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EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
BY AND AMONG
WEATHERFORD ENTERRA, INC.,
ARROW COMPLETION SYSTEMS, INC.
AND
ENERGY VENTURES, INC.
OCTOBER 18, 1996
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TABLE OF CONTENTS
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ARTICLE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Transferred Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Purchase Price for the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 Purchase Price Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Liabilities Not Assumed by the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.6 Prorations of Expenses and Certain Property Taxes . . . . . . . . . . . . . . . . . . . . 4
1.7 Transfer Taxes; Recording Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.8 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SELLER AND WEATHERFORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Validity of Agreement and Conflict with Other Instruments . . . . . . . . . . . . . . . . 6
2.3 Approvals, Licenses and Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Title to and Condition of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Contracts and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.6 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.7 No Adverse Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.8 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.9 Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.10 Warranties and Product Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.11 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.12 Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.1 Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 Approvals and Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.3 Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Delivery of Corporate Documents; Proprietary Data; Record Retention; Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Nondisclosure of Proprietary Information . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Covenant Not to Compete With the Business . . . . . . . . . . . . . . . . . . . . . . . . 16
4.5 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.6 Use of Corporate Names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
BUYER'S CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Instruments of Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Licenses, Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Consents of Third Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.7 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8 Xxxx-Xxxxx-Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.9 Disclosure Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SELLER'S CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.1 Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 Receipt of the Transferred Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Licenses, Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.5 Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Xxxx-Xxxxx-Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Events of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.2 Liability Upon Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.3 Notice of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Indemnification by the Seller and Weatherford . . . . . . . . . . . . . . . . . . . . . . 22
8.2 Indemnification by the Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Special Environmental Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.4 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.5 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.6 Failure to Pay Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.7 Adjustment of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS,WARRANTIES AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
DEFINITIONS OF CERTAIN TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.1 Conduct of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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11.2 Governmental Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.3 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.4 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.5 Other Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.6 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.7 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.9 Bulk Transfer Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.10 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.13 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.15 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.17 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.18 Negotiated Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 18th day of October, 1996, by and among Weatherford Enterra, Inc., a
Delaware corporation ("Weatherford"), Arrow Completion Systems, Inc., a Texas
corporation (the "Seller"), and Energy Ventures, Inc., a Delaware corporation
(the "Buyer").
W I T N E S S E T H :
WHEREAS, the Seller desires to transfer to the Buyer the Business (as
hereinafter defined) and the properties, assets and liabilities related to the
Business, and the Buyer desires to acquire such Business, properties and assets
and assume such liabilities, all upon the terms and subject to the conditions
set forth herein; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties and agreements, all as more fully set forth below;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Transferred Assets.
(a) Subject to the terms and conditions of this Agreement
and in consideration of the obligations of the Buyer as provided herein, and
except as otherwise provided in Section 1.2 hereof, at the Closing the Seller
shall sell, assign, transfer, grant, bargain, deliver and convey, and
Weatherford shall cause to be sold, assigned, transferred, granted, bargained,
delivered and conveyed, to the Buyer, free and clear of all Liens, the Seller's
and the Affiliated Companies' entire right, title and interest in, to and under
the Business, as a going concern, and all assets owned or used by the Seller or
any of the Affiliated Companies in connection with or arising out of the
Business of every type and description, tangible and intangible, wherever
located and whether or not reflected on the books and records of the Seller
(all of such assets, properties, rights and business being hereinafter
sometimes collectively referred to as the "Transferred Assets"), including, but
not limited to,
(i) the Equipment, including the Equipment set
forth in Section 1.1(a)(i) of the Disclosure
Schedule;
(ii) all Inventories, including the Inventories
set forth in Section 1.1(a)(ii) of the
Disclosure Schedule;
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(iii) all accounts and notes receivable relating to
the Business (the "Accounts Receivable"),
including the Accounts Receivable set forth
in Section 1.1(a)(iii) of the Disclosure
Schedule;
(iv) all Real Property, including the Real
Property set forth in Section 1.1(a)(iv) of
the Disclosure Schedule;
(v) the Leasehold Interests, including the
Leasehold Interests set forth in Section
1.1(a)(v) of the Disclosure Schedule;
(vi) all Proprietary Information, including the
Proprietary Information set forth in Section
1.1(a)(vi) of the Disclosure Schedule;
(vii) subject to Section 1.1(b) hereof, the benefit
of all unfilled or outstanding purchase
orders, sales contracts, other commitments,
contracts and engagements to which the Seller
is entitled on the Closing Date and which
relate to the Business (the "Entitlements");
(viii) all prepaid expenses and deposits made by the
Seller relating to the Business;
(ix) all shares of capital stock of Arrow Oil
Tools (Canada) Ltd. owned by the Seller; and
(x) any goodwill associated with the Business.
(b) The Seller shall use its best efforts to obtain such
consents of third parties as are necessary for the assignment of the
Transferred Assets. To the extent that any of the Transferred Assets are not
assignable by the terms thereof or consents to the assignment thereof cannot be
obtained as provided herein, the Transferred Assets shall be held by the Seller
in trust for the Buyer and shall be performed by the Buyer in the name of the
Seller and all benefits and obligations derived thereunder shall be for the
account of the Buyer; provided, however, that where entitlement of the Buyer to
such Transferred Assets hereunder is not recognized by any third party, the
Seller shall, at the request of the Buyer, enforce in a reasonable manner, at
the cost of and for the account of the Buyer, any and all rights of the Seller
against such third party.
(c) The Seller shall also notify each Person that may
have possession of the Transferred Assets at the Closing Date, whether by
consignment or otherwise, of the transfer of such Transferred Assets to the
Buyer.
1.2 Excluded Assets. Anything in Section 1.1(a) to the contrary
notwithstanding, there shall be excluded from the assets, properties, rights
and business
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to be transferred to the Buyer hereunder those assets of the Seller listed or
described in Section 1.2 of the Disclosure Schedule (collectively, the
"Excluded Assets").
1.3 Purchase Price for the Assets.
(a) In consideration of the transfer to the Buyer of the
Transferred Assets, the Buyer shall (i) pay to the Seller an amount in cash
equal to the Cash Purchase Price and (ii) assume (A) the payment obligations of
the Seller with respect to all Trade Payables, Accrued Liabilities and Notes
Payable as of the Closing Date and (B) the obligations of the Seller under the
express written terms of the Entitlements to the extent and only to the extent
such obligations are not Pre-Closing Obligations (collectively, the "Assumed
Liabilities"). The Cash Purchase Price and the Assumed Liabilities are herein
collectively referred to as the "Purchase Price".
(b) On the Closing Date, the Buyer shall pay to the
Seller by wire transfer of same day funds of $21,307,000 (the "Closing
Payment"). The Closing Payment shall be based on the balance sheet of the
Seller, at September 30, 1996, a copy of which has been provided to the Buyer
(the "Pre-Closing Balance Sheet"). The Buyer shall be entitled to review the
accounting records used to prepare the Pre-Closing Balance Sheet and confirm
the existence of the assets and liabilities reflected thereon prior to the
Closing.
1.4 Purchase Price Adjustment.
(a) Within 60 calendar days after the Closing Date, the
Buyer shall prepare and deliver to the Seller a statement reflecting the Cash
Purchase Price and the calculation thereof (the "Final Statement"). The Buyer
shall provide the Seller with access to copies of all work papers and other
relevant documents to verify the entries contained in the Final Statement. The
Seller shall have a period of 15 calendar days after delivery to it of the
Final Statement to review it and make any objections the Seller may have in
writing to the Buyer. If written objections to the Final Statement are
delivered to the Buyer within such 15 day period, then the Buyer and the Seller
shall attempt to resolve the matter or matters in dispute. If no written
objections are made within the time period provided above, the Buyer shall pay
to the Seller in same day funds the aggregate amount, if any, by which the Cash
Purchase Price exceeds the Closing Payment and the Seller shall pay to the
Buyer in same day funds the aggregate amount, if any, by which the Closing
Payment exceeds the Cash Purchase Price, in each case within five calendar days
after the end of such 15 day period.
(b) If disputes with respect to the Final Statement
cannot be resolved by the Buyer and the Seller within 15 calendar days after
the delivery of the objections to the Final Statement, then the specific
matters in dispute shall be submitted to Xxxxxx Xxxxxxxx LLP or such other
independent accounting firm as may be approved by the Buyer and the Seller,
which firm shall render its opinion as to such matters. Based on such opinion,
such independent accounting firm will then send to the Buyer and the Seller its
determination on the specific matters in dispute, which determination shall be
final and binding on the parties hereto. Within five calendar days after
delivery of such opinion to the Buyer and the Seller, the Buyer shall pay to
the Seller
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the aggregate amount, if any, by which the Cash Purchase Price exceeds the
Closing Payment and the Seller shall pay to the Buyer the aggregate amount, if
any, by which the Closing Payment exceeds the Cash Purchase Price. The fees
and other costs charged by such independent accounting firm shall be borne by
the Buyer and the Seller equally.
1.5 Liabilities Not Assumed by the Buyer. Except for the Assumed
Liabilities, the Seller shall pay and discharge in due course all of its
liabilities, debts and obligations relating to the Transferred Assets or the
Business, whether known or unknown, now existing or hereafter arising,
contingent or liquidated, including, without limitation, any Tax liabilities of
the Seller pertaining to the Transferred Assets or the Business for periods
prior to the Closing Date, any Debt Obligations and the liabilities and
obligations set forth in clauses (a) through (d) below (collectively, the
"Retained Liabilities"), and the Buyer shall not assume, or in any way be
liable or responsible for, any of such Retained Liabilities. Without limiting
the generality of the foregoing, the Retained Liabilities shall include the
following:
(a) any liability or obligation of the Seller arising out
of or in connection with the negotiation and preparation of this Agreement and
the consummation and performance of the transactions contemplated hereby,
whether or not such transactions are consummated;
(b) any liability or obligation for any and all Taxes of,
or pertaining or attributable to, (i) the Seller for any period that ends on or
before the Closing Date, or (ii) the Business and/or the Transferred Assets for
any period or portion thereof that ends on or before the Closing Date
(including, but in no way limited to, any and all Taxes described in clauses
(i) and (ii) of this Section 1.5(b) for which liability is or may be sought to
be imposed on the Buyer under any successor liability, transferee liability or
similar provision of any applicable federal, foreign, state or local law;
(c) any liability (other than with respect to the Assumed
Liabilities) to which any of the parties may become subject as a result of the
fact that the transactions contemplated by this Agreement are being effected
without compliance with the bulk sales provisions of the Uniform Commercial
Code as in effect in any state or any similar statute as enacted in any
jurisdiction; and
(d) all other liabilities and obligations of any Person
arising prior to the Closing or related to the conduct or operation of the
Transferred Assets or the Business on or prior to the Closing Date, including,
but not limited to, the Pre-Closing Obligations and the specific liabilities,
obligations or litigation listed in Sections 2.4(f), 2.6, 2.8 or 2.11 of the
Disclosure Schedule.
1.6 Prorations of Expenses and Certain Property Taxes.
(a) The Seller warrants that the Transferred Assets are
not, and on the Closing Date will not be, subject to or liable for any special
assessments or similar types of impositions. Any general property Tax assessed
against or pertaining to the Transferred Assets for the taxable period that
includes the Closing Date shall be
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prorated between the Buyer and the Seller as of the Closing Date. In the event
the amount of any such general property Tax cannot be ascertained as of the
Closing Date, proration shall be made on the basis of the preceding year, the
Buyer shall receive a credit against the Cash Purchase Price on the Closing
Date for the Seller's pro rata portion of such general property Taxes, and to
the extent that such proration may be inaccurate the Seller and the Buyer agree
to make such payment to the other after the tax statements have been received
as is necessary to allocate such general property Tax properly between the
Seller and the Buyer as of the Closing Date.
(b) Except as otherwise provided in this Agreement, the
Seller and the Buyer agree that amounts payable with respect to utility charges
and other items of expense attributable to the conduct of the Business shall be
prorated as of the Closing Date to the extent the charges and expenses cannot
be identified as to the party that received the benefits to which such charges
and expenses relate. To the extent such amounts are estimated on the Closing
Date and such prorations are inaccurate, the Seller and the Buyer agree to make
such payment to the other after such amounts are correctly computed as is
necessary to allocate such charges properly between the Seller and the Buyer as
of the Closing Date.
1.7 Transfer Taxes; Recording Fees.
(a) The Buyer and the Seller acknowledge and agree that
the Purchase Price includes and is inclusive of any and all sales, use,
transfer or other similar Taxes imposed as a result of the consummation of the
transactions contemplated by this Agreement and the Seller hereby agrees to
indemnify the Buyer against, and agrees to protect, save and hold the Buyer
harmless from, any loss, liability, obligation or claim (whether or not
ultimately successful) for sales, use, transfer or other similar Taxes (and any
interest, penalties, additions to tax and fines thereon or related thereto)
imposed as a result of the consummation of the transactions contemplated by
this Agreement.
(b) The Buyer shall pay any and all recording, filing or
other fees relating to the conveyance or transfer of the Transferred Assets
from the Seller to the Buyer.
(c) The Buyer shall deliver to the Seller on the Closing
Date a certificate certifying that the Inventories are being purchased for
resale to the extent stated therein.
1.8 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Transferred Assets by the Buyer and the Seller within 60
days following the Closing Date subject to the following:
(a) such allocation of the Purchase Price will be
reflected in Form 8594 that will be filed by the Buyer and the Seller in
accordance with Section 1060 of the Code, with such adjustments as may be
necessary pursuant to Section 1.4; and
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(b) The Buyer and the Seller agree to treat and report in
filings under the Code (and, if necessary, to cause each of their respective
Affiliates to so treat and report) the transactions contemplated by this
Agreement in a manner consistent with one another.
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SELLER AND WEATHERFORD
Except as otherwise set forth in the correspondingly numbered section
of the Disclosure Schedule delivered by the Seller to the Buyer, the Seller and
Weatherford, jointly and severally, represent and warrant to the Buyer and
covenant and agree as follows:
2.1 Corporate Matters.
(a) The Seller and Weatherford are corporations duly
incorporated, validly existing and in good standing under the laws of their
respective states of incorporation. The Seller is duly authorized, qualified
and licensed, and has all requisite power and authority under all applicable
laws, ordinances and orders of public authorities, to own, operate and lease
its properties and assets and to carry on its business in the places and in the
manner currently conducted, except where the failure to be so qualified would
not have a Material Adverse Effect. The Seller is qualified to transact
business as a foreign corporation and is in good standing in the jurisdictions,
if any, specified in Section 2.1(a) of the Disclosure Schedule. Each of the
Seller and Weatherford has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations under this Agreement.
(b) True, correct and complete copies of the Articles of
Incorporation of the Seller and the Bylaws of the Seller have been provided by
the Seller to the Buyer, and such Articles of Incorporation and Bylaws are in
full force and effect.
(c) Set forth in Section 2.1(c) of the Disclosure
Schedule is a list of assumed names under which the Seller operates the
Business.
2.2 Validity of Agreement and Conflict with Other Instruments.
(a) This Agreement, and all transactions contemplated
hereby, have been duly authorized and approved by all necessary corporate
action on the part of the Seller and Weatherford. No further corporate action
is necessary on the part of the Seller or Weatherford to execute and deliver
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Seller and Weatherford
and is a legal, valid and binding obligation of the Seller and Weatherford,
enforceable against the Seller and Weatherford in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time
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in effect that affect creditors' rights generally and by legal and equitable
limitations on the availability of specific remedies.
(b) The execution, delivery and performance of this
Agreement and the other agreements and documents to be delivered by the Seller
and Xxxxxxxxxxx to the Buyer, the consummation of the transactions contemplated
hereby or thereby, and the compliance with the provisions hereof or thereof, by
the Seller and Xxxxxxxxxxx will not, with or without the passage of time or the
giving of notice or both:
(i) conflict with, constitute a breach, violation
or termination of any provision of, or give rise to any right
of termination, cancellation or acceleration, or loss of any
right or benefit or both, under, any of the Contracts and
Other Agreements relating to the Business,
(ii) conflict with or violate the Certificate or
Articles of Incorporation or Bylaws of the Seller or
Xxxxxxxxxxx,
(iii) result in an acceleration or increase of any
amounts due with respect to the Trade Payables, Accrued
Liabilities or Notes Payable,
(iv) result in the creation or imposition of any
Lien on any of the Transferred Assets, or
(v) violate any law, statute, ordinance,
regulation, judgment, writ, injunction, rule, decree, order
or any other restriction of any kind or character applicable
to the Seller or Xxxxxxxxxxx or any of their respective
properties or assets,
other than violations, defaults or conflicts that would not materially and
adversely affect the ability of the Seller or Xxxxxxxxxxx to consummate the
transactions provided for in this Agreement.
2.3 Approvals, Licenses and Authorizations.
(a) No order, license, consent, waiver, authorization or
approval of, or exemption by, or the giving of notice to, or the registration
with, or the taking of any other action in respect of, any Person not a party
to this Agreement, including any Governmental Entity, and no filing, recording,
publication or registration in any public office or any other place is now, or
under existing law in the future will be, necessary on behalf of the Seller to
authorize its execution, delivery and performance of this Agreement or any
other agreement contemplated hereby to be executed and delivered by the Seller
and the consummation of the transactions contemplated hereby or thereby
(including, but not limited to, assignment of the Transferred Assets), or to
effect the legality, validity, binding effect or enforceability thereof.
(b) All material licenses, permits, concessions,
warrants, franchises and other governmental authorizations and approvals of all
Governmental Entities required or necessary for the Seller to carry on its
business in the places and in the manner
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currently conducted have been duly obtained, are in full force and effect and
are set forth truly, correctly and completely in Section 2.3(b) of the
Disclosure Schedule. No material violations are in existence or have been
recorded with respect to such licenses, permits or other authorizations and no
proceeding is pending or, to the best knowledge of the Seller, threatened with
respect to the revocation or limitation of any of such licenses, permits or
other authorizations. The Seller has complied with all laws, rules,
regulations and orders applicable to the Business, and all rules, regulations
and orders respecting the provision of services by the Seller, except for
violations that would not have a Material Adverse Effect.
2.4 Title to and Condition of Properties.
(a) The Seller owns, and has good and indefeasible title
to, each parcel of Real Property, free and clear of any Liens, other than
Permitted Liens and Liens and imperfections of title that, singly or in the
aggregate, would not have a Material Adverse Effect. No parcel of Real
Property is subject to any decree of any Governmental Authority nor is being
condemned, expropriated or otherwise taken by any public authority with or
without payment of compensation therefor, nor, to the knowledge of the Seller,
has any such condemnation, expropriation or taking been proposed.
(b) The Seller is the lessee or has succeeded to the
rights of the lessee under all of the Leasehold Interests and owns the
Leasehold Interests free and clear of all Liens, except for Permitted Liens.
The Seller either owns the improvements and fixtures located on each Leasehold
Interest or validly occupies and uses such improvements and fixtures in
accordance with the terms of the Leasehold Interest, in each case free and
clear of Liens, except for Permitted Liens. A true and complete copy or
description of the lease governing each Leasehold Interest, as amended to date
and including any letter agreements relating thereto, has been furnished by the
Seller to the Buyer.
(c) All Equipment (excluding Equipment that did not have
a cost basis of $500 or more at their respective dates of acquisition by the
Seller) is set forth in Section 1.1(a)(i) of the Disclosure Schedule. The
Seller has good and marketable title to all Equipment free and clear of all
Liens. All of the Equipment is in the Seller's possession and control.
(d) All Inventories at September 30, 1996 are set forth
in Section 1.1(a)(ii) of the Disclosure Schedule. The Seller has good and
marketable title to all Inventories free and clear of all Liens.
(e) The Accounts Receivable are owned by the Seller free
and clear of all Liens.
(f) The Seller owns or possesses licenses or other rights
to use all rights to all Proprietary Rights necessary for the conduct of the
Business as currently conducted. On the Closing Date, the Seller and
Xxxxxxxxxxx will transfer or cause to be transferred all Proprietary Rights
necessary for the conduct of the Business as
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currently conducted. Set forth in Section 2.4(f) of the Disclosure Schedule is
a complete and accurate list of all patents, trademarks and licenses the Seller
owns or possesses or otherwise has rights to use and all patents, trademarks
and licenses pertaining to the Business that the Seller owns or possesses or
otherwise has rights to use. No licenses, sublicenses, covenants or agreements
have been granted or entered into by the Seller in respect of the items listed
in Section 2.4(f) of the Disclosure Schedule except as noted thereon. The
Seller has not received any notice of infringement, misappropriation or
conflict from any other Person with respect to such Proprietary Rights and the
conduct of the Business has not infringed, misappropriated or otherwise
conflicted with any Proprietary Rights of any such Person. The Seller has not
given indemnification for patent, trademark, service xxxx or copyright
infringements except to licensees or customers in the ordinary course of
business. All of the Proprietary Rights that are owned by the Seller are owned
free and clear of all Liens and all such Proprietary Rights will be transferred
to the Buyer free and clear of all Liens. All Proprietary Rights that are
licensed by the Seller from third parties are licensed pursuant to valid and
existing license agreements and such interests are not subject to any Liens
other than those under the applicable license agreements. The consummation of
the transactions contemplated by this Agreement will not result in the loss of
any Proprietary Rights and will not conflict with, constitute a breach,
violation or termination of, any agreement or understanding, whether written or
otherwise, relating to any Proprietary Rights necessary for the conduct of the
Business as currently conducted.
2.5 Contracts and Commitments.
(a) None of the Transferred Assets is subject to, and,
except for the Retained Liabilities, the Seller is not a party to or bound by:
(i) any agreement, contract or commitment
requiring the expenditure or series of related expenditures
of funds in excess of $25,000 (other than purchase orders in
the ordinary course of business for goods necessary for the
Seller to complete then existing contracts or purchase
orders);
(ii) any agreement, contract or commitment
requiring the payment for goods or services whether or not
such goods or services are actually provided or the provision
of goods or services at a price less than the Seller's cost
of producing such goods or providing such services;
(iii) any loan or advance to, or investment in, any
Person or any agreement, contract, commitment or
understanding relating to the making of any such loan,
advance or investment;
(iv) any Debt Obligations (other than the notes
described in Section 2.5(a)(iv) of the Disclosure Schedule);
(v) any management service, employment,
consulting or other similar type contract or agreement;
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(vi) any agreement, contract or commitment that
would limit the freedom of the Buyer or any Affiliate thereof
following the Closing Date to engage in any line of business,
to own, operate, sell, transfer, pledge or otherwise dispose
of or encumber any of the Transferred Assets or to compete
with any Person or to engage in any business or activity in
any geographic area;
(vii) any agreement, lease, contract or commitment
or series of related agreements, leases, contracts or
commitments not entered into in the ordinary course of
business or, except for agreements to purchase or sell goods
and services entered into in the ordinary course of business
of the Seller, not cancelable within 30 calendar days by the
Seller without penalty to the Seller;
(viii) any agreement or contract obligating the
Seller or that would obligate or require any subsequent owner
of the Business or any of the Transferred Assets to provide
for indemnification or contribution with respect to any
matter;
(ix) any sales, distributorship or similar
agreement relating to the products sold or services provided
by the Seller;
(x) any license, royalty or similar agreement; or
(xi) any other agreement, contract or commitment
that might reasonably be expected to have a Material Adverse
Effect.
(b) The Seller is not in breach of any provision of, or
in default (or has knowledge of any event or circumstance that with notice, or
lapse of time or both, would constitute an event of default) under the terms of
any of the Contracts and Other Agreements that constitute a part of the
Transferred Assets, except for breaches or defaults that would not have a
Material Adverse Effect. All of the Contracts and Other Agreements that
constitute a part of the Transferred Assets are in full force and effect. The
Seller is not aware of any pending or threatened disputes with respect to any
of the Contracts and Other Agreements.
(c) Except as set forth in Section 2.3(a) or Section
2.5(a) of the Disclosure Schedule, the enforceability of the Contracts and
Other Agreements that constitute a part of the Transferred Assets will not be
affected in any manner by the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
2.6 No Litigation. There is no action, suit, claim,
investigation or legal, administrative, arbitration or other proceeding, or
governmental investigation or examination, or any change in any zoning or
building ordinance pending or, to the Seller's knowledge, threatened against or
affecting the Seller, the Business or any of the Transferred Assets, at law or
in equity, before or by any Governmental Entity and no basis exists for any
such action, suit, claim, investigation or proceeding.
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2.7 No Adverse Changes or Events. Since September 30, 1996, the
Business has been consistently operated only in the ordinary course, and there
has not been:
(a) any adverse change in the financial condition,
assets, liabilities (contingent or otherwise), results of operations or
business of the Seller except for such changes that in the aggregate have not
had a Material Adverse Effect, or any occurrence, circumstance or combination
thereof that might reasonably be expected to have a Material Adverse Effect
before or after the Closing;
(b) any damage, destruction or loss, whether or not
covered by insurance, materially adversely affecting the Transferred Assets or
the Business;
(c) any increase in the compensation or rate of
compensation or commissions or bonuses payable or to become payable by the
Seller to any employee of the Seller subsequently hired by the Buyer that is
not consistent with past practice, any payment or accrual of, or commitment
with respect to, any bonus plan or severance arrangement that is not consistent
with past practice or any change or modification to any severance arrangement;
(d) any sale, assignment, transfer or other disposition
or lapse of any Proprietary Rights or disclosure to any Person (other than
employees of the Seller in the scope of their employment) of any Proprietary
Rights material to the Business;
(e) any cancellation or compromise of any material
claims, or any waiver of any other material rights relating to the Business, or
any sale, transfer or other disposition of any properties or assets, real,
personal or mixed, tangible or intangible, material to the Business (other than
sales of Inventory in the ordinary course of business); or
(f) any change in the Seller's method of accounting for
financial, Tax or other purposes.
2.8 Environmental Matters.
(a) Neither the Seller nor, to the knowledge of the
Seller, any prior owner or operator of the Business or the Transferred Assets
has caused or allowed the generation, use, treatment, storage or disposal of
Hazardous Materials at any site or facility owned, leased or operated by the
Seller or used in the Business except in accordance with all applicable
Environmental Laws or except to the extent the same would not have a Material
Adverse Effect.
(b) The Seller does not own or lease any real property,
improvements or related assets that form a part of the Transferred Assets or
the Business and that have been subject to the release of any Hazardous
Materials except to the extent that the same would not have a Material Adverse
Effect.
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(c) The Seller has secured all Environmental Permits
necessary to the conduct of the Business and the Seller is in compliance with
such permits, except to the extent any such noncompliance does not impose
liability on the Buyer or its Affiliates.
(d) The Seller has not received any notice, nor is it
aware, of any proposal to amend, revoke or replace any Environmental Permit, or
requiring the issuance of any additional Environmental Permit, necessary to
conduct the Business.
(e) The Seller has not received inquiry or notice nor
does the Seller have any reason to suspect or believe that it will receive
inquiry or notice of any actual or potential proceedings, claims, lawsuits or
losses related to or arising under any Environmental Law and related to the
Business or the Transferred Assets.
(f) The Seller is not currently operating or required to
be operating the Business under any compliance order, schedule, decree or
agreement, any consent decree, order or agreement, or corrective action decree,
order or agreement issued or entered into under any Environmental Law.
(g) Each of the Seller, the Transferred Assets and the
Business is in compliance with all applicable limitations, restrictions,
conditions, standards, prohibitions, requirements and obligations established
under Environmental Laws except to the extent any such noncompliance would not
have a Material Adverse Effect.
2.9 Condition of Assets. Except as expressly provided herein,
the Inventory, property and Equipment included in the Transferred Assets are
being sold, transferred and conveyed on an "AS IS, WHERE IS" condition, and the
Seller makes NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THEIR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AS TO THEIR CONDITION.
2.10 Warranties and Product Liability. Except for (i) warranties
implied by law and (ii) warranties disclosed in Section 2.10 of the Disclosure
Schedule, the Seller has not given or made any warranties in connection with
the sale or rental of goods or services on or prior to the Closing Date,
including, without limitation, warranties covering the customer's consequential
damages. The Seller is not aware of any state of facts or the occurrence of
any event forming the basis of any present claim against the Seller with
respect to warranties relating to products manufactured, sold or distributed by
the Seller or services performed by or on behalf of the Seller on or prior to
the Closing Date except any claim that would not individually or in the
aggregate exceed $50,000.
2.11 Employee Matters.
(a) There are no collective bargaining or other labor
union agreements to which the Seller is a party or by which it is bound. To
the knowledge of the Seller, the Seller has not encountered any labor union
organizing activity or had any actual or threatened employee strikes, work
stoppages, slowdowns or walkouts.
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(b) The Seller does not contribute to or have an
obligation to contribute to, and has not at any time within six years prior to
the Closing Date contributed to or had an obligation to contribute to, a
multi-employer plan within the meaning of Section 3(37) of ERISA.
(c) With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, which is sponsored, maintained or contributed
to, or has been sponsored, maintained or contributed to within six years prior
to the Closing Date, by the Seller or any corporation, trade, business or
entity under common control with the Seller, within the meaning of Section
414(b), (c) or (m) of the Code or Section 4001 of ERISA ("Commonly Controlled
Entity"), (i) no withdrawal liability, within the meaning of Section 4201 of
ERISA, has been incurred, which withdrawal liability has not been satisfied,
(ii) no liability to the Pension Benefit Guaranty Corporation has been incurred
by the Seller or any Commonly Controlled Entity, which liability has not been
satisfied, (iii) no accumulated funding deficiency, whether waived or not
waived, within the meaning of Section 302 of ERISA or Section 412 of the Code
has been incurred and (iv) all contributions, including installments, to such
plan required by Section 302 of ERISA and Section 412 of the Code have been
timely made.
2.12 Finder's Fees. Except for fees payable to Xxxxxxx Xxxxx &
Co. ("Xxxxxxx Xxxxx") and Xxxxxxx & Company International ("Xxxxxxx"), neither
the Seller nor any Affiliate of the Seller has employed or retained any
investment banker, broker, agent, finder or other party, or incurred any
obligation for brokerage fees, finder's fees or commissions, with respect to
the sale by the Seller of any of the Transferred Assets or with respect to the
transactions contemplated by this Agreement, or otherwise dealt with anyone
purporting to act in the capacity of a finder or broker with respect thereto
whereby any party hereto may be obligated to pay such a fee or commission. The
Seller and Xxxxxxxxxxx agree to indemnify and hold the Buyer and its Affiliates
harmless from and against any and all claims, liabilities or obligations with
respect to all fees, commissions or expenses asserted by any Person on the
basis of any act, statement, agreement or commitment alleged to have been made
by the Seller, Xxxxxxxxxxx or any Affiliate of Weatherford with respect to any
fee, commission or expense payable to Xxxxxxx Xxxxx, Xxxxxxx or any other party
with respect to the sale by the Seller of any of the Transferred Assets or with
respect to the transactions contemplated by this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
3.1 Corporate Matters. The Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Buyer has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations under this Agreement.
This Agreement, and all transactions contemplated hereby, have been duly
authorized and approved by all necessary
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corporate action on the part of the Buyer. No further corporate action is
necessary on the part of the Buyer to execute and deliver this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Buyer and is a legal, valid and binding
obligation of the Buyer, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations on
the availability of specific remedies. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby,
and the compliance with the provisions hereof, by the Buyer will not violate
any provision of, or constitute a default under, any contract or other
agreement to which the Buyer is a party or by which it is bound, or conflict
with its Certificate of Incorporation or Bylaws, other than violations,
defaults or conflicts that would not materially and adversely affect the
ability of the Buyer to consummate the transactions provided for in this
Agreement.
3.2 Approvals and Authorizations. No order, license, consent,
waiver, authorization or approval of, or exemption by, or the giving of notice
to, or the registration with, or the taking of any other action in respect of,
any Person not a party to this Agreement, including any Governmental Entity,
and no filing, recording, publication or registration in any public office or
any other place is now, or under existing law in the future will be, necessary
on behalf of the Buyer to authorize its execution, delivery and performance of
this Agreement or any other agreement contemplated hereby to be executed and
delivered by the Buyer and the consummation of the transactions contemplated
hereby or thereby (including, but not limited to, assignment of the Transferred
Assets), or to effect the legality, validity, binding effect or enforceability
thereof.
3.3 Finder's Fees. Neither the Buyer nor any Affiliate of the
Buyer has employed or retained any investment banker, broker, agent, finder or
other party, or incurred any obligation for brokerage fees, finder's fees or
commissions, with respect to the transactions contemplated by this Agreement,
or otherwise dealt with anyone purporting to act in the capacity of a finder or
broker with respect thereto whereby any party hereto may be obligated to pay
such a fee or a commission. The Buyer agrees to indemnify and hold the Seller
and its Affiliates harmless from and against any and all claims, liabilities or
obligations with respect to all fees, commissions or expenses asserted by any
Person on the basis of any act, statement, agreement or commitment alleged to
have been made by the Buyer or any Affiliate of the Buyer with respect to any
such fee, commission or expense.
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ARTICLE 4
ADDITIONAL AGREEMENTS
4.1 Delivery of Corporate Documents; Proprietary Data; Record
Retention; Financial Statements.
(a) The Seller shall deliver to the Buyer all Documents
and Other Papers relating to the Transferred Assets, the Assumed Liabilities
and the current and proposed operations of the Business, including, without
limitation, all files relating to the Accounts Receivable and the Trade
Payables, computer disks reflecting any books or records, documents or other
papers, or other information or data relating to the operation of the Business
or the Transferred Assets stored on any electronic media, including computers.
The Seller, however, shall be entitled to retain the historical books and
records relating to the Business to the extent such books and records are not
necessary for the ongoing operations of the Business by the Buyer.
(b) The Seller and Xxxxxxxxxxx agree that neither of them
nor any of their Affiliates shall retain any copies of any blueprints,
drawings, diagrams, models or similar Proprietary Information included in the
Transferred Assets.
(c) In the event and for so long as any party is
contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand asserted by a third party
(including any Governmental Entity) in connection with (i) any transaction
contemplated by this Agreement or (ii) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act or transaction on or prior to the Closing Date involving
the Business or the Transferred Assets, the other party will to the extent
reasonably practicable cooperate with the contesting or defending party and its
counsel in the contest or defense, and provide such testimony and access to its
books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party
(except to the extent the contesting or defending party is entitled to
indemnification therefor under Article 8 hereof); provided, however, that
nothing herein requires any party to retain any books and records other than in
the ordinary course of business; provided further, any party hereto, before
destroying any historical books and records that relate in whole or in part to
the Business or the Transferred Assets, shall give such other party reasonable
notice of its intention to destroy such books and records and an opportunity to
make copies thereof at the sole expense of the party destroying such copies.
In addition, the Buyer agrees to provide Xxxxxxxxxxx with reasonable access to
any books and records included in the Transferred Assets as may be necessary
for the preparation of any Tax returns or financial statements.
Notwithstanding the foregoing, information as to which the contesting or
defending party may reasonably assert would waive a privilege need not be
disclosed.
(d) If the Buyer is required under applicable United
States federal securities laws to include historical accounting information for
periods prior to the Closing relating to the Business in any of the Buyer's
filings with the Securities and
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Exchange Commission, then the Seller shall cooperate with and provide the Buyer
reasonable access, during regular business hours and upon reasonable advance
notice, to the Seller's accounting records relating to the Business prior to
the Closing and shall cause its outside auditors to cooperate, at the Buyer's
expense, with the Buyer in the preparation of such historical financial
statements relating to the Business prior to the Closing as may be required
under such securities laws to be included in such filings.
4.2 Further Assurances. The Seller shall execute, acknowledge
and deliver or cause to be executed, acknowledged and delivered to the Buyer
such bills of sale, assignments (including, but not limited to, assignments of
leases) and other instruments of transfer, assignment and conveyance, in form
and substance satisfactory to counsel for the Buyer, as shall be necessary to
vest in the Buyer all the right, title and interest in and to the Transferred
Assets free and clear of all Liens (including the release of all Liens of
record) and shall use its best efforts to cause to be taken such other action
as the Buyer reasonably may require to more effectively implement and carry
into effect the transactions contemplated by this Agreement.
4.3 Nondisclosure of Proprietary Information.
(a) The Seller agrees that, from and after the Closing
Date, the Seller and its Affiliates shall:
(i) hold in confidence and will not directly or
indirectly at any time reveal, report, publish, disclose or
transfer to any Person other than the Buyer any of the
Proprietary Information that is not generally known to the
public or utilize any of the Proprietary Information for any
purpose; and
(ii) not for a period of two years solicit any
Transferred Employees.
(b) The Seller acknowledges that all documents and
objects containing or reflecting any Proprietary Information, whether developed
by the Seller or by someone else for the Seller or any of its Affiliates, will
after the Closing Date become the exclusive property of the Buyer and be
delivered to the Buyer.
(c) Because of the unique nature of the Proprietary
Information, the Seller understands and agrees that the breach or anticipated
breach of the obligations under this Section 4.3 will result in immediate and
irreparable harm and injury to the Buyer and its Affiliates, for which it will
not have an adequate remedy at law, and that the Buyer and its Affiliates and
their successors and assigns shall be entitled to relief in equity to enjoin
such breach or anticipated breach and to seek any and all other legal and
equitable remedies to which they may be entitled.
4.4 Covenant Not to Compete With the Business. As an inducement
to the Buyer to acquire the Business, each of Xxxxxxxxxxx and the Seller agree
that, except as otherwise permitted herein or Exhibit A hereto, effective as of
the Closing Date and for a period of three years thereafter, it and its
Affiliates shall not, without the consent
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of the Buyer, directly or indirectly, engage in the manufacture of packer
equipment. Xxxxxxxxxxx and the Seller acknowledge that a remedy at law for any
breach or attempted breach of this Section 4.4 will be inadequate and further
agrees that any breach of this Section 4.4 will result in irreparable harm to
the Business and the Buyer shall, in addition to any other remedy that may be
available to it, be entitled to specific performance and injunctive and other
equitable relief in case of any such breach or attempted breach. Weatherford
and the Seller acknowledge that this covenant not to compete is being provided
as an inducement to the Buyer to acquire the Business and the Transferred
Assets and that this Section 4.4 contains reasonable limitations as to time,
geographical area and scope of activity to be restrained that do not impose a
greater restraint than is necessary to protect the goodwill or other business
interest of the Buyer. Whenever possible, each provision of this Section 4.4
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Section 4.4 shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remaining
provisions of this Section 4.4. If any provision of this Section 4.4 shall,
for any reason, be judged by any court of competent jurisdiction to be invalid
or unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this Section 4.4 but shall be confined in its operation to the
provision of this Section 4.4 directly involved in the controversy in which
such judgment shall have been rendered. In the event that the provisions of
this Section 4.4 should ever be deemed to exceed the time or geographic
limitations permitted by applicable laws, then such provision shall be reformed
to the maximum time or geographic limitations permitted by applicable law. The
foregoing provisions of this Section 4.4 shall not prevent Weatherford or any
of its Affiliates from making any acquisition (whether by way of assets, stock
or otherwise) of, or retain any interest in, or any investment in, in either
case, whether directly or indirectly, any business, entity or affiliated group
of entities that on a consolidated basis during the most recent fiscal quarter
derived 20% or less of its gross revenues from the manufacture and sale of
packer equipment so long as (i) such acquisition is pursuant to an agreement
entered into on or after one year from the Closing Date or (ii) the business or
entities that are engaged in the manufacture and sale of packer equipment is
sold within one year after the date of acquisition of such business or
entities. In addition, the foregoing provision shall not prohibit Weatherford
or any of its Affiliates from making any acquisition (whether by way of assets,
stock or otherwise) or any investment in, in either case, whether directly or
indirectly, any business, entity or affiliated group of entities that are
engaged in the business of the manufacture and sale of packer equipment as long
as the agreement to make such acquisition is entered into after two years from
the Closing Date. The foregoing provisions shall also not prohibit any Person
who may in the future acquire 50% or more of the outstanding capital stock of
Weatherford (or any successor thereto) from engaging in the manufacture of
packer equipment as long as such acquiring Person was engaged in the
manufacture of packer equipment prior to such acquisition.
4.5 Employee Matters.
(a) The Buyer agrees to offer employment to all of the
employees of the Seller or EPEG who are engaged in the Business on terms
substantially similar to those under which such employees are currently
engaged, provided that the Buyer need only
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offer the Seller's employees those benefits that are provided by the Buyer to
similarly situated employees. Any such employees that the Buyer in fact
employs immediately after the Closing Date shall hereinafter be referred to as
the "Transferred Employees." Any such employees who are not employed by the
Buyer or one of its Affiliates immediately after the Closing Date shall
hereinafter be referred to as the "Terminated Employees." In determining
eligibility for and entitlement to vacation and other normal benefits
(excluding stock-based plans and incentive programs) based on length of service
by Transferred Employees under the Buyer's normal policies, service with the
Seller or EPEG shall be considered by the Buyer and its Affiliates as service
with the Buyer and its Affiliates.
(b) The Seller shall be responsible for the severance
obligations, if any, with respect to the Terminated Employees. The Buyer
agrees that if the employment of any of the Transferred Employees with the
Buyer or its Affiliates is terminated by the Buyer within six months following
the Closing Date other than for cause, the Buyer will provide to such
terminated Transferred Employee the severance that such Transferred Employee
would have received had the Transferred Employee been entitled to receive
severance from the Seller in accordance with the severance policy (including,
as applicable, the Weatherford Enterra Special Severance Payment Plan) of the
Seller previously provided to the Buyer, without giving effect to any
provisions that eliminate the severance payment obligations as a result of a
purchaser of the Business offering the Transferred Employee employment.
(c) In determining eligibility for and the amount of
severance benefits the Transferred Employees may become entitled to upon
termination of employment with the Buyer or one of its Affiliates after the
Closing Date under the Buyer's normal severance policies, service with the
Seller or EPEG shall be considered as service with the Buyer and its
Affiliates.
(d) The parties hereto do not intend to create any
third-party beneficiary rights respecting any employee of the Seller as a
result of the provisions hereof and specifically hereby negate any such
intention.
(e) The Buyer agrees to provide to all Transferred
Employees the opportunity to participate in group health and other benefit
plans maintained by it or its Affiliates for similarly situated employees. The
Buyer agrees to use its best efforts to obtain group health coverage for the
Transferred Employees effective as of the Closing Date; provided, however, such
coverage need not cover pre-existing conditions. With respect to any
Transferred Employees with pre-existing conditions, the Buyer, at its option,
will either make coverage available to such Transferred Employees (by waiving
any waiting periods for such pre-existing conditions) or, for a period of 12
months, reimburse such Transferred Employees for the premiums paid by such
employees (who elect to retain their existing coverage) to maintain their prior
coverage with the Seller as permitted under applicable law.
(f) The Buyer shall be fully responsible for all
liabilities related to the termination by the Buyer of the employment of any of
the Transferred Employees within 90 days after the Closing Date or such other
period that would expose the Seller
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to liabilities under the WARN Act as a result of the premature termination by
the Buyer of the employment of any of the Transferred Employees.
4.6 Use of Corporate Names. All uses of the corporate names set
forth in Section 1.1(a)(vi) of the Disclosure Schedule, or any derivations
thereof, are being transferred to the Buyer hereunder as part of the
Transferred Assets. The Seller agrees that it will not take any action that
could reasonably be expected to adversely affect the Buyer's right to the such
names or cause confusion with respect to the Buyer's use of the such names.
All goodwill with respect to the use of the names will inure to the benefit of
the Buyer, and the Seller will not have any rights to xxx or recover against
any person with respect to the use of such names.
ARTICLE 5
BUYER'S CONDITIONS
The obligation of the Buyer to purchase the Transferred Assets and to
assume the Assumed Liabilities as contemplated hereby is, at the option of the
Buyer, subject to the satisfaction on or before the Closing Date of the
conditions set forth below, any of which may be waived by the Buyer in writing;
provided, however, the Buyer's election to proceed with the Closing shall not
be deemed a waiver of any breach of any representation, warranty or covenant
herein, whether or not known to the Buyer or existing on the Closing Date, and
such action shall not prejudice the Buyer's right to recover damages for any
such breach.
5.1 Representations, Warranties and Covenants. The
representations and warranties of the Seller and Weatherford contained in this
Agreement shall be true, correct and complete in all respects on and as of the
Closing Date with the same force and effect as though such representations and
warranties had been made or given on and as of such date, except for such
matters due to changes in facts from the date hereof required or permitted by
this Agreement; each and all of the agreements and covenants of the Seller and
Weatherford to be performed or complied with by it on or before the Closing
Date pursuant to this Agreement shall have been performed or complied with in
all material respects; and the Seller and Weatherford shall have delivered to
the Buyer a certificate signed by duly authorized officers dated the Closing
Date regarding the matters set forth in this Section 5.1.
5.2 Good Standing. The Seller shall have delivered to the Buyer
a certificate issued by the Secretary of State of the State of Texas evidencing
the good standing of the Seller, as of a date not more than five calendar days
prior to the Closing Date. The Seller also shall have delivered to the Buyer a
certificate issued by the Texas Comptroller of Public Accounts evidencing that
all applicable state franchise Taxes have been paid in Texas.
5.3 Instruments of Transfer. The Seller shall have executed,
acknowledged and delivered to the Buyer such bills of sale, assignments
(including but not limited to assignments of the leases) and other instruments
of transfer, assignment and
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conveyance, in form and substance mutually agreeable, as shall be necessary to
vest in the Buyer all the right, title and interest in and to the Transferred
Assets.
5.4 Licenses, Consents and Approvals. The Seller and Weatherford
shall have delivered to the Buyer a copy of each of the licenses, consents,
approvals and other authorizations from Governmental Entities necessary or
appropriate for the Seller and Weatherford to consummate the transactions
contemplated by this Agreement.
5.5 No Litigation. No preliminary or permanent injunction or
other order of any Governmental Entity shall be in effect nor shall there be in
effect any statute, rule, regulation or executive order promulgated or enacted
by any Governmental Entity that, in any such case, prevents the consummation of
the transactions contemplated by this Agreement. No suit, action, claim,
proceeding or investigation before any Governmental Entity shall have been
commenced or threatened by any Person (other than the Buyer or any of its
Affiliates) seeking to prevent the sale of the Transferred Assets or the
Business or asserting that the sale of all or a portion of the Transferred
Assets or the Business would be unlawful.
5.6 Consents of Third Persons. A copy of all consents from third
Persons that are listed in Section 2.3 of the Disclosure Schedule shall have
been delivered to the Buyer.
5.7 Resolutions. The Buyer shall have received certified copies
of resolutions of the Boards of Directors of the Seller and Weatherford
approving this Agreement and the transactions contemplated hereby.
5.8 Xxxx-Xxxxx-Xxxxxx. The waiting period (and any extension
thereof) applicable to the consummation of the transactions contemplated by
this Agreement under the HSR Act shall have been expired or been terminated.
5.9 Disclosure Schedule. The Seller shall have delivered to the
Buyer a copy of the Disclosure Schedule not later than five Business Days after
the date of this Agreement.
ARTICLE 6
SELLER'S CONDITIONS
The obligation of the Seller to transfer the Transferred Assets as
contemplated hereby is, at the option of the Seller, subject to the
satisfaction on or before the Closing Date of the conditions set forth below,
any of which may be waived by the Seller in writing; provided, however, the
Seller's election to proceed with the closing of the transactions contemplated
hereby shall not be deemed a waiver of any breach of any representation,
warranty or covenant herein, whether or not known to the Seller or existing on
the Closing Date, and such action shall not prejudice the Seller's right to
recover damages for any breach.
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6.1 Representations, Warranties and Covenants. The
representations and warranties of the Buyer contained in this Agreement shall
be true, correct and complete in all respects on and as of the Closing Date
with the same force and effect as though such representations and warranties
had been made or given on and as of such date; each and all of the agreements
and covenants of the Buyer to be performed or complied with by it on or before
the Closing Date pursuant to this Agreement shall have been performed or
complied with in all material respects; and the Buyer shall have delivered to
the Seller a certificate signed by one of its duly authorized officers, dated
the Closing Date, regarding the matters set forth in this Section 6.1.
6.2 Receipt of the Transferred Assets. The Buyer shall have paid
the Closing Payment and the Buyer shall have duly executed and delivered to the
Seller an instrument acknowledging receipt of the Transferred Assets and
assumption of the Assumed Liabilities in form and substance mutually agreeable.
6.3 Licenses, Consents and Approvals. The Buyer shall have
delivered to the Seller a copy of each of the licenses, consents, approvals and
other authorizations from Governmental Entities necessary or appropriate for
the Buyer to consummate the transactions contemplated by this Agreement.
6.4 No Litigation. No preliminary or permanent injunction or
other order of any Governmental Entity shall be in effect nor shall there be in
effect any statute, rule, regulation or executive order promulgated or enacted
by any Governmental Entity that, in any such case, prevents the consummation of
the transactions contemplated by this Agreement. No suit, action, claim,
proceeding or investigation before any Governmental Entity shall have been
commenced or threatened by any Person (other than the Seller or any of its
Affiliates) seeking to prevent the sale of the Transferred Assets or the
Business or asserting that the sale of all or a portion of the Transferred
Assets or the Business would be unlawful.
6.5 Resolutions. The Seller shall have received certified copies
of resolutions of the Board of Directors of the Buyer approving this Agreement
and the transactions contemplated hereby.
6.6 Xxxx-Xxxxx-Xxxxxx. The waiting period (and any extension
thereof) applicable to the consummation of the transactions contemplated by
this Agreement under the HSR Act shall have been expired or been terminated.
ARTICLE 7
TERMINATION
7.1 Events of Termination. The obligation to close the
transactions contemplated by this Agreement may be terminated by:
(a) mutual agreement of the Buyer and the Seller;
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(b) the Buyer, if a material default shall be made by the
Seller in the observance or in the due and timely performance by the Seller of
any agreements and covenants of the Seller herein contained, or if there shall
have been a breach by the Seller of any of the warranties and representations
of the Seller herein contained, and such default or breach has not been cured
or has not been waived within 20 days of written notice thereof;
(c) the Seller, if a material default shall be made by
the Buyer in the observance or in the due and timely performance by the Buyer
of any agreements and covenants of the Buyer herein contained, or if there
shall have been a breach by the Buyer of any of the warranties and
representations of the Buyer herein contained, and such default or breach has
not been cured or has not been waived within 20 days of written notice thereof;
(d) by the Buyer, on or before the fifth Business Day
following the Buyer's receipt of the Disclosure Schedule, if the Buyer shall
have determined in its good faith reasonable judgment that the business,
operations or assets of the Seller (including environmental conditions,
contract obligations, litigation, contingent liabilities and title of property)
are materially different than that which the Buyer currently understands such
business, operations and assets to be; or
(e) the Buyer or the Seller (provided the terminating
party has not materially breached any of its agreements, covenants or
representations and warranties), if the Closing shall not have occurred on or
before December 31, 1996.
7.2 Liability Upon Termination. If the obligation to consummate
the transactions contemplated by this Agreement is terminated pursuant to any
provision of this Article 7, 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 the Seller or the Buyer except and to the extent such
termination results from the willful breach by a party of any of its
representations, warranties or agreements hereunder. The termination of this
Agreement shall not relieve any party of its obligations under this Article 7.
7.3 Notice of Termination. The parties hereto may exercise their
respective rights of termination under this Article 7 only by delivering
written notice to that effect to the other party or parties, and such notice is
received on or before the Closing Date.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Seller and Weatherford. Except as
otherwise limited by this Article 8 or Article 9 hereof, the Seller and
Weatherford, jointly and severally, agree to indemnify, defend and hold the
Buyer and each of its officers, directors, employees, agents, stockholders and
controlling Persons and their respective successors and assigns harmless from
and against and in respect of Damages actually
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suffered, incurred or realized by such party (collectively, "Buyer Losses"),
arising out of or resulting from or relating to:
(a) any misrepresentation, breach of warranty (other than
a misrepresentation or breach of any of the representations set forth in
Section 2.8) or breach of any covenant or agreement made or undertaken by the
Seller in this Agreement or any misrepresentation in or omission from any other
agreement, certificate, exhibit or writing delivered to the Buyer pursuant to
this Agreement, including the Disclosure Schedule;
(b) any Retained Liability;
(c) any liability resulting from the acquisition in
August 1996 by EPEG of the common stock of Xxxxxx Packer owned by stockholders
other than EPEG and matters relating thereto;
(d) any products manufactured, sold or distributed or
services provided by or on behalf of the Seller on or prior to the Closing Date
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 Seller on or prior to the Closing Date; or
(e) any and all Environmental Liabilities that may be
imposed upon or incurred by the Buyer or its respective officers, directors,
employees, agents, stockholders and controlling Persons or their respective
successors and assigns, arising out of or in connection with (i) the acts or
omissions of any Person prior to the Closing Date relating to the Seller, any
business currently or previously conducted by the Seller, the Transferred
Assets, the operations currently or previously conducted by the Seller or its
Affiliates on any other assets or properties currently or previously leased or
owned by the Seller or its Affiliates in connection with the Business or any
business currently or previously conducted at the properties owned or leased by
it or its Affiliates; (ii) any breach by the Seller or Weatherford of a
representation or warranty contained in Section 2.8; (iii) any and all
Environmental Conditions existing on or prior to the Closing Date on, at or
underlying the Real Property or the Leasehold Interests; or (iv) the handling,
storage, treatment or disposal of any Hazardous Materials generated by Seller
on or prior to the Closing Date (collectively, "Environmental Losses").
Notwithstanding the foregoing, neither Weatherford nor the Seller shall be
liable under clause (a) of this Section 8.1 in respect of a misrepresentation
or breach of warranty unless and until the aggregate amount of any Buyer Losses
for which the Buyer is entitled to indemnification pursuant to such clause from
all such Persons exceeds $500,000 and then only for those Buyer Losses that in
the aggregate exceed $500,000; provided, however, (i) liability under clauses
(b) through (e) of this Section 8.1 shall not be so limited, (ii) liability
under clause (a) of this Section 8.1 shall not be so limited if such Buyer
Losses arise from a breach of any of the representations set forth in Sections
2.2, 2.4 or 2.12 and (iii) except for liability under clause (a) for Buyer
Losses that arise from a breach of any of the representations set forth in
Sections 2.2, 2.4 or
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2.12, which shall not be limited, liability under clause (a) of this Section
8.1 shall not exceed the Cash Purchase Price.
8.2 Indemnification by the Buyer. Except as otherwise limited by
this Article 8 and Article 9 hereof, the Buyer agrees to indemnify, defend and
hold the Seller, Weatherford and each of its officers, directors, employees,
agents, stockholders and controlling Persons and its successors and assigns
harmless from and against and in respect of Damages actually suffered, incurred
or realized by such party (collectively, "Seller Losses"), arising out of or
resulting from:
(a) any misrepresentation, breach of warranty or breach
of any covenant or agreement made or undertaken by the Buyer in this Agreement
or any misrepresentation in or omission from any other agreement, certificate,
exhibit or writing delivered to the Seller or Weatherford pursuant to this
Agreement; or
(b) any Assumed Liability.
8.3 Special Environmental Remediation.
(a) In addition to the indemnification provided in
Section 8.1 hereof, Weatherford agrees to commence as promptly as reasonably
practicable any remediation at the Seller's Huntsville facility that the
investigation currently being conducted by the Seller demonstrates is required
by Environmental Law to achieve at least Risk Reduction Standard No. 2 under
the Texas Natural Resource Conservation Commission ("TNRCC") regulations
(subject to the provisions set forth in Section 8.3(b)), and to diligently
pursue the remediation until it is completed (the "Huntsville Remediation").
Weatherford further agrees to perform the actions described in Exhibit B and to
pay for the capital expenditures described in Exhibit B. The remediation and
capital expenditures described in Exhibit B are herein referred to as the
"Xxxxxx Remediation" and collectively with the Huntsville Remediation as the
"Remediation". The Remediation shall be effected in compliance with all
applicable federal, state and local safety and health laws and applicable
Environmental Laws. Prior to the Closing, Weatherford and the Buyer will
review the cost estimates for the "Recommended Facility Upgrades" set forth in
the Xxxxxx Xxxxxx, Inc. Environmental Site Assessment (Project # WEA 99-1011)
dated July 1996 prepared by Xxxxxxx Environmental Corporation (the "Xxxxxx
Phase II"). If Weatherford and the Buyer agree in writing that the cost
estimates represent an acceptable payment for the listed facility upgrades,
Weatherford will pay the Buyer at Closing the total estimated cost of such
facility upgrades, as set forth in the Xxxxxx Phase II, and the Buyer shall
assume responsibility for making the listed facility upgrades and will release
Weatherford, the Seller and their Affiliates from any and all responsibility
for such facility upgrades. If Weatherford and the Buyer do not so agree,
Weatherford shall be obligated to make and pay for the upgrades as provided
herein.
(b) The Buyer agrees to provide Weatherford and its
representatives with access to and cooperation with respect to the records,
employees, agents, assets and facilities to be acquired from the Seller
throughout the course of completion of the Remediation and any investigation,
clean-up, remediation or response, if any, pertaining
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to any claims for indemnification made pursuant to Section 8.1(e) hereof. The
Buyer further agrees that Weatherford shall have management and control over
the Remediation and over any proceeding, clean-up, remediation or any response
to or any negotiations or discussions with any governmental agencies or third
Persons (provided the Buyer shall have the right to participate in any such
negotiations or discussions) that could reasonably be expected to result in a
claim for an Environmental Loss pursuant to Section 8.1(e). Subject to the
provisions of this Section 8.3 and Exhibit B, Weatherford shall have the right
to select the appropriate remedy to be implemented with respect to the
Remediation and in response to any claim for remediation or clean-up and the
right to control any other action with respect to an Environmental Loss for
which indemnification is required; provided that the remedy selected is in
compliance with applicable Environmental Laws and is adequate to comply with
the regulatory requirements of the TNRCC. Further, the remedy will be adequate
to achieve closure under either Risk Reduction Standard 1 or Risk Reduction
Standard 2 for industrial facilities, as set forth in the regulations
promulgated by the TNRCC, unless the Buyer consents in writing to closure under
Risk Reduction Standard 3, which consent will not be unreasonably withheld, and
all costs of any continuing requirements imposed as a condition to the closure
shall be paid by Weatherford. Weatherford shall effect any remedy in a manner
that will not unduly disrupt the Business. Further, such remedies shall be
effected by Weatherford as promptly as reasonably practical under the
circumstances. The Buyer agrees that, at the request of the Seller, the Buyer
will deed record any property owned by the Buyer that is remediated in
compliance with Risk Reduction Standard 2 or, with the consent of the Buyer,
Risk Reduction Standard 3.
8.4 Procedure. All claims for indemnification under this Article
8 shall be asserted and resolved as follows:
(a) An Indemnitee shall promptly 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 Losses, if known, and method of computation thereof, all with reasonable
particularity, and stating with particularity the nature of such matter.
Failure to provide such notice shall not affect the right of the Indemnitee to
indemnification except to the extent such failure shall have resulted in
liability to the Indemnitor that could have been actually avoided had such
notice been provided within such required time period.
(b) The obligations and liabilities of an Indemnitor
under this Article 8 with respect to Losses arising from claims of any third
party that are subject to the indemnification provided for in this Article 8
("Third Party Claims") shall be governed by and contingent upon the following
additional terms and conditions: if an Indemnitee shall receive notice of any
Third Party Claim, the Indemnitee shall give the Indemnitor prompt notice of
such Third Party Claim and the Indemnitor may, at its option, assume and
control the defense of such Third Party Claim at the Indemnitor's expense and
through counsel of the Indemnitor's choice reasonably acceptable to the
Indemnitee. In the event the Indemnitor assumes the defense against any such
Third Party Claim as provided above, the Indemnitee shall have the right to
participate at its own expense in the defense of such asserted liability, shall
cooperate with the Indemnitor in such
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defense and will attempt to make available on a reasonable basis to the
Indemnitor all witnesses, pertinent records, materials and information in its
possession or under its control relating thereto as is reasonably required by
the Indemnitor. In the event the Indemnitor does not elect to conduct the
defense against any such Third Party Claim, the Indemnitor shall pay all
reasonable costs and expenses of such defense as incurred and shall cooperate
with the Indemnitee (and be entitled to participate) in such defense and
attempt to make available to it on a reasonable basis all such witnesses,
records, materials and information in its possession or under its control
relating thereto as is reasonably required by the Indemnitee. Except for the
settlement of a Third Party Claim that involves the payment of money only and
for which the Indemnitee is totally indemnified by the Indemnitor, no Third
Party Claim may be settled without the written consent of the Indemnitee.
(c) Notwithstanding the other procedural provisions of
this Section 8.4, with respect to any claims involving an environmental matter,
the following shall apply. If in the good faith judgment of the Buyer, the
Buyer believes the circumstances underlying such claim creates an obligation to
report such matter to any Governmental Entity, the Buyer will first notify the
Seller of such belief. As soon as practicable, but in no event more than 10
days after receiving the Buyer's notice, the Seller will contact such
Governmental Entities as the Buyer requests based on the Buyer's good faith
belief or shall inform the Buyer, in writing, of the basis for its belief that
no reporting is required. If the Seller does not contact such Governmental
Entities within such period, the Buyer may do so. With respect to any
Environmental Loss for which the Buyer may be entitled to indemnification, the
Seller shall have the right to perform and complete all actions required by the
Governmental Entities. The Buyer shall have the right to attend meetings and
otherwise participate in all meetings and communications with the Governmental
Entities, and the Seller will give the Buyer reasonable advance notice and an
opportunity to so participate. The Buyer may obtain information regarding the
status of any such matter directly from the applicable Governmental Entities,
but will give the Seller at least five Business Days' notice of the Buyer's
intent to meet or otherwise communicate therewith and the Seller shall have the
right to attend or participate in any meeting or communication, but the
Seller's failure to participate shall not affect the Buyer's right to proceed
with any such meeting or communication. The Seller shall be deemed to have
satisfied in full its indemnity obligations with respect to any such matter if
it fully complies with the remediation or other program prescribed or approved
by the appropriate Governmental Entity; provided, in no event shall the
foregoing be construed to relieve the Seller of any indemnity obligations
hereunder relating to the same matter to the extent additional governmental
requirements are imposed or Third Party Claims are asserted notwithstanding the
Seller's compliance with such governmental standards and in no event shall the
Buyer Indemnified Parties be precluded by the foregoing from asserting
indemnity rights for diminution in value of the property affected if the
property, after being remediated, cannot be used in the same manner as it was
used on the Closing Date. The Buyer's indemnity rights shall not be adversely
affected if any of the Buyer's non-management employees contact any
Governmental Entity without approval from any management level employee.
Moreover, all other parties (including the Buyer's lenders and insurance
carriers) may have full access and may contact any Governmental Entity at their
own discretion without affecting the indemnity rights set
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forth elsewhere in this Article 8; provided, however, in no event shall the
foregoing constitute authorization from the Seller for such third parties to
obtain documents or information from any Governmental Entity that is not public
information. Notwithstanding anything to the contrary in this subsection,
neither the Buyer nor its Affiliates shall be required to comply with the
foregoing restrictions to the extent compliance with the foregoing would
violate laws or applicable regulations, would create an immediate endangerment
to health of persons or would materially impair the operations of the property
so affected by the matter.
8.5 Payment. Payment of any amounts due pursuant to this Article
8 shall be made within ten Business Days after notice is sent by the
Indemnitee.
8.6 Failure to Pay Indemnification. If and to the extent the
Indemnitee shall make written demand upon the Indemnitor for indemnification
pursuant to this Article 8 and the Indemnitor shall refuse or fail to pay in
full within ten Business Days of such written demand the amounts demanded
pursuant hereto and in accordance herewith, then the Indemnitee may utilize any
legal or equitable remedy to collect from the Indemnitor the amount of its
Losses. Nothing contained herein is intended to limit or constrain the
Indemnitee's rights against the Indemnitor for indemnity, the remedies herein
being cumulative and in addition to all other rights and remedies of the
Indemnitee.
8.7 Adjustment of Liability. The amount which an Indemnitee
shall be entitled to receive from an Indemnitor with respect to any
indemnifiable Losses under this Article 8 shall be net of any insurance
recovery by the Indemnitee on account of such Losses from an unaffiliated
party.
8.8 EXPRESS NEGLIGENCE. THE FOREGOING INDEMNITIES SET FORTH
IN THIS ARTICLE 8 ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN
ACCORDANCE WITH THE EXPRESS TERMS AND SCOPE THEREOF NOTWITHSTANDING TEXAS'
EXPRESS NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR
OTHERWISE LIMIT INDEMNITIES BECAUSE OF THE SIMPLE OR GROSS NEGLIGENCE (WHETHER
SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY
OF THE INDEMNIFIED PARTIES.
ARTICLE 9
NATURE OF STATEMENTS AND SURVIVAL OF COVENANTS,
REPRESENTATIONS,WARRANTIES AND AGREEMENTS
All statements of fact contained in any written statement (including
financial statements), certificate, instrument or document delivered by or on
behalf of the Seller pursuant to this Agreement shall be deemed representations
and warranties of the Seller. The several representations and warranties of
the parties to this Agreement shall survive the Closing Date and shall remain
in full force and effect for a period of one year following the Closing Date
(except that the representations and warranties set
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forth in Sections 2.2, 2.4 and 2.12 shall survive the Closing Date without
limitation) (the period during which the representations and warranties shall
survive being referred to herein with respect to such representations and
warranties as the "Survival Period"), and shall be effective with respect to
any inaccuracy therein or breach thereof (and a claim for indemnification under
Article 8 hereof may be made thereon) if a written notice asserting the claim
shall have been duly given in accordance with Article 8 hereof within the
Survival Period with respect to such matter. All covenants and agreements
contained herein shall survive without limitation. Any claim for
indemnification made during the Survival Period shall be valid and the
representations and warranties relating thereto shall remain in effect for
purposes of such indemnification notwithstanding such claim may not be resolved
within the Survival Period. All representations, warranties and covenants and
agreements made by the parties shall not be affected by any investigation
heretofore or hereafter made by and on behalf of any of them and shall not be
deemed merged into any instruments or agreements delivered in connection with
this Agreement or otherwise in connection with the transactions contemplated
hereby.
ARTICLE 10
DEFINITIONS OF CERTAIN TERMS
In addition to terms defined elsewhere in this Agreement, the
following terms shall have the meanings assigned to them herein, unless the
context otherwise indicates, both for purposes of this Agreement and all
exhibits hereto and the Disclosure Schedule:
10.1 "Accounts Receivable" shall have the meaning given such term
in Section 1.1(a)(iii) hereof.
10.2 "Accrued Liabilities" shall mean the "accrued liabilities" of
the Seller to the extent accrued and reflected on the financial statements of
the Seller, excluding intercompany liabilities, Taxes and accrued Taxes.
10.3 "Affiliate" shall mean, with respect to any Person, an
individual or entity that, directly or indirectly, controls, is controlled by
or is under common control with such Person.
10.4 "Affiliated Companies" shall mean EPEG, Xxxxxxxxxxx
Venezuela, S.A. and Enterra Petroleum Equipment Group (UK) Ltd.
10.5 "Agreement" shall mean this Asset Purchase Agreement among
the Seller, Xxxxxxxxxxx and the Buyer, as amended from time to time by such
parties.
10.6 "Assumed Liabilities" shall have the meaning given such term
in Section 1.3(a) hereof.
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10.7 "Business" shall mean the businesses and operations of the
Seller relating to design, manufacture, distribution, sale, repair or service
of permanent and retrievable downhole packers and oil recovery and completion
service tools.
10.8 "Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks in Houston, Texas are authorized
by law to close.
10.9 "Buyer" shall have the meaning specified in the preamble.
10.10 "Buyer Losses" shall have the meaning given such term in
Section 8.1 hereof.
10.11 "Cash Purchase Price" shall mean $21,307,000 plus (a) the sum
of (i) the amount, if any, by which the sum of the book value of the Inventory
before reserves, the Seller's prepaids (the rights to which are Transferred
Assets) and the net Accounts Receivable on the Closing Date exceeds
$17,286,000, and (ii) the amount, if any, by which $2,604,000 exceeds the book
value of the sum of (x) the Trade Payables (excluding intercompany payables),
(y) Accrued Liabilities (excluding intercompany liabilities, Taxes and accrued
Taxes) reflected on the Final Statement and (z) the outstanding principal
amount, if any, of the Notes Payable as of the Closing Date, and minus (b) the
sum of (i) the amount, if any, by which $17,286,000 exceeds the book value of
the Inventory before reserves, the Seller's prepaids (the rights to which are
Transferred Assets) and Accounts Receivable on the Closing Date and (ii) the
amount, if any, by which the book value of the sum of (x) the Trade Payables
(excluding intercompany payables), (y) Accrued Liabilities (excluding
intercompany liabilities, Taxes and accrued Taxes) reflected on the Final
Statement and (z) the outstanding principal amount, if any, of the Notes
Payable as of the Closing Date exceeds $2,604,000. For purposes of this
definition, the book value of the Inventory before reserves, the Seller's
prepaids, Accounts Receivable, Trade Payables (excluding intercompany
payables), Accrued Liabilities (excluding intercompany liabilities, Taxes and
accrued Taxes) and Notes Payable shall be determined under generally accepted
accounting principles as consistently applied by the Seller. Inventory shall
include the Venezuelan Inventory described in Section 1.1(a)(ii) of the
Disclosure Schedule and, notwithstanding the preceding sentence, shall be
valued at the Seller's standard cost, which at September 30, 1996, was
approximately $304,000.
10.12 "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.
10.13 "Closing" shall mean the closing of the transactions
contemplated by this Agreement.
10.14 "Closing Date" shall have the meaning given such term in
Section 1.3 hereof.
10.15 "Closing Payment" shall have the meaning given such term in
Section 1.3(b) hereof.
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10.16 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or similar provisions of legislation replacing such
law from time to time.
10.17 "Commonly Controlled Entity" shall have the meaning given
such term in Section 2.11 hereof.
10.18 "Contracts and Other Agreements" shall mean all contracts,
agreements, understandings, indentures, notes, bonds, loans, instruments,
leases, mortgages, franchises, licenses, commitments or binding arrangements,
whether express or implied, oral or written, to which the Seller is a party or
bound or to which its properties or assets are subject.
10.19 "Damages" shall mean any and all liabilities, losses,
damages, demands, assessments, claims, costs and expenses (including interest,
awards, judgments, penalties, settlements, fines, costs of remediation,
diminutions in value, costs and expenses incurred in connection with
investigating and defending any claims or causes of action (including, without
limitation, attorneys' fees and expenses and all fees and expenses of
consultants and other professionals)).
10.20 "Debt Obligations" shall mean any contract, agreement,
indenture, note or other instrument relating to the borrowing of money or any
guarantee or other contingent liability in respect of any indebtedness or
obligation of any Person (other than the endorsement of negotiable instruments
for deposit or collection in the ordinary course of business).
10.21 "Disclosure Schedule" shall mean the disclosure schedule
delivered to the Buyer.
10.22 "Documents and Other Papers" shall mean and include any
document, agreement, instrument, certificate, writing, notice, consent,
affidavit, letter, telegram, telex, statement, file, computer disk, microfiche
or other document in electronic format, schedule, exhibit or any other paper or
record whatsoever.
10.23 "Entitlements" shall have the meaning given such term in
Section 1.1(a)(vii) hereof.
10.24 "Environmental Condition" means any pollution, contamination,
degradation, damage or injury caused by, related to or arising from the
generation, handling, use, treatment, storage, transportation, disposal,
discharge, release or emission of any Hazardous Materials.
10.25 "Environmental Laws" shall mean all federal, state, or
municipal laws, rules, regulations, statutes, ordinances or orders of any
Governmental Entity relating to (a) the control of any potential pollutant or
protection of the air, water or land, (b) solid, gaseous or liquid waste
generation, handling, treatment, storage, disposal or transportation and (c)
exposure to hazardous, toxic or other substances alleged to be harmful.
"Environmental Laws" shall include, but not be limited to, the Clean Air Act,
42 U.S.C. Section 7401 et seq., the Resource Conservation Recovery Act, 42
U.S.C. Section 6901 et
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seq., the Superfund Amendments and Reauthorization Act, 42 U.S.C. Section
11001, et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et
seq., the Water Pollution Control Act, 33 U.S.C. Section 1251 et seq., the
Safe Drinking Water Act, 42 U.S.C. Section 300f et seq. and CERCLA. The term
"Environmental Laws" shall also include all state, local and municipal laws,
rules, regulations, statutes, ordinances and orders dealing with the same
subject matter or promulgated by any governmental or quasi-governmental agency
thereunder or to carry out the purposes of any federal, state, local and
municipal law. "Environmental Laws" does not include the Occupational Safety
and Health Act or any other federal, state or local law, statute, ordinance,
regulation or order governing worker safety or workplace conditions.
10.26 "Environmental Liabilities" shall mean any and all Damages
(including remediation, removal, response, abatement, clean-up, investigative
and/or monitoring costs and any other related costs and expenses) incurred or
imposed (a) pursuant to any agreement, order, notice, requirement,
responsibility or directive (including directives embodied in Environmental
Laws), injunction, judgment or similar documents (including settlements)
arising out of, in connection with or under Environmental Laws, or (b) pursuant
to any claim by a Governmental Entity or other third Person or entity for
personal injury, property damage, damage to natural resources, remediation or
similar costs or expenses incurred or asserted by such entity or person
pursuant to common law or statute and arising out of or in connection with a
release, as such term is defined in Section 101(22) of CERCLA, of Hazardous
Materials.
10.27 "Environmental Losses" shall have the meaning given such term
in Section 8.1(e) hereof.
10.28 "Environmental Permit" shall mean any permit, license,
approval, registration, identification number or other authorization with
respect to the Transferred Assets or the Business under any applicable
Environmental Law.
10.29 "EPEG" shall mean Enterra Petroleum Equipment Group, Inc., a
Delaware corporation.
10.30 "Equipment" shall mean all machinery, transportation
equipment, tools, equipment, furnishings and fixtures owned, leased or subject
to a contract of purchase and sale, or lease commitment, that is used in the
Business as operated by the Seller.
10.31 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
10.32 "Excluded Assets" shall have the meaning given such term in
Section 1.2 hereof.
10.33 "Final Statement" shall have the meaning given such term in
Section 1.4(a) hereof.
10.34 "Governmental Entity" shall mean any arbitrator, court,
administrative or regulatory agency, commission, department, board or bureau or
body or other
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government or authority or instrumentality or any entity or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
10.35 "Hazardous Materials" shall mean any (a) petroleum or
petroleum products, (b) hazardous substances as defined by Section 101(14) of
CERCLA and (c) any other chemical, substance or waste that is regulated by any
Governmental Entity under any Environmental Law.
10.36 "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976.
10.37 "Indemnitee" shall mean the Person or Persons indemnified, or
entitled or claiming to be entitled to be indemnified, pursuant to the
provisions of Section 8.1 or Section 8.2 hereof, as the case may be.
10.38 "Indemnitor" shall mean the Person or Persons having the
obligation to indemnify pursuant to the provisions of Section 8.1 or Section
8.2 hereof, as the case may be.
10.39 "Inventories" shall mean all inventories of finished goods,
tooling inventory, work in progress and raw materials relating to the Business,
wherever situated.
10.40 "Leasehold Interests" shall mean the interests of the Seller
as lessee in the real property listed in Section 1.1(a)(v) of the Disclosure
Schedule.
10.41 "Lien" shall mean any lien, pledge, claim, charge, security
interest or other encumbrance, option, defect or other rights of any third
Person of any nature whatsoever.
10.42 "Losses" shall mean Seller Losses or Buyer Losses, as the
case may be.
10.43 "Material Adverse Effect" shall mean a single event,
occurrence or fact that, together with all other events, occurrences and facts
that could reasonably be expected to result in a loss to the Business, would
have, or might reasonably be expected to have, a material adverse effect on the
assets, business, operations or financial condition of the Transferred Assets
or the Business, or that would constitute a criminal violation of law involving
a felony.
10.44 "Notes Payable" shall mean the obligations of Seller under
the notes described in Section 2.5(a)(iv) of the Disclosure Schedule.
10.45 "Permitted Liens" shall mean (a) Liens securing or relating
to liabilities or obligations that are to be assumed by the Buyer pursuant to
this Agreement, (b) Liens for current taxes and assessments not yet due, (c)
inchoate mechanic and materialmen Liens for construction in progress, (d)
inchoate workmen, repairmen,
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warehousemen and carriers Liens arising in the ordinary course of business or
(e) Liens created by the Buyer.
10.46 "Person" shall mean a corporation, an association, a
partnership, an organization, a business, an individual or a Governmental
Entity.
10.47 "Pre-Closing Balance Sheet" shall have the meaning given such
term in Section 1.3(b) hereof.
10.48 "Pre-Closing Obligations" shall mean all obligations of the
Seller (including indemnification and other contingent obligations) relating to
(i) acts, events or omissions by any Person or circumstances existing at or
prior to the Closing Date, (ii) goods or services provided to or for the
benefit of the Seller or any of its Affiliates prior to the Closing Date, (iii)
goods or services provided by or on behalf of the Seller or any of its
Affiliates or licensees prior to the Closing Date, (iv) any pending or
threatened litigation or claims made or threatened prior to the Closing Date,
(v) any Retained Liabilities, (vi) the conduct of the Business, the ownership
or operation of the Transferred Assets or any benefit realized by the Seller
prior to the Closing Date, (vii) contracts, agreements and other commitments
that were required to be scheduled in Section 2.5(a) of the Disclosure Schedule
but were not scheduled and (viii) Debt Obligations (other than the Notes
Payable).
10.49 "Proprietary Information" shall mean collectively (a)
Proprietary Rights and (b) any and all other information and material
proprietary to the Seller owned, possessed or used by the Seller, whether or
not such information is embodied in writing or other physical form, and which
is not generally known to the public, that (i) relates to financial information
regarding the Seller or the Business, including, without limitation, (A)
business plans and (B) sales, financing, pricing and marketing procedures or
methods of the Seller or (ii) relates to specific business matters concerning
the Seller, including, without limitation, the identity of or other information
regarding sales personnel or customers of the Seller.
10.50 "Proprietary Rights" means all patents, inventions, shop
rights, know how, trade secrets, designs, plans, manuals, computer software,
specifications, confidentiality agreements, confidential information and other
proprietary technology and similar information; all registered and unregistered
trademarks, service marks, logos, trade and corporate names (including the
names "Arrow Completion Systems, Inc.", "Xxxxxx Packer" and all derivations
thereof) and all other trademark rights; all registered and unregistered
copyrights; and all registrations for, and applications for registration of,
any of the foregoing, that are used in the conduct of the Business.
10.51 "Purchase Price" shall have the meaning given such term in
Section 1.3(a) hereof.
10.52 "Real Property" shall mean the all owned real property of the
Seller.
10.53 "Retained Liabilities" shall have the meaning given such term
in Section 1.5 hereof.
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10.54 "Seller" shall have the meaning specified in the preamble
and, unless the context otherwise requires, any predecessor Affiliate of the
Seller to the extent a portion of the Business was conducted by such Affiliate.
10.55 "Seller Losses" shall have the meaning given such term in
Section 8.2 hereof.
10.56 "Survival Period" shall have the meaning given such term in
Article 9 hereof.
10.57 "Taxes" shall mean all federal, state, local, foreign and
other taxes, charges, fees, duties, levies, imposts, customs or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, profit share,
license, lease, service, service use, value added, withholding, payroll,
employment, excise, estimated, severance, stamp, occupation, premium, property,
windfall profits, or other taxes, fees, assessments, customs, duties, levies,
imposts, or charges of any kind whatsoever, together with any interest,
penalties, additions to tax, fines or other additional amounts imposed thereon
or related thereto, and the term "Tax" means any one of the foregoing Taxes.
10.58 "Terminated Employees" shall have the meaning given such term
in Section 4.5(a) hereof.
10.59 "Third Party Claims" shall have the meaning given such term
in Section 8.4(b) hereof.
10.60 "Trade Payables" shall mean those obligations of the Seller
relating to the provision of goods and services to the Seller for the conduct
of the Business in the ordinary course of business of the Seller that relate to
the Transferred Assets and that are classified as Trade Payables in accordance
with generally accepted accounting principles as consistently applied by the
Seller.
10.61 "Transferred Assets" shall have the meaning given such term
in Section 1.1(a) hereof.
10.62 "Transferred Employees" shall have the meaning given such
term in Section 4.5(a) hereof.
10.63 "Xxxxxx Xxxxxx" shall mean Xxxxxx Packer, Inc., a Texas
corporation.
ARTICLE 11
MISCELLANEOUS
11.1 Conduct of the Business. The Seller covenants and agrees
with the Buyer that from and after the date hereof until the Closing, except as
expressly authorized by
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this Agreement or as expressly consented to in writing by the Buyer, the Seller
shall, and Xxxxxxxxxxx shall cause the Seller to:
(a) operate the Business and the Transferred Assets only
in the usual, regular and ordinary manner with a view to maintaining the
goodwill that the Seller now enjoys and, to the extent consistent with such
operation, will use all reasonable efforts to preserve intact its present
business organization, keep available the services of its employees and
preserve its relationship with its customers, suppliers, jobbers, distributors
and other Persons having business relations with it;
(b) use all reasonable efforts to maintain the
Transferred Assets in a state of repair, order and condition consistent with
its usual practice in connection with the Business;
(c) maintain its books of account and records relating to
the Business in the usual, regular and ordinary manner, in accordance with the
Seller's usual accounting practices applied on a consistent basis;
(d) comply in all material respects with all statutes,
laws, orders and regulations applicable to it and to the conduct of the
Business;
(e) not sell, assign, transfer, lease or otherwise
dispose of any Equipment or any of the other Transferred Assets except for
dispositions of Inventories for value in the usual and ordinary course of
business;
(f) preserve and maintain all rights that it now enjoys
in and to the Proprietary Rights and not sell, assign, transfer, lease or
otherwise dispose of any Proprietary Rights other than to the Buyer pursuant to
the terms of this Agreement;
(g) not mortgage, pledge or otherwise create a security
interest in any of the Transferred Assets or permit there to be created or
exist any Liens thereon that would not be released upon the transfer of the
Transferred Assets to the Buyer pursuant to this Agreement;
(h) not enter into any contract, commitment or lease in
relation to the Business that is out of the ordinary course of the Business or
that is with an Affiliate of the Seller or that would bind the Buyer under a
contract or other obligation with the Seller or any of its Affiliates;
(i) not amend or modify any of the Contracts and Other
Agreements disclosed in Section 2.5 of the Disclosure Schedule;
(j) not consent to the termination of any of the
Contracts and Other Agreements disclosed in Section 2.5 of the Disclosure
Schedule or waive any of the Seller's rights with respect thereto;
(k) not permit any insurance policy naming it as a
beneficiary or a loss payee relating to the Business or the Transferred Assets
to be canceled or terminated
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or any of the coverage thereunder to lapse unless simultaneously with such
termination or cancellation replacement policies providing substantially the
same coverage are in full force and effect; and
(l) promptly notify the Buyer in writing if the Seller or
Xxxxxxxxxxx becomes aware of any change that shall have occurred or that shall
have been threatened (or any development that shall have occurred or that shall
have been threatened involving a prospective change) in the Transferred Assets
or the Business that would reasonably be expected to have a Material Adverse
Effect whether or not occurring in the ordinary course of business.
11.2 Governmental Filings. As promptly as practicable after the
execution of this Agreement, the Buyer and Xxxxxxxxxxx shall, in cooperation
with the other, file any reports or notifications that may be required to be
filed by it under applicable law, including filings under the HSR Act with the
Federal Trade Commission and the Antitrust Division of the Department of
Justice, and shall furnish to the other all such information in its possession
as may be necessary for the completion of the reports or notifications to be
filed by the other.
11.3 Access to Information. Prior to the Closing, the Buyer may
make such investigation of the business and properties of the Seller as the
Buyer may desire and, upon reasonable notice, the Seller shall give to the
Buyer and its counsel, accountants and other representatives reasonable access,
during normal business hours throughout the period prior to the Closing, to the
property, books, commitments, agreements, records, files and personnel of the
Seller, and the Seller shall furnish to the Buyer during that period all copies
of documents and information concerning the Seller as the Buyer may reasonably
request, subject to applicable law. The Buyer shall hold, and shall cause its
counsel, accountants and other agents and representatives to hold, all such
information and documents in confidence.
11.4 Public Announcements. Subject to applicable securities law
or stock exchange requirements, none of the Buyer, the Seller or Xxxxxxxxxxx
shall, without the prior approval of the other parties, issue, or permit any of
their respective partners, directors, officers, employees, agents or Affiliates
to issue, any press release or other public announcement with respect to this
Agreement or the transactions contemplated hereby.
11.5 Other Action. Each of the parties shall use its reasonable
efforts to cause the fulfillment at the earliest practicable date but, in any
event, prior to the Closing Date of all of the conditions to their respective
obligations to consummate the transactions under this Agreement.
11.6 Arbitration.
(a) In the event there shall exist any dispute or
controversy with respect to this Agreement or any matter relating hereto or the
transactions contemplated hereby, the parties hereto agree to seek to resolve
such dispute or controversy by mutual agreement. If the parties hereto are
unable to resolve such
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dispute or controversy by agreement within 60 days following notice by any
party hereto of the nature of such dispute or controversy setting forth in
reasonable detail the circumstances and basis of such dispute or controversy,
the Buyer or Xxxxxxxxxxx may require that such dispute or controversy be
resolved by binding arbitration pursuant to the provisions of this Section
11.6. If a party elects to submit such matter to arbitration, such party shall
provide notice to the other party of its election to do so, which notice shall
name one arbitrator. Within 10 days after the receipt of such notice, the
other party shall provide written notice to the electing party naming a second
arbitrator. The two arbitrators so appointed shall name a third arbitrator, or
failing to do so, a third arbitrator shall be appointed pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Each
arbitrator selected to act hereunder shall be qualified by education and
experience to pass on the particular question in dispute and shall be
independent and not affiliated with any of the parties hereto. The arbitrators
shall resolve all disputes in controversy in accordance with the applicable
substantive law. All statutes of limitations that would otherwise be
applicable shall apply to any arbitration proceeding.
(b) The arbitrators appointed pursuant to this Section
11.6 shall promptly hear and determine (after due notice and hearing and giving
the parties reasonable opportunity to be heard) the questions submitted, and
shall render their decision within 60 days after appointment of the third
arbitrator or as soon as practical thereafter. If within such period a
decision is not rendered by the board or a majority thereof, new arbitrators
may be named and shall act hereunder at the election of either party in like
manner as if none had previously been named. The decision of the arbitrators,
or a majority thereof, made in writing, shall absent manifest error be final
and binding upon the parties hereto as to the questions submitted, and each
party shall abide by such decision.
(c) All expenses of arbitration, including reasonable
compensation to the arbitrators, shall be borne equally by the Buyer and
Weatherford, except each party shall bear the compensation and expenses of its
own counsel, witnesses and employees.
11.7 Expenses. Except as otherwise set forth herein, and
whether or not the transactions contemplated by this Agreement shall be
consummated, each party agrees to pay, without right of reimbursement from any
other party, the costs incurred by such party incident to the preparation and
execution of this Agreement and performance of its obligations hereunder,
including, without limitation, the fees and disbursements of legal counsel,
accountants and consultants employed by such party in connection with the
transactions contemplated by this Agreement.
11.8 Notices. All notices, requests, consents, directions and
other instruments and communications required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered in person, by courier, by overnight delivery service with proof of
delivery or by prepaid registered or certified United States first-class mail,
return receipt requested, addressed to the respective party at the address set
forth below, or if sent by facsimile or other similar form of communication
(with receipt confirmed) to the respective party at the facsimile number set
forth below:
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If to the Seller or Weatherford, to:
Weatherford Enterra, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: H. Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
If to the Buyer, to:
Energy Ventures, Inc.
0 Xxxx Xxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Copies to:
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
or to such other address or facsimile number and to the attention of such other
Person(s) as either party may designate by written notice. Any notice mailed
shall be deemed to have been given and received on the third Business Day
following the day of mailing.
11.9 Bulk Transfer Laws. The Seller agrees with the Buyer that
the provisions of any statute of any state or jurisdiction regulating bulk
sales or transfers do not apply to this Agreement.
11.10 Successors. This Agreement will inure to the benefit of and
be binding upon the Buyer, Weatherford and the Seller and their respective
successors and permitted assigns. Neither this Agreement nor any of the
rights, interest or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties hereto.
Notwithstanding the foregoing, the Buyer may assign its rights under this
Agreement to an Affiliate; provided, however, that any such assignment by the
Buyer shall not release the Buyer from any of its obligations or agreements
under this Agreement.
11.11 Entire Agreement. This Agreement and the exhibits hereto and
the Disclosure Schedule constitute the entire agreement and understanding
between the parties relating to the subject matter hereof and thereof and
supersedes all prior
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representations, endorsements, premises, agreements, memoranda, communications,
negotiations, discussions, understandings and arrangements, whether oral,
written or inferred, between the parties relating to the subject matter hereof.
This Agreement may not be modified, amended, rescinded, canceled, altered or
supplemented, in whole or in part, except upon the execution and delivery of a
written instrument executed by a duly authorized representative of each of the
parties hereto.
11.12 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas
without giving effect to choice of law principles.
11.13 Waiver. The waiver of any breach of any term or condition of
this Agreement shall not be deemed to constitute the waiver of any other breach
of the same or any other term or condition.
11.14 Severability. Any provision hereof that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.15 No Third Party Beneficiaries. Any agreement contained,
expressed or implied in this Agreement shall be only for the benefit of the
parties hereto and their respective legal representatives, successors and
assigns, and such agreements shall not inure to the benefit of the obligees of
any indebtedness of any party hereto, it being the intention of the parties
hereto that no Person shall be deemed a third party beneficiary of this
Agreement, except to the extent a third party is expressly given rights herein.
11.16 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.17 Headings. Each statement set forth in the Disclosure
Schedule with respect to a particular section herein shall be deemed made
solely with respect to such section and not with respect to any other section
hereof unless specifically set forth in the Disclosure Schedule as also being
made with respect to such other section. The headings of the Articles and
Sections of this Agreement have been inserted for convenience of reference only
and shall in no way restrict or otherwise modify any of the terms or provisions
hereof or affect in any way the meaning or interpretation of this Agreement.
11.18 Negotiated Transaction. The provisions of this Agreement
were negotiated by the parties hereto, and this Agreement shall be deemed to
have been drafted by all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
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XXXXXXXXXXX ENTERRA, INC.
By: /s/ H. XXXXXXX XXXXXX
------------------------------------
Name: H. XXXXXXX XXXXXX
----------------------------------
Title: SENIOR VICE PRESIDENT
---------------------------------
ARROW COMPLETION SYSTEMS, INC.
By: /s/ H. XXXXXXX XXXXXX
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Name: H. XXXXXXX XXXXXX
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Title: SENIOR VICE PRESIDENT
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ENERGY VENTURES, INC.
By: /s/ X. X. XXXXX
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Name: XXXXX X. XXXXX
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Title: VICE PRESIDENT
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As permitted by Item 601(b)(2) of Regulation S-K, the Company has not
filed any schedules and exhibits with this Exhibit No. 2.1. Listed below is a
brief description of the omitted exhibits and schedules. The Company agrees to
furnish supplementally a copy of any of such omitted exhibits and schedules to
the Commission upon request.
Schedules
1.1(a)(i) Equipment
1.1(a)(ii) Inventory
1.1(a)(iii) Accounts Receivable
1.1(a)(iv) Real Property
1.1(a)(v) Leasehold Interests
1.1(a)(vi) Proprietary Information
1.2 Excluded Assets
2.1(a) States in which Qualified as a Foreign Corporation
2.1(c) Assumed Names
2.2(b) Required Approvals
2.3(a) Required Approvals
2.3(b) Required Licenses
2.4(a) Title to Properties
2.4(f) Licenses, Sublicenses, Etc.
2.5(a) Contracts and Commitments
2.5(b) Contracts and Commitments
2.6 Litigation
2.8 Environmental Matters
2.10 Warranties
2.11 Employee Matters
Exhibits
A Exceptions to the Covenant Not to Compete
B Xxxxxx Remediation
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