EXHIBIT (c)(1)
MASTER AGREEMENT FOR PURCHASE AND SALE
OF SHARES, ASSETS AND LIABILITIES
This Master Agreement (the "Agreement"), is made as of June 19, 1998, by and
among
- SCHLUMBERGER LIMITED, a Netherlands Antilles Corporation, acting for itself
and on behalf of the companies listed in Schedule A (the "Selling
Subsidiaries"),
(hereinafter referred to as "SCHLUMBERGER")
and,
- TOKHEIM CORPORATION an Indiana corporation, acting for itself and on behalf
of all its subsidiaries (the "Acquiring Subsidiaries"),
(hereinafter referred to as "BUYER"),
SCHLUMBERGER and BUYER are sometimes referred to herein as the "Parties".
RECITALS
Whereas the Selling Subsidiaries are, among other things, directly or
indirectly, engaged in the business of design, development, manufacture,
marketing, distribution, and sale of fuel pump dispensers (the "RPS Dispenser
Business"), and electronic hardware and system software related to retail
automation systems and forecourt payment terminals (the "RPS Systems Business"),
and design, construction, maintenance of, and other services for service-
stations (the "RPS Service Business");
Whereas Selling Subsidiaries conduct the RPS Dispenser Business, the RPS Systems
Business and the RPS Service Business (collectively, the "RPS Business") to
varying degrees through the entities and divisions of companies listed in
Schedule C;
Whereas upon the terms and subject to the conditions hereinafter set forth, and
subject to certain agreed upon corporate restructurings, BUYER agrees to
purchase and assume, and SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries to sell, and assign, all of the issued and outstanding capital
shares (the "Acquired Shares") of the entities devoted to the RPS Business (the
"Acquired Companies") and the RPS Business of the Selling Subsidiaries (the
"Acquired RPS Activities") listed in Schedule D and comprised of the assets (the
"Acquired Assets") and liabilities (the "Assumed Liabilities") as defined in
Schedule E;
Whereas the Parties also desire to make certain representations, warranties and
other agreements in connection with the transactions contemplated herein and to
provide for certain conditions precedent with respect thereto.
NOW THEREFORE, the Parties hereto agree as follows:
ARTICLE I
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PURCHASE AND SALE
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1.1 The Acquisition
Subject to the terms and conditions of this Agreement on the Closing Date
(as defined in Section 4.1 hereinafter), SCHLUMBERGER shall cause the
Selling Subsidiaries to sell, transfer, convey and deliver to BUYER and the
Acquiring Subsidiaries, the Acquired Shares and the Acquired Assets subject
to assumption by BUYER and the Acquiring Subsidiaries, of the Assumed
Liabilities.
1.2 Separate Acquisition Agreements
Each of the acquisitions of Acquired Shares, Acquired Assets and the
assumption of the Assumed Liabilities shall be carried out by separate
acquisition agreements between the respective Selling Subsidiaries and
Acquiring Subsidiaries, which form an integral and indivisible part of this
Agreement and which, subject only to mandatory changes imposed by local
applicable laws, shall be in accordance with the form of acquisition
agreement attached hereto as Schedule 1.2 (the "Specific Acquisition
Agreements").
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In no event shall any representation or warranty, covenant or any other
specific provision possibly imposed by local laws supersede the terms and
conditions specified herein. The Parties hereby acknowledge that their
relationship shall be solely governed by the terms contained herein.
SCHLUMBERGER and BUYER shall respectively cause the Selling Subsidiaries
and the Acquiring Subsidiaries to duly execute the Specific Acquisition
Agreements forthwith on the Closing Date.
1.3 Total Purchase Price
The aggregate purchase price for the Acquired Shares and the Acquired
Assets shall be US dollars 335,000,000 (three hundred and thirty five
million dollars) (the "Total Purchase Price"), subject to the assumption by
BUYER and the Acquiring Subsidiaries of the Assumed Liabilities. The Total
Purchase Price shall be allocated to each of the Acquired Companies and to
each of the, or group of, Acquired Assets relating to each of the Acquired
RPS Activities, as indicated in Schedule 1.3.
1.4 Payment of the Total Purchase Price
Payment of the Total Purchase Price for the Acquired Shares and the
Acquired Assets shall be made by BUYER on the Closing Date by depositing,
by bank wire transfer in US Dollars, the amount of the Total Purchase Price
in immediately available funds, into an account designated by SCHLUMBERGER
for such purpose, which designation shall be made no later than three (3)
business days before the Closing Date by SCHLUMBERGER, acting as agent for
the Selling Subsidiaries.
1.5 Base Balance Sheet and Statements of Income
Within 15 calendar days of the date of this Agreement, SCHLUMBERGER shall
prepare, in accordance with United States generally accepted account ing
principles ("US GAAP"), except that no reserve shall be included for
outstanding litigation of the RPS Business in France, the United States of
America, Russia, the Czech Republic, the United Kingdom and Italy (but
solely relating to the RPS Business of the Italian Selling Subsidiary), and
in accordance with the accounting rules and practices described in Schedule
1.5 (a) (the "Accounting Principles"), which accounting rules the Parties
acknowledge to be consistent with US GAAP, and deliver to BUYER (i) an
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audited combined balance sheet of the RPS Business as at December 31, 1997,
including the related schedules and notes, and (ii) the audited combined
statements of income and cash flows of the RPS Business for the year ended
on December 31, 1997. The December 31, 1997 balance sheet and the 1997
statements of income and cash flows shall be prepared for the RPS Business
on a "stand alone" basis. The pro forma adjustments, which are to be made
in the preparation of the combined balance sheet and income statement for
1997, are set out in Schedule 1.5(b). The December 31, 1997 balance sheet,
as adjusted in accordance with Schedule 1.5 (b), shall be referred to as
the "Base Balance Sheet". The December 31, 1997 statements of income and
cash flows, as adjusted in accordance with Schedule 1.5 (b), shall be
referred to as the "Base Income Statement".
1.6 Adjustment to the Total Purchase Price
(a) Within thirty (30) calendar days from the Closing, SCHLUMBERGER shall
deliver to BUYER a combined balance sheet of the RPS Business as of
the month-end which shall corre spond to the Closing Date, as defined
in Section 4.1 hereto (the "Closing Balance Sheet"). The Closing
Balance Sheet shall be prepared in accordance with US GAAP and the
Accounting Principles. To the extent that the Net Equity, shown on
the Base Balance Sheet is higher than the Net Equity shown on the
Closing Balance Sheet, SCHLUMBERGER shall make a payment to BUYER
equivalent to the amount of the difference. To the extent that the Net
Equity shown on the Base Balance Sheet is less than the Net Equity
shown on the Closing Balance Sheet, BUYER shall make a payment to
SCHLUMBERGER equivalent to the amount of the surplus. Any payment
resulting from this Section 1.6 (a) shall be referred to as the "Post
Closing Adjustment". "Net Equity" ("situation reelle") shall mean an
amount equal to (i) the aggregate book value of the assets of the RPS
Business reflected on a balance sheet prepared at a given date, in
accordance with US GAAP and the Accounting Principles, minus (ii) the
aggregate book value of the liabilities of the RPS Business reflected
on that same balance sheet.
(b) BUYER and its auditors will review the Closing Balance Sheet within 20
days from the submission by SCHLUMBERGER of the foregoing. BUYER shall
then deliver to SCHLUMBERGER, within 10 days after completion of this
review, a detailed statement setting forth its objections to the
Closing Balance Sheet, if any.
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Based on such statement, SCHLUMBERGER shall deliver to BUYER, within
10 days after SCHLUMBERGER's receipt of BUYER's objections, a detailed
statement setting forth its position with respect to such objections.
In the event that the determination by each of the Parties of the Net
Equity is different but within US dollars (1,000,000 one million
dollars) of each other, then the Net Equity shall be the average of
such determination by each such Party.
SCHLUMBERGER and BUYER shall use all reasonable efforts to resolve any
further dispute, but if a final resolution is not obtained within 5
business days after BUYER receives SCHLUMBERGER's statement of
position, any remaining disputes shall be resolved by Ernst & Young
Paris office (the "Arbitrator").
Should Ernst & Young refuse the appointment or be unable to carry out
its mission as provided by this paragraph 1.6 (b), each party may
request, pursuant to "refere" proceedings, the President of the Paris
Commercial Court to appoint the Paris office of another
internationally recognized accounting firm to act as the Arbitrator,
(c) The Arbitrator will audit the Closing Balance Sheet, will review
and try to resolve the Parties' disagreements and will determine
the final value of the Net Equity as of the Closing Date and thus
of its increase, or decrease, as the case may be, as compared to
the Net Equity as of December 31, 1997. Within 10 days from first
being informed of the dispute by a Party, the Arbitrator will
organize a joint session to enable each party to submit
additional arguments and reasoning. Within 20 days from said
joint session, the Arbitrator shall deliver to SCHLUMBERGER and
BUYER a written report restating the Parties' disputes as well as
his determination of the Net Equity as of the Closing Date. These
determinations will be conclusive and binding upon the Parties
hereto.
Each party shall bear the fees and expenses of its auditors in
connection with the matters referred to in this Section. SCHLUMBERGER
and BUYER shall each pay 50% of the fees charged by the Arbitrator.
(d) If any additional payment were to be due by SCHLUMBERGER or owed
to SCHLUMBERGER subsequent to the Post Closing Adjustment, such
payment will take place within the later of (i) 10 days from the
date of issuance of the final determination by the Arbitrator or
(ii) 30 days from SCHLUMBERGER's submission of
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the Closing Balance Sheet, should these documents be agreed upon
by BUYER.
(e) "Interest Rate" shall mean the rate per annum equal to the London
Inter bank Borrowing Rate (LIBOR) for deposits of three months
duration.
(f) Notwithstanding anything else contained in this Agreement, in no
event shall the Post-Closing Adjustment result in an overall
adjustment higher than 10% of the Base Balance Sheet Net Equity.
1.7 Assumption of Liabilities
With respect to the purchase and sale of the Acquired Assets, in addition
to the payment of the Total Purchase Price, and pursuant to the Specific
Acquisition Agreements, BUYER and the Acquiring Subsidiaries will assume,
as of the Closing Date, and subsequently, in due course, pay or otherwise
discharge all Assumed Liabilities.
ARTICLE II
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PRE-CLOSING COMMITMENTS
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2.1 Conduct of Business pending Closing
Except as otherwise provided in Schedule 2.1, and as otherwise provided in
this Agreement, including without limitation, the restructuring agreed upon
by the Parties, SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries, and BUYER agree that, from the date hereof to the Closing
Date, unless BUYER shall otherwise consent in writing (which consent BUYER
shall not unreasonably withhold) or as expressly contemplated by this
Agreement the following provisions shall apply:
(a) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the
Acquired Companies to, use their best efforts to preserve in all
material respects the business organization of the RPS Business
intact. SCHLUMBERGER shall cause the RPS Business to be conducted only
in the ordinary course of business, consistent with past practice.
Such commitment shall include, without limitation, the fact that:
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(i) SCHLUMBERGER, shall, and shall cause the Selling Subsidiaries
and the Acquired Companies to, adequately insure all property,
real, personal and mixed, owned or leased by the RPS Business,
against all ordinary and insurable risks; and all such property
shall be used, operated, maintained and repaired in a careful
and reasonably efficient manner;
(ii) SCHLUMBERGER shall not, and shall not permit any Selling
Subsidiary or any Acquired Company to, do any act or omit to do
any act, or permit any act or omission to act, which will cause
a breach of any material contract or material commitment of the
RPS Business or which would cause the breach of any
representation or warranty made hereunder; and
(iii) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and
the Acquired Companies to, continue to comply in a manner
consistent with past practice with all laws applicable to the
RPS Business and its properties, operations, business and
employees.
(b) SCHLUMBERGER shall not, and shall not permit any Selling Subsidiary or
any Acquired Company to, pledge, sell or encumber any of the Acquired
Assets or assets of the Acquired Companies other than in the ordinary
course of business and consistent with past practice;
(c) SCHLUMBERGER shall not permit the Selling Subsidiaries ,to the extent
related to, or affecting, the RPS Business, and the Acquired
Companies, to do any of the following:
(i) authorize for issuance, issue, sell, pledge, deliver, or agree
or commit to issue, sell, pledge, deliver (whether through the
issuance or grant of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any capital
stock of the Acquired Companies or securities or rights
convertible into, or exchangeable for, shares of capital stock
or securities convertible into, or exchangeable for, such
shares;
(ii) amend or propose to amend their by-laws or articles of
incorporation or those of the Acquired Companies;
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(iii) split, combine or reclassify any shares of the capital stock of
the Acquired Companies;
(iv) redeem, purchase or otherwise acquire or offer to redeem,
purchase or otherwise acquire any share of the capital stock of
the Acquired Companies; or
(v) authorize any agreement, commitment or arrangement to do any of
the foregoing;
(vi) make changes in the accounting methods or practices followed by
the Selling Subsidiaries and Acquired Companies as regards the
RPS Business or make any changes in depreciation or amortization
policies or rates;
(vii) terminate the employment of, or increase, out of the ordinary
course of business, the compensation of, any officer;
(d) SCHLUMBERGER shall cause the Selling Subsidiaries and the Acquired
Companies, solely as it relates to the RPS Business, with respect to
clauses (ii), (iii) and (vi) below, not to:
(i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business
organization or division thereof or make any investment either
by purchase of stock or securities of any other individual or
entity;
(ii) acquire any assets for a value in excess of US dollars 100,000
(one hundred thousand dollars) other than pursuant to pending
or approved capital acquisition requests of the RPS Business as
disclosed to BUYER, and other than purchases in the ordinary
course of business;
(iii) dispose of any RPS Assets with a value in excess of US dollars
100,000 (one hundred thousand dollars);
(iv) incur any indebtedness for borrowed money or issue any debt
securities or assume or guarantee the obligations of any other
person, make any loans or advances or enter into any other
transaction, except the occurrence of intercompany loans or the
making of intercompany advances in the ordinary course of
business consistent with past practices and except for
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advances to employees for expenses in the ordinary course of
business and consistent with past practices;
(v) authorize, recommend or propose any change in its
capitalization, unless such capitalization is necessary to
comply with applicable laws; or
(vi) make changes in the accounting methods or practices followed by
the Selling Subsidiaries, Acquired Companies or RPS Business,
or make any changes in depreciation or amortization policies or
rates relating to the RPS Business;
(vii) make their best efforts not to terminate the employment of, or
increase the compensation of, employees identified in Schedule
5.20(a)(ii) (including any increase pursuant to any bonus,
pension, profit sharing or other plan or commitment) other than
as set forth in Schedule 2.1 in the ordinary course of business
consistent with past practice;
(viii) pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities or
obligations reflected or reserved against in the Base Balance
Sheet or incurred in the ordinary course of business and
consistent with past practice since the date of the Base
Balance Sheet;
(ix) write down the value of any inventory or write off as
uncollectable any notes or accounts receivable, except for
write-downs and write-offs in the ordinary course of business
and consistent with past practice;
(x) cancel any debts or waive any claims or rights of substantial
value, except in the ordinary course of business and consis
tent with past practice or with respect to (i) SCHLUMBERGER
cash pool agreements, (ii) loan agreements by SCHLUMBERGER
affiliates not involved in the RPS Business, and (iii) bank
loans or overdrafts facilities;
(xi) change any of the banking or safe deposit arrangements
described in Schedule 5.22 hereof;
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(xii) enter into any contract or commitment for, or purchase, any raw
material or supplies, except (a) normal contracts or
commitments for the purchase of, and normal purchases of, raw
materials or supplies, made in the ordinary course of business
and consistent with past practice, (b) normal contracts or
commitments for the purchase of and normal purchases of,
inventory in the ordinary course of business and consistent
with past practice, and (c) other contracts, commitments, or
purchases in the ordinary course of business and consistent
with past practice; or
(xiii) authorize or propose any of the foregoing or enter into or
modify any contract, agreement, or commitment or arrangement
with respect to any of the foregoing;
(e) None of the Acquired Companies, the Selling Subsidiaries or
SCHLUMBERGER shall waive, release, grant, license or transfer any
Intellectual Property (as defined in Section 5.9) or modify or change,
in any material respect, any existing material license, distribution
agreement, lease, or other document used in the RPS Business, in each
case, other than in the ordinary course of business.
2.2 Access/Filing and Authorizations/Reasonable Efforts
(a) Between the date hereof and the Closing Date, BUYER shall use its best
efforts to enable the conditions precedent listed in the following
Article to be satisfied as promptly as practicable. SCHLUMBERGER
shall, in all respects, cooperate with BUYER and shall give good faith
responses to all requests for information by any governmental agency
or under any applicable laws and each party shall notify the other
prior to undertaking any action relating to the RPS Business. BUYER
shall notify SCHLUMBERGER, prior to the Closing Date, as to whether
such conditions are satisfied and, where appropriate, the grounds on
which it maintains that any condition is not satisfied.
(b) Between the date hereof and the Closing Date, SCHLUMBERGER is
prepared, in order to ensure the transition of the operations after
the Closing Date, to give BUYER, its counsel, accountants, financing
representatives and other representatives, upon BUYER's reasonable
request, access to the senior management, the key personnel, the
plants and premises, and the books and records of the RPS Business,
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under conditions to be mutually defined so that such access shall not
interfere with the day-to-day operations of the RPS Business and the
duties of management, provided that one of the SCHLUMBERGER legal
representatives, listed in Schedule 2.2 (b) is present during such
contact, communication or visit. Access by BUYER's personnel to RPS
Business information shall be subject to guidelines which have been
mutually agreed upon by SCHLUMBERGER and BUYER. No access to such
personnel, information, plants or premises shall be unreasonably
denied by SCHLUMBERGER, the intent of the Parties, as reflected in
this Section 2.2(b), being only to carefully plan together the
transitional period to the benefit of the RPS Business as an ongoing
concern.
(c) From the date hereof, SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries to, their best efforts with BUYER in order to procure the
assignment to BUYER and the Acquiring Companies of all of the
contracts relating to the Acquired RPS Activities, including, but not
limited to, their direct and indirect distribution agreements (such as
dealer agreements, distributor agreements and supply agreements to
third Parties including affiliates of SCHLUMBERGER), orders of
customers as well as purchase agreements, service agreements with
customers and lease agreements.
(d) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to, use
their best efforts to obtain the resignation of the statutory auditors
of the Acquired Companies, effective as of the Closing Date or any
other meaningful date agreed to by the Parties hereto.
(e) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to,
within thirty (30) calendar days from the end of each month from the
date hereof to the Closing, furnish BUYER with an unaudited proforma
consolidated balance sheet of the RPS Business as at the end of each
month, and unaudited proforma consolidating statements of income,
changes in stockholder's equity and changes in financial position for
the monthly period then ended, all attested by the relevant financial
officer of the RPS Business.
(f) From time to time after signature of this Agreement and prior to the
Closing, SCHLUMBERGER will promptly supplement or amend the Schedules
set forth in Article V hereof (the "Disclosure Schedules") with
respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to
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be set forth or described in the Disclosure Schedules. No supplement
or amendment of the Disclosure Schedules made pursuant to this Section
shall be deemed to cure any breach of any representation or warranty
made in this Agreement unless BUYER specifically agrees thereto in
writing.
(g) As soon as practicable, SCHLUMBERGER and BUYER shall make any and all
filings, which are required under, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx") and other applicable
antitrust or competition laws. Each Party will furnish to the other
Party such necessary information and reasonable assistance as the
latter may request in connection with its preparation of necessary
filings or submissions to any governmental agency, including, without
limitation, any filings necessary under the provisions of the HSR Act.
Each Party will supply the other Party with copies of all
correspondence, filings or communications (or memoranda setting forth
the substance thereof) between it or its representatives, on the one
hand, and the Federal Trade Commission, the Antitrust Division of the
U.S. Department of Justice or any other governmental agency or
authority or members of their respective staffs, on the other hand,
with respect to this Agreement or the transactions contemplated
hereby.
(h) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the
Acquired Companies to, and BUYER shall, and shall cause the Acquiring
Subsidiaries to, use its and their best efforts to insure that the
conditions set forth in Section 2 hereof are satisfied, insofar as
such matters are within the control of any of them.
2.3 Exclusivity
Except as specifically disclosed in Schedule 2.3 from the date of this
Agreement through the Closing Date, or earlier, if BUYER is in material
breach of its obligations and commitments hereunder, SCHLUMBERGER agrees
that BUYER will have exclusive rights to consummate the transactions
contemplated hereby. SCHLUMBERGER, shall not, and shall not permit the
Selling Subsidiaries and the Acquired Companies, and their representatives
and agents, to, entertain, accept, or discuss a possible sale or other
disposition of any component of the RPS Business, any capital stock of the
Acquired Companies or any of the RPS Assets, or any interest therein, with
any other party, or provide information to any other party in connection
therewith.
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BUYER hereby agrees that from the date of signature hereof and through the
Closing Date, BUYER, the Acquiring Subsidiaries, and their representatives
and agents shall not entertain, accept, or discuss a possible purchase or
other acquisition of any major competitor of the RPS Business with any
other party.
2.4 Specific Tax Indemnification for Restructuring
BUYER shall indemnify SCHLUMBERGER against any and all tax liability and
associated costs that would derive from any restructuring of the RPS
Business requested by BUYER from SCHLUMBERGER prior to Closing.
ARTICLE III
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CONDITIONS PRECEDENT AND OTHER AUTHORIZATIONS
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3.1 Conditions Precedent to SCHLUMBERGER's Obligations
The obligations of SCHLUMBERGER to consummate the sale of the RPS Business
as contemplated in Article I above are subject to the satisfaction of the
following conditions (all or any of which may be waived, in whole or in
part, by SCHLUMBERGER):
(a) All governmental anti-trust consents and approvals required by law
prior to Closing to permit the consummation of the transactions
contemplated by this Agreement shall have been obtained and any pre-
Closing waiting periods (and any extension thereof) applicable to the
consummation of the Agreement shall have expired or been terminated,
provided, however, that the obligations to consummate the sale shall
remain unchanged, and Article I shall apply, if and where anti-trust
consents are subject to divestitures which, in the aggregate, do not
substantially alter the ability of BUYER to run the RPS Business as
presently conducted.
(b) There shall be no material suit, action or other enforcement
proceeding instituted or pending by or before any court or
governmental or other regulatory or administrative agency or
commission requesting an order, judgment or decree challenging all or
a substantial portion of the transactions contemplated by this
Agreement.
(c) There shall be no event, circumstances or current financial
disclosures by BUYER or its representatives which would indicate
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BUYER's inability to finance the cash payment of the Total Purchase
Price, as of the Closing Date.
(d) BUYER shall have delivered to SCHLUMBERGER a certificate, dated as of
the Closing Date, signed by a duly authorized officer of BUYER, to the
effect that all representations and warranties of BUYER in this
Agreement are true and correct in all material respects as of the
Closing Date with the same force and effect as though made at such
time, except for changes specifically disclosed or expressly permitted
or contemplated by the Agreement.
(e) BUYER shall have performed and complied with all agreements,
obligations and conditions required by this Agreement to be performed
or complied with by it on or prior to the Closing.
(f) Opinions of BUYER's counsel, in a form and substance reasonably
acceptable to Schlumberger.
3.2 Conditions Precedent to BUYER's Obligations
The obligation of BUYER to consummate the acquisition of the RPS Business
as contemplated in this Agreement, is subject to the satisfaction of the
following conditions (all or any of which may be waived in whole or in part
by BUYER):
(a) All governmental anti-trust consents and approvals required by law
prior to Closing to permit the consummation of the transactions
contemplated by this Agreement shall have been obtained and any pre-
Closing waiting periods (and any extension thereof) applicable to the
consummation of the Agreement shall have expired or been terminated,
provided, however, that the obligations to consummate the sale shall
remain unchanged, and Article I shall apply, if and where anti-trust
consents are subject to divestitures which, in the aggregate, do not
substantially alter the ability of BUYER to run the RPS Business as
presently conducted.
(b) Any and all information of, consultation with or approval by, work
councils of the Selling Subsidiaries, and Acquired Companies shall
have been given, made or obtained, where required by applicable law.
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(c) The representations and warranties contained in Article V hereof, the
Disclosure Schedules and in all certificates and other documents
delivered and to be delivered by SCHLUMBERGER to BUYER or pursuant
hereto or in connection with this Agreement shall be true, complete
and accurate in all material respects as of the date when made and at
and as of the Closing Date as though such representations and
warranties were made at and as of such date, except for:
(i) changes expressly permitted or contemplated by the terms of this
Agreement;
(ii) changes resulting from the normal course of the RPS Business;
(iii) changes that do not have, alone or in the aggregate, a
substantial impact on the RPS Business as a whole; and
(iv) changes that SCHLUMBERGER otherwise commits to reflect in a
reasonable and adequate manner in the Closing Date Balance
Sheet, or in the Post Closing Adjustment, after consultation
with BUYER.
and SCHLUMBERGER shall have provided BUYER with a certificate of a duly
authorized officer to this effect.
(d) SCHLUMBERGER shall have materially performed and complied with all
agreements, obligations and conditions required by this Agreement to
be performed or complied with by it on or prior to the Closing.
(e) There shall not be instituted or pending any material suit, action, or
other enforcement proceeding by or before any court or governmental or
other regulatory or administrative agency or commission requesting an
order, judgment or decree which substantially impairs BUYER's ability
to exercise control over or manage the RPS Business after the Closing.
(f) From the date of the Base Balance Sheet to the Closing Date, the RPS
Business as a whole shall not have suffered an event specific to the
RPS Business having a material adverse impact upon the RPS Business as
a whole (whether or not such change is referred to or described in any
supplement to the Disclosure Schedules). An event
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shall be deemed specific to the RPS Business if it does not concern
the industry as a whole or if it is not related to the identity of
BUYER.
(g) SCHLUMBERGER shall have delivered to BUYER opinions of counsel to
SCHLUMBERGER, dated as of the Closing Date, in substantially the form
and substance reasonably acceptable to Buyer regarding SCHLUMBERGER,
Schlumberger Technologies Inc. and certain US law aspects of the
transactions contemplated by this Agreement.
3.3 Other Authorizations
In case one or more permits, consents or authorizations other than
mentioned in Sections 3.1 and 3.2, which is necessary for the completion of
the transactions contemplated herein in a respective country, were not
delivered prior to the Closing Date (the "Affected Jurisdictions"), the
Closing shall notwithstanding take place with respect to the Acquired
Companies and Acquired Assets in all jurisdictions where the permits,
consents or authorizations have been granted or are not legally required
(the "Non-Affected Jurisdictions").
The Total Purchase Price payable on the Closing Date shall relate to the
Non-Affected Jurisdictions and be adjusted on the basis of the allocation
of the Total Purchase Price set forth in Schedule 1.3.
For each of the Affected Jurisdiction, the Closing, as well as the payment
of the portion of the Total Purchase Price allocable to said Affected
Jurisdiction, shall take place within fifteen (15) days of the date when
the requested permit, consent or authorization are obtained and shall be
deemed retroactive as of the Closing Date.
ARTICLE IV
CLOSING
4.1 The Closing
The Closing for the acquisition of the RPS Business shall take places at
the offices of Schlumberger Limited, 00, xxx Xx Xxxxxxxxx, 00000 Xxxxx,
Xxxxxx on July 31, 1998, or at such other place and date as SCHLUMBERGER
and BUYER mutually shall agree (the "Closing Date"), subject to the Closing
Date corresponding to the last day of the month in which the last of the
conditions precedent, listed in Section 3.1 and 3.2 hereto, is met.
16
If the conditions precedent set forth in Article III, Sections 3.1 and 3.2
have not been satisfied or waived on or before such date, then the Closing
Date shall be postponed to a date (not later than December 31, 1998) which
is within five business days following the satisfaction or waiver of the
last of the conditions precedent.
4.2 Documents to be delivered by SCHLUMBERGER
At the Closing Date, SCHLUMBERGER shall perform and deliver, and shall
cause each of the Selling Subsidiaries to deliver, to BUYER and to each of
the Acquiring Subsidiaries, such documents and instruments to be delivered
by them to convey title to all of the Acquired Shares, Acquired Assets and
assign all Assumed liabilities, including:
(a) Specific Acquisition Agreements allowing for the transfer of the
Acquired Shares, the Acquired Assets and the assumption of the Assumed
Liabilities, with the exception of the Acquired Shares, Acquired
Assets and Assumed Liabilities related to the Affected Jurisdictions,
if any;
(b) Duly endorsed share certificates, share transfer forms or other
instruments required by applicable laws to validly transfer the
Acquired Shares other than those relating to the Affected
Jurisdictions, if any;
(c) Agreements, other than the Specific Acquisition Agreements, required
by applicable laws to validly transfer the Acquired Assets, if any;
(d) Certified copies of resolutions, duly adopted by the Selling
Subsidiaries' Board of Directors, approving the transaction
contemplated and authorizing the performance by the Selling
Subsidiaries of this Agreement and the execution of the Specific
Acquisition Agreements, together with all other agreements necessary
to consummate the transactions contemplated by this Agreement, and the
stock transfer register ("registre des mouvements de titres") and the
stockholders' register ("registre des comptes d'actionnaires") of the
Acquired Companies;
(e) Letters of resignation signed by each of the directors of the Acquired
Companies, as may be requested in writing by BUYER at least seven days
prior to the Closing Date;
(f) Transfer to the Acquired Companies or the Selling Subsidiaries of the
employees set forth in Schedule 4.2(f) who are fully dedicated to the
RPS Business and are seconded from other SCHLUMBERGER entities;
17
(g) To the extent possible, a letter of resignation signed by the
statutory auditors of the Selling Subsidiaries and the Acquired
Companies effective upon the Closing;
(h) The minutes of a duly called meeting of the board of directors and the
shareholders, where required by applicable law, of the Selling
Subsidiaries (other than SCHLUMBERGER) and the Acquired Companies,
including provisions with respect to, inter alia, approving the new
shareholders and appointing new directors designated in writing by
BUYER at least seven days prior to the Closing;
(i) Duly endorsed share certificates, share transfer forms or other
instruments required by applicable laws to validly transfer all
shares of the Acquired Companies held by officers and directors
thereof.
4.3 Documents to be delivered by BUYER
At the Closing Date, BUYER shall deliver to SCHLUMBERGER the Total Purchase
Price and perform and deliver, and shall cause each of the Acquiring
Subsidiaries to deliver, to SCHLUMBERGER and each of the Selling
Subsidiaries, such documents and instruments to be delivered by them to
convey title to all of the Acquired Shares and RPS Activities, including:
(a) Specific Acquisition Agreements allowing for the transfer of the
Acquired Shares, the Acquired Assets and the assumption of the Assumed
Liabilities, with the exception of the Acquired Shares, Acquired
Assets and Assumed Liabilities related to the Affected Jurisdictions,
if any;
(b) Share transfer forms or other instruments required by applicable laws
to validly transfer the Acquired Shares other than those relating to
the Affected Jurisdictions, if any;
(c) Agreements, other than the Specific Acquisition Agreements, required
by applicable laws to validly transfer the Acquired Assets, if any;
(d) Agreements or other instruments required by applicable law to
acknowledge BUYER's assumption of the Assumed Liabilities, if any;
(e) Certified copies of resolutions, duly adopted by BUYER's and the
Acquiring Subsidiaries' Board of Directors approving the transaction
contemplated and authorizing their execution and performance of this
Agreement;
18
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SCHLUMBERGER
SCHLUMBERGER, in its own name and on behalf of the Selling Subsidiaries, but in
respect of the RPS Business only, represents and warrants to BUYER that:
5.1 Organization
(a) Each of the Acquired Companies is, and shall be at the Closing Date, a
corporation duly organized, validly existing and in good standing
under the laws of the state or country in which it was incorporated.
(b) The copies of the by-laws and/or articles of association of the
Acquired Companies previously requested by and delivered to BUYER are
true and complete copies, as presently in effect and the Acquired
Companies have materially complied with all the provisions of these
documents.
(c) The statutory books and registers of the Acquired Companies and all
current books of account have been properly maintained in compliance
with applicable laws and accounting principles, and are up to date.
5.2 Title to the Acquired Shares and Acquired Assets
(a) Except as listed in Schedule D, all of the issued and outstanding
shares of the Acquired Companies are owned by a Selling Subsidiary or
directors of the Acquired Companies. The Acquired Shares are validly
issued and outstanding, fully paid and transferable. There are no
outstanding subscriptions, options, warrants, puts, calls, rights,
contracts, commitments, agreements, understandings, or arrangements
relating to any Acquired Company, including any right of conversion or
exchange under any outstanding instrument, and none of such securities
are reserved for issuance for any purpose. Except as disclosed in
Schedule 5.2 (a), SCHLUMBERGER does not own, directly or indirectly,
any capital stock or other equity securities of any corporation or has
any direct or indirect equity or ownership interest in any other
entity engaged in the RPS Business.
(b) On the date hereof, SCHLUMBERGER, the Selling Subsidiaries and the
directors of the Acquired Companies are the sole owners of, and have
full power and authority to vote with, all of the Acquired Shares,
with the full power and authority to deliver to BUYER and the
Acquiring Subsidiaries all of the Acquired Shares, respectively,
pursuant to Article I of this Agreement
19
and the relevant Specific Acquisition Agreements, free and clear of
all options, pledges, mortgages, escrow, rights of first refusal,
security interests, liens, claims, charges, encumbrances or
restrictions on transfer either written or oral whatsoever.
SCHLUMBERGER commits to obtain, on the Closing Date, the transfer by
the directors of the Acquired Companies to the Acquiring Subsidiaries
of all shares held by them in the Acquired Companies.
(c) Except as specified otherwise in Schedule 5.2 (c) of this Agreement
and, as the case may be, as per the by-laws of the Acquired Companies,
there are, and there shall be, at the Closing Date, no contracts,
commitments, agreements, understandings, arrangements, or restrictions
relating to ownership or voting of any of the Acquired Shares.
(d) Except as specified otherwise in Schedule 5.10 of this Agreement or in
any other document delivered by SCHLUMBERGER or any of the Selling
Subsidiaries prior to the date of this Agreement, SCHLUMBERGER and the
Selling Subsidiaries are the owners of the Acquired Assets with full
power and authority to convey them to BUYER and the Acquiring
Subsidiaries, pursuant to this Agreement and to the Specific
Acquisition Agreements, free and clear of all liens and encumbrances,
restrictions, mortgages or charges that could materially affect their
value.
5.3 Authority of SCHLUMBERGER
(a) SCHLUMBERGER is a Netherlands Antilles Corporation duly organized and
validly existing under the laws of the Netherlands Antilles and has
all material requisite corporate power to own its properties and carry
on its business as now being conducted. SCHLUMBERGER has full power
and authority, and has taken all necessary and proper action, to
execute and deliver this Agreement and the other agreements and
instruments executed in connection with this Agreement to which it is
a party, and to consummate the transactions contemplated herein, and
to transfer, assign and deliver the Acquired Shares as provided in
this Agreement and such delivery will convey to BUYER good and
marketable title to the Acquired Shares and to all rights afforded
thereby, free and clear of all liens. SCHLUMBERGER has taken, and has
caused the Selling Subsidiaries to take, all necessary and proper
actions to execute and deliver the agreements and instruments to be
executed in connection with this Agreement and the agreements
contemplated herein, including the Specific Acquisition Agreements,
and to consummate the transactions contemplated hereby or thereby.
20
(b) This Agreement, the Specific Acquisition Agreements and any other
agreement contemplated herein to which SCHLUMBERGER or any of the
Selling Subsidiaries is a party, constitute valid and binding
obligations of SCHLUMBERGER and the Selling Subsidiaries, enforceable
against them in accordance with their terms.
(c) The Acquired Companies have all power and authority to own the
properties and assets they now own or will own at the Closing, to
conduct the RPS Business as presently conducted, and are duly
qualified or licensed to do business as foreign corporations in good
standing in every jurisdiction listed opposite the name of the
Acquired Companies in Schedule 5.3 (c) which are the only
jurisdictions in which ownership of property or the conduct of its
business requires such qualification.
5.4 Subsidiaries
Except as disclosed in Schedule 5.4, none of the Acquired Companies holds
any direct or indirect ownership interest in any company, business or other
legal entities as of the Closing Date.
5.5 Articles of Incorporation: No Violation
Except as set forth in Schedule 5.5, neither the execution nor the delivery
of this Agreement or any of the Specific Acquisition Agreements and other
documents executed in connection with this Agreement, to which SCHLUMBERGER
or the Selling Subsidiaries is a party, nor the consummation of the
transactions contemplated hereby or thereby violates or conflicts with
any provision of, or constitute a default under, the articles of
incorporation or by-laws, as amended, of SCHLUMBERGER or of any Selling
Subsidiary or any Acquired Company, or violates, or is in conflict with, or
constitutes a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or results in the termination of,
or accelerates the performance required by, or causes the acceleration of
the maturity of any debt or obligation pursuant to, or results in the
creation or imposition of any security interest, lien or other encumbrance
upon any property or assets of the RPS Business under, any agreement or
commitment to which any Selling Subsidiary or other subsidiary of
SCHLUMBERGER engaged in the RPS Business is a party or by which any Selling
Subsidiary or other subsidiary of SCHLUMBERGER engaged in the RPS Business
is bound, or to which the property of any Selling Subsidiary or other
subsidiary of SCHLUMBERGER engaged in the RPS Business is subject, or
violates any statute or law or any judgment, decree, order, regulation or
rule of any court or governmental authority.
21
5.6 Financial Statements/Accounts Receivable/Customers
(a) SCHLUMBERGER has heretofore delivered, or will deliver, to the BUYER
the Base Balance Sheet of the RPS Business, and the balance sheet,
combined statements of income and cash flows of the RPS Business for
the years ended on December 31, 1995, 1996 and 1997, all certified and
audited by Price Waterhouse, independent certified public accountants,
whose reports thereon are included therein. Such pro forma combined
balance sheets and the notes thereto are true, complete and accurate
and fairly present the pro forma consolidated assets, liabilities and
financial condition of the RPS Business as at the respective dates
thereof, and such combined statements of income and cash flows and the
notes thereto are true, complete and accurate and fairly present the
results of operations for the periods therein referred to, all in
accordance with US GAAP and the Accounting Principles, except for
reserves relating to outstanding litigation of the RPS Business in
France, the United States of America, Russia, the Czech Republic, the
United Kingdom and Italy (but solely relating to the RPS Business of
the Italian Selling Subsidiary).
(b) The accounts receivable shown on the Base Balance Sheet and all
accounts receivable acquired or generated by each Acquired Company and
each Acquired RPS Activity since December 31, 1997 (the
"Receivables"), are bona fide receivables and represent amounts due
with respect to actual transactions entered into in the ordinary
course of business and are collectible at their recorded amounts
within 250 days from the date of the Closing and are legal, valid and
binding obligations of their account obligors; provided, however, that
SCHLUMBERGER makes no representation as to the collectability of any
Receivable should the account obligor be declared, voluntarily or
involuntarily, bankrupt or be involved in a bankruptcy or similar type
proceeding or be subject to any judicially imposed stay of payments
after the Closing. Those Receivables reflected on the Acquisition
Balance Sheet have been so reflected in accordance with the Accounting
Principles. No account has been assigned or pledged to any other
person and except as set forth in Schedule 5.6 no defense or setoff to
any such account has been asserted in writing by an account obligor.
The representations and warranties contained in this Section 5.6(b)
are not given in respect of RPS intra-company agreements, to which
management principles apply.
(c) Except ongoing purchases or sales, all inter-company accounts
receivable from other SCHLUMBERGER affiliates not involved in the RPS
Business and accounts payable to other SCHLUMBERGER affiliates not
involved in the RPS Business, as of the date of signature of this
Agreement, have been
22
paid or will be paid on or before the Closing Date to, or by, the
respective Acquired Companies or to and by the Selling Subsidiaries.
5.7 Customers and Suppliers
(a) Schedule 5.7 (a) sets forth: (a) a list of (i) the ten largest
customers of the RPS Business in terms of sales during the fiscal year
ended December 31, 1997, showing the approximate total sales by the
RPS Business to each such customer during each of such fiscal year;
(b) a list of the ten largest suppliers of the RPS Business in terms
of purchases during the fiscal year ended December 31, 1997, showing
the approximate total purchases by the RPS Business from each such
supplier during each of such fiscal year. There has not been any
material adverse change in the business relationship of the RPS
Business with any customer or supplier named in Schedule 5.7 (a).
Except for the customers and suppliers named in Schedule 5.7 (a), the
RPS Business has not had any customer who accounted for more than 5%
of the sales of the RPS Business during the fiscal year ended December
31, 1997, or any supplier from whom it purchased more than 5% of the
goods or services which it purchased during the fiscal year ended
December 31, 1997.
(b) As of the date of this Agreement, there are no claims against the RPS
Business to return in excess of an aggregate of US$100,000 of
merchandise by reason of alleged overshipments, defective merchandise
or otherwise, or of merchandise in the hands of customers under an
understanding that such merchandise would be returnable.
(c) Nothing in this Agreement shall constitute a representation or
warranty by Schlumberger that any of the contracts listed in Schedule
5.7 (c) shall be renewed, continued, or unaffected by a change in
control of the RPS Business.
5.8 Taxes
As related to the RPS Business and except as set forth in Schedule 5.8:
The Selling Subsidiaries and the Acquired Companies have duly and properly
filed with the appropriate governmental authorities all national, state,
local and other tax returns, as well as social security returns and reports
required to be filed by them, and have paid in full or made adequate
provisions for the payment of all taxes and social security contributions
owed. There are no tax liens upon any property or assets of the Acquired
Companies or the Selling Subsidiaries. All amounts to be
23
collected or withheld by the Selling Companies and the Acquired Companies
have been duly collected or withheld and all such amounts that are required
to be remitted to any taxing authority have been duly remitted to the
appropriate authority.
There are no contingent tax liabilities not reflected on the Base Balance
Sheet, except those which may have arisen since the date of such Base
Balance Sheet in the ordinary course of business and consistent with past
practice. All deferred tax assets are recoverable either directly as
refunds or as future offsets to tax liabilities.
None of the Acquired Companies has entered into special arrangements with
any tax authority other than the ones listed in Schedule 5.8.
None of the Acquired Companies is party to any agreement providing for the
allocation or sharing of Taxes, and none of the Acquired Companies shall
have any continuing obligations or liabilities under any such agreement
after the Closing Date.
None of the Acquired Companies or Selling Subsidiaries is a party to any
pending or to the best of their knowledge, threatened material action or
proceeding by any governmental or other authority for the assessment or
collection of income or other taxes or fiscal or social charges, except for
those listed in Schedule 5.8. The tax or social security authorities have
no liens, charges or other encumbrances on the assets of the Acquired
Companies or the Acquired Assets other than liens, charges or encumbrances
for taxes or payments not yet due and payable.
5.9 Intellectual and Industrial Property
(a) Schedule 5.9(a) hereto exhaustively lists: (i) each patent, patent
application, registered copyright and application therefor, registered
trademark and application therefor (including those trademarks that
have been in continuous use since 1990), registered design and
application therefor (including priority dates and registration
numbers) registered in the name of SCHLUMBERGER, the Selling
Subsidiaries or any of the Acquired Companies related to the RPS
Business; (ii) each material license or other agreement relating to
any of the items listed in (i) above; and (iii) each material license
or other similar agreement relating to any registered intellectual
property owned by third parties to which SCHLUMBERGER, the Selling
Subsidiaries or any of the Acquired Companies are a party and that are
material to the current RPS Business.
(b) The foregoing, together with all unregistered copyrights and
trademarks, know-how, trade secrets and proprietary technology
material to SCHLUMBERGER, the Selling Subsidiaries (or any of the
Acquired
24
Companies) in the conduct of the RPS Business or being developed by
any third party for SCHLUMBERGER, the Selling Subsidiaries or any of
the Acquired Companies, are herein referred to as the "Intellectual
Property". On the Closing Date the Selling Subsidiaries shall transfer
the Intellectual Property not already held by the Acquired Companies
to BUYER and the Acquiring Subsidiaries, as the case may be.
(c) Except as indicated in Schedule 5.9(a), SCHLUMBERGER, the Selling
Subsidiaries and the Acquired Companies are the sole and exclusive
owners of the Intellectual Property disclosed in Section 5.9(a)(i)
above, and have a valid contractual right to use the Intellectual
Property disclosed in Section 5.9(a)(iii) above. All of the owned
Intellectual Property disclosed in Section 5.9(a) above is held free
and clear of any material encumbrances, and the right of SCHLUMBERGER,
the Selling Subsidiaries and the Acquired Companies to use the
licensed Intellectual Property disclosed in Section 5.9(a)(iii) is
subject only to the terms of such licenses.
(d) Except for intellectual property rights held or controlled by
suppliers or sub-contractors of the RPS Business, the Intellectual
Property constitutes all of the intellectual property currently used
for, and necessary to, the conduct of the RPS Business, as it is
presently conducted. No registration or application relating to any
Intellectual Property, which is currently used in or is necessary for
the conduct of the RPS Business has lapsed, expired or been abandoned
or cancelled.
(e) Except as set forth on Schedule 5.9 (e), no Intellectual Property is
the subject of any pending or threatened opposition, cancellation,
interference or similar proceeding before any Governmental Entity, and
to the best of SCHLUMBERGER's knowledge there are no claims pending or
threatened (nor does SCHLUMBERGER know of any valid basis for any
claim), before any court or registration office challenging (i) the
registrability, validity, renewal or enforceability of any
Intellectual Property, (ii) the ownership rights of SCHLUMBERGER, the
Selling Subsidiaries or the Acquired Companies with respect to owned
Intellectual Property, or (iii) SCHLUMBERGER's, the Selling
Subsidiaries' or the Acquired Companies' right, to use the
Intellectual Property on the grounds of infringement upon the
proprietary rights of a third party.
(f) Subject to the relevant third party rights, consummation of this
Agreement by SCHLUMBERGER will not result in the loss, termination or
impairment of any of the Intellectual Property nor will it affect the
right of the BUYER to use the Intellectual Property after the Closing.
Except for confidentiality agreements signed in connection with the
divestiture of the RPS Business,
25
neither SCHLUMBERGER nor the Selling Subsidiaries nor the Acquired
Companies has entered into any agreement outside of the ordinary
course of business with respect to the maintenance of the secrecy or
confidentiality of any Intellectual Property.
5.10 Title to Properties; Encumbrances
Except as set forth in Schedule 5.10, each of the Selling Subsidiaries and
the other subsidiaries of SCHLUMBERGER engaged in the RPS Business has good,
valid and marketable title to all the properties and assets which it purports to
own (real, personal and mixed, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Base Balance Sheet
(except for inventory and personal property having an aggregate book value not
in excess of US$100,000 sold since the date of the Base Balance Sheet in the
ordinary course of business and consistent with past practice), and all the
properties and assets (other than inventory) purchased by the Selling
Subsidiaries or Acquired Companies since the date of the Base Balance Sheet are
listed in Schedule 5.10. All properties and assets are free and clear of all
title defects or objections, liens, claims, charges, security interests or other
encumbrances of any nature whatsoever including, without limitation, leases,
chattel mortgages, conditional sales contracts, collateral security arrangements
and other title or interest retention arrangements, and are not, in the case of
real property, subject to any rights of way, building use restrictions,
exceptions, variances, reservations or limitations of any nature whatsoever
except, with respect to all such properties and assets, (a) liens shown on the
Base Balance Sheet as securing specified liabilities or obligations with respect
to which no default exists; (b) minor imperfections of title, if any, none of
which are substantial in amount, materially detract from the value, or impair
the use of the property subject thereto, or impair the operations of any Selling
Subsidiary or Acquired Company, and which have arisen only in the ordinary
course of business and consistent with past practice since the date of the Base
Balance Sheet; and (c) liens for current taxes not yet due. The rights,
properties and other assets presently owned, leased or licensed by the
Subsidiaries (and the Acquired Companies) and described elsewhere in this
Agreement include all rights, properties and other assets necessary to permit
the Selling Subsidiaries or Acquired Companies to conduct RPS Business in all
material respects in the same manner as their businesses have been conducted
prior to the date hereof.
5.11 Leases
Schedule 5.11 contains an accurate and complete description of the terms of
all leases pursuant to which the Selling Subsidiaries and the Acquired
Companies lease (i) real property, or (ii) personal property with annual
rents above US dollars 100,000 (one hundred thousand dollars) per year.
Except as set forth in Schedule 5.11, all
26
such leases are valid, binding and enforceable in accordance with their
terms, and are in full force and effect; there are no existing defaults by
any Selling Subsidiary or any Acquired Companies thereunder; no event of
default has occurred which (whether with or without notice, lapse of time
or the happening or occurrence of any other event) would constitute a
default thereunder. SCHLUMBERGER shall use its best efforts, and shall
cause the Selling Subsidiaries to use their best efforts, to obtain the
consent of all lessors whose consent is required in connection with this
transaction.
In the event that, despite the Selling Subsidiaries' best efforts, not all
consents can be obtained from lessors, then, for these premises where such
consents cannot be obtained, SCHLUMBERGER shall cause the relevant Selling
Subsidiary to seek any alternative, including, without limitation,
subletting, if permitted, to BUYER the relevant premises, in order to allow
BUYER the use of said premises until a suitable arrangement can be found,
and up to a maximum of twelve months.
5.12 Transactions with Affiliates
Except as reflected on the Base Balance Sheet or Schedule 5.12, none of the
Selling Subsidiaries nor any of the Acquired Companies has any outstanding
liabilities or obligations for amounts owing to or from, or leases,
contracts or other commitments or arrangements or understandings of a
legally binding nature of any kind with SCHLUMBERGER or any affiliate
thereof (excluding from such affiliates, the Selling Subsidiaries).
5.13 Machinery/Inventory
(a) All machinery owned, leased or used by the Acquired Companies or
included in the Acquired Assets have been maintained in the ordinary
course of business .
(b) All inventory used in or relating to the conduct of the RPS Business
is usable or able to be sold (but with no guarantee as to such sale)
in the ordinary course of business consistent with past practices or
has been depreciated in line with applicable procedures applied in a
consistent manner to the RPS Business. All such inventory is owned by
the Acquired Companies or the Selling Subsidiaries, free and clear of
all liens or encumbrances.
5.14 Plant and Equipment
27
The plants, structures and manufacturing equipment of the RPS Business
owned by the Selling Subsidiaries are structurally sound with no known
defects and are in good operating condition and repair and are adequate for
the uses to which they are being put; and none of such plants, structures
or equipment are in need of major maintenance or repairs except for
ordinary, routine maintenance and repairs which are not material in nature
or cost. Neither SCHLUMBERGER nor any Selling Subsidiary nor any of the
Acquired Companies has received notification that it is in violation of any
applicable building, or zoning, regulations in respect of its plants or
structures or their operations and no such violation exists.
5.15 Product Liability
Except as set forth in Schedule 5.15, there is no action, suit, inquiry,
proceeding or investigation by or before any court or governmental or other
regulatory or administrative agency or commission pending or threatened
against or involving any Selling Subsidiary or Acquired Company relating to
any product alleged to have been manufactured or sold by the RPS Business
and alleged to have been defective, or improperly designed or manufactured,
nor is there any valid basis for any such action, proceeding or
investigation.
5.16 Year 2000 Compliance
Schedule 5.16 sets forth the measures taken by the Selling Subsidiaries and
the Acquired Companies to address the risks associated with the Year 2000
event.
5.17 Common European Currency
Schedule 5.17 sets forth the measures taken by the Selling Subsidiaries and
the Acquired Companies to address the risks associated with the Common
European Currency.
5.18 Insurance
The Selling Subsidiaries and the Acquired Companies have consistently
maintained in full force and effect all insurance policies that are
customary in their field of business and all premiums have been paid in due
course. Such policies are sufficient for compliance with all requirements
of law and of all agreements to which the Selling Subsidiaries or Acquired
Companies are a party and provide insurance coverage for the assets and
operations of the Selling Subsidiaries or Acquired
28
Companies in accordance with SCHLUMBERGER's practice throughout its group.
None of the Acquired Companies and of the Selling Subsidiaries has been
denied any insurance with respect to their assets or operations, nor has
their coverage been limited, since January 1, 1994, by reason of losses
incurred by the RPS Business, in particular as a result of product
liability.
It is expressly provided that all group insurance policies maintained by
SCHLUMBERGER and the Selling Subsidiaries and benefiting the Acquired
Companies and the Acquired RPS Activities shall cease with effect from the
Closing Date. Until the Closing Date, SCHLUMBERGER and the Selling
Subsidiaries shall have maintained in full force and effect such insurance
policies and SCHLUMBERGER or the Selling Subsidiaries shall have filed in
due course all relevant claims if any, thereunder.
5.19 Contracts and Commitments
(a) To the best knowledge of SCHLUMBERGER, except as provided in Schedule
5.19 (a), none of the Acquired Companies or the Selling Subsidiaries
has any power of attorney outstanding or any obligations or
liabilities (whether absolute, accrued, contingent or otherwise) as
guarantor, surety, co-signer, endorser, co-maker, indemnitor or
otherwise in respect of obligations of any third party. Neither are
there any forward foreign exchange contracts or similar foreign
exchange instruments.
(b) Schedule 5.19 (b) lists all contracts which are material to the
operation of the RPS Business (the "Material Contracts"). For purposes
of this Agreement, Material Contracts shall mean (i) supply contracts:
those for more than one year not cancelable without penalty, and those
for the five highest dollar volumes of purchases for each of the
Acquired Companies or Selling Subsidiaries; (ii) contracts for
products and services with a sole source supplier which, during the
1997 calendar year, accounted for more than US dollars 1,000,000 (one
million dollars); (iii) patent licensing agreements the object of
which is specific to an RPS Business application, whether or not
payments are required; (iv) sales agreements which, in 1997, accounted
for more than US dollars 1,000,000 (one million dollars) worth of
sales.
(c) Neither the Acquired Companies nor any of the Selling Subsidiaries is
in material default under any of the Material Contracts. To the best
knowledge of SCHLUMBERGER and of the Selling Subsidiaries, there has
not been any material default under any of the Material Contracts by
any other party thereto nor to the best of their knowledge have they
been informed, as of the
29
date of this Agreement by any such other party of its intent to
terminate a Material Contract.
(d) None of SCHLUMBERGER, the Acquired Companies or the Selling
Subsidiaries has received any written notice or has any knowledge or
reason to believe that any current material supplier to any Acquired
Company or Acquired RPS Activity will not continue to supply any
Acquired Company or Acquired RPS Activity on substantially the same
basis as it currently supplies any such Acquired Company or Acquired
RPS Activity, except for price increases in accordance with any such
supplier's ordinary course of business.
(e) SCHLUMBERGER shall, and shall cause each Selling Subsidiary and the
Acquired Companies to, not do any act or omit to do any act, or permit
any act or omission which would, upon such act or omission or with the
passage of time, cause a breach or default under any of the Material
Contracts, or materially adversely affect BUYER's use of the
properties or the assets of the RPS Business. Beginning on the date
hereof, SCHLUMBERGER shall, and shall cause each Selling Subsidiary
and the Acquired Companies to, use their respective best efforts to
obtain any consents and waivers necessary to maintain such Contracts.
(f) The assignment of Material Contracts entered into by the Selling
Subsidiaries with respect to the Acquired RPS Activities may require
the prior written consent of the other party. However, to
SCHLUMBERGER's knowledge, and except as listed in Schedule 5.19 (f),
all Material Contracts are assignable to BUYER without undue
difficulties, and SCHLUMBERGER shall use its best efforts to
facilitate such assignment.
(g) The RPS Business is not restricted by agreement from carrying on its
business anywhere in the world.
(h) The RPS Business does not have any material outstanding loan to any
person.
(i) Except for employment agreements and those agreements that are listed
in Schedule 5.19(i), neither the Selling Subsidiaries nor the Acquired
Companies have entered into agreements with their officers and
directors that relate to the RPS Business and are being transferred to
BUYER either through the Acquired Companies or the Acquired RPS
Activities.
30
5.20 Labor Matters
(a) Schedule 5.20(a)(i) lists, as of the date hereof, the name of each
employee transferable with the RPS Business, including employees of
both the Acquired Companies and the Selling Subsidiaries attached to
the RPS Business, and Schedule 5.20(a)(ii) lists the key employees of
both the Acquired Companies and the Selling Subsidiaries attached to
the RPS Business.
(b) Except as disclosed by SCHLUMBERGER or any of the Selling Subsidiaries
prior to the date hereof or except as disclosed in Schedule 5.20(b),
none of SCHLUMBERGER or the Selling Subsidiaries (as it relates to the
RPS Business) has, as of the date hereof, established any labor policy
such as offered pension, disability, profit sharing, hospitalization
insurance or retirement, other than as required by law or any
applicable collective bargaining agreement. All such pension plans are
fully funded. There are no benefits to employees, officers or
directors that shall become due on account of the change in control in
the capital of any Acquired Companies or Acquired RPS Activities.
(c) SCHLUMBERGER, the Selling Subsidiaries and the Acquired Companies have
paid and shall pay until the Closing Date, in full, all wages,
salaries, bonuses and other direct or indirect compensation in cash or
in kind earned by, and due and payable to, all transferred employees.
(d) To the best knowledge of SCHLUMBERGER, each of the Acquired Companies
and Selling Subsidiaries as it relates to the RPS Business is, and
shall be at the Closing Date, in compliance with local laws and
regulations concerning employment, it being understood that
SCHLUMBERGER and its affiliates may be held liable only for failure to
comply with these laws and regulations up to the Closing Date.
(e) The Acquired Companies and the Selling Subsidiaries have in relation
to each of their employees, and in accordance with relevant applicable
laws and usages:
(i) maintained records of the service of the employees:
(ii) paid all income tax under applicable laws and payments due in
respect of national insurance contributions (including the
employer's contributions) after making the applicable, required
deductions from
31
salaries, wages and bonuses paid by the Acquired Companies and
the Selling Subsidiaries:
(iii) maintained proper records of the payments and deductions
mentioned above.
(f) There is no labor strike, slow down or stoppage pending, or to
SCHLUMBERGER's knowledge, threatened against or directly affecting the
RPS Business. Neither the Selling Subsidiaries (in relation to the RPS
Business) nor the Acquiring Companies have received notice of a labor
dispute or claim brought by a terminated employee. There are no
pending law suits in relation to employee termination. SCHLUMBERGER
has no knowledge of any threatened labor disputes or claims.
(g) Except as set forth in Schedule 5.20(g), neither the Selling
Subsidiaries nor the Acquired Companies have entered into employment
agreements that contain any severance or termination pay liabilities
or obligations in excess of what is provided by applicable law or
applicable collective bargaining agreements.
(h) Except as set forth in Schedule 5.20(h), the Selling Subsidiaries and
Acquired Companies have entered into, or apply, no collective
bargaining agreements, union contracts or agreements.
5.21 Fringe Benefit Plans
Except as set forth in Schedule 5.21, neither the Selling Subsidiaries nor
any of the Acquired Companies has any bonus, deferred compensation,
pension, profit-sharing, retirement, stock purchase, stock option or any
other fringe benefit plan, arrangement or practice, whether formal or
informal that would be transferred by BUYER. The Base Balance Sheet
reflects in the aggregate an accrual of all amounts accrued but unpaid
under the aforesaid plans and arrangements as of December 31, 1997. Neither
the Selling Subsidiaries or Acquired Companies has any commitment, whether
formal or informal and whether legally binding or not, to create any
additional such plan or arrangement.
5.22 Banking Relationships
32
Schedule 5.22 lists the name of each bank, trust company, savings and loan
association and other financial institution in which the Acquired Companies
have any account or related to the Acquired RPS Activities (giving the
account numbers and the names of the person(s) authorized to draw thereon
or to have access thereto).
5.23 Litigation
Schedule 5.23 lists all known litigation except for (i) matters involving
each a claim of less than US dollars 50,000 (fifty thousand dollars) or
(ii) matters covered by insurance for which the insurance carrier has
accepted the potential liability and defense thereof,
Except for (i) matters involving each a claim of less than US dollars
50,000 (fifty thousand dollars) or (ii) matters covered by insurance for
which the insurance carrier has accepted the potential liability and
defense thereof, there is, to the knowledge of SCHLUMBERGER, no claim,
action, suit, proceeding, outside of France, the United States of America,
Russia, the Czech Republic, the United Kingdom and Italy (but solely
relating to the RPS Business of the Italian Selling Subsidiary) or
investigation pending which has not been adequately, or will not have been
adequately, reserved for, in the Base Balance Sheet and, in particular,
concerning product liability, there are to the knowledge of SCHLUMBERGER no
claims pending or threatening as of the date hereof.
(a) The Acquired Companies and the Selling Subsidiaries have not received
any process, notice or communication, formal or informal, by or on
behalf of the Office of Fair trading, the Monopolies and Mergers
Commission or any other authority of any country having jurisdiction
in anti-trust matters, in relation to any aspect of the RPS Business
or any agreement or arrangement to which the Company is or was, or is
alleged to be or have been, a party.
5.24 No Material Change
Except as set forth in Schedule 5.24, since the date of the Base Balance
Sheet, the RPS Business has been conducted in the ordinary course and there
have been no events having a material adverse effect on the value of the
RPS Business.
5.25 Compliance with Applicable Laws/Permits
(a) The Selling Subsidiaries and the Acquired Companies have generally
conducted their business in accordance with all applicable laws,
regulations and other requirements of all national governmental
authorities, and of all states, municipalities and other political
subdivisions and agencies thereof,
33
having jurisdiction over the RPS Business. None of the Selling
Subsidiaries nor the Acquired Companies has received any notification
of any asserted present or past material failure by the Selling
Subsidiaries or the Acquired Companies to comply with such laws, rules
or regulations except as described in Section 5.26.
(b) Except when presently in the process of renewal, in accordance with
local regulation and past local practices: (i) the Selling
Subsidiaries and the Acquired Companies hold, or will hold at the end
of the regular periodic renewal process, all applicable weight and
control certificates currently required by any country in which they
do business or required with respect to the sale of any RPS product,
and all other permits of any kind currently required for the operation
of the RPS Business as currently conducted and such certificates and
permits are in full force and effect; (ii) at the Closing, each
Selling Subsidiary and Acquired Company will hold, or will be in the
process of obtaining the renewal of, all material governmental or
regulatory permits and authorizations which are required for the
conduct of the RPS Business as currently being conducted.
No notices have been received by SCHLUMBERGER, any Selling Subsidiary, or
any of the Acquired Companies, relating to termination or cancellation of,
and neither SCHLUMBERGER nor any Selling Subsidiary or any of Acquired
Company is in violation of the material terms and conditions of, any such
permits or authorizations.
5.26 Environmental Matters
(a) For purposes of this Agreement:
(i) "Environmental Law" means any applicable treaties, laws,
regulations, directives, circulars, orders, decrees, judgments,
injunctions, permits, approvals, authorizations, or permissions
relating to pollution or protection of the environment,
including, without limitation, laws relating to releases or
threatened releases of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, ambient
air, surface water, groundwater, land, surface and subsurface
strata) or pertaining to the protection of natural resources,
the environment and public and employee health and safety, or
governing or regulating the use, storage, handling,
transportation, treatment, processing, disposal or generation
of any Hazardous Materials, and the regulations promulgated
pursuant thereto as such laws and regulations may be amended or
supplemented through the Closing Date;
34
(ii) "Hazardous Materials" means any substance, material or waste
which is regulated pursuant to any Environmental Law by any
public or governmental authority in the jurisdictions in which
the SCHLUMBERGER conducts business, including any material or
substance which is defined as a "hazardous waste", "hazardous
substance", "contaminant", "pollutant", "explosive",
"flammable", "radioactive" or "toxic" under any provision of
Environmental Law, but not limited to, petroleum, asbestos, or
PCB's (as defined in Section 5.26(c));
(iii) "Release" means any release, spill, effluent, emission, leaking,
pumping, injection, deposit, disposal, discharge, or migration
into the environment, or into or out of any property subject to
this Agreement;
(iv) "Remedial Action" means all actions, including any capital
expenditures, required by a governmental entity or required
under any applicable Environmental Law to (i) investigate,
clean-up, remove, treat, or in any other way address any
Hazardous Materials in the environment, (ii) prevent the
Release of any Hazardous Material so it does not endanger
public health or the environment, or (iii) perform pre-remedial
studies, and investigations or post-remedial monitoring and
care pertaining or relating to a Release, or (iv) bring the
applicable party into compliance with any Environmental Law;
and
(v) Contemporaneously with the execution of this Agreement, to the
best of its knowledge, SCHLUMBERGER has delivered to BUYER, true
and complete copies of all environmental studies made in the
last five years relating to the RPS Business, any Selling
Subsidiary or Acquired Company; a list of material Hazardous
Materials used or generated by any Selling Subsidiary or
Acquired Company; and a general description of the waste
disposal practices of the Selling Subsidiaries or Acquired
Companies.
(b) Except as set forth in Schedule 5.26(b), to the best of Schlumberger's
knowledge, all of the Real Property (as defined below) which is part
of the RPS Business and the operations of the RPS Business is, or, as
of the Closing Date, will be in material compliance with all
Environmental Laws, including, without limitation, all restrictions,
conditions, standards, limitations, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental
Laws or contained in any code, plan or demand letter issued, entered,
promulgated or approved thereunder. For the
35
purposes of this Agreement, Real Property shall mean all real property
(including plants, buildings, structures and fixtures) used in the
operation of the RPS Business and which is owned, leased or used by
either SCHLUMBERGER, any of the Selling Subsidiaries or Acquired
Companies.
(c) Except as set forth in Schedule 5.26(c), to the best of Schlumberger's
knowledge, there have been no releases, spills or discharges of
Hazardous Materials on or underneath any of the Real Property which is
part of the RPS Business or waste disposal by any Acquired Company or
Selling Subsidiary at an offsite location that is currently in
violation of any Environmental Law; also except as noted in such
Schedule, the Real Property in the United States which is part of the
RPS Business does not contain any underground storage tanks, asbestos,
manufacturing equipment using polychlorinated biphenyls ("PCBs"),
underground injection xxxxx, or septic tanks in which process
wastewater or any Hazardous Materials have been disposed.
(d) Except as set forth in Schedule 5.26(d), to the best of Schlumberger's
knowledge, the Selling Subsidiaries and the Acquired Companies have
obtained and will, as of the Closing Date, maintain all material
permits required under applicable Environmental Laws for the continued
operations of the RPS Business as currently conducted (the
"Environmental Permits").
(e) Except as set forth in Schedule 5.26(e), to the best of Schlumberger's
knowledge, there is no claim, notice or proceeding pending to
terminate any Environmental Permit; and SCHLUMBERGER, the Selling
Subsidiaries or Acquired Companies have received no communication that
alleges that any Selling Subsidiary or Acquired Company is in non-
compliance.
(f) Except as set forth in Schedule 5.26(f), to the best of Schlumberger's
knowledge, the operations of the Selling Subsidiaries or Acquired
Companies are not subject to any outstanding written orders,
investigations or material contracts with any governmental entity
respecting (i) Environmental Laws, (ii) Remedial Actions or (iii)
Release of a Hazardous Material.
(g) Except as set forth in Schedule 5.26(g), to the best of Schlumberger's
knowledge, neither SCHLUMBERGER, the Selling Subsidiaries or Acquired
Companies have received any written communication alleging the
violation of or a liability under any Environmental Law or liability
attributable to the Release of any Hazardous Materials.
(h) Except as set forth in Schedule 5.26(h), to the best of Schlumberger's
knowledge, neither SCHLUMBERGER, the Selling Subsidiaries or Acquired
36
Companies have any contingent liabilities in connection with the
Release of any Hazardous Materials in the environment (whether on-site
or off-site).
(i) (i) As identified in Schedule 5.26 (i)(i) and Section 9.14 below, or
as might be identified after the Closing Date in accordance with
this Agreement, SCHLUMBERGER shall perform any Remedial Action
(a) as may be deemed necessary or appropriate by SCHLUMBERGER
after prior consultation and BUYER's agreement in principle to
the applicable remediation plan as presented by SCHLUMBERGER or
(b) as may be ordered or approved by a governmental authority
and an applicable Environmental Law. ;
(ii) With respect to the Remedial Action, SCHLUMBERGER, shall conduct
all tests, undertake all monitoring, and perform any and all
actions, of whatever scope, kind and nature as (a) may be deemed
necessary or appropriate by SCHLUMBERGER after prior
consultation and BUYER's agreement in principle to the
applicable remediation plan as presented by SCHLUMBERGER or (b)
may be ordered or approved by a governmental authority and an
applicable Environmental Law. SCHLUMBERGER shall use reasonable
efforts to undertake any Remedial Action in such a manner as to
minimize interference with normal business operations. With
regard to Remedial Actions that may be performed by
SCHLUMBERGER, BUYER shall provide SCHLUMBERGER such access to
portions of the property as are not otherwise accessible to
SCHLUMBERGER, as SCHLUMBERGER deems reasonable and necessary to
effect such Remedial Action, provided that such access shall
minimize interference with BUYER's normal operations.
(iii) BUYER agrees for itself, its directors, officers, employees,
agents, invitees, contractors, lessees, successors and assigns,
not to (i) interfere unreasonably with the operation of
SCHLUMBERGER's Remedial Action, or (ii) contribute to the
exacerbation of any environmental situation for which
SCHLUMBERGER has a Remedial Action obligation. SCHLUMBERGER
shall consult fully with BUYER prior to engaging in any Remedial
Action in order to explain what it will do and to establish
cooperative means so that the Remedial Action can be conducted
properly and efficiently. BUYER shall consult with SCHLUMBERGER
prior to engaging in any activity that could reasonably be
expected to adversely affect the Remedial Action or exacerbate
any related environmental condition, and will comply as
appropriate and reasonable with such reasonable safeguards and
procedures as SCHLUMBERGER may request.
37
(iv) For purposes of this paragraph 5.26(i)(iv), all actions to be
taken by SCHLUMBERGER will be taken by SCHLUMBERGER or any
affiliate of its choice designated for purposes of carrying out
the Remedial Action. BUYER's obligations towards SCHLUMBERGER
will apply towards SCHLUMBERGER's designated affiliate.
(v) In the event that SCHLUMBERGER does not perform any work in
connection with a Remedial Action called for by an
administrative or court order, within 20 days of notice by BUYER
of said order, accompanied by all applicable information, BUYER
shall be entitled to initiate and perform such work or action on
its own, without prejudice to the allocation of related expenses
set forth in Section 9.3 herein, until such time as SCHLUMBERGER
shall undertake such work or action as called for in such
administrative or court order.
5.27 No undisclosed liability
The RPS Business does not have any liabilities or obligations of any nature
which, under US GAAP, or the Accounting Principles, should be fully
reflected or reserved against in the Base Balance Sheet and are not so
reflected or reserved against, except for liabilities and obligations
incurred in the ordinary course of business and consistent with past
practice since the date hereof.
5.28 No implied representation
Notwithstanding anything contained in this Article V or any other provision
of this Agreement, it is the explicit intent of each Party thereto that
SCHLUMBERGER is not making any representation or warranty whatsoever,
express or implied, beyond those expressly given in this Agreement,
including but not limited to any implied warranty or representation as to
condition, merchantability or suitability as to any of the properties or
assets of the RPS Business.
ARTICLE VI
-----------
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
BUYER represents and warrants that:
38
6.1 Organization of BUYER and the Acquiring Subsidiaries
Each of BUYER and as per the Closing Date the Acquiring Subsidiaries is a
corporation which is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the corporate
power and authority to own, lease and operate its properties and to carry
on its business as now being conducted.
6.2 Authority of BUYER and the Acquiring Subsidiaries
(a) Each of BUYER and as per the Closing Date the Acquiring Subsidiaries
has full power and authority to enter into this Agreement and/or the
other agreements and instruments executed in connection with this
Agreement, and to carry out its respective obligations hereunder. The
execution and delivery of this Agreement and the other agreements and
instruments executed in connection with this Agreement, to which any
of them is a party, have been duly authorized by its Board of
Directors and, as necessary, its shareholders. No other corporate or
other proceedings on the part of any of them are necessary to
authorize this Agreement, the agreements contemplated in this
Agreement and the transactions contemplated hereby or thereby, except
the declaration or notification required under any stock exchange
regulations whatsoever, which BUYER undertakes to make in due course
as required:
(b) This Agreement and the other agreements and instruments executed in
connection with this Agreement to which BUYER or as per the Closing
Date the Acquiring Subsidiaries is a party constitute valid and
binding obligations of BUYER and said Acquiring Subsidiaries,
enforceable against each of them, in accordance with their respective
terms.
6.3 Consents and Approvals; No Violation
Neither the execution or delivery of this Agreement or any of the other
agreements and instruments executed in connection with this Agreement, to
which BUYER or as per the Closing Date the Acquiring Subsidiaries is a
party, nor the consummation of the transactions contemplated hereby or
thereby (i) requires any filing or registration with, or material permit,
authorization, consent or approval of, any governmental or regulatory
authority other than as shall have been made and obtained on or prior to
the Closing Date; (ii) violates any law, rule, regulation, ordinance,
order, writ, injunction, judgment, decree or award of any court of
governmental or regulatory authority; (iii) violates or conflicts with any
provision of, or constitutes a default (or an event which, with notice or
lapse of time or both,
39
would constitute a default) under the Articles of Incorporation or by-laws,
as amended, of BUYER and of the Acquiring Subsidiaries; and (iv) violates
or breaches any material provision of any agreement, commitment or
obligation of any kind to which BUYER or one of the Acquiring Subsidiaries
is a party.
6.4 Financing
BUYER has received from The First National Bank of Chicago, First Chicago
Capital Markets, Inc. and Bankers Trust Company, a valid and binding
commitment to finance the transactions contemplated hereby, which
commitment is entirely described in the letter attached hereto as Schedule
6.4 (the "Financing Letter").
ARTICLE VII
------------
ADDITIONAL COVENANTS
--------------------
7.1 Reasonable Efforts
If at any time after the Closing Date any further action is necessary,
proper or advisable to implement this Agreement and the other agreements
contemplated hereby, as soon as reasonably practicable, each Party to this
Agreement shall, or cause the proper employees. officers or directors of
such Party or its Subsidiaries to, take all such necessary action.
7.2 Non-Competition Agreements
SCHLUMBERGER, for itself and on behalf of each of its affiliates, unless
acting with the prior written consent of BUYER, shall not, and shall cause
each of its affiliates not to, directly and indirectly, for a period of
four (4) years after the Closing Date engage in any business which is in
competition with the RPS Dispenser Business and the RPS Service Business
(as conducted as of the date hereof), provided, however, that SCHLUMBERGER
or its affiliates may participate in a joint venture, similar arrangement
or commercial alliance with a third party which engages in a business
competitive with the RPS Dispenser Business or RPS Service Business if the
purpose and activities of such joint venture, similar arrangement or
commercial alliance is not dispensers nor services.
It is understood and agreed by the Parties that SCHLUMBERGER or its
affiliates are free to engage directly or indirectly in any activity in the
area of electronic payment networks, transactions and/or systems in
relation to RPS Business applications including but not limited to smart
cards, fidelity or payment cards, card
40
validators and payment terminals, with the exception, however, of any
electronic systems or programs controlling gasoline dispensers or gasoline
pumps which SCHLUMBERGER and each of its affiliates shall not, directly or
indirectly, engage in for a period of four (4) years after the Closing
Date.
In the event that the provisions of this Section 7.2 should ever be deemed
to exceed the time or geographic limitations or any other limitations
permitted by applicable law in any jurisdiction, then such provisions shall
be deemed reformed in such jurisdiction to the maximum permitted by
applicable law.
7.3 Public Announcements/Disclosures
Upon execution of this Agreement each Party shall be entitled to issue
press-releases or public announcements regarding the transactions
contemplated hereby, which press releases or announcements shall be
submitted for prior approval to the other party which shall not
unreasonably withhold the approval.
Neither SCHLUMBERGER nor BUYER will disclose any other information
regarding this Agreement except:
- with the prior written consent of the other party;
- as required under securities and stock exchange laws and regulations
or other applicable laws and governmental regulations, including the
Treaty of Rome;
- to their employees, agents and consultants (including, without
limitation, any entity providing credit to BUYER) and only to the
extent such persons have a need to know such information and are bound
by the Confidentiality Agreement executed on April 21, 1998, or unless
such disclosure is required by applicable law.
7.4 SCHLUMBERGER Guarantees
As of the Closing Date, BUYER shall assume the obligations of the Acquired
Companies or related to the Acquired RPS Activities under any guarantees
and similar obligations including any comfort letters related to the RPS
Business so that SCHLUMBERGER is relieved of all liabilities with respect
to such guarantees as of the Closing Date and hold harmless of any claims
and expenses related thereto.
7.5 Product Liability
41
SCHLUMBERGER agrees to be responsible for all claims in respect of all
legal and contractual product liability and all other warranty obligations
in respect of the products manufactured and sold, as well as the services
provided in connection therewith, in the course of the RPS Business prior
to the Closing Date.
BUYER agrees to be responsible for all claims in respect of all legal and
contractual product liability and all other warranty obligations in respect
of the products sold, as well as of the services provided in connection
therewith, in the course of the RPS Business after the Closing Date.
7.6 SCHLUMBERGER Names and Trademarks
Within six (6) months from the Closing Date, BUYER and the Acquiring
Subsidiaries shall promptly discontinue the direct use of the name,
trademark and corporate denomination "SCHLUMBERGER" and of SCHLUMBERGER's
corporate logo, or of any variation thereof.
BUYER, the Acquiring Subsidiaries and the Acquired Companies shall be
authorized to use the stock of technical and commercial documentation held
by the Acquired Companies or related to the Acquired RPS Activities as
existing at the Closing Date during six months only as from this Date. At
the end of this period, they shall immediately return to SCHLUMBERGER or
destroy the remaining documentation in compliance with its instructions.
BUYER and the Acquiring Subsidiaries shall be authorized for a period not
exceeding six (6) months from the Closing Date, to continue to
commercialize directly or through the Acquired Companies or its
distributors the RPS Business products which will be in stock at said date,
marked with the "SCHLUMBERGER" names, trademarks or logos. At the end of
this period, BUYER and the Acquiring Subsidiaries shall be prohibited to
manufacture and sell new RPS Business products or RPS Business products in
stock labeled with these names, trademarks or logos, and any mention
thereof shall be removed from any and all of the products remaining in
stock and SCHLUMBERGER shall be given access to all premises so that it may
proceed with all reasonable investigations with respect to this
undertaking.
7.7 Release of liens or encumbrances
Should liens or encumbrances exist which happened not to have been
disclosed by SCHLUMBERGER or the Selling Subsidiaries, SCHLUMBERGER
covenants to cause such liens or encumbrances to be released, at its cost,
upon request from
42
BUYER or any of the Acquiring Subsidiaries, unless such encumbrances or
liens are granted in relation to lease agreements for equipment, financial
leasing agreements for equipment and the like, which agreements are
transferred to, and assumed by, BUYER pursuant to the terms of this
Agreement, which liens shall not be in excess of an aggregate amount of US
dollars 100,000 (one hundred thousand dollars).
7.8 Other SCHLUMBERGER employees
(a) Schedule 7.8(a) sets out a list of sales personnel located in South
America and Asia, that, although not on payrolls of the RPS Business,
exclusively sell RPS products. These employees will remain employed by
SCHLUMBERGER affiliates for a maximum of twelve months after the
Closing Date but will continue to sell RPS products, in the name and
on behalf of BUYER. Their cost (salary, benefits and expenses) will be
billed to BUYER by their employer, with no margin, during that period.
At the end of the twelve-month period, the Parties shall decide
jointly on the future of these employees.
(b) Schedule 7.8(b) sets out a list of employees of SCHLUMBERGER or
affiliates thereof that SCHLUMBERGER will second, or will cause to be
seconded, to BUYER or Acquiring Subsidiaries for a period of at least
one year and at most two years. This exact period will be decided by
BUYER. SCHLUMBERGER or its affiliates shall xxxx BUYER or the
Acquiring Subsidiaries for the cost of these employees (salary,
benefits and expenses), with no margin, during the period of the
secondment.
7.9 Customer Information
All customers and prospects, the customers data base including all
information on history of customers as from installation date, files,
commercial and technical documentation of the Selling Subsidiaries and all
other subsidiaries of SCHLUMBERGER engaged in the RPS Business shall be
transferred to BUYER and the Acquiring Companies at the Closing.
7.10 Contracts awaiting consent to transfer
Should the consent of a party to a contract that is part of the Acquired
Assets fail to be obtained in relation to the transfer of such contract to
the Acquiring Subsidiary, SCHLUMBERGER shall, and shall cause the Selling
Subsidiaries to, cooperate with
43
BUYER in any arrangement reasonably requested by BUYER to provide BUYER or
the Acquiring Subsidiaries the benefits under such contract, including the
enforcement at the cost of and for the benefit of BUYER or the Acquiring
Subsidiaries of any and all rights thereunder of SCHLUMBERGER or the
Selling Subsidiaries against the other party thereto that are attributable
to the RPS Business.
7.11 Shared Premises
As soon as practicable after the Closing Date but at the latest within nine
(9) months of such date, BUYER shall have relocated all the RPS Business
presently operated out of the SCHLUMBERGER Montrouge site. The Parties
will review, and agree upon, on a case by case basis, other lease or
sublease arrangements relating to shared premises to ensure a practical
transitional period.
7.12 Access
After the Closing Date, SCHLUMBERGER and the Selling Subsidiaries shall
continue to give access to BUYER and the Acquiring Subsidiaries to any
information and archives relating to the RPS Business not transferred to
BUYER or the Acquiring Subsidiaries pursuant to this Agreement and to
provide reasonable assistance with all tax, customs and social security
inquiries and claims in relation to the RPS Business.
7.13 Waiver of Subrogation
To the extent of liabilities assumed by BUYER or Acquiring Subsidiaries
pursuant to this Agreement, BUYER shall ensure that its insurers, and the
Acquiring Subsidiaries' insurers, agree to waive all rights of subrogation
against SCHLUMBERGER or the Selling Subsidiaries and their insurers.
7.14 Pension Plans
(a) In the USA, SCHLUMBERGER shall continue to maintain the existing
defined benefit pension plan and defined contribution savings plan.
Said plans shall continue to remain under the sponsorship and
direction of the Selling Subsidiary in the USA, and no direct transfer
of the assets or liabilities shall occur with respect to said plans.
The treatment of benefits under said plans is detailed in Schedule
7.14 (a).
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(b) In the UK, SCHLUMBERGER and BUYER undertake to cooperate to procure
that
(i) BUYER (or any Acquiring Subsidiary that employs the UK Employees,
as defined in Schedule 7.14 (b) after Closing) is appointed as
the principal company of the Dunclare Scheme, as defined in
Schedule 7.14 (b) with effect from Closing;
(ii) subject to the requirements of sections 16-21 of the Xxxxxxx Xxx
0000, new trustees nominated by BUYER are appointed as trustees
of the Dunclare Scheme with effect from Closing in the place of
the existing trustees.
The treatment of the replacement benefits and the participation
period in the Schlumberger Scheme are defined and treated in Schedule
7.14 (b).
7.15 Continuing relationships
In the event relationships with SCHLUMBERGER affiliates not involved in the
RPS Business survive the Closing, the Parties shall continue such
relationships at standard arm's length conditions.
7.16 Cashflow forecasts
SCHLUMBERGER commits to provide BUYER with historical cashflow requirement
data, for 1997 and for each of the significant Acquired Companies and
Acquired RPS Assets, within one month from the date of signature of this
Agreement.
7.17 Chinese Joint Venture
Within 90 days from the date of signature of this Agreement, BUYER commits
to notify SCHLUMBERGER of its decision whether to acquire SCHLUMBERGER's
indirect interest in a Chinese joint venture (58% shareholding in
Schlumberger-Xxx Xxxx Retail Petroleum Systems Corporation Ltd) (the
"Chinese Joint Venture"), at conditions to be discussed. Failing such
notification, BUYER shall be deemed not to acquire this interest and
SCHLUMBERGER shall be free to keep it, transfer it or otherwise dispose of
it, notwithstanding any other provision of this Agreement. Should BUYER not
acquire the Chinese Joint Venture, it commits to continue all existing
agreements between the RPS Business and the Chinese Joint Venture until
45
their respective term, all renewals excluded. The major agreements are
attached in Schedule 7.17 hereto. If SCHLUMBERGER is obliged to stay as a
shareholder of the Chinese Joint Venture, SCHLUMBERGER shall not be
considered in violation of any non-competition obligation or warranty as it
relates to such Chinese Joint Venture, provided that SCHLUMBERGER shall
exit the share capital of the Chinese Joint Venture by December 31, 2014.
7.18 BUYER's commitments with regards to employees
(a) BUYER shall maintain the employment conditions of all employees of the
Acquired Companies and all employees transferred by the Selling
Subsidiaries to the Acquiring Subsidiaries, including, without
limitation: (i) the seniority acquired during their employment with
the Acquired Companies, the Selling Subsidiaries and any SCHLUMBERGER
affiliates; (ii) severance pay, such severance payment, for all US
employees of the RPS Business, being equal to the sum of one week's
pay per year of employment up to a maximum of 26 weeks pay, with a
minimum severance payment equal to two week's pay; and (iii) retiree
medical benefits, to the extent such benefits are currently offered by
BUYER.
(b) BUYER shall continue the incentive compensation programs in place with
the Acquired Companies and the Selling Subsidiaries for the year 1998
with measurements and awards consistent with such programs and past
practices, but subject to appropriately redefined business objectives.
(c) BUYER shall ensure that the employees of the Acquired Companies and
the Selling Subsidiaries be entitled to take any remaining accrued and
unused vacation or receive pay in lieu thereof, for the year 1998.
7.19 Cooperation in Connection with Outstanding Litigation
SCHLUMBERGER and BUYER shall fully cooperate in connection with all
litigation outstanding at the Closing Date and continuing beyond the
Closing Date. Without limitation, in France, the United States of America,
Russia, the Czech Republic, the United Kingdom and Italy (but solely
relating to the RPS Business of the Italian Selling Subsidiary), BUYER
shall provide reasonable access to all records, documents, employees and
information of the RPS Business as may be required from time to time to
properly defend in such litigation. Failure to cooperate as provided in
this Section 7.19, if it prevents one Party to adequately defend its
interest, shall render the other party liable for all amounts that may
become due as a result.
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For any litigation outstanding at the Closing Date relating to the RPS
Business, no settlement shall be entered into by either BUYER or
SCHLUMBERGER with respect to such litigation unless (i) the amounts to be
paid are entirely covered by insurance; or (ii) the Parties agree to such
settlement, to which their consent shall not be unreasonably withheld.
ARTICLE VIII
-------------
TERMINATION
-----------
8.1 Failure of Conditions Precedent
If the conditions precedent set out in Article III, Sections 3.1 and 3.2
above shall not have been fulfilled on or before December 31, 1998, this
Agreement may be terminated by either party, in which case no party shall
have any claim of any nature whatsoever hereunder against any other party.
8.2 Mutual Consent
This Agreement may be terminated at any time by mutual consent.
8.3 Procedure Upon Termination
In the event of termination of this Agreement as provided herein, written
notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated and
abandoned, without further action by SCHLUMBERGER or BUYER. If the
transactions contemplated by this Agreement are terminated and abandoned as
provided herein:
(a) Each Party will redeliver all documents, work papers and other
material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to
the Party furnishing the same;
(b) All confidential information received by any Party hereto with respect
to the business of any other Party or its subsidiaries shall be
treated in accordance with Section 8.4 hereof; and
(c) No party hereto shall have any liability or further obligation to any
other party to this Agreement except as stated in subparagraphs (a)
and (b) of this Section 8.3.
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8.4 Confidentiality
Subject to the terms of any non-disclosure agreement in effect between the
Parties, if, for any reason, this Agreement is terminated or if the
transactions contemplated herein were not completed, BUYER and the
Acquiring Subsidiaries shall not use or disclose any information concerning
the RPS Business, SCHLUMBERGER, the Selling Subsidiaries and any of the
persons with whom the foregoing entertain business relations which they
shall have obtained in the course of the negotiation leading to the
signature of this Agreement and to the Closing, unless such information
becomes publicly available other than as a result of a disclosure by
SCHLUMBERGER or becomes available on a non-confidential basis from a
source other than SCHLUMBERGER which is not prohibited from disclosing such
information.
ARTICLE IX
----------
GENERAL AGREEMENTS
------------------
9.1 Expenses
(a) Whether or not the acquisition of the RPS Business is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses.
(b) Notwithstanding anything to the contrary, stock transfer tax, stamp
duties, and similar taxes (but not income, capital gains, and similar
taxes) imposed by any jurisdiction on the sale of the Acquired Shares
or the Acquired Assets contemplated by this Agreement shall be borne
by BUYER or any of the Acquiring Subsidiaries.
9.2 Brokers
SCHLUMBERGER represents and warrants that no broker or finder is entitled
to any brokerage or finders fee or other commission from BUYER or any
Acquiring Subsidiary based on agreements, arrangements or undertakings made
by SCHLUMBERGER or any Selling Subsidiary in connection with the
transactions contemplated hereby.
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BUYER represents and warrants that no broker or finder is entitled to any
brokerage or finders fee or other commission from SCHLUMBERGER or any
Selling Subsidiary based on agreements, arrangements or undertakings made
by BUYER or any Acquiring Subsidiary or affiliates in connection with the
transactions contemplated hereby.
9.3 Survival of Representations and Warranties
(a) The representations and warranties made by SCHLUMBERGER and BUYER in
this Agreement or in any of the Specific Acquisition Agreement
delivered pursuant to said Agreement shall terminate at the expiration
of the periods set out below and starting from the Closing Date,
except as to any matters occurred before the expiration of said
periods as to which a specific claim for indemnification will have
been notified in writing and in detail to the Indemnifying Party (as
defined in subparagraph d below) prior to the expiration of said
periods:
(i) with respect to the tax and social security liability,
representations: the periods shall be that of the applicable
statute of limitation, excluding any available extensions
thereof;
(ii) with respect to Environmental matters, December 31, 2004 for
issues arising in the United States of America, and outside the
United States of America, December 31, 2001, providing however,
that, beyond December 31, 1999, all Damages, costs and expenses
relating to environmental matters shall be shared equally by the
Parties;
(iii) with respect to all other representations and warranties:
December 31, 1999.
(b) Subject to the provisions of this Section 9.3, SCHLUMBERGER shall, or
shall cause a Selling Subsidiary, provided such subsidiary satisfies
such obligation, to indemnify and hold harmless BUYER and the
Acquiring Subsidiaries from any liability, damage, loss, judgment,
assessments, cost or expense, including all reasonable attorney's
fees, with the exception of those attorney's fees expressly dealt with
in Section 9.3(d) (the "Damages") arising from and attributable to:
(i) the material breach of any representation or warranty made by
SCHLUMBERGER in this Agreement;
49
(ii) any failure of SCHLUMBERGER or the Selling Subsidiaries duly to
materially perform or observe any covenant or agreement to be
performed or observed by SCHLUMBERGER or the Selling
Subsidiaries pursuant to this Agreement; and
(iii) all other liabilities of the RPS Business which are not (i)
liabilities of an Acquired Company on the date hereof, (ii)
incurred by an Acquired Company after the date hereof in the
ordinary course of business and consistent with past practice,
(iii) liabilities listed in Exhibit E, or (iv) reflected on the
Closing Balance Sheet.
(c) Subject to the provisions of this Section 9.3, BUYER shall indemnify
and hold harmless SCHLUMBERGER and the Selling Subsidiaries from any
Damages arising from and attributable to:
(i) the material breach of any representation or warranty made by
BUYER in this Agreement;
(ii) any failure of Buyer or the Acquiring Subsidiaries duly to
materially perform or observe any covenant or agreement to be
performed or observed by BUYER or the Acquiring Subsidiaries
pursuant to this Agreement; and
(iii) the Assumed Liabilities.
(d) Any claim for indemnity shall be made by the party seeking
indemnification (the "Aggrieved Party") to the other party (the
"Indemnifying Party"), by written notice specifying in reasonable
detail the basis of the claim. Such notice, as well as the compliance
with the procedure set forth in the subsequent paragraph, shall be a
condition precedent to any liability hereunder. In regard to claims
brought by BUYER or Acquiring Subsidiaries, SCHLUMBERGER shall
determine which Selling Subsidiary or Subsidiaries, if any, shall be
responsible as the Indemnifying Party or Parties, and shall cause such
Selling Subsidiary to satisfy such obligation.
In the event of a direct claim, the Indemnifying Party shall have thirty
(30) days following its receipt of the relevant claim notice (the "Review
Period") to make such investigation of the underlying claim as it considers
necessary or desirable and the Aggrieved Party shall cooperate therewith.
If, on or prior to the expiration of the Review Period, the Parties agree
upon the validity and amount of such
50
claim, the Indemnifying Party shall pay to the Aggrieved Party, within
three (3) business days following the date of such agreement, the full
agreed amount of the indemnification due on account of such claim. If the
Parties are unable to reach agreement prior to the expiration of the Review
Period, the parties may then refer the matter to arbitration as provided
pursuant to Section 9.13 of the Agreement.
In the event indemnification is likely to be sought with respect to a
claim, action or proceeding brought by a third party against the Aggrieved
Party, the Aggrieved Party shall permit the Indemnifying Party to assume
the defense of such third party claim, action or proceeding and shall
cooperate fully with the Indemnifying Party in the conduct of such defense.
Failure by the Indemnifying Party to notify the Aggrieved Party of its
election to defend any such claim or litigation within fifteen (15) days
from receipt of the notice thereof, shall be deemed a waiver by the
Indemnifying Party of its right to defend such claim or litigation. If the
Indemnifying Party assumes the defense of any such claim or litigation, the
obligations of the Indemnifying Party as to such claim shall be limited to
taking all steps necessary in the defense or settlement of the claim or
litigation and to holding the Aggrieved Party harmless from and against any
and all Damages caused by or arising out of any settlement or judgment in
connection with such claim or litigation, subject to the limitations of
Section 9.3 (e) hereunder. The Aggrieved Party may participate, at its
expense, in the defense of such claim or litigation, provided that the
Indemnifying Party shall direct and control the defense of such claim or
litigation. The Indemnifying Party shall not, in the defense of such claim
or litigation, consent to entry of any judgment or settlement, except
with the written consent of the Aggrieved Party. In case of failure by the
Indemnifying Party to duly elect to defend a claim or litigation, it may
participate, at its expense, in the defense of such claim or litigation,
provided that the Aggrieved Party shall direct and control the defense of
such claim or litigation.
Subject to final authority regarding direction and control as set forth
above, SCHLUMBERGER and BUYER will coordinate the conduct of the matter and
in particular the statements to be made, as well as the advisability of
settling or contesting the proceedings, will confer regarding their
respective choice of counsel and will each make available to the other the
documents related to the RPS Business under its control available to the
other for purposes of the defense.
(i) An Aggrieved Party shall not be entitled to an indemnity from an
Indemnifying Party for claims which individually do not exceed US
dollars 75,000 (seventy five thousand dollars) and in the
aggregate do not exceed US dollars 1,000,000 (one million
dollars).
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The total liability of an Indemnifying Party (including all affiliates
involved in the transactions contemplated by this agreement) shall not
exceed a total equal to US dollars 35,000,000 (thirty five million
dollars). This amount shall be reduced by the same percentage as the Total
Purchase Price, should the Total Purchase Price be reduced pursuant to
Section 1.6 above.
It is expressly understood that subject to the limitations above, an
Aggrieved Party shall be liable only for the net loss in excess of the US
dollars 1,000,000 (one million dollars) deductible amount referred to in
the first sentence of this paragraph 9.3 (e).
(e) Any net loss to be indemnified pursuant to this Section shall mean the
amount of the aggregate Damages actually suffered by affiliated
Aggrieved Parties less any provision on the Closing Balance Sheet no
longer justified, less any reduction, saving or repayment of taxes or
duties, or associated payments due or paid under any insurance policy
or other third party indemnity arrangement as well as any other
receipt or benefit which it might receive, whether or not these
amounts are related in any way to the claim giving rise to the
indemnification. It is expressly agreed that an Aggrieved Party shall
endeavor to mitigate any and all the damages for which an Indemnifying
Party may be exposed and held responsible under this Agreement.
9.4 Currencies
All financial documents and information contained in this Agreement,
provided or to be provided pursuant to this Agreement, shall be in US
dollars. The applicable exchange rate shall be that used by SCHLUMBERGER
at the relevant date. For purposes of the Base Balance Sheet; the
applicable exchange rate is that defined in Schedule 9.4.
9.5 Interpretation
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
9.6 Notices
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given: when delivered, if delivered by
messenger
52
during normal business hours of the recipient: when sent, if transmitted by
facsimile transmission (receipt confirmed) during normal business hours of
the recipient, or, if mailed by registered mail, postage prepaid, on the
third business day following mailing, in each case addressed as follows:
(a) if to SCHLUMBERGER or any of the Selling Subsidiaries to:
Schlumberger Limited
Legal Department
Attention Acquisitions Counsel
00 xxx Xx Xxxxxxxxx - 00000 Xxxxx
With a copy to:
Xxxxxx Xxxx & Xxxxxxxx LLP
000 xxxxxx Xxxxxxx Xxxxxxxx
00000 Xxxxx, Xxxxxx
Attention: Xxxxxxx Xxxxxxxx
(b) if to BUYER or any of the Acquiring Subsidiaries, to:
Tokheim Coporation
00000 Xxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxx 00000 XXX
Attention: Chief Financial Officer
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
00, xxx xx Xxxxxxxx Xxxxx-Xxxxxx
00000 Xxxxx, Xxxxxx
Attention: Xxxxxx X. Xxxxxxx
9.7 Entire Agreement
This Agreement (including the documents and instruments referred to herein
or therein) (i) constitutes the entire agreement and supersedes all other
prior agreements and understandings, both written and oral, between the
Parties with respect to the subject matter hereof, except the
confidentiality Agreement executed on April 21, 1998; and (ii) is not
intended to confer upon any other person any rights or remedies hereunder,
except as explicitly mentioned herein.
9.8 Amendment
53
This Agreement may be amended or modified in whole or in part at any time
by an agreement in writing executed in the same manner as this Agreement.
9.9 Waiver of Compliance
Any failure of SCHLUMBERGER, on the one hand, or BUYER, on the other, to
comply with any obligation, covenant, agreement or condition herein may be
expressly waived in writing by SCHLUMBERGER or the BUYER, respectively, but
such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
9.10 Governing Law
This Agreement as well as the Specific Acquisition Agreements shall be
governed by and construed in accordance with the laws of France.
9.11 Assignability; Successors and Assigns
The rights and obligations under this Agreement may not be assigned or
delegated by any party hereto, in whole or in part, to any third party
without the prior written consent of the other party hereto; provided,
however, that without such prior consent, BUYER shall have the right to
assign all or any part of its rights and obligations hereunder to (i) any
of BUYER's directly or indirectly wholly-owned affiliates, or (ii) by way
of security, guaranty or pledge, to any person providing credit to BUYER;
provided further that BUYER irrevocably and unconditionally guarantees the
prompt and complete performance by such transferee of BUYER's obligations
thereunder, and notifies SCHLUMBERGER of such assignment at least ten (10)
business days before the Closing.
9.12 Severability
Any provision of this Agreement which is held invalid or unenforceable in
any jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the
remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
54
9.13 Arbitration
All disputes, controversy or claim arising out of or in connection with the
Agreement shall be finally settled by arbitration under the rules of the
International Chamber of Commerce then in effect by three arbitrators
appointed in accordance with the said Rules.
The seat of arbitration shall be Paris (France).
The arbitration language shall be conducted and the award shall be rendered
in English.
It is further expressly stated that the arbitrators appointed as provided
above shall have sole and final jurisdiction for all disputes which may
arise in connection with this Agreement and its schedules but also for all
specific Acquisition Agreements, as well as their schedules and exhibits
executed pursuant to Article I above.
The award shall be final and binding upon the Parties as from the date
rendered and shall be the sole and exclusive remedy between the Parties
regarding any claims, counterclaims or issues presented to the arbitral
tribunal.
Any monetary award shall be made and promptly payable in US Dollars free of
any tax. Any costs, fees or taxes incident to enforcing the award shall,
to the maximum extent permitted by law, be charged against the Party
resisting such enforcement.
BUYER guarantees that all Acquiring Subsidiaries shall strictly observe
this arbitration provision and shall not xxx XXXXXXXXXXXX or any of the
Selling Subsidiaries in any Court of justice. SCHLUMBERGER guarantees that
all Selling Subsidiaries shall strictly observe this arbitration provision
and shall not xxx BUYER or any of the Acquiring Subsidiaries in any Court
of justice.
These guarantees shall be supported in writing by the Acquiring
subsidiaries and the Selling Subsidiaries but the failure to give such
support or the possible invalidity of said guarantees shall not invalidate
commitments of BUYER and SCHLUMBERGER under this provision.
9.14 Bladel Remediation
In accordance with Section 5.26(i), SCHLUMBERGER shall arrange and bear the
cost at the Bladel, Netherlands site for monitoring and remediation of the
soil
55
and groundwater contamination currently known by SCHLUMBERGER, as discussed
in part in the Bladel Environmental Reports listed in Schedule 9.14. The
Remedial Action required to address this contamination will be conducted in
accordance with applicable Environmental Laws and under the oversight and
with the approval of the appropriate governmental authorities.
SCHLUMBERGER's obligation to arrange and bear the costs for the Bladel
Remedial Action as required under this Section 9.14, expires eight years
from the date of this Agreement, provided, however, that during this
period SCHLUMBERGER shall make its best efforts to proceed with such
Remedial Action.
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IN WITNESS WHEREOF, this Master Agreement has been signed on behalf of
SCHLUMBERGER Limited and TOKHEIM CORPORATION by a duly authorized officer of
each corporation, all as of the date first abovewritten.
__________________________ __________________________
SCHLUMBERGER LIMITED TOKHEIM CORPORATION
By: ______________________ By: ______________________
Title:____________________ Title:____________________
57
