Exhibit 10.14
ASSET PURCHASE
AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the
“ Agreement ”) is entered as of the 2
nd
day of September, 2005,
but made effective as of the 1st day of August, 2005 (the
“ Effective Date ”), by and between THOMAS
DRILLING CO., an Oklahoma corporation (the “ Seller
”) and BRONCO DRILLING COMPANY, INC., a Delaware corporation
(the “ Buyer ”). The Seller and the Buyer may be
separately referred to in this Agreement as a “ Party
” or collectively as the “ Parties
”.
WITNESSETH:
WHEREAS, the Seller desires to sell
to the Buyer, and the Buyer desires to purchase from the Seller,
certain assets of the Seller 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 Seller and the Buyer hereby
agree as follows:
1. PURCHASE AND SALE .
Subject to the terms and conditions described in this Agreement,
the Seller hereby agrees to sell, transfer, convey and deliver to
the Buyer, and the Buyer hereby agrees to purchase from the Seller,
all of the Seller’s 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, the Buyer
shall assume and become responsible for the contracts and
obligations of the Seller 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 Seller except for the
Assumed Liabilities, and the Seller shall remain liable for all
obligations other than the Assumed Liabilities.
2. PURCHASE PRICE . The Buyer
shall pay to the Seller the aggregate amount of Sixty-eight Million
and 00/100 Dollars ($68,000,000.00) for the Acquired Assets (the
“ Purchase Price ”). The Purchase Price shall be
paid by certified funds or wire transfer at Closing (as hereafter
defined) to such account as shall be designated by the Seller at
least twenty-four (24) hours prior to Closing.
3. REPRESENTATIONS AND WARRANTIES
OF THE SELLER . The Seller hereby represents and warrants 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
Seller is a corporation that is duly organized, validly existing
and in good standing under the laws of the State of Oklahoma 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 where the
failure to so register or qualify would not have a Material Adverse
Effect (defined below). The Seller has full power and authority to
own, lease and operate its properties and to carry on its business
as now being conducted, to own or use the properties and assets
(including the Acquired Assets) that it purports to own or use and
to perform all of its 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 Seller
has full power and authority to execute and deliver, and to perform
its duties and obligations under, this Agreement and each other
agreement, document and instrument to be executed or delivered by
the Seller contemplated by this Agreement collectively, (the
“ Seller Documents ”). The execution and
delivery of, the performance of their obligations under, and the
consummation of the transactions contemplated by, this Agreement
and any Seller Document, have been duly authorized by all necessary
action on the part of the Seller. This Agreement is, and the Seller
Documents will constitute, the legal, valid and binding obligation
of the Seller and is, and the Seller Documents will be, enforceable
against the Seller in accordance with its 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 .
To the Seller’s knowledge, the execution and delivery of this
Agreement and each Seller Document and the consummation of the
transactions contemplated by this Agreement and the Seller
Documents will not: (i) violate or conflict with any provision
of the Seller’s 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 Seller or the
Acquired 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 Seller is a party or
bound or to which any of the Acquired 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 the
Acquired Assets; or (v) require the Seller 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 Seller Documents.
3.4. Litigation . Except as
disclosed on Schedule 3. 4, 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 Seller relating to, involving or affecting any of the
Acquired Assets or that would seek to
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question, delay, prevent or
materially impair the ability of the Seller to perform its 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 Seller or the Acquired Assets.
3.5. Taxes . To the
Seller’s knowledge, except for any taxes which may be imposed
or assessed upon the Seller or the Acquired Assets with respect to
the transactions contemplated by this Agreement, 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
Seller on or prior to the Effective Date, or for which the Seller
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. To the
Seller’s knowledge, 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, and no
deficiency for any Tax or claim for additional Taxes relating to or
affecting in any manner any of the Seller’s business or the
Acquired Assets has been proposed, asserted or assessed against the
Seller. To the Seller’s knowledge, there are no liens on any
of the Acquired Assets with respect to Taxes, other than liens for
taxes not yet due and payable, and there is no action, suit, taxing
authority proceeding, or audit now in progress, pending or
threatened against the Seller or involving the Acquired
Assets.
3.6. Compliance with Laws and
Permits . To the Seller’s knowledge, the Seller has
conducted its business so as to comply with, and is 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, and the Seller has all of the licenses, permits and other
governmental authorizations required for the operation of its
business and the Acquired Assets (collectively, the “
Permits ”), which Permits are identified on
Schedule 3.6 .
3.7. Title to and Adequacy of
Assets . The Seller has 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. The
operating rigs comprising a portion of the Acquired Assets have
been maintained in accordance with normal industry practice, are in
good and safe operating condition and repair (ordinary wear and
tear excepted), and are adequate for the uses to which they are
being put. As to all other assets comprising the Acquired Assets,
the Seller makes no warranty, whether express or implied, and is
conveying such assets “as is” and “where
is”.
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3.8. Assumed Liabilities . To
the Seller’s knowledge, 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 Seller or the other party. As to any consents that are required
under any Assumed Liabilities for the consummation of the
transactions contemplated by this Agreement and the Seller
Documents, the Buyer and the Seller shall use their respective best
efforts to obtain such consents. To the Seller’s knowledge,
the Assumed Liabilities are in full force and effect and are a
valid and binding obligation of the Seller and each other party
thereto, and are enforceable in accordance with its terms, and will
immediately following the Closing be valid, binding and enforceable
by the Buyer as assignee thereof in accordance with its 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.
3.9. Insurance . The assets
and the business of the Seller 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
Seller operates. Schedule 3.9 contains a true and complete
list of all policies providing insurance for the Acquired Assets
(including the name insured).
3.10. Environmental Matters .
To the Seller’s knowledge, all activities of the Seller have
been conducted in substantial compliance with, and all properties
leased or operated by the Seller with respect to the Acquired
Assets on or prior to the Closing Date substantially comply with,
all Environmental, Health, and Safety Requirements (as defined
below in this Section 3.10 ) applicable to the Seller.
To the Seller’s knowledge, the Seller has obtained, has
complied with, and is in compliance with all Permits that are
required pursuant to Environmental, Health, and Safety Requirements
for the occupation of its facilities and the operation of its
business with respect to 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. To the Seller’s knowledge, the Seller has not received
any written or oral notice, report or other information regarding
any actual or alleged violation of Environmental, Health, and
Safety Requirements with respect to the Acquired Assets on or prior
to the Closing Date, and the Seller has not treated, recycled,
stored, disposed of, arranged for or permitted the disposal of,
transported, handled, or released any substance, including any
Hazardous Materials (as defined below in this
Section 3.10 ), or owned or operated any property or
facility with respect to the Acquired Assets on or prior to the
Acquired Assets (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. To the
Seller’s knowledge, 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. To the Seller’s
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knowledge, no Hazardous Material is
located or is suspected to be located in the soil, groundwater,
surface water, or waterways at or under any property now or
previously owned, leased or operated by the Seller with respect to
the Acquired Assets on or prior to the Closing Date 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.
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.
3.11. Brokers . No broker,
finder or other person is entitled to any brokerage fees,
commissions or finder’s fees in connection with the
transactions contemplated by this Agreement.
3.12. No Pending Transactions
. Except for this Agreement, the Seller is not a party to or bound
by any agreement, undertaking, commitment, contract to sell,
transfer, or otherwise dispose of any or all of its asset
(including the Acquired Assets).
3.13. Full Disclosure . To
the Seller’s knowledge, all documents and other papers
delivered by or on behalf of the Seller in connection with this
Agreement and the Seller Documents and the transactions
contemplated hereby and thereby are true, complete and correct, and
the information furnished by or on behalf of the Seller in
connection with
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this Agreement and the transactions
contemplated hereby and thereby does not contain any untrue
statement of a material fact and does 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
Seller 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 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 and obligations under, this Agreement and each other
agreement, document and instrument to be executed or delivered by
the Buyer contemplated by this Agreement (collectively, the “
Buyer Documents ”). The execution and delivery of, the
performance of its obligations under, and the consummation of the
transactions contemplated by, this Agreement and any Buyer
Document, have been duly authorized by all necessary action on the
part of the Buyer. This Agreement is, and the Buyer Documents will
constitute, the legal, valid and binding obligation of the Buyer
and is, and the Buyer Documents will be, enforceable against the
Buyer in accordance with its 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.
4.3. No Conflicts; Consents .
The execution and delivery of this Agreement and each Buyer
Document and the consummation of the transactions contemplated by
this Agreement and the Buyer Documents will not: (i) violate
or conflict with any provision of the Buyer’s 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
Buyer or its 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 Buyer is a party or
bound or to which any of its assets are subject; or
(iv) require the Buyer 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
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to consummate the transactions
contemplated by this Agreement or the Buyer Documents, except the
HSR Act (as hereafter defined).
4.4. 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 Buyer relating to,
involving or affecting any of its assets or that would seek to
question, delay, prevent or materially impair the ability of the
Buyer to perform its duties or obligations under, or to consummate
the transactions contemplated by, this Agreement.
4.5. Brokers . No broker,
finder or other person is entitled to any brokerage fees,
commissions or finder’s fees in connection with the
transactions contemplated by this Agreement.
4.6. Full Disclosure . All
documents and other papers delivered by or on behalf of the Buyer
in connection with this Agreement and the Buyer Documents and the
transactions contemplated hereby and thereby are true, complete and
correct. The information furnished by or on behalf of the
Buyer
