Asset Purchase Agreement
among
WellTech Eastern, Inc.,
Key Energy Group, Inc.,
and
White Rhino Drilling, Inc.
and
Jeff Critchfield
December 2, 1997
Asset Purchase Agreement
This Asset Purchase Agreement (this Agreement) is entered into as of December 2,
1997, among WellTech Eastern, Inc., a Delaware corporation (Buyer), Key Energy
Group, Inc., a Maryland corporation (Key), White Rhino Drilling, Inc., a
Michigan corporation (White Rhino), and Jeff Critchfield (Shareholder). White
Rhino is referred herein as the Seller. The effective date of this transaction
is December 2, 1997, at 7:00 a.m. (herein, Effective Date).
W I T N E S S E T H:
WHEREAS, the Seller desires to sell substantially all of its assets, and Buyer
desires to acquire 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
I.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 all of the assets of the Seller existing on the
Effective Date 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 businesses as
conducted by the Seller on and before the Effective Date (the Businesses) (all
such assets being sold hereunder are referred to collectively herein as the
Assets):
(a) all tangible personal property of the Seller (such as machinery, equipment,
and vehicles), including, without limitation, that which is more fully
described on Schedule 1.1(a) hereto (collectively, the Tangible Personal
Property);
(b) all of the inventory of the Seller, including without limitation, that
which is more fully described on Schedule 1.1(b) hereto (collectively, the
Inventories);
(c) all of the Sellers intangible assets, including without limitation, (i)
all of the Sellers rights to the names under which it is incorporated or
under which it currently does business, (ii) all of the Sellers 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 proprietary data and the goodwill associated therewith
(collectively, the Intellectual Property) used or held in connection with
the Businesses, including without limitation, that which is more fully
described on Schedule 1.1(c) hereto (the Seller Intellectual Property)
and (iii) the Sellers 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 Businesses, excluding the corporate minute books of the Seller
(collectively, the Intangibles);
(d) those leases and subleases relating to the Assets, as well as contracts,
contract rights, and agreements relating to the Assets or the operation of
the Businesses specifically listed on Schedule 1.1(d) hereto (collectively,
the Contracts);
(e) 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 Businesses, including, but not limited
to, that which is more fully described on Schedule 1.1(e) hereto
(collectively, the Seller Permits);
(f) the goodwill and going concern value of the Businesses; and
(g) 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 Businesses or intended for use in the Businesses in
connection with, or that are necessary for the continued conduct of, the
Businesses, except for the Excluded Assets, as defined below.
The Assets shall not include the following (collectively, the Excluded Assets):
(i) all of the Sellers accounts receivable and all other rights of the Seller
to payment for services rendered by the Seller before the Effective Date; (ii)
all cash accounts of the Seller and all petty cash of the Seller kept on hand
for use in the Businesses; (iii) 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 Businesses; (iv) all assets in possession of the Seller but
owned by third parties; (v) the corporate charter, related organizational
documents and minute books of the Seller; (vi) the Cash Consideration (as
hereinafter defined) and the Key Shares (as hereinafter defined) paid or
delivered by Buyer or Key to Seller and/or Seller's designee pursuant to Section
1.2 hereof, (vii) all real property, leasehold improvements, furniture, fixtures
and leases and/or subleases relating to real property and (viii) those assets
listed on Schedule 1.1(h).
I.2 Consideration for Assets. As consideration for the sale of the Assets to
Buyer and for the covenants and agreements of the Seller and the Shareholder
contained herein:
(a) Buyer agrees on the Effective Date to pay Seller, and the Sellers designee,
in the form of a cashiers check or bank check or wire transfer of
immediately available funds to an account or accounts designated by the
Seller and Seller's designee (the Cash Consideration), the following:
Seller: $629,380
Jordan Exploration Company, L.L.C.: $847,700
b) Key, for the benefit of Buyer, agrees to issue in accordance with Section
4.8, hereof, the following shares of common stock of Key, par value $0.10
per share (Key Shares) to the Seller, or the Sellers designee, the
following:
Seller: 140,256 shares to be issued effective Jan. 2, 1998
Jordan Exploration
Company, L.L.C.: 72,240 shares to be issued effective on the Effective
Date
The Cash Consideration and the value of the Key Shares on the day immediately
preceding the Effective Date shall cumulatively be referred to as the Purchase
Price.
I.3 Liabilities. As of the Effective Date, 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
Effective Date (the Assumed Liabilities). On and after the Effective Date, 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 or liabilities arising prior to the Effective Date from (i) the
Sellers employment of those employees of the Seller listed on Schedule 4.2
hereto, (ii) any violations of Environmental Law (as defined in Section 2.2.10
hereof), (iii) any environmental conditions or circumstances on any property
owned or leased by Seller or any property on which Seller performed services or
used the Assets, and (iv) the Sellers ownership or operation of the Assets or
conduct of the Businesses prior to the Effective Date (collectively, the
Retained Liabilities). The Buyer shall be responsible for any and all
liabilities and obligations arising with respect to the ownership and operation
of the Assets from and after the Effective Date, except to the extent that such
liabilities or obligations arise out of a breach by Seller or Shareholder of any
of their respective representations, warranties or covenants contained herein.
Article II
Representations and Warranties
II.1 General Representations and Warranties of the Seller and the Shareholder.
The Seller and the Shareholder jointly and severally represent and warrant to
Buyer as follows:
II.1.1. Organization and Good Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of its state of
organization, has full requisite corporate power and authority to carry on its
business as it is currently conducted, and to own and operate the properties
currently owned and operated by it, 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.
II.1.2. Agreement Authorized and its Effect on Other Obligations. The execution
and delivery of this Agreement have been authorized by all necessary corporate,
shareholder and other action on the part of the Seller and the Shareholder, and
this Agreement is the valid and binding obligation of the Seller and the
Shareholder enforceable (subject to normal equitable principals) against each of
such parties in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, will not conflict with or result in a violation or breach
of any term or provision of, nor constitute a default under (i) the charter or
bylaws (or other organizational documents) of the Seller, (ii) any obligation,
indenture, mortgage, deed of trust, lease, contract or other agreement to which
the Seller or the Shareholder is a party or by which the Seller or the
Shareholder or their respective properties are bound; or (iii) to the knowledge
of the Seller and Shareholder any provision of any law, rule, regulation, order,
permit, certificate, writ, judgment, injunction, decree, determination, award or
other decision of any court, arbitrator, or other governmental authority to
which the Seller or the Shareholder or any of their respective properties are
subject.
II.1.3. Contracts. Schedule 1.1(d) hereto 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
Effective Date. All of the Contracts are in full force and effect, and
constitute valid and binding obligations of the applicable Seller. The Seller is
not in default, and to the knowledge of Seller and Shareholder 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 or the Shareholder have received no information
which 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, or such consent has been
received.
II.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). To the knowledge of Seller and Shareholder 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 or the Shareholder, except such as have
been fully complied with. The term Encumbrances means all liens, security
interests, pledges, mortgages, deeds of trust, claims, rights of first refusal,
options, charges, restrictions or conditions to transfer or assignment,
liabilities, obligations, privileges, equities, easements, rights of way,
limitations, reservations, restrictions, and other encumbrances of any kind or
nature.
II.1.5. Licenses and Permits. Schedule 1.1(e) 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 Sellers 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 and further subject to applicable laws. The Seller
is in compliance in all material respects with the terms of each of the Seller
Permits. The Seller Permits have not been, or are not, to the knowledge of the
Seller or the Shareholder, threatened to be, revoked, canceled, suspended or
modified. To the knowledge of Seller and the Shareholder 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 or in accordance with applicable laws. On and after the
Effective Date, to the knowledge of Seller and the Shareholder each of the
Seller Permits and Buyers 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 Permits and applicable laws.
II.1.6. Intellectual Property. Schedule 1.1(c) hereto sets forth a complete list
of all Intellectual Property material to or necessary for the continued conduct
of the Assets.
II.1.7. Financial Statements. The Seller has delivered to Buyer copies of an
unaudited financial statement of Seller, a copy of which is attached hereto as
Schedule 2.1.7 (the Seller Financial Statement), and includes an unaudited
balance sheet (the Unaudited Balance Sheet) as of September 30, 1997 (the
Balance Sheet Date). The Seller Financial Statement is true, correct and
complete in all material respects and presents fairly and fully the financial
condition of the Seller on that date and for the period indicated thereon as
accounted for under a tax basis accounting. The Seller Financial Statement has
been prepared using a tax basis for management purposes only. The account
classifications have been determined to derive the best tax benefit for the
Shareholder.
II.1.8. Absence of Certain Changes and Events. Since the Balance Sheet Date,
there has not been:
(a) Financial Change. Any material adverse change in the Assets, the Businesses
or the financial condition, operations, liabilities or prospects of the
Seller;
(b) Property Damage. Any material damage, destruction, or loss to any of the
Assets or the Businesses (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. Except as set forth on Schedule 2.1.8(d), any material
acquisition, disposition, transfer, encumbrance, mortgage, pledge or other
encumbrance of any Asset of the Seller other than in the ordinary course of
business or other than the Excluded Assets;
(e) Labor Disputes. Any material labor disputes between the Seller and its
employees; or
(f) Other Changes. Any other event or condition known to the Seller or the
Shareholder that particularly pertains to and has or might have a material
adverse effect on the Assets, the operations of the Businesses or the
financial condition or prospects of the Seller.
For the purposes of this Section 2.1.8 a change will be considered material@ if
it has a value of $10,000, or more.
II.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, if any, in order to
validly transfer the Assets hereunder, including, without limitation, any
consents required to assign the Contracts and the Seller Permits.
II.1.10. Environmental Matters. To the knowledge of Seller none of the current
or past operations of any of the Businesses or any of the Assets are being or
have been conducted or used in such a manner as to constitute a violation of any
Environmental Law (defined below). The Seller or the Shareholder has received no
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 or the Shareholder,
threatened relating to the ownership, use, maintenance or operation of the
Assets or the conduct of the Businesses, nor, to the knowledge of the Seller or
the Shareholder, is there any basis for any of the foregoing. To the knowledge
of Seller Buyer is not required to obtain any permits, licenses or similar
authorizations pursuant to any Environmental Law in effect as of the Effective
Date to operate and use any of the Assets for their current purposes and uses.
To the knowledge of the Seller or the Shareholder, the Assets include all
environmental and pollution control equipment necessary for compliance with
applicable Environmental Law. There are no environmental conditions or
circumstances caused by Seller in whole or in part or exacerbated by Seller,
including the presence or release of any Hazardous Materials, on any property on
which Seller performed services or used the Assets which would result in an
adverse change in the Businesses 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 governmental 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 biphenyls,
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.
II.1.11. No ERISA Plans or Labor Issues. Seller has no employee benefit plan.
The Seller has not engaged in any unfair labor practices which could reasonably
be expected to result in an adverse effect on the Assets. The Seller has no
dispute with any of its existing or former employees, and there are no labor
disputes or, to the knowledge of the Seller or the Shareholder, any labor
disputes threatened by current or former employees of the Seller.
II.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 or
the Shareholder, threatened, nor has any governmental entity indicated to the
Seller or the Shareholder 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 or the Shareholder is a
party or, to the knowledge of the Seller or the Shareholder, might become a
party which would adversely affect the Assets or the Buyers future conduct of
the Businesses.
II.1.13. Absence of Certain Business Practices. The Seller, nor any officer,
employee or agent of the Seller, or any other person acting on behalf of the
Seller, has not, directly or indirectly, within the past five years, given or
agreed to give any material gift 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 Businesses or the profitable use of the Assets (or to assist the
Seller in connection with any actual or proposed transaction). A gift will be
considered material if it is worth more than $5,000.
II.1.14. Solvency. The Seller is not presently insolvent, and the Seller will
not 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 Sellers assets does not and
will not exceed its debts and other probable liabilities, and the term debts
includes any legal liability whether matured or unmatured, liquidated or
unliquidated, absolute fixed or contingent, disputed or undisputed or secured or
unsecured.
II.1.15. Untrue Statements. This Agreement and all other agreements executed by
the Seller or the Shareholder and delivered to Buyer in connection with the
transaction contemplated does not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. 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 Businesses and the Assets, and such information covers all commitments and
liabilities of Buyer relating principally to the Businesses and the Assets,
except for the Excluded Assets.
II.1.16. Finders Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Seller and the
Shareholder and their counsel directly with Buyer and its counsel, without the
intervention of any other person as a result of any act of Seller or the
Shareholder in such manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission, finders fee or any similar payment.
II.1.17. Taxes. All taxes of the Seller with respect to the Assets and the
Businesses for that period of time before the Effective Date, including any and
all sales taxes, use taxes, and unemployment compensation taxes or personal
property taxes, have been paid or will be paid by Seller.
II.2 Investment Representations of the Seller and the Shareholder. The Seller
and Shareholder acknowledge, represent and agree that:
(a) Each of the Seller and Jordan Exploration Company, L.L.C. ( collectively,
the Key Share Recipients) is an accredited investor as such term is defined
in Regulation D under the Securities Act of 1993, as amended (the
Securities Act).
(b) (i) Each Key Share Recipient, through its own operations, is knowledgeable
in operations of the type conducted by Key, (ii) Key has made available to
each Key Share Recipient extensive legal, financial, accounting and other
business records for examination by each Key Share Recipient, (iii) Key has
made its principal executive and operating personnel available for
consultation with the designated representatives of each Key Share
Recipient, (iv) each Key Share Recipient has made an extensive
investigation of Keys assets and liabilities, business and financial
affairs, and operations, (v) each Key Share Recipient is aware of the risks
associated with ownership of the Key Shares, (vi) each Key Share Recipient
is capable of bearing the financial risks associated with such ownership,
and (vii) while recognizing that it cannot effectively waive the
protections afforded to it under the Securities Act, each Key Share
Recipient regards itself as an entity of such financial capacity,
sophistication, and prudence that it does not require the protections
afforded to it by the Securities Act, and is relying upon its own
investigation of Key in making its decision to enter into this Agreement.
(c) The Key Shares have not been registered under the Securities Act, or
registered or qualified under any applicable state securities laws;
(d) The Key Shares are being issued to each Key Share Recipient in reliance
upon exemptions from such registration or qualification requirements, and
the availability of such exemptions depends in part upon the bona fide
investment intent of Seller and the Shareholder with respect to the Key
Shares;
(e) The acquisition of the Key Shares by each Key Share Recipient is solely for
its own account for investment, and each Key Share Recipient is not
acquiring the Key Shares for the account of any other person or with a view
toward resale, assignment, fractionalization, or distribution thereof. This
representation does not prohibit any Key Share Recipient from making any
sale or transfer not otherwise prohibited by law or this Agreement;
(f) Each Key Share Recipient shall not offer for sale, sell, transfer, pledge,
hypothecate or otherwise dispose of any of the Key Shares except in
accordance with the registration requirements of the Securities Act and
applicable state securities laws or upon delivery to Key of an opinion of
legal counsel reasonably satisfactory to Key that an exemption from
registration is available;
(g) Since the Key Shares have not been registered under the Securities Act or
applicable state securities laws, each Key Share Recipient must bear the
economic risk of holding the Key Shares for an indefinite period of time,
and each Key Share Recipient is capable of bearing such risk; and
(h) In addition to any other legends required by law or the other agreements
entered into in connection herewith, the certificate evidencing the Key
Shares will bear a conspicuous restrictive legend substantially as follows:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (ACT), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS,
AND THEY CANNOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE ACT
AND SUCH OTHER STATE LAWS OR UPON DELIVERY TO THIS CORPORATION OF AN OPINION OF
LEGAL COUNSEL SATISFACTORY TO THE CORPORATION THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
II.3 General Representations and Warranties of Buyer. Buyer represents and
warrants to the Seller and Shareholder as follows:
II.3.1. 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.
II.3.2. Agreement Authorized and its Effect on Other Obligations. The execution
and delivery of this Agreement have been authorized by all necessary corporate,
shareholder and other action on the part of the Buyer, and this Agreement is the
valid and binding obligation of the Buyer and enforceable (subject to normal
equitable principals) against the Buyer in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, debtor
relief or similar laws affecting the rights of creditors generally. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, will not conflict with or result in a
violation or breach of any term or provision of, nor constitute a default under
(i) the charter or bylaws (or other organizational documents) of the Buyer, (ii)
any obligation, indenture, mortgage, deed of trust, lease, contract or other
agreement to which the Buyer is a party or by which the Buyer is bound; or (iii)
any provision of any law, rule, regulation, order, permits, certificate, writ,
judgment, injunction, decree, determination, award or other decision of any
court, arbitrator, or other governmental authority to which the Buyer is
subject.
II.3.3. Consents and Approvals. No consent, approval or authorization of, or
filing of a registration with, any governmental or regulatory authority, or any
other person or entity is required to be made or obtained by Buyer in connection
with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
II.3.4. Finders Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Buyer and its counsel
directly with the Seller and the Shareholder and their counsel, without the
intervention by any other person as the result of any act of Buyer in such a
manner as to give rise to any valid claim against any of the parties hereto for
any brokerage commission, finders fee or any similar payments.
II.4 General Representations and Warranties of Key. Key represents and warrants
to the Key Share Recipients as follows:
II.4.1. Organization and Good Standing. Key is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland,
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 be so qualified or licensed would not
have a material adverse effect on its financial condition, properties or
business.
II.4.2. Agreement Authorized and its Effect on Other Obligations. The execution
and delivery of this Agreement have been authorized by all necessary corporate,
shareholder and other action on the part of Key, and this Agreement is the valid
and binding obligation of Key and enforceable (subject to normal equitable
principals) against Key in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, debtor relief or
similar laws affecting the rights of creditors generally. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, will not conflict with or result in a
violation or breach of any term or provision of, nor constitute a default under
(i) the charter or bylaws (or other organizational documents) of Key, (ii) any
obligation, indenture, mortgage, deed of trust, lease, contract or other
agreement to which Key is a party or by which Key is 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 Key or is subject.
II.4.3. Reports and Financial Statements. Key has previously furnished to the
Seller and Shareholder true and complete copies of the following (collectively,
the Key SEC Documents: (i) Keys annual report filed with the Securities and
Exchange Commission (the Commission) pursuant to the Securities and Exchange
Act of 1934, as amended (the Exchange Act), for Keys fiscal year ended June 30,
1997; (ii) Keys quarterly and other reports filed with the Commission since
June 30, 1997; (iii) all definitive proxy solicitation materials filed with the
Commission since June 30, 1997; (iv) any registration statements (other than
those relating to employee benefit plans) declared effective by the Commission
since June 30, 1997; (v) Keys Private Offering Memorandum dated September 18,
1997, relating to the 5% Convertible Subordinated Notes due 2004. The
consolidated financial statements of Key and its consolidated subsidiaries
included in Keys most recent annual report on Form 10-K and most recent
quarterly reports on Form 10-Q were prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as noted
therein) during the periods involved and fairly present the consolidated
financial position of Key and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and changes in
financial position for the periods then ended; and the Key SEC Documents did 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
the light of the circumstances under which they were made, not misleading as of
the date of such documents or such other date specified therein. Key further
represents that there has been no material adverse change in the consolidated
financial condition of Key since September 30, 1997.
II.4.4. Consents and Approvals. No consent, approval or authorization of, or
filing of a registration with, any governmental or regulatory authority, or any
other person or entity is required to be made or obtained by Key in connection
with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby, other than what is
required by the American Stock Exchange for the listing of the Key Shares to be
issued hereunder.
II.4.5. Finders Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Key and its counsel
directly with the Seller and the Shareholder and their counsel, without the
intervention by any other person as the result of any act of Key in such a
manner as to give rise to any valid claim against any of the parties hereto for
any brokerage commission, finders fee or any similar payments.
Article III
Closing
III.1 Closing Date. Consummation of the sale and the purchase contemplated by
this Agreement shall take place on the Effective Date at the offices of Lynch,
Gallagher, Lynch & Martineau, P.L.L.C., 555 N. Main Street, Mt. Pleasant,
Michigan.
III.2 Duties of Seller and the Shareholder at Closing. Contemporaneously with
the performance by Buyer and Key of their obligations to be performed at the
Closing, Seller and the Shareholder agree to, and shall deliver to Buyer at the
Closing the following:
(a) Bills of Sale conveying all of the Assets to Buyer sufficient to convey,
transfer to, and vest in Buyer, good and marketable title to all rights in
the Assets, free and clear of any and all Encumbrances;
(b) Duly endorsed Certificates of Title conveying from Seller to Buyer all of
those Assets for which a Certificate of Title is issued or required by an
applicable governmental entity sufficient to convey, transfer to, and vest
in Buyer, good and marketable title to all rights in those Assets, free and
clear of any and all Encumbrances;
(c) Assignments conveying all of the Seller Permits, if any, to Buyer
sufficient to convey, transfer to, and vest in Buyer, good and marketable
title to all rights in the Seller Permits, free and clear of any and all
Encumbrances;
(d) An Assignment of Contracts conveying all of the Contracts to Buyer
sufficient to convey, transfer to, and vest in Buyer, good and marketable
title to all rights in the Contracts, free and clear of any and all
Encumbrances;
(e) A legal opinion from Sellers counsel in a form acceptable to Buyer; and
(f) Such other items that Buyer deems necessary or convenient to effect the
transactions contemplated hereby.
III.3 Duties of Buyer and Key at Closing. Contemporaneously with the performance
by Seller and the Shareholder of their obligations to be performed at the
Closing, Buyer and Key agree to, and shall deliver to Seller, the Shareholder or
Sellers designee at the Closing the following:
(a) The Cash Consideration;
(b) A copy of the Listing Application (as defined in Section 4.8);
(c) The Key Shares for Jordan Exploration Company, L.L.C.;
(d) A legal opinion from Buyers counsel in a form acceptable to Seller and
Shareholder; and
(e) Such other items that Seller deems necessary or convenient to effect the
transactions contemplated hereby.
Article IV
Additional Agreements
IV.1 Noncompetition. Except as otherwise consented to or approved in writing by
Buyer, the Seller and the Shareholder agree that for a period of 60 months
following the Effective Date, such party will not, directly or indirectly,
acting alone or as a member of a partnership or a holder of, or investor in 5%
or more of any security of any class of any corporation or other business entity
(i) in the States of Michigan, Indiana, Ohio, Pennsylvania, West Virginia or New
York engage in the Businesses of Seller as it existed on or before the Effective
Date or perform trucking services; (ii) request any present customers or
suppliers of the Seller or Buyer (or any affiliate of Buyer) to curtail or
cancel their business with Buyer (or any of Buyers affiliates); (iii) disclose
to any person, firm or corporation any trade, technical or technological secrets
of Buyer (or any of Buyers affiliates) or of the Seller or any details of their
organization or business affairs which constitute confidential information; (iv)
induce or actively attempt to influence any employee of Buyer (or any of Buyers
affiliates) to terminate his employment; or (v) for a period of one year employ
any of those individuals set forth in Schedule 4.1. The Seller and the
Shareholder agree that if either the length of time or geographical area as set
forth in this Section 4.1 is deemed too restrictive in any court proceeding, the
court may reduce such restrictions to those which it deems reasonable under the
circumstances. The obligations expressed in this Section 4.1 are in addition to
any other obligations that the Seller or the Shareholder may have under the laws
of any state requiring a corporation selling its assets (or a 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.
The Seller and the Shareholder further agree and acknowledge that Buyer does not
have any adequate remedy at law for the breach or threatened breach by the
Seller or the Shareholder of the covenants contained in this Section 4.1, and
agree that Buyer may, in addition to the other remedies which may be available
to it hereunder, file a suit in equity to enjoin the Seller or the Shareholder
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. The Seller and the Shareholder acknowledge that the
covenants set forth in this Section 4.1 are being executed and delivered by such
party in consideration of the covenants of Buyer contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged. Notwithstanding any other provision the Shareholder shall not be
in violation of this Section 4.1 if he continues to operate Phoenix Operating
Co., Inc., but only to the extent that Phoenix Operating Co., Inc. performs
engineering, supervision and consulting services in the oil and gas business
and/or provides well testing equipment for gas wells in accordance with business
practices of Phoenix Operating Co., Inc. as of the Effective Date.
IV.2 Hiring Employees. Schedule 4.2 hereto is a complete and accurate listing of
all employees of the Seller that devote their full time and effort in the
conduct of the Businesses (the Employees). 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 Effective Date. Notwithstanding any other provision hereof, this
Section 4.2 shall not be deemed to create any right or claim for the benefit of,
and shall not be enforceable by, any person that is not a party to this
Agreement.
IV.3 Allocation of Purchase Price. The parties hereto agree to allocate the
purchase price paid by Buyer for the Assets hereunder as set forth on Schedule
4.3 hereto, and shall report this transaction for federal income tax purposes in
accordance with the allocation so agreed upon. The parties hereto for themselves
and for their respective successors and assigns covenant and agree that they
will file coordinating Form 8594's in accordance with Section 1060 of the
Internal Revenue Code of 1986, as amended, with their respective income tax
returns for the taxable year that includes the Effective Date.
IV.4 Name Change. The Seller shall, within ten (10) days from the Effective
Date, caused to be filed (i) with the appropriate state office of the Sellers
state of organization an amendment to the charter (or other applicable
organization document) of the Seller changing the name of the Seller from its
current name to a name that is not similar to such name, and (ii) with the
appropriate authorities of the Sellers state of organization and any other
states such documents as are required to effect such name change, including
without limitation, amendments or withdrawals of certificates of authority to do
business and assumed name filings. The Seller shall, within five (5) days from
the date of its receipt of confirmation of such filings from the applicable
state authorities, cause to be delivered to Buyer copies of all such
confirmations. The Shareholder shall take all steps necessary for the Seller to
complete the obligations set forth in this Section 4.4.
IV.5 First Call. Shareholder agrees to comply with the covenants given by
Shareholder in Section 4.5.2 of an Asset Purchase Agreement dated December 2,
1997, between Wellcorps, L.L.C., and others, and WellTech Eastern, Inc.
IV.6 Possession of Tangible Personal Property and Inventories. Possession of the
Assets shall be deemed to have passed from Seller to Buyer as of the Effective
Date. Seller will notify Buyer of the location of the Tangible Personal Property
and Inventories and all such Assets shall be located in the State of Michigan on
the Effective Date.
IV.7 Proration of Expenses. The parties further agree that the following
obligations shall be prorated as follows:
(a) All utility charges incurred by Seller in the Businesses prior to the date
of Closing shall be paid by Seller. The Buyer shall be responsible for the
utility charges incurred by the Assets purchased by Buyer after the
Effective Date.
(b) The Seller shall pay a prorata share of the personal property taxes for the
Assets sold by the Seller to Buyer for all years prior to the Closing and a
prorata share of all such taxes for 1997, prorated to the Effective Date,
in accordance with the standards of practice in Grand Traverse County,
Michigan. If the actual taxes for the current year are not known as of the
Effective Date, the apportionment of taxes shall be upon the basis of taxes
for the immediate preceding year, provided that, if taxes for the current
year are thereafter determined to be more or less than the taxes for the
preceding year (after any appeal of the assessed valuation thereof is
concluded), Seller and Buyer promptly shall adjust the proration of such
taxes and Seller and/or Buyer, as the case may be, shall pay to the other
any amount required as a result of such adjustment and as a covenant shall
survive the Closing.
(c) The Seller shall pay all taxes, whether federal, state or local, assessed
against the Assets or the Businesses for that period of time prior to the
Effective Date, including any and all sales taxes, use taxes, unemployment
compensation taxes or taxes arising out of the fact that Seller hired
employees.
(d) The Seller shall pay all other costs or expenses arising out of the Assets
or the Businesses prior to the Effective Date.
(e) The Buyer shall pay all sales taxes and/or use taxes, if any, charged as a
result of the transfer of title of any and all Assets from the Seller to
Buyer with respect to this transaction.
(f) The Buyer shall pay all costs or expenses arising out of the Assets or the
use of the Assets by the Buyer after the Effective Date.
IV.8 Issuance of Key Shares. On the Effective Date, Key shall file an additional
Listing Application with the American Stock Exchange requesting the listing of
Key Shares (the Listing Application@). In addition, Key shall send written
instructions to its transfer agent to issue, countersign and register one or
more certificates representing the Key Shares in the name of the Key Share
Recipients in accordance with Section 1.2(b) and deliver such certificate(s) to
Seller at the address specified in Section 6.4 hereof. In the event that the
American Stock Exchange does not approve the Listing Application by December 15,
1997, the parties hereto shall negotiate in good faith the appropriate
consideration to replace such shares.
If the parties are unable to resolve any issue as to the adjustments to be made
pursuant to the preceding sentence within thirty (30) days after the closing,
then either party, within fifteen (15) days thereafter, but no later than
forty-five (45) calendar days after the closing, may file for arbitration in
accordance with the rules of the American Arbitration Association (AAA) then
currently in effect, with arbitration to take place in Isabella County,
Michigan, or such other place as the parties shall agree. Notice of demand for
arbitration shall be filed in writing with the other party to this agreement and
with AAA. The award rendered by the arbitrator or arbitrators shall be final,
and judgment may be entered on it in accordance with applicable law in any court
having jurisdiction on the matter. However, the time for filing arbitration
shall be of the essence and shall be strictly limited to the time period
provided in this agreement, and the timely filing shall be a condition precedent
to the exercise of the right of arbitration; if arbitration is not filed within
such scope, any right to arbitrate shall be barred. Further the scope of any
arbitration shall be limited solely to the issue of amount of any adjustments to
the purchase price pursuant to this section and shall not extend to any other
issue or matter that may arise out of this agreement. The arbitrator shall have
no power or authority to order or determine any thing or matter other than the
dollar amount of, and procedure for payment of, any adjustment.
IV.9 Registration Rights.
IV.9.1. Agreement to Register Resales. Key agrees that no later than December
31, 1997, it will file with the Commission on Form S-3, or if Form S-3 is not
available to Key, on such other form as is available to Key for registration of
its securities under the Securities Act, a shelf registration statement pursuant
to Rule 415 of the Securities Act (the Shelf Registration Statement) covering
the offer and resale by the Key Share Recipients of 88,540 of the Key Shares
issued pursuant to this Agreement (herein the Covered Shares) and will use its
best efforts to cause the Shelf Registration Statement to be declared effective
by March 31, 1998, by the Commission. The Covered Shares shall be issued as
follows:
30,100 Key Shares: Jordan Exploration Company, L.L.C.
58,440 Key Shares: Seller
IV.9.2. Effectiveness of Shelf Registration Statement. Key agrees to maintain
the Shelf Registration in effect until the earlier of (i) the date that the Key
Share Recipients can transfer the Covered Shares without restriction pursuant to
Rule 144 promulgated under the Securities Act (or any successor rule) and (ii)
the date that the Key Share Recipients no longer own any of the Covered Shares.
In addition, Key shall amend the Shelf Registration Statement and supplement the
prospectus included therein as and when required by Form S-3 or the applicable
form, or by the Securities Act. Key shall promptly deliver upon request from
time to time to Key Share Recipients copies of the prospectus, as supplemented,
in order to facilitate resale of the Covered Shares.
IV.9.3. Blue Sky Qualification. In any offering pursuant to this Section, Key
will use its best efforts to effect any such registration and use its best
efforts to effect such qualification and compliance as may be required and as
would permit or facilitate the resale of such Covered Shares, including, without
limitation, registration under the Securities Act, appropriate qualifications
under applicable blue-sky or other state securities laws and, appropriate
compliance with any other governmental requirements.
IV.9.4. Registration Expenses. All expenses (except for any legal fees for the
Key Share Recipients counsel) relating to the obligations of Key pursuant to
this Section 4.9 (including, but not limited to, the expenses of any
qualifications under the blue-sky or other state securities laws and compliance
with governmental requirements of preparing and filing any post-effective
amendments or prospectus supplements required for the lawful distribution of the
Covered Shares to the public in connection with such registration) will be paid
by Key.
IV.9.5. Rights Non-Transferable. The registration rights under this Section 4.9
are for the sole benefit of the Key Share Recipients, are personal in nature,
and shall not be transferrable or otherwise available to any subsequent
shareholder of the Covered Shares; provided, however, that Seller may transfer
its registration rights under this Section 4.9 to the Shareholder in the event
the Covered Shares are distributed to the Shareholder, and upon such transfer,
the Shareholder shall have all of the rights, duties and obligations of Seller
under this Section 4.9 with respect to the Covered Shares so transferred.
IV.9.6. Undertaking to File Reports and Cooperate in Transactions. For as long
as Key Share Recipients are subject to Rule 144 or Rule 145 of the Securities
Act with respect to the Key Shares, Key will use reasonable commercial efforts
to timely file all annual, quarterly and other reports required to be file by it
under Section 13 or 15(d) of the Exchange Act and the rules and regulations of
the Commission thereunder, as amended from time to time, or make other
information publicly available as required by Rule 144 or 145 (or such Rules=
successor). If the Key Share Recipients propose to sell any of the Covered
Shares pursuant to the Shelf Registration, or any of the Key Shares pursuant to
Rule 144 or Rule 145, Key shall cooperate with the Key Share Recipients so as to
enable such sales to be made in accordance with applicable laws, rules and
regulations, the requirements of Key's transfer agent, and the reasonable
requirements of the broker through which the sales are proposed to be executed.
Without limiting the generality of the foregoing, Key shall, upon request,
furnish with respect to each such sale (i) a written statement certifying that
Key has complied with the public information requirements of Rule 144 and 145
and (ii) an opinion of Key's counsel regarding such matters as Key's transfer
agents or such Key Share Recipients broker may reasonably request.
IV.9.7. Remedies. As long as an Event of Default (as defined below) has occurred
and is continuing on the date that Key receives the Default Notice (as defined
below), Key shall, upon receipt of written notice from a Key Share Recipient
(the Default Notice@) and within ten (10) days of receiving the Default Notice,
purchase those number of Covered Shares still owned by the Key Share Recipient
specified in the Default Notice at a price equal to the average closing price of
Key Common Stock on the American Stock Exchange, or if the Key Common Stock is
not trading on the American Stock Exchange on the applicable trading day, on the
national securities exchange on which Key Common Stock was traded on such date,
for the twenty (20) trading days immediately preceding the day on which Key
receives the Default Notice. As used in this Section 4.9.7, the term Event of
Default@ means the occurrence of (i) Keys failure to cause the Shelf
Registration Statement to be declare effective by the Commission on or before
March 31, 1998, or (ii) Keys failure to maintain the effectiveness of the Shelf
Registration Statement as herein required.
IV.10 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 V
Indemnification
V.1 Indemnification by the Seller and the Shareholder. In addition to any other
remedies available to Buyer under this Agreement, or at law or in equity, the
Seller and the Shareholder shall, jointly and severally, indemnify, defend and
hold harmless Buyer and its officers, directors, employees, agents and
stockholders (collectively, the Buyer Indemnified Parties@), 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 any of the Buyer Indemnified Parties shall incur or suffer,
which arise, result from or relate to (i) any breach of, or failure by the
Seller or the Shareholder 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
Seller or the Shareholder under this Agreement; and (ii) except to the extent
the Damages are exacerbated by Buyer or Key, the Retained Liabilities. The
indemnification obligations of Seller and the Shareholder under this Section 5.1
shall not exceed the Purchase Price; provided, however, that the indemnification
obligations of Seller and the Shareholder under this Section 5.1 for Damages
incurred or suffered which arise from or relate to the Retained Liabilities
shall be unlimited in amount.
V.2 Indemnification by Buyer and Key. In addition to any other remedies
available to the Seller and the Shareholder under this Agreement, or at law or
in equity, Buyer and Key shall, jointly and severally, indemnify, defend and
hold harmless the Seller and the Shareholder and their respective officers,
directors, employees and agents (collectively, the Seller Indemnified Parties@)
against and with respect to any and all Damages that any of the Seller
Indemnified Parties shall incur or suffer, which arise, result from or relate to
(i) any breach of, or failure by Buyer or Key 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 or the Shareholder by or on behalf of Buyer or Key under this Agreement;
and (ii) except to the extent that any Damages arise out of a breach by Seller
and/or Shareholder of any of their respective representations, warranties or
covenants contained herein, any Damages arising out of the use of the Assets by
Buyer after the Effective Date.
V.3 Indemnification Procedure. If any party hereto discovers or otherwise
becomes aware of an indemnification claim arising under Section 5.1 or 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
amount of the claim is not increased by the timing of, or failure to give such
notice. 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 amount of the claim is not increased by
the timing of, or failure to give such notice. 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 or delayed.
Article VI
Miscellaneous
VI.1 Survival of Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements made by the parties hereto shall survive
for sixty (60) months after the Effective Date notwithstanding any investigation
made by or on behalf of any of the parties hereto unless otherwise provided by
this Agreement or applicable law. 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 for sixty (60) months after
the Effective Date despite any investigation made by any party hereto or on its
behalf unless otherwise provided by this Agreement or applicable law.
VI.2 Entirety. This Agreement with the attached Schedules 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.
VI.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.
VI.4 Notices and Waivers. Any notice or waiver to be given to any party hereto
shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested:
If to Buyer
- --------------------------------------------------------------------------------
Addressed to: With a copy to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Key Energy Group, Inc. Steven W. Martineau
Two Tower Center, Twentieth Floor Lynch, Gallagher, Lynch & Martineau, PLLC
East Brunswick, New Jersey 08816 555 N. Main Street, P.O. Box 446
Attn: General Counsel Mt. Pleasant, Michigan 48804-0446
Facsimile: (908) 247-5148 Facsimile: (517) 773-2107
- --------------------------------------------------------------------------------
If to any of the Sellers or any of the Shareholders
- --------------------------------------------------------------------------------
Addressed to: With a copy to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Jeff Critchfield Michael Rhodes
1623 Northern Star Drive Loomis, Ewert, Parsley, Davis & Gotting
Traverse City, Michigan 49686 232 S. Capitol Avenue, #1000
Facsimile: (616) 929-7110 Lansing, Michigan 48933-1525
Facsimile: (517) 482-0555
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
VI.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.
VI.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.
VI.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.
VI.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of the State of Michigan.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Shareholder has executed this Agreement and the other
parties hereto have caused this Agreement to be signed in their respective
corporate names by their respective duly authorized representatives, all as of
the day and year first above written.
BUYER:
WELLTECH EASTERN, INC.
By:
Name: Francis D. John
Title: President
KEY:
KEY ENERGY GROUP, INC.
By:
Name: Francis D. John
Title: President
SELLERS:
WHITE RHINO DRILLING, INC.
By:
Name:
Title:
SHAREHOLDER:
_________________________________
Jeff Critchfield
SCHEDULE 2.1.8(d)
CHANGE IN ASSETS
On November 25, 1997, Seller purchased three (3) rigs from Jordan Exploration
Company, L.L.C.