Item 1.01. Entry Into a Material Definitive Agreement.
On October 21, Key Energy Services, Inc. (the "Company") entered into an Asset
Purchase Agreement (the "Purchase Agreement") with Tri-State Water Logistics,
LLC, a Texas limited liability company ("Tri-State"), pursuant to which
Tri-State acquired certain assets related to the Company's waste water
management division, which provides water management services to oil and gas
operators in East Texas, Arkansas and Louisiana (the "Assets").
Under the terms of the Purchase Agreement, the Company sold the Assets in
exchange for cash consideration of $6,000,000 and a $940,000 seller secured
promissory note. The Assets include, among other things: (i) saltwater disposal
wells, (ii) real property, (iii) government permits, (iv) equipment related to
the Assets, and (v) service vehicles. The Purchase Agreement contains negotiated
representations, warranties and covenants by the Company and Tri-State, which
are believed to be customary for transactions of this kind. These
representations and warranties (i) may be intended not as statements of fact,
but rather as a way of allocating risk to one of the parties if those statements
prove to be inaccurate, (ii) may apply materiality standards different from what
may be viewed as material to investors and (iii) were made only as of the date
of the Purchase Agreement or as of such other date or dates as may be specified
in the Purchase Agreement.
In addition, the Purchase Agreement contains indemnification provisions which
are believed to be customary for transactions of this type. The Company's and
Tri-State's obligations for a breach of representations and warranties and
related indemnification, in some cases, only apply with respect to aggregate
liabilities in excess of specified thresholds, are subject to caps and are only
effective for specified periods of time.
The foregoing summary does not purport to be complete and is qualified in its
entirety by reference to the complete text of the Purchase Agreement, which is
attached as Exhibit 10.1 hereto.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
10.1 Asset Purchase Agreement, dated as of October 21, 2020, by and among Key
Energy Services, Inc., and Tri-State Water Logistics, LLC.
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