Asset Purchase Agreement
among
WellTech Eastern, Inc.,
Diamond Well Service, Inc.,
John Scott and
Dwayne Wardwell
April 3, 1997
1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this AAgreement@) is entered into as of April 3,
1997 (the AEffective Date@) among WellTech Eastern, Inc., a Delaware corporation
(ABuyer@), Diamond Well Service, Inc., an Oklahoma corporation (ASeller@), John
Scott and Dwayne Wardwell, owners of all of the issued and outstanding stock of
the Seller (the AShareholders@).
WITNESSETH:
WHEREAS, Seller desires to sell substantially all of its assets, and Buyer
desires to purchase such assets.
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
1.1 Purchase and Sale of the Assets.. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell, convey, transfer, assign
and deliver to Buyer, and Buyer hereby agrees to purchase from Seller,
substantially all of the assets of Seller existing on the date hereof other than
the Excluded Assets (defined below), whether real, personal, tangible, or
intangible, including the following assets of Seller relating to or used or
useful in the operation of the business of Seller as conducted by Seller on and
before the date hereof (the ABusiness@) (all such assets being sold hereunder
are referred to collectively herein as the AAssets@):
(a) the tangible personal property of Seller (such as machinery, equipment,
leasehold improvements, furniture and fixtures, and vehicles) which is more
fully described on Schedule 1.1(a) hereto (collectively, the ATangible Personal
Property@);
(b) certain of Seller=s intangible assets (collectively, the AIntangibles@),
including (I) all of Seller=s rights to the names under which it is incorporated
or under which it currently does business, (ii) all of Seller=s rights to any
patents, copyrights, trademarks, service marks, licenses or sublicenses, trade
names, written know-how, trade secrets and all other similar proprietary data
and the goodwill associated therewith (collectively, the AIntellectual
Property@) used or held in connection with the business, including those
specifically listed on Schedule 1.1(c) hereto (collectively, the ASeller
Intellectual Property@), and (iii) all of Seller=s rights in its sales and
promotional literature, computer software, customer and supplier lists; (c)
those leases, subleases, contracts, contract rights, and agreements,
(collectively, the AContracts@) relating to the operation of the Business,
specifically listed on Schedule 1.1(d) hereto (collectively, the Transferred
AContracts@);
(d) to the extent transferrable, all permits, authorizations, certificates,
approvals, registrations, variances, waivers, exemptions, rights-of-way,
franchises, ordinances, licenses and other rights of every kind and character
(collectively, the APermits@) of Seller obtained from governments and
governmental agencies relating to including, without limitation, that which is
more fully described on Schedule 1.1(e) hereto (collectively, the ASeller
Permits@); and,
(e) the goodwill and going concern value of the Business.
The Assets shall not include the following (collectively, the AExcluded
Assets@); (I) all of Seller=s accounts receivable and all other rights of Seller
to payment for services rendered by Seller before the date hereof (the ASeller
Receivables@); (ii) all cash accounts, cash equivalents or similar investments
of Seller and all petty cash of Seller kept on hand for use in the Business;
(iii) all right, title and interest of Seller in and to all prepaid rentals,
other prepaid expenses, prepaid taxes, bonds, deposits and financial assurance
requirements, and other current assets relating to any of the Assets of the
Business; (iv) the corporate charter, corporate seal, organizational documents
and minute books of Seller; (v) all assets in possession of Seller but owned by
third parties; (vi) all rights under the Contracts of Seller not specifically
assigned to Buyer hereunder; and (viii) Seller=s right, title and interest in
and to this Agreement; (ix) the right to prosecute and collect claims relating
to business of Seller prior to the date hereof.
1.2 Consideration for Assets. As consideration for the sale of the Assets to
Buyer and for the other covenants and agreements of Seller contained herein,
Buyer (I) agrees to pay to Seller, on the date hereof, the amount of $675,000 in
the form of a cashier=s check or bank check or wire transfer of immediately
available funds to an account designated by Seller.
1.3 Assumed Liabilities. Buyer shall assume only those liabilities of Seller
associated with Buyer=s assumption of the Transferred Contracts. Seller shall be
responsible for all other liabilities of Seller (collectively, the ARetained
Liabilities@), including, without limitation all obligations and liabilities
owed by Seller to the Employees (as defined in Section 2.1.10 hereof).
Article II
Representations and Warranties
of Seller and the Shareholders
2.1 Representations and Warranties of Seller. Each of Seller and the
Shareholders jointly and severally represent and warrant to Buyer as follows:
2.1.1. Organization and Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
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 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 so qualify or be licensed would
not have a material adverse effect on the Assets or the Business.
2.1.2. Agreements Authorized and their Effect on Other Obligations. The
execution and delivery of this Agreement and all other agreements executed by
Seller or the Shareholders and delivered to Buyer in connection herewith (the
ASeller Agreements@) have been authorized by all necessary corporate action on
the part of Seller, and this Agreement and the Seller Agreements are valid and
binding obligations of Seller and Shareholders, as applicable, enforceable
(subject to normal equitable principals) against such parties in accordance with
their 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
Seller Agreements and the consummation of the transaction contemplated hereby
and thereby, 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
of Seller, (ii) any obligation, indenture, mortgage, deed of trust, lease,
contract or other agreement to which Seller or Shareholders is a party or by
which Seller or Shareholders 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 Seller or
Shareholders or any of their respective properties are subject.
2.1.3. Financial Statement; Absence of Certain Changes and Events. Seller has
delivered to Buyer copies of certain unaudited financial statements of Seller.
Such financial statements are attached hereto as Schedule 2.1.3 (collectively,
the ASeller Financial Statements@) and include Seller=s balance sheet (the
AJanuary 31, Balance Sheet@) as at January 31, 1997 (the ABalance Sheet Date@).
The Seller Financial Statements present fairly and fully the financial condition
of the Seller as at the dates and for the periods indicated thereon, subject, in
the case of interim financial statements, to normal year end adjustments. Other
than as a result of the transactions contemplated by this Agreement, since the
Balance Sheet Date, there has not been (whether as a result of a single event or
in the aggregate): (a) Financial Change. Any material adverse change in the
Assets, the Business or the financial condition, operations, liabilities or
prospects of Seller; (b) Property Damage. Any material damage, destruction, or
loss to any of the Assets or the Business (whether or not covered by insurance);
(c) Waiver. Any waiver or release of a material right of or claim held by
Seller; (d) Change in Assets. Any acquisition, disposition, transfer,
encumbrance, mortgage, pledge or other encumbrance of any material asset of
Seller other than in the ordinary course of business; (e) Labor Disputes. Any
labor disputes between Seller and its employees; or (f) Other Changes. Any other
event or condition known to either Seller or Shareholders that particularly
pertains to and has or is likely to have a material adverse effect on the
Assets, the operations and the Business or the financial condition or prospects
of Seller.
2.1.4. Transferred Contracts. All of the Transferred Contracts are in full force
and effect, and constitute valid and binding obligations of Seller. Seller is
not, and no other party to any Transferred Contract is, in default thereunder,
and no event has occurred which (with or without notice, lapse of time, or the
happening of any other event) would constitute a default thereunder. No
Transferred Contract has been entered into on terms which could reasonably be
expected to have a material adverse effect on the use of the Assets by Buyer.
Neither Seller nor the Shareholders has received any information which would
cause such party to conclude that any customer of Seller will (or is likely to)
cease doing business with Buyer, as successor the Business, as a result of the
consummation of the transactions contemplated hereby.
2.1.5. Title to and Condition of Assets. Seller has good, indefeasible and
marketable title to all of the Assets, free and clear of any Encumbrances
(defined below). It is agreed and understood that the Assets are transferred to
Buyer in AS IS condition and neither Seller nor Shareholders make any warranty
of any kind, express or implied. To the knowledge of either Seller or
Shareholders, all of the Assets conform to all applicable laws governing their
use. No notice of any violation of any law, statute, ordinance, or regulation
relating to any of the Assets has been received by Seller or Shareholders,
except such as have been fully complied with. The term AEncumbrances@ 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.
2.1.6. Licenses and Permits. Each of the Seller Permits and Seller=s rights with
respect thereto is valid and subsisting, in full force and effect, and
enforceable by Seller subject to administrative powers of regulatory agencies
having jurisdiction. Seller is in compliance in all material respects with the
terms of each of the Seller Permits. None of the Seller Permits has been, or to
the knowledge of Seller or Shareholders, are threatened to be, revoked,
canceled, suspended or modified. Upon consummation of the transactions
contemplated hereby, each of the Seller Permits shall have been validly assigned
to Buyer, will be valid and subsisting in full force and effect, and will be
enforceable by Buyer subject to administrative powers of regulatory agencies
having jurisdiction.
2.1.7. Intellectual Property. The Seller Intellectual Property is owned or
licensed by Seller free and clear of any Encumbrances. Seller has not granted to
any other person any license to use any Seller Intellectual Property. Use of the
Seller Intellectual Property by Buyer will not, and the use of the Seller
Intellectual Property by Seller did not, infringe, misappropriate or conflict
with the intellectual property rights of others. Neither Seller nor the
Shareholders has received any notice of infringement, misappropriation, or
conflict with the intellectual property rights of others in connection with the
use by Seller of the Seller Intellectual Property.
2.1.8. Necessary Consents. Seller has 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, including the assignment of the Seller Permits
and the Transferred Contracts.
2.1.9. Employees. Schedule 2.1.10 hereto is a complete and accurate listing of
all employees of Seller that are involved in the ownership, operation,
maintenance or use of the Assets or the conduct of the Business (the
AEmployees@). Seller does not currently sponsor, maintain or contribute to, and
has not at anytime sponsored, maintained or contributed to any employee benefit
plan which is or was subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended. No employee benefit plan of Seller will, by
its terms or applicable law, become binding upon or an obligation of Buyer.
Buyer has not engaged in any unfair labor practices which could reasonably be
expected to result in a material adverse effect on the Assets or the Business.
Seller does not have any dispute with any of its existing or former employees.
There are no labor disputes or to the knowledge of Seller, any disputes
threatened by current or former employees of Seller.
2.1.10. Investigations; Litigation. No investigation or review by any
governmental entity with respect to Seller or any of the transactions
contemplated by this Agreement or the Seller Agreements is pending or, to the
best of Seller=s knowledge, threatened, nor has any governmental entity
indicated to Seller an intention to conduct the same. There is no suit, action,
or legal, administrative, arbitration, or other proceeding or governmental
investigation pending to which Seller is a party or, to the knowledge of Seller
or Shareholders, to which might become a party, and which particularly affects
the Assets or property being transferred to Seller.
2.1.11. Absence of Certain Business Practices. Neither Seller, the Shareholders
nor any officer, employee or agent of Seller, nor any other person acting on its
or his behalf, has, directly or indirectly, within the past five years, given or
agreed to give any gift or similar benefit to any customer, supplier, government
employee or other person who is or may be in a position to help or hinder the
profitable use of the Assets or conduct of the Business (or to assist Seller in
connection with any actual or proposed transaction) which if not given in the
past, might have had a material adverse effect on the profitable use of the
Assets or conduct of the Business , or if not continued in the future, might
materially adversely effect the profitable use of the Assets or conduct of the
Business.
2.1.12. Solvency. Seller is not now insolvent, nor will Seller be rendered
insolvent by the occurrence of the transactions contemplated by this Agreement.
The term Ainsolvent@ means that the sum of the present fair and saleable value
of Seller=s assets does not and will not exceed its debts and other probable
liabilities, and the term Adebts@ includes any legal liability whether matured
or unmatured, liquidated or unliquidated, absolute fixed or contingent, disputed
or undisputed or secured or unsecured.
2.1.13. Untrue Statements. Seller has made available to Buyer true, complete and
correct copies of customers, and if required, Seller will make available records
relating principally to the Assets and the business, and such information covers
all commitments and liabilities of Seller relating principally to the Assets.
This Agreement, the Seller Agreements and the other instruments executed by
Seller or Shareholders and delivered to Buyer in connection herewith do not
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements made herein and therein not misleading in
any material respect.
2.1.14. Finder=s Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Seller, the
Shareholders 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.
Article III
Representations and Warranties of Buyer
3.1 Representations and Warranties of Buyer. Buyer represents and warrants to
Seller and Shareholders as follows:
3.1.1. Organization and Standing. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws 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 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 so qualify or be licensed would not have a material adverse effect on
the business of Buyer.
3.1.2. Agreement Authorized and its Effect on Other Obligations. The execution
and delivery of this Agreement and all other agreements executed by Buyer and
delivered to Seller or Shareholders in connection herewith (the ABuyer
Agreements@) have been authorized by all necessary corporate action on the part
of Buyer, and this Agreement and the Buyer Agreements are valid and binding
obligations of Buyer, enforceable (subject to normal equitable principals)
against Buyer in accordance with their 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 Buyer Agreements and the consummation of
the transactions contemplated hereby and thereby 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 of Buyer; (ii) any obligation,
indenture, mortgage, deed of trust, lease, contract or other agreement to which
Buyer is a party or by which Buyer or its 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 Buyer or any of its
properties is subject.
3.1.3. 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 Seller, the Shareholders and their counsel, without the
intervention of 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 payment.
Article IV
Additional Agreements
4.1 Noncompetition. Except as otherwise consented to or approved in writing by
Buyer, each of Seller and the Shareholders agree that for a period of thirty-six
(36) months following the Effective Date, they shall 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 workover or well
services, or providing any other oil field services previously provided by
Seller during the twenty-four (24) month period immediately preceding the
execution of this Agreement in Oklahoma (the ATerritory@); (ii) request any
present customers or suppliers of Seller to curtail or cancel their business
with Buyer; (iii) disclose to any person, firm or corporation any trade,
technical or technological secrets of Seller or Buyer or any details of their
organization or business affairs or (iv) induce or actively attempt to influence
any employee of Buyer to terminate his employment. Notwithstanding the
foregoing, Seller=s and Shareholders= non-competition obligations shall cease in
the event that Buyer or its successors in interest, no longer engages in like
business in the Territory. Seller agrees that if either the length of time or
geographical area of the Territory 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
4.1 are in addition to any other obligations that Seller or the Shareholders may
have under the laws of any state requiring a corporation who sells its assets
(and the Shareholders of such corporation) to limit its activities so that the
goodwill and business relations being transferred with such assets will not be
materially impaired. Seller further agrees and acknowledge that Buyer does not
have any adequate remedy at law for the breach or threatened breach by Seller of
this covenant, 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 Seller from
such breach or threatened breach. If any provisions of this Section 4.1 are held
to be invalid or against public policy, the remaining provisions shall not be
affected thereby. Seller acknowledges that the covenants set forth in this
Section 4.1 are being executed and delivered by Seller in consideration of the
covenants of Buyer contained in this Agreement, and for other good and valuable
consideration, receipt of which is hereby acknowledged.
4.2 Employment of the Shareholders. Buyer hereby agrees to simultaneously with
execution of this Agreement, enter into employment contracts with Shareholders
in the forms of Schedule ___ and ___ hereto.
4.3 Hiring Employees. Effective as of the date hereof, all of the Employees
shall be terminated by Seller. Buyer may, but shall be under no obligation to,
hire any of the Employees effective as of the date hereof. Except as provided in
Section 1.4 hereof, Buyer shall have no liability or obligation with respect to
any employee benefits of any Employee except those benefits that accrue pursuant
to such Employees= employment with Buyer on or after the date hereof. Seller and
the Shareholders shall cooperate with Buyer in connection with any offer of
employment from Buyer to the Employees and use its best efforts to cause the
acceptance of any and all such offers. All Employees hired by Buyer shall be
at-will employees of Buyer.
4.4 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
4.6 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.
4.5 Name Change. Seller shall retain the right to use the name DIAMOND WELL
SERVICE, INC., for the limited and exclusive purpose of (i) prosecuting and
collecting claims relating to causes of action based on facts occurring prior to
the date hereof.
4.6 Collection of Receivables. Buyer shall cooperate with and assist Seller in
collecting the Seller Receivables, which cooperation and assistance shall
include promptly forwarding to Seller all payments received by Buyer that are
made in respect of the Seller Receivables. Seller shall cooperate with and
assist Buyer in collecting receivables of Buyer, which cooperation and
assistance shall include promptly forwarding to Buyer all payments received by
the Seller that are made in respect of Buyer=s receivables.
4.7 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.
4.8 Closing Costs. Each party will bear the cost and expenses of performing the
acts required of such party under this Agreement, including, without limitation,
attorneys= fees and disbursements incurred by the respective parties in
connection herewith; provided, however, the Buyer will pay all sales tax imposed
by any governmental authority as a result of the sale of Assets and will prepare
and file all sales tax reports and tax returns relating thereto.
4.9 Taxes. All federal, state and local taxes relating to the Property which
accrued prior to the date hereof will be paid by the Seller. All such taxes
incurred on or after the date hereof (including sales taxes arising from the
sale of the Property) will be paid by the Buyer and the Buyer agrees to
indemnify and hold the Seller and Shareholders harmless with respect thereto.
4.10 Insurance. All existing insurance policies maintained by the Seller will be
terminated on the date hereof and the Buyer will be responsible for obtaining
its own insurance subsequent thereto.
4.11 Possession; Risk of Loss. Possession of the Assets will be delivered to the
Buyer by the Seller on the date hereof and the risk of loss will pass from the
Seller to the Buyer on such delivery of possession.
4.12 Attorneys= Fees. If either party institutes an action or proceeding against
the other relating to the provisions of this Agreement or any default hereunder,
the prevailing party in such action or proceeding will be entitled to receive a
reasonable attorneys= fee as a part of its costs incurred therein.
Article V
Indemnification
5.1 Indemnification by Seller and the Shareholders. In addition to any other
remedies available to Buyer under this Agreement, or at law or in equity, each
of Seller and Shareholders shall, jointly and severally, indemnify, defend and
hold harmless Buyer, and its 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 ADamages@) that such indemnitee
shall incur or suffer, which arise, result from or relate to (I) any breach of,
or failure by Seller or Shareholders 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 Seller or the Shareholders under this Agreement and (ii) the Retained
Liabilities.
5.2 Indemnification by Buyer. In addition to any other remedies available to
Seller or Shareholders under this Agreement, or at law or in equity, Buyer
shall, jointly and severally, indemnify, defend and hold harmless the
Shareholders, Seller and its officers, directors, employees and agents against
and with respect to any and all Damages that such indemnities 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 Seller or the Shareholders by or on behalf of Buyer
under this Agreement.
5.3 Indemnification Procedure. If any party hereto discovers or otherwise
becomes aware of an indemnification claim arising under Section 5.1 or Section
5.2 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 this Article 5, 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 VI
Miscellaneous
6.1 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.
6.2 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.
6.3 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall deemed to be an original instrument, but all of which
together shall constitute one and the same instrument.
6.4 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 Copy to:
WellTech Eastern, Inc. William P. Parker, P. C.
c/o Key Energy Group, Inc. Attorney at Law
Two Tower Center, Tenth Floor 2212 N.W. 50th
East Brunswick, NJ 08816 Suite 163
Attn: General Counsel Oklahoma City, OK 73112
Facsimile: (908) 247-5148
If to Seller or Shareholders
Addressed to: With Copy to:
Diamond Well Service, Inc. Rebecca J. Sherwood, Esq.
1680 Southwest 86th Street Fellers, Snider, Blankenship,
Oklahoma City, OK 73159 Bailey & Tippens, P.C.
Bank One Tower
Mr. John Scott 101 N. Broadway, Suite 1700
12216 Lorien Way Oklahoma City, OK 73102
Oklahoma City, OK 73170 Telephone: (405) 232-0621
Mr. Dwayne Wardwell
P. O. Box 156
Paoli, OK 73074
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.
6.5 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.
6.6 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.
6.7 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.
6.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of the State of Texas.
IN WITNESS WHEREOF, the Shareholders have 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 on this
3rd day of April, 1997 to be effective as of the Effective Date.
WELLTECH EASTERN, INC.
By:
Name:
Title:
DIAMOND WELL SERVICE, INC.
By:
Name:
Title:
SHAREHOLDER:
John Scott
SHAREHOLDER:
Dwayne Wardwell
SCHEDULE 1.1(a) - TANGIBLE PERSONAL PROPERTY
Property.
SCHEDULE 1.1(b) - INVENTORY
None.
SCHEDULE 1.1(c) - SELLER INTELLECTUAL PROPERTY
(Patents, Copy Rights, Trademarks, Service Marks, Licenses
and all applicable customer lists of Seller)
Ricks Exploration
Apache Corporation
KS Oil Co.
Huntington Energy
Chesapeake
Outback
Lance Ruffel
Triad
Shoney Oil & Gas
SND Energy
B. R. Polk
Post Oak
SCHEDULE 1.1(d) - CONTRACTS
(Leases, Subleases, Contracts, Contract Rights and Agreements relating to
ownership, operation or maintenance or use of Tangible Personal Property)
None.
SCHEDULE 1.1(e) - SELLER PERMITS
(Permits, Authorizations, Certificates, Approvals, Registrations,
Variances, Waivers, Exemptions, Rights of Way, Franchises,
Ordinances, Licenses and Rights obtained from governmental agencies
relating to use, operation, maintenance or use of Tangible Personal Property)
Certificate of Qualification of Specialized Mobilized Machinery Vehicle issued
by the Oklahoma Tax Commission No. 11041.
Size and Weight Permit issued by the Oklahoma Department of Public Safety No.
97006123.
SCHEDULE 2.1.3 - FINANCIAL STATEMENTS
SCHEDULE 2.1.10 - EMPLOYEES
Employee Social Security No.
Schedule 4.6 - ALLOCATION OF PURCHASE PRICE
Equipment $ 587,500
Goodwill $ 20,000
Covenant not to compete $ 67,500
Total $675,000