Exhibit 10.13
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the
“ Agreement ”) is entered as of the 15
th
day of September, 2005,
but made effective as of the 1st day of September, 2005 (the
“ Effective Date ”), by and between EAGLE
DRILLING L.L.C., an Oklahoma limited liability company (“
Eagle ”), THORNTON DRILLING EQUIPMENT LLC, an Oklahoma
limited liability company (“ Thornton ”,
RIVERSIDE OILFIELD EQUIPMENT LLC, an Oklahoma limited liability
company (“ Riverside ”, with Eagle and Thornton
being collectively referred to as the “Sellers”), and
BRONCO DRILLING COMPANY, INC., a Delaware corporation (the “
Buyer ”). The Sellers and the Buyer may be separately
referred to in this Agreement as a “ Party ” or
collectively as the “ Parties ”.
WITNESSETH
:
WHEREAS, the Sellers desire to sell
to the Buyer, and the Buyer desires to purchase from the Sellers,
certain assets of the Sellers in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration for
the mutual promises and conditions contained in this Agreement, and
other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Sellers and the Buyer hereby
agree as follows:
1. PURCHASE AND SALE .
Subject to the terms and conditions described in this Agreement,
the Sellers hereby agree to sell, transfer, convey and deliver to
the Buyer, and the Buyer hereby agrees to purchase from the
Sellers, all of the Sellers’ right, title and interest in and
to the assets and property described in
Exhibit ”A” (the “ Acquired Assets
”), free and clear of any and all liens, security interests
and encumbrances of any type or nature whatsoever. In addition to
the Acquired Assets, at Closing (as hereafter defined), the Buyer
shall assume and become responsible for the contracts and
obligations of the Sellers identified on Exhibit “B”
(collectively, the “ Assumed Liabilities ”). The
Buyer shall not assume or have any obligation under this Agreement
with respect to any other obligation of the Sellers except for the
Assumed Liabilities, and the Sellers shall remain liable for all
obligations other than the Assumed Liabilities.
2. PURCHASE PRICE . The
Buyer shall pay to the Sellers the aggregate amount of Fifty
Million and 00/100 Dollars ($50,000,000.00) (The purchase price is
to be adjusted by agreement for any inventory and rig parts
reserved by the Sellers and excluded from this transaction, by
mutual agreement.) for the Acquired Assets (the “ Purchase
Price ”), which amount shall be paid to the Sellers in
cash or by wire transfer at Closing (as hereafter
defined).
3. REPRESENTATIONS AND WARRANTIES
OF SELLER . The Sellers hereby represent and warrant to the
Buyer that the following statements are true and correct as of the
Effective Date and will be true and correct as of the Closing Date
(as hereafter defined).
3.1. Organization . The
Sellers are limited liability companies that are duly organized,
validly existing and in good standing under the laws of the State
of Oklahoma and are duly registered or qualified to do business and
in good standing in each jurisdiction in which the nature of their
business or properties requires such registration
or qualification, except where the
failure to so register or qualify would have a Material Adverse
Effect (as hereafter defined). The Sellers have full power and
authority to own, lease and operate their properties and to carry
on their businesses as now being conducted, to own or use the
properties and assets that they purports to own or use and to
perform all of their obligations under the Assumed Liabilities. For
purposes of this Agreement, “ Material Adverse Effect
” shall mean any state or states of fact, condition or
conditions, event or events, circumstance or circumstances, change
or changes, or effect or effects that individually or in the
aggregate (including, without limitation, an aggregate combination
of one or more of the foregoing whether or not related to each
other or involving or affecting the same or different
representations, warranties and/or covenants) could be materially
adverse to (i) the business, condition (financial or
otherwise), results of operations or prospects of the business or
the assets of the applicable Party, or (ii) the ability of the
applicable Party to consummate the transactions contemplated by
this Agreement.
3.2. Authority . The Sellers
have full power and authority to execute and deliver, and to
perform their duties and obligations under, this Agreement and each
other agreement, document and instrument to be executed or
delivered by the Sellers contemplated by this Agreement
collectively, (the “ Sellers’ Documents
”). The execution and delivery of, the performance of their
obligations under, and the consummation of the transactions
contemplated by, this Agreement and any Sellers’ Documents,
have been duly authorized by all necessary action on the part of
the Sellers. This Agreement is, and the Sellers’ Documents
will constitute, the legal, valid and binding obligations of the
Sellers and is, and the Sellers’ Documents will be,
enforceable against the Sellers in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency,
or other similar laws affecting the enforcement of creditors’
rights generally and except that the availability of equitable
remedies, including specific performance, may be subject to the
discretion of the court before which any proceeding may be
brought.
3.3. No Conflicts; Consents .
The execution and delivery of this Agreement and each
Sellers’ Document and the consummation of the transactions
contemplated by this Agreement and the Sellers’ Documents
will not: (i) violate or conflict with any provision of the
Sellers’ organizational documents, as amended;
(ii) violate or conflict with any constitution, statute,
regulation, rule, injunction, judgment, order, permit, decree,
ruling, charge, or other restriction of any government,
governmental agency, court or arbitrator to which the Sellers or
their assets are subject; (iii) conflict with, result in a
breach of, constitute a default under (or with notice or the lapse
of time or both could result in a breach of or constitute a
default), result in the acceleration of, create in any party the
right to accelerate, terminate, modify, or cancel, or require any
notice or consent under any agreement, contract, lease, license,
instrument, or other arrangement to which the Sellers are a party
or bound or to which any of their assets are subject;
(iv) that could result in the creation or imposition of any
lien, security interest or encumbrance in, to or on any of their
assets (including the Acquired Assets); or (v) require the
Sellers to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or
governmental agency, creditor or other third party in order to
consummate the transactions contemplated by this Agreement or the
Sellers’ Documents.
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3.4. Litigation . There are
no claims, demands, filings, hearings, notices of violation,
proceedings, notices or demand letters, investigations,
administrative proceedings, civil, criminal or other actions,
litigation, suits, mediations, arbitrations or other legal
proceedings pending or threatened against the Sellers, or that
relate to, involve or affect any of their assets, or that would
seek to question, delay, prevent or materially impair the ability
of the Sellers to perform their duties or obligations under, or to
consummate the transactions contemplated by, this Agreement. There
are no outstanding judgments, orders, writs, injunctions,
indictments or informations, grand jury subpoenas or civil
investigative demands, plea agreements, stipulations, awards or
decrees of any court, arbitrator or any federal, state, municipal
or other governmental department, commission, board, agency or
instrumentality against or relating to the Sellers or their
assets.
3.5. Taxes . All taxes, fees,
assessments and charges imposed by the United States or by any
foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or
by any other taxing authority, which are due or payable by the
Sellers on or prior to the Effective Date, or for which the Sellers
may be liable on or prior to the Effective Date, and all interest
and penalties thereon (collectively, “ Taxes ”
or “ Tax ”), have been paid in full, or, if not
due on or prior to the Effective Date but due on or prior to the
Closing Date, will be timely paid in full when due. All Tax returns
required to be filed in connection therewith have been, or will be
timely and accurately prepared in all material respects and filed
or if not due on or prior to the Effective Date will be timely and
duly made. No deficiency for any Tax or claim for additional Taxes
relating to or affecting in any manner any of the Sellers’
business or the Acquired Assets has been proposed, asserted or
assessed against the Sellers. There are no liens on any of the
Acquired Assets with respect to Taxes, other than liens for taxes
not yet due and payable. There is no action, suit, taxing authority
proceeding, or audit now in progress, pending or threatened against
the Sellers or involving the Acquired Assets.
3.6. Compliance with Laws and
Permits . The Sellers have conducted their business, the Yard
(as hereafter defined) and the Acquired Assets so as to comply
with, and are in compliance with, all applicable laws, rules and
regulations, of all applicable governmental authorities, including,
without limitation, any applicable laws, rules, regulations,
ordinances, codes, orders, judgments or decrees as to
environmental, health and/or safety matters, the noncompliance with
which could have a Material Adverse Effect. The Sellers’ have
all of the licenses, permits and other governmental authorizations
required for the operation of their business, the Yard and the
Acquired Assets (collectively, the “ Permits ”),
and each Permit is identified on Schedule 3.6
.
3.7. Title to and Adequacy of
Assets . The Sellers have good and indefeasible title to the
Acquired Assets and shall convey such title to the Buyer, free and
clear of all liens, security interests and encumbrances. Buyer, as
a drilling contractor, is a sophisticated purchaser of the Acquired
Assets and has inspected the working rigs and the equipment in the
Yard, and except as expressly provided in this Agreement, the Buyer
is purchasing the Acquired Assets on an “as is” ,
“where is” basis based on its inspection and knowledge
of drilling equipment and drilling rigs and not on any
representation made
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by the Sellers as to the physical
condition, design, operation or fitness for a particular purpose.
The Sellers are selling the equipment without warranty, either
express or implied.
3.8. Assumed Liabilities .
There is not, under any of the Assumed Liabilities, any existing
default or event of default which, with or without due notice or
lapse of time or both, would constitute a material default or event
of default on the part of the Sellers or the other party. No
consents are required under any of the Assumed Liabilities for the
consummation of the transactions contemplated by this Agreement and
the Sellers’ Documents. The Assumed Liabilities are in full
force and effect and are valid and binding obligations of the
Sellers and, to the Sellers’ knowledge, each other party
thereto, and are enforceable in accordance with their terms, and
will immediately following the Closing be valid, binding and
enforceable by the Buyer as assignee thereof in accordance with
their terms, except as any such enforceability may be limited by
the effect of bankruptcy, insolvency or similar laws affecting
creditors’ rights generally or by general principles of
equity. While drilling contracts are considered an asset, they
could also be considered a contractual liability. The parties
understand that consent is required to assign the contracts to the
Buyer. A failure of consent by any of the operators to the drilling
contracts shall not be considered a material default for purposes
of this Agreement.
3.9 Employees . Schedule
3.9 is a true and complete list of the name of each individual
who is employed for, or retained or compensated by the Sellers as
an employee, independent contractor or consultant, in connection
with the maintenance, repair or operation of the Acquired Assets
(the “ Employees ”) along with his or her
compensation. Except as set forth on Schedule 3.9 ,
(i) the Sellers have paid or made provision for the payment of
(and will pay when due) all salaries, commissions and accrued wages
of the Employees (including accrued vacation pay and sick leave) up
to the Closing Date; (ii) the Sellers have complied with all
applicable laws, rules and regulations relating to the employment
of labor, including those relating to wages, hours, unemployment
insurance, collective bargaining and the payment and withholding of
taxes for all Employees; (iii) the Sellers have withheld all
amounts required by law or agreement to be withheld from the wages
or salaries of the Employees; and (iv) the Sellers are not
liable for any arrears of wages or other taxes or penalties for
failure to comply with any of the foregoing to the extent they are
applicable to the Employees or any of its former employees. There
is not pending or, to the Sellers’ knowledge, threatened, any
labor dispute, strike, work stoppage or union organizing effort,
and the Sellers are not a party to any agreement with a labor union
or other labor representative of any Employee.
3.10 Insurance . The assets
and the business of the Sellers are insured and will be so insured
through the Closing Date, in amounts and against risks consistent
with levels and types commonly used in the industry in which the
Sellers operate. The Sellers shall furnish copies of their
insurance to Buyer and in the event Buyer does not consider the
insurance sufficient, Buyer will obtain additional insurance. In
the event of any of the Acquired Assets are damaged and such damage
is covered by insurance, such event shall not be considered a
“Material Adverse Effect” as set forth in
Section 3.1.
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3.11 Environmental Matters .
All activities of the Sellers have been conducted in substantial
compliance with, and the Yard and all other properties leased or
operated by the Sellers substantially comply with, all
Environmental, Health, and Safety Requirements (as hereafter
defined) applicable to the Sellers or the Acquired Assets. The
Sellers have obtained, have complied with, and are in compliance
with all Permits that are required pursuant to Environmental,
Health, and Safety Requirements for the occupation of the Yard and
their other facilities and the operation of their business, the
Yard and the Acquired Assets, and such Permits are in full force
and effect, free from breach, and the consummation of the
transactions contemplated by this Agreement will not affect them.
The Sellers have not received any written or oral notice, report or
other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements. The Sellers have
not treated, recycled, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or released any
substance, including any Hazardous Materials (as hereafter
defined), on the Yard or any other property or facility owned or
operated by the Sellers (and no such property or facility is
contaminated by any such substance) in a manner that has given or
would give rise to any damages, including any damages for response
costs, corrective action costs, personal injury, property damage or
natural resources damages, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Solid Waste Disposal Act, as amended, or any other
Environmental, Health, and Safety Requirements. The consummation of
the transactions contemplated by this Agreement will not result in
any liabilities or damages for site investigation or cleanup, or
require any consent or approval, pursuant to any Environmental,
Health, and Safety Requirements, including any so-called
“transaction-triggered” or “responsible property
transfer” requirements. No Hazardous Material is located or
is suspected to be located in the soil, groundwater, surface water,
or waterways at or under the Yard or any other property now or
previously owned, leased or operated by the Sellers in quantities
or concentrations sufficient to require investigation, removal or
remediation under the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, or any other federal,
state or local law.
For purposes of this Agreement,
“ Hazardous Material ” shall mean any hazardous
or toxic substance, material, pollutant or waste which is regulated
by any federal, state or local governmental authority, including,
but not limited to, the following as defined by the cited laws or
regulations implementing the cited laws: “ hazardous
substances ” and “ pollutants or
contaminants ” as defined under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended,
42 U.S.C. § 9601 et seq.; “ hazardous waste
” as defined under the Solid Waste Disposal Act, as amended,
42 U.S.C. § 6901 et seq.; air pollutants regulated under
the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.;
“ pollutants ” as defined under the Clean Water
Act, as amended, 33 U.S.C. § 1251 et seq.; any pesticide
as defined by the Federal Insecticide, Fungicide, and Rodenticide
Act, as amended, 7 U.S.C. § 136 et seq., any hazardous
chemical substance or mixture or imminently hazardous substance or
mixture regulated by the Toxic Substances Control Act, as amended,
15 U.S.C. § 2601 et seq.; any substance listed in the
United States Department of Transportation Table at 49 CFR 172.101;
any petroleum produce, any explosives, any radioactive material and
any asbestos containing material.
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For purposes of this Agreement,
“ Environmental, Health, and Safety Requirements
” shall mean all orders, contracts, laws, and programs
(including those promulgated or sponsored by industry associations,
insurance companies, and risk management companies) concerning or
relating to public health and safety, worker/occupational health
and safety, and pollution or protection of the environment,
including those relating to the presence, use, manufacturing,
refining, production, generation, handling, transportation,
treatment, recycling, transfer, storage, disposal, distribution,
importing, labeling, testing, processing, discharge, release,
threatened release, control, or other action or failure to act
involving cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise, or
radiation.
3.12 Real Property . An
entity related to the Sellers presently owns certain real property
(consisting of approximately 13 acres more or less) and
improvements situated thereon that are physically located at 693
Sycamore Rd., Norman, OK 73072 (the “ Yard ”),
and all buildings, fixtures and improvements situated on or affixed
to the Yard are in good operating condition, except for ordinary
wear and tear. Such entity has received all permits, licenses,
certificates, approvals, consents, notices, waivers, franchises,
registrations, filings, or other similar authorizations required by
any applicable law, governmental body or contract, required in
connection with the Yard, and such entity is not in violation of
any zoning, building or safety ordinance, regulation or requirement
or other law or regulation applicable to the Yard.
3.13 Brokers . No broker,
finder or other person is entitled to any brokerage
fees.
3.14 No Pending Transactions
. Except for this Agreement, the Sellers are not a party to or
bound by any agreement, undertaking, commitment, contract to sell,
transfer, or otherwise dispose of any or all of their
asset.
3.15 Full Disclosure . All
documents and other papers delivered by or on behalf of the Sellers
in connection with this Agreement and the Sellers’ Documents
and the transactions contemplated hereby and thereby are true,
complete and correct. The information furnished by or on behalf of
the Sellers in connection with this Agreement and the transactions
contemplated hereby and thereby do not contain any untrue statement
of a material fact and do not omit to state any material fact
necessary to make the statements made, in the context in which they
were made, not false or misleading.
4 REPRESENTATIONS AND WARRANTIES
OF BUYER . The Buyer hereby represents and warrants to the
Sellers that the following statements are true and correct as of
the Effective Date and will be true and correct as of the Closing
Date.
4.1 Organization . The Buyer
is a corporation that is duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly
registered or qualified to do business and in good standing in each
jurisdiction in which the nature of its business or properties
requires such registration or qualification, except
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where the failure to so register or
qualify would have a Material Adverse Effect. The Buyer has full
power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and to own or use the
properties and assets that it purports to own or use.
4.2 Authority . The Buyer has
full power and authority to execute and deliver, and to perform its
duties
