Exhibit 10(aa)
ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT made as of the 4th day of May, 2001.
BETWEEN:
ITS-TESTCO, LLC
a limited liability company organized under the laws of the
State of Oklahoma, United States of America
(the "Vendor")
- and -
INTER-TECH DRILLING SOLUTIONS, INC.
a corporation incorporated under the laws of the
State of Texas, United States of America
(the "Purchaser")
WHEREAS:
A. The Vendor is the owner of the Assets; and
B. The Purchaser is willing to purchase the Assets from the Vendor and the
Vendor is willing to sell the Assets to the Purchaser in accordance with
the terms and conditions of this Agreement;
NOW THEREFORE IN CONSIDERATION OF the mutual covenants and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Parties hereto
covenant and agree as follows:
ARTICLE I
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 Definitions - Whenever used in this Agreement, the following words and
terms shall have the respective meanings ascribed to them as follows:
"Agreement" means this Asset Purchase and Sale Agreement, including any
Schedules attached hereto, and all amendments made by written agreement
between the Parties;
"Assets" means those assets owned by the Vendor and listed in Schedule "A"
attached hereto which shall include all type of service agreements, if any,
warranties by producers, insurance policies, spare parts supplier
agreements, if any, and any other agreements and governmental licenses
required for the proper operation of the Assets;
"Business Day" means a day other than a Saturday, Sunday, or any other day
on which the principal commercial banks located in McAllen, Texas are not
open for business during normal banking hours;
"Closing" means subject to the terms and conditions of this Agreement, the
completion of the sale, assignment, transfer and conveyance by the Vendor
to the Purchaser and the purchase and receipt by the Purchaser from the
Vendor of the Assets, and the execution and delivery by the Parties of all
documents, and the satisfaction of all conditions required for such
transactions to be completed;
"Closing Date" means May 4th, 2001 or such other date as the Parties may
agree upon as the date upon which the Closing shall take place;
"Encumbrances" means mortgages, charges, pledges, security interests,
liens, encumbrances, actions, claims, demands and equities of any nature
whatsoever or howsoever arising and any rights or privileges capable of
becoming any of the foregoing;
"Excluded Assets" means any real property whether leased or owned, any
leased or borrowed equipment, any cash and equivalents, any prepaid
expenses and any loans and accounts receivable including investment in
Testco Inc. de Mexico, S.A. de C.V., collected, collectible or in any way
associated with the business and operations of the Vendor;
"Governmental Charges" means all taxes, customs, duties, certificates,
rates, levies, assessments, reassessments and other charges associated or
in connection with the Assets, including the process of having goods and/or
equipment nationalized in the country of Mexico, together with all
penalties, interest and fines with respect thereto, payable to any federal,
provincial, state, municipal, local or other government or governmental
agency, authority, board, bureau or commission, domestic or foreign;
"Parties" means the parties to this Agreement, collectively, and "Party"
means any one of them; and
"Purchase Price" has the meaning set out in Section 2.1.
1.2 Schedules - The following are the Schedules annexed hereto and incorporated
by reference and deemed to be part hereof:
Schedule "A" - Assets
Schedule "B" - Xxxx of Sale
1.3 Entire Agreement - This Agreement constitutes the entire agreement between
the Parties and supercedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the Parties, and
there are no warranties, representations and other agreements between the
Parties in connection with the subject matter hereof except as specifically
set forth in this Agreement.
1.4 Extended Meanings - In this Agreement, words importing the singular number
include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders.
1.5 References - References to an Article, Section, Subsection, Paragraph or
Schedule shall be construed as references to an Article, Section,
Subsection, Paragraph or Schedule to this Agreement unless the context
otherwise requires.
1.6 Currency - Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in American (U.S.) dollars.
1.7 Governing Law - This Agreement shall be construed in accordance with the
laws of the State of Texas and the laws of the United States of America
applicable therein and shall be treated, in all respects, as a Texas
contract, and actions in respect thereof shall be brought in the State of
Texas.
ARTICLE II
SALE AND PURCHASE OF ASSETS
2.1 Purchase Price of the Assets - The Vendor shall sell to the Purchaser, and
the Purchaser shall purchase from the Vendor, the Assets, which for greater
certainty shall exclude the Excluded Assets, for an aggregate purchase
price of U.S.$664,328.00 (the "Purchase Price").
2.2 Payment of Purchase Price - The Purchaser shall pay the Vendor the Purchase
Price in the following manner:
(a) On Closing, the Purchaser shall pay the Vendor by way of wire transfer
U.S. $600,000.00.
(b) The Purchaser shall hold back a total of $64,328.00 for a period of
ninety (90) days from the Closing Date and subject to any issues of
indemnification as set out in Article VI hereof, the Purchaser shall
pay the Vendor the balance of any such hold back monies remaining, if
any, by way of wire transfer in the following manner:
(i) on the expiry of thirty (30) days from the Closing Date: U.S.$21,442.67
(ii) on the expiry of sixty (60) days from the Closing Date: U.S.$21,442.67
(iii) on the expiry of ninety (90) days from the Closing Date: U.S.$21,442.66
(c) Where the Purchaser reduces its payment of any or all of the hold back
money referred to in Subsection 2.2(b) above, the Purchaser shall
provide to the Vendor written reasons for such reduction along with a
proper accounting of such amounts, if possible.
2.3 Xxxx of Sale - On Closing, the Parties agree to execute a Xxxx of Sale with
respect to the sale of the Assets in the form provided in Schedule "B"
attached hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Vendor - The Vendor hereby represents
and warrants to the Purchaser that as of the date of this Agreement:
(a) Organization and Good Standing of the Corporation - The Vendor is a
limited liability company duly incorporated and organized and is
validly existing under the laws of the State of Oklahoma and has all
necessary power, authority and capacity to own or otherwise hold the
Assets and is in good standing and has conducted its business in
accordance with applicable laws, the failure to comply with which
would not have an adverse impact on the Vendor or its ability to
convey the Assets to the Purchaser.
(b) Title to Assets - The Vendor is the owner of the Assets, free and
clear of any Encumbrances, and as such is entitled to absolutely
convey to the Purchaser at Closing all of its right, title and
interest in the Assets.
(c) Authority and Binding Obligations - The Vendor has all necessary right
and capacity, full power and absolute authority to sign and deliver
this Agreement, and to sell, assign and transfer the Assets in the
manner contemplated in this Agreement, to perform its obligations
under this Agreement, and to otherwise complete the transactions
contemplated in this Agreement. The Vendor and its respective Members
have taken all necessary or desirable actions, steps and other
proceedings to approve or authorize, validly and effectively, the
entering into, and the signing, delivery and performance of, this
Agreement, sale, assignment and transfer of the Assets.
(d) Location of Assets - Both now and at Closing, all of the Assets are
located either within a distance of twenty (20) miles from the city
centre of Laredo, Texas, United States of America, or within a
distance of approximately twenty (20) miles from the city centre of
Reynosa, Mexico. In addition, none of the Assets are located more than
twenty (20) miles south of the United States of America - Mexico
border.
(e) Use of the Assets - As of the Closing Date, the Assets shall be made
available for the sole and immediate use by the Purchaser. For greater
clarification, as of the Closing Date, these are no lease agreements
or other arrangements in place with any third party which may involve
the use, operation or delivery of any of the Assets on or after the
Closing Date.
(f) All or Substantially all of the Assets of the Business of the Vendor -
Excepting the Excluded Assets, the Assets consist of all of the assets
of the Vendor which are set out in Schedule "A" attached hereto.
3.2 Representations and Warranties of the Purchaser - The Purchaser hereby
represents and warrants to the Vendor that as of the date of this
Agreement:
(a) Organization and Good Standing of the Corporation - The Purchaser is a
corporation duly incorporated and organized and is validly existing
under the laws of the State of Texas.
(b) Corporate Authority and Binding Obligations - The Purchaser has all
necessary right and capacity, full corporate power and absolute
authority to sign and deliver this Agreement, and to purchase the
Assets in the manner contemplated in this Agreement, to perform its
obligations under this Agreement, and to otherwise complete the
transactions contemplated in this Agreement. The Purchaser, its
respective boards of directors, and its respective shareholders have
taken all necessary or desirable actions, steps and corporate and
other proceedings to approve or authorize, validly and effectively,
the entering into, and the signing, delivery and performance of, this
Agreement, sale, assignment and transfer of the Assets.
3.3 Condition of the Assets - Subject to Sections 3.1, 4.1 and 6.1, the Parties
agree that the Assets are to be purchased on an "as is-where is" basis and
there are no collateral agreements, conditions, representations or
warranties of any nature whatsoever made by the Vendor, express or implied,
arising at law, by statute or in equity or otherwise, with respect to the
quality and condition of the Assets.
ARTICLE IV
COVENANTS
4.1 Covenants of the Vendor -The Vendor covenants and agrees with the Purchaser
as follows:
(a) From the date of this Agreement up to and including the Closing Date,
the Vendor shall keep the Assets in a safe and secure location in
accordance with the representations made in this Agreement and in the
same state of repair and condition as they were on the date of this
Agreement or the date of last inspection by the Purchaser, whichever
is earlier, usual wear and tear excepted, and the Vendor shall
immediately inform the Purchaser if the condition or location of the
Assets materially changes in any respect.
(b) As of the Closing Date, the Vendor shall ensure that any and all
Assets located in Mexico are certified by the applicable Mexican
governmental authority as being "nationalized" as that term is
understood and applied in such country with respect to the use and
importation of goods and equipment into Mexico.
(c) The Vendor shall properly collect and remit any applicable taxes
associated with the purchase of the Assets by the Purchaser to the
relevant governmental authority and in that regard will also arrange
for the proper filing of any applicable tax documents associated with
such transaction.
(d) The Vendor shall arrange for the proper filing of any United States of
America and Mexican tax documents associated with the Purchase of the
Assets by the Purchaser.
ARTICLE V
CLOSING ARRANGEMENTS
5.1 Closing - The Closing will take place on the Closing Date or on such other
date that the Parties may agree. On Closing, the Parties shall arrange for
the execution and delivery via facsimile, where applicable, of all such
documents associated with such transaction. The Parties agree to arrange
for the subsequent timely distribution and execution of original copies of
such documents, where required, so that each Party shall have at least one
set of original copies for its records.
5.2 Delivery of Documents by Vendor - The Vendor will deliver to the Purchaser
at Closing the following:
(a) evidence satisfactory to the Purchaser that all of the Assets located
in the country of Mexico at Closing are "nationalized", as that term
is understood and applied in such country with respect to the use and
importation of goods and equipment into Mexico;
(b) an executed copy of the Xxxx of Sale in the form provided in Schedule
"B" attached hereto; and
(c) all other documents, instruments and writings required to be delivered
by the Vendor pursuant to this Agreement or otherwise required in
connection herewith, including but not limited to (i) warranties by
producers; (ii) insurance policies; (iii) service agreements, if any;
(iv) spare parts supplier agreements; (v) environmental permits and
licenses, if any; (vi) import permits; and (vii) evidence of import
duties payments, if any.
5.3 Delivery of Documents by Purchaser -The Purchaser will deliver to the
Vendor at Closing the following:
(a) an executed copy of the Xxxx of Sale in the form provided in Schedule
"B" attached hereto;
(b) a wire transfer for that portion of the Purchase Price owing at
Closing in accordance with Section 2.2(a) hereof; and
(c) all other documents, instruments and writings required to be delivered
by the Purchaser pursuant to this Agreement or otherwise required in
connection herewith.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnity by Vendor - The Vendor acknowledges and agrees that it will
indemnify and save the Purchaser harmless from and against any claims,
demands, actions, cause of action, damage, loss, deficiency, cost,
liability and expense which may be made or brought against the Purchaser or
which the Purchaser may suffer or incur as a result of, in respect of or
arising out of:
(a) any and all Governmental Charges incurred by the Purchaser with
respect to the importation into Mexico of those Assets which at the
date of this Agreement are presently in Mexico or intended on being
imported into Mexico by the Vendor prior to the Closing Date;
(b) any loss, damage, repair, theft or destruction of any of the Assets
that arises prior to the Closing Date;
(c) any non-performance or non-fulfilment of any covenant or agreement on
the part of the Vendor contained in this Agreement or in any document
given in order to carry out the transactions contemplated hereby;
(d) any misrepresentation, inaccuracy, incorrectness or breach of any
representation or warranty made by the Vendor contained in this
Agreement or contained in any document or certificate given in order
to carry out the transactions contemplated hereby; and
(e) all costs and expenses including legal fees on a solicitor-and-client
basis, incidental to or in respect of the foregoing.
6.2 Indemnity by Purchaser - The Purchaser acknowledges and agrees that it will
indemnify and save the Vendor harmless from and against any claims,
demands, actions, cause of action, damage, loss, deficiency, cost,
liability and expense which may be made or brought against the Vendor or
which the Vendor may suffer or incur as a result of, in respect of or
arising out of:
(a) any non-performance or non-fulfilment of any covenant or agreement on
the part of the Purchaser contained in this Agreement or in any
document given in order to carry out the transactions contemplated
hereby;
(b) any misrepresentation, inaccuracy, incorrectness or breach of any
representation or warranty made by the Purchaser contained in this
Agreement or contained in any document or certificate given in order
to carry out the transactions contemplated hereby;
(c) the payment of any applicable Texas sales tax to the relevant
government authority in relation to the payment of the Purchase Price,
if such tax is required to be paid; and
(d) all costs and expenses including legal fees on a solicitor-and-client
basis, incidental to or in respect of the foregoing.
ARTICLE VII
GENERAL
7.1 Expenses - All costs and expenses (including, without limitation, the fees
and disbursements of legal counsel) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
Party incurring such expenses.
7.2 Risk - All risks of ownership of the Assets shall stay with the Vendor up
to the Closing Date whereupon all such risk shall pass to the Purchaser on
and after the Closing Date.
7.3 Time - Time shall be of the essence in this Agreement.
7.4 Notices - Any notice required or permitted to be given hereunder, or for
the purposes hereof for any future payment to any Party, shall be
sufficiently given if in writing and delivered personally, or in the case
of written notice only, if transmitted by telecopier or other form of
recorded communication to such Party:
(a) in the case of the Vendor at:
The Xxxxx Company, Xxxxxxxxxx Xxxxx
Xxxxx 000, 0000 Xxxxx Xxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx
00000 X.X.X.
Attention: Xxxx Xxx, Xx.
Facsimile: (000) 000-0000
(b) in the case of the Purchaser at:
c/o Northland Energy Corporation
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxx, Senior Controller
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Gervais LLP
Barristers and Solicitors
0000 Xxxxxxxx Xxxxx
000 - 0xx Xxxxxx X.X.
Xxxxxxx, XX, X0X 0X0
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
or at such other address as the Party to whom such notice or payment is to
be given shall have last notified to the Party giving the same in the
manner provided in this Section. Any notice delivered to the Party to whom
it is addressed shall be deemed to have been given and received on the day
it is so delivered at such address, provided that if the notice is
delivered after 4:00 p.m. (local time) or if such day is not a Business Day
then the notice shall be deemed to have been given and received on the
Business Day next following such day. Any notice transmitted by telecopier
or other form of recorded communication shall be deemed given and received
on the first Business Day after its transmission.
7.5 Assignment - This Agreement may not be assigned by either Party without the
prior written consent of the other Party. Subject thereto, this Agreement
shall inure to the benefit of and be binding upon the Parties and their
respective successors and permitted assigns.
7.6 Further Assurances - The Parties shall provide all such reasonable
assurances as may be required to consummate the transactions contemplated
hereby, and each Party shall provide such further documents or instruments
required by any other Party as may be reasonably necessary or desirable to
effect the purpose of this Agreement and carry out its provisions, whether
before or after the Closing.
7.7 Amendments - This Agreement may only be amended by agreement in writing
signed by both Parties hereto.
7.8 Counterparts - This Agreement may be executed by the Parties in separate
facsimile counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and
the same instrument.
7.9 Severability - If any provision or section of this Agreement or the
application thereof is held invalid under specified circumstances, the
remainder of this Agreement or the application of such provision or section
or part under other circumstances, shall not be affected thereby.
IN WITNESS WHEREOF the Parties have duly executed this Agreement as of the
date first above written.
ITS-TESTCO, LLC
Per its Manager: TESTCO, INC.
Per: XXXXXXX XXXXXX
Xxxxxxx Xxxxxx, President
INTER-TECH DRILLING SOLUTIONS, INC.
Per: XXXXXXX X. XXXXXXX
Xxxxxxx X. XxXxxxx
Per: XXXXXX XXXXXX
Xxxxxx Xxxxxx
SCHEDULE "A"
ASSETS
SCHEDULE "B"
XXXX OF SALE
