Exhibit 10.13
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ASSET PURCHASE AGREEMENT
DATED AS OF MAY 31, 2005
BETWEEN
C AND L SERVICES, LP
AS SELLER
AND
UNION DRILLING TEXAS, LP
AS BUYER
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made and entered into as of May 31,
2005, between C AND L SERVICES, LP, a Texas limited partnership ("Seller"), and
UNION DRILLING TEXAS, LP, a Texas limited partnership ("Buyer").
WITNESSETH:
WHEREAS, Buyer desires to purchase the Assets (as hereinafter defined)
from Seller; and
WHEREAS, Seller desires to sell the Assets to Buyer in exchange for
the payment by Buyer of the Purchase Price (as hereinafter defined);
NOW, THEREFORE, for and in consideration of the mutual benefits
derived and to be derived herefrom by each party, Seller and Buyer agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Basic Definitions. In addition to the terms defined in the
introductory paragraph of this Agreement, for purposes hereof, the
following terms shall have the meanings set forth in this Article I,
unless the context otherwise requires:
"Affiliate" means, as to the person specified, any person controlling,
controlled by or under common control with such person, with the concept of
control in such context meaning the possession, directly or indirectly, of the
power to direct or cause to direct or cause the direction of the management
policies of another, whether through the ownership of voting securities, by
contract, or otherwise.
"Agreement" means this Asset Purchase Agreement and all schedules and
exhibits attached hereto.
"Assets" has the meaning specified in Section 2.01.
"Best Efforts" means a party's best efforts in accordance with
reasonable commercial practice.
"Business Day" means a day on which national banks are generally open
for the transaction of business in Pittsburgh, Pennsylvania.
"Buyer" has the meaning specified in the preamble.
"Closing" means the consummation of the sale and purchase of the
Assets as contemplated by this Agreement which shall take place on the Closing
Date.
"Closing Date" has the meaning specified in Section 9.01.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) or any public, governmental commission, board, bureau or
other authority or instrumentality (domestic or foreign).
"Purchase Price" means the consideration specified in Section 3.01 to
be paid by Buyer to Seller in connection with the sale of the Assets by Seller
to Buyer under the terms of this Agreement.
"Rig Lien" means the security interest of Community Bank of Cleburne
in certain of the Assets, securing a debt of Seller in the approximate principal
amount of $1.4 million, and any related UCC financing statements filed by
Community Bank of Cleburne.
"Seller" has the meaning specified in the preamble.
1.02 Additional Definitions. Other terms are elsewhere defined in
this Agreement and shall, for purposes of this Agreement, have the
meanings so specified unless the context otherwise requires. The
definitions given to the terms herein shall be applicable to both the
singular and plural forms of such terms as the context requires.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.01 Assets to be Purchased. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller agrees
to sell, assign, transfer, deliver and convey to Buyer, and Buyer
agrees to purchase, the following (collectively, the "Assets"):
(a) the two land drilling rigs described on Schedule 2.01(a),
together with all of such drilling rigs' engines, machinery, and
fittings, and the drilling equipment, blowout preventers,
handling tools, spare parts, supplies, tubulars and pipe
described on Schedule 2.01(a) (collectively, the "Rigs");
(b) the following tangible and intangible assets used or held for use
in connection with the ownership, maintenance and operation of
the Assets, to the extent assignable by law and Seller or its
Affiliates have the right to assign and transfer such assets:
(i) all records to be delivered to Buyer pursuant to Section
2.04; and
(ii) the certificates, licenses, permits, consents, operating
authorities, orders, exemptions, franchises, approvals,
registrations and other
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authorizations and applications therefor specifically
associated with the maintenance and operation of the Assets
("Permits"); and
(iii) all warranties relating to the Assets providing benefits to
the owner of the Assets.
Notwithstanding the foregoing, if any drill pipe is replaced or
substituted pursuant to Section 8.09, the Assets shall include such
replacement or substituted drill pipe and not the drill pipe replaced.
2.02 Risk and Expense. Seller shall bear the risks inherent in
the ownership of the Assets until the Closing Date. Seller shall
maintain in full force and effect the insurance policies currently
covering the Assets through the Closing Date. Should either of the
Rigs sustain damage in excess of $1,000,000 before the Closing Date,
this Agreement shall immediately terminate. Should either of the Rigs
suffer any damage that constitutes less than $1,000,000 between the
date hereof and the Closing, Sellers shall at the Closing pay over to
Buyer any insurance proceeds received by Sellers with respect to such
damage, together with an amount equal to any insurance deductible or
coinsurance amount applied against such damages.
2.03 Nonassumption of Liabilities. Buyer does not assume and
shall in no event be liable for any liabilities, debts or obligations
of Seller, whether accrued, absolute, matured, contingent or
otherwise, including, without limitation, (a) any foreign, federal,
state, county, or local taxes, including, without limitation, excise
taxes, or documentary transfer taxes, which in each case arise from
the ownership of the Assets on or prior to the Closing Date or from
the consummation of the transactions contemplated by this Agreement;
(b) any obligations or liabilities arising from any Environmental Laws
(as hereinafter defined) or hazardous substances, or any other
obligations or liabilities of any type relating to ownership or
operation of any property either directly or indirectly by Seller or
the ownership or operation of any business, property or assets
utilized by Seller arising prior to or on the Closing Date; (c) any
obligations or liabilities whatsoever which may be imposed upon Buyer
as a successor to Seller either directly or indirectly or otherwise by
any Environmental Laws; (d) any obligations or liabilities arising out
of, relating to, or in connection with any action, suit, proceeding,
or investigation pending or threatened against Seller or any of its
shareholders, officers, directors, employees, or agents; (e) any labor
or employment-related claims, obligations, or liabilities which accrue
or arise from events occurring prior to, on or after the Closing Date,
including, but not limited to, any claim of obligation or liability
relating to wages, employee benefits, severance pay, workers'
compensation, including insurance premiums, unemployment insurance,
breach of employment contract, wrongful discharge, employment
discrimination, or unfair labor practice; (f) any claims, obligations,
or liabilities arising under or relating to any alleged violation of
the Worker Adjustment and Retraining Notification Act of 1988, as
amended; (g) any liabilities for fees or expenses incident to the
preparation of this Agreement or the consummation of the transactions
contemplated hereby
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(including, without limitation, counsel, accountant's or finder's fees
of Seller); or (h) trade payables or expenses, debt, contracts,
agreements, leases or other obligations of Seller.
2.04 Delivery of Records.
(a) Buyer shall be entitled to the records physically located on the
Rigs or at the location thereof on the Closing Date and relevant
to the Rigs.
(b) As promptly following the Closing as practicable, Seller shall
deliver or cause to be delivered to Buyer at such location as
mutually agreed, copies of any technical or operational manuals
or maintenance records related to the Assets.
(c) Seller shall be entitled to retain all originals of its
corporate, financial, accounting, legal, tax and audit records,
subject to Buyer's rights of inspection as set forth in Section
8.02.
ARTICLE III
PURCHASE PRICE
3.01 Consideration for Assets. As consideration for the sale by
Seller to Buyer of the Assets, Buyer shall pay to Seller the sum of
Eight Million and No/100 Dollars ($8,000,000.00) in United States
currency, subject to Section 8.09 (the "Purchase Price").
ARTICLE IV
REPRESENTATIONS, WARRANTIES OF SELLER
Seller represents and warrants to and agrees with Buyer that, as of
the date hereof and as of the Closing Date:
4.01 Organization and Qualification. Seller is a limited
partnership duly organized, validly existing, and in good standing
under the laws of Texas, has the full power and authority, to own,
operate and lease its property and to carry on its business as now
conducted, and is duly qualified and is in good standing in each
jurisdictions in which the character of its properties and assets
currently owned or leased or the nature of its business transactions
makes such qualification necessary.
4.02 Due Execution. The execution, delivery and performance of
this Agreement by Seller and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite
corporate action including the approval by the general and limited
partners of Seller. This Agreement and all other agreements and
written obligations entered into or undertaken in connection with the
transactions contemplated hereby constitute the valid and legally
binding
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obligations of Seller enforceable against Seller in accordance with
their respective terms.
4.03 Legal Power and Authority. Seller has full power and
authority to enter into this Agreement and to perform all acts and to
do all things required on its part to be performed in connection with
this Agreement and the transactions contemplated hereby, and has
granted full power and authority to its appropriate officers to take
all actions, to do all things and to make, execute and deliver all
documents as may be necessary or required in order to effectuate and
consummate the transactions contemplated hereby.
4.04 No Conflicts. The execution, delivery and performance by
Seller of this Agreement and the other documents, instruments and
agreements contemplated hereby and the consummation of the transaction
contemplated hereby and thereby will not (a) conflict with or result
in a breach of any provisions of the organizational documents of
Seller, (b) result in a material default or the creation of any lien
or encumbrance or give rise to any right of termination, cancellation
or acceleration under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, lease or other agreement
to which Seller is a party or by which it or the Assets may be bound
or affected, or (c) violate any order, writ, injunction, judgment,
decree, statute, rule or regulation applicable to Seller or any of its
properties or assets.
4.05 Litigation. There are no material suits, actions,
proceedings or governmental investigations or inquiries pending or, to
Seller's knowledge, threatened against Seller or the Assets that
reasonably may be expected to have a materially adverse effect on the
sale by Seller of the Assets.
4.06 Brokers. Seller has incurred no obligation or liability,
contingent or otherwise, for brokers' or finders' fees with respect to
the matters provided for in this Agreement.
4.07 Title to and Condition of Assets. On the date of this
Agreement, Seller lawfully owns and is lawfully possessed of good,
valid, and indefeasible title to the Assets. At the Closing, Seller
shall lawfully own and be lawfully possessed of, and shall sell,
transfer and assign to Buyer, good, valid, and indefeasible title to
the Assets, free and clear of any and all mortgages, security
interests, liens, claims, debts, charges, or other encumbrances of any
kind. Seller agrees to warrant and defend the title to, and possession
of, the Assets for the benefit of Buyer against the claims and demands
of all persons claiming an interest in the Assets as of the Closing
Date, regardless of when any such claims or demands may be asserted.
Seller has not received any written notice from any governmental
agency, board, bureau, body, department or authority of any federal,
state, municipal or foreign jurisdiction, to the effect that any of
the Assets is in violation of any applicable ordinance, regulation or
building, zoning, environmental or other law in respect thereof, the
violation of which will have a material adverse effect on the
ownership or use of any of such Assets.
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4.08 Insurance. Seller has in place insurance policies of the
types and in coverage amount sufficient to fully insure any damage or
casualty loss which may arise between the date hereof and Closing with
respect to any of the Assets. Seller has previously delivered to Buyer
a true and complete list of all deductible and retention amount
applicable to the Assets under such policies. Seller does not know of
any threatened termination of or material alteration of coverage under
any of such policies. All premiums payable under all such policies
have teen timely paid and Seller has otherwise complied fully with the
terms and conditions of all such policies.
4.09 Compliance with Laws. Seller has substantially complied
with, and is in substantial compliance with, all federal, state, local
and foreign statutes, laws, ordinances, regulations, rules, permits,
judgments, orders or decrees applicable to the Assets, and there does
not exist, to the best of Seller's knowledge, any basis for any claim
of default under or violation of any such statute, law, ordinance,
regulation, rule, judgment, order or decree with respect to the
Assets.
4.10 No Untrue Statement. In or in connection with the making of
this Agreement, together with the various schedules and exhibits
hereto, Seller has not made any untrue statements of a material fact
or omitted to state a material fact necessary in order to make the
statements made by it herein not misleading.
4.11 Sales Tax Exemption. To the knowledge and belief of Seller,
the conveyance of the Assets by Seller is an occasional sale under
Section 151.304 of the Texas Tax Code and the rules promulgated
thereunder and is thus exempt from the imposition of the Texas sales
tax.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to and agrees with Seller that, as of
the date hereof and as of the Closing Date:
5.01 Organization and Qualification. Buyer is a limited
partnership duly organized, validly existing, and in good standing
under the laws of Texas, has the full power and authority, to own,
operate and lease its property and to carry on its business as now
conducted, and is duly qualified and is in good standing in each
jurisdiction in which the character of its properties and assets
currently owned or leased or the nature of its business transactions
makes such qualification necessary.
5.02 Due Execution. The execution, delivery and performance of
this Agreement by Buyer and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite
corporate action including the approval by its Board of Directors.
This Agreement and all other agreements and written obligations
entered into or undertaken in connection with the transactions
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contemplated hereby constitute the valid and legally binding
obligations of Buyer enforceable against Buyer in accordance with
their respective terms.
5.03 Legal Power and Authority. Buyer has full power and
authority to enter into this Agreement and to perform all acts and to
do all things required on its part to be performed in connection with
this Agreement and the transactions contemplated hereby, and has
granted full power and authority to its appropriate officers to take
all actions, to do all things and to make, execute and deliver all
documents as may be necessary or required in order to effectuate and
consummate the transactions contemplated hereby.
5.04 No Conflicts. The execution, delivery and performance by
Buyer of this Agreement and the other documents, instruments and
agreements contemplated herein will not (a) conflict with or result in
a breach of any provision of the organizational documents of Buyer,
(b) result in a material default or the creation of any lien or
encumbrance or give rise to any right of termination, cancellation, or
acceleration under any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, license or other agreement
to which Buyer is a party or by which it or any of its properties
assets or may be bound or affected, or (c) violate any order, writ,
injunction, judgment, decree, statute, rule or regulation applicable
to Buyer or any of its respective properties or assets.
5.05 Litigation. There are no material suits, actions,
proceedings or governmental investigations or inquiries pending or, to
Buyer's knowledge, threatened against Buyer or its properties, assets,
operations or businesses that reasonably may be expected to have a
materially adverse effect on the purchase by Buyer of the Assets.
5.06 Brokers. Buyer has incurred no obligation or liability,
contingent or otherwise, for brokers' or finders' fees with respect to
the matters provided for in this Agreement.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions contemplated
herein are subject, at the option of Seller, to the fulfillment, on or prior to
the Closing Date, of each of the following conditions:
6.01 Representations and Warranties. Each of the representations
and warranties of Buyer herein contained shall be true and correct
(disregarding all references to materiality contained therein) in all
material respects on the Closing Date.
6.02 Performance. Buyer shall have performed all material
obligations, covenants, and agreements hereunder and shall have
complied with all material
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covenants and conditions contained in this Agreement to be performed
or complied with by Buyer at or prior to the Closing.
6.03 Legal Prohibition. No provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit
the consummation of the Closing.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to consummate the transactions contemplated
herein are subject, at the option of Buyer, to the fulfillment on or prior to
the Closing Date of each of the following conditions:
7.01 Representations and Warranties. Each of the representations
and warranties of Seller herein contained shall be true and correct
(disregarding all references to materiality contained therein) in all
material respects on the Closing Date.
7.02 Performance. Seller shall have performed all material
obligations, covenants and agreements hereunder and shall have
complied with all material covenants and conditions contained in this
Agreement to be performed or complied with by Seller at or prior to
the Closing.
7.03 Legal Prohibition. No provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit
the consummation of the Closing.
7.04 Release of Lien. The Rig Lien shall have been released and
terminated.
7.05 Board Approval. The board of directors of Union Drilling,
Inc., the indirect parent corporation of Buyer, shall have approved
the execution and performance of this Agreement by Buyer.
ARTICLE VIII
COVENANTS AND AGREEMENTS OF THE PARTIES
BEFORE, RELATING TO AND SUBSEQUENT TO THE CLOSING
Seller and Buyer hereby covenant and agree as follows:
8.01 Expenses. Except as may be otherwise provided in this
Agreement, Seller and Buyer shall pay and discharge, or cause to be
paid and discharged, their own expenses incurred in connection with
the preparation, authorization, execution, and performance of this
Agreement and the transactions contemplated
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herein, including, without limitation, inspection fees and fees and
expenses of counsel, accountants and consultants.
8.02 Access; Books and Records. Seller shall provide the
officers, employees and attorneys of Buyer reasonable access, during
normal business hours upon Buyer's reasonable prior notice to Seller,
to the Assets and the records of Seller specifically relating thereto.
Seller shall cooperate fully with such representatives of Buyer in
connection with such review. If and to the extent necessary to comply
with any disclosure requirements under the Securities Act of 1933 or
the Securities Exchange Act of 1934, or any rules or regulations
thereunder, or for any other reasonable business purpose, Buyer shall
have the right, at its own expense, at any time or from time to time
within three (3) years after the Closing Date during reasonable
business hours upon reasonable notice to Seller to inspect, and make
copies of or extracts from, any of the records of Seller relating to
the business of Seller or the Assets and which are not provided to
Buyer (the "Retained Records"). 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. None of the Retained Records in the possession of Seller shall
be destroyed prior to three (3) years after the Closing Date without
the consent of Buyer, unless first reproduced by microfilm or any
other similar process. In the event that during such period Seller
wishes to destroy any of the Retained Records at any time or from time
to time after the Closing Date, Seller shall give not less than sixty
(60) days notice to Buyer and Buyer shall have the right, at its own
expense, during reasonable business hours to remove such records and
keep possession of the same.
8.03 Preservation of Assets. From the date hereof and until the
Closing Date, Seller shall use its Best Efforts to preserve, maintain
and protect the Assets.
8.04 Notices of Certain Events. Until the Closing, Seller will
promptly notify Buyer of any action, suit, proceeding, claim or
investigation which is overtly threatened or commenced against Seller
which is not fully insured against (except standard deductible or
self-retention amounts) and which relates to or affects the Assets or
this Agreement or the transactions contemplated hereby, and Buyer will
promptly notify Seller of any action, suit, proceeding, claim or
investigation which is overtly threatened or commenced against Buyer
which is not fully insured against (except standard deductible or
self-retention amounts) and which relates to and materially and
adversely affects Buyer or its business or affects this Agreement or
the transactions contemplated hereby. Seller further agrees to
promptly notify Buyer of (i) any notice or other communication from
any governmental or regulatory agency or authority in connection with
the transactions contemplated by this Agreement; (ii) any notice or
other communication from any person or entity alleging that the
consent of such person or entity is or may be required in connection
with the transactions contemplated by this Agreement; and (iii) the
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damage or destruction by fire or other casualty of any Asset or part
thereof or in the event that any Asset or part thereof becomes the
subject of any proceeding or, to the knowledge of any Seller,
threatened proceeding for the taking thereof or any part thereof or of
any right relating thereto by condemnation, eminent domain or other
similar governmental action.
8.05 Actions with Respect to Closing. Seller will use its Best
Efforts to obtain the satisfaction of the conditions to Closing
applicable to Seller set forth in Article VII as soon as practicable.
Buyer will use its Best Efforts to obtain the satisfaction of the
conditions to Closing applicable to Buyer set forth in Article VI as
soon as practicable.
8.06 Public Statements. Neither the Buyer nor Seller, nor any of
their respective Affiliates, shall make any news release or other
announcement concerning the transactions contemplated hereby without
first obtaining approval from each party hereto; except that Buyer may
disclose the transactions contemplated hereby in connection any
offering of its securities or as otherwise may be required by law.
8.07 Continued Effectiveness of Representations and Warranties.
Seller and Buyer shall each use its Best Efforts to cause the
representations and warranties made by it herein to continue to be
true and correct on and as of the Closing Date as if made on and as of
the Closing Date.
8.08 Removal of Assets. Seller agrees to allow Buyer up to ten
days after the Closing Date to remove the Rigs and any associated
Assets from the current drill sites in Xxxxxxx County, Texas, unless
Buyer shall have entered into a new drilling contract with the
operator of such drill site.
8.09 Drill Pipe Inspection. As promptly as practicable after the
execution of this Agreement, Seller shall retain a reputable firm to
inspect the 10,000 feet of 4 1/2 inch drill pipe included in the
Assets to verify its rating as double white band pipe (API RP7G
specifications). If the inspection is not completed prior to the
Closing, Buyer shall hold back $150,000 of the Purchase Price until
such time as the inspection is satisfactorily completed and the pipe
is available to Buyer. In the event that the results of the inspection
preclude Seller from being able to deliver 10,000 feet of 4 1/2 double
white band rated pipe to Buyer, Seller may elect to either substitute
10,000 feet of similarly rated 5 inch pipe or forfeit the $150,000
holdback and conclude the sale without the 4 1/2 inch drill pipe.
ARTICLE IX
CLOSING
9.01 Time and Place of Closing. Subject to the satisfaction by
Seller and Buyer of the conditions set forth in Articles VII and VI,
respectively, the Closing
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of the transactions contemplated by this Agreement shall take place on
June 2, 2005, at such place and time as the parties may agree. The
date on which the Closing takes place is herein referred to as the
"Closing Date."
9.02 Actions of Seller at the Closing. At the Closing, Seller
shall:
(a) deliver to Buyer a duly executed Xxxx of Sale and General
Instrument of Assignment of the Assets (the "Xxxx of Sale") in
the form of Exhibit A, dated as of the Closing Date;
(b) deliver to Buyer possession of the Assets at the current drill
sites Xxxxxxx County, Texas;
(c) deliver to Buyer any and all other affidavits, certificates,
documents, or agreements required by any federal, state, or local
governmental or administrative body or authority necessary to
pass title to the Assets to Buyer, together with such operation
manuals, engineering drawings and specifications, technical
documentation and copies of certificates pertaining to the Assets
as Seller may possess;
(d) execute such other documents and instruments, and take such other
actions, as may be necessary to carry out Seller's obligations
under this Agreement.
9.03 Actions of Buyer at Closing. At the Closing, and subject to
Section 8.09, Buyer shall deliver to Seller the Purchase Price, by
wire transfer to the account or accounts designated in writing by
Seller. It is understood that a portion of the Purchase Price
sufficient to obtain the release of the Rig Lien ($1,435,223.42 if the
Closing occurs on June 2, 2005) will be paid by Buyer on Seller's
behalf directly to Community Bank of Cleburne, as provided in the
payoff letter previously delivered by Community Bank of Cleburne.
9.04 Passage of Title; Delivery of Assets. Title to the Assets
will pass from Seller to Buyer at the Closing, subject to Section
8.09.
9.05 Further Assurances. Subject to the terms and provisions of
this Agreement, from time to time subsequent to the Closing Date, each
party agrees to use reasonable efforts to execute and deliver, at the
reasonable request of the other party, such additional documents and
instruments as may, in the reasonable opinion of the requesting party,
be reasonably required to carry out the intents and purposes of this
Agreement and the transactions contemplated hereby.
ARTICLE X
TAXES
10.01 Income Taxes. Seller shall assume responsibility for, and
shall bear and pay, all income taxes, and other similar taxes on gross
income, net income, or
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gross receipts (including any applicable interest or penalties)
incurred or imposed by any United States or foreign taxing authority
with respect to the operation of the Assets prior to Closing.
10.02 Sales Taxes. Buyer shall assume responsibility for, and
shall bear and pay, all state and local sales and use taxes (including
any applicable interest or penalties) incurred or imposed with respect
to the sale by Seller to Buyer of the Assets pursuant to this
Agreement.
10.03 Tax Indemnities. Seller agrees to indemnify and hold
harmless Buyer and its successors and assigns from and against any and
all claims, demands, assessments, deficiencies, liabilities, costs,
and expenses (including reasonable attorneys' fees and other costs and
expenses of Buyer incident to the defense of same) that are caused by,
arise out of, or result from any liability for the payment of federal,
state or local taxes (including applicable penalties and interest)
attributable to the operation of the Assets prior to the Closing for
which the responsibility for payment has been allocated to Seller
pursuant to the preceding provisions of this Article X.
ARTICLE XI
INDEMNIFICATION
11.01 Indemnification by Seller. In addition to the other
indemnities given by Seller to Buyer in this Agreement, Seller shall
indemnify and hold harmless Buyer and its successors and assigns from
and against any and all claims, demands, losses, damages, liabilities,
costs, expenses, and deficiencies (including, without limitation,
reasonable attorneys' fees and other costs and expenses of Buyer
incident to the defense of any claim that results in litigation, or
the settlement of any claim, or the enforcement by Buyer or the
provisions of this Section 11.01) caused by, arising out of, or
resulting from, and to pay Buyer any sum that Buyer pays or becomes
obligated to pay on account of, (a) the ownership of the Assets by
Seller prior to the Closing Date, (b) the use and/or operation of the
Assets prior to the Closing Date, (c) any breach or default in the
performance by Seller of any covenant or agreement of Seller contained
in this Agreement or in any other instrument delivered by or on behalf
of Seller pursuant hereto, (d) any breach of a warranty or an
inaccurate or erroneous representation made by Seller herein or in any
other instrument delivered by or on behalf of Seller pursuant hereto,
or (e) any and all actions, suits, proceedings, claims, demands or
judgments incident to any of the foregoing. If any person shall assert
a claim against Buyer or its affiliates that, if successful, might
result in a breach or default by Seller under this Agreement, Buyer
shall give Seller prompt written notice thereof, and Seller shall have
the right to participate in the defense thereof and to be represented,
at the sole expense of Seller, by counsel selected by it. No such
claim, demand, or other matter shall be compromised or settled by
Seller or Buyer in any manner that might adversely affect the interest
of the other party without the prior written consent of such other
party (which consent shall not be unreasonably withheld).
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11.02 Indemnification by Buyer. In addition to the other
indemnities given by Buyer to Seller in this Agreement, Buyer shall
indemnify and hold harmless Seller and its successors and assigns from
and against any and all claims, demands, losses, damages, liabilities,
costs, expenses, and deficiencies (including, without limitation,
reasonable attorneys' fees and other costs and expenses of Seller
incident to the defense of any claim that results in litigation, or
the settlement of any claim, or the enforcement by Seller or the
provisions of this Section 11.02) caused by, arising out of, or
resulting from, and to pay Seller any sum that Seller pays or becomes
obligated to pay on account of, (a) the ownership of the Assets by
Buyer from and after the Closing Date, (b) the use and/or operation of
the Assets from and after the Closing Date, (c) any breach or default
in the performance by Buyer of any covenant or agreement of Buyer
contained in this Agreement or in any other instrument delivered by or
on behalf of Buyer pursuant hereto, (d) any breach of a warranty or an
inaccurate or erroneous representation made by Buyer herein or in any
other instrument delivered by or on behalf of Buyer pursuant hereto,
or (e) any and all actions, suits, proceedings, claims, demands or
judgments incident to any of the foregoing. If any person shall assert
a claim against Seller or its affiliates that, if successful, might
result in a breach or default by Buyer under this Agreement, Seller
shall give Buyer prompt written notice thereof, and Buyer shall have
the right to participate in the defense thereof and to be represented,
at the sole expense of Buyer, by counsel selected by it. No such
claim, demand, or other matter shall be compromised or settled by
Buyer or Seller in any manner that might adversely affect the interest
of the other party without the prior written consent of such other
party (which consent shall not be unreasonably withheld).
ARTICLE XII
TERMINATION
12.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to
the Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer, if
(i) the Closing shall not have occurred by June 7, 2005
(provided that the right to terminate this Agreement under
this clause (i) shall not be available to Buyer if Buyer's
failure to fulfill any of its obligations under this
Agreement or its misrepresentation or breach of warranty
hereunder has been the cause thereof); or
(ii) there has been a material breach by Seller of any covenant
or agreement, or a material inaccuracy of any representation
or warranty of Seller, contained in this Agreement which has
rendered the satisfaction of any condition to the
obligations of
13
Buyer impossible and such breach or inaccuracy has not been
cured by Seller within five (5) Business Days after Seller's
receipt of notice thereof from Buyer, or waived by Buyer.
(c) by Seller, if
(i) the Closing shall not have occurred by June 7, 2005
(provided that the right to terminate this Agreement under
this clause (i) shall not be available to Seller if Seller's
failure to fulfill any of its obligations under this
Agreement or its misrepresentation or breach of warranty
hereunder has been the cause thereof); or
(ii) there has been a material breach by Buyer of any covenant or
agreement, or a material inaccuracy of any representation or
warranty of Buyer, contained in this Agreement which has
rendered the satisfaction of any condition to the
obligations of Seller impossible and such breach or
inaccuracy has not been cured by Buyer within five (5)
Business Days after Buyer's receipt of notice thereof from
Seller, or waived by Seller.
(d) By Buyer or Seller pursuant to Section 2.02.
12.02 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 12.01 by Buyer or Seller, written
notice thereof shall forthwith be given to the other party specifying
the provision hereof pursuant to which such termination is made, and
this Agreement shall become void and have no effect, and there shall
be no liability hereunder on the part of Buyer or Seller or any of
their respective directors, officers, employees, stockholders or
representatives; provided that nothing contained in this Section 12.02
shall relieve any party from liability for damages actually incurred
(excluding consequential damages) for breach of any covenant or
agreement, or for the inaccuracy of any representation or warranty,
contained herein.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be delivered personally, or
sent by reputable overnight courier, or mailed by certified or
registered United States Mail with postage prepaid, or sent by
telecopy (provided such telecopy is confirmed by mail in the manner
previously described), addressed to the appropriate party at the
address for such party shown below or at such other address as such
party shall have theretofore designated by written notice delivered to
the party giving such notice:
If to Seller:
C and L Services, LP
14
0000 Xxxxx Xxxx Xx.
Xxxxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxx and Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Buyer:
Union Drilling Texas, LP
South Pittsburgh Technology Park
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.:(000) 000-0000
Any notice given in accordance herewith shall be deemed to have been
given when delivered to the addressee in person or transmitted by telecopy, or
one (1) day after such notice has been delivered to a reputable overnight
courier, or five (5) days after such notice has been deposited in the United
States Mail, as the case may be, Seller or Buyer may change the address to which
such communications are to be directed by giving written notice to the other
parties in the manner provided in this Section 13.01.
13.02 Entire Agreement. This Agreement, the documents,
instruments and agreements to be executed pursuant hereto, the
schedules and exhibits hereto, and the documents referred to herein,
constitute the entire agreement between the parties hereto pertaining
to the subject matter hereof and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written,
of the parties pertaining to the subject matter hereof.
13.03 Successors and Assigns. This agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Buyer may assign its rights
hereunder only to an Affiliate or subsidiary of Buyer.
13.04 Amendment. This Agreement may be amended only by an
instrument in writing executed by all of the parties hereto.
13.05 Waiver. Any of the terms, covenants, representations,
warranties or conditions hereof may be waived only by a written
instrument executed by or on behalf of the party hereto waiving
compliance. The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the
right of such party at a later time to enforce the performance of such
provisions. No waiver by any party of any condition, or of any breach
of any term, covenant, representation, or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or
breach, or a waiver of any other condition or of any breach of any
other term, covenant, representation or warranty.
15
13.06 Captions. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement.
13.07 No Third-Party Beneficiaries. Nothing in this Agreement
shall entitle any party other than Buyer and Seller to any claim,
cause of action, remedy, or right of any kind.
13.08 Governing Law. This Agreement shall be governed by the laws
of the State of Texas, without regard to conflicts of law principles.
13.09 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any adverse manner to any
party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby
are fulfilled to the extent possible.
13.10 Execution Counterparts. This Agreement may be executed in
any number of counterparts, and each such counterpart hereof shall be
deemed to be an original instrument, but all such counterparts
together shall constitute for all purposes one agreement.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLER:
C AND L SERVICES, LP
By /s/ XXXX XXXXX
--------------------------------------
Name: Xxxx Xxxxx
Title: President
BUYER:
UNION DRILLING TEXAS, LP, by
UNION DRILLING TEXAS GP, LLC, its General
Partner
By /s/ XXXXXXXXXXX XXXXXX
--------------------------------------
Xxxxxxxxxxx Xxxxxx, President
17
INDEX TO SCHEDULES AND EXHIBITS
Schedule
Number Description
-------- -----------
2.01(a) Assets
Exhibits
--------
Exhibit A Form of Xxxx of Sale
18
Schedule 2.01(a)
Assets
NATIONAL 80B
NATIONAL 80B Single Drum Drawworks, 1,000-HP, XXXXX Grooved f/1-1/4" Drilling
Line, XXXXXX Make-Up & Breakout Catheads, Overrunning Clutch, Air Driller's
Console Controls, Unitized PARMAC 22" Hydromatic Brakes, Crown-O-Matic
2-Engine Compound w/Single Pedestal Pump Drive, (2) CAT D-379 Diesel Engines,
NATIONAL 245-125 Torque Converters, QUINCY 390 Air Compressor MAST/SUBSTRUCTURE
DSI 131'H x 18'6"W Cantilever Mast, 500,000# SHL, IDEAL 6-Sheave Pin Type Crown
Block, (2) Crown Stands
16'H Box on Box Substructure, V-Door, Steps, Safety Rails, Built-In Parts Room,
Locker Room, Air Volume Tank, Air Lines
MUD PUMPS
BOMCO F-800 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover
& Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve,
Charging Pump, Master Skidded, p/b CAT D-398 Diesel Engine
BOMCO F-800 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover
& Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve,
Charging Pump, Skidded, Compound Driven
ROTATING/TRAVELING EQUIPMENT
250-Ton Block/Hook Combination
300-Ton Swivel
OILWELL 20-1/2" X 53" Rotary Table
5-1/4" x 46'L Hex Xxxxx
Xxxxx Drive Bushing
19
WELL CONTROL EQUIPMENT
XXXXXXX LA-70, 11" 5,000# Double Blowout Preventer
WSI 11" 5,000# Annular Blowout Preventer
KOOMEY 4-Station Closing Unit
3" Choke Manifold, Skidded
RIG HOUSES
8'W x 28'L Top Doghouse, Skidded, w/Lockers, SATELLITE Automatic Driller, XXXXXX
XXXXXX Type-D Weight Indicator, 4-Pin Drilling Recorder, Heater
10'W x 20'L Parts/Tool House, Skidded
GENERATORS/UTILITY HOUSE
(2) MECALTE 325-KW Generator Sets, Each p/b CAT D-3406B DITA Diesel Engines,
Skidded
Screw Air Compressor
Motor Control Center/Receptacle Outlets
Voltage Panel f/Trailers
All Above Mounted in 10'W x 30'L Utility House, w/Fluorescent Lights, Skidded
MUD SYSTEM
750-Barrel Mud System, 2-Tank, Mud Agitators in Each Tank, Mud Flow Troughs,
Internal & External Plumbing, (4) 5" x 6" Centrifugal Pumps p/b Electric Motors,
Skidded
MCM Dual Screen Shale Shaker
Desander w/(2) 10" Cones
Desilter w/(10) 5" Cones
20
WATER/FUEL TANK/LUBESTER
10,000-Gallon Fuel Tank, Skidded
Lubester, Skidded, with Suncoast Bulk tanks mounted on skid
HANDLING TOOLS
BJ Type B Xxxxxx Xxxxx, 0" - 00-0/0"
Xxxxx Pipe Slips, Drill Collar Slips, Safety Clamp
XXXXXXXXX XXXX 4,000# Capacity Air Hoist
AUXILIARY EQUIPMENT
Rotary Hose
15,000' Capacity Wireline Unit
7,500' of 1-1/4" Drilling Line, Spool, Stand
42"H x 60'L 2-Section Catwalk
4-Sets (8) Pipe Racks
DRILL PIPE/DRILL COLLARS
10,000' 5" Drill Pipe, Double White Band
(20) 7" Spiral Drill Collars
21
IDECO 750
IDECO 750 Single Drum Drawworks, 1,000-HP, XXXXX Grooved f/1-1/8" Drilling Line,
XXXXXX Make-Up & Breakout Catheads, Overrunning Clutch, Air Driller's Console
Controls, Crown-O-Matic, Unitized PARMAC 22" Hydromatic Brakes
2-Engine Compound w/Single Pedestal Pump Drive, (2) CAT D-379 Diesel Engines,
NATIONAL 245-125 Torque Converters
MAST/SUBSTRUCTURE
Xxxxxxx 131'H x 18'6"W Cantilever Mast, 550,000# GNC, 5-Sheave Pin Type Crown
Block, (1) Crown Stands
16'H Box on Box Substructure, V-Door, Steps, Safety Rails, Air Volume Tank, Air
Lines
MUD PUMPS
BOMCO F-800 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover
& Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve,
Charging Pump, Master Skidded, p/b CAT D-398 Diesel Engine
BOMCO F-800 Triplex Mud Pump, Forged Steel Fluid End w/Quick Change Valve Cover
& Quick Change Cylinder Head Caps, Pulsation Dampener, Shear Relief Valve,
Charging Pump, Skidded, Compound Driven
ROTATING/TRAVELING EQUIPMENT
000-Xxx Xxxxxxxxx Xxxxx
000-Xxx Xxxx
300-Ton Swivel
IDECO 23" X 54" Rotary Table
4-1/4" x 44'L Square Xxxxx
Xxxxx Drive Bushing
22
WELL CONTROL EQUIPMENT
XXXXXXX LA-5000, 11" 5,000# Double Blowout Preventer
HYDRIL 12" 3,000# Annular Blowout Preventer
KOOMEY 5-Station Closing Unit
3" Choke Manifold, Skidded
RIG HOUSE
8'W x 32'L Top Doghouse, Skidded, w/Lockers, SATELLITE Automatic Driller, XXXXXX
XXXXXX Type-D Weight Indicator, 4-Pin Drilling Recorder, Heater
GENERATORS/UTILITY HOUSE
(2) MECALTE 325-KW Generator Sets, Each p/b CAT D-3406B DITA Diesel Engines,
Skidded
Screw Air Compressor
Motor Control Center/Receptacle Outlets
Voltage Panel f/Trailers
All Above Mounted in 10'W x 30'L Utility House, w/Fluorescent Lights, Skidded
MUD SYSTEM
750-Barrel Mud System, 2-Tank, Mud Agitators in Each Tank, Mud Flow Troughs,
Internal & External Plumbing, (4) 5" x 6" Centrifugal Pumps p/b Electric Motors,
Skidded
MCM Dual Screen Shale Shaker
Desander w/(2) 10" Cones
Desilter w/(10) 5" Cones
WATER/FUEL TANK/LUBESTER
500-Barrel Water Tank, Skidded
Lubester, Skidded, with Suncoast Bulk tanks mounted on Skid
23
HANDLING TOOLS
BJ Type D Rotary Tongs, 4" - 10-3/4"
Drill Pipe Slips, Drill Collar Slips, Safety Clamp
XXXXXXXXX XXXX 4,000# Capacity Air Hoist
AUXILIARY EQUIPMENT
Rotary Hose
15,000' Capacity Wireline Unit
7,500' of 1-1/8" Drilling Line, Spool, Stand
42"H x 60'L 2-Section Catwalk
2-Sets (4) Pipe Racks
DRILL PIPE/DRILL COLLARS
10,000' 0-0/0" Xxxxx Xxxx, Xxxxxx E & S135
(20) 6" Spiral Drill Collars
24
Exhibit A
Form of Xxxx of Sale
GENERAL XXXX OF SALE AND ASSIGNMENT
GENERAL XXXX OF SALE AND ASSIGNMENT, effective as of 12:01 a.m. on
June 2, 2005, from C AND L SERVICES, LP, a Texas limited partnership ("Seller"),
to UNION DRILLING TEXAS, LP, a Texas limited partnership ("Buyer").
RECITALS
1. Seller is executing and delivering this General Xxxx of Sale and
Assignment to Buyer for the purpose of selling, assigning, transferring, and
delivering to, and vesting in, the Buyer all right, title and interest of the
Seller in and to the "Assets" (as defined in the Asset Purchase Agreement dated
as of May 31, 2005, by and between Seller and Buyer).
AGREEMENT
Section 1. In consideration of the premises and of other good and
valuable consideration, receipt of which is hereby acknowledged, Seller by these
presents does sell, assign, transfer, and deliver to, and vest in Buyer, its
successors and assigns forever, good and marketable title and all of Seller's
right, title, and interest, legal and equitable, in and to each and every one of
the Assets.
TO HAVE AND TO HOLD all of the Assets unto Buyer, its successors and
assigns forever; and Seller does for itself, and its successors and assigns,
covenant and agree with Buyer to WARRANT AND DEFEND the title of the aforesaid
Assets against all and every person and persons whomsoever.
Section 2. Seller hereby constitutes and appoints Buyer, its
successors and assigns the true and lawful attorney and attorneys of Seller with
full power of substitution in its
25
name and stead, but on behalf and for the benefit of Buyer, its successors and
assigns, to demand and receive any and all of the Assets sold, transferred and
assigned to Buyer this instrument and to give receipts and releases for and in
respect of the same or any part thereof, to endorse any claim or right of any
kind in respect thereof and to do all acts and things in relation to the Assets,
which Buyer, its successors and assigns may deem desirable, Seller hereby
declaring that the foregoing powers are coupled with an interest and are not
revocable and shall not be revoked by Seller or its successors or assigns for
any reason whatsoever.
Section 3. Seller, for itself, its successors and assigns, hereby
covenants and agrees that, at any time and from time to time forthwith upon the
written request of Buyer, Seller will, at its expense, do, execute, acknowledge,
and deliver or cause to be done, executed, acknowledged, or delivered, all and
every such further acts, deeds, assignments, transfers, conveyances, powers of
attorney, and assurances as may be reasonably required by Buyer in order to
sell, assign, transfer, and convey to, and vest in, Buyer, its successors and
assigns, or to aid and assist Buyer in reducing to possession and use any or all
of the Assets assigned to Buyer.
Section 4. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or entity, other than Seller and
Buyer, and their respective successors and assigns, any rights or remedies by
reason of this General Xxxx of Sale and Assignment.
Section 5. This General Xxxx of Sale and Assignment is executed by,
and shall be binding upon, Seller, its successors and assigns, for the uses and
purposes above set forth and referred to, as of the effective date thereof.
26
IN WITNESS WHEREOF, Seller has caused this General Xxxx of Sale and
Assignment to be signed as of the date set forth above.
C AND L SERVICES, LP
By: /s/ XXXX XXXXX
-------------------------------------
Name: Xxxx Xxxxx
Title: President
27
