Asset Purchase Agreement
between
Brooks Well Servicing, Inc.
and
Sam F. McKee, Individually and d/b/a
Circle M Vacuum Services
January 30, 1998
TABLE OF CONTENTS
Article I PURCHASE AND SALE OF ASSETS......................................1
1.1 Purchase and Sale of the Assets..............................1
1.2 Consideration for Assets.....................................2
1.3 Liabilities..................................................2
1.4 Time and Place of Closing....................................2
1.5 Closing Deliveries...........................................3
1.5.1 Opinion of Buyer's Counsel...................................3
1.5.2 Opinion of Seller's Counsel..................................3
Article II
REPRESENTATIONS AND WARRANTIES........................................4
2.1 Representations and Warranties of the Seller.................4
2.1.1 Organization and Good Standing...............................4
2.2.2 Agreements Authorized and their Effect on Other Obligations..4
2.1.3 Contracts....................................................4
2.1.4 Title to and Condition of Assets.............................5
2.1.5. Licenses and Permits.........................................5
2.1.7. Financial Statements.........................................5
2.1.8. Absence of Certain Changes and Events........................6
(a) Financial Change....................................6
(b) Property Damage....................................6
(c) Waiver..............................................6
(d) Change in Assets....................................6
(e) Labor Disputes....................................6
(f) Other Changes.......................................6
2.1.9. Necessary Consents...........................................6
2.1.10. Environmental Matters........................................6
2.1.11. No ERISA Plans or Labor Issues...............................7
2.1.12. Investigations; Litigation...................................7
2.1.13. Absence of Certain Business Practices........................8
2.1.14. Solvency.....................................................8
2.1.15. Untrue Statements............................................8
2.1.16. Finder's Fee.................................................8
2.2. Representations and Warranties of Buyer......................8
2.2.1. Organization and Good Standing...............................8
2.2.2. Agreement Authorized and its Effect on Other Obligations.....9
Article III ADDITIONAL AGREEMENTS..........................................9
3.1 Hiring Employees.............................................9
3.2 Allocation of Purchase Price.................................9
3.3 Name Change.................................................10
3.4 Further Assurances..........................................10
Article IV INDEMNIFICATION................................................10
4.1 Indemnification by the Seller...............................10
4.2 Indemnification by Buyer....................................10
4.3 Indemnification Procedure...................................10
4.4 Limitation on Damages.......................................11
Article V MISCELLANEOUS...................................................11
5.1 Survival of Representations, Warranties and Covenants.......11
5.2 Entirety....................................................12
5.3 Counterparts................................................12
5.4 Notices and Waivers.........................................12
5.5 Captions....................................................12
5.6 Successors and Assigns......................................12
5.7 Severability................................................13
5.8 Applicable Law..............................................13
Asset Purchase Agreement
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of January
30, 1998 among Brooks Well Servicing, Inc., a Delaware corporation ("Buyer"),
and Sam F. McKee, individually and d/b/a Circle M Vacuum Services ("Seller").
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, the Seller hereby agrees to sell, convey, transfer,
assign and deliver to Buyer the assets of the Seller existing on the date hereof
other than the Excluded Assets (defined below), whether personal, tangible or
intangible, including, without limitation, the following assets of the Seller
relating to or used or useful in the operation of the business as conducted by
the Seller individually and under the assumed name of "Circle M Vacuum Services"
on and before the date hereof (the "Business") such assets being sold hereunder
are referred to collectively herein as the "Assets"):
(a) the tangible personal property of the Seller (such as machinery, equipment,
leasehold improvements, furniture and fixtures and vehicles), including,
without limitation, that which is more fully described on Schedule 1.1.(a)
hereto (collectively, the "Tangible Personal Property");
(b) the Seller's intangible assets, including without limitation, (i) all of
the Seller's rights to the name "Circle M Vacuum Services" and all
derivations thereof under which Seller currently does business, (ii) all of
the Seller's rights to any patents, patent applications, trademarks and
service marks (including registrations and applications therefor), trade
names, and copyrights and written know-how, trade secrets, licenses and
sublicenses and all other similar propriety data and the goodwill
associated therewith and with the Business and the Assets (collectively,
the "Intellectual Property") and (ii) the Seller's business telephone
numbers and all of their account ledgers, sales and promotional literature,
computer software, books, records, files and data (including customer and
supplier lists) and all other records of the Seller relating to the Assets
or the Business (collectively, the "Intangibles");
(c) those leases, subleases, contracts, contract rights and agreements relating
to the Assets or the operation of the Business listed on Schedule 1.1(c)
hereto (collectively, the "Contracts");
(d) all of the permits, authorizations, certificates, approvals, registrations,
variances, waivers, exemptions, rights-of-way, franchises, ordinances,
orders, licenses and other rights of every kind and character
(collectively, the "Permits") relating principally to all or any of the
Assets or to the operation of the Business, including, but not limited to,
those which are more fully described on Schedule 1.1(d) hereto
(collectively, the "Seller Permits");
(e) the goodwill and going concern value of the Business; and
(f) all other or additional privileges, rights, interests, properties and
assets of the Seller of every kind and description and wherever located
that are used in the Business or intended for use in the Business in
connection with, or that are necessary for the continued conduct, of the
Business.
The Assets shall not include the following (collectively, the "Excluded
Assets"): (i) the assets described on Schedule 1.1 hereto as being Excluded
Assets, (ii) all real property owned by Seller (iii) all of the Seller's
accounts receivable and all other rights of the Seller to payment for services
rendered by the Seller before the date hereof; (iv) all cash accounts of the
Seller and all petty cash of the Seller kept on hand for use in the Business or
personally; (v) all right, title and interest of the Seller in and to all
prepaid rentals, other prepaid expenses, bonds, deposits and financial assurance
requirements, and other current assets relating to any of the Assets or the
Business; (vi) all assets in possession of the Seller but owned by third
parties; and (vii) the cash consideration paid or payable by Buyer to Seller
pursuant to Section 1.2 hereof.
1.2 Consideration for Assets. As consideration for the sale of the Assets to
Buyer and for the other covenants and agreements of the Seller contained herein,
Buyer agrees to pay to the Seller, on the date hereof, the aggregate amount of
Seven Hundred Thousand Dollars ($700,000).
1.3 Liabilities. Effective as of the date hereof, Buyer shall assume those, and
only those, liabilities and obligations of the Seller to perform the Contracts
to the extent that the Contracts have not been performed and are not in default
on the date hereof (the "Assumed Liabilities"). On and after the date hereof,
the Seller shall be responsible for any and all other liabilities and
obligations of the Seller other than the Assumed Liabilities, including, without
limitation, any obligations arising from the Seller's employment of those
employees of the Seller listed on Schedule 3.1 hereto (collectively, the
"Retained Liabilities"). Seller shall assign to Buyer without warranty, all
rights of Seller with respect to the Barnhart #1 (TA) well wellbore located on
the Barnhart lease in Burleson County, Texas. Buyer shall assume all duties,
obligations and liabilities of regulatory authority arising after the date
hereof with respect to this wellbore.
1.4 Time and Place of Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place on the date hereof at the
offices of James Jones, 205 North Market Street, Brenham, Texas 77833.
1.5 Closing Deliveries. At the Closing, in addition to the conveyances of the
Assets to the Buyer in exchange for the Purchase Price: (i) the Buyer and Seller
will enter into a lease agreement in the form of Exhibit A hereto (the "Lease
Agreement"); (ii) the Seller shall enter into agreement not to compete (the
"Noncompetition Agreement") in the form of Exhibit B hereto, and (iii) Buyer and
Seller will deliver to one another the opinions of counsel described below:
1.5.1 Opinion of Buyer' Counsel. The Seller shall have received a favorable
opinion, dated as of the Closing Date, from Lynch, Chappell & Alsup, P.C.,
counsel for Buyer, in form and substance satisfactory to the Seller, to the
effect that (i) Buyer has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware; (ii) all corporate
proceedings required to be taken by or on the part of the Buyer to authorize the
execution of this Agreement, the Lease Agreement, the Noncompetition Agreement
and the implementation of the transactions contemplated hereby and thereby, have
been taken; and (iii) this Agreement, the Lease Agreement and the Noncompetition
Agreement have been duly executed and delivered by, and are the legal, valid and
binding obligations of Buyer and are enforceable against Buyer in accordance
with their respective terms, except as enforceability may be limited by (a)
equitable principals of general applicability of (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights of
creditors generally. In rendering such opinion, such counsel may rely upon (x)
certificates of public officials and of officers or Buyer as to the matters of
fact and (y) the opinion or opinions of other counsel, which opinions shall be
reasonably satisfactory to the Seller, as to matters other than federal or Texas
law.
1.5.2 Opinion of Seller' Counsel. The Buyer shall have received a favorable
opinion, dated as of the Closing Date, from James Jones, counsel to Seller, in
form and substance satisfactory to Buyer, to the effect that (i) the Seller has
business under the name "ircle M Vacuum Services" under the laws of the State
of Texas; (ii) all proceedings required to be taken by or on the part of Seller
to authorize the execution of this Agreement, the Lease Agreement and the
Noncompetition Agreement and the implementation of the transactions contemplated
hereby and thereby have been taken; (iii) the Seller owns all of the Assets free
and clear of any Encumbrances other than those Encumbrances listed on the
Schedules to this Agreement; and (iv) (A) this Agreement, the Lease Agreement
and the Noncompetition Agreement have been duly executed and delivered by, and
are the legal, valid and binding obligations of the Seller and are enforceable
against the Seller in accordance with their respective terms, in each case,
except as the enforceability may be limited by (a) equitable principles of
general applicability or (b) bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws affecting the rights of creditors generally. In
rendering such opinion, such counsel may rely upon (x) certificates of public
officials and of officers of the Seller as to the matters of fact and (y) on the
opinion or opinions of other counsel, which opinions shall be reasonably
satisfactory to Buyer, as to matters other than federal or Texas law.
Article II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Seller. The Seller represents and
warrants to Buyer as follows:
2.1.1 Organization and Good Standing. The Seller is an individual informally
doing business under the assumed name "Circle M Vacuum Services" under the laws
of the State of Texas, has full requisite power and authority to carry on
Seller's business as it is currently conducted, and to own and operate the
Business and the Assets.
2.2.2 Agreements Authorized and their Effect on Other Obligations. The execution
and delivery of this Agreement, the Lease Agreement and the Noncompetition
Agreement have been authorized by all necessary action on the part of the Seller
and this Agreement, the Lease Agreement and the Noncompetition Agreement are the
valid and binding obligations of the Seller, enforceable (subject to normal
equitable principals) against the Seller in accordance with their respective
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, the Lease
Agreement and the Noncompetition Agreement 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) any organizational documents of the Seller, (ii) any obligation,
indenture, mortgage, deed of trust, lease, contract or other agreement to which
the Seller is a party or by which the Seller or his properties are bound; (iii)
any provision of any law, rule, regulation, order, permits, certificate, writ,
judgment, decree, determination, award or other decision of any court,
arbitrator, or other governmental authority to which the Seller or any of his
respective properties are subject.
2.1.3 Contracts. Schedule 1.1(c) hereby sets forth a complete list of all
contracts, including leases under which the Seller is lessor or lessee, which
relate to the Assets and are to be performed in whole or in part after the date
hereof. All of the Contracts are in full force and effect, and constitute valid
and binding obligations of the Seller. The Seller is not, and no other party to
any of the Contracts 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 Contract has been entered into on
terms which could reasonably be expected to have an adverse effect on the use of
the Assets by Buyer. The Seller has not received any information that would
cause any of such parties to conclude that any customer of the Seller will (or
is likely to) cease doing business with Buyer (or its successors) as a result of
the consummation of the transactions contemplated hereby. All of the Contracts
are assignable (and are hereby validly assigned) to Buyer without the consent of
any other party thereto.
2.1.4 Title to and Condition of Assets. The Seller has good, indefeasible and
marketable title to all of the Assets, free and clear of any Encumbrances
(defined below). All of the Assets are in a state of good operating condition
and repair, ordinary wear and tear excepted, and are free from any known defects
except as may be repaired by routine maintenance and such minor defects as to
not substantially interfere with the continued use thereof in the conduct of
normal operations. 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 the Seller, except
such as have been fully complied with. The term "Encumbrances" means all liens,
security interests, pledges, mortgages, deeds of trust, claims, rights of first
refusal, options, charges, restrictions or conditions to transfer or assignment,
liabilities, obligations, privileges, equities, easements, rights of way,
limitations, reservations, restrictions and other encumbrances of any kind or
nature.
2.1.5. Licenses and Permits. Schedule 1.1(d) hereto sets forth a complete list
of all Permits necessary under law or otherwise for the operation, maintenance
and use of the Assets in the manner in which they are now being operated,
maintained and used. Each of the Seller Permits and the Seller's rights with
respect thereto is valid and subsisting, in full force and effect, and
enforceable by the Seller subject to administrative powers of regulatory
agencies having jurisdiction. The Seller is in compliance in all material
respects with the terms of each of the Seller Permits. None of the Seller
Permits have been, or to the knowledge of the Seller, are threatened to be,
revoked, canceled, suspended modified. Upon consummation of the transactions
contemplated hereby, all of the Seller Permits shall be assignable (and are
hereby assigned) to Buyer without the consent of any regulatory agency. On and
after the date hereof, each of the Seller Permits and Buyer's rights with
respect thereto will be valid and subsisting in full force and effect, and
enforceable by Buyer subject only to the administrative powers of regulatory
agencies having jurisdiction over the assigned Seller Permit.
2.1.6. Intellectual Property. The Seller Intellectual Property is owned or
licensed by the Seller free and clear of any Encumbrances. The Seller has not
granted to any other person any license to use any Seller Intellectual Property.
Use of the Seller Intellectual Property will not and the conduct of the Business
did not, infringe, misappropriate or conflict with the Intellectual Property
rights of others. The Seller has not 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.
2.1.7. Financial Statements. The Seller has delivered to Buyer copies of an
unaudited income statement of Seller, a copy of which is attached hereto as
Schedule 2.1.7 (the "Seller Income Statement") as of September 30, 1997 (the
"Seller Income Statement Date"). The Seller Income Statement is true, correct
and complete in all material respects and present fairly and fully the Financial
condition of the Seller as at the dates and for the periods indicated thereon,
and has been prepared in accordance with generally accepted accounting
principles as promulgated by the American Institute of Certified Public
Accountants ("GAAP") applied on a consistent basis, except as noted therein. The
Seller Income Statement includes all adjustments that are necessary for a fair
presentation of the Seller's results for that period .
2.1.8. Absence of Certain Changes and Events. Since the Seller Income Statement
Date, there has not been:
(a) Financial Change. Any adverse change in the Assets, the Business or the
financial condition, operations, liabilities or prospects of the Seller;
(b) Property Damage. Any 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 the
Seller;
(d) Change in Assets. Any acquisition, disposition, transfer, encumbrance,
mortgage, pledge or other encumbrance of any asset of the Seller other than
in the ordinary course of business;
(e) Labor Disputes. Any labor disputes between the Seller and his employees; or
(f) Other Changes. Any other event or condition known to the Seller that
particularly pertains to and has or might have an adverse effect on the
Assets, the operations of the Business or the financial condition or
prospects of the Seller.
2.1.9. Necessary Consents. The 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, without limitation, any consents
required to assign the Contacts and the Seller Permits.
2.1.10. Environmental Matters. None of the current or past operations of the
Business or any of the Assets is being or has been conducted or used in such a
manner as to constitute a violation of any Environmental Law (defined below).
The Seller has not received any notice (whether formal or informal, written or
oral) from any entity, governmental agency or individual regarding any existing,
pending or threatened investigation or inquiry related to violations of any
Environmental Law or regarding any claims for remedial obligations or
contribution for removal costs or damages under any Environmental Law. There are
no writs, injunction, decrees, orders or judgments outstanding, or lawsuits,
claims, proceedings or investigations pending or, to the knowledge of the
Seller, threatened relating to the ownership, use, maintenance or operation of
the Assets or the conduct of the Business, nor, to the knowledge of the Seller,
is there any basis for any of the foregoing. Buyer is not required to obtain any
permits, licenses or similar authorizations pursuant to any Environmental Law in
effect as of the date hereof to operate and use any of the Assets for their
current or proposed purposes and uses. To the knowledge of the Seller, the
Assets include all environmental and pollution control equipment necessary for
compliance with applicable Environmental Law. No Hazardous Materials (defined
below) have been or are currently being used by the Seller in the operation of
the Assets. No Hazardous Materials are or have ever been situated on or under
any of the Seller's properties, whether owned or leased, or incorporated into
any of the Assets. There are no, and there have never been any, underground
storage tanks (as defined under Environmental Law) located under any of the
Seller's properties, whether owned or leased. There are no environmental
conditions or circumstances, including the presence or release of any hazardous
Materials, on any property presently or previously owned or leased by the
Seller, or on any property on which Hazardous Materials generated by the
Seller's operations or the use of the Assets were disposed of, which would
result in an adverse change in the Business or business prospects of the Seller.
The term "Environmental Law" means any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, and other legally enforceable requirements
(including, without limitation, common law) of the United states, or any state,
regional, city, local, municipal or other governments authority or quasi
governmental authority, regulating, relating to, or imposing environmental
standards of conduct concerning protection of the environment or human health,
or employee health and safety as from time to time has been or is now in effect.
The term "Hazardous Materials" means (x) asbestos, polychlorinated biphanyls,
urea formaldehyde, lead based paint, radon gas, petroleum, oil, solid waste,
pollutants and contaminants, and (y) any chemicals, materials, wastes or
substances that are defined, regulated, determined or identified as toxic or
hazardous in any Environmental Law.
2.1.11. No ERISA Plans or Labor Issues. No employee benefit plan of the Seller,
whether or not subject to any provisions of the Employee Retirement Income
Security Art of 1974, as amended, will by its terms or applicable law, become
binding upon or an obligation of Buyer. The Seller has not engaged in any unfair
labor practices which could reasonably be expected to result in an adverse
effect on the Assets or the Business. The Seller does not have any dispute with
any of its existing or former employees, and there are no labor disputes or, to
the knowledge of the Seller, any disputes threatened by current or former
employees of the Seller.
2.1.12. Investigations; Litigation. No investigation or review by any
governmental entity with respect to the Seller or any of the transactions
contemplated by this Agreement is pending or, to the knowledge of the Seller,
threatened, nor has any governmental entity indicated to the 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
the Seller is a party or, to the knowledge of the Seller, might become a party
or which would adversely affect the Assets or the Buyer's future conduct of the
Business.
2.1.13. Absence of Certain Business Practices. Neither the Seller nor any
employee or agent of the Seller, or any other person acting on behalf of the
Seller, 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 conduct of the Business or the profitable use of the Assets (or to
assist the Seller in connection with any actual or proposed transaction) which
if not given in the past, might have had an adverse effect on the profitable
conduct of the Business or the profitable use of the Assets, or if not continued
in the future, might adversely affect the profitable conduct of the Business or
the profitable use of the Assets.
2.1.14. Solvency. The Seller is not presently insolvent, nor will the Seller be
rendered insolvent by the occurrence of the transactions contemplated by this
Agreement. The term "insolvent", with respect to the Seller, means that the sum
of the present fair and saleable value of the Seller's assets does not and will
not exceed his debts and other probable liabilities, and the term "debts"
includes any legal liability whether matured or unmatured, liquidated or
unliquidated, absolute fixed or contingent, disputed or undisputed or secured or
unsecured.
2.1.15. Untrue Statements. This Agreement and all other agreements executed by
the Seller and delivered to Buyer do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Seller has also made available to
Buyer true, complete and correct copies of all contracts, documents concerning
all litigation and administrative proceedings, licenses, permits, insurance
policies, lists of suppliers and customers, and records relating principally to
the Business and the Assets, and such information covers all commitments and
liabilities of Seller relating principally to the Business and Assets.
2.1.16. Finder's Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Seller and his
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.
2.2. Representations and Warranties of Buyer. Buyer represents and warrants to
the Seller as follows:
2.2.1. Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has full requisite corporate power and authority to carry on its business as it
is currently conducted and to own and operate the properties currently owned and
operated by it, and is duly 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.
2.2.2. Agreement Authorized and its Effect on Other Obligations. The
consummation of the transactions contemplated hereby and by the Lease Agreement
and the Noncompetition Agreement have been duly and validly authorized by all
necessary corporate action on the part of Buyer, and the Agreement, the Lease
Agreement and the Noncompetition Agreement are each valid and binding
obligations of Buyer enforceable (subject to normal equitable principles) in
accordance with the 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, the Lease Agreement and the Noncompetition Agreement by Buyer
will not conflict with or result in a violation or breach of any term or
provision of, or constitute a default under (a) the Certificate of Incorporation
or Bylaws of Buyer or (b) any obligation, indenture, mortgage, deed of trust,
lease, contract or other agreement to which Buyer or any of its property is
bound.
Article III
ADDITIONAL AGREEMENTS
3.1 Hiring Employees. Schedule 3.1 hereto is a complete and accurate listing of
all employees of the Seller that devote their full time and effort in the
operation of the Assets and the conduct of the Business (the "Employees").
Effective as of the date hereof, all of the Employees shall be terminated by the
Seller and, subject to such Employees meeting Buyer's standard eligibility
requirements, offered employment by Buyer. Buyer shall have no liability or
obligation with respect to any employee benefits of any Employee except those
benefits that pursuant to such Employees' employment with Buyer on or after the
date hereof. The Seller 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.
3.2 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
3.3 hereto, and shall report this transaction for federal income tax purposes in
accordance with the allocation so agreed upon. The parties hereto for themselves
and for their respective successor 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.
3.3 Further Assurances. From time to time, as and when requested by any party
hereto, any other party hereto shall execute and deliver, or cause to be
executed and delivered, such documents and instruments and shall take, or cause
to be taken, such further or other actions as may be reasonably necessary to
effect the transactions contemplated hereby.
Article IV
INDEMNIFICATION
4.1 Indemnification by the Seller. In addition to any other remedies available
to Buyer under this Agreement, or at law or in equity, the Seller shall
indemnify, defend and hold harmless Buyer and its officers, directors,
employees, agents and stockholders, against and with respect to any and all
claims, costs, damages, losses, expenses, obligations, liabilities, recoveries,
suits, causes of action and deficiencies, including interest, penalties and
reasonable attorneys' fees and expenses (collectively, the "Damages") that such
indemnitee shall incur or suffer, which arise, result from or relate to (i) any
breach of, or failure by the Seller to perform, his 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
Seller under this Agreement; and (ii) the Retained Liabilities.
4.2 Indemnification by Buyer. In addition to any other remedies available to the
Seller under this Agreement, or at law or in equity, Buyer shall indemnify,
defend and hold harmless the Seller against and with respect to any and all
Damages that such indemnitees shall incur or suffer, which arise, result from or
relate to any breach of, or failure by Buyer to perform, any of its
representations, warranties, covenants or agreements in this Agreement or in any
schedule, certificate, exhibit or other instrument furnished or delivered to the
Seller by or on behalf of Buyer under this Agreement.
4.3 Indemnification Procedure. If any party hereto discovers or otherwise
becomes aware of an indemnification claim arising under Section 4.1 or 4.2 of
this Agreement, such indemnified party shall give written notice to the
indemnifying party, specifying such claim, and may thereafter exercise any
remedies available to such party under this Agreement; provided, however, that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of any obligations hereunder, to the extent the
indemnifying party is not materially prejudiced thereby. Further, promptly after
receipt by an indemnified party hereunder of written notice of the commencement
of any action or proceeding with respect to which a claim for indemnification
may be made pursuant to this Article 4, 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
it, 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 or delayed.
4.4 Limitation on Damages. Notwithstanding anything in this Agreement to the
contrary, the Seller shall not be liable to the Buyer or any of its affiliates
under this Article IV, and Buyer shall not be liable to the Seller under this
Article IV, for cumulative costs of any Damages in excess of $800,000; provided,
however, that such limitation on liability shall not include Damages for
breaches of the representations and warranties contained in Section 2.1.10.
Article V
MISCELLANEOUS
5.1 Survival of Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements, made by the parties hereto shall survive
indefinitely without limitation, notwithstanding any investigation made by or on
behalf of any of the parties hereto. All statements contained in any
certificate, schedule, exhibit or other instrument delivered pursuant to this
Agreement shall be deemed to have been representations and warranties by the
respective party or parties, as the case may be, and shall also survive without
limitation despite any investigation made by any party hereto or on its behalf.
5.2 Entirety. This Agreement embodies the entire agreement among the parties
with respect to the subject matter hereof, and all prior agreements between the
parties with respect thereto are hereby superseded in their entirety.
5.3 Counterparts. Any number of counterparts of this Agreement may be executed
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one instrument.
5.4 Notices and Waivers. Any notice or waiver to be given to any party hereto
shall be in writing and shall be delivered by courier, sent by facsimile
transmissions or first class registered or certified mail, postage prepaid,
return receipt requested:
If to Buyer
Addressed to: With a copy to:
Brooks Well Servicing, Inc. Lynch, Chappell & Alsup, P.C.
Two Tower Center, Tenth Floor 300 N. Marienfeld, Suite 700
East Brunswick, New Jersey 08816 Midland, Texas 79701
Attn: General Counsel Attn: James M. Alsup
Facsimile: (732) 247-5148 Facsimile: (915) 683-2587
If to the Seller
Addressed to: With a copy to:
Sam McKee James Jones, Esq.
906 E. Tom Green St. 205 North Market Street
Brenham, Texas 77833 Brenham, Texas 77833
Facsimile: _______________ Facsimile: (409) 836-3253
Any communication so addressed and mailed by first-class registered or certified
mail, postage prepaid, with return receipt requested shall be deemed to be
received on the third business day after so mailed, and if delivered by courier
or facsimile to such address, upon delivery during normal business hours on any
business day.
5.5 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.
5.6 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
5.7 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. it is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
5.8 Applicable Law. This Agreement shall he governed by and construed and
enforced in accordance with the applicable laws of the State of Texas.
(SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Seller has executed this Agreement and the Buyer has
caused this Agreement to be signed in its corporate name by its duly authorized
representative, all as of the day and year first above written.
BUYER:
BROOKS WELL SERVICING, INC.
By:__________________________________
Name:_______________________________
Title:________________________________
SELLER:
____________________________________
Sam F. McKee, Individually and d/b/a
Circle M Vacuum Services