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EXHIBIT 4.20
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ASSET PURCHASE AGREEMENT
BY AND AMONG
TEXAS PIPE WORKS, INC.,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇.,
GRANT PRIDECO, INC.
AND
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
MAY 17, 1999
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TABLE OF CONTENTS
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ARTICLE 1
PURCHASE AND SALE OF ASSETS.......................................................................................1
1.1 Transferred Assets...............................................................................1
1.2 Closing..........................................................................................2
1.3 Purchase Price...................................................................................2
1.4 Liabilities Not Assumed by the Buyer.............................................................2
1.5 Transfer Taxes; Recording Fees...................................................................2
1.6 Allocation of Purchase Price.....................................................................2
1.7 Prorations of Certain Expenses and Property Taxes................................................2
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDER..................................................3
2.1 Corporate Matters................................................................................3
2.2 Validity of Agreement and Conflict with Other Instruments........................................3
2.3 Approvals, Licenses and Authorizations...........................................................3
2.4 Title to and Condition of Properties.............................................................4
2.5 Contracts and Commitments........................................................................4
2.6 Taxes............................................................................................5
2.7 No Litigation....................................................................................5
2.8 Warranties and Product Liability.................................................................5
2.9 Finder's Fees....................................................................................5
2.10 Insurance........................................................................................6
2.11 Securities Law Matters...........................................................................6
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ▇▇▇▇▇▇▇▇▇▇▇.......................................................7
3.1 Corporate Matters................................................................................7
3.2 Approvals, Licenses and Authorizations...........................................................7
3.3 Authorization for the ▇▇▇▇▇▇▇▇▇▇▇ Shares.........................................................8
3.4 SEC Documents....................................................................................8
ARTICLE 4
REGISTRATION RIGHTS...............................................................................................8
4.1 Registration Rights..............................................................................8
4.2 Procedure........................................................................................9
4.3 Indemnification.................................................................................10
4.4 Termination.....................................................................................11
ARTICLE 5
ADDITIONAL AGREEMENTS............................................................................................11
5.1 Access to Information...........................................................................11
5.2 Storage of Transferred Assets...................................................................12
5.3 Inventory, Orders and Orders in Production......................................................12
5.4 Conduct of the Seller's Business................................................................12
5.5 Negotiation with Others.........................................................................13
5.6 Information.....................................................................................14
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5.7 Delivery of Business Documents..................................................................14
5.8 Further Assurances..............................................................................14
5.9 Covenant Not to Compete With its Business.......................................................14
5.10 Employee Matters. .............................................................................15
ARTICLE 6
BUYER'S AND ▇▇▇▇▇▇▇▇▇▇▇'▇ CONDITIONS.............................................................................15
6.1 Representations, Warranties and Covenants.......................................................15
6.2 Good Standing...................................................................................15
6.3 Instruments of Transfer.........................................................................15
6.4 No Litigation...................................................................................15
6.5 Licenses, Consents and Approvals................................................................16
6.6 Consents and Release of Liens...................................................................16
6.7 Resolutions.....................................................................................16
6.8 ▇▇▇▇▇▇▇▇▇▇▇ Share Price.........................................................................16
6.9 Schedule of Orders and Orders in Production.....................................................16
ARTICLE 7
SELLER'S AND SHAREHOLDER'S CONDITIONS............................................................................16
7.1 Representations and Warranties..................................................................16
7.2 No Litigation...................................................................................16
7.3 Resolutions.....................................................................................17
ARTICLE 8
INDEMNIFICATION..................................................................................................17
8.1 Indemnification by the Seller and the Shareholder...............................................17
8.2 Indemnification by the Buyer and ▇▇▇▇▇▇▇▇▇▇▇....................................................17
8.3 Procedure.......................................................................................17
8.4 Payment.........................................................................................18
8.5 Failure to Pay Indemnification..................................................................18
8.6 Adjustment of Liability.........................................................................18
8.7 Express Negligence..............................................................................18
ARTICLE 9
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS, WARRANTIES AND AGREEMENTS..............................................................19
ARTICLE 10
TERMINATION......................................................................................................19
10.1 Termination.....................................................................................19
10.2 Liability Upon Termination......................................................................20
10.3 Notice of Termination...........................................................................20
ARTICLE 11
DEFINITIONS OF CERTAIN TERMS.....................................................................................20
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ARTICLE 12
MISCELLANEOUS....................................................................................................23
12.1 Spousal Consent.................................................................................23
12.2 Expenses........................................................................................23
12.3 Notices.........................................................................................23
12.4 Arbitration.....................................................................................24
12.5 Successors......................................................................................25
12.6 Entire Agreement................................................................................25
12.7 Governing Law...................................................................................25
12.8 Waiver..........................................................................................25
12.9 Severability....................................................................................25
12.10 No Third Party Beneficiaries....................................................................25
12.11 Counterparts....................................................................................25
12.12 Headings........................................................................................25
12.13 Negotiated Transaction..........................................................................25
LIST OF DISCLOSURE SCHEDULES
Section 1.1 - Transferred Assets
Section 2.5 - Contracts and Commitments
Section 2.7 - Litigation
Section 2.8 - Product Warranties
Section 2.10 - Insurance
EXHIBITS
Exhibit A - Form of Inventory Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered
into as of May 17, 1999, by and among Texas Pipe Works, Inc., a Texas
corporation (the "Seller"), ▇▇▇▇ ▇▇▇▇▇▇, ▇▇., the sole shareholder of the
Seller (the "Shareholder"), Grant Prideco, Inc., a Delaware corporation (the
"Buyer"), and ▇▇▇▇▇▇▇▇▇▇▇ International, Inc., a Delaware corporation
("Weatherford").
WITNESSETH:
WHEREAS, the Seller desires to transfer to the Buyer the Transferred
Assets, and the Buyer desires to acquire such Transferred Assets, all upon the
terms and subject to the conditions set forth herein; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and agreements, all as more fully set forth below.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Transferred Assets.
(a) Subject to the terms and conditions of this Agreement and
in consideration of the obligations of the Buyer herein, at the Closing, the
Seller shall sell, assign, transfer, grant, bargain, deliver and convey to the
Buyer, free and clear of all Liens, the Seller's entire right, title and
interest in and to the machinery and equipment listed in Section 1.1 of the
Disclosure Schedule (the "Transferred Assets"). Nothing herein shall be deemed
to be a sale or conveyance, or an agreement to sell or convey, any assets of
the Seller except for the Transferred Assets. The Seller also shall assign all
orders from customers relating to oilfield couplings as of the Closing Date
that are not yet in production as of the Closing Date (the "Orders") to an
Affiliate of the Buyer pursuant to Section 5.3 hereof. The Seller agrees that
all orders from customers relating to oilfield couplings as of the Closing Date
that are in production as of the Closing Date (the "Orders in Production")
shall be completed by the Seller within 20 days of the Closing Date. Any Orders
in Production that are not completed within such 20-day period shall be deemed
to be "Orders" and shall be transferred pursuant to the Inventory Agreement.
(b) The Seller shall use its best efforts to obtain such
consents of third parties as are necessary for the assignment of the
Transferred Assets. To the extent that any of the Transferred Assets are not
assignable by the terms thereof or consents to the assignment thereof cannot be
obtained as provided herein, the Transferred Assets shall be held by the Seller
in trust for the Buyer and shall be performed by the Buyer in the name of the
Seller and all benefits and obligations derived thereunder shall be for the
account of the Buyer; provided, however, that where entitlement of the Buyer to
such Transferred Assets hereunder is not recognized by any third party, the
Seller shall, at the request of the Buyer, enforce in a reasonable manner, at
the cost of and for the account of the Buyer, any and all rights of the Seller
against such third party.
(c) On or prior to the Closing Date, the Seller shall notify
each Person which may have possession of any of the Transferred Assets at the
Closing Date, whether by consignment or otherwise, of the transfer of such
Transferred Assets to the Buyer.
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1.2 Closing. Subject to the conditions set forth in this Agreement,
the closing shall take place at the offices of the Buyer, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, at 9:00 a.m. on May 27, 1999, or at such other time,
date or place as the parties hereto shall mutually agree upon in writing (the
"Closing Date"). Failure to consummate the transactions contemplated hereby on
such date shall not result in a termination of this Agreement or relieve any
party hereto of any obligation hereunder unless otherwise terminated in
accordance with Article 10 of this Agreement. Title to, ownership of, control
over and risk of loss of the Transferred Assets shall pass to the Buyer at the
Closing.
1.3 Purchase Price. In consideration of the transfer to the Buyer of
the Transferred Assets and the other covenants of the Seller contained herein,
the Buyer shall, on the Closing Date, pay to the Seller, or to any Person
designated by the Seller on the Seller's behalf, an aggregate amount equal to
$980,000 in immediately available funds by wire transfer to a bank account or
accounts to be designated by the Seller (the "Cash Payment"). In consideration
of the covenants of the Shareholder contained in Section 5.9, the Buyer shall,
on the Closing Date, cause ▇▇▇▇▇▇▇▇▇▇▇ to issue to the Shareholder the
▇▇▇▇▇▇▇▇▇▇▇ Shares. The Cash Payment and the ▇▇▇▇▇▇▇▇▇▇▇ Shares are herein
collectively referred to as the "Purchase Price".
1.4 Liabilities Not Assumed by the Buyer. The Seller shall pay and
discharge in due course all liabilities, debts and obligations relating to the
Seller and the Transferred Assets, whether known or unknown, now existing or
hereafter arising, contingent or liquidated, including, without limitation, (i)
any Tax liabilities pertaining to any of the Transferred Assets, the Seller or
its business for periods prior to and including the Closing Date, (ii) any Debt
Obligations, (iii) all liabilities and obligations relating to any products
manufactured, sold or distributed or services provided by or on behalf of the
Seller or with respect to any claims made by any Person in connection with
products manufactured, sold or distributed or services provided by or on behalf
of the Seller, (iv) all Pre-Closing Obligations and (v) all liabilities and
obligations of any Person related to the conduct or operation of the
Transferred Assets or the Seller's business on or prior to the Closing Date
(collectively, the "Retained Liabilities"), and the Buyer shall not assume, or
in any way be liable or responsible for, any of such Retained Liabilities.
1.5 Transfer Taxes; Recording Fees. The Buyer and the Seller
acknowledge and agree that the Purchase Price includes and is inclusive of any
and all sales, use, transfer or other similar Taxes imposed as a result of the
consummation of the transactions contemplated by this Agreement, and the Seller
and the Shareholder hereby jointly and severally agree to indemnify the Buyer
against, and agree to protect, save and hold the Buyer harmless from, any loss,
liability, obligation or claim (whether or not ultimately successful) for
sales, use, transfer or other similar Taxes (and any interest, penalties,
additions to tax and fines thereon or related thereto) imposed as a result of
the consummation of the transactions contemplated by this Agreement, including,
without limitation, any liability to which any of the parties may become
subject as a result of the fact that the transactions contemplated by this
Agreement are effected without compliance with the bulk sales provisions of the
Uniform Commercial Code as in effect in any state or any similar statute as
enacted in any jurisdiction. The Buyer shall pay any and all recording, filing
or other fees relating to the conveyance or transfer of the Transferred Assets
from the Seller to the Buyer.
1.6 Allocation of Purchase Price. The Cash Payment shall be allocated
among the Transferred Assets by the Buyer in its sole discretion. The
▇▇▇▇▇▇▇▇▇▇▇ Shares shall be allocated to the covenants of the Shareholder
contained in Section 5.9.
1.7 Prorations of Certain Expenses and Property Taxes. The Seller and
the Shareholder warrant that the Transferred Assets are not, and on the Closing
Date will not be, subject to or liable for any special assessments or similar
types of impositions. Any general property Tax assessed against or pertaining
to the Transferred Assets for the taxable period that includes the Closing Date
shall be prorated between the Buyer and the Seller as of the Closing Date. In
the event the amount of any such general property Tax cannot be ascertained as
of the Closing Date, proration shall be made on the basis of the preceding
year, the Buyer shall
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receive a credit against the Cash Payment on the Closing Date for the Seller's
pro rata portion of such general property Taxes, and to the extent that such
proration may be inaccurate, the Seller and the Buyer agree to make such
payment to the other after the tax statements have been received as is
necessary to allocate such general property Tax properly between the Seller and
the Buyer as of the Closing Date.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE SHAREHOLDER
The Seller and the Shareholder hereby jointly and severally represent
and warrant to the Buyer and ▇▇▇▇▇▇▇▇▇▇▇ and agree as follows:
2.1 Corporate Matters. The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Texas. The
Seller is duly authorized, qualified and licensed and has all requisite power
and authority under all applicable laws, ordinances and orders of public
authorities to own, operate and lease its properties and assets and to carry on
its business in the places and in the manner currently conducted. The Seller
has all requisite corporate power and authority to enter into this Agreement
and to perform its obligations under this Agreement. The Shareholder has all
requisite legal capacity, power and authority to enter into this Agreement and
to perform his obligations under this Agreement.
2.2 Validity of Agreement and Conflict with Other Instruments.
(a) This Agreement, and all transactions contemplated hereby,
have been duly authorized and approved by the board of directors and the
Shareholder. No further corporate action is necessary on the part of the Seller
to execute and deliver this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
each of the Seller and the Shareholder and is a legal, valid and binding
obligation of the Seller and the Shareholder enforceable against them in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
from time to time in effect that affect creditors' rights generally and by
legal and equitable limitations on the availability of specific remedies.
(b) The execution, delivery and performance of this Agreement
and the other agreements and documents to be delivered by each of the Seller
and the Shareholder to the Buyer, the consummation of the transactions
contemplated hereby or thereby, and the compliance with the provisions hereof
or thereof, by each of the Seller and the Shareholder will not, with or without
the passage of time or the giving of notice or both: (i) conflict with,
constitute a breach, violation or termination of any provision of, or give rise
to any right of termination, cancellation or acceleration, or loss of any right
or benefit or both, under, any of the Orders or the Orders in Production; (ii)
conflict with or violate the articles of incorporation or by-laws of the
Seller; (iii) result in the creation or imposition of any Lien on any of the
Transferred Assets; (iv) violate any law, statute, ordinance, regulation,
judgment, writ, injunction, rule, decree, order or any other restriction of any
kind or character applicable to the Seller or the Shareholder or any of their
respective properties or assets; or (v) conflict with, constitute a breach,
violation or termination of any agreement or understanding, whether written or
otherwise, to which either of the Seller or the Shareholder is a party or by
which it or he is bound.
2.3 Approvals, Licenses and Authorizations.
(a) No order, license, consent, waiver, authorization or
approval of, or exemption by, or the giving of notice to, or the registration
with, or the taking of any other action in respect of, any Person not a party
to this Agreement, including any Governmental Entity, and no filing, recording,
publication or registration in any public office or any other place is now, or
under existing law in the future will be,
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necessary on behalf of the Seller or the Shareholder to authorize the
execution, delivery and performance of this Agreement or any other agreement
contemplated hereby to be executed and delivered by the Seller or the
Shareholder and the consummation of the transactions contemplated hereby or
thereby (including, but not limited to, assignment of the Transferred Assets),
or to effect the legality, validity, binding effect or enforceability thereof.
(b) All licenses, permits, concessions, warrants, franchises
and other governmental authorizations and approvals of all Governmental
Entities required or necessary for the Seller to carry on its business in the
places and in the manner currently conducted have been duly obtained and are in
full force and effect. No violations are in existence or have been recorded
with respect to such licenses, permits or other authorizations and no
proceeding is pending or, to the best knowledge of the Seller and the
Shareholder, threatened with respect to the revocation or limitation of any of
such licenses, permits or other authorizations. The Seller has complied with
all laws, rules, regulations and orders applicable to its business, and all
rules, regulations and orders respecting the provision of products and services
by the Seller.
2.4 Title to and Condition of Properties. All of the Transferred
Assets are set forth in Section 1.1 of the Disclosure Schedule. All of the
Transferred Assets are in the Seller's possession and control. The Seller has,
or will have as of the Closing, good and marketable title to all of the
Transferred Assets free and clear of all Liens. Other than the warranties set
forth herein, the Buyer acknowledges that the Transferred Assets will be sold
on an "AS IS, WHERE IS, WITH FAULTS" BASIS, WITHOUT ANY WARRANTIES, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OF INCOME
POTENTIAL.
2.5 Contracts and Commitments.
(a) Except as set forth in Section 2.5 of the Disclosure
Schedule, none of the Transferred Assets is subject to: (i) any agreement,
contract or commitment requiring the expenditure or series of related
expenditures of funds in excess of $5,000 (other than purchase orders in the
ordinary course of business necessary for the Seller to complete the Orders or
the Orders in Production); (ii) any agreement, contract or commitment requiring
the payment for goods or services whether or not such goods or services are
actually provided or the provision of goods or services at a price less than
the Seller's cost of producing such goods or providing such services; (iii) any
loan or advance to, or investment in, any Person or any agreement, contract,
commitment or understanding relating to the making of any such loan, advance or
investment; (iv) any Debt Obligations; (v) any agreement, contract or
commitment that would limit the freedom of the Buyer or any of its Affiliates
following the Closing Date to engage in any line of business, to own, operate,
sell, transfer, pledge or otherwise dispose of or encumber any of the
Transferred Assets or to compete with any Person or to engage in any business
or activity in any geographic area; (vi) any agreement, lease, contract or
commitment or series of related agreements, leases, contracts or commitments
not entered into in the ordinary course of Seller's business, (vii) any
agreement or contract obligating the Seller or that would obligate or require
any subsequent owner of any of the Transferred Assets to provide for
indemnification or contribution with respect to any matter; (viii) any sales,
distributorship or similar agreement relating to the products sold or services
provided by the Seller; or (ix) any license, royalty or similar agreement.
(b) The Seller is not, and as of the Closing Date will not
be, in breach of any provision of, or in default (and neither the Seller nor
the Shareholder has any knowledge of any event or circumstance that with
notice, or lapse of time or both, would constitute an event of default) under
the terms of any of the Orders or Orders in Production. All of the Orders and
Orders in Production are, in full force and effect. Neither the Seller nor the
Shareholder is aware of any pending or threatened disputes with respect to any
of the Orders or Orders in Production. The enforceability of the Orders and
Orders in Production will not be affected in any manner by the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby. Seller will use its best efforts to ensure that all of the Orders and
Orders
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in Production remain in full force and effect and agrees to immediately provide
Buyer notice if any Order or Order in Production is canceled.
2.6 Taxes.
(a) All Tax Returns that are required to be filed (taking
into account all extensions) on or before the Closing Date for, by, on behalf
of or with respect to the Seller, including, but not limited to, those relating
to the Seller's business and the Transferred Assets, and those which include or
should include the Seller or the Transferred Assets, have been or will be
timely filed with the appropriate foreign, federal, state and local authorities
on or before the Closing Date, and all Taxes shown to be due and payable on
such Tax Returns or related to such Tax Returns have been or will be timely
paid in full on or before the Closing Date.
(b) None of such Tax Returns are now under audit or
examination by any foreign, federal, state or local authority and there are no
agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment or collection of any Tax or deficiency of any
nature against the Seller, its business or the Transferred Assets, or with
respect to any such Tax Return, or any suits or other actions, proceedings,
investigations or claims now pending or threatened against the Seller, its
business or the Transferred Assets with respect to any Tax, or any matters
under discussion with any foreign, federal, state or local authority relating
to any Tax, or any claims for any additional Tax asserted by any such
authority.
2.7 No Litigation. Except as set forth in Section 2.7 of the
Disclosure Schedule, there is no action, suit, claim, judgment, investigation
or legal, administrative, arbitration or other proceeding, or governmental
investigation or examination, pending or, to the knowledge of each of the
Seller and the Shareholder, threatened against or affecting the Seller or any
of the Transferred Assets, at law or in equity, before or by any Governmental
Entity and, to the best knowledge of each of the Seller and the Shareholder, no
basis exists for any such action, suit, claim, investigation or proceeding.
2.8 Warranties and Product Liability.
(a) Except for (i) warranties implied by law and (ii)
warranties disclosed in Section 2.8 of the Disclosure Schedule, the Seller has
not given or made any warranties in connection with the sale or rental, if any,
of goods or services on or prior to the Closing, including, without limitation,
warranties covering the customer's consequential damages. Neither the Seller
nor the Shareholder is aware of any state of facts or the occurrence of any
event forming the basis of any present claim against the Seller with respect to
warranties relating to products manufactured, sold or distributed by the Seller
or services performed by or on behalf of the Seller on or prior to the Closing.
(b) To the knowledge of each of the Seller and the
Shareholder, there is no state of facts or any event forming the basis of any
present claim against the Seller, its business or the Transferred Assets not
fully covered by insurance, except for deductibles and self-insurance
retentions, for personal injury or property damage alleged to be caused by
products shipped or services rendered by or on behalf of the Seller.
2.9 Finder's Fees. None of the Seller or the Shareholder or any of
their respective Affiliates has employed or retained any investment banker,
broker, agent, finder or other party, or incurred any obligation for brokerage
fees, finder's fees or commissions, with respect to the sale by the Seller of
any of the Transferred Assets or with respect to the transactions contemplated
by this Agreement, or otherwise dealt with anyone purporting to act in the
capacity of a finder or broker with respect thereto whereby any party hereto
may be obligated to pay such a fee or commission. The Seller and the
Shareholder agree to indemnify and hold the Buyer and its Affiliates harmless
from and against any and all claims, liabilities or obligations
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with respect to all fees, commissions or expenses asserted by any Person on the
basis of any act, statement, agreement or commitment alleged to have been made
by the Seller or the Shareholder or any Affiliate of the Seller or the
Shareholder with respect to any such fee, commission or expense.
2.10 Insurance. Section 2.10 of the Disclosure Schedule sets forth all
existing insurance policies held by the Seller relating to the Transferred
Assets. Each such policy is in full force and effect and is with responsible
insurance carriers. There is no dispute with respect to such policies, and all
claims arising from events or circumstances occurring prior to the date hereof
have been paid in full or adequate reserves therefor are recorded in the
Financial Statements.
2.11 Securities Law Matters.
(a) The Shareholder recognizes and understands that the
▇▇▇▇▇▇▇▇▇▇▇ Shares to be issued to the Shareholder (the "securities") will not,
except as expressly provided in Article 4, be registered under the Securities
Act, or under the securities laws of any state (the "securities laws"). The
securities are not being so registered in reliance upon exemptions from the
Securities Act and the securities laws which are predicated, in part, on the
representations, warranties and agreements of the Shareholder contained herein.
(b) The Shareholder represents and warrants that (i) the
Shareholder has business knowledge and experience, such experience being based
on actual participation therein, (ii) the Shareholder is capable of evaluating
the merits and risks of an investment in the ▇▇▇▇▇▇▇▇▇▇▇ Shares and the
suitability thereof as an investment therefor, (iii) the ▇▇▇▇▇▇▇▇▇▇▇ Shares
will be acquired by the Shareholder solely for investment and not with a view
toward resale or redistribution in violation of the securities laws, (iv) the
Shareholder is an individual whose principal residence is in Longview, Texas,
(v) in connection with the transactions contemplated hereby, no assurances have
been made concerning the future results of the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ or as to
the value of the Weatherford Shares and (vi) the Shareholder is an "accredited
investor" within the meaning of Regulation D promulgated by the Commission
pursuant to the Securities Act. The Shareholder understands that neither
▇▇▇▇▇▇▇▇▇▇▇ nor the Buyer is under any obligation to file a registration
statement or to take any other action under the securities laws with respect to
any such securities except as expressly set forth in Article 4 hereof.
(c) The Shareholder has consulted with his own counsel in
regard to the securities laws and are fully aware (i) of the circumstances
under which the Shareholder is required to hold the securities, (ii) of the
limitations on the transfer or disposition of the securities, (iii) that the
securities must be held indefinitely unless the transfer thereof is registered
under the securities laws or an exemption from registration is available and
(iv) that no exemption from registration is likely to become available for at
least one year from the date of acquisition of the securities. The Shareholder
has been advised by his counsel as to the provisions of Rules 144 and 145 as
promulgated by the Commission under the Securities Act and have been advised of
the applicable limitations thereof. The Shareholder acknowledges that
▇▇▇▇▇▇▇▇▇▇▇ and the Buyer are relying upon the truth and accuracy of the
representations and warranties in this Section 2.11 by the Shareholder in
consummating the transactions contemplated by this Agreement without
registering the securities under the securities laws.
(d) The Shareholder has been furnished with the SEC
Documents. The Shareholder has been furnished with a summary description of the
terms of this Agreement, the ▇▇▇▇▇▇▇▇▇▇▇ Shares and ▇▇▇▇▇▇▇▇▇▇▇, and the Buyer
and ▇▇▇▇▇▇▇▇▇▇▇ have made available to the Shareholder the opportunity to ask
questions and receive answers concerning the terms and conditions of the
transactions contemplated by this Agreement and to obtain any additional
information which they possess or could reasonably acquire for the purpose of
verifying the accuracy of information furnished to the Shareholder as set forth
herein or for the purpose of considering the transactions contemplated hereby.
▇▇▇▇▇▇▇▇▇▇▇ has offered to make available
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to the Shareholder upon request at any time all exhibits filed by ▇▇▇▇▇▇▇▇▇▇▇
with the Commission as part of any of the reports filed therewith.
(e) The Shareholder agrees that the certificates representing
the ▇▇▇▇▇▇▇▇▇▇▇ Shares will be imprinted with the following legend, the terms
of which are specifically agreed to:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON EXEMPTIONS
FROM REGISTRATION REQUIREMENTS. WITHOUT SUCH REGISTRATION, SUCH SHARES
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED,
EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED FOR SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER OR THE
SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH SALE, PLEDGE,
HYPOTHECATION OR TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933 OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.
The Shareholder understands and agrees that appropriate stop transfer notations
will be placed in the records of ▇▇▇▇▇▇▇▇▇▇▇ and with its transfer agents in
respect of the securities which are to be issued to the Shareholder.
▇▇▇▇▇▇▇▇▇▇▇ agrees that any ▇▇▇▇▇▇▇▇▇▇▇ Shares sold pursuant to an effective
registration statement, including a registration statement filed pursuant to
Article 4 hereof, shall have the above legend removed to permit the closing of
the sale within three Business Days of written notice of the sale and
certification by the Shareholder that the sale was made pursuant to the plan of
distribution described in the registration statement and the prospectus
delivery requirements under the Securities Act were fully complied with in
connection with the sale.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER AND ▇▇▇▇▇▇▇▇▇▇▇
The Buyer and ▇▇▇▇▇▇▇▇▇▇▇ jointly and severally represent and warrant
to the Seller and the Shareholder as follows:
3.1 Corporate Matters. The Buyer and ▇▇▇▇▇▇▇▇▇▇▇ are corporations
validly existing and in good standing under the laws of Delaware. Each of
▇▇▇▇▇▇▇▇▇▇▇ and the Buyer has all requisite power and authority to enter into
this Agreement and to perform its obligations under this Agreement. This
Agreement has been duly authorized, executed and delivered by each of
▇▇▇▇▇▇▇▇▇▇▇ and the Buyer and is a legal, valid and binding obligation of each
of ▇▇▇▇▇▇▇▇▇▇▇ and the Buyer, enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations on
the availability of specific remedies.
3.2 Approvals, Licenses and Authorizations. Except as contemplated by
this Agreement, no order, license, consent, waiver, authorization or approval
of, or exemption by, or the giving of notice to, or the registration with, or
the taking of any other action in respect of, any Person not a party to this
Agreement, including any Governmental Entity, and no filing, recording,
publication or registration in any public office or any other place is now, or
under existing law in the future will be, necessary on behalf of the Buyer or
▇▇▇▇▇▇▇▇▇▇▇ to authorize its execution, delivery and performance of this
Agreement or any other agreement
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contemplated hereby to be executed and delivered by the Buyer or ▇▇▇▇▇▇▇▇▇▇▇
and the consummation by the Buyer and ▇▇▇▇▇▇▇▇▇▇▇ of the transactions
contemplated hereby or thereby, or to effect the legality, validity, binding
effect or enforceability thereof.
3.3 Authorization for the ▇▇▇▇▇▇▇▇▇▇▇ Shares. ▇▇▇▇▇▇▇▇▇▇▇ has taken,
or will have taken prior to Closing, all necessary action to permit it to issue
the ▇▇▇▇▇▇▇▇▇▇▇ Shares. The ▇▇▇▇▇▇▇▇▇▇▇ Shares issued pursuant to the terms of
this Agreement will be validly issued, fully paid and nonassessable and not
subject to preemptive rights. The ▇▇▇▇▇▇▇▇▇▇▇ Shares will be listed on the New
York Stock Exchange.
3.4 SEC Documents. Weatherford has made available to the Seller and
the Shareholder all of the SEC Documents. The SEC Documents represent each
report filed by ▇▇▇▇▇▇▇▇▇▇▇ with the Commission since March 30, 1999. As of
their respective dates, the SEC Documents (i) were prepared in all material
respects in accordance with the applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder
applicable to such documents and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading except for such statements, if any,
as have been modified by subsequent filing with the Commission prior to the
date hereof. The consolidated financial statements of ▇▇▇▇▇▇▇▇▇▇▇ included in
the SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of ▇▇▇▇▇▇▇▇▇▇▇ and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. Since December
31, 1998, other than as discussed in the SEC Documents, there has been no
material adverse change in the business of ▇▇▇▇▇▇▇▇▇▇▇ and its Subsidiaries,
taken as a whole.
ARTICLE 4
REGISTRATION RIGHTS
4.1 Registration Rights.
(a) ▇▇▇▇▇▇▇▇▇▇▇ will use its best efforts to register under
the Securities Act the ▇▇▇▇▇▇▇▇▇▇▇ Shares pursuant to a non-underwritten
offering having a period of distribution not to exceed one year from the
Closing Date. In furtherance of such obligation, ▇▇▇▇▇▇▇▇▇▇▇ shall file, within
30 Business Days after the Closing Date, with the Commission a registration
statement on the appropriate form seeking the registration for resale of the
▇▇▇▇▇▇▇▇▇▇▇ Shares (the "Registration Statement"), pursuant to a
non-underwritten offering in accordance with the plan of distribution described
therein. References in this Article 4 to the ▇▇▇▇▇▇▇▇▇▇▇ Shares shall be deemed
to include any shares of Common Stock or other securities received by the
Shareholder on account of any stock split, stock dividend or merger of
▇▇▇▇▇▇▇▇▇▇▇.
(b) Notwithstanding anything to the contrary contained in
this Section 4.1, ▇▇▇▇▇▇▇▇▇▇▇ shall not be obligated to prepare and file the
Registration Statement pursuant to this Section 4.1, or prepare or file any
amendment or supplement thereto, at any time when ▇▇▇▇▇▇▇▇▇▇▇ reasonably
believes that the filing thereof, or the offering of securities pursuant
thereto, would adversely affect a pending or proposed public offering of
securities of Weatherford, an acquisition, merger, recapitalization,
consolidation, reorganization or similar transaction relating to ▇▇▇▇▇▇▇▇▇▇▇ or
negotiations, discussions or pending proposals with respect thereto or require
premature disclosure of information not otherwise required to be disclosed to
the potential detriment of ▇▇▇▇▇▇▇▇▇▇▇.
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(c) Notwithstanding anything to the contrary contained in
this Section 4.1, ▇▇▇▇▇▇▇▇▇▇▇ shall be permitted, on written notice to the
Shareholder, to suspend the period of sale or distribution of the ▇▇▇▇▇▇▇▇▇▇▇
Shares at any time when ▇▇▇▇▇▇▇▇▇▇▇ reasonably believes that the sale or
distribution thereof would adversely affect a pending or proposed public
offering of securities of Weatherford, an acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction relating
to ▇▇▇▇▇▇▇▇▇▇▇ or negotiations, discussions or pending proposals with respect
thereto or require premature disclosure of information not otherwise required
to be disclosed to the potential detriment of ▇▇▇▇▇▇▇▇▇▇▇.
(d) The filing of the Registration Statement, or any
amendment or supplement thereto, by ▇▇▇▇▇▇▇▇▇▇▇ may not be deferred pursuant to
Section 4.1(b), and the sale and distribution of the ▇▇▇▇▇▇▇▇▇▇▇ Shares may not
be suspended pursuant to Section 4.1(c), for more than 60 days after the
abandonment or consummation (or the completion of the distribution of
securities in the case of a public offering) of any of the proposals or
transactions described therein or, in any event, for more than 120 days.
(e) The Shareholder agrees and covenants to fully cooperate
with and assist ▇▇▇▇▇▇▇▇▇▇▇ and its counsel and representatives in connection
with ▇▇▇▇▇▇▇▇▇▇▇'▇ obligations under this Article 4, including providing such
information as requested by ▇▇▇▇▇▇▇▇▇▇▇ in connection the preparation of the
Registration Statement and the resale of the ▇▇▇▇▇▇▇▇▇▇▇ Shares.
4.2 Procedure. ▇▇▇▇▇▇▇▇▇▇▇ will, subject to the provisions of
Sections 4.1, 4.2 and 4.4 hereof:
(a) seek to cause the Registration Statement to become and
remain effective;
(b) as expeditiously as reasonably practicable, prepare and
file with the Commission such amendments and supplements to the Registration
Statement and the prospectus used in connection therewith as may be necessary
to keep the Registration Statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of the ▇▇▇▇▇▇▇▇▇▇▇ Shares
covered by the Registration Statement in accordance with the intended method of
distribution set forth therein;
(c) as expeditiously as reasonably practicable, furnish to
the Shareholder such number of copies of prospectuses and preliminary
prospectuses in conformity with the requirements of the Securities Act, and
such other documents as the Shareholder may reasonably request, in order to
facilitate the public sale or other disposition of the ▇▇▇▇▇▇▇▇▇▇▇ Shares owned
by the Shareholder; provided, however, that the obligation of ▇▇▇▇▇▇▇▇▇▇▇ to
deliver copies of prospectuses or preliminary prospectuses to the Shareholder
shall be subject to the receipt by ▇▇▇▇▇▇▇▇▇▇▇ of reasonable assurances from
the Shareholder that it will comply with the applicable provisions of the
Securities Act and of such other securities laws as may be applicable in
connection with any use by it of any prospectuses or preliminary prospectuses;
(d) as expeditiously as practicable, use its best efforts to
register or qualify the ▇▇▇▇▇▇▇▇▇▇▇ Shares under such other securities laws of
such United States jurisdictions as the Shareholder shall reasonably request
(considering the nature and size of the offering) and do any and all other acts
and things which may be necessary or desirable to enable the Shareholder to
consummate the public sale or other disposition in such jurisdictions of the
▇▇▇▇▇▇▇▇▇▇▇ Shares; provided, however, that ▇▇▇▇▇▇▇▇▇▇▇ shall not be required
to qualify to transact business as a foreign corporation in any jurisdiction in
which it would otherwise not be required to be so qualified or to take any
action which would subject it to general service of process in any jurisdiction
in which it is not then so subject;
(e) bear all Registration Expenses (as defined below) in
connection with the registration hereunder; provided, however, that all Selling
Expenses (as defined below) of the ▇▇▇▇▇▇▇▇▇▇▇ Shares and all fees and
disbursements of Shareholder's counsel shall be borne by the Shareholder. For
purposes of this Section 4.2, expenses incurred by ▇▇▇▇▇▇▇▇▇▇▇ in complying
with this Agreement include (i) all registration
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and filing fees; (ii) all printing expenses, (iii) all fees and disbursements
of counsel for ▇▇▇▇▇▇▇▇▇▇▇, (iv) all blue sky fees and expenses, and (v) all
fees and expenses of accountants for ▇▇▇▇▇▇▇▇▇▇▇ are herein referred to as
"Registration Expenses". All brokerage and selling commissions and fees and
expenses of counsel for the Shareholder in connection with any such
registration or resale are herein referred to as "Selling Expenses"; and
(f) keep the registration pursuant to Section 4.1 hereof
effective for a period of up to one year following the Closing Date or such
shorter period of time until the transfer or sale of all the ▇▇▇▇▇▇▇▇▇▇▇ Shares
has been completed.
4.3 Indemnification.
(a) In the event of a registration of the ▇▇▇▇▇▇▇▇▇▇▇ Shares
under the Securities Act pursuant to this Agreement, ▇▇▇▇▇▇▇▇▇▇▇ will indemnify
and hold harmless the Seller and the Shareholder and any other Person, if any,
who controls the Seller or the Shareholder within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which the Seller or the Shareholder or such controlling Person
may become subject under the Securities 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, on the effective date thereof, in the Registration
Statement, any preliminary prospectus distributed with the consent of
▇▇▇▇▇▇▇▇▇▇▇ or final prospectus contained therein, or any amendment thereof or
supplement thereto, including all documents incorporated by reference therein,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will, unless ▇▇▇▇▇▇▇▇▇▇▇ assumes the
defense as provided in Section 4.3(c), promptly following request and receipt
of reasonable supporting documents, such as invoices, reimburse the Seller and
the Shareholder and each such controlling Person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that ▇▇▇▇▇▇▇▇▇▇▇ will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, such preliminary prospectus, such final prospectus
or such amendment or supplement, including all documents incorporated by
reference therein, in reliance upon and in conformity with written information
furnished to ▇▇▇▇▇▇▇▇▇▇▇ by or on behalf of the Seller or the Shareholder or a
controlling Person thereof specifically for use in the preparation thereof.
(b) In the event of any registration of the ▇▇▇▇▇▇▇▇▇▇▇
Shares under the Securities Act pursuant to this Agreement, the Seller and the
Shareholder will jointly and severally indemnify and hold harmless Weatherford
and the Buyer and each Person, if any, who controls ▇▇▇▇▇▇▇▇▇▇▇ or the Buyer
within the meaning of Section 15 of the Securities Act, each officer of
Weatherford who signs the Registration Statement, each director of ▇▇▇▇▇▇▇▇▇▇▇
and each Person who controls any underwriter (if any) within the meaning of
Section 15 of the Securities Act, against any and all such losses, claims,
damages, liabilities or actions which ▇▇▇▇▇▇▇▇▇▇▇ or such officer, director,
underwriter (if any) or controlling Person may become subject under the
Securities Act or otherwise, and will reimburse ▇▇▇▇▇▇▇▇▇▇▇, each such officer,
director, underwriter (if any) and controlling Person for any legal or any
other expenses reasonably incurred by such party in connection with
investigating or defending any such loss, claim, damage, liability or action,
if (i) such loss, claim, damage, liability or action in respect thereof arises
out of or is based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any such prospectus,
or any amendment thereof or supplement thereto, or arises out of or is based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
and such statement or omission of a material fact was made in reliance upon and
in conformity with written information furnished to ▇▇▇▇▇▇▇▇▇▇▇ by or on behalf
of the
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Seller or the Shareholder specifically for use in connection with the
preparation of the Registration Statement or prospectus or (ii) such loss,
claim, damage, liability or action in respect thereof arises out of or is based
upon the Seller's or the Shareholder's failure to deliver any required
prospectus or otherwise comply with applicable laws regarding the same.
(c) Promptly after receipt by any indemnified Person of
notice of any claim or commencement of any action in respect of which indemnity
is to be sought against an indemnifying Person pursuant to this Agreement, such
indemnified Person shall notify the indemnifying Person in writing of such
claim or of the commencement of such action, and, subject to provisions
hereinafter stated, in case any such action shall be brought against an
indemnified Person and such indemnifying Person shall have been notified of the
same, such indemnifying Person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified Person, and after notice from the
indemnifying Person to such indemnified Person of its election to assume the
defense thereof, such indemnifying Person shall not be liable to such
indemnified Person in connection with the defense thereof; provided, however,
if there exists or will exist a conflict of interest which would make it
inappropriate in the reasonable judgment of the indemnified Person for the same
counsel to represent both the indemnified Person and such indemnifying Person
then such indemnifying Person shall be entitled to retain its own counsel at
the expense of such indemnifying Person; provided further, however, the
indemnifying Person shall not be required to pay for more than one separate
counsel for all of the indemnified Persons in addition to any local counsel.
Payment of any amounts due pursuant to this Section 4.3 shall be made within
ten Business Days after notice is sent by the indemnified Person.
(d) If the indemnification provided for in this Article 4 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with the respect to the loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense, as well as, any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party should be determined by reference to, among others, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the indemnifying party
or the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement of omission.
4.4 Termination. If Rule 144 or Rule 145 as promulgated under the
Securities Act or any successor or similar rule or statute shall permit the
sale of the ▇▇▇▇▇▇▇▇▇▇▇ Shares, the rights of the Shareholder as to the
registration provided for in this Agreement as to the ▇▇▇▇▇▇▇▇▇▇▇ Shares shall
terminate immediately.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Access to Information.
(a) Until the Closing, the Seller will furnish the Buyer and
its employees, officers, accountants, attorneys, agents, investment bankers and
other authorized representatives with all financial, operating and other data
and information concerning the business, commitments and properties of the
Seller as the Buyer shall from time to time reasonably request and will afford
the Buyer and its employees, officers, accountants, attorneys, agents,
investment bankers and other authorized representatives reasonable access
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to the Seller's offices, properties, books, records, contracts and documents
and will be given the opportunity to ask questions of, and receive answers
from, representatives of the Seller with respect to the Transferred Assets. No
investigations by the Buyer or its employees, representatives or agents shall
reduce or otherwise affect the obligation or liability of the Seller with
respect to any representations, warranties, covenants or agreements made herein
or in any exhibit, schedule or other certificate, instrument, agreement or
document, including the Disclosure Schedule, executed and delivered in
connection with this Agreement. The Seller will cooperate with the Buyer and
its employees, officers, accountants, attorneys, agents and other authorized
representatives in the preparation of any documents or other materials that may
be required by any Governmental Entity.
(b) Notwithstanding any provision in this Agreement to the
contrary, if any party hereto learns between the date of this Agreement and the
Closing Date that any warranty or representation made by such party in this
Agreement or in any schedule, exhibit, certificate or document delivered
pursuant to the provisions in this Agreement, is no longer true, then such
party shall immediately give written notice ("Written Notice") to the other
party of such fact. The other party shall then have five days from the receipt
of the Written Notice to terminate this Agreement by providing the notifying
party with written notice ("Termination Notice") of its election to terminate
this Agreement. If the party to whom Written Notice was given fails to provide
the Termination Notice within five Business Days after the receipt of a Written
Notice, then such party shall be deemed to have waived its right to terminate
this Agreement with respect only to the items in the Written Notice and the
warranty or representation to which the Written Notice pertained shall be
deemed modified to include the information included in the Written Notice. If
no Written Notice is given before the Closing Date, all such representations
and warranties shall be deemed true and correct on the Closing Date.
(c) Each party hereto agrees to hold in confidence all, and
not to disclose to others for any reason whatsoever, any non-public information
received by it or its representatives from the other party hereto in connection
with the transactions contemplated by this Agreement except (i) as required by
law; (ii) for disclosure to officers, directors, employees and representatives
of such party as necessary in connection with the transactions contemplated
hereby or as necessary to the operation of such party's business; and (iii) for
information that becomes publicly available other than through such party. If
the transactions contemplated by this Agreement are not consummated, each party
hereto will return to the other party hereto all non-public documents and other
material obtained from the such other party hereto, and all copies, summaries
and extracts thereof, or certify to such other party hereto that such
information has been destroyed.
5.2 Storage of Transferred Assets. The Buyer shall have the right, for
a period of 90 days following the Closing Date, and for no additional
consideration other than the Purchase Price, to store the Transferred Assets at
the Seller's facilities in Navasota, Texas. During such 90-day period, the
Seller shall provide the Buyer reasonable access to such facilities to allow
the Buyer to relocate the Transferred Assets to the Buyer's facilities. The
Seller shall not be required to provide insurance for such stored items.
5.3 Inventory, Orders and Orders in Production. The Seller and the
Buyer agree to enter into an agreement, the form of which is attached hereto as
Exhibit A, as of the Closing Date whereby the Seller will sell certain
inventory to the Buyer or one of its Affiliates and will transfer all Orders
(the "Inventory Agreement"). All Orders in Production shall be completed by the
Seller within 20 days of the Closing Date.
5.4 Conduct of the Seller's Business. The Seller covenants and agrees
with the Buyer that from and after the date hereof until the Closing, except as
expressly authorized by this Agreement or as expressly consented to in writing
by the Buyer, the Seller shall:
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(a) operate its business and the Transferred Assets only in
the usual, regular and ordinary manner and, to the extent consistent
with such operation, will use all reasonable efforts to preserve
intact its present business organization, keep available the services
of its employees and preserve its relationship with its customers,
suppliers, jobbers, distributors and other Persons having business
relations with it;
(b) use all reasonable efforts to maintain the Transferred
Assets in a state of repair, order and condition consistent with its
usual past practice;
(c) maintain its books of account and records relating to its
business in the usual, regular and ordinary manner, in accordance with
the Seller's usual accounting practices applied on a consistent basis;
(d) comply in all respects with all statutes, laws, orders
and regulations applicable to it and to its business;
(e) not sell, assign, transfer, lease or otherwise dispose of
any of the Transferred Assets or sell, assign, trade, lease, rent or
otherwise dispose of any inventory or other assets of the Seller
outside of the ordinary course of business;
(f) not mortgage, pledge or otherwise create a security
interest in any of the Transferred Assets or permit there to be
created or exist any Liens thereon that would not be released upon the
transfer of the Transferred Assets to the Buyer pursuant to this
Agreement;
(g) not enter into any contract, commitment or lease in
relation to its business or the Transferred Assets that is out of the
ordinary course of business;
(h) not amend or modify any of the Orders or Orders in
Production;
(i) not consent to the termination of any of the Orders or
Orders in Production or waive any of the Seller's rights with respect
thereto;
(j) not permit any insurance policy naming it as a
beneficiary or a loss payee relating to its business or the
Transferred Assets to be canceled or terminated or any of the coverage
thereunder to lapse unless simultaneously with such termination or
cancellation replacement policies providing substantially the same
coverage are in full force and effect;
(k) pay when due all accounts payable, all payments required
with respect to any of the Orders or Orders in Production and all
Taxes other than Taxes that are being contested in good faith and for
which adequate reserves against the Transferred Assets exist and which
would not result in a Lien being imposed on any of the Transferred
Assets; and
(l) promptly notify the Buyer in writing if the Seller
becomes aware of any change that shall have occurred or that shall
have been threatened (or any development that shall have occurred or
that shall have been threatened involving a prospective change) in the
Seller's business or the Transferred Assets that would reasonably be
expected to have a material or adverse effect on the Seller's business
or the Transferred Assets whether or not occurring in the ordinary
course of business.
5.5 Negotiation with Others. The Seller agrees that from the date
hereof until the Closing Date or the termination of this Agreement pursuant to
Section 10.1, the Seller will not, directly or indirectly,
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solicit, encourage or negotiate with any Person not a party hereto or not
affiliated with a party hereto with respect to a merger, consolidation, asset
or stock purchase or any similar transaction with the Seller.
5.6 Information. During the period from the date of this Agreement to
the Closing Date, the Buyer and the Seller will promptly inform the other in
writing of any claim, action or any proceeding commenced against such party
with respect to the transactions contemplated by this Agreement or any assets
or property of the Seller or the Transferred Assets.
5.7 Delivery of Business Documents. At Closing, the Seller shall
deliver to the Buyer all Documents and Other Papers relating to the Transferred
Assets, copies of all insurance policies and all files relating thereto,
computer disks reflecting any books or records, documents or other papers, or
other information or data relating to the Transferred Assets stored on any
electronic media, including computers.
5.8 Further Assurances. The Seller shall execute, acknowledge and
deliver or cause to be executed, acknowledged and delivered to the Buyer such
bills of sale, assignments and other instruments of transfer, assignment and
conveyance, in form and substance reasonably satisfactory to counsel for the
Buyer and counsel for the Seller, as shall be necessary to vest in the Buyer
all the right, title and interest in and to the Transferred Assets free and
clear of all Liens (including the release of all Liens of record) and shall use
their best efforts to cause to be taken such other action as the Buyer
reasonably may require to more effectively implement and carry into effect the
transactions contemplated by this Agreement.
5.9 Covenant Not to Compete With its Business. As an inducement for
the Buyer to acquire the Transferred Assets, the Seller and Shareholder agree
that, effective as of the Closing Date and for a period of three years
thereafter, neither the Seller nor the Shareholder nor any of their respective
Affiliates shall, without the consent of the Buyer, directly or indirectly,
design, develop, market, produce, manufacture, sell, convert, trade, provide or
repair any oilfield coupling (whether API or not) products or provide services
related thereto in any geographical area of the world, or, except for the
benefit of the Buyer and its Affiliates, assist any Person to do the same;
provided, however, the foregoing shall not prohibit the Seller and the
Shareholder from participating in the coupled pipe trading business. The Seller
and the Shareholder acknowledge that a remedy at law for any breach or
attempted breach of this Section 5.9 will be inadequate and further agree that
any breach of this Section 5.9 will result in irreparable harm to the Buyer's
business and the Buyer shall, in addition to any other remedy that may be
available to it, be entitled to specific performance and injunctive and other
equitable relief in case of any such breach or attempted breach. The Seller and
the Shareholder acknowledge that this covenant not to compete is being provided
as an inducement to the Buyer to acquire the Transferred Assets and that this
Section 5.9 contains reasonable limitations as to time, geographical area and
scope of activity to be restrained that do not impose a greater restraint than
is necessary to protect the goodwill or other business interest of the Buyer.
Whenever possible, each provision of this Section 5.9 shall be interpreted in
such a manner as to be effective and valid under applicable law but if any
provision of this Section 5.9 shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of
this Section 5.9. If any provision of this Section 5.9 shall, for any reason,
be judged by any court of competent jurisdiction to be invalid or
unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this Section 5.9 but shall be confined in its operation to the
provision of this Section 5.9 directly involved in the controversy in which
such judgment shall have been rendered. In the event that the provisions of
this Section 5.9 should ever be deemed to exceed the time or geographic
limitations permitted by applicable laws, then such provision shall be reformed
to the maximum time or geographic limitations permitted by applicable law.
Notwithstanding the foregoing, nothing herein shall prevent the Seller or the
Shareholder from engaging in the manufacture, repair and sale of the current
VAM- look-alike coupling known as the HSC connection.
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5.10 Employee Matters. The Seller and the Buyer acknowledge and agree
that the Buyer has no obligation whatsoever to offer employment to any of the
employees of the Seller. All of the Seller's employees who are not employed by
the Buyer or one of its Affiliates immediately after the Closing Date shall
hereinafter be referred to as the "Seller Retained Employees". The Seller shall
be responsible and liable for any and all severance obligations with respect to
the Seller Retained Employees, including any COBRA obligations. The parties
hereto do not intend to create any third-party beneficiary rights respecting
any employee of the Seller as a result of the provisions hereof and
specifically hereby negate any such intention.
ARTICLE 6
BUYER'S AND ▇▇▇▇▇▇▇▇▇▇▇'▇ CONDITIONS
The obligation of the Buyer to purchase the Transferred Assets as
contemplated hereby is, at the option of the Buyer and ▇▇▇▇▇▇▇▇▇▇▇, subject to
the satisfaction on or before the Closing Date of the conditions set forth
below, any of which may be waived by the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ in writing;
provided, however, the Buyer's and ▇▇▇▇▇▇▇▇▇▇▇'▇ election to proceed with the
Closing shall not be deemed a waiver of any breach of any representation,
warranty or covenant herein, whether or not known to the Buyer or ▇▇▇▇▇▇▇▇▇▇▇
or existing on the Closing Date, and such action shall not prejudice the
Buyer's and ▇▇▇▇▇▇▇▇▇▇▇'▇ right to recover damages for any such breach.
6.1 Representations, Warranties and Covenants. The representations and
warranties of the Seller and the Shareholder contained in this Agreement shall
be true, correct and complete in all material respects on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made or given on and as of such date. Each and all of the
agreements and covenants of the Seller and the Shareholder to be performed or
complied with by it or him on or before the Closing Date pursuant to this
Agreement shall have been performed or complied with in all respects. The
Seller shall have delivered to the Buyer a certificate signed by one of its
duly authorized officers, and the Shareholder shall have signed and delivered a
certificate, dated the Closing Date regarding the matters set forth in this
Section 6.1.
6.2 Good Standing. The Seller shall have delivered to the Buyer a
certificate issued by appropriate Governmental Entities evidencing the good
standing of the Seller, as of a date not more than five calendar days prior to
the Closing Date, in the State of Texas. To the extent provided for under
applicable law, the Seller shall also have delivered to the Buyer certificates
or other writings issued by appropriate Governmental Entities evidencing that
all applicable franchise Taxes have been paid.
6.3 Instruments of Transfer. The Seller shall have executed,
acknowledged and delivered to the Buyer the Inventory Agreement and such other
bills of sale, assignments and other instruments of transfer, assignment and
conveyance, as shall be necessary to vest in the Buyer all the right, title and
interest in and to the Transferred Assets.
6.4 No Litigation. No preliminary or permanent injunction or other
order of any court or other Governmental Entity shall be in effect nor shall
there be in effect any statute, rule, regulation or executive order promulgated
or enacted by any Governmental Entity that, in any such case, prevents the
consummation of the transactions contemplated by this Agreement. No suit,
action, claim, proceeding or investigation before any Governmental Entity shall
have been commenced or threatened by any Person other than the Buyer or any of
its Affiliates seeking to prevent the sale of the Transferred Assets or
asserting that the sale of all or a portion of the Transferred Assets would be
unlawful.
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6.5 Licenses, Consents and Approvals. The Seller shall have delivered
to the Buyer a copy of each of the licenses, consents, approvals and other
authorizations from Governmental Entities necessary or appropriate for the
Seller to consummate the transactions contemplated by this Agreement.
6.6 Consents and Release of Liens. All Liens on the Transferred Assets
shall be released at Closing and satisfactory evidence of the release of the
Liens and the termination of any financing statements relating thereto shall be
provided to the Buyer at Closing. In this regard, the Seller may request the
Buyer to pay any portion of the Purchase Price to certain other Persons in
connection with the payment of any indebtedness and release of Liens on the
Transferred Assets.
6.7 Resolutions. The Seller shall have delivered to the Buyer
certified copies of resolutions of the board of directors of the Seller and the
Shareholder approving this Agreement and the transactions contemplated hereby.
6.8 ▇▇▇▇▇▇▇▇▇▇▇ Share Price. The average of the closing price per
share of the Common Stock for the five consecutive trading days ending on the
first Business Day immediately preceding the Closing Date, as reported by the
New York Stock Exchange, must equal or exceed $17.00 per share.
6.9 Schedule of Orders and Orders in Production. The Seller shall have
delivered to the Buyer, at least three Business Days prior to the Closing Date,
a schedule of all orders and orders in Production, together with copies of any
purchase orders, related thereto.
ARTICLE 7
SELLER'S AND SHAREHOLDER'S CONDITIONS
The obligation of the Seller to transfer the Transferred Assets as
contemplated hereby is, at the option of the Seller and the Shareholder,
subject to the satisfaction on or before the Closing Date of the conditions set
forth below, any of which may be waived by the Seller or the Shareholder in
writing; provided, however, the Seller's and the Shareholder's election to
proceed with the Closing shall not be deemed a waiver of any breach of any
representation, warranty or covenant herein, whether or not known to the Seller
or the Shareholder or existing on the Closing Date, and such action shall not
prejudice the Seller's and the Shareholder's right to recover damages for any
breach.
7.1 Representations and Warranties. The representations and warranties
of each of the Buyer and ▇▇▇▇▇▇▇▇▇▇▇ contained in this Agreement shall be true,
correct and complete in all material respects on and as of the Closing Date
with the same force and effect as though such representations and warranties
had been made or given on and as of such date; each and all of the agreements
and covenants of each of the Buyer and ▇▇▇▇▇▇▇▇▇▇▇ to be performed or complied
with by it on or before the Closing Date pursuant to this Agreement shall have
been performed or complied with in all respects; and each of the Buyer and
▇▇▇▇▇▇▇▇▇▇▇ shall have delivered to the Seller a certificate signed by an
authorized officer of each of the Buyer and ▇▇▇▇▇▇▇▇▇▇▇, dated the Closing
Date, regarding the matters set forth in this Section 7.1.
7.2 No Litigation. No preliminary or permanent injunction or other
order of any Governmental Entity shall be in effect nor shall there be any
statute, rule, regulation or executive order promulgated or enacted by any
Governmental Entity that, in any such case, prevents the consummation of the
transactions contemplated by this Agreement. No suit, action, claim, proceeding
or investigation before any court or other Governmental Entity shall have been
commenced or threatened by any Person other than the Seller or any of its
Affiliates seeking to prevent the sale of the Transferred Assets or asserting
that the sale of all or a portion of the Transferred Assets would be unlawful.
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7.3 Resolutions. Each of the Buyer and ▇▇▇▇▇▇▇▇▇▇▇ shall have
delivered to the Seller certified copies of resolutions of the board of
directors of the Buyer and ▇▇▇▇▇▇▇▇▇▇▇ approving this Agreement and the
transactions contemplated hereby.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Seller and the Shareholder. Except as
otherwise limited by this Article 8 and Article 9 hereof, the Seller and the
Shareholder jointly and severally agree to indemnify, defend and hold the
Buyer, ▇▇▇▇▇▇▇▇▇▇▇, each of their respective Affiliates and each of their
respective officers, directors, employees, agents, stockholders and controlling
Persons and their respective successors and assigns harmless from and against
and in respect of Damages actually suffered, incurred or realized by such party
(collectively, "Buyer Losses"), arising out of or resulting from or relating
to:
(a) any misrepresentation, breach of warranty or breach of
any covenant or agreement made or undertaken by the Seller or the Shareholder
in this Agreement or any misrepresentation in or omission from any other
agreement, certificate, exhibit or writing delivered to the Buyer or
▇▇▇▇▇▇▇▇▇▇▇ pursuant to this Agreement, including the Disclosure Schedule; or
(b) any Retained Liability.
Notwithstanding the foregoing, the Seller and the Shareholder shall not be
liable under clause (a) of this Section 8.1 with respect to a misrepresentation
or breach of warranty unless and until the aggregate amount of any Buyer Losses
for which Buyer and ▇▇▇▇▇▇▇▇▇▇▇ are entitled to indemnification pursuant to
such clause from all such Persons exceeds $10,000; provided, however, (i)
liability under clause (b) of this Section 8.1 shall not be so limited and (ii)
liability under clause (a) of this Section 8.1 shall not be so limited if such
Buyer Losses arise from a breach of any of the representations set forth in
Sections 2.1, 2.2, 2.4, 2.6, 2.8, 2.9 or 2.11. For purposes of determining the
Buyer's and ▇▇▇▇▇▇▇▇▇▇▇'▇ right to indemnification for a misrepresentation or
breach of warranty made by the Seller or the Shareholder in this Agreement, all
such representations and warranties that have been made subject to a
materiality qualification shall be deemed to have been made without that
qualification, it being understood that the threshold provided for in the
previous sentence is intended to be the only materiality qualification for
purposes of indemnification. The aggregate liability of the Seller and the
Shareholder under Section 8.1(a) for Buyer Losses arising from a breach of the
representations set forth in this Agreement shall be limited to the Purchase
Price.
8.2 Indemnification by the Buyer and ▇▇▇▇▇▇▇▇▇▇▇. Except as otherwise
limited by this Article 8 and Article 9 hereof, the Buyer and ▇▇▇▇▇▇▇▇▇▇▇
jointly and severally agree to indemnify, defend and hold the Seller, the
Shareholder and each of their respective officers, directors, employees,
agents, shareholders and controlling Persons and successors and assigns
harmless from and against and in respect of Damages actually suffered, incurred
or realized by such party (collectively, "Seller Losses"), arising out of or
resulting from any misrepresentation, breach of warranty or breach of any
covenant or agreement made or undertaken by the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ in this
Agreement or any misrepresentation in or omission from any other agreement,
certificate, exhibit or writing delivered to the Seller or the Shareholder
pursuant to this Agreement.
8.3 Procedure. All claims for indemnification under this Article 8
shall be asserted and resolved as follows:
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(a) An Indemnitee shall promptly give the Indemnitor notice
of any matter which an Indemnitee has determined has given or could give rise
to a right of indemnification under this Agreement, stating the amount of the
Losses, if known, and method of computation thereof, all with reasonable
particularity, and stating with particularity the nature of such matter.
Failure to provide such notice shall not affect the right of the Indemnitee to
indemnification except to the extent such failure shall have resulted in
liability to the Indemnitor that could have been actually avoided had such
notice been provided within such required time period.
(b) The obligations and liabilities of an Indemnitor under
this Article 8 with respect to Losses arising from claims of any third party
that are subject to the indemnification provided for in this Article 8 ("Third
Party Claims") shall be governed by and contingent upon the following
additional terms and conditions: if an Indemnitee shall receive notice of any
Third Party Claim, the Indemnitee shall give the Indemnitor prompt notice of
such Third Party Claim and the Indemnitor may, at its option, assume and
control the defense of such Third Party Claim at the Indemnitor's expense and
through counsel of the Indemnitor's choice reasonably acceptable to Indemnitee.
In the event the Indemnitor assumes the defense against any such Third Party
Claim as provided above, the Indemnitee shall have the right to participate at
its own expense in the defense of such asserted liability, shall cooperate with
the Indemnitor in such defense and will attempt to make available on a
reasonable basis to the Indemnitor all witnesses, pertinent records, materials
and information in its possession or under its control relating thereto as is
reasonably required by the Indemnitor. In the event the Indemnitor does not
elect to conduct the defense against any such Third Party Claim, the Indemnitor
shall pay all reasonable costs and expenses of such defense as incurred and
shall cooperate with the Indemnitee (and be entitled to participate) in such
defense and attempt to make available to it on a reasonable basis all such
witnesses, records, materials and information in its possession or under its
control relating thereto as is reasonably required by the Indemnitee. Except
for the settlement of a Third Party Claim that involves the payment of money
only and for which the Indemnitee is totally indemnified by the Indemnitor, no
Third Party Claim may be settled without the written consent of the Indemnitee
or the Indemnitor.
8.4 Payment. Payment of any amounts due pursuant to this Article 8
shall be made in United States dollars in immediately available funds by wire
transfer to a bank account or accounts to be designated by the Indemnitee
within ten Business Days after notice is sent by the Indemnitee.
8.5 Failure to Pay Indemnification. If and to the extent the
Indemnitee shall make written demand upon the Indemnitor for indemnification
pursuant to this Article 8 and the Indemnitor shall refuse or fail to pay in
full within ten Business Days of such written demand the amounts demanded
pursuant hereto and in accordance herewith, then the Indemnitee may utilize any
legal or equitable remedy to collect from the Indemnitor the amount of its
Losses. Nothing contained herein is intended to limit or constrain the
Indemnitee's rights against the Indemnitor for indemnity, the remedies herein
being cumulative and in addition to all other rights and remedies of the
Indemnitee.
8.6 Adjustment of Liability. The amount which an Indemnitee shall be
entitled to receive from an Indemnitor with respect to any indemnifiable Losses
under this Article 8 shall be net of any insurance recovery by the Indemnitee
on account of such Losses from an unaffiliated party.
8.7 Express Negligence. THE INDEMNITIES SET FORTH IN THIS ARTICLE 8
ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE
EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING TEXAS' EXPRESS NEGLIGENCE RULE
OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES
BECAUSE OF THE SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR
PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.
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ARTICLE 9
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
All statements of fact contained in any written statement (including
financial statements), certificate, instrument or document delivered by or on
behalf of the Seller or the Shareholder pursuant to this Agreement shall be
deemed representations and warranties of the Seller and the Shareholder. All
representations and warranties contained in this Agreement shall survive the
Closing Date and shall remain in full force and effect for a period of two
years following the Closing Date (except that the representations and
warranties set forth in Sections 2.1, 2.2, 2.4, 2.6, 2.8, 2.9, 2.11 and 3.1
shall survive the Closing Date without limitation) (the period during which the
representations and warranties shall survive being referred to herein with
respect to such representations and warranties as the "Survival Period"), and
shall be effective with respect to any inaccuracy therein or breach thereof
(and a claim for indemnification under Article 8 hereof may be made thereon) if
a written notice asserting the claim shall have been duly given in accordance
with Article 8 hereof within the Survival Period with respect to such matter.
All covenants and agreements contained herein shall survive without limitation.
Any claim for indemnification made pursuant to the terms of this Agreement
during the Survival Period shall be valid and the representations and
warranties relating thereto shall remain in effect for purposes of such
indemnification notwithstanding such claim may not be resolved within the
Survival Period. All representations, warranties and covenants and agreements
made by the parties shall not be affected by any investigation heretofore or
hereafter made by and on behalf of any of them and shall not be deemed merged
into any instruments or agreements delivered in connection with this Agreement
or otherwise in connection with the transactions contemplated hereby.
ARTICLE 10
TERMINATION
10.1 Termination. The obligation to close the transactions
contemplated by this Agreement may be terminated by:
(a) mutual agreement of the Buyer, ▇▇▇▇▇▇▇▇▇▇▇, the Seller
and the Shareholder:
(b) the Buyer or ▇▇▇▇▇▇▇▇▇▇▇, if a material default shall be
made in the observance or in the due and timely performance by the Seller or
the Shareholder of any agreements and covenants of such Person herein
contained, or if there shall have been a breach by such Person of any of the
warranties and representations of the Seller or the Shareholder herein
contained, and such default or breach has not been cured or has not been
waived;
(c) the Seller or the Shareholder , if a material default
shall be made by the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ in the observance or in the due and
timely performance by the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ of any agreements and covenants
of such Person herein contained, or if there shall have been a breach by such
Person of any of the warranties and representations of the Buyer or ▇▇▇▇▇▇▇▇▇▇▇
herein contained, and such default or breach has not been cured or has not been
waived;
(d) the Buyer or the Seller (provided the terminating party
has not materially breached any of its agreements, covenants or representations
and warranties) if the Closing shall not have occurred on or before June 30,
1999; or
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(e) by the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ if the condition set forth in
Section 6.8 has not been satisfied.
10.2 Liability Upon Termination. If the obligation to close the
transactions contemplated by this Agreement is terminated pursuant to any
provision of Section 10.1 or Section 5.1(b), then this Agreement shall
forthwith become void and there shall not be any liability or obligation with
respect to the terminated provisions of this Agreement on the part of the
Seller, the Shareholder, the Buyer or ▇▇▇▇▇▇▇▇▇▇▇ except and to the extent such
termination results from the willful breach by a party of any of its
representations, warranties or agreements hereunder and except that the
termination of this Agreement shall not relieve any party of its obligations
under Section 5.1(c), Article 8 (but only to the extent it applies to breaches
of the warranties made in Section 2.9) and Section 12.7.
10.3 Notice of Termination. The parties hereto may exercise their
respective rights of termination under Section 10.1 and Section 5.1(b) only by
delivering written notice to that effect to the other party or parties, and
such notice is received on or before the Closing Date.
ARTICLE 11
DEFINITIONS OF CERTAIN TERMS
In addition to terms defined elsewhere in this Agreement, the
following terms shall have the meanings assigned to them herein, unless the
context otherwise indicates, both for purposes of this Agreement and all
exhibits hereto and the Disclosure Schedule:
11.1 "Affiliate" shall mean, with respect to any specified Person, a
Person that, directly or indirectly, controls, is controlled by or is under
common control with such specified Person.
11.2 "Agreement" shall mean this Asset Purchase Agreement among the
Seller, the Shareholder, the Buyer and ▇▇▇▇▇▇▇▇▇▇▇, as amended from time to
time by the parties hereto, including the exhibits hereto and the Disclosure
Schedule.
11.3 "Average Closing Price" shall have the meaning given such term in
Section 11.33 hereof.
11.4 "Business Day" shall mean any day other than a Saturday, Sunday
or other day on which commercial banks in Houston, Texas are authorized by law
to close.
11.5 "Buyer" shall mean Grant Prideco, Inc., a Delaware corporation,
or one or more of its designees.
11.6 "Buyer Losses" shall have the meaning given such term in Section
8.1 hereof.
11.7 "Closing" shall mean the transfer by the Seller to the Buyer of
the Transferred Assets and the transfer by the Buyer to the Seller and the
Shareholder of the Purchase Price.
11.8 "Closing Date" shall have the meaning given such term in Section
1.2 hereof.
11.9 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or similar provisions of legislation replacing such law from
time to time.
11.10 "Common Stock" shall mean the common stock, par value $1.00 per
share, of ▇▇▇▇▇▇▇▇▇▇▇.
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11.11 "Damages" shall mean any and all liabilities, losses, demands,
assessments, claims, costs and expenses (including interest, awards, judgments,
penalties, settlements, fines, costs of remediation, diminutions in value,
costs and expenses incurred in connection with investigating and defending any
claims or causes of action (including, without limitation, attorneys' fees and
expenses and all fees and expenses of consultants and other professionals)).
11.12 "Debt Obligations" shall mean any contract, agreement,
indenture, note or other instrument relating to the borrowing of money or any
guarantee or other contingent liability in respect of any indebtedness or
obligation of any Person, including, without limitation, the carry value of all
capital leases and all non-current liabilities, including deferred income taxes
(other than the endorsement of negotiable instruments for deposit or collection
in the ordinary course of business)
11.13 "Disclosure Schedule" shall mean the disclosure schedule of even
date delivered to the Buyer. The Disclosure Schedule is a part of this
Agreement.
11.14 "Documents and Other Papers" shall mean and include any
document, agreement, instrument, certificate, writing, notice, consent,
affidavit, letter, telegram, telex, statement, file, computer disk, microfiche
or other document in electronic format, schedule, exhibit or any other paper or
record whatsoever.
11.15 "Governmental Entity" shall mean any arbitrator, court,
administrative or regulatory agency, commission, department, board or bureau or
body or other government or authority or instrumentality or any entity or
Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
11.16 "Indemnitee" shall mean the Person or Persons indemnified, or
entitled, or claiming to be entitled to be indemnified, pursuant to the
provisions of Section 8.1 or Section 8.2 hereof, as the case may be.
11.17 "Indemnitor" shall mean the Person or Persons having the
obligation to indemnify pursuant to the provisions of Section 8.1 or Section
8.2 hereof, as the case may be.
11.18 "Lien" shall mean any lien, pledge, claim, charge, security
interest or other encumbrance, option, defect or other rights of any third
Person of any nature whatsoever.
11.19 "Losses" shall mean Seller Losses or Buyer Losses, as the case
may be.
11.20 "Person" shall mean a corporation, an association, a
partnership, an organization, a business, an individual or a Governmental
Entity.
11.21 "Pre-Closing Obligations" shall mean all liabilities, debts and
obligations of the Seller or the Shareholder (including indemnification and
other contingent obligations) relating to (i) acts, events or omissions by any
Person or circumstances existing at or prior to the Closing, (ii) goods or
services provided to or for the benefit of the Seller or any of its Affiliates
prior to the Closing, (iii) goods or services manufactured or provided by or on
behalf of the Seller or any of its Affiliates or licensees prior to the
Closing, (iv) any pending or threatened litigation, claims or disputes made or
threatened prior to the Closing or any litigation, claims or disputes that
arise after Closing and relate in whole or in part to matters occurring on or
prior to Closing, (v) any Retained Liabilities, (vi) the conduct of the
Seller's business, the ownership or operation of the Transferred Assets or any
benefit realized by the Seller or the Shareholder prior to the Closing, (vii)
Debt Obligations of the Seller or the Shareholder, (viii) the employees of the
Seller under any contracts, agreements, arrangements or understandings with
such employees and all other obligations of the
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Seller or any of its Affiliates with respect to its employees, (ix) Taxes, (x)
any matters set forth in the Disclosure Schedule and (xi) any warranty or
product liability claims that are pending, threatened or hereafter arise,
relating to the Transferred Assets or the Orders in Production and any other
goods or services manufactured or provided by or on behalf of the Seller or its
Affiliates prior to the Closing.
11.22 "Purchase Price" shall have the meaning given such term in
Section 1.3 hereof.
11.23 "Retained Liabilities" shall have the meaning given such term in
Section 1.4 hereof.
11.24 "SEC Documents" shall mean ▇▇▇▇▇▇▇▇▇▇▇'▇ (a) Annual Report on
Form 10-K for the year ended December 31, 1998, (b) proxy statement with
respect to the Annual Meeting of Stockholders to be held on May 6, 1999, (c)
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1999,
and (d) Current Report on Form 8-K dated April 29, 1999.
11.25 "Securities Act" shall mean the Securities Act of 1933, as
amended.
11.26 "Seller" shall mean Texas Pipe Works, Inc., a Texas corporation.
11.27 "Seller Losses" shall have the meaning given such term in
Section 8.2 hereof.
11.28 "Taxes" shall mean all federal, state, local, foreign and other
taxes, charges, fees, duties, levies, imposts, customs or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, profit share, license,
lease, service, service use, value added, withholding, payroll, employment,
excise, estimated, severance, stamp, occupation, premium, property, windfall
profits, or other taxes, fees, assessments, customs, duties, levies, imposts,
or charges of any kind whatsoever, together with any interests, penalties,
additions to tax, fines or other additional amounts imposed thereon or related
thereto, and the term "Tax" means any one of the foregoing Taxes.
11.29 "Tax Returns" shall mean all returns, declarations, reports,
statements and other documents of, relating to, or required to be filed in
respect of, any and all Taxes, and the term "Tax Return" means any one of the
foregoing Tax Returns.
11.30 "Third Party Claims" shall have the meaning given such term in
Section 8.3(b) hereof.
11.31 "Transferred Assets" shall have the meaning given such term in
Section 1.1(a) hereof.
11.32 "US$", "dollar" or "$" shall mean United States dollars.
11.33 "Weatherford Shares" shall mean 59,200 shares of Common Stock;
provided, however, that if the average of the closing sales price per share of
the Common Stock for the five consecutive trading days ending on the third
Business Day immediately preceding the Closing Date, as reported by the New
York Stock Exchange (the "Average Closing Price"), is (i) less than $21.00, the
Weatherford Shares shall mean the number of shares of Common Stock equal to
$1,243,200 divided by the Average Closing Price, or (ii) more than $29.00, the
Weatherford Shares shall mean the number of shares of Common Stock equal to
$1,716,800 divided by the Average Closing Price.
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ARTICLE 12
MISCELLANEOUS
12.1 Spousal Consent. The spouse of the Shareholder is also executing
this Agreement. By executing this Agreement, she (a) acknowledges that she
knows of the contents of this Agreement, (b) consents to the entering into of
this Agreement by her spouse and (c) agrees that this Agreement shall be
binding upon her to the extent of her community property interest.
12.2 Expenses. Except as otherwise set forth herein, and whether or
not the transactions contemplated by this Agreement shall be consummated, each
party agrees to pay, without right of reimbursement from any other party, the
costs incurred by such party incident to the preparation and execution of this
Agreement and performance of its obligations hereunder, including without
limitation the fees and disbursements of legal counsel, accountants and
consultants employed by such party in connection with the transactions
contemplated by this Agreement.
12.3 Notices. All notices, requests, consents, directions and other
instruments and communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered in person, by courier, by overnight delivery service with proof of
delivery or by prepaid registered or certified United States first-class mail,
return receipt requested, addressed to the respective party at the address set
forth below, or if sent by facsimile or other similar form of communication
(with receipt confirmed) to the respective party at the facsimile number set
forth below:
If to the Seller or the Shareholder, to:
TEXAS PIPE WORKS, INC.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm: (▇▇▇) ▇▇▇-▇▇▇▇
Copies to:
▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Buyer, to:
GRANT PRIDECO, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm: (▇▇▇) ▇▇▇-▇▇▇▇
If to Weatherford, to:
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm: (▇▇▇) ▇▇▇-▇▇▇▇
Copies to:
FULBRIGHT & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Confirm: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or facsimile number and to the attention of such other
Person(s) as either party may designate by written notice. Any notice mailed
shall be deemed to have been given and received on the third Business Day
following the day of mailing.
12.4 Arbitration. In the event there shall exist any dispute or
controversy with respect to this Agreement or any matter relating hereto or the
transactions contemplated hereby, including, but not limited to Article 8, the
parties hereto agree to seek to resolve such dispute or controversy by mutual
agreement. If the parties hereto are unable to resolve such dispute or
controversy by agreement within 60 days following notice by any party hereto of
the nature of such dispute or controversy setting forth in reasonable detail
the circumstances and basis of such dispute or controversy, the parties agree
that such dispute or controversy be resolved by binding arbitration pursuant to
the provisions of this Section 12.4 and in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association. All
arbitration proceedings shall be held in Houston, Texas. If a party elects to
submit such matter to arbitration, such party shall provide notice to the other
party of its election to do so, which notice shall name one arbitrator. Within
10 days after the receipt of such notice, the other party shall provide written
notice to the electing party naming a second arbitrator. The two arbitrators so
appointed shall name a third arbitrator, or failing to do so, a third
arbitrator shall be appointed pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Each arbitrator selected to act hereunder
shall be qualified by education and experience to pass on the particular
question in dispute and shall be independent and not affiliated with any of the
parties hereto. The arbitrators shall resolve all disputes in controversy in
accordance with the Texas substantive law. All statutes of limitations that
would otherwise be applicable shall apply to any arbitration proceeding. The
arbitrators appointed pursuant to this Section 12.4 shall promptly hear and
determine (after due notice and hearing and giving the parties reasonable
opportunity to be heard) the questions submitted,
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and shall render their decision within 60 days after appointment of the third
arbitrator or as soon as practical thereafter. If within such period a decision
is not rendered by the board or a majority thereof, new arbitrators may be
named and shall act hereunder at the election of either party in like manner as
if none had previously been named. The decision of the arbitrators, or a
majority thereof, made in writing, shall absent manifest error be final and
binding upon the parties hereto as to the questions submitted, and each party
shall abide by such decision.
12.5 Successors. Except as specifically contemplated by this
Agreement, no party hereto shall assign this Agreement or any part hereof
without the prior written consent of the other parties; provided, however, the
Buyer may assign its rights and obligations in this Agreement to an Affiliate
of the Buyer. This Agreement shall inure to the benefit of, be binding upon and
be enforceable by the parties hereto and their respective successors and
assigns.
12.6 Entire Agreement. This Agreement and the exhibits hereto and the
Disclosure Schedule constitute the entire agreement and understanding between
the parties relating to the subject matter hereof and thereof and supersedes
all prior representations, endorsements, premises, agreements, memoranda
communications, negotiations, discussions, understandings and arrangements,
whether oral, written or inferred, between the parties relating to the subject
matter hereof. This Agreement may not be modified, amended, rescinded,
canceled, altered or supplemented, in whole or in part, except upon the
execution and delivery of a written instrument executed by a duly authorized
representative of each of the parties hereto.
12.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES.
12.8 Waiver. The waiver of any breach of any term or condition of this
Agreement shall not be deemed to constitute the waiver of any other breach of
the same or any other term or condition.
12.9 Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12.10 No Third Party Beneficiaries. Any agreement contained, expressed
or implied in this Agreement shall be only for the benefit of the parties
hereto and their respective legal representatives, successors and assigns, and
such agreements shall not inure to the benefit of the obligees of any
indebtedness of any party hereto, it being the intention of the parties hereto
that no Person shall be deemed a third party beneficiary of this Agreement,
except to the extent a third party is expressly given rights herein.
12.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.12 Headings. Each statement set forth in the Disclosure Schedule
with respect to a particular section herein shall be deemed made solely with
respect to such section and not with respect to any other section hereof unless
specifically set forth in the Disclosure Schedule as also being made with
respect to such other section. The headings of the Articles and Sections of
this Agreement have been inserted for convenience of reference only and shall
in no way restrict or otherwise modify any of the terms or provisions hereof or
affect in any way the meaning or interpretation of this Agreement.
12.13 Negotiated Transaction. The provisions of this Agreement were
negotiated by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
SELLER:
TEXAS PIPE WORKS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
--------------------------------------
Title: President
-------------------------------------
SHAREHOLDER:
/S/ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
SPOUSE:
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
BUYER:
GRANT PRIDECO, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title: Vice President and Secretary
-------------------------------------
WEATHERFORD:
▇▇▇▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title: Senior Vice President, General Counsel
and Secretary
--------------------------------------
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