ASSET PURCHASE AGREEMENT
BY AND BETWEEN
XXXXXX PRODUCTION PARTNERS, L.P.,
a Delaware limited partnership
("PURCHASER")
XXXXXX PRODUCTION SERVICES, INC.
a Texas corporation
("DPS")
AND
XXXXXXX SERVICES II, INC.
SUPERIOR COMPLETION SERVICES, INC.
SOUTH TEXAS DISPOSAL, INC.
ELSIK II, INC.,
all Texas corporations
("SELLERS"),
AND
XXXXX X. XXXXXXX
XXXXXXX X. XXXXXX, XX.
XXXXXX X. XXXXX, XX.
XXXXXX X. XXXXXXX
XXXX X. XXXXX
XXXXXXX XXXXXX
and
XXXXX X. XXXXX
(the "SELLER SHAREHOLDERS")
August 14, 1998
================================================================================
This Agreement contains important indemnity provisions.
See particularly Article VI.
================================================================================
TABLE OF CONTENTS
ARTICLE I - PURCHASE AND SALE 1
1.1 Agreement to Sell 1
(a) Included Assets 2
(b) Excluded Assets 3
1.2 Agreement to Purchase 3
1.3 The Purchase Price; Tax Basis 3
1.4 Assumption of Liabilities 4
1.5 Prorations 4
1.6 Transfer Taxes; Recording Fees 5
ARTICLE II - CLOSING, ITEMS TO BE DELIVERED, THIRD PARTY CONSENTS
AND FURTHER ASSURANCES 5
2.1 Closing 5
2.2 Items to be Delivered at Closing 6
2.3 Release of Liens 7
2.4 Third Party Consents 7
2.5 Further Assurances 7
2.6 No Equitable Conversion 8
ARTICLE III - REPRESENTATIONS AND WARRANTIES 8
3.1 Representations and Warranties of Seller 8
(a) Corporate Existence 8
(b) Corporate Power; Authorization;
Enforceable Obligations 8
(c) Validity of Contemplated
Transactions, Etc 8
(d) No Third Party Options 9
(e) Financial Statements 9
(f) Taxes; Tax and Other Returns and Reports 10
(g) Books of Account 10
(h) Existing Condition. 10
(i) Title to Properties 11
(j) Compliance with Laws; Authorizations 11
(k) Transactions With Affiliates 11
(l) Litigation 12
(m) Equipment 12
(n) Contracts and Commitments 12
(o) Environmental Matters 13
(p) Availability of Documents 15
(q) Assets 16
(r) Restrictions 16
(s) Conditions Affecting Seller 16
(t) Employee Benefit Plans 16
(u) Personnel. 17
(v) Legal Compliance; Undisclosed Liabilities. 18
(w) Inventory. 18
(x) Warranty. 18
(y) Investment 18
(z) Disclosure. 19
3.2 Representations and Warranties of Purchaser 19
(a) Partnership 19
(b) Power and Authorization 19
(c) Noncontravention. 19
3.3 Survival 19
ARTICLE IV - AGREEMENTS PENDING CLOSING 20
4.1 Agreements of Seller Pending the Closing 20
(a) Business in the Ordinary Course 20
(b) Conduct of Business 20
(c) Exclusive Dealing 20
(d) Access 20
(e) Press Release 21
(f) Actions of Directors and Shareholders 21
(g) Employee Matters. 21
(h) Actions of Seller 21
4.2 Agreements of Purchaser Pending the Closing 21
(a) Press Release 21
(b) Actions of Directors of Purchaser. 22
(c) Actions of Purchaser 22
ARTICLE V - CONDITIONS PRECEDENT TO THE CLOSING 22
5.1 Conditions Precedent to Purchaser's Obligations 22
(a) Representations and Warranties True
as of the Closing Date 22
(b) Compliance with this Agreement 22
(c) Closing Certificate 22
(d) Opinion of Counsel for Seller 22
(e) No Threatened or Pending Litigation 22
(f) Consents and Approvals 23
(g) Material Adverse Changes 23
(h) Approval of Counsel; Corporate Matters 23
(i) Physical Inventory 23
(j) Employment Contracts 23
(k) SWD Lease 23
(l) Frac Tanks 23
5.2 Conditions Precedent to the Obligations of Seller 23
(a) Representations and Warranties True
as of the Closing Date 23
(b) Compliance with this Agreement 24
(c) Closing Certificates 24
(d) No Threatened or Pending Litigation 24
(e) Consent of Shareholders. 24
ARTICLE VI - INDEMNIFICATION 24
6.1 Definitions 24
6.2 Indemnification by Seller and
the Seller Shareholders 24
6.3 Indemnification by Purchaser 25
6.4 Procedure 26
6.5 Payment and Offset 26
6.6 Failure to Pay Indemnification 27
6.7 Express Negligence 27
6.8 Other Rights and Remedies Not Affected 27
ARTICLE VII - POST CLOSING MATTERS 27
7.1 Arbitration. 27
(a) Negotiation Period. 27
(b) Commencement of Arbitration. 27
(c) Consolidation of Hearings. 28
(d) Discovery. 28
(e) Conclusion of Arbitration. 28
(f) Expenses of Arbitrators. 28
7.2 Discharge of Business Obligations. 28
7.3 Maintenance of Books and Records 28
7.4 Payments Received 29
7.5 Inquiries 29
7.6 Covenant Not to Compete 29
7.7 Transition Period 30
(a) Collections 30
(b) Accounting 30
(c) Licenses and Permits 30
7.8 Accounting Records 30
7.9 Nondisclosure of Proprietary Information 30
7.10 Contact with Former Employees 31
7.11 Registration of Buyer Common Stock. 31
(a) Registration Obligation. 31
(b) Blue Sky. 31
(c) Suspension Period. 31
(d) Registration Expenses. 31
7.12 Health Insurance. 31
ARTICLE VIII - TERMINATION 32
8.1 Events of Termination 32
8.2 Liability Upon Termination 32
8.3 Notice of Termination 32
ARTICLE IX - MISCELLANEOUS 32
9.1 Finders' Fees 32
9.2 Expenses 33
9.3 Assignment and Binding Effect 33
9.4 Notices 33
9.5 Governing Law 34
9.6 No Benefit to Others 34
9.7 Entire Agreement 34
9.8 Headings 34
9.9 Severability 34
9.10 Counterparts 34
9.11 Construction 35
9.12 Waiver 35
9.13 Specific Performance 35
9.14 Submission to Jurisdiction 35
9.15 Good Faith 35
9.16 Attorneys' Fees 35
DEFINITIONS:
The definition of "Affected Employees" can be found in Section 3.1(t).
The definition of "Agreement" can be found on page 1.
The definition of "Assets" can be found in Section 1.1.
The definition of "Assigned Contracts" can be found in Section 1.1(a)(i).
The definition of "Assumed Liabilities" can be found in Section 1.4(a).
The definition of "Authorizations" can be found in Section 3.1(j).
The definition of "Business" can be found on page 1.
The definition of "Closing" can be found in Section 2.1.
The definition of "Closing Date" can be found in Section 2.1.
The definition of "Contamination" can be found in Section 3.1(o)(i)(A).
The definition of "Contracts" can be found in Section 3.1(c)(iv).
The definition of "Damages" can be found in Section 6.2.
The definition of "Dispute Notice" can be found in Section 7.1(a).
The definition of "Effective Date" can be found on page 1.
The definition of "Employee Benefit Plan" can be found in Section 3.1(t)(i).
The definition of "Environmental, Health and Safety Laws" can be
found in Section 3.1(o)(i)(B).
The definition of "Environmental Loss" can be found in Section 3.1(o)(i)(C).
The definition of "Equipment" can be found in Section 1.1(a)(v).
The definition of "Equipment Leases" can be found in Section 1.1(a)(ii).
The definition of "ERISA" can be found in Section 3.1(t).
The definition of "Excluded Assets" can be found in Section 1.1(b).
The definition of "Fuel and Inventory" can be found in Section 1.1(a)(ix).
The definition of "Governmental Entity" can be found in Section 6.1(a).
The definition of "Hazardous Substance" can be found in Section 3.1(o)(i)(D).
The definition of "Indemnitee" can be found in Section 6.1(b).
The definition of "Indemnitor" can be found in Section 6.1(c).
The definition of "Negotiation Period" can be found in Section 7.1(a).
The definition of "Operating Assets" can be found in Section 1.1(a)(iii).
The definition of "Permits" can be found in Section 1.1(a)(viii).
The definition of "Permitted Liens" can be found in Section 3.1(i).
The definition of "person" can be found in Section 9.11.
The definition of "Personal Property" can be found in Section 1.1(a)(vii).
The definition of "Property Taxes" can be found in Section 1.5.
The definition of "Proprietary Information" can be found in Section 7.9.
The definition of "Purchase Price" can be found in Section 1.3(a).
The definition of "Purchaser" can be found on page 1.
The definition of "Purchaser Losses" can be found in Section 6.2.
The definition of "Records" can be found in Section 1.1(a)(vi).
The definition of "Regulations" can be found in Section 3.1(j).
The definition of "Release" can be found in Section 3.1(o)(i)(E).
The definition of "Remediation" can be found in Section 3.1(o)(i)(F).
The definition of "Seller" can be found on page 1.
The definition of "Seller Losses" can be found in Section 6.3.
The definition of "Seller Shareholders" can be found on page 1.
The definition of "Tax Returns" can be found in Section 3.1(f).
The definition of "Taxes" can be found in Section 3.1(f).
The definition of "Third Party Claims" can be found in Section 6.4(b).
The definition of "Transition Period" can be found in Section 7.7.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of August 14,
1998 (the "Effective Date"), is entered into by and among Xxxxxxx Services
II, Inc. ("Xxxxxxx"), Superior Completion Services, Inc. ("Superior"),
South Texas Disposal, Inc. ("South Texas"), and Elsik II, Inc. ("Elsik"),
each of which is a Texas corporation (together, the "Sellers"), and Xxxxx
X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxx, Xx., Xxxxxx X.
Xxxxxxx, Xxxx X. Xxxxx, Xxxxxxx Xxxxxx and Xxxxx X. Xxxxx (together, the
"Seller Shareholders"), Xxxxxx Production Services, Inc., a Texas
corporation ("DPS"), and Xxxxxx Production Partners, L.P., a Delaware
limited partnership (the "Purchaser").
RECITALS:
(1) The Sellers are engaged in the following aspects of the oil field servicing
business (collectively, the "Business"): Xxxxxxx is engaged in the business
of supplying vacuum truck, frac tank, open top tank and related services;
Superior is in workover rig business; South Texas is in the business of
operating salt water disposal xxxxx; and Elsik is in the business of
supplying camp rental equipment, including trailer houses and satellite
antennas.
B. The Seller Shareholders own 79.4% of the outstanding stock of Xxxxxxx and
South Texas; the Seller Shareholders own 84.5% of the outstanding stock of
Elsik; and Xxxxxxx owns 100% of the outstanding stock of Superior;
C. DPS owns all of the issued and outstanding stock of Xxxxxx Production
Management, Inc., a Delaware corporation ("Management"), Xxxxxx Production
Acquisition Corp., a Delaware corporation ("Acquisition Corp."), and Xxxxxx
Production Xxxxxx, Inc., a Delaware corporation ("Xxxxxx"); Management is
the sole general partner of Purchaser, and Acquisition Corp. and Xxxxxx own
all of the limited partnership interests of Purchaser.
D. Each of the Boards of Directors of the Sellers and DPS, and the General
Partner of Purchaser has approved this Agreement and the transactions
contemplated by this Agreement;
E. Subject to the limitations and exclusions contained in this Agreement and
on the terms and conditions hereinafter set forth, the Sellers desire to
sell and Purchaser desires to purchase, and DPS desires to cause Purchaser
to purchase the Business including all of the oil field servicing
operations and substantially all of the oil field servicing assets of the
Sellers.
F. It is the intention of the Purchaser and the Sellers that, unless otherwise
specified in this Agreement, all damages, liabilities and losses not in the
ordinary course of business that result from events or conditions that
occur or exist prior to the Closing (whether or not reported prior to the
Closing) shall be the financial responsibility of the Sellers and subject
to the indemnification provisions provided in Section 6.2 of this
Agreement, and that all such damages, liabilities and losses that result
from events or conditions that occur or first exist after the Closing shall
be the financial responsibility of the Purchaser and subject to the
indemnification provisions provided in Section 6.3 of this Agreement.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements contained in this
Agreement, and intending to be legally bound by this Agreement, the parties
agree as follows:
I. ARTICLE - PURCHASE AND SALE
A. Agreement to Sell. At the Closing (as defined in Section 2.1), and except
as otherwise specifically provided in this Section 1.1, the Sellers shall
grant, sell, convey, assign, transfer and deliver to Purchaser, upon and
subject to the terms and conditions of this Agreement, all right, title and
interest of the Sellers in and to (a) the Business as a going concern, and
(b) all of the assets, properties and rights of the Sellers constituting
the Business or used therein, of every kind and description, real, personal
and mixed, tangible and intangible, wherever situated (which Business,
assets, properties and rights, together with the Vehicle Sub Stock as
hereinafter defined, are herein sometimes collectively referred to as the
"Assets"), free and clear of all mortgages, liens, pledges, security
interests, charges, claims, restrictions and encumbrances of any nature
whatsoever, except Permitted Liens (as defined in Section 3.1(i)).
(a) Included Assets. The Assets shall include, without limitation, the
following assets, properties and rights of the Sellers used directly or
indirectly in the conduct of, or generated by or constituting the Business:
(i) all Contracts (as hereinafter defined) to which any one or more of the
Sellers is a party all of which are described in Schedule 1.1(a)(i)
(collectively, the "Assigned Contracts");
(i) all of the Sellers' rights in and to operating leases of personal property
including vehicles, all of which are described in Schedule 1.1(a)(ii) (the
"Equipment Leases"), subject to the consents of lessors, if required;
(i) all of Sellers' interest in equipment material to the operation of the
Business, all of which is described on Schedule 1.1(a)(iii) (the "Operating
Assets");
(i) all of the issued and outstanding stock of Xxxxxxx Vehicle Corporation, a
Texas corporation (the "Vehicle Sub Stock"), which, as of the Closing Date,
will own all of the vehicles of the Sellers (the "Vehicles") all of which
are listed in Schedule 1.1(a)(iv);
(i) all office furniture, fixtures and equipment owned by the Sellers and all
other equipment, parts, materials, supplies, furniture and fixtures owned
by the Sellers including, without limitation, the equipment, furniture,
fixtures, computers, servers, local area network systems, intranet systems,
financial accounting equipment, and systems described on Schedule 1.1(a)(v)
(collectively, the "Equipment");
(i) all books, records, correspondence, files, plans and other documents and
instruments of the Sellers, including but not limited to customer and
supplier information and sales information relating to the Business or to
the Assets (collectively, the "Records") subject to a continuing right of
the Sellers and the Seller Shareholders to access and copy the Records for
tax reporting purposes;
(i) all other intangible and tangible personal property, all technologies,
methods, formulations, data bases, trade secrets, customer lists, know-how,
inventions and other intellectual property used in the Business or under
development, and owned, leased or licensed by the Sellers, all of which is
described on Schedule 1.1(a)(vii) (collectively, the "Personal Property");
(i) all permits, authorizations, certificates, approvals, registrations, or
other approvals and licenses granted by any federal, state, local or
foreign court, arbitrator or administrative or Governmental Entity (as
hereinafter defined) in connection with the Business, which are described
on Schedule 1.1(a)(viii) (collectively, the "Permits") to the extent that
they may be legally assigned by the Sellers; and
(i) all motor fuel and inventory on hand on the Closing Date, including without
limitation, all motor fuel, oil, lubricants, drilling mud and other items
of tangible personal property of similar character (collectively, the "Fuel
and Inventory");
(i) all other personal property not listed in this Section 1.1(a) or excluded
by Section 1.1(b), which is owned by any of the Seller or the Seller
Shareholders and is reasonably necessary to operate the Business.
(a) Excluded Assets. The Assets shall not include the corporate seals,
certificates of incorporation, minute books, stock books, or other records
having to do with the corporate organization of the Sellers, cash, the
Sellers' prepaid items and the deposits not subject to proration under
Section 1.5; the Assets additionally shall not include the rights which
accrue or will accrue to the Sellers under this Agreement, the Sellers'
customers' accounts receivable and un-invoiced work relating to the
Business in existence on the Closing Date (whether billed or unbilled as of
the Closing), the rights to any of the Sellers' claims for any federal,
state, local, or foreign tax refunds, the Sellers' financial and accounting
records not relating to the Business, Sellers' tax returns, or any items
listed on Schedule 1.1(b) all of which are referred to in this Agreement as
the "Excluded Assets."
A. Agreement to Purchase. At the Closing, Purchaser shall purchase the Assets
from the Sellers upon and subject to the terms and conditions of this
Agreement and in reliance on the representations, warranties and covenants
of the Sellers contained herein, in exchange for the Purchase Price (as
defined in Section 1.3). In addition, Purchaser shall assume, and DPS shall
cause Purchaser to assume, at the Closing and agree to pay, discharge or
perform, as appropriate, certain liabilities and obligations of the
Sellers, but only to the extent expressly provided in Section 1.4. Except
as expressly provided in Section 1.4, Purchaser shall not assume or be
responsible for any liabilities or obligations based on events occurring
prior to Closing relative to the Assets, the Business or the Sellers.
A. The Purchase Price; Tax Basis.
(a) The Purchase Price. In consideration of the transfer to Purchaser of the
Assets and the undertakings of the Seller Shareholders, and subject to
adjustment as provided below, Purchaser shall pay (and DPS shall cause
Purchaser to pay) Forty-Six Million Dollars ($46,000,000) (the "Purchase
Price"), as follows: (i) Thirty-Nine Million Eight Hundred Twenty Thousand
Dollars ($39,820,000) shall be paid to the individual Sellers in the
amounts set forth on Schedule 1.3(a) by wire transfer at the Closing, and
(ii) Six Million One Hundred Eighty Thousand Dollars ($6,180,000) shall be
delivered into escrow (together, the "Cash") to be held pursuant to the
escrow agreement in the form of Exhibit A (the "Escrow Agreement").
The foregoing form of payment of the Purchase Price is predicated on the
presumption that DPS shall be merged with Key Energy Group, Inc., a
Maryland corporation ("Key"), or its wholly owned subsidiary (the
"Merger"). If, at the time of the Closing, Key has not completed the
Merger, or, in the reasonable judgment of Purchaser, it is unlikely that
the Merger will be completed, then Purchaser shall have the right to pay
Eleven Million Dollars ($11,000,000) of the Purchaser Price by delivering
880,000 shares of unregistered common stock, $0.01 par value per share, of
DPS in the names and in the amounts set forth on Schedule 1.3(a) (the
"Shares"). The Shares shall be subject to a Registration Rights Agreement
in the form of Exhibit B (the "Registration Rights Agreement").
Notwithstanding the foregoing, the Purchase Price shall be reduced (by a
reduction in the amount wire transferred to the Sellers at the Closing) by
the amount, if any, (i) determined in accordance with Section 1.5 of this
Agreement and (ii) by the amount of accrued vacation shown on Schedule
3.1(u). In addition, the Purchaser Price shall be adjusted after the
Closing in accordance with Sections 1.3(b) and 1.3(c).
(a) Seller Tax Basis and Fair Market Value of Assets. The fair market value and
the tax basis for federal income tax purposes of the Assets of the Sellers
being transferred to Purchaser shall be set forth on Schedule 1.3(b). The
Sellers and Purchaser each hereby covenant and agree that such amounts
reflect the fair market value of the Assets and that none of them, directly
or indirectly, through a subsidiary or affiliate or otherwise, will take a
position on any income tax return, before any governmental agency charged
with the collection of any income tax, or in any judicial proceeding that
is in any way inconsistent with the tax basis and fair market value of the
Assets set forth on Schedule 1.3(b). Such allocations will be reflected in
Forms 8594 to be signed and filed by Seller and Purchaser in accordance
with Section 1060 of the Internal Revenue Code of 1986, as amended (the
"Code"). In addition, the Purchase Price payable under Section 1.2 shall be
allocated in the manner set forth on Schedule 1.3(b).
A. Assumption of Liabilities.
(a) At the Closing and except as otherwise specifically provided in this
Section 1.4, Purchaser shall assume and agree to pay, discharge or perform,
as appropriate, the liabilities and obligations of the Sellers set forth on
Schedule 1.4(a) (the "Assumed Liabilities"); provided, however, that the
aggregate amount of any debt and leases included in the Assumed Liabilities
shall not exceed $150,000.
(b) Notwithstanding Section 1.4(a), it is expressly understood that, other than
obligations and liabilities expressly assumed in Section 1.4(a), Purchaser
shall not be liable for, and shall not assume, any of the Sellers' or the
Seller Shareholders' obligations or liabilities, whether known or unknown,
matured or unmatured, or fixed or contingent, including but not limited to
liabilities relating to events occurring prior to the Closing, any Taxes
(as hereinafter defined, other than those pro rated as of the Closing
Date), or any liabilities under any Employee Benefit Plans of the Sellers.
The Sellers shall remain obligated to pay and discharge any liabilities and
obligations not expressly assumed by Purchaser hereby. The Sellers and the
Seller Shareholders hereby agree that they will indemnify Purchaser for any
liabilities of the Sellers not expressly assumed pursuant to Section 1.4(a)
by Purchaser and Purchaser and DPS agree that they will indemnify the
Sellers and the Seller Shareholders with respect to the Assumed
Liabilities.
A. Prorations. All annual or periodic ad valorem fees, taxes and assessments,
licensing fees and vehicle use fees, and similar charges imposed by taxing
authorities on the Assets (collectively, "Property Taxes") shall be borne
and paid (a) by Seller for all full tax years or periods ending before the
date of the Closing and for that portion of any tax year or period ending
on or after the effective date of Closing from the date of commencement of
such year or period to the date immediately preceding the effective date of
the Closing and (b) by Purchaser for all full tax years or periods
beginning on or after the effective date of Closing and for that portion of
any tax year or period ending on or after the effective date of the Closing
from and including the effective date of Closing to the final date of such
year or period, regardless of when or by which party such Property Taxes
are actually paid to the applicable taxing authority. In addition, all
rents and other lease charges, power and utility charges, license or other
fees, Assigned Contracts, and similar items shall be allocated between
Purchaser and the Sellers effective as of 12:01 a.m. on the effective date
of the Closing. Such allocations shall be determined and payment
accordingly made from one party to the other, as the case may be, on the
date of the Closing to the extent they are known and agreed to by Purchaser
and Seller; otherwise such allocations shall be determined and payment made
(effective as of 12:01 a.m. on the effective date of the Closing) as soon
as practicable but not later than the date 30 days thereafter.
I. ARTICLE - CLOSING, ITEMS TO BE DELIVERED,
THIRD PARTY CONSENTS AND FURTHER ASSURANCES
A. Closing. Subject to the terms and conditions of this Agreement, the
execution of documents relative to the sale and purchase of the Assets
shall be held at Jenkens & Xxxxxxxxx, A Professional Corporation, in
Austin, Texas on or about the date of the closing of the Merger. The
effective date and time of the Closing (referred to herein as the "Closing"
or "Closing Date") shall be 12:01 a.m., the Closing Date, and all risk of
loss shall be borne by the Sellers until the Closing, and thereafter all
such risk of loss shall be borne by Purchaser.
A. Items to be Delivered at Closing. At the Closing and subject to the terms
and conditions contained in this Agreement,
(a) the Sellers shall deliver to Purchaser the following:
(i) bills of sale with covenants of warranty of title and assignments of
contracts in a form reasonable acceptable to the parties, stock
certificates representing the Vehicle Sub Stock, together with executed
stock powers, and other good and sufficient instruments and documents of
conveyance and transfer, in a form reasonably satisfactory to Purchaser and
its counsel, as shall be necessary and effective to transfer and assign to
and vest in Purchaser all of the Sellers' right, title and interest in and
to the Assets;
(i) all of the certificates, certificates of title, Contracts, customer lists,
supplier lists, Equipment Leases assumed by Purchaser, all correspondence,
files, plans and other documents and instruments, books, Records, and data
belonging to the Sellers which are part of the Assets;
(i) a Closing and Secretary's Certificate from each of the Sellers, dated as of
the Closing Date, certifying, among other items, that all representations
and warranties of the Sellers and the Seller Shareholders contained in this
Agreement or in any Schedule, certificate or document delivered by the
Sellers to Purchaser pursuant to the provisions of this Agreement are true
on the Closing Date and that the applicable Seller has performed and
complied in all material respects with all of its obligations under this
Agreement to be performed or complied with by it prior to or at the Closing
and certifying that the Sellers and the Seller Shareholders have obtained
all consents and approvals required with respect to the Sellers or the
Business except as otherwise set forth on a Schedule hereto;
(i) a certificate of existence issued by the Secretary of State of the State of
Texas, and a certificate of good standing issued by the Comptroller of
Public Accounts of the State of Texas, as of a date not more than ten
calendar days prior to the Closing Date;
(i) Employment Agreements, Non-Competition Agreements and Mutual Agreements to
Arbitrate Claims in substantially the form attached hereto as Exhibit C
executed by each of the Selling Shareholders (the "Employment,
Non-Competition and Arbitration Agreement"); and
(i) the Escrow Agreement; and
(i) a Form P-4 executed by the applicable Sellers showing a change in the
operator of each of the Assets that is a salt water disposal well;
simultaneously with such delivery, the Sellers shall take all steps as may
be reasonably required to put Purchaser in actual possession and operating
control of the Assets.
(a) Purchaser shall deliver (and DPS shall cause Purchaser to deliver) to the
Sellers the following:
(i) the wire transfer of the Cash less adjustments, if any, in accordance with
Section 1.3 and less the amount delivered into escrow;
(i) the Escrow Agreement;
(i) the Non-Competition Payment (defined below);
(i) a copy of a letter addressed to the DPS transfer agent providing for the
issuance of the Shares to the Sellers; and
(i) the Registration Rights Agreement. In addition, Purchaser shall deliver
(and DPS shall cause Purchaser to deliver) that portion of the Cash subject
to the Escrow Agreement to the escrow agent.
A. Release of Liens. The Sellers shall cause all liens and other encumbrances
other than Permitted Liens affecting the Assets to be released and
discharged prior to Closing and shall provide Purchaser with proof thereof
including but not limited to copies of UCC-3 filings.
A. Third Party Consents. To the extent that any of the Sellers' rights under
any Contracts, Authorizations (as defined in Section 3.1(j)), Permits or
Equipment Leases assumed by Purchaser, or other Assets to be assigned to
Purchaser may not be assigned without the consent of another person, which
consent has not been obtained prior to the Closing, this Agreement shall
not constitute an agreement to assign the same if an attempted assignment
would constitute a breach thereof or be unlawful, and the applicable
Seller, at such Seller's expense, shall use reasonable commercial efforts
to obtain any such required consent(s) as promptly as possible after
Closing. If any consent is not obtained or if any attempted assignment
would be ineffective or would impair Purchaser's rights under or to the
Asset in question so that Purchaser would not acquire the benefit of all
such rights, the applicable Seller, to the maximum extent permitted by law
and by the terms of any documents affecting the Asset, at such Seller's
expense, shall act for one year after the Closing as Purchaser's agent in
order to obtain for Purchaser the benefits thereunder and shall cooperate,
to the maximum extent permitted by law and by the terms of any document
affecting the Asset, with Purchaser in any other reasonable arrangement
designed to provide such benefits to Purchaser.
A. Further Assurances. Each Seller from time to time after the Closing, at
Purchaser's request, will execute, acknowledge and deliver to Purchaser
such other instruments of conveyance and transfer and will take such other
actions and execute and deliver such other documents, certifications and
further assurances as Purchaser may reasonably request in order to vest
more effectively in Purchaser, or to put Purchaser more fully in possession
of, any of the Assets, or to better enable Purchaser to complete, perform
or discharge any of the liabilities or obligations assumed by Purchaser at
the Closing pursuant to Section 1.4. Each of the parties will cooperate
with the other and execute and deliver to the other parties such other
instruments and documents and take such other actions as may be reasonably
requested from time to time by any other party as necessary to carry out,
evidence and confirm the intended purposes of this Agreement. If any of the
Sellers dissolves within one year following the Closing Date, effective as
of the dissolution of such Seller, such Seller hereby irrevocably appoints
Purchaser or Purchaser's substitute as its attorney-in-fact coupled with an
interest and with full power of substitution to carry out the provisions of
this Section 2.5.
A. No Equitable Conversion. Prior to the Closing, neither the execution of
this Agreement nor the performance of any provision contained herein shall
cause Purchaser to become liable for any aspect or obligation of relating
to the Assets or the Business.
I. ARTICLE - REPRESENTATIONS AND WARRANTIES
A. Representations and Warranties of the Sellers and the Seller Shareholders.
Each of the Sellers and the Seller Shareholders, jointly and severally,
hereby represent and warrant to Purchaser and to DPS that the following
statements are true and correct, except as set forth on the Schedules, each
of which scheduled exceptions shall specifically identify the relevant
section of this Agreement to which it relates and shall be deemed to be
representations and warranties as if made hereunder; provided, however,
that the representations and warranties made regarding the Seller
Shareholders (as opposed to the Sellers) shall be deemed to be made by each
Seller Shareholder severally and not jointly, wholly with respect to such
Seller Shareholder individually.
(a) Corporate Existence. Each of the Sellers is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas.
Each of the Sellers is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where the conduct of
the Business requires it to be so qualified, all of which jurisdictions are
listed on Schedule 3.1(a). None of the Sellers is nor has ever been an
investment company within the meaning of the Investment Company Act of
1940.
(a) Corporate Power; Authorization; Enforceable Obligations. Each of the
Sellers has the corporate power, authority and legal right to execute,
deliver and perform this Agreement. The execution, delivery and performance
of this Agreement by each of the Sellers has been duly authorized by all
necessary corporate action as of the Closing Date. This Agreement has been,
and the other agreements, documents and instruments required to be
delivered by the Sellers in accordance with the provisions hereof
(collectively, the "Seller Documents") will be duly executed and delivered
on behalf of each Seller by duly authorized officers or directors of each
Seller and this Agreement constitutes, and the Seller Documents when
executed and delivered will constitute, the legal, valid and binding
obligation of each of the Sellers enforceable against each of the Sellers
in accordance with their respective terms except as the same may be limited
by applicable bankruptcy, insolvency, reorganization, or other laws
affecting the enforcement of creditors' rights generally and the
application of general principles of equity. The Board of Directors of each
of the Sellers has approved this Agreement and the transactions
contemplated hereby.
(a) Validity of Contemplated Transactions, Etc. Except as identified on
Schedule 3.1(c), the execution, delivery and performance of this Agreement
by each of the Sellers and the Seller Shareholders does not and will not
violate, conflict with or result in the breach of any material term,
condition or provision of, require notice to or the consent of any other
person, result in the acceleration of or give any party a right to
terminate, modify, accelerate or change the terms, rights or obligations
under any of the following:
(i) any Regulation (as hereinafter defined);
(i) any judgment, order, writ, injunction, decree or award of any court,
arbitrator or Governmental Entity;
(i) the charter documents of any of the Sellers or any securities issued by any
Seller; or
(i) any material mortgage, indenture, undertaking, note, bond, debenture,
letter of credit, commitment, agreement, contract, lease, Authorization,
Assigned Contract (including but not limited to Vehicle Operating Leases
and Equipment Leases) or other instrument, or understanding, whether or not
assigned hereby (collectively, the "Contracts"), by which any of the
Sellers may have rights or by which any of the Assets may be bound or
affected.
As of the Effective Date and as of the Closing Date, no fact or condition
exists or will exist which would result in the termination of or give any
party to a Contract the right to terminate, modify, accelerate or otherwise
change the existing rights or obligations of the Sellers in or to the
Assets or the Business. Except as otherwise identified on Schedule 3.1(c),
no Authorization, approval or consent of, and no registration or filing
with, any Governmental Entity is required in connection with the execution,
delivery or performance of this Agreement by any of the Sellers or by any
Seller Shareholder.
(a) No Third Party Options. No person has any existing agreements, options,
commitments or rights to acquire any of the Assets or any interest therein.
(a) Financial Statements. Attached hereto as Schedule 3.1(e) are the following
financial statements (collectively, the "Financial Statements") for the
Sellers: (i) unaudited consolidated and consolidating balance sheet and
statement of income, changes in shareholders' equity and cash flows, and
unaudited earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA") as of and for the fiscal years ended December 31, 1995,
and December 31, 1996, and December 31, 1997 (the "Most Recent Fiscal Year
End") and as of and for the 12 month period ended June 30, 1998; and (ii)
the unaudited consolidated balance sheet and statement of income, changes
in shareholders' equity and cash flow and Adjusted EBITDA (the "Most Recent
Financial Statements") as of and for the six month period ended June 30,
1998 (the "Most Recent Fiscal Month End") for the Sellers. The Financial
Statements (including the notes thereto) have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby, present fairly the financial
condition of the Sellers as of such dates and the results of operations of
the Sellers for such periods, are correct and complete, and are consistent
with the books and records of the Sellers (which books and records are
correct and complete); provided, however, that the Most Recent Financial
Statements are subject to normal year-end adjustments (which will not be
material, individually or in the aggregate) and lack footnotes. The
Financial Statements fairly present all of the activities of the Sellers
that will be part of the operations and Business of the Sellers at Closing,
and all assets, tangible or intangible, and all Contracts, formal or
informal whether or not in writing, necessary to conduct the Business, as
actually operating as of the Effective Date and as set forth in the
Financial Statements, will be owned by the Sellers (in the case of such
assets) and will be in full force and effect (in the case of such
Contracts) immediately prior to the Closing.
(a) Taxes; Tax and Other Returns and Reports. All federal, state, local and
foreign tax returns, reports, statements and other similar filings required
to be filed by the Sellers and affecting the Assets or the Business (the
"Tax Returns") with respect to any federal, state, local or foreign taxes,
assessments, interest, penalties, deficiencies, fees, duties and other
governmental charges or impositions (including without limitation all
income tax, unemployment compensation, social security, payroll, sales and
use, excise, gross receipts, value-added, privilege, property, ad valorem,
franchise, license, school transfer, mortgage recording, customs,
withholding, estimated and other tax or similar governmental charge or
imposition under laws of the United States or any state, county, or
municipal entity, agency or instrumentality or political subdivision
thereof or any foreign country or political subdivision thereof) insofar as
same may affect the Assets or the Business (the "Taxes") have been timely
filed with the appropriate governmental agencies in all jurisdictions in
which such Tax Returns are required to be filed, and all such Tax Returns
properly reflect the liabilities of Sellers for Taxes for the periods,
property and events covered thereby. All Taxes, including without
limitation, those which are called for by the Tax Returns, have been
properly accrued or timely paid. Purchaser will have no liability to any
person or taxing authority for Taxes relating to actions or events
occurring prior to 12:01 a.m. on the Closing Date, except as otherwise
provided by Section 1.5. The Sellers' warranties and representations under
this Section 3.1(f) shall be construed consistently with Section 1.5.
(a) Books of Account. The books, records and accounts of the Sellers maintained
with respect to the Business and the Assets fairly reflect, in all material
respects and in reasonable detail, the transactions and the assets and
liabilities of each of the Sellers with respect to the Business.
(a) Existing Condition. Except as set forth on Schedule 3.1(h), and except for
such changes as have affected the oil field services business generally,
since December 31, 1997, there has not been, and through the date of the
Closing there will not have been, any material adverse change in the Assets
or the Business or the financial condition, operations, results of
operations, or future prospects of the Business. Without limiting the
generality of the foregoing, since that date, except as otherwise stated on
Schedule 3.1(h), none of the Sellers has (i) entered into any transaction
or agreement affecting the Business or the Assets except in the ordinary
course of business, consistent with past practice; (ii) encumbered, leased,
licensed or transferred any tangible or intangible assets which would have
been included in the Assets if the Closing had been held on December 31,
1997 or on any date since then; (iii) subjected any of the Assets to any
lien or other encumbrance of any nature whatsoever, except in the ordinary
course of business, consistent with past practices, and except for
Permitted Liens (defined in Section 3.1(i)); (iv) entered into any
agreement, Contract, lease, or license (or series of related agreements,
Contracts, leases, and licenses) outside the ordinary course of business,
made any amendment to or terminated any material agreement affecting the
Business or the Assets, or canceled, modified or waived any rights
affecting the Business or the Assets, whether or not in the ordinary course
of business; (v) changed any of the accounting principles followed by it or
the methods of applying such principles; (vi) increased the compensation of
any employee other than in the ordinary course of business, entered into
any employment Contract or collective bargaining agreement, written or
oral, or modified the terms of any existing Contract or agreement, made any
other change in employment terms for any of its directors, officers, or
employees outside the ordinary course of business, or adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive, severance,
retirement, employee benefit plan, employee pension benefit plan, or other
plan, Contract, or commitment relating to its directors, officers, and
employees; (vii) suffered any damage, destruction or loss to its property
or other loss, whether or not covered by insurance, (a) materially and
adversely affecting the Business or Assets or (b) of any items which amount
to $20,000 or more in the aggregate; (vii) granted any license or
sublicense of any rights under or with respect to any of Seller's
intellectual property or other proprietary rights; (viii) canceled,
compromised, waived, or released any right or claim (or series of related
rights and claims) outside of the ordinary course of business; (ix) delayed
or postponed the payment of accounts payable or any other liabilities
outside the ordinary course of business; or (x) committed to any of the
foregoing. In addition, no party (including the Sellers) has accelerated,
terminated, modified, or canceled any agreement, Contract, lease, or
license (or series of related agreements, Contracts, leases, and licenses)
to which any of the Sellers is or was a party or by which any of them is or
was bound.
(a) Title to Properties. Notwithstanding anything herein to the contrary, each
of the Sellers has good, valid and marketable title (or in the case of real
property, indefeasible title) to all of its assets, real, personal and
mixed, which would be included in the Assets if the Closing took place on
the Effective Date, which it purports to own, including without limitation
all assets reflected on the Schedules hereto, free and clear of all liens
(including but not limited to tax liens), claims, restrictions and other
encumbrances and defects of title of any nature whatsoever, except for
(i) liens for current real or personal property taxes not yet due and
payable; (ii) Personal Properties as to which the applicable Seller is the
lessee; and (iii) liens and other exceptions to title as disclosed in
Schedules 3.1(i) (collectively, "Permitted Liens").
(a) Compliance with Laws; Authorizations. Each of the Sellers has complied in
all material respects with each, and is not in material violation of any,
law, ordinance or governmental or regulatory rule or regulation, whether
federal, state, local or foreign, to which the Business or Assets is
subject ("Regulations"). Each of the Sellers owns, holds, possesses or
lawfully uses in the operation of the Business all permits, franchises,
licenses, easements, rights, applications, filings, registrations and other
authorizations ("Authorizations") which are in any material respect
necessary for it to conduct the Business as now conducted or for the
ownership and use of the Assets in the conduct of the Business. Each of the
Sellers is in compliance with all Regulations related to the
Authorizations. All such Authorizations are listed and described in
Schedule 3.1(j). None of the Sellers is not in default, nor has any of the
Sellers received any notice of any claim of default, with respect to any
such Authorization. None of the Sellers has received any notice that any of
the Authorizations used by a Seller in the operation of the Business would
not or cannot be renewed or continued in the ordinary course of business,
and all such Authorizations are renewable by the Sellers by their terms or
in the ordinary course of business. No person other than the Sellers owns
or has any proprietary, financial or other interest (direct or indirect) in
any Authorization.
(a) Transactions With Affiliates. Any and all material transactions between
each of the Sellers and its Affiliates (as defined herein) affecting the
Business or the Assets have been upon terms substantially comparable to
those that would have been available to such Seller from third parties in
arms length transactions.
(a) Litigation. Except as set forth on Schedule 3.1(l), no litigation or
administrative proceeding, including any arbitration, investigation or
other proceeding of or before any court, arbitrator or Governmental Entity
is pending or, to the best knowledge of the Sellers, threatened against any
Seller, which relates to the Business or Assets or the transactions
contemplated by this Agreement, nor do the Sellers know of any reasonably
likely basis for any such litigation, arbitration, investigation or
proceeding, the result of which could reasonably be expected to adversely
affect the Assets or Business, or the transactions contemplated hereby.
None of the Sellers is a party to or subject to the provisions of any
judgment, order, writ, injunction, decree or award of any court, arbitrator
or Governmental Entity which may materially adversely affect the Assets or
Business, or the transactions contemplated hereby. The Sellers shall
reimburse and indemnify Purchaser for any damages, liabilities or other
losses incurred by Purchaser in connection with any and all matters
identified on Schedule 3.1(l).
(a) Equipment. The Operating Assets are at the execution of this Agreement, and
will be at Closing, in good working condition and sufficient to maintain
the operation of the Business.
(a) Contracts and Commitments. Except as set forth on Schedule 3.1(n), none of
the Sellers is a party to any written or oral:
(i) lease under which it is either lessor or lessee relating to the Assets or
any property at which the Assets are located other than those set forth on
the Schedules to this Agreement;
(i) Contract or agreement for any capital expenditure or leasehold improvement
relating to the Assets or Business;
(i) Contract or agreement limiting or restraining such Seller, its successor or
assigns, from engaging or competing in any manner in the Business, or any
agreement concerning confidentiality, nor is any employee of any Seller
subject to any such Contract;
(i) agreement (or group of related agreements) for the purchase or sale of raw
materials, supplies, products, or other personal property or for the
furnishing or receipt of services, the performance of which will extend
over a period of one year or result in a material loss to such Seller;
(i) collective bargaining agreement;
(i) agreement for the employment of any individual on a full-time, part-time,
consulting or other basis, other than an oral Contract for employment at
will; or
(i) agreement under which the consequences of a default or termination could
have a material adverse effect on the Business or the financial condition,
operations, results of operations, or future prospects of any Seller.
Each of the Contracts and agreements listed in Schedule 3.1(n), and each
other Assigned Contract, including but not limited to Equipment Leases
under which Purchaser is to acquire rights or obligations, is valid and
enforceable in accordance with its terms; each of the Sellers is, and to
each Seller's knowledge all other parties thereto are, in compliance with
the provisions thereof; none of the Sellers is, and to each of the Seller's
knowledge, no other party is, in default in the performance, observance or
fulfillment of any material obligation, covenant or condition contained
therein; and to each of the Seller's knowledge, no event has occurred which
with or without the giving of notice or lapse of time, or both, would
constitute a default thereunder. Furthermore, no such Contract or
agreement, in the reasonable opinion of the Sellers contains any
requirement with which there is a reasonable likelihood a Seller or, to the
Sellers' knowledge, any other party thereto will be unable to comply.
(a) Environmental Matters.
(i) Definitions. For purposes of this Agreement the following terms shall have
the following meanings:
A. "Contamination" shall mean the Release, in violation of Environmental,
Health and Safety Laws, of Hazardous Substances in, on, underlying or
surrounding (including into air, soils, surface water or groundwater) any
real property, including migration of or depositing of Hazardous Substances
onto or from adjoining or neighboring properties or the Release or presence
of Hazardous Substances from or associated with the operations conducted on
any real property when such Hazardous Substances have been transported to
any other offsite location.
B. "Environmental, Health and Safety Laws" shall mean any and all federal,
state or local laws (including common law), rules, Regulations, orders,
agreements, ordinances, writs, judgments, injunctions, decrees or
determinations, or similar requirements, whether issued by a court or a
Governmental Entity, relating to the protection of the environment, the
Release of any Hazardous Substances into the environment, the generation,
management, transportation, storage, treatment and disposal of Hazardous
Substances, public health and safety, or employee health and safety,
including laws relating to emissions, discharges, Releases, or threatened
releases of pollutants, Contaminants, or chemical, industrial, hazardous,
or toxic materials or wastes into ambient air, soils, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes (including, without limitation, the Clean Air Act, the
Toxic Substance Control Act, the Clean Water Act, the Oil Pollution Act of
1990, the Comprehensive Environmental Response, Compensation and Liability
Act, the Resource Conservation and Recovery Act, and the Occupational
Safety and Health Act of 1970, all as amended, including similar state or
local laws).
C. "Environmental Loss" shall mean any and all claims, damages, losses,
expenses, costs, deficiencies, penalties, liens, interests, fines,
assessments, charges, compensation, obligations and liabilities of any
kind, whether known or unknown, imposed by private parties or Governmental
Entities in civil, criminal or administrative proceedings, and which are
incurred by, under or pursuant to Environmental, Health and Safety Laws,
whether based on negligence, strict liability or otherwise, under any
theory or process of recovery or relief, at law or at equity, including
Remediation, restoration, abatement, investigation, testing, monitoring,
personal injury, death and property damage costs, contribution for, or
recovery of such costs under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, or similar state or federal
laws, and reasonable attorneys' fees, court costs and interest paid or
accrued, related to Contamination or the presence of Hazardous Substances
at offsite locations arising from Seller's operations or activities,
including but not limited to transportation or disposal activities.
D. "Hazardous Substance" shall mean any toxic or hazardous substance, material
or waste, pollutant, petroleum or petroleum derived substance or waste,
salt water, oil and gas waste, radioactive substance, material or waste,
asbestos containing materials, or any constituent of any such substance or
waste regulated under or pursuant to any Environmental, Health and Safety
Law.
E. "Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the environment or into or out of any real property, including the
movement of Hazardous Substances through or in the air, soil, surface water
or groundwater of any real properties or adjoining properties.
F. "Remediation" shall mean all actions, whether undertaken pursuant to
judicial or administrative order or otherwise, reasonably necessary to
comply with applicable Environmental, Health and Safety Laws, (a) to
investigate, clean up, remediate, remove, treat, cover or in any other way
adjust the levels of Hazardous Substances in or around the real properties;
or (b) to prevent or control the Release of Hazardous Substances so that
they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment.
(i) Representations and Warranties. The parties agree that the following
representations and warranties shall govern in the event of any conflict
between the provisions of this Section 3.1(o) and any other provision of
this Agreement or of the other agreements or conveyance instruments
contemplated hereby. The Sellers and the Seller Shareholders, jointly and
severally, represent and warrant that, except as otherwise set forth on
Schedule 3.1(o), the following statements are true and correct in all
material respects:
A. Each of the Sellers has obtained all Authorizations, including permits,
which are required in connection with the conduct of the Business under
Environmental, Health and Safety Laws;
B. Each of the Sellers is in compliance in all material respects in the
conduct of the Business with all terms and conditions of the required
Authorizations, and is also in compliance in all material respects with all
Environmental, Health and Safety Laws and with any plan required by law,
order, decree, judgment, or injunction entered, promulgated or approved
thereunder, and, with any notice or demand letter issued thereunder;
C. None of the Sellers is aware of, nor has any Seller received notice of, any
past or present circumstances that, if continued, are reasonably likely to
interfere with or prevent compliance or continued compliance in the conduct
of the Business with any Environmental, Health and Safety Laws or with any
plan required by law, order, decree, judgment or injunction entered,
promulgated or approved thereunder, or, with any notice or demand letter,
or which may otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any Hazardous Substance;
D. There is no civil, criminal or administrative action, suit, order, demand,
claim, hearing, notice or demand letter, notice of violation,
investigation, or proceeding pending or, to the Sellers' knowledge,
threatened against any Seller in connection with the conduct of the
Business relating in any way to any Environmental, Health and Safety Laws;
E. Each of the Sellers agrees to cooperate with Purchaser, both prior to and
following the Closing, in connection with Purchaser's application for the
transfer, renewal or issuance of any Authorizations or Purchaser's efforts
to satisfy any Environmental, Health and Safety Laws involving the
Business, (provided, however, that the Sellers shall not be required to
incur any material expense in connection therewith);
F. None of the Sellers, in connection with the operation of the Business, has
handled or disposed of any Hazardous Substance in violation of
Environmental, Health and Safety Laws, arranged for the disposal of any
Hazardous Substance in violation of Environmental, Health and Safety Laws,
exposed any employee or other individual to any Hazardous Substance or
condition in violation of Environmental, Health and Safety Laws, or
operated any Assets in any manner that could form the basis for any present
or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand for damage to, or for investigation and
Remediation of, any site, location, or body of water (surface or
subsurface), for any illness of or personal injury to any employee or other
individual, or for any reason under any Environmental, Health and Safety
Laws or Authorizations;
G. Each of the Sellers has provided Purchaser all material information in such
Seller's control or possession relating to: (1) the existence of
Contamination on or affecting all Assets; (2) compliance with all
Environmental, Health and Safety Laws; and (3) any alleged or actual
Environmental Losses; and
H. No oral or written agreements, including but not limited to indemnity or
cleanup agreements, exist between the Sellers or the Seller Shareholders
and any third parties, relating to or concerning the environmental, safety
or health conditions of the Assets.
(a) Availability of Documents. Each of the Sellers has provided Purchaser with
copies of all material documents, including without limitation all of the
Contracts, permits, licenses, patents, trademarks, copyrights and
applications therefor listed in the Schedules. Each of the Sellers will use
its best efforts to obtain any such documents not in its possession and
promptly deliver same to Purchaser. Such copies are true and complete and
include all amendments, supplements and modifications thereto or waivers
currently in effect thereunder.
(a) Assets. Except as set forth in Schedule 3.1(q), the Assets include all
rights and property, other than real property, reasonably necessary for the
conduct of the Business by Purchaser in the manner in which it has been
conducted by the Sellers for the period of time reflected in the Financial
Statements and for the conduct of the Business as presently conducted by
each of the Sellers, and no property excluded from the Assets under Section
1.1(b), other than real property, constitutes property or rights material
to the Business. Each such tangible Asset is structurally sound, has been
maintained in accordance with normal industry practice, is in good
operating condition and repair, subject to normal wear and tear, is
suitable for the purposes for which it presently is used and for use in the
continued conduct of the Business in substantially the same manner as
conducted prior to the Closing. None of the tangible Assets is in need of
maintenance or repairs except for ordinary routine maintenance and repairs
that are not material in nature or cost. Any modifications that have been
made to any of the tangible Assets prior to Closing, have been made in
accordance with normal industry practice.
(a) Restrictions. None of the Sellers is a party to any material agreement,
license, Permit, Authorization or other instrument or any understanding or
oral agreement, and none of the Sellers is subject to any charter or other
corporate restriction or any judgment, order, writ, injunction, decree or
award, which materially adversely affects or materially restricts the
Business or Assets.
(a) Conditions Affecting the Sellers. Except as provided in this Agreement or
disclosed in the Schedules, and except for conditions that affect as a
whole the oil field servicing industry generally, there is no fact known to
the Sellers which may reasonably be expected to materially adversely affect
the Business considered as a whole. Notwithstanding the foregoing, the
Sellers and the Seller Shareholders shall not be deemed to have made to
Purchaser or DPS any representation or warranty other than as expressly
made in this Article II. Without limiting the generality of the foregoing,
the Sellers and the Seller Shareholders make no representations or
warranties to Purchaser or DPS with respect to (i) any projections,
estimates or budgets heretofore delivered to or made available to Purchaser
or DPS of future revenues, expenses or expenditures or future results of
operations; or (ii) except as expressly covered by a representation and
warranty contained in this Article II, any other information or documents
(financial or otherwise) made available to Purchaser or DPS or its counsel,
accountants or other advisors with respect to the Sellers, the Business or
the Assets.
(a) Employee Benefit Plans. Schedule 3.1(t) lists all of the Sellers' Employee
Benefit Plans. None of the Sellers is now and for the preceding five years
has not been, a party to any "employee pension benefit plan" as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). None of the Sellers is under any legal obligation to
create a new Employee Benefit Plan, or amend an existing Employee Benefit
Plan, that would affect any of the employees of the Sellers who are
employed or otherwise compensated for activities involving the Assets or
the Business ("Affected Employees").
(i) Purchaser shall have no responsibility or liability with respect to
benefits which may have accrued or been promised to any Affected Employee
under any "Employee Benefit Plan" of the Sellers or any member of a
Seller's control group as determined under Sections 414(b) or (c) of the
Code, or which form an affiliated service group with any of the Sellers or
the Seller Shareholders within the meaning of Section 414(m) of the Code.
The term "Employee Benefit Plan" includes, but is not limited to any profit
sharing, stock, bonus, 401(k), nonqualified deferred compensation, medical,
dental, workers' compensation, life insurance, incentive, vacation
benefits, and fringe benefits plan or program and each "employee benefit
plan" described in Section 3(3) of ERISA. The Sellers shall indemnify
Purchaser as provided in Section VI of this Agreement against and in
respect of any Damages (as hereinafter defined) which arise directly or
indirectly with respect to an Employee Benefit Plan. None of the Sellers
contributes to any "multiemployer plan" as defined in Section 3(37) or
4001(o)(3) of ERISA.
(i) The Sellers shall pay and be liable to Purchaser, and shall indemnify
Purchaser as provided in Section VI of this Agreement, from and against and
in respect of any and all Damages that arise under section 4980B of the
Code, imposed upon, incurred by, or assessed against Purchaser or any of
its employees arising by reason of or relating (x) to any failure to comply
with the continuation health care coverage requirements of section 4980B of
the Code, which failure occurred with respect to any current or prior
employee of Seller or any "qualified beneficiary" of such employee (as
defined in section 4980B(g)(I) of the Code) on or prior to the Closing
Date, and (y) to the extent, if any, of any amounts paid by Purchaser under
its health plan to any current or prior employee of the Sellers as a result
of a "qualifying event" (as defined in Section 4980B(f)(3) of the Code)
which occurred prior to the Closing Date, over the amount of the
"applicable premium" (as defined in section 4980B(f)(4) of the Code) paid
to Purchaser or Purchaser's health plan, by such current or prior employee.
References to the Code include any amendments that may be made to the Code
from time to time.
(a) Personnel. Schedule 3.1(u) lists the names and monthly or, as applicable,
hourly rates of compensation (including base salary, bonus, commissions,
and incentive pay) of the Affected Employees and summarizes the bonus,
profit sharing, percentage compensation, automobile, club membership and
other benefits, if any, paid or payable to the Affected Employees during
the Sellers' 1997 fiscal year and from the beginning of each of the
Seller's current fiscal year to the Effective Date and identifies all
accrued vacation relating to the Affected Employees. Schedule 3.1(u) also
contains a brief description of all material terms of all written or oral
employment agreements, severance agreements, confidentiality agreements,
noncompete agreements or similar agreements to which any Affected Employee
is or may be subject. The Sellers have delivered to Purchaser accurate and
complete copies of all such agreements, and all other agreements, plans and
other instruments to which any of the Sellers is a party and under which
the Affected Employees are entitled to receive benefits of any nature. To
the Sellers' knowledge, and except as set forth on Schedule 3.1(u), the
employee relations of each of the Sellers are good and there is no pending
or threatened controversy, labor dispute or union organization campaign
between any Seller and any of its employees or former employees. None of
the Affected Employees are represented by any labor union or organization
nor is any Seller a party to any collective bargaining agreement. Except as
set forth on Schedule 3.1(u), each of the Sellers is in compliance in all
material respects with all federal and state laws respecting employment and
employment practices, terms and conditions of employment and wages and
hours and is not engaged in any unfair labor practices. There is no unfair
labor practices complaint or charge of employment discrimination pending,
or threatened with respect to an Affected Employee before the National
Labor Relations Board, the Equal Employment Opportunity Commission, or any
other state, federal or local court or Governmental Entity, or any strike,
labor dispute, work slowdown or work stoppage pending or, to the Sellers'
knowledge, threatened against or involving any Seller, and none of the
Sellers has experienced any material labor difficulty during the last three
years. Except as otherwise specifically provided in this Agreement,
Purchaser shall have no liability for any severance or termination expenses
of any Seller or Seller Shareholder, including accrued vacation and sick
leave time, in connection with the termination of employment by Seller of
any Affected Employee, whether or not such person is employed by Purchaser.
None of the Sellers nor any Seller Shareholder shall have any such
liability in connection with the termination of employment by Purchaser of
any Affected Employee who has been employed by Purchaser and subsequently
terminated by Purchaser after the Closing.
(a) Legal Compliance; Undisclosed Liabilities. Each of the Sellers and each of
their predecessors and "Affiliates" (as defined in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934) has complied with all applicable
laws (including rules, Regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local,
and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or
notice has been filed or commenced against any of them alleging any failure
so to comply. None of the Sellers has any liability and there is no basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against Seller), except for
(i) liabilities set forth on the face of the Financial Statements, (ii)
liabilities which have arisen in the ordinary course of business (none of
which results from, arises out of, relates to, is in the nature of, or was
caused by any breach of Contract, breach of warranty, tort, infringement,
or violation of law), and (iii) liabilities listed on Schedule 3.1(l).
(a) Inventory. All inventory of the Sellers, whether or not reflected in the
balance sheets, consists of a quality and quantity usable and where
applicable, salable in the ordinary course of business.
(a) Warranty. Schedule 3.1(x) includes copies of the standard terms and
conditions of sale or lease for each of the products and services of the
Sellers (containing applicable guaranty, warranty, and indemnity
provisions). The products and services provided by the Sellers have, in
each case, been in conformity with all applicable contractual commitments
and all express and implied warranties, and none of the Sellers has any
liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against any of them giving rise to any liability) for replacement or repair
or other damages in connection therewith, subject only to the reserve for
warranty claims set forth on the face of the Financial Statements (rather
than in any notes thereto) as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of the
Sellers. No service provided by any of the Sellers is subject to any
guaranty, warranty, or other indemnity beyond the applicable standard terms
and conditions of sale or lease listed in Schedule 3.1(x).
(a) Investment. The Sellers and the Seller Shareholders understand that the
Shares have not been, nor will be, registered under the Securities Act of
1933 or under any state securities laws and are being offered and sold in
reliance upon federal and state exemptions for transactions not involving
any public offering. Each of the Sellers is acquiring the Shares solely for
its own account for investment purposes, and not with a view to the
distribution thereof. The Sellers and Seller Shareholders are sophisticated
investors, with knowledge and experience in business and financial matters,
and are able to bear the economic risk and lack of liquidity inherent in
holding the Shares. The Sellers and Seller Shareholders acknowledge and
agree that (i) they have fully reviewed all periodic reports filed with the
Securities and Exchange Commission by DPS within the past 12 months, (ii)
they have had the opportunity to ask questions of and receive information
from representatives of DPS and have received all information necessary for
each of them to evaluate the merits and risks inherent in holding the
Shares, (iii) the stock certificates issued to each Seller shall bear a
restrictive legend indicating that the Shares have not been registered
under the Securities Act or any other state securities laws.
A. Representations and Warranties of Purchaser. Purchaser and DPS, jointly and
severally, represent and warrant to the Sellers and the Seller Shareholders
as follows:
(a) Existence. Purchaser is a limited partnership validly existing and in good
standing under the laws of the State of Delaware. DPS is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Texas.
(a) Power and Authorization. Purchaser and DPS each has the power, authority
and legal right to execute, deliver and perform this Agreement. The
execution, delivery and performance of this Agreement by Purchaser and by
DPS have been duly authorized by all necessary corporate and partnership
action. This Agreement has been duly executed and delivered by Purchaser
and DPS and constitutes the legal, valid and binding obligation of
Purchaser and DPS, enforceable against Purchaser and DPS in accordance with
its terms except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, or other laws affecting the enforcement of
creditors' rights generally and the application of general principles of
equity.
(a) Noncontravention. The execution, delivery and performance of this Agreement
by Purchaser and DPS does not and will not violate, conflict with or result
in the breach of any material term, condition or provision of, or require
the consent of any other party which has not already been obtained under,
(i) any existing law, ordinance, or governmental rule or regulation to
which Purchaser or DPS is subject, (ii) any judgment, order, writ,
injunction, decree or award of any court, arbitrator or governmental or
regulatory official, body or authority which is applicable to Purchaser or
DPS, (iii) the Limited Partnership Agreement, Articles of Incorporation or
Bylaws or equivalent organizational documents, or any securities issued by
Purchaser, its general partner, or DPS as the case may be, or (iv) any
Contract to which Purchaser or DPS is a party or by which Purchaser or DPS
is otherwise bound. Except as otherwise contemplated by this Agreement, no
Authorization, approval or consent of, and no registration or filing with,
any Governmental Entity is required in connection with the execution,
delivery and performance of this Agreement by Purchaser or DPS.
(a) Shares. The Shares, if issued and delivered in accordance with the terms of
this Agreement for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and will be free of
restrictions on transfer other than restrictions on transfer set forth in
this Agreement and under applicable state and federal securities laws.
(a) No Material Misstatements. The documents filed by DPS pursuant to the
Securities Exchange Act of 1934 do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they
were made, not misleading.
A. Survival. All statements of fact contained in any written statement
(including financial statements), certificate, instrument or document
delivered by or on behalf of any party hereto pursuant to this Agreement
shall be deemed representations and warranties of such party. All
covenants, agreements, representations and warranties of the parties to
this Agreement shall survive and remain in full force and effect after the
Closing Date and shall not be affected by any investigation heretofore or
hereafter made by and on behalf of any of them or be deemed merged into any
instruments or agreements delivered in connection with this Agreement or
otherwise in connection with the transactions contemplated hereby. Subject
to the limitations on indemnification obligations set forth in Article VI,
the representations and warranties set forth in this Article III and in any
schedule, certificate or instrument delivered by or on behalf of any party
hereto in connection with this Agreement, shall terminate on the close of
business on the fifth anniversary of the Closing Date, following which all
the parties shall cease to have any right to bring any action or present
any claim for a breach of such representations and warranties; provided
that there shall be no termination of any such representation and warranty
as to which a bona fide claim has been asserted and notice of such claim
has been delivered prior to such termination date. Nothing in this Section
3.3 shall at any time relieve any party hereto from the performance of such
party's agreements, covenants and undertakings set forth in the Agreement
or in any other agreement executed and delivered by or on behalf of any
party hereto at or prior to the Closing pursuant to this Agreement.
I. ARTICLE - AGREEMENTS PENDING CLOSING
A. Agreements of the Sellers and the Seller Shareholders Pending the Closing.
The Sellers and the Seller Shareholders covenant and agree that, pending
the Closing and except as otherwise agreed to in writing by Purchaser, they
shall take the following actions:
(a) Business in the Ordinary Course. The Business shall be conducted solely in
the ordinary course consistent with past practice. The Sellers shall
continue to maintain and service the physical Assets used in the conduct of
the Business in good working condition consistent with past practices. The
Sellers shall not cause or permit to occur any of the events or occurrences
described in Section 3.1(h) (Existing Condition). Each of the Sellers shall
use its reasonable commercial efforts to maintain in full force and effect
all Authorizations currently in effect and used in the conduct of the
Business, and shall comply with all Regulations applicable to the Business,
the noncompliance with which might materially and adversely affect the
Business or the Assets. The Sellers shall not (i) sell, lease, license,
assign or otherwise transfer any of the Assets, (ii) enter into any
Contract outside of the ordinary course of business, (iii) amend, modify,
terminate, waive any material provision of, or breach any material
Contract, or (iv) cancel, terminate or cause or allow to lapse any
insurance coverage affecting the Business or the Assets.
(a) Conduct of Business. Each of the Sellers shall use its best efforts to
conduct the Business in such a manner that on the Closing Date the
representations and warranties contained in this Agreement shall be true,
except as specifically contemplated by this Article IV, as though such
representations and warranties were made on and as of such date.
Furthermore, each of the Sellers shall cooperate with Purchaser and use its
reasonable commercial efforts to cause all of the conditions to the
obligations of Purchaser under this Agreement to be satisfied on or prior
to the Closing Date.
(a) Exclusive Dealing. Until such time, if any, as this Agreement is terminated
pursuant to Article VIII, none of the Sellers shall (nor shall any Seller
cause its representatives and agents directly or indirectly, through any
third party or otherwise to), sell or encumber any part of the Assets, or
solicit, initiate, encourage or entertain any inquiries, proposals or
offers from, discuss or negotiate with, provide any non-public information
to or consider the merits of any inquiries or proposals from any person
(other than Purchaser) relating to any transaction involving the sale of
the Business or Assets, in whole or in part (other than sales of inventory
in the ordinary course of business), or any of the capital stock of the
Sellers, or any merger, consolidation, business combination or similar
transaction involving any of the Sellers.
(a) Access. Each of the Sellers shall give to Purchaser's officers, employees,
counsel, accountants and other representatives free and full access to and
the right to inspect, during normal business hours, all of the premises,
properties, assets, records, Contracts and other documents relating to the
Business and the Assets and shall permit them to consult with the officers,
employees, accountants, counsel and agents of Seller for the purpose of
making such investigation of the Business and the Assets as Purchaser shall
desire to make, provided that such investigation shall be at Purchaser's
sole cost and expense and shall not unreasonably interfere with the
Sellers' business operations. Furthermore, each Seller shall furnish to
Purchaser all such documents and copies of documents and Records and
information with respect to the Business and the Assets and copies of any
internal financial records relating thereto as Purchaser shall from time to
time reasonably request and shall permit Purchaser and its agents to make
such physical inventories and inspections of the Assets as Purchaser may
reasonably request from time to time.
(a) Press Release. Except for such press release and discussions with employees
and customers as mutually agreed to by the Sellers and Purchaser and except
as required by applicable law, the Sellers shall not give notice to third
parties or otherwise make any public statement or releases concerning this
Agreement or the transactions contemplated hereby except for such written
information as shall have been approved in writing as to form and content
by Purchaser, which approval shall not be unreasonably withheld.
(b) Actions of Directors and Shareholders. Each of the Sellers shall promptly
and diligently take all action necessary in accordance with law and its
Articles of Incorporation, Bylaws and other organizational documents to
approve this Agreement and to consummate the transactions contemplated
hereby.
(a) Employee Matters. Each of the Sellers shall give its employees all notices
required by law, including but not limited to notices of their rights under
the Comprehensive Omnibus Budget Reconciliation Act of 1986. Each of the
Sellers shall terminate all of such Seller's Employee Benefit Plans, as
listed on Schedule 3.1(u), as of the Closing.
(a) Actions of Sellers and Seller Shareholders. None of the Sellers or the
Seller Shareholders will intentionally take any action which would result
in a breach of any of its representations and warranties.
(a) Required Approvals; HSR. As promptly as practicable after the Effective
Date, the Sellers and the Seller Shareholders will make all filings
required to be made by them in order to consummate the transactions
contemplated by this Agreement, including any filings required by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx") and
will use reasonable commercial efforts to cause the early termination of
any applicable waiting period under the HSR Act.
A. Agreements of Purchaser Pending the Closing. Purchaser and DPS covenant and
agree that, pending the Closing and except as otherwise agreed to in
writing by the Sellers, they shall take the following actions:
(a) Press Release. Except for such press release and discussions with employees
and customers as mutually agreed to by the Sellers and Purchaser and except
as required by applicable law, Purchaser will not give notice to third
parties or otherwise make any public statement or releases concerning this
Agreement or the transactions contemplated hereby except for such written
information as shall have been approved in writing as to form and content
by Seller, which approval shall not be unreasonably withheld.
(a) Actions of DPS and Purchaser. Each of DPS and Purchaser shall promptly and
diligently take all action necessary in accordance with law and its
Articles of Incorporation, Bylaws, Limited Partnership Agreement, or other
organizational documents, as the case may be, to approve this Agreement and
to consummate the transactions contemplated hereby.
(a) Actions of Purchaser and DPS. Neither Purchaser nor DPS will intentionally
take any action which would result in a breach of any of its
representations and warranties hereunder.
(b) Required Approvals; HSR. As promptly as practicable after the Effective
Date, Purchaser and DPS will make all filings required to be made by them
in order to consummate the transactions contemplated by this Agreement,
including any filings required by the HSR Act and will use reasonable
commercial efforts to cause the early termination of any applicable waiting
period under the HSR Act.
I. ARTICLE - CONDITIONS PRECEDENT TO THE CLOSING
A. Conditions Precedent to the Obligation of Purchaser and DPS. All
obligations of Purchaser and DPS under this Agreement are subject to the
fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent:
(a) Representations and Warranties True as of the Closing Date. The
representations and warranties of the Sellers and the Seller Shareholders
contained in this Agreement or in any Schedule, certificate or document
delivered by the Sellers to Purchaser pursuant to the provisions hereof
shall have been true on the date hereof and shall be true on the Closing
Date as though such representations and warranties were made as of such
date.
(a) Compliance with this Agreement. Each of the Sellers shall have performed
and complied in all material respects with all of its obligations under
this Agreement to be performed or complied with by it prior to or at the
Closing.
(a) No Threatened or Pending Litigation. Except as otherwise provided on
Schedule 5.1(c), on the Closing Date, no suit, action or other proceeding,
or injunction or final judgment relating thereto, shall be threatened or be
pending before any Governmental Entity in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby, and
no investigation that might result in any such suit, action or proceeding
shall be pending or threatened.
(a) Consents and Approvals. The Sellers and the Seller Shareholders shall have
obtained all third party consents required for the assignment or transfer
of the Assets from the Sellers to Purchaser which are material to the
continued operations of the Business after the Closing, all of which are
listed on Schedule 5.1(d).
(a) Material Adverse Changes. Neither the Assets nor the Business in the
aggregate shall have been or shall be threatened to be materially adversely
affected in any way as a result of any event or occurrence other than such
conditions as may affect the well servicing industry as a whole.
(a) Closing Certificate. Purchaser shall have received certificates from the
Sellers, dated the Closing Date, certifying in such detail as Purchaser may
reasonably request that the conditions specified in Sections 5.1(a) through
5.1(e) have been fulfilled.
(a) Approval of Counsel; Corporate Matters. All actions, proceedings,
resolutions, instruments and documents required to carry out this Agreement
or incidental hereto and all other related legal matters shall have been
approved on the Closing Date by Jenkens & Xxxxxxxxx, A Professional
Corporation, counsel for Purchaser, in the exercise of its reasonable
judgment. The Sellers also shall have delivered to Purchaser such other
documents, instruments, certifications and further assurances as such
counsel may reasonably require.
(b) Physical Inventory. Purchaser shall be entitled to conduct an inventory of
the Assets immediately prior to Closing to determine, among other matters,
whether a Purchase Price adjustment will be required.
(a) Employment Contracts. The Selling Shareholders shall have executed and
delivered to Purchaser the Employment, Non-Competition and Arbitration
Agreements.
(a) Xxxx-Xxxxx-Xxxxxx Approval. The waiting period (including any extension
thereof) applicable to the consummation of the transactions contemplated by
this Agreement under the HSR Act shall have expired or terminated or the
transaction shall have been approved thereunder.
(a) EBITDA. Purchaser's auditors shall have confirmed that Sellers' EBITDA for
the 12-month period beginning June 1, 1997 through May 31, 1998 is not less
than $9,400,000 determined on a basis consistent with that certain report
dated July 24, 1998 prepared by Xxxxxxx & Co. for Purchaser attached as
Schedule 5.1(k) and that Sellers' EBITDA for each of the months of June
1998 and July 1998 is not less than $800,000 for each such month.
A. Conditions Precedent to the Obligations of the Sellers and the Seller
Shareholders. All obligations of the Sellers and the Seller Shareholders
under this Agreement are subject to the fulfillment or satisfaction, prior
to or at the Closing, of each of the following conditions precedent:
(a) Representations and Warranties True as of the Closing Date. The
representations and warranties of Purchaser and DPS contained in this
Agreement or in any list, certificate or document delivered by Purchaser or
DPS to the Sellers pursuant to the provisions of this Agreement shall be
true on the Closing Date as though such representations and warranties were
made as of such date.
(a) Compliance with this Agreement. Purchaser and DPS shall have performed and
complied with all obligations required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(a) No Threatened or Pending Litigation. Except as otherwise provided on
Schedule 5.1(c), on the Closing Date, no suit, action or other proceeding,
or injunction or final judgment relating thereto, shall be threatened or be
pending before any Governmental Entity in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby, and
no investigations that might result in any such suit, action or proceeding
shall be pending or threatened.
(a) Closing Certificates. The Sellers shall have received a certificate from
Purchaser and DPS, dated the Closing Date, certifying in such detail as the
Sellers may reasonably request that the conditions specified in Sections
5.2(a) through 5.2(c) have been fulfilled.
(a) Consent of Shareholders. If required, the requisite percentage of each of
the Seller's shareholders shall have approved the consummation of the
transactions contemplated in accordance with the requirements of applicable
law.
(a) Approval of Counsel; Corporate Matters. All actions, proceedings,
resolutions, instruments and documents required to carry out this Agreement
or incidental hereto and all other related legal matters shall have been
approved on the Closing Date by Xxxxx & Xxxxx, L.L.P., counsel for the
Sellers, in the exercise of its reasonable judgment. Purchaser and DPS also
shall have delivered to the Sellers such other documents, instruments,
certifications and further assurances as such counsel may reasonably
require.
(a) Employment Contracts. Purchaser shall have executed and delivered to the
Selling Shareholders, the Employment, Non-Competition and Arbitration
Agreements, and DPS shall have executed and delivered to the Sellers the
Registration Rights Agreement.
(a) Xxxx-Xxxxx-Xxxxxx Approval. The waiting period (including any extension
thereof) applicable to the consummation of the transactions contemplated by
this Agreement under the HSR Act shall have expired or terminated or the
transaction shall have been approved thereunder.
I. ARTICLE - INDEMNIFICATION
================================================================================
The following Sections are important
and should be read carefully.
================================================================================
A. Definitions.
(a) "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.
(a) "Indemnitee" shall mean the person or persons indemnified, or entitled or
claiming to be entitled to be indemnified, pursuant to the provisions of
Article VI.
(a) "Indemnitor" shall mean the person or persons having the obligation to
indemnify pursuant to the provisions of Article VI.
A. Indemnification by the Sellers and the Seller Shareholders. Except as
otherwise limited by this Article VI, (and subject to the limitations set
forth in Section 3.1 regarding the several, as opposed to joint, liability
of the Seller Shareholders for representations and warranties made
regarding the Seller Shareholders), the Sellers and the Seller
Shareholders, jointly and severally, agree to indemnify, defend and hold
harmless DPS, Purchaser and each of their officers, directors, employees,
agents, shareholders and controlling persons, and their respective
successors and assigns (the "Purchaser Indemnified Parties"), separate
consideration for which is hereby acknowledged, of, from and against and in
respect of any and all liabilities, losses, damages, demands, assessments,
claims, costs and expenses (including interest, awards, judgments,
penalties, settlements, fines, costs of Remediation, costs and expenses
incurred in connection with investigating and defending any claims or
causes of action including attorneys' fees and expenses and all fees and
expenses of consultants and other professionals) ("Damages") actually
suffered, incurred or realized by the Purchaser Indemnified Parties
(collectively, "Purchaser Losses") arising out of or resulting from or
relating to any of the following:
any misrepresentation, breach of warranty or breach of any covenant or
agreement made or undertaken by the Sellers or the Seller Shareholders in
this Agreement or any misrepresentation in or omission from any other
agreement, certificate, exhibit or writing delivered to Purchaser pursuant
to this Agreement, including the Schedules;
any liability other than the Assumed Liabilities relating to the Assets or
the Business, whether known or unknown, now existing or hereafter arising,
contingent or liquidated, including without limitation, any Tax liabilities
of the Sellers prior to the Closing;
(a) any products manufactured, sold or distributed or services provided by or
on behalf of the Sellers on or prior to the Closing or with respect to any
claims made pursuant to warranties to third persons in connection with
products manufactured, sold or distributed or services provided by or on
behalf of the Sellers on or prior to the Closing;
(a) any Environmental Losses in connection with, relating to, or arising from
acts or omissions of any of the Sellers or Seller Shareholders or
conditions in existence on or prior to the Closing which relate to the
Assets or the operations of the Business; and
(a) any claims arising from, in connection with, or relating to, any breach of
this Agreement by any of the Sellers or Seller Shareholders.
A. Indemnification by Purchaser and DPS. Except as otherwise limited by this
Article VI, Purchaser and DPS, jointly and severally, agree to indemnify,
defend and hold each of the Sellers and the Seller Shareholders and each of
their officers, directors, employees, agents, shareholders and controlling
persons and their successors and assigns (the "Seller Indemnified Parties")
harmless, separate consideration for which is hereby acknowledged, of, from
and against and in respect of Damages actually suffered, incurred or
realized by the Seller Indemnified Parties (collectively, "Seller Losses")
arising out of or resulting from any of the following:
(a) any misrepresentation, breach of warranty or breach of any covenant or
agreement made or undertaken by Purchaser or DPS in this Agreement or any
misrepresentation in or omission from any other agreement, certificate,
exhibit or writing delivered to the Sellers pursuant to this Agreement;
(a) (i) any Assumed Liability and (ii) any other liability relating to the
Assets or the Business that arises out of the operation of the Business by
Purchaser or DPS after the Closing, whether contingent or liquidated,
including without limitation, any Tax liabilities of Purchaser or DPS
pertaining to the Assets or the Business arising subsequent to the Closing;
(a) any products manufactured, sold or distributed or services provided by or
on behalf of Purchaser after the Closing or with respect to any claims made
pursuant to warranties to third persons in connection with products
manufactured, sold or distributed or services provided by or on behalf of
Purchaser after the Closing;
(a) any Environmental Losses in connection with, relating to, or arising from
acts or omissions of Purchaser or DPS subsequent to the Closing which
relate to the Assets or the operations of the Business; and
(a) any claims arising from, in connection with, or relating to, any breach of
this Agreement by Purchaser or DPS.
A. Procedure. All claims for indemnification pursuant to Article VI of this
Agreement shall be asserted and resolved as follows:
(a) An Indemnitee promptly shall give the Indemnitor notice of any matter that
an Indemnitee has determined has given or could give rise to a right of
indemnification under this Agreement, stating the amount of the Damages, 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 an Indemnitee
to indemnification except to the extent such failure shall have resulted in
liability to the Indemnitor that actually could have been avoided had such
notice been provided.
(a) The obligations and liabilities of an Indemnitor with respect to Damages
arising from claims of any third party that are subject to the
indemnification provided for in this Article VI ("Third Party Claims")
shall be governed by and contingent upon the following additional terms and
conditions. If an Indemnitee receives notice of any Third Party Claim, the
Indemnitee shall give the Indemnitor written 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 the Indemnitee. If 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 reasonably required by the Indemnitor. If 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 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.
A. Survival; Limitations on Amount. All of the representations and warranties
of the parties contained in this Agreement shall survive until the fifth
anniversary of the Closing (even if the damaged party knew or had reason to
know of any misrepresentation or breach of warranty at the time of Closing
except as disclosed on the Schedules). No party who is a Purchaser
Indemnified Party shall make a claim for indemnification with respect to a
claim based upon a breach of a representation or warranty until the
aggregate amount of the Purchaser Losses attributable to claims for breach
of representations or warranties is at least $50,000, at which time, all
such amounts may be claimed. No party who is Seller Indemnified Party shall
make a claim for indemnification with respect to a claim based upon a
breach of a representation or warranty until the aggregate amount of the
Seller Losses attributable to claims for breach of representations or
warranties is at least $50,000 at which time, all such amounts may be
claimed. However, neither the Sellers and the Seller Shareholders on the
one hand, nor Purchaser or DPS on the other hand, shall be required to pay
in the aggregate more than $25,000,000 to satisfy claims made pursuant to
this Article 6 for claims based upon breaches of the representations and
warranties.
A. Payment; Failure to Pay Indemnification. Payment of any amount due pursuant
to this Article VI shall be made by the Indemnitor within 30 business days
after notice is sent by the Indemnitee. If and to the extent an Indemnitee
makes written demand upon an Indemnitor for indemnification pursuant to
this Article VI and the Indemnitor refuses or fails to pay in full within
30 business days of such written demand, then the Indemnitee after
arbitration of the matter may use any legal or equitable remedy to collect
from the Indemnitor the amount of its Damages. Nothing contained herein is
intended to limit or constrain an Indemnitee's rights against an Indemnitor
for indemnity, the remedies herein being cumulative and in addition to all
other rights and remedies of the Indemnitee.
A. Express Negligence. THE FOREGOING INDEMNITIES 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
NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR
STRICT LIABILITY OF ANY OF THE INDEMNIFIED PARTIES.
A. Other Rights and Remedies Not Affected. The indemnification rights of the
parties under this Agreement are independent of and in addition to such
rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty or failure to
fulfill any agreement or covenant hereunder on the part of any party
hereto, including without limitation the right to seek specific
performance, rescission or restitution, none of which rights or remedies
shall be affected or diminished hereby.
I. ARTICLE - POST CLOSING MATTERS
A. Arbitration.
(a) Negotiation Period. All disputes arising under this Agreement (other than a
suit for injunctive relief) or arising with respect to any transaction
contemplated hereby will be subject to binding arbitration in accordance
with this Section 7.1 If such a dispute exists, the parties shall attempt
for a thirty-day period (the "Negotiation Period") from the date any party
gives any one or more of the other parties notice (the "Dispute Notice")
pursuant to this Section, to negotiate in good faith, a resolution of the
dispute. The Dispute Notice shall set forth with specificity the basis of
the dispute and shall be delivered to each party to this Agreement to whom
the dispute relates. During the Negotiation Period, representatives of each
party involved in the dispute who have authority to settle the dispute
shall meet at mutually convenient times and places and use their best
efforts to resolve the dispute.
(a) Commencement of Arbitration. If a resolution is not reached by the parties
prior to the end of the Negotiation Period, the parties agree to submit to
binding arbitration in San Antonio, Texas with an arbitrator or arbitrators
experienced in the arbitration of complex commercial disputes.
(a) Consolidation of Hearings. If more than one party delivers a Dispute Notice
to one or more other parties pursuant to this Section 7.1, the arbitrators
selected with respect to each such Dispute Notice may elect, in their sole
discretion, to combine the matters set forth in one or more, but not
necessarily all, of the Dispute Notices into one or more hearings, in which
case, the arbitrators shall adjust the time deadlines set forth herein as
they determine appropriate, and shall decide which one of them will hear
the evidence and render a final determination with respect to each hearing.
(a) Conclusion of Arbitration. The arbitrator shall make the final decision as
to the parties' respective rights and obligations. The arbitrator may
determine that a party is entitled to damages hereunder from one or more
other parties, and the manner in which such damages shall be assessed
against the other parties. However, the arbitrator may not award emotional
distress or punitive damages.
(a) Expenses of Arbitrators. The expenses of the arbitrator(s) shall be shared
equally by the parties to the arbitration.
A. Discharge of Business Obligations. Following the Closing Date, the Sellers
shall pay and discharge, in accordance with past practice but not more than
30 days within receipt of an invoice, all obligations and liabilities
incurred prior to the Closing Date relating to the Business and the Assets
(except for those expressly assumed by Purchaser hereunder and except to
the extent prorated pursuant to Section 1.5), including without limitation
any liabilities or obligations to employees, trade creditors and clients of
the Business. The Sellers, Seller Shareholders, Purchaser and DPS shall
each use commercially reasonable efforts following the Closing to ensure a
smooth transition of the Business to Purchaser.
A. Maintenance of Books and Records. The Sellers and Purchaser shall each
preserve all records possessed by such party relating to the Business or
Assets prior to the Closing Date for a period of at least six years
following the fiscal year to which the records relate. After the Closing
Date, where there is a legitimate purpose, such party shall provide the
other parties and their representatives with access, upon prior reasonable
written request specifying the need therefor, during regular business
hours, to (a) the officers, employees and other duly appointed
representatives of such party and (b) the books of account and records of
such party, but, in each case, only to the extent relating to the Assets or
Business prior to the Closing Date, and the other parties and their
representatives shall have the right to make copies of such books and
records; provided, however, that the foregoing right of access shall not be
exercisable in such a manner as to interfere unreasonably with the normal
operations and business of such party; and further, provided that, as to so
much of such information as constitutes trade secrets or confidential
business information of such party, the requesting party and its officers,
directors and representatives will use due care to not disclose such
information except (x) as required by law, (y) with the prior written
consent of such party, which consent shall not be unreasonably withheld, or
(z) where such information becomes available to the public generally, or
becomes generally known to competitors of such party through sources other
than the requesting party, its Affiliates or its officers, directors or
representatives. Such records may nevertheless be destroyed by a party if
such party sends to the other parties written notice of its intent to
destroy the records, specifying with particularity the contents of the
records to be destroyed. Such records may then be destroyed after the 30th
day after such notice is given unless another party objects to the
destruction in which case the party seeking to destroy the records shall
deliver such records to the objecting party.
A. Payments Received. The Sellers and Purchaser after the Closing shall hold
and will promptly transfer and deliver to the other, from time to time as
and when received by them, any cash, checks with appropriate endorsements
(using their best efforts not to convert such checks into cash), or other
property that they may receive on or after the Closing which properly
belongs to the other party, including without limitation any insurance
proceeds, and will account to the other for all such receipts. Following
the Closing, Purchaser shall have the right and authority to endorse
without recourse the name of the Sellers on any check or any other
evidences of indebtedness received by Purchaser on account of the Business
and the Assets transferred to Purchaser hereunder, for the sole purpose of
depositing such items into accounts over which the Sellers have signatory
authority.
A. Inquiries. Following the Closing Date, the Sellers will promptly refer all
inquiries with respect to ownership of the Assets or the Business to
Purchaser. The Sellers will execute such documents and financing statements
as Purchaser may reasonably request from time to time to evidence the
transfer of the Assets to Purchaser, including any necessary assignments of
financing statements. In addition, the Sellers shall take all reasonable
steps necessary to convey to Purchaser any Assets used in the normal course
of the Business which are not listed in the Schedules set forth in Section
1.1(a) of this Agreement.
A. Covenant Not to Compete. In exchange for the payment by Purchaser to the
Seller Shareholders of Two Million Dollars ($2,000,000) in immediately
available funds (the "Non-Competition Payment") in accordance with Schedule
7.6, and as part of the transactions described in this Agreement, the
Sellers and the Seller Shareholders each separately agree, for a period of
five years after the Closing Date, not to, directly or indirectly, own,
manage, operate, join or control, or participate in ownership, management,
operation or control of, any business whether in corporate, proprietorship
or partnership form or otherwise as more than a one percent owner in such
business where such business is competitive with the Business and is within
a 300-mile radius of the Sellers' facilities used in the Business or in the
operation of the Assets as of the Closing Date. The parties hereto
specifically acknowledge and agree that the remedy at law for any breach of
the foregoing will be inadequate and that Purchaser, in addition to any
other relief available to it, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damage. The
Seller and the Seller Shareholders acknowledge that this covenant not to
compete is being provided as an inducement to Purchaser to acquire the
Business and the Assets and that this Section 7.6 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 Purchaser in the
Business. Whenever possible, each provision of this Section 7.6 shall be
interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Section 7.6 is 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 7.6. If any provision of this Section 7.6 is,
for any reason, 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 7.6 but shall be confined in its operation to the
provision of this Section 7.6 directly involved in the controversy in which
such judgment has been rendered. If the provisions of this Section 7.6 are
ever deemed to exceed the time or geographic limitations permitted by
applicable laws, then such provisions shall be reformed to the maximum time
or geographic limitations permitted by applicable law.
A. Transition Period. During the six-month period following the Closing (the
"Transition Period"), the parties shall operate the Business in the
following manner:
(a) Collections. Purchaser's employees shall issue invoices for work in process
as of the Closing Date for both the portion of the work completed by the
Sellers prior to the Closing and the portion of the work completed by
Purchaser thereafter.
(a) Accounting. Purchaser's employees will assist Seller as reasonably
necessary to close out the Sellers' books and records relating to the
Business.
(a) Licenses and Permits. The Sellers will continue to cooperate with Purchaser
in connection with Purchaser's applications for the transfer, renewal or
issuance of any permits, licenses, approvals or other Authorizations and as
required to satisfy any regulatory requirements arising as a result of the
sale of the Business pursuant to this Agreement, provided that all
out-of-pocket expenses incurred in connection therewith shall be paid by
Purchaser.
A. Accounting Records. For a five year period following the Closing, each of
the Sellers will use commercially reasonable efforts to take all action
necessary or appropriate to allow Purchaser to obtain access to audit work
papers of the Sellers' accountants for the immediately preceding five
years, if Purchaser requests such access in connection with the audit by
Purchaser of the Business for periods preceding the Closing.
A. Nondisclosure of Proprietary Information. The Sellers and the Seller
Shareholders agree that, from and after the Closing Date, they and all of
their Affiliates shall hold in confidence and will not directly or
indirectly at any time reveal, report, publish, disclose or transfer to any
person other than Purchaser any proprietary information relating to the
Business or the Assets (the "Proprietary Information") that is not
generally known to the public or use any Proprietary Information for any
purpose. The Sellers and the Seller Shareholders acknowledge that all
documents and objects containing or reflecting any Proprietary Information
whether developed by any of the Sellers or by a third party for any of the
Sellers, will after the Closing Date become the exclusive property of
Purchaser and be delivered to Purchaser.
A. Contact with Former Employees. The Sellers and the Seller Shareholders
agree that for a period of five years following the Closing Date, they will
not solicit for employment, directly or indirectly, any of Purchaser's
employees, or employees of Purchaser's Affiliates or related companies, or
any person who has been so employed within one year prior to such
solicitation.
I. ARTICLE - TERMINATION
A. Events of Termination. The obligation to close the transactions
contemplated by this Agreement may be terminated as follows:
(a) by mutual agreement of Purchaser and Sellers;
(a) by Purchaser, if a material default is made by the Sellers or the Seller
Shareholders in the observance or in the due and timely performance by the
Sellers or the Seller Shareholders of any agreements and covenants of the
Sellers or the Seller Shareholders herein contained, or if there has been a
breach by the Sellers or the Seller Shareholders of any of the warranties
and representations of the Sellers or the Seller Shareholders herein
contained, and such default or breach has not been cured or waived within
20 days of written notice thereof;
(a) by the Sellers, if a material default is made by Purchaser or DPS in the
observance or in the due and timely performance by Purchaser or DPS of any
agreements and covenants of Purchaser or DPS herein contained, or if there
has been a breach by Purchaser or DPS of any of the warranties and
representations of Purchaser or DPS herein contained, and such default or
breach has not been cured or has not been waived within 20 days of written
notice thereof;
(a) by Purchaser or the Sellers (provided the terminating party has not
materially breached any of its agreements, covenants or representations and
warranties), if the Closing has not occurred on or before October 15, 1998.
A. Liability Upon Termination. If the obligation to consummate the
transactions contemplated by this Agreement is terminated pursuant to any
provision of this Article VIII, then this Agreement shall forthwith become
void and there shall not be any liability or obligation with respect to
this Agreement on the part of Seller or Purchaser except and to the extent
such termination results from the willful breach by a party of any of its
representations, warranties or agreements hereunder.
A. Notice of Termination. The parties hereto may exercise their respective
rights of termination under this Article VIII only by delivering written
notice to that effect to the other party on or before the Closing Date,
specifically describing the factual basis and provisions of this Agreement
relied upon for such termination.
I. ARTICLE - MISCELLANEOUS
A. Finders' Fees. Neither the Sellers nor the Seller Shareholders have engaged
any person to act on their behalf in connection with the transactions
contemplated by this Agreement who would have any claim against Purchaser
or DPS or any of their respective Affiliates for brokerage or finders' fees
or agent commissions or similar payments.
A. Expenses. Except as otherwise provided in this Agreement, each party hereto
shall pay its own expenses incidental to the preparation of this Agreement,
the carrying out of the provisions of this Agreement and the consummation
of the transactions contemplated hereby.
A. Assignment and Binding Effect. This Agreement may not be assigned prior to
the Closing by any party hereto without the prior written consent of the
other party; provided, however, Purchaser and DPS may assign their rights
but not their obligations hereunder to any other entity that is
controlling, controlled by or under common control with Purchaser or DPS.
Purchaser shall give Sellers prompt written notice of any such assignment.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and assigns of the Sellers, the Seller Shareholders, Purchaser
and DPS.
A. Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally or sent by telegram,
facsimile, first class mail, postage prepaid, or overnight courier as
follows:
If to Purchaser or DPS, to: With a copy to:
Xxxxxx Production Partners, X.X. Xxxxxxx & Xxxxxxxxx,
000 X. Xxxxx Xxxxxx, Xxxxx 0000 A Professional Corporation
Xxx Xxxxxxx, Xxxxx 00000 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
ATTN: Xxxxxxx X. Xxxxxx Xxxxxx, Xxxxx 00000
Facsimile Number: (000) 000-0000 ATTN: X. Xxxxxxx Xxxx
Facsimile Number: (000) 000-0000
If to the Sellers or
the Seller Shareholders, to: With a copy to:
Xx. Xxxxx Xxxxxxx Xxxxx & Xxxxx, L.L.P.
P.O. Drawer 000 Xxx Xxxxx Xxxxx
Xxxxx, Xxxxx 00000 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
ATTN: L. Xxxxxxx Xxxxxx, III
Facsimile Number: (000) 000-0000
or to such other address as the addressee may have specified in a notice
duly given to the sender as provided herein. Such notice, request, demand,
waiver, consent, approval or other communication will be deemed to have
been given as of the date so delivered, telegraphed or faxed or five
business days after the date so mailed, or on the day after the date
delivered to Federal Express or another similar courier marked for next day
delivery if delivered within the continental United States, and, if
delivered overseas, two business days after the date so delivered to DHL,
Federal Express or another similar overseas delivery service.
A. Governing Law. This Agreement shall be governed by, interpreted and
enforced in accordance with the laws of the State of Texas (without regard
to the choice or conflicts of law provisions of Texas law).
A. No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article VI hereof, certain other
indemnified parties, and their heirs, executors, administrators, legal
representatives, successors and assigns, and they shall not be construed as
conferring any rights on any other persons.
A. Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the parties and supersedes
any prior understandings, agreements, or representations by or among the
parties, written or oral, to the extent they related in any way to the
subject matter hereof. All Exhibits and Schedules referred to herein are
incorporated herein in full and are specifically made a part of this
Agreement.
A. Headings. All Section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and
shall not affect in any way the meaning or interpretation of this
Agreement.
A. Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
enforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction; provided if any
provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the effective
period of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and
the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement. Furthermore, in lieu of
each illegal, invalid, or unenforceable provision there shall be added
automatically as part of this Agreement a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
A. Counterparts. This Agreement may be executed in any number of counterparts
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when all counterparts taken
together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Agreement as to a party to produce
or account for any of the other counterparts signed by another party not
joined in the action.
A. Construction. The parties have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as drafted jointly
by the parties and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
Regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation. Words used
herein, regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and
any other gender, masculine, feminine or neuter, as the context requires.
Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, Governmental Entity, association,
unincorporated organization and any other entity. Any references to a
Section, Article, Schedule or Exhibit are to sections, articles, schedule
and exhibits to this Agreement, unless otherwise specifically stated.
A. Waiver. No waiver by any party of any default, misrepresentation, or breach
of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.
A. Specific Performance. The Sellers and the Seller Shareholders acknowledge
and agree that Purchaser and DPS would be damaged irreparably if any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, the Sellers agree
that Purchaser and DPS shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions of this Agreement
in any action instituted in any court of the United States or any state
thereof having jurisdiction over the parties and the matter (subject to the
provisions set forth in Section__), in addition to any other remedy to
which they may be entitled, at law or in equity.
A. Submission to Jurisdiction. Each of the parties submits to the jurisdiction
of any state or federal court sitting in San Antonio, Texas, in any action
or proceeding arising out of or relating to this Agreement and agrees that
all claims or proceedings will be heard and determined in any such court.
Each party also agrees not to bring any action or proceeding arising out of
or relating to this Agreement in any other court. Each of the parties
waives any defense of inconvenient forum to the maintenance of any action
or proceeding so brought and waives any bond, surety, or other security
that might be required of any other party with respect thereto. Each party
agrees that a final judgment in any action or proceeding so brought shall
be conclusive and may be enforced by suit on the judgment or in any other
manner provided by law or at equity.
A. Good Faith. The parties agree to act in good faith in the performance and
enforcement of this Agreement.
B. Attorneys' Fees. If any arbitration or action at law or in equity,
including an action for declaratory relief, is brought to enforce or
interpret the provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs from the other
party; provided, however, that no party shall be a prevailing party unless
such party has recovered more or paid less as a result of arbitration or a
final order resulting from judicial proceedings than the amount offered in
writing by an opposing party to settle the dispute.
A. Appointment of Seller Shareholders' Representative. Each of the Seller
Shareholders hereby constitutes and appoints Xxxxx X. Xxxxxxx as such
Seller Shareholder's duly authorized representative and attorney-in-fact
(the "Representative") for all purposes of this Agreement, the Escrow
Agreement, the Registration Rights Agreement and all actions to be taken
hereunder and thereunder, having the power and authority, without
limitation, (i) to execute and deliver, for and on behalf of such Seller
Shareholder, the Escrow Agreement, the Registration Rights Agreement and
any other documents, certificates or instruments required to be executed in
connection with the transactions contemplated by this Agreement; (ii) to
act for and on behalf of such Seller Shareholder with respect to any
dispute arising under this Agreement, the Escrow Agreement or the
Registration Rights Agreement; (iii) to exercise any investment authority
conferred upon any of the Seller Shareholders individually or as a group by
the Escrow Agreement; and (iv) to execute and deliver, for and on behalf of
such Seller Shareholder, all certificates, confirmations and other
documents as shall be necessary and appropriate to consummate the
transactions provided for in this Agreement and to fulfill any and all of
such Seller Shareholder obligations hereunder. Such power and authority of
the Representative shall be irrevocable. Each Seller Shareholder expressly
acknowledges and agrees that the Representative shall have no liability to
such Seller Shareholder for error in judgment or acts or omissions in
connection herewith, whether or not disclosed and whether or not due to his
negligence, unless caused by his willful misconduct.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the date first written.
PURCHASER:
XXXXXX PRODUCTION PARTNERS, L.P.
By: Xxxxxx Production Management, Inc.
its General Partner
By:
P. Xxxx Xxxxx, Vice President
DPS:
XXXXXX PRODUCTION SERVICES, INC.
By:
P. Xxxx Xxxxx, Chief Financial Officer
SELLERS:
XXXXXXX SERVICES II, INC.
By:
Xxxxx X. Xxxxxxx, President
SUPERIOR COMPLETION SERVICES, INC.
By:
Xxxxxxx X. Xxxxxx, President
SOUTH TEXAS DISPOSAL, INC.
By:
Xxxxx X. Xxxxxxx, President
ELSIK, II, INC.
By:
Xxxxx X. Xxxxxxx, President
SELLER SHAREHOLDERS:
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxx
Xxxxxxx Xxxxxx
Xxxxx X. Xxxxx
SCHEDULES
Schedule 1.1(a)(i) Assigned Contracts
Schedule 1.1(a)(ii) Equipment Leases
Schedule 1.1(a)(iii) Operating Assets
Schedule 1.1(a)(iv) Vehicles
Schedule 1.1(a)(v) Equipment
Schedule 1.1(a)(vii) Personal Property
Schedule 1.1(a)(viii) Permits
Schedule 1.1(b) Excluded Assets
Schedule 1.3(a) Purchase Price
Schedule 1.3(b) Seller Tax Basis and Fair Market Value of Assets
Schedule 1.4(a) Assumed Liabilities
Schedule 3.1(a) Corporate Jurisdiction
Schedule 3.1(c) Validity of Contemplated Transactions
Schedule 3.1(e) Financial Statements
Schedule 3.1(h) Existing Condition
Schedule 3.1(i) Permitted Liens
Schedule 3.1(j) Compliance with Laws; Authorizations
Schedule 3.1(l) Litigation
Schedule 3.1(n) Contracts and Commitments
Schedule 3.1(o) Environmental Matters
Schedule 3.1(q) Assets
Schedule 3.1(t) Employee Benefit Plans
Schedule 3.1(u) Personnel
Schedule 3.1(x) Warranty
Schedule 5.1(c) No Threatened or Pending Litigation
Schedule 5.1(f) Consents and Approvals
Schedule 7.6 Covenant Not to Compete
Schedule 9.1 Finders' Fees
EXHIBITS:
Exhibit A Escrow Agreement
Exhibit B Registration Rights Agreement
Exhibit C Employment Agreement, Non-Competition Agreement
and Mutual Agreement to Arbitrate Claims
