::ODMA\PCDOCS\DOCS\139922\6
Stock Purchase Agreement
among
Key Rocky Mountain, Inc.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated as of September 29, 1997
::ODMA\PCDOCS\DOCS\139922\6
TABLE OF CONTENTS
Page
ARTICLE 1PURCHASE AND SALE
1.1 Purchase and Sale of the Company Shares...........................iii
1.2 Cash Adjustment Payment...........................................iii
1.3 Closing.............................................................2
1.4 Resignations; Consulting Agreement..................................2
1.5 Closing Deliveries..................................................2
1.5.1 Opinion of Buyer=s Counsel...................................2
1.5.2 Opinion of Shareholders= Counsel.............................3
ARTICLE 2REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Shareholders..................3
2.1.1 Organization and Standing..................................3
2.1.2 Agreement Authorized and its Effect on Other Obligations...4
2.1.3 Capitalization.............................................4
2.1.4 Ownership of the Company Shares............................4
2.1.5 No Subsidiaries............................................4
2.1.6 Financial Statements.......................................4
2.1.7 Liabilities................................................5
2.1.8. Additional Company Information.............................5
2.1.9 No Defaults................................................7
2.1.10 Absence of Certain Changes and Events......................7
2.1.11 Taxes......................................................8
2.1.12 Columbine Farms, Inc........................................9
2.1.13 Intellectual Property.......................................9
2.1.14 Title to and Condition of Assets............................9
2.1.15 Contracts...................................................9
2.1.16 Licenses and Permits........................................10
2.1.17 Litigation..................................................10
2.1.18 Environmental Compliance....................................10
2.1.19 Compliance with Other Laws..................................11
2.1.20 ERISA Plans or Labor Issues................................12
2.1.21 Investigations; Litigation..................................12
2.1.22 Absence of Certain Business Practices.......................13
2.1.23 No Untrue Statements........................................13
2.1.24 Consents and Approvals......................................13
2.1.25 Finder=s Fee................................................13
2.2 Representations and Warranties of Buyer.................................13
2.2.1 Organization and Good Standing...............................13
2.2.2 Agreement Authorized and its Effect on Other Obligations.....14
2.2.3 Consents and Approvals.......................................14
2.2.4 Investigations; Litigation...................................14
ARTICLE 3ADDITIONAL AGREEMENTS
3.1 Further Assurances..................................................14
3.2 Public Announcements................................................14
3.3 338(h)(10) Election.................................................14
ARTICLE 4INDEMNIFICATION
4.1 Indemnification by the Shareholders.................................15
4.2 Indemnification by Buyer............................................15
4.3. Indemnification Procedure...........................................15
ARTICLE 5MISCELLANEOUS
5.1 Survival of Representations, Warranties and Covenants...............16
5.2 Entirety............................................................16
5.3 Counterparts........................................................16
5.4 Notices and Waivers.................................................16
5.5 Table of Contents and Captions......................................17
5.6 Successors and Assigns..............................................17
5.7 Severability........................................................17
5.8 Applicable Law......................................................17
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this AAgreement@) is entered into as of
September 29, 1997, by and among Key Rocky Mountain, Inc., a Delaware
corporation (ABuyer@), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (collectively,
the AShareholders@).
W I T N E S S E T H:
WHEREAS, Buyer is a corporation duly organized and validly existing under
the laws of the State of Delaware, with its principal executive offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇;
WHEREAS, ▇▇▇▇▇▇ Well Service, Inc. (the ACompany@) is a corporation duly
organized and validly existing under the laws of the State of Colorado, with its
principal executive offices at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
WHEREAS, the Shareholders own 7,500 shares (the ACompany Shares@) of common
stock, par value $10 per share, of the Company (the ACompany Common Stock@),
which constitutes all of the issued and outstanding shares of capital stock of
the Company; and
WHEREAS, the Shareholders desire to sell to Buyer, and Buyer desires to
purchase from the Shareholders, all of the issued and outstanding capital stock
of the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE
ARTICLE 1 PURCHASE AND SALE.1.1 Purchase and Sale of the Company Shares.1.1
Purchase and Sale of the Company Shares. Subject to the terms and conditions of
this Agreement, on the date hereof, the Shareholders agree to sell and convey to
Buyer, free and clear of all Encumbrances (as defined in Section 2.1.8.1
hereof), and Buyer agrees to purchase and accept from the Shareholders, all of
the Company Shares. In consideration of the sale of the Company Shares, Buyer
shall pay to the Shareholders a purchase price of Eleven Million Eight Hundred
Thirty Nine Thousand Dollars ($11,839,000) (the APurchase Price@) in cash, and
the Cash Adjustment Payment (as defined in Section 1.2 hereof), if any, in
accordance with Section 1.2 hereof.
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1.2 Cash Adjustment Payment1.2Cash Adjustment Payment. Buyer shall cause to
be prepared and delivered to the Shareholders a consolidated balance sheet of
the Company as of the date hereof (the AFinal Balance Sheet@) within 60 days
after the date hereof, which balance sheet will be prepared in accordance with
generally accepted accounting principles, consistently applied in all respects.
Buyer and the Shareholders shall jointly review the Final Balance Sheet, and
endeavor in good faith to resolve all disagreements regarding the entries
thereon and reach a final determination thereof within 90 days from the date
hereof. If the parties cannot agree on the entries to be placed on the Final
Balance Sheet, the dispute will be resolved by an independent accounting firm
mutually agreed to by the Shareholders and Buyer (such agreement not to be
unreasonably withheld or delayed) whose resolution shall be binding on and
enforceable against the parties hereto. Within 10 days of reaching such final
determination, the following adjusting payments shall be made:
1.2.1 If the Final Net Current Value of the Company (defined below) exceeds
$1,839,000, Buyer shall pay to the Shareholders the amount of such difference
(the ACash Adjustment Payment@), or
1.2.2 If the Final Net Current Value of the Company (defined below) is less
than $1,839,000, Shareholders shall pay to Buyer the amount of such difference.
1.2.3 In addition, any capital expenditures made by Company since the HADCO
appraisal dated May 25, 1997, subject to Buyer=s approval, will be added to the
Final Net Current Value of the Company as set out in paragraph (1) or (2) above.
Buyer hereby acknowledges approval of the capital expenditures listed on
Schedule 1.2.
The term AFinal Net Current Value of the Company@ means the dollar value of
the amount by which the ATotal Current Assets@ as recorded on the Final Balance
Sheet exceed the ATotal Current Liabilities@ as recorded on the Final Balance
Sheet.
1.3 Closing1.3........Closing. Consummation of the transactions
contemplated by this Agreement (the AClosing@) shall take place at the offices
of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
contemporaneously with the execution of this Agreement by all of the parties
hereto (the AClosing Date@) unless another time, place or date is agreed to by
the Shareholders and the Buyer.
1.4 Resignations; Consulting Agreement1.4 Resignations; Consulting
Agreement. At the Closing, each of the officers and directors of the Company
will resign, and Buyer will enter into an consulting agreement (the AConsulting
Agreement@) with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. The performance of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as a
consultant to Buyer is separate and divisible from this Agreement and his manner
of performance of such consulting agreement shall not effect the binding
obligations of this Agreement.
1.5 Closing Deliveries1.5 Closing Deliveries. At the Closing, (a) the
Shareholders shall deliver to Buyer duly and validly issued certificate(s)
representing all of the Company Shares owned beneficially or of record by them,
each such certificate to be duly endorsed in blank and in good form for
transfer, or accompanied by stock powers duly executed in blank sufficient and
in good form to properly transfer such Company Shares to Buyer, (b) the
Shareholders shall deliver Buyer an agreement not to compete dated the date
hereof (the ANon-Compete Agreement@), (c) the Shareholders and Buyer shall have
delivered to one another all other documents, instruments and agreements as
required under this Agreement, (d) Buyer shall deliver to the Shareholders the
cash purchase price payable at Closing as provided in Section 1.1 by a check
drawn on an account of Buyer or one of Buyer=s affiliates, and (e) the Buyer and
Shareholders will deliver to one another the opinions of counsel as described
below:
1.5.1 Opinion of Buyer=s Counsel1.5.1 Opinion of Buyer=s Counsel. The Buyer
shall deliver a favorable opinion, dated as of the Closing Date, from ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P., counsel for the Buyer, in form and substance satisfactory to the
Shareholders, to the effect that (i) the Buyer has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its state
of organization; (ii) all corporate proceedings required to be taken by or on
the part of the Buyer to authorize the execution of this Agreement and the
implementation of the transactions contemplated hereby have been taken; and
(iii) this Agreement has been duly executed and delivered by, and is the legal,
valid and binding obligation of the Buyer and is enforceable against Buyer in
accordance with its terms, except as 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 (i)
certificates of public officials and of officers of the Buyer as to matters of
fact and (ii) the opinion or opinions of other counsel, which opinions shall be
reasonably satisfactory to the Shareholders, as to matters other than federal or
Texas law.
1.5.2 Opinion of Shareholders= Counsel1.5.2 Opinion of Shareholders=
Counsel. The Shareholders shall deliver a favorable opinion, dated the Closing
Date, from ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Gillette, Wyoming, counsel to the Shareholders,
in form and substance satisfactory to Buyer, to the effect that (i) the Company
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Colorado and is qualified to transact
business in every jurisdiction in which the nature of the Company=s contacts
require such qualification, (ii) all outstanding shares of the Company Common
Stock have been validly issued and are fully paid and nonassessable and are free
of preemptive rights; (iii) all of the Company Shares are owned beneficially and
of record by the Shareholders free of any Encumbrances; (iv) the Company owns
all of its assets free and clear of any Encumbrances other than those
Encumbrances listed on the Balance Sheet or Schedules hereto, and (v) this
Agreement, the Non-Competition Agreement and the Consulting Agreement have been
duly executed and delivered by, and this Agreement and the Consulting Agreement
are the legal valid and binding obligations of the Shareholders that are parties
thereto and are enforceable against the Shareholders that are parties thereto in
accordance with their terms, except as the enforceability of this Agreement 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 (i) certificates of public officials and of officers of
the Company or the Shareholders as to matters of fact and (ii) on the opinion or
opinions of other counsel, which opinions shall be reasonably satisfactory to
Buyer, as to matters other than federal or Wyoming law.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Shareholders2.1 Representations
and Warranties of the Shareholders. Each of the Shareholders jointly and
severally represents and warrants to Buyer as follows:
2.1.1 Organization and Standing2.1.1 Organization and Standing. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Colorado, 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.
2.1.2 Agreement Authorized and its Effect on Other
Obligations2.1.2Agreement Authorized and its Effect on Other Obligations. Each
of the Shareholders is a resident of Wyoming, above the age of 18 years, and has
the legal capacity and requisite power and authority to enter into, and perform
his obligations under this Agreement, the Non-Competition Agreement and the
Consulting Agreement. This Agreement, the Non-Competition Agreement and the
Consulting Agreement are valid and binding obligations of each of the
Shareholders that are a party thereto enforceable against each of the
Shareholders that are a party thereto in accordance with their terms. The
execution, delivery and performance of this Agreement, the Non-Competition
Agreement and the Consulting Agreement by each of the Shareholders that are a
party thereto will not conflict with or result in a violation or breach of any
term or provision of, nor constitute a default under (i) the Certificate of
Incorporation or Bylaws of the Company or (ii) any obligation, indenture,
mortgage, deed of trust, lease, contract or other agreement to which the Company
or either of the Shareholders is a party or by which the Company or either of
the Shareholders or their respective properties are bound.
2.1.3 Capitalization2.1.3 Capitalization. The authorized capitalization of
the Company consists of 15,000 shares of Company Common Stock, of which, as of
the date hereof, 7,500 shares are issued and outstanding and held beneficially
and of record by the Shareholders. On the date hereof, the Company does not have
any outstanding options, warrants, calls or commitments of any character
relating to any of its authorized but unissued shares of capital stock. All
issued and outstanding shares of Company Common Stock are validly issued, fully
paid and non-assessable and are not subject to preemptive rights. None of the
outstanding shares of Company Common Stock is subject to any voting trusts,
voting agreement or other agreement or understanding with respect to the voting
thereof, nor is any proxy in existence with respect thereto.
2.1.4 Ownership of the Company Shares.2.1.4 Ownership of the Company
Shares. The Shareholders hold good and valid title to all of the Company Shares,
free and clear of all Encumbrances. The Shareholders possess full authority and
legal right to sell, transfer and assign the Company Shares to Buyer, free and
clear of all Encumbrances. Upon transfer to Buyer by the Shareholders of the
Company Shares, Buyer will own the Company Shares free and clear of all
Encumbrances. There are no claims pending or, to the knowledge of either of the
Shareholders, threatened, against the Company or either of the Shareholders that
concern or affect title to the Company Shares, or that seek to compel the
issuance of capital stock or other securities of the Company.
2.1.5 No Subsidiaries2.1.5 No Subsidiaries. Except as specified in Schedule
2.1.5 hereto, there is no corporation, partnership, joint venture, business
trust or other legal entity in which the Company, either directly or indirectly
through one or more intermediaries, owns or holds beneficial or record ownership
of the outstanding voting securities.
2.1.6 Financial Statements2.1.6 Financial Statements. The Company has
delivered to Buyer copies of the Company=s unaudited balance sheet as of June
30, 1997, a copy of which is attached hereto as Schedule 2.1.6 (the A6/30
Balance Sheet@), and related statements of income (collectively, the AFinancial
Statements@), as at and for the six months ended as of June 30, 1997 (the
ABalance Sheet Date@). The financial Statements are complete in all material
respects. The Financial Statements present fairly the financial condition of the
Company as of the dates and for the periods indicated. The Financial Statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis. The accounts receivable reflected in the 6/30
Balance Sheet, or which have been thereafter acquired by the Company, have been
collected or are collectible at the aggregate recorded amounts thereof less
applicable reserves, which reserves are adequate.
2.1.7 Liabilities2.1.7 Liabilities. Except as disclosed on Schedule 2.1.7.
hereto, the Company does not have any liabilities or obligations, either
accrued, absolute or contingent, nor do either of the Shareholders have any
knowledge of any potential liabilities or obligations, other than those (i)
reflected or reserved against in the 6/30 Balance Sheet or (ii) incurred in the
ordinary course of business since the Balance Sheet Date that would not
materially adversely affect the value and conduct of the business of the
Company.
2.1.8. Additional Company Information2.1.8. Additional Company Information.
Attached as Schedule 2.1.8 hereto are true, complete and correct lists of the
following items:
2.1.8.1 Real Estate2.1.8.1 Real Estate. All real property and structures
thereon owned, leased or subject to a contract of purchase and sale, or lease
commitment, by the Company, with a description of the nature and amount of any
Encumbrances thereon. The term AEncumbrances@ means all liens, security
interests, pledges, mortgages, deeds of trust, claims, rights of first refusal,
options, charges, restrictions or conditions to transfer or assignment,
liabilities, obligations, privileges, equities, easements, rights-of-way,
limitations, reservations, restrictions and other encumbrances of any kind or
nature;
2.1.8.2 Machinery and Equipment2.1.8.2 Machinery and Equipment. All rigs,
carriers, rig equipment, machinery, transportation equipment, tools, equipment,
furnishings, and fixtures owned, leased or subject to a contract of purchase and
sale, or lease commitment, by the Company with a description of the nature and
amount of any Encumbrances thereon;
2.1.8.3 Inventory2.1.8.3 Inventory. All Inventory items or groups of
inventory items owned by the Company, excluding raw materials and work in
process, which raw materials and work in process are valued on the 6/30 Balance
Sheet, together with the amount of any Encumbrances thereon;
2.1.8.4 Receivables2.1.8.4 Receivables. All accounts and notes receivable
of the Company, together with (i) aging schedules by invoice date and due date,
(ii) the amounts provided for as an allowance for bad debts, (iii) the identity
and location of any asset in which the Company holds a security interest to
secure payment of the underlying indebtedness, and (iv) a description of the
nature and amount of any Encumbrances on such accounts and notes receivable.
Buyer agrees to pay Shareholders any proceeds received from the case captioned
▇▇▇▇▇▇▇▇▇ Oil Corporation vs. ▇▇▇▇▇▇ Well Service Inc. vs. Centron, less any
costs or attorneys fees incurred by Buyer. Such proceeds will include the amount
deposited by ▇▇▇▇▇▇▇▇▇ Oil Corporation in the Park County District Court which
is an offer of judgment.
2.1.8.5 Payables2.1.8.5 Payables. All notes payable of the Company,
together with an appropriate aging schedule;
2.1.8.6 Insurance2.1.8.6 Insurance. All insurance policies or bonds
currently maintained by the Company, including title insurance policies, with
respect to the Company, including those covering the Company=s properties, rigs,
machinery, equipment, fixtures, employees and operations, as well as listing of
any premiums, deductibles, audit adjustments or retroactive adjustments dues or
pending on such policies or any predecessor policies;
2.1.8.7 Contracts2.1.8.7 Contracts. All contracts, including leases under
which the Company is lessor or lessee, which are to be performed in whole or in
part after the date hereof;
2.1.8.8 Employee Compensation Plans2.1.8.8 Employee Compensation Plans. All
bonus, incentive compensation, deferred compensation, profit-sharing,
retirement, pension, welfare, group insurance, death benefit, or other employee
benefit or fringe benefit plans, arrangements or trust agreements of the Company
or any employee benefit plan maintained by the Company, together with copies of
the most recent reports with respect to such plans, arrangements, or trust
agreements filed with any governmental agency and all Internal Revenue Service
determination letters and other correspondence from governmental entities that
have been received with respect to such plans, arrangements or agreements
(collectively, AEmployee Plans@);
2.1.8.9 Salaries2.1.8.9 Salaries. The names and salary rates of all present
employees of the Company, and, to the extent existing on the date of this
Agreement, all arrangements with respect to any bonuses to be paid to them from
and after the date of this Agreement;
2.1.8.10 Bank Accounts2.1.8.10 Bank Accounts. The name of each bank in
which the Company has an account, the account balances as of the Closing Date
and the names of all persons authorized to draw thereon;
2.1.8.11 Employee Agreements2.1.8.11 Employee Agreements. Any collective
bargaining agreements of the Company with any labor union or other
representative of employees, including amendments, supplements, and written or
oral understandings, and all employment and consulting and severance agreements
of the Company;
2.1.8.12 Intellectual Property2.1.8.12 Intellectual Property. All patents,
patent applications, trademarks and service marks (including registrations and
applications therefore), trade names, copyrights and written know-how, trade
secrets and all other similar proprietary data and the goodwill associated
therewith (collectively, the AIntellectual Property@) used by the Company;
2.1.8.13 Trade Names2.1.8.13 Trade Names. All trade names, assumed and
fictitious names used or held by the Company, whether and where such names are
registered and where used;
2.1.8.14 Licenses and Permits2.1.8.14 Licenses and Permits. All permits,
authorizations, certificates, approvals, registrations, variances, waivers,
exemptions, rights-of-way, franchises, ordinances, licenses and other rights of
every kind and character (collectively, the APermits@) of the Company under
which it conducts its business;
2.1.8.15 Promissory Notes2.1.8.15 Promissory Notes. All long-term and
short-term promissory notes, installment contracts, loan agreements,
credit-agreements, and any other agreements of the Company relating thereto or
with respect to collateral securing the same;
2.1.8.16 Guaranties2.1.8.16 Guaranties. All indebtedness, liabilities and
commitments of others and as to which the Company is a guarantor, endorser,
co-maker, surety, or accommodation maker, or is contingently liable therefor and
all letters of credit, whether stand-by or documentary, issued by any third
party;
2.1.8.17 Reserves and Accruals2.1.8.17 Reserves and Accruals. All
accounting reserves and accruals maintained in the 6/30 Balance Sheet;
2.1.8.18 Leases2.1.8.18 Leases. All leases to which the Company is a party;
and
2.1.8.19 Environment2.1.8.19 Environment. All environmental permits,
approvals, certifications, licenses, registrations, orders and decrees
applicable to current operations conducted by the Company and all environmental
audits, assessments, investigations and reviews conducted by the Company within
the last five years or otherwise in the Company=s possession on any property
owned, leased or used by the Company.
2.1.9 No Defaults2.1.9 No Defaults. The Company is not in default in any
obligation or covenant on its part to be performed under any obligation, lease,
contract, order, plan or other arrangement.
2.1.10 Absence of Certain Changes and Events2.1.10 Absence of Certain
Changes and Events. Except as disclosed on Schedule 2.1.10 hereto and other than
as a result of the transactions contemplated by this Agreement, since the
Balance Sheet Date, there has not been:
2.1.10.1 Financial Change2.1.10.1 Financial Change. Any adverse change in
the financial condition, backlog, operations, assets, liabilities or business of
the Company;
2.1.10.2 Property Damage2.1.10.2 Property Damage. Any material damage,
destruction, or loss to the business or properties of the Company (whether or
not covered by insurance);
2.1.10.3 Dividends. Any declaration, setting aside, or payment of any
dividend or other distribution in respect of the Company Common Stock, or any
direct or indirect redemption, purchase or any other acquisition by the Company
of any such stock;
2.1.10.4 Capitalization Change. Any change in the capital stock or in the
number of shares or classes of the Company=s authorized or outstanding capital
stock as described in Section 2.1.3 hereof;
2.1.10.5 Labor Disputes. Any labor or employment dispute of whatever
nature; or
2.1.10.6 Other Material Changes. Any other event or condition known to
either of the Shareholders particularly pertaining to and adversely affecting
the operations, assets or business of the Company.
2.1.11 Taxes2.1.11 Taxes.
2.1.11.1 General2.1.11.1 General. All federal, state and local income,
value added, sales, use, franchise, gross revenue, turnover, excise, payroll,
property, employment, customs, duties and any and all other tax returns,
reports, and estimates have been filed with appropriate governmental agencies,
domestic and foreign, by the Company for each period for which any such returns,
reports, or estimates were due (taking into account any extensions of time to
file before the date hereof); all such returns are true and correct; the Company
has only done business in Wyoming, Montana, South Dakota and Utah; all taxes
shown by such returns to be payable and any other taxes due and payable have
been paid other than those being contested in good faith by the Company; and the
tax provision reflected in the 6/30 Balance Sheet is adequate, in accordance
with generally acceptable accounting principles, to cover liabilities of the
Company at the date thereof for all taxes, including, but not limited to,
interest and penalties, and additions to taxes of any character whatsoever
applicable to the Company or its assets or business. No waiver of any statute of
limitations executed by the Company with respect to any income or other tax is
in effect for any period. The income tax returns of the Company have not been
examined by the Internal Revenue Service or the taxing authorities of any other
jurisdiction. There are no tax liens on any assets of the Company except for
taxes not yet currently due. The Company is not a member of a consolidated group
subject to Treasury Regulation 1.1502-6 or any similar provision.
2.1.11.2 Subchapter S MattersSubchapter S Matters. The Company (i) made an
effective, valid and binding S election pursuant to Section 1362 of the Code
effective August 1, 1983, (ii) has since maintained its status as an
Corporation pursuant to Section 1361 of the Code without lapse or
interruption, and (iii) has made and continuously maintained elections similar
to the federal S election in each state or local jurisdiction where the Company
does business or is required to file a tax return to the extent such states or
jurisdictions permit such elections. The Company neither is nor will or can be
subject to the built-in gains tax under Section 1374 of the Code or any similar
corporate level tax imposed on the Company by any taxing authority. The Company
(i) has not adopted or utilized LIFO as a method of accounting for inventory,
and (ii) has no other tax item, election, agreement or adjustment which will
accelerate or trigger income or deferred deductions of the Company as a result
of termination of the Company=s status as an S Corporation.
2.1.12 Columbine Farms, Inc2.1.12 Columbine Farms, Inc. The spin-off of
Columbine Farms, Inc. described in Section 5.10 qualified as a valid Code
Section 355 spin-off and the ownership of Columbine Farms, Inc. did not
terminate the Company=s status as an S-Corporation under Code Section 1361.
2.1.13 Intellectual Property2.1.13 Intellectual Property. The Company owns
or possesses licenses to use all Intellectual Property that is either material
to the business of the Company or that is necessary for the rendering of any
services rendered by the Company and the use or sale of any equipment or
products used or sold by the Company, including all such Intellectual Property
listed in Schedule 2.1.8 hereto (the ARequired Intellectual Property@). The
Required Intellectual Property is owned or licensed by the Company free and
clear of any Encumbrance. The Company has not granted to any other person any
license to use any Required Intellectual Property. The Company has not
infringed, misappropriated, or conflicted with, the Intellectual Property rights
of others in connection with the use by the Company of the Required Intellectual
Property or otherwise in connection with the Company=s operation of its
business, nor has the Company received any notice of such infringement,
misappropriation, or conflict such Intellectual Property rights of others.
2.1.14 Title to and Condition of Assets2.1.14 Title to and Condition of
Assets. Except as disclosed on Schedule 2.1.14 hereto, the Company has good,
indefeasible and marketable title to all its properties, interests in properties
and assets, real and personal, reflected in the 6/30 Balance Sheet or in
Schedule 2.1.8 hereto, free and clear of any Encumbrance of any nature
whatsoever, except Encumbrances reflected in the 6/30 Balance Sheet or in
Schedule 2.1.8 hereto. All leases pursuant to which the Company leases (whether
as lessee or lessor) any substantial amount of real or personal property are in
good standing, valid, and effective; and there is not, under any such leases,
any existing default or event of default or event which with notice or lapse of
time, or both, would constitute a default by the Company and in respect to which
the Company has not taken adequate steps to prevent a default from occurring.
The buildings and premises of the Company that are used in its business are in
good operating condition and repair, subject only to ordinary wear and tear. All
rigs, rig equipment, machinery, transportation equipment, tools and other major
items of equipment of the Company are in good operating condition and in a state
of good maintenance and repair, ordinary wear and tear excepted, and are free
from any known defects except as may be repaired by routine maintenance. All
such assets conform to all applicable laws governing their use. The Company has
not violated any law, statute, ordinance, or regulation relating to any such
assets, nor has any notice of such violation been received by the Company or
either of the Shareholders, except such as have been fully complied with.
2.1.15 Contracts2.1.15 Contracts. All contracts, leases, plans or other
arrangements to which the Company is a party, by which it is bound or to which
it or its assets are subject are in full force and effect, and constitute valid
and binding obligations of the Company. The Company is not, and to the knowledge
of any of the Shareholders, no other party to any such contract, lease, plan or
other arrangement 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
Company. Neither the Company nor either of the Shareholders has received any
information which would cause the Company or such Shareholders to conclude that
any customer of the Company will (or is likely to) cease doing business with the
Company (or its successors) as a result of the consummation of the transactions
contemplated hereby.
2.1.16 Licenses and Permits2.1.16 Licenses and Permits. The Company
possesses all Permits necessary under law or otherwise for the Company to
conduct its business as now being conducted and to construct, own, operate,
maintain and use its assets in the manner in which they are now being
constructed, operated, maintained and used, including all such Permits listed in
Schedule 2.1.8 hereto (collectively, the ARequired Permits@). Each of the
Required Permits and the Company=s rights with respect thereto is valid and
subsisting, in full force and effect, and enforceable by the Company subject to
administrative powers of regulatory agencies having jurisdiction, and will
continue in full force and effect after the Closing Date. The Company is in
compliance in all respects with the terms of each of the Required Permits. None
of the Required Permits have been, or to the knowledge either of the
Shareholders, is threatened to be, revoked, canceled, suspended or modified.
2.1.17 Litigation2.1.17 Litigation. Except as set forth in Schedule 2.1.17
hereto, there is no suit, action, or legal, administrative, arbitration, or
other proceeding or governmental investigation pending to which the Company is a
party or, to the knowledge of the Shareholders, might become a party which
particularly affects the Company or its assets, nor is any change in the zoning
or building ordinances directly affecting the real property or leasehold
interests of the Company pending or, to the knowledge of any of the either of
the Shareholders, threatened.
2.1.18 Environmental Compliance2.1.18 Environmental Compliance.
2.1.18.1 Environmental Conditions2.1.18.1 Environmental Conditions. There
are no environmental conditions or circumstances, including, without limitation,
the presence or release of any Substance of Environmental Concern, on any
property presently or previously owned, leased or operated by the Company, or on
any property to which any Substance of Environmental Concern or waste generated
by the Company=s operations or use of its assets were disposed of, which would
have a result a material adverse effect on the business or business prospects of
the Company. The term ASubstance of Environmental Concern@ means (a) any
gasoline, petroleum (including crude oil or any fraction thereof), petroleum
product, polychlorinated biphenyls, ureaformaldehyde insulation, asbestos,
pollutant, contaminant, radiation and any other substance of any kind, whether
or not any such substance is defined as toxic or hazardous under any
Environmental Law ( as defined in Section 2.1.18.3 hereof), that is regulated
pursuant to or could give rise to liability under any Environmental Law;
2.1.18.2 Permits, etc.2.1.18.2 Permits, etc. The Company has, and within
the period of all applicable statutes of limitations has had, in full force and
effect all environmental Permits required to conduct its operations, and is, and
within the period of all applicable statutes of limitations has been, operating
in compliance thereunder.
2.1.18.3 Compliance2.1.18.3 Compliance. The Company=s operations and use of
its assets are, and within the period of all applicable statutes of limitations,
have been in compliance with applicable Environmental Law. AEnvironmental Law@
as used herein 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,
local, municipal or other governmental authority, or quasi-governmental
authority, regulating, relating to, or imposing liability or standards of
conduct concerning protection of the environmental or of human health, or
employee health and safety as from time to time has been or is now in effect;
2.1.18.4 Environmental Claims2.1.18.4 Environmental Claims. No notice has
been received by the Company or either of the Shareholders from any entity,
governmental agency or individual regarding any existing, pending or threatened
investigation, inquiry, enforcement action, litigation, or liability, including,
without limitation any claim for remedial obligations, response costs or
contribution, relating to any Environmental Law;
2.1.18.5 Enforcement2.1.18.5 Enforcement. The Company, and to the knowledge
of either of the Shareholders, no predecessor of the Company or other party
acting on behalf of the Company, has entered into or agreed to any consent,
decree, order, settlement or other agreement, nor is subject to any judgment,
decree, order or other agreement, in any judicial, administrative, arbitral, or
other forum, relating to compliance with or liability under any Environmental
Law;
2.1.18.6 Liabilities2.1.18.6 Liabilities. The Company has not assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed or
contingent, known or unknown, under any Environmental Law.
2.1.18.7 Renewals2.1.18.7 Renewals. Neither of the Shareholders knows of
any reason the Company (or its successors) would not be able to renew without
material expense any of the permits, licenses, or other authorizations required
pursuant to any of the Environmental Law to conduct and use any of the Company=s
current or planned operations; and
2.1.18.8 Asbestos and PCBs2.1.18.8 Asbestos and PCBs. No material amounts
of friable asbestos currently exist on any property owned or operated by the
Company, nor do polychlorinated biphenyls exist in concentrations of 50 parts
per million or more in electrical equipment owned or being used by the Company
in its operations or on its properties.
2.1.19 Compliance with Other Laws2.1.19 Compliance with Other Laws. The
Company is not in violation of or in default with respect to, or in alleged
violation of or alleged default with respect to, the Occupational Safety and
Health Act (29 U.S.C. ''651 et seq.) as amended, or any other applicable law or
any applicable rule, regulation, or any writ or decree of any court or any
governmental commission, board, bureau, agency, or instrumentality, or
delinquent with respect to any report required to be filed with any governmental
commission, board, bureau, agency or instrumentality.
2.1.20 ERISA Plans or Labor Issues2.1.20 ERISA Plans or Labor Issues.
Except as identified in Schedule 2.1.8.8, the Company does not currently
sponsor, maintain or contribute to, and has not at any time sponsored,
maintained or contributed to, any Employee Plan (as defined in Section 2.1.8.8
hereof) or any employee benefit plan which is subject to any of the provisions
of the Employee Retirement Income Security Act of 1974, as amended (AERISA@), in
which any of its employees are or were participants (whether on an active or
frozen basis). Each Employee Plan set forth in Schedule 2.1.8.8 complies
currently, and has complied in the past, in form and operation, with the
applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended
(the ACode@) and other applicable laws including, without limitation, all
qualification and reporting and disclosure requirements. Also, with respect to
each Employee Plan, the Company and any other party in interest has not engaged
in any prohibited transaction or any violation of its fiduciary duties to such
plan. All contributions required to be made to each Employee Plan under the
terms of such Employee Plan, ERISA or other applicable law have been timely made
and there are no delinquent contributions as of the Closing Date. None of the
Employee Plans (i) is a Amultiemployer plan@ (as defined in Section 3(37) of
ERISA), (ii) is a defined benefit pension plan subject to Title IV of ERISA,
(iii) is a Avoluntary employees= beneficiary association@ within the meaning of
Code Section 501(c)(9), (iv provides for medical or other insurance benefits to
current or future retired employees or former employees of the Company (other
than as required for group health plan continuation coverage under Code Section
4980B (ACOBRA@) or applicable state law), or (v) obligates the Company to pay
any benefits solely as a result of a change in control of the Company. During
the six years preceding the Closing Date, (i no under-funded pension plan
subject to Section 412 of the Code has been transferred out of the Company, (ii)
the Company has not participated in or contributed to, or had an obligation to
contribute to, any multiemployer plan (as defined in ERISA Section 3(37)) and
has no withdrawal liability with respect to any multiemployer plan, and (iii)
the Company has not maintained any pension plan subject to Title IV of ERISA.
There are no claims, lawsuits or regulatory actions which have been asserted,
instituted or threatened against any Employee Plan by any fiduciary or
participant of such plan, except routine claims for benefits thereunder, or by
any governmental entity. The Company has no collective bargaining agreements
with any labor union or other representative of employees. The Company has not
engaged in any unfair labor practices. The Company is not aware of any pending
or threatened dispute with any of its existing or former employees.
2.1.21 Investigations; Litigation2.1.21 Investigations; Litigation. No
investigation or review by any governmental entity with respect to the Company
or any of the transactions contemplated by this Agreement is pending or, to the
knowledge of either of the Shareholders, threatened, nor has any governmental
entity indicated to the Company or either of the Shareholders an intention to
conduct the same, and there is no action, suit or proceeding pending or, to the
knowledge of either of the Shareholders, threatened against or affecting the
Company at law or in equity, or before any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
that either individually or in the aggregate, does or is likely to result in any
material adverse change in the financial condition, properties or business of
the Company.
2.1.22 Absence of Certain Business Practices2.1.22 Absence of Certain
Business Practices. Neither the Company nor any officer, employee or agent of
the Company, nor any other person acting on its behalf, has directly or
indirectly, within the past five years, given or agreed to give any gift or
similar benefit to any customer, supplier, government employee or other person
who is or may be in a position to help or hinder the business of the Company (or
to assist the Company in connection with any actual or proposed transaction)
which (i) might subject the Company to any damage or penalty in any civil,
criminal or governmental litigation or proceeding, (ii) if not given in the
past, might have had a material adverse effect on the assets, business or
operations of the Company as reflected in the Financial Statements, or (iii) if
not continued in the future, might materially adversely effect the assets,
business operations or prospects of the Company or which might subject the
Company to suit or penalty in a private or governmental litigation or
proceeding.
2.1.23 No Untrue Statements2.1.23 No Untrue Statements. The Company and
each of the Shareholders have made available to Buyer true, complete and correct
copies of all contracts, documents concerning all litigation and administrative
proceedings, licenses, permits, insurance policies, list of suppliers and
customers, and records relating principally to the Company=s assets and
business, and such information covers all commitments and liabilities of the
Company relating to its business or its assets. This Agreement and the
agreements and instruments to be entered into in connection herewith do not
include any untrue statement of a material fact of omit to state any material
fact or omit to state any material fact necessary to make the statements made
herein and therein not misleading in any material respect.
2.1.24 Consents and Approvals2.1.24 Consents and Approvals. No consent,
approval or authorization of, or filing or registration with, any governmental
or regulatory authority, or any other person or entity other than the
Shareholders, is required to be made or obtained by the Company or either of
Shareholders in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby.
2.1.25 Finder=s Fee2.1.25 Finder=s Fee. All negotiations relative to this
Agreement, the Non-Competition Agreement and the Consulting Agreement, and the
transactions contemplated hereby and thereby, have been carried on by the
Shareholders and their counsel directly with Buyer and its counsel, without the
intervention of any other person in such manner as to give rise to any valid
claim against any of the parties hereto for a brokerage commission, finder=s fee
or any similar payments.
2.2 Representations and Warranties of Buyer2.2 Representations and
Warranties of Buyer. Buyer represents and warrants to each of the Shareholders
as follows:
2.2.1 Organization and Good Standing2.2.1 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 Obligations2.2.2
Agreement Authorized and its Effect on Other Obligations. The consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Buyer, and this Agreement is a
valid and binding obligation of Buyer enforceable in accordance with its terms.
The execution, delivery and performance of this Agreement by Buyer will not
conflict with or result in a violation of 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.
2.2.3 Consents and Approvals2.2.3 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.
2.2.4 Investigations; Litigation2.2.4 Investigations; Litigation. No
investigation or review by any governmental entity with respect to Buyer in
connection with any of the transactions contemplated by this Agreement is
pending or, to the best of Buyer=s knowledge, threatened, nor has any
governmental entity indicated to Buyer an intention to conduct the same. There
is no action, suit or proceeding pending or, to the Buyer=s knowledge,
threatened against or affecting Buyer by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
which either individually or in the aggregate, does or is likely to result in
any material adverse change in the financial condition, properties or businesses
of Buyer.
ARTICLE 3
ADDITIONAL AGREEMENTS
ARTICLE 3.........ADDITIONAL AGREEMENTS3.1 Further Assurances3.1 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 effectuate the
transactions contemplated hereby.
3.2 Public Announcements3.2 Public Announcements. Except as mutually
agreed, neither Buyer, the Shareholders nor any of their respective Affiliates
or agents shall issue any press release or public announcement regarding the
execution of this Agreement or the transactions contemplated thereby. The
Shareholders hereby consent to Buyer=s issuance of a press release announcing
the completion of the transactions contemplated by this Agreement.
3.3 338(h)(10) Election3.3 338(h)(10) Election. If the Buyer elects to file
an election to treat the acquisition of the Company Shares as an asset purchase
under Section 338(h)(10) of the Internal Revenue Code of 1986, as amended,
Shareholders agree to execute and deliver to Buyer any documents required to be
executed by Shareholders in connection with such election, and Buyer will
compensate and indemnify the Shareholders for any increased tax liability
resulting therefrom. In addition, Buyer will indemnify and reimburse
Shareholders for any additional tax that may be deemed to be paid by
Shareholders on income created by Buyer compensating Shareholders for taxes paid
on a Section 338(h)(10) election increase in asset values.
ARTICLE 4
INDEMNIFICATION ARTICLE 4 INDEMNIFICATION 4.1 Indemnification by the
Shareholders4.1 Indemnification by the Shareholders. In addition to any other
remedies available to Buyer under this Agreement, or at law or in equity, each
of the Shareholders shall jointly and severally indemnify, defend and hold
harmless the Company, Buyer and their affiliates and their respective officers,
directors, employees, agents and stockholders (collectively, the ABuyer
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 fees
and expenses of attorneys, consultants and experts (collectively, the ADamages@)
that the Buyer Indemnified Parties shall incur or suffer, which arise, result
from or relate to any breach by either of the Shareholders of (or the failure of
either of the Shareholders to perform) their respective representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument delivered to Buyer by either of the
Shareholders under this Agreement.
4.2 Indemnification by Buyer4.2 Indemnification by Buyer. In addition to
any other remedies available to the Shareholders under this Agreement, or at law
or in equity, Buyer shall indemnify, defend and hold harmless each of the
Shareholders 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 either of the
Shareholders by or on behalf of Buyer under this Agreement.
4.3. Indemnification Procedure4.3. Indemnification Procedure. In the event
that any party hereto discovers or otherwise becomes aware of an indemnification
claim arising under Section 4.1 of this Agreement, such indemnified party shall
give written notice to the indemnifying party, specifying such claim, and may
thereafter exercise any remedies available to such party under this Agreement;
provided, however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of any obligations
hereunder, to the extent the indemnifying party is not materially prejudiced
thereby. Further, promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding with respect to
which a claim for indemnification may be made pursuant to Section 4.1 hereof,
such indemnified party shall, if a claim in respect thereof is to be made
against any indemnifying party, give written notice to the latter of the
commencement of such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of any obligations hereunder, to the extent the indemnifying
party is not materially prejudiced thereby. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after such notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof unless the indemnifying party has
failed to assume the defense of such claim and to employ counsel reasonably
satisfactory to such indemnified person. As 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 5
MISCELLANEOUS
ARTICLE 5 MISCELLANEOUS 5.1 Survival of Representations, Warranties and
Covenants5.1 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
indefinitely despite any investigation made by any party hereto or on its
behalf.
5.2 Entirety5.2.......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 Counterparts5.3...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 Waivers5.4 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 Rocky Mountain, Inc.... ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
Two Tower Center, Tenth Floor 700 Louisiana, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel..... Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.. Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to either Shareholder:
Addressed to:.............. With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇........... ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
P.O. Box 1209.............. P. O. Box 909
Gillette, Wyoming 82717-1209 ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇. Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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 Table of Contents and Captions5.5 Table of Contents and Captions. The
table of contents and 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 Assigns5.6 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 Severability5.7...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 Law5.8.Applicable Law. This Agreement shall be governed by
and construed and enforced in accordance with the applicable laws of the State
of Wyoming.
5.9 Sale of Certain Properties. Company currently owns several oil and gas
properties which are included in the 6/30 Balance Sheet. The Company is
attempting to sell the properties and it is agreed that if the properties have
not been sold before the Closing Date, the properties will be assigned by the
Company to the Shareholders and all proceeds from the sale of the properties and
any oil or gas production following the Closing Date will belong to the
Shareholders.
IN WITNESS WHEREOF, the Shareholders have 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:
KEY ROCKY MOUNTAIN, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
SHAREHOLDERS:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇