Stock Purchase Agreement
Between
3022481 NOVA SCOTIA COMPANY
Xxxxxx Xxxxxxx,
Xxxxxx Xxxxxxx,
Xxxxxx Xxxxxxx
and
corunna petroleum limited
October 22, 1998
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 22nd day of October, 1998, by and between 3022481
Nova Scotia Company, a Nova Scotia corporation (the "Buyer") and Xxxxxx Xxxxxxx,
Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Corunna Petroleum Limited (the "Sellers"),
being all of the shareholders of Corunna Drilling Company, a Nova Scotia
corporation, (the "Company").
WHEREAS the Sellers are the registered and beneficial owners and holders of all
of the issued and outstanding shares of the capital stock of Company (the
"Stock"), desire to sell all such shares of Stock to Buyer, and Buyer wishes to
purchase such Stock on the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of and in reliance upon the foregoing and each
of the covenants, agreements, representations, and warranties herein set forth,
Sellers and Buyer agree as follows:
1 . PURCHASE OF COMPANY STOCK:
1.1 Agreement to Purchase and to Sell. Upon and subject to the terms and
conditions of this Agreement, and relying upon the covenants, agreements,
representations, and warranties of Buyer and Sellers herein contained and each
act done pursuant to and in reliance upon this Agreement, Buyer agrees to
purchase from Sellers, and Sellers agree to sell to Buyer the Stock.
1.2
2 . SALE OF STOCK AND PERSONAL PROPERTY:
1.1 Purchase Price. Upon the terms and subject to the conditions of this
Agreement, Buyer shall pay to Sellers an aggregate purchase price for the Stock
of three million five hundred thousand Canadian dollars and no cents (Canadian
$3,500,000.00) which amount shall be adjusted as follows, namely,
1.2
a () such amount shall be (i) increased by the excess of the Net Current
Value of the Company (as defined in Section 2.3, below) as of the Closing
Date (as defined in Section 2.5, below) over Canadian $27,032.00 or (ii)
reduced by the excess of Canadian $27,032.00 over such Net Current Value as
of the Company as of the Closing Date and
a () such amount shall be increased by an amount equal to the capital
expenditures made by the Company between March 20, 1998, and the Closing
Date, but only to the extent these capital expenditures are for equipment
which expand the capability of the Company to carry out its business,
provided that five hundred thousand Canadian dollars (Canadian $500,000.00) (the
"Performance Amount") of the purchase price shall be payable only if on or
before December 31, 0000 Xxxxxxx enters into an agreement (the "Talisman
Agreement") in writing with Talisman Energy Inc. ("Talisman") pursuant to which,
effective for a period commencing in or before 1999 and continuing for at least
three years, Corunna is to operate and maintain at least 75% of the gas xxxxx
and well drilling operations which are operated or carried on by or on behalf of
Talisman on Lake Erie or within one kilometer of any part of any shoreline on
Lake Erie and such five hundred thousand dollars ($500,000.00) shall be due and
payable on the thirtieth (30th) day (the "Due Date") after the Talisman
Agreement is delivered to the Buyer. If the Sellers so choose and give written
notice of such choice to Buyer at least 30 days before the Due Date, then the
obligation to pay the Performance Amount may be satisfied by the delivery to the
Sellers of one or more certificates representing common shares ("Key Energy
Shares") in the capital of Key Energy Group, Inc. ("Key Energy") and issued in
the names of one or more Sellers. In the aggregate such certificates shall
represent the lowest whole number of Key Energy Shares which when multiplied by
the closing price per share for Key Energy Shares traded through the facilities
of the New York Stock Exchange on a particular day (which day shall be chosen by
Key Energy and be within the thirty days prior to the delivery of such
certificates to any of the Sellers) is not less than the Performance Amount. All
such Key Energy Shares shall be fully paid and nonassessable. The receipt of
such certificates by the Sellers or any of them shall constitute payment in full
of the Performance Amount. Notwithstanding the foregoing, the Performance Amount
shall be payable in cash and not in Key Energy Shares if (x) at any time in the
period of thirty days ending on and including the Due Date, the Key Energy
Shares are not listed for trading on the New York Stock Exchange or (y) the
issue of Key Energy Shares in payment of the Performance Amount would be in
breach of applicable securities laws or would oblige Key Energy or the Company
to perform obligations under or comply with applicable securities laws and Key
Energy, in its absolute discretion, determines that it or Corunna is unwilling
to undertake such performance or compliance. Each of the Sellers acknowledges
that any Key Energy Shares acquired pursuant to this section shall be subject to
restrictions under applicable securities laws including restrictions on the
right to sell or trade or transfer such Key Energy Shares, and agrees that if
such Seller chooses to have any obligation under this section satisfied by the
delivery of Key Energy Shares, such Seller shall execute and deliver to Key
Energy such agreements and other documents as are reasonably requested by Key
Energy or the Buyer in order that the issue and delivery of such Key Energy
Shares shall be in compliance with applicable securities laws and the rules,
policies, requirements or practices of any securities regulatory authority or
any stock exchange on which any shares of capital stock of Key Energy are then
listed.
The sum payable pursuant to this Section 2.1 is referred to as the "Purchase
Price".
The Purchase Price shall be allocated among the Stock as follows, namely: (i) as
to the Class "A" Preference Shares, the sum of ten Canadian dollars (Canadian
$10) per share and (ii) as to the remainder of the Stock, the balance of the
Purchase Price in an equal amount per share.
1.1 Payment. On the Closing Date the Buyer shall pay to the Sellers on account
of the Purchase Price the aggregate of (a) the amount of three million Canadian
dollars (Canadian $3,000,000) and (b) an amount (the "Estimated Net Current
Value Adjustment Amount") reasonably determined by Buyer in consultation with
one or more Sellers to be the excess of the Net Current Value of the Company as
of August 31, 1998 over Canadian $27,032.00, and such amounts shall be paid in
cash, money order or certified cheque payable to Sellers or by wire transfer of
immediately available funds to an account designated by Sellers.
1.2
1.3 Net Current Value. The "Net Current Value of the Company" as of any date is
agreed to mean that amount by which (a) the "Total Current Assets" of the
Company (including accounts receivable for work in progress at the Closing Date)
as of such date exceeds (b) the "Total Liabilities" (including accounts payable
relating to work in progress at the Closing Date) as each such line item is
accurately recorded on the balance sheet of the Company as of such date in
accordance with Canadian generally accepted accounting principles. The Balance
Sheet of the Company as of December 31, 1997, is set forth on Schedule 2.3(a).
The calculation of the Net Current Value of the Company as of December 31, 1997,
based on the December 31, 1997 Balance Sheet is shown on Schedule 2.3(b). The
calculation of the Net Current Value of the Company as of the Closing Date shall
be made by the Company and shall be completed by the Company within 60 days of
the Closing Date. The calculation of the Net Current Value of the Company as of
the Closing Date shall be set out in a statement prepared by the Company and
approved by the Buyer which statement shall include a balance sheet (the
"Closing Balance Sheet") of the Company as of the Closing Date prepared in
accordance with Canadian generally accepted accounting principles. A copy of
such statement shall be delivered to the Buyer and each of the Sellers promptly
following its completion and approval as aforesaid. Within fifteen days after
receipt of such statement:
1.4
a () the Buyer shall pay to the Sellers the amount, if any, by which
1 () the Purchase Price exceeds
1 () the aggregate of Canadian $3,500,000 and the Estimated Net Current Value
Adjustment Amount and
a () the Sellers shall jointly and severally pay to the Buyer the amount, if
any, by which
1 () the aggregate of Canadian $3,500,000 and the Estimated Net Current Value
Adjustment Amount exceeds
1 () the Purchase Price.
Any amount payable pursuant to this Section 2.3 shall bear interest at the Prime
Rate plus 2% per annum (as hereinafter defined), calculated monthly, from and
after the date on which such amount is deemed payable until such amount is paid
and such interest shall be payable on demand. For purposes of this Agreement
"Prime Rate" means, in relation to any day, the variable rate of interest
determined by Royal Bank of Canada as or commonly known as, its prime rate of
interest effective for such day for Canadian dollar loans made by such bank in
Canada, being a variable per annum reference rate of interest adjusted
automatically upon change by such bank.
1.1 Delivery of Stock Certificate. Sellers shall deliver (or cause to be
delivered) to Buyer on the Closing Date, as hereinafter defined, all
certificates representing the Stock, duly endorsed in blank by the Sellers, or
accompanied by duly executed stock powers in blank with their signatures
guaranteed by a bank, trust company or member firm of The Toronto Stock
Exchange, all in such form as Buyer or Buyer's counsel may require. Any and all
requisite transfer stamps shall be attached thereto.
1.2
1.3 Time and Place of Closing. The parties hereto shall attend at the Closing
Place at the Closing Time, and subject to the terms and conditions of this
Agreement, they shall complete the purchase and sale of the Stock at the Closing
Place on the Closing Date. In this Agreement,
1.4
a () "Closing Date" means the day of the completion (the "Closing") of the
sale of shares contemplated by this Agreement provided that until the
Closing occurs the Closing Date shall be the 22nd day of October, 1998 or
such other date as Buyer and Sellers may agree in writing is to be the
Closing Date for purposes of this Agreement;
a () "Closing Time" means the time of the Closing provided that until the
Closing occurs the Closing Time shall be 2:00 p.m. (local time at the
Closing Place) on the Closing Date or such other time on the Closing Date
as Buyer and Sellers may agree upon in writing is to be the Closing Time
for purposes of this Agreement; and
a () "Closing Place" means the offices of Xxxx & Berlis located at Suite
1800, 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx or such other location as Buyer and
Sellers may agree in writing is to be the Closing Place for purposes of
this Agreement.
1 . SELLER'S REPRESENTATIONS AND WARRANTIES:
To induce Buyer to enter into this Agreement, Sellers jointly and severally
represent and warrant to Buyer that the representations set forth below are
true, except as otherwise provided by the specific terms of the representation.
1.1 Authorized and Outstanding Stock. The total authorized capital stock of the
Company consists of 1,000,000 common shares without nominal or par value and
1,000,000 Class "A" Preference shares without nominal or par value, and the
Company has no authority to issue any other shares. There are only 20 shares of
the common stock of the Company issued and outstanding, all of which are owned
(of record and beneficially) by and are in possession of Xxxxxx Xxxxxxx and
Xxxxxx Xxxxxxx, and only 90,000 Class "A" Preference shares issued and
outstanding all of which are owned (of record and beneficially) by Xxxxxx
Xxxxxxx and Corunna Petroleum Limited all of which capital stock has been
validly issued and is fully paid and nonassessable. There are no proxies,
irrevocable or otherwise, or voting trusts or agreements outstanding or held by
any person as to any share of the Stock.
1.2
1.3 There are no outstanding subscriptions, options, warrants, calls contracts,
demands, commitments, convertible securities, or other agreements or
arrangements of any kind, pursuant to which the Company is or may be obligated
to issue any shares of common or preferred stock or other securities of any kind
representing an actual or contingent ownership interest in the Company,
including any right of conversion or exchange under any outstanding security or
other instrument, and no other shares of the Company capital stock are reserved
for any purpose.
1.4
1.5 Sellers have, and upon Sellers' delivery of the Stock as provided in Section
2.4 hereof, Buyer will acquire good and marketable title to the Stock, free and
clear of any and all Encumbrances. Sellers are authorized and empowered to enter
into this Agreement and to sell the Stock, and on demand Sellers will supply
Buyer with proof of Sellers' authority to transfer the Stock and with any other
thing necessary to obtain from the Company unrestricted transfer of each share
of Stock into the name of Buyer. In this Agreement, "Encumbrances" means
encumbrances of any nature or kind including any one or more liens, pledges,
options, warrants, charges, mortgages, trusts, proxies, equities, security
interests, adverse claims, restrictions on transfer or registration, or claims
(including liability for or claims of any taxing authority, creditor, devisee,
legatee, or beneficiary).
1.6
1.7 Sellers' Authority. (a) Sellers are the lawful owners and the holders of
record of the Stock of the Company, free and clear of all Encumbrances; (b) this
Agreement constitutes a valid and binding obligation of each of the Sellers,
enforceable in accordance with its terms; (c) delivery to the Buyer of
certificates duly endorsed by Sellers representing the Stock of the Company
pursuant to the provisions of this Agreement will transfer to Buyer valid title
thereto upon registration of the transfer of the Stock to Buyer; and (d) each
Seller that is an individual is of such age, and has all such capacity, as is
required to enter into and be bound by this Agreement.
1.8
1.9 Execution. This Agreement has been duly executed and delivered by Sellers
and constitutes a valid and binding obligation of Sellers enforceable against
each of the Sellers in accordance with its terms.
1.10
1.11 Corporate Qualification, Organization, Authorization, etc. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the Province of Nova Scotia, and has full corporate power and authority to
conduct its business as it is now being conducted and to own, lease and operate
the property and assets it now owns, leases or operates and is duly licensed,
registered and qualified to carry on such business in each jurisdiction in which
1.12
a () any property owned or leased by the Company is situate or
a () the nature or conduct of its business or any part thereof makes such
qualification necessary or desirable to duly authorize or enable such business
to be carried on as now conducted.
The Company operates its business only in Ontario. The Company is not a
"reporting issuer" as defined in, and for the purposes of, the Securities Act
(Ontario).
1.1 Subsidiaries and Certain Affiliates. The Company does not own, directly or
indirectly, any capital stock or investment in any limited partnership, joint
venture, or corporation.
1.2
1.3 Real Property. Except for Leasehold Interests (as defined in section 3.9) as
at the Closing Date the Company holds no interest in any real property and
except as aforesaid the Company has never held any interest in any real property
(collectively the "Real Property").
1.4
1.5 Title to and Condition of Personal Property. The Company's tangible personal
property ("Personal Property") includes but is not limited to all property
("Scheduled Property") (including machinery, equipment, automobiles, trucks, and
other vehicles owned or leased by the Company), collectively described in
Schedule 3.7(a). All Personal Property will be owned or leased by the Company on
the Closing Date. The Personal Property is free and clear of any and all
Encumbrances except as set forth in Schedule 3.7(b). All items of Personal
Property are in a state of good operating condition and repair, ordinary wear
and tear excepted, and are free from any known defects except (i) as may be
repaired by routine maintenance of such minor defects as do not substantially
interfere with the continued use thereof in the conduct of normal operations, or
(ii) as set forth in Schedule 3.7(c).
1.6
3.7A Intellectual Property. The Company has all such rights in, and to the use
of, Intellectual Property (as hereinafter defined) as are necessary or
reasonably required in order to carry on its business in the manner in which
such business has been carried on since December 31, 1996 without infringing on
the rights of, or breaching any obligation to, any third party. The Company has
not infringed on the rights of, or breached any obligation to, any third party
in relation to any Intellectual Property, and has not received any notification
from any third party claiming that the Company has infringed on any such rights
or breached any such obligation. The Company is not obligated to pay any fee,
royalty or other compensation or charge to any third party in respect of any
Intellectual Property (including computer software) used in the conduct of its
business or in respect of the use of such Intellectual Property in the future.
Except for any Intellectual Property which is owned by the Company and described
in Schedule 3.7A, there is no Intellectual Property, the use of which is
material to the conduct of the business of the Company. In this section,
"Intellectual Property" means property that is, or is evidenced by or reflected
in, a patent, a patent application or registration, a trade xxxx, a trade xxxx
application or registration, copyright, a copyright application or registration,
a trade name or an industrial design (whether domestic or foreign in the case of
any such property) and trade secrets and inventions.
1.1 Inventories. Schedule 3.8(a) sets forth a description of the approximate
current level of the inventory (the "Inventory") of the Company. The Inventory
is shown on the Financial Statements (as defined hereinafter) and consists of
items of a quality and quantity usable in the ordinary course of the Company's
businesses and is presented therein at a value which reflects the Company's
customary inventory valuation policy of stating inventory at the lower of cost
or market, in accordance with generally accepted accounting principles. The
Inventory is free and clear of all Encumbrances, except as set forth in Schedule
3.8(b).
1.2
1.3 Leasehold Interests. Schedule 3.9(a) attached hereto contains an accurate
and complete list of all leases pursuant to which the Company leases real
property or personal property (collectively, the "Leasehold Interests"). All
such leases are valid, binding and enforceable against the Company in accordance
with their terms, and are in full force and effect. The Company is not in
default under any lease and will not be in default under any lease as a result
of the execution of this Agreement or closing of the transactions contemplated
herein.
1.4
1.5 Tax Matters. (a) All tax returns, reports, declarations and other documents
required to be filed with taxation authorities (collectively referred to as "Tax
Returns") required to be filed on or prior to the Closing Date by the Company
with all taxing authorities have been or will have been filed prior to the
Closing Date; and all taxes due and payable on such Tax Returns, all taxes,
duties and other governmental charges payable by the Company, and all
deficiencies, assessments, penalties and interest with respect thereto, in each
case due and payable on or before the Closing Date, have been or will have been
paid prior to the Closing Date. Copies of all Tax Returns in respect of the past
four years have been delivered by the Sellers to the Buyer and the Sellers
represent that each such Tax Return has been duly and timely filed with the
appropriate governmental authority and is a true and complete copy of the
original of the Tax Return which was duly filed. None of such Tax Returns has
been amended except as disclosed in the Tax Returns.
1.6
1.7 All Tax Returns filed by the Company for any year are true, complete and
correct in all respects and are in accordance with the books and records of the
Company. To the best of the Sellers' knowledge, each such Tax Return has been
prepared in accordance with applicable law and properly reflects the liability
for taxes of the Company to the jurisdiction or authority to which such return
was made for the period covered thereby.
1.8
1.9 (b) The Company has not agreed to any extensions of time of any applicable
statutes of limitation in connection with the filing of Tax Returns or payment
of taxes. No audit or examination, or claim or proposed assessment, by any
taxing authority is pending or, to the best of the Sellers' knowledge,
threatened against the Company. Other than as listed in Schedule 3.10(b), none
of the Company's Tax Returns for any year have been audited by the relevant
taxing authorities. All issues arising out of such audits have been resolved.
The Company has made all payments required as a result of such resolutions and
there are no matters currently outstanding as a result of such audits.
1.10
1.11 (c) There has been withheld or collected from each payment made to each
employee of the Company the amount of all taxes and other statutory deductions
(including without limitation federal, provincial, state and local income taxes,
payroll taxes and wage taxes) required to be withheld or collected therefrom and
the same have been paid to the proper tax depositories or collecting
authorities. The Company has duly and fully paid all employee and employer
amounts for government programs, including Ontario employer health taxes,
Worker's Compensation Board, Canada Pension Plan, and employment insurance. All
shareholders and employee benefits have been properly and timely reported, and
appropriate tax slips have been issued to the shareholders and employees as
required under applicable law.
1.12
1.13 (d) All property taxes required to be paid by the Company prior to the
Closing Date with respect to, or which may become a lien on, its assets have
been paid in full.
1.14
1.15 (e) The Company has duly and timely collected all federal and provincial
sales taxes required to be collected by it, filed such Tax Returns as are
necessary, and has remitted all taxes which are due and payable to the
appropriate governmental authority.
1.16
1.17 (f) The Company is not making any installment payments on account of any
arrears in respect of any tax liability or obligation.
1.18
1.19 (g) Immediately prior to the execution of this Agreement and at all
relevant times prior thereto, the Company was a "Canadian controlled private
corporation" for purposes of the Income Tax Act (Canada).
1.20
1.21 Conduct of Business. Since December 31, 1997, Company's business has been
conducted only in the ordinary course, and except as set forth in Schedule 3.11
there has been (i) no damages, theft, destruction, or loss (whether or not
covered by insurance) affecting Company's properties, assets, or business; (ii)
no agreement, contract, or other arrangement entered into, obligating Company
for any debt, obligation, or liability (whether direct or indirect, contingent
or otherwise), incurred other than in the ordinary course of its business; and
(iii) no sale or other disposition of, or liquidating or other distribution or
redemption with respect to, the Stock, either authorized, declared, paid, or
effected.
1.22
1.23 The Company has conducted and continues to conduct its business so as to
comply with, and is in compliance with all laws, statutes, regulations, rules,
orders, directives and other requirements of any governmental authority
applicable to it (including, without limitation, all applicable antitrust,
competition, employment, labour, securities, environmental, and occupational
health and safety laws), the noncompliance with which or curing thereof could
have a material adverse effect on the Company or its business.
1.24
1.25 There are no capital expenditures in excess of $5,000 in total which the
Company now anticipates will be required to be made in connection with the
Company's business as now conducted in order to comply with any existing laws,
regulations or other governmental requirements applicable to the Company's
business, including without limitation requirements relating to occupational
health and safety and protection of the environment.
1.26
1.27 Labour Organizations. The Company is not a party to any collective
bargaining agreement; there have been no petitions for union elections filed
covering any of the Company's employees; there are no pending or contemplated
labour negotiations with a union and no union presently is known to be
attempting to represent any Company employee as collective bargaining agent.
1.28
1.29 Licenses and Permits. Schedule 3.13 hereto sets forth all of the licenses,
permits, approvals and other governmental franchises held by the Company and
required for the conduct of the Company's business as now conducted (the
"Permits"), which constitute all material licenses required of the Company for
the conduct of its business at the place and in the manner currently carried on.
The Company is not presently in violation or default under any Permit, there
does not exist any circumstance which with notice or the passage of time, or
both, would result in such a violation or default, and there is no proceeding
pending or, to the best of the Sellers' knowledge, threatened with respect to
the revocation or limitation of any Permit. Neither this Agreement nor the
consummation of the transactions contemplated herein shall cause any of the
Permits to terminate or become invalid or to otherwise cease to be effective in
accordance with its terms and for the purpose for which it was obtained.
1.30
1.31 Banking Information and Personnel Data. The Sellers have delivered to the
Buyer lists attached hereto as Schedule 3.14 setting forth the following:
1.32
a () the names of all persons holding powers of attorney from the Company to
act on its behalf;
a () for each employee of the Company, the name and current annual rate or
hourly rate of compensation for such employee, together with a summary of
existing bonuses, deferred compensation rights, additional compensation and
other fringe or additional benefits of or for such employee, if any, and
for each employee and former employee, amounts earned or accrued to such
employee in the fiscal year ended December 31, 1997 (other than in the case
of any employee compensation at the normal annual rate or hourly rate
applicable to such employee and payable in respect of a period of less than
fourteen days) and payable subsequent to such date; and
a () all bank accounts held by the Company along with the name of the banking
institution, account number and the names of all persons authorized to draw
thereon or have access thereto.
Except as disclosed in Schedule 3.14, there are no other employee benefits or
perquisites provided or paid for by the Company for the benefit of any one or
more employees of the Company.
There are no banks in which the Company has any lock box or safe deposit box.
There are no retired employees of the Company, who are receiving or are entitled
to receive any payments or deferred compensation rights.
1.1 Claims or Litigation. Except as set forth in Schedule 3.15, there is no
legal, administrative, arbitrative, or other suit, action, proceeding, claim or
dispute, currently pending or to Seller's knowledge threatened against or by the
Company relating to any one or more of the Company, the Real Property, the
Personal Property, the Inventory, the Leasehold Interests and the Permits,
(including any relating to violation of any safety laws) or which questions the
validity of this Agreement or any action taken or to be taken pursuant thereto
or in connection with the transactions contemplated hereby; there has been no
violation of any law by Company nor any basis or grounds for any such suit,
action, proceeding, charge, claim or dispute, and there are no judicial or
administrative injunctions, judgments, order, or decrees outstanding against
Company or any of its operations, products, or services. There are no other
material "contingent losses" (as defined in section 3290 of the CICA Handbook
issued by the Canadian Institute of Chartered Accountants), which would be
required by such section to be disclosed or accrued in financial statements of
the Company were such statements prepared at the Closing Date.
1.2
1.3 Authorization for Agreement. Sellers and the Company have obtained all
necessary authorizations or approvals required to enter into this Agreement and
consummate the transactions contemplated hereby. No other consent or approval
of, prior filing with or notice to, or other action by, any governmental body or
agency or any other third party is required in connection with the execution and
delivery of this Agreement by the Sellers, the Company or any other document
delivered in connection with the consummation of the transactions provided for
herein.
1.4
1.5 Agreements, Contracts, Leases, etc. Schedule 3.17(a) contains a list of all
written or oral agreements, contracts and leases to provide services for
customers of the Company and commitments to which Company is a party or by which
its properties are bound (for both real and personal property), which would
require a payment by either party during the life of the agreement, lease,
contract and/or commitment in excess of one thousand dollars ($1,000.00). Each
of the documents listed on Schedule 3.17(a) remains in full force and effect,
unamended as of the Closing Date and the Company is not in default or breach of
any such document, nor does there exist any state of facts which, after notice
or lapse of time or both, would constitute such a default or breach.
1.6
1.7 Except for the documents so listed and described, or except as set forth on
other Schedules attached to this Agreement, Company is not bound to any: (i)
agreement that contains any severance pay liabilities or obligations; (ii)
agreement of guarantee or indemnification; (iii) loan or credit agreement
providing for any extension of credit to or by the Company except in the
ordinary course of business; (iv) employment contract; (vi) advertising
contract; (vii) any agreement or commitment containing a covenant limiting
Company's right to compete with any person or engage in any line of business.
Schedule 3.17(b) contains a list of all of the entities to whom the Company is
indebted to the extent that the indebtedness is One Thousand Dollars ($1,000.00)
or greater.
1.8
1.9 The execution, delivery and performance of this Agreement or any other
document delivered in connection with the consummation of the transactions
provided for herein will not, with any consents and approvals required to be
obtained and the giving of any notice required to be given to any persons or
entity, (i) violate any provision of the Articles or Bylaws of any corporate
Seller or the Company; (ii) violate any law or rule or regulation of any
administrative agency or governmental body, or any order, writ, injunction or
decree of any court, arbitrator, administrative agency or governmental body;
(iii) violate, suspend, terminate, cancel, breach, or result in the creation or
imposition of any lien or encumbrance on any of the Sellers' or the Company's
properties or assets under any indenture, mortgage, contract, agreement or other
undertaking or instrument to which the Seller or the Company, is a party or by
which their property may be bound or affected; or (iv) accelerate the time for
payment or performance of any debt or obligation of the Company.
1.10
1.11 Insurance. Schedule 3.18 lists all policies of insurance (the "Insurance
Policies") including, but not limited to, third party insurance, retention
insurance and self-insurance, in force with respect to the Company, including,
without restricting the generality of the foregoing, those covering properties,
buildings, machinery, equipment, vehicles, furniture, fixtures, operations,
products sold by the Company, and lives and health of corporate personnel,
including the policy numbers, names and addresses of insurers, expiration dates,
descriptions and amounts of coverage and annual premiums. Schedule 3.18 includes
all policies of insurance owned by the Company. Each of the Insurance Policies
listed in Schedule 3.18 is in good standing and all premiums payable in respect
thereof have been duly and timely paid. Except as disclosed in Schedule 3.18,
there are no claims that have been made by the Company under any of the
Insurance Policies which remain outstanding, and any claims which are
outstanding or may be made by the Company under any of the Insurance Policies
have been duly made in accordance with the terms of any applicable Insurance
Policy. The Company has not agreed to indemnify any insurer in respect of all or
any portion of a claim by any third party under any one or more of the Insurance
Policies.
1.12
1.13 Environmental Matters. Except as disclosed on Schedule 3.19 attached
hereto: (i) the conduct of all of the business of the Company complies with and
has at all times complied with, and the Company is not in violation of, and has
not violated, any Applicable Environmental Laws (as such term is hereinafter
defined); (ii) there are no notices of violation of any Environmental Laws
requiring any work, repairs, construction, capital expenditures or otherwise
with respect to the business of the Company which has been received by Company,
and there are no writs, injunctions, decrees, orders or judgments outstanding,
no lawsuits, claims, proceedings or investigations pending or to the best of the
Sellers' knowledge, threatened relating to the ownership, use, maintenance, or
operations of the Company; (iii) to the best of the Sellers' knowledge, there is
not any basis for any such lawsuits, claims, proceedings or investigations being
instituted or filed, (iv) no hazardous or toxic materials, substances,
pollutants, contaminants or wastes as regulated by the Applicable Environmental
Laws have been released into the environment, or deposited, discharged, placed
or disposed of at, on or near 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx by the Company
or, to the best of the Sellers' knowledge, any other person, and (v) to the best
of the Sellers' knowledge, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx has not been used
at any time by any person as a landfill or a waste disposal site.
1.14
1.15 The term "Applicable Environmental Laws" means all applicable statutes,
regulations, ordinances, by-laws, and codes and all international treaties and
agreements, now or hereafter in existence in Canada (whether federal,
provincial, state or local) or in the United States (whether federal, state or
local) which:
1.16
a () relate to or provide for or concern any one or more of (i) reclamation
or restoration of the lands, (ii) abatement of pollution, (iii) protection
of the environment, (iv) protection of wildlife including endangered
species, (v) ensuring public safety from environmental hazards, (vi)
protection of cultural or historic resources, (vii) management or storage
or control of hazardous materials and substances, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances (within the meaning of any applicable law) as wastes
into the environment, including without limitation, ambient air, surface
water and ground water; and (viii) all other laws relating to the
manufacturing, processing, distribution, use, treatment, storage, disposal,
handling or transport of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes or
a () relate to any one or more of occupational health and safety, product
safety, product liability or Hazardous Substances (as such term is defined
in the EPA), including without limitation, the Environmental Protection Act
(the "EPA"), the Canadian Environmental Protection Act, (the "CEPA"), the
Water Resources Act (Ontario), the Municipal Act (Ontario), the
Occupational Health and Safety Act (Ontario) and the Public Health Act
(Ontario).
1.1 Compliance with Laws. The Sellers represent that, after due and diligent
inquiry, to the best of their knowledge, information and belief the current or
past operations of the Company are being or have been conducted or used in such
a manner so as not to constitute a violation of any laws.
1.2
1.3 Statements True and Not Misleading. No schedule (or any document identified
thereby or attached thereto), no representation or warranty made by Sellers in
this Agreement, and no record, document, statement, schedule, instrument, or
certificate furnished or to be furnished to Buyer (its representatives, agents,
attorneys, or accountants) pursuant hereto, or in connection with the
transactions contemplated hereby, contain any knowingly untrue statement or omit
to state any material fact reasonably necessary to make any of representations
or warranties herein not misleading. The Sellers have made due and diligent
inquiry to confirm the matters represented or warranted to by them in this
Agreement and none of the Sellers has any reason to believe that any of the
representations or warranties made by any of the Sellers in this Agreement is
untrue or inaccurate. As of the Closing Date, none of the Sellers know of any
facts that have not been disclosed in this Agreement or the Schedules hereto
that materially and adversely affects the business, properties, assets,
prospects or conditions, financial or otherwise, of the Company.
1.4
1.5 Conflicts of Interest. Save and except for the lease arrangements in force
from time to time between the Company and Corunna Petroleum Limited in relation
to 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, no officer, director, or shareholder of
the Company (nor any corporation, firm, association, or entity in which any such
officer, director, or shareholder is interested) is a party to or has a material
interest in any contract or transaction to which the Company will be bound
subsequent to the Closing Date.
1.6
1.7 Minute and Stock Books. The Company's minute books, stock certificate books
and stock record and transfer books have been made available to the Buyer for
inspection; the signatures therein are the true signatures of the persons
purporting to have signed them.
1.8
1.9 Loans to and from Officers, Directors, etc. There are no loans payable to
the Company by any officer, director, shareholder or employee, or any loans or
bonuses payable by the Company to any officer, director, shareholder or
employee. The Company has no obligation or debt to any Seller or any related
individual or entity, except as set forth in Schedule 3.24.
1.10
1.11 Financial Statements. Sellers have identified and furnished Buyer with the
following financial statements of the Company (collectively, the "Financial
Statements"):
1.12
a () unaudited financial statements of the Company for the year ended March
31, 1997 (the "1997 Statements").
a () unaudited financial statements for the year ended March 31, 1998 (the
Sellers further warrant and represent that the 1997 Statements and the 1998
Statements have been prepared and maintained in accordance with Canadian
generally accepted accounting principles consistently applied, subject to any
qualifications contained therein.
The Financial Statements present fairly the financial condition of the Company
as of March 31, 1997 and March 31, 1998 respectively and the results of the
operations of the Company for the year ended March 31, 1997 and the year ended
March 31, 1998. All amounts receivable by the Company which are owing as of the
Closing Time are valid and enforceable and are and shall be fully collectable
within ninety days following the Closing Date without any setoff or
counterclaim.
1.1 Residency. Each of the Sellers is not
1.2
a () a non-resident of Canada for the purposes of the Income Tax Act (Canada)
or
a () a "non-Canadian" for the purposes of the Investment Canada Act.
1.1 Prospective Changes. There are no impending changes which, if such change
occurs, would have a material adverse effect on the Company's businesses,
assets, liabilities, relations with employees, competitive situation or
relations with suppliers or customers, or governmental actions or regulations
affecting the Company's business.
1.2
1.3 Bankruptcy. Neither any of the Sellers nor the Company has committed any act
of bankruptcy, is insolvent (or will be insolvent as a result of the
consummation of the transactions contemplated by this Agreement), has proposed a
compromise or arrangement to his or its creditors generally, has had any
petition for a receiving order in bankruptcy filed against him or it, has made a
voluntary assignment in bankruptcy, has taken any proceeding to have himself or
itself declared bankrupt or wound-up, has taken any proceeding to have a
receiver appointed for any part of its assets, has had any encumbrancer take
possession of any of his or its property, or has had any execution or distress
become enforceable or become levied upon any of his or its property.
1.4
1.5 Use of Premises. With respect to the Company's lease of the premises
municipally known as 000 Xxxxx Xxxxxx, Xxxxxx xx Xxxxxxx, Xxxxxxxx of Xxxxx,
from Corunna Petroleum Limited, the Company benefits from a legal non-conforming
use and thus is permitted under the applicable zoning by-laws to use such
premises for the purposes of storing, repairing, servicing and fueling,
equipment, spare parts and vehicles related to the drilling of oil and gas xxxxx
and associated and ancillary offices and facilities.
1.6
1.7 Customer Payments. In the ten years prior to the date hereof, the Company
has not made any material payments to, or conferred any material benefit on, any
person or third party which could reasonably be regarded as having been paid or
conferred primarily so as to induce such person or third party to, or to cause
some other person or third party to, enter into or maintain any transaction or
business relationship with the Company.
1.8
1.9
2 . CONDITIONS TO BUYER'S OBLIGATIONS:
Each and every obligation of Buyer under this Agreement shall be subject to and
conditioned upon Buyer being satisfied, on or before and as of the time of
Closing, of the following:
1.1 Compliance with Agreement. Each and all terms, covenants, agreements, and
conditions of this Agreement to be complied with or performed by Sellers or
Company until, at, or prior to the Closing Date shall have been complied with or
performed; and Buyer shall not have rescinded or terminated this Agreement as
permitted by the terms of this Agreement.
1.2
1.3 Representations and Warranties True as of Closing Date. Sellers'
representations and warranties set forth in Section 3 (including all of Sections
3.1 to 3.30, both inclusive) shall be true and correct as of the Closing Date.
Sellers shall deliver to Buyer a certificate to such effect, executed by
Sellers. In addition, Sellers' other representations and warranties contained
within this Agreement, to the best of Sellers' knowledge after due and diligent
inquiry, shall be true and correct as of Closing Date.
1.4
1.5 No Governmental or Other Proceeding. Nothing shall restrain or prohibit the
transactions contemplated hereby, and no suit, action, investigation, inquiry,
or governmental or other proceeding, legal or administrative, shall have been
instituted or threatened questioning the validity, legality, or enforceability
of this Agreement, or the transactions contemplated hereby.
1.6
1.7 Approvals and Consents. All requisite approval of public authorities
(federal, state, or local, domestic or foreign), necessary for consummation of
the transactions contemplated hereby without any loss to Company or to prevent
termination or restriction of any right, privilege, license or agreement of, or
any loss or disadvantage to, Company shall have been obtained and copies thereof
delivered to Buyer.
1.8
1.9 Opinion of Sellers' Counsel. Sellers shall deliver to Buyer one or more
legal opinions of Sellers' counsel, each of which shall be in a form acceptable
to Buyer.
1.10
1.11 Resignations of Officers and Directors. Buyer shall have received the
written resignation of each officer and member of Company's Board of Directors
in a form satisfactory to Buyer.
1.12
1.13 Charter Certificate. Buyer shall have acquired a current certificate of the
Ministry of Consumer and Corporate Relations of the Province of Ontario
evidencing the good standing and continuing existence of the Company.
1.14
1.15 Tender of Shares and Closing Documents. Buyer shall have received from
Sellers a fully executed copy of this Agreement, and Sellers shall have
delivered (or caused to be delivered) the certificates of stock to Buyer as
provided for in Section 2.4; Sellers shall have delivered (or caused to be
delivered) to Buyer each and every financial statement, document, opinion,
certificate, agreement and instrument required to be so delivered by this
Agreement, and Buyer shall have received from Company and Sellers, copies of
such other documents, instruments, and certificates as Buyer's counsel shall
have reasonably requested.
1.16
1.17 Real and Personal Property Taxes. Sellers shall provide Buyer on the
Closing Date proof that all real and personal property taxes and any special
assessments due and payable in 1997 and prior years are paid.
1.18
1.19 Condition of Personal Property. All of the Personal Property is in a state
of good operating condition and repair (ordinary wear and tear excepted) and are
free from defects, except (i) as may be repaired by routine maintenance and such
minor defects do not substantially interfere with the continued use thereof in
the conduct of normal operations, or (ii) as set forth in Schedule 4.10.
1.20
1.21 Environmental Site Assessment. Before the Closing Date, the Company will
cause, at its expense, a Phase I and Phase II environmental site assessment of
the premises located at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx to be conducted and
reported upon in conformance with the scope and limitations of the ASTM Standard
Practice E1527 (or the equivalent Canadian standard) by an environmental
surveyor approved by Buyer.
1.22
1.23 No Adverse Proceedings. No action, suit or proceeding before any court or
any governmental or regulatory authority shall have been commenced, no
investigation by any governmental or regulatory authority shall have been
commenced, and no action, suit or proceeding by any governmental or regulatory
authority shall have been threatened, against any of the parties to this
Agreement, or any of the principals, officers or directors of any of them, or
any of the assets of the Company seeking to restrain, prevent or change the
transactions contemplated hereby or questioning the validity or legality of any
of such transactions or seeking damages in connection with any of such
transactions.
1.1 Legal Matters. All legal matters incident to the consummation of the
transactions contemplated hereby are satisfactory to counsel to the Buyer.
1.2
1.3 Releases. The Sellers shall deliver releases to the Company in form
satisfactory to the Buyer to the effect that the Sellers release and discharge
all claims which they may have against the Company or any of its directors,
officers, agents or representatives.
1.4
2 . BUYER'S REPRESENTATIONS AND WARRANTIES:
To induce Sellers to enter into and perform this Agreement, Buyer represents and
warrants to Sellers that the following are true:
1.1 Corporate Qualification, Organization, Authorization, etc. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the Province of Nova Scotia, has full corporate power and authority to
conduct its business as it is now being conducted and to own the properties and
assets it now owns.
1.2
1.3 Authorization for Agreement. Neither the execution or delivery of this
Agreement, nor the performance or consummation of the transactions contemplated
by this Agreement, will constitute or result in the breach of or default under
any term, condition or provision of any the Buyer's memorandum or articles of
association, or violate any statute, law, regulation, judgment, or order binding
upon or applicable to Buyer.
1.4
2 . CONDITIONS TO SELLERS' OBLIGATIONS:
Each and every obligation of Sellers under this Agreement shall be subject to
and conditioned upon satisfaction, on or before the Closing Date of the
following conditions:
1.1 Representations, Warranties, and Covenants. Buyer's representations and
warranties contained in Section 5 hereof shall be in all respects true and
correct when made and shall be deemed to be made again and shall be true and
correct as of the Closing Date, and Buyer shall have performed, or caused to be
performed, all obligations and complied with all covenants required by this
Agreement to be performed or complied with by Buyer prior to Closing.
1.2
1.3 Payment. Buyer shall deliver such payment on account of the Purchase Price
as is to be paid on the Closing Date pursuant to Section 2 and the amount
referred to Section 7.4 to Sellers at Closing in accordance with Section 2.2.
1 . ADDITIONAL AGREEMENTS:
1.1 Liabilities as of Closing Date. Except to the extent that they are reflected
as liabilities included in the Closing Balance Sheet (as defined in Section 2.3)
of the Company and only to the extent of the amount specified thereon, the
Sellers agree that they shall be obligated for, and pay or reimburse the Company
upon request for,
a () all expenses, liabilities and accounts payable of the Company incurred
prior to the Closing Date, including tax liabilities, whether actual or
contingent relating to the Company or its operations up to the Closing Date
(which tax liabilities shall be determined as if a taxation period for the
determination of the amount of such tax ended immediately before the
Closing Date); and
a () all wages and the cost of fringe benefits of employees of the Company
earned or accrued up to the Closing Date.
1.1 Employees. Sellers will use their best efforts to assist the Company in
retaining all of its employees through the Closing Date. The Buyer anticipates
that the employee compensation will be continued at or above current levels and
that employee benefit programs in place prior to the Closing Date will either be
continued or replaced with programs substantially equal to or better than such
benefit programs.
1.2
1.3 Employment Agreements. At the time of Closing each of Xxxxxx Xxxxxxx and
Xxxxxx Xxxxxxx shall execute and deliver to the Buyer and the Company an
employment agreement (the "Employment Agreements") with Company which is in the
form attached hereto as Schedule 7.3 and applicable to such individual. On the
Closing Date the Company shall enter into an employment agreement with Xxxxx
Xxxxxxx in respect of her service as Office Manager.
1.4
1.5 Non-Competition Agreements. The Buyer shall pay the Sellers one million
Canadian dollars (Canadian $1,000,000) in total at Closing as consideration for
each of the Sellers entering into a non-competition agreement in the form
attached hereto as Schedule 7.4 and applicable to such Seller. Each of the
Sellers shall execute and deliver such Agreement to the Buyer and the Company at
the time of Closing.
1.6
1.7 Lease. At the Closing the Sellers will cause Corunna Petroleum Limited to
enter into a lease (the "Lease") with the Company for the building and premises
located at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx which lease shall be in a form
acceptable to the Buyer.
1.8
2 . INDEMNIFICATION:
1.1 Indemnification by the Sellers. In addition to any other remedies available
to Buyer under this Agreement, or at law or in equity, the Sellers jointly and
severally shall indemnify, defend and hold harmless Buyer and the Company and
their respective 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 (whether the Damages are suffered or incurred directly by any particular
party entitled to be indemnified pursuant to this section or as a result of a
claim made by a third party against any such particular party), which arise,
result from or relate to:
1.2
a () any breach of, inaccuracy in, or failure by 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 or in
connection with the Closing or
a () any liability (contingent or otherwise) or obligation (contingent or
otherwise) of the Company which exists on the Closing Date or arises or
results from any act, omission, transaction, event or occurrence that
occurs on or before the Closing Date, save and except for the following,
namely, any liability or obligation reflected in the Closing Balance Sheet
(as defined in Section 2.3) to the extent the same is reflected therein.
Notwithstanding the foregoing, the liability of the Sellers under this Section
in respect of the indemnity provided in this Article 8 shall be several, rather
than joint and several, in respect of Damages arising in respect of any one or
more of the employment agreements, the lease and the non-competition agreements
referred to in Article 7.
1.1 Indemnification by Buyer. In addition to any other remedies available to
Sellers under this Agreement, or at law or in equity, Buyer shall indemnify,
defend and hold harmless the Sellers against and with respect to any and all
Damages that Sellers shall incur or suffer, which arise, result from or relate
to any breach of, inaccuracy in 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
Sellers by or on behalf of Buyer under this Agreement.
1.2
1.3 Indemnification Procedure . If any party hereto discovers or otherwise
becomes aware of any circumstances which may entitle such person to claim
indemnification under Section 8.1 or 8.2 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 indemnified
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
third party action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 8, 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 third party
action or proceeding; 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 third party action or proceeding
is brought against an indemnified party, the indemnifying party shall be
entitled, at its expense, 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. An
indemnifying party who elects not to assume the defense of a third party 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 third party claim or with respect to third party 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 third party action or proceeding 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 third party claim without the prior
written consent of the indemnified party, which consent shall not be
unreasonably withheld where such judgment or settlement includes as an
unconditional term thereof the prompt receipt by the indemnified party of a
release which is effective to release all liability with respect to such third
party claim. No indemnified party shall consent to entry of any judgment or
enter into any settlement of any such third party action or proceeding, 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.
1.4
2 . MISCELLANEOUS:
1.1 Notices: All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given as follows:
1.2
a () If to Xxxxxx Xxxxxxx, when delivered by hand or mailed, certified or
registered mail with postage prepaid or given by fax to:
0000 Xxxxxxxx Xxxxxx
Xxxxxx'x Xxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx
X.X. Xxx 000
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
a () If to Xxxxxx Xxxxxxx, when delivered by hand or mailed, certified or
registered mail with postage prepaid or given by fax to:
X.X. Xxx 0000
000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx
X.X. Xxx 000
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
a () If to Xxxxxx Xxxxxxx, when delivered by hand or mailed, certified or
registered mail with postage prepaid or given by fax to:
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx
X.X. Xxx 000
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: (000) 000-0000
a () If to Buyer, when delivered by hand or mailed, certified or registered mail
with postage prepaid or given by fax to:
c/o WellTech Eastern, Inc.
0000 Xxxxxxx Xxx
Xx. Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Mr. Xxxxx Xxxxxxx
Xxxx & Berlis
BCE Place, Suite 1800, Box 754
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile: (000) 000-0000
and to:
Xx. Xxxxxx X. Xxxxxxxxx
Lynch, Gallagher, Xxxxx & Xxxxxxxxx, P.L.L.C.
000 Xxxxx Xxxx Xxxxxx
Xx. Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
and to:
Key Energy Group, Inc.
Xxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel
Facsimile: (000) 000-0000
or to such other place or person as the party to be notified may have specified
in a prior written notice to the other parties.
1.1 Survival of Representations and Warranties. All representations and
warranties made by Sellers or Buyer, respectively, in this Agreement or made in
certificates or other instruments delivered on the Closing Date, as required
hereunder, shall remain operative and in full force and effect, and shall
survive the Closing Date, but shall not survive the expiration of any applicable
statute of limitation in respect thereof, except for liability arising out of
fraud or fraudulent misrepresentation. However, if any claim based upon any
representation or warranties have been made the subject of a lawsuit brought
within applicable statute of limitations, then such warranties and
representations shall continue to be in force and effect until entry of a final
nonappealable judgment in respect of such claim.
1.2
1.3 Assignment. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, but no party hereto shall assign his or its rights under
this Agreement without the prior, written consent of the other party.
1.4
1.5 Indemnity Concerning Brokers. Sellers represent and warrant that there is no
broker, finder or consultant connected with this transaction retained by any of
Sellers and Sellers hereby jointly and severally agree to indemnify and hold
Buyer harmless from and against any and all such broker's, finder's or
consultant's fees in connection with this transaction. Buyer represents and
warrants that there is no broker, finder or consultant connected with this
transaction retained by Buyer, and Buyer hereby agrees to indemnify and hold
Sellers harmless from and against any and all such broker's, finder's, or
consultant's fees in connection with this transaction.
1.6
1.7 Expenses. Sellers shall pay all expenses of Sellers in connection with this
Agreement and the transactions contemplated hereby, including any and all of
Sellers' counsel, and Buyer shall pay its expenses in connection with this
Agreement and the transactions contemplated hereby, including any and all of
Buyer's counsel. The Company shall not assume, pay, or agree to pay any
obligations of the Sellers in connection with the expenses or fees hereby agreed
to be paid by Sellers.
1.8
1.9 Governing Law. This Agreement and the legal relationships between Buyer and
Sellers shall be governed by and construed in accordance with the laws of the
Province of Ontario.
1.10
1.11 Headings. The headings of the Sections of this Agreement are inserted for
convenience only and shall not constitute a substantive part hereof.
1.12
1.1
1.13 Waiver and Modifications. By express notice to the other party, expressly
referring to this paragraph and captioned "Waiver," Sellers or Buyer may, as to
such other party receiving such notice, (i) waive or extend the time for
performance of any act other than performance required of the party or parties
giving notice, (ii) waive any inaccuracy in any representation or warranty made
by the notified party and contained in this Agreement or in any document
delivered by such party pursuant to this Agreement or any covenant, condition,
representation or warranty which is in this Agreement and is binding upon or
made by the notified party; provided, however, that no other act of Buyer or
Sellers shall constitute such a waiver.
1.14
1.15 Entire Agreement. This Agreement, including the Schedules and other
documents referred to herein, which form a part hereof, contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants, or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
1.16
1.17 Severability. If any provisions in this Agreement shall for any reason be
determined to be invalid or unenforceable, the remaining provisions of this
Agreement shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable provision had not been a part hereof.
1.18
1.19 Further Assurances. Sellers agree to execute such further instruments or to
take such other actions as may be requested by counsel for Buyer and as
reasonably may be necessary or appropriate to the transactions contemplated by
this Agreement and to assure to Buyer the benefits intended by this Agreement.
1.20
1.21 Counterparts. This Agreement may be executed in any number of counterparts,
which shall constitute but one agreement.
1.22
1.23 Confidentiality. All of the parties hereto agree to maintain
confidentiality with respect to all information which may be exchanged among
them in connection with the proposed purchase and sale of shares provided for in
this Agreement. This covenant shall survive the termination of this Agreement
indefinitely in the event that such purchase and sale is not completed;
provided, this provision shall not apply to information which is or has become
available in the public domain. Neither the Sellers, the Company, nor the Buyer
will make any public announcements with respect to this transaction without the
approval of the other parties, except as otherwise required by law or reasonably
made to comply with applicable securities laws or the rules, requirements,
policies or practices of any applicable securities regulatory authority or stock
exchange. Notwithstanding the foregoing, the Buyer or any of its affiliates may
prepare and issue any press release or other public announcement concerning the
completion of the transaction provided for herein or the operations of the
Company.
1.24
1.25 Captions. The captions and headings set forth in this Agreement are for
convenience of reference only and will not be construed as a part of this
Agreement.
1.26
1.27 Amendments. No change, amendment, qualification or cancellation hereof will
be effective unless in writing and executed by each of the parties hereto by
their duly authorized officers.
1.28
1.29 Time of the Essence. Time is of the essence of this Agreement.
1.30
1.31 Expenses. Each of the Sellers and the Buyer will bear his or its own
expenses in connection with this Agreement, including without limitation, fees
of their attorneys, financial advisors, and finders. The Company will not bear
the expenses of any of the Sellers.
1.32
1.33 Independent Advice. Each of the Sellers hereby confirms that he or it has
received independent legal advice in connection with this Agreement and the
transactions contemplated hereby.
1.34
1.35 IN WITNESS WHEREOF, Buyer and Sellers have duly executed this Agreement by
affixing thereto their signatures and seals as of the day, month and year first
above written.
1.36
1.37 BUYER:
1.38
1.393022481 NOVA SCOTIA COMPANY
1.40
1.41
By:
Name: Xxxxxxx X. Xxxx
Title: President
SELLERS:
WITNESS:
)
) ______________________________________l.s.
) Xxxxxx Xxxxxxx
)
)
) _______________________________________l.s.
) Xxxxxx Xxxxxxx
)
)
) _______________________________________l.s.
) Xxxxxx Xxxxxxx
CORUNNA PETROLEUM LIMITED
By:
Name: Xxxxxx Xxxxxxx
Title: President and Director
WellTech Eastern, Inc. ("WellTech") hereby guarantees the due and timely payment
to the Sellers of any amount which may become payable pursuant to section 2.1
after the Closing Date (as defined in the above Agreement) provided that the
Buyer completes the purchase of the Stock (as defined in the above Agreement)
pursuant to the above Agreement. The obligations of WellTech under this
paragraph shall be subject to a condition that WellTech shall be entitled to the
benefit of any claim or defence which the Buyer may have against any one or more
Sellers with respect to the above Agreement.
WELLTECH EASTERN, INC.
By: ______________________________________
Name: Xxxxxxx X. Xxxx
Title: Vice President
