U.S. 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) June 10, 1999
RENTECH, INC.
(Exact name of registrant as specified in its charter)
Colorado 0-19260 84-0957421
(State of incorporation) (Commission File Number) (IRS Employer
Identification No.)
1331 17th Street, Suite 720, Denver, Colorado 80202 80202
(Address of principal executive offices) (Zip Code)
(303) 298-8008
(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.
The Company acquired the assets of two Oklahoma corporations,
Petroleum Mud Logging, Inc. and Petroleum Well Logging, Inc., by purchase
on June 10, 1999. The acquisition was made by Rentech's wholly-owned
subsidiary, Petroleum Mud Logging, Inc., a Colorado corporation. The
assets acquired primarily consisted of well logging vehicles, well logs,
and related instruments. The purchase price of $1,205,000 was paid by
$550,000 in cash, 50,000 shares of Rentech's restricted common stock,
Rentech's promissory note in the amount of $200,000 payable with interest
at 9.75% on June 1, 2000, and Rentech's promissory note in the amount of
$405,000 payable with interest at 9.75% in equal monthly installments,
with the entire balance due on June 1, 2001. Rentech also assumed a
promissory note in the approximate balance of $70,000. The assets were
purchased at a bargained price determined by arm's-length negotiations.
The sellers had no material relationship with the Company or any of its
officers or directors or their associates. The funds for that part of
the purchase price paid in cash were Company funds obtained through
private placement of sales of shares of the Company's convertible
preferred stock. The assets will be used by Rentech in the business of
providing petroleum and natural gas well mud logging services to the oil
and gas industry.
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Item 5. Other Events.
Rentech's annual meeting of shareholders was held on June 16, 1999.
At the meeting the following persons were re-elected directors with the
following votes:
<TABLE>
<CAPTION>
Elected to Votes Votes
Nominee Term Ending For Withheld
------- ----------- ----- --------
<S> <C> <C> <C>
John P. Diesel 2002 34,796,163 773,397
Dennis L. Yakobson 2002 34,932,490 637,070
</TABLE>
The shareholders also adopted a proposal to authorize the board of
directors of Rentech, for one year from the date of the annual meeting
(June 16, 2000), to effect, in its discretion, a reverse stock split of
the outstanding shares of Rentech, Inc.'s common stock on the basis of
one share for each five shares outstanding at the time of the reverse
stock split. The voting was 27,608,159 shares for the proposal,
7,820,691 against, and 140,710 shares abstained.
The Nasdaq Listings Qualifications Panel has notified Rentech that
Rentech's common stock must meet Rentech's minimum closing bid
requirements on or before July 30, 1999 in order for the stock to
continue to be listed on The Nasdaq SmallCap Market after that date. The
July 30 deadline is an extension of the original deadline of June 28,
1999. The exemption granted by Nasdaq now requires that , for continued
listing, on or before July 30, 1999, Rentech must demonstrate a closing
bid price of at least $1.00 per share, and immediately thereafter, the
stock must have a closing bid price at or above $1.00 per share for a
minimum of ten consecutive trading days.
Item 7. Financial Statements and Exhibits.
No financial statements or exhibits for the assets acquired by the
Company through its wholly-owned subsidiary, Petroleum Mud Logging, Inc.,
are required.
The agreement for purchase of the assets is filed as Exhibit 99.1 to
this Current Report on Form 8-K.
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SIGNATURE
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.
RENTECH, INC.
By: (signature)
------------------------------------
James P. Samuels, Vice President,
Date: June 23, 1999
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AGREEMENT FOR PURCHASE AND SALE OF ASSETS
THIS AGREEMENT FOR SALE AND PURCHASE OF ASSETS (Agreement) is made
and entered into as of ---------------, 1999, by and among PETROLEUM MUD
LOGGING, INC., an Oklahoma corporation (Mud Logging); and PETROLEUM WELL
LOGGING, INC., an Oklahoma corporation (Well Logging) (collectively
Sellers); with PETROLEUM MUD LOGGING, INC., a Colorado corporation, a
wholly-owned subsidiary of Rentech, Inc. (Subsidiary); and RENTECH, INC.,
a Colorado corporation (Rentech).
BACKGROUND CIRCUMSTANCES:
The following circumstances precede the execution of this Agreement:
Mud Logging owns and operates a business with headquarters located
at Oklahoma City, Oklahoma that is engaged in logging drill hole mud.
Well Logging owns and operates a business located at Oklahoma City,
Oklahoma that is engaged in logging drill hole wells.
Both Well Logging and Mud Logging are desirous of selling their
respective businesses (Businesses) and all of the assets used in their
respective businesses, except as otherwise provided herein. Rentech and
Subsidiary desire to purchase and acquire the Businesses and all of the
assets used in the Businesses, except as otherwise provided herein, and
to assume only those liabilities specified in this Agreement.
NOW, THEREFORE, in consideration of the background circumstances and
the mutual covenants and agreements herein set forth, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
SALE AND PURCHASE
1.1 Sale of Assets. Subject to the terms and conditions set forth
in this Agreement, Well Logging and Mud Logging (Sellers) shall sell,
convey, transfer, assign and deliver to Subsidiary, and Subsidiary shall
purchase all of the right, title and interest of Well Logging and Mud
Logging in and to their respective businesses and the assets (the
Purchased Assets) used in their respective Businesses as a going concern
including, but not limited to, the following:
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(a) The real property known as the warehouse and depot building
which is identified by street address of 5600 S.W. 11th, Oklahoma
City, Oklahoma, together with all easements and other appurtenances
thereto, all improvements thereon and all attached fixtures (the
Real Property).
(b) All tangible personal property of all kinds used in the
Businesses (the Personal Property) including all of the machinery,
furniture, fixtures and equipment owned by Well Logging and Mud
Logging at 5600 S.W. 11th, Oklahoma City, Oklahoma, and 6418-B
North Santa Fe, Oklahoma City, Oklahoma 73116, or elsewhere, as set
forth on Schedule 1.1(b), except the Personal Property identified on
Schedule 1.1(c) as Exempt Personal Property;
(c) All trade secrets, know-how, proprietary rights, patents and
patents pending, product formulations, copyrights, trademarks, trade
names (including "Petroleum Well Logging," "Petroleum Mud Logging"),
and logos, patterns, designs, proprietary rights and all other
intellectual property rights of whatever type used in the
businesses;
(d) All inventory, supplies, materials, expendables and packaging
on order or on hand owned by Well Logging and Mud Logging and set
forth on Schedule 1.1(b);
(e) All contracts, commitments, purchase orders and sales orders;
(f) Mud Logging's and Well Logging's finished products, goods and
work in process, including oil and gas well hole logs, scout tickets
and mud logs;
(g) All automotive vehicles used in the Businesses, except as
otherwise indicated in Section 1.7;
(h) Use of the telephone numbers used by the Businesses;
(i) All goodwill of the Businesses as a going concern, including
all franchises, licenses, registrations, files, papers, books of
account, sales and marketing records, customer lists, personnel
files and all other books and records and files of any kind or
description relating to the Businesses.
The Purchased Assets shall include any assets like those described in
this section that are acquired hereafter and prior to the Closing (as
hereinafter defined) except for those assets transferred or disposed of
in the ordinary course of business after the date of this Agreement.
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1.2 Purchase Price. The aggregate purchase price (Purchase Price)
to be paid by Rentech and Subsidiary for the Purchased Assets will be
$1,205,000. The Purchase Price shall be allocated among the Purchased
Assets as shown on Schedule 1.2. The Purchase Price shall be paid as
follows:
1.2.1 Well Logging Purchase Price. The purchase price for the
Purchased Assets owned by Well Logging shall be $600,000.
Rentech will pay $550,000 in cash or other immediately
available funds, $25,000 by issuance of 50,000 shares of the
restricted and unregistered shares of Rentech's common stock to
Hoyt L. Hudspeth and $25,000 by issuance of 50,000 shares of
the restricted and unregistered shares of Rentech's common
stock to Joseph Peters. The shares of Rentech's common stock
shall be deemed to have a value of $.50 each.
1.2.2 Mud Logging Purchase Price. The purchase price for the
Purchased Assets owned by Mud Logging shall be paid pursuant to
two promissory notes in the principal amounts of $200,000 (Note
I) and $405,000 (Note II), both of which shall be issued by
Subsidiary at Closing. Note I and Note II shall be made in the
form of the promissory note attached as Exhibit 1.2.2.
1.2.2.1 Terms of Note I. Note I shall have a term of one
year and bear interest at a rate equal to the prime rate
described in the Wall Street Journal, Western Edition, for
the date that is five business days before the date of
closing, plus two percent (2%). Note I shall be
guaranteed by Rentech pursuant to the Guaranty Agreement
attached hereto as Exhibit 1.2.2.1. In addition, Note I
shall be secured by all assets purchased by Subsidiary
from Well Logging and Mud Logging pursuant to this
Agreement.
1.2.2.2 Terms of Note II. Note II shall have a term of
two years over which payments are payable monthly and bear
interest at a rate equal to the prime rate described in
the Wall Street Journal, Western Edition, for the date
that is five business days before the date of closing,
plus two percent (2%). Note II shall be guaranteed by
Rentech pursuant to the Guaranty Agreement attached hereto
as Exhibit 1.2.2.1. In addition, Note II shall be secured
by all assets purchased by Subsidiary from Well Logging
and Mud Logging pursuant to this Agreement.
1.2.2.3 Cross Default. A default by Rentech or
Subsidiary under either Note I or Note II shall be a
default under both Note I and Note II.
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1.3 Assumption of Liabilities. Rentech and Subsidiary will not
assume any debts, obligations, duties or liabilities of Sellers
(Liabilities) other than (i) Liabilities, the assumption of which is
necessary for the continued operation of the Businesses, as determined by
Rentech and Subsidiary, accruing after the Closing pursuant to contracts
approved by Rentech and Subsidiary in writing, (ii) Liabilities expressly
assumed by Rentech and Subsidiary in their sole discretion, and (iii) the
following Liabilities:
1.3.1 Subsidiary and Rentech shall assume the balance of the
promissory note payable to M. H. Burton Construction Company, which
is secured by a mortgage recorded in Book 7105, Page 1244, against
the warehouse and depot building located at 5600 S.W. 11th, Oklahoma
City, Oklahoma, and shall be responsible for payment of the note.
The assumption shall be accomplished by Subsidiary's monthly
transfer of the mortgage payments to either Mud Logging or Hoyt L.
Hudspeth, (whichever is presently liable on the mortgage), who
agrees to timely pay the mortgage amount to the mortgagee as and
when due. This agreement shall be evidenced by a separate writing
executed by Hoyt L. Hudspeth, Mud Logging and Subsidiary.
Subsidiary and Rentech shall mortgage the building to secure the
obligations created herein, and further agree that should there be
any default, and upon notification to Hoyt L. Hudspeth, Hoyt L.
Hudspeth shall be entitled to immediately seek a receiver and
temporary restraining order allowing him to take possession of the
property by the receiver during any litigation. Subsidiary and
Rentech will endeavor to have Hoyt L. Hudspeth's name as an obligor
removed from the promissory note, but if they are unable to do so,
they will hold harmless and indemnify him from any liability on the
promissory note which is secured by the shop building. The current
balance of the promissory note is approximately $70,000; and
1.3.2 The Liabilities described in Section 1.7 as the
equipment loan.
1.4 Employment Contracts. The Sellers shall employ Hoyt L.
Hudspeth, Ronald Ray Hudspeth and Tammy Silva, pursuant to the terms and
conditions of the employment contracts attached hereto as Exhibit 1.4.
1.5 Purchase of Businesses. The purchase of the Businesses shall
be subject to the following terms and conditions:
1.5.1 Cost of Appraisal. Cost of any appraisal to be obtained
after the date of this Agreement shall be timely paid by Rentech or
Subsidiary.
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1.5.2 Evidence of Title. Sellers shall furnish to Rentech, a
current commitment for owner's title insurance policy pertaining to
the Real Property in an amount equal to the purchase price, on or
before five days before Closing (Title Deadline). The expense of
the title insurance policy shall be divided equally between Sellers
and Rentech. The commitment shall constitute a binding obligation
of the title insurance company to insure fee simple title in
Subsidiary, with no exceptions except real property taxes due for
the year of Closing and the lien of the mortgage recorded in Book
7105 at Page 1244 in favor of M.H. Burton Construction Company, upon
Closing in the amount of the Purchase Price allocated to the Real
Property upon Closing in the amount allocated to the Real Property.
When the title insurance commitment is furnished, Rentech may
require that copies of instruments (or abstracts of instruments)
listed in the schedule of exceptions (Exceptions) in the title
insurance commitment also be furnished to Rentech at Sellers'
expense. This requirement shall pertain only to instruments shown
of record in the office of the clerk of the designated county or
counties. The title insurance commitment, together with any copies
or abstracts of instruments furnished pursuant to this Section,
constitute the title documents (Title Documents). Rentech or
Rentech's designee, must request Well Logging or Mud Logging or
both, in writing, to furnish copies or abstracts of instruments
listed in the schedule of exceptions no later than five calendar
days after Title Deadline. Sellers will pay the premium for the
title insurance policy at Closing and have the title insurance
policy delivered to Subsidiary as soon as practical after Closing.
1.5.3 Title Review. Rentech shall have the right to inspect
the Title Documents pertaining to the Real Property. No written
notice by Rentech of unmerchantability of title or other
unsatisfactory title conditions need be given as to Exceptions to
title, including other liens, not permitted according to Section
1.5.2. Written notice by Rentech of additional grounds of
unmerchantability of title or of any other unsatisfactory title
condition shown by the Title Documents may be signed by or on behalf
of Rentech and given to Sellers on or before five calendar days
after Title Deadline, or within five calendar days after receipt by
Rentech of any Title Documents or endorsements adding new Exceptions
to the title commitment together with a copy of the Title Document
adding new Exceptions to title.
1.5.4 Matters Not Shown by the Public Records. Sellers shall
deliver to Rentech, on or before the Title Deadline set forth in
Section 1.5.2, true copies of all leases in Sellers' possession
pertaining to the Real Property, if any, and shall disclose to
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Rentech all easements, liens or other title matters not shown by the
public records of which Sellers have actual knowledge. Rentech
shall have the right to inspect the Real Property to determine if
any third parties has any right to the Real Property not shown by
the public records (such as an unrecorded easement, unrecorded
lease, or boundary line discrepancy). Written notice of any
unsatisfactory conditions disclosed by Sellers or revealed by such
inspection shall be signed by or on behalf of Rentech and given to
Sellers on or before five days after the Title Deadline. If Sellers
do not receive Rentech's notice by said date, Rentech agrees to
accept title subject to such rights, if any, of third parties of
which Rentech has actual knowledge.
1.5.5 Right to Cure. If Sellers receive notice of
unmerchantability of title or any other unsatisfactory title
conditions pertaining to the Real Property as provided in Sections
1.5.3 and 1.5.4 above, Sellers shall use reasonable effort to
correct said unsatisfactory title conditions prior to the date of
Closing. If Sellers fail to correct said unsatisfactory title
conditions on or before the date of closing, this contract shall
then terminate; provided, however, Rentech may, by written notice
received by Sellers, on or before closing, waive objection to said
unsatisfactory title conditions.
1.5.6 Transfer of Title. Subject to tender or payment at
Closing as required herein and compliance by Rentech and Subsidiary
with the other terms and provisions hereof, Sellers shall execute
and deliver a good and sufficient general warranty deed to
Subsidiary, on Closing, conveying the Real Property free and clear
of all taxes except the general taxes for the year of Closing, and
subject to easements, rights of way, reservations, covenants,
conditions, restrictions, and zoning ordinances of record accepted
in writing by Rentech. Title shall be conveyed free and clear of
all liens for special improvements installed as of the date of
Rentech's signature hereon, whether assessed or not; except (i)
distribution utility easements (including cable TV), (ii)
those matters reflected by the Title Documents accepted by Rentech
in accordance with subsection 1.5.3, and (iii) those rights, if
any, of third parties in the Real Property not shown by the public
records in accordance with subsection 1.5.4.
1.5.7 Payment of Encumbrances. Any encumbrance required to be
paid by Sellers shall be paid at or before Closing from the proceeds
of this transaction or from any other source.
1.5.8 Real Property Closing Services. Rentech, Subsidiary and
Sellers shall pay, in certified funds or other immediately available
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funds, their respective closing costs and all other items required
to be paid respectively by them at Closing, except as otherwise
provided herein. Rentech, Subsidiary and Sellers shall sign and
complete all customary or required documents at or before Closing.
One-half of the fees for real estate closing services shall be paid
at Closing by Rentech or Subsidiary and one-half shall be paid by
Sellers. Any sales and use tax that may accrue because of this
transaction shall be collected by Sellers but paid by Subsidiary.
1.6 Lease of Building. Subsidiary or Rentech shall lease from the
Hudspeths the building at 6418-B North Santa Fe, Oklahoma City, Oklahoma
73116 at a rate of $10.00 per square foot per year (approximately 1,930
square feet) on a net-net-net basis for a two-year lease term. If
Subsidiary is the tenant, Rentech shall guarantee the lease. The Lease
will be executed and delivered at Closing.
1.7 Vehicles. All vehicles that are being transferred to
Subsidiary and Rentech as to which any encumbrances remain unpaid, will
be assumed by Subsidiary and Rentech, and Hoyt L. Hudspeth will be held
harmless by both from payment of the same. Indebtedness on any vehicles
that are specifically reserved prior to Closing, and currently being
driven, by Hoyt L. Hudspeth and his family will remain the responsibility
of Hoyt L. Hudspeth and his family. At Closing, Ruthe Hudspeth and Hoyt
L. Hudspeth's daughter's vehicles, identified as a --------------- model
--------------------, and a --------------- model --------------------,
will be transferred to Ruthe Hudspeth and Hoyt Hudspeth's daughter,
respectively. They will be responsible for the remainder of the loans
payable on those vehicles. Hoyt L. Hudspeth's vehicle, identified as a
---------------- model --------------------, will remain as part of Mud
Logging's assets for the one-year period during which Hoyt L. Hudspeth is
training Bill Williamson. The Subsidiary or Rentech will make or
reimburse Mud Logging for the vehicle payment and insurance payments for
that one-year period. At the end of the said one-year period, title to
the vehicle will be transferred to Hoyt L. Hudspeth for $10, and the
remaining balance of the loan and insurance will become the
responsibility of Hoyt L. Hudspeth or the Sellers.
1.8 Accounts Receivable. Mud Logging shall retain all accounts
receivable generated prior to Closing, and shall be responsible for
payment of the Seller's line of credit secured by the accounts receivable
at First Bethany Bank and Trust, N.A. Any accounts generated after
Closing shall belong to Subsidiary.
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ARTICLE II.
THE CLOSING
2.1 Place and Time. The closing (the Closing) under this Agreement
shall take place on June 1, 1999 (the Closing Date) at the offices of
American Guaranty Title Company located at 4040 North Tulsa, Oklahoma
City, Oklahoma 73112, (telephone (405) 942-4848; fax (405) 942-6482).
Regardless of the actual hour of the Closing, the Closing shall be
effective as of 12:01 a.m. Central Time on the Closing Date (the
Effective Time).
2.2 Payment and Delivery by Rentech and Subsidiary. At the
Closing, and subject to the terms and conditions set forth herein,
Rentech and Subsidiary shall:
(a) pay the Purchase Price;
(b) execute and deliver the certificate required by Section 8.2
hereof; and
(c) execute and deliver the closing documents contemplated under
this Agreement.
2.3 Delivery by Sellers. At the Closing, and subject to the terms
and conditions set forth herein, Sellers shall:
(a) execute and deliver a General Assignment and Conveyance
conveying all of the Purchased Assets other than the Real Property
to Subsidiary;
(b) execute and deliver a general warranty deed as described in
Section 1.5.6;
(c) execute and deliver such other bills of sale, endorsements,
assignments, certificates of title, and other instruments of
transfer and conveyance as are reasonably requested by Rentech and
Subsidiary;
(d) deliver fully executed releases of all filed or recorded liens
affecting the Purchased Assets, other than the mortgage to M.H.
Barton described in Section 1.3.1 and security interests securing
the equipment loan of the First Bethany Bank and Trust, N.A.
described in Section 1.7.
(e) execute and deliver the certificate required by Section 7.1
hereof.
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Sellers will from time to time after the Closing Date, at Rentech's
request, execute such further instruments as Rentech reasonably deems
necessary to carry out the sale of the Purchased Assets pursuant to this
Agreement.
2.4 Possession. Subsidiary shall be entitled to take possession of
and Sellers shall deliver to Subsidiary the Purchased Assets as of the
Closing Date.
2.5 Prorations. Taxes assessed against the Real Property and
Personal Property for the year of sale, water and sewer charges, personal
property taxes, equipment leases, prepaid expenses and other customary
items shall be prorated between Sellers and Subsidiary as of the
Effective Time.
ARTICLE III.
REPRESENTATIONS OF SELLERS
WELL LOGGING
Well Logging represents, promises and warrants, to the best of its
knowledge, information and belief, to Rentech and Subsidiary as follows:
3.1 Organization. Well Logging is a corporation duly organized,
validly existing, and in good standing under the laws of the state of
Oklahoma and has all power and authority to own its property and carry on
its business as now conducted and has all necessary licenses, permits and
government approvals.
3.2 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby have
been duly authorized by all necessary action of Well Logging, and this
Agreement has been executed and delivered by Well Logging and constitutes
a legal, valid and binding obligation of Well Logging enforceable in
accordance with its terms.
3.3 Financial Reports. True and correct copies of the financial
statement (including a balance sheet and statement of income) of Well
Logging for the year ended December 31, 1998, and for each month since
then to this date (collectively, the Reports) will be provided to Rentech
by separate delivery. At Closing, Well Logging shall deliver to Rentech
a true and correct copy of the financial statements including a balance
sheet and statement of income of Well Logging as of the last day of the
most current month for which available prepared from the books of Well
Logging without audit since December 31, 1998 (the Interim Reports) the
Reports and the Interim Reports are collectively referred to as the
Financial Reports). All such Financial Reports are in accordance with
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PAGE 10
the books and records of Well Logging, have been prepared consistently
throughout the periods indicated, reflect all material assets and, to
Well Logging's knowledge, material liabilities of Well Logging, and
present fairly and completely, in all material respects, the financial
condition of Well Logging and its business at such dates and results of
its operations for the periods then ended, subject only, in the case of
the Interim Reports, to normal year end adjustments.
3.4 Absence of Certain Changes. Except as reflected in Financial
Reports, since December 31, 1998, Well Logging, its business and the
Purchased Assets owned by it have not suffered or undergone any change
that is reasonably likely to have an adverse effect on its business,
condition (financial or otherwise), or prospects (whether as a result of
any change as to inventory or other assets, any loss of a competitive
position, any natural disaster, accident, strike, or any other event or
condition affecting or relating to its business, Well Logging or the
Purchased Assets owned by it, whether or not related to any of the
foregoing), experienced any labor difficulty or suffered any damage,
destruction or loss (whether or not insured). Except as reflected in
Financial Reports since December 31, 1998, Well Logging and its business
have not:
(a) incurred any obligations or liabilities (whether absolute,
accrued, contingent, or otherwise and whether due or to become due),
except current liabilities lin the ordinary course of business and
consistent with past practice;
(b) written down or written up the value of any of the Inventory;
(c) canceled or waived any claim of right of substantial value or
sold, assigned, transferred or encumbered any of its properties or
assets, real, persona, or mixed, tangible or intangible, except for
fair consideration and in the ordinary course of business and
consistent with past practice;
(d) granted any increase in compensation, rate of compensation or
commission payable or to become payable, or made any loan, advance
or other extension of credit to any of its employees or agents
except merit increases made in the usual and ordinary course of
business;
(e) changed the methods of accounting or accounting principles or
practices of Well Logging set forth in or reflected in the Financial
Reports;
(f) lost any key employees;
(g) terminated or been advised of the termination of its
relationship with any material customer or supplier;
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PAGE 11
(h) changed in any material respect the business policies or
practices of Well Logging or failed to operate the business of Well
Logging in good faith and in the ordinary course; and
(i) agreed, whether in writing or not, to do any of the foregoing.
3.5 Title to Purchased Assets. Well Logging has good and
marketable title to all Purchased Assets, including, without limitation,
those reflected in the Financial Reports or acquired since the date
thereof (except for property disposed of since such date in the ordinary
course of business consistent with past practice), in each case free and
clear of liens, easements or title imperfections except that, as of the
date of this Agreement, the Purchased Assets may be subject to liens for
current taxes not yet due and payable. As of the Closing Date, the
Purchased Assets owned by it shall be subject to no liens and Well
Logging shall have good and marketable title to all Purchased Assets
owned by it free and clear of liens.
3.6 Personal Property. The Purchased Assets owned by Well Logging
are all of the Personal Property used by Well Logging in the Business.
The Personal Property is in possession of Well Logging and located at
Well Logging's principal place of business. Schedule 1.1(b) includes a
true and complete list of the Purchased Assets owned by Well Logging.
Except as set forth on Schedule 1.1(b), all tangible Purchased Assets
owned by Well Logging are in good operating condition and repair, subject
to ordinary wear and tear.
3.7 Suppliers. After the Closing, Well Logging will identify for
Subsidiary all suppliers or subcontractors from which Well Logging
purchased goods or services in excess of $5,000 during the year ended
December 31, 1998 or expects to purchase goods and services in excess of
that amount during the current fiscal year. Well Logging does not
believe and has not received any threat or notice that any such supplier
or subcontractor intends to discontinue or to reduce delivery of any such
goods or services or default under or terminate any agreement with Well
Logging, or to take any such action with respect to Rentech or Subsidiary
after the Closing, whether as a result of the transactions contemplated
hereby or otherwise.
3.8 Customers. After the Closing, Well Logging will identify for
Subsidiary all customers to which Well Logging sold goods or services in
excess of $5,000 during the year ended December 31, 1998 and all
customers to which Well Logging expects to sell goods or services in
excess of that amount during the current year. Well Logging has no
reason to believe and has not received any threat or notice that any such
customer intends to discontinue or to reduce significantly purchases of
such goods or services or default under or terminate or to reduce
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PAGE 12
significantly purchases of such goods or services or default under or
terminate any agreement with Well Logging or to take any such actions
with respect to Rentech or Subsidiary after the Closing, whether as a
result of the transactions contemplated hereby or otherwise.
3.9 Purchased Inventory. The Inventory is in good repair, is not
obsolete, is usable and saleable in the ordinary course of the business
as currently conducted, and to Well Logging's knowledge, consists of a
quantity that is not excessive in kind or amount. Since December 31,
1998, no Inventory has been acquired, sold or disposed of except in the
ordinary course of business consistent with past practice.
3.10 Compliance With Other Instruments. Well Logging has complete
and unrestricted power to undertake and perform all of the obligations
contained in this Agreement. Neither the execution and delivery, nor the
consummation of the transactions provided for in this Agreement, will
violate the Articles of Incorporation of Well Logging or any material
agreement, mortgage, indenture, license, franchise, permit, judgment,
decree, order, law or regulation by which Well Logging is bound.
3.11 Litigation. There are no actions, claims, suits,
investigations, litigation or proceedings pending, or, to the knowledge
of Well Logging, threatened against or relating to Well Logging or the
business, including any that would question the validity of this
Agreement or any other agreements contemplated hereunder or any action
taken or to be taken pursuant to or in connection with the provisions of
this Agreement or any other agreement contemplated hereunder, nor is
there any reasonable basis for any such action, claim, suit, proceeding
or investigation. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed (and not discharged or otherwise
satisfied) against Well Logging under any United States federal, state,
local or foreign law, and there are no unsatisfied judgments against Well
Logging.
3.12 Environmental Matters. Well Logging is and has at all times
been in compliance with all applicable United States, federal, state,
local, and foreign laws and regulations relating to environmental, land
use, welfare, natural resources, health and safety matters. There is no
suit, claim, action or proceeding pending or threatened against Well
Logging or any reasonable basis therefor, in respect of (a)
noncompliance by Well Logging with any such laws or regulations, (b)
personal injury, wrongful death or other tortious conduct arising out of
or resulting from materials, commodities or products held, used, sold,
transferred, manufactured or disposed of by or on behalf of Well Logging
or one of its shareholders, containing or incorporating any hazardous or
toxic materials commodities or substances, or (c) the presence or
release or threatened release into the environment of any pollutant,
<PAGE>
PAGE 13
contaminant or toxic or hazardous material, substance or waste, whether
solid, liquid or gas (each a Hazardous Substance), whether generated by
Well Logging or located at or about a site currently owned, leased or
otherwise used by Well Logging or heretofore owned, leased or otherwise
used by Well Logging or any predecessor entity and for which Well Logging
would have liability. There have been no Hazardous Substances generated
by Well Logging that have been disposed of or come to rest at any site
that has been included in any published United States federal, state or
local "superfund" site list or any other list of hazardous or toxic waste
sites published by any governmental authority in the United States.
There are and have been no underground storage tanks located on, no
polychlorinated biphenyls (PCBs) or PCB-containing equipment used or
stored on, and no hazardous waste, as defined by the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et. seq.,
stored on, any site owned, leased or otherwise used by Well Logging. No
such Hazardous Substance is stored by or on behalf of Well Logging at any
site at which Well Logging provides services. There has been no release
or threatened release by Well Logging of Hazardous Substances on, upon,
into or from (x) any site currently owned, leased or otherwise used by
Well Logging, (y) any site heretofore owned, leased or otherwise used by
Well Logging or any predecessor entity or (z) any other site at which
Well Logging provides services.
3.13 Tax Returns. Well Logging has duly filed all tax reports and
returns required to be filed by it and has duly paid all taxes and other
charges due as shown thereon or claimed to be due from it by written
notice from any federal, state, or local taxing authorities, including,
without limitation, those due in respect of its properties, income,
franchise, licenses, sales, and payrolls; there are no tax liens upon any
of the Purchased Assets owned by Well Logging (other than liens for
current taxes not yet due); there are no agreements, waivers or other
arrangements providing for an extension of time with respect to the
assessment of any tax or deficiency against the Purchased Assets owned by
Well Logging or Well Logging nor are there any actions, suits,
proceedings, investigations or claims now pending against Well Logging or
relating to its business; and, there are no pending discussions or
questions relating to, or claims asserted for taxes or assessments
against Well Logging.
3.14 Leases. As of the Effective Time of Closing, Well Logging
will not be bound to any leases pursuant to which Well Logging leases
real or personal property from or to others.
3.15 Intellectual Property. Well Logging has no pending
applications for registration of any rights in Intellectual Property. No
licenses, sublicenses or covenants have been granted or entered into by
Well Logging in respect of any Intellectual Property. "Intellectual
<PAGE>
PAGE 14
Property" means, collectively: (a) all registered, unregistered and
pending (i) trade names, trade dress, trademarks, service marks, assumed
names, business names and logos, and all registrations and applications
therefor, (ii) all computer software, data files, manuals and other
specifications and documentation and all know-how related thereto, (iii)
technical information, data, process technology, technical papers, plans,
drawings and blue prints, (iv) all patents, patent applications, and
inventions and discoveries that may be patentable, registered designs and
invention disclosures, (v) all know-how, trade secrets, proprietary
inventions, proprietary processes, proprietary formulas, proprietary
know-how, proprietary concepts, proprietary ideas, proprietary research
and development, and proprietary designs, and (vi) all other
intellectual property, and (b) all licenses, sublicenses, assignments in
respect thereto and rights thereunder, remedies against infringements
thereof and rights to protection of interest therein relating to the
items set forth in clause (a) above. Well Logging owns all well logs
that constitute part of the Purchased Assets, and has the unrestricted
right to sell information contained in the well logs or abstracted from
the well logs.
3.16 Employee Matters. After the Closing, Well Logging will
introduce Subsidiary to all employees employed by Well Logging
(collectively, the Employees), including for each such Employee: (i) his
or her position and title; (ii) his or her date of hire; (iii) his or
her salary; (iv) his or her unpaid wages, accrued vacation time and
accrued personal time; and (v) any bonuses paid to him or her with
respect to the fiscal year ended December 31, 1998 or earned by him or
her with respect to the current fiscal year. Well Logging shall as soon
as reasonably practicable, but in any event within five days after the
Closing, provide to Rentech the foregoing information with respect to any
other Employees hired prior to the Closing. There are no continuing
contracts of employment with any employees of Well Logging and no bonuses
due that will be unpaid at Closing. Well Logging has complied with all
applicable laws relative to employee benefits, including COBRA and the
Employee Retirement Income Security Act of 1974, as amended (ERISA), and
there are no unfunded liabilities relating to any pension or welfare
benefit plan for which Well Logging could be liable. Well Logging is not
a party to any collective bargaining agreement and there is no existing
dispute or controversy between Well Logging and any of the Employees.
None of the Employees are represented by a labor union and, to Well
Logging's knowledge, there is no labor union organizing activity by or
among such Employees. Well Logging does not maintain or contribute to,
nor has it ever maintained or contributed to, any employee benefit plan
(as defined in ERISA) that is an employee pension benefit plan (as
defined in ERISA). Well Logging does not maintain or contribute to, nor
has it ever maintained or contributed to, an employee benefit plan that
is an employee welfare benefit plan (as defined in ERISA).
<PAGE>
PAGE 15
3.17 Contracts and Commitments. There are no continuing contracts,
agreements, plans, arrangements, or commitments for the benefit of or
relating to its business that Well Logging holds and that will continue
past the Closing.
3.18 Compliance with Law. Well Logging has not received any notice
of any violation of and, to the best of Well Logging's knowledge, has
complied in all material respects with all laws, regulations, and orders
applicable to its business including all rules and regulations of the
Occupational Health and Safety Administration, and all federal, state and
local environmental laws, rules and regulations.
3.19 Licenses and Permits. Well Logging holds all licenses and
permits which, to the best of Well Logging's knowledge, are required for
Well Logging's operation of its business, all of which are in full force
and effect. Well Logging has all governmental and regulatory licenses
and permits necessary for the conduct of the business as presently
conducted for the ownership of the Purchased Assets. All such licenses
and permits are in full force and effect, and no written notice of any
violations has been received by Well Logging relating to such licenses or
permits. Well Logging is not in violation of any such license or permit,
and no proceeding or investigation is pending or, to Well Logging's
knowledge, threatened that would have the effect, directly or indirectly,
of revoking or limiting in any way such license or permits. To the
extent that any such license or permit cannot be obtained independently
by Subsidiary without condition other than application and the payment of
applicable fees, such licenses and permits are fully assignable to
Subsidiary.
3.20 Disclosure. No material representation or warranty by Well
Logging contained in this Agreement and no statement contained in any
exhibit, schedule certificate, list, or other writing furnished to the
Buyer pursuant to the provision hereof, to the best knowledge of Well
Logging, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein
not materially misleading.
3.21 Certain Agreements. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation,
severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any Employee or any other person from Well
Logging under any plan, agreement or otherwise, (ii) increase any
benefits otherwise payable to any Employee under any plan or agreement,
or (iii) result in the acceleration of the time of payment or vesting of
any such benefits.
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PAGE 16
3.22 Books and Records. Well Logging has made available to Rentech
and Subsidiary true and correct copies of the books and of all corporate
(including minute books and stock record books) and financial records of
Well Logging.
3.23 Standstill. Neither Well Logging nor any shareholder of Well
Logging has entered into any arrangement or understanding with any person
other than Rentech and Subsidiary regarding this sale, exchange or other
disposition of any of the Purchased Assets owned by it, other than the
sale of Inventory or used equipment in the ordinary course of business.
3.24 Year 2000 Representations and Warranties Well Logging
represents and warrants that all of Well Logging's products, hardware and
software, mechanical, electrical or other system that contains a
microchip or software which is date sensitive (including but not limited
to: business, accounting and order fulfillment systems, payroll and
employee benefit systems, security systems, drilling trucks, logging
trucks, and equipment controllers), and which are material to Well
Logging's continued operations (hereinafter the Products and Systems) are
designed to be used prior to, during, and after the calendar year 2000
AD, and that the Products and Systems will operate during each such time
period without error relating to date data, specifically including any
error relating to, or the product of, data which represents or references
different centuries or more than one century. Without limiting the
generality of the foregoing, Well Logging further represents and warrants
that the Products and Systems are and will continue to be "Year 2000
Compliant," meaning that the data outside the range 1990-1999 will be
correctly processed in any level of the Products and Systems including,
but not limited to, microcode, firmware, hardware, application programs,
files and databases, and all date processing by the Products and Systems
will recognize and correctly process dates for Leap Years.
MUD LOGGING
Mud Logging represents, promises and warrants, to the best of its
knowledge, information and belief, to Rentech and Subsidiary as follows:
3.25 Organization. Mud Logging is a corporation duly organized,
validly existing, and in good standing under the laws of the state of
Oklahoma and has all power and authority to own its property and carry on
its business as now conducted and has all necessary licenses, permits and
government approvals.
3.26 Authorization. The execution, delivery and performance of
this Agreement and any other documents or instruments contemplated hereby
have been duly authorized by all necessary action of Mud Logging, and
this Agreement has been executed and delivered by Mud Logging and
constitutes a legal, valid and binding obligation of Mud Logging
enforceable in accordance with its terms.
<PAGE>
PAGE 17
3.27 Financial Reports. True and correct copies of the financial
statement (including a balance sheet and statement of income) of Mud
Logging for the year ended December 31, 1998, and for each current month
since then to this date (collectively, the Reports) will be provided to
Rentech by separate delivery. At Closing, Mud Logging shall deliver to
Rentech a true and correct copy of the financial statements including a
balance sheet and statement of income of Mud Logging as of the last day
of the most current month for which available prepared from the books of
Mud Logging without audit since December 31, 1998 (the Interim Reports)
(the Reports and the Interim Reports are collectively referred to as the
Financial Reports). All such Financial Reports are in accordance with
the books and records of Mud Logging, have been prepared consistently
throughout the periods indicated, reflect all material assets and, to Mud
Logging's knowledge, material liabilities of Mud Logging, and present
fairly and completely, in all material respects, the financial condition
of Mud Logging and its business at such dates and results of its
operations for the periods then ended, subject only, in the case of the
Interim Reports, to normal year end adjustments.
3.28 Absence of Certain Changes. Except as reflected in Financial
Reports, since December 31, 1998, Mud Logging, its business and the
Purchased Assets owned by it have not suffered or undergone any change
that is reasonably likely to have an adverse effect on its business,
condition (financial or otherwise), or prospects (whether as a result of
any change as to inventory or other assets, any loss of a competitive
position, any natural disaster, accident, strike, or any other event or
condition affecting or relating to its business, Mud Logging or the
Purchased Assets owned by it, whether or not related to any of the
foregoing), experienced any labor difficulty or suffered any damage,
destruction or loss (whether or not insured). Except as reflected in
Financial Reports since December 31, 1998, Well Logging and its business
have not:
(a) incurred any obligations or liabilities (whether absolute,
accrued, contingent, or otherwise and whether due or to become due),
except current liabilities lin the ordinary course of business and
consistent with past practice;
(b) written down or written up the value of any of the Inventory;
(c) canceled or waived any claim of right of substantial value or
sold, assigned, transferred or encumbered any of its properties or
assets, real, persona, or mixed, tangible or intangible, except for
fair consideration and in the ordinary course of business and
consistent with past practice;
<PAGE>
PAGE 18
(d) granted any increase in compensation, rate of compensation or
commission payable or to become payable, or made any loan, advance
or other extension of credit to any of its employees or agents
except merit increases made in the usual and ordinary course of
business;
(e) changed the methods of accounting or accounting principles or
practices of Mud Logging set forth in or reflected in the Financial
Reports;
(f) lost any key employees;
(g) terminated or been advised of the termination of its
relationship with any material customer or supplier;
(h) changed in any material respect the business policies or
practices of Mud Logging or failed to operate the business of Mud
Logging in good faith and in the ordinary course; and
(i) agreed, whether in writing or not, to do any of the foregoing.
3.29 Title to Purchased Assets. Mud Logging has good and
marketable title to all Purchased Assets, including, without limitation,
those reflected in the Financial Reports or acquired since the date
thereof (except for property disposed of since such date in the ordinary
course of business consistent with past practice), in each case free and
clear of liens, easements or title imperfections except that, as of the
date of this Agreement, the Purchased Assets may be subject to liens for
current taxes not yet due and payable. As of the Closing Date, the
Purchased Assets owned by it shall be subject to no liens and Mud Logging
shall have good and marketable title to all Purchased Assets owned by it
free and clear of liens.
3.30 Personal Property. The Purchased Assets owned by Mud Logging
are all of the Personal Property used by Mud Logging in the Business.
The Personal Property is in possession of Mud Logging and located at Mud
Logging's principal place of business. Schedule 1.1(b) includes a true
and complete list of the Purchased Assets owned by Mud Logging. Except
as set forth on Schedule 1.1(b), all tangible Purchased Assets owned by
Mud Logging are in good operating condition and repair, subject to
ordinary wear and tear.
3.31 Suppliers. After the Closing, Mud Logging will identify for
Subsidiary all suppliers or subcontractors from which Mud Logging
purchased goods or services in excess of $5,000 during the year ended
December 31, 1998 or expects to purchase goods and services in excess of
that amount during the current fiscal year. Mud Logging does not believe
<PAGE>
PAGE 19
and has not received any threat or notice that any such supplier or
subcontractor intends to discontinue or to reduce delivery of any such
goods or services or default under or terminate any agreement with Mud
Logging, or to take any such action with respect to Rentech or Subsidiary
after the Closing, whether as a result of the transactions contemplated
hereby or otherwise.
3.32 Customers. After the Closing, Mud Logging will identify for
Subsidiary all customers to which Mud Logging sold goods or services in
excess of $5,000 during the year ended December 31, 1998 and all
customers to which Mud Logging expects to sell goods or services in
excess of that amount during the current year. Mud Logging has no reason
to believe and has not received any threat or notice that any such
customer intends to discontinue or to reduce significantly purchases of
such goods or services or default under or terminate or to reduce
significantly purchases of such goods or services or default under or
terminate any agreement with Mud Logging or to take any such actions with
respect to Rentech or Subsidiary after the Closing, whether as a result
of the transactions contemplated hereby or otherwise.
3.33 Purchased Inventory. The Inventory is in good repair, is not
obsolete, is usable and saleable in the ordinary course of the business
as currently conducted, and to Mud Logging's knowledge, consists of a
quantity that is not excessive in kind or amount. Since December 31,
1998, no Inventory has been acquired, sold or disposed of except in the
ordinary course of business consistent with past practice.
3.34 Compliance With Other Instruments. Mud Logging has complete
and unrestricted power to undertake and perform all of the obligations
contained in this Agreement. Neither the execution and delivery, nor the
consummation of the transactions provided for in this Agreement, will
violate the Articles of Incorporation of Mud Logging or any material
agreement, mortgage, indenture, license, franchise, permit, judgment,
decree, order, law or regulation by which Mud Logging is bound.
3.35 Litigation. There are no actions, claims, suits,
investigations, litigation or proceedings pending, or, to the knowledge
of Mud Logging, threatened against or relating to Mud Logging or the
business, including any that would question the validity of this
Agreement or any other agreements contemplated hereunder or any action
taken or to be taken pursuant to or in connection with the provisions of
this Agreement or any other agreement contemplated hereunder, nor is
there any reasonable basis for any such action, claim, suit, proceeding
or investigation. There are no judgments, orders, decrees, citations,
fines or penalties heretofore assessed (and not discharged or otherwise
satisfied) against Mud Logging under any United States federal, state,
local or foreign law, and there are no unsatisfied judgments against Mud
Logging.
<PAGE>
PAGE 20
3.36 Environmental Matters. Mud Logging is and has at all times
been in compliance with all applicable United States, federal, state,
local, and foreign laws and regulations relating to environmental, land
use, welfare, natural resources, health and safety matters. There is no
suit, claim, action or proceeding pending or threatened against Mud
Logging or any reasonable basis therefor, in respect of (a)
noncompliance by Mud Logging with any such laws or regulations, (b)
personal injury, wrongful death or other tortious conduct arising out of
or resulting from materials, commodities or products held, used, sold,
transferred, manufactured or disposed of by or on behalf of Mud Logging
or one of its shareholders, containing or incorporating any hazardous or
toxic materials commodities or substances, or (c) the presence or
release or threatened release into the environment of any pollutant,
contaminant or toxic or hazardous material, substance or waste, whether
solid, liquid or gas (each a Hazardous Substance), whether generated by
Mud Logging or located at or about a site currently owned, leased or
otherwise used by Mud Logging or heretofore owned, leased or otherwise
used by Well Logging or any predecessor entity and for which Mud Logging
would have liability. There have been no Hazardous Substances generated
by Mud Logging that have been disposed of or come to rest at any site
that has been included in any published United States federal, state or
local "superfund" site list or any other list of hazardous or toxic waste
sites published by any governmental authority in the United States.
There are and have been no underground storage tanks located on, no
polychlorinated biphenyls (PCBs) or PCB-containing equipment used or
stored on, and no hazardous waste, as defined by the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et. seq.,
stored on, any site owned, leased or otherwise used by Mud Logging. No
such Hazardous Substance is stored by or on behalf of Mud Logging at any
site at which Mud Logging provides services. There has been no release
or threatened release by Mud Logging of Hazardous Substances on, upon,
into or from (x) any site currently owned, leased or otherwise used by
Mud Logging, (y) any site heretofore owned, leased or otherwise used by
Mud Logging or any predecessor entity or (z) any other site at which Mud
Logging provides services.
3.37 Tax Returns. Mud Logging has duly filed all tax reports and
returns required to be filed by it and has duly paid all taxes and other
charges due as shown thereon or claimed to be due from it by written
notice from any federal, state, or local taxing authorities, including,
without limitation, those due in respect of its properties, income,
franchise, licenses, sales, and payrolls; there are no tax liens upon any
of the Purchased Assets owned by Mud Logging (other than liens for
current taxes not yet due); there are no agreements, waivers or other
arrangements providing for an extension of time with respect to the
assessment of any tax or deficiency against the Purchased Assets owned by
<PAGE>
PAGE 21
Mud Logging or Mud Logging nor are there any actions, suits, proceedings,
investigations or claims now pending against Mud Logging or relating to
its business; and, there are no pending discussions or questions relating
to, or claims asserted for taxes or assessments against Mud Logging.
3.38 Leases. At the Effective Time of Closing, Mud Logging will
not be bound to any leases pursuant to which Mud Logging leases real or
personal property from or to others.
3.39 Intellectual Property. Mud Logging has no pending
applications for registration of any rights in Intellectual Property. No
licenses, sublicenses or covenants have been granted or entered into by
Mud Logging in respect of any Intellectual Property. "Intellectual
Property" means, collectively: (a) all registered, unregistered and
pending (i) trade names, trade dress, trademarks, service marks, assumed
names, business names and logos, and all registrations and applications
therefor, (ii) all computer software, data files, manuals and other
specifications and documentation and all know-how related thereto, (iii)
technical information, data, process technology, technical papers, plans,
drawings and blue prints, (iv) all patents, patent applications, and
inventions and discoveries that may be patentable, registered designs and
invention disclosures, (v) all know-how, trade secrets, proprietary
inventions, proprietary processes, proprietary formulas, proprietary
know-how, proprietary concepts, proprietary ideas, proprietary research
and development, and proprietary designs, and (vi) all other
intellectual property, and (b) all licenses, sublicenses, assignments in
respect thereto and rights thereunder, remedies against infringements
thereof and rights to protection of interest therein relating to the
items set forth in clause (a) above.
3.40 Employee Matters. After the Closing, Mud Logging will
introduce Subsidiary to all employees employed by Mud Logging
(collectively, the Employees), including for each such Employee: (i) his
or her position and title; (ii) his or her date of hire; (iii) his or
her salary; (iv) his or her unpaid wages, accrued vacation time and
accrued personal time; and (v) any bonuses paid to him or her with
respect to the fiscal year ended December 31, 1998 or earned by him or
her with respect to the current fiscal year. Mud Logging shall as soon
as reasonably practicable, but in any event within five days after the
Closing, provide to Rentech the foregoing information with respect to any
other Employees hired prior to the Closing. There are no continuing
contracts of employment with any employees of Mud Logging and no bonuses
due that will be unpaid at Closing. Mud Logging has complied with all
applicable laws relative to employee benefits, including COBRA and the
Employee Retirement Income Security Act of 1974, as amended (ERISA), and
there are no unfunded liabilities relating to any pension or welfare
benefit plan for which Mud Logging could be liable. Mud Logging is not a
<PAGE>
PAGE 22
party to any collective bargaining agreement and there is no existing
dispute or controversy between Mud Logging and any of the Employees.
None of the Employees are represented by a labor union and, to Mud
Logging's knowledge, there is no labor union organizing activity by or
among such Employees. Mud Logging does not maintain or contribute to,
nor has it ever maintained or contributed to, any employee benefit plan
(as defined in ERISA) that is an employee pension benefit plan (as
defined in ERISA). Mud Logging does not maintain or contribute to, nor
has it ever maintained or contributed to, an employee benefit plan that
is an employee welfare benefit plan (as defined in ERISA).
3.41 Contracts and Commitments. There are no continuing contracts,
agreements, plans, arrangements, or commitments for the benefit of or
relating to its business that Mud Logging holds and that will continue
past the Closing.
3.42 Compliance with Law. Mud Logging has not received any notice
of any violation of and, to the best of Mud Logging's knowledge, has
complied in all material respects with all laws, regulations, and orders
applicable to its business including all rules and regulations of the
Occupational Health and Safety Administration, and all federal, state and
local environmental laws, rules and regulations.
3.43 Licenses and Permits. Mud Logging holds all licenses and
permits which, to the best of Well Logging's knowledge, are required for
Mud Logging's operation of its business, all of which are in full force
and effect. Mud Logging has all governmental and regulatory licenses and
permits necessary for the conduct of the business as presently conducted
for the ownership of the Purchased Assets. All such licenses and permits
are in full force and effect, and no written notice of any violations has
been received by Mud Logging relating to such licenses or permits. Mud
Logging is not in violation of any such license or permit, and no
proceeding or investigation is pending or, to Mud Logging's knowledge,
threatened that would have the effect, directly or indirectly, of
revoking or limiting in any way such license or permits. To the extent
that any such license or permit cannot be obtained independently by
Subsidiary without condition other than application and the payment of
applicable fees, such licenses and permits are fully assignable to
Subsidiary.
3.44 Disclosure. No material representation or warranty by Mud
Logging contained in this Agreement and no statement contained in any
exhibit, schedule certificate, list, or other writing furnished to the
Buyer pursuant to the provision hereof, to the best knowledge of Mud
Logging, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements therein
not materially misleading.
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PAGE 23
3.45 Certain Agreements. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation,
severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any Employee or any other person from Mud
Logging under any plan, agreement or otherwise, (ii) increase any
benefits otherwise payable to any Employee under any plan or agreement,
or (iii) result in the acceleration of the time of payment or vesting of
any such benefits.
3.46 Books and Records. Mud Logging has made available to Rentech
and Subsidiary true and correct copies of the books and of all corporate
(including minute books and stock record books) and financial records of
Mud Logging.
3.47 Standstill. Neither Mud Logging nor any shareholder of Mud
Logging has entered into any arrangement or understanding with any person
other than Rentech and Subsidiary regarding this sale, exchange or other
disposition of any of the Purchased Assets owned by it, other than the
sale of Inventory or used equipment in the ordinary course of business.
3.48 Year 2000 Representations and Warranties Mud Logging
represents and warrants that all of Well Logging's products, hardware and
software, mechanical, electrical or other system that contains a
microchip or software which is date sensitive (including but not limited
to: business, accounting and order fulfillment systems, payroll and
employee benefit systems, security systems, drilling trucks, logging
trucks, and equipment controllers), and which are material to Mud
Logging's continued operations (hereinafter the Products and Systems) are
designed to be used prior to, during, and after the calendar year 2000
AD, and that the Products and Systems will operate during each such time
period without error relating to date data, specifically including any
error relating to, or the product of, date data which represents or
references different centuries or more than one century. Without
limiting the generality of the foregoing, Mud Logging further represents
and warrants that the Products and Systems are and will continue to be
"Year 2000 Compliant," meaning that the data outside the range 1990-1999
will be correctly processed in any level of the Products and Systems
including, but not limited to, microcode, firmware, hardware, application
programs, files and databases, and all date processing by the Products
and Systems will recognize and correctly process dates
ARTICLE IV.
CONDUCT OF BUSINESS PRIOR TO CLOSING
Sellers each separately covenant and agree that prior to the
Closing, except as Rentech may consent in writing:
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PAGE 24
4.1 Operation in Ordinary Course. Its business will be conducted
only in the ordinary course.
4.2 Operation of the Business. It shall use its best efforts to
keep its business intact and to preserve the goodwill of suppliers,
customers and others having business relations with it.
4.3 Employees. It will pay all salaries, wages, payroll taxes,
benefits, vacation pay, all other fringe benefit costs, and all other
costs of every nature whatsoever due or accrued at or prior to the
Closing to or for the benefit of its employees or agents, Rentech and
Subsidiary assuming no responsibility for any of the above. Effective as
of the Effective Time, of the Closing, it shall terminate the employment
of all of its employees.
4.4 Payment of Liabilities. It will pay as the same become due all
of its expenses, trade payables and all liabilities other than the
Assumed Liabilities.
4.5 Payment of Taxes. It will promptly file all tax returns and
pay all federal, state and local tax assessments and governmental charges
which are or may be lawfully levied or assessed against it, its business
or the Purchased Assets owned by it for periods ending on or prior to the
Closing Date, including, but not limited to, ad valorem, sales, use,
excise, franchise, and personal property taxes.
4.6 Insurance. It will maintain in effect through the Closing Date
all existing insurance coverage covering the Purchased Assets owned by
it.
4.7 Maintenance of Properties; Risk of Loss. Through the Closing
Date, it will maintain all the Purchased Assets owned by it in customary
repair, order and condition, reasonable wear and use and damage by fire
or other casualty excepted. It shall be responsible for all risk of loss
prior to the Closing Date.
4.8 Maintenance of Books. Through the Closing Date, it will
maintain its books, accounts and records in the usual manner on a basis
consistent with prior periods. It will duly comply in all material
respects with all laws and decrees applicable to it.
4.9 Update Schedules. It will advise Rentech of any changes in the
information provided in the schedules attached hereto.
4.10 Exclusivity; Acquisition Proposals. Unless and until this
Agreement shall have been terminated by either party pursuant to Article
9, except as required by law, neither Well Logging, Mud Logging nor Hoyt
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L. Hudspeth will and they shall so instruct their officers, directors,
agents, representatives or affiliates, not to, take or cause, directly or
indirectly, any of the following actions with any person other than Buyer
and its designees or agents: (i) solicit, encourage, initiate or
participate in any negotiations, inquiries or discussions with respect to
any offer or proposal to acquire all or any substantial part of the
Purchased Assets owned by Well Logging or Mud Logging, respectively,
(Acquisition Transaction); (ii) disclose any information not customarily
disclosed to any person concerning its business or the Purchased Assets
except in the ordinary course of business consistent with past practice
and as required pursuant to a governmental request for information;
(iii) enter into or execute any agreement relating to an Acquisition
Transaction, or other agreement calling for the sale, directly or
indirectly, of all or any significant part of its business or the
Purchased Assets; or (iv) make or authorize any public statement,
recommendation or solicitation with respect to any Acquisition
Transaction or any offer or proposal relating to an Acquisition
Transaction other than with respect to the transactions contemplated
hereby.
ARTICLE V.
PRE-CLOSING COVENANTS OF SELLERS AND BUYER
5.1 Environmental Survey. If Rentech elects to obtain an
environmental survey of the Real Property, Sellers and Rentech shall
cooperate in obtaining, at Rentech's expense, a Phase I environmental
survey of the Real Property. The Phase I survey shall be ordered from an
environmental consultant by Rentech, at its expense, no later than ten
(10) days after the date hereof and shall be completed as promptly as
possible. If a Phase II environmental survey is required by the
environmental consultant preparing the Phase I survey, Sellers shall be
responsible for the cost of the Phase II survey.
5.2 Cooperation. Mud Logging, Well Logging, Rentech and Subsidiary
shall use their best efforts to cause the sale contemplated by this
Agreement to be consummated, and, without limiting the generality of the
foregoing, to make all filings with and give notices to third parties
which may be necessary or reasonably required in order to effect the
transactions contemplated hereby.
5.3 Access to Premises. Between the date hereof and the Closing
Date, the Sellers will afford to the officers and authorized
representatives of Rentech and Subsidiary access during normal business
hours (with the participation of Hoyt L. Hudspeth) to the premises,
properties, and to the books and records of Sellers in order that Rentech
and Subsidiary shall have the opportunity to make such investigations as
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it shall desire and to permit Sellers to review such financial and
operating data and other information regarding the Businesses as Rentech
shall from time to time reasonably request. Rentech shall not contact or
meet with Sellers' customers or suppliers without the participation of
Hoyt L. Hudspeth. Neither party shall make public disclosure of this
Agreement prior to the Closing except as required in connection with
transfer of permits, licenses and other such transactions.
5.4 Confidentiality.
(a) Rentech and Subsidiary agree to keep confidential the
information that Sellers provides to Rentech and Subsidiary and not
to use such information for any purpose whatsoever other than
evaluating the transactions contemplated in this Agreement. Rentech
and Subsidiary further agree that they will not make any oral or
written disclosures concerning the information provided to it to any
person without the prior approval of Sellers; provided, however,
that Rentech and Subsidiary may disclose such confidential
information to persons subject to Rentech's and Subsidiary's control
who have a need to know such confidential information in connection
with the negotiations between Rentech and Subsidiary and Sellers, to
Rentech's and Subsidiary's affiliates, to existing or prospective
lenders of or investors in Rentech and Subsidiary, all of whom will
be directed and required to maintain such information in the
strictest confidence at all times.
(b) Sellers agree to keep in strictest confidence and to
refrain from disclosing to any person, except to their legal
counsel, any aspect of the transactions contemplated in this
Agreement, including (without limitation) the identify of Rentech
and Subsidiary, the existence of this Agreement, the terms and
conditions set forth in this Agreement, the contents of any
discussions and negotiations that already have taken place and that
may take place in the future, and the fact that Sellers or Rentech
and Subsidiary are contemplating a transaction of the type set
forth in this Agreement, as well as any other matter relating to
this Agreement or relating to the transactions contemplated thereby.
5.5 Due Diligence Investigation. Sellers agree that Rentech's or
Subsidiary's representatives shall have full access to and the right to
inspect and evaluate the Businesses, including the Properties and books
and records, and shall have the opportunity to interview Sellers'
respective accountants and Sellers' respective key employees concerning
the Businesses. Rentech will be provided a copy of an appraisal of the
Real Property. Rentech will make its own due diligence investigation and
financial analysis of all matters pertaining to the value of the
Businesses and the advisability of making the purchase. Rentech will
have the opportunity to conduct such investigations of the Businesses as
it wishes, including environmental assessments of the Real Property.
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ARTICLE VI.
REPRESENTATIONS BY BUYER
RENTECH
Rentech represents, promises and warrants to the Sellers as follows:
6.1 Organization. Rentech is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Colorado,
and has all corporate power and authority to own its property and carry
on its business as now conducted.
6.2 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby has
been duly authorized by all necessary corporate actions of Rentech, and
this Agreement has been executed and will be delivered by Rentech and
will constitute a legal, valid and binding obligation of the Rentech
enforceable in accordance with their terms.
6.3 Compliance With Other Instruments. Rentech has complete and
unrestricted power to undertake and perform all of the obligations
contained in this Agreement. Neither the execution and delivery, nor the
consummation of the transactions provided for in this Agreement, will
violate the Articles of Incorporation or the bylaws of Rentech or any
material agreement, mortgage, indenture, license, franchise, permit,
lease or other instrument, judgment, decree, order, law or regulation by
which Rentech is bound.
6.4 Litigation. There is no action, suit, litigation or proceeding
pending, or, to the best knowledge of Rentech, threatened against or
relating to Rentech which could adversely affect the ability of Rentech
to perform the transactions contemplated by this Agreement.
SUBSIDIARY
Subsidiary represents, promises and warrants to the Sellers as
follows:
6.5 Organization. Subsidiary is a corporation duly organized,
validly existing, and in good standing under the laws of the state of
Colorado, and has all corporate power and authority to own its property
and carry on its business as now conducted.
6.6 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby has
<PAGE>
PAGE 28
been duly authorized by all necessary corporate actions of Subsidiary,
and this Agreement has been executed and will be delivered by Subsidiary
and will constitute a legal, valid and binding obligation of the
Subsidiary enforceable in accordance with their terms.
6.7 Compliance With Other Instruments. Subsidiary has complete and
unrestricted power to undertake and perform all of the obligations
contained in this Agreement. Neither the execution and delivery, nor the
consummation of the transactions provided for in this Agreement, will
violate the Articles of Incorporation or the bylaws of Subsidiary or any
material agreement, mortgage, indenture, license, franchise, permit,
lease or other instrument, judgment, decree, order, law or regulation by
which Subsidiary is bound.
6.8 Litigation. There is no action, suit, litigation or proceeding
pending, or, to the best knowledge of Subsidiary, threatened against or
relating to Subsidiary which could adversely affect the ability of
Subsidiary to perform the transactions contemplated by this Agreement.
ARTICLE VII.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligation of Rentech and Subsidiary to consummate the
transactions contemplated in this Agreement is subject to the fulfillment
to its satisfaction or the following conditions prior to or at the
Closing (unless expressly waived in writing by Rentech and Subsidiary).
7.1 Representations, Warranties and Covenants. The representations
and warranties made by Sellers shall be true and correct in all material
respects at and as of the Closing Date; and Sellers shall have performed
and complied in all material respects with all covenants, agreements and
conditions contained in this Agreement required to be performed or
complied with by them prior to the Closing and Sellers shall provide to
Rentech and Subsidiary at the Closing a certificate to such effect
executed by Sellers.
7.2 Litigation. There shall be no litigation pending or threatened
against Sellers with respect to the consummation of this Agreement or
which could adversely affect the ability of Sellers to convey the
Purchased Assets to Subsidiary.
7.3 Transfer of Purchased Assets. Sellers shall have executed and
delivered to Subsidiary one or more bills of sale, assignments or other
instruments transferring the Purchased Assets to Subsidiary, including,
without limitation, any specific forms of assignment or instrument
required by applicable law for a particular asset or type of asset, all
of which shall be in both form and substance reasonably satisfactory to
Rentech and Subsidiary.
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PAGE 29
7.4 Release of Liens, Guarantees, Etc. All liens and other
encumbrances on the Purchased Assets shall have been released, unless
specifically agreed herein to be assumed by Buyer.
7.5 No Adverse Effect, etc. No material adverse effect shall have
occurred between the date of this Agreement and the Closing Date nor
shall have occurred any other fact or circumstance that could be expected
to have a material adverse effect and Sellers shall certify to that
effect. Rentech shall not have become aware of any fact or circumstance
materially adversely affecting or that could be expected to materially
adversely affect Rentech's and Subsidiary's right to conduct the
Businesses substantially as they were being conducted on March 31, 1999
or to own the Purchased Assets.
7.6 Buyer's Due Diligence. Rentech shall have completed its due
diligence with respect to Sellers, the Businesses and the Purchased
Assets and the results of such due diligence shall be satisfactory to
Rentech.
7.7 Noncompetition Agreement. Sellers and Hoyt L. Hudspeth, Ronald
Ray Hudspeth, and Tammy Silva shall have entered into the employment
agreements with Subsidiary, in the form of those attached as Exhibit 1.4,
with the noncompetition agreements contained in each of them,
respectively.
7.8 Title Documents. The Title Documents, the title commitment and
the Deed shall have been delivered and shall be deemed to be satisfactory
to Rentech and Subsidiary pursuant to provisions of Section 1.5.
7.9 Delivery of Possession, Etc. Sellers shall have delivered to
Subsidiary possession and control of the Purchased Assets in a manner
reasonably satisfactory to Rentech and Subsidiary.
7.10 Charter Documents, Etc. Sellers shall have delivered (i) a
copy of their respective articles of incorporation certified by the
Secretary of State of the state of Oklahoma and a good standing
certificate for each Sellers issued by the Secretary of State of the
state of Oklahoma and (ii) certificates of the Secretary of State
certifying that attached thereto is a copy of each Sellers' respective
bylaws as in effect on the date thereof, copies of directors' and
shareholders' resolutions authorizing the transactions contemplated by
this Agreement and certifying the incumbency of the officers authorized
to execute this Agreement and the documents and instruments delivered by
each Seller in connection therewith. Mud Logging shall have executed an
amendment to its Certificate of Incorporation changing its name from
Petroleum Mud Logging, Inc. to such other name that will not conflict
<PAGE>
PAGE 30
with Subsidiary's qualification as a foreign corporation in Oklahoma
under the name Petroleum Mud Logging, Inc., a Colorado corporation. The
amendment to the Certificate of Incorporation shall be filed prior to or
immediately after Closing.
7.11 General. All instruments and legal and corporate proceedings
in connection with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to Rentech, and Rentech
shall have received counterpart originals, or certified or other copies,
of all documents that it may reasonably request in connection therewith.
ARTICLE VIII.
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
The obligation of Sellers to consummate the transactions
contemplated by this Agreement is subject to the fulfillment to its
satisfaction of the following conditions prior to at the Closing (unless
expressly waived in writing by Sellers):
8.1 Execution of Employment Contracts. Rentech and Subsidiary
shall have provided employment contracts with agreed upon terms to Hoyt
L. Hudspeth, Ronald Ray Hudspeth, Tammy Silva and the key staff members,
and these individuals and the key staff members shall have executed such
employment contracts.
8.2 Representations Warranties and Covenants. The representations
and warranties made by Rentech and Subsidiary shall be true and correct
in all material respects at and as of the Closing Date and Rentech and
Subsidiary shall have performed and complied in all material respects
with all covenants, agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to the Closing and
Rentech and Subsidiary shall provide to Sellers at the Closing a
certificate to such effect executed by an officer of Rentech and
Subsidiary, respectively.
8.3 Litigation. There shall be no litigation pending or threatened
against Rentech or Subsidiary with respect to the consummation of this
Agreement.
8.4 Consideration. Rentech and Subsidiary shall have paid to
Sellers the Purchase Price as provided in Section 1.2.
8.5 Charter Documents, etc. Rentech and Subsidiary shall have
delivered: (i) a copy of a good standing certificate for Rentech and
Subsidiary issued by the Secretary of State of the state of Colorado and
(ii) copies of directors' and shareholders' resolutions of Rentech and
<PAGE>
PAGE 31
Subsidiary, respectively, authorizing the transactions contemplated by
this Agreement and certifying the incumbency of the officers authorized
to execute this Agreement and the documents and instruments delivered by
Rentech and Subsidiary in connection therewith.
8.6 General. All instruments and legal and corporate proceedings
in connection with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to Rentech, and Rentech
shall have received counterpart originals, or certified or other copies,
of all documents that it may reasonably request in connection therewith.
ARTICLE IX.
FAILURE OF CONDITIONS: REMEDIES
9.1 Failure of Conditions Precedent - No Breach. In the event any
condition precedent to the obligations of any party are not satisfied on
the Closing Date and the failure to satisfy the condition precedent is
not due to a breach of this Agreement by the other party, the party whose
conditions precedent have not been satisfied shall have the option of
terminating this Agreement or waiving the unsatisfied condition precedent
and closing hereunder (and, in either event, waiving any claim for
damages or indemnity relating thereto).
9.2 Failure of Conditions Precedent - Breach. In the event any
condition precedent to the obligations of any party are not satisfied on
the Closing Date and the failure to satisfy the condition precedent is
due to a breach of this Agreement by the other party, or in the event of
any other breach of this Agreement, the party who is not in breach of
this Agreement shall have the following rights:
(a) If either Mud Logging or Well Logging are in breach, Rentech
and Subsidiary shall have the option of terminating this Agreement
without, in either event, waiving its claim for damages resulting
from the breach;
(b) If Rentech or Subsidiary are in breach, Mud Logging and Well
Logging shall have the option of terminating this Agreement without,
in either event, waiving their claim for damages resulting from the
breach.
ARTICLE X.
INDEMNIFICATION
10.1 Survival of Representations Warranties and Covenants. All of
Rentech's and Subsidiary's representations, covenants and warranties
<PAGE>
PAGE 32
contained herein and in any documents delivered pursuant to this
Agreement (except those waived pursuant to Section 9.1) shall survive the
Closing hereunder; provided that the representation and warranties shall
only remain in full force and effect for a period of two (2) years
following the Closing Date.
10.2 Indemnity by Sellers. Sellers shall indemnify, save, and hold
harmless Rentech and Subsidiary from any "damages" as hereinafter
defined. "Damages," as used herein, shall mean and include any loss,
cost, expense, or other liability, including counsel fees, which Rentech
or Subsidiary may incur or suffer: (a) by reason of the inaccuracy of
any of Sellers' representations contained in this Agreement or breach or
default in performance by the Sellers of the covenants which it is to
perform hereunder after the Closing Date; or (b) except for any assumed
liabilities, liabilities not assumed by Rentech or Subsidiary arising out
of or relating to Sellers' ownership and operation of the Businesses and
the Purchased Assets prior to the Closing Date, including Sellers'
failure to comply with federal and state environmental laws.
10.3 Indemnity by Buyer. Rentech and Subsidiary shall indemnify,
save, and hold harmless Sellers from any "damages" as hereinafter
defined. "Damages," as used herein, shall mean and include any loss,
cost, expense, or other liability, including counsel fees, which Sellers
may incur or suffer: (a) by reason of the inaccuracy of any
representation of Rentech or Subsidiary contained in this Agreement, or
breach or default in performance by Rentech or Subsidiary, of the
covenants which it is to perform hereunder after the Closing Date; or as
a result of (b) Rentech's or Subsidiary's ownership and operation of the
Businesses and the Purchased Assets from and after the Closing Date,
including any assumed liabilities and Damages resulting from Rentech's or
Subsidiary's failure to comply with federal and state environmental laws
from and after the Closing Date.
10.4 Procedures for Indemnification. The party entitled to
indemnification (Indemnitee) shall, as promptly as is reasonably
practicable after it becomes aware thereof, notify the other party
(Indemnitor) of the existence of any claim, demand or other matter to
which Indemnitor's indemnification obligations apply and shall give
Indemnitor a reasonable opportunity to defend the same at its own expense
and with counsel of its own selection reasonably acceptable to
Indemnitee; provided, that Indemnitee shall at all times, also have the
right to fully participate in the defense at its own expense. Indemnitor
may, at its own discretion, settle any dispute, demand or claim defended
by it hereunder; provided, any such settlement shall be solely for
Indemnitor's account and Indemnitee shall not be liable for any amounts
whatsoever payable in connection with any such settlement. If Indemnitor
shall, within a reasonable time after notice to it, fail to so defend,
<PAGE>
PAGE 33
Indemnitee shall have the right, but not the obligation, to undertake the
defense of, and to compromise or settle (exercising reasonable business
judgment), the claim or other matter on behalf, and at the risk of,
Indemnitor.
ARTICLE XI.
POST-CLOSING RIGHTS AND OBLIGATIONS
11.1 Cooperation. Sellers and Rentech and Subsidiary shall
cooperate with each other as reasonably required to complete an orderly
and efficient transition of the ownership, operation and management of
the Businesses from Sellers to Subsidiary.
11.2 Preservation of Records. At the Closing, Sellers shall
deliver to Subsidiary's control all of the books, records, and other
documents or information relating to the Businesses but shall not be
required to deliver any records, documents or other information regarding
Sellers. Subsidiary shall maintain, preserve and, upon reasonable
notice, provide Sellers or its representatives access during normal
business hours to, and the right to make copies of, all financial books
and records, marketing and sales records, files, data, projections,
reports, correspondence, lists, record and reports concerning customers,
employees, and suppliers, or any dealings with federal, state and local
government bodies and regulatory agencies or otherwise relating to or
used in connection with the Purchased Assets that relate to periods prior
to the Closing Date. Subsidiary shall provide Sellers or its
representatives prior written notice of Subsidiary's intent to destroy or
otherwise dispose of any such books, records, correspondence, documents
or files held pursuant to this Agreement and, upon request of Sellers or
its representatives, shall deliver to Sellers such books, records,
correspondence, documents or files with respect to periods prior to the
Closing as requested by Sellers or its representatives.
11.3 Sales and Use Tax. Buyers shall be responsible for the
payment of all sales, use or other transfer taxes resulting from the sale
of the Purchased Assets and Businesses to Rentech and Subsidiary pursuant
to this Agreement.
11.4 Closing Date Financial Statement. No later than thirty (30)
days following the Closing Date, Sellers shall deliver to Rentech a copy
of Sellers' financial statements for the period ending on the Closing
Date.
ARTICLE XII.
GENERAL
<PAGE>
PAGE 34
12.1 Notice. All notices, requests, demands and other
communications hereunder shall be furnished to the other party at its
address listed below (or such other address as provided in accordance
with this Section 12.1), shall be in writing, and shall be sent either by
telecopy, hand delivery, or reputable overnight courier, addressed as
follows or to such other address or addresses of which the respective
party shall have notified the other party. Each such notice or other
communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted and the transmission thereof is confirmed by the
sender's telecopier, (b) if given by reputable overnight courier, one
business day after being delivered to such courier or (c) if given by any
other means, when actually received.
(a) If to Rentech or Subsidiary to:
Rentech, Inc.
Attention: Ronald C. Butz, Vice President
1331 17th St., Ste. 720
Denver, CO 80202
(b) If to Sellers, to:
Petroleum Mud Logging, Inc./Petroleum Well Logging, Inc.
Attention: Hoyt L. Hudspeth
6418-B North Santa Fe
Oklahoma City, OK 73116
12.2 Amendment. This Agreement may be amended or modified only by
a written instrument executed by the party hereto against which it is to
be enforced.
12.3 Expense of Parties. Except as otherwise specifically provided
herein, each party to this Agreement shall pay its own expenses
(including, without limitation, the fees and expenses of their respective
agents, representatives, counsel and accountants) incidental to the
preparation and carrying out of this Agreement. In the event a party
commences legal action against another party to enforce its rights under
this Agreement, the prevailing party in such action shall be entitled to
recover all of its costs and expenses in connection therewith, including
reasonable attorneys' fees and costs.
12.4 Brokers. Sellers agree to indemnify Rentech and Subsidiary,
and Rentech and Subsidiary agree to indemnify Sellers, against any claim
by any third person for any commission, brokerage, finder's fee or other
payment based upon any alleged agreement or understanding between such
party and such third person, whether expressed or implied from the
actions of such party.
12.5 Governing Law. This Agreement is being delivered in and shall
be construed in accordance with and governed by the laws of the state of
Oklahoma.
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12.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Terms used with initial capital
letters shall not in any way affect the meaning or interpretation of this
Agreement. Terms used with initial capital letters will have the
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. All pronouns (and any variation) will be
deemed to refer to the masculine, feminine or neuter, as the identify of
the person may require. The singular or plural includes the other, as
the context requires or permits. The word include (and any variation) is
used in an illustrative sense rather than a limiting sense. The word
"day" means a calendar day. All references to "Sections" are to sections
of this Agreement unless indicated otherwise.
12.7 Prior Agreements; Counterparts. This Agreement, with its
Exhibits and Schedules, merges and integrates all prior agreements and
representations respecting this transaction, whether written or oral, and
constitutes the sole agreement of the parties in connection therewith.
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.8 Assignment. This Agreement shall not be assignable by any
party, except that Rentech or Subsidiary may assign this Agreement to a
corporation of which Rentech or Subsidiary is the sole shareholder
provided Rentech and Subsidiary remain fully liable to Sellers hereunder.
Subject to the foregoing, this Agreement shall be binding upon, and inure
to the benefit of, and be enforceable by, the respective successors and
permitted assigns of the Sellers, Rentech and Subsidiary. Nothing in
this Agreement, express or implied, is intended to confer upon any other
person any rights or remedies under or by reason of this Agreement.
12.9 Waiver. The failure of any party to enforce any right arising
under this Agreement on one or more occasions shall not operate as a
waiver of that or any other right on that or any other occasion.
12.10 Exclusivity of Representations. Sellers shall not be deemed
to have made to Rentech or Subsidiary any representation or warranty
other than as expressly made by Sellers in Section 3. Rentech and
Subsidiary shall not be deemed to have made to Sellers any representation
or warranty other than as expressly made by Rentech and Subsidiary in
Section 6.
12.11 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term
or provision in any other situation or in any other jurisdiction.
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12.12 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties and no presumption or
burden of proof will arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement. The parties
intend that each representation, warranty and covenant contained herein
will have independent significance. If any party breaches any
representation, warranty or covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which the party has not breached will not detract from or
mitigate the fact that the party is in breach of the first
representation, warranty or covenant.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
Sellers:
PETROLEUM WELL LOGGING, INC., RENTECH, INC.,
an Oklahoma corporation a Colorado corporation
By: By:
------------------------------ ------------------------------
Hoyt L. Hudspeth, James P. Samuels,
Vice President Vice President
PETROLEUM MUD LOGGING, INC., PETROLEUM MUD LOGGING, INC.,
an Oklahoma corporation a Colorado corporation
By: By:
------------------------------ ------------------------------
Hoyt L. Hudspeth, James P. Samuels,
President Vice President
