INTEREST IN AND TO, THE FOLLOWING (COLLECTIVELY, THE "RETAINED
ASSETS"):
(A)
ALL PUMPS, POWER SWIVELS AND FOAM UNITS
ASSOCIATED WITH THE RETAINED BUSINESS (AS DEFINED IN SECTION 3.5);
(B)
ALL FISHING AND RENTAL TOOLS RELATED TO THE
RETAINED BUSINESS;
(C)
ONE (1) OIL PRODUCTION/WORKOVER RIG
ASSOCIATED WITH THE RETAINED BUSINESS, AS MORE FULLY DESCRIBED ON SCHEDULE
1.2(C) HERETO;
(D)
ALL OF THE PERMITS, AUTHORIZATIONS,
CERTIFICATES, APPROVALS, REGISTRATIONS, VARIANCES, WAIVERS, EXEMPTIONS,
RIGHTS-OF-WAY, FRANCHISES, ORDINANCES, ORDERS, LICENSES AND OTHER RIGHTS OF
EVERY KIND AND CHARACTER OF THE SELLER RELATING PRINCIPALLY TO THE OPERATION OF
THE RETAINED BUSINESS; AND
(E)
ALL OF THE GOODWILL ASSOCIATED WITH THE
RETAINED BUSINESS.
1.3
LIABILITIES. THE SELLER SHALL BE RESPONSIBLE FOR ALL OF ITS
LIABILITIES AND OBLIGATIONS. ALL OF THE SELLER'S LIABILITIES ARE REFERRED TO
HEREIN AS THE "RETAINED LIABILITIES" AND INCLUDE, WITHOUT LIMITATION, (I) ANY
OBLIGATIONS ARISING BEFORE THE CLOSING DATE FROM THE SELLER'S EMPLOYMENT OF ANY
EMPLOYEE, INDEPENDENT CONTRACTOR, CONSULTANT, AGENT OR ADVISOR; (II) ANY FAILURE
TO PAY ANY TAXES (AS DEFINED IN SECTION 2.1.8) OWED BY THE SELLER; (III) ANY
LIABILITIES, KNOWN OR UNKNOWN, FIXED OR UNFIXED, ACCRUED, ABSOLUTE, CONTINGENT
OR OTHERWISE, ARISING OUT OF OR RELATED TO ANY RETAINED ASSETS OR THE RETAINED
BUSINESS (AS DEFINED IN SECTION 3.5) OR ANY EXPRESSED OR IMPLIED CONTRACT OF THE
SELLER; AND (IV) ANY OTHER LIABILITIES OR OBLIGATIONS RESULTING FROM THE
SELLER'S OPERATION OF THE ASSETS OR CONDUCT OF THE BUSINESS BEFORE THE CLOSING
DATE. THE BUYER SHALL ASSUME AND PAY ALL OBLIGATIONS AND LIABILITIES FOR ANY
SALES, USE, VEHICLE OR OTHER TAX THAT MAY BE IMPOSED BY ANY GOVERNMENTAL
AUTHORITY IN CONNECTION WITH THE PURCHASE AND SALE OF THE ASSETS FROM THE SELLER
TO THE BUYER.
1.4
PURCHASE PRICE. AS CONSIDERATION FOR THE SALE OF THE ASSETS AND
FOR THE OTHER COVENANTS AND AGREEMENTS OF THE SELLER AND THE SHAREHOLDER
CONTAINED HEREIN, THE BUYER AGREES
2
to pay, on the Closing Date (as defined in Section 1.5), (a) $35,395,750 (the
"Asset Purchase Price") to the Seller for the Assets and (b) $100,000 (the
"Seller Noncompete Amount") to the Seller for its agreement not to compete
contained in Section 3.5 (collectively, the Asset Purchase Price and the Seller
Noncompete Amount are referred to herein as the "Purchase Price") by wire
transfer of immediately available funds to such accounts at a California
financial institution as designated by the Seller in its sole and absolute
discretion.
1.5
TIME AND PLACE OF CLOSING. THE CLOSING OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT (THE "CLOSING") SHALL BE AT THE OFFICES OF
CLIFFORD & BROWN, A PROFESSIONAL CORPORATION, LOCATED AT 1430 TRUXTUN AVENUE,
SUITE 900, IN BAKERSFIELD, CALIFORNIA, AT 5:00 P.M. (PDT) ON DECEMBER 7, 2007
(THE "CLOSING DATE").
1.6
CONDITIONS TO CLOSING.
1.6.1
DELIVERIES OF THE SELLER AND THE SHAREHOLDER. AT THE CLOSING, IN
ADDITION TO THE CONVEYANCE OF THE ASSETS FROM THE SELLER TO THE BUYER IN
EXCHANGE FOR THE PURCHASE PRICE, THE SELLER SHALL DELIVER OR CAUSE TO BE
DELIVERED TO THE BUYER:
(A)
A BILL OF