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Exhibit 10.27
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated as of the 22nd of December, 1994
(the "Agreement") is by and among Xxxxxx Industries, Inc., a Delaware
corporation ("Nabors"), Delta Drilling Company, a Texas corporation wholly
owned by Xxxxxx X. Getty ("Delta"), and Xxxxxx X. Getty ("Getty"). Nabors,
Delta and Getty are referred to collectively herein as the "Parties," and each
individually as a "Party." Exhibit A sets forth the definitions of certain
terms used herein.
RECITALS:
WHEREAS, Getty beneficially and of record owns all of the outstanding
capital stock of Delta, which consists of 10,000 shares of common stock, par
value $.01 per share ("Delta Common Stock ");
WHEREAS, subject to and in accordance with the terms of this
Agreement, Nabors wishes to purchase from Getty, and Getty wishes to sell to
Nabors, all of the outstanding shares of Delta Common Stock for $20,000,000 in
cash, subject to adjustment as provided herein.
WHEREAS, the parties hereto desire to set forth certain
representations, warranties, and covenants made by each to the other as an
inducement to the consummation of the purchase and sale of the shares of Delta
Common Stock;
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. PURCHASE AND SALE OF DELTA SHARES.
(a) BASIC TRANSACTION. On and subject to the terms and conditions
of this Agreement, Nabors agrees to purchase from Getty, and Getty agrees to
sell to Nabors, all of the issued and outstanding shares of Delta Common Stock
for the consideration specified below in this Section 1.
(b) PURCHASE PRICE. Nabors agrees to pay to Getty $20,000,000
(the "Purchase Price") at the Closing by delivery of cash by wire transfer to
an account designated by Getty in writing to Nabors prior to the Closing Date.
(c) THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing ") shall take place at the offices of Xxxxxx &
Xxxxxx L.L.P., 2300 First City Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000-0000,
commencing at 9:00 a.m. local time on the second Business Day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing itself) or
such other date as the Parties may mutually determine (the "Closing Date").
(d) DELIVERIES AT THE CLOSING. At the Closing, (i) Getty will
deliver to Nabors the various certificates, instruments, and documents referred
to in Section 6(a), (ii) Nabors will deliver to Getty
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the various certificates, instruments, and documents referred to in Section
6(b), (iii) Getty will deliver to Nabors stock certificates representing all of
the issued and outstanding shares of Delta Common Stock, endorsed in blank or
accompanied by duly executed stock powers, signature guaranteed, and (iv) Nabors
will deliver to Getty the consideration specified in Section 1(b).
(e) TAKING OF NECESSARY ACTION; FURTHER ACTION. The Parties
hereto shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the transactions contemplated hereby as
promptly as possible. If, at any time after the Closing Date, any such further
action is necessary or desirable to carry out the purposes of this Agreement,
Getty shall, and shall direct his representatives to, take all such lawful and
necessary action.
(f) ADJUSTMENTS TO THE PURCHASE PRICE. Nabors and Getty agree
that the Net Liabilities (as defined below) of Delta as of the Closing Date
shall equal $1,265,000 and that in the event the Net Liabilities of Delta are
greater or lesser than $1,265,000, the Purchase Price shall be increased or
decreased, as the case may be, by an amount equal to the difference between the
actual Net Liabilities and $1,265,000, as set forth below.
(1) On or before a date that is 125 days following the
Closing (or the next Business Day if such day is not a Business Day),
Nabors will prepare and deliver to Getty a statement (the "Closing
Balance Sheet") showing the actual amount of Delta's assets and
liabilities as of the Closing Date, calculated in a manner consistent
with Delta's historical accounting policies and practices and
generally accepted accounting principles ("GAAP"). For purposes of
this Agreement, "Net Liabilities" shall mean the difference between
Delta's current assets and total liabilities, each calculated in a
manner consistent with Delta's historical accounting policies and
practices and GAAP; provided, however, that the following adjustments
shall be made in the calculation of Net Liabilities on the Closing
Balance Sheet: (i) Delta's liabilities shall be increased by an amount
equal to (x) the best estimate of the severance expenses for Delta
employees that arise as a result of the transactions contemplated
hereby pursuant to severance policies or employment agreements of
Delta in effect as of the Closing Date, as amended pursuant to Section
5(g)(4), including the cost to Delta of any continuation of health
insurance or other employee benefits pursuant to such policies or
agreements, minus (y) $1,000,000 (but in no event less than zero);
provided, that if such expenses are less than $1,000,000 then Getty
shall receive a credit in the amount by which such expenses are less
than $1,000,000 (the "Severance Credit") to be applied against Getty's
obligations to Nabors with respect to Former Employee Liabilities for
Terminated Employees pursuant to Section 5(g); (ii) Delta's current
assets shall be increased by the amount of capital expenditures from
October 1, 1994 through the Closing Date as permitted pursuant to the
terms of this Agreement (excluding amounts of capital expenditures for
which Delta is reimbursed by a third party); (iii) Delta's current
assets shall be decreased by the amount of proceeds from the sale or
other disposition of any property, plant or equipment from October 1,
1994 through the Closing Date; (iv) all insurance claims, accounts
receivables or other receivables included on the Closing Balance Sheet
that are not collected on or before the date that is 120 days
following the Closing Date (or the next Business Day if such day is
not a Business Day) will be fully reserved for on the Closing Balance
Sheet; (v) Delta's liabilities shall be increased by the cost to
Nabors of any insurance premiums incurred by Nabors at Getty's request
pursuant to Section 5(g)(4); and (vi) Delta's current assets shall be
increased for profits and decreased for losses resulting from
accounting for turnkey and footage drilling contracts not completed by
the Closing Date on a percentage-of-completion basis in accordance
with GAAP, based upon the actual cost of the well and Delta's results
pursuant to such contract or, if a well remains uncompleted as of the
date of delivery of the Closing Balance Sheet, the drilling budget and
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status of such contracts as of the date of delivery of the Closing
Balance Sheet and the percentage-of-completion adjustments shall
fully reflect any applicable insurance payments or claims of Delta
related to such turnkey or footage xxxxx. With respect to the
adjustment referred to in (vi) above, Delta's current assets shall be
increased for positive contract margins and decreased for negative
contract margins by an amount equal to the product of (i) the positive
or negative contract margins on the contract multiplied by (ii) a
fraction the numerator of which shall be equal to the number of
revenue days under such contract occurring prior to and including the
Closing Date and the denominator of which shall be equal to the total
number of revenue days during the term of such contract. To the
extent any insurance claims, account receivables or other receivables
that are reserved on the Closing Balance Sheet pursuant to (iv) above
are collected, in whole or in part, or sold, transferred or otherwise
disposed of by or on behalf of Delta, Nabors or any of their
affiliates on or before the first anniversary of the Closing Date,
Nabors shall pay the full amount collected or received in respect
thereof to Getty in cash within five Business Days of the receipt
thereof by Nabors, Delta or such affiliate. Any such insurance
claims, account receivables or other receivables that remain
uncollected at the end of the first anniversary of the Closing Date
shall, upon the request of Getty, be assigned to Getty or his designee
for no further consideration.
(2) Within 30 days following delivery of the Closing
Balance Sheet, Getty shall notify Nabors whether it agrees with such
statement; provided, however, that if Getty shall fail to so notify
Nabors within such 30-day period, it shall be deemed to have agreed
with such statements. If Getty disagrees with such statements, Getty
and Nabors shall work in good faith to reach agreement on such
statements; but if they shall not agree within 10 days the matter will
be referred to one of the "Big Six" independent public accounting
firms as Getty and Nabors may mutually agree, the costs of which shall
be borne equally by Nabors and Getty. Such accountants shall examine
the records of Delta and determine the disputed Closing Balance Sheet
items within 30 days following the date such matter is referred to
them, and such determination shall be final and binding on Getty and
Nabors, and may be enforced by appropriate judicial or other
proceedings.
(3) If, as so determined, the Net Liabilities reflected
on the Closing Balance Sheet exceed $1,265,000, then Getty will within
ten days of such determination make a cash payment to Nabors in an
amount equal to the excess of the amount of the Net Liabilities over
$1,265,000, as an adjustment to the Purchase Price. If the Net
Liabilities as reflected on the Closing Balance Sheet are less than
$1,265,000, then Nabors shall within ten days of such determination
make a cash payment to Getty in an amount equal to the excess of
$1,265,000 over the Net Liabilities on such date, as an adjustment to
the Purchase Price.
2. REPRESENTATIONS AND WARRANTIES OF GETTY AND DELTA.
Getty and Delta, jointly and severally (with regard to Delta only
prior to the Closing Date), represent and warrant to Nabors that the statements
contained in this Section 2 are true, correct and complete as of the date of
this Agreement and will be true, correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 2, except for representations
that are made effective as of a specific date, which shall be true, correct and
complete as of such date), except as set forth in the Schedule applicable to
such representation and warranty contained in the disclosure schedule delivered
by Delta to Nabors on the date hereof attached hereto as Exhibit B (the
"Disclosure Schedule").
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(a) ORGANIZATION OF DELTA. Delta is a corporation duly
incorporated, validly existing, and in good standing under the laws of the
State of Texas.
(b) AUTHORIZATION OF TRANSACTION. Delta has all requisite power
and authority to execute and to deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
Getty has the capacity, right and power to execute and deliver this Agreement
and to perform his obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate action or proceeding
on the part of Delta is necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed
and delivered by each of Delta and Getty and constitutes the valid and legally
binding obligation of Getty and Delta, respectively, enforceable in accordance
with its terms. Except as required under the Xxxx-Xxxxx-Xxxxxx Act or as
otherwise provided herein, neither Getty nor Delta are obligated to give any
notice to, to make any filing with, or to obtain any authorization, consent, or
approval of any Governmental Authority in order to consummate the transactions
contemplated by this Agreement.
(c) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Delta has
all requisite corporate or other power and authority to own, lease and operate
its properties and to carry on its business as it is now being conducted, and
is duly qualified and in good standing to do business in each jurisdiction in
which the nature of the business conducted by it or the ownership or leasing of
its properties makes such qualification necessary, except where the failure to
be so qualified and in good standing, would not, individually or in the
aggregate have a Material Adverse Effect. Delta is in possession of all
franchises, authorizations, licenses, permits, approvals and orders necessary
to own, lease and operate its properties and to carry on its business as it is
now being conducted, except for such franchises, authorizations, licenses,
permits, approvals and orders the failure of which to obtain would not,
individually or in the aggregate, have a Material Adverse Effect (collectively,
the "Permits"), and there is no action, proceeding or investigation pending, or
to the knowledge of Delta, threatened, regarding the suspension or cancellation
of any of the Permits. Schedule 2(c) of the Disclosure Schedule lists the
directors and officers of Delta. Delta has delivered to Nabors correct and
complete copies of the charter and bylaws of Delta (as amended to date). The
minute books (containing the records of meetings of the stockholders, the board
of directors, and any committees of the board of directors), the stock
certificate books, and the stock record books of Delta are correct and
complete. Delta is not in default under or in violation of any provision of
its charter or bylaws.
(d) CAPITALIZATION. The entire authorized capital stock of Delta
consists of 100,000 shares of Delta Common Stock, of which 10,000 shares of
Delta Common Stock are issued and outstanding. All of the issued and
outstanding shares of Delta Common Stock have been duly authorized, are validly
issued, fully paid, and nonassessable. The issued and outstanding shares of
Delta Common Stock are held beneficially and of record by Getty, and are free
and clear of any Taxes and Security Interests (other than any restrictions
under the Securities Act and state securities laws), options, warrants, calls,
purchase rights, conversion rights, exchange rights, trusts, voting trusts or
other contracts or commitments relating to any capital stock or other security
of Delta (other than this Agreement). There are no outstanding or authorized
options, warrants, purchase rights, conversion rights, exchange rights, trusts,
voting trusts or other contracts or commitments that could require Delta to
issue, sell, or otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to Delta. There are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of Delta.
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(e) SUBSIDIARIES. Delta has no subsidiaries.
(f) FINANCIAL STATEMENTS. Set forth in Schedule 2(f) are the
following financial statements of Delta (collectively, the "Financial
Statements"): (i) audited balance sheets and statements of income, changes in
stockholders' equity, and cash flow ("Audited Financial Statements") as of and
for the fiscal years ended December 31, 1992 and December 31, 1993, (the "Most
Recent Year End"); and (ii) unaudited balance sheets and statements of income,
changes in stockholders' equity, and cash flow (the "Unaudited Financial
Statements") as of and for the nine months ended September 30, 1994 (the "Most
Recent Quarter End"). The Financial Statements (including the notes thereto,
in the case of the Audited Financial Statements) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby (except as noted therein), are consistent with the books and
records of Delta, and present fairly the financial condition of Delta as of
such dates and the results of operations of Delta for such periods; provided,
however, that the Unaudited Financial Statements do not contain footnotes and
are subject to normal year-end adjustments consistent with prior practice that
will not, individually or in the aggregate, have a Material Adverse Effect.
(g) EVENTS SUBSEQUENT TO MOST RECENT QUARTER END. Except as set
forth on Schedule 2(g) of the Disclosure Schedule and since the date of the
Unaudited Financial Statements there has not been any change in the conduct of
the ongoing business operations of Delta that would, individually or in the
aggregate, have a Material Adverse Effect. Without limiting the generality of
the foregoing, since that date:
(1) Delta has not sold, leased, transferred, or assigned
any assets with a book value of $10,000 or more, or assets with an
aggregate book value of $50,000 or more, tangible or intangible,
outside the Ordinary Course of Business;
(2) Delta has not entered into any agreement, contract,
lease, or license outside the Ordinary Course of Business;
(3) Delta has not imposed or caused to be imposed any
Security Interest upon any of its assets, tangible or intangible,
outside the Ordinary Course of Business;
(4) Delta has not made any capital expenditures outside
the Ordinary Course of Business;
(5) Delta has not experienced any damage, destruction, or
loss (whether or not covered by insurance) to its property, other than
ordinary wear and tear or damage, destruction or loss in any single
incident in an amount greater than $20,000 in amount, or damage,
destruction or loss in an aggregate amount greater than $50,000;
(6) Delta has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
(7) made any change in its accounting methods, principles
or practices;
(8) Delta has not committed to any of the foregoing; and
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(9) No new Employee Benefit Plan has been established and
no existing Delta Employee Benefit Plan has been modified or
terminated.
(h) LEGAL COMPLIANCE; NONCONTRAVENTION. Except as set forth in
Schedule 2(h) of the Disclosure Schedule, Delta has complied with and is not in
violation of or default under (i) any Law applicable to it or by which its
properties are bound by or subject to; or (ii) any Permits, except for such
events of noncompliance that would not, individually or in the aggregate, have
a Material Adverse Effect. No action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand, or notice alleging any failure
so to comply has been filed or commenced against Delta and to the Knowledge of
Delta no such action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been threatened. The execution and
delivery of this Agreement by Delta does not, and the performance of this
Agreement by Delta will not, (i) conflict with or violate its certificate of
incorporation or bylaws, (ii) conflict with or violate any Law in effect as of
the date of this Agreement and applicable to Delta or by which its properties
are bound or subject to, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or require payment under, or result in the
creation of a Security Interest on any properties or assets of Delta pursuant
to any note, bond, mortgage, indenture, contract, agreement, lease, license,
Permit, franchise or other instrument or obligation to which Delta is a party
or by which Delta or its properties are bound or subject to, except for
breaches, defaults, events, rights of termination, amendment, acceleration or
cancellation, payment obligations or Security Interests that would not,
individually or in the aggregate, have a Material Adverse Effect.
(i) TITLE TO PROPERTIES. Except as disclosed in the Financial
Statements or on Schedule 2(i) of the Disclosure Schedule, Delta has good and
indefeasible title to, or a valid leasehold interest in, the properties and
assets used by it, located on its premises, or shown on the Most Recent Balance
Sheet or acquired after the date thereof, free and clear of all Security
Interests, except for properties and assets disposed of in the Ordinary Course
of Business since the date of the Most Recent Balance Sheet and except for such
other liens or imperfections in title as do not affect Delta's enjoyment of
such assets in its business and that will not, individually or in the
aggregate, have a Material Adverse Effect.
(j) INTELLECTUAL PROPERTY. Schedule 2(j) of the Disclosure
Schedule lists all patents, trademarks, trade names, and copyrights and
registrations and applications for any such items, domestic or foreign, owned
or registered in the name of Delta. Delta owns or holds licenses under such
patents, trademarks, trade names, and copyrights necessary for the conduct of
its business as now being conducted. Delta is not currently in receipt of any
notice of infringement or notice of conflict with the asserted rights of others
in such patents, trademarks, trade names, and copyrights; nor is Delta
otherwise aware of any such infringement or conflict, or of any infringement
by, or conflict on the part of, others with respect to patents, trademarks,
trade names, or copyrights of Delta.
(k) TANGIBLE ASSETS. Schedule 2(k) of the Disclosure Schedule
lists and describes briefly (where appropriate by generic category) all
machinery, equipment, rigs and other tangible assets that Delta owns. Except
as set forth in Schedule 2(k) of the Disclosure Schedule, each such tangible
asset has been maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to normal wear and tear) and is
suitable for the purposes for which it presently is used.
(l) CONTRACTS. Schedule 2(l) of the Disclosure Schedule lists the
following contracts and other agreements to which Delta is a party:
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(1) any agreement (or group of related agreements) for
the lease of personal property to or from any Person providing for
lease payments in excess of $3,000 per annum;
(2) any agreement (or group of related agreements) for
the purchase or sale of raw materials, commodities, equipment,
supplies, products, or other personal property, or for the furnishing
or receipt of services, including drilling contracts on active or
future jobs, the performance of which either will extend over a period
of more than six months (and is not terminable by Delta on notice of
60 days or less), or involves consideration in excess of $50,000;
(3) any agreement concerning a partnership or joint
venture;
(4) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, in excess of
$50,000 or under which it has imposed a Security Interest on any of
its assets, tangible or intangible;
(5) any material agreement concerning confidentiality or
noncompetition;
(6) any collective bargaining agreement or other contract
with any labor union;
(7) any separate agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $50,000 or any agreement or
document providing severance benefits;
(8) any agreement under which it has advanced or loaned
any amount to any of its directors, officers, and employees outside
the Ordinary Course of Business;
(9) any agreement under which the consequences of a
default or termination would have a Material Adverse Effect; or
(10) any other agreement (or group of related agreements)
the performance of which involves consideration in excess of $50,000.
Delta has provided Nabors or Nabors' representatives access to correct and
complete copies of each written agreement listed in Schedule 2(l) of the
Disclosure Schedule and described in this Section 2(l). With respect to each
such agreement: (A) the agreement is legal, valid, binding, and in full force
and effect; (B) to the Knowledge of Delta, no party is in breach or default,
and no event has occurred which with notice or lapse of time would constitute a
breach or default, or permit termination, modification, or acceleration under
the agreement, except in each case as set forth on Schedule 2(l) of the
Disclosure Schedule; (C) the Agreement will continue to be legal, valid,
binding, enforceable in accordance with its terms, and in full force and effect
following the consummation of the transaction contemplated herein; and (D)
except as set forth on Schedule 2(l) of the Disclosure Schedule, no party has
repudiated any provision of the agreement.
(m) INSURANCE. Schedule 2(m) of the Disclosure Schedule sets
forth the following information with respect to each insurance policy and self
insurance arrangements (including policies providing property, casualty,
liability, and workers' compensation coverage, and bond and surety
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arrangements) to which Delta is a party, a named insured, or otherwise the named
beneficiary of coverage at any time within the last three policy years:
(1) the name, address, and telephone number of the agent;
(2) the name of the insurer, the name of the
policyholder, and the name of each covered insured;
(3) the policy number and the period of coverage;
(4) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or other basis) and amount
(including a description of deductibles and ceilings) of and limits on
coverage; and
(5) a description of any retroactive premium adjustments
or other loss-sharing arrangements.
With respect to each such insurance policy, and except as set forth on Schedule
2(m) of the Disclosure Schedule: (A) the policy is in full force and effect;
(B) to the Knowledge of Delta, neither Delta nor any other party to the policy
is in breach or default (including with respect to the payment of premiums or
the giving of notices), and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit termination,
modification, or acceleration under the policy; and (C) no party to the policy
has repudiated any provision thereof. Delta has been covered during the past
five years by insurance in scope and amount believed by management to be
adequate for the businesses in which it has engaged during the aforementioned
period. Schedule 2(m) of the Disclosure Schedule describes any self-insurance
arrangements affecting Delta.
(n) LITIGATION. Schedule 2(n) of the Disclosure Schedule sets
forth a brief description of each instance in which Delta or its properties (i)
is subject to any outstanding injunction, judgment, order, decree, ruling, or
charge, or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court of quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator and seeking a judgment or award against Delta in excess of $50,000
and each instance in which to the Knowledge of Delta any such actions described
in (i) and (ii) above is threatened against Delta or its properties.
(o) EMPLOYEE AND EMPLOYEE BENEFITS MATTERS.
(1) There are no pending or, to the Knowledge of Delta,
threatened disputes, labor controversies, strikes, lockouts, or work
stoppages with any current or former employees of Delta. Except for
Xxxxxx X. Xxxxxxx, the President of Delta, all employees of Delta are
employed on an at-will basis and may be terminated without cause by
Delta.
(2) Delta is not a party to any collective bargaining
agreement, nor are any collective bargaining agreements currently
being negotiated by or with respect to Delta.
(3) Delta has properly verified the identity and
authorization to work in the United States and has properly completed
and retained INS forms I-9 for all employees where required by the
Immigration Reform and Control Act of 1986 and related statutes.
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(4) Delta has delivered to Nabors a description of
Delta's severance pay program for salaried employees that was
announced to the salaried employees of Delta in conjunction with the
contemplated disposition of Delta and that will be in effect on the
day before the Closing Date. Delta does not maintain any other
severance pay program, but does have certain severance obligations to
Xxxxxx X. Xxxxxxx pursuant to an Employment Agreement dated January
10, 1990, a true, correct and complete copy of which has been provided
to Nabors.
(5) Except as set forth on Schedule 2(o) of the
Disclosure Schedule, with respect to all employees and former
employees of Delta, neither Delta nor any ERISA Affiliate presently
maintains, contributes to or has any Liability under any Employee
Benefit Plan. The plans, programs and arrangements set forth on
Schedule 2(o) of the Disclosure Schedule are herein referred to as the
"Delta Employee Benefit Plans."
(6) With respect to all employees and former employees of
Delta, neither Delta nor any ERISA Affiliate presently maintains,
contributes to or has any Liability under any funded or unfunded
medical, health or life insurance plan or arrangement for present or
future retirees or present or future terminated employees except as
required by the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"), and except as set forth in the Delta
Drilling Company Special Health and Welfare Plan (and any predecessor
plan, arrangement or court order relating to such benefits).
(7) Delta does not maintain or contribute to a trust,
organization or association described in any of sections 501(c)(9),
501(c)(17) or 501(c)(20) of the Code.
(8) Favorable determination letters have been received
from the Internal Revenue Service with respect to each Delta Employee
Benefit Plan that is intended to comply with the provisions of section
401(a) of the Code, evidencing compliance with the relevant provisions
of the Tax Equity and Fiscal Responsibility Act of 1982, the Tax
Reform Act of 1984 and the Retirement Equity Act of 1984 and each such
Delta Employee Benefit Plan complies in form and in operation with the
requirements of the Code and meets the requirements of a "qualified
plan" under section 401(a) of the Code. The 401(k) Plan has been or
will be amended by December 31, 1994 so as to bring it into compliance
with the Tax Reform Act of 1986 and other applicable laws and
governmental regulations for which amendment is required by such date,
and is and will be as of the transfer date described in Section 5(c)
qualified under section 401(a) of the Code and the trust established
thereunder will be exempt from tax pursuant to section 501(a) of the
Code.
(9) With respect to each Delta Employee Benefit Plan that
is subject to Title I of ERISA, neither Delta nor any ERISA Affiliate
has failed to comply with any of the applicable reporting, disclosure
or other requirements of ERISA and the Code. There has been no
"prohibited transaction" as described in section 4975 of the Code or
section 406 of ERISA for which Delta has any Liability.
(10) Delta does not have any unsatisfied Liability that is
not disclosed on Schedule 2(o) of the Disclosure Schedule for failure
to comply with ERISA or the Code for any action or failure to act in
connection with the administration or investment of, or with respect
to, the Delta Employee Benefit Plans including any actions taken or
omitted in connection with the Retirement Plan for Employees of
DeltaUS Corporation.
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(11) Any Delta Employee Benefit Plan that is or has been
subject to section 412 of the Code, section 302 of ERISA, or Title IV
of ERISA has been terminated. Except as set forth in Schedule 2(o) of
the Disclosure Schedule, Delta does not have any unsatisfied Liability
relating to any such terminated plan. With respect to the Delta
Employee Benefit Plans, all applicable contributions and premium
payments for all periods ending prior to the Closing Date (including
periods from the first day of the then current plan year to the
Closing Date) shall be made prior to the Closing Date in accordance
with past practice.
(12) Delta does not presently maintain, contribute to or
have any Liability (including current or potential withdrawal
liability) with respect to any "multiemployer plan" as such term is
defined in section 3(37) of ERISA.
(13) Except with regard to the Delta Employee Benefit
Plans listed on Schedule 2(o) of the Disclosure Schedule, Delta does
not have any Liability attributable to any Employee Benefit Plan. No
ERISA Affiliate sponsors, maintains, contributes to or has any
Liability under or, within six years of the date of this Agreement,
sponsored, maintained or contributed to or had any Liability under any
multiemployer plan as defined in section 3(37) of ERISA or any
Employee Benefit Plan subject to section 302 or Title IV of ERISA or
section 412 of the Code.
(14) There is no pending or threatened legal action,
proceeding or investigation against or involving any Delta Employee
Benefit Plan (other than routine claims for benefits) and, to the
Knowledge of Delta, there is no basis for any such condition, legal
action, proceeding or investigation. Any bonding required with
respect to the Delta Employee Benefit Plans in accordance with
applicable provisions of ERISA has been obtained and is in full force
and effect. No Delta Employee Benefit Plan is presently under audit
or examination (nor has notice been received of a potential audit) by
the Internal Revenue Service, the Department of Labor, or the PBGC,
nor are there any matters pending with respect to any Delta Employee
Benefit Plan with the Internal Revenue Service under its Voluntary
Compliance Resolution program, its Closing Agreement Program, or
similar programs.
(15) Except as set forth on Schedule 2(o) of the
Disclosure Schedule.
(a) Delta is not a party to any employment
agreement, whether written or oral, or agreement with change
in control or similar provisions;
(b) Delta does not have a currently outstanding
loan or loans to any current or former employees of Delta, nor
has Delta guaranteed such loans;
(c) No amount payable to an employee or former
employee of Delta in connection with the consummation of the
transactions contemplated by this Agreement will be an "excess
parachute payment" which is non-deductible under section 280G
of the Code.
(16) To the Knowledge of Delta, there has been no act or
acts which would result in a disallowance of a deduction to Delta or
the imposition of a tax upon Delta pursuant to section 4980B of the
Code, or with regard to plan years beginning before December 31, 1988,
section 162(i) of the Code as in effect immediately prior to the
enactment of the Technical and Miscellaneous Revenue Act of 1988, or
any regulations promulgated thereunder, whether final, temporary or
proposed, which disallowance or imposition would have a Material
Adverse Effect. No event has occurred with respect to which Delta
could be liable for a tax imposed by
11
any of sections 4972, 4976, 4977, 4979, or 4980 of the Code, or for a
civil penalty under section 502(c) of ERISA, which tax or civil
penalty would have a Material Adverse Effect.
(17) With respect to each of the Delta Employee Benefit
Plans, Delta has delivered to Xxxxxx true and complete copies of: (a)
the plan documents, including any related trust agreements, insurance
contracts or other funding arrangements, or a written summary of the
terms and conditions of the plan if there is no written plan document;
(b) the most recent determination letter received from the Internal
Revenue Service (where applicable); (c) the most recent IRS Form 5500;
(d) the most recent financial statement; and (e) the most recent
summary plan description. Except with respect to the Delta Drilling
Company Special Health and Welfare Plan and the benefits to be
provided pursuant to the severance pay program referred to in Section
2(o)(4), there has been no act or omission by Delta or any current or
prior affiliate of Delta that would impair the right or ability of
Delta to unilaterally amend or terminate any Delta Employee Benefit
Plans or to unilaterally terminate as of the Closing Date the accrual
of any benefits after such date with respect to employees or former
employees of Delta.
(p) TAX MATTERS. Except as set forth on Schedule 2(p) of the
Disclosure Schedule:
(1) Delta has filed all Tax Returns that are required to
be filed by it. All such Tax Returns were correct and complete in all
material respects. All Taxes stated to be due and owing by Delta on
such Tax Returns have been paid except to the extent payment thereof
is being contested by appropriate action and for which adequate
provision has been made on the Unaudited Financial Statements and
shall be made on the Closing Balance Sheet. Delta is not the
beneficiary of any extension of time within which to file any Tax
Return. To the Knowledge of Delta, no claim has been made by any
authority in a jurisdiction where Delta does not file Tax Returns that
it is or may be subject to taxation by that jurisdiction. There are
no Security Interests on any of the assets of Delta that arose in
connection with any failure (or alleged failure) to pay any Tax.
(2) Delta has withheld and paid all Taxes required to
have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, or stockholder.
(3) There is no dispute or claim concerning any Tax
Liability of Delta either (A) claimed or raised by any authority in
writing or (B) as to which Delta has Knowledge.
(4) Schedule 2(p) of the Disclosure Schedule lists all
federal, state, local, and foreign income Tax Returns filed with
respect to Delta for taxable periods ended on or after December 31,
1992.
(5) Delta has not waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a
Tax assessment or deficiency.
(6) Delta is not a party to any Tax allocation or sharing
agreement. Since February 1, 1990, Delta (A) has not been a member of
an Affiliated Group filing a consolidated federal income Tax Return,
and (B) has no Liability for the Taxes of any Person under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise.
12
(7) Delta has qualified as an "S Corporation" as defined
in section 1361 et seq. of the Code (and any similar provisions of
state or local law) since February 1, 1990 and has no Subchapter C
earnings and profits.
(q) BROKERS' FEES. Getty is responsible for the payment of fees
to Xxxxxxx & Company International in connection with the transactions
contemplated hereby. Delta does not have any Liability to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Xxxxxx could become liable or
obligated.
(r) REAL PROPERTY. Schedule 2(r) of the Disclosure Schedule lists
and describes briefly all real property owned by Delta. With respect to each
such parcel of owned real property:
(1) the identified owner has good and indefeasible title
to, and quiet enjoyment of, the parcel of real property, free and clear
of any Security Interest, easement, covenant, or other restriction,
except for installments of special assessments not yet delinquent,
recorded easements, covenants, and other restrictions, and utility
easements, building restrictions, zoning restrictions, and other
easements and restrictions existing generally with respect to
properties of a similar character that do not affect materially and
adversely the current use, occupancy, or value of the property subject
thereto;
(2) there are no pending or threatened condemnation
proceedings, lawsuits, or administrative actions relating to the
property or other matters affecting materially and adversely the
current use, occupancy, or value thereof;
(3) the legal description for the parcel contained in the
deed thereof describes such parcel fully and adequately except for
variations, the buildings and improvements are located within the
boundary lines of the described parcels of land, are not in material
violation of applicable setback requirements, zoning laws, and
ordinances (and none of the properties or buildings or improvements
thereon are subject to "permitted non-conforming use" or "permitted
non-conforming structure" classifications), and do not encroach on any
easement which may burden the land;
(4) all facilities have received all approvals of
governmental authorities (including material licenses and permits)
required in connection with the ownership or operation thereof, and
have been operated and maintained in accordance with applicable laws,
rules, and regulations in all material respects;
(5) there are no leases, subleases, licenses,
concessions, or other agreements, written or oral, granting to any
party or parties the right of use or occupancy of any portion of the
parcel or real property; and
(6) there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion
thereof or interest therein.
(s) LEASES. Schedule 2(s) of the Disclosure Schedule lists and
describes briefly all real property leased or subleased by Delta. Delta has
made available to Xxxxxx or its representatives correct and complete copies of
the leases and subleases listed in Schedule 2(s) of the Disclosure Schedule.
With respect to each material lease and sublease listed in Schedule 2(s) of the
Disclosure Schedule:
13
(1) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect in all material respects;
(2) no party to the lease or sublease is in material
breach or default, and no event has occurred which, with notice or
lapse of time, would constitute a material breach or default or permit
termination, modification, or acceleration thereunder;
(3) no party to the lease or sublease has repudiated any
material provision thereof;
(4) there are no material disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(5) Delta has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the
leasehold or subleasehold; and
(6) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including material
licenses and permits) required in connection with the operation
thereof.
(t) GUARANTIES. Delta is not a guarantor and is not otherwise
responsible for any liability or obligation (including indebtedness) of any
other Person.
(u) ENVIRONMENT, HEALTH, AND SAFETY. Except as disclosed on
Schedule 2(u) of the Disclosure Schedule and as otherwise would not have a
Material Adverse Affect:
(1) Delta (A) has complied with the Environmental, Health,
and Safety Laws in all respects and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has
been filed or commenced against it alleging any such failure to comply,
(B) has obtained and been in substantial compliance with all of the
terms and conditions (including notification, reporting and
registration requirements) of all permits, licenses, and other
authorizations that are required under the Environmental, Health, and
Safety Laws and no circumstance exists that is reasonably likely to
interfere with such compliance in the future or require material
expenditures, and (C) has complied in all respects with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables that are contained
in the Environmental, Health, and Safety Laws;
(2) Delta has no Liability, and has not handled or
disposed of any substance, arranged for the disposal of any substance,
exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility in any manner
that could give rise to any Liability, for damage to or clean up of
any site, location, or body of water (surface or subsurface) for
remediation (including removal, response, clean up, investigative and
monitoring of contaminants or pollutants), for any illness of or
personal injury to any employee or other individual or for any reason
under any Environmental, Health, and Safety law; and
(3) All properties and equipment used in the business of
the Company have been free of asbestos, PCBs, methylene chloride,
trichloroethylene, 1,2-transdichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances in concentrations or locations that
require remedial action under any Environmental, Health, and Safety
Laws.
14
(v) ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
Schedule 2(v) of the Disclosure Schedule and other than (i) Liabilities fully
reflected and reserved against on the Most Recent Financial Statements, (ii)
Liabilities incurred in the Ordinary Course of Business since September 30,
1994, and (iii) Liabilities provided for in this Agreement that shall be fully
reflected on the Closing Balance Sheet, there are no Liabilities of Delta of
any kind whatsoever, and there is no existing condition, situation or set of
circumstances that could reasonably be expected to result in such Liabilities.
(w) RECEIVABLES. Schedule 2(w) of the Disclosure Statement sets
forth an accurate aging of the receivables of Delta. All of the receivables
reflected on the Financial Statements have arisen only from bonafide
transactions entered into in the Ordinary Course of Business.
3. REPRESENTATIONS AND WARRANTIES OF XXXXXX. Xxxxxx represents
and warrants to Delta and Getty that the statements contained in this Section 3
are true, correct and complete as of the date of this Agreement and will be
true, correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 3).
(a) ORGANIZATION. Xxxxxx is a corporation duly incorporated,
validly existing, and in good standing under the laws of Delaware.
(b) AUTHORIZATION OF TRANSACTION. Xxxxxx has all requisite power
and authority to execute and to deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action and no other corporate action or proceeding on the part of
Xxxxxx is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Xxxxxx and constitutes the valid and legally binding obligations
of Xxxxxx, enforceable in accordance with its terms. Except as required by the
Xxxx-Xxxxx-Xxxxxx Act or as otherwise provided herein, Xxxxxx need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Authority in order to consummate the transactions
contemplated by this Agreement.
(c) POWER AND AUTHORITY. Xxxxxx has all requisite corporate or
other power and authority to own, lease and operate its properties and to carry
on their respective businesses as each is now being conducted.
(d) BROKERS' FEES. Xxxxxx shall not have any Liability to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which Getty could become liable
or obligated.
(e) INVESTMENT. Xxxxxx is acquiring the shares of Delta Common
Stock for investment purposes only and not with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act.
(f) ABILITY TO PAY. Xxxxxx has available sufficient funds to pay
the Purchase Price, together with all costs and expenses relevant thereto, and
otherwise to perform its obligations under this Agreement.
15
4. PRE-CLOSING COVENANTS. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing:
(a) GENERAL. Each of the Parties will use all reasonable efforts
to take all action and to do all things necessary, proper, or advisable in
order to consummate and to make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section 6).
(b) NOTICES AND CONSENTS. Delta will give any notices to third
parties, and will use all reasonable efforts to obtain all third-party
consents, that are required for the consummation of the transactions
contemplated hereby or that Xxxxxx may reasonably request in connection with
the matters referred to in Sections 2(l) and 2(s). To the extent, if any,
noted in the Disclosure Schedule as being required, Xxxxxx will give any
notices to third parties, and will use all reasonable efforts to obtain any
third-party consents, that Delta or Getty may reasonably request. Each of the
Parties will (and Getty will cause Delta to) give any notices to, make any
filings with, and use all reasonable efforts to obtain any authorizations,
consents, and approvals of Governmental Authorities in connection with the
matters referred to in Sections 2(b) and 3(b). Without limiting the generality
of the foregoing, each of the Parties will file any Notification and Report
Forms and related material that it may be required to file with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the Xxxx-Xxxxx-Xxxxxx Act, will use all reasonable efforts to
obtain an early termination of the applicable waiting period, and will make any
further filings pursuant thereto that may be necessary, proper, or advisable in
connection therewith.
(c) OPERATION OF BUSINESS. Getty and Delta covenant and agree
that unless otherwise expressly contemplated by this Agreement or consented to
in writing by Xxxxxx, (x) Delta will:
(1) operate its business only in the usual and ordinary
course consistent with past practices;
(2) preserve its business and properties, including its
present operations, physical facilities, working conditions and
relationships with lessors, licensors, suppliers, customers and
employees;
(3) maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear
excepted; and
(4) keep in full force and effect insurance and bonds
comparable in amount and scope of coverage to that currently
maintained;
and (y) Delta will not:
(1) make any declaration, setting aside or payment of
dividends or distributions in respect of shares of Delta's Common
Stock or any redemption, purchase or other acquisition of any of
Delta's securities;
(2) increase or otherwise modify (except as contemplated
by this Agreement) the compensation of its employees including
salaries, bonus and other employee benefits, including severance
payments;
16
(3) sell or otherwise dispose of any real or tangible
property the replacement value of which exceeds $25,000;
(4) make any capital expenditures, other than in the
Ordinary Course of Business, or make any capital expenditures for any
single item in excess of $15,000, without the prior consent of Xxxxxx;
(5) except for borrowings under existing credit facilities
in the Ordinary Course of Business, incur any obligation for borrowed
money or purchase money indebtedness; and
(6) enter any new bids for turnkey or footage drilling
contracts without the prior consent of Xxxxxx, which consent shall not
be unreasonably withheld, provided that Xxxxxx agrees to notify Delta
of its decision with regard to turnkey or footage bids within two
Business Days after Delta notifies Xxxxxx of its desire to bid on such
a contract.
(d) FULL ACCESS. Delta will permit representatives of Xxxxxx to
have full access at reasonable times during normal business hours, in a manner
that will not interfere with the normal business operations of Delta, to all
premises, properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to Delta.
(e) NOTICE OF DEVELOPMENTS. Each Party will give prompt written
notice to the other of any material adverse development causing a breach of any
of its representations and warranties under this Agreement.
(f) 401(k) PLAN. On or before the Closing Date, and effective as
of such date, Delta (i) will withdraw as a participating employer under the
401(k) Plan, and (ii) will cause each Delta Participant (including each
Terminated Employee who is a Delta Participant) to have a fully vested and
nonforfeitable interest in his or her account balance under the 401(k) Plan.
(g) NO SHOPPING. From and after the date of this Agreement until
the termination of this Agreement in accordance with its terms, neither Getty,
any representative or agent of Getty nor any officer, director, employee, agent
or representative of Delta shall, directly or indirectly, solicit or knowingly
encourage, including by way of furnishing information, the initiation of any
inquiries or proposals regarding, or engage in any discussions or enter into
any agreements regarding, any merger, tender offer, sale of shares of capital
stock or similar business combination transactions involving Delta, or any sale
of all or substantially all the assets of Delta.
(h) INSURANCE MATTERS. Delta shall use its reasonable efforts to
obtain an endorsement on its insurance policies naming Xxxxxx and its
subsidiaries and affiliates as additional named insureds effective on the
Closing Date.
5. POST-CLOSING COVENANTS. The Parties agree as follows with
respect to the period following the Closing.
(a) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as the other Party
reasonably may request; provided, however, that this Section 5(a) shall not be
deemed to require
17
either party to expend funds or to incur obligations not otherwise expressly
required pursuant to the Agreement.
(b) XXXXXX' PLAN. As soon as practicable after the Closing Date,
Xxxxxx shall establish or designate a defined contribution plan of its own or
of an affiliate ("Xxxxxx' Plan") that is qualified under sections 401(a) and
501(a) of the Code to receive a transfer of assets and liabilities from the
401(k) Plan, as described in Section 5(c) below. As of the date of the
transfer of assets and liabilities from the 401(k) Plan to Xxxxxx' Plan in
accordance with Section 5(c) below, Xxxxxx' Plan shall satisfy the requirements
of a "qualified plan" under section 401(a) of the Code, and the trust
established under Xxxxxx' Plan shall be exempt from tax pursuant to section
501(a) of the Code.
(c) TRANSFER TO XXXXXX' PLAN. As soon as practicable following
the later of (i) the Closing Date, (ii) the distribution of any amounts
necessary to cause the 401(k) Plan to satisfy the non-discrimination tests of
sections 401(k) and 401(m) of the Code for the 1994 plan year, and (iii) the
establishment or designation of Xxxxxx' Plan, and in any event not later than
March 31, 1995, Getty shall cause to be transferred from the trust established
under the 401(k) Plan to the trust established under Xxxxxx' Plan an amount in
cash equal to the aggregate account balances of the Delta Participants under
the 401(k) Plan determined as of the transfer date in accordance with the
methods of valuation set forth in the 401(k) Plan, together with such records
as are necessary to determine each participant's account balance; provided,
however, that to the extent any Delta Participant owes any amount to the 401(k)
Plan pursuant to the terms of a loan from such plan to such Delta Participant,
an in-kind transfer of such loan shall be made in lieu of the transfer of cash.
From and after the date of such transfer, Xxxxxx shall cause Xxxxxx' Plan to
assume the obligations of the 401(k) Plan with respect to the account balances
transferred with respect to Delta Participants, and the 401(k) Plan shall cease
to be responsible therefor. Xxxxxx and Getty shall cooperate in making all
appropriate Internal Revenue Service filings, if any, in connection with the
transfer described above. The transfer of assets and liabilities from the
401(k) Plan to the Xxxxxx' Plan is intended to constitute a spin-off for
purposes of section 414(l) of the Code and the regulations thereunder. For the
period between the Closing Date and the date of the transfer of assets and
liabilities from the 401(k) Plan to the Xxxxxx' Plan, Xxxxxx, Getty, and Delta
shall cooperate in making appropriate arrangements to continue to permit Delta
Participants who remain employed by Delta or Xxxxxx or any affiliate of Xxxxxx
to make payments on their outstanding loans from the 401(k) Plan, including,
without limitation, implementing payroll deductions from the paychecks of such
Delta Participants and remitting such amounts to the trustee of the 401(k) Plan
in accordance with the existing practice of Delta.
(d) PARTICIPATION IN XXXXXX' RSP. Effective as of the Closing
Date, Xxxxxx and Delta shall extend coverage under the Xxxxxx Industries, Inc.
Retirement Savings Plan (the "Xxxxxx' RSP") to each employee of Delta who is
employed by Delta or Xxxxxx (or a Xxxxxx affiliate that is a participating
employer in the Xxxxxx' RSP) immediately after the Closing Date, who was a
participant in the 401(k) Plan as of the day immediately preceding the Closing
Date, and who satisfies the eligibility requirements of the Nabors' RSP. For
purposes of participation in the Nabors' RSP following the Closing Date, each
employee of Delta shall be credited with service under the Nabors' RSP, for
eligibility and vesting purposes, with the service that they have with Delta or
its affiliates under sections 414 (b), (c), (m) and (o) of the Code as of the
day prior to the Closing Date.
(e) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity practice, plan,
occurrence, event, incident, action,
18
failure to act, or transaction on or prior to the Closing Date involving Delta,
each of the other Parties will cooperate with it and its counsel in the contest
or defense, make available their personnel, and provide such testimony and
access to their books and records as shall be necessary in connection with the
contest or defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefor under Section 7).
(f) CHANGE IN TAX STATUS. Each Party acknowledges that the
consummation of the transactions contemplated hereby will result in the
termination, as of the Closing Date, of Delta's status as an S Corporation
under the Code. Furthermore, each Party acknowledges that in accordance with
section 1362(e) of the Code and the Treasury regulations thereunder (i) the
portion of Delta's taxable year beginning January 1, 1995 and ending on the day
prior to the Closing Date shall be treated as a short taxable year for which
Delta is an S Corporation (the "S short year"), (ii) the portion of Delta's
taxable year beginning on the day following the end of the S short year and
ending on September 30, 1995 shall be treated as a short taxable year for which
Delta is a C Corporation subject to federal income tax imposed by Subtitle A,
Chapter 1 of the Code (the "C short year"), and (iii) that items shall be
allocated between the S short year and the C short year on the basis of Delta's
normal tax accounting method. The Parties agree to provide Getty and those
persons designated by Getty as responsible for the preparation of the Form 1120
S and accompanying schedules required to be filed by Delta with the Internal
Revenue Service for the S short year access to the books and records of Delta
for purposes of preparing the Form 1120 S and accompanying schedules.
(g) EMPLOYEE MATTERS.
(1) As soon as practicable prior to the Closing Date, but
no later than five days prior to the Closing Date, Nabors will
identify and provide written notice to Getty of those salaried
employees of Delta that Delta will continue to employ following the
Closing Date. Those employees who are so identified are referred to
herein as "Continuing Employees." Continuing Employees will be
provided the opportunity to obtain coverage under Nabors' Employee
Benefit Plans, subject to the terms thereof.
(2) Delta shall terminate the employment of all salaried
employees of Delta other than the Continuing Employees effective
immediately prior to the Closing. Such employees are referred to
herein as "Terminated Employees."
(3) Except to the extent accrued on the Closing Balance
Sheet (determined without regard to the subtraction of $1,000,000 from
the amount of such costs), with respect to all employees or former
employees whose employment with Delta (or any person for whose
Liabilities Delta would be responsible through indemnification or
otherwise) ceased on or before the Closing Date (including each
Terminated Employee) and their dependents, Getty shall be responsible
for all related Liabilities (including severance costs and other
Liabilities in respect of Employee Benefit Plans such individuals
participated in or are entitled to participate in prior to the Closing
Date) whether such Liabilities arise on, prior to or after the Closing
Date (collectively, "Former Employee Liabilities"); provided, however,
that Former Employee Liabilities shall not include any Liabilities
assumed by the Nabors' Plan pursuant to Section 5(c). Notwithstanding
the preceding provisions of this paragraph, Getty's liability under
this paragraph with respect to Terminated Employees shall be reduced by
the amount, if any, of the Severance Credit. Subject to the forgoing,
Delta shall retain Liabilities after the Closing Date for the Delta
Drilling Company Special Health and Welfare Plan and for the provision
of the continued medical and dental coverage to the former employees of
Delta and
19
their dependents pursuant to the severance pay program for salaried
employees described in Section 2(o)(4) or section 4980B of the Code and
Part 6 of Title I of ERISA. Notwithstanding anything in this Agreement
to the contrary, Getty's obligation to reimburse Nabors for Former
Employee Liabilities with respect to COBRA and the Delta Drilling
Company Special Health and Welfare Plan and any predecessor plan,
arrangement, or court order relating to such benefits shall survive
until the obligations of Delta with respect to such benefits shall have
ceased to exist.
(4) With respect to Former Employee Liabilities that
relate to the continuation of health insurance under any severance
policy or agreement or COBRA, Nabors agrees to use its best efforts
(with the cooperation of Delta) to obtain quotes for insurance
coverage in its name that would limit the retention or deductible
amount or the amount of self insurance for such Former Employee
Liabilities to $75,000 per individual per year and quotes for full
insurance coverage without any retention or deductible or self
insurance provision with respect to such Former Employee Liabilities.
Nabors shall notify Getty of the quotes it receives in respect of such
insurance coverage. Getty shall have the option prior to the Closing
to elect whether to request that Nabors place such insurance coverage,
and, if so requested, Nabors shall place the coverage that Getty
requests and use its best efforts to keep such coverage or comparable
coverage in place for so long as such Former Employee Liabilities
continue to exist. Any insurance premium paid by Nabors to provide
the supplemental coverage to the extent requested by pursuant to this
Section 5(g)(4) prior to the date of delivery of the Closing Balance
Sheet shall result in a Purchase Price Adjustment pursuant to the
provisions of Section 1(f). Any such insurance premium paid by Nabors
pursuant to this Section 5(g)(4) after delivery of the Closing Balance
Sheet shall be reimbursed by Getty within five Business Days of
Getty's receipt of evidence of the payment of such premiums by Nabors.
Nabors further agrees to use its best efforts to provide for the
continuation of life and disability insurance benefits pursuant to
severance policies or agreements for Terminated Employees on a fully
insured basis (not including self insurance) after the Closing Date.
(5) Prior to the Closing Date, Delta shall amend the
severance pay program for salaried employees described in Section
2(o)(4) so that it permits Delta or any successor to Delta to provide,
at its discretion, the one year or less of continued medical and
dental coverage described therein through wholly or partially self
funded plans, including the self funded medical and dental plan
maintained by Nabors, as well as insured plans.
6. CLOSING CONDITIONS.
(a) CONDITIONS TO OBLIGATION OF NABORS. The obligation of Nabors
to consummate the transactions contemplated hereby is subject to satisfaction
of the following conditions:
(1) the representations and warranties of Getty set forth
in Section 2 shall be true and correct in all material respects at and
as of the Closing Date;
(2) Delta and Getty shall have performed and complied
with all of their respective covenants and agreements hereunder in all
material respects through the Closing;
(3) Nabors and Delta shall have procured all of their
third party consents specified in Section 4(b);
20
(4) no action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (C) affect adversely
the right of Nabors to own Delta Common Stock and to control Delta, or
(D) affect adversely the right of Delta to own its assets and to
operate its business (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);
(5) Getty shall have delivered to Nabors a certificate to
the effect that each of the conditions specified above in Section
6(a)(1)-(4) is satisfied in all respects;
(6) all applicable waiting periods (and any extensions
thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
otherwise been terminated;
(7) Nabors shall have received the resignations,
effective as of the Closing, of each director and officer of Delta;
(8) there shall have not occurred any events or
developments, individually or in the aggregate, resulting in a
Material Adverse Effect with respect to Delta; and
(9) Nabors shall have received the opinion of Xxxxxx &
Xxxxxx L.L.P., dated as of the Closing Date, that this Agreement has
been duly authorized, executed and delivered by Getty and Delta and
assuming due authorization, execution and delivery of this Agreement
by Nabors, this Agreement constitutes a legal, valid and binding
agreement enforceable against Getty and Delta (with respect to
obligators of Delta prior to the Closing) in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and to general principles of equity and other customary
exceptions.
At or prior to the Closing, Nabors may waive in writing any condition specified
in this Section 6(a), to the extent permitted by law.
(b) CONDITIONS TO OBLIGATION OF DELTA AND GETTY. The obligations
of Delta and Getty to consummate the transactions contemplated hereby are
subject to satisfaction of the following conditions:
(1) the representations and warranties of Nabors set
forth in Section 3 shall be true and correct in all material respects
at and as of the Closing Date;
(2) Nabors shall have performed and complied with all of
their respective covenants hereunder in all material respects through
the Closing;
(3) Nabors and Delta shall have procured all of their
third party consents specified in Section 4(b);
(4) no action, suit, or proceeding shall be pending before
any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge
would (A) prevent consummation of any of the transactions contemplated
by this Agreement, or (B)
21
cause any of the transactions contemplated by this Agreement to
be rescinded following consummation (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(5) Nabors shall have delivered to Delta a certificate to
the effect that each of the conditions specified above in Section
6(b)(1)-(4) is satisfied in all respects;
(6) all applicable waiting periods (and any extensions
hereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
otherwise been terminated;
(7) Delta's letter of credit in the approximate amount of
$1,700,000 with The Northern Trust Company and the guarantee of Getty
with regard thereto shall have been terminated without recourse to
Getty; and
(8) Getty shall have received the opinion of Xxxxx &
XxXxxxxx, dated as of the Closing Date, that this Agreement has been
duly authorized, executed and delivered by Nabors and assuming due
authorization, execution and delivery of this Agreement by each of the
other Parties hereto, this Agreement constitutes a legal, valid and
binding agreement enforceable against Nabors in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and to general principles of equity and other customary
exceptions.
At or prior to the Closing, Delta and Getty may waive in writing any condition
specified in this Section 6(b), to the extent permitted by law.
7. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Parties contained in Sections 2 and 3
shall survive the Closing hereunder for the Survival Period.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF NABORS. Getty shall
defend, indemnify and hold Nabors harmless from and against any and all Adverse
Consequences resulting from or arising out of any of the following:
(i) the breach or nonperformance, either partial or total, of any
representation, warranty, covenant or agreement of Getty or Delta
(excluding covenants or agreements to be performed by Delta after the
Closing) in this Agreement, and
(ii) all Liabilities of Delta, including but not limited to Special
Matters, whether or not disclosed on the Disclosure Schedule, whether
or not Known by Delta and whether or not addressed by a representation
or warranty of Getty or Delta herein, that were created, incurred or
arose from facts, events, conditions or circumstances existing on or
before the Closing Date (or arise from a breach or nonperformance by
Getty of a covenant set forth in Section 5 or a Delta severance policy
or agreement in place as of the Closing Date) to the extent, and only
to the extent, such Liabilities are not fully reserved against on the
Closing Balance Sheet. In the case of Liabilities for Taxes, such
Liability shall be considered to be created or incurred on or before
the Closing Date if such Tax relates to (i) a Tax period of Delta
ending on or before the Closing Date, or (ii) a Tax period of Delta
ending after the Closing Date, if any, but only with respect to the
portion of such Tax period that has elapsed
22
through the Closing Date or activities on or before the Closing Date;
provided, that such Liabilities shall not include any Liabilities for
Taxes resulting from any election by Nabors under section 338 of the
Code or any corresponding provisions of applicable state law; and in
the case of Liabilities arising from workers' compensation claims, such
Liability shall be considered to be created or incurred on or before
the Closing Date if such claim for Liabilities relates to illnesses and
injuries sustained on or prior to the Closing Date.
provided, however, that Getty shall have no obligation to indemnify, defend or
hold Nabors harmless with respect to any Adverse Consequences to the extent
such Adverse Consequence has been taken into account in calculating the
Purchase Price adjustment pursuant to Section 1(f), and, provided further, that
Getty shall have no obligation to indemnify, defend or hold Nabors harmless
with respect to any Adverse Consequence resulting from or arising out of a
breach or nonperformance of any representation, warranty, covenant or agreement
of Getty or Delta in this Agreement unless Getty receives notice of such
Adverse Consequence within the applicable Survival Period (or, if the
applicable Survival Period is the statute of limitations period, within 20 days
after the end of the applicable statute of limitations period), and Getty shall
have no obligation to indemnify, defend or hold Nabors harmless with respect to
any Adverse Consequences resulting from or arising out of a Liability of Delta
that was created, incurred or arose from facts, events, conditions or
circumstances existing on or before the Closing Date unless Getty receives
notice of such Adverse Consequence within two years of the Closing Date or with
respect to an Adverse Consequence resulting from or arising out of a Liability
of Delta involving any Special Matter unless Getty receives notice of such
Adverse Consequence within 20 days after the expiration of the applicable
statute of limitations. Notwithstanding anything in this Agreement to the
contrary, Getty shall not have any obligation to defend, indemnify and hold
Nabors harmless against any Adverse Consequences until Nabors has suffered
Adverse Consequences for which Nabors are entitled to indemnification hereunder
in excess of a $200,000 aggregate threshold (at which point Getty will be
obligated to indemnify Nabors from and against the full amount of such Adverse
Consequences including the initial $200,000 of Adverse Consequences). Further,
in no event shall Getty's aggregate liability for all Adverse Consequences
resulting from or arising out of breaches of the representations, warranties,
covenants or agreements set forth in Sections 2(d), 2(o), 2(p) and 2(u) and
Liabilities arising from a Special Matter exceed the aggregate value of the
Purchase Price as adjusted in accordance with Section 1(f), and in no event
shall Getty's aggregate liability for all Adverse Consequences resulting from
or arising out of all other representations, warranties, covenants or
agreements set forth in this Agreement and for any Liabilities of Delta that
were created or incurred on or before the Closing Date (other than a Liability
arising from a Special Matter) exceed $4,000,000. Notwithstanding anything
herein to the contrary, Getty's liability for any Adverse Consequences
resulting from or arising out of the representations, warranties, covenants and
agreements set forth in Section 2(o)(13) or Section 5(g)(3) shall be unlimited
in amount.
(c) INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF GETTY. Nabors
shall defend, indemnify and hold Getty harmless from and against any and all
Adverse Consequences resulting from or arising out of any of the following:
(i) the breach or non-performance, either partial or
total, of any representation, warranty, covenant, or agreement
of Nabors in this Agreement, and
(ii) all Liabilities of Delta that are created, incurred
or arose from facts, events, conditions or circumstances
existing after the Closing Date;
23
provided, however, that Nabors shall have no obligation to indemnify, defend or
hold Getty harmless with respect to any Adverse Consequences resulting from or
arising out of a breach or non-performance of any representation, warranty,
covenant or agreement of Nabors in this Agreement unless Nabors receives notice
of such Adverse Consequence within the applicable Survival Period.
(d) MATTERS INVOLVING THIRD PARTIES.
(1) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party
Claim") that may give rise to a claim for indemnification against any
other Party (the "Indemnifying Party") under this Section 7, then the
Indemnified Party shall promptly notify the Indemnifying Party thereof
in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(2) The Indemnifying Party will have the right to defend
the Indemnified Party against the Third Party Claim with counsel of
its choice reasonably satisfactory to the Indemnified Party so long as
(A) the Indemnifying Party notifies the Indemnified Party in writing
within 15 days after the Indemnified Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify the
Indemnified Party from and against the entirety of any Adverse
Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party
Claim; (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the
Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations
hereunder; (C) the Third Party Claim involves only money damages and
does not seek an injunction or other equitable relief; (D) settlement
of, or an adverse judgment with respect to, the Third Party Claim is
not in the good faith judgment of the Indemnified Party, likely to
establish a precedential custom or practice materially adverse to the
continuing business interests of the Indemnified Party; and (E) the
Indemnifying Party conducts the defense of the Third Party Claim
actively and diligently.
(3) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7(d)(2),
(A) the Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third Party
Claim, (B) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party
(which consent will not be withheld unreasonably); and (C) the
Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (which
consent will not be withheld unreasonably).
(4) In the event any of the conditions in Section 7(d)(2)
is or becomes unsatisfied, however, (A) the Indemnified Party may
defend against the Third Party Claim in any manner it reasonably may
deem appropriate; provided, however, that the Indemnified Party shall
not consent to the entry of any judgment or enter into any settlement
or agreement to settle a Third Party Claim without the prior written
consent of the Indemnifying Party which consent shall not be
unreasonably withheld; (B) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees
and expenses); and (C) the Indemnifying Party will remain responsible
for any Adverse Consequences the Indemnified Party actually suffers
24
resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim to the fullest extent provided in this
Section 7.
(e) SOLE REMEDY FOR BREACHES OF THIS AGREEMENT. Following the
Closing, the foregoing indemnification provisions will be the sole remedy of
the Parties for breaches of the representations, warranties, covenants and
agreements contained herein, and each Party hereby waives any other statutory,
equitable, or common law remedy any Party would otherwise have for breach of
this Agreement.
8. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Parties may terminate this
Agreement as provided below:
(1) Nabors, Delta and Getty may terminate this Agreement
by mutual written consent at any time prior to the Closing;
(2) Nabors may terminate this Agreement by giving written
notice to Delta and to Getty at any time prior to the Closing if: (A)
in the event Delta has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, Nabors
has notified Delta and Getty of the breach, and the breach has
continued without cure for a period of 30 days after the notice of
breach; or (B) the Closing shall not have occurred on or before
February 15, 1995, by reason of the failure of any condition precedent
under Section 6(a) (unless the failure results primarily from a breach
of any representation, warranty, covenant or agreement of Nabors
contained in this Agreement), provided that such date may be extended
to March 15, 1995 by Getty by written notice to Nabors if the failure
to consummate the stock purchase by February 15, 1995 shall not have
been due to Getty or Delta's willful action or intentional failure to
act; and
(3) Delta and Getty may terminate this Agreement by
giving written notice to Nabors at any time prior to the Closing if:
(A) in the event Nabors has breached any representation, warranty, or
covenant contained in this Agreement in any material respect, Delta or
Getty has notified Nabors of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach; or
(B) the Closing shall not have occurred on or before February 15,
1995, by reason of the failure of any condition precedent under
Section 6(b) (unless the failure results primarily from a breach of
any representation, warranty, covenant or agreement of Delta or Getty
contained in this Agreement), provided that such date may be extended
to March 15, 1995 by Nabors by written notice to Getty if the failure
to consummate the stock purchase by February 15, 1995 shall not have
been due to Nabors' willful action or intentional failure to act.
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to Section 8(a), all rights and obligations of the Parties hereunder
shall terminate without any Liability of either Party to the other Party,
except that nothing herein shall relieve any party from liability for any
breach of this Agreement and any termination shall not be deemed to be a waiver
of any applicable remedy for such breach.
25
9. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written
approval of Nabors and Delta; provided, however, that either Party may make any
public disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly traded securities (in
which case the disclosing Party will use all reasonable efforts to advise the
other Party prior to making the disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
heirs, successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the other Parties hereto.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) NOTICES. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be sent by (i) personal delivery
(including courier service), (ii) telecopier during normal business hours to
the number indicated, or (iii) registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set
forth below (any communication shall be deemed given upon receipt):
IF TO GETTY:
Xxxxxx X. Getty
x/x Xxxxxxx Xxxxxxx
Xxxxx 0000
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
26
WITH A COPY TO:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxxx
Telecopier: (000) 000-0000
IF TO NABORS:
Xxxxxx Industries, Inc.
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, President
Telecopier No.: (000) 000-0000
WITH A COPY TO:
Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
Any Party may change its telecopier number or its address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
(g) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Texas without giving
effect to any choice or conflict of Law provision or rule (whether of the State
of Texas or any other jurisdiction) that would cause the application of the
Laws of any jurisdiction other than the State of Texas. The Parties agree that
any legal action or proceeding in connection with this Agreement and the
transactions contemplated hereby shall be brought in the courts of the State of
Texas located in Xxxxxx County, Texas or of the United States of America for
the Southern District of Texas, and the parties hereto submit and agree to such
exclusive jurisdiction and further agree that any summons or other process may
be served by registered mail to the address set forth in Section 9(f) hereof.
(h) AMENDMENTS AND WAIVERS. No amendments of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
each Party hereto. No waiver by either Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(i) 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.
27
(j) EXPENSES. Each of the Parties will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
(k) 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 shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring either Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(l) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(m) SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement shall be specifically enforceable and the parties hereto hereby waive
any defense to such a proceeding in equity that monetary damages are
sufficient.
28
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
DELTA DRILLING COMPANY
By: /s/ X. X. Xxxxxxxxxxx
---------------------
Name: X.X. Xxxxxxxxxxx
Title: Vice President - Finance
XXXXXX X. GETTY
*_________________________________
*By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Attorney-in-Fact for
Xxxxxx X. Getty
