EXHIBIT 10.12
OPTION AND ASSET
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of February 28, 2005, is
entered into by and between Xxxxxxxx Drilling Company, a Colorado corporation
with a mailing address of X.X. Xxx 000, Xxxxxx, Xxxxxxxx 00000 (hereinafter
called "Buyer"), and SPA Drilling, L.P., a limited partnership organized under
the laws of the State of Texas, with a mailing address of X.X. Xxx 0000,
Xxxxxxx, Xxxxx (hereinafter called "Seller"),
WITNESSETH:
That Seller desires to sell to Buyer and Buyer desires to purchase from
Seller, on the terms set forth in this Agreement, those certain assets
identified in Exhibits "A" and "B" attached hereto and made a part hereof.
Accordingly, Seller and Buyer agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1 Assets To Be Sold. Seller shall sell, transfer and assign to Buyer, and
Buyer shall purchase and receive, all right, title and interest in and to the
following described assets hereinafter collectively referred to as the Assets,"
to-wit:
1.1.1 The personal property, machinery and equipment described on
Exhibit "A" attached hereto and made a part hereof.
1.1.2 Those certain agreements described in Exhibit "B" attached
hereto and made a part hereof
1.2 Assets Excluded. The Assets do not include:
1.2.1 Cash, accounts receivable and work in progress associated with
the agreements described in Exhibit "B" attached hereto and made a part
hereof and relating to operations prior to the Effective Date of Sale, and
prepaid items.
1.3 Conveyancing Instruments. The Assets to be conveyed by Seller to Buyer
pursuant to Section 1.1 shall be conveyed "as is" with the express conditions
and limitations noted in Section 4.1. The Assets to be transferred to Buyer
pursuant to Section 1.1 shall be transferred pursuant to a form of sale and
assignment as provided in Sections 6.1.3 and 6.2.6.
2. PURCHASE PRICE
2.1. Price. As consideration for the sale of the Assets, Buyer shall pay to
Seller or its designee, Nineteen Million Six Hundred Thousand United States
dollars ($19,600,000.00) (the "Purchase Price"), as follows:
2.1.1 Upon signing this Agreement, Buyer shall pay to Seller the sum
of Five Hundred Thousand Dollars ($500,000.00), which shall be an option
fee, by wire transfer,
in immediately available funds, to a bank account to be designated by
Seller. In the event this transaction is closed, said option fee shall be
credited against the purchase price of the Assets.
2.1.2 Balance shall be paid at Closing by wire transfer, in
immediately available funds, to a bank account to be designated by Seller.
2.1.3 The payment provided for in Section 2.1.1 shall be considered an
option fee. Accordingly, either Buyer or Seller may recede from this
Agreement at any time prior to Closing by giving written notice of such
action to the other party prior to Closing. Should Buyer recede from this
Agreement, then Buyer shall forfeit the option fee to Seller and Buyer
shall have no other liability whatsoever to Seller for receding from this
Agreement. Should Seller recede from this Agreement, then Seller shall,
with the written notice of Seller's receding from the Agreement, return the
option fee to Buyer and pay to Buyer the additional sum of $500,000.00, and
Seller shall have no other liability whatsoever to Buyer for receding from
this Agreement.
2.1.4 Notwithstanding the provisions of Section 2.1.3, (i) Seller may
recede from this Agreement without liability to Buyer for return of Buyer's
option fee or payment of an additional $500,000 if Seller recedes because
Buyer has materially breached this Agreement, and (ii) Buyer may recede
from this Agreement and be entitled to the return of its option fee if
Buyer recedes because Seller has materially breached this Agreement or
because Seller has, pursuant to the provisions of Section 5.2, 5.3 and/or
Section 8.2, withdrawn or deleted from the Assets having a value equal to
or greater than $3,000,000.
After the Effective Date of Sale, Seller will pay only that portion of
invoices received with respect to any of the agreements described in attached
Exhibit "B" that are applicable to work performed or material received in the
period prior to the Effective Date of Sale; other charges and invoices under
said agreements will be returned to the vendor for rebilling to Buyer.
Similarly, after the Effective Date of Sale, Buyer will pay only that portion of
invoices received with respect to any of the agreements described in attached
Exhibit "B" that are applicable to work performed or material received in the
period subsequent to the Effective Date of Sale; other charges and invoices
under said agreements will be returned to the vendor for rebilIing to Seller.
2.2 Assumption of Liabilities. Buyer shall assume and be responsible for
all obligations of Seller accruing after the Effective Date of Sale under the
agreements listed in Exhibit B hereto (except that lease rentals shall be
prorated as of the Effective Date of Sale, and any obligation associated with an
agreement listed in Exhibit B shall be assumed only to the extent that the
material or service with respect to which such payment is due is received by
Buyer after the Effective Date of Sale).
2.3 Non-Competition and Non-Solicitation. In consideration of the Purchase
Price, Seller and the partners in Seller (said partners being signatory parties
hereto), agree that, for a period of two (2) years commencing on the Closing
Date, neither Seller nor any of the partners in Seller shall:
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(a) engage in any way, directly or indirectly, in the business of
drilling, completing or workover of oil and gas xxxxx within a
200 mile radius of the city limits of Abilene, Texas;
(b) solicit or assist in soliciting, directly or indirectly, any
current, future or former customer of the Seller or Buyer,
wherever situated, in connection with their needs for drilling,
competition, workover or related rigs; or
(c) induce, advise or counsel any employee or agent, of the Buyer to
leave the employ of the Buyer, solicit or employ the services of
employees or agents of the Buyer, or otherwise interfere with the
relationship between the Buyer and its employees or agents.
2.4 Effective Date of Sale. The Effective Date of Sale of the Assets
described in Section 1.1 shall be at the close of business by Seller on April
29, 2005.
2.5 Closing. The Closing of the transactions contemplated herein and the
transfer of the Assets shall occur on April 29, 2005, at Seller's office at
10:00 A.M. local time, or such other date, time and place as Seller and Buyer
may agree in writing.
2.6 Purchase Price Allocation. The Purchase Price shall be allocated in
accordance with Exhibit C hereto. Seller and Buyer further agree to file all tax
returns or reports, including, without limitation, IRS From 8594, for their
respective taxable years in which the Closing occurs and to reflect the
allocation of the Purchase Price described in Exhibit C on any such tax returns
or reports and agree not to take any position inconsistent therewith before any
governmental authority or in the course of any tax audit, tax review or tax
litigation matter relating thereto.
3. TAXES
3.1 Payment of Taxes. All ad valorem, property and other similar forms of
taxes, which have been paid by Seller or which have accrued on or before the
Effective Date of Sale, shall be prorated between Seller and Buyer as of the
Effective Date of Sale. Buyer shall be responsible for all sales, use and
similar taxes arising out of the sale of the Assets, but not any income taxes
for which Seller and its partners are liable as a consequence of the Sale. At
the Closing, Buyer shall pay Seller all state and local sales or use taxes
applicable to that portion of the Assets which is tangible personal property,
and Seller shall remit such amount to the appropriate taxing authority in
accordance with applicable law. Buyer shall hold harmless and shall indemnify
Seller for any sales or use taxes assessed against Seller by any taxing
authority in respect to this sale, including the amounts of any penalties,
interest and attorneys' fee.
Should this purchase and sale constitute an isolated or occasional sale and
not be subject to sales or use tax with any of the taxing authorities having
jurisdiction over this transaction, no sales tax will be collected by Seller
from Buyer at the date of Closing. Seller agrees to cooperate with Buyer in
demonstrating that the requirements for an isolated or occasional sale or any
other sales tax exemption have been met.
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4. REPRESENTATIONS AND WARRANTIES
4.1 Seller's Representations and Warranties. Seller represents and warrants
to Buyer:
4.1.1 Seller is a limited partnership duly organized and validly
existing, in good standing, under the laws of the State of Texas. Seller
has the power and authority to own the Assets and to carry on its business
as now conducted and to enter into and to carry out the terms of this
Agreement.
4.1.2 Spud, Inc., a Texas corporation and the general partner of
Seller, and XXX XXXXXX, X.X., XXX 0000, X.X. and Xxx X. Xxxxxxxx, the only
limited partners of Seller, are the only persons having partnership
interests in Seller.
4.1.3 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized and Seller is not subject to any charter, by-law, lien or
encumbrance of any kind, agreement, instrument, order or decree of any
court or governmental body which would prevent consummation of the
transactions contemplated by this Agreement.
4.1.4 Seller will at the Closing be the owner of 100% of the right,
title and interest in the Assets, and the transfer of the Assets to Buyer
pursuant to this Agreement will vest in Buyer all right, title and interest
in and to all of the Assets, free and clear of all security interests,
mortgages, liens, tax liens, leases and other encumbrances.
4.1.5 Seller has made available to Buyer for inspection and copying
all books and records maintained by or on behalf of Seller concerning the
Assets and, to the best of Seller's knowledge, none of the information so
made available contains or will contain any untrue statement of a material
factor omits or will omit to state a material fact necessary to make the
statements contained therein not misleading.
4.1.6 No employee of Seller has or will on the date of Closing have
any contract of employment with Seller.
4.1.7 With respect to each of the agreements described in Exhibit "B"
attached hereto and made a part hereof: (a) each has been duly authorized,
executed and delivered by Seller; (b) each is in full force and effect; (c)
neither Seller nor, to the knowledge of Seller, any other party to such
agreements (i) is, or as a result of the transactions contemplated herein
will be, in breach of or default, or with the lapse of time or the giving
of notice, or both, would be in breach or default, with respect to any of
its obligations thereunder; or (ii) has given or threatened to give notice
of any default under or inquiry into any possible default under, or action
to alter, terminate, rescind or procure a judicial reformation of any such
agreement; and (d) Seller ,does not anticipate that any other party to any
such agreement will be in breach of or default under or repudiate any of
its obligations thereunder.
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4.1.8 There are no preferential purchase rights, consents and
approvals required to be obtained for the transfer of the Assets to Buyer.
4.1.9 There is no claim, demand, filing, cause of action,
administrative proceeding, lawsuit or other litigation pending or
threatened that could now or hereafter materially affect the ownership,
operation or value of any of the Assets.
4.1.10 The Assets have been used by. Seller in compliance with all
laws, orders, regulations, rules and ordinances issued or promulgated by
all governmental authorities having jurisdiction with respect to the
Assets, including, but not limited to, laws, regulations and ordinances
relating to environmental protection, health and safety; and all necessary
governmental certificates, consents, permits, licenses or other
authorizations with regard to the ownership or operation of the Assets have
been obtained and Seller has received no notices of violations in respect
of such licenses, permits or authorizations.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE ASSETS DESCRIBED ON EXHIBIT
"A" ARE TO BE SOLD "AS IS," AND SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED IN
FACT OR BY LAW, WHETHER OF OPERATING CONDITION, SAFETY, COMPLIANCE WITH
GOVERNMENT REGULATIONS, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSES,
CONDITION OR OTHERWISE, CONCERNING ANY OF SAID ASSETS. ALL PERSONAL PROPERTY,
MACHINERY AND EQUIPMENT ARE TO BE CONVEYED BY SELLER AND ACCEPTED BY BUYER
PRECISELY AND ONLY "AS IS, WHERE IS." SELLER DOES NOT WARRANT THE ASSETS FREE
FROM REDHIBITORY VICES OR DEFECTS.
4.2 Buyer's Representations and Warranties. Buyer represents and warrants:
4.2.1 Buyer is a corporation duly organized and validly existing, in
good standing, under the laws of the State of Colorado and has the power
and authority to own its property and to carry on its business as now
conducted and to enter into and to carry out the terms of this Agreement.
4.2.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized and Buyer is not subject to any charter, by-law, lien or
encumbrance of any kind, agreement, instrument, order or decree of any
court or governmental body which would prevent consummation of the actions
contemplated by this Agreement.
4.2.3 Buyer shall comply with all applicable laws, ordinances, rules
and regulations and shall promptly obtain and maintain all permits required
by public authorities in connection with the Assets purchased.
4.2.4 Buyer acknowledges that the Assets have been used for oil and
gas drilling operations and related oilfield operations and possibly the
storage and
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disposal of waste materials incidental to or occurring in connection with
such operations, and Buyer has entered into this Asset Sale Agreement on
the basis of Buyer's own investigation of the physical condition of the
Assets. Buyer is acquiring the Assets precisely and only in an "as is and
where is" condition.
5. ADDITIONAL COVENANTS
5.1 Seller shall afford to Buyer, and/or Buyer's designated
representatives, reasonable access to the Assets, from the date hereof until the
Closing, for the purpose of inspecting the Assets and conducting such tests
thereon (at the expense of Buyer) as Buyer may deem necessary to satisfy itself
as to the condition of the Assets.
5.2 Asset Title Review. From the date hereof until the Closing, "Seller
shall make available to Buyer without express or implied warranty of any kind
regarding the accuracy of such information, copies of information in Seller's
possession regarding Seller's title to the Assets. Buyer shall review the
information at Seller's office Buyer specifically agrees that any conclusions
made from any examination done or caused to be done shall result from its own
independent review and judgment only. In the event of a title defect which would
prevent Buyer from enjoyment of the Assets in the same manner enjoyed by Seller
immediately prior to the date of this agreement, Buyer shall notify Seller of
such. defect within fifteen (15) days after discovery. If Seller and Buyer
cannot agree on resolution of such defect, Seller shall elect (a) to cure the
defect at its own expense, (b) to delete the property with such defect from the
sale and to reduce the Purchase Price by the amount allocated to such property
on Exhibit C, or (c) to cancel the sale and refund Buyer's $500,000.00 deposit
without interest.
5.3 Operations Prior to Closing. After the date of this Agreement and prior
to the Closing, Seller shall use and maintain the Assets in substantially the
same manner in which they have been used and maintained prior to this Agreement.
Unless Seller and Buyer otherwise agree, Seller shall not enter into any
agreement or transaction in relation to the Assets except such as are entered
into in the ordinary course of business consistent with past practices. Seller
shall not be obligated for any expenditures for purposes other than normal
day-to-day operations between the execution of this Agreement and the Closing
thereon. In the event that an expenditure for other purposes is proposed,
contemplated, or necessary to maintain a property included in the Assets in the
condition such property is as of the date of this Agreement, Seller shall elect
(a) to make such expenditure to maintain such property in such condition, (b) to
delete the property from the sale and to reduce the Purchase Price by the amount
allocated to such property on Exhibit C, or (c) to cancel the sale and refund
Buyer's $500,000.00 deposit amount without interest. Except as contemplated in
the preceding sentence or unless Buyer and Seller otherwise agree, Seller shall
not materially alter the Assets (other than the use of supplies and consumables)
or remove any improvements, equipment or property which comprise the Assets
(other than the use of supplies and consumables) with the exception of
individual Assets (i) involving a fair market value of less than Two Thousand
Dollars ($2,000.00) and (ii) sold or transferred to unaffiliated third parties
or disposed of or consumed in the ordinary course of business. Seller shall
promptly notify Buyer of any material matter affecting the Assets known to
Seller which arises from the date of this Agreement to the date of Closing.
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5.4 Force Majeure. In the event any Assets is damaged by fire or other
calamity before Closing, Seller may repair the damage at its cost or, at its
sole option, either reduce the purchase price by the cost of the damage or
withdraw the damaged asset from the sale and reduce the purchase price by the
undamaged value thereof Should Buyer and Seller not agree as to the amount of
such price reduction, and if Buyer is not in default hereunder, this Agreement
will be terminated and Seller shall promptly after such termination return to
Buyer the amount specified in Section 2.1.1 without interest.
6. CONDITIONS PRECEDENT TO CLOSING
6.1 Seller's Condition Precedent. The obligations of Seller to consummate
the transactions contemplated by this Agreement are subject to each of the
following conditions:
6.1.1 Buyer shall have performed and complied with aft, terms of this
Agreement required to be performed or complied with by Buyer prior to
Closing.
6.1.2 No action or proceeding by or before any governmental authority
shall have been instituted or threatened (and not subsequently dismissed,
settled or otherwise terminated) which might restrain, prohibit or
invalidate any of the transactions contemplated by this Agreement.
6.1.3 Seller and Buyer shall have executed a bilateral form of
assignment whereby Seller transfers all right, title and interest in the
Assets to Buyer, and Buyer assumes the obligations and liabilities pursuant
to Section 2.2 hereof.
6.2 Buyer's Conditions Precedent. The. obligations of Buyer to consummate
the transactions contemplated by this Agreement are subject to each of the
following conditions:
6.2.1 The representations and warranties by Seller set forth in this
Agreement shall be true and correct in all material respects at and as of
the Closing as though made at and as of the Closing; and Seller shall have
performed and complied with all terms of this Agreement required to be
performed or complied with by Seller prior to Closing.
6.2.2 No action or proceeding by or before any. governmental authority
shall have been instituted or threatened (and not subsequently dismissed,
settled or otherwise terminated) which might restrain, prohibit or
invalidate any of the transactions contemplated by this Agreement.
6.2.3 Since the date of this Agreement, there shall have been no
material adverse changes in the condition of any of the Assets, except
normal depreciation of equipment through ordinary wear and tear.
6.2.4 All consents and approvals required to be obtained for the
transfer of the Assets to Buyer shall have been obtained, and all
preferential purchase rights arising in connection with the transfer of the
Assets to Buyer shall have been waived or shall have expired.
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6.2.5 Buyer shall be reasonably satisfied with the results of its due
diligence review of the Assets provided for in Sections 5.1, 5.2 and 8.2.
6.2.6 Seller and Buyer will have, executed a bilateral form of
assignment whereby Seller transfers all right, title and interest in the
Assets to Buyer, and Buyer assumes the obligations and liabilities pursuant
to Section 2.2 hereof.
7. CROSS-INDEMNIFICATION
7.1 Buyer agrees to indemnify and hold Seller harmless from and against any
and all liability, loss, cost and expense (including, without limitation, court
costs and reasonable attorneys' fees) that are attributable to the Assets
conveyed to Buyer and are attributable to periods of time after the Effective
Date of Sale (including, but not limited to, any liability resulting from the
condition of the Assets arising after the Effective Date of Sale under any
federal, state or local statute, regulation, rule, ordinance or order relating
to the environment or health and safety) or that are attributable to a breach by
Buyer of any of its surviving representations and warranties hereunder.
7.2 Seller agrees to indemnify and hold Buyer harmless from and against any
and all liability, loss, cost and expense (including, without limitation, court
costs and reasonable attorneys' fees) that are attributable to the Assets
conveyed to Buyer and are attributable to periods of time on or before the
Effective Date of Sale (including, but not limited to, any liability resulting
from the condition of the Assets as of the Effective Date of Sale under any
federal, state or local statute, regulations, rule, ordinance or order relating
to the environment or health and safety) or that are attributable to a breach by
Seller of any of its surviving representations and warranties hereunder.
7.3 Each party does not assume, and hereby disclaims any liability or
obligation in respect of, any matter against which a party is obligated to
indemnify the other party under the terms of this Agreement.
8. MISCELLANEOUS
8.1 Payment of Expenses and Fees. Buyer and Seller shall each bear their
own costs and expenses, including but not limited to attorney's fees incurred in
connection with the transactions contemplated in this Agreement; provided,
however, Buyer shall pay all recording fees or transfer taxes in connection with
the recording of any instrument of transfer of Assets from Seller to Buyer
hereunder.
8.2 Environmental Review. Promptly after signing this Agreement, Buyer
and/or its representatives may have access to environmental data in Seller's
files for the Assets to be sold herein. Buyer and/or its representatives shall
review the information at Seller's office. Buyer specifically acknowledges that
such access is given as an accommodation only, that Seller makes no
representations whatsoever as to the accuracy completeness or reliability of any
such environmental information so or otherwise disclosed to or obtained by Buyer
and that Buyer
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relies and depends on and uses any and all such environmental information
exclusively and entirely at its own risk and without any recourse whatsoever.
Seller shall use reasonable efforts to arrange for the performance of any
additional environmental testing at Buyer's expense which Buyer may reasonably
request, and Seller and Buyer shall cooperate to ensure that such testing is
performed on an expedited basis before Closing. If it is determined by Closing
that any of the Assets has been materially contaminated (with "materially
contaminated" being defined as the violation of applicable Federal or State laws
or regulations or common law principles, with respect to environmental
conditions, to the extent that prosecution, if instituted, would likely result
in a penalty, fine or damage payment which are material when compared with the
value of the affected property), Seller shall elect either (a) to correct or to
make arrangements for the correction of such contamination, (b) to delete the
Asset from this sale and reduce the Purchase Price by the amount allocated to
such Asset on Exhibit C, or (c) to cancel the entire sale and refund Buyer's
$500,000.00 option fee without interest. Buyer shall cooperate with Seller's
reasonable corrective work, and any operations unreasonably interfering with the
corrective work shall cease until correction is completed.
8.3 Books and Records. With the exception of books of account, tax returns
and correspondence relating thereto, Seller's proprietary, technical or
interpretive information and any documents of overall significance to Seller's
business, Seller shall deliver to Buyer promptly after Closing copies of any
materials, contract and agreement files which may exist in Seller's files and
which relate to the Assets. Buyer shall preserve such records for a period of
six years after the date of Closing or such longer periods as may be required by
law or agreement relating to such documents and during such period shall make
the same available for examination (or for the making of copies or extracts), if
necessary for a lawful purpose, by Seller at reasonable times so not to
interfere with Buyer's business. If Buyer desires to destroy any such materials
prior to the end of such period, Buyer shall give Seller notice of such desire
and may destroy such materials unless Seller requests that such materials not be
destroyed, in which case such materials' shall be retained by Buyer or
retransferred to Seller.
8.4 Entire Agreement. This Agreement constitutes the entire agreement
between Seller and Buyer with respect to the transactions contemplated herein,
and supersedes all prior oral or written agreements, commitments, understandings
or information otherwise furnished by Seller to Buyer with respect to such
matters. No amendment shall be binding unless in writing and signed by
representatives of both parties. Headings used in this Agreement are only for
convenience of reference and shall not be used to define the meaning of any
provision. This Agreement is for the benefit of Seller and Buyer only and not
for the benefit of third parties.
8.5 Notices. All notices and consents to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
telexed with receipt acknowledged, mailed by registered mail, or delivered by a
recognized commercial courier to the party at the address set forth on the first
page of this Agreement or such other address as any party shall have designated
by ten days' notice to the other party.
8.6 Governing Law. This Agreement shall be governed by the law of the State
of Texas without regard to rules concerning conflicts of law.
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8.7 All representations and warranties made by Seller and Buyer under this
Agreement shall remain in full force and effect, and shall survive the
execution, delivery and performance of this Agreement, for a period of two years
from the Closing.
8.8 Assignment. Buyer may assign its rights and obligations under this
Agreement to an entity in which Buyer or an affiliate of Buyer owns in excess of
80% of the equity interests without the consent of Seller.
IN WITNESS WHEREOF, each party hereto has executed this agreement in the
presence of the indicated witnesses, to be effective as of the Effective Date.
SPA DRILLING, L.P.
By: Spud, Inc., a Texas corporation
General Partner of SPA Drilling, L.P
By: /s/ XXX XXXXXX
-----------------------------------------
Name: Xxx Xxxxxx
Title: President
Date: 2-28-05
EFO OILERS, L.P., a Texas limited partnership
Limited Partner of SPA Drilling, L.P.
By: EFO Holdings, L.P.
Its: General Partner
By: EFO GenPar, Inc., a Texas corporation
Its: General Partner
By: /s/ G. XXXXX XXXXXXX
-----------------------------------------
Name: G. Xxxxx Xxxxxxx
Its: President
Date: 2-25-05
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BRH 2002, L.P., a Texas limited partnership
Limited Partner of SPA Drilling, L.P.
By: SHK Inc., a Texas corporation
Its: General Partner
By: /s/ XXX XXXXXX
-----------------------------------------
Name: Xxx Xxxxxx
Its: President
Date: 2-28-05
/s/ XXX X. XXXXXXXX
---------------------------------------------
Xxx X. Xxxxxxxx
Limited Partner of SPA Drilling, L.P.
Date: 2-28-05
XXXXXXXX DRILLING COMPANY
/s/ XXXXXXX XXXXXXXX
---------------------------------------------
By: Xxxxxxx Xxxxxxxx
Its: President
Date: 2-28-05
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AMENDMENT NO. 1
TO
PURCHASE AND SALE AGREEMENT
AMENDMENT NO. 1 (the "AMENDMENT") dated as of March 31, 2005 to the
Purchase and Sale Agreement (the "PURCHASE AGREEMENT") dated February 28, 2005
between Xxxxxxxx Drilling Company, a Delaware corporation (and, as of the date
of the Purchase Agreement, a Colorado corporation) ("BUYER") and SPA Drilling
L.P., a Texas limited partnership.
WITNESSETH
WHEREAS, the parties hereto desire to amend the Purchase Agreement in
certain respects;
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings given to them in the Purchase Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendment to Section 1.3 of Purchase Agreement. Section 1.3 of
the Purchase Agreement is hereby amended by adding the letter "(a)" before the
current words thereof and inserting a new clause (b) thereto as follows:
"(b) Seller and Buyer agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable in order to consummate or implement expeditiously
the transactions contemplated by this Agreement and to vest in Buyer good and
marketable title to the Assets."
Section 2. Amendment to Section 2.4 of Purchase Agreement. Section 2.4 of
the Purchase Agreement is hereby amended in its entirety by substituting the
following:
"2.4 The Effective Date of Sale of the Assets described in Section 1.1
shall be at the close of business by Seller on March 31, 2005."
Section 3. Amendment to Section 4.1 of Purchase Agreement. Section 4.1 of
the Purchase Agreement is hereby amended by adding the following Section 4.1.11:
"4.1.11 The conveyance of the Assets by Seller constitutes the sale of the
entire operating assets of a business or of a separate division, branch, or
identifiable segment of a business and is an occasional sale under Section
151.304 of the Texas Tax Code and the rules promulgated thereunder."
Section 4. Amendment to Section 8.3 of Purchase Agreement. Section 8.3 of
the Purchase Agreement is hereby amended by adding the letter "(a)" before the
current words thereof and inserting a new clause (b) thereto as follows:
"(b) Notwithstanding anything in this Agreement to the contrary, on and
after the Closing Date, Seller will afford promptly to Buyer and its agents
reasonable access to its books
of account, tax returns, financial and other records (including, without
limitation, accountant's work papers and all items referenced in Section 8.3(a)
to the extent not delivered to Buyer promptly after Closing), information,
employees, consultants and auditors to the extent necessary or useful for Buyer
in connection with any audit, investigation, dispute or litigation or any other
reasonable business purpose relating to the business of the Buyer (after giving
effect to the purchase of the Assets); provided that any such access by Buyer
shall not unreasonably interfere with the conduct of the business of Seller.
Buyer shall hold, and shall use its best efforts to cause its officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the business of the Seller as it exists after the
Closing, except to the extent that such information can be shown to have been
(i) previously known on a nonconfidential basis by Buyer, (ii) in the public
domain through no fault of Buyer or (iii) later lawfully acquired by Buyer from
third parties. The obligation of Buyer to hold any such information in
confidence shall be satisfied if they exercise the same care with respect to
such information as they would take to preserve the confidentiality of their own
similar information. Without limiting the generality of the foregoing, Seller
shall make available to Buyer any employees or consultants necessary or useful
to the preparation of historical audited financial statements relating to the
Assets and shall use its best efforts to cause such employees or consultants to
deliver to the Buyer's auditors all certifications, attestations and
representations deemed necessary or useful for the completion of such historical
audits."
Section 5. Governing Law. This Amendment shall be governed by the law of
the State of Texas, without regard to rules concerning conflicts of law rules.
Section 6. Counterparts; Effectiveness. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Amendment shall become effective when each party hereto shall have received a
counterpart hereof signed by the other party hereto. Until and unless each party
has received a counterpart hereof signed by the other party hereto, this
Amendment shall have no effect and no party shall have any right or obligation
hereunder (whether by virtue of any other oral or written agreement or other
communication).
2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed as of the day and year first above written.
SPA DRILLING, L.P.
By: Spud, Inc., a Texas corporation,
General Partner of SPA Drilling, L.P.
By: /s/ XXX XXXXXX
-----------------------------------------
Name: Xxx Xxxxxx
Title: President
EFO OILERS, L.P., a Texas limited partnership
Limited Partner of SPA Drilling, L.P.
By: EFO Holdings, L.P.
Its: General Partner
By: EFO GenPar, Inc., a Texas corporation
Its: General Partner
By: /s/ G. XXXXX XXXXXXX
-----------------------------------------
Name: G. Xxxxx Xxxxxxx
Title: President
BRH 2002, L.P., a Texas limited partnership
Limited Partner of SPA Drilling, L.P.
By: SHK Inc., a Texas corporation
Its: General Partner
By: /s/ XXX XXXXXX
-----------------------------------------
Name: Xxx Xxxxxx
Title: President
3
XXX X. XXXXXXXX
/s/ XXX X. XXXXXXXX
---------------------------------------------
Limited Partner of SPA Drilling, X.X.
XXXXXXXX DRILLING COMPANY
By: /s/ XXXXXXX XXXXXXXX
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
4
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "ASSIGNMENT") is made and
entered into as of this 31st day of March, 2005, by and among Xxxxxxxx Drilling
Company, a Delaware corporation ("TDC"), and Union Drilling Texas, LP, a Texas
limited partnership ("UDT").
WITNESSETH:
WHEREAS, TDC, as purchaser, and SPA Drilling, L.P., a Texas limited
partnership ("SPA"), as seller, entered into that certain Option and Asset
Purchase and Sale Agreement dated February 28, 2005 (as amended, the "PURCHASE
AGREEMENT");
WHEREAS, Union Drilling, Inc. has acquired all of the outstanding stock of
TDC and has formed UDT to take title to and hold the assets and agreements
described in the Purchase Agreement;
WHEREAS, Union Drilling, Inc. is an affiliate of TDC and owns in excess
of 80% of the equity interests in UDT and the general partner of UDT;
WHEREAS, this Assignment is pursuant to the right of TDC contained in
Section 8.8 of the Purchase Agreement to assign its rights under the Purchase
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
TDC and UDT hereby agree as follows:
TDC hereby assigns and sets over to UDT all of the rights and obligations
of TDC under and with respect to the Purchase Agreement.
UDT hereby accepts the above and foregoing assignment, assumes all of the
obligations of TDC under the Purchase Agreement and agrees to perform any and
all of the obligations of TDC thereunder, all effective as of the 31st day of
March 2005.
XXXXXXXX DRILLING COMPANY, UNION DRILLING TEXAS, LP,
a Delaware corporation a Texas limited partnership.
By: Union Drilling Texas GP, LLC
By: /s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXXXXXX XXXXXX
------------------------------- -----------------------------------
Name: Xxxxxxxxxxx Xxxxxx, President
Title:
