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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 3, 1997
SUPERIOR ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20310 75-2379388
(State or other (Commission File Number) (IRS Employer
jurisdiction Identification No.)
of incorporation)
1503 Engineers Road, Belle Chasse, Louisiana 70037
(Address of principal executive offices) (Zip Code)
(504) 393-7774
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.
Item 2: Acquisition or Disposition of Assets
On October 3, 1997, pursuant to a Stock Purchase Agreement
dated as of September 30, 1997, by and among Superior Energy
Services, Inc. ("Superior"), Phillip D. Jaudon and Al J. Shiyou,
the sole shareholders of Fastorq, Inc. ("Fastorq"), Superior
acquired all of the outstanding common stock of Fastorq for
$4,810,000 cash plus notes providing for maximum principal payments
of $2,600,00 plus interest, the amount of which is dependent upon
Fastorq's financial performance over the next three years.
Superior is not aware of any material relationships between
itself, its affiliates, directors or officers or any associates of
its directors or officers with Messrs. Jaudon and Shiyou.
Fastorq is and will continue to be engaged in the business of
providing torque services, which are generally used to help unscrew
pipe and other equipment used to support drilling and production
operations with minimal thread damage.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
2.1.Stock Purchase Agreement dated as of September 30, 1997, by
and among Superior Energy Services, Inc., Phillip D. Jaudon
and Al J. Shiyou. The following attachments are omitted from
herein and will be provided to the Commission upon request:
Form of Promissory Note, Form of Employment Agreement and Form
of Disclosure Schedule.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
SUPERIOR ENERGY SERVICES, INC.
By: /s/ Robert S. Taylor
---------------------
Robert S. Taylor
Chief Financial Officer
and duly authorized officer
Dated: October 17, 1997
STOCK PURCHASE AGREEMENT
Among
SUPERIOR ENERGY SERVICES, INC.,
PHILLIP D. JAUDON
and
AL J. SHIYOU
Dated as of September 30, 1997
TABLE OF CONTENTS
ARTICLE 1 1
SALE AND PURCHASE OF SHARES; CLOSING 1
Section 1.1 Sale of Shares 1
Section 1.2 Purchase Price 1
Section 1.3 Closing 1
Section 1.4 Deliveries at Closing 2
ARTICLE 2 2
REPRESENTATIONS AND WARRANTIES OF SELLERS 2
Section 2.1 Ownership 2
Section 2.2 Authority; Enforceability 2
Section 2.3 Organization; Qualification; Subsidiaries 2
Section 2.4 Capital Stock 3
Section 2.5 No Conflict 3
Section 2.6 Consent 3
Section 2.7 Legal Proceedings 3
Section 2.8 Charter and By-laws 3
Section 2.9 Financial Statements 4
Section 2.10 Accounts Receivable 4
Section 2.11 Absence of Certain Changes 4
Section 2.12 Suppliers and Customers 6
Section 2.13 Properties 6
Section 2.14 Permits; Compliance with Laws 6
Section 2.15 Material Contracts 6
Section 2.16 Litigation 7
Section 2.17 Environmental Matters 7
Section 2.18 ERISA and Related Matters. 7
Section 2.19 Taxes. 9
Section 2.20 Transactions with Certain Persons 11
Section 2.21 Intellectual Property 12
Section 2.22 Insurance 12
Section 2.23 Safety and Health 12
Section 2.24 Bank Accounts; Powers of Attorney 12
Section 2.25 Compensation Agreements 12
Section 2.26 Director and Officer Indemnification 13
Section 2.27 Documents and Written Materials 13
Section 2.28 Effectiveness of Representations and
Warranties 13
ARTICLE 3REPRESENTATIONS AND WARRANTIES OF SESI 13
Section 3.1 Organization 13
Section 3.2 Authority; Enforceability 13
Section 3.3 Consents and Approvals; Conflicts 13
Section 3.4 Effectiveness of Representations and
Warranties 14
ARTICLE 4 14
PRE-CLOSING COVENANTS 14
Section 4.1 Legal Requirements 14
Section 4.2 Access to Properties and Records 14
Section 4.3 Conduct of Business 15
Section 4.4 Public Statements 15
Section 4.5 No Solicitation 15
Section 4.6 Update Information 15
ARTICLE 5 15
CLOSING CONDITIONS 15
Section 5.1 Conditions Applicable to all Parties 15
Section 5.2 Conditions to Obligations of SESI 16
Section 5.3 Conditions to Obligations of Sellers 16
ARTICLE 6 17
TERMINATION AND AMENDMENT 17
Section 6.1 Termination 17
Section 6.2 Effect of Termination 17
Section 6.3 Amendment 17
Section 6.4 Extension; Waiver 17
ARTICLE 7 18
INDEMNIFICATION; REMEDIES 18
Section 7.1 Indemnification by Sellers 18
Section 7.2 Indemnification by SESI 18
Section 7.3 Notice and Defense of Third Party Claims 19
ARTICLE 8 19
DEFINED TERMS 19
Section 8.1 Definitions 19
ARTICLE 9 22
MISCELLANEOUS 22
Section 9.1 Bonus Pool 22
Section 9.2 Confidentiality 22
Section 9.3 Survival of Representations, Warranties and
Agreements 22
Section 9.4 Notices 22
Section 9.5 Headings; Gender 23
Section 9.6 Entire Agreement; No Third Party
Beneficiaries 23
Section 9.7 Governing Law 23
Section 9.8 Assignment 23
Section 9.9 Severability 23
Section 9.10 Counterparts 24
Exhibits
A - Form of Employment Agreement
B - Form of Promissory Note
C - Form of Disclosure Schedule
-i-
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT, dated as of September
30, 1997 (this "Agreement"), is among Superior Energy
Services, Inc., a Delaware corporation ("SESI" or "Buyer"),
Phillip D. Jaudon and Al J. Shiyou (collectively,
"Sellers").
W I T N E S S E T H:
WHEREAS, Sellers are the owners of all of the
outstanding shares of common stock, no par value, of
Fastorq, Inc., a Louisiana corporation ("Fastorq"); and
WHEREAS, Sellers desire to sell to Buyer, and Buyer
desires to buy from Sellers, all of the outstanding shares
of common stock of Fastorq that are owned by Sellers for the
purchase price and subject to the terms and conditions set
forth in this Agreement; and
WHEREAS, in addition to the other defined terms used
herein, as used in this Agreement, certain terms are defined
in Article 8;
NOW, THEREFORE, in consideration of the mutual
promises, covenants and agreements set forth herein and in
reliance upon the undertakings, representations, warranties
and indemnities contained herein, Sellers and Buyer agree as
follows:
ARTICLE 1
SALE AND PURCHASE OF SHARES; CLOSING
Section 1.11834 Sale of Shares. Subject to the terms
and conditions herein stated, at the Closing Sellers agree
to sell to Buyer, and Buyer agrees to purchase from Sellers,
the Shares, free and clear of all Liens, restrictions, and
claims of every kind.
Section 2.11834 Purchase Price. In consideration of its
purchase of the Shares, Buyer shall at the Closing (a) pay
to Sellers the sum of $4,810,000 by check ($3,607,500 to Mr.
Jaudon and $1,202,500 to Mr. Shiyou) and (b) execute and
deliver to the Sellers the Notes in the form attached hereto
as Exhibit "B" providing for maximum payouts thereunder of
$2,590,000, plus accrued interest (Notes providing for
maximum payouts of $1,942,500 and $647,500 to Messrs. Jaudon
and Shiyou, respectively).
Section 3.11834 Closing. Subject to satisfaction or
waiver of the conditions specified in Article 5 hereof, the
Closing shall take place at such place and time as Buyer and
Sellers may agree.
Section 4.11834 Deliveries at Closing. At the Closing
(a) Buyer shall pay or deliver to Sellers the cash payment
and the Notes specified in Section 1.2, (b) Sellers shall
deliver to Buyer certificates representing the Shares duly
endorsed to SESI, which shall transfer to SESI good and
marketable title to the Shares free and clear of all Liens,
restrictions, and claims of every kind and (c) Sellers and
Buyer shall each (i) provide to the other such certificates,
agreements and instruments as are required to be delivered
under Article 5, (ii) provide to the other proof or
indication of the satisfaction or waiver of the conditions
set forth in Article 5, and (iii) take such other action as
is required to consummate the transactions contemplated by
this Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each of the representations and warranties set forth
herein shall be separate and independent, and, except as
expressly provided herein, shall not be limited by reference
to any other representation or warranty or anything else in
this Agreement. Except as set forth in the Disclosure
Schedule that is attached hereto and that is numbered to
correspond to the applicable representation or warranty,
Sellers represent and warrant to Buyer as follows:
Section 1.11834 Ownership. Sellers are, and at the
Closing Date will be, the sole record and beneficial owners
of the number of shares of the Shares, which are represented
by the certificates bearing the numbers, shown opposite
their names in the Disclosure Schedule. Sellers have and at
the Closing Date will have good and marketable title to the
Shares and the absolute right to deliver the Shares in
accordance with the terms of this Agreement, free and clear
of all Liens. The transfer of the Shares to SESI in
accordance with the terms of this Agreement will transfer
good and marketable title to the Shares to SESI free and
clear of all Liens, restrictions, and claims of every kind.
Section 2.11834 Authority; Enforceability. Sellers have
full legal right, power and authority to execute, deliver
and perform this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been
duly executed and delivered by Sellers and constitutes, and
each other agreement, instrument or documents executed or to
be executed by Sellers in connection with the transactions
contemplated hereby has been, or when executed will be, duly
executed and delivered by Sellers and constitutes, or when
executed and delivered will constitute, a valid and legally
binding obligation of Sellers, enforceable against Sellers
in accordance with their respective terms, except that such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws
affecting creditors' rights generally and equitable
principles which may limit the availability of certain
equitable remedies in certain instances.
Section 3.11834 Organization; Qualification;
Subsidiaries. Fastorq is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Louisiana, having all requisite corporate power and
authority to own its property and to carry on its business
as it is now being conducted. No actions or proceedings to
dissolve Fastorq are pending. Fastorq is duly qualified or
licensed to do business and is in good standing in each
jurisdiction in which the property owned, leased or operated
by it or the conduct of its business requires such
qualification or licensing. Fastorq has no subsidiaries or
equity interests in any other Person.
Section 4.11834 Capital Stock. The authorized capital
stock of Fastorq consists exclusively of 100 shares of
common stock, without par value, of which 100 shares are
issued. All of such issued shares have been validly issued
and are fully paid. There are no existing options, warrants,
calls, commitments or other agreements or rights with
respect to the capital stock of Fastorq, and there are no
convertible or exchangeable securities of Fastorq
outstanding which, upon conversion or exchange, would
require the issuance of any shares of capital stock or other
securities of Fastorq.
Section 5.11834 No Conflict. Neither the execution and
the delivery of this Agreement by Sellers, nor the
consummation of the transactions contemplated hereby do or
will (a) violate, conflict with, or result in a breach of
any provisions of, (b) constitute a default (or an event
which, with notice or lapse of time or both, would
constitute a default) under, (c) result in the termination
of or accelerate the performance required by, (d) result in
the creation of any Lien upon the Shares or any of Fastorq's
properties or assets under any of the terms, conditions or
provisions of Fastorq's Articles of Incorporation or By-laws
or any note, bond, mortgage, indenture, deed of trust,
lease, license, loan agreement or other instrument or
obligation to or by which Fastorq or any of its assets are
bound, or (e) violate any Applicable Law binding upon
Sellers or Fastorq or any of its assets.
Section 6.11834 Consent. No consent, approval, order or
authorization of, or declaration, filing or registration
with, any Governmental Entity or other Person is required to
be obtained or made by Sellers or Fastorq in connection with
the execution, delivery or performance by Sellers of this
Agreement or the consummation by them of the transactions
contemplated hereby.
Section 7.11834 Legal Proceedings. There are no
Proceedings pending or, to the knowledge of Sellers,
threatened seeking to restrain, prohibit or obtain damages
or other relief in connection with the execution, delivery
or performance of this Agreement or the transactions
contemplated hereby.
Section 8.11834 Charter and By-laws. Sellers have made
available to SESI accurate and complete copies of (a) the
Articles of Incorporation and By-laws of Fastorq, (b) the
stock records of Fastorq and (c) the minutes of all meetings
of the Board of Directors of Fastorq, any committees of such
board and the shareholders of Fastorq (and all consents in
lieu of such meetings). Such records, minutes and consents
accurately reflect the stock ownership of Fastorq and all
actions taken by the Board of Directors, committees and
shareholders. Fastorq is not in violation of any provision
of its Articles of Incorporation or By-laws.
Section 9.11834 Financial Statements. The Disclosure
Schedule contains true and complete copies of the Financial
Statements. The Financial Statements have been prepared from
the books and records of Fastorq on the cash basis and are
complete, correct and in accordance with the books of
account and records of Fastorq. Fastorq has not since July
31, 1997 incurred any liability or obligation (whether
accrued, absolute, contingent, unliquidated or otherwise),
except (i) liabilities reflected in the Financial
Statements, (ii) current liabilities which have arisen since
the date of the Financial Statements in the ordinary course
of business (none of which is a material liability for
breach of contract, tort or infringement) and (iii)
liabilities arising under executory contracts entered into
in the ordinary course of business (none of which is a
material liability for breach of contract).
Section 10.11834 Accounts Receivable. All of the
accounts receivable of Fastorq have arisen only from bona
fide transactions in the ordinary course of business and
represent valid obligations owing to Fastorq and have been
accrued in accordance with generally accepted accounting
principles. All such accounts receivable either have been
collected in full or will be collectible in full within 120
days of when due, without any counterclaims, setoffs or
other defenses and without provision for any allowance for
uncollectible accounts in excess of any reserve provided for
in the Financial Statements.
Section 11.11834 Absence of Certain Changes. Since July
31, 1997 there has been no event or condition of any
character that has had, or can reasonably be expected to
have, a material adverse effect on the financial condition,
results of operations, cash flow, business or prospects of
Fastorq. Fastorq has not since July 31, 1997:
(1) made any material change in the conduct of
its business and operations or failed to operate its
business so as to preserve its business organization intact
and to preserve the good will of its customers, suppliers
and others with whom it has significant business relations;
(2) entered into any agreement or transaction not
in the ordinary course of business;
(3) incurred any obligation or liability,
absolute or contingent, except trade or business obligations
incurred in the ordinary course of business or sales,
income, franchise, or ad valorem taxes accruing or becoming
payable in the ordinary course of business;
(4) declared or paid any dividend or other
distribution with respect to any of its capital stock or
purchased any of its capital stock;
(5) acquired or disposed of any assets material
to its business or operations;
(6) subjected any of its assets to any Lien;
(7) increased the rate of compensation (including
bonuses, contingent severance payments, retirement, profit
sharing, benefit or similar payments) payable or to become
payable to any of its officers or directors;
(8) adopted any employee welfare, pension,
retirement, profit sharing or similar plan or made any
material addition to or modification of existing plans;
(9) experienced any labor trouble or any
controversy or unsettled grievance involving any personnel;
(10) terminated or received notice of the
termination of any contract, commitment or transaction that
is material to it, or waived any right of material value to
it;
(11) made any material change in any accounting
principle, procedure or practice followed by it;
(12) issued any stock or merged or consolidated
with any other business or agreed to do so;
(13) made any capital expenditure or entered into
any Lease;
(14) borrowed any money or guaranteed or assumed
any indebtedness of others;
(15) suffered any extraordinary losses or any
material damage, destruction or casualty with respect to its
assets, or experienced any events, conditions, losses or
casualties which have resulted in or might result in claims
under its insurance policies of an aggregate of $5,000 or
more;
(16) loaned any money to any Person;
(17) defaulted under any note, loan, mortgage,
guarantee or other instrument of indebtedness or any
Material Contract;
(18) received any notification, warning or inquiry
from or given any notification to or had any communication
with any Governmental Entity, with respect to any proposed
remedial action for any violation or alleged or possible
violation of any law, rule, regulation or order relating to
or affecting its business, nor are any facts known to
Fastorq that may reasonably be expected to give rise to any
such notification, warning or inquiry;
(19) transferred any asset, right or interest to,
or entered into any transaction with Sellers or any of their
Affiliates;
(20) amended its Articles of Incorporation or By-
laws;
(21) received written notice or had knowledge or
reason to believe that any substantial customer of Fastorq
has terminated or intends to terminate its relationship with
Fastorq;
(22) waived any right in connection with any
aspect of its business that could have a material effect on
the business of Fastorq; or
(23) made any agreement or commitment to do any of
the foregoing.
Section 12.23 Suppliers and Customers. To the knowledge
of Sellers, (a) no supplier providing products, materials or
services to Fastorq intends to cease selling such products,
materials or services to Fastorq or to limit or reduce such
sales to Fastorq or materially alter the terms or conditions
of such sales and (b) no customer of Fastorq intends to
terminate, limit or reduce its or their business relations
with Fastorq.
Section 13.23 Properties.
(1) The Disclosure Schedule sets forth all of the
real property owned by Fastorq. Fastorq has never owned any
real property other than as described in the Disclosure
Schedule. Fastorq has good title to all material properties
and assets reflected in the Disclosure Schedule, free and
clear of any Liens.
(2) The Disclosure Schedule sets forth a complete
and correct list of all Leases, all of which are valid and
enforceable and in full force and effect. Complete and
correct copies of each Lease have been made available to
SESI. Fastorq is in full compliance with and has not
received a notice of default under any Lease and is not
involved in any dispute under any Lease, the effect of which
would have a material adverse effect on the business, assets
or financial condition of Fastorq.
(3) Except as described in the Disclosure
Schedule, there are no developments affecting any of
Fastorq's owned or leased properties or assets pending or
threatened which could materially detract from the value of
such property or assets, materially interfere with any
present or intended use of any such property or assets or
materially adversely affect the marketability of such
properties or assets.
Section 14.3 Permits; Compliance with Laws. Fastorq (a)
has all necessary permits, licenses and governmental
authorizations required for the lease, ownership, occupancy
or operation of its properties and assets and the carrying
on of its business, and (b) has conducted its business in
substantial compliance with and is in substantial compliance
with all applicable laws, regulations, orders, permits,
judgments, ordinances or decrees of any Governmental Entity.
Section 15.3 Material Contracts. The Disclosure
Schedule lists and describes all Material Contracts. A
complete and correct copy of each Material Contract has been
furnished to or made available to SESI. Each Material
Contract is valid, binding and enforceable, except to the
extent that enforcement may be limited by bankruptcy,
reorganization, insolvency and other similar laws and court
decisions relating to or affecting the enforcement of
creditors' rights generally and by equitable principles.
Fastorq and each other party to each Material Contract are
in compliance in all material respects with the provisions
of such Material Contract.
Section 16.3 Litigation. There are no Proceedings
pending or threatened against Fastorq and, to the knowledge
of Sellers, there have been no events and there are no facts
or circumstances that could result in any Proceedings.
Section 17.3 Environmental Matters. Fastorq is not in
violation of any Applicable Law relating to the environment
and is not a party to any proposed removal, response or
remedial action. Fastorq has not received any written notice
with respect to the business, the leased or owned
properties, or the use by third parties of the assets of
Fastorq that (i) any investigation, administrative order,
consent order and agreement, removal or remedial action,
litigation or settlement with respect to any environmental
permit, law or regulation is proposed, threatened,
anticipated or in existence, (ii) any release of any
hazardous substances, pollutant or contaminant into the
environment by Fastorq has occurred or (iii) any exposure of
any person or property to any hazardous substance, pollutant
or contaminant has occurred. The properties currently and
previously leased or owned by Fastorq are not and have never
been on or associated with any "national priorities" list or
any equivalent state list or any federal or state
"superlien" list. Fastorq has made available to SESI all
internal and external environmental audits and studies
relating to the leased or owned properties of Fastorq and
all correspondence on substantial environmental matters
relating to the leased or owned properties of Fastorq in the
possession of Fastorq.
Section 18.3 ERISA and Related Matters.
(1) The Disclosure Schedule lists each Employee
Plan that Fastorq maintains, administers, contributes to, or
has any contingent liability with respect thereto. Sellers
have provided a true and complete copy of each such Employee
Plan, current summary plan description, (and, if applicable,
related trust documents) and all amendments thereto and
written interpretations thereof together with (i) all annual
reports, if any, that have been prepared in connection with
each such Employee Plan; (ii) all material communications
received from or sent to the Internal Revenue Service or the
Department of Labor within the last two years (including a
written description of any oral communications); and
(iii) the most recent Internal Revenue Services
determination letter with respect to each Employee Plan and
the most recent application for a determination letter.
(2) The Disclosure Schedule identifies each
Benefit Arrangement that Fastorq maintains, or administers.
Except as set forth in the Disclosure Schedule, Fastorq has
made all contributions to and has no contingent liability
with respect to any of its Benefit Arrangements. Sellers
have furnished to SESI copies or descriptions of each
Benefit Arrangement. To the knowledge of Sellers, each
Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and
regulations which are applicable to such Benefit
Arrangement.
(3) Fastorq does not maintain and has never
maintained an "employee benefit plan" (as defined in Section
3(3) of ERISA) which is or was (i) a plan subject to Title
IV of ERISA or (ii) a "multiemployer plan" (as defined in
Section 3(37) of ERISA).
(4) Benefits under any Employee Plan or Benefit
Arrangement are as represented in said documents and have
not been increased or modified (whether written or not
written) subsequent to the dates of such documents. Fastorq
has not communicated to any employee or former employee any
intention or commitment to modify any Employee Plan or
Benefit Arrangement or to establish or implement any other
employee or retiree benefit or compensation arrangement.
(5) Each Employee Plan which is intended to be
qualified under Section 401(a) of the Code is so qualified
and has been so qualified during the period from its
adoption to date, and, to the knowledge of Sellers, no event
has occurred since such adoption that would adversely affect
such qualification and each trust created in connection with
each such Employee Plan forming a part thereof is exempt
from tax pursuant to Section 501(a) of the Code. To the
knowledge of Sellers, each Employee Plan has been maintained
and administered in compliance with its terms and with the
requirements prescribed by any and all applicable statutes,
orders, rules and regulations, including but not limited to
ERISA and the Code.
(6) To the knowledge of Sellers, full payment
has been made of all amounts which Fastorq is or has been
required to have paid as contributions to any Employee Plan
or Benefit Arrangement under applicable law or under the
terms of any such plan or any arrangement.
(7) To the knowledge of Sellers, neither Fastorq
nor any of its shareholders, directors, officers or
employers has engaged in any transaction with respect to an
Employee Plan that could subject Fastorq to a tax, penalty
or liability for a prohibited transaction, as defined in
Section 406 of ERISA or Section 4975 of the Code.
(8) To the knowledge of Sellers, Fastorq has no
current or projected liability in respect of post-retirement
or post-employment welfare benefits for retired, current or
former employees. No health, medical, death or survivor
benefits have been provided under any Benefit Arrangement to
any person who is not an employee or former employee of
Fastorq or a dependent thereof.
(9) There is no litigation, administrative or
arbitration proceeding or other dispute pending or
threatened that involves any Employee Plan or Benefit
Arrangement which could reasonably be expected to result in
a liability to Fastorq, any employees or directors of
Fastorq, or any fiduciary (as defined in ERISA Section
3(21)) of such Employee Plan or Benefit Arrangement.
(10) No employee or former employee of Fastorq
will become entitled to any bonus, retirement, severance,
job security or similar benefit or enhanced benefit
(including acceleration of compensation, an award, vesting
or exercise of an incentive award) or any fee or payment of
any kind solely as a result of any of the transactions
contemplated hereby.
(11) Fastorq is not a party to any agreement,
contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in the payment of
any "excess parachute payments" within the meaning of
Section 280G of the Code (i.e., a golden parachute).
Section 19.11 Taxes.
(1) All Returns required to be filed by or on
behalf of Fastorq have been duly filed on a timely basis and
such Returns (including all attached statements and
schedules) are true and complete. All Taxes shown to be
payable on the Returns or on subsequent assessments with
respect thereto have been paid in full on a timely basis,
and, to the knowledge of Sellers, no other Taxes are payable
by Fastorq with respect to items or periods covered by such
Returns (whether or not shown on or reportable on such
Returns).
(2) Fastorq has withheld and paid over all Taxes
required to have been withheld and paid over (including any
estimated taxes), and has complied with all information
reporting and backup withholding requirements, including
maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party.
(3) There are no Liens on any of the assets of
Fastorq with respect to Taxes other than Liens for Taxes not
yet due and payable or for Taxes that are being contested in
good faith through appropriate proceedings and for which
appropriate reserves have been established.
(4) Sellers have furnished or made available to
SESI true and complete copies of: (i) all federal and state
income and franchise tax returns of Fastorq for all periods
beginning on or after January 1, 1994, and (ii) all tax
audit reports, work papers statements of deficiencies,
closing or other agreements received by Fastorq or on
Fastorq's behalf relating to Taxes.
(5) Except as disclosed on the Disclosure
Schedule or in documents provided to or made available to
SESI:
(1) The Returns of Fastorq have never been
audited by a governmental or taxing authority, nor is any
such audit in process, pending or, to the knowledge of
Sellers, threatened (formally or informally).
(2) No deficiencies exist or have been
asserted (either formally or informally) or are expected to
be asserted with respect to Taxes of Fastorq, and there is
no basis for the assertion of any deficiency of Taxes of
Fastorq. No notice (either formally or informally) has been
received by Fastorq that it has not filed a Return or paid
Taxes required to be filed or paid by it.
(3) Fastorq is not a party to any pending
action or proceeding for assessment or collection of Taxes,
nor, to the knowledge of Sellers, has such action or
proceeding been asserted or threatened (either formally or
informally) against Fastorq or any of Fastorq's assets.
(4) Except as reflected in the Returns or as
disclosed on the Disclosure Schedule, no waiver or extension
of any statute of limitations is in effect with respect to
Taxes or Returns of Fastorq.
(5) There are no requests for rulings,
subpoenas or requests for information pending with respect
to Fastorq.
(6) No power of attorney has been granted by
Fastorq, with respect to any matter relating to Taxes.
(7) The amount of liability for unpaid Taxes
of Fastorq for all periods ending on or before the Closing
Date will not, in the aggregate, exceed the amount of the
current liability accruals for Taxes (excluding reserves for
deferred Taxes), as such accruals are reflected on the
balance sheets of Fastorq as of the Closing Date.
(6) Except as disclosed on the Disclosure
Schedule, or as described in documents furnished to or made
available to SESI:
(1) Fastorq has not made an election, and is
not required to treat any asset as owned by another person
for federal income tax purposes or as tax-exempt bond
financed property or tax-exempt use property within the
meaning of section 168 of the Code.
(2) Fastorq has not issued or assumed any
indebtedness that is subject to section 279(b) of the Code.
(3) Fastorq has not entered into any
compensatory agreements with respect to the performance of
services which payment thereunder would result in a
nondeductible expense to Section 280G of the Code or an
excise tax to the recipient of such payment pursuant to
Section 4999 of the Code.
(4) No consent under Section 341(f) of the
Code has been filed with respect to Fastorq.
(5) Fastorq has not agreed, nor is Fastorq
required to make, any adjustment under Code Section 481(a)
by reason of change in accounting method or otherwise.
(6) Fastorq has not disposed of any property
that has been accounted for under the installment method.
(7) Fastorq is not a party to any interest
rate swap, currency swap or similar transaction.
(8) Fastorq is not a United States real
property holding corporation within the meaning of Section
897(c)(2) of the Code and SESI is not required to withhold
tax on the acquisition of the stock of Fastorq.
(9) Fastorq has not participated in any
international boycott as defined in Code Section 999.
(10) Fastorq is not subject to any joint
venture, partnership or other arrangement or contract that
is treated as a partnership for federal income tax purposes.
(11) Fastorq has not made any of the
foregoing elections or is required to apply any of the
foregoing rules under any comparable state or local income
tax provisions.
(12) Fastorq does not have and has never had
a permanent establishment in any foreign country, as defined
in any applicable tax treaty or convention between the
United States and such foreign country.
(13) The transactions contemplated herein are
not subject to the tax withholding provisions of Section
3406 of the Code, or of Subchapter A of Chapter 3 of the
Code, or of any other provision of law.
(7) Set forth in the Disclosure Schedule or in
documents furnished or made available to SESI is accurate
and complete information with respect to each of the
following for all tax periods beginning on or after January
1, 1994:
(1) Any tax elections in effect with respect
to Fastorq;
(2) Any net operating loss carry overs of
Fastorq; and
(3) Any tax credit carry overs of Fastorq.
Section 20.7 Transactions with Certain Persons. Except
for employment relationships in the ordinary course of
business, no employee of Fastorq or any of the employees'
Affiliates is presently a party to any transaction with
Fastorq, including without limitation any contract,
agreement or other arrangement providing for the furnishing
of services by or the rental of real or personal property
from any such person or from any of their Affiliates.
Section 21.7 Intellectual Property. Fastorq either owns
or has valid licenses to use all patents, copyrights,
trademarks, software, databases, and other technical
information used in its business as presently conducted,
subject to limitations contained in the agreements governing
the use of same, which limitations are customary for
companies engaged in businesses similar to Fastorq. There
are no limitations contained in any such agreements which
will alter any such rights, breach any such agreement or any
third-party vendor, or require payments of additional sums
thereunder. Fastorq is in compliance with all such licenses
and agreements and there are no pending or, to the
knowledge of Sellers, threatened Proceedings challenging or
questioning the validity or effectiveness of any license or
agreement relating to such property or the right of Fastorq
to use, copy, modify or distribute the same.
Section 22.7 Insurance. SESI has been provided copies
of or access to all insurance policies or binders which
relate to Fastorq's business. All premiums due under such
policies and binders have been paid and all such policies
and binders are in full force and effect and no notice of
cancellation or nonrenewal of any such policy or binder has
been received by Fastorq and no notice of disallowance of
any claim under any insurance policy or binder, whether or
not currently in effect, has been received by Fastorq.
Fastorq has no liability for or exposure to any premium
expense for expired policies and there are no current claims
by Fastorq under any such policy or binder as to which
coverage has been questioned, denied or disputed by the
underwriters of such policies, nor are there any insured
losses for which claims have not been made.
Section 23.7 Safety and Health. The property and assets
of Fastorq have been and are being operated in compliance
with all Applicable Laws designed to protect safety or
health, or both, including without limitation, the
Occupational Safety and Health Act and the regulations
promulgated pursuant thereto. Fastorq has not received any
written notice of any violations, deficiency, investigation
or inquiry from any Governmental Entity, employer or third
party under any such law and, to the knowledge of Sellers,
no such investigation or inquiry is planned or threatened.
Section 24.7 Bank Accounts; Powers of Attorney. The
Disclosure Schedule sets forth with respect to each bank
account or cash account maintained by Fastorq at any bank,
brokerage or other financial firm, the name of the
institution at which such account is maintained, the number
of the account, and the names of the individuals having
authority to withdraw funds from such account.
Section 25.7 Compensation Agreements. The Disclosure
Schedule lists all written employment, commission, bonus or
other compensation and consulting agreements to which
Fastorq is a party. Except as set forth on the Disclosure
Schedule, Fastorq is not a party to any written or oral
employment, commission, bonus or other compensation or
consulting agreement which Fastorq may not terminate without
any payment or penalty, at will, with or without cause,
except to the extent that employment at will may be limited
by Applicable Law.
Section 26.7 Director and Officer Indemnification. The
directors and officers of Fastorq are not entitled to
indemnification by Fastorq, except to the extent that
indemnification rights are provided for generally in
Louisiana and there are no pending claims for
indemnification by any director or officer of Fastorq.
Section 27.7 Documents and Written Materials. Originals
or true and complete copies of all documents or other
written materials underlying items listed in the Disclosure
Schedule have been furnished or made available to SESI in
the form in which each of such documents is in effect, and
will not be modified in any material respect prior to the
Closing Date without SESI's prior written consent.
Section 28.7 Effectiveness of Representations and
Warranties. All of the representations and warranties of
Sellers in this Agreement shall be true in all material
respects on the Closing Date and shall be deemed to have
been made again by Sellers on and as of the Closing Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SESI
SESI represents and warrants to and agrees with
Sellers as follows:
Section 1.7 Organization. SESI is a corporation duly
organized, validly existing and in good standing under the
laws of Louisiana and has all requisite corporate power and
authority to own its properties and carry on its business as
now being conducted.
Section 2.7 Authority; Enforceability. SESI has the
requisite corporate power and authority to execute and
deliver this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all
necessary corporate action on the part of SESI and no other
corporate proceedings on the part of SESI are necessary to
authorize this Agreement or to consummate the transactions
so contemplated. This Agreement has been duly executed and
delivered by SESI and constitutes a valid and binding
obligation of SESI, enforceable against SESI in accordance
with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and equitable principles which may limit the
availability of certain equitable remedies in certain
instances.
Section 3.7 Consents and Approvals; Conflicts. No
filing with or notice to, and no permit, authorization,
consent or approval of, any Governmental Entity is necessary
for the execution and delivery by SESI of this Agreement or
the consummation by SESI of the transactions contemplated
hereby. Neither the execution and delivery of this Agreement
by SESI, nor the consummation of the transactions
contemplated hereby, will violate any of the provisions of
the Certificate of Incorporation or By-laws of SESI; or
conflict with or result in a breach of, or give rise to a
right of termination of, or accelerate the performance
required by, any terms of any court order, consent decree,
note, bond, mortgage, indenture, deed of trust, or any
license or agreement binding on SESI or to which SESI is
subject or a party, or constitute a default thereunder, or
result in the creation of any Lien upon any of the assets of
SESI, except for any such conflict, breach, termination,
acceleration, default or Lien which would not have a
material adverse effect on (a) the business, assets or
financial condition of SESI or (b) SESI's ability to
consummate any of the transactions contemplated hereby.
Section 4.7 Effectiveness of Representations and
Warranties. All of the representations and warranties of
SESI in this Agreement shall be true in all material
respects on the Closing Date and shall be deemed to have
been made again by SESI on and as of the Closing Date.
ARTICLE 4
PRE-CLOSING COVENANTS
Section 1.7 Legal Requirements. Subject to the
conditions set forth in Article 5 and to the other terms and
provisions of this Agreement, each of the parties to this
Agreement agrees to take, or cause to be taken, all
reasonable actions necessary to comply promptly with all
legal requirements applicable to it with respect to the
transactions contemplated by this Agreement and will
promptly cooperate with and furnish information to each
other in connection with any such requirements imposed upon
any of them. Each of SESI and Sellers will take all
reasonable actions necessary to obtain, and will cooperate
with each other in obtaining, any consent, authorization,
order or approval of, or any exemption by, any Governmental
Entity or other public or private party, required to be
obtained or made by it or the taking or any action
contemplated by this Agreement.
Section 2.7 Access to Properties and Records. Until the
Closing Date, Sellers shall cause Fastorq to allow SESI and
its authorized representatives full access, during normal
business hours and on reasonable notice, to all of Fastorq's
properties, offices, vehicles, equipment, inventory and
other assets, documents, files, books and records, in order
to allow SESI a full opportunity to make such investigation
and inspection as it desires of Fastorq's business and
assets. Sellers shall further cause Fastorq to use its best
efforts to cause the employees, counsel and regular
independent certified public accountants of Fastorq to be
available upon reasonable notice to answer questions of
SESI's representatives concerning the business and affairs
of Fastorq, and shall further use their best efforts to
cause them to make available all relevant books and records
in connection with such inspection and examination,
including without limitation work papers for all audits and
reviews of financial statements of Fastorq.
Section 3.7 Conduct of Business. From and after the
date of this Agreement and until the Closing Date Sellers
shall cause Fastorq to conduct its business, in the ordinary
course and consistently with past practice, except as
expressly required or otherwise permitted by this Agreement,
and shall not take or permit any action which would cause
any of his representations made in this Agreement not to be
true and correct on the Closing Date.
Section 4.7 Public Statements. Prior to the Closing
Date, none of the parties to this Agreement shall, and each
party shall use its best efforts so that none of its
advisors, officers, directors or employees shall, except
with the prior written consent of the other party,
publicize, announce or describe to any third person, except
their respective advisors and employees, the execution or
terms of this Agreement, the parties hereto or the
transactions contemplated hereby, except as required by law
or as required pursuant to this Agreement to obtain the
consent of such third person; provided, in any case, that
SESI may make such disclosures and announcements as may be
necessary or advisable under applicable securities laws.
Section 5.7 No Solicitation. Sellers will not prior to
the Closing Date or the termination of this Agreement
pursuant to Section 6.1, (nor will they permit any of their
affiliates or any of Fastorq's officers, directors or agents
to) directly or indirectly solicit or participate or engage
in or initiate any negotiations or discussions, or enter
into or authorize any agreement or agreements in principle,
or announce any intention to do any of the foregoing, with
respect to any offer or proposal to acquire all or any
significant part of Fastorq's business and properties or any
Shares whether by merger, purchase of assets, purchase of
stock or otherwise. Sellers will notify SESI promptly upon
receipt of any inquiry, offer or other communication from
any third party regarding any such activities.
Section 6.7 Update Information. Each party hereto will
promptly disclose to the other any information contained in
its representations and warranties that because of an event
occurring after the date hereof is incomplete or no longer
correct; provided, however, that none of such disclosures
will be deemed to modify, amend, or supplement the
representations and warranties of such party, unless the
other party consents to such modification, amendment, or
supplement in writing.
ARTICLE 5
CLOSING CONDITIONS
Section 1.7 Conditions Applicable to all Parties. The
respective obligations of each party to consummate the
transactions contemplated by this Agreement shall be subject
to the satisfaction or, where permissible, waiver by such
party of the following conditions at or prior to the Closing
Date:
(1) No statute, rule, regulation, executive
order, decree, preliminary or permanent injunction or
restraining order shall have been enacted, entered,
promulgated or enforced by any court of competent
jurisdiction or other Governmental Entity which prohibits or
restricts the consummation of the transactions contemplated
by this Agreement, and no action, suit, claim or proceeding
by a state or federal Governmental Entity before any court
or other Governmental Entity shall have been commenced and
be pending which seeks to prohibit or restrict the
consummation of the transactions contemplated by this
Agreement.
(2) Phillip D. Jaudon and Al J. Shiyou shall each
enter into an Employment Agreement with Fastorq.
Section 2.2 Conditions to Obligations of SESI. The
obligations of SESI to consummate the transactions
contemplated by this Agreement are subject to the
satisfaction of the following conditions unless waived by
SESI:
(1) The representations and warranties of Sellers
set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing
Date, except as otherwise contemplated by this Agreement,
and Sellers shall have performed in all material respects
all obligations required to be performed by them under this
Agreement at or prior to the Closing Date.
(2) All consents and approvals of third parties
necessary for consummation of the transactions contemplated
by this Agreement shall have been obtained. Sellers shall
have used their best efforts to obtain all necessary
permits, authorizations, consents and approvals required by
such Governmental Entities prior to the Closing Date.
(3) SESI shall have had a full opportunity to
conduct inspections of the operating assets and books and
records of Fastorq. Sellers shall have provided SESI
certified copies of Fastorq's Articles of Incorporation and
By-laws and certificates of existence and good standing,
certified by the Secretary of State of the State of
Louisiana.
(4) Any and all changes made to the Disclosure
Schedule or to the representations and warranties of Sellers
shall be satisfactory in all respects to SESI.
Section 3.4 Conditions to Obligations of Sellers. The
obligations of Sellers to consummate the transactions
contemplated by this Agreement are subject to the
satisfaction of the following conditions, unless waived by
Sellers:
(1) The representations and warranties of SESI
set forth in this Agreement shall be true and correct in all
material respects as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing
Date, except as otherwise contemplated by this Agreement,
and SESI shall have performed in all material respects all
obligations required to be performed by them under this
Agreement at or prior to the Closing Date.
(2) Sellers shall have received a certificate of
a duly authorized officer of SESI, dated the Closing Date,
certifying as to the incumbency of any person executing this
Agreement or any certificate or other document delivered in
connection with this Agreement and certifying such other
matters as Sellers shall reasonably request.
ARTICLE 6
TERMINATION AND AMENDMENT
Section 1.2 Termination. This Agreement may be
terminated and may be abandoned at any time prior to the
Closing Date:
(1) by mutual consent of SESI and Sellers;
(2) by SESI or Sellers, as the case may be, if
(a) there shall have been a material breach of any
representation, warranty, covenant or agreement on the part
of either of the Sellers or on the part of SESI, as the case
may be, which breach shall not have been cured prior to the
earlier of (i) 10 days following notice of such breach and
(ii) the Closing Date; or (b) any permanent injunction or
other order of a court or other competent Governmental
Entity preventing the transactions contemplated by this
agreement shall have become final and nonappealable; or
(3) by SESI or Sellers if the transactions
contemplated by this Agreement shall not have been
consummated on or before October 31, 1997; provided, that
the right to terminate this Agreement under this Section
6.1(c) shall not be available to any party whose breach of
its representations and warranties in this Agreement or
whose failure to perform any of its covenants and agreements
under this Agreement has resulted in the failure of the
transactions contemplated by this agreement to occur on or
before such date.
Section 2.3 Effect of Termination. In the event of a
termination of this Agreement as provided in Section 6.1,
this Agreement shall forthwith become void and there shall
be no liability or obligation under any provisions hereof on
the part of SESI or Sellers, except (a) pursuant to the
covenants and agreements contained in Section 9.1.
Section 3.3 Amendment. This Agreement may not be
amended except by an instrument in writing signed by each of
the parties hereto.
Section 4.3 Extension; Waiver. At any time prior to the
Closing Date, the parties hereto may, in their respective
sole discretion and to the extent legally allowed, (a)
extend the time for the performance of any of the
obligations or other acts of the other parties hereto; (b)
waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant
thereto; and (c) waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of
a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed by or
on behalf of such party.
ARTICLE 7
INDEMNIFICATION; REMEDIES
Section 1.3 Indemnification by Sellers. Except as
otherwise expressly provided in this Article 7, Sellers
shall jointly and severally defend, indemnify and hold
harmless SESI and each of SESI's officers, directors,
employees, Affiliates, successors and assigns (SESI and such
persons, collectively, "SESI's Indemnified Persons"), and
shall reimburse SESI's Indemnified Persons, for, from and
against each and every demand, claim, action, loss (which
shall include any diminution in value), liability, judgment,
damage, cost and expense (including, without limitation,
interest, penalties, costs of preparation and investigation,
and the reasonable fees, disbursements and expenses of
attorneys, accountants and other professional advisors)
(collectively, "Losses") imposed on or incurred by SESI's
Indemnified Persons, directly or indirectly, relating to,
resulting from or arising out of: (a) any inaccuracy in any
representation or warranty of Sellers in this Agreement or
any certificate, document or other instrument delivered or
to be delivered pursuant hereto in any respect whether or
not SESI's Indemnified Persons relied thereon or had
knowledge thereof or (b) any breach or nonperformance of any
covenant, agreement or other obligation of Sellers under
this Agreement or any certificate, document or other
instrument delivered or to be delivered pursuant hereto;
provided, however, that, except for a knowing and
intentional breach of any representation or warranty of
Sellers in this Agreement (as to which there shall be no
Minimum Amount), Sellers shall have no liability under
Section 7.1(a) unless and until the aggregate of all Losses
resulting therefrom exceeds $10,000 (the "Sellers' Minimum
Amount"), in which event Sellers shall be liable for all
Losses in excess of Sellers' Minimum Amount. The
indemnification rights provided in this Section 7.1 shall
expire on September 30, 2002, unless the party seeking
indemnification shall make its claim therefor on or before
September 30, 2002.
Section 2.3 Indemnification by SESI. Except as
otherwise expressly provided in this Article 7, SESI shall
defend, indemnify and hold harmless Sellers and each of
Sellers' successors and assigns (Sellers and such persons,
collectively, "Sellers' Indemnified Persons"), and shall
reimburse Sellers' Indemnified Persons for, from and against
all Losses, as defined in Section 7.1, imposed on or
incurred by Sellers' Indemnified Persons, directly or
indirectly, relating to, resulting from or arising out of:
(a) any inaccuracy in any representation or warranty of SESI
in this Agreement or any certificate, document or other
instrument delivered or to be delivered pursuant hereto in
any respect, whether or not Sellers' Indemnified Persons
relied thereon or had knowledge thereof, or (b) any breach
or nonperformance of any covenant, agreement or other
obligation of SESI under this Agreement or any certificate,
document or other instrument delivered or to be delivered
pursuant hereto; provided, however, that SESI shall have no
liability under this Section 7.2(b) unless and until the
aggregate of all Losses exceeds $10,000 ("SESI Minimum
Amount"), in which event SESI shall be liable for all Losses
in excess of SESI's Minimum Amount. The indemnification
rights provided in this Section 7.2 shall expire on
September 30, 2002, unless the party seeking indemnification
shall make its claim therefor on or before September 30,
2002.
Section 3.3 Notice and Defense of Third Party Claims.
If any third party demand, claim, action or proceeding shall
be brought or asserted under this Article 7 against an
indemnified party or any successor thereto (the "Indemnified
Person") in respect of which indemnity may be sought under
this Article 7 from an indemnifying person or any successor
thereto (the "Indemnifying Person"), the Indemnified Person
shall give prompt written notice thereof to the Indemnifying
Person who shall have the right to assume its defense,
including the hiring of counsel reasonably satisfactory to
the Indemnified Person and the payment of all expenses;
except that any delay or failure to so notify the
Indemnifying Person shall relieve the Indemnifying Person of
its obligations under this Article 7 only to the extent, if
at all, that it is prejudiced by reason of such delay or
failure. The Indemnified Person shall have the right to
employ separate counsel in any of the foregoing actions,
claims or proceedings and to participate in the defense
thereof, but the fees and expenses of such counsel shall be
at the expense of the Indemnified Person unless both the
Indemnified Person and the Indemnifying Person are named as
parties and the Indemnified Person shall in good faith
determine that representation by the same counsel is
inappropriate. In the event that the Indemnifying Person,
within ten days after notice of any such action or claim,
does not assume the defense thereof, the Indemnified Person
shall have the right to undertake the defense, compromise or
settlement of such action, claim or proceeding for the
account of the Indemnifying Person, subject to the right of
the Indemnifying Person to assume the defense of such
action, claim or proceeding with counsel reasonably
satisfactory to the Indemnified Person at any time prior to
the settlement, compromise or final determination thereof.
Anything in this Article 7 to the contrary notwithstanding,
the Indemnifying Person shall not, without the Indemnified
Person's prior consent, settle or compromise any action or
claim or consent to the entry of any judgment with respect
to any action, claim or proceeding for anything other than
money damages paid by the Indemnifying Person. The
Indemnifying Person may, without the Indemnified Person's
prior consent, settle or compromise any such action, claim
or proceeding or consent to entry of any judgment with
respect to any such action or claim that requires solely the
payment of money damages by the Indemnifying Person and that
includes as an unconditional term thereof the release by the
claimant or the plaintiff of the Indemnified Person from all
liability in respect of such action, claim or proceeding.
ARTICLE 8
DEFINED TERMS
Section 1.3 Definitions. In addition to the other
defined terms used herein, as used in this Agreement, the
following terms when capitalized have the meanings
indicated.
"Affiliate" shall have the meaning ascribed by Rule
12b-2 promulgated under the Securities Exchange Act of 1934,
as amended.
"Applicable Law" shall mean any statute, law, rule or
regulation or any judgement, order, writ, injunction or
decree of any Governmental Entity to which a specified
Person or its property is subject.
"Agreement" shall mean this Stock Purchase Agreement,
including the Exhibits hereto, all as amended or otherwise
modified from time to time.
"Benefit Arrangement" shall mean any employment,
severance or similar contract, or any other contract, plan,
policy or arrangement (whether or not written) providing for
compensation, bonus, profit-sharing, stock option or other
stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage
(including any self-insured arrangement), health or medical
benefits, disability benefits, severance benefits and post-
employment or retirement benefits (including compensation,
pension, health, medical or life insurance benefits), other
than the Employee Plans, that is maintained, administered
or contributed to by the employer and covers any employee or
former employee of the employer.
"Closing" means the consummation of the Purchase and
the other transactions contemplated by this Agreement.
"Closing Date" shall mean the date on which the Closing
occurs, but no later than October 31, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Disclosure Schedule" shall mean the disclosure
schedules and other documents attached hereto as Exhibit "C"
prepared by Sellers in accordance with the applicable
provisions of this Agreement.
"Employee Plan" means a plan or arrangement as defined
in Section 3(3) of ERISA, that (a) is subject to any
provision of ERISA, (b) is maintained, administered or
contributed to by the employer and (c) covers any employee
or former employee of the employer.
"Employment Agreement" shall mean the Employment
Agreement in the form attached hereto as Exhibit "A".
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"Financial Statements" shall mean, as the context may
require, the unaudited balance sheet and related unaudited
statements of income of Fastorq as of and for the fiscal
year ended May 31, 1997 and the unaudited balance sheet and
related unaudited statements of income and the related notes
thereto of Fastorq as of and for the two months ended July
31, 1997.
"Governmental Entity" shall mean any court or tribunal
in any jurisdiction or any public, governmental or
regulatory body, agency, department, commission, board,
bureau or other authority or instrumentality.
"Leases" shall mean any executory lease to which
Fastorq is subject having future rental payments of more
than $5,000 in the aggregate.
"Liens" shall mean pledges, liens, defects, leases,
licenses, equities, conditional sales contracts, charges,
claims, encumbrances, security interests, easements,
restrictions, chattel mortgages, mortgages or deeds of
trust, of any kind or nature whatsoever.
"Material Contract" means any executory contract,
agreement or other understanding, whether or not reduced to
writing, that is not cancelable within 30 days, to which
Fastorq or its property is subject, which provides for
future payments to another Person by Fastorq of more than
$5,000 in the aggregate.
"Multiemployer Plan" means a plan or arrangement as
defined in Section 4001(a)(3) and 3(37) of ERISA.
"Notes" shall mean Non-Negotiable Promissory Notes in
the form attached hereto as Exhibit "B".
"Person" shall mean an individual, firm, corporation,
general or limited partnership, limited liability company,
limited liability partnership, joint venture, trust,
governmental authority or body, association, unincorporated
organization or other entity.
"Pre-Closing Periods" shall mean all Tax periods ending
at or before the Closing Date and, with respect to any Tax
period that includes but does not end at the Closing Date,
the portion of such period that ends at and includes the
Closing Date.
"Proceedings" means any suit, action, proceeding,
dispute or claim before or investigation by any Governmental
Entity.
"Purchase" shall mean the purchase by SESI of the
Shares for the consideration specified in Section 2.2 of
this Agreement.
"Returns" means all returns, reports, estimates,
declarations and statements of any nature relating to, or
required to be filed in connection with, any Taxes,
including information returns or reports with respect to
backup withholding and other payments to third parties.
"Shares" shall mean all of the outstanding shares of
common stock, no par value, of Fastorq.
"Taxes" shall mean any federal, state, local or other
taxes (including, without limitation, income, alternative
minimum, franchise, property, sales, use, lease, excise,
premium, payroll, wage, employment or withholding taxes),
fees, duties, assessments, withholdings or governmental
charges of any kind whatsoever (including interest,
penalties and additions to tax).
ARTICLE 9
MISCELLANEOUS
Section 1.3 Bonus Pool. SESI will cause Fastorq
immediately following the Closing Date to establish an
employee bonus pool for its employees for the 12 month
period ending September 30, 1998, 1999 and 2000 in
accordance with this Section 9.1. If Fastorq's Average
EBITDA (as defined and calculated in accordance with the
Note) exceeds $1,850,000, in any of these periods then a
bonus pool of 20% of the amount over $1,850,000 will be
established for that period for the benefit of Fastorq's
employees to be allocated as determined by the Sellers.
SESI will not, without the prior consent of the Sellers,
cause a material change in the nature of the business
conducted by Fastorq that could have an adverse effect on
the ability to meet or exceed the minimum Average EBITDA
threshold specified in the Note.
Section 2.3 Confidentiality. Until the Closing Date and
subsequent to the termination of this Agreement pursuant to
Section 6.1, SESI will keep confidential and will not
disclose to any third party any information obtained by it
from Sellers in connection with this Agreement except (a)
that information may be disclosed by SESI to its advisors in
connection with the negotiation of and the activities
conducted pursuant to this Agreement, or (b) to the extent
that such information is or becomes generally available to
the public through no act or omission of SESI in violation
of this Agreement.
Section 3.3 Survival of Representations, Warranties and
Agreements The representations, warranties, covenants and
agreements in this Agreement (or in any Exhibit hereto) or
in any instrument delivered pursuant to this Agreement shall
survive the Closing until September 30, 2002 (unless a claim
is brought under Article 7 on or prior to such date as
provided therein) and shall not be limited or affected by
any investigation by or on behalf of any party hereto.
Section 4.3 Notices. All notices hereunder must be in
writing and shall be deemed to have been given upon receipt
of delivery by: (a) personal delivery to the designated
individual, (b) certified or registered mail, postage
prepaid, return receipt requested, (c) a nationally
recognized overnight courier service (against a receipt
therefor) or (d) facsimile transmission with confirmation of
receipt. All such notices must be addressed as follows or
such other address as to which any party hereto may have
notified the other in writing:
If to SESI, to:
1503 Engineers Road
Belle Chasse, LA 70037
Attention: Terence Hall
Facsimile transmission No.: 393-9904
If to Sellers, to:
2305 Concord
Belle Chasse, LA 70037
Facsimile transmission No.: 392-1688
Section 5.3 Headings; Gender. When a reference is made
in this Agreement to a section, exhibit or schedule, such
reference shall be to a section, exhibit or schedule of this
Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All personal pronouns used
in this Agreement shall include the other genders, whether
used in the masculine, feminine or neuter gender, and the
singular shall include the plural and vice versa, whenever
and as often as may be appropriate.
Section 6.3 Entire Agreement; No Third Party
Beneficiaries. This Agreement (including the documents,
exhibits and instruments referred to herein) (a) constitutes
the entire agreement and supersedes all prior agreements,
and understandings and communications, both written and
oral, among the parties with respect to the subject matter
hereof, and (b) is not intended to confer upon any person
other than the parties hereto any rights or remedies
hereunder.
Section 7.3 Governing Law. This Agreement shall be
governed and construed in accordance with the laws of the
State of Louisiana without regard to any applicable
principles of conflicts of law.
Section 8.3 Assignment. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of
the other parties.
Section 9.3 Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable
of being enforced by reason of any rule of law or public
policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any
adverse manner to either party. Upon such determination that
any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible,
and in any case such term or provision shall be deemed
amended to the extent necessary to make it no longer
invalid, illegal or unenforceable.
Section 10.3 Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall
constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed themselves or by their respective
duly authorized officers as of the date first written above.
SUPERIOR ENERGY SERVICES, INC.
By: /s/ Terence E. Hall
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Terence E. Hall,
President
Sellers:
/s/ Philip D. Jaudon
---------------------
Phillip D. Jaudon
/s/ Al J. Shiyou
-----------------
Al J. Shiyou