EXECUTION COPY
Stock Purchase Agreement
Between
WellTech Eastern, Inc.
and
Kenting Energy Services Inc.
Dated as of July 30, 1997
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Stock Purchase Agreement
This Stock Purchase Agreement (this "Agreement") is entered into as of July
30, 1997 by and between WellTech Eastern, Inc., a Delaware corporation
("Buyer"), and Kenting Energy Services Inc., an Alberta corporation (the
"Shareholder").
WITNESSETH :
Whereas, Buyer is a corporation duly organized and validly existing under
the laws of the State of Delaware, with its principal executive offices at Xxx
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000; and
Whereas, Kenting Holdings (Argentina) S.A. (the "Company") is a corporation
duly organized and validly existing under the laws of the republic of Argentina,
with its principal executive offices at Xxxxxxx 0000-Xxxx 0, (0000) Xxxxxx
Xxxxx, Xxxxxxxxx; and
Whereas, Kenting Drilling (Argentina) S.A. (the "Company Subsidiary") is a
subsidiary of the Company and is a corporation duly organized and validly
existing under the laws of the republic of Argentina, with its principal
executive offices at Xxxxxxx 0000-Xxxx 0, (0000) Xxxxxx Xxxxx, Xxxxxxxxx; and
Whereas, the Shareholder owns 15,300,000 shares (the "Company Shares") of
common stock, par value $1.00 per share, of the Company ("Company Common
Stock"), which constitutes all of the issued and outstanding shares of capital
stock of the Company
Whereas, the Company owns 24,545,362 shares (the "Company-Owned Subsidiary
Shares") of common stock, par value $1.00 per share, of the Company Subsidiary
("Subsidiary Common Stock"), and the Shareholder owns 37,386 shares (the
"Shareholder-Owned Subsidiary Shares") of Subsidiary Common Stock, which
constitutes all of the issued and outstanding shares of capital stock of the
Company Subsidiary; and
Whereas, the Shareholder desires to sell to Buyer, and Buyer desires to
purchase from the Shareholder all of the issued and outstanding capital stock of
the Company and all of the shares of capital stock of the Company Subsidiary
owned by the Shareholder.
Now, Therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
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ARTICLE 1
Purchase and Sale
1.1. Purchase and Sale of the Company Shares. Subject to the terms and
conditions of this Agreement, on the date hereof, the Shareholder agrees to sell
and convey to Buyer, free and clear of all Encumbrances (defined below) and
Buyer agrees to purchase and accept from the Shareholder, all of the Company
Shares and all of the Shareholder-Owned Subsidiary Shares. In consideration of
the sale of the Company Shares and the Shareholder-Owned Subsidiary Shares,
Buyer shall pay to the Shareholder $9,575,000 in cash by wire transfer of
immediately available funds, and the Cash Adjustment Payment (as defined in
Section 1.3 hereof), if any, in accordance with Section 1.3 hereof. In addition,
on the date hereof Buyer shall pay to the Shareholder $525,000 in satisfaction
of all debts remaining due to the Shareholder or irs affiliates on the date
hereof. The term "Encumbrances" means all liens, security interests, pledges,
mortgages, deed of trust, claims, rights of first refusal, options, charges,
restrictions or conditions to transfer or assignment, liabilities, obligations,
privileges, equities, easements, rights-of-way, limitations, reservations,
restrictions and other encumbrances of any kind or nature.
1.2. Recording the Transfer of Shares. The parties hereto acknowledge that
the Company Shares are currently held of record as follows: 15,299,988 shares
(the "KID Company Shares") by Kenting Drilling International, Inc., a
predecessor (by amalgamation) to the Shareholder ("KID") and 12 shares (the
"XXXX Company Shares") by Kenting Energy Services Ltd, a predecessor (by
amalgamation) to the Shareholder ("XXXX"). The parties hereto acknowledge that
the Shareholder- Owned Subsidiary Shares are currently held of record by KID.
The Shareholder represents and warrants to Buyer that it has validly acquired
the KID Company Shares, the XXXX Company Shares and the Shareholder-Owned
Subsidiary Shares by means of an amalgamation of various affiliated corporate
entities and a subsequent liquidation of the resulting entity without having
such acquisitions (the "Shareholder Stock Acquisitions") formally recorded in
the appropriate stock records of the Company and the Company Subsidiary. On the
date hereof, the Shareholder shall caused to be filed in the appropriate stock
records of the Company and the Company Subsidiary those transfer documents
necessary to properly record the Shareholder Stock Acquisitions in accordance
with Argentina law (the "Delinquent Filings") and those transfer documents
necessary to properly record the transfer of the Company Shares and the
Shareholder-Owned Shares hereunder in accordance with Argentina law such that,
as a result of such filings, the Buyer (and its designees) will become the
record and beneficial owners of the Company Shares and the Shareholder-Owned
Subsidiary Shares.
1.3 Adjustment of Purchase Price. Buyer shall cause to be prepared and
delivered to the Shareholder a consolidated balance sheet of the Company as of
the date hereof (the "Final Balance Sheet") within sixty (60) days after the
date hereof, which balance sheet will be prepared in accordance with Canadian
generally accepted accounting principles, consistently applied in all respects
(which shall not include any reserve or accruals for employee termination
costs). Buyer and the Shareholder shall jointly review the Final Balance Sheet,
and endeavor in good faith to resolve all disagreements regarding the entries
thereon and reach a final determination thereof within 90 days
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from the date hereof. In the event that the parties cannot agree on the
entries to be placed on the Final Balance Sheet, the dispute will be resolved by
an independent accounting firm mutually agreed to by the Shareholder and Buyer
(such agreement not to be unreasonably withheld or delayed) whose resolution
shall be binding on and enforceable against the parties hereto. Within 10 days
of reaching such final determination, the following adjusting payments shall be
made:
(1) If the sum of (A) the Final Net Current Value of the Company (defined
below) plus (B) $100,056 (the"Capital Expenditure Amount") exceeds the 4/30 Net
Current Value of the Company (defined below), Buyer shall pay to the Shareholder
the amount of such excess (the "Cash Adjustment Payment").
(2) If the sum of (A) the Final Net Current Value of the Company plus the
Capital Expenditure Amount is less than the 4/30 Net Current Value of the
Company, the Shareholder shall pay to Buyer the amount of such difference.
The term "Final Net Current Value of the Company" means the dollar value of
the amount by which (i) the "Total Current Assets" (excluding any prepaid job
costs relating to the assets referred to in Schedule 2.1.8 hereto (the "Excluded
Assets") transferred from the Company to the Shareholder or an associated
company of the Shareholder in anticipation of the consummation of the
transactions contemplated hereby but including the book value of any
"Inventories" included in the Excluded Assets) plus the "Other Assets" minus the
"Due from Kenting Group" as recorded on the Final Balance Sheet exceeds (ii) the
'Total Current Liabilities" plus the " Term Debt" plus the "Deferred Income
Taxes" minus the "Due to Kenting Group" as recorded on the Final Balance Sheet.
The term"4/30 Net Current Value of the Company" means the dollar value of the
amount by which (i) the "Total Current Assets" (excluding any prepaid job costs
relating to the Excluded Assets but including the book value of any
"Inventories" included in the Excluded Assets) plus the "Other Assets" minus the
"Due from Kenting Group" as recorded on the 4/30 Balance Sheet (as defined in
Section 2.1.6 hereof) exceeds (ii) the "Total Current Liabilities" plus the
"Term Debt" plus the"Deferred Income Taxes" minus the "Due to Kenting Group" as
recorded on the 4/30 Balance Sheet.
ARTICLE 2
Representations and Warranties
2.1. Representations and Warranties of the Shareholder. The Shareholder
represents and warrants to Buyer as follows:
2.1.1. Organization and Standing. Each of the Company, the Company
Subsidiary and the Shareholder is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization, has
full requisite corporate power and authority to carry on its business as it is
currently conducted, and to own and operate the properties currently owned and
operated by it, and is duly qualified or licensed to do business
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and is in good standing and is authorized to do business in all
jurisdictions in which the character of the properties owned or the nature of
the business conducted by it would make such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not
have an adverse effect on its financial condition, properties or business.
2.1.2. Agreement Authorized and its Effect on Other Obligations. The
execution and delivery of this Agreement have been authorized by all of
necessary corporate action on the part of the Shareholder, and the Shareholder
has the legal capacity and requisite power and authority to enter into, and
perform its obligations under this Agreement. This Agreement is a valid and
binding obligation of the Shareholder enforceable against the Shareholder
(subject to normal equitable principles) in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, debtor relief or similar laws affecting the rights of creditors
generally. The execution, delivery and performance of this Agreement by the
Shareholder will not conflict with or result in a violation or breach of any
term or provision of, nor constitute a default under (i) any of the
organizational or other documents of the Company or the Company Subsidiary or
(ii) any obligation, indenture, mortgage, deed of trust, lease, contract or
other agreement to which the Company, the Company Subsidiary or the Shareholder
is a party or by which the Company, the Company Subsidiary or the Shareholder or
their respective properties are bound.
2.1.3. Capitalization. The authorized capitalization of the Company
consists of 15,300,000 shares of Company Common Stock, of which, as of the date
hereof, 15,300,000 shares were issued and outstanding and, following the
recording of the Delinquent Filings, are held beneficially and of record by the
Shareholder. On the date hereof, the Company does not have any outstanding
options, warrants, calls or commitments of any character relating to any of its
authorized but unissued shares of capital stock. All issued and outstanding
shares of Company Common Stock are validly issued, fully paid and non-
assessable and are not subject to preemptive rights. None of the outstanding
shares of Company Common Stock is subject to any voting trusts, voting agreement
or other agreement or understanding with respect to the voting thereof, nor is
any proxy in existence with respect thereto. The authorized capitalization of
the Company Subsidiary consists of 24,582,748 shares of Subsidiary Common Stock,
all of which shares were issued and outstanding as of the date hereof, with
24,545,362 shares held beneficially and of record by the Company (following the
recording of the Delinquent Filings) and 37,386 shares held beneficially and of
record by the Shareholder (following the recording of the Delinquent Filings).
On the date hereof, the Company Subsidiary does not have any outstanding
options, warrants, calls or commitments of any character relating to any of its
authorized but unissued shares of capital stock. All issued and outstanding
shares of Subsidiary Common Stock are validly issued, fully paid and
non-assessable and are not subject to preemptive rights. None of the outstanding
shares of Subsidiary Common Stock is subject to any voting
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trusts, voting agreement or other agreement or understanding with respect
to the voting thereof, nor is any proxy in existence with respect thereto.
2.1.4. Ownership of the Company Shares. Following the recording of the
Delinquent Filings, the Shareholder holds good and valid title to all of the
Company Shares and the Shareholder-Owned Subsidiary Shares, free and clear of
all Encumbrances. Following the recording of the Delinquent Filings, the
Shareholder possesses full authority and legal right to sell, transfer and
assign to Buyer the Company Shares and the Shareholder-Owned Subsidiary Shares,
free and clear of all Encumbrances. Upon transfer to Buyer by the Shareholder of
the Company Shares and the Shareholder-Owned Subsidiary Shares, Buyer will own
the Company Shares and the Shareholder-Owned Subsidiary Shares free and clear of
all Encumbrances. There are no claims pending or, to the knowledge of the
Shareholder, threatened, against the Company or the Shareholder that concern or
affect title to the Company Shares or the Shareholder-Owned Subsidiary Shares,
or that seek to compel the issuance of capital stock or other securities of
either the Company or the Company Subsidiary.
2.1.5. No Subsidiaries. Other than the Company Subsidiary, there is no
corporation, partnership, joint venture, business trust or other legal entity in
which the Company, either directly or indirectly through one or more
intermediaries, owns or holds beneficial or record ownership of at least a
majority of the outstanding voting securities.
2.1.6. Financial Statements. The Company has delivered to Buyer copies of
the unaudited consolidated balance sheet of the Company and the Company
Subsidiary (the "4/30 Balance Sheet") and related consolidated statements of
income, copies of which are attached hereto as Schedule 2.1.6 (collectively, the
"4/30 Financial Statements"), as at and for the four months ended April 30, 1997
(the "Balance Sheet Date"). The 4/30 Financial Statements are complete in all
material respects. The 4/30 Financial Statements presents fairly in all material
respects the consolidated financial condition of the Company as at the dates and
for the periods indicated. The 4/30 Financial Statements have been prepared in
accordance with Canadian generally accepted accounting principles applied on a
consistent basis.
2.1.7. Liabilities. Except as provided in Schedule 2.1.7 hereto, to the
knowledge of any of (i) the directors and officers of the Company, (ii) the
directors and officers of the Company Subsidiary, (iii) Xxxx Xxxxx and (iv)
Xxxxxxx Xxxxx Xxxxxxxxxx (collectively, the "Company Management"), neither the
Company nor the Company Subsidiary has any liabilities or obligations, either
accrued, absolute or contingent, nor are any of the foregoing persons aware of
any potential liabilities or obligations (including, without limitation,
liabilities related to non-performance of contracts, non-payment of taxes,
infringement of the intellectual property rights of others, violations of
applicable laws, current or pending litigation, environmental conditions or
labor disputes) that could materially adversely affect the value and conduct of
the business of the Company and the Company Subsidiary, taken
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as a whole, other than those required to be reflected or properly reserved
against in the 4/30 Balance Sheet and the Final Balance Sheet (and which will be
reflected in an accurate calculation of the 4/30 Net Current Value of the
Company and the Final Net Current Value of the Company).
2.1.8. Absence of Certain Changes and Events. The Shareholder has caused
the Company and the Company Subsidiary to make those fixed asset transfers and
those balance sheet adjustments referred to in Schedule 2.1.8 hereto. To the
knowledge of Company Management, other than the transactions specified in
Schedule 2.1.8 hereto, since the Balance Sheet Date, there has not been any
material reduction in the value of the fixed assets of the Company or the
Company Subsidiary or the occurrence of any other transaction or event that
could materially adversely affect the value and conduct of the business of the
Company and the Company Subsidiary, taken as a whole, other than those that will
be reflected in an accurate calculation of the Final Net Current Value of the
Company.
2.1.9. Title to and Condition of Assets. Except as disclosed on Schedule
2.1.9 hereto, the Company and the Company Subsidiary have good title to all
their assets reflected in the 4/30 Balance Sheet, including, without limitation,
all of the Company-Owned Subsidiary Shares, free and clear of any Encumbrance of
any nature whatsoever, except (i) Encumbrances reflected in the 4/30 Balance
Sheet, (ii) liens for current taxes not yet due and payable, and (iii) such
imperfections of title, easements and Encumbrances, if any, as are not
substantial in character, amount, or extent and do not and will not materially
detract from the value, or interfere with the present use, of the property
subject thereto or affected thereby, or otherwise materially impair business
operations.
2.1.10. Consents and Approvals. All consents, approvals and authorizations
required to be made or obtained by the Company, the Company Subsidiary or the
Shareholder in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby have been
obtained.
2.1.11. Finder's Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Shareholder and its
counsel directly with Buyer and its counsel, without the intervention of any
other person in such manner as to give rise to any valid claim against any of
the parties hereto for a brokerage commission, finder's fee or any similar
payments.
2.2. Representations and Warranties of Buyer. Buyer represents and warrants
to the Shareholder as follows:
2.2.1. Organization and Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has full requisite corporate power and authority to carry on its
business as it is currently conducted, and to own and operate the properties
currently owned and operated by it, and is duly
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qualified or licensed to do business and is in good standing as a foreign
corporation authorized to do business in all jurisdictions in which the
character of the properties owned or the nature of the business conducted by it
would make such qualification or licensing necessary, except where the failure
to be so qualified or licensed would not have an adverse effect on its financial
condition, properties or business.
2.2.2. Agreement Authorized and its Effect on Other Obligations. The
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Buyer, and this
Agreement is a valid and binding obligation of Buyer enforceable (subject to
normal equitable principles) in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, debtor
relief or similar laws affecting the rights of creditors generally. The
execution, delivery and performance of this Agreement by Buyer will not conflict
with or result in a violation or breach of any term or provision of, or
constitute a default under (a) the Certificate of Incorporation or Bylaws of
Buyer or (b) any obligation, indenture, mortgage, deed of trust, lease, contract
or other agreement to which Buyer or any of its property is bound.
2.2.3. Consents and Approvals. No consent, approval or authorization of, or
filing of a registration with, any governmental or regulatory authority, or any
other person or entity is required to be made or obtained by Buyer in connection
with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
2.2.4. Finder's Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Buyer and its counsel
directly with the Company, the Company Subsidiary and the Shareholder and its
counsel, without the intervention by any other person as the result of any act
of Buyer in such a manner as to give rise to any valid claim against any of the
parties hereto for any brokerage commission, finder's fee or any similar
payments.
ARTICLE 3
Additional Agreements
3.1. Noncompetition. Except as otherwise consented to or approved in
writing by Buyer, the Shareholder agrees that for a period of 42 months from the
date hereof, it will not (and will cause its affiliates not to), directly or
indirectly, acting alone or as a member of a partnership or as an officer,
director, employee, consultant, representative, holder of, or investor in as
much as 5% of any security of any class of any corporation or other business
entity (i) engage in any businesses involved in providing well servicing or
shallow/moderate depth drilling services within the country of Argentina; (ii)
request any present customers or suppliers of the Company or the Company
Subsidiary to curtail or cancel their business with the Company, the Company
Subsidiary, Buyer or
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any affiliate of Buyer; (iii) disclose to any person, firm or corporation
any trade, technical or technological secrets of the Company, the Company
Subsidiary, Buyer or any affiliate of Buyer or any details of their organization
or business affairs or (iv) induce or actively attempt to influence any employee
of the Company, the Company Subsidiary, Buyer or any affiliate of Buyer to
terminate his employment. The Shareholder agrees that if either the length of
time or geographical area set forth in this Section 3.1 is deemed too
restrictive in any court proceeding, the court may reduce such restrictions to
those which it deems reasonable under the circumstances. The obligations
expressed in this Section 3.1 are in addition to any other obligations that the
Shareholder may have under the laws of any jurisdiction in which they do
business requiring an employee of a business or a shareholder who sells his
stock in a corporation (including a disposition in a merger) to limit his
activities so that the goodwill and business relations of his employer and of
the corporation whose stock he has sold (and any successor corporation) will not
be materially impaired. Each of the Shareholder further agrees and acknowledges
that the Company, the Company Subsidiary, Buyer and its affiliates do not have
any adequate remedy at law for the breach or threatened breach by the
Shareholder of this covenant, and agree that the Company, the Company
Subsidiary, Buyer or any affiliate of Buyer may, in addition to the other
remedies which may be available to it hereunder, file a suit in equity to enjoin
the Shareholder from such breach or threatened breach. If any provisions of this
Section 3.1 are held to be invalid or against public policy, the remaining
provisions shall not be affected thereby. The Shareholder acknowledges that the
covenants set forth in this Section 3.1 are being executed and delivered by such
Shareholder in consideration of the covenants of Buyer contained in this
Agreement, and for other good and valuable consideration, receipt of which is
hereby acknowledged.
3.2. Employee Matters. From the date hereof, the Company and the Company
Subsidiary shall remain responsible for all costs associated with the
termination of any of their employees terminated after the date hereof;
provided, however, that the Shareholder shall be solely responsible for any and
all liabilities, costs and expenses associated with the termination of Xxxx
Xxxxx by either the Company or the Company Subsidiary, regardless of whether he
is terminated before, on or after the date hereof (the "Xxxxx Termination").
3.3. Further Assurances. From time to time, as and when requested by any
party hereto, any other party hereto shall execute and deliver, or cause to be
executed and delivered, such documents and instruments and shall take, or cause
to be taken, such further or other actions as may be reasonably necessary to
effectuate the transactions contemplated hereby. Without limiting the generality
of the foregoing, the Shareholder shall take those actions reasonably requested
by Buyer to (i) properly record the transfer of the Company Shares and the
Shareholder-Owned Subsidiary Shares in accordance with Section 1.2 hereof and
(ii) resolve the title exceptions described in Schedule 2.1.9 hereto.
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ARTICLE 4
Indemnification
4.1. Indemnification by the Shareholder. In addition to any other remedies
available to Buyer under this Agreement, or at law or in equity, the Shareholder
shall indemnify, defend and hold harmless the Company, the Company Subsidiary,
Buyer and their affiliates and their respective officers, directors, employees,
agents and stockholders (collectively, the "Buyer Indemnified Parties"), against
and with respect to any and all claims, costs, damages, losses, expenses, obliga
tions, liabilities, recoveries, suits, causes of action and deficiencies,
including interest, penalties and reasonable fees and expenses of attorneys,
consultants and experts (collectively, the "Damages") that the Buyer Indemnified
Parties shall incur or suffer, which arise, result from or relate to (i) any
breach by the Shareholder of (or the failure of the Shareholder to perform) its
respective representations, warranties, covenants or agreements in this
Agreement or in any schedule, certificate, exhibit or other instrument furnished
or delivered to Buyer by the Shareholder under this Agreement or (ii) the Xxxxx
Termination.
4.2. Indemnification by Buyer. In addition to any other remedies available
to the Shareholder under this Agreement, or at law or in equity, Buyer shall
indemnify, defend and hold harmless the Shareholder against and with respect to
any and all Damages that such indemnitees shall incur or suffer, which arise,
result from or relate to any breach of, or failure by Buyer to perform, any of
its representations, warranties, covenants or agreements in this Agreement or in
any schedule, certificate, exhibit or other instrument furnished or delivered to
the Shareholder by or on behalf of Buyer under this Agreement.
4.3. Indemnification Procedure. In the event that any party hereto
discovers or otherwise becomes aware of an indemnification claim arising under
Section 4.1 or 4.2 of this Agreement, such indemnified party shall give written
notice to the indemnifying party, specifying such claim, and may thereafter
exercise any remedies available to such party under this Agreement; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of any obligations hereunder, to
the extent the indemnifying party is not materially prejudiced thereby. Further,
promptly after receipt by an indemnified party hereunder of written notice of
the commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to Section 4.1 or 4.2 hereof, such
indemnified party shall, if a claim in respect thereof is to be made against any
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of any
obligations hereunder, to the extent the indemnifying party is not materially
prejudiced thereby. In case any such action is brought against an indemnified
party, the indemnifying party shall be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that it may wish, with counsel reasonably satisfactory
to such indemnified party, and after such notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party
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for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof unless the indemnifying party has failed to
assume the defense of such claim and to employ counsel reasonably satisfactory
to such indemnified person. An indemnifying party who elects not to assume the
defense of a claim shall not be liable for the fees and expenses of more than
one counsel in any single jurisdiction for all parties indemnified by such
indemnifying party with respect to such claim or with respect to claims separate
but similar or related in the same jurisdiction arising out of the same general
allegations. Notwithstanding any of the foregoing to the contrary, the
indemnified party will be entitled to select its own counsel and assume the
defense of any action brought against it if the indemnifying party fails to
select counsel reasonably satisfactory to the indemnified party, the expenses of
such defense to be paid by the indemnifying party. No indemnifying party shall
consent to entry of any judgment or enter into any settlement with respect to a
claim without the consent of the indemnified party, which consent shall not be
unreasonably withheld, or unless such judgment or settlement includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability with respect to such claim. No
indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action, the defense of which has been assumed by an
indemnifying party, without the consent of such indemnifying party, which
consent shall not be unreasonably withheld or delayed.
ARTICLE 5
Miscellaneous
5.1. Survival of Representations, Warranties and Covenants. All
representations, warranties, covenants and agreements made by the parties hereto
shall survive indefinitely without limitation, notwithstanding any investigation
made by or on behalf of any of the parties hereto. All statements contained in
any certificate, schedule, exhibit or other instrument delivered pursuant to
this Agreement shall be deemed to have been representations and warranties by
the respective party or parties, as the case may be, and shall also survive
indefinitely despite any investigation made by any party hereto or on its
behalf.
5.2. Entirety. This Agreement embodies the entire agreement among the
parties with respect to the subject matter hereof, and all prior agreements
between the parties with respect thereto are hereby superseded in their
entirety.
5.3. Counterparts. Any number of counterparts of this Agreement may be
executed and each such counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one instrument.
5.4. Notices and Waivers. Any notice or waiver to be given to any party
hereto shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested:
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If to Buyer
Addressed to: With a copy to:
WellTech Eastern, Inc. Xxxxxx & Xxxxxx, L.L.P.
Two Tower Center, Tenth Floor 700 Louisiana, 00xx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to any Shareholder
Addressed to: With a copy to:
Kenting Energy Services Inc. Xxxxxx Xxxxxx
Xxxxx 000, 000 - 0xx Xxx. X.X. 0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X0X0 000 Xxxxx Xxx. X.X.
Attn: Chief Operating Officer Xxxxxxx, Xxxxxxx X0X0X0
Facsimile: (000) 000-0000 Attn: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, with return receipt requested, shall be deemed
to be received on the third business day after so mailed, and if delivered by
courier or facsimile to such address, upon delivery during normal business hours
on any business day.
5.5. Table of Contents and Captions. The table of contents and captions
contained in this Agreement are solely for convenient reference and shall not be
deemed to affect the meaning or interpretation of any article, section, or
paragraph hereof.
5.6. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
5.7. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
5.8. Applicable Law. While the parties hereto acknowledge and agree that
the transfer of the Company Shares and the Shareholder-Owned Subsidiary Shares
hereunder shall be effected and
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recorded in accordance with Argentina law, this Agreement shall be governed
by and construed and enforced in accordance with the applicable laws of the
Province of Alberta.
5.9. Fees, Expenses. All legal and other fees and expenses incurred by the
parties hereto in connection with the negotiation of this Agreement and the
consummation of the transactions contemplated hereby shall be borne solely by
the party incurring such fee or expense. Without limiting the generality of the
foregoing, any fees and expenses incurred by the Shareholder's counsel in
connection with updating the stock records of the Company and the Company
Subsidiary as required to properly record the transfer of the shares hereunder
shall not be the obligation of the Company or the Company Subsidiary. All
out-of-pocket expenses incurred by Buyer, the Company or the Company Subsidiary
in connection with resolving the title exceptions described in Schedule 2.1.9
hereto shall be reimbursed by the Shareholder promptly upon written request
accompanied by written evidence of such expense.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in their respective corporate names by their respective duly authorized
representatives, all as of the day and year first above written.
WELLTECH EASTERN, INC.
By:
Name:
Title:
KENTING ENERGY SERVICES INC.
By:
Name:
Title
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Schedule 2.1.6 - 4/30 Financial Statements
See the financial statements attached hereto
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Schedule 2.1.7 - Liabilities
See the listing attached hereto
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Schedule 2.1.8 - Material Pre-Closing Transactions
Excluded Assets:
Since the Balance Sheet date and in anticipation of the consummation of the
transactions contemplated by this Agreement, the Company Subsidiary has
transferred to P.D. Technical Services Inc. the following assets referred to in
the attached Xxxx of Sale (the "Excluded Assets"):
Balance Sheet Adjustments:
The amounts payable from the Company or the Company Subsidiary to the
Shareholder or its affiliates in excess of the amounts payable to the Company or
the Company Subsidiary from the Shareholder or its affiliates shall be satisfied
as follows:
$3,000,000 US will be canceled in consideration for the transfer of the
Excluded Assets with the remaining $525,000 US to be paid by the Buyer on the
date hereof.
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Schedule 2.1.9 - Title Exceptions
1. The Argentina real property records do not currently show that the
Company Subsidiary is the owner of the parcel of real property located in Las
Heres, Argentina and the two parcels of real property located in Comodoro
Rivadavia, Argentina (the "Company Property") that valid purchase documents in
the possession of the Company Subsidiary indicate it as owning. The Shareholder
represents and warrants that (i) the Company Subsidiary is the owner in fee
simple of the Company Property (with no material Encumbrances thereon), (ii) no
other party has claimed or can validly claim title to any portion of the Company
Property and (iii) it has (or will cause to be) delivered all documents
necessary to file in the appropriate real property records to reflect that the
Company Subsidiary owns the Company Property in fee simple, free from any
material Encumbrances.
2. Some of the certificates of title covering the thirty-seven (37)
automobiles and light pickup trucks owned by the Company Subsidiary (the
"Company Vehicles") either do not properly reflect the Company Subsidiary as the
owner thereof or indicate that such automobile is subject to a third part lien.
The Shareholder represents and warrants that Company Vehicles are owned outright
by the Company Subsidiary subject to no Encumbrances, (ii) no other party has
claimed or can validly claim title to any of the Company Vehicles and (iii) it
has (or will cause to be) delivered to Buyer all documents necessary to file
with the appropriate governmental agency to enable the Company Subsidiary to
obtain a clear certificate of title to each Company Vehicle.
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