Asset Purchase Agreement
This
Asset Purchase Agreement (“Agreement”)
is made as of February 27, 2008, by and among (i) Best Energy Services, Inc., a
Nevada corporation (“Buyer”),
(ii) American Rig Housing, Inc., a Texas corporation (“Seller”),
and (iii) Xxxxx Xxxxxxx, a resident of Houston, Texas (“Shareholder”).
Recitals
Seller
desires to sell, assign, transfer and convey to Buyer certain assets and
specified obligations and liabilities of Seller, and Buyer desires to purchase
such assets from Seller and to assume such obligations and liabilities, each as
described herein.
Agreement
In consideration of the foregoing and
the respective representations, warranties, covenants and agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
Article
I
Definitions
1.1 Definitions.
For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Article
I:
“Agreement” – as defined in the Preamble
of this Agreement.
“Assets” – as defined in Section
2.1.
“Assigned Seller
Contracts” – as
defined in Section
2.1(c).
“Balance
Sheet” – as
defined in Section
3.4.
“Xxxx of
Sale” – as
defined in Section
2.4(i).
“Board of
Directors” – as
defined in Section
3.2(b)(i).
“Buyer” – as defined in the Preamble
of this Agreement.
“Buyer’s Closing
Documents” – as
defined in Section
4.2(a).
“Closing” – as defined in Section
2.3.
“Closing
Date” – as defined in Section 2.3.
“Consent” – any approval, consent,
ratification, waiver, or other authorization (including any Governmental
Authorization).
“Contemplated
Transactions” –
all of the transactions contemplated by this Agreement, including: (a) the sale
of the Assets by Seller to Buyer; (b) the execution, delivery, and performance
of the Xxxx of Sale, the Shareholder’s Release, the Yard Lease Agreement and all
other documents or agreements executed, delivered and performed in connection
with this Agreement; and (c) the performance by Buyer and Seller of their
respective covenants and obligations under this Agreement.
“Contract” – any agreement, contract,
obligation, promise, or undertaking (whether written or oral and whether express
or implied) that is legally binding.
“Damages” – as defined in Section
8.2.
“Disclosure
Schedule” – the
disclosure schedule delivered by Seller to Buyer concurrently with the execution
and delivery of this Agreement.
“Effective
Time” – as
defined in Section
2.3.
“Encumbrance” – any charge, claim,
community property interest or similar equitable interest, lien, option, pledge,
security interest, right of first refusal, or restriction of any kind, including
any restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
“Facilities” – any real property,
leaseholds, or other interests in real property currently or formerly owned or
operated by the Seller and any buildings, plants or structures currently or
formerly owned or operated by the Seller.
“GAAP” – generally accepted United
States accounting principles, including the statements and interpretations of
the U.S. Financial Accounting Standards Board.
“Governmental
Authorization” –
any approval, consent, license, permit, waiver, or other authorization issued,
granted or given by or under the authority of any Governmental Body or pursuant
to any Legal Requirement.
“Governmental
Body” – any: (a)
federal, state, local, municipal, foreign, or other government; (b) governmental
or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other
tribunal); (c) multi-national organization or body; or (d) body properly
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, police, regulatory, or taxing authority or power of any
nature.
“Indemnified
Persons” – as
defined in Section
8.2.
“Interim Balance
Sheet” – as
defined in Section
3.4.
“Law” – any statute, law, rule,
regulation, ordinance or other pronouncement having the effect of law of any
Governmental Body.
“Legal
Requirement” –
any federal, state, local, municipal, foreign, international, multinational, or
other administrative order, constitution, Law, principle of common law, or
treaty.
“Material
Contract” – as
defined in Section
3.8(a).
“Order” – any award, decision,
injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made,
or rendered by any court, administrative agency, or other Governmental Body or
by any arbitrator.
“Ordinary Course
of Business” – an
action taken by a Person will be deemed to have been taken in the “Ordinary
Course of Business” only if such action is taken in the ordinary course of the
normal day-to-day operations of such Person.
“Organizational
Documents” – (a)
the articles or certificate of incorporation and the bylaws of a corporation;
(b) the partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and (e) any amendment to any of the
foregoing.
“Person” – any individual,
corporation (including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or Governmental
Body.
“Proceeding” – any action, arbitration,
audit, hearing, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body or
arbitrator.
“Purchase
Price” – as
defined in Section
2.2.
“Related
Person” – with
respect to a particular individual: (a) each other member of such individual's
Family; (b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family; and (c) any
Person with respect to which such individual or one or more members of such
individual's Family serves as a director, officer, partner, executor, or trustee
(or in a similar capacity). With respect to a specified Person other than an
individual: (a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person; (b) each Person that serves as a director, officer,
partner, executor, or trustee of such specified Person (or in a similar
capacity); and (c) any Related Person of any individual described in
clause
(b). For purposes of this definition, the “Family” of
an individual includes (i) the individual, (ii) the individual's spouse, (iii)
any other natural person who is related to the individual or the individual's
spouse within the second degree, and (iv) any other natural person who resides
with such individual.
“Representative” – with respect to a
particular Person, any director, officer, employee, agent, consultant, advisor,
broker, or other representative of such Person, including legal counsel,
accountants, and financial advisors.
“Retained
Liabilities” – as
defined in Section
2.2(b).
“Securities
Act” – the
Securities Act of 1933 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
“Seller” – as defined in the Preamble
of this Agreement.
“Seller
Contract” – any
Contract (a) under which the Seller has or may acquire any rights, (b) under
which the Seller has or may become subject to any obligation or liability, or
(c) by which the Seller or any of the assets owned or used by the Seller is or
may become bound.
“Seller’s Closing
Documents” – as
defined in Section
3.2(a).
“Shareholder” – as defined in the Preamble
of this Agreement.
“Shareholder’s
Release” – as
defined in Section
2.4(a)(ii).
“Subsidiary” – with respect to any Person
(the “Owner”),
any corporation or other Person of which securities or other interests having
the power to elect a majority of that corporation's or other Person's board of
directors or similar governing body, or otherwise having the power to direct the
business and policies of that corporation or other Person (other than securities
or other interests having such power only upon the happening of a contingency
that has not occurred), are held by the Owner or one or more of its
Subsidiaries; when used without reference to a particular Person, “Subsidiary”
means a Subsidiary of the Seller.
“Tax” – any tax, fee, assessment,
levy, tariff, charge or duty of any kind whatsoever and any interest, penalty,
addition or additional amount thereon imposed, assessed or collected by or under
the authority of any Governmental Body or payable under any tax-sharing
agreement or any other Contract.
“Yard Lease
Agreement” – as
defined in Section
2.4(a)(iii).
1.2 Usage.
(a) Interpretation. In
this Agreement, unless a clear contrary intention appears: (i) the singular
number includes the plural number and vice versa; (ii) reference to any Person
includes such Person’s successors and assigns but, if applicable, only if such
successors and assigns are not prohibited by this Agreement, and reference to a
Person in a particular
capacity
excludes such Person in any other capacity or individually; (iii) reference to
any gender includes each other gender; (iv) reference to any agreement, document
or instrument means such agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the terms thereof;
(v) reference to any Legal Requirement means such Legal Requirement as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder, and
reference to any section or other provision of any Legal Requirement means that
provision of such Legal Requirement from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision; (vi) “hereunder,”
“hereof,”
“hereto,” and
words of similar import shall be deemed references to this Agreement as a whole
and not to any particular Article, Section or other provision hereof; (vii)
“including”
(and with correlative meaning “include”) means including without limiting the
generality of any description preceding such term; (viii) “or” is
used in the inclusive sense of “and/or”; (ix) references herein to an “Article”
or “Section”
without further reference to another agreement shall mean the specified Article
or Section of this Agreement; (x) with respect to the determination of any
period of time, “from”
means “from and including” and “to” means
“to but excluding”; and (xii) references to documents, instruments or agreements
shall be deemed to refer as well to all addenda, exhibits, schedules or
amendments thereto.
(b) Accounting
Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
(c) Legal
Representation of the Parties. This Agreement has been jointly
drafted by the parties hereto and the parties have had an opportunity to review
this Agreement with counsel and no rule of construction strictly construing this
Agreement against the drafter shall be applied by a court of competent
jurisdiction.
Article
II
Sale and Transfer of Assets;
Closing
2.1 Purchase
and Sale of
Assets. Subject to the terms and
conditions of this Agreement, at the Closing, Seller shall sell, assign, convey,
transfer and deliver to the Buyer, and the Buyer shall purchase and acquire from
the Seller, free and clear of all Encumbrances, all right, title and interest in
and to all of the assets of Seller, including but not limited to all of the
following assets, wherever located (collectively, the “Assets”):
(a) all
personal property, including but not limited to all equipment (including
computer equipment), fixtures and furniture, inventory, finished goods,
supplies, raw materials and work in process, and all Documents of Title (as such
term is defined in the Uniform Commercial Code as in effect in the State of
Texas) issued to Seller with regard thereto, including the Assets listed on
Exhibit
A;
(b) all
intangible property, including all intellectual property rights, of Seller, and
all claims and causes of action of any kind for past, present or future
infringements of any such intellectual property rights; and
(c) all
of the Seller’s rights, claims and interest in and under the Seller Contracts
set forth on Exhibit
B (the “Assigned Seller
Contracts”).
2.2 Purchase
Price; Assumption of Liabilities.
(a) The
aggregate purchase price for the Assets will be 6,200,000 shares of the Buyer’s
common stock, valued by Buyer and Seller at $2,271,000 (the “Purchase
Price”).
(b) Other
than the liabilities related to the Assigned Seller Contracts being assigned to
Buyer pursuant to Section 2.1(c), all
liabilities of Seller of every kind or nature (the “Retained
Liabilities”) shall remain the sole responsibility of and shall be
retained, paid, performed and discharged solely by Seller.
2.3 Closing. The
purchase and sale provided for in this Agreement (the “Closing”)
will take place at the offices of Buyer’s counsel at 000 Xxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx, on February 27, 2008, or such other place agreed to by
Buyer and Seller. The Closing shall be deemed to have occurred at
11:59 p.m. C.S.T. (the “Effective
Time”) on the date on which the Closing actually takes place (the “Closing
Date”).
2.4 Closing
Obligations. At the Closing:
(a) Seller
will deliver to Buyer: (i) a xxxx of sale, in the form mutually acceptable to
Buyer and Seller, executed by of Seller (the “Xxxx of
Sale”); (ii) a release, in the form mutually acceptable to Buyer and
Seller, executed by Shareholder (collectively, “Shareholder’s
Release”); and (iii) a lease agreement with respect to Cleveland, Texas
yard, in the form mutually acceptable to Buyer and Seller, executed by the
Company (the “Yard Lease
Agreement”).
(b) Buyer
will deliver to Seller: (i) the Purchase Price by delivery of a stock
certificate; and (ii) the Yard Lease Agreement, executed by
Buyer.
2.5 Allocation. The
Purchase Price shall be allocated in accordance with Exhibit 2.5, as
mutually agreed to by Buyer and Seller prior to Closing. After the Closing, the
parties shall make consistent use of the allocation, fair market value and
useful lives specified in Exhibit 2.5 for all
Tax purposes and in all filings, declarations and reports with the Internal
Revenue Service in respect thereof, including the reports required to be filed
under Section 1060 of the Internal Revenue Code of 1986, as amended. Buyer shall
prepare and deliver Internal Revenue Service Form 8594 to Seller within 45 days
after the Closing Date to be filed by Buyer with the Internal Revenue Service.
In any Proceeding related to the determination of any Tax, neither Buyer nor
Seller nor Shareholder shall contend or represent that such allocation is not a
correct allocation.
Article
III
Representations and
Warranties of Seller and Shareholder
Except with respect to each section in
this Article III for
such disclosures as are set forth (i) in the section of the Disclosure
Schedule corresponding to such section in this Article III, or
(ii) in any other section of the Disclosure Schedule to the extent it is
reasonably apparent from the face of such disclosure that such disclosure
qualifies such section in this Article III,
Seller and Shareholder jointly and severally represent and warrant to Buyer, as
follows:
3.1 Organization
and Good Standing.
(a) The
Seller is a corporation, duly organized, validly existing and in good standing
under the laws of the State of Texas, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that the Seller purports to own or use, and to perform all of its
obligations under the Seller Contracts. The Seller is duly qualified to do
business and is in good standing under the laws of each jurisdiction in which
either the ownership or use of the properties owned or used by the Seller, or
the nature of the activities conducted by the Seller, requires such
qualification.
(b) Seller
has delivered or made available to Buyer copies of the Organizational Documents
of the Seller, as currently in effect.
3.2 Authority; No
Conflict.
(a) This
Agreement constitutes the legal, valid, and binding obligation of Seller and
Shareholder, enforceable against Seller and Shareholder in accordance with its
terms. Upon the execution and delivery by Seller and Shareholder, as applicable,
of the Xxxx of Sale, the Shareholder’s Release, the Yard Lease Agreement and all
other documents or agreements executed by Seller in connection herewith,
(collectively, the “Seller’s Closing
Documents”), the Seller’s Closing Documents will constitute the legal,
valid, and binding obligations of Seller and Shareholder, as applicable,
enforceable against Seller and Shareholder, as applicable, in accordance with
their respective terms. Seller and Shareholder, as applicable, has the absolute
and unrestricted right, power, authority, and capacity to execute and deliver
this Agreement and the Seller’s Closing Documents and to perform their
respective obligations under this Agreement and the Seller’s Closing
Documents.
(b) The
consummation or performance of any of the Contemplated Transactions by the
Seller will not directly or indirectly (with or without notice or lapse of
time): (i) contravene, conflict with, or result in a violation of (A) any
provision of the Organizational Documents of the Seller, or (B) any resolution
adopted by the board of directors (the “Board of
Directors”) or the shareholders of the Seller; (ii) contravene, conflict
with, or result in a violation of, or give any Governmental Body or other Person
the right to challenge any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any Order to which
the Seller, or any of the assets owned or used by the Seller, may be subject;
(iii) contravene, conflict with, or result in a violation of any of the terms or
requirements
of, or give any Governmental Body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any Governmental Authorization that is held by the
Seller; (iv) cause Buyer or the Seller to become subject to, or to become liable
for the payment of, any tax; (v) cause any of the assets owned by the Seller to
be reassessed or revalued by any taxing authority or other Governmental Body;
(vi) contravene, conflict with, or result in a violation or breach of any
material provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any material Seller Contract; or (vii) result
in the imposition or creation of any Encumbrance upon or with respect to any of
the assets owned or used by the Seller. Seller is not, nor will Seller be,
required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
3.3 Financial
Statements. The Seller has delivered to Buyer: (a)
reviewed balance
sheets of the Seller as at December 31 in each of the years 2005 and 2006 (the
balance sheet for the calendar year ended December 31, 2006, being hereinafter
referred to as the “Balance
Sheet”), and the related reviewed statements of income,
changes in stockholders' equity, and cash flow for each of the fiscal years then
ended (including the notes thereto), all of which were prepared in accordance
with GAAP, (b) an unaudited consolidated balance sheet of the Seller as at
November 30, 2007 (the “Interim Balance
Sheet”) and the related unaudited consolidated statements of income and
cash flow for the eleven months then ended, which were prepared in accordance
with GAAP. Such financial statements fairly present in all material respects the
financial condition and the results of operations, changes in stockholders'
equity, and cash flow of the Seller as at the respective dates of and for the
periods referred to in such financial statements, subject, in the case of
interim financial statements, to normal recurring year-end adjustments (the
effect of which will not, individually or in the aggregate, be materially
adverse) and the absence of notes. The financial statements referred to in this
Section 3.3
reflect the consistent application of such accounting principles throughout the
periods involved, except as disclosed in the notes to such financial statements.
No financial statements of any Person other than the Seller are required by GAAP
to be included in the consolidated financial statements of the
Seller.
3.4 Title
to Property and Assets. Seller is the sole legal and
beneficial owner of all right, title and interest in and to the Assets free and
clear of all Encumbrances. All tangible personal property included in
the Assets is in good operating condition and repair, normal wear and tear
excepted. The Assets constitute all assets, properties and rights that are
necessary to enable the Buyer following the Closing to own, conduct, operate and
continue the Seller’s business as currently conducted and as proposed to be
conducted by the Seller and otherwise to enjoy full rights to commercial
exploitation of the Assets.
3.5 Compliance with Legal
Requirements; Governmental Authorizations.
(a) (i) The
Seller is, and at all times since January 1, 2003 has been, in full compliance
with each material Legal Requirement that is or was applicable to the Seller or
to the conduct or operation of its business or the ownership or use of any of
its assets; (ii) no event has occurred since January 1, 2003, or circumstance
exists that (with or without notice or lapse
of time)
(A) would reasonably be expected to constitute or result in a violation by the
Seller of, or a failure on the part of the Seller to comply with, any material
Legal Requirement, or (B) would reasonably be expected to give rise to any
obligation on the part of the Seller to undertake, or to bear a material portion
of the cost of, any remedial action of any nature; and (iii) the Seller has not
received, at any time since January 1, 2003, any written notice or other written
communication from any Governmental Body or any other Person regarding (A) any
actual or potential violation of, or failure to comply with, any material Legal
Requirement, or (B) any actual or potential obligation on the part of the Seller
to undertake, or to bear a material portion of the cost of, any remedial action
of any nature.
(b) Schedule 3.5(b) of
the Disclosure Schedule contains a complete and accurate list of each
Governmental Authorization that is held by the Seller and that is material to
the operation of the business of the Seller as currently conducted. Each
Governmental Authorization listed or required to be listed in Schedule 3.5(b) of
the Disclosure Schedule is valid and in full force and effect. Except
as set forth in Schedule 3.5(b) of
the Disclosure Schedule: (i) the Seller is, and at all times since January 1,
2003, has been, in material compliance with all of the terms and requirements of
each Governmental Authorization identified or required to be identified in Schedule 3.5(b) of
the Disclosure Schedule; (ii) no event has occurred or circumstance exists that
would reasonably be expected to (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a violation of or a failure to
comply with any material term or requirement of any Governmental Authorization
listed or required to be listed in Schedule 3.5(b) of
the Disclosure Schedule, or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any modification to,
any Governmental Authorization listed or required to be listed in Schedule 3.5(b)
of the Disclosure Schedule; (iii) the Seller has not received, at any time since
January 1, 2003, any written notice or other written communication from any
Governmental Body or any other Person regarding (A) any actual or potential
violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual or potential revocation,
withdrawal, suspension, cancellation, termination of, or modification to any
Governmental Authorization; and (iv) all applications required to have been
filed for the renewal of the Governmental Authorizations listed or required to
be listed in Schedule
3.5(b) of the Disclosure Schedule have been duly filed on a timely basis
with the appropriate Governmental Bodies.
3.6 Legal Proceedings;
Orders.
(a) Schedule 3.6 of the
Disclosure Schedule sets forth a complete and accurate list of all Proceedings:
(i) that have been commenced by or against the Seller; or (ii) to which the
Seller is a party that challenges any of the Contemplated Transactions. No other
such Proceedings have been threatened by any third party. The Seller
has delivered or made available to Buyer copies of all pleadings,
correspondence, and other documents relating to each Proceeding listed in Schedule 3.6 of the
Disclosure Schedule. The Proceedings listed in Schedule 3.6 of
the Disclosure Schedule would not reasonably be expected to have a material
adverse effect on the business, operations, assets or condition of the
Seller.
(b)
There is no Order to which any of the Seller is subject; and no officer,
director,
agent, or employee of the Seller is subject to any Order that prohibits such
officer, director, agent, or employee from engaging in or continuing any
conduct, activity, or practice relating to the business of the
Seller.
3.7 Absence
of Certain Changes and Events. For the period from the date of
the Balance Sheet to the date hereof, the Seller has conducted its business only
in the Ordinary Course of Business and there has not been any:
(a) damage
to or destruction or loss of any asset or property of the Seller, whether or not
covered by insurance, materially and adversely affecting the properties, assets,
business, financial condition, of the Seller, taken as a whole;
(b) sale
(other than sales of inventory in the Ordinary Course of Business), lease, or
other disposition of any material asset or property of the Seller or mortgage,
pledge, or imposition of any lien or other encumbrance on any material asset or
property of the Seller, including the sale, lease, or other disposition of any
of the material intellectual property assets of the Seller;
(c) cancellation
or waiver in writing of any claims or rights with a value to the Seller in
excess of $25,000 except to the extent reserved for in the Balance Sheet or
Interim Balance Sheet, or that will be reserved for in the Closing Balance
Sheet;
(d) written
agreement, by the Seller to do any of the foregoing.
3.8 Contracts; No
Defaults.
(a) Schedule 3.8(a) of
the Disclosure Schedule contains a complete and accurate list, and the Seller
has delivered or made available to Buyer true and complete copies, of (each, a
“Material
Contract”):
(i)
each
executory Seller Contract that involves the performance of services or the
delivery of goods or materials by the Seller of an outstanding amount or value
in excess of $25,000 other than purchase orders given or received by the Seller
for the purchase or sale of inventory in the Ordinary Course of Business of an
outstanding amount or value of less than $25,000; and
(ii)
each
executory Seller Contract that involves the performance of services or the
delivery of goods or materials to the Seller of an outstanding amount or value
in excess of $25,000 other than purchase orders given or received by the Seller
for the purchase or sale of inventory in the Ordinary Course of Business of an
outstanding amount or value of less than
$25,000.
(b) Each
Material Contract is in full force and effect and is valid and enforceable in
accordance with its terms and the Seller is in full compliance with all material
terms and requirements of each Material Contract;
3.9 No
Material Adverse Change. Since November 30, 2007, there has
not been any material adverse change in the business, operations, customer and
employee relations, properties, assets or financial condition of the Seller and
no event has occurred or circumstance exists that would reasonably be expected
to result in such a material adverse change.
3.10 Solvency.
Seller will not be insolvent after the consummation of the Contemplated
Transactions. As used in this section, “insolvent”
means, with respect to Seller, that (i) the aggregate of Seller’s property,
exclusive of any property which it may have conveyed, transferred, concealed,
removed or permitted to be concealed or removed, with intent to defraud, hinder
or delay its creditors, shall not at a fair valuation be sufficient in amount to
pay its debts; or (ii) Seller is unable, by its available assets or the honest
use of credit, to pay its debts as they become due. Immediately after giving
effect to the consummation of the Contemplated Transactions: (i) Seller will be
able to pay its Liabilities as they become due in the usual course of its
business; and (ii) Seller will have assets (calculated at fair market value)
that exceed its Liabilities. The cash available to Seller, after taking into
account all other anticipated uses of the cash, will be sufficient to pay such
debts and judgments against Seller.
3.11 Disclosure. No
representation or warranty of Seller in this Agreement, the Disclosure Schedule
or any other certificate or document delivered by Seller pursuant to this
Agreement, and no statement in this Agreement, the Disclosure Schedule or any
other certificate or document delivered by Seller pursuant to this Agreement,
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
There is no fact known to Seller that has specific application to Seller or the
Seller and that materially adversely affects the assets, business, prospects,
financial condition, or results of operations of the Seller that has not been
set forth in this Agreement or the Disclosure Schedule.
3.12 Brokers
and Finders. Neither Seller nor its Representatives have
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement.
Article
IV
Representations and
Warranties of Buyer
Buyer represents and warrants to Seller
as follows:
4.1 Organization
and Good Standing. Buyer is a corporation validly established,
currently existing, and in good standing under the laws of State of
Texas.
4.2 Authority;
No Conflict.
(a) This
Agreement constitutes the legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. Upon the
execution and delivery by Buyer of the Yard Lease Agreement and all other
documents or agreements executed by Buyer in connection herewith, (collectively,
the “Buyer’s Closing
Documents”), the Buyer’s Closing Documents will constitute the legal,
valid, and binding obligations of
Buyer,
enforceable against Buyer in accordance with their respective terms. Buyer has
the absolute and unrestricted right, power, authority, and capacity to execute
and deliver this Agreement and the Buyer’s Closing Documents and to perform its
obligations under this Agreement and the Buyer’s Closing Documents.
(b) Except as
set forth in Schedule
4.2, neither the execution and delivery of this Agreement by Buyer nor
the consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to: (i) any provision of Buyer's
Organizational Documents; (ii) any resolution adopted by the Board of Directors
or the shareholders of Buyer; (iii) any Legal Requirement or Order to which
Buyer may be subject; or (iv) any Contract to which Buyer is a party or by which
Buyer may be bound. Except as set forth in Schedule 4.2, Buyer
is not, nor will it be, required to obtain any Consent from any third-party
Person in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated
Transactions.
4.3 Certain
Proceedings. There is no pending Proceeding that has been
commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
4.4 Brokers
and Finders. Neither Buyer, nor its officers and agents have
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement.
Article
V
Conditions Precedent to
Buyer’s Obligations to Close
Buyer's obligation to purchase the
Assets and to take the other actions required to be taken by Buyer at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Buyer, in whole or in
part):
5.1 Accuracy
of Representations. Each of Seller’s representations and
warranties in this Agreement must have been accurate in all respects as of the
Closing Date.
5.2 Seller’s
Performance.
(a) All of
the covenants and obligations that Seller is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing must have been duly
performed and complied with in all material respects.
(b) Each
document required to be delivered by Seller pursuant to Section 2.4(a)
must have been delivered.
5.3 Consents. Each
of the Consents identified in Schedule 4.2, if any,
must have been obtained and must be in full force and effect.
5.4 Additional
Documents. Each of the following documents must have been
delivered to Buyer:
(a) the
certificate of incorporation and all amendments thereto of the Seller, duly
certified as of a date not more than 30 days prior to the Closing Date by the
Secretary of State of the State of Texas;
(b) certificates
dated as of a date not more than 30 days prior to the Closing Date as to the
good standing of the Seller executed by the Secretary of State of the State of
Texas and the Texas Comptroller’s Office; and
(c) such
other documents as Buyer may reasonably request for the purpose of
(i) evidencing the accuracy of any of Seller’s representations and
warranties, (ii) evidencing the performance by Seller of, or the compliance by
Seller with, any covenant or obligation required to be performed or complied
with by Seller on or before the Closing Date, (iii) evidencing the satisfaction
of any condition referred to in this Article V, or (v)
otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.
5.5 Delivery
of W-8 or W-9. On or prior to the Closing Date, Seller shall have
delivered a fully-executed W-8 or W-9 IRS form, as applicable.
5.6 Due
Diligence. On or prior to the Closing Date, Buyer shall
completed the business, legal, financial, tax and accounting due diligence
review of the Seller to its sole satisfaction.
Article
VI
Conditions Precedent to
Seller’s Obligations to Close
Seller’s obligation to sell the Assets
and to take the other actions required to be taken by Seller at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Seller, in whole or in
part):
6.1 Accuracy
of Representations. Each of Buyer's representations and
warranties in this Agreement must have been accurate in all respects as of the
Closing Date.
6.2 Buyer’s
Performance.
(a) All of
the covenants and obligations that Buyer is required to perform or to comply
with pursuant to this Agreement at or prior to the Closing must have been
performed and complied with in all material respects.
(b) Buyer
must have delivered each of the documents required to be delivered by Buyer
pursuant to Section
2.4(b) and must have made the payments required to be made by
Buyer
pursuant to Section
2.4(b).
6.3 Consents. Each
of the Consents identified in Schedule 3.2 of the
Disclosure Schedule, if any, must have been obtained and must be in full force
and effect.
6.4 Additional
Documents. Buyer must have caused the following documents to
be delivered to Seller such other documents as Seller may reasonably request for
the purpose of (i) evidencing the accuracy of any representation or warranty of
Buyer, (ii) evidencing the performance by Buyer of, or the compliance by Buyer
with, any covenant or obligation required to be performed or complied with by
Buyer, (iii) evidencing the satisfaction of any condition referred to in this
Article VI, or
(v) otherwise facilitating the consummation of any of the Contemplated
Transactions.
Article
VII
Additional
Covenants
7.1 Payment
of All Taxes Resulting From Sale of Assets by Seller. Seller
shall pay in a timely manner all Taxes resulting from or payable in connection
with the sale by Seller of the Assets pursuant to this Agreement, regardless of
the Person on whom such Taxes are imposed by Legal Requirements.
7.2 Payment
of Other Retained Liabilities. If Buyer reasonably determines
that Seller’s failure to make any payments related to the Retained Liabilities
will impair Buyer’s use or enjoyment of the Assets or conduct of the business
previously conducted by Seller with the Assets, Buyer may, upon ten business
days’ notice to Seller, elect to make all such payments directly (but shall have
no obligation to do so) and Seller shall immediately reimburse Buyer for such
amounts.
7.3 Restrictions
on Seller Dissolution and Distributions. Seller shall not make
any distribution of the proceeds received pursuant to this Agreement until
Seller has paid, or made adequate provision for the payment, of all of its
obligations pursuant to applicable Legal Requirements, including its obligations
to pay or otherwise satisfy all Retained Liabilities.
7.4 Assistance
in Proceedings. For a period of two years after the Closing
Date, Seller will cooperate with Buyer and its counsel in the contest or defense
of, and make available its personnel and provide any testimony and access to its
books and Records in connection with, any Proceeding involving or relating to
(a) any Contemplated Transaction or (b) any action, activity, circumstance,
condition, conduct, event, fact, failure to act, incident, occurrence, plan,
practice, situation, status or transaction on or before the Closing Date
involving Seller or its business.
7.5 Noncompetition,
Nonsolicitation and Nondisparagement.
(a) Noncompetition. For
a period of five years after the Closing Date, Seller shall not, anywhere in the
world, directly or indirectly invest in, own, manage, operate, finance, control,
advise, render services to or guarantee the obligations of any Person engaged in
or
planning
to become engaged in any business that is competitive with Seller’s business as
of the Closing Date.
(b) Nonsolicitation. For
a period of three years after the Closing Date, Seller shall not, directly or
indirectly:
(i) solicit
the business of any Person who is a customer of Seller prior to the Closing or
Buyer after the Closing with respect to the sale of products of the type sold by
Seller;
(ii) cause,
induce or attempt to cause or induce any customer, supplier, licensee, licensor,
franchisee, employee or consultant of Seller prior to the Closing or Buyer after
the Closing to cease doing business with Buyer, to deal with any competitor of
Buyer or in any way interfere with its relationship with Buyer;
(iii) cause,
induce or attempt to cause or induce any customer, supplier, licensee, licensor,
franchisee, employee or consultant of Seller on the Closing Date or within the
year preceding the Closing Date to cease doing business with Buyer, to deal with
any competitor of Buyer or in any way interfere with its relationship with
Buyer; or
(iv) hire,
retain or attempt to hire or retain any employee or independent contractor of
Buyer or in any way interfere with the relationship between Buyer and any of its
employees or independent contractors.
(c) Nondisparagement. After
the Closing Date, Seller shall not disparage Buyer or any of Buyer’s directors,
officers, employees or agents. After the Closing Date, Buyer shall not disparage
Seller or any of Seller’s shareholders, directors, officers, employees or
agents.
(d) Modification
of Covenant. If a final
judgment of a court or tribunal of competent jurisdiction determines that any
term or provision contained in Section 7.5(a)
through (c) is
invalid or unenforceable, then the parties agree that the court or tribunal will
have the power to reduce the scope, duration or geographic area of the term or
provision, to delete specific words or phrases or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision. This Section 7.5 will be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed. This Section 7.5 is
reasonable and necessary to protect and preserve Buyer’s legitimate business
interests and the value of the Assets and to prevent any unfair advantage
conferred on Seller.
7.6 Customer
and Other Business Relationships. For a period of two years
from the Closing Date, Seller will cooperate with Buyer in its efforts to
continue and maintain for the benefit of Buyer those business relationships of
Seller existing prior to the Closing and relating to the business of Seller to
be operated by Buyer after the Closing, including relationships with lessors,
employees, regulatory authorities, licensors, customers, suppliers and others,
and Seller will satisfy the Retained Liabilities in a manner that is not
detrimental to any of such
relationships.
Seller will refer to Buyer all inquiries relating to such business. Neither
Seller nor any of its officers, directors, shall take any action that would tend
to diminish the value of the Assets after the Closing or that would interfere
with the business of Buyer prior to the Closing or of Seller after the
Closing.
7.7 Change
of Name. On or before the Closing Date, Seller shall (a) amend
its Organizational Documents and take all other actions necessary to change its
name to one sufficiently dissimilar to Seller’s present name, in Buyer’s
judgment, to avoid confusion, and (b) take all actions requested by Buyer to
enable Buyer or any of its Related Persons to change its name to Seller’s
present name.
7.8 Further
Assurance. The parties shall cooperate reasonably with each
other and with their respective Representatives in connection with any steps
required to be taken as part of their respective obligations under this
Agreement, and shall (a) furnish upon request to each other such further
information; (b) execute and deliver to each other such other documents; and (c)
do such other acts and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and the Contemplated
Transactions.
Article
VII
Indemnification
8.1 Survival. All
representations, warranties, covenants, and obligations in this Agreement, the
Disclosure Schedule and any other certificate or document delivered pursuant to
this Agreement will survive the Closing.
8.2 Indemnification
and Payment of Damages by Seller and Shareholder. After the
Closing, Seller and Shareholder will jointly and severally indemnify and hold
harmless Buyer, and Buyer’s respective Representatives, stockholders,
controlling persons, and affiliates (collectively, the “Indemnified
Persons”) from and against, and will pay to the Indemnified Persons the
amount of any loss, liability, claim, damage, expense (including reasonable
costs of investigation and defense and reasonable attorneys' fees) or diminution
of value, whether or not involving a third-party claim (collectively, “Damages”),
arising, directly or indirectly, from or in connection with:
(a) any
Breach of any representation or warranty made by Seller in this Agreement, the
Disclosure Schedule or any other certificate or document delivered by Seller
pursuant to this Agreement;
(b) any
Breach by Seller of any covenant or obligation of Seller in this
Agreement;
(c) any
product shipped or manufactured by, or any services provided by, the Seller
prior to the Closing Date;
(d) any
noncompliance by Seller with the applicable provisions of any fraudulent
transfer law or bulk sales laws in respect of the Contemplated
Transactions;
(e) any
liability under the Worker Adjustment and Retraining Notification Act or any
similar state or local Legal Requirement that may result from an “Employment
Loss”, as defined by 29 U.S.C. sect. 2101(a)(6), caused by any action of Seller
prior to the Closing or by Buyer’s decision not to hire previous employees of
Seller; and
(f) any
claim by any Person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by
any such Person with the Seller or the Seller (or any Person acting on their
behalf) in connection with any of the Contemplated Transactions.
Seller
and Shareholder shall have no liability for indemnification with respect to
claims under Section 8.2(a)
until the total of all Damages with respect to such matters exceeds $25,000 at
which xxxx Xxxxxx shall be liable for indemnification for all Damages with
respect to such claims (including the first $25,000 of such Damages). However,
the immediately preceding sentence shall not apply to claims under Section 8.2(a) with
respect to matters arising in respect of Sections 3.2(a),
3.4 and 3.12. Seller’s total
liability for Damages pursuant to this Article VIII shall
not exceed $1,700,000 except for (i) Damages relating to claims arising out of
or related to Seller’s representations regarding ownership by Seller of the
Assets free and clear of any Encumbrances as set forth in Section 3.4, or
(ii) Damages from any intentional breach by Seller or Shareholder of any of
Seller’s or Shareholder’s representations, warranties, covenants or obligations,
and Seller and Shareholder will be jointly and severally liable for all Damages
with respect to any such breaches.
8.3 Procedure
for Indemnification – Third Party Claims.
(a) Promptly
after receipt by an Indemnified Person of notice of the commencement of any
Proceeding against such Indemnified Person, such Indemnified Person will, if a
claim is to be made against Seller under Section 8.2, give
notice, setting forth the factual basis for such claim in reasonable detail to
the extent known, to the Seller of the commencement of such claim, but the
failure to notify Seller will not relieve Seller of any liability that Seller
may have to any Indemnified Person, except to the extent that Seller is
prejudiced by the Indemnified Person's failure to give such notice.
(b) If
any Proceeding referred to in Section 8.3(a) is
brought against an Indemnified Person and such Indemnified Person gives notice
to Seller of the commencement of such Proceeding, Seller will be entitled to
participate in such Proceeding and, to the extent that Seller wishes (unless (i)
Seller or Shareholder is also a party to such Proceeding and the Indemnified
Person determines in good faith that joint representation would be
inappropriate, or (ii) Seller fails to provide reasonable assurance to the
Indemnified Person of Seller’s financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel reasonably satisfactory to such Indemnified
Person and, after notice from Seller to the Indemnified Person of Seller’s
election to assume the defense of such Proceeding, Seller will not, as long as
Seller diligently conducts such defense, be liable to the Indemnified Person
under this Article VIII for
any fees of other counsel or any other expenses with respect to the defense of
such Proceeding, in each case subsequently incurred by the Indemnified Person in
connection with the defense of such Proceeding. If Seller assumes the defense of
a Proceeding, (i) no compromise or settlement of
such
claims may be effected by Seller without the Indemnified Person's consent (not
to be unreasonably withheld, delayed or conditioned) unless (A) there is no
finding or admission of any violation of Legal Requirements, and (B) there is no
liability or restriction on the Indemnified Person; and (ii) the Indemnified
Person will have no liability with respect to any compromise or settlement of
such claims effected without such Indemnified Person’s consent. If notice is
given to Seller of the commencement of any Proceeding and Seller does not,
within 20 days after the Indemnified Person's notice is given, give notice to
the Indemnified Person of Seller’s election to assume the defense of such
Proceeding, the Indemnified Person shall diligently conduct the defense and
Seller will be bound by any determination made in such Proceeding or any
compromise or settlement effected by the Indemnified Person.
8.4 Procedure
for Indemnification – Other Claims. A claim for
indemnification for any matter not involving a third-party claim shall be
promptly asserted by notice to Seller.
8.5 Payment
of Indemnification Claims. All claims for indemnification made against by
an Indemnified Person shall be paid by Seller or Shareholder to such Indemnified
Person within 10 days of the later of (i) notice of such claim pursuant to Section 8.2 or Section 8.3, or
(ii) the resolution thereof by the parties or pursuant to any Proceeding brought
by an Indemnified Person with respect thereto.
Article
IX
General
Provisions
9.1 Expenses. Except
as otherwise expressly provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the Contemplated Transactions,
including all fees and expenses of its Representatives.
9.2 Public
Announcements. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as Buyer and Seller mutually
agree.
9.3 Confidentiality. Buyer
and Seller will maintain in confidence, and will cause their respective
Representatives to maintain in confidence, this Agreement, any related agreement
and the Contemplated Transactions and not use to the detriment of another party
or the Seller any written, oral, or other information obtained in confidence
from another party or the Seller in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
Consent required for the consummation of the Contemplated Transactions, or (c)
the furnishing or use of such information is required by legal
proceedings.
9.4 Notices. All
notices, requests, demands and other communications given or made pursuant to
this Agreement shall be in writing and shall be deemed effectively
given: (i) upon personal delivery to the party to be notified, (ii)
when sent by confirmed electronic mail or
facsimile
if sent during normal business hours of the recipient, and if not so confirmed,
then on the next business day, (iii) five days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt, in each case to the
following addresses, facsimile numbers or e-mail addresses and marked to the
attention of the person (by name or title) designated below (or to such other
address, facsimile number, e-mail address or person as a party may designate by
notice to the other parties):
Seller: American
Rig Housing, Inc.
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile No.:
Email: xxxxxxxx-xxxxxxx@xxx.xxx
Buyer: Best
Energy Services, Inc.
0000 Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx, Chief
Executive Officer
Facsimile No.: (000)
000-0000
Email: xxxxxxxxx@xxxxxxxxxxxxxxxxxxxxx.xxx
with a
copy (which shall not be considered notice) to:
Xxxxxxx Xxxxxx L.L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxx,
Esq.
Facsimile No.: (000)
000-0000
Email: xxxxx@xx.xxx
9.5 Further
Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
9.6 Waiver. Neither
the failure nor any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other
or further exercise of such right, power, or privilege or the exercise of any
other right, power, or privilege. To the maximum extent permitted by applicable
Law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one party, in whole or in
part, by a
waiver or
renunciation of the claim or right unless in writing signed by Buyer, with
respect to a waiver on behalf of Buyer, and by Seller, with respect to a waiver
on behalf of Seller; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.
9.7 Entire
Agreement; Modification; Termination. This Agreement
supersedes all prior agreements between the parties with respect to its subject
matter and constitutes (along with the documents referred to in this Agreement)
a complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be charged with the
amendment. This Agreement may be terminated by mutual consent of Buyer and
Seller.
9.8 Assignments,
Successors, and No Third Party Rights. Neither party may
assign any of its rights under this Agreement without the prior consent of the
other parties except that Buyer may assign any of its rights under this
Agreement to any Subsidiary or other Related Person of Buyer. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.
9.9 Severability. If
any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid
or unenforceable only in part or degree will remain in full force and effect to
the extent not held invalid or unenforceable.
9.10 Time
of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
9.11 Governing
Law. This Agreement (including any claim or controversy
arising out of or relating to this Agreement) shall be governed by the laws of
the State of Texas, without regard to conflict of law principles that would
result in the application of any law other than the law of the State of
Texas.
9.12 Jurisdiction;
Service of Process. Any Proceeding arising out of or relating
to this Agreement or any Contemplated Transaction may be brought in the courts
of the State of Texas, County of Xxxxxx, or, if it has or can acquire
jurisdiction, in the United States District Court for the Western District of
Texas – Austin Division, and each of the parties irrevocably submits to the
exclusive jurisdiction of each such court in any such Proceeding, waives any
objection that any such party may now or hereafter have to venue or to
convenience of forum,
agrees
that all claims in respect of the Proceeding shall be heard and determined only
in any such court and agrees not to bring any Proceeding arising out of or
relating to this Agreement or any Contemplated Transaction in any other court.
The parties agree that either or both of them may file a copy of this paragraph
with any court as written evidence of the knowing, voluntary and bargained
agreement between the parties irrevocably to waive any objections to venue or to
convenience of forum. Process in any Proceeding referred to in the first
sentence of this section may be served on any party anywhere in the
world.
9.13 Counterparts;
Facsimile Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document. The exchange of copies of this Agreement and
of signature pages by facsimile transmission, PDF or other electronic file shall
constitute effective execution and delivery of this Agreement as to the parties
and may be used in lieu of the original Agreement for all purposes. Signatures
of the parties transmitted by facsimile, PDF or other electronic file shall be
deemed to be their original signatures for all purposes.
[Signature Page to
Follow]
In Witness Whereof, the parties have
executed and delivered this Agreement as of the date first written
above.
|
Buyer:
|
|
| /s/Xxxxx Xxxxxxxx | |
|
Xxxxx
Xxxxxxxx, Chief Executive Officer
|
|
|
Seller:
|
|
|
American
Rig Housing, Inc.
|
|
| /s/Xxxxx Xxxxxxxx | |
| Xxxxx Xxxxxxxx, President | |
|
Shareholder:
|
|
| Xxxxx Xxxxxxxx | |
| /s/Xxxxx Xxxxxxxx | |
|
Xxxxx
Xxxxxxxx, individually
|
Exhibit
A
Assets
See
attached.
Exhibit
B
Assigned Seller
Contracts
None
Xxxx
of Sale
1. Sale
and Transfer of Assets.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and as contemplated by Section 2.4(a)(i) of
that certain Asset Purchase Agreement dated February 27, 2008 (the "Purchase
Agreement"), by and between Best Energy Services, Inc., a Nevada
corporation ("Buyer"),
American Rig Housing, Inc., a Texas corporation ("Seller"),
and Xxxxx Xxxxxxxx, Seller hereby sells, conveys, assigns, transfers and
delivers to Buyer, effective as of 11:59 p.m. C.S.T. on February 27,
2008, (the "Effective
Time"), all of Seller’s right, title and interest in and to all of the
Assets (as defined in the Purchase Agreement).
2. Further
Actions. Seller
covenants and agrees to warrant and defend the sale, conveyance, assignment,
transfer and delivery of the Assets hereby made against all Persons whomsoever,
to take all steps reasonably necessary to establish the record of Buyer's title
to the Assets and, at the request of Buyer, to execute and deliver further
instruments of transfer and assignment and to take such other action as Buyer
may reasonably request to more effectively transfer and assign to, and to vest
in, Buyer each of the Assets, all at the sole cost and expense of
Seller.
3. Power of Attorney. Without
limiting Section
2 hereof, Seller hereby constitutes and appoints Buyer the true and
lawful agent and attorney in fact of Seller, with full power of substitution and
resubstitution, in whole or in part, in the name and stead of Seller but on
behalf and for the benefit of Buyer and its successors and assigns, from time to
time:
(a) to
demand, receive and collect any and all of the Assets and to give receipts and
releases for and with respect to the same, or any part thereof;
(b) to
institute and prosecute, in the name of Seller or otherwise, any and all
Proceedings that Buyer or its successors and assigns may reasonably deem proper
in order to collect or reduce to possession any of the Assets and in order to
collect or enforce any claim or right of any kind hereby assigned or
transferred, or intended so to be; and
(c) to do all
things legally permissible, required or reasonably deemed by Buyer to be
required to recover and collect the Assets and to use Seller’s name in such
manner as Buyer may reasonably deem necessary for the collection and recovery of
the Assets.
Seller
hereby declares that the foregoing powers are coupled with an interest and are
and shall be accordingly irrevocable by Seller.
4. Terms
of the Purchase Agreement. The terms of the Purchase
Agreement, including but not limited to Seller’s representations, warranties,
covenants, agreements and indemnities relating to the Assets, are incorporated
herein by this reference. Seller acknowledges and agrees that the
representations, warranties, covenants, agreements and indemnities contained in
the Purchase Agreement shall not be superseded hereby but shall remain in full
force and effect to the full extent provided therein. In the event of any
conflict or inconsistency between the terms of the Purchase Agreement and the
terms hereof, the terms of the Purchase Agreement shall govern. Capitalized
terms used but not defined herein shall have the meanings for such terms that
are set forth in the Purchase Agreement.
In
Witness Whereof, Seller has executed this Xxxx of Sale as of the Effective
Time.
American
Rig Housing, Inc.
/s/Xxxxx
Xxxxxxxx
Xxxxx
Xxxxxxxx, President
LEASE
AGREEMENT
By and
Between
XXXXX
XXXXXXXX
(Landlord)
And
(Tenant).
Effective February 27, 2008
TABLE OF
CONTENTS
| ARTICLE 1. |
LEASED
PREMISES
|
1
|
| ARTICLE 2. |
TERM OF LEASE
|
1
|
| ARTICLE 3. |
RENT
|
1
|
| ARTICLE 4. |
TAXES, INSURANCE, UTILITIES, AND
MAINTENANCE.
|
1
|
| ARTICLE 5. |
LATE FEE
|
1
|
| ARTICLE 6. |
SECURITY DEPOSIT
|
2
|
| ARTICLE 9. |
USE OF PREMISES
|
2
|
| ARTICLE 8. |
SIGNS
|
2
|
| ARTICLE 9. |
COVENANT OF TITLE AND QUIET
ENJOYMENT
|
2
|
| ARTICLE 11. |
SUBORDINATION TO FUTURE MORTGAGE HOLDERS PROVIDED
TENANT IS NOT DISTURBED IN POSSESSION
|
2
|
| ARTICLE 12. |
COMPLIANCE WITH LAWS AND
ORDINANCES
|
3
|
| ARTICLE 13. |
MECHANICS' LIENS
|
3
|
| ARTICLE 14. |
LOSS OF POSSESSION OR USE
|
3
|
| ARTICLE 15. |
TENANT'S RIGHT TO CURE LANDLORD'S
DEFAULTS
|
3
|
| ARTICLE 16. |
ALTERATIONS, TITLE TO AND REMOVAL OF IMPROVEMENTS
REPAIRS
|
4
|
| ARTICLE 20. |
PUBLIC LIABILITY INSURANCE
|
4
|
| ARTICLE 21. |
WAIVER OF SUBROGATION
|
5
|
| ARTICLE 22. |
DAMAGE TO OR DESTRUCTION OF
IMPROVEMENTS
|
5
|
| ARTICLE 21. |
EMINENT DOMAIN
|
6
|
| ARTICLE 22. |
ASSIGNMENT AND SUBLETTING
|
7
|
| ARTICLE 23. |
REMEDIES OF LANDLORD
|
7
|
| ARTICLE 24. |
LANDLORD'S ACCESS TO
PREMISES
|
7
|
| ARTICLE 25. |
LEASE OF PERSONAL PROPERTY
|
7
|
| ARTICLE 26. |
SURRENDER OF PREMISES
|
8
|
| ARTICLE 27. |
HOLDING OVER
|
8
|
| ARTICLE 28. |
SERVICE OF NOTICE
|
8
|
| ARTICLE 29. |
SUCCESSORS AND ASSIGNS
|
8
|
| ARTICLE 30. |
RECORDING
|
8
|
| ARTICLE 31. |
AMENDMENTS
|
8
|
| ARTICLE 32. |
ESTOPPEL CERTIFICATE
|
9
|
| ARTICLE 33. |
INVALIDITY OF
PROVISIONS
|
9
|
| ARTICLE 34. |
ATTORNEYS' FEES AND COSTS IN EVENT OF
BREACH.
|
9
|
| ARTICLE 35. |
CAPTIONS
|
9
|
| ARTICLE 36. |
ENTIRE AGREEMENT
|
9
|
Agreement
of Lease
This
Agreement of Lease (“Lease”) is
made this 27th day of
February, 2008, between Xxxxx Xxxxxxxx (hereinafter referred to as "Landlord"),
and Best Energy Services, Inc., a Nevada corporation, (hereinafter referred to
as "Tenant").
ARTICLE
1. LEASED
PREMISES. Landlord owns that
parcel of property at 0000 XX Xxxxxxx 00 X, Xxxxxxxxx, Xxxxx, 00000, that will
be subject to this Lease (the “Leased
Premises”). The Leased Premises are more particularly
described in Exhibit
A attached hereto and incorporated herein by reference.
ARTICLE
2. TERM OF LEASE. The Lease Term of this
lease shall be from February 27, 2008, and shall continue until February 27,
2011 (the “Lease
Term”).
ARTICLE
3. RENT. Tenant shall pay rent (“Rent”) to
the Landlord for the Leased Premises the amount of Six Thousand Dollars ($6,000)
per month with the first Rent payment due on the date of this Lease and on the
same day of each month thereafter during the term of the Lease.
ARTICLE
4. TAXES, INSURANCE, UTILITIES, AND MAINTENANCE.
Tenant and Landlord shall pay the following expenses as
designated:
|
Property
taxes
|
Tenant
|
|
Property
insurance
|
Tenant
|
|
Utilities
|
Tenant
|
|
Water
& Sewer
|
Tenant
|
|
Maintenance
of interior
|
Tenant
|
|
Maintenance
of exterior
|
Landlord |
|
Fencing
|
Tenant
|
|
Snow
plowing/removal
|
Tenant
|
|
Landscaping
|
Tenant
|
If Tenant
pays the property taxes, the taxes for 2008 and 2011 shall be prorated for the
number of days that Tenant occupies the property in those years.
ARTICLE 5. LATE FEE. Tenant
agrees that if any payment or installment of Rent hereunder becomes delinquent
(i.e., has not be received by Landlord) for a period of more than ten (10) days,
Tenant shall pay Landlord a late charge of Five Hundred Dollars ($500.00) and
the delinquent payment shall also bear interest at the rate of one and one-half
percent (1½ %) per month (18% annual percentage rate) until
paid. Said late charge and interest shall be due and payable with the
next following Rent payment due. Returned check fee:
If any check for payment of Rent is
returned
to Landlord for insufficient funds, there shall be a returned check fee assessed
of One Hundred Dollars ($100.00), and the Late Fee shall also
apply.
ARTICLE
6. SECURITY DEPOSIT. Tenant
shall not be required to pay to Landlord any security
deposit.
ARTICLE
7. USE OF PREMISES. The Leased Premises
may be used and occupied only for the purpose of operating an oil field
equipment and mineral services yard, maintenance facilities and administrative
offices. Tenant shall not use the Leased Premises for any other
purpose without the prior written consent of the Landlord, which shall not be
unreasonably withheld. Tenant shall comply with all laws and
regulations governing the use of the Leased Premises.
ARTICLE
8. SIGNS. Tenant shall not install, erect, display,
paint or attach any sign to the exterior of the building or elsewhere on the
Leased Premises without the written consent of the Landlord, which shall not be
unreasonably withheld, and any sign authorized by the Landlord shall be removed
and the sign space restored to its original condition upon termination of the
Lease.
ARTICLE
9. COVENANT OF TITLE AND QUIET ENJOYMENT. Landlord covenants
that Landlord is well seized of and has good title to the Leased Premises and
does warrant and will defend the title thereto and will indemnify the Tenant for
any damage and expense which Tenant may suffer by reason of any lien,
encumbrance, restriction or defect in the title or description herein of the
Leased Premises. If, at any time, Landlord's title or right to
receive Rent hereunder is disputed, or there is a change of ownership of
Landlord's estate by act of the parties or operation of law, Tenant may withhold
Rent thereafter accruing until Tenant has been furnished proof satisfactory to
it as to the party entitled thereto.
ARTICLE
10. TIME OF THE ESSENCE: It is agreed that time is of the
essence in respect to the agreements hereinafter contained.
ARTICLE
11. SUBORDINATION TO FUTURE MORTGAGE HOLDERS PROVIDED TENANT IS NOT
DISTURBED IN POSSESSION. There are no mortgages on the Leased
Premises. However, Landlord reserves the right to mortgage the Leased
Premises in the future if he desires to do so. If Landlord desires to
borrow against the Leased Premises, Tenant will, upon request by
Landlord, subject and subordinate all or any of its rights under this Lease to
any and all mortgages and deeds of trust hereafter placed on the property of
which the Leased Premises are a part; provided,
however,
that Tenant will not be disturbed in the use or enjoyment of the Leased Premises
so long as it is not in default hereunder and Landlord shall, at the time of
execution of any new mortgage or trust deed, provide a binding written
commitment from any and all lenders whose interests are secured by mortgage or
deed of trust that Tenant may remain in possession notwithstanding foreclosure
so long as Tenant is not in default of this Lease. Tenant agrees that
this Lease shall remain in full force and effect notwithstanding any default or
foreclosure under any such mortgage or deed of trust hereinafter placed on the
property and that it will remain liable under the terms of this Lease
to the mortgagee, trustee, or beneficiary of such mortgage or trust deed, and
their
successors
and assigns, and to the purchaser or assignee under any such
foreclosure. Tenant will, upon request by Landlord, execute and
deliver to Landlord, or to any other person designated by Landlord, any
instrument or instruments required to give effect to the provisions of this
Article.
ARTICLE
12. COMPLIANCE WITH LAWS AND ORDINANCES. Landlord, as owner,
shall comply with all federal, state, county and city laws and ordinances, and
all rules and regulations of any duly constituted authority presently affecting
or respecting the Leased Premises. Any other improvements that may be
necessary to comply with any such rules and regulations shall be the obligation
of Tenant. Tenant shall comply with all federal, state, county
and city laws and ordinances and all rules and regulations of any
duly constituted authority present or future affecting or respecting the use or
occupancy of the Leased Premises by Tenant, or the business at any time thereon
transacted by Tenant or any assignee or Sub-tenant of Tenant, after commencement
of the term of this Lease. Tenant shall, at all times,
keep the Leased Premises, the buildings thereon and all
appurtenances, in a clean and sanitary condition, according to the applicable
statues, city ordinances and the directions and regulations of the proper public
authorities.
ARTICLE
13. MECHANICS' LIENS. Tenant agrees to pay,
when due, all sums of money that may become due for, or purporting to be due
for, any labor, services, materials, supplies or Tenant's equipment, alleged to
have been furnished or to be furnished to or for the Landlord,
in, upon or about the Leased Premises and which may be secured
by any mechanics', materialmen's or other lien against the
Leased Premises and/or the Landlord's interest
therein. Tenant shall cause each such lien to be fully discharged and
released, provided,
however,
that, if the Tenant desires to contest any such lien, it may do so, but
notwithstanding any such contest, if such lien shall be reduced to
final judgment and such judgment or processes may be issued for the
enforcement thereof is not promptly stayed or is so stayed and
such stay thereafter expires, then, and in that event, the Tenant
shall forthwith pay and discharge said judgment.
ARTICLE
14. LOSS OF POSSESSION OR USE. If at any time
during the term of this Lease or any extension thereof, Tenant shall, through no
act, default or neglect on its part, be deprived of possession of the
Leased Premises or any material portion thereof or the use of the Leased
Premises for the purposes contemplated by Tenant for any reason including, but
not limited to, any limitation of access to the Leased Premises or
any rezoning or other governmental action which would prohibit the operation of
the business contemplated by Tenant, then, and in any such event, Tenant shall
have the right to terminate this Lease upon giving Landlord ten (10)
days written notice of its intention to so terminate, in accordance with the
provisions of Article
28 hereof.
ARTICLE
15. TENANT'S RIGHT TO CURE LANDLORD'S DEFAULTS.Landlord agrees
that if Landlord fails to pay any interest, principal, cost or other
charges upon any mortgage or mortgages or other liens and encumbrances affecting
the Leased Premises and to which this Lease may be subordinate when any of the
same become due, or if Landlord fails to make any repairs or do any
work required of the Landlord by the provisions of this Lease, or in
any other respect fails to perform any covenant or agreement in this Lease
contained on the part of the Landlord to be performed, then, and in
such event, after the continuance of any such failure or default for ten
(10)
days
after notice in writing thereof is given by the Tenant to the Landlord,
notwithstanding any delay or forbearance in giving such notice, Tenant may pay
said principal, interest cost or other charges and cure such defaults all on
behalf of and at the expense of the Landlord. Tenant may
further do all necessary work and make all necessary payments in
connection therewith, including, but not limiting the same, to the payment
of any attorneys' fees and costs and charges of or in connection with
any legal action which may have been brought. Landlord agrees to pay
to Tenant forthwith any amount so paid by Tenant together with
interest thereon at the maximum legal rate. Landlord further agrees to give
Tenant written notice of any claim of default which may be made by
any mortgagee or lienor as to the Leased Premises within five (5) days after
such claim shall have been made if Landlord shall have not remedied the same
within said five (5) day period. All sums charged to Landlord by
Tenant hereunder shall be indebtedness of Landlord to Tenant payable on
demand. If any such indebtedness or any other indebtedness of
Landlord to Tenant is due at any time, Tenant may, in addition to other
remedies, withhold all Rent accruing hereunder and apply the same to such
indebtedness. If all such indebtedness is not fully paid at
the expiration of the Lease Term or any extension thereof, Tenant
may, at its option, extend this Lease on the same covenants and
conditions as herein provided, until such indebtedness is fully paid
by application of the Rent payable hereunder against such
indebtedness.
ARTICLE
16. ALTERATIONS, TITLE TO AND REMOVAL OF
IMPROVEMENTS. Tenant or any Subtenant may not make
alterations, additions and improvements to the Leased Premises
without the prior written consent of Landlord, which shall not be unreasonably
withheld. Notwithstanding the foregoing, Tenant shall not erect signs
or other improvements that will restrict the free flow of traffic. It
is mutually agreed that the trade fixtures and equipment and interior and
exterior signs which may be installed on the Leased Premises prior to, or during
the term hereof, at the cost of Tenant or any assignee or Subtenant,
shall remain personal property and shall not be deemed to become part of the
Leased Premises. Tenant shall have the right and obligation to remove
such trade fixtures and equipment on or before the expiration of this Lease or
any extensions or renewals thereof. Tenant or any assignee or
Subtenant is hereby expressly given the right, at any time during the term of
this Lease or any extension thereof and for a period of ten (10) days after the
termination of this Lease or any extension thereof, by lapse of time or
otherwise, to enter upon and remove from said Premises any improvements or
equipment of Tenant or any assignee or Subtenant. Tenant shall repair
at its expense any damage to the property created by its installation
or removal of improvements.
ARTICLE
17. REPAIRS. Tenant agrees that it has had the
opportunity of inspecting the Leased Premises, is satisfied therewith, and
accepts the same "as is." Landlord further represents that prior to
commencement of this Lease, the Leased Premises have been lawfully used and
maintained in accordance with all applicable federal, state, and local laws.
Tenant shall be responsible for maintaining the Leased Premises in all respects
and to return the Leased Premises at the end of the lease term in as good or
better condition as when first occupied by Tenant. In default
of the Tenant making the necessary repairs or replacements during the course of
the Lease, the Landlord may, but shall not be required to, make such repairs and
replacements for the Tenant's account and the expense thereof
shall constitute and be collectible as additional Rent, together with interest
at twelve
percent (12%) per annum and reasonable attorney's fees.
ARTICLE
18. PUBLIC LIABILITY INSURANCE. Tenant hereby
covenants and agrees that at all times during the term hereof to obtain and
maintain and keep in force for the mutual benefit of Landlord and Tenant general
public liability insurance against the claims for personal injury, death or
property damage occurring in, on or about the Leased Premises or sidewalks
adjacent to the Leased Premises in the following amounts:
| Bodily injury | per person | $1,000,000 |
| per accident | $2,000,000 (involving two or more persons) | |
| Property damage | $500,000 |
Tenant
agrees that all of the above-noted insurance shall be noncancellable without
(10) days written notice to Landlord. Tenant further covenants and
agrees that the insurance required to be carried hereunder shall be
placed with top rated insurance companies as shall be selected by Tenant. The
parties further covenant and agree that the Landlord and Tenant or anyone
claiming by, through or under them, shall be named as co-insureds as their
respective interests may appear in the above policies and that Tenant, at the
request of Landlord, shall deliver to the Landlord certificates of said
insurance and of renewals thereof, from time to time during the term of this
Lease. Tenant shall keep, protect and save the Landlord harmless from any loss,
costs, or expenses of any sort or nature and from any liability to any
third-party person natural or artificial, on account of any damage to such third
person or their property arising out of any failure to comply with and perform
all of the requirements and provisions set forth in this Article. Landlord may,
if necessary, arrange and pay for all such insurance and invoice Tenant
therefor, together with interest thereon at twelve per cent (12%) per annum
until paid.
ARTICLE
19. WAIVER OF SUBROGATION. Landlord and Tenant each
hereby release the other, their agents and employees from any claim for damage
or destruction to the above-described Premises and the contents thereof
belonging to either, and for the business interruption of either, caused by fire
or any other event insured under fire and extended coverage insurance, whether
due to the negligence of either of them or otherwise.
ARTICLE
20. DAMAGE TO OR DESTRUCTION OF IMPROVEMENTS. If Landlord's
improvements on the Leased Premises shall be damaged or rendered untenantable by
fire or other casualty, the Landlord shall within thirty (30) days from the date
of said damage or destruction commence to repair or replace said improvements,
according to the condition and use of the property prior to said damage or
destruction so that the Tenant may continue with occupancy and the same shall be
completed within one hundred twenty (120) days thereafter. However,
Landlord's obligation to pay for cost of rebuilding or repairing any such damage
or destruction to the improvements located on the Leased Premises shall be
limited to the insurance monies payable by reason of such damage or destruction
and if the cost of repairing or replacing said improvements according to the
condition and use of the Leased Premises prior to said damage shall exceed this
amount this Lease shall terminate immediately and Landlord shall be entitled to
keep all insurance
proceeds
as compensation for damage done to the Leased Premises unless Tenant, upon
written notification by Landlord of the amount of the excess elects in writing
to itself pay such excess. It is further agreed that the Rent herein
required to be paid shall xxxxx during said period of untenantability or if the
improvements shall be damaged but not rendered untenantable thereby, the Rent
shall xxxxx in an amount appropriate to the decrease in the utility of the
Leased Premises. In the event Landlord has not commenced construction
or has not notified Tenant that he intends to commence construction within
thirty (30) days from the date of such damage, then, and in that event, Tenant
may either (a) terminate this Lease by giving written notice of such termination
in accordance with Article 28 hereof, or
(b) thereupon and without further notice to Landlord commence to repair or
replace said building with Tenant having access to the insurance proceeds
available by reason of such damage or destruction. In the event
Tenant makes said repairs or replacements, Landlord shall be liable to the
Tenant for any and all costs and expenses of Tenant in making the same and
Landlord shall be required to reimburse Tenant for any such costs and expenses
of Tenant for any costs which Tenant expends for replacement or repair of the
improvements plus 12% (which shall not be in excess of the insurance proceeds
payable by reason of such damage or destruction). If Landlord fails
to reimburse Tenant within thirty (30) days after receiving Tenant's invoice
Tenant shall have the right to deduct this amount of the invoice from Rent
payments due to Landlord and/or institute legal action at law or equity to
recover its expense.
It is
agreed by the parties that if the building cannot be replaced or repaired within
one hundred twenty (120) days after such damage to the building, due to the
inability of either party to obtain materials or labor needed, strikes or acts
of God or governmental restrictions that would prohibit, limit, or delay said
construction, then the time for completion of said repairs and replacement shall
be extended accordingly, provided,
however,
that in any event, if the repair or replacement of the building has not been
completed within a period of one hundred eighty (180) days from the date of such
damage or destruction, Tenant may, at its option, and in addition to other
remedies available to Tenant, elect to terminate this Lease. In the
event of any damage or destruction occurring in the last six (6) months of the
original term of this Lease or during any extension of the term, to the extent
of fifty percent (50%) or more of the insurable value of the building, Tenant
may, at its option, to be evidenced by notice in writing given to Landlord
within thirty (30) days after the occurrence of such damage and destruction, in
lieu of repairing or replacing such building, elect to terminate this Lease as
of the date of said damage or destruction.
ARTICLE
21. EMINENT DOMAIN. If the whole or any part
of the Leased Premises shall be taken for any public or quasi-public use under
any statute or by right of eminent domain or by private purchase in lieu
thereof, Tenant reserves unto itself the right to prosecute its claim for an
award based upon injury caused to its leasehold interest by such taking, without
impairing any rights of Landlord for the taking of or injury to the reversion.
In the event a part of the Leased Premises shall be so taken that (a) the part
so taken includes the building or Premises on the Leased Premises or any part
thereof or (b) ten percent(10%) or more of the from depth of the Leased Premises
or (c) that part taken shall consist of twenty-five percent (25%) or more of the
total Premises or (d) such part so taken shall result in cutting off direct
access from the Leased Premises to any adjacent public street or highway or (e)
such taking makes the carrying on of Tenant's business impractical, then, and
in any
such event, the Tenant may at any time either prior to or within a period of
sixty (60) days after the date when possession of the Leased Premises shall be
required by the taking authority elect to terminate this Lease. In
the event that Tenant shall fail to exercise any such option to terminate this
Lease or in the event that a part of the Leased Premises shall be taken under
circumstances under which the Tenant will have no such option, then the Landlord
shall, at its own cost and expense and with reasonable promptness, restore the
remaining portion of the Leased Premises to the extent necessary to reconstitute
the improvements thereon as a complete architectural unit, susceptible to the
same use as that which was in effect immediately prior to such taking and the
Rent payable under the provisions of the lease shall be equitably reduced
according to the decrease in the utility of the Leased Premises for Tenant's
intended use and the effect thereof upon the business of Tenant.
ARTICLE
22. ASSIGNMENT AND SUBLETTING. Tenant may not,
without consent of Landlord, which consent shall not be unreasonably withheld,
assign or encumber this Lease or its rights hereunder. In the event
Landlord consents to any assignment or subletting, Tenant shall remain liable
for the payment of all Rent required to be paid hereunder and for the
performance of all terms, covenants and conditions herein undertaken by
Tenant.
ARTICLE
23. REMEDIES OF LANDLORD. If Tenant
shall fail to pay any installment of Rent promptly on the day when the same
shall become due and payable hereunder, and shall continue in such default for a
period of ten (10) days after written notice thereof by Landlord, or if Tenant
shall fail to promptly keep and perform any other affirmative covenants of this
Lease, strictly in accordance with the terms of this Lease and shall
continue in default for a period of thirty (30) days after written notice
thereof by Landlord of default and demand of performance, then and in any such
event and as often as any such event shall occur, Landlord may (a)
declare the said term ended, and enter into said Premises, or any part thereof,
either with or without process of law and expel Tenant or any
person occupying the same in or upon said Premises, using such force
as may be necessary, and to repossess and enjoy said Premises as
in the Landlord's former estate; or (b) relet the Leased Premises
against the Rent payable by Tenant hereunder and Tenant shall be
responsible for no more than the balance that may be due, should a
balance exist. However, if any default shall occur, other
than in the payment of money, which cannot with due diligence be
cured within a period of thirty (30) days, and if Tenant prior to the
expiration of thirty (30) days from and after the giving of the
notice of aforesaid, commences to eliminate the cause of such default and
proceeds diligently and with reasonable dispatch to take all
steps and undertake all work required to cure such default and does
so cure such default, then Landlord shall not have the right to
declare the term ended by reason of such default.
ARTICLE
24. LANDLORD'S ACCESS TO PREMISES. Landlord
shall have the right to inspect the Leased Premises
during normal business hours and upon reasonable
notice. Landlord shall have access to the Leased Premises during
normal business hours during the last six (6) months of the Lease or
any extension thereof for the purpose of showing the same to any
prospective tenants.
ARTICLE
25. LEASE OF PERSONAL PROPERTY. Landlord
shall lease to Tenant
such
personal property on the Premises as shall be reflected in an
Addendum attached to this Lease which Addendum shall set forth the terms and
conditions of the Lease of said personal property.
ARTICLE
26. SURRENDER OF PREMISES. Tenant shall,
after the last day of the Lease Term or any extension thereof, or
upon any earlier termination of such term, surrender and yield up to
Landlord all of Landlord's improvements on such Premises in good order,
condition, and state of repair, reasonable wear and tear and the
provisions of Article
16 hereof excepted.
ARTICLE
27. HOLDING OVER. In the event Tenant
continues to occupy the Leased Premises after the last day of the Lease Term
hereby created, or after the last day of any extension of the Lease
Term, and the Landlord elects to accept Rent thereafter, a tenancy
from month to month only shall be created under and subject to all other
provisions contained herein.
ARTICLE
28. SERVICE OF NOTICE. Every notice,
approval, consent or other communication authorized or required by this Lease
shall not be effective unless the same shall be in writing and sent
postage prepaid by United States registered or certified mail, return receipt
requested, and shall be addressed to:
|
To
Landlord:
|
To
Tenant:
|
| Xxxxx Xxxxxxxx | Best Energy Services, Inc. |
|
0000
Xxxxx Xxxxxx, Xxxxx 0000
|
0000
Xxxxx Xxxxxx, Xxxxx 0000
|
| Xxxxxxx, Xxxxx 00000 | Xxxxxxx, Xxxxx 00000 |
or to
such other address as either party may designate, by notice given from time to
time in accordance with this Article. Any notice given in
accordance with the provisions of this Article shall be deemed to
have been given as of the date such notice shall have been placed in
the United States Postal Service. The Rent payable by Tenant
hereunder shall be paid to Landlord at the same place where a notice to Landlord
is herein required to be directed.
ARTICLE
29. SUCCESSORS AND ASSIGNS. The terms, conditions
and covenants of this Lease shall be binding upon and shall inure to
the benefit of each of the parties hereto, their heirs,
personal representatives, successors or assigns, and shall run with
the land; and where more than one party shall be Landlord under this
Lease, the word "Landlord" whenever used in this Lease shall be
deemed to include all Landlords jointly and severally.
ARTICLE
30. RECORDING. This Lease shall not be
recorded. However, if either of the parties hereto desire
to record a memorandum of this Lease, Landlord and Tenant agree to execute and
deliver to the other a memorandum of this Lease containing only
minimum statutory requirements, which memorandum of lease may then be recorded
in the appropriate office of the county within which the Leased
Premises are located.
ARTICLE
31. AMENDMENTS. No waivers, alterations, or
modifications of this Lease or any agreements in connection therewith shall be
valid unless in writing duly executed by both
Landlord
and Tenant herein.
ARTICLE
32. ESTOPPEL CERTIFICATE. Either party to this
Lease shall from time to time during the term of this Lease,
immediately (within 10 days at the latest) upon the request of the
other party, execute and deliver to the other party a statement certifying that
this Lease is in full force and effect, the date through which the Rent and
other charges hereunder have been paid, and any other factual matters
reasonably requested by the other party.
ARTICLE
33. INVALIDITY OF PROVISIONS. If any term,
covenant, condition or provision of this Lease or the application
thereof to any person or circumstance shall, at any time, or to any
extent, be invalid or unenforceable, the remainder of this Lease or
the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, covenant, condition and
provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
ARTICLE
34. ATTORNEYS' FEES AND COSTS IN EVENT OF
BREACH. In the event of any breach of this Lease,
the nonbreaching party shall be entitled to receive reasonable
attorneys' fees and costs from the breaching party in enforcing
the terms of this Lease, in addition to any other damages
or compensation that may be applicable.
ARTICLE
35. CAPTIONS. The captions appearing in this Lease
are inserted only as a matter of convenience and in no way define,
limit, construe or describe the scope or intent of such Articles of
this Lease or in any way affect this Lease.
ARTICLE
36. ENTIRE AGREEMENT. This Lease supersedes
any and all other agreements, either oral or in writing, between the
parties hereto with respect to the Leased Premises and contains all of the
covenants, agreements and other obligations between the said parties
in respect to said Premise.
ARTICLE
37. EXECUTION. This Lease may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which shall be one and the same document. The exchange of copies of this
Lease and of signature pages by facsimile transmission, PDF or other electronic
file shall constitute effective execution and delivery of this Lease as to the
parties and may be used in lieu of the original Lease for all purposes.
Signatures of the parties transmitted by facsimile, PDF or other electronic file
shall be deemed to be their original signatures for all purposes.
[Signatures
are on following page]
In
Witness Whereof, the said parties have hereunto set their hands the day and year
first above written.
| LANDLORD: | TENANT: |
|
Xxxxx
Xxxxxxxx
|
|
|
|
|
| /s/Xxxxx Xxxxxxxx | /s/ Xxxxx Xxxxxxxx |
| Xxxxx Xxxxxxxx, individually | Xxxxx Xxxxxxxx, Chief Executive Officer |
Exhibit
A
Description
of Leased Premises
Property
in Cleveland, Texas: 000306 M B Xxxxxxxx, Tract 86, 11.42 acres
Release
This
Release is being executed and delivered as of this February 27, 2008 in
accordance with Section 2.4(a)(ii)
of the Asset Purchase Agreement dated February 27, 2008 (the “Agreement”)
by and among Best Energy Services, Inc., a Nevada corporation ("Buyer"),
American Rig Housing, Inc., a Texas corporation ("Seller")
and Xxxxx Xxxxxxxx. The undersigned (“Shareholder”)
is a shareholder of Seller and will directly benefit from the Agreement,
including receiving the Purchase Price. Capitalized terms used in this Release
without definition have the respective meanings given to them in the
Agreement.
Shareholder
acknowledges that execution and delivery of this Release is a condition to
Buyer’s obligation to purchase the Assets and to consummate the Contemplated
Transactions pursuant to the Agreement and that Buyer is relying on this Release
in consummating such purchase.
Shareholder,
for good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged and intending to be legally bound, in order to induce Buyer
to purchase the Assets and to consummate the Contemplated Transactions pursuant
to the Agreement, hereby agrees as follows:
Shareholder,
on behalf of himself and each of his Related Persons, hereby releases and
forever discharges the Buyer and Seller, and each of their respective
individual, joint or mutual, past, present and future Representatives,
affiliates, stockholders, controlling persons, Subsidiaries, successors and
assigns (individually, a “Releasee”
and collectively, “Releasees”)
from any and all claims, demands, Proceedings, causes of action, Orders,
obligations, Contracts and liabilities of any kind or nature whatsoever, whether
known or unknown, suspected or unsuspected, both at law and in equity, which
Shareholder or any of his Related Persons now has, have ever had or may
hereafter have against the respective Releasees arising contemporaneously with
or prior to the Closing Date or on account of or arising out of any matter,
cause or event occurring contemporaneously with or prior to the Closing Date;
provided,
however, that nothing
contained herein shall operate to (i) release any claims of the Shareholder or his Related
Persons under the Agreement or the Seller’s Closing Documents, or
(ii) limit Shareholder’s or his Related
Persons’s right to assert claims that are based on any matter, cause or event that happened after this
Release becomes effective.
Shareholder
hereby irrevocably covenants to refrain from, directly or indirectly, asserting
any claim or demand, or commencing, instituting or causing to be commenced, any
proceeding of any kind against any Releasee, based upon any matter purported to
be released hereby.
Without
in any way limiting any of the rights and remedies otherwise available to any
Releasee, Shareholder shall indemnify and hold harmless each Releasee from and
against all loss, liability, claim, damage (including incidental and
consequential damages)
or
expense (including costs of investigation and defense and reasonable attorney’s
fees) whether or not involving third party claims, arising directly or
indirectly from or in connection with (i) the assertion by or on behalf of
Shareholder or any of his Related Persons of any claim or other matter purported
to be released pursuant to this Release, and (ii) the assertion by any third
party of any claim or demand against any Releasee which claim or demand arises
directly or indirectly from, or in connection with, any assertion by or on
behalf of Shareholder or any of his Related Persons against such third party of
any claims or other matters purported to be released pursuant to this
Release.
If any
provision of this Release is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Release will remain in full
force and effect. Any provision of this Release held invalid or unenforceable
only in part or degree will remain in full force and effect to the extent not
held invalid or unenforceable.
This
Release may not be changed except in a writing signed by the person against
whose interest such change shall operate.
This
Release (including any claim or controversy arising out of or relating to this
Release) shall be governed by the law of the State of Texas, without regard to
conflict of law principles that would result in the application of any law other
than the law of the State of Texas.
All words
used in this Release will be construed to be of such gender or number as the
circumstances require.
In
Witness Whereof, each of the undersigned have executed and delivered this
Release as of the day and year first written above.
/s/Xxxxx
Xxxxxxxx
Xxxxx Xxxxxxxx, individually
American
Rig Housing, Inc.
Disclosure
Statement
|
Section
|
Requirement
|
Response
|
|
3.5(b)
|
Government
authorizations
|
See
attached Schedule 3.5(b)
|
|
3.6
|
Legal
proceedings
|
See
attached Schedule 3.6
|
|
3.8(a)
|
Material
Contracts that are still pending or being complete
|
See
attached Schedule 3.8(a)
|
Schedule
3.5(b)
Government
Authorizations
None
Schedule
3.6
Legal
Proceedings
None
Schedule
3.8(a)
Material
Contracts
None
|
.
American
Rig Housing, Inc. Inventory
|
Units
|
|
12-Man
Crew Quarter- 12' X 60' on 3 - 12" l-Beam Oilfield Skid
Completely
refurbished 1998-99 - 2 bedrooms; central bath w/2 sinks, 2 showers, 2
toilets, complete w/ individual lockers, table and chairs, sofa,
mattresses, stove, 2 refrigerators, washer/dryer, central heat and A/C,
TV, microwave, satellite, 200 amp outside disconnects and 150' of 4/3 S.O.
cord.
|
27
|
|
12-Man
Crew Quarter - 12' X 58' on 3 - 12" l-Beam Oilfield
Skid
Completely
refurbished 1998-99 - 2-3 bedrooms; 2 baths, complete w/ individual
lockers, table and chairs, sofa, mattresses, stove, 2 refrigerators,
washer/dryer, central heat and A/C, TV, microwave, satellite, 200 amp
outside disconnects and 150' of 4/3 S.O. cord.
|
11
|
|
12-Man
Crew Quarter - 12' X 56' on 3 - 12" l-Beam Oilfield
Skid
2 bedrooms; 2 baths, complete w/
individual lockers, table and chairs, sofa, mattresses, stove, 2
refrigerators, washer/dryer, central heat and A/C, TV, microwave, satellite,
200 amp outside disconnects and 150' of 4/3 S.O. cord.
|
3
|
|
Tool
Pushers Quarter - 10-12' X 48' and 5-12' X 42' on 3 - 12" I-Beam Oilfield
Skids
48'
quarters: 2 bedrooms; 1 bath, w/ separate office end
42'
quarter: 1 bedroom; 1 bath
All
units completely stocked with pots, pans, linens,
etc. Stove,
refrigerator,
microwave, satellite, washer/dryer, central heat and
A/C,
200
amp outside disconnects and 150' of 4/3 S.O. cord
|
10
(48’)
5
(42’)
|
|
Specialty
Units -on 3 - 12" l-Beam Oilfield Skids
12'
X 60' Men and Women's Bath: Change house, six toilets; 10 sinks; 2
urinals; 4 showers; lockers; central heat and A/C, 200 amp outside
disconnects and 150' of 4/3 S.O. cord. Refurbished in 2000 and on
long-term lease in Joilet, 111.
14'
X 60' Men and Women's Decontamination: change house w/ 2 washers and 2
dryers, showers; lockers; dual heat and A/C, 200 amp outside disconnects
and 150' of 4/3 S.O. cord. Constructed new in 2000 and on long-term lease
in Joilet, 111.
|
2
|
|
Oilfield
Skid Galley/Diner
Galley
12’ X 58’ Service for 50 men; complete w/ oven, stove freezer,
refrigerator, vent-a-hood, driddle, deep-fryer, etc. Separate xxxx’x
quarters w/ private bath, separate dry goods area.
Diner
12’ X 60”: seating for 50 men
|
2
|
|
Wheel
mounted Tool Pusher Quarter- 10' X 36'
1
bedroom; I bath, complete w/ separate office and
built-in
desk,
private living area. Each unit come complete with stove, refrigerator,
microwave, central heat and A/C, TV, microwave, posts, pans,
etc
|
7
|
|
Skid
Mounted Mud Engineers' Quarter- 8' X 32'
1
bedroom; 1 bath, complete w/ separate office and private living
area, stove, refrigerator, central heat and A/C, TV, microwave,
pots
|
1
|
|
Mobile
Home 14’X70” 3 Bedroom 2 Bath
|
3
|
Living
Quarters Scheduled for Refurbishment
|
Description
of
|
Units
|
|
Company
Man Quarters- 12' X 60' on 3 - 12" l-Beain Oilfield
Skid
2
bedrooms; 1 bath; central A/C and Heat
|
3
|
|
12-Man
Crew Quarter - 10' X 56' on 3 - 12" I-Beam Oilfield
Skid
2
bedrooms; 2 baths
|
1
|
|
Wheel
Mounted Tool Pusher Quarters - 10' X 36'
1
bedroom; 1 bath; separate office w/built-in desk, private living area, A/C
heat
|
3
|
|
Portable
Office Bldg. - 10' X 36'
Open
bldg. w/ half kitchen, A/C heat
|
1
|
|
Commissary
- 12' X 44' Skid Mounted
2
room w/ service window; A/C heat
|
1
|
|
Recreation
Bldg. - 12' X 50' Skid Mounted
Open
bldg. w/ half kitchen, A/C heat
|
1
|
|
Gate
Guard Houses - 8' X 36'
1
bedroom; 1 bath; full kitchen; A/C heat
|
4
|
Trucks
and Trailers
|
Description
of Asset
|
Units
|
|
1991 Xxxx
oilfield winch trucks w/ A/C; 350 hp; 24 ton Tulsa winches;
rolling tailboard; tandem axle, 216" WB
|
2
|
|
1981
Xxxx oilfield winch truck; 350 hp; 24 ton Xxxxxx xxxxx; rolling tailboard;
tandem axle
|
1
|
|
1983 Aztec 80,000 # Drop-deck
Trailers; extendible to 60'; air
cushion floats
|
4
|
|
1977
Ford 2-ton diesel work truck w/ 40' gooseneck
trailer
|
1
|
|
1997
Ford Isuzu pickup service trucks
|
1
|
|
Miscellaneous
work trailers
|
|
Description
of Asset
|
Unit
|
|
2,500
gallon trailer mounted, portable water systems
|
6
|
|
2,500
gallon trailer free standing, portable water systems
|
15
|
|
750
gallon portable sewer system w/ holding tank
|
10
|
|
Explosion
proof intercoms
|
20
|
|
4.5
Kw trailer mounted "Job-Lighter"
|
1
|
|
Trailer
mounted diesel driven portable air compressor
|
1
|
