Execution Copy
ASSET PURCHASE AGREEMENT
AMONG
WELLTECH EASTERN, INC.,
TALON TRUCKING COMPANY,
AND
LOMAK PETROLEUM, INC.
December 31, 1996
C:\34ACTREP\EXFILES\EXHIBIT.2G
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into this
31st day of December, 1996 among WellTech Eastern, Inc., a Delaware corporation
("Buyer"), Talon Trucking Company, an Oklahoma corporation (the "Seller"), and
Lomak Petroleum, Inc., a Delaware corporation and the sole shareholder of the
Seller (the "Shareholder").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell substantially all of its assets,
and Buyer desires to acquire such assets.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements, and subject to the terms
and conditions herein contained, the parties hereto hereby agree as follows:
Article I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of the Assets. Subject to the terms and
conditions set forth in this Agreement, at the Closing (as defined in Section
1.4 hereof), the Seller hereby agrees to sell, convey, transfer, assign and
deliver to Buyer and Buyer agrees to purchase from the Seller all of the assets
of the Seller existing on the Closing Date (as defined in Section 1.4 hereof)
other than the Excluded Assets (defined below), whether real, personal, tangible
or intangible, including, without limitation, the following assets of the Seller
relating to or used or useful in the operation of the business as conducted by
the Seller on and before the Closing Date (the "Business") (all such assets
being sold hereunder are referred to collectively herein as the "Assets"):
(a) all tangible personal property of the Seller (such as
machinery, equipment, leasehold improvements, furniture and fixtures,
and vehicles), including, without limitation, that which is more fully
described on Schedule 1.1(a) hereto (collectively, the "Tangible
Personal Property");
(b) all of the inventory of Seller, including without
limitation, that which is more fully described on Schedule 1.1(b)
hereto (collectively, the "Inventories"), subject to changes in the
ordinary course of business since the Balance Sheet Date (as defined in
Section 2.1.7 hereof);
(c) all of the Seller's intangible assets, including without
limitation, (i) all of the Seller's rights to the names under which it
is incorporated or under which it currently does business, (ii) all of
the Seller's rights to any patents, patent applications, trademarks and
service marks (including registrations and applications therefor),
trade names, and copyrights and written know-how, trade secrets,
licenses and sublicenses and all other similar proprietary data and the
goodwill associated therewith (collectively, the "Intellectual
Property") used or
C:\34ACTREP\EXFILES\EXHIBIT.2G
1
held in connection with the Business, including without limitation,
that which is more fully described on Schedule 1.1(c) hereto (the
"Seller Intellectual Property") and (iii) all of the Seller's rights in
its phone numbers and all of its account ledgers, sales and promotional
literature, computer software, books, records, files and data
(including customer and supplier lists), and all other records of the
Seller relating to the Assets or the Business, excluding the corporate
minute books of the Seller (collectively, the "Intangibles");
(d) those leases, subleases, contracts, contract rights, and
agreements relating to the Assets or the operation of the Business
specifically listed on Schedule 1.1(d) hereto (collectively, the
"Contracts");
(e) to the extent assignable, all of the permits,
authorizations, certificates, approvals, registrations, variances,
waivers, exemptions, rights-of-way, franchises, ordinances, orders,
licenses and other rights of every kind and character (collectively,
the "Permits") relating principally to all or any of the Assets or to
the operation of the Business, including, but not limited to, that
which is more fully described on Schedule 1.1(e) hereto (collectively,
the "Seller Permits");
(f) the goodwill of the Business; and
(g) all other or additional privileges, rights, interests,
properties and assets of the Seller of every kind and description and
wherever located that are used in the Business, intended for use in the
Business, or necessary for the continued conduct of the Business other
than the Excluded Assets.
The Assets shall not include the following (collectively, the "Excluded
Assets"): (i) all of the Seller's accounts receivable and all other rights of
the Seller to payment for services rendered by the Seller before the Closing
Date (the "Seller Receivables"); (ii) all cash accounts, cash equivalents or
similar investments of the Seller and all xxxxx cash of the Seller kept on hand
for use in the Business; (iii) all right, title and interest of the Seller in
and to all prepaid rentals, other prepaid expenses, prepaid taxes, bonds,
deposits and financial assurance requirements, and other current assets relating
to any of the Assets or the Business; (iv) all assets in possession of the
Seller but owned by third parties; (v) the corporate charter, corporate seal,
organizational documents and minute books of the Seller and all records
necessary for the preparation of returns and other reports by the Seller, the
Shareholder and their affiliates; (vi) the cash consideration paid or payable by
Buyer to Seller pursuant to Section 1.2 hereof; (vii) all Seller Permits
specified as not assignable in Schedule 1.1(e) hereto; and (viii) the Seller's
right, title and interest in and to this Agreement.
1.2 Consideration for Assets. As consideration for the sale of the
Assets to Buyer and for the other covenants and agreements of the Seller and the
Shareholder contained herein, Buyer agrees to pay to the Seller at the Closing
the amount of $1,860,000 in the form of a cashier's check or bank check or wire
transfer of immediately available funds to an account designated by the Seller.
C:\34ACTREP\EXFILES\EXHIBIT.2G
2
1.3 Liabilities. Effective as of the Closing, Buyer shall assume, pay,
perform, and discharge those, and only those, liabilities and obligations of the
Seller to perform under the Contracts and the Permits to the extent that the
Contracts and the Permits have been validly assigned to Buyer (the "Assumed
Liabilities"). On and after the Closing Date, the Seller shall be responsible
for any and all other liabilities and obligations of the Seller other than the
Assumed Liabilities, including, without limitation, those liabilities and
obligations specified in Section 6.3 hereof arising from the Seller's employment
of its former employees (collectively, the "Retained Liabilities").
1.4 Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall be at 10:00 a.m. on January
10, 1997 at such location as is mutually agreed to by the parties, or such other
time, place or date as is agreed to among the parties hereto. The date on which
the Closing occurs is referred to elsewhere herein as the "Closing Date."
Article II
REPRESENTATIONS AND WARRANTIES
OF THE SELLER, THE SHAREHOLDER AND BUYER
2.1 Representations and Warranties of the Seller and the
Shareholder. Each of the Seller
and the Shareholder jointly and severally represents and warrants to Buyer as
follows:
2.1.1. Organization and Good Standing. The Seller is a
corporation duly organized, validly existing and in good standing under
the laws of its state of organization, has full requisite corporate
power and authority to carry on its business as it is currently
conducted, and to own and operate the properties currently owned and
operated by it. The Seller is duly qualified or licensed to do business
and is in good standing as a foreign corporation authorized to do
business in all jurisdictions in which the character of the properties
owned or the nature of the business conducted by it would make such
qualification or licensing necessary, except where the failure to so
qualify or be licensed would not have a material adverse effect on the
Assets or the Business.
2.1.2. Agreements Authorized and their Effect on Other
Obligations. The execution and delivery of this Agreement have been
authorized by all necessary corporate and shareholder action on the
part of the Seller and the Shareholder, and this Agreement is the valid
and binding obligation of the Seller and the Shareholder enforceable
(subject to normal equitable principals) against each of such parties
in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, debtor relief or similar
laws affecting the rights of creditors generally. Except as provided in
Schedule 2.1.2 hereto, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
will not conflict with or result in a violation or breach of any term
or provision of, nor constitute a default under (i) the charter or
bylaws (or other organizational documents) of either the Seller or the
Shareholder, (ii) any obligation,
C:\34ACTREP\EXFILES\EXHIBIT.2G
3
indenture, mortgage, deed of trust, lease, contract or other agreement
to which either the Seller or the Shareholder is a party or by which
either the Seller or the Shareholder or their respective properties are
bound, except where such conflicts, violations and/or breaches, in the
aggregate, would not have a material adverse effect on the Assets or
the Business; or (iii) any provision of any law, rule, regulation,
order, permits, certificate, writ, judgment, injunction, decree,
determination, award or other decision of any court, arbitrator, or
other governmental authority to which either the Seller or the
Shareholder or any of their respective properties are subject, except
where such conflicts, violations and/or breaches, in the aggregate,
would not have a material adverse effect on the Assets or the Business.
2.1.3. Contracts. Schedule 1.1(d) hereto sets forth a complete
list of all contracts, including leases under which the Seller is
lessor or lessee, which relate to the Assets and are to be performed in
whole or in part after the date hereof. All of the Contracts are in
full force and effect, and constitute valid and binding obligations of
the Seller. The Seller is not, and, to the knowledge of either the
Seller or the Shareholder, no other party to any of the Contracts is,
in default thereunder, and, to the knowledge of either the Seller or
the Shareholder, no event has occurred which (with or without notice,
lapse of time, or the happening of any other event) would constitute a
default thereunder. No Contract has been entered into on terms which
could reasonably be expected to have a material adverse effect on the
use of the Assets by Buyer. None of the members of the management of
either the Seller or the Shareholder has received any information which
would cause such persons to conclude that any customer of the Seller
will (or is likely to) cease doing business with the Seller or Buyer as
a result of the consummation of the transactions contemplated hereby.
All of the Contracts are assignable to Buyer without the consent of any
other party thereto.
2.1.4. Title to and Condition of Assets. The Seller has good,
indefeasible, defensible and marketable title to all of the Assets
(other than the goodwill of the Business), free and clear of any
Encumbrances (defined below) other than Permitted Encumbrances (defined
below). All of the Assets are in a state of good operating condition
and repair, ordinary wear and tear excepted, and are free from any
known defects except as may be repaired by routine maintenance and such
minor defects as to not substantially interfere with the continued use
thereof in the conduct of normal operations. All of the Assets conform
in all material respects to all applicable laws governing their use. No
written notice of any violation of any law, statute, ordinance, or
regulation relating to any of the Assets has been received by either
the Seller or the Shareholder, except such as have been fully complied
with. The term "Encumbrances" means all liens, security interests,
pledges, mortgages, deeds of trust, claims, rights of first refusal,
options, charges, restrictions or conditions to transfer or assignment,
liabilities, obligations, privileges, equities, easements, rights of
way, limitations, reservations, restrictions, and other encumbrances of
any kind or nature. The term "Permitted Encumbrances" means
Encumbrances for current taxes and assessments not yet due and payable,
including nondelinquent ad valorem taxes or nondelinquent statutory
Encumbrances arising other than by reason of any default on the part of
the Seller.
C:\34ACTREP\EXFILES\EXHIBIT.2G
4
2.1.5. Licenses and Permits. Schedule 1.1(e) hereto sets forth
a complete list of all Permits necessary under law for the operation,
maintenance and use of the Assets in the manner in which they are now
being operated, maintained and used. Each of the Seller Permits and the
Seller's rights with respect thereto is valid and subsisting, in full
force and effect. The Seller is in compliance in all material respects
with the terms of each of the Seller Permits. None of the Seller
Permits has been, or to the knowledge of either the Seller or the
Shareholder, is threatened to be, revoked, canceled, suspended or
modified. Except as shown on Schedule 1.1(e) hereto, upon consummation
of the transactions contemplated hereby, all of the Seller Permits
shall be assignable to Buyer without the consent of any regulatory
agency and without undue delay as to their transfer.
2.1.6. Intellectual Property. Schedule 1.1(c) hereto sets
forth a complete list of all Intellectual Property material to or
necessary for the continued conduct of the Business. The Seller
Intellectual Property is owned or licensed by the Seller free and clear
of any Encumbrances other than Permitted Encumbrances. The Seller has
not granted to any other person any license to use any Seller
Intellectual Property. To the knowledge of either the Seller or the
Shareholder, Buyer's use of the Seller Intellectual Property as used by
the Seller on or before the date hereof will not, and the conduct of
the Business did not, infringe, misappropriate or conflict with the
Intellectual Property rights of others. Neither the Seller nor the
Shareholder has received any notice of infringement, misappropriation,
or conflict with the intellectual property rights of others in
connection with the use by Seller of the Seller Intellectual Property.
2.1.7. Financial Statements. The Seller has delivered to Buyer
copies of certain unaudited financial statements of Seller. Such
financial statements (collectively, the "Seller Financial Statements")
were included in the Descriptive Offering Memorandum (as defined in
Section 2.1.14 hereof) under the heading "Financial Review" and include
Seller's balance sheet (the "9/30 Balance Sheet") as at September 30,
1996 (the "Balance Sheet Date"). Other than the financial projections
covering periods beyond the Balance Sheet Date, the Seller Financial
Statements present fairly and fully the financial condition of the
Seller as at the dates and for the periods indicated thereon, subject,
in the case of interim financial statements, to normal year end
adjustments.
2.1.8. Absence of Certain Changes and Events. Other than as
a result of the transactions contemplated by this Agreement, since the
Balance Sheet Date, there has not been (whether as a result of a single
event or in the aggregate):
(a) Financial Change. Any material adverse change in the Assets, the
Business or the financial condition, operations, liabilities or prospects of the
Seller;
(b) Property Damage. Any material damage, destruction, or loss to any of
the Assets or the Business (whether or not covered by insurance);
C:\34ACTREP\EXFILES\EXHIBIT.2G
5
(c) Waiver. Any waiver or release of a material right of or claim held by
the Seller;\
(d) Change in Assets. Any acquisition, disposition, transfer,
encumbrance, mortgage, pledge or other encumbrance of any material asset of the
Seller other than in the ordinary course of business; (e) Labor Disputes. Any
labor disputes between the Seller and its employees; or
(f) Other Changes. Any other event or condition known
to either the Seller or the Shareholder that particularly
pertains to and has or is likely to have a material adverse
effect on the Assets, the operations of the Business or the
financial condition or prospects of the Seller.
2.1.9. Necessary Consents. Except as provided in Schedule
2.1.9 hereto, The Seller has obtained and delivered to Buyer all
consents to assignment or waivers thereof required to be obtained from
any governmental authority or from any other third party in order to
validly transfer the Assets hereunder, including, without limitation,
any consents required to assign the Contracts or the Seller Permits, to
the extent assignable.
2.1.10. Environmental Matters. For so long as the Seller has
owned the Assets, neither the Seller nor the Shareholder has received
any citation or formal notice from any entity, governmental agency or
individual regarding any existing, pending or threatened investigation
or inquiry related to violations of any Applicable Environmental Laws
or regarding any claims for remedial obligations or contribution for
removal costs or damages under any Applicable Environmental Laws. To
the knowledge of either the Seller or the Shareholder, there are no
writs, injunction decrees, orders or judgments outstanding, or
lawsuits, claims, proceedings or investigations pending or threatened
relating to the ownership, use, maintenance or operation of the Assets
or the conduct of the Business, nor, to the knowledge of either the
Seller or the Shareholder, is there any reasonable basis for any of the
foregoing. To the knowledge of either the Seller or the Shareholder,
there are no environmental conditions or circumstances, including the
presence or release of any Hazardous Materials, on any property
presently owned or leased by the Seller, or on any property on which
Hazardous Materials generated by the Seller's operations or the use of
the Assets were disposed of, which would result in a material adverse
change in the Business or business prospects of the Seller. The term
"Applicable Environmental Laws" means any applicable federal, state or
local law, statute, ordinance, rule, regulation, order or notice
requirement pertaining to human health, the environment, or to the
storage, treatment, discharge, release or disposal of hazardous wastes
or hazardous substances, including, without limitation (i) the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. ss.ss.9601 et seq.), as amended from time to time,
including, without limitation, as amended pursuant to the Superfund
Amendments and Reauthorization
C:\34ACTREP\EXFILES\EXHIBIT.2G
6
Act of 1986 ("CERCLA"), and regulations promulgated thereunder, (ii)
the Resources Conservation and Recovery Act of 1976 (42 U.S.C.
ss.ss.6901 et seq.), as amended from time to time ("RCRA"), and
regulations promulgated thereunder, (iii) the Federal Water Pollution
Control Act (U.S.C.A. ss.9601 et seq.), as amended, and regulations
promulgated thereunder, and (iv) any applicable state laws or
regulations relating to the environment. The term "Hazardous Materials"
means (x) asbestos, polychlorinated biphenyls, urea formaldehyde, lead
based paint, radon gas, petroleum, oil, solid waste, pollutants and
contaminants, and (y) any chemicals, materials, wastes or substances
that are defined, regulated, determined or identified as toxic or
hazardous in any Applicable Environmental Laws, including, but not
limited to, substances defined as "hazardous substances," "hazardous
materials," or "hazardous waste" in CERCLA, RCRA, the Hazardous
Materials Transportation Act (49 U.S.C. ss. 1801, et seq.), or
comparable state and local statutes or in the regulations adopted and
publications promulgated pursuant to said statutes.
2.1.11. No ERISA Plans or Labor Issues. No employee benefit
plan of the Seller, whether or not subject to any provisions of the
Employee Retirement Income Security Act of 1974, as amended, will by
its terms or applicable law, become binding upon or an obligation of
Buyer. The Seller has not engaged in any unfair labor practices which
could reasonably be expected to result in a material adverse effect on
the Assets. The Seller does not have any dispute with any of its
existing or former employees, and there are no labor disputes pending
or, to the knowledge of either the Seller or the Shareholder,
threatened by current or former employees of any of the Seller.
2.1.12. Investigations; Litigation. No investigation or review
by any governmental entity with respect to the Seller or any of the
transactions contemplated by this Agreement is pending or, to the
knowledge of either the Seller or the Shareholder, threatened, nor has
any governmental entity indicated in writing to either the Seller or
the Shareholder an intention to conduct the same. There is no suit,
action, or legal, administrative, arbitration, or other proceeding or
governmental investigation pending to which either the Seller or the
Shareholder is a party or, to the knowledge of either the Seller or the
Shareholder, might become a party or which particularly affects the
Assets.
2.1.13. Absence of Certain Business Practices. Neither the
Seller, nor any officer, employee or agent of the Seller, or any other
person acting on behalf of the Seller, have, directly or indirectly,
within the past two years, given or agreed to give any gift or similar
benefit (other than normal sales promotions or similar practices) to
any customer, supplier, government employee or other person who is or
may be in a position to help or hinder the profitable conduct of the
Business or the profitable use of the Assets (or to assist the Seller
in connection with any actual or proposed transaction) which if not
given in the past, would likely have had a material adverse effect on
the profitable conduct of the Business or the profitable use of the
Assets, or if not continued in the future, would likely materially
adversely affect the profitable conduct of the Business or the
profitable use of the Assets.
C:\34ACTREP\EXFILES\EXHIBIT.2G
7
2.1.14. Descriptive Offering Memorandum; Untrue Statements.
The Shareholder has delivered to Buyer the Confidential Talon Trucking
Company Descriptive Offering Memorandum dated November 1996, a copy of
which is attached hereto as Schedule 2.1.14 (the "Descriptive Offering
Memorandum"). Except as disclosed to Buyer in writing, the Descriptive
Offering Memorandum does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Seller has also
provided Buyer with access to all of its books and records, including
copies of all material contracts, documents concerning all litigation
and administrative proceedings, licenses, permits, insurance policies,
lists of suppliers and customers, and records relating principally to
the Business and the Assets.
2.1.15. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on
by the Seller, the Shareholder and their counsel directly with Buyer
and its counsel, without the intervention of any other person in such
manner as to give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee or any similar payment.
2.2 Representations and Warranties of Buyer. Buyer represents and
warrants to the Seller and the Shareholder as follows:
2.2.1. Organization and Good Standing. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of
its state of organization, has full requisite corporate power and
authority to carry on its business as it is currently conducted, and to
own and operate the properties currently owned and operated by it.
Buyer is duly qualified or licensed to do business and is in good
standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the
nature of the business conducted by it would make such qualification or
licensing necessary, except where the failure to so qualify or be
licensed would not have a material adverse effect on the business of
Buyer.
2.2.2. Agreements Authorized and their Effect on Other
Obligations. The execution and delivery of this Agreement have been
authorized by all necessary corporate and shareholder action on the
part of Buyer, and this Agreement is the valid and binding obligation
of Buyer enforceable (subject to normal equitable principals) against
Buyer in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or
similar laws affecting the rights of creditors generally. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, will not conflict
with or result in a violation or breach of any term or provision of,
nor constitute a default under (i) the charter or bylaws (or other
organizational documents) of Buyer, (ii) any obligation, indenture,
mortgage, deed of trust, lease, contract or other agreement to which
Buyer is a party or by which Buyer or any of its properties are bound,
except where such conflicts, violations and/or breaches, in the
C:\34ACTREP\EXFILES\EXHIBIT.2G
8
aggregate, would not have a material adverse effect on the business of
Buyer; or (iii) any provision of any law, rule, regulation, order,
permits, certificate, writ, judgment, injunction, decree,
determination, award or other decision of any court, arbitrator, or
other governmental authority to which Buyer or any of its properties
are subject, except where such conflicts, violations and/or breaches,
in the aggregate, would not have a material adverse effect on the
business of Buyer.
2.2.3. Investigations; Litigation. No investigation or review
by any governmental entity with respect to Buyer or any of the
transactions contemplated by this Agreement is pending or, to the
knowledge of Buyer, threatened, nor has any governmental entity
indicated to either the Seller or the Shareholder an intention to
conduct the same.
2.2.4. Inspections; Limitations of the Seller's Warranties.
Buyer is an informed sophisticated participant in the transactions
contemplated by this Agreement and has undertaken such investigation,
and has been provided with and has evaluated documents and information,
as Buyer and its advisors have deemed necessary to enable them to make
an informed and intelligent decision with respect to the execution and
delivery of this Agreement. Notwithstanding any contrary provision
herein, Buyer acknowledges that it is acquiring the Assets and the
Business without any representation or warranty, express or implied, by
either the Seller or the Shareholder other than representations and
warranties contained herein. Buyer further acknowledges that any
information regarding financial projections of the Business, whether or
not conatined in the Descriptive Offering Memorandum, were not relied
upon by Buyer in any way.
2.2.5. Financing. Buyer has available on hand, from its
working capital or currently available credit facilities, all of the
cash that Buyer will need to consummate the purchase of the Assets.
2.2.6. Finder's Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on
by Buyer and its counsel directly with the Seller and the Shareholder
and their counsel, without the intervention of any other person in such
manner as to give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee or any similar payment.
Article III
OBLIGATIONS PENDING CLOSING DATE
3.1 Agreements of the Seller and the Shareholder. Except as expressly
contemplated elsewhere in this Agreement, from the date hereof until the Closing
Date, the Seller shall, and the Shareholder shall cause the Seller to:
C:\34ACTREP\EXFILES\EXHIBIT.2G
9
3.1.1. Maintenance of Present Business. Operate the Business
and the Assets only in the ordinary course so as to maintain the
goodwill it now enjoys and, to the extent consistent with such
operation, use all reasonable efforts to preserve intact its present
business organization, keep available the services of its present
officers and employees, and preserve its relationships with customers,
suppliers, jobbers, distributors, and others having business dealings
with it;
3.1.2. Maintenance of Properties. At its expense, maintain
the Assets in customary repair, order, and condition, reasonable wear
and tear excepted;
3.1.3. Maintenance of Books and Records. Maintain its books
of account and records in the usual, regular, and ordinary manner, in
accordance with its current accounting
policies applied on a consistent basis;
3.1.4. Compliance with Law. Duly comply in all material
respects with all laws
applicable to it and to the conduct of the Business;
3.1.5. Disposal of Assets. Not sell, dispose of, or
encumber, any of the Assets,
except (i) in the usual and ordinary course of business or (iii) as
may be approved in writing
by Buyer;
3.1.6. Maintenance of Insurance. Maintain the insurance
coverage set forth on
Schedule 3.1.6 hereto with respect to the Assets and the Business;
3.1.7. Acquisition Proposals. Not directly or indirectly (i)
solicit, initiate or encourage any inquiry or Acquisition Proposal
(defined below) from any person or (ii) participate in any discussions
or negotiations regarding, or furnish to any person other than Buyer or
its representatives any information with respect to, or otherwise
facilitate or encourage any Acquisition Proposal by any other person.
As used herein "Acquisition Proposal" means any proposal for a merger,
consolidation or other business combination involving the Seller or for
the acquisition or purchase of any equity interest in, or a material
portion of the assets of, the Seller, other than the transactions with
Buyer and the Shareholder contemplated by this Agreement. Each of the
Seller and the Shareholder shall promptly communicate to Buyer the
terms of any such written Acquisition Proposals which it may receive or
any written inquiries made to it or any of its directors, officers,
representatives or agents; and
3.1.8. No Amendment to Articles of Incorporation. Not amend
its Articles of
Incorporation or merge or consolidate with or into any other
corporation or change in any
manner the rights of its common stock or the character of its business.
C:\34ACTREP\EXFILES\EXHIBIT.2G
10
3.2 Agreements of Buyer, the Seller and the Shareholder. Except as
expressly contemplated elsewhere in this Agreement, from the date hereof until
the Closing Date, each of the parties hereto shall:
3.2.1. Inspection. Permit the other parties and their
authorized representatives, during normal business hours, to inspect
their records and to consult with their officers, employees, attorneys,
and agents for the purpose of determining the accuracy of the
representations and warranties herein made and the compliance with
covenants contained in this Agreement. Each of the parties hereto
further agrees that, except as required by law, it will and will cause
its representatives to hold all data and information obtained with
respect to the other parties, in confidence and further agrees that it
will not use such data or information or disclose the same to others,
except to the extent such data or information either are, or become,
published or a matter of public knowledge through no fault of its own;
3.2.2. Notice of Material Developments. Promptly notify the
other parties in writing of any condition or circumstance, known to
such party, occurring from the date hereof through the Closing Date,
that would cause the respective representations and warranties of such
party contained herein to become untrue in any material respect; and
3.2.3. Reasonable Efforts to Satisfy Closing Conditions. Use
its reasonable efforts to cause the conditions precedent to the
obligations of the other parties hereto contained in Article IV hereof
to be satisfied to the extent that the satisfaction of such condition
is reasonably in control of such party.
Article IV
CONDITIONS PRECEDENT TO OBLIGATIONS
4.1 Conditions Precedent to Obligations of Buyer. The obligation of
Buyer to consummate and effect the transactions contemplated hereunder shall be
subject to the satisfaction of the following conditions, or to the waiver
thereof by Buyer before the Closing Date:
4.1.1. Representations and Warranties of the Seller and the
Shareholder True at Closing Date. The representations and warranties of
the Seller and the Shareholder herein contained shall be, in all
material respects, true as of and at the Closing Date with the same
effect as though made at such date, except as affected by transactions
permitted or contemplated by this Agreement; the Seller and the
Shareholder shall have performed and complied in all material respects,
with all covenants required by this Agreement to be performed or
complied with by them on or before the Closing Date; and each of the
Seller and the Shareholder shall have delivered to Buyer a certificate,
dated the Closing Date and signed by a duly authorized officer of such
party, to such effects.
C:\34ACTREP\EXFILES\EXHIBIT.2G
11
4.1.2. No Material Litigation. No suit, action, or other
proceeding shall be pending, or to the knowledge of either the Seller
or the Shareholders, threatened, before any court or governmental
agency in which it will be, or 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 or which would
likely result in a material adverse change in the value of the Assets
or Business of the Seller.
4.1.3. Opinion of Counsel. Buyer shall have received a
favorable opinion, dated the Closing Date, from Rubin, Baum, Xxxxx
Constant & Xxxxxxxx, counsel to the Seller and the Shareholder, in form
and substance reasonably satisfactory to Buyer, that the
representations and warranties made by the Seller and the Shareholder
in Sections 2.1.1 and 2.1.2 hereof are true as of the Closing Date. In
rendering such opinion, such counsel may rely upon certificates of
public officials and of officers of the Seller and the Shareholder as
to matters of fact; provided that such certificates are delivered to
Buyer with such opinion.
4.1.4. Consents Received. Buyer shall have received all
consents specified in
Schedule 2.1.9 hereto.
4.1.5. Real Estate Purchases. Buyer shall have purchased from
the Shareholder and the Shareholder shall have sold to Buyer those two
parcels of real estate described in Schedule 4.1.5 hereto
(collectively, the "Shareholder Real Property") and under such terms
and conditions as are reasonably acceptable to Buyer, which conditions
shall include (i) a total purchase price of $840,000; (ii) the
completion of Phase I environmental assessments of the Shareholder Real
Property; (iii) at Buyer's request, the completion of Phase II
environmental assessments of the Shareholder Real Property where Phase
II assessments are reasonably determined by Buyer to be appropriate;
and (iv) either a conclusion, pursuant to such environmental
assessments, that no liabilities exist for environmental cleanup on the
Shareholder Real Property or, to the extent that such environmental
assessments indicate that liabilities do exist for environmental
cleanup on the Shareholder Real Property, an agreement by the
Shareholder that it will conduct and bear all of the expenses in
connection with appropriate remediation and restoration activities on
such Shareholder Real Property and fully indemnify Buyer from all
liabilities and costs associated with such environmental condition.
4.1.6. Conveyance Documents. Buyer shall have received from
the Seller such assignment documents and other instruments of transfer
reasonably determined by Buyer as being required to effect and record
the transfer of the Assets hereunder, including the properly endorsed
certificates of title and an executed xxxx of sale in a form reasonably
satisfactory to Buyer.
4.2 Conditions Precedent to Obligations of the Seller and the
Shareholder. The obligations of the Seller and the Shareholder to consummate and
effect the transactions contemplated hereunder shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by the Seller
and the Shareholder before the Closing Date:
C:\34ACTREP\EXFILES\EXHIBIT.2G
12
4.2.1. Representations and Warranties of Buyer True at Closing
Date. The representations and warranties of Buyer herein contained
shall be, in all material respects, true as of and at the Closing Date
with the same effect as though made at such date, except as affected by
transactions permitted or contemplated by this Agreement; Buyer shall
have performed and complied in all material respects, with all
covenants required by this Agreement to be performed or complied with
by it before the Closing Date; and Buyer shall have delivered to the
Seller and the Shareholder a certificate, dated the Closing Date and
signed by a duly authorized officer of Buyer, to such effects.
4.2.2. No Material Litigation. No suit, action, or other
proceeding shall be pending, or to the knowledge of Buyer, threatened,
before any court or governmental agency in which it will be, or 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.
4.2.3. Opinion of Counsel. The Seller and the Shareholder
shall have received a favorable opinion, dated the Closing Date, from
Buyer's in-house counsel, in form and substance reasonably satisfactory
to the Seller and the Shareholder, that the representations and
warranties made by Buyer in Sections 2.2.1 and 2.2.2 hereof are true as
of the Closing Date. In rendering such opinion, such counsel may rely
upon certificates of public officials and of officers of Buyer as to
matters of fact; provided that such certificates are delivered to the
Seller and the Shareholder with such opinion.
4.2.4. Real Estate Purchases. Buyer shall have purchased from
the Shareholder and the Shareholder shall have sold to Buyer the
Shareholder Real Property and under such terms and conditions as are
reasonably acceptable to the Shareholder, which conditions shall
include a total purchase price of $840,000.
4.2.5. Assumption Documents. The Seller shall have received
from Buyer such
assumption agreements and other instruments reasonably determined by
the Seller as being
required to effect Buyer's assumption of the Assumed Liabilities.
Article V
TERMINATION AND ABANDONMENT
5.1 Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the purchase and sale
contemplated hereby abandoned at any time before the Closing Date:
5.1.1. By Mutual Consent. By mutual consent of Buyer, the
Seller and the Shareholder.
C:\34ACTREP\EXFILES\EXHIBIT.2G
13
5.1.2. By Buyer Because of Failure to Perform Agreements. By
Buyer, if either the Seller or the Shareholder has failed to perform
any of its covenants set forth in Sections 3.1 or 3.2 hereof,
including, without limitation, the provisions of Section 3.2.3 hereof.
5.1.3. By the Seller or the Shareholder Because of Failure to
Perform Agreements. By either the Seller or the Shareholder, if Buyer
has failed to perform any agreement set forth in Section 3.2 hereof,
including, without limitation, the provisions of Section 3.2.3 hereof.
5.1.4. By Buyer, the Seller or the Shareholders if No Closing
by January 15, 1997. By Buyer, the Seller or the Shareholder, if the
Closing shall not have been consummated on or before January 15, 1997
(the "Closing Deadline"); provided, however, that this Agreement may
not be terminated by any party hereto pursuant to this Section 5.1.5 if
the Closing has not occurred prior to the Closing Deadline due to the
breach of any provision of this Agreement by the party seeking such
termination, including the provisions of Section 3.2.3 hereof.
5.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to and in accordance with the provisions of Section 5.1
hereof, this Agreement shall become void and have no effect, without any
liability on the part of any party hereto (or its stockholders or controlling
persons or directors or officers), except as otherwise provided in this
Agreement; provided, however, that a termination of this Agreement shall not
relieve any party hereto from any liability for damages incurred as a result of
a breach by such party of its covenants under Section 3.2.3 hereof and the
second sentence of Section 3.2.1 hereof.
5.3 Waiver of Conditions. Subject to the requirements of any applicable
law, any of the terms or conditions of this Agreement may be waived at any time
by the party which is entitled to the benefit thereof.
5.4 Expenses on Termination. If this Agreement is terminated and the
transactions contemplated hereby abandoned pursuant to and in accordance with
the provisions of Section 5.1 hereof, all expenses will be paid by the party
incurring them.
Article VI
ADDITIONAL AGREEMENTS
6.1 Noncompetition. Except as otherwise consented to or approved in
writing by Buyer and subject to Section 6.2 hereof, each of the Seller and the
Shareholder agree that for a period of 36 months following the Closing Date,
such party will not, directly or indirectly, acting alone or as a member of a
partnership or a holder of, or investor in 5% or more of any class of voting
equity security of any corporation or other business entity (i) engage, in
Oklahoma, in any business conducted by the Seller on or before the Closing Date
(a "Competing Business"); (ii) request any
C:\34ACTREP\EXFILES\EXHIBIT.2G
14
current customer or supplier of the Seller to curtail or cancel their business
with Buyer; (iii) except as is required by law, disclose to any person, firm or
corporation any trade, technical or technological secrets of Buyer (or Buyer's
affiliates) or of the Seller or any details of their organization or business
affairs or (iv) induce or actively attempt to induce any employee of Buyer (or
Buyer's affiliates) to terminate his employment with Buyer (or such affiliate).
Each of the Seller and the Shareholder agree that if either the length of time
or geographical as set forth in this Section 6.1 is deemed too restrictive in
any court proceeding, the court may reduce such restrictions to those which it
deems reasonable under the circumstances. The obligations expressed in this
Section 6.1 are in addition to any other obligations that the Seller and the
Shareholder may have under the applicable laws of any state requiring a
corporation selling its assets (and the shareholders of such corporation) to
limit its activities so that the goodwill and business relations being
transferred with such assets will not be materially impaired. Each of the Seller
and the Shareholder further agree and acknowledge that Buyer does not have any
adequate remedy at law for the breach or threatened breach by either the Seller
or the Shareholder of the covenants contained in this Section 6.1, and agree
that Buyer may, in addition to the other remedies which may be available to it
hereunder, file a suit in equity to enjoin the Seller or the Shareholder from
such breach or threatened breach. If any provisions of this Section 6.1 are held
to be invalid or against public policy, the remaining provisions shall not be
affected thereby. Each of the Seller and the Shareholder acknowledges that the
covenants set forth in this Section 6.1 are being executed and delivered by such
party in consideration of the covenants of Buyer contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged.
6.2 Limitation on Noncompetition. Notwithstanding the covenants of the
Seller and the Shareholder contained in clause (i) of the first sentence of
Section 6.1 hereof, the Shareholder and its affiliates may perform any services
for themselves or for any of their affiliates. Notwithstanding the covenants of
the Seller and the Shareholder contained in clause (i) of the first sentence of
Section 6.1 hereof, the Shareholder may acquire all of the businesses and assets
of a third party (the "Acquired Company") that, as of the date such acquisition
is consummated, engages in a Competing Business in Oklahoma and operate such
businesses and assets following the consummation of such acquisition if and only
if the following conditions are met: (1) The Shareholder (whether directly or
through the Acquired Company) ceases engaging in the Competing Business, whether
by sale or otherwise, within six (6) months after the date the acquisition is
consummated; and (2) Prior to consummating any sale of the acquired Competing
Business to any third party, the Shareholder offers to sell such Competing
Business on the same terms and conditions as those offered by such third party,
which offer shall remain open for 15 days; provided, that if such offer is not
accepted in writing by Buyer within such time period, the Shareholder may
consummate the sale to such third party, but only on substantially the same
terms and conditions originally offered by such third party. Notwithstanding the
foregoing, in the event the Shareholder is unsuccessful in obtaining a
reasonably acceptable offer from a third party within such six-month period, the
Shareholder may make an offer (the "Put Offer") to sell to Buyer the Competing
Business on those same general terms and conditions under which the Shareholder
originally purchased the Competing Business except that the purchase price shall
be the fair market value of the Competing Business as determined by an
independent appraiser mutually agreed to by the Shareholder and Buyer. If Buyer
accepts the Put Offer within
C:\34ACTREP\EXFILES\EXHIBIT.2G
15
15 days after receiving written notice from the Shareholder specifying the
appraiser's determination of the purchase price and the general terms and
conditions of the sale, Buyer and the Shareholder shall endeavor in good faith
to consummate the purchase and sale on those terms and conditions within 30 days
of the Shareholder's receipt of Buyer's acceptance. If Buyer does not accept the
Put Offer within 15 days after receiving written notice from the Shareholder
specifying the appraiser's determination of the purchase price and the general
terms and conditions of the sale, the Shareholder shall be free to operate the
Competing Business and to sell such Competing Business to third parties without
restriction under this Section 6.2 and without being deemed to violate the
covenants of the Shareholder contained in clause (i) of the first sentence of
Section 6.1 hereof.
6.3 Hiring Employees. Schedule 6.3 hereto is a complete and accurate
listing of all employees of the Seller that devote their full time and effort in
the operation of the Assets and the conduct of the Business (the "Employees")
along with their current wages or salary. Except as provided in Schedule 6.3
hereto, effective as of the Closing Date, each of the Employees shall be
terminated by the Seller and offered a position of employment with Buyer,
subject to passing Buyer's standard drug test for its new employees, with the
same job duties and at the same wages as such Employee had with the Seller on
the date hereof and with such other benefits as are consistent with the current
policies and practices of Buyer (which benefits are substantially equal to those
benefits currently provided by the Seller); provided, however, that with respect
to each Employee who accepts employment with Buyer as of the Closing Date (the
"Hired Employees"), the benefits to which such Employee shall be entitled to
receive from Buyer as its employee shall be determined as if such Employee was
hired by Buyer as of the date on which such Employee began his current period of
employment with the Seller, except that the exclusivity period for coverage of
pre-existing conditions under Buyer's current medical insurance plan shall be
applicable to such Employee. Neither the Seller nor the Shareholder makes any
representations or warranties to Buyer as to whether any of the Employees will
accept employment with Buyer; provided, however, that each of the Seller and the
Shareholder shall cooperate with Buyer in connection with any offer of
employment from Buyer to the Employees. The Employee noted in Schedule 6.3
hereto as being currently disabled (the "Disabled Employee") will remain an
employee of the Seller after the Closing Date until the Disabled Employee is
able to return to work at which time the Disabled Employee shall be terminated
by the Seller and offered a position of employment with Buyer, subject to
passing Buyer's standard drug test for its new employees, with the same job
duties and at the same wages as the Disabled Employee had with the Seller
immediately prior to being disabled and will be otherwise treated as a Hired
Employee hereunder. Buyer shall be responsible for any and all obligations
arising as a result of the termination of any Hired Employees by Buyer after the
Closing Date, including, without limitation, any severance, accrued vacation
pay, COBRA obligations, notices or compensation required under the Worker
Adjustment and Restraining Act, employment discrimination complaints, unfair
labor practices, charges, grievances under any collective bargaining agreements,
breach of contract claims, and wrongful termination and related tort claims, but
only to the extent that such claims arise as a result of or in connection with
the Hired Employees' employment with Buyer and not as a result of or in
connection with the Hired Employees' employment with the Seller or their
termination by the Seller hereunder. The Seller shall be responsible and retain
liability for (and Buyer shall have no liability or obligation with respect to)
any employee benefits of any Employee that accrued pursuant to such
C:\34ACTREP\EXFILES\EXHIBIT.2G
16
Employee's employment with Buyer on or before the Closing Date. After the
Closing Date, the parties hereto shall, except as prohibited by law, each
provide the other parties with such information regarding the Employees as
reasonably requested by such other parties, such information to be provided on a
continuing basis and at no cost to the requesting party.
6.4 Allocation of Purchase Price. The parties hereto agree to allocate
the purchase price paid by Buyer for the Assets hereunder as set forth on
Schedule 6.4 hereto, and shall report this transaction for federal income tax
purposes in accordance with the allocation so agreed upon. The parties hereto
for themselves and for their respective successors and assigns covenant and
agree that they will file coordinating Form 8594's in accordance with Section
1060 of the Internal Revenue Code of 1986, as amended, with their respective
income tax returns for the taxable year that includes the Closing Date.
6.5 Name Change. The Seller and the Shareholder shall, within thirty
(30) days from the Closing Date, caused to be filed (i) with the secretary of
state of the Seller's state of organization an amendment to the charter (or
other applicable organization document) of the Seller changing the name of the
Seller from its current name to a name that is not similar to such name or such
merger documents required to effect the merger of the Seller with and into
another entity so that the separate corporate existence of the Seller is
terminated, and (ii) with the appropriate authorities of the Seller's state of
organization and any other states such documents as are required to effect such
name change, including without limitation, amendments or withdrawals of
certificates of authority to do business and assumed name filings. The Seller
and the Shareholder shall, within five (5) business days from the date of its
receipt of confirmation of such filings from the applicable state authorities,
cause to be delivered to Buyer copies of all such confirmations.
6.6 First Call. Subject to the provisions contained in the last three
sentences of this Section 6.6, for a period of one year from the Closing Date,
in the event that the Shareholder intends to retain the services of a third
party (that is not an affiliate of the Shareholder) to perform services anywhere
in the United States, which services are performed for third parties by Buyer
(or Buyer's affiliates), the Shareholder shall, prior to retaining such third
party, give Buyer (or Buyer's affiliate) the opportunity (the "Buyer First
Call") to offer to perform such services to the Shareholder. Should Buyer (or
Buyer's affiliate) offer to perform such services, which in the reasonable
opinion of Shareholder is of equal or better quality as those offered by such
third party based on the past performances of Buyer and such third party, on
terms and conditions (including, without limitation, price and timing) no less
advantageous, individually or in the aggregate, to the Shareholder than those
available from such third party, Buyer (or Buyer's affiliate) and the
Shareholder shall mutually agree on the specific terms, conditions and services
to be performed by Buyer. If Buyer (or Buyer's affiliate) cannot, promptly upon
the Shareholder's request, offer in good faith the services on the terms set
forth in the immediately preceding sentence, the Shareholder shall be free to
retain such third party to perform such services as it shall see fit. In the
event of a breach by the Shareholder of its obligations under this Section 6.6,
Buyer shall be entitled to recover any profits lost as a result of such breach
(in addition to all other available remedies). Notwithstanding the foregoing,
Buyer acknowledges that the Shareholder is currently obligated, pursuant to a
binding written contract with
C:\34ACTREP\EXFILES\EXHIBIT.2G
17
The Canton Oil & Gas Company ("Canton"), a copy of which is attached hereto as
Schedule 6.6 (the "Canton Agreement"), to engage Canton to provide services for
the Shareholder in certain territories within the United States and under
certain circumstances as specified in the Canton Agreement. Buyer agrees that
during the term of the Canton Agreement, the Buyer First Call shall be subject
to the rights of Canton under the Canton Agreement and that the Shareholder's
compliance with the terms and provisions of the Canton Agreement shall not be
deemed to be a breach of the provisions of this Section 6.6. The Shareholder
agrees not to consent to any amendment to the Canton Agreement that would
further adversely affect the Buyer First Call.
6.7 Collection of Receivables. Buyer shall cooperate with and assist
the Seller in collecting the Seller Receivables, which cooperation and
assistance shall include promptly forwarding to the Seller all payments received
by Buyer that are made in respect of the Seller Receivables. The Seller shall
cooperate with and assist Buyer in collecting receivables of Buyer, which
cooperation and assistance shall include promptly forwarding to Buyer all
payments received by the Seller that are made in respect of Buyer's receivables.
6.8 Expenses, Fees and Taxes. Each of the parties hereto shall pay its
own fees and expenses incident to the negotiation and preparation of this
Agreement and the consummation of the transactions contemplated hereby. Buyer
shall be responsible for the costs of all fees for the recording of transfer
documents. Notwithstanding anything to the contrary herein, it is acknowledged
by the parties hereto that the purchase price being paid hereunder excludes any
sales taxes or other taxes in connection with the sale of the Assets. If a
determination is ever made that a sales taxes or other transfer taxes applies to
the transaction contemplated hereby, Buyer shall be liable for the entire amount
of such taxes.
6.9 Access to Records. Each of the parties hereto shall allow the other
parties reasonable access to those (but only those) business and corporate
records of such party reasonably required by the other parties in the
preparation and filing of their federal and state tax returns and reports to be
filed with the Securities and Exchange Commission or similar state agencies
6.10 Further Assurances. From time to time, as and when requested by
any party hereto, any other party hereto shall execute and deliver, or cause to
be executed and delivered, such documents and instruments and shall take, or
cause to be taken, such further or other actions as may be reasonably necessary
to effect the transactions contemplated hereby.
Article VII
INDEMNIFICATION
7.1 Indemnification by the Seller and the Shareholder. In addition to
any other remedies available to Buyer under this Agreement, or at law or in
equity, each of the Seller and the Shareholder shall, jointly and severally,
indemnify, defend and hold harmless Buyer and its officers, directors,
C:\34ACTREP\EXFILES\EXHIBIT.2G
18
employees, agents and stockholders, against and with respect to any and all
claims, costs, damages, losses, expenses, obligations, liabilities, recoveries,
suits, causes of action and deficiencies, including interest, penalties and
reasonable attorneys' fees and expenses (collectively, the "Damages") that such
indemnitee shall incur or suffer, which arise, result from or relate to (i) any
breach of, or failure by either the Seller or the Shareholder to perform, their
respective representations, warranties, covenants or agreements in this
Agreement or in any schedule, certificate, exhibit or other instrument furnished
or delivered to Buyer by the Seller or the Shareholder under this Agreement; and
(ii) the Retained Liabilities; provided, however, that such indemnification is
subject to the following conditions: (A) the aggregate obligations of the Seller
and the Shareholder to indemnify Buyer and the other parties identified above
pursuant to Sections 7.1 and 7.2 hereof and the applicable provisions of any
other agreement or document executed and delivered in connection herewith,
including, without limitation, the purchase and sale agreement(s) pursuant to
which the Shareholder Real Property will be sold by the Shareholder to Buyer in
connection herewith, shall not exceed $2,700,000; and (B) with respect to the
Damages caused by the events specified in this Section 7.1, enforcement of the
indemnification obligations of the Seller and the Shareholder under this Section
7.1 shall be Buyer's sole and exclusive remedy.
7.2 Environmental Indemnification. Notwithstanding the limitations of
the representations and warranties of the Seller and the Shareholder contained
in Section 2. 1.10 hereof, each of the Seller and the Shareholder shall, jointly
and severally, indemnify, defend and hold harmless Buyer and its officers,
directors, employees, agents and stockholders, against and with respect to any
and all Damages that such indemnitee shall incur or suffer, which arise, result
from or relate to (i) any violation of any Applicable Environmental Laws by the
Seller, or (ii) the occurrence of any materially adverse environmental condition
or circumstance (including the presence or release of hazardous materials) on
(A) the Shareholder Real Property, whether or not such circumstance or condition
was caused by or known to the Seller or the Shareholder, or (B) any property,
whether or not owned or leased by the Seller, on which Hazardous Materials were
generated by the Seller's operation of the Assets or conduct of the Business;
provided, however, that such indemnification is subject to the following
conditions: (1) the foregoing indemnification applies only if the event from
which such Damages arose shall have occurred before the Closing Date; (2) the
aggregate obligations of the Seller and the Shareholder to indemnify Buyer and
the other parties identified above pursuant to Sections 7.1 and 7.2 hereof and
the applicable provisions of any other agreement or document executed and
delivered in connection herewith, including, without limitation, the purchase
and sale agreement(s) pursuant to which the Shareholder Real Property will be
sold by the Shareholder to Buyer in connection herewith, shall not exceed
$2,700,000; and (3) with respect to the Damages caused by the events specified
in this Section 7.2, enforcement of the indemnification obligations of the
Seller and the Shareholder under this Section 7.2 shall be Buyer's sole and
exclusive remedy.
7.3 Indemnification by Buyer. In addition to any other remedies
available to the Seller or the Shareholder under this Agreement, or at law or in
equity, Buyer shall indemnify, defend and hold harmless each of the Seller and
the Shareholder and their officers, directors, employees, agents and
stockholders, against and with respect to any and all Damages that such
indemnitee shall incur or suffer, which arise, result from or relate to (i) any
breach of, or failure by Buyer to perform, its re presentations, warranties,
covenants or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished or delivered to the Seller or the
Shareholder by Buyer under this Agreement; and (ii) the Assumed Liabilities;
provided, however, that such indemnification is subject to the following
conditions: (A) the aggregate obligations of Buyer to indemnify the Seller, the
Shareholder and the other parties identified above pursuant to this Section 7.3
and 7.2 and the applicable provisions of any other agreement or document
executed and delivered in connection herewith, including, without limitation,
the purchase and sale agreement(s) pursuant to which the Shareholder Real
Property will be sold by the Shareholder to Buyer in connection herewith, shall
not exceed $2,700,000; and (B) with respect to the Damages caused by the events
specified in this Section 7.3, enforcement of the indemnification obligations of
Buyer under this Section 7. shall be the sole and exclusive remedy of the Seller
and the Shareholder.
7.4 Indemnification Procedure. If any party hereto discovers or
otherwise becomes aware of an event giving rise to indemnification claim under
this Article VII, such indemnified party shall promptly give written notice to
the indemnifying party, specifying such claim; provided, however, that the
failure of any indemnified party to give prompt written notice as provided
herein shall not relieve the indemnifying party of any obligations hereunder, to
the extent the indemnifying party is not mate rially prejudiced thereby.
Further, promptly after receipt by an indemnified party hereunder of written
notice of the commencement of any action or proceeding with respect to which a
claim for indemnification may be made pursuant to this Article VII, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of any
obligations hereunder, to the extent the indemnifying party is not materially
prejudiced thereby. In case any such action is brought against an indemnified
party (or an indemnification claim under Section 7.2 hereof is made involving
remediation of the environmental condition in question), the indemnifying party
shall be entitled to participate in and to assume the defense thereof (or, in
the case of a claim for remediation, to participate in and assume responsibility
for such remediation), jointly with any other indemnifying party similarly
notified, to the extent that it may wish, with counsel (or, in the case of a
claim for remediation, any personnel or contractor) reasonably satisfactory to
such indemnified party, and after such notice from the indemnifying party to
such indemnified party of its election to so assume the defense (or, in the case
of a claim for remediation, to assume the responsibility for the remediation)
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense (or, in the case of a claim for remediation, the
remediation) thereof unless the indemnifying party has failed to assume the
defense of such claim (or, in the case of a claim for remediation, failed to
assume the responsibility for the remediation) and to employ counsel (or, in the
case of a claim for remediation, personnel or contractors) reasonably
satisfactory to such indemnified person. An indemnifying party who elects not to
assume the defense of a claim (or, in the case of a claim for remediation, to
assume the responsibility for the remediation) shall not be liable for the fees
and expenses of more than one counsel in any single jurisdiction (or, in the
case of a claim for remediation, more than one contractor) for all parties
indemnified by such indemnifying party with respect to such claim or with
respect to claims separate but similar or related in the same jurisdiction
arising out of the same general
C:\34ACTREP\EXFILES\EXHIBIT.2G
19
allegations. Notwithstanding any of the foregoing to the contrary, in the case
of an action or proceeding, the indemnified party will be entitled to select its
own counsel and assume the defense of any action brought against it if the
indemnifying party fails to select counsel reasonably satisfactory to the
indemnified party, the expenses of such defense to be paid by the indemnifying
party. No indemnifying party shall consent to entry of any judgment or enter
into any settlement with respect to a claim without the consent of the
indemnified party, which consent shall not be unreasonably withheld, or unless
such judgment or settlement includes as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability with respect to such claim and involves no equitable relief affecting
the indemnified party. No indemnified party shall consent to entry of any
judgment or enter into any settlement of any such action, the defense of which
has been assumed by an indemnifying party, without the consent of such
indemnifying party, which consent shall not be unreasonably withheld.
Article VIII
MISCELLANEOUS
8.1 Survival of Representations, Warranties and Covenants. All
representations and warranties made by the parties hereto shall survive for a
period of 12 months from the Closing Date, notwithstanding any investigation
made by or on behalf of any of the parties hereto. All statements contained in
any certificate, schedule, exhibit or other instrument delivered pursuant to
this Agreement shall be deemed to have been representations and warranties by
the respective party or parties, as the case may be, and shall also survive for
a period of 12 months from the Closing Date despite any investigation made by
any party hereto or on its behalf. All covenants and agreements of the parties
hereto contained herein shall survive as provided herein.
8.2 Entirety. This Agreement embodies the entire agreement among the
parties with respect to the subject matter hereof, and all prior agreements
between the parties with respect thereto are hereby superseded in their
entirety.
8.3 Counterparts. This Agreement may be executed by facsimile signature
and in one or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
8.4 Notices and Waivers. Any notice or waiver to be given to any party
hereto shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested.
C:\34ACTREP\EXFILES\EXHIBIT.2G
20
If to Buyer
Addressed to: With a copy to:
WellTech Eastern, Inc. Xxxxxx & Xxxxxx, L.L.P.
Two Tower Center, Tenth Floor 000 Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to the Seller or the Shareholder
Addressed to: With a copy to:
Lomak Petroleum, Inc. Rubin, Baum, Xxxxx, Constant & Xxxxxxxx
000 Xxxxxxxxxxx Xxxxxx 00 Xxxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attn: Hardy Xxxxxxxxx Attn: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, with return receipt requested, shall be deemed
to be received on the third business day after so mailed, and if delivered by
courier or facsimile to such address, upon delivery during normal business hours
on any business day.
8.5 Captions. The captions contained in this Agreement are solely for
convenient reference and shall not be deemed to affect the meaning or
interpretation of any article, section, or paragraph hereof.
8.6 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the successors and permitted
assigns of the parties hereto.
8.7 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void,
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
8.8 Applicable Law. This Agreement shall be governed by and
construed and enforced
in accordance with the applicable laws of the State of Texas.
C:\34ACTREP\EXFILES\EXHIBIT.2G
21
IN WITNESS WHEREOF, the Shareholder has executed this Agreement and the
other parties hereto have caused this Agreement to be signed in their respective
corporate names by their respective duly authorized representatives, all as of
the day and year first above written.
WELLTECH EASTERN, INC.
By: \s\ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
TALON TRUCKING COMPANY
By: \s\ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President
LOMAK PETROLEUM, INC.
By: \s\ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Vice President
C:\34ACTREP\EXFILES\EXHIBIT.2G
22
