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EXHIBIT 10.18
AGREEMENT
This Agreement is being entered into by and between Tubos xx Xxxxx de
Mexico ("Tamsa"), Tamsider S.A. de C.V. ("Tamsider"), DST Distributors of Steel
Tubes Limited ("DST"), Techint Engineering Company ("Techint"), Xxxxxxxxxxx
International, Inc., formerly known as XXX Xxxxxxxxxxx, Inc. ("Weatherford"),
Grant Prideco, Inc. ("Grant"), Pridecomex Holding, S.A. de C.V. ("Pridecomex")
and Grant Prideco, S.A. de C.V. ("Grant Mexico") in connection with the
following agreements (collectively, the "Agreements"):
1. Stock Purchase Agreement dated as of June 19, 1998, by and among
Weatherford, Pridecomex, Tamsa and Tamsider (the "Stock Purchase Agreement");
and
2. Master Technology License Agreement dated June 19, 1998, by and
between Grant and DST (the "Technology License Agreement").
Unless otherwise defined herein, all capitalized terms shall have the
meaning assigned to such terms in Stock Purchase Agreement.
Each of Tamsa, Tamsider, DST, Techint, Weatherford, Grant, Pridecomex
and Grant Mexico hereby agree as follows:
1. In lieu of the payment of the Purchase Price in cash by Pridecomex
at Closing pursuant to Section 2.2(a) of the Stock Purchase Agreement,
Pridecomex will execute and deliver to Tamsider a promissory note, in the form
attached hereto as Exhibit A (the "Note"), in the amount of the Purchase Price.
2. To secure the payment of the Note by Pridecomex, Weatherford agrees
to execute and deliver to Tamsider a guarantee in the form attached hereto as
Exhibit B (the "Guarantee").
3. Pridecomex will pay to Tamsa the amount of the Intercompany Debt on
the Closing Date pursuant to Section 2.3(b) of the Stock Purchase Agreement.
4. On the Closing Date, Tamsider will deliver the Shares and the
Minority Interest (collectively, the "TF Shares") to Pridecomex and its designee
(the "Designee") in exchange for the delivery of the Note by Pridecomex and the
Guarantee by Weatherford. Simultaneously, Tamsider, Pridecomex, Weatherford and
Banamex will execute a trust agreement or fideicomiso, whereby Banamex will hold
the TF Shares in trust as security for the payment of the Note. Pridecomex
agrees to, and will cause the Designee to, endorse the TF Shares and deliver
them to Banamex pursuant to the fideicomiso. The fideicomiso will be in a form
that is reasonably acceptable to Weatherford and will contain the following
terms, among others:
(i) While the TF Shares remain subject to the fideicomiso,
Banamex will vote the TF Shares pursuant to instructions provided by
Pridecomex, except in connection with
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any decision that would change the corporate structure of TF de Mexico,
S.A. de C.V. ("TF"), such as a merger, spin-off or dissolution. The
board of directors of TF shall be composed of Pridecomex nominees and
at least one person nominated by Tamsa. The Tamsa nominee shall be
notified of all board meetings at least five days in advance.
(ii) Banamex shall deliver the TF Shares out of the
fideicomiso to Pridecomex upon evidence provided by Pridecomex that the
Note has been paid in full. Upon payment in full, the member of the
board appointed by Tamsa shall either immediately resign or be removed
as a director of TF.
(iii) If Pridecomex or Weatherford fails to pay the Note when
due, Tamsider shall, upon ten days prior written notice to Weatherford,
at any time after such date and for so long as the Note shall not have
been paid, be entitled to: (a) enforce its rights under the Note and/or
the Guarantee, (b) request Banamex to deliver the TF Shares to Tamsider
upon surrender of the Note and a written release of Tamsider's rights
under the Guarantee, or (c) require Banamex to sell the TF Shares and
pay Tamsider any amounts received for the TF Shares.
5. For purposes of the Stock Purchase Agreement, the Closing of the
Contemplated Transactions will take place on November 23, 1998, and the Closing
Date will be November 23, 1998.
6. For purposes of the Technology License Agreement, the definition of
Accessory Equipment in Schedule C is hereby amended and restated to read in its
entirety as follows:
"ACCESSORY EQUIPMENT" means thread protectors, crossovers,
connectors, pup joints, liner hangers, landing nipples,
packers, packer stringers, end line pressure control
equipment, safety valves, gas lift valve mandrels, lift plugs,
lift caps, hydrostatic test plugs, hydrostatic test caps,
handling plugs, handling caps, discharge head hangers, float
shoes, float guides, float collars, flow couplings collars
blast joints, tubing anchors, side pocket mandrels, couplings
and similar equipment.
7. Pridecomex covenants and agrees that until all principal and accrued
and unpaid interest under the Note are repaid in full, Pridecomex shall (and
shall cause each of the Companies and the Designee to), unless Tamsider shall
otherwise agree in writing, perform the following covenants:
(i) the Companies shall not directly or indirectly do any of
the following: (A) issue, sell, pledge, dispose of or encumber any
capital stock of the Companies; (B) split, combine, or reclassify any
outstanding capital stock, or declare, set aside, or pay any dividend
payable in cash, stock, property, or otherwise with respect to its
capital stock whether now or hereafter outstanding; (C) redeem,
purchase or acquire
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or offer to acquire any of its capital stock except as may be required
to cancel the registration of TF with the Mexican Stock Exchange; (D)
except as provided in (C) above, acquire, agree to acquire or make any
offer to acquire for cash or other consideration, any equity interest
in or assets of any corporation, partnership, joint venture or other
entity in an amount greater than $10,000; or (E) enter into any
contract, agreement, commitment, or arrangement with respect to any of
the matters set forth in this Section 7(i);
(ii) Pridecomex shall not transfer, dispose or otherwise
convey any of the Shares held by it or grant or permit there to exist
any encumbrance on the Shares;
(iii) the Designee shall not transfer, dispose or otherwise
convey any of the Minority Interest held by it or grant or permit there
to exist any encumbrance on the Minority Interest;
(iv) except for agreements in amounts less than $100,000 in
the aggregate outstanding at any one time and as provided in (i)(C) and
(i)(D) above, the Companies shall not enter into any Contract;
(v) except pursuant to the Lease Agreement, the Companies
shall not sell, lease, mortgage, pledge, xxxxx x xxxx on or otherwise
encumber or otherwise dispose of any of their properties or assets;
(vi) the Companies shall not, directly or indirectly, incur
any indebtedness for borrowed money or guarantee any such indebtedness
of another person, issue or sell any debt securities or warrants or
other rights to acquire any debt securities of the Companies, guarantee
any debt securities of another person, or make or permit to remain
outstanding any loan (other than the Intercompany Debt), advances or
capital contributions to, or investments in, any other person, other
than to the Subsidiary;
(vii) neither Pridecomex, Designee nor the Companies shall
permit to occur any event described in clauses (a)-(c) of Section 3.13
of the Stock Purchase Agreement;
(viii) TF will comply with all applicable laws, including
timely compliance with all tax obligations, except where non-compliance
would not have a material adverse effect on the financial condition,
operations, business prospects or business of TF and its subsidiaries,
taken as a whole;
(ix) TF will not modify or amend the Lease Agreement in any
manner adverse to Tamsa or Tamsider and will hire no personnel.
8. Any breach by Weatherford, Pridecomex, Grant or Grant Mexico of any
of their
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respective covenants and agreements in Section 7 of this Agreement shall not
constitute a breach of or default under the Guarantee or the Note. Each of
Weatherford, Pridecomex, Grant or Grant Mexico agree to indemnify Tamsa,
Tamsider, DST and Techint for any losses or damages as a result of any such
breaches if Tamsider exercises its rights under Section 4(iii) hereof following
a default under the Note.
9. Tamsider and Tamsa represent and warrant to Weatherford and
Pridecomex that the payment of interest under the Note and the Guarantee is not
subject to any present income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings under any Mexican Legal Requirements.
Tamsider and Tamsa agree to indemnify Weatherford and Pridecomex for any losses
or damages suffered by Weatherford or Pridecomex as a result of a breach of the
foregoing representation.
10. The provisions of Section 11.6 and 11.8 of the Stock Purchase
Agreement apply to this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed and delivered
this Agreement effective as of November 12, 1998.
TUBOS XX XXXXX DE MEXICO, S.A.
By: Xxxxxxxxx Xxxxxxx
Attorney in fact
TAMSIDER S.A. DE C.V.
By: Xxxxxxxxx Xxxxxxx
Attorney in fact
DST DISTRIBUTORS OF STEEL TUBES LIMITED
By: Xxxxxxxxx Xxxxxxx
Attorney in fact
TECHINT ENGINEERING COMPANY
By: Xxxxxxxxx Xxxxxxx
Attorney in fact
XXXXXXXXXXX INTERNATIONAL, INC.
By: Xxxxxx Xxxx
Senior Vice President
GRANT PRIDECO, INC.
By: Xxxxxx Xxxx
Senior Vice President
PRIDECOMEX HOLDING, S.A. DE C.V.
By: Xxxxxx Xxxx
Vice President
GRANT PRIDECO, S.A. DE C.V.
By: Xxxxxx Xxxx
Vice President
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