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ASSET PURCHASE AGREEMENT
AMONG
WELLTECH EASTERN, INC.
PETRO-EQUIPMENT, INC.
AND
XXXXXX X. XXXXX
May 1, 1997
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Asset Purchase Agreement
This Asset Purchase Agreement (this "Agreement") is entered into as of May 1,
1997 among WellTech Eastern, Inc., a Delaware corporation ("Buyer"),
Petro-Equipment, Inc., a West Virginia corporation, and Xxxxxx X. Xxxxx,
(collectively "Sellers").
W I T N E S S E T H:
WHEREAS, the Sellers desire to sell certain assets to Buyer, and Buyer desires
to acquire certain assets from Sellers.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements, and subject to the terms
and conditions herein contained, the parties hereto hereby agree as follows:
Article I
Purchase and Sale of Assets
I.1 Purchase and Sale of the Assets. Subject to the terms and conditions set
forth in this Agreement, the Sellers hereby agree to sell, convey, transfer,
assign and deliver to Buyer all of the assets more particularly described on
Schedule I.1 hereof (all such assets being sold hereunder are referred to
collectively herein as the "Assets"):
Sellers shall execute and deliver to Buyer Bills of Sale and Assignment
conveying all of Sellers' respective right, title and interest in the Assets to
Buyer and shall execute and deliver such other documents of assignment and
conveyance as are necessary to transfer ownership of the Assets to Buyer.
I.2 Consideration for Assets. As consideration for the sale of the Assets to
Buyer, the execution of those certain non-competition agreements provided herein
and for the other covenants and agreements of the Sellers contained herein,
Buyer agrees to pay to Sellers, on the date hereof, the total sum of $
500,000.00 in the form of a cashier's check or bank check or wire transfer of
immediately available funds to an account or accounts designated by the Sellers.
Sellers acknowledge and agree that the consideration paid hereunder shall be
allocated and paid as follows: Buyer shall pay Petro-Equipment, Inc. the sum of
$253,757.00 and Buyer shall pay Xxxxxx X. Xxxxx the sum of $246,243.00. In
addition, in consideration for the sale of the Assets, Buyer agrees to pay J & D
Rentals the sum of $17,500.00, representing the accrued and unpaid rentals due J
& D Rentals from Young Wireline Service, Inc. The parties agree that all sums
paid hereunder totaling $517,500 shall be defined as and constitute the
"Purchase Price."
1.3 Closing. The Closing for the sale of the Assets and other transactions
contemplated herein shall occur on May 1, 1997 at 10:00 a.m. at the offices of
Xxxxxxx & Xxxxxxx, LLP, 1500 One Valley Square, Charleston, West Virginia or at
such other time and place as is mutually agreed to by the parties.
Article II
Representations and Warranties
of the Sellers
II.1 Representations and Warranties of the Sellers. Each of the Sellers jointly
and severally represents and warrants to Buyer as follows:
II.1.1. Organization and Good Standing. Petro-Equipment, Inc. is a corporation
duly organized, validly existing and in good standing under the laws of its
state of organization, has full requisite corporate power and authority to carry
on its business as it is currently conducted, and to own and operate the
properties currently owned and operated by it.
II.1.2. Agreements Authorized and their Effect on Other Obligations. The
execution and delivery of this Agreement have been authorized by all necessary
corporate and shareholder action on the part of the Sellers, and this Agreement
is the valid and binding obligation of the Sellers enforceable (subject to
normal equitable principles) against each of such parties in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, debtor relief or similar laws affecting the rights of creditors
generally. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, will not conflict with or
result in a violation or breach of any term or provision of, nor constitute a
default under (i) the charter or bylaws (or other organizational documents) of
the Sellers, (ii) any obligation, indenture, mortgage, deed of trust, lease,
contract or other agreement to which one or both of the Sellers may be a party
or by which the Sellers or their respective properties are bound; or (iii) any
provision of any law, rule, regulation, order, permits, certificate, writ,
judgment, injunction, decree, determination, award or other decision of any
court, arbitrator, or other governmental authority to which the Sellers or any
of their respective properties are subject.
II.1.3. Title to and Condition of Assets. The Sellers have good, indefeasible
and marketable title to all of the Assets, free and clear of any Encumbrances
(defined below). Buyer has had the opportunity to inspect the Assets and Sellers
make no warranty concerning the condition of said Assets, the sale hereunder
being AS IS, WHERE IS with respect to the condition of the Assets. No notice of
any violation of any law, statute, ordinance, or regulation relating to any of
the Assets has been received by the Sellers, except such as have been fully
complied with. The term "Encumbrances" means all liens, security interests,
pledges, mortgages, deeds of trust, claims, rights of first refusal, options,
charges, restrictions or conditions to transfer or assignment, liabilities,
obligations, privileges, equities, easements, rights of way, limitations,
reservations, restrictions, and other encumbrances of any kind or nature.
II.1.4. Legal Right to Convey. The Sellers have acquired the Assets in
accordance with all applicable laws and have the legal right to convey the
Assets to Buyer and no other person or entity has or will have any claim to the
Assets nor has or will have the right to void the transfers and conveyances
hereunder for any reason including any proceeding commenced under the laws of
any state or the United States Bankruptcy Code. The transactions contemplated
hereby are not and will not become subject to any valid and enforceable claims
of any third party, including any claims of a bankruptcy trustee. Sellers have
not received notice of any pending or threatened claim by any person or entity
to the Assets. At Closing, Buyer shall have the absolute right to the quiet
possession and use of the Assets.
II.1.5. Necessary Consents. The Sellers have obtained and delivered to Buyer all
consents to assignment or waivers thereof required to be obtained from any
governmental authority or from any other third party in order to validly
transfer the Assets hereunder.
II.1.6. Investigations; Litigation. There is no suit, action, or legal,
administrative, arbitration, or other proceeding or governmental investigation
pending to which either of the Sellers is a party or, to the knowledge of either
the Sellers, might become a party or which particularly affects the Assets.
II.1.7. Solvency. Neither Seller is presently insolvent, nor will either Seller
be rendered insolvent by the occurrence of the transactions contemplated by this
Agreement. The term "insolvent", with respect to a particular Seller, means that
the sum of the present fair and saleable value of such Seller's assets does not
and will not exceed its debts and other probable liabilities, and the term
"debts" includes any legal liability whether matured or unmatured, liquidated or
unliquidated, absolute fixed or contingent, disputed or undisputed or secured or
unsecured.
II.1.8. Untrue Statements. To the best of Sellers' knowledge, this Agreement and
all other agreements executed by the Sellers and delivered to Buyer does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that Sellers acknowledge and agree that their representations and
warranties in Sections II.1.3 and II.1.4 are absolute and unqualified. The
Sellers have also made available to Buyer true, complete and correct copies of
all contracts, documents concerning all litigation and administrative
proceedings, licenses, permits, insurance policies, and records relating
principally to the Assets, and such information covers all commitments and
liabilities of Buyer relating principally to the Assets.
II.1.9. Finder's Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Sellers and their
counsel directly with Buyer and its counsel, without the intervention of any
other person in such manner as to give rise to any valid claim against any of
the parties hereto for a brokerage commission, finder's fee or any similar
payment.
II.2 Reliance. Sellers expressly agree and acknowledge that Buyer is relying
upon Sellers' representations and warranties contained herein, that said
representations and warranties are material and that absent such representations
and warranties that Buyer would not enter into this Asset Purchase Agreement and
the transactions contemplated herein.
Article III
Additional Agreements
III.1 Noncompetition. Except as otherwise consented to or approved in writing by
Buyer, each of the Sellers and Xxxxxxx Xxxxxxx Xxxx agree that for a period of
60 months following the date hereof, such party will not, directly or
indirectly, acting alone or as a member of a partnership or a 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 business providing logging, perforating
or electric wireline services or own, operate or lease a complete service truck
for use in the well service or wireline service business in West Virginia,
Virginia, Kentucky, Ohio, Pennsylvania, New York, Maryland and Indiana (the
"Non-Competition Territory"); (ii) request any present customers or suppliers of
Young Wireline Services, Inc. or customers or suppliers of the Sellers to
curtail or cancel their business with Buyer; (iii) disclose to any person, firm
or corporation any trade, technical or technological secrets of Buyer (or
Buyer's affiliates) or of the Sellers or any details of their organization or
business affairs or (iv) induce or actively attempt to influence any employee of
Buyer (or Buyer's affiliates) to terminate his employment; provided, however,
that nothing contained herein shall be construed to prevent Sellers from owning
Superior Micro System and continuing to operate Superior Micro System in the
businesses in which it is operated as of the date hereof, nor shall Sellers be
prevented from leasing a complete full service truck to a competitor of Buyer
who has been in existence for at least five years prior to the date hereof for a
lease term not to exceed ninety (90) days, which lease term cannot be extended
or renewed, provided such business is not owned by any former employee of
Hitwell Surveys, Inc., Young Wireline Service, Inc., or Titan Surveys. Each of
the Sellers and Xxxxxxx Xxxxxxx Xxxx agrees that if either the length of time or
geographical area as set forth in this Section III.1 is deemed too restrictive
in any court proceeding, the court may reduce such restrictions to those which
it deems reasonable under the circumstances. Each of the Sellers and Xxxxxxx
Xxxxxxx Xxxx further agrees and acknowledges that Buyer does not have any
adequate remedy at law for the breach or threatened breach by the Sellers or
Xxxxxxx Xxxxxxx Xxxx of the covenants contained in this Section III.1, and agree
that Buyer may, in addition to the other remedies which may be available to it
hereunder, file a suit in equity to enjoin the Sellers or Xxxxxxx Xxxxxxx Xxxx
from such breach or threatened breach. If any provisions of this Section III.1
are held to be invalid or against public policy, the remaining provisions shall
not be affected thereby. Each of the Sellers and Xxxxxxx Xxxxxxx Xxxx
acknowledges that the covenants set forth in this Section III.1 are being
executed and delivered by such party in consideration of the covenants of Buyer
contained in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged.
III.2 Lease of Shop. Sellers agree that they will cause J & D Rentals to extend
the lease between J & D Rentals and Young Wireline Services, Inc. for that
certain facility located at Xxx Xxx 00 Xxxx, Xxxxxxxxxx, Xxxx Xxxxxxxx, for a
period of thirty days upon receipt of $1,500.00. During such extension J & D
Rentals shall grant Buyer the right to use such premises, to store any of the
Assets purchased hereunder and to conduct such environmental investigations or
assessment as Buyer deems necessary. If, in Buyer's sole discretion, such
environmental reports are satisfactory, then Buyer and J & D Rentals shall enter
into a lease for such premises in the form attached hereto as Exhibit III.2.
III.3 Allocation of Purchase Price. The parties hereto agree to allocate the
purchase price paid by Buyer for the Assets hereunder as set forth on Schedule
III.3 hereto, and shall report this transaction for federal income tax purposes
in accordance with the allocation so agreed upon. The parties hereto for
themselves and for their respective successors and assigns covenant and agree
that they will file coordinating Form 8594's in accordance with Section 1060 of
the Internal Revenue Code of 1986, as amended, with their respective income tax
returns for the taxable year that includes the date hereof.
III.4 Further Assurances. From time to time, as and when requested by any party
hereto, any other party hereto shall execute and deliver, or cause to be
executed and delivered, such documents and instruments and shall take, or cause
to be taken, such further or other actions as may be reasonably necessary to
effect the transactions contemplated hereby, including but not limited to
certificates of title to any of the Assets which were not delivered at Closing.
Article IV
Indemnification
IV.1 Indemnification by the Sellers. In addition to any other remedies available
to Buyer under this Agreement, or at law or in equity, each of the Sellers
shall, jointly and severally, indemnify, defend and hold harmless Buyer and its
officers, directors, employees, agents and stockholders, against and with
respect to any and all claims, costs, damages, losses, expenses, obligations,
liabilities, recoveries, suits, causes of action and deficiencies, including
interest, penalties and reasonable attorneys' fees and expenses (collectively,
the "Damages") that such indemnitee shall incur or suffer, which arise, result
from or relate to any breach of, or failure by either of the Sellers to perform,
their respective representations, warranties, covenants or agreements in this
Agreement or in any schedule, certificate, exhibit or other instrument furnished
or delivered to Buyer by the Sellers under this Agreement; provided, however,
that such indemnity, including claims for breach of warranty of title to the
Assets, shall not exceed the Purchase Price. Xxxxxx X. Xxxxx ("Xxxxx") expressly
assumes and agrees to indemnify Buyer for any claim for Damages asserted by
Buyer hereunder against Xxxxx or against Petro-Equipment, Inc.. Xxxxx further
agrees that Buyer may assert any claim for indemnity against Petro-Equipment,
Inc. directly against Xxxxx without first asserting or exhausting any remedies,
it may have against Petro-Equipment, Inc., provided that Xxxxx'x Indemnity,
including claims for breach of warranty of title to the Assets shall not exceed
the Purchase Price.
IV.2 Indemnification Procedure. If any party hereto discovers or otherwise
becomes aware of an indemnification claim arising under Section IV.1 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 this Article IV, 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 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.
Article V
Miscellaneous
V.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 without
limitation despite any investigation made by any party hereto or on its behalf.
V.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.
V.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.
V.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.
If to Buyer
Addressed to: With a copy to:
WellTech Eastern, Inc. Xxxxxx & Xxxxxx, L.L.P.
Two Tower Center, Tenth Floor 000 Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel Attention: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to the Sellers
Addressed to: With a copy to:
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx, Esq.
P. O. Box 0000 Xxxxxxx & Xxxxxxx
Xxxx Xxxxxxxxx, XX 00000 00 Xxxxx Xxxxxxx Xx.
Facsimile: (000) 000-0000 Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Petro-Equipment, Inc.
P. X. Xxx 000
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxx Xxxx
P. O. Xxx 000
Xxxxxxxxxx, XX 00000
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.
V.5 Captions. The captions contained in this Agreement are solely for convenient
reference and shall not be deemed to affect the meaning or interpretation of any
article, section, or paragraph hereof.
V.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.
V.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.
V.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of the State of West Virginia.
IN WITNESS WHEREOF, Xxxxxx X. Xxxxx has executed this Agreement and the other
parties hereto have caused this Agreement to be signed in their respective
corporate names by their respective duly authorized representatives, all as of
the day and year first above written.
BUYER:
WELLTECH EASTERN, INC.
By:
Name:
Title:
SELLERS:
PETRO-EQUIPMENT, INC.
By:
Name: Xxxxxxx Xxxxxxx Xxxx
Title: President
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Xxxxxx Xxxxx
IN WITNESS WHEREOF, Xxxxxxx Xxxxxxx Xxxx has executed this Agreement, solely
with respect to the agreements contained in Section III.1, hereof, as of the day
and year first above written.
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Xxxxxxx Xxxxxxx Xxxx
