not affect the indemnification obligations under this Article VIII, except to
the extent the Shareholder Representative's defense of a Third Party Claim is
prejudiced thereby. The Acquiror Indemnified Party shall make available to the
Shareholder
-26-
<PAGE>
Representative or its representatives all records and other materials required
by the Shareholder Representative and in the possession or under the control of
the Acquiror Indemnified Party, for the use of the Shareholder Representative
and its representatives in defending any such clam, and shall in other respects
give reasonable cooperation in such defense. Acquiror shall not be required to
deliver any notice pursuant to this Section 8.03(a) with respect to the matters
described in Sections 8.01(c) and 8.01(d), and the Shareholders hereby agree to
waive any right to undertake the defense of such matters after the Closing.
(b) FAILURE TO DEFEND. If the Shareholder Representative, within 20
days after notice of any such Third Party Claim (or sooner if the nature of any
Third Party Claim so requires), fails to undertake the defense of such Third
Party Claim actively and in good faith, then the Acquiror Indemnified Party will
have the right to undertake the defense, compromise or settlement of such Third
Party Claim, or consent to the entry of a judgment with respect thereto.
(c) ACQUIROR INDEMNIFIED PARTY'S RIGHTS. Anything in this Article
VIII to the contrary notwithstanding, (i) if there is a reasonable probability
that the Third Party Claim may adversely affect the Acquiror Indemnified Party
other than as a result of money damages and such Third Party Claim is reasonably
likely to result in money payments in an aggregate amount of less than $100,000,
the Acquiror Indemnified Party shall have the right to defend, compromise or
settle such Third Party Claim (provided that the Acquiror Indemnified Party
shall not settle such Third Party Claim or consent to any judgment without first
obtaining the written consent of the Shareholder Representative, which shall not
be unreasonably withheld), and (ii) the Shareholder Representative shall not
without the written consent of the Acquiror Indemnified Party, settle or
compromise any Third Party Claim or consent to the entry of any judgment that
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the Acquiror Indemnified Party of an unconditional release from
all liability in respect of such Third Party Claim.
(d) Acquiror agrees to discuss the status of the matters described
in Section 8.01(c) of this Agreement with the Shareholder Representative at such
times as the Shareholder Representative may reasonably request, upon reasonable
prior notice.
8.04 WAIVER. Each of the Shareholders hereby agrees to waive, and to not
assert, any and all rights such Shareholder may have under Dutch or any other
applicable Law or otherwise to make a claim against or otherwise demand or
receive payment from the Company or any of its subsidiaries arising out of or
with respect to the inaccuracy or breach of any representation or warranty of
the Company set forth in this Agreement, the breach by the Company of any
covenant or agreement of the Company set forth in this Agreement or the payment
of any amounts to the Acquiror Indemnified Parties pursuant to this Article VIII
or the Escrow Agreement.
ARTICLE IX
CONDITIONS
9.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The respective
obligations of Acquiror and the Shareholders to effect the transactions
contemplated hereby shall be subject to the
-27-
<PAGE>
satisfaction at or prior to the Closing of the following conditions, any or all
of which may be waived by the agreement of the parties, in whole or in part, to
the extent permitted by applicable law:
(a) the positive advice of the Works Council with respect to the
Acquisition and any other matter relating to the Acquisition for which positive
advice is required shall have been obtained;
(b) Acquiror, each of the Shareholders and the Escrow Agent shall
each have executed and delivered the Escrow Agreement;
(c) no Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any Law or Order which is in effect and which has the effect
of making the Acquisition or the other transactions contemplated in this
Agreement illegal or otherwise prohibiting consummation of the Acquisition or
such other transactions;
(d) the applicable waiting period under the HSR Act shall have
expired or been terminated;
(e) the applicable waiting period under any competition Law or Order
of any foreign Governmental Entity shall have expired or been terminated;
(f) The Stichting and (if required by such entity's organizational
documents) each entity to which the Stichting has transferred depositary
receipts representing interests in Company Shares shall have amended their
respective articles and conditions of administration to enable them to
consummate the Acquisition and the depositary receipt holders in the Stichting
shall have taken such action necessary to permit the Stichting to sell the
Company Shares held by it; and
(g) the satisfaction of all applicable requirements imposed by Dutch
Law that must be satisfied prior to Closing.
9.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR. The obligations of
Acquiror to effect the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any or all
of which may be waived by Acquiror, in whole or in part, to the extent permitted
by applicable law:
(a) each of the representations and warranties of the Company and
the Shareholders contained in this Agreement shall be true and correct in all
material respects (without duplication of any materiality exception contained in
any individual representation and warranty) as of the date of this Agreement and
as of the Closing as though made again as of the Closing. Acquiror shall have
received a certificate (i) of the President and the Chief Financial Officer of
the Company, dated the Closing Date, to such effect as it relates to the Company
and (ii) from each of the Shareholders, dated the Closing Date, to such effect
as it relates to Article II;
(b) the Company and the Shareholders shall have performed or
complied with all agreements and covenants required by this Agreement to be
performed or complied with by the Company or the Shareholder on or prior to the
Closing. Acquiror shall have received a certificate
-28-
<PAGE>
(i) of the President and the Chief Financial Officer of the Company, dated the
Closing Date, to such effect as it relates to the Company and (ii) from each of
the Shareholders, dated the Closing Date, to such effect as it relates to
Article VI;
(c) the resignations, effective at Closing, of each of directors and
officers of the Company shall have been delivered to Acquiror;
(d) Each of the Shareholders, the Company and Acquiror shall have
executed a deed of transfer (or other appropriate documentation) that effects
the valid transfer of title to all of the issued and outstanding Company Shares
to Acquiror;
(e) Acquiror shall have received a certificate of the Chief
Financial Officer of the Company, dated the Closing Date, that sets forth a good
faith estimate of the amount of Company Transaction Costs;
(f) Acquiror shall have obtained commitments for sufficient
financing, in such amounts, on such terms and subject to such conditions as are
satisfactory to it in its reasonable discretion, to enable it to pay the Cash
Purchase Price and other amounts required to be paid by Acquiror hereunder or in
connection herewith and adequate to conduct the business of the Company and its
subsidiaries (including satisfactory working capital financing) (the
"Financing"); all conditions to the availability of the Financing shall have
been met; and the Financing shall be available; and
(g) each of the Shareholders identified on page 39 of this Agreement
shall have become record holders of the Company Class B Shares currently
beneficially owned by them and shall have signed and delivered to the other
signatories to this Agreement such signature pages, whereupon they shall
automatically and without any further action on the part of any party become
Shareholders for all purposes of this Agreement as of the date hereof, except
that their representation in Section 2.01 hereof as to valid title shall be
deemed made as of the date such title was transferred to them by CPNL.
9.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS. The
obligations of the Shareholders to effect the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived by the Shareholders, in whole or
in part, to the extent permitted by applicable law:
(a) each of the representations and warranties of Acquiror contained
in this Agreement shall be true and correct in all material respects (without
duplication of any materiality exception contained in any individual
representation and warranty) as of the date of this Agreement and as of the
Closing as though made again as of the Closing. The Company shall have received
a certificate of the President and the Chief Financial Officer of Acquiror,
dated the Closing Date, to such effect;
(b) Acquiror shall have performed or complied with all agreements
and covenants required by this Agreement to be performed or complied with by it
on or prior to the Closing. The
-29-
<PAGE>
Company shall have received a certificate of the President and the Chief
Financial Officer of Acquiror, dated the Closing Date, to such effect;
(c) employment agreements for each of Mr. Pluimers, Mr. Mead and Mr.
Heinsbroek, substantially in the form of Exhibits B, C and D hereto,
respectively, shall have been executed and delivered by the other parties
thereto; and
(d) Acquiror shall have (i) paid the Closing Purchase Price to the
Shareholders and (ii) delivered the Escrowed Purchase Price to the Escrow Agent
pursuant the Escrow Agreement, in each such case as provided in Article I.
ARTICLE X
MISCELLANEOUS
10.01 TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual consent of Acquiror, the Company and each of the
Shareholders;
(b) by Acquiror, the Company or any of the Shareholders if the
Closing has not occurred on or before 45 days from the date of this Agreement;
(c) by Acquiror, upon a material breach of any covenant or agreement
on the part of the Company or the Shareholders set forth in this Agreement, or
if any representation or warranty of the Company or the Shareholders shall have
become untrue, in either case such that the conditions set forth in Section
9.02(a) or Section 9.02(b) would not be satisfied (a "Terminating Company
Breach"); PROVIDED THAT, if such Termination Company Breach is curable by the
Company or the Shareholders through the exercise of reasonable efforts and for
so long as the Company or the Shareholders continue to exercise such reasonable
efforts, Acquiror may not terminate this Agreement under this Section 10.01(c);
(d) by the Company or any of the Shareholders, upon a material
breach of any covenant or agreement on the part of Acquiror set forth in this
Agreement, or if any representation or warranty of Acquiror shall have become
untrue, in either case such that the conditions set forth in Section 9.03(a) or
Section 9.03(b) would not be satisfied (a "Terminating Acquiror Breach");
PROVIDED THAT, if such Terminating Acquiror Breach is curable by Acquiror
through the exercise of its reasonable efforts and for so long as Acquiror
continues to exercise such reasonable efforts, the Company may not terminate
this Agreement under this Section 10.02(d);
(e) by Acquiror, the Company or any of the Shareholders, if there
shall be any Order which is final and nonappealable preventing the consummation
of the Acquisition, unless the party relying on such Order has not complied with
its obligations under Section 7.05(b); or
(f) by the Company or any of the Shareholders if the Deposit is not
paid to the Company within two business days after the execution and delivery of
this Agreement.
-30-
<PAGE>
10.02 EFFECT OF TERMINATION. In the event of any termination of this
Agreement pursuant to Section 10.01, the Company and Acquiror shall have no
obligation or liability to each other except that (i) the provisions of Sections
1.05, 7.02(c) and 7.05 shall survive any such termination, and (ii) nothing
herein and no termination pursuant hereto will relieve any party from liability
for any breach of this Agreement.
10.03 WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits thereof. This
Agreement may not be amended or supplemented at any time, except by an
instrument in writing signed on behalf of each party hereto. The waiver by any
party hereto of any condition or of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any other condition or
subsequent breach.
10.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
(including the Schedules and Exhibits hereto) together with that certain Letter
Agreement dated as of the date hereof by and between Acquiror and the Company
constitute the entire agreement and, except as provided in Section 7.02(c),
supersede all other prior agreements and understandings, both oral and written,
among the parties or any of them, with respect to the subject matter hereof.
Neither this Agreement nor any document delivered in connection with this
Agreement confers upon any person not a party hereto any rights or remedies
hereunder except as provided in Article VIII hereof.
10.05 ASSIGNMENT. This Agreement shall inure to the benefit of and will be
binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Acquiror may, upon notice to the Company,
assign or delegate its rights and obligations under this Agreement or any part
hereof to any direct or indirect wholly owned subsidiary of Acquiror, but no
such assignment shall in any way operate to enlarge, alter or change any
obligation of or due to the Company or the Shareholders or relieve Acquiror of
its obligations hereunder. Except as set forth in this Agreement, this Agreement
shall not be assignable by any party hereto without the consent of the other
parties hereto.
10.06 CERTAIN DEFINITIONS. For the purposes of this Agreement, unless the
context clearly indicates otherwise, the term:
(a) "affiliate" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person;
(b) "beneficial owner" and words of similar import shall have the
meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
(c) "Benefit Plan" or "Benefit Plans" shall mean each Plan and each
personnel policy, stock option plan, collective bargaining agreement, bonus plan
or arrangement, incentive award plan or arrangement, vacation policy, severance
pay plan, policy or agreement, deferred compensation agreement or arrangement,
executive compensation or supplemental income arrangement, consulting agreement,
employment agreement, and each other employee benefit plan, agreement,
arrangement, program, practice or understanding that is not a Plan and that is
sponsored, maintained or contributed to by the Company or any of its
subsidiaries for the benefit of the
-31-
<PAGE>
employees, former employees, independent contractors, or agents of the Company
or any of its subsidiaries, or has been so sponsored, maintained or contributed
to since 1974;
(d) "business day" shall mean any day other than a day on which
banks in Rotterdam, The Netherlands are authorized or obligated to be closed;
(e) "Closing" shall mean a meeting, which shall be held in
accordance with Section 1.02 of this Agreement, of persons interested in the
transactions contemplated by this Agreement at which all documents deemed
necessary by the parties to this Agreement to evidence the fulfillment or waiver
of all conditions precedent to the consummation of the Acquisition are executed
and delivered;
(f) "Closing Date" shall mean the date of the Closing as determined
pursuant to Section 1.02 of this Agreement;
(g) "control" (including the terms "controlled," "controlled by" and
"under common control with") shall mean the possession, directly or indirectly
or as trustee or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or otherwise;
(h) "person" shall mean an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d) of the Exchange Act);
(i) "Plan" or "Plans" shall mean each "employee benefit plan," as
such term is defined in Section 3(3) of ERISA, including, but not limited to,
any employee benefit plan that may be exempt from some or all of the provisions
of ERISA, that is sponsored, maintained or contributed to by the Company or any
of its subsidiaries for the benefit of the employees, former employees,
independent contractors, or agents of the Company or any of its subsidiaries, or
has been so sponsored, maintained or contributed to since 1974;
(j) "Significant Subsidiary" shall mean any subsidiary of Acquiror
that would constitute a "significant subsidiary" within the meaning of Rule 1-02
of Regulation S-X of the SEC;
(k) "subsidiary" or "subsidiaries" of the Company, Acquiror or any
other person, shall mean any corporation, partnership, joint venture or other
legal entity of which the Company, Acquiror or any such other person, as the
case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity interests
the holders of which are generally entitled to vote for the election of the
board of directors or other governing body of such corporation or other legal
entity;
(l) "Tax" or "Taxes" shall mean any and all taxes, charges, fees,
levies, assessments, duties or other amounts payable to any federal, state,
local or foreign taxing authority or agency, including, without limitation, (i)
income, franchise, profits, gross receipts, minimum, alternative minimum,
estimated, ad valorem, value added, sales, use, service, real or personal
property, capital stock, license, payroll, withholding, disability, employment,
social security, workers
-32-
<PAGE>
compensation, unemployment compensation, utility, severance, excise, stamp,
windfall profits, transfer and gains taxes, (ii) customs, duties, imposts,
charges, levies or other similar assessments of any kind, and (iii) interest,
penalties and additions to tax imposed with respect thereto; and
10.07 NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class mail,
postage prepaid, return receipt requested, to the appropriate party at the
following addresses:
if to the Company:
Saybolt International BV
Postbus 151
3000 AD Rotterdam
The Netherlands
Telecopy: (011) 31-10-460-9911
Attn: Erik Pluimers
with copies to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Telecopy: (212) 848-7179
Attention: John A. Marzulli, Jr.
Stibbe Simont Monahan Dehot
P. O. Box 75460
1070 AP Amsterdam
The Netherlands
Telecopy: (011) 31-20-546-0733
Attention: Hector W. L. de Beaufort
if to Acquiror:
Core Laboratories N.V.
Herengracht 424
1017 BZ Amsterdam
The Netherlands
Telecopy: (011) 31-20-627-9886
Attention: Managing Director
-33-
<PAGE>
with copies to:
Nauta Dutilh
Postbus 1110
3000 BC Rotterdam
Weena 750
3014 DA Rotterdam
The Netherlands
Telecopy: (011) 31-10-414-8444
Attention: Chris A. Fonteijn
Core Laboratories, Inc.
5295 Hollister Road
Houston, Texas 77040
Telecopy: (713) 690-3947
Attention: John D. Denson
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Telecopy: (713) 615-5531
Attention: T. Mark Kelly
if to the Shareholder Representative:
Stanley Roth
North American Capital Corp.
510 Broad Hollow Road
Melville, New York 11747-3665
Telecopy: (516) 752-9618
with copies to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Telecopy: (212) 848-7179
Attention: John A. Marzulli, Jr.
Stibbe Simont Monahan Dehot
P. O. Box 75460
1070 AP Amsterdam
The Netherlands
Telecopy: (011) 31-20-546-0733
Attention: Hector W. L. de Beaufort
or to such other address as the parties set forth above shall have furnished to
the other parties set forth above by notice given in accordance with this
Section 10.07. Such notices shall be effective
-34-
<PAGE>
(i) if delivered in person or by courier, upon actual receipt by the intended
recipient, (ii) if sent by telecopy or facsimile transmission, when the sender
receives telecopier confirmation that such notice was received at the telecopier
number of the addressee, or (iii) if mailed, upon the earlier of five days after
deposit in the mail and the date of delivery as shown by the return receipt
therefor.
10.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE NETHERLANDS, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
10.09 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
10.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
10.11 HEADINGS. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
10.12 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy available at law or in equity.
10.13 FORUM. EXCEPT IN EACH CASE FOR ALL MATTERS RELATING IN ANY RESPECT
TO THE ESCROW AGREEMENT OR THE FUNDS HELD PURSUANT THERETO, INCLUDING THE
DETERMINATION OF ANY AND ALL AMOUNTS TO BE DISTRIBUTED FROM THE FUNDS HELD
PURSUANT THERETO, (WHICH MATTERS SHALL BE GOVERNED BY THE TERMS (INCLUDING THE
ARBITRATION PROVISIONS) OF THE ESCROW AGREEMENT), ACQUIROR, THE COMPANY AND THE
SHAREHOLDERS FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN THE
NETHERLANDS AND AGREE AND CONSENT THAT SERVICE OF PROCESS MAY BE MADE UPON ANY
OF THEM IN ANY LEGAL PROCEEDING ARISING EXCLUSIVELY OUT OF OR IN CONNECTION WITH
THIS AGREEMENT BY SERVICE OF PROCESS AS PROVIDED BY DUTCH LAW (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT THEY MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING EXCLUSIVELY
OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS LOCATED IN THE
NETHERLANDS, (C) FOR SUCH PURPOSES IRREVOCABLY WAIVES ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
-35-
<PAGE>
INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS WITH
RESPECT TO ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH LITIGATION BY THE
MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, TO SUCH PARTY AND ITS COUNSEL AT THEIR ADDRESSES SET FORTH HEREIN, AND
(E) IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING AGAINST ACQUIROR, THE COMPANY
OR ANY OF THE SHAREHOLDERS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ITS OBLIGATIONS HEREUNDER SHALL, BE BROUGHT IN THE COURTS OF THE NETHERLANDS.
THE SHAREHOLDERS IRREVOCABLY DESIGNATE, APPOINT AND EMPOWER STIBBE SIMONT
MONAHAN DEHOT AS THEIR AUTHORIZED AGENT TO RECEIVE SERVICE OF PROCESS WHICH MAY
BE SERVED AT THE ADDRESS SET FORTH IN SECTION 10.07 OF THIS AGREEMENT IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT. SERVICE IN SUCH MANNER UPON
THE AGENT IS HEREBY ACKNOWLEDGED BY THE SHAREHOLDERS TO BE BINDING UPON THEM IN
EVERY RESPECT. IN THE EVENT THAT, FOR ANY REASON, THE AGENT NAMED ABOVE SHALL NO
LONGER SERVE AS THE AGENT OF THE SHAREHOLDERS TO RECEIVE PROCESS IN THE
NETHERLANDS, THE SHAREHOLDERS SHALL APPOINT A SUCCESSOR SO TO SERVE. NOTHING
HEREIN SHALL EFFECT THE RIGHT OF ANY PARTY TO ATTEMPT TO SERVE PROCESS WITH
RESPECT TO THE MATTERS DESCRIBED ABOVE, EXCEPT FOR ALL MATTERS RELATING IN ANY
RESPECT TO THE ESCROW AGREEMENT OR THE FUNDS HELD PURSUANT THERETO, INCLUDING
THE DETERMINATION OF ANY AND ALL AMOUNTS TO BE DISTRIBUTED FROM THE FUNDS HELD
PURSUANT THERETO, (WHICH MATTERS SHALL BE GOVERNED BY THE TERMS (INCLUDING THE
ARBITRATION PROVISIONS) OF THE ESCROW AGREEMENT), IN ANY OTHER MANNER PERMITTED
BY DUTCH LAW.
-36-
<PAGE>
IN WITNESS WHEREOF, Acquiror, the Company and each of the Shareholders
have each executed or caused this Agreement to be executed on its behalf by its
officer thereunto duly authorized, as applicable, all as of the date first above
written.
CORE LABORATORIES N.V.
By: Core Laboratories International B.V.,
its sole managing director
By: ____________________________
Jacobus Schouten
Managing Director
SAYBOLT INTERNATIONAL B.V.
By: ___________________________________
Name: ____________________________
Title: ___________________________
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
57,000 -
------------------------------------
Frerik Pluimers
99,531 21,976 ALPINVEST HOLDING N.V.
By: ________________________________
Name:
Title:
22,115 - HEMERA II & CIE S.C.A
By: ________________________________
Name:
Title:
-37-
<PAGE>
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
26,533 - EUROFRANDEV S.A.
By: ________________________________
Name:
Title:
30,960 - PARINDEV PME SA
By: ________________________________
Name:
Title:
263,000 - STICHTING PARTICIPATIE SAYBOLT
INTERNATIONAL B.V.
By: ________________________________
Name:
Title:
5,500 228,024 ABN AMRO PARTICIPATIES B.V.
By: ________________________________
Name:
Title:
- 106,732 CITICORP CAPITAL INVESTORS
EUROPE LTD.
By: ________________________________
Name:
Title:
-38-
<PAGE>
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
- 106,732 EUROPENTERPRISE '92 CURACAO N.V.
By: ________________________________
Name:
Title:
CAPITAL PARTNERSHIP NOMINEES LTD.
- 31,897 By: ________________________________
Name:
Title:
-39-
<PAGE>
Number of Number of
Class A Class B
Shares Owned Shares Owned Shareholders:
------------ ------------ -------------
______________________________________
Rolly Louis Rudolf Jules van Rappard
______________________________________
Maarten Ruijs
______________________________________
Michael David Cook Smith
______________________________________
Alexander Donald MacKenzie
______________________________________
Corinne Ingeborg Beatrice Koltes-Sulzer
-40-
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as
of May 12, 1997 by and between Saybolt Netherlands B.V., a private limited
liability company organized under the laws of The Netherlands ("Employer"), and
Frerik Pluimers, a resident of The Netherlands ("Employee").
WHEREAS, Employee is employed as the Chairman of Saybolt International
B.V. ("Previous Employer");
WHEREAS, Core Laboratories N.V. ("Core"), Employee and Previous Employer
are parties to a Stock Purchase Agreement dated as of the date hereof whereby
Core will purchase all of the capital stock of Previous Employer, and Previous
Employer will become a wholly owned subsidiary of Core (the "Acquisition");
WHEREAS, one of the conditions to consummation of the Acquisition is that
Employer and Employee enter into this Agreement;
WHEREAS, Employer is desirous of employing Employee, and Employee wishes
to be employed by Employer, in accordance with the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT
1.01 Employer hereby employs Employee, effective as of the Closing Date
(as defined in the Stock Purchase Agreement) (the "Effective Date"), and
Employee accepts such employment as of the Effective Date, according to the
terms and conditions set forth in this Agreement.
ARTICLE II
TERM OF EMPLOYMENT
2.01 TERM. The term of this Agreement shall commence on the Effective Date
and, except as provided in Section 7.03, shall continue until the earliest to
occur of the following events: (a) Employee resigns, (b) Employee's service is
terminated pursuant to the provisions of Sections 2.03, 2.04 or 2.05 or (c) the
parties hereto agree in writing to terminate this Agreement.
2.02 DISABILITY. Employee shall be entitled to disability compensation in
accordance with Dutch law (Wet Arbeidsongeschikheidsverzekering). In addition,
Employer shall continue to provide excess insurance coverage (Aanvullende WAO
verzekering) for the benefit of Employee in the amount it currently provides.
-1-
<PAGE>
2.03 DEATH. This Agreement shall terminate immediately on the date of
Employee's death. Employee's estate shall be entitled only to, and Employer's
obligation under this Agreement shall be limited to, the payment of any unpaid
amount of Employee's base salary accrued under Section 4.01 to the date of
Employee's death and any accrued and unused vacation days.
2.04 TERMINATION FOR CAUSE. The employment of Employee hereunder may be
terminated "for cause" immediately without prior notice by Employer if Employer
in its discretion determines that Employee shall have:
(A) deliberately refused or failed, after reasonable notice in writing
from the Board of Supervisory Directors of Core (the "Board") or a
representative of Employer duly authorized by the Board (the
"Supervising Representative") that such refusal or failure would
constitute a default hereunder, to carry out any reasonable order of
the Board or the Supervising Representative;
(B) committed a breach of the terms of this Agreement or any other legal
obligation owed by Employee to Employer;
(C) demonstrated gross incompetence, negligence or willful misconduct in
the execution of Employee's assigned duties;
(D) demonstrated moral turpitude to the detriment of Employer or
violated Employer's policy on the use of alcohol or drugs as in
effect from time to time; or
(E) been convicted of a felony or other serious crime.
In such cases, Employee shall be entitled only to, and Employer's
obligation under this Agreement shall be limited to, the payment of any unpaid
amount of Employee's base salary accrued under Section 4.01 to the date of such
termination and any accrued and unused vacation days. This Section 2.04 shall in
no way be construed as precluding Employer from terminating Employee without
cause or prior notice or for any reason, as provided in Section 2.05.
2.05 OTHER TERMINATION. Employee understands and agrees that he may be
terminated from employment with Employer for any reason, without cause, at any
time; PROVIDED, HOWEVER, that for any termination made pursuant to this Section
2.05, Employer shall provide Employee with 30 days prior notice of such
termination. Furthermore, Employer agrees that Employee may terminate his
employment with Employer at any time and for any reason by giving prior written
notice to Employer. In such cases, Employee shall be entitled only to, and
Employer's obligation under this Agreement shall be limited to, the payment of
any unpaid amount of Employee's base salary accrued under Section 4.01 to the
date of such termination and any accrued and unused vacation days.
-2-
<PAGE>
ARTICLE III
DUTIES AND FUNCTIONS
3.01 POSITION; DUTIES. Employee agrees to serve as a Managing Director of
Employer, to perform the duties of such office diligently and to the best of his
abilities and to assume such additional duties as may from time to time be
assigned to him consistent with his position.
3.02 PERFORMANCE; SERVICE. Employee agrees in all respects to carry out
and use his best efforts in carrying out the objectives of Employer and
protecting Employer's interests. Employee agrees to be in the full-time service
of Employer and to devote all of his business time and attention to the duties
assigned to him pursuant to this Agreement; PROVIDED, HOWEVER, that Employee may
(i) continue to serve as the Honorary Consul of Gambia and as director for such
entities he currently serves in such capacity or (ii) assume such additional
directorships as may be approved by the Board.
3.03 WORK FOR SUBSIDIARIES OR OTHER AFFILIATES. All terms and conditions
set forth in this Agreement between Employer and Employee shall apply whether
Employee carries out his activities in or for Employer or in or for any
subsidiary or other affiliate thereof. Employee shall receive no salary or other
payment for any position he holds with Employer or any subsidiary or other
affiliate thereof other than as set forth in this Agreement.
ARTICLE IV
COMPENSATION
During the term of employment described in Section 2.01 above while this
Agreement is in effect, Employer shall provide to Employee the following:
4.01 BASE SALARY. Employer shall pay to Employee an annual gross base
salary in the amount of Three Hundred Fifty Thousand and No/100 Dutch guilders
(NLG 350,000), payable in twelve (12) equal installments on the last day of each
calendar month. Annual cost of living adjustments may be made from time to time
to such base salary (commensurate with increases to senior executives of
Employer on August 1 of each calendar year) as determined by the Board or the
Supervising Representative.
4.02 BONUS. Employee shall be eligible to receive an annual incentive
bonus on March 31 of each calendar year in accordance with and subject to the
performance criteria approved by the Board or the Supervising Representative and
commensurate with those applicable to senior management of Employer. The amount
of any such incentive bonus shall be limited to 60% of Employee's then base
salary.
4.03 TAX. All amounts payable by Employer under this Agreement shall be
subject to the prior reduction or withholding by Employer of appropriate taxes
and other required amounts. If a determination is made by any relevant
governmental authority that insufficient withholdings have been made and to the
extent that such withholdings would, if made, have resulted in the Employee
-3-
<PAGE>
receiving a lower amount of net remuneration, Employee shall indemnify Employer
for all amounts determined to be so payable as a result of such failure to
withhold any or sufficient amounts.
ARTICLE V
EMPLOYEE BENEFITS
5.01 AUTOMOBILE. During the Employee's term of employment hereunder,
Employer shall provide the automobile-related benefits set forth in ANNEX 1
hereto.
5.02 PENSION. Employer shall continue for the benefit of Employee the
monthly contribution to his pension plan with Previous Employer that is
maintained in The Netherlands, to the extent such contribution does not (1)
conflict with any applicable law and (2) conflict with the terms of such pension
plan. A copy of the applicable pension plan is attached hereto as ANNEX 2.
5.03 OTHER EMPLOYEE BENEFITS. Employee shall be entitled to participate in
all health, disability and other employee benefit plans offered by Employer or
required (but only to the extent required) by applicable law under the terms and
conditions of each such plan. With respect to Employer's disability plan,
Employer shall continue to sponsor Employee for his existing benefit amount in
excess of the Employer amount. The cash and expenses of such excess benefit
amount shall be borne by Employee.
ARTICLE VI
ADDITIONAL RIGHTS OF EMPLOYEE
6.01 VACATION. In addition to Dutch public holidays, Employee shall be
entitled to a paid annual vacation of twenty-three (23) business days during
each full calendar year of employment during such times as shall not interfere
with the operations of Employer. Employee's rights shall accrue ratably during
each calendar year and shall be subject to proration for partial calendar years.
In the event that in any calendar year Employee shall fail to use all vacation
days to which he is entitled during such year, Employee shall be entitled to
carry forward five (5) of such vacation days into the next succeeding calendar
year.
6.02 EXPENSES. Employer shall reimburse, or direct payment of, all
expenses reasonably incurred by Employee in the performance of his duties
hereunder, upon the submission of written evidence of such expenses to the
reasonable satisfaction of Employer, plus a fixed expense allowance in the
amount of Five Hundred Dutch guilders (NLG 500) per month.
6.03 TERMINATION PAYMENT.
(A) Subject to Paragraph (B) below, in the event that Employee's
employment pursuant to this Agreement is terminated by Employer
other than "for cause," as described in Section 2.04, or for death,
Employer shall pay to Employee an amount equal to the annual gross
base salary specified in Section 4.01 as adjusted for the year in
which such termination occurs. Employee agrees that this termination
payment will be in
-4-
<PAGE>
lieu of, and not in addition to, any payment to which he would
otherwise be entitled on account of termination of his employment
under any other Employer severance, termination, pay in lieu of
notice, or similar payment program, plan, policy or agreement.
(B) The payment referred to in Section 6.03(A) shall be reduced by any
statutory or other compensation that Employee may be entitled to
receive from Employer as a result of such termination, and Employee,
to the extent permitted by applicable law, hereby waives any and all
rights and remedies with respect to such termination other than as
expressly provided herein.
6.04 LOCATION. Employee's services shall be performed primarily at the
facilities of Employer located in The Netherlands. Employee acknowledges that
worldwide travel shall be required. In the event that the Board or the
Supervising Representative determines in its sole discretion that the duties of
Employee hereunder require that Employee relocate to a country or state other
than as set forth above, the parties agree to enter into good faith negotiations
regarding the terms of such relocation. In the event that, after forty five (45)
days after such negotiations have commenced, the parties have failed to reach an
agreement, Employer shall have the option of suspending its relocation plans or
exercising its rights under Section 2.05 above.
ARTICLE VII
CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE
7.01 GENERAL. Employee hereby covenants and agrees with Employer that,
except as otherwise expressly consented to, approved or otherwise permitted by
the Board or the Supervising Representative in writing, during Employee's term
of employment hereunder and for a subsequent period as set forth below, Employee
shall not, in any geographic area or market area or market where Employer or any
of its affiliates conduct any business either on the date of termination of the
employment of Employee or during any of the immediately preceding twelve (12)
months, directly or indirectly, acting alone, by providing material assistance
to the efforts of his spouse or as a member of a partnership or other business
entity or as a holder of any interest in a security of any class of a
corporation or other business entity (other than as a holder of less than one
percent (1%) of the outstanding amount of any security listed on a national
securities exchange or designated as a National Market System security by the
National Association of Securities Dealers, Inc.) or as an officer, director,
partner, employee, consultant, agent or representative of any corporation,
partnership or other business entity:
(A) Other than as required in the performance of his assigned duties to
Employer and other than as required by law, either use or disclose
to any person, firm or corporation any confidential or proprietary
information concerning the organization, business, inventions,
discoveries, customers, suppliers, operations, affairs or trade
secrets of Employer, Employer's affiliates or Previous Employer that
Employee may have acquired in the course of, or incident to, his
employment by Employer, Employer's affiliates or Previous Employer,
whether or not Employee was aware that such information was
confidential or proprietary when originally given to or learned by
-5-
<PAGE>
him; PROVIDED, HOWEVER, that such obligations of non-use and
nondisclosure shall not apply to information that is or becomes a
part of the public domain without breach by Employee of the
aforementioned obligations;
(B) Engage anywhere in any business, trade, or other enterprise
substantially similar to, or directly or indirectly in competition
with, the business of Employer, Employer's affiliates or Previous
Employer if engaging in such business, trade or other enterprise
could result in any unauthorized use or disclosure by Employee of
any confidential or proprietary information of or concerning
Employer, Employer's affiliates or Previous Employer. Employer and
Employee agree that Employer currently carries on substantial
business worldwide. Employer and Employee further agree that
Employee's engaging in the business of inspection, testing
analytical services and calibration services of oil and chemicals
and environmental testing of air, water and soil, would necessarily
involve the unauthorized use or disclosure by Employee of such
confidential or proprietary information;
(C) Request, induce or attempt to influence any current, future or
prospective customer or supplier of Employer, Employer's affiliates
or Previous Employer to limit, curtail or cancel its business with
Employer; or
(D) Request, induce or attempt to influence any current, future or
prospective officer, director, employee, consultant, agent or
representative of Employer to (i) terminate his, her or its
employment or business relationship with Employer or (ii) commit any
act that, if committed by Employee, would constitute a breach of any
provision of this Section 7.01.
7.02 INTENT; SCOPE. Employee and Employer agree that the provisions of
clauses (A), (B), (C) and (D) of Section 7.01 are reasonable and necessary to
protect the legitimate interests of Employer. The provisions of said clauses are
separate and distinct commitments independent of each of the other said clauses.
Employee and Employer further agree that if the scope of any said clauses is
deemed by any administrative agency, arbitrator or court to be overly broad,
such agency, arbitrator or court may reduce the scope thereof to that which it
deems reasonable under the circumstances.
7.03 TERM. If Employee is terminated for any reason or voluntarily leaves
the employ of Employer, the provisions set forth in this Article VII shall
survive for a period of twelve (12) months following the date of such
termination or cessation of employment.
ARTICLE VIII
PENALTY
8.01 GENERAL. Employee will forfeit to Employer for each breach of any of
the provisions of Article VII hereof a penalty in the amount of Ten Thousand and
No/100 Dutch guilders (NLG 10,000) for each day that the breach continues,
without prejudice to:
-6-
<PAGE>
(i) Employer's right to claim instead of this penalty the actual
damage Employer has suffered through this breach; and
(ii) any other relief to which Employer may be entitled under law or
equity.
8.02 GROUNDS FOR TERMINATION. Breach by Employee of the provisions of
Section 7.01 hereof shall also constitute grounds for immediate termination of
Employee's employment and shall be considered a termination "for cause" within
the meaning of Section 2.04.
ARTICLE IX
EMPLOYEE REPRESENTATIONS
9.01 Employee represents that he is free to enter into this Agreement and
is not under any contractual or other restraint which would prohibit the
satisfactory performance of his duties to Employer hereunder. Employee
represents and warrants further that he has read and understands each of the
provisions of this Agreement and that he has sought and obtained the advice of
legal counsel before agreeing to be bound by the terms hereof. Employee
acknowledges and agrees that Employer would not have continued Employee's
employment and entered into this Agreement but for Employee's agreement to be
bound by the covenants contained herein.
ARTICLE X
MISCELLANEOUS
10.01 ENTIRE AGREEMENT. This Agreement, including the annexes attached
hereto, contains the entire understanding of the parties hereto in respect of
its subject matter. This Agreement supersedes all prior written or oral
agreements and understandings between the parties with respect to the subject
matter hereof.
10.02 GOVERNING LAW. This Agreement shall be construed under and governed
in accordance with the laws of The Netherlands.
10.03 NOTICES. Any notice or other communications required or permitted
hereunder shall be sufficiently given if in writing and personally delivered or
sent by airmail, postage prepaid, or by international air courier, telecopier or
telex addressed to Employer or Employee, as the case may be, to the following
address or at such other address for such party as specified by like notice:
(A) If to Employer:
to: Saybolt Netherlands B.V.
c/o Core Laboratories N.V.
424 Herengracht
1017 BZ Amsterdam
The Netherlands
Attention: Jacobus Schouten
Telecopy: (011) 31-20-627-9886
-7-
<PAGE>
copies to: Nauta Dutilh
Postbus 1110
3000 BC Rotterdam
Weena 750
3014 DA Rotterdam
The Netherlands
Attention: Chris A. Fonteijn
Telecopy: (011) 31-10-414-8444
Core Laboratories, Inc.
5295 Hollister Road
Houston, Texas 77040
Attention: John D. Denson
Telecopy: (713) 690-3947
(B) If to Employee:
to: Frerik Pluimers
Saybolt Netherlands B.V.
Postbus 151
3000 AD Rotterdam
The Netherlands
Telecopy: (011) 31-10-460-9911
10.04 CHANGE, MODIFICATION, WAIVER. No change or modification of this
Agreement shall be valid unless it is in writing and signed by each of the
parties hereto. No waiver of any provision of this Agreement shall be valid
unless it is in writing and signed by the party against whom the waiver is
sought to be enforced. The failure of a party to insist upon strict performance
of any provision of this Agreement in any one or more instances shall not be
construed as a waiver or relinquishment of the right to insist upon strict
compliance with such provision in the future. No waiver by any party of the
breach of any term or provision contained in this Agreement, whether by conduct
or otherwise, shall be deemed to be or construed as a further or continuing
waiver of any such breach.
10.05 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs and
assigns; PROVIDED, HOWEVER, that Employee shall not directly or indirectly
assign or delegate any of his rights or obligations hereunder in whole or in
part without the prior written consent of Employer, and any such assignment or
delegation without such consent shall be void.
10.06 HEADINGS DESCRIPTIVE. The headings used herein are included for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.07 SAVINGS CLAUSE. Should any valid Dutch or other applicable law or
final determination of any administrative agency, arbitrator or court of
competent jurisdiction affect any provision of this Agreement, the provision or
provisions so affected shall be automatically conformed to the law of
determination and this Agreement shall otherwise continue in full force and
effect.
-8-
<PAGE>
IN WITNESS WHEREOF, Employer and Employee have each executed or caused this
Agreement to be executed on its behalf by its officer thereunto duly authorized,
as applicable, all as of the date first above written.
SAYBOLT NETHERLANDS B.V.
By:_________________________________
Name:
Title:
FRERIK PLUIMERS
By:_________________________________
-9-
<PAGE>
ANNEX 1
AUTOMOBILE RELATED BENEFITS
Employer shall reimburse Employee for his mileage. Employer acknowledges
that Employee has outstanding a loan for the purchase of his Mercedes Benz
automobile.
<PAGE>
ANNEX 2
PENSION PLAN
EXHIBIT 10.4
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement") is made and entered into as of
May 12, 1997 by and among Core Laboratories N.V., a Netherlands public limited
liability company ("Acquiror"), each of the shareholders of Saybolt
International B.V., a Netherlands private limited liability company (the
"Company"), signatory hereto (the "Shareholders") and Chase Manhattan Bank (the
"Escrow Agent").
WHEREAS, Acquiror, the Company and the Shareholders are parties to that
certain Stock Purchase Agreement, dated as of April 16, 1997 (the "Stock
Purchase Agreement");
WHEREAS, Article VIII of the Stock Purchase Agreement provides that
Acquiror and its directors, officers, employees, consultants, affiliates and
controlling persons (hereinafter, including the Company and its subsidiaries
after the Closing (as defined in the Stock Purchase Agreement), collectively,
the "Acquiror Indemnified Parties") shall be indemnified and held harmless from
and against certain matters, as more particularly set forth in the Stock
Purchase Agreement;
WHEREAS, Acquiror, on behalf of itself and the Acquiror Indemnified
Parties, and the Shareholders desire to establish an escrow for the
indemnification obligations of the Shareholders pursuant to the terms and
conditions of the Stock Purchase Agreement and this Agreement; and
WHEREAS, the Escrow Agent is willing to act as escrow agent hereunder;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Stock Purchase Agreement.
2. APPOINTMENT OF ESCROW AGENT. Acquiror and the Shareholders hereby
appoint the Escrow Agent to act as escrow agent hereunder, and the Escrow Agent
hereby accepts such appointment for the purpose of receiving and disbursing the
Escrow Funds (as defined below) in accordance with the terms and conditions set
forth herein.
3. ESTABLISHMENT OF ESCROW; INVESTMENT.
(a) On the date of this Agreement (the "Closing Date"), Acquiror
shall deliver to the Escrow Agent the sum of U.S. $6 million in cash pursuant to
Section 1.03 of the Stock Purchase Agreement (the "Escrow Amount"). Acquiror and
the Shareholders hereby direct the Escrow Agent to invest and reinvest such
Escrow Amount and the income therefrom in savings or money market accounts with,
repurchase agreements with, or certificates of deposit (with maturities
<PAGE>
of not more than three months) issued by banks or trust companies located in the
United States of America, the actual value of the assets of which is at least
$100,000,000 in excess of its liabilities, or in United States Treasury Bills
(with maturities of not more than three months) or mutual funds backed by United
States Treasury Bills or as otherwise directed in writing by Acquiror and
Stanley Roth, as the representative of the Shareholders (the "Shareholder
Representative").
(b) Unless otherwise directed, the Escrow Agent may use a
broker-dealer of its own selection, including a broker-dealer owned by or
affiliated with the Escrow Agent or any of its affiliates. All brokerage costs
and related expenses incurred hereunder shall be paid from the Escrow Funds. The
Escrow Amount together with all amounts so earned from such investments and
reinvestments ("Escrow Income") are collectively referred to herein as the
"Escrow Funds." The Escrow Funds shall be held by Escrow Agent subject to the
terms and conditions hereinafter set forth.
(c) The Escrow Agent shall have the right to liquidate any
investments held, in order to provide funds necessary to make required payments
under this Escrow Agreement. The Escrow Agent in its capacity as escrow agent
hereunder shall not have any liability for any loss sustained as a result of any
investment made pursuant to the instructions of the parties hereto or as a
result of any liquidation of any investment prior to its maturity or for the
failure of the parties to give the Escrow Agent instructions to invest or
reinvest the Escrow Funds or any earnings thereon.
4. USE OF ESCROW FUNDS; DISTRIBUTIONS OF ESCROW INCOME.
4.1 USE OF ESCROW FUNDS. The Escrow Funds shall be used, to the
extent required, to satisfy in full or in part the indemnification obligations
of the Shareholders as set forth in Article VIII of the Stock Purchase Agreement
("Indemnification Obligations"). Notwithstanding the foregoing, the use of
Escrow Funds to satisfy Indemnification Obligations shall be limited to $6
million in the aggregate.
4.2 CLAIM NOTICES. If at any time up to and including the second
anniversary of the Closing Date, a Claim (as defined in Section 8.01 of the
Stock Purchase Agreement) has been asserted against, resulted from, imposed upon
or incurred by Acquiror or any Acquiror Indemnified Party, directly or
indirectly, by reason of, arising out of or resulting from the matters set forth
in Sections 8.01(a), (b), (d) or (e) of the Stock Purchase Agreement that
Acquiror in good faith believes gives rise to an Indemnification Obligation,
Acquiror may provide the Escrow Agent and the Shareholder Representative with
written notice with respect to such Claim (a "Claim Notice"). Such Claim Notice
shall (a) specify in reasonable detail the basis for each individual
Indemnification Obligation with respect to such Claim in accordance with the
provisions of the Stock Purchase Agreement and this Agreement, (b) include the
amount (with supporting calculations and documents), if any, that Acquiror
believes in good faith should be distributed from the Escrow Funds for each
individual Indemnification Obligation at such time in accordance with the
provisions of the Stock Purchase Agreement and this Agreement and (c) provide
instructions with respect to the distribution of such amount, if any, including
the recipients thereof and the amount to be distributed to each recipient. Each
Claim Notice shall be executed by an authorized officer of Acquiror, and the
<PAGE>
Escrow Agent shall be entitled to rely on such Claim Notice as being duly
authorized and executed by Acquiror on behalf of either itself or another
Acquiror Indemnified Party.
4.3 DISTRIBUTION NOTICES. If (a) a Claim has been asserted against,
resulted from, imposed upon or incurred by Acquiror or any Acquiror Indemnified
Party, directly or indirectly, by reason of, arising out of or resulting from
the matters set forth in (i) a Claim Notice previously delivered pursuant to
Section 4.2 of this Agreement or (ii) Section 8.01(c) of the Stock Purchase
Agreement and (b) Acquiror believes in good faith that such Claim gives rise to
an Indemnification Obligation (or, in the case of clause (a)(i) above, an
additional Indemnification Obligation) from the Escrow Funds in accordance with
the provisions of the Stock Purchase Agreement and this Agreement as a result of
such Claim, then Acquiror may provide the Escrow Agent and the Shareholder
Representative with written notice (a "Distribution Notice") at any time
thereafter. Such Distribution Notice shall (a) specify in reasonable detail the
basis for each individual Indemnification Obligation with respect to such Claim
in accordance with the provisions of the Stock Purchase Agreement and this
Agreement, (b) include the amount (with supporting calculations and documents)
that Acquiror believes in good faith should be distributed from the Escrow Funds
for each individual Indemnification Obligation at such time in accordance with
the provisions of the Stock Purchase Agreement and this Agreement and (c)
provide instructions with respect to the distribution of such amount, including
the recipients thereof and the amount to be distributed to each recipient. Each
Distribution Notice shall be executed by an authorized officer of Acquiror, and
the Escrow Agent shall be entitled to rely on such Distribution Notice as being
duly authorized and executed by Acquiror on behalf of either itself or another
Acquiror Indemnified Party.
4.4 INTEREST EXPENSE. Acquiror may from time to time submit to the
Escrow Agent and the Shareholder Representative a notice, together with
supporting documents, that requests payment of any due but previously unpaid
Interest Expense (an "Interest Notice"). For purposes of this Section 4.4, the
term "Interest Expense" means the amount of interest Acquiror would incur if it
had borrowed the funds it used to pay any amounts for which it or any other
Acquiror Indemnified Party is eventually indemnified pursuant to this Agreement
for the period from the date of payment of such amount by Acquiror or any other
Acquiror Indemnified Party to the receipt by Acquiror of indemnification
pursuant to this Agreement. For purposes of such calculation, the marginal
interest rate in effect under Acquiror's revolving credit facility during such
period shall be used. Notwithstanding the foregoing, the aggregate amount of
payments to Acquiror at any time pursuant to this Section 4.4 shall not exceed
the aggregate amount of Escrow Income at such time. To the extent that Acquiror
has submitted one or more Interest Notices that request payment of due but
previously unpaid Interest Expense in excess of the aggregate amount of Escrow
Income at such time, the Escrow Agent shall, subject to Section 4.6, pay such
unpaid Interest Expense to the extent of available Escrow Income and thereafter
upon receipt of additional Escrow Income, shall, subject to Section 4.6 pay,
such Escrow Income to Acquiror pursuant to the terms of such outstanding
Interest Notices until such time as all such unpaid Interest Expense has been
paid.
4.5 DISTRIBUTIONS. If, within 20 days of the Notice Receipt Date (as
hereinafter defined) for a Claim Notice, a Distribution Notice or an Interest
Notice, Acquiror and the Escrow Agent are not in receipt of a Notice of
Disagreement (as hereinafter defined) with respect to such Claim Notice,
Distribution Notice or Interest Notice, then on the next Business Day thereafter
the
<PAGE>
Escrow Agent shall pay from the Escrow Funds by wire transfer of immediately
available funds the amount, if any, set forth in such Claim Notice, Distribution
Notice or Interest Notice in accordance with the terms of such Claim Notice,
Distribution Notice or Interest Notice. Acquiror shall not be entitled to any
distributions of Escrow Funds with respect to a particular matter or for
Interest Expense unless Acquiror has delivered a Claim Notice, a Distribution
Notice or Interest Notice, as appropriate.
4.6 NOTICE OF DISAGREEMENT. If ,upon receipt of a Claim Notice, a
Distribution Notice or an Interest Notice, the Shareholder Representative
believes in good faith that the Acquiror Indemnified Parties are not entitled to
all or part of the indemnification or Interest Expense, as applicable, described
therein, then the Shareholder Representative may provide Acquiror and the Escrow
Agent with written notice of such disagreement (a "Notice of Disagreement").
Such Notice of Disagreement shall specify in reasonable detail the basis for
such disagreement and such Notice of Disagreement shall be received by Acquiror
and the Escrow Agent within 20 days of the Notice Receipt Date for the Claim
Notice, Distribution Notice or Interest Notice, as appropriate, with respect to
which such Notice of Disagreement is being provided. Each Notice of Disagreement
shall be executed by the Shareholder Representative, and the Escrow Agent shall
be entitled to rely on such Notice of Disagreement as being duly authorized and
executed by the Shareholder Representative.
4.7 RESOLUTION OF DISAGREEMENTS. Each of the parties hereto agrees
to cause its representatives to negotiate in good faith and use all reasonable
efforts to resolve any matters set forth in an effective Notice of Disagreement
until the earlier of (a) the receipt by the Escrow Agent of a Resolution Notice
(as hereinafter defined) with respect to such matters and (b) 20 days from the
date of receipt by Acquiror of such Notice of Disagreement. If the matters set
forth in a Notice of Disagreement are resolved by the parties hereto, within two
Business Days of such resolution Acquiror and the Shareholders (or the
Shareholder Representative on behalf of the Shareholders) shall deliver a notice
to the Escrow Agent (a "Resolution Notice") that sets forth the amount, if any,
that should be distributed from the Escrow Funds and instructions with respect
to the distribution of such amount, if any, including the recipients thereof and
the amount to be distributed to each recipient. The Escrow Agent shall pay from
the Escrow Funds by wire transfer of immediately available funds the amount, if
any, set forth in such Resolution Notice in accordance with the instructions set
forth therein within two Business Days of receipt of such Resolution Notice.
Each Resolution Notice shall be executed by an authorized officer of Acquiror
and the Shareholder Representative, and the Escrow Agent shall be entitled to
rely on such Resolution Notice as being duly authorized and executed by Acquiror
and the Shareholder Representative.
4.8 ARBITRATION.At any time after the expiration of the 20-day
period referred to in clause (a) of Section 4.7 with respect to any unresolved
matters set forth in an effective Notice of Disagreement, Acquiror may elect to,
and, upon such election, Acquiror and the Shareholders shall, submit such
unresolved matters to final and binding arbitration in accordance with the
arbitration procedures of the American Arbitration Association, such arbitration
proceedings to be held in New York City or in such other place as may be agreed
to in writing by Acquiror and the Shareholder Representative. Judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. In connection with such arbitration proceedings, each of the
<PAGE>
Shareholder Representative and Acquiror shall submit to the arbitrator the
amount that the Shareholders would agree to distribute from the Escrow Funds, if
any, or that Acquiror would agree to accept, respectively, to settle the
unresolved matter. Notwithstanding anything herein to the contrary, the award
rendered by the arbitrator shall be either the amount submitted by Acquiror or
the amount submitted by the Shareholder Representative, and the arbitrator
shall, in addition, award the prevailing party the reasonable costs and expenses
incurred by such prevailing party in connection with such arbitration
proceedings. The non-prevailing party in such arbitration proceeding agrees to
indemnify the prevailing party from and against all reasonable costs and
expenses of the arbitration proceeding. No costs and expenses of arbitration
awarded or payable pursuant to this Section 4.8 shall be paid from the Escrow
Funds. Except as otherwise expressly provided herein, in reaching his or her
decision, the arbitrator shall have no authority or jurisdiction to change or
modify any provision of this Agreement or to award punitive damages nor shall
such provisions be modified or punitive damages be awarded in any other forum.
The parties agree that if, pursuant to the award of the arbitrator, the Acquiror
Indemnified Parties are to receive any payments from the Escrow Funds, the
Escrow Agent shall make such payment within two Business Days of receipt from
(a) such arbitrator of written notice, executed by such arbitrator, of such
arbitrator's award and (b) written instructions from Acquiror (executed by a
duly authorized officer of Acquiror) with respect to the distribution of such
award, including the recipients thereof and the amount to be distributed, by
wire transfer of immediately available funds in accordance with such written
instructions. The Escrow Agent shall be entitled to rely on (i) the notice from
the arbitrator as being duly authorized and executed by such arbitrator and (ii)
the written instructions from Acquiror as being duly authorized and executed by
Acquiror.
4.9 CERTAIN DEFINITIONS. For purposes of this Section 4:
(a) With respect to a particular Claim Notice, Distribution Notice
or Interest Notice, the term "Notice Receipt Date" shall mean the date indicated
as such in a certificate delivered by Acquiror to the Escrow Agent. Such
certificate shall be executed by an authorized officer of Acquiror and shall
certify that Acquiror is in possession of confirmation, as provided in Section
7.5 of this Agreement, that such Claim Notice, Distribution Notice or Interest
Notice has been received by the Shareholder Representative. The Escrow Agent
shall be entitled to rely on such certificate as being duly authorized and
executed by Acquiror.
(b) The term "Business Day" shall mean any day on which commercial
banks are not authorized or required to close in New York City.
5. TERMINATION OF ESCROW. The escrow provided for hereunder shall
terminate (the "Escrow Termination Date") upon the earlier of (i) distribution
of $6 million to the Acquiror Indemnified Parties by the Escrow Agent for
Indemnification Obligations in accordance with Section 4.5 hereof and the
satisfaction or resolution of each Interest Notice delivered by Acquiror
pursuant to Section 4.4, (ii) the receipt of written notification ("a
Termination Notice") from Acquiror to the Escrow Agent, which Termination Notice
shall be provided promptly upon the later of (a) such time as all matters
described in Claim Notices that relate to Section 8.01(a), (b) or (d) of the
Stock Purchase Agreement have been fully resolved, (b) the matters described in
Section 8.01(c) of the Stock Purchase Agreement have been fully resolved and (c)
the second anniversary of the
<PAGE>
Closing Date, and (iii) the sixth anniversary of the Closing Date. Subject to
any unpaid distributions required pursuant to Section 4, all Escrow Funds
remaining on the Escrow Termination Date shall be distributed by the Escrow
Agent to the Shareholders upon written instructions from the Shareholder
Representative. Such distribution of Escrow Funds shall be made in the same
manner, using the same percentages, as the distribution of the Closing Purchase
Price to such Shareholders in connection with the Acquisition as directed in
writing by the Shareholder Representative.
6. ESCROW AGENT.
6.1 DUTIES. The Escrow Agent's obligations and duties in connection
herewith are purely ministerial and are confined to those specifically
enumerated in this Agreement. The Escrow Agent shall not be liable or
responsible for the sufficiency, correctness, genuineness or validity of any
instrument deposited with it or with reference to the form of execution thereof,
or the identity, authority or rights of any person executing or depositing same,
and the Escrow Agent shall not be liable for any loss that may occur by reason
of forgery, false representation or the exercise of its discretion in any
particular manner or for any other reason, except for its own gross negligence,
bad faith or willful misconduct. The Escrow Agent is not a principal,
participant or beneficiary in any transaction underlying this Agreement and
shall have no duty to inquire beyond the terms and provisions hereof. The Escrow
Agent shall never be required to use, advance or risk its own funds or otherwise
incur financial liability in the performance of any of its duties or the
exercise of any of its rights and powers hereunder.
6.2 RELIANCE; LIABILITY. The Escrow Agent may rely and shall not be
liable for acting or refraining from acting in good faith upon any written
notice, instruction or request or other paper furnished to it hereunder and
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties. The Escrow Agent shall be responsible for holding
and distributing the Escrow Funds pursuant to this Agreement, but in no event
shall be liable for any special, indirect, exemplary or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits)
even if the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action. The Escrow Agent is not responsible
or liable in any manner whatever for the sufficiency, correctness, genuineness
or validity of the subject matter of this Agreement or any part hereof or for
the form or execution hereof, or for the identity or authority of any person
executing or depositing the same. The Escrow Agent shall have no liability for
any loss arising from any cause beyond its control, including, but not limited
to, the following: (a) the act, failure or neglect of any other party hereto or
any agent or correspondent prudently selected by the Escrow Agent for the
remittance of the Escrow Funds; (b) any delay, error, omission or default of any
mail, courier, telegraph, cable or wireless agency or operator; (c) the acts or
edicts of any government or governmental agency or other group or entity
exercising governmental powers; or (d) acts of God, FORCE MAJEURE, including,
without limitation, war (whether or not declared or existing), revolution,
insurrection, riot, civil commotion, accident, fire, explosion, stoppage of
labor and strike.
6.3 INDEMNIFICATION. Except in instances of the Escrow Agent's own
gross negligence, bad faith or willful misconduct, Acquiror and the
Shareholders, jointly and severally, shall indemnify, defend and hold harmless
the Escrow Agent, its officers, employees, agents and
<PAGE>
counsel against any and all costs, losses, claims, damages, liabilities,
expenses, including reasonable costs of investigation, court costs and
reasonable attorneys' fees, and disbursements that may be imposed upon the
Escrow Agent in connection with its acceptance of appointment as the Escrow
Agent and the exercise of, or failure to exercise, its rights and duties
hereunder, including any litigation arising from this Agreement involving the
subject matter hereof, and all such costs, expenses and disbursements shall be
for the account of and shall be borne and paid by Acquiror and the Shareholders
as a condition to termination of this Agreement. Such costs, losses, claims,
damages, liabilities, expenses and disbursements shall be paid according to the
fee schedule attached as Exhibit A hereto. To the extent the foregoing indemnity
contemplates indemnification of the Escrow Agent for its own negligent acts or
omissions under certain circumstances, that is the express intent of the parties
hereto. The terms and provisions of this Section 6.3 shall survive the
termination of this Agreement.
6.4 DISPUTES; UNCERTAINTY; CONFLICTS. In the event of a dispute
between the parties or any other person, firm or entity with respect to this
Agreement or the Escrow Funds, such dispute shall be resolved only by means of
the provisions of Section 4.8, if applicable, or final and binding arbitration
in accordance with the arbitration procedures of the American Arbitration
Association, such arbitration proceedings to be held in New York City or in such
other place as may be agreed to in writing by Acquiror and the Shareholder
Representative. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. In the event that the Escrow
Agent shall be uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands from any party hereto which, in its opinion,
conflict with any of the provisions of this Agreement, it shall be entitled to
refrain from taking any action and its sole obligation shall be to keep safely
all property held in escrow until it shall be directed otherwise in writing by
all of the other parties hereto or by a final order or judgment of a court of
competent jurisdiction.
6.5 FEES. The Escrow Agent shall be compensated in accordance with
the fee schedule attached as Exhibit A hereto. All such fees and expenses shall
be paid first from the Escrow Funds as available, then in the absence of
availability, jointly and severally by the parties hereto.
6.6 RESIGNATION AND SUCCESSOR. The Escrow Agent may resign and be
discharged of its duties and obligations under this Agreement by written notice
provided to Acquiror and the Shareholder Representative not less than 15 days
before the date when such resignation is to take effect. A successor escrow
agent shall be selected by Acquiror and the Shareholder Representative. Any
successor escrow agent shall execute, acknowledge and deliver to Acquiror and
the Shareholder Representative an instrument accepting such duties and
obligations hereunder; and thereupon such successor escrow agent, without any
further act, deed or conveyance, shall become fully vested with all rights,
duties and obligations of its predecessor under this Agreement, with like effect
as if originally named Escrow Agent. The Escrow Agent, ceasing to act hereunder,
shall turn over to the successor escrow agent the Escrow Funds. If Acquiror and
the Shareholder Representative fail to designate a substitute escrow agent
within 30 days after the giving of such notice, the Escrow Agent may institute a
bill of interpleader with any court of competent jurisdiction. The Escrow
Agent's sole responsibility after the notice period expires shall be to keep
safely the Escrow Funds and to deliver the same to a designated substitute
escrow agent, if any, or in accordance with the directions
<PAGE>
of a final order or judgment of a court of competent jurisdiction, at which time
the Escrow Agent's obligations hereunder shall cease and terminate. Subject to
the Escrow Agent's right to institute a bill of interpleader, the Escrow Agent
may not resign until a successor escrow agent has been appointed and accepts
such function as provided in this Section 6.6.
6.7 CONSULTATION WITH LEGAL COUNSEL. The Escrow Agent may consult
with its counsel or other counsel satisfactory to it concerning any question
relating to its duties and responsibilities hereunder or otherwise in connection
herewith and shall not be liable for any action taken, suffered or omitted by it
in good faith upon the advice of such counsel.
6.8 RECEIPT OF ESCROW AMOUNT. By its execution and delivery of this
Agreement, the Escrow Agent acknowledges receipt from Acquiror of the Escrow
Amount. Receipt, investment and reinvestment of the Escrow Funds shall be
confirmed by the Escrow Agent as soon as practicable by account statement, and
any discrepancies in any such account statement will be noted by Acquiror and
the Shareholder Representative to the Escrow Agent within 30 days after receipt
thereof. Failure to inform the Escrow Agent in writing of any discrepancies in
any such account statement within said 30-day period shall conclusively be
deemed confirmation of such account statement in its entirety. Each account
statement shall have been deemed to have been received by the party to whom
directed on the earlier of (i) actual receipt thereof and (ii) ten Business Days
after the deposit thereof in the United States Mail, postage prepaid.
6.9 MERGER, CONSOLIDATION, ETC. OF THE ESCROW AGENT. Any corporation
into which the Escrow Agent in its individual capacity may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent in its
individual capacity shall be a party, or any corporation to which substantially
all the corporate trust business of the Escrow Agent in its individual capacity
may be transferred, shall be the Escrow Agent under this Escrow Agreement
without further act.
7. MISCELLANEOUS.
7.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Stock
Purchase Agreement constitute the entire agreement between Acquiror and the
Shareholders with respect to the subject matter hereof. No amendment,
modification or alteration of the terms or provisions of this Agreement shall be
binding unless the same shall be in writing and duly executed by the parties
hereto.
7.2 BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon each of Acquiror, the Company, the Shareholders and the
Escrow Agent and their respective successors, executors, beneficiaries,
administrators, heirs, personal representatives and assigns.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its
principles of conflicts of laws and any action brought hereunder shall be
brought in the courts of the State of New York, located in the County of New
York. Each party hereto irrevocably waives any objection on the
<PAGE>
grounds of venue, forum noncoveniens or any similar grounds and irrevocably
consents to service of process by mail or in any other manner permitted by
applicable law and consents to the jurisdiction of said courts..
7.4 HEADINGS. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction hereof.
7.5 NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class mail,
postage prepaid, return receipt requested, to the appropriate party at the
following addresses:
if to Acquiror:
Core Laboratories N.V.
Herengracht 424
1017 BZ Amsterdam
The Netherlands
Telecopy: (011) 31-20-627-9886
Attention: Managing Director
with copies to:
Core Laboratories, Inc.
5295 Hollister Road
Houston, Texas 77040
Telecopy: (713) 690-3947
Attention: John D. Denson
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Telecopy: (713) 615-5531
Attention: T. Mark Kelly
if to the Escrow Agent:
Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Telecopy: (212) 946-8156
Attention: Escrow Administration, 15th Floor
<PAGE>
if to the Shareholder Representative:
Stanley Roth
North American Capital Corp.
510 Broad Hollow Road
Melville, New York 11747-3665
Telecopy: (516) 752-9618
with copies to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022-6069
Telecopy: (212) 848-7179
Attention: John A. Marzulli, Jr.
Stibbe Simont Monahan Dehot
P. O. Box 75460
1070 AP Amsterdam
The Netherlands
Telecopy: (011) 31-20-546-0733
Attention: Hector W. L. de Beaufort
or to such other address as the parties set forth above shall have furnished to
the other parties set forth above by notice given in accordance with this
Section 7.5. Such notices shall be effective (i) if delivered in person or by
courier, upon actual receipt by the intended recipient, (ii) if sent by telecopy
or facsimile transmission, when the sender receives telecopier confirmation that
such notice was received at the telecopier number of the addressee, or (iii) if
mailed, upon the earlier of 10 days after deposit in the mail and the date of
delivery as shown by the return receipt therefor.
7.6 TAX MATTERS. Acquiror and each of the Shareholders shall provide
the Escrow Agent with an appropriately completed Form W-8 or form W-9, as
applicable, as soon as reasonably practicable after the execution of this Escrow
Agreement. Failure so to provide such forms may prevent or delay disbursements
from the Escrow Funds and may also result in the assessment of a penalty and the
Escrow Agent's being required to withhold tax on any interest or other income
earned on the Escrow Funds. Any payments of income shall be subject to
applicable withholding regulations then in force in the United States or any
other jurisdiction, as applicable.
7.7 ASSIGNMENT. This Escrow Agreement shall not be assigned by
Acquiror or any of the Shareholders without the prior written consent of the
Escrow Agent.
7.8 SEVERABILITY. If any term or provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions of this Agreement shall continue in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated
<PAGE>
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term, provision, covenant or restriction is invalid, void
or unenforceable, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
7.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, Acquiror, each of the Shareholders and Escrow Agent
have each caused this Agreement to be executed on its behalf by its officer
thereunto duly authorized, all as of the date first above written.
ACQUIROR:
CORE LABORATORIES N.V.
By: Core Laboratories International B.V.,
its sole managing director
By: ____________________________
Jacobus Schouten
Managing Director
SHAREHOLDERS:
______________________________________
Frerik Pluimers
ALPINVEST HOLDING N.V.
By: __________________________________
Name:
Title:
HEMERA II & CIE S.C.A
By: __________________________________
Name:
Title:
EUROFRANDEV S.A.
By: __________________________________
Name:
Title:
<PAGE>
SHAREHOLDERS:
PARINDEV PME SA
By: __________________________________
Name:
Title:
STICHTING PARTICIPATIE SAYBOLT
INTERNATIONAL B.V.
By: __________________________________
Name:
Title:
ABN AMRO PARTICIPATIES B.V.
By: __________________________________
Name:
Title:
CITICORP CAPITAL INVESTORS
EUROPE LTD.
By: __________________________________
Name:
Title:
EUROPENTERPRISE '92 CURACAO N.V.
By: __________________________________
Name:
Title:
<PAGE>
SHAREHOLDERS:
______________________________________
Rolly Louis Rudolph Jules van Rappard
______________________________________
Maarten Ruijs
______________________________________
Michael David Cook Smith
______________________________________
Alexander Donald MacKenzie
______________________________________
Corinne Ingeborg Beatrice Koltes-Sulzer
<PAGE>
THE ESCROW AGENT:
CHASE MANHATTAN BANK
By: __________________________________
Name:
Title:
<PAGE>
EXHIBIT A
$5,000 per annum or any part thereof without proration for partial years
(includes investment in a Chase Manhattan Bank Money Market Account, The Chase
Manhattan Bank Mutual Fund known as the Vista Fund or the Cash Escrow).
$75 per investment (excludes Money Market, Vista Fund or Cash Escrow
investments).
EXHIBIT 99.1
[LETTERHEAD OF CORE LABORATORIES]
FOR IMMEDIATE RELEASE For more information, contact:
Richard Bergmark, 713-329-7403 (phone)
713-939-8295 (fax)
CORE LABORATORIES ACQUIRES SAYBOLT
HOUSTON (May 12, 1997) -- Core Laboratories N.V. announced that it has acquired
Saybolt International B.V. for $67 million in cash and the assumption of
approximately $5 million of net debt. Saybolt, a privately held company with
1996 revenues of approximately $100 million, provides field and analytical
services used to characterize crude oil and its derivatives. Combined, the
companies will offer petroleum oilfield services from over 70 offices in 50
countries and locally serve every major petroleum producing province in the
world.
"Our client-driven business strategies of adding technologies and services to
further leverage our global presence should lead to accelerated growth," said
David M. Demshur, President and CEO of Core Laboratories. "Saybolt, with 24
offices in the Commonwealth of Independent States, provides the operating
experience and base from which Core can offer reservoir description and
production management services that are in increasing demand, especially in the
southern Caspian Sea area," Demshur added.
Although the acquisition will provide greater growth opportunities to both
companies, there will be consolidation savings at both the operating and
administrative levels. Several field offices will be combined and Saybolt's
Western Hemisphere administrative functions will be moved from Parsippany, New
Jersey to Houston, Texas. The total consolidation savings could exceed $3.0
million. "This acquisition is expected to be accretive to our 1997 operational
earnings," said Richard L. Bergmark, CFO and Treasurer of Core Laboratories. "We
have arranged financing for this transaction on attractive terms which should
preclude the need to seek additional equity capital through a secondary offering
at this time," Bergmark added.
"We will be better able to service our clients and offer a more complete package
of services," said Erik Pluimers, President and CEO of Saybolt. "Exchanging
technology and increasing technical interaction of our senior engineers and
scientists should lead to a new series of related services as we go forward. We
are very encouraged about the future," Pluimers added.
<PAGE>
Core Laboratories N.V. (NASDAQ - NNM: CRLBF) is one of the world's leading
providers of petroleum reservoir description data and production management
services for maximizing hydrocarbon recovery from new and existing fields. The
company is the world's largest provider of petroleum reservoir rock and fluids
analyses and multidisciplinary reservoir description studies. Core is also a
leading provider of field services evaluating the efficiencies of well
completions and stimulations 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's forecasts and projections herein are subject to various important
cautionary factors as more fully described in Core Laboratories 1996 10-K and in
other securities filings.
# # #
