EXHIBIT 10 (cc)
$100,000,000
TUBOSCOPE INC.
7 1/2% Senior Notes due 2008
PURCHASE AGREEMENT
February 19, 1998
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
Salomon Brothers Inc
As Purchasers
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Tuboscope Inc. , a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several initial purchasers named in Schedule A hereto (the "Purchasers")
$100,000,000 principal amount of its 7 1/2% Senior Notes due 2008 (the "Notes")
to be issued under an indenture (the "Indenture"), among the Company, the
Guarantors (as defined herein) and Bank of New York Trust Company of Florida, as
Trustee (the "Trustee"). The United States Securities Act of 1933 is herein
referred to as the "Securities Act."
Initially, the Notes will be guaranteed (the "Guarantees" and together with
the Notes, the "Offered Securities") on a senior unsecured basis by Tuboscope
I/P Inc., Tuboscope Vetco International, Inc., Tubo-FGS Inc., Fiber Glass
Holdings, Inc., Environmental Procedures Inc., Tuboscope Pipeline Services Inc.
and Tuboscope (Holding U.S.) Inc. (collectively, the "Guarantors" and, together
with the Company, the "Issuers").
The Issuers hereby agree with the several Purchasers as follows:
2. Representations and Warranties of the Issuers. The Issuers, jointly
and severally, represent and warrant to, and agree with, the several Purchasers
that:
(a) A preliminary offering circular and an offering circular relating
to the Offered Securities to be offered by the Purchasers have been
prepared by the Company. Such preliminary offering circular and offering
circular, as supplemented as of the date of this Agreement, together with
any other document approved by the Company for use in connection with the
contemplated resale of the Offered Securities are hereinafter collectively
referred to as the "Offering Document". On the date of this Agreement, the
Offering Document does not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not
apply to statements in or omissions from the Offering Document based upon
written information furnished to the Company by Credit Suisse First Boston
Corporation ("CSFBC") and the other Purchasers specifically for use
therein, it being understood and agreed that the only such information is
that described as such in Section 7(b). Except as disclosed in the Offering
Document, on the date of this Agreement, the Company's Annual Report on
Form 10-K most recently filed with the Securities and Exchange Commission
(the "Commission") and all subsequent reports (collectively, the "Exchange
Act Reports") which have been filed by the Company with the Commission or
sent to stockholders pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") do not include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. Such documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder.
(b) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Offering Document; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure so to qualify would not have a material adverse effect on the
financial condition of the Company and its subsidiaries taken as a whole.
(c) Each Guarantor and each Significant Subsidiary (as defined in
Regulation S-X under the Securities Act) of the Company has been duly
incorporated and is an existing corporation in good standing under the laws
of the jurisdiction of its incorporation, with corporate power and
authority to own its properties and conduct its business as described in
the Offering Document; and each Guarantor and each Significant Subsidiary
of the Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect on
the financial condition of the Company and its subsidiaries taken as a
whole; all of the issued and outstanding capital stock of each Guarantor
and each Significant Subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; and the capital stock
of each Guarantor and each Significant Subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens, encumbrances
and defects.
(d) (1) The Indenture has been duly authorized by each of the
Issuers; (2) the Notes and the Guarantees have been duly authorized by the
Company and each of the Guarantors, respectively; and (3) when the Notes
and the Guarantees are delivered and paid for pursuant to this Agreement on
the Closing Date (as defined below), (i) the Indenture will have been duly
executed and delivered by each of the Issuers, (ii) the Notes and the
Guarantees will have been duly executed, authenticated, issued and
delivered by the Company and each of the Guarantors, respectively, and will
conform to the description thereof contained in the Offering Document,
(iii) the Indenture and the Notes will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
and (iv) the Indenture and the Guarantees will constitute valid and binding
obligations of each of the Guarantors enforceable against each Guarantor in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer,
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reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(e) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company.
(f) The execution, delivery and performance of the Indenture and this
Agreement by the Issuers, and the issuance and sale of the Offered
Securities by the Issuers and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument to which
the Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws of the
Company or any such subsidiary, and the Issuers have full power and
authority to authorize, issue and sell the Offered Securities as
contemplated by this Agreement.
(g) This Agreement has been duly authorized, executed and delivered
by the Company and each of the Guarantors.
(h) Except as disclosed in the Offering Document, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and
except as disclosed in the Offering Document or the Exchange Act Documents,
the Company and its subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(i) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(j) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its subsidiaries
taken as a whole.
(k) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole.
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(l) Except as disclosed in the Offering Document or the Exchange Act
Documents, neither the Company nor any of its subsidiaries is in violation
of any statute, rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a material adverse effect on
the Company and its subsidiaries taken as a whole; and the Company is not
aware of any pending investigation which might lead to such a claim.
(m) Except as disclosed in the Offering Document or the Exchange Act
Documents, there are no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as a
whole, or would materially and adversely affect the ability of the Company
to perform its obligations under the Indenture or this Agreement, or which
are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are threatened or, to
the Company's knowledge, contemplated.
(n) The financial statements included in the Offering Document and
the Exchange Act Documents present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis.
(o) Except as disclosed in the Offering Document, since the date of
the latest audited financial statements incorporated by reference in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(p) None of the Issuers is an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the United States Investment Company
Act of 1940 (the "Investment Company Act); and none of the Issuers is nor,
after giving effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the Offering
Document, will be an "investment company" as defined in the Investment
Company Act.
(q) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed
on any national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
(r) The offer and sale of the Offered Securities in the manner
contemplated by this Agreement and the Offering Document will be exempt
from the registration requirements of the Securities Act by reason of
Section 4(2) thereof and Regulation S thereunder and it is not necessary
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to qualify an indenture in respect of the Offered Securities under the
United States Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act").
(s) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf (i) has, within the six-month period prior to
the date hereof, offered or sold in the United States or to any U.S. person
(as such terms are defined in Regulation S under the Securities Act) the
Offered Securities or any security of the same class or series as the
Offered Securities or (ii) has offered or will offer or sell the Offered
Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act or (B) with respect to any such securities sold in
reliance on Rule 903 of Regulation S ("Regulation S") under the Securities
Act, by means of any directed selling efforts within the meaning of Rule
902(b) of Regulation S. The Company, its affiliates and any person acting
on its or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S. The Company has not entered and
will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except for this Agreement.
(t) The Company is subject to Section 13 or 15(d) of the Exchange
Act.
(u) There is no "substantial U.S. market interest" as defined in Rule
902(n) of Regulation S in the Company's debt securities.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Issuers agree to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Issuers, at a purchase price of 98.2% of the principal amount thereof,
the respective principal amounts of Notes (together with Guarantees) set forth
opposite the names of the several Purchasers in Schedule A hereto.
The Issuers will deliver, against payment of the purchase price the Offered
Securities to be offered and sold by the Purchasers in reliance on Regulation S
(the "Regulation S Securities") and Rule 144A (the "144A Securities") under the
Securities Act in the form of one or more permanent global securities in
registered form without interest coupons (the "Global Securities") which will be
deposited with the Trustee as custodian for The Depository Trust Company ("DTC")
and registered in the name of Cede & Co., as nominee for DTC. The Offered
Securities to be offered and sold by the Purchasers in reliance on Regulation S
will be held by the Trustee as custodian for DTC for the respective accounts of
the DTC participants for Xxxxxx Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System ("Euroclear"), and Cedel Bank
societe anonyme ("Cedel"). The Global Securities shall include the legend
regarding restrictions on transfer set forth under "Transfer Restrictions" in
the Offering Document. Until the termination of the restricted period (as
defined in Regulation S) with respect to the offering of the Offered Securities,
interests in the Regulation S Securities may only be held by the DTC
participants for Euroclear and Cedel. Interests in any permanent global
securities will be held only in book-entry form through Euroclear, Cedel or DTC,
as the case may be, except in the limited circumstances described in the
Offering Document.
Payment for the Regulation S Securities and the 144A Securities shall be
made by the Purchasers in Federal (same day) funds by official check or checks
or wire transfer to an account at a bank acceptable to CSFBC drawn to the order
of the Company at the office of Xxxxxx & Xxxxxx L.L.P. at 9:00 A.M., (New York
time), on February 25, 1998 , or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "Closing Date", against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the Regulation S
Securities for the respective accounts of the DTC participants for Euroclear and
Cedel and all of the 144A
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Securities. The Global Securities will be made available for checking at the
above office of Xxxxxx & Xxxxxx L.L.P. at least 24 hours prior to the Closing
Date.
4. Representations by Purchasers; Resale by Purchasers. (a) Each
Purchaser severally represents and warrants to the Issuers that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
(b) Each Purchaser severally acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons except pursuant to an exemption from the registration requirements
of the Securities Act. Each Purchaser severally represents and agrees that
it has offered and sold the Offered Securities, and will offer and sell the
Offered Securities (i) as part of its distribution at any time, only in
accordance with Rule 903 or Rule 144A under the Securities Act ("Rule
144A"). Accordingly, neither such Purchaser nor its affiliates, nor any
persons acting on its or their behalf, have engaged or will engage in any
directed selling efforts with respect to the Offered Securities, and such
Purchaser, its affiliates and all persons acting on its or their behalf
have complied and will comply with the offering restrictions requirement of
Regulation S.
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or affiliates of
the other Purchasers or with the prior written consent of the Company.
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act, including, but
not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. Each Purchaser severally agrees, with respect to resales made
in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of such
Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(e) Each of the Purchasers severally represents and agrees that (i)
it has not offered or sold and prior to the date six months after the date
of issue of the Offered Securities will not offer or sell any Offered
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Xxx 0000 with respect to anything done by it in relation to the
Offered Securities in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of
the Offered Securities to a person who is of a kind described in Article
11(3) of the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on.
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5. Certain Agreements of the Company. The Issuers agree with the several
Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to amend
or supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent, which consent will not be
unreasonably witheld. If, at any time prior to the completion of the
resale of the Offered Securities by the Purchasers, any event occurs as a
result of which the Offering Document as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, the
Company promptly will notify CSFBC of such event and promptly will prepare,
at its own expense, an amendment or supplement which will correct such
statement or omission. Neither CSFBC's consent to, nor the Purchasers'
delivery to offerees or investors of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any preliminary
offering circular, the Offering Document and all amendments and supplements
to such documents, in each case as soon as available and in such quantities
as CSFBC requests, and the Company will furnish to CSFBC on the date hereof
three copies of the Offering Document signed by duly authorized officers of
the Company and each of the Guarantors, one of which will include the
independent accountants' reports therein manually signed by such
independent accountants. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, the Company will promptly furnish
or cause to be furnished to CSFBC (and, upon request, to each of the other
Purchasers) and, upon request of holders and prospective purchasers of the
Offered Securities, to such holders and purchasers, copies of the
information required to be delivered to holders and prospective purchasers
of the Offered Securities pursuant to Rule 144A(d)(4) under the Securities
Act (or any successor provision thereto) in order to permit compliance with
Rule 144A in connection with resales by such holders of the Offered
Securities. The Company will pay the expenses of printing and distributing
to the Purchasers all such documents.
(c) The Issuers will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions in the United States and
Canada as CSFBC designates and will continue such qualifications in effect
so long as required for the resale of the Offered Securities by the
Purchasers, provided that the Issuers will not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any such state.
(d) During the period of ten years hereafter or such shorter period
as the Notes are outstanding, the Company will furnish to CSFBC and, upon
request, to each of the other Purchasers, as soon as practicable after the
end of each fiscal year, a copy of its annual report to stockholders for
such year; and the Company will furnish to CSFBC and, upon request, to each
of the other Purchasers (i) as soon as available, a copy of each report and
any definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other information concerning the Issuers as CSFBC may reasonably
request.
(e) During the period of two years after the Closing Date the Company
will, upon request, furnish to CSFBC, each of the other Purchasers and any
holder of Offered Securities a copy of the restrictions on transfer
applicable to the Offered Securities.
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(f) During the period of two years after the Closing Date the Issuers
will not, and will not permit any of their affiliates (as defined in Rule
144 under the Securities Act) to, resell any of the Offered Securities that
have been reacquired by any of them.
(g) During the period of two years after the Closing Date, none of
the Issuers will be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is required
to be registered under Section 8 of the Investment Company Act.
(h) The Company will pay all expenses incidental to the performance
of its obligations under this Agreement and the Indenture, including (i)
the fees and expenses of the Trustee and its professional advisers; (ii)
all expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Offered Securities, the preparation
and printing of this Agreement, the Offered Securities, the Indenture, the
Offering Document and amendments and supplements thereto, and any other
document relating to the issuance, offer, sale and delivery of the Offered
Securities; (iii) the cost of qualifying the Offered Securities for trading
in The Portal/SM/ Market ("PORTAL") and any expenses incidental thereto;
(iv) the cost of any advertising approved by the Company in connection with
the issue of the Offered Securities; (v) any expenses (including fees and
disbursements of counsel) incurred in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions in the
United States and Canada as CSFBC designates and the printing of memoranda
relating thereto; (vi) any fees charged by investment rating agencies for
the rating of the Securities; (vii) expenses incurred in distributing
preliminary offering circulars and the Offering Document (including any
amendments and supplements thereto) to the Purchasers; and (viii) all fees
and expenses of its counsel. The Company will also pay or reimburse the
Purchasers (to the extent incurred by them) for all travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers
of the Offered Securities from the Purchasers. Such amount may be deducted
from the purchase price for the Offered Securities set forth in Section 3
hereof.
(i) In connection with the offering, until CSFBC shall have notified
the Company and the other Purchasers of the completion of the resale of the
Offered Securities, neither the Issuers nor any of their affiliates has or
will, either alone or with one or more other persons, bid for or purchase
for any account in which it or any of its affiliates has a beneficial
interest any Offered Securities or attempt to induce any person to purchase
any Offered Securities; and neither it nor any of its affiliates will make
bids or purchases for the purpose of creating actual, or apparent, active
trading in, or of raising the price of, the Offered Securities.
(j) For a period of 60 days after the date of the initial offering of
the Offered Securities by the Purchasers, neither the Issuers nor any of
their affiliates will offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any United States dollar-denominated
debt securities issued or guaranteed by any of the Issuers and having a
maturity of more than one year from the date of issue. Neither the Issuers
nor any of their affiliates will at any time offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any securities
under circumstances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities Act or
the safe harbor of Regulation S thereunder to cease to be applicable to the
offer and sale of the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Issuers herein, to the accuracy of the statements of officers of the Issuers
made
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pursuant to the provisions hereof, to the performance by the Issuers of
their obligations hereunder and to the following additional conditions
precedent:
(a) The Purchasers shall have received a letter, dated the date of
this Agreement, of Ernst & Young L.L.P. confirming that they are
independent public accountants within the meaning of the Securities Act and
the applicable published rules and regulations thereunder ("Rules and
Regulations") and to the effect that:
(i) in their opinion the financial statements examined by them and
included in the Offering Document and in the Exchange Act Reports comply as to
form in all material respects with the applicable accounting requirements of the
Securities Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements included in the
Offering Document and in the Exchange Act Reports;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the Company,
inquiries of officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements included in the Offering
Document or in the Exchange Act Reports do not comply as to form in all material
respects with the applicable accounting requirements of the Securities Act and
the related published Rules and Regulations or any material modifications should
be made to such unaudited financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than three business days
prior to the date of this Agreement, there was any change in the capital stock
or any increase in short-term indebtedness or long-term debt of the Company and
its consolidated subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in consolidated net
current assets or net assets, as compared with amounts shown on the latest
balance sheet included in the Offering Document; or
(C) for the period from the closing date of the latest income
statement included in the Offering Document to the closing date of the latest
available income statement read by such accountants there were any decreases, as
compared with the corresponding period of the previous year and with the period
of corresponding length ended the date of the latest income statement included
in the Offering Document, in consolidated net sales, net operating income,
consolidated income before extraordinary items or net income or in the ratio of
earnings to fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Document discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Offering Document and the Exchange Act Reports (in each case to the extent
that such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its subsidiaries
subject to the internal
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controls of the Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as otherwise specified
in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) a change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the judgment of CSFBC, be likely to prejudice
materially the success of the proposed issue, sale or distribution of the
Offered Securities, whether in the primary market or in respect of dealings
in the secondary market, or (ii) (A) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Purchasers including CSFBC, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the offering or
the sale of and payment for the Offered Securities; (B) any downgrading in
the rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (C) any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market; (D) any banking moratorium declared by U.S. Federal or New York
authorities; or (E) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Purchasers including
CSFBC, the effect of any such outbreak, escalation, declaration, calamity
or emergency makes it impractical or inadvisable to proceed with completion
of the offering or sale of and payment for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated the Closing
Date, of Xxxxxx and Xxxxxxx, counsel for the Company and Xxxxx X. Xxxxxxx,
III, Executive Vice President, Chief Financial Officer and General Counsel
to the Company, substantially to the effect that:
(i) Each of the Company and the Guarantors has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its organization, with corporate power and authority to own its
properties and conduct its business as described in the Offering Document; and
each of the Company and the Guarantors is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification;
(ii) The Indenture has been duly authorized, executed and delivered by
each of the Issuers; the Notes and the Guarantees have been duly authorized,
executed, authenticated, issued and delivered by the Company and each of the
Guarantors, respectively, and conform to the description thereof contained in
the Offering Document; the Indenture and the Notes constitute valid and legally
binding obligations of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Indenture and the
Guarantees constitute valid and legally binding obligations of each of the
Guarantors, enforceable in accordance with their terms,
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subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(iii) None of the Issuers are and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as described in the Offering Document, will be an "investment company" as
defined in the Investment Company Act.
(iv) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement in connection with the issuance
or sale of the Offered Securities by the Issuers, except such as may be required
under state securities laws;
(v) The execution, delivery and performance of the Indenture and
this Agreement, and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental agency or body or
any court having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any agreement or instrument to which the Company
or any such subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties of the Company or any such subsidiary
is subject, or the charter or by-laws of the Company or any such subsidiary, and
each of the Issuers has full power and authority to authorize, issue and sell
the Offered Securities as contemplated by this Agreement;
(vi) Such counsel has no reason to believe that the Offering Document,
or any amendment or supplement thereto, or any Exchange Act Report as of the
date thereof and as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; the
descriptions in the Offering Document and the Exchange Act Reports of statutes,
legal and governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Offering Document and the
Exchange Act Reports;
(vii) This Agreement has been duly authorized, executed and delivered
by each of the Issuers; and
(viii) It is not necessary in connection with (i) the offer, sale and
delivery of the Offered Securities by the Issuers to the several Purchasers
pursuant to this Agreement or (ii) the resales of the Offered Securities by the
several Purchasers in the manner contemplated by this Agreement, to register the
Offered Securities under the Securities Act or to qualify an indenture in
respect thereof under the Trust Indenture Act.
(d) The Purchasers shall have received from Xxxxxx & Xxxxxx L.L.P.,
counsel for the Purchasers, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Issuers, the validity of the
Offered Securities, the Offering Document, the exemption from registration
for the offer and sale of the Offered Securities by the Company to the
several Purchasers and the resales by the several Purchasers as
contemplated hereby and other related matters as CSFBC may require, and the
Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(e) The Purchasers shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such
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officers, to the best of their knowledge after reasonable investigation,
shall state that the representations and warranties of the Issuers in this
Agreement are true and correct, that the Issuers have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that, subsequent
to the date of the most recent financial statements in the Offering
Document there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such certificate.
(f) The Purchasers shall have received a letter, dated the Closing
Date, of Ernst & Young L.L.P., which meets the requirements of subsection (a) of
this Section, except that the specified date referred to in such subsection will
be a date not more than three business days prior to the Closing Date for the
purposes of this subsection.
The Company will furnish the Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (a) Each of the Issuers, jointly
and severally, will indemnify and hold harmless each Purchaser against any
losses, claims, damages or liabilities, joint or several, to which such
Purchaser may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular or
the Exchange Act Reports, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Issuers will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Purchaser
through CSFBC specifically for use therein, it being understood and agreed that
the only such information consists of the information described as such in
subsection (b) below.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Issuers against any losses, claims, damages or liabilities to which
the Issuers may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Purchaser through CSFBC specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Purchaser consists of the following information in
the Offering Document furnished on behalf of each
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Purchaser: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Purchasers, the legend concerning over-allotments
and stabilizing on the inside front cover page, the table of Initial Purchasers
under the caption "Plan of Distribution" and the penultimate paragraph under the
section captioned "Plan of Distribution."
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnified party from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuers on the one hand and the Purchasers on the other from the offering of
the Offered Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Issuers on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Issuers bear to the total discounts and commissions received by the
Purchasers from the Issuers under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuers or the Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the Offered
Securities purchased by it were resold exceeds the amount of any damages which
such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective purchase obligations and not joint.
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(e) The obligations of the Issuers under this Section shall be in
addition to any liability which the Issuers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Issuers within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in their
obligations to purchase Offered Securities hereunder and the aggregate principal
amount of Offered Securities that such defaulting Purchaser or Purchasers agreed
but failed to purchase does not exceed 10% of the total principal amount of
Offered Securities, CSFBC may make arrangements satisfactory to the Company for
the purchase of such Offered Securities by other persons, including any of the
Purchasers, but if no such arrangements are made by the Closing Date, the non-
defaulting Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate principal amount of Securities with
respect to which such default or defaults occur exceeds 10% of the total
principal amount of Offered Securities and arrangements satisfactory to CSFBC
and the Company for the purchase of such Offered Securities by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Purchaser or the Company,
except as provided in Section 9. As used in this Agreement, the term
"Purchaser" includes any person substituted for a Purchaser under this Section.
Nothing herein will relieve a defaulting Purchaser from liability for its
default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuers or their officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Issuers or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Offered
Securities by the Purchasers is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Issuers and the Purchasers pursuant to
Section 7 shall remain in effect. If the purchase of the Offered Securities by
the Purchasers is not consummated for any reason other than solely because of
the termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (C), (D) or (E) of Section 6(b)(ii), the Company will
reimburse the Purchasers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Purchasers will be mailed, delivered or telegraphed and confirmed to the
Purchasers, c/o Credit Suisse First Boston Corporation, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Issuers, will be mailed,
delivered or telegraphed and confirmed to it at Tuboscope Inc., 0000 Xxxxxx
Xxxx, Xxxxxxx Xxxxx, Attention: Xxxxx X. Xxxxxxx, III; provided, however, that
any notice to a Purchaser pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
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12. Representation of Purchasers. CSFBC will act for the several
Purchasers in connection with this purchase, and any action under this Agreement
taken by CSFBC will be binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
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If the foregoing is in accordance with the Purchasers' understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
TUBOSCOPE INC.
TUBOSCOPE I/P INC.
TUBOSCOPE VETCO INTERNATIONAL, INC.
TUBO-FGS INC.
FIBER GLASS HOLDINGS, INC.
ENVIRONMENTAL PROCEDURES INC.
TUBOSCOPE PIPELINE SERVICES INC.
TUBOSCOPE (HOLDING U.S.) INC.
By.
----------------------------------
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Credit Suisse First Boston Corporation
ABN AMRO Incorporated
Chase Securities Inc.
Salomon Brothers Inc
As the Purchasers
By: Credit Suisse First Boston Corporation
By
----------------------------------------
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SCHEDULE A
PRINCIPAL AMOUNT OF
OFFERED SECURITIES
MANAGER FIRM SECURITIES
---------------------------------------------------------------
Credit Suisse First Boston Corporation...... $ 25,000,000
ABN AMRO Incorporated 25,000,000
Chase Securities Inc. 25,000,000
Salomon Brothers Inc 25,000,000
------------
Total.................................. $100,000,000
============
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