EXHIBIT 99.1
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ASSET PURCHASE AGREEMENT
by and between
UNIT CORPORATION,
▇▇▇▇▇▇ DRILLING COMPANY NORTH AMERICA, INC.
and
▇▇▇▇▇▇ DRILLING COMPANY
August 12, 1999
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS............................................................................. 1
SECTION 1.01 Definitions................................................................................ 1
ARTICLE II PURCHASE AND SALE OF ASSETS.................................................................... 4
SECTION 2.01 Assets to be Purchased..................................................................... 4
SECTION 2.02 Excluded Assets............................................................................ 5
SECTION 2.03 Assumed Liabilities........................................................................ 6
SECTION 2.04 Limitation of Liabilities.................................................................. 6
SECTION 2.05 Limitation on Assignments.................................................................. 7
SECTION 2.06 Delivery................................................................................... 7
SECTION 2.07 Other Funds Received....................................................................... 8
ARTICLE III PURCHASE PRICE................................................................................ 8
SECTION 3.01 Consideration for the Purchased Assets..................................................... 8
SECTION 3.02 Allocation of Purchase Consideration....................................................... 8
ARTICLE IV THE CLOSING.................................................................................... 8
SECTION 4.01 Time and Place of Closing.................................................................. 8
SECTION 4.02 Deliveries by Seller....................................................................... 8
SECTION 4.03 Deliveries by Buyer........................................................................ 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER........................................................ 9
SECTION 5.01 Corporate Existence and Power.............................................................. 9
SECTION 5.02 Corporate Authorization; Etc............................................................... 9
SECTION 5.03 Non-Contravention.......................................................................... 10
SECTION 5.04 Ownership of Rigs and Other Equipment...................................................... 10
SECTION 5.05 [Reserved]................................................................................. 10
SECTION 5.06 Contracts.................................................................................. 10
SECTION 5.07 Litigation................................................................................. 11
SECTION 5.08 Governmental Approval...................................................................... 11
SECTION 5.09 Compliance With Laws....................................................................... 11
SECTION 5.10 Employee Matters........................................................................... 11
SECTION 5.11 Real Property.............................................................................. 12
SECTION 5.12 Environmental Matters...................................................................... 12
SECTION 5.13 No Brokers................................................................................. 13
SECTION 5.14 Decrees, Etc............................................................................... 13
SECTION 5.15 Performance Bonds; Letters of Credit....................................................... 13
SECTION 5.16 Certain Property on Rigs................................................................... 13
SECTION 5.17 Accredited Investor; Investment Purpose.................................................... 13
SECTION 5.18 Competitive Restrictions................................................................... 14
SECTION 5.19 Year 2000 Compliance....................................................................... 14
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER........................................................ 14
SECTION 6.01 Organization and Existence................................................................. 14
SECTION 6.02 Corporate Authorization and Power.......................................................... 15
SECTION 6.03 SEC Documents.............................................................................. 15
SECTION 6.04 Non-Contravention.......................................................................... 15
SECTION 6.05 Governmental Approval...................................................................... 16
SECTION 6.06 Litigation................................................................................. 16
SECTION 6.07 No Brokers................................................................................. 16
SECTION 6.08 Capitalization............................................................................. 16
SECTION 6.09 Subsidiaries............................................................................... 16
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ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF SELLER....................................................... 17
SECTION 7.01 Accuracy of Representations and Warranties................................................. 17
SECTION 7.02 Covenants and Agreements Performed......................................................... 17
SECTION 7.03 Officer's Certificate...................................................................... 17
SECTION 7.04 Legal Opinion.............................................................................. 17
SECTION 7.05 No Governmental Action..................................................................... 17
SECTION 7.06 Termination under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.................................................... 17
SECTION 7.07 Due Execution and Delivery of Documents.................................................... 17
SECTION 7.08 No Adverse Change.......................................................................... 17
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF BUYER....................................................... 17
SECTION 8.01 Accuracy of Representations and Warranties................................................. 18
SECTION 8.02 Covenants and Agreements Performed......................................................... 18
SECTION 8.03 Officer's Certificate...................................................................... 18
SECTION 8.04 Legal Opinion.............................................................................. 18
SECTION 8.05 Drilling Contracts......................................................................... 18
SECTION 8.06 No Adverse Change.......................................................................... 18
SECTION 8.07 [Reserved]................................................................................. 18
SECTION 8.08 No Governmental Action..................................................................... 18
SECTION 8.09 Termination under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act.................................................... 18
SECTION 8.10 Due Execution and Delivery of Documents.................................................... 18
ARTICLE IX COVENANTS AND AGREEMENTS OF THE PARTIES........................................................ 18
SECTION 9.01 Expenses................................................................................... 18
SECTION 9.02 Access..................................................................................... 19
SECTION 9.03 Conduct of Business and Preservation of Assets............................................. 19
SECTION 9.04 Notices of Certain Events.................................................................. 19
SECTION 9.05 Certain Taxes.............................................................................. 20
SECTION 9.06 Actions with Respect to Closing............................................................ 20
SECTION 9.07 Public Statements.......................................................................... 20
SECTION 9.08 Continued Effectiveness of Representations and Warranties.................................. 21
SECTION 9.09 Performance Bonds.......................................................................... 21
SECTION 9.10 Action of Buyer Regarding Financing and Financial Statements............................... 21
SECTION 9.11 Employee Matters........................................................................... 21
SECTION 9.12 Approvals of Governmental Bodies........................................................... 23
SECTION 9.13. Further Assurances......................................................................... 23
SECTION 9.14 Rig Loss................................................................................... 23
SECTION 9.15 Seller's Covenants Not to Compete.......................................................... 24
SECTION 9.16 Other Offer................................................................................ 24
SECTION 9.17 Conduct of Purchaser's Business............................................................ 25
ARTICLE X TERMINATION..................................................................................... 25
SECTION 10.01 Termination............................................................................... 25
SECTION 10.02 Effect of Termination..................................................................... 26
ARTICLE XI EXTENT AND SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION.. 26
SECTION 11.01 Scope of Representations of Seller........................................................ 26
SECTION 11.02 Indemnification by Seller and ▇▇▇▇▇▇...................................................... 27
SECTION 11.03 Indemnification by Buyer.................................................................. 27
SECTION 11.04 Indemnification Procedures................................................................ 27
SECTION 11.05 Survival.................................................................................. 28
SECTION 11.06 Limitation of Remedies.................................................................... 28
SECTION 11.07 Applicability of Indemnification Obligation............................................... 28
SECTION 11.08 Exclusive Rights and Remedies............................................................. 28
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ARTICLE XII REGISTRATION RIGHTS........................................................................... 28
SECTION 12.01 Registration of Securities................................................................ 29
ARTICLE XIII MISCELLANEOUS................................................................................ 32
SECTION 13.01 Notices................................................................................... 32
SECTION 13.02 Entire Agreement.......................................................................... 33
SECTION 13.03 Amendments and Waiver; Rights and Remedies................................................ 33
SECTION 13.04 Governing Law............................................................................. 33
SECTION 13.05 Arbitration............................................................................... 33
SECTION 13.06 Binding Effect; Assignment................................................................ 34
SECTION 13.07 Counterparts.............................................................................. 34
SECTION 13.08 References................................................................................ 34
SECTION 13.09 Severability of Provisions................................................................ 34
SECTION 13.10 Gender.................................................................................... 34
SECTION 13.11 Descriptive Headings...................................................................... 34
Schedules and Exhibits:
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Schedule 2.01 (a) Description of Rigs
Schedule 2.01 (b) Description of Other Equipment
Schedule 2.01 (c) Inventory
Schedule 2.01 (d) Real Property
Schedule 2.01 (g)(i) Drilling Contracts
Schedule 2.01 (g)(ii) Other Contracts
Schedule 3.02 Allocation of Purchase Consideration
Schedule 6.08 Outstanding Registration Rights
Exhibit A Form of General Assignment and ▇▇▇▇ of Sale
Exhibit B Form of Deed
Exhibit C Form of General Assignment of Contracts
Exhibit D Form of Buyer's Certificate
Exhibit E Form of Seller's Certificate
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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of August 12,
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1999, by and between Unit Corporation., a Delaware corporation ("Buyer"), ▇▇▇▇▇▇
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Drilling Company, a Delaware corporation ("▇▇▇▇▇▇") and ▇▇▇▇▇▇ Drilling Company
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North America, Inc., a Nevada corporation ("Seller"), a wholly owned subsidiary
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of ▇▇▇▇▇▇.
WITNESSETH:
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WHEREAS, Buyer desires to purchase the Purchased Assets (as hereinafter
defined) from Seller; and
WHEREAS, Seller desires to sell the Purchased Assets to Buyer in exchange
for the payment by Buyer of the Purchase Consideration (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions set forth in this Agreement, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01 Definitions. As used in this Agreement, the following terms
have the following respective meanings:
"Affiliate" means, as to the Person specified, any Person controlling,
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controlled by or under common control with such Person, with the concept of
control in such context meaning the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
another, whether through the ownership of voting securities, by contract or
otherwise.
"Acquisition Proposal" has the meaning specified in Section 9.16
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"Agreement" has the meaning specified in the preamble.
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"Applicable Environmental Laws" has the meaning specified in Section
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5.12(j).
"Applicable Laws" has the meaning specified in Section 5.09.
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"Assumed Liabilities" has the meaning specified in Section 2.03.
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"Best Efforts" means a party's best efforts in accordance with reasonable
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commercial practice and without the incurrence of unreasonable expense.
"Business Day" means a day on which national banks are generally open for
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the transaction of business in Tulsa, Oklahoma.
"Buyer" has the meaning specified in the preamble.
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"Buyer Basket" has the meaning specified in Section 11.02.
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"Buyer Designee" has the meaning specified in Section 13.06(b).
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"Cash Consideration" shall have the meaning specified in Section 3.01(a).
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"Claims" has the meaning specified in Section 11.02.
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"Closing" means the consummation of the transactions contemplated by this
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Agreement.
"Closing Date" has the meaning specified in Section 4.01.
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"Code" means the Internal Revenue Code of 1986, as amended, or any
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successor law, and regulations issued by the IRS pursuant to the Internal
Revenue Code or any successor law.
"Commission" means the Securities and Exchange Commission.
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"Consent Required Contract" has the meaning specified in Section 2.05.
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"Deeds" has the meaning specified in Section 4.02(b).
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"Drilling Contracts" has the meaning specified in Section 2.01(f)(i).
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"Encumbrances" means liens, charges, pledges, options, mortgages, security
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interests, claims, easements, rights-of-way, servitudes, title defects, rights
of third parties and other encumbrances of every type and description, whether
imposed by law, agreement, understanding or otherwise.
"Environmental Laws" has the meaning specified in Section 5.12(j).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"Exchange Act" has the meaning specified in Section 5.08.
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"Excluded Assets" has the meaning specified in Section 2.02.
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"GAAP" means U.S. generally accepted accounting principles applied on a
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consistent basis.
"General Assignment of Contracts" has the meaning specified in Section
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4.02(c).
"General Assignment and ▇▇▇▇ of Sale " has the meaning specified in Section
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4.02(a).
"Governmental Entity" means any (i) nation, state, county, city, town,
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village, district, or other jurisdiction of any nature; (ii) federal, state,
local, municipal, or other government; (iii) governmental or quasi-governmental
authority of any nature (including an governmental agency, branch, department,
official, or entity and any court or other tribunal); or (iv) body exercising,
or entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.
"hazardous material" has the meaning specified in Section 5.12(j).
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"HSR Act" has the meaning specified in Section 5.08.
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"Indemnified Party" has the meaning specified in Section 11.04.
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"Indemnifying Party" has the meaning specified in Section 11.04.
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"IRS" means the United States Internal Revenue Service or any successor
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agency, and, to the extent relevant, the United States Department of the
Treasury.
"Inventory" has the meaning specified in Section 2.01(c).
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"Nonassigned Contract" has the meaning specified in Section 2.05.
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"Other Contracts" has the meaning specified in Section 2.01(f)(ii).
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"Other Equipment" has the meaning specified in Section 2.01(b).
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"▇▇▇▇▇▇" has the meaning specified in the preamble.
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"Permitted Encumbrances" means (i) Encumbrances for Taxes, assessments and
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governmental charges not yet due and payable; (ii) statutory liens arising in
the ordinary course of business relating to obligations as to which there is no
default on the part of Seller, excluding any mortgage; and (iii) the express
terms of the Drilling Contracts and Other Contracts; provided, however, that at
the Closing "Permitted Encumbrances" shall not include any Encumbrances for
taxes, assessments or governmental charges filed of record against the Purchased
Assets, or statutory liens filed of record against the Purchased Assets.
"Permits" has the meaning specified in Section 2.01(e)(iii).
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"Permitted Real Property Encumbrances" means, with respect to Real Estate
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Assets, (i) Encumbrances for Taxes, assessments and governmental charges not yet
due and payable; (ii) statutory liens arising in the ordinary course of business
relating to obligations as to which there is no default on the part of Seller,
excluding any mortgage or indenture; (iii) zoning laws and ordinances and
similar governmental regulations; (iv) minor imperfections of title or easements
that do not materially detract from the value of the property or impair the
Seller's use thereof; (v) rights reserved to any municipality or governmental,
statutory or public authority to regulate such property and (vi) the outstanding
option to purchase the ▇▇▇▇▇▇▇ Yard in Mills, Wyoming; provided, however, that
at the Closing "Permitted Real Property Encumbrances" shall not include any
Encumbrance for Taxes, assessments or governmental charges filed of record
against the Real Estate Assets, or liens filed of record against the Real Estate
Assets.
"Person" means any individual, corporation, (including any non-profit
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corporation), general or limited partnership, limited liability company, joint
venture, estate, trust or association, organization, labor union, or entity or
Governmental Entity.
"Proceedings" means any action, arbitration, audit, hearing, investigation,
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litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before or otherwise
involving any Governmental Entity or arbitrator.
"Purchased Assets" has the meaning specified in Section 2.01.
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"Purchase Consideration" shall mean the Cash Consideration plus the Stock
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Consideration.
"Real Estate Assets" has the meaning specified in Section 2.01(d).
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"Real Property" has the meaning specified in Section 2.01(d).
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"Retained Liabilities" has the meaning specified in Section 2.04.
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"Rigs" or "Rig" has the meaning specified in Section 2.01(a).
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"SEC Documents" has the meaning specified in Section 6.03.
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"Securities Act" has the meaning specified in Section 5.08.
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"Seller" has the meaning specified in the preamble.
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"Seller Basket" has the meaning specified in Section 11.03.
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"Seller MAE" means a single event, occurrence or fact that, together with
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all other events, occurrences and facts (i) would have, or might reasonably be
expected to have, (x) a material adverse effect
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on the Purchased Assets (individually or in the aggregate as to the Rigs), or
(y) a material adverse effect on the ability of the Buyer to own and operate the
Rigs, individually or in the aggregate, after the Closing Date, (ii) would
create an Encumbrance on any of the Purchased Assets except for a Permitted
Encumbrance or Permitted Real Property Encumbrance, (iii) results in a material
loss or damage to the Rigs, individually or in the aggregate (whether or not
covered by insurance), or (iv) would constitute a criminal violation of law by
Seller involving a felony.
"Stock Consideration" has the meaning specified in Section 3.01(b).
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"Survival Period" has the meaning specified in Section 11.05.
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"Taxes" means all federal, state, local, foreign and other taxes, charges,
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fees, duties, levies, imposts, customs or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, profit sharing, license, lease, service,
service use, value added, withholding, payroll, employment, excise, estimated,
severance, stamp, recording, occupation, premium, property, windfall profits, or
other taxes, fees, assessments, customs, duties, levies, imposts, or charges of
any kind whatsoever, together with any interest, penalties, additions to tax,
fines or other additional amounts imposed thereon or related thereto, and the
term "Tax" means any one of the foregoing Taxes.
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"Transferred Employees" has the meaning specified in Section 9.11.
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"Unit Common Stock" has the meaning specified in Section 6.08.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
SECTION 2.01 Assets to be Purchased. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall sell,
assign, transfer, deliver and convey to Buyer, and Buyer shall purchase, free
and clear of any Encumbrances other than Permitted Encumbrances, all of the
following assets (collectively, the "Purchased Assets"):
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(a) the thirteen (13) land drilling rigs and all such drilling rigs'
respective drilling machinery and equipment (including, without limitation,
floor tools and blow-out preventers), engines, machinery, rigging, apparel,
furniture, computers and computer equipment on such rigs, fittings and
equipment, pumps and pumping equipment, spare components and parts, drill pipe,
case barrels, drill collars, heavy-weight drill pipe, racking, supporting
inventory and stores and all appurtenances thereto appertaining or belonging
thereto, as specifically identified on Schedule 2.01(a) (collectively, the
"Rigs" and each a "Rig") (any discrepancy in the tubular equipment listed on
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Schedule 2.01(a) and that actually delivered to Buyer shall be accounted for as
provided in Schedule 2.01(a));
(b) the other equipment and assets specifically identified on Schedule
2.01(b), (the "Other Equipment");
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(c) the stocks and inventory owned by Seller or any of its Affiliates
specifically identified on Schedule 2.01(c) (collectively "Inventory"), as such
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Inventory may be reduced through consumption thereof, or increased through
replacement thereof or addition thereto, in the ordinary course of the
maintenance and operation of the Rigs through the Closing Date;
(d) the real property fee ownership described on Schedule 2.01(d) (the
"Real Property"), together with all buildings, fixtures and other improvements
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upon the Real Property and all rights, easements, rights-of-way and other
interests incidental thereto that are used or held for use by Seller in
connection with the ownership, maintenance or operation of the Purchased Assets
(the "Real Estate Assets");
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(e) the following tangible and intangible assets used or held for use in
connection with the
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ownership, maintenance and operation of the Purchased Assets, to the extent
assignable by law and Seller or its Affiliates have the right to assign and
transfer such assets:
(i) all records to be delivered to Buyer pursuant to Section 2.06;
(ii) to the extent not subject to the specific provisions of Section
9.14, all insurance proceeds or rights to insurance proceeds relating to
any damage, destruction or other loss to the Purchased Assets; and
(iii) the certificates, licenses, permits, consents, operating
authorities, orders, exemptions, franchises, approvals, registrations and
other authorizations and applications therefore specifically associated
with the ownership, maintenance and operation of the Purchased Assets
("Permits");
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(f) the benefit and burden subsequent to the Closing Date of:
(i) all drilling contracts and any amendments thereto for the
employment of the Rigs existing on the Closing Date (the "Drilling
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Contracts"), including without limitation the Drilling Contracts identified
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on Schedule 2.01(f)(i) hereto existing on the Closing Date; and
(ii) all other contracts to which Seller or any of its Affiliates is
a party relating to the ownership, maintenance and operation of the Rigs or
the Real Estate Assets existing on the Closing Date to the extent described
on Schedule 2.01(f)(ii) (the "Other Contracts"); and
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(g) all warranties and guarantees, if any, express or implied, existing for
the benefit of the Seller in connection with the Purchased Assets to the extent
assignable; and
SECTION 2.02 Excluded Assets. The Purchased Assets to be transferred by
Seller hereunder shall include only those described or referred to in Section
2.01. Notwithstanding anything herein to the contrary, Seller shall not, and is
not hereby agreeing to sell, assign, convey, transfer, or deliver to Buyer any
of Seller's right, title and interest in, to or under any of the assets listed
below ( the "Excluded Assets"):
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(a) cash or cash equivalents, whether on hand at the premises, in banks or
in transit between accounts of Seller and whether or not relating to the
operation on the Assets;
(b) the bank accounts, deposit accounts or similar accounts of Seller;
(c) any and all policies of insurance or surety bonds of the Seller;
(d) all accounts receivable of Seller (except any relating to reimbursement
from operators under the Drilling Contracts for loss or damage to any of the
Purchased Assets which receivables shall be the property of Buyer);
(e) any and all accruals as of the Closing Date for income taxes and
deferred income taxes;
(f) any choses in action, claims, or causes of action or rights of Seller
to recover or offset of any kind or character arising prior to the Closing Date,
except as such may arise in connection with the Drilling Contracts or Other
Contracts; and
(g) all rights to payments, prepayments, prepaid expenses, deposits and the
like to the extent the same arise under any Drilling Contracts or Other
Contracts and are attributable to work performed by Seller prior to the Closing
Date
SECTION 2.03 Assumed Liabilities. As of the Closing Date, as additional
consideration to Seller in exchange for the performance by Seller of its
obligations hereunder, Buyer assumes and agrees to pay,
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discharge and perform as and when due, each of the following, excluding any
Retained Liabilities (collectively, the "Assumed Liabilities"):
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(a) all obligations and liabilities under the Drilling Contracts and Other
Contracts, to the extent that such obligations or liabilities are solely
attributable to all periods subsequent to the Closing Date; and
(b) all obligations and liabilities relating to the Transferred Employees
as specified in Section 9.11.
SECTION 2.04 Limitation of Liabilities. Buyer shall not assume or in any
way be liable or responsible for any liabilities or obligations of Seller or its
Affiliates except as specifically provided herein, it being expressly
acknowledged that it is the intention of the parties hereto that all liabilities
that Seller or its Affiliates has or may have in the future, whether fixed or
contingent, and whether known or unknown, not expressly described in the
definition of Assumed Liabilities shall be "Retained Liabilities" and remain
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the liabilities of Seller and its Affiliates. Without limiting the generality of
the foregoing, except to the extent specifically provided in Section 2.03, Buyer
shall not assume, or take title to the Purchased Assets subject to:
(a) any obligation or liability, including indemnification, arising out of
or relating to the ownership, operation, performance of or the maintenance of
the Purchased Assets prior to the Closing Date;
(b) Taxes arising out of or relating to the ownership, operation or
maintenance of the Purchased Assets for any period ending on or prior to the
Closing Date, any income (or similar) Taxes of any Seller or its Affiliates on
the sale of the Purchased Assets and any Taxes or payments payable by Seller in
connection with the sale of the Purchased Assets to Buyer to the extent
expressly set forth herein;
(c) any liability or obligation of Seller or any of its Affiliates under
any note, bond, indenture or other instrument whether or not secured by the
Purchased Assets;
(d) any liability or obligation of Seller or any of its Affiliates in
respect of any express or implied representation, warranty, indemnity, agreement
or guaranty made (or claimed to have been made) by Seller or any of its
Affiliates or imposed or asserted to be imposed by operation of law (except
obligations or liabilities imposed on Buyer by operation of law after the
Closing Date);
(e) any Encumbrance accrued (except for Permitted Encumbrances) or existing
at the time of the Closing Date against the Purchased Assets;
(f) any violation by Seller or any of its Affiliates of or default by
Seller or any such Affiliate under any Applicable Laws, including, without
limitation, Applicable Environmental Laws, which affects the ownership or
operation of the Purchased Assets, or any remedial obligation under any
Applicable Environmental Law arising out of or related to the ownership,
operation, performance of or the maintenance of the Purchased Assets prior to
the Closing Date; or
(g) any liability arising out of, relating to or resulting from the
employment relationship between Seller or its Affiliates and any of their
present or former employees or the termination of any such employment
relationship with Seller or any of its Affiliates prior to the Closing Date,
including, without limitation, severance pay and other similar benefits, if any,
and any claim filed by or on behalf of any employee or former employee of Seller
or its Affiliates relating to the employment or termination of employment of any
such employee by Seller or its Affiliates including, but not limited to, any
claim for wrongful discharge, breach of contract, unfair labor practice,
violation of the Worker Adjustment and Retraining Notification Act, continued
health benefits, employment discrimination, unemployment compensation or
workers' compensation; or
(h) any liability as a result of this Agreement arising out of, relating to
or resulting from any bulk transfer or similar laws of any jurisdiction.
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SECTION 2.05 Limitation on Assignments. Notwithstanding any other provision
hereof, this Agreement shall not constitute nor require an assignment to Buyer
of any Drilling Contract, Other Contract, lease, Permit, license or other right
if an attempted assignment of the same without the consent of any party would
constitute a breach thereof or a violation of any law or any judgment, decree,
order, writ, injunction, rule or regulation of any Governmental Entity unless
and until such consent shall have been obtained. In the case of any such
Drilling Contract, Other Contract, Permit, license or other right that cannot be
effectively transferred to Buyer without such consent (a "Consent Required
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Contract"), Seller agrees that between the date hereof and the Closing Date it
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will use its Best Efforts to obtain or cause to be obtained the necessary
consents to the transfer of any Consent Required Contract. Buyer agrees to
cooperate and to cause any Buyer Designee to cooperate with Seller in obtaining
such consents and to enter into such arrangement of assumption as may be
reasonably requested by the other contracting party under a Consent Required
Contract. In the event that Seller shall have failed prior to the Closing Date
to obtain consents to the transfer of any Consent Required Contract and Buyer
shall have waived the conditions set forth in Section 8.05, the terms of this
Section 2.05 shall govern the transfer of the benefits of each such contract.
Seller and Buyer shall use their Best Efforts after the Closing Date to obtain
any required consent to the assignment to, and assumption by, Buyer of each
Consent Required Contract that is not transferred to Buyer at the Closing (a
"Nonassigned Contract"). With respect to the Nonassigned Contracts and any of
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the Purchased Assets that are not assignable by the terms thereof or consents to
the assignment thereof cannot be obtained as provided herein, such Purchased
Assets shall be held by the Seller in trust for the Buyer and shall be performed
by the Buyer in the name of the Seller and all benefits derived and obligations
incurred hereunder shall be for the account of the Buyer; provided, however,
that where entitlement of the Buyer to such Purchased Assets hereunder is not
recognized by any third party, the Seller shall, at the request of the Buyer,
enforce in a reasonable manner, at the cost of and for the account of the Buyer,
any and all rights of the Seller against such third party. Buyer shall defend,
indemnify and hold Seller harmless in respect of Buyer's performance or failure
to perform any obligation, duty or liability in connection with such Purchased
Assets.
SECTION 2.06 Delivery. (a) Buyer shall be entitled to the records relating
to the Rigs and their operation, whether physically located on the Rigs or at
another location on the Closing Date.
(b) On the Closing Date, Seller shall deliver or cause to be delivered to
Buyer at the offices where such records are located or such other location as
mutually agreed the following to the extent related to the Purchased Assets (i)
a copy of the operational and accident records, (ii) engineering drawings,
designs, schematics, blueprints, instruction manuals, flow sheets, models,
maintenance schedules and similar technical records (including, but not limited
to, all O.I.M.E.(now ▇▇▇▇▇▇ Technology) and Parco Mast and Substructures, Inc.
records), (iii) all regulatory certification and documentation, all pertinent
correspondence relating thereto, all technical manuals relating to equipment on
the Rigs and all equipment history files and preventive maintenance data, (iv)
all Drilling Contracts, Other Contracts, and all material correspondence and
other records relating thereto, and (v) property records, including
environmental reports and assessments relating to the Real Estate Assets in the
possession or control of Seller or its Affiliates.
(c) Seller shall be entitled to retain all originals of its corporate,
financial, accounting, legal, tax and audit records. For a period of five years
following the Closing Date, Buyer shall give Seller reasonable access to (and
the right to make copies at the sole expense of Seller) the records delivered by
Seller pursuant to the terms of this Agreement, but any access pursuant to this
Section 2.06(c) shall be conducted in such manner as not to interfere
unreasonably with the operations of Buyer following the Closing Date.
Notwithstanding the foregoing sentence and anything in this Agreement to the
contrary, Buyer shall have no liability to the Seller for any breach of Buyer's
obligations under this Section 2.06(c). Following such five-year period, Buyer
may destroy such records unless Seller has provided Buyer with written notice,
no later than sixty days prior to the end of such five year period, that Seller
wishes to obtain, at its cost and expense, copies of such records.
(d) The Rigs shall be delivered on the Closing Date at their present
locations as is, where is at the time of delivery.
7
SECTION 2.07 Other Funds Received. (a) To implement the provisions of
Sections 2.01.(f), 2.02(d) and 2.02(g) hereto, Seller shall prepare and submit
to the operators for payment invoices for all accounts receivable under the
Drilling Contracts for periods up to the Closing Date and the Buyer shall
prepare invoices for periods from and after the Closing Date. In the event
either party receives or otherwise acquires funds (including, but not limited
to, rebates, warranty proceeds, incentives, accounts receivable, prepaid
expenses, deposits and asset dispositions, in any form whatsoever), which are
properly due and payable to the other party hereunder, the recipient of such
funds shall within three Business Days following receipt thereof forward such
funds to the other party at the address provided in Section 13.01.
(b) Notwithstanding anything herein to the contrary, Buyer and Seller
agree that any funds received or to be received or amounts earned, pursuant to
any Drilling Contract, which represent payment of a bonus or other form of
incentive payment for satisfaction of any performance based standards (or
similar type compensation) shall be for the account of Buyer. Likewise, any
similar performance based penalty assessed under any Drilling Contract shall be
for the account of Buyer.
ARTICLE III
PURCHASE PRICE
SECTION 3.01 Consideration for the Purchased Assets. At the Closing, Buyer
shall pay to Seller the Purchase Consideration by delivering to Seller:
(a) the amount of $40,000,000.00 in immediately available funds by
confirmed wire transfer to a bank account to be designated by Seller (such
designation to occur no later than the second business day prior to the Closing
Date) (such funds, the "Cash Consideration"); and
------------------
(b) one or more stock certificates representing 1,000,000 shares of Unit
Common Stock issued in the name of Seller and all accompanying rights pursuant
to the Rights Agreement referenced in Section 6.08 (the " Stock Consideration"),
-------------------
subject to adjustment for stock splits, stock dividends, recapitalization and
similar arrangements that occur prior to Closing.
SECTION 3.02 Allocation of Purchase Consideration. The Purchase
Consideration shall be allocated among the Purchased Assets in a manner set
forth in Schedule 3.02. After the Closing, Seller and Buyer shall cooperate with
each other in the preparation, execution and filing of (i) all information
returns and supplements thereto required to be filed with the IRS by the parties
under Section 1060 of the Code and the Treasury Regulations promulgated there
under relating to the allocation of the Purchase Consideration and (ii) all
similar filings required to be filed with respect to the transactions
contemplated by this Agreement with the IRS and other appropriate taxing
authorities. Each party hereto agrees not to assert, in connection with any tax
return, tax audit or similar proceeding, any allocation that differs from that
set forth in Schedule 3.02.
ARTICLE IV
THE CLOSING
SECTION 4.01 Time and Place of Closing. The Closing shall take place at
the offices of Buyer, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ at 10:00 a.m., local
time, on the third Business Day after the satisfaction of the conditions to the
obligations of the parties set forth in Articles VII and VIII, or at such other
place, date or time as the parties may agree in writing. The date on which the
Closing takes place is herein referred to as the "Closing Date."
------------
SECTION 4.02 Deliveries by Seller. At the Closing, Seller shall deliver
the following to Buyer:
(a) a duly executed General Conveyance, Assignment and ▇▇▇▇ of Sale (the
"General Assignment and ▇▇▇▇ of Sale") substantially in the form of Exhibit "A"
------------------------------------
hereto, together with such other bills of sale, assignments and other
instruments of transfer, assignment and conveyance as Buyer shall reasonably
request to vest in Buyer (or a Buyer Designee) good and indefeasible title to
the Purchased Assets other
8
than the Real Property;
(b) general warranty deeds, substantially in the Form of Exhibit "B"
hereto, with such modifications as are necessary to comply with applicable local
law in the jurisdictions in which the Real Property is located (the "Deeds"),
-----
sufficient to transfer to Buyer (or a Buyer Designee) good and marketable title
to the Real Property, free and clear of all Encumbrances except for Permitted
Real Property Encumbrances;
(c) a duly executed General Assignment of Contracts (the "General
-------
Assignment of Contracts"), substantially in the form of Exhibit "C" hereto, and
-----------------------
such other instruments of transfer and assumption as may be needed in order to
cause an effective assignment to and assumption by Buyer (or a Buyer Designee)
of the Drilling Contracts and Other Contracts as contemplated herein;
(d) any consents obtained as contemplated by Section 2.05;
(e) the certificate and opinion of counsel contemplated by Sections 8.03
and 8.04, respectively;
(f) the documents to be delivered pursuant to Section 2.06.
SECTION 4.03 Deliveries by Buyer. At the Closing, Buyer shall deliver the
following to Seller:
(a) the Cash Consideration;
(b) the Stock Consideration; and
(c) the certificate and opinion of counsel contemplated by Sections 7.03
and 7.04, respectively.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
SECTION 5.01 Corporate Existence and Power. The Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of its incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to own the Purchased
Assets and carry on its business as now conducted. The Seller is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the Purchased Assets or the nature of its
activities makes such qualification necessary unless the failure so to qualify
or be licensed would not reasonably be expected to have a Seller MAE.
SECTION 5.02 Corporate Authorization; Etc. Seller has all necessary power
and authority to execute and deliver this Agreement and all agreements,
instruments and documents to be executed and delivered hereunder by Seller, to
consummate the transactions contemplated hereby and to perform all terms and
conditions hereof to be performed by it. The execution and delivery of this
Agreement by Seller and all agreements, instruments and documents to be executed
and delivered by Seller hereunder, the performance by Seller of all the terms
and conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized and approved by the
Board of Directors of Seller, and no other proceedings of Seller are necessary
with respect thereto. All corporate actions required on behalf of the Seller in
connection with this Agreement and the transactions contemplated hereby have
been duly taken. All persons who have executed and delivered this Agreement, and
all persons who will execute and deliver the other agreements, documents and
instruments to be executed and delivered by Seller hereunder, have been duly
authorized to do so by all necessary actions on the part of Seller. This
Agreement constitutes, and each other agreement or instrument to be executed by
Seller hereunder, when executed and delivered by Seller, will constitute, the
legal, valid and binding obligation of Seller, enforceable against it in
accordance with its terms, except to the extent the enforceability hereof and
thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or
other laws relating to or affecting
9
creditors' rights generally or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 5.03 Non-Contravention. The execution, delivery or performance of
this Agreement by Seller, the fulfillment of and compliance by it with the terms
and conditions hereof and the consummation by it of the transactions
contemplated hereby do not and will not:
(a) contravene or conflict with any of the terms of the certificate of
incorporation or bylaws of the Seller;
(b) to the knowledge of Seller, contravene or conflict with or constitute
a violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Seller or any of its Affiliates;
(c) result in the creation or imposition of any Encumbrances on any of the
Purchased Assets; or
(d) (i) result in a breach of or constitute a default under (whether with
notice or the lapse of time or both) any (x) note, bond, mortgage, loan
agreement, indenture or other instrument evidencing borrowed money to which
Seller is a party or by which Seller or any of its Affiliates is bound or to
which any of the Purchased Assets is subject or (y) provision of any agreement,
contract or other instrument assumed by Buyer or any license, franchise, permit
or other similar authorization held by the Seller or any of its Affiliates
relating to the Purchased Assets; or (ii) result in the creation of any
Encumbrance on any of the Purchased Assets, or (iii) gives any Person the right
to terminate any Drilling Contract, Permit or Other Contract assumed by Buyer.
SECTION 5.04 Ownership of Rigs and Other Equipment. Seller owns and, upon
Seller's execution and delivery of the General Assignment and ▇▇▇▇ of Sale,
Buyer will own good and indefeasible title to the Rigs and Other Equipment, free
and clear of all Encumbrances except for Permitted Encumbrances and
Encumbrances, if any, created or permitted to be imposed by Buyer.
SECTION 5.05 [Reserved]
SECTION 5.06 Contracts. Seller has made available to Buyer for review
complete and correct copies of all Drilling Contracts and Other Contracts.
Except as expressly identified on Schedule 2.01(f)(i) or (ii), each of the
Drilling Contracts and Other Contracts may be transferred to Buyer without the
consent of any Person. All the Drilling Contracts and Other Contracts are valid,
binding and in full force and effect against Seller, and, to Seller's knowledge,
are valid, binding and in full force and effect against the other parties
thereto. As of the Closing Date, none of the Rigs will be subject to any
agreement, contract or commitment of Seller or any of its Affiliates other than
the Drilling Contracts and Other Contracts. Neither Seller nor any of its
Affiliates is in default in any material respect, and no notice of default or
alleged default has been received by Seller or any of its Affiliates, under any
of the Drilling Contracts and Other Contracts, no other party thereto is, to the
knowledge of Seller or its Affiliates, in default there under in any material
respect, and, to the knowledge of Seller or its Affiliates, there exists no
condition or event which, with or without notice or lapse of time or both, would
constitute a default under any of the Drilling Contracts and Other Contracts by
Seller, any of its Affiliates or, to the knowledge of Seller, any other party
thereto.
SECTION 5.07 Litigation. (a) There is no Proceeding pending, instituted or,
to the knowledge of Seller, overtly threatened against any of the Purchased
Assets or against the Seller or any of its Affiliates and relating to the
ownership, operation or maintenance of any of the Purchased Assets before any
Governmental Entity applicable to or binding upon Seller or any of the Purchased
Assets that (i) seeks injunctive relief, or (ii) if adversely determined would
delay or prevent the consummation of the transactions contemplated by this
Agreement or have an adverse affect on Buyer or (iii) would reasonably be
expected to have a Seller MAE.
(b) None of Seller or any of its Affiliates nor any of its respective
properties or assets is subject to
10
any judicial or administrative judgment, order, decree or restraint currently
affecting, in a material and adverse manner, the ownership, maintenance and
operation of the Purchased Assets. Seller has not received any notifications or
charges in writing from any Governmental Entity involving alleged violations of
or alleged obligations to remediate under occupational safety and health or
water quality or other environmental matters (including Applicable Environmental
Laws) that materially and adversely affect the conduct by Seller of the
ownership, maintenance and operation of the Purchased Assets or that have not
been finally dismissed or otherwise disposed of.
SECTION 5.08 Governmental Approval. The execution, delivery and
performance by the Seller of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than (i)
compliance with any applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), (▇▇) compliance with any applicable
-------
requirements of the Securities Exchange Act of 1934, as amended ("Exchange
--------
Act"), and (iii) compliance with any applicable requirements of the Securities
---
Act of 1933, as amended ("Securities Act").
--------------
SECTION 5.09 Compliance With Laws. Seller is not in violation of or in
default under any federal, state, local, municipal, foreign, international,
multinational or other administrative order, constitution, ordinance, principle
of common law, statute, treaty, law, rule, regulation, code, governmental
determination, governmental certification requirement or other public limitation
that is not an Applicable Environmental Law (collectively, "Applicable Laws")
---------------
relating to the ownership, maintenance or operation of the Purchased Assets,
which violation or default materially adversely affects Seller's ownership,
maintenance or operation (as presently conducted) of the Purchased Assets, and
no claim is pending or, to Seller's knowledge, overtly threatened with respect
to any such matters which if determined adversely to Seller would have such
effect.
SECTION 5.10 Employee Matters. (a) There are no collective bargaining or
other labor union agreements to which the Seller is a party or by which it is
bound. To the knowledge of the Seller, the Seller has not encountered any labor
union organizing activity or had any actual or threatened employee strikes, work
stoppages, slowdowns or walkouts.
(b) The Seller does not contribute to or have an obligation to contribute
to, and has not at any time within seven years prior to the Closing Date
contributed to or had an obligation to contribute to, a multi-employer plan
within the meaning of Section 3(37) of ERISA.
(c) With respect to any employee benefit plan, within the meaning of
Section 3(3) of ERISA, which is sponsored, maintained or contributed to, or has
been sponsored, maintained or contributed to within seven years prior to the
Closing Date, by the Seller or any corporation, trade, business or entity under
common control with the Seller, within the meaning of Section 414(b), (c) or (m)
of the Code or Section 4001 of ERISA ("Commonly Controlled Entity"), (i) no
--------------------------
withdrawal liability, within the meaning of Section 4201 of ERISA, has been
incurred, which withdrawal liability has not been satisfied, (ii) no liability
to the Pension Benefit Guaranty Corporation has been incurred by the Seller or
any Commonly Controlled Entity, which liability has not been satisfied, (iii) no
accumulated funding deficiency, whether waived or not waived, within the meaning
of Section 302 of ERISA or Section 412 of the Code has been incurred and (iv)
all contributions, including installments, to such plan required by Section 302
of ERISA and Section 412 of the Code have been timely made which, in each case,
would affect the Purchased Assets or create any liabilities for Buyer.
(d) Buyer will not be obligated or liable with respect to any employee
benefit plan or agreement relating to the employees of Seller by virtue of its
possible employment of any employee or former employee of the Seller except as
otherwise specifically provided in this Agreement.
SECTION 5.11 Real Property. Seller owns, and upon execution and delivery
by Seller of the Deeds, Buyer will own, good and marketable title to the Real
Property described on Schedule 2.01(d), free and clear of all Encumbrances
except Permitted Real Property Encumbrances.
11
SECTION 5.12 Environmental Matters. (a) Seller has received no written
notice of any investigation or inquiry by any Governmental Entity under any
Applicable Environmental Laws (as defined below) relating to the ownership or
operation of the Purchased Assets. To the knowledge of Seller, Seller has not
disposed of any hazardous material (as defined below) on any of the Purchased
Assets and no condition exists on any of the Purchased Assets, which would
subject Seller, or the Purchased Assets to any material remedial obligations
under any Applicable Environmental Laws.
(b) Seller and its Affiliates have complied, in all material respects,
with all Applicable Environmental Laws relating to the Real Estate Assets, and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against it alleging any failure so
to comply. Without limiting the generality of the preceding sentence Seller and
its Affiliates have obtained and been in compliance with all of the terms and
conditions of all permits, licenses, and other authorizations which are required
under, and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and time tables
which are contained in all Applicable Environmental Laws relating to the
Purchased Assets, except to the extent that non-compliance would not have a
Seller MAE.
(c) Neither Seller or any of its Affiliates nor, to the knowledge of
Seller, any prior owner or operator of the Purchased Assets, has caused or
allowed the generation, use, treatment, storage, release or disposal of
hazardous materials at any site or facility owned, leased or operated by any
Seller or its Affiliates or used in connection with the Purchased Assets except
in accordance with all Applicable Environmental Laws.
(d) [Reserved]
(e) Seller has secured all environmental Permits necessary to the
operation of the Purchased Assets and Seller is in compliance with such permits,
except to the extent any such noncompliance does not and will not impose
liability on Buyer or its Affiliates.
(f) Seller has not received any notice, nor is it aware, of any proposal
to amend, revoke or replace any environmental Permit, or requiring the issuance
of any additional environmental Permit, necessary to operate any of the Rigs.
(g) Seller has not received inquiry or notice nor does Seller have any
reason to believe that it will receive inquiry or notice of any actual or
potential Proceedings, claims, or losses related to or arising under any
Applicable Environmental Law and related to the Purchased Assets.
(h) Seller is not currently operating or required to be operating any of
the Purchased Assets under any compliance order, schedule, decree or agreement,
any consent decree, order or agreement, or corrective action decree, order or
agreement issued or entered into under any Applicable Environmental Law.
(i) Each of Seller and the Purchased Assets is in compliance with all
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements and obligations established under Applicable Environmental Laws
except to the extent any such noncompliance would not have a Seller MAE.
(j) For purposes of this Agreement, "Applicable Environmental Laws" means
-----------------------------
any and all Environmental Laws and Applicable Laws pertaining to (x) the control
of any potential pollutant or protection of the air, water or land, (y) solid,
gaseous or liquid waste generation, handling, treatment, storage, disposal or
transportation or (z) exposure to hazardous, toxic or other substances alleged
to be harmful. "Environmental Laws" shall include all such laws in effect in
------------------
any and all jurisdictions in which the Purchased Assets are located or in which
any Seller or its Affiliates has conducted operations using any of the Purchased
Assets, including, without limitation, the Clean Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Rivers and Harbors Act of 1899, as amended, the Federal Water
Pollution Control Act, as amended, the Resource Conservation and Recovery Act of
1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Transportation Act, as amended and any
other state or federal
12
environmental conservation or protection laws. For purposes of this Agreement,
the term "hazardous material" means (i) any substance which is listed or defined
------------------
as a hazardous substance, hazardous constituent, or solid waste pursuant to any
Applicable Environmental Laws and (ii) petroleum (including crude oil and any
fraction thereof), natural gas and natural gas liquids.
SECTION 5.13 No Brokers. Seller has not employed or authorized anyone to
represent it as a broker or finder in connection with the transactions
contemplated by this Agreement, and no broker or other Person is entitled to any
commission or finder's fee from Seller in connection with such transactions.
Seller agrees to indemnify and hold harmless Buyer from and against any and all
losses, claims, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, Buyer may sustain or incur
as a result of any claim for a commission or fee by a broker or finder acting on
behalf of Seller.
SECTION 5.14 Decrees, Etc. No order, writ, injunction, decree, judgment,
award or determination of any Governmental Entity has been issued or entered
against Seller or any of its Affiliates which continues to be in effect and
affects the ownership or operation of the Purchased Assets.
SECTION 5.15 Performance Bonds; Letters of Credit. There are no
performance or similar bonds or letters of credit currently posted by Seller or
any of its Affiliates for the purpose of owning, operating or maintaining the
Purchased Assets.
SECTION 5.16 Certain Property on Rigs. Since the date of completion of
Buyer's inspection of each Rig, subject to normal wear and tear and consumption
in the ordinary course of business, Seller has not removed or permitted to be
removed any tangible property from such Rig, except for any such tangible
property relocated from one Rig to another Rig or transferred to Inventory.
SECTION 5.17 Accredited Investor; Investment Purpose. The Seller hereby
acknowledges receipt of copies of the SEC Documents and represents, acknowledges
and understands that:
(a) the Stock Consideration has not been, and will not have been at the
time of its issuance pursuant to this Agreement, registered under the Securities
Act or registered or qualified under any state securities laws because it will
be so issued in reliance upon exemptions from registration or qualification that
depend, in part, on the Seller's acknowledgements, representations and
warranties made herein;
(b) the certificates evidencing the Stock Consideration will bear a legend
in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE OKLAHOMA
SECURITIES ACT. NEITHER THE RECORD NOR THE BENEFICIAL OWNERSHIP
OF SAID SECURITIES MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SAID SECURITIES UNDER
BOTH OF SAID ACTS AND ANY OTHER APPLICABLE STATE SECURITIES LAWS
OR RULES UNLESS IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SAID ACTS ARE AVAILABLE WITH RESPECT TO SUCH SALE OR TRANSFER AND
SAID SALE OR TRANSFER IS MADE PURSUANT TO AND IN STRICT
COMPLIANCE WITH THE TERMS AND CONDITIONS OF SAID EXEMPTIONS;
(c) the Stock Consideration is being acquired for its own account and
without a view to the distribution thereof or any interest therein;
(d) Seller is an accredited investor within the meaning of Rule 501(a) or
Regulation D promulgated under the Securities Act;
13
(e) Seller has received certain information concerning the Buyer and has
had the opportunity to obtain additional information as desired in order to
evaluate the merits and risks inherent in holding the Stock Consideration; and
(f) the Stock Consideration shall not be sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of by Seller in violation of
any applicable securities laws or regulations.
SECTION 5.18 Competitive Restrictions. The Seller is not a party to any
agreement that expressly limits the ability of the Buyer or any Affiliate of
Buyer after the Closing, to use the Purchased Assets in competition with any
third party.
SECTION 5.19 Year 2000 Compliance. Seller has conducted an audit of its
assets, including the Purchased Assets, to determine if any components contain
imbedded chips containing data related logic. This audit has determined that
most components do not have date related logic. The components which have
sensitive chips have been tested and the Seller is reasonably certain that they
are Year 2000 Compliant. "Year 2000 Compliant" means that, prior to January 1,
-------------------
2000, the software, hardware, systems and devices with date-related
functionality comprising the Purchased Assets will correctly Process (as defined
below) all dates, including those before, on or after January 1, 2000, without
any loss of functionality, interoperability or performance when used on a stand-
alone basis and not in combination with any other software, hardware, system or
device used by Seller as of the date hereof. For purposes of the foregoing,
"Process" means all functions, including accepting as input, calculating,
-------
storing, displaying and generating as output.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 6.01 Organization and Existence. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of its incorporation, with all necessary corporate power and authority to own
and lease the assets it currently owns and leases and to carry on its business
as such business is currently conducted. Buyer is duly qualified or licensed to
transact business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the assets currently owned or leased by
it or the nature of the business currently conducted by it requires it so to be
qualified or licensed unless the failure so to qualify or be licensed would not
reasonably be expected to have a material adverse effect on the business or
financial condition of Buyer and its subsidiaries taken as a whole. Buyer has
heretofore furnished to Seller a complete and correct copy of its certificate of
incorporation and bylaws, as amended or restated. Buyer is not in violation of
any of the provisions of its charter or any material provisions of its bylaws.
14
SECTION 6.02 Corporate Authorization and Power. (a) Buyer has all
necessary corporate power and authority to execute and deliver this Agreement
and all agreements, instruments and documents to be executed and delivered
hereunder by Buyer, to consummate the transactions contemplated hereby and to
perform all terms and conditions hereof to be performed by it. No corporate
proceedings of Buyer are necessary on the part of Buyer with respect to the
execution, delivery and performance of this Agreement by Buyer. All persons who
have executed and delivered this Agreement, and all persons who will execute and
deliver the other agreements, documents and instruments to be executed and
delivered by Buyer hereunder, will have been duly authorized to do so by all
necessary actions on the part of Buyer. This Agreement constitutes, and each
other agreement or instrument to be executed by Buyer hereunder, when executed
and delivered by Buyer, will constitute, legal, valid and binding obligations of
Buyer, enforceable against it in accordance with their respective terms, except
to the extent the enforceability hereof and thereof may be limited by
bankruptcy, insolvency, moratorium, reorganization or other laws relating to or
affecting creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(b) Buyer has taken all necessary corporate action to permit it to issue
the Stock Consideration. The Stock Consideration will, when issued, be validly
issued, fully paid and non assessable and not subject to preemptive rights.
SECTION 6.03 SEC Documents. Buyer has provided to Seller its Annual
Report on Form 10-K for the year ended December 31, 1998, Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999, and its proxy
statement with respect to its Annual Meeting of Stockholders for 1999 and any
registration statements filed since December 31, 1998 (such documents
collectively referred to herein as the "SEC Documents"). As of their respective
-------------
dates, except as otherwise disclosed in writing to Seller, the SEC Documents
complied in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission promulgated there under applicable
to such SEC Documents, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The consolidated
financial statements of Buyer included in the SEC Documents comply as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Buyer
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended. Since
June 30, 1999, other than as discussed in the SEC Documents, there has been no
material adverse change in the business of Buyer and its subsidiaries, taken as
a whole.
SECTION 6.04 Non-Contravention. The execution and delivery of this
Agreement by Buyer, the fulfillment of and compliance by it with the terms and
conditions hereof and the consummation by it of the transactions contemplated
hereby will not:
(a) contravene or conflict with any of the terms of the certificate of
incorporation or bylaws of Buyer;
(b) (i) result in a breach of or constitute a default under (whether with
notice or the lapse of time or both) any (x) note, bond, mortgage, loan
agreement, indenture or other instrument evidencing borrowed money to which
Buyer is a party or by which Buyer is bound or to which any of its assets is
subject or (y) provision of any material agreement , contract or other
instrument binding upon the Buyer or any of its Affiliates or any license,
permit or other similar authorization held by Buyer or any of its Affiliates,
which breach or default would reasonably be expected to have a material adverse
effect on Buyer's business or financial condition or the results of its
operations or on its ability to perform its obligations hereunder or (ii) result
in the creation of any Encumbrance on any of its assets; or
(c) to Buyer's knowledge, violate any provision of any law, statute, rule
or administrative regulation or any judgment, order, injunction or decree of any
Governmental Entity applicable to or binding
15
upon Buyer or any of its Affiliates which would reasonably be expected to have a
material adverse effect on Buyer's business or financial condition or the
results of its operations or on its ability to perform its obligations
hereunder.
SECTION 6.05 Governmental Approval. The execution, delivery and
performance by the Buyer of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than (a)
compliance with any applicable requirements of the HSR Act, (b) compliance with
any applicable requirements of the Exchange Act and (c) compliance with any
applicable requirements of the Securities Act.
SECTION 6.06 Litigation. There is no Proceeding pending, instituted or,
to the knowledge of Buyer overtly threatened against Buyer or its subsidiaries
that could reasonably be expected to have a material adverse effect on the
business or financial condition of Buyer and its subsidiaries taken as a whole
or that, if adversely determined, would delay or prevent the consummation of the
transactions contemplated by this Agreement.
SECTION 6.07 No Brokers. Buyer has not employed or authorized anyone to
represent it as a broker or finder in connection with the transactions
contemplated by this Agreement, and no broker or other Person is entitled to any
commission or finder's fee from Buyer in connection with such transactions.
Buyer will indemnify and hold harmless Seller from and against any and all
losses, claims, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, Seller may sustain or incur
as a result of any claim for a commission or fee by a broker or finder acting on
behalf of Buyer.
SECTION 6.08 Capitalization. The authorized capital stock of Buyer
consists of 40,000,000 shares of common stock, par value $.20 per share ("Unit
----
Common Stock"), and 5,000,000 shares of preferred stock, par value $1.00 per
------------
share ("Unit Preferred Stock"). As of August 10, 1999 there were issued and
--------------------
outstanding 25,745,160 shares of Unit Common Stock and no shares of Unit
Preferred Stock. In addition, 0 shares of Unit Common Stock are held in the
treasury of Buyer. The only outstanding options, warrants, or other rights to
purchase shares of Unit Common Stock are stock options covering a total of
838,560 shares of Unit Common Stock. All shares of capital stock of Buyer which
are outstanding as of the date hereof, or will be outstanding immediately prior
to the Closing, are or will be duly authorized, validly issued, fully paid and
nonassessable, and are not or will not be subject to, or issued in violation of,
any preemptive rights. Except as set forth above, as provided on Schedule 6.08
and as provided in the Rights Agreement adopted by the Board of Directors of
Buyer in May 1995, (i) there are no shares of capital stock of Buyer authorized
or outstanding, and there are no subscriptions, options to purchase shares of
the capital stock of Buyer, conversion or exchange rights, warrants, preemptive
rights or other agreements, claims or commitments of any nature whatsoever
(whether firm or conditional) obligating Buyer to issue, transfer, deliver to
sell, or cause to be issued, transferred, delivered or sold, additional shares
of the capital stock or other securities or interest of Buyer or obligating
Buyer to grant, extend or enter into any such agreement or commitment, (ii)
there are no voting trusts, proxies or other agreements or understandings to
which Buyer is bound with respect to the voting of any shares at capital stock
of Buyer and (iii) there currently are no registration rights or similar rights
outstanding with respect to the Unit Common Stock.
SECTION 6.09 Subsidiaries. The only wholly owned subsidiaries of Buyer
are Unit Drilling Company, Unit Petroleum Company, Unit Drilling and Exploration
Company, Mountain Front Pipeline Company, Inc., Unit Texas Company, Petroleum
Supply Company, Unit Drilling Company International, Perforaciones Leasing Ltd.,
Rig Leasing International, and Unit Energy Canada Inc. In addition, Buyer is a
member of GED Gas Services, L.L.C. and Superior Pipeline Company L.L.C., both
limited liability companies formed under Oklahoma law.
16
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller to proceed with the Closing contemplated by this
Agreement are subject to the satisfaction, on or before the Closing Date, of all
the following conditions, any one or more of which may be waived, in whole or in
part, by Seller:
SECTION 7.01 Accuracy of Representations and Warranties. Each
representation and warranty of Buyer contained in this Agreement shall be true
and correct in all material respects as of the Closing Date with the same effect
as though made on the Closing Date, except as otherwise specifically
contemplated by this Agreement.
SECTION 7.02 Covenants and Agreements Performed. Buyer shall have
complied on or before the Closing Date in all material respects with each of its
covenants or agreements contained in this Agreement to be performed on or before
the Closing Date.
SECTION 7.03 Officer's Certificate. Seller shall have received a
certificate, substantially in the form of Exhibit "D" hereto, dated as of the
Closing Date, of the President or a Vice President of Buyer certifying as to the
matters specified in Sections 7.1 and 7.2.
SECTION 7.04 Legal Opinion. Seller shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, A Professional Corporation, counsel for Buyer, an opinion dated the
Closing Date, with respect to the due authorization, execution, delivery and
enforceability of this Agreement.
SECTION 7.05 No Governmental Action. No action of any private party or
Governmental Entity shall have been taken or threatened and no statute, rule,
regulation or executive order shall have been proposed, promulgated or enacted
by any Governmental Entity which seeks to restrain, enjoin or otherwise prohibit
or to obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.
SECTION 7.06 Termination under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. The termination or
early termination of any applicable waiting period under the HSR Act shall have
occurred.
SECTION 7.07 Due Execution and Delivery of Documents. The documents to be
delivered by Buyer at Closing shall have been properly executed and delivered.
SECTION7.08 No Adverse Change. There shall not have occurred any material
adverse change in the business of Buyer.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer to proceed with the Closing contemplated by this
Agreement are subject to the satisfaction, on or before the Closing Date, of all
the following conditions, any one or more of which may be waived, in whole or in
part, by Buyer:
SECTION 8.01 Accuracy of Representations and Warranties. Each
representation and warranty of Seller contained in this Agreement shall be true
and correct in all material respects as of the Closing Date with the same effect
as though made on the Closing Date, except as otherwise specifically
contemplated by this Agreement.
SECTION 8.02 Covenants and Agreements Performed. Seller shall have
complied on or before the Closing Date in all material respects with each of its
covenants or agreements contained in this Agreement to be performed on or before
the Closing Date.
17
SECTION 8.03 Officer's Certificate. Buyer shall have received a
certificate, substantially in the form of Exhibit "E" hereto, dated as of the
Closing Date, of the President or a Vice President of Seller certifying as to
the matters specified in Sections 8.01 and 8.02.
SECTION 8.04 Legal Opinion. Buyer shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇▇ counsel for Seller, an opinion dated the Closing Date, with respect to
the due authorization, execution, delivery and enforceability of this Agreement.
SECTION 8.05 Drilling Contracts. Seller shall have obtained the consents
to the assignment of the Drilling Contracts, Other Contracts and leases
identified as "Consent Required Contracts" on Schedule 2.01(f)(i) and
2.01(f)(ii) on terms reasonably acceptable to Buyer or, with respect to any
Nonassigned Contracts, there are no reasonable grounds to believe that the
arrangements provided in Section 2.05 to provide the economic benefits to Buyer
cannot be implemented.
SECTION 8.06 No Adverse Change. There shall not have occurred any Seller
MAE.
SECTION 8.07 [Reserved]
SECTION 8.08 No Governmental Action. No action of any private party or
Governmental Entity shall have been taken or threatened and no statute, rule,
regulation or executive order shall have been proposed, promulgated or enacted
by any Governmental Entity which seeks to restrain, enjoin or otherwise prohibit
or to obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.
SECTION 8.09 Termination under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. The termination or
early termination of any applicable waiting period under the HSR Act shall have
occurred.
SECTION 8.10 Due Execution and Delivery of Documents. The documents to be
delivered by Seller at Closing shall have been properly executed and delivered.
ARTICLE IX
COVENANTS AND AGREEMENTS OF THE PARTIES
Seller and Buyer hereby covenant and agree as follows:
SECTION 9.01 Expenses. Except as otherwise expressly provided in this
Agreement, each of the parties hereto shall assume and bear all expenses, costs
and fees incurred or assumed by such party in the preparation and execution of
this Agreement and in compliance with and performance of the agreements and
covenants contained in this Agreement, regardless of whether the transactions
contemplated hereby are consummated.
SECTION 9.02 Access. Between the date hereof and the Closing, to the
extent permitted by applicable law and subject to the provisions of the
Confidentiality Letter between Seller and Buyer dated June 25, 1999, the Seller
and Buyer will give the other party, its counsel, financial advisors, auditors
and other authorized representatives reasonable access to the offices,
properties, books and records of such party and its Affiliates, furnish to the
other party, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request and will instruct its own employees, counsel and
financial advisors to cooperate with the other party in its investigation of the
business of the Seller or Buyer, as the case may be; provided that no
investigation of the other party's business shall affect any representation or
warranty given by either party hereunder. Buyer acknowledges and agrees that its
due diligence, including observation of the Purchased Assets, shall be conducted
at the sole risk and expense of Buyer and Buyer hereby agrees to defend,
indemnify and hold Seller harmless from and against any and all Claims brought
by Buyer, its Affiliates, and their respective officers, agents and employees
for damage or loss to property or injury or death to persons arising out of the
performance of said due diligence activities.
18
SECTION 9.03 Conduct of Business and Preservation of Assets. Until the
Closing, Buyer and Seller agree to cooperate with each other to effect an
orderly transition of the ongoing operation of the Purchased Assets and Seller
shall preserve, maintain and protect the Purchased Assets consistent with past
practice. From and after the date of this Agreement and until the Closing Date,
without the prior express written consent of Buyer, which consent shall not be
unreasonably withheld or delayed, Seller and its Affiliates will:
(a) conduct its business and operations as they relate to the Purchased
Assets only in the usual, regular and ordinary manner consistent with current
practice and, to the extent consistent with such operation, use its reasonable
efforts to keep available the services of the present employees associated with
the operation of the Purchased Assets and preserve the Seller's present
relationships with Persons having business dealings with the Seller relating to
the Purchased Assets;
(b) maintain the Seller's books, accounts and records relating to the
Purchased Assets in the usual, regular and ordinary manner, on a basis
consistent with past practice, and comply in all material respects with all
Applicable Laws and other obligations of the Seller;
(c) not (i) sell, lease or otherwise dispose of any of the Purchased
Assets, (ii) modify or change in any material respect adverse to Seller or Buyer
any Drilling Contract or Other Contract, (iii) move any Rig to a different
geographic region, or (iv) agree, whether in writing or otherwise, to do any of
the foregoing;
(d) not (i) permit or allow any of the Purchased Assets to become subject
to any Encumbrances other than Permitted Encumbrances or Permitted Real Property
Encumbrances, (ii) waive any claims or rights relating to the Purchased Assets,
except in the ordinary course of business and consistent with past practice,
(iii) grant any increase in the compensation of any employees employed with
respect to the Purchased Assets, except in the ordinary course of business or as
required by contractual arrangements existing on the date hereof, (iv) enter
into any agreements giving rise to trade and barter obligations relating to the
Purchased Assets, or (v) agree, whether in writing or otherwise, to do any of
the foregoing;
(e) maintain the Inventory associated with the Rigs, including spare
components and parts, supporting inventory, drill pipe and tubulars, in such
amounts and of such quality as would be in accordance with past practice and
comparable historical levels and sufficient to comply with any applicable
Drilling Contract under which such Rig is operating; and
(f) not execute any drilling contracts without the prior written consent
of Buyer, such consent not to be unreasonably withheld.
SECTION 9.04 Notices of Certain Events. (a) Until the Closing, Seller
will promptly notify Buyer of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement; and
(ii) any notice or other communication from any Governmental
Entity or in connection with the transactions contemplated by this
Agreement.
(b) Seller shall promptly notify Buyer of any Proceedings or Claims
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting Seller or any of its Affiliates, which relate
to the consummation of the transactions contemplated by this Agreement, or
affects the Purchased Assets or this Agreement and Buyer will promptly notify
Seller of any Proceeding or Claim which is overtly threatened or commenced
against Buyer which relates to and materially and adversely affects this
Agreement or the transactions contemplated hereby.
SECTION 9.05 Certain Taxes. In regard to Taxes, the parties further agree
as follows:
19
(a) Seller and Buyer will cooperate fully with each other, on a
reasonable basis, in connection with the preparation, signing and filing of tax
returns and in any administrative, judicial or other proceeding involving Taxes
relating to the Purchased Assets, including but not limited to the furnishing or
making available of records, books of account or other materials necessary or
helpful for the defense against assertions of any taxing authority as to any tax
returns for such year or period.
(b) Buyer agrees to pay all transfer and documentary taxes, sales or use
taxes and recording costs related to the sale and transfer of the Purchased
Assets from Seller to Buyer. Buyer and Seller further agree to cooperate to
obtain all available exemptions from such taxes.
(c) Except as other provided in this Agreement, as among the parties
hereto, (i) Seller shall be responsible for and pay all Taxes levied or imposed
upon, or in connection with, the Purchased Assets on or before the Closing Date;
(ii) Buyer shall be responsible for and pay all Taxes levied or imposed upon, or
in connection with, the Purchased Assets after the Closing Date; and (iii)
Seller and Buyer will each be responsible for its own income and franchise
taxes, if any, arising from the transactions contemplated by this Agreement.
Any real property taxes, personal property taxes, similar ad valorem obligations
and any other Taxes (other than income or franchise taxes) imposed with respect
to the Purchased Assets for a tax or assessment period that includes, but does
not end on, the Closing Date, shall be apportioned between Buyer and Seller,
[with Seller bearing a portion of such Taxes based on the number of days in the
tax or assessment period prior to and including the Closing Date and Buyer
bearing a portion of such Taxes based on the number of days in the tax or
assessment period after the Closing Date].
(d) The party legally obligated to file a tax return with the relevant
taxing authorities shall be responsible for preparing and timely filing such tax
return. Notwithstanding the foregoing, (i) with respect to tax returns for
taxes described in the last sentence of Section 9.05(c) (e.g., ad valorem
taxes), Buyer shall be responsible for preparing and timely filing such tax
returns and (ii) with respect to tax returns described in Section 9.05(b) (e.g.
transfer taxes), the party legally obligated to file such tax returns with the
relevant taxing authorities shall be responsible for preparing and timely filing
such tax returns, in each case, after consulting with, and reaching mutual
agreement with, the other party with respect to the preparation and filing
thereof.
SECTION 9.06 Actions with Respect to Closing. Seller will use its Best
Efforts to obtain the satisfaction of the conditions to Closing applicable to
Seller set forth in Article VIII as soon as practicable. Buyer will use its Best
Efforts to obtain the satisfaction of the conditions to Closing applicable to
Buyer set forth in Article VII as soon as practicable.
SECTION 9.07 Public Statements. Buyer and Seller will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and shall not
issue any such press release or make any such public statement without the prior
consent of the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, any such press release or public statement as may
be required by applicable law or any listing agreement with any national
securities exchange may be issued prior to such consultation, if the party
making such release or statement has used its reasonable efforts to consult with
the other party.
SECTION 9.08 Continued Effectiveness of Representations and Warranties.
Seller and Buyer shall each use its Best Efforts to cause the
representations and warranties made by it herein to continue to be true and
correct on and as of the Closing Date as if made on and as of the Closing Date.
Seller and Buyer shall each advise the other promptly in writing of any
condition or circumstance occurring from the date hereof up to and including the
Closing Date that would cause the representations and warranties made by it
herein to become untrue in any material respect. Nothing contained in this
Section 9.08 shall be construed as being inconsistent with or in derogation of
Sections 11.01 or 11.05.
SECTION 9.09 Performance Bonds. If Seller has posted a performance or
other similar bond or letter of credit in connection with Seller's ownership or
operation of the Purchased Assets, Buyer and Seller shall cooperate with each
other in order (i) for Seller to obtain the release of any such bond and (ii) to
the extent required, for Buyer to obtain at Buyer's sole cost a substitute bond
or letter of credit or to assume
20
Seller's existing bond. Buyer shall reimburse Seller for all costs incurred by
Seller as a result of Seller's leaving a performance or similar bond or letter
of credit in place after the Closing Date in order to permit Buyer to operate
the Purchased Assets after the Closing Date.
SECTION 9.10 Action of Buyer Regarding Financing and Financial Statements.
(a) Buyer agrees to use its Best Efforts to secure financing for the payment of
the Cash Consideration.
(b) Seller agrees to cooperate with Buyer and to assist Buyer's outside
auditors in the preparation of any financial statements relating to the
Purchased Assets and Seller that may be reasonably requested by Buyer for filing
with the Commission in connection with any filings that may be made by Buyer
under the Securities Act or the Exchange Act. Such financial statements may
consist of (i) such audited balance sheets and audited statements of operations,
cash flows and changes in equity together with the notes thereon and (ii) such
unaudited interim balance sheet and unaudited interim statements of operations,
cash flows and changes in equity, if any, in each case as Buyer shall reasonably
deem to be required.
SECTION 9.11 Employee Matters. (a) Seller shall provide to Buyer a list of
all of Seller's non corporate employees whose work is primarily associated with
the Purchased Assets. Buyer agrees to offer employment to substantially all such
employees who are actively working on the Closing Date. Buyer shall have no
obligation to offer employment to employees of Seller who, on the Closing Date,
are on medical, disability or other leave of absence, until such time as the
employee has met all requirements of the applicable leave policy to return to
work. In that regard, Buyer shall have the right to interview Seller's employees
at any time after the execution of this Agreement and provide Seller with a list
of Seller's employees which have agreed, prior to Closing, to become a
Transferred Employees (as defined below). Seller shall be solely responsible for
the payment of any severance or other benefits to employees who are not
Transferred Employees. Notwithstanding any other provision of this Agreement,
the parties hereto do not intend to create any third-party beneficiary rights
respecting any of Seller's employees or future employees as a result of the
provisions herein and specifically hereby negate any such intention. With
respect to those employees who accept employment with the Buyer after the
Closing Date (the "Transferred Employees", Buyer (or Buyer Designee as the case
---------------------
may be) agrees to provide employee benefits to the Transferred Employees that
are, in all material respects, no less favorable to such Transferred Employees
than the employee benefits provided to similarly situated employees of Buyer
under employee benefit plans sponsored by Buyer provided that such Transferred
Employees will be subject to the terms and conditions of the applicable employee
benefit plan, subject, in all cases, to the provisions of this Section 9.11.
Further, as to the Transferred Employees, Buyer (or Buyer Designee, as the case
may be) shall (i) offer such employees substantially similar cash compensation
as that paid by Buyer to its existing employees employed in substantially
similar capacities, (ii) service with Seller shall be counted for purposes of
determining eligibility for participation in all health benefit programs of
Buyer, (iii) any expenses by such Transferred Employees for purposes of
satisfying deductibles, co-payments and out-of- pocket expenses under the
Seller's medical or dental plans in the calendar year that included the Closing
Date shall be credited for purposes of satisfying any such requirements under
Buyer's similar plans, if any; (iv) service with the Seller shall be counted for
purposes of determining continuous service and eligibility for safety awards of
Buyer; (v) any life, medical and disability plans maintained by Buyer
immediately after the Closing shall not exclude any Transferred Employees from
eligibility, or deny or reject benefits from such employee, due to any pre-
existing condition (except for such employees who have been or would have been
denied eligibility, or denied or rejected benefits, under any similar plan
maintained by the Seller prior to the Closing Date), (vi) cause any of its
employee pension benefit plans (including 401(k) plans) to be amended to provide
that the Transferred Employees shall receive credit for participation and
vesting purposes under such plans for their period of employment with the Seller
and its predecessors to the extent such employment was recognized by Seller
under its 401(k) plan, and (vii) take all other reasonable steps to carry out
the intent of the foregoing. However, the Transferred Employees shall not be
credited with their prior years of service with Seller for purposes of Buyer's
Separation Benefit Plan or Buyer's Separation Benefit Plan for Senior
Management.
(b) On or before the Closing Date, Seller may take any necessary action to
fully vest an employee's account balance and other accrued benefits under any
employee benefit plan maintained by Seller that is intended to be qualified
under Section 401(a) of the Code. As soon as practicable following
21
the Closing Date, Seller shall cause to be transferred from the trustees of the
▇▇▇▇▇▇ Drilling Company Stock Bonus Plan ("Seller's 401(k) Plan") to the
--------------------
trustees of the Unit Corporation Employees' Thrift Plan ("Buyer's 401(k) Plan")
-------------------
an amount in cash equal to the aggregate account balances of the Transferred
Employees under Seller's 401(k) Plan determined as of the transfer date (which
shall be a valuation date) in accordance with the methods of valuation currently
set forth in Seller's 401(k) Plan; provided, however, that to the extent any
Transferred Employee owes any amount to Seller's 401(k) Plan pursuant to the
terms of a loan from such plan to such Transferred Employee, 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, Buyer shall cause Buyer's 401(k) Plan to assume the
obligations of Seller's 401(k) Plan with respect to the aggregate account
balances transferred to the Buyer's 401(k) Plan, and Seller's 401(k) Plan shall
cease to be responsible therefore. Buyer and Seller shall cooperate in making
all appropriate arrangements and filings, if any, in connection with the
transfer described above. Further, Buyer and Seller shall cooperate and take
such actions as are necessary to permit the continuation of loan repayments by
Transferred Employees to Seller's 401(k) Plan by payroll deductions during the
period beginning on the Closing Date and ending on the date of the transfer
described in this subsection. Seller represents, covenants and agrees with
respect to Seller's 401(k) Plan, and Buyer represents, covenants and agrees with
respect to Buyer's 401(k) Plan, that, as of the date of the transfer described
in this subsection, such plan (i) will satisfy the requirements of Sections
401(a), (k), and (m) of the Code, (ii) will have received a favorable
determination letter from the Internal Revenue Service regarding such qualified
status and covering amendments required under the Tax Reform Act of 1986, the
Unemployment Compensation Amendments of 1992, the Omnibus Reconciliation Act of
1993, and the final nondiscrimination regulations under Section 401(a)(4) of the
Code, and (iii) will have not been amended or operated in a way which would
adversely affect such qualified status.
Seller further represents, covenants and agrees that, as to the Transferred
Employees: (i) the only optional form of benefit provided by the Seller's 401(k)
Plan, which must be protected by the Buyer's 401(k) Plan, is a single sum cash
distribution; (ii) the only in-service withdrawals permitted under Seller's
401(k) Plan are reflected in Article X of Seller's 401(k) Plan; (iii) the only
distributions permitted upon termination of employment or death under Seller's
401(k) Plan are reflected in Articles XI and XII of Seller's 401(k) Plan; (iv)
none of the loans being transferred to Buyer's 401(k) Plan are in default; and
(v) Seller will provide Buyer with all documents, records and other information
reasonably required by Buyer in order for Buyer's 401(k) Plan to fulfill its
obligations with respect to the aggregate account balances being transferred to
Buyer's 401(k) Plan.
(c) Buyer shall provide any Transferred Employee who is subsequently
terminated by Buyer for any reason, health plan continuation coverage to the
extent of and in accordance with the requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and Section 601 through 608 of
ERISA ("COBRA"); and Seller agrees to provide health plan continuation coverage
to the extent of and in accordance with COBRA.
(d) As soon as possible after execution of this Agreement, Seller will
provide Buyer with copies of each of its employee benefit plans, policies and
programs provided to Seller's employees associated with the Purchased Assets.
SECTION 9.12 Approvals of Governmental Bodies. As promptly as practicable
after the date of this Agreement, Seller and Buyer, as the case may be, will,
and will cause each of their respective Affiliates to, make all filings required
by Applicable Laws to be made by it to consummate the transactions contemplated
by this Agreement (including, if needed, all filings under the HSR Act). Each
party will, and will cause each of its Affiliates to, cooperate with the other
party with respect to all filings that the other party and its Affiliates are
required by Applicable Laws to make in connection with the transactions
contemplated in this Agreement; provided that nothing in this Agreement will
require Buyer to dispose of or make any change in any portion of its business or
to incur any other burden to obtain any consent or approval required by any
Governmental Entity. Each party agrees to make available to the other such
information as each of them may reasonably request relative to its business,
assets and property as may be required of each of them to make any required
filings and to provide any additional information requested by any agencies
under the HSR Act and shall use its Best Efforts to make any such filings,
provide such
22
additional information and take such other actions as may be appropriate or
desirable to permit early termination of the waiting period under such act.
SECTION 9.13. Further Assurances. Subject to the terms and conditions of
this Agreement, (including, without limitation, Section 9.10), Seller and Buyer
will each use their Best Efforts to take, or cause to be taken, all action and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including using Best Efforts: (i) to obtain prior to the Closing Date all
Permits, consents, approvals, authorizations, qualifications and orders of
Governmental Entities and parties to Contracts as are necessary for the
consummation of the transactions contemplated hereby; and (ii) to furnish to
each other such information and assistance as reasonably may be requested in
connection with the foregoing. Seller and Buyer shall cooperate fully with each
other to the extent reasonably required to obtain such consents. Notwithstanding
any other provision hereof, this Agreement shall not constitute or require an
assignment to Buyer of any Drilling Contract, Permit, or other right if an
attempted assignment of the same without the consent of any party would
constitute a breach thereof or a violation of Applicable Law unless and until
such consent shall have been obtained.
SECTION 9.14 Rig Loss. (a) If any Rig shall become an actual or
constructive total loss (as determined by the Seller's insurance underwriter)
prior to the Closing Date: (i) Buyer shall not be required to purchase such Rig,
(ii) the Purchase Consideration shall be reduced by the amount allocated to such
rig pursuant to Schedule 3.02, (iii) the term "Purchased Assets" shall be deemed
not to include such Rig and the Seller shall be entitled to any insurance
proceeds and claims with respect thereto (and such proceeds and claims shall be
deemed to be Excluded Assets for all purposes hereunder) and (iv) the other
provisions of this Agreement shall continue to be in effect and the Closing
shall take place in the manner contemplated herein.
(b) If a Rig sustains damage (estimated to cost more than $50,000 to
repair) not amounting to an actual or constructive total loss prior to the
Closing Date, at the Seller's election either (i) the Seller shall repair or
cause to be repaired the damage to the Rig at the Seller's own expense or (ii)
elect not to repair such Rig. In the case of an election under Section
9.14(b)(ii), the Buyer may (x) require the Seller to assign to Buyer at the
Closing the rights, if any, the Seller has to receive insurance proceeds in
respect of such loss or damage or (y) elect to not purchase the Rig and be
entitled to a reduction in Purchase Consideration equal to its value as set out
in Schedule 3.02. In the case of either (i) or (ii)(x) above, Buyer shall
remain obligated to purchase the Purchased Assets on the Closing Date and the
Purchase Consideration shall not be reduced.
SECTION 9.15 Seller's Covenants Not to Compete. (a) In order to allow Buyer
to realize the full benefit of its bargain in connection with the purchase of
the Purchased Assets, neither the Seller nor its Affiliates will, at any time,
for a period of one year following the Closing Date, directly or indirectly,
acting alone or as a member of a partnership or as a holder of in excess of 5%
of any security of any class, or as a representative of, any corporation or
other business entity undertake the following as the same pertains to the Area
of Operations (as defined below):
(i) engage in any business in competition with the business
conducted by Buyer's Affiliate, Unit Drilling Company;
(ii) directly or indirectly, (i) induce or attempt to induce any
employee of the Buyer or Unit Drilling Company to leave the employ of the
Buyer or Unit Drilling Company, (ii) in any way interfere with the
relationship between the employer and any employee of the Buyer or Unit
Drilling Company, (iii) induce or attempt to induce any customer, supplier,
licensee, or business relation of the Buyer or Unit Drilling Company to
cease doing business with the Buyer or Unit Drilling Company or in any way
interfere with the relationship between any customer, supplier, licensee,
or business relation of the Buyer or Unit Drilling Company; and
(iii) directly or indirectly, either for itself or any other Person,
solicit the business of any Person known to Seller to be a customer of the
Buyer or Unit Drilling Company whether or not
23
Seller had personal contact with such person, with respect to activities or
services which complete in whole or in part with the services or activities
of the Buyer or Unit Drilling Company;
(b) The provisions of this Section 9.15 shall not be applicable to any (i)
drilling rigs that may be acquired by Seller pursuant to a merger, consolidation
or agreement to acquire all of the assets and business of a company whose
principal business is not domestic contract drilling for oil and gas between
Seller and a non Affiliate subsequent to the Closing Date, or (ii) barge rig
operations.
(c) Seller acknowledges that in the event the scope of the covenants set
forth in this Section 9.15 are deemed to be too broad in any Proceeding, the
court or arbitrator may reduce such scope to that which it deems reasonable
under the circumstances. The parties hereto agree and acknowledge that Buyer
would not have any adequate remedy at law for the breach or threatened breach by
Seller or any of its Affiliates of the covenants and agreements set forth in
this Section 9.15 and, accordingly, Seller further agrees that Buyer may, in
addition to the other remedies which may be available to it hereunder, file
suit, notwithstanding the provisions of Section 13.05, in equity to enjoin, the
Seller, or any of its Affiliates from such breach or threatened breach and
consents to the issuance of injunctive relief hereunder. Seller understands and
agrees that the act of Buyer in entering into this Agreement, and Buyer's
covenants and payments hereunder, shall and do constitute sufficient
consideration for the Seller to agree not to compete against Buyer as set out in
this Section 9.15 and that the covenants contained in this Section 9.15 are
reasonable with respect to there duration, geographical area and scope.
(d) For purposes of this Section 9.15, the term "Area of Operations" shall
------------------
mean those States where the Rigs are located on the Closing Date. The parties
agree that this geographical area is reasonable in view of the purposes and
intentions of the parties and that in any action or arbitration hereunder, the
court or the arbitrator, as the case may be, shall not be limited in giving
effect to this Section by virtue of any provision of Oklahoma law that would
require a more restrictive geographical area.
SECTION 9.16 Other Offer. The Seller and its Affiliates will not, and the
Seller will use its Best Efforts to cause the officers, directors, employees,
investment bankers, consultants and other agents of the Seller not to, directly
or indirectly, take any action to solicit, initiate, encourage or facilitate the
making of any Acquisition Proposal or any inquiry with respect thereto or engage
in discussions or negotiations with any Person with respect thereto, or disclose
any non-public information relating to the Purchased Assets or afford access to
the properties, books or records of the Seller or any Affiliate, as the same
relate to the Purchase Assets, to any Person that has made, or to the Seller's
knowledge, is considering making, any Acquisition Proposal. The Seller and its
Affiliates will, and the Seller will use its Best Efforts to cause the officers,
directors, employees, investment bankers, consultants and other agents of the
Seller and its Affiliates to, immediately cease and cause to be terminated all
discussions and negotiations, if any, that have taken place prior to the date
hereof with any Persons with respect to any Acquisition Proposal. For purposes
of this Agreement, "Acquisition Proposal" means any offer or proposal for the
--------------------
acquisition or purchase of, or any indication of interest in, directly or
indirectly, all or part of the Purchased Assets.
SECTION 9.17 Conduct of Purchaser's Business. Between the date hereof and
Closing Buyer and its Affiliates will:
(a) conduct its business and operations only in the usual, regular and
ordinary manner consistent with current practice and, to the extent consistent
with such operation and preserve the Buyer's present relationships with Persons
having business dealings with the Seller;
(b) maintain the Buyer's books, accounts and records in the usual, regular
and ordinary manner, on a basis consistent with past practice, and comply in all
material respects with all Applicable Laws; and
(c) refrain from issuing any securities other than those securities issued
in connection with the transactions contemplated in this Agreement (including
any Unit Common Stock issued in connection with the Buyer's proposed public
offering for the purpose of financing the Cash Consideration) and under stock
options or stock plans of Buyer currently in existence.
24
ARTICLE X
TERMINATION
SECTION 10.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer, if there shall be any statute, rule or regulation that makes
consummation of the transactions contemplated hereby illegal or otherwise
prohibited or a Governmental Entity shall have issued an order, decree or ruling
or taken any other action permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby, and such
order, decree, ruling or other action shall have become final and nonappealable;
(c) by Buyer, if
(i) the Closing shall not have occurred by October 31, 1999
(provided that the right to terminate this Agreement under this clause (i)
shall not be available to Buyer if such failure is due to Buyer not
fulfilling one or more of its obligations under this Agreement or its
misrepresentation or breach of any warranty hereunder); or
(ii) there has been a material breach by Seller of any covenant
or agreement, or a material inaccuracy of any representation or warranty of
Seller, contained in this Agreement which has rendered the satisfaction of
any condition to the obligations of Buyer impossible and such breach or
inaccuracy has not been cured by Seller within ten Business Days after
Seller's receipt of notice thereof from Buyer, or waived by Buyer;
(iii) there shall occur an event that results in or would
reasonably be expected to result in a Seller MAE; or
(iv) Buyer is unable or unwilling to complete the proposed
public offering of its common stock for the purpose of financing the Cash
Consideration.
(d) by Seller, if
(i) the Closing shall not have occurred by October 31, 1999
(provided that the right to terminate this Agreement under this clause (i)
shall not be available to Seller if such failure is due to Seller not
fulfilling one or more of its obligations under this Agreement or its
misrepresentation or breach of any warranty hereunder); or
(ii) there has been a material breach by Buyer of any covenant or
agreement, or a material inaccuracy of any representation or warranty of
Buyer, contained in this Agreement which has rendered the satisfaction of
any condition to the obligations of Seller impossible and such breach or
inaccuracy has not been cured by Buyer within ten Business Days after
Buyer's receipt of notice thereof from any Seller, or waived by Seller; or
(iii) at any time prior to Closing, the closing prices of Unit
Common Stock as reported on the New York Stock Exchange for a period of ten
consecutive trading days are less than the price set forth in the letter to
Seller referred to in Section 10.02 below.
SECTION 10.02 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 10.01 by Buyer or Seller, written notice
thereof shall forthwith be given to the other party specifying the provision
hereof pursuant to which such termination is made, and this Agreement shall
become void and have no effect, and, except in the case of a termination under
Section 10.01(c)(i), (ii) and (iv) or 10.01(d)(i) and (ii), there shall be no
liability hereunder on the part of Buyer or Seller or any of their respective
directors, officers, employees, stockholders or representatives, except that the
agreements
25
contained in this Section 10.02 and in Article XI and Sections 5.13, 6.07, and
9.01 shall survive the termination hereof. In the event of a termination under
10.01(c)(iv) because Buyer elects not to complete its proposed public offering
of its common stock (unless due to (i) a major financial market collapse which
significantly impairs the Buyer's ability to raise financing prior to the
Closing Date due to reasons other than the Buyer's financial standing, or (ii)
the proposed public offering could be effected only at a price to the public
which is less than the price of which Buyer has notified Seller by letter prior
to the date of this Agreement), Buyer shall pay to Seller, by wire transfer,
within five (5) Business Days after such termination, the sum of $1,500,000.00,
by way of liquidated damages and not as a penalty. In the event Buyer notifies
Seller under Section 10.02(ii) of such price, Seller shall and shall cause its
Affiliates to maintain such information in strictest confidence and shall not
disclose such information to any Person without the prior written consent of
Buyer.
Nothing contained in this Section 10.02 shall relieve any party from
liability for breach of any covenant or agreement, or for the inaccuracy of any
representation or warranty, contained herein. Furthermore, the terms of the
Confidentiality Letter dated June 25, 1999, shall remain in full force and
effect.
ARTICLE XI
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION
SECTION 11.01 Scope of Representations of Seller. Except as and to the
extent set forth in this Agreement, the Deeds and the other documents,
agreements and instruments delivered in connection with the Agreement, Seller
makes no other representations or warranties, and disclaims all liability and
responsibility for any representation, warranty, statement or information made
or communicated (orally or in writing) to Buyer. WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE DEEDS AND THE OTHER DOCUMENTS, AGREEMENTS AND INSTRUMENTS
DELIVERED IN CONNECTION WITH THIS AGREEMENT, SELLER MAKES NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE MAINTENANCE, REPAIR, CONDITION,
DESIGN, WORKMANSHIP, SUITABILITY, UTILITY OR MARKETABILITY OF THE RIGS OR OTHER
PURCHASED ASSETS OR ANY PORTION THEREOF OR PROPERTY THEREON OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR ANY OTHER MATERIALS OR
INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO BUYER OR ITS
AGENTS, CONSULTANTS OR REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING
THERETO, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IT BEING THE EXPRESS
AGREEMENT OF BUYER AND SELLER THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, BUYER WILL OBTAIN RIGHTS IN THE PURCHASED ASSETS IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, "AS IS" AND "WHERE IS" AND "WITH ALL FAULTS."
SECTION 11.02 Indemnification by Seller and ▇▇▇▇▇▇. Seller and ▇▇▇▇▇▇,
individually and jointly, agree to indemnify, defend and hold Buyer and its
Affiliates harmless from and against any and all losses, liabilities, claims,
demands, damages, costs and expenses (including reasonable attorneys' fees and
disbursements) of every kind, nature and description (collectively, "Claims")
------
sustained by Buyer or any of its Affiliates based upon, arising out of or
otherwise in respect of (i) the inaccuracy of any representation or warranty, or
the breach of any covenant or agreement, of Seller contained in this Agreement
or in any certificate, agreement, document or instrument delivered pursuant to
this Agreement, (ii) the ownership, management or use of the Purchased Assets
prior to the Closing or (iii) any Retained Liabilities; except, that Seller and
▇▇▇▇▇▇ shall have no liability pursuant to Section 11.02(i) for the first
$100,000.00 of aggregate Claims (the "Buyer Basket") provided, that Seller and
------------
▇▇▇▇▇▇ shall be responsible only for such amounts of such Claims as exceed the
Buyer Basket up to and including $5,000,000; provided however, such limitation
shall not apply if such claims arise from (i) a breach of any representations
and warranties set forth in Sections 5.01, 5.02, 5.04, 5.05, 5.11 and 5.13 or
(ii) the Retained Liabilities. The amount of any
26
Claims for which indemnification is provided under this Section 11.02 shall be
net of any amounts recovered by the Indemnified Party under any insurance
policies with respect to such Claims. Indemnified Party shall seek recovery of
any Claim or any portion thereof, from any insurance policies covering such
claim or loss in effect prior to the Closing, and Seller will reasonably
cooperate with Indemnified Party in Indemnified Party seeking such recovery.
SECTION 11.03 Indemnification by Buyer. Buyer agrees to indemnify, defend
and hold Seller and its Affiliates harmless from and against any and all Claims
sustained by Seller or any of its Affiliates based upon, arising out of or
otherwise in respect of (i) the inaccuracy of any representation or warranty, or
the breach of any covenant or agreement, of Buyer contained in this Agreement or
in any certificate, agreement, document or instrument delivered pursuant to this
Agreement, or (ii) the ownership, management or use of the Purchased Assets
after the Closing (including the matters referred to in the last sentence of
Section 2.05), unless and to the extent that such Claim arises solely from any
action of Seller or any of its Affiliates after the Closing; provided, however,
that Buyer shall have no liability pursuant to Section 11.03(i) for the first
$100,000.00 of aggregate Claims (the "Seller Basket"); provided, that Buyer
-------------
shall be responsible only for such amounts of such Claims as exceed the Seller
Basket up to and including $5,000,000; provided however, such limitation shall
not apply if such claims arise from (i) a breach of the representation and
warranty set forth in Section 6.01, 6.02 and 6.07 or (ii) the Assumed
Liabilities. The amount of any Claims for which indemnification is provided
under this Section 11.03 shall be net of any amounts recovered by the
Indemnified Party under any insurance policies with respect to such Claims.
SECTION 11.04 Indemnification Procedures. Any party seeking information or
reimbursement for Claims hereunder (the "Indemnified Party") shall as promptly
-----------------
as practicable notify the party from which such indemnification is sought (the
"Indemnifying Party") upon which the Indemnified Party intends to base a claim
------------------
for indemnification or reimbursement hereunder; provided, however, that the
failure of an Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability under this Agreement to the
Indemnified Party with respect to such Claim except to the extent the
Indemnifying Party is actually prejudiced or damaged by the failure to receive
timely notice. In the event of any claims for indemnification or reimbursement,
the Indemnifying Party, at its option, may assume (with legal counsel reasonably
acceptable to the Indemnified Party) the defense of any claim, demand, lawsuit
or other Proceeding brought against the Indemnified Party, which claim, demand,
lawsuit or other Proceeding may give rise to the indemnity or reimbursement
obligation of the Indemnifying Party hereunder, and may assert any defense of
any party; provided, however, that the Indemnified Party shall have the right at
its own expense to participate jointly with the Indemnifying Party in the
defense of any claim, demand, lawsuit or other Proceeding in connection with
which the Indemnified Party claims indemnification or reimbursement hereunder.
Notwithstanding the right of an Indemnified Party so to participate, the
Indemnifying Party shall have the sole right to settle or otherwise dispose of
such claim, demand, lawsuit or other Proceeding on such terms as the
Indemnifying Party, in its sole discretion, shall deem appropriate with respect
to any issue involved in such claim, demand, lawsuit or other Proceeding as to
which (i) the Indemnifying Party shall have acknowledged the obligation to
indemnify the Indemnified Party hereunder and the settlement is solely for cash
or (ii) the Indemnified Party shall have declined so to participate and, in
either case, the Indemnified Party is provided a full and complete release of
Claims.
SECTION 11.05 Survival. The representations and warranties of the parties
to this Agreement shall survive the Closing Date and shall remain in full force
and effect for a period of one year following the Closing Date; provided, that
the (i) representations and warranties set forth in Section 5.12 shall survive
the Closing and shall terminate at the close of business two years after the
Closing Date and (ii) the representation and warranties contained in Sections
5.02, 5.04, 5.05, 5.11, 5.13 and 6.01, 6.02 and 6.07 shall survive the Closing
and shall terminate at the close of business four years after the Closing Date
(the period during which the representations and warranties shall survive being
referred to herein with respect to such representations and warranties as the
"Survival Period"), and shall be effective with respect to any inaccuracy
---------------
therein or breach thereof (and a claim for indemnification under Article 11
hereof may be made thereon) if a written notice asserting the claim shall have
been duly given in accordance with Article 11 hereof within the Survival Period
with respect to such matter. Any claim for indemnification made during the
Survival Period shall be valid and the representations and warranties relating
thereto shall remain in effect for purposes of such indemnification
notwithstanding that such claim may not be resolved within the
27
Survival Period. All representations, warranties and covenants and agreements
made by the parties shall not be affected by any investigation heretofore or
hereafter made by and on behalf of any of them and shall not be deemed merged
into any instruments or agreements delivered in connection with this Agreement
or otherwise in connection with the transactions contemplated hereby.
SECTION 11.06 Limitation of Remedies. The indemnification obligations of
Buyer, Seller and ▇▇▇▇▇▇ set forth in this Agreement, including in this Article
XI, shall be limited to indemnification for actual damages suffered and shall
not include incidental, consequential, special or indirect damages; provided,
however, that any such incidental, consequential, special or indirect damages
recovered by a third party against a party entitled to indemnity under this
Agreement shall be included in the damages recoverable pursuant to the
indemnities herein.
SECTION 11.07 Applicability of Indemnification Obligation. EACH OF THE
AGREEMENTS TO INDEMNIFY, DEFEND OR HOLD HARMLESS CONTAINED IN SECTION 11.02 OR
11.03 SHALL APPLY IRRESPECTIVE OF WHETHER THE SUBJECT CLAIM IS BASED IN WHOLE OR
IN PART UPON THE SOLE OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR
GROSS), BREACH OF WARRANTY, OR BREACH OR VIOLATION OF ANY DUTY IMPOSED BY ANY
LAW OR REGULATION, ON THE PART OF THE BENEFICIARY OF THE AGREEMENT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
SECTION 11.08 Exclusive Rights and Remedies. The rights and remedies
provided in this Article XI shall be the exclusive rights and remedies,
contractual or otherwise, of the indemnified Persons with respect to breaches of
the representations, warranties, covenants and agreements contained in this
Agreement.
ARTICLE XII
REGISTRATION RIGHTS
SECTION 12.01 Registration of Securities. (a) As used in this Article XII,
the following terms have the meanings set forth below:
"Disadvantageous Condition" has the meaning set forth in Section
-------------------------
12.01(b)(iii).
"Holders" means the Seller or any Person who becomes a holder of Subject
-------
Securities after the Closing Date as a result of a No-Sale Transaction.
"No-Sale Transaction" means a transfer from a Holder of Subject Securities
-------------------
that does not constitute a "sale" (as such term is understood and defined under
the Securities Act), including without limitation a distribution from a Holder
that is a corporation, partnership, joint venture, limited liability company,
association or trust to the owner of a beneficial interest in such Holder.
"Registration Expenses" has the meaning set forth in Section 12.01(e).
---------------------
"Registration Termination Date" means the second anniversary of the date
-----------------------------
when the Commission first declares the Shelf Registration Statement effective;
provided, however that the Registration Termination Date shall be extended for a
period equal to the aggregate period or periods during which the Holders have
been precluded from selling any Subject Securities under subparagraph (b) (iii)
by reason of receipt of a Suspension Notice. Notwithstanding anything to the
contrary, the Registration Termination Date shall occur at such earlier date as
the Subject Securities become freely transferable on the public market without
any restrictions or limitations pursuant to Rule 144(k) promulgated by the
Commission.
"Shelf Registration Statement" means a registration statement on Form S-3
----------------------------
filed with the Commission under the Securities Act.
"Subject Securities" means the shares of Unit Common Stock issued as the
------------------
Stock Consideration to Seller and any common stock or other security issued or
issuable as a dividend or other distribution with
28
respect to, or in exchange for, or upon conversion or in replacement of, any of
such Unit Common Stock.
"Suspension Notice" has the meaning set forth in Section 12.01(b)(iii).
-----------------
(b) (i) If the Closing occurs, as promptly as practicable thereafter
(but in no event more than 15 days thereafter, subject to Buyer's right to
extend such time in the event that there exists any Disadvantageous Condition
which would permit Buyer to issue a Suspension Notice if the Shelf Registration
Statement were already effective), Buyer will, on one occasion only, prepare and
file with the Commission a Shelf Registration Statement for the purpose of
registering the resale in the market from time to time of the Subject Securities
by Holders or by potential assignees of such Holders to which all or a portion
of such Holders' Subject Securities may be transferred in a No-Sale Transaction.
(ii) Buyer will use its Best Efforts to have the Shelf Registration
Statement promptly declared effective by the Commission and thereafter to
maintain the effectiveness of the Shelf Registration Statement and, subject
to subparagraph (iv) below, to maintain such Shelf Registration Statement
"current" (as below defined) at all times until the Registration
Termination Date. Unit shall promptly give written notice to the Holders
when the Registration Statement has been declared effective by the
Commission and is available for use by Holders for the resale of Subject
Securities.
(iii) The Shelf Registration Statement shall not be considered to be
"current" at any time when, by reason of occurrence of any event or by
reason of the passage of time, the Shelf Registration Statement does not
meet the requirements of Section 10, Section 12(2) or Section 17 of the
Securities Act, or the Shelf Registration Statement contains an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Shelf Registration Statement shall disclose that Holders
may elect to resell Subject Securities without registration of such sales
under the Shelf Registration Statement, by making such sales under and as
permitted by Rules 144 or 145, as applicable, of the Commission under the
Securities Act.
If at any time or times after the Shelf Registration Statement is
declared effective by the Commission, Buyer's Board of Directors determines
that the offering of Unit Common Stock under the Shelf Registration
Statement would be significantly disadvantageous to Buyer's ability to
negotiate or complete a material financing, merger, acquisition or other
material transaction or event involving Buyer or its subsidiaries that has
not been publicly disclosed or the unavailability of any required
financial statements for reasons substantially beyond the control of the
Buyer, (a "Disadvantageous Condition"), Buyer shall be entitled to either
-------------------------
suspend the effectiveness of the Shelf Registration Statement with the
Commission or suspend the availability of the Shelf Registration for
resales of Subject Securities by Holders, or may take both such actions,
and shall promptly notify all Holders thereof by delivery of written notice
(a "Suspension Notice"); provided, however, that Buyer's obligation to
-----------------
maintain the Shelf Registration Statement current under this Section
12.01(b) shall not be suspended by reason of Buyer's failure to disclose
information at a time when public disclosure of such information is
required by law. Upon receipt of a Suspension Notice, Holders shall
immediately discontinue the use of the Shelf Registration Statement for any
purpose until notified by Buyer that the Shelf Registration Statement is
current and available for use by Holders for sales of Subject Securities.
Buyer shall not be entitled to suspend the effectiveness of the Shelf
Registration Statement for more than 60 consecutive days or an aggregate of
120 days within any twelve-month period and no subsequent suspension period
shall occur unless at least 90 days have elapsed during which Seller can
utilize the Registration Statement.. As promptly as practicable after the
public disclosure of such Disadvantageous Condition or the Buyer determines
that the Disadvantageous Condition no longer exists, Buyer shall amend or
supplement the Shelf Registration Statement to the extent necessary to make
the Shelf Registration Statement current, and shall give prompt written
notice to all Holders when the Shelf Registration Statement is again
available for resales of Subject Securities.
(iv) If Unit should undertake an underwritten public offering of its
shares either after the
29
Shelf Registration Statement has been declared effective or prior to the
consummation of the transactions contemplated by this Agreement, Seller
shall, upon the request of the managing underwriter of such offering, agree
and commit, and it does hereby agree and commit, that it will not effect
any public sale or distribution, directly or indirectly, or make any offer
to sell, contract to sell (including without limitation any short sale),
grant any option to purchase or otherwise transfer or dispose (including
sales pursuant to Rule 144) of any of the Subject Securities during a
period of seven days prior to and up to 90 days after the closing of such
public offering without the consent of the managing underwriter. This
restriction shall not apply to the offer and sale of any Subject Securities
which may be covered by the registration statement covering such public
offering.
(v) Unit shall promptly notify all Holders of Subject Securities of,
and confirm in writing, the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose. Unit shall use its Best
Efforts to obtain the withdrawal of any order suspending the effectiveness
of the Shelf Registration Statement at the earliest possible time.
(vi) Unit will cause all of the Subject Securities to be listed on
each securities exchange on which similar securities issued by Unit are
then listed no later than the effective date of the Shelf Registration
Statement.
(c) Buyer will indemnify and hold harmless each Holder, each of such
Holder's officers, directors, partners, or members, as the case may be, and each
Person controlling such Holder, with respect to which registration or
qualification of Subject Securities has been effected pursuant to this Article
XII against all claims, losses, damages, and liabilities, joint or several (or
actions in respect thereof), arising out of or based upon any untrue statement
(or alleged untrue statement) of a material fact contained in the Shelf
Registration Statement, prospectus, or offering circular, or in any document
incorporated by reference in any of the foregoing, or arising out of or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by Buyer of any rule or regulation promulgated
under the Securities Act applicable to Buyer and relating to action or inaction
required of Buyer in connection with the Shelf Registration and will promptly
reimburse Holder and, each of such Holder's officers, directors, partners, or
members, as the case may be, and each Person controlling such Holder, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claims, loss, damage, liability or action;
PROVIDED, however, that Buyer will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based upon any untrue statement or omission based upon written information
furnished to Buyer by such Holder specifically for inclusion in any such
registration statement, prospectus or offering circular. The obligations of
Buyer under the foregoing indemnity agreement shall survive the completion of
the offering of Subject Securities under the Shelf Registration Statement .
(d) Each Holder with respect to which registration or qualification of
Subject Securities has been effected pursuant to this Article XII will indemnify
and hold harmless Buyer, each of Buyer's officers, directors, and each Person
controlling Buyer, against all claims, losses, damages, and liabilities, joint
or several (or actions in respect thereof), arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, prospectus, or offering circular, or in any document
incorporated by reference in any of the foregoing, or arising out of or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by such Holder of any rule or regulation
promulgated under the Securities Act or Exchange Act applicable to such Holder
and relating to action or inaction required of such Holder in connection with
any such registration or qualification, and will promptly reimburse Buyer, each
of Buyer's officers, directors, and each Person controlling Buyer, for any legal
and any other expenses reasonably incurred in connection with investigating or
defending any such claims, loss, damage, liability or action; PROVIDED, however,
that such Holder will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense does not arise out of or is not based
upon any untrue statement or omission based upon written information furnished
by such Holder
30
specifically for inclusion in any such registration statement, prospectus or
offering circular. The obligations of Holders under the foregoing indemnity
agreement shall survive the completion of the offering of Subject Securities
under any registration statement provided for in this Article XII.
Notwithstanding the foregoing, in no event shall any selling Holder be liable
for an amount in excess of the proceeds from the sale of the Subject Securities
realized by such Holder.
(e) All expenses incident to Buyer's performance of or compliance with
this Section 12.01, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Subject Securities), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with
the listing of the securities to be registered on the New York Stock Exchange
and all securities exchanges on which similar securities issued by Buyer are
then quoted or listed, the fees and disbursements of counsel for Buyer and its
independent certified public accountants (including the expense of any special
audit or comfort letters required by or incident to such performance),
securities act liability insurance (if Buyer elects to obtain such insurance),
the fees and expenses of any special experts retained by Buyer in connection
with such registration, and fees and expenses of other Persons retained by
Buyer, in connection with each registration hereunder (but not including
discounts, commissions, fees or expenses payable to underwriters that are
attributable to the Subject Securities offered on behalf of the Selling Holder
or the fees and expenses of counsel for any selling Holder) (collectively, the
"Registration Expenses") will be borne by Buyer.
---------------------
(f) Buyer will also take such action as may be required to be taken under
applicable blue sky laws in connection with the issuance of Unit Common Stock
pursuant to this Agreement and in connection with resale of Subject Securities
by Holders pursuant to the Shelf Registration Statement; PROVIDED that Buyer
will not be required to become qualified as a foreign corporation in any
jurisdiction.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Notices. All notices and other communications required or
permitted to be given or made hereunder by either party hereto shall be in
writing and shall be deemed to have been duly given if delivered personally or
transmitted by first class registered or certified mail, postage prepaid, return
receipt requested, or sent by prepaid overnight delivery service, or sent by
cable, telegram, telefax, facsimile, telecopy or telex, to the parties at the
following addresses (or at such other addresses as shall be specified by the
parties by like notice):
If to Buyer:
Unit Corporation.
1000 Kensington Tower, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
General Counsel
Unit Corporation
1000 Kensington Tower, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
31
If to Seller or to ▇▇▇▇▇▇:
▇▇▇▇▇▇ Drilling Company North America, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Attorney
▇▇▇▇▇▇ Drilling Company
▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Such notices, demands and other communications shall be effective (i) if
delivered personally or sent by courier service, upon actual receipt by the
intended receipt, (ii) if mailed, upon the earlier of five days after deposit in
the mail or the date of delivery as shown by the return receipt therefore, or
(iii) if sent by cable, telegram, telefax, telecopy, facsimile or telex
transmission, when confirmation of receipt is received.
SECTION 13.02 Entire Agreement. This Agreement, including the Schedules,
Exhibits and other writings referred to herein or delivered pursuant hereto,
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof.
SECTION 13.03 Amendments and Waiver; Rights and Remedies. This Agreement
may be amended, superseded, canceled, renewed or extended, and the terms hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of
either party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of either party of any
such right, power or privilege, or any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the exercise
of any other such right, power or privilege. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that any
party may otherwise have at law or in equity. The rights and remedies of either
party based upon, arising out of or otherwise in respect of any inaccuracy in or
breach of any representation, warranty, covenant or agreement contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
SECTION 13.04 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Oklahoma,
without regard to the principles of conflicts of laws thereof.
SECTION 13.05 Arbitration. (a) The parties shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement or any
agreement entered into pursuant to this Agreement promptly by negotiation
between Persons who have authority to settle the controversy. Any party may give
the other party written notice of any dispute not resolved in the normal course
of business. Within 15 days after delivery of the notice, the receiving party
shall submit to the other a written response. The notice and the response shall
include (a) a statement of each party's position and a summary of arguments
32
supporting that position, and (b) if the party is a company, the name and title
of the executive who will represent that party and of any other Person who will
accompany the executive. Within 30 days after delivery of the disputing party's
notice, both parties shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to resolve the
dispute. All reasonable requests for information made by one party to the other
will be honored. All negotiations pursuant to this clause are confidential and
shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence and/or the arbitration proceedings.
(b) Any dispute arising out of or relating to this Agreement or any
agreement entered into pursuant to this Agreement or the breach, termination or
validity thereof which has not been resolved by negotiation as provided herein
within 45 days of the disputing party's notice, or if the parties fail to meet,
shall be settled by arbitration conducted expeditiously in accordance with the
Center for Public Resources Rules for Non-Administered Arbitration of Business
Disputes by a sole arbitrator. The United States Arbitration Act, 9 U.S.C. (S)1-
16, shall govern the arbitration and any court having jurisdiction thereof may
enter judgment upon the award rendered by the arbitrator. The place of
arbitration shall be Tulsa, Oklahoma, unless otherwise agreed to by the parties
hereto. The arbitrator is not empowered to award consequential, indirect, third
party costs, special, punitive, or exemplary damages, and each party hereby
irrevocably waives such damages.
(c) Notwithstanding anything in this Section to the contrary, this Section
shall not apply in the event any Claim is asserted in a court of law against one
or all parties hereto by a third party and any party hereto asserts, in such
legal proceedings, the provisions of this Agreement against the other either as
a defense to such Claim or as a basis for indemnification against such Claim.
Each of the parties consents to the jurisdiction of any such court (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in this subparagraph (c) may be served on any party anywhere in the world.
SECTION 13.06 Binding Effect; Assignment. (a) This Agreement and all the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
(b) No party may assign either this Agreement or any of its rights,
interest or obligations hereunder without the prior written approval of the
other party; provided, however, that Buyer may upon notice to Seller (i) direct
that title to all or part of the Purchased Assets be taken in one or more of
Buyer's affiliates, (ii) assign any or all of its rights and interest hereunder
to one or more of its Affiliates, and (iii) designate one or more of its
Affiliates to perform its obligations hereunder (any such Affiliate or
Affiliates shall be a "Buyer Designee"); provided, that in any or all such cases
--------------
the Buyer nonetheless shall remain responsible for the performance of its
duties, liabilities or obligations hereunder.
SECTION 13.07 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same agreement.
SECTION 13.08 References. All references in this Agreement to Articles,
Sections and other subdivisions refer to the Articles, Sections and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement," "herein," "hereof," "hereby," "hereunder" and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless expressly so limited.
SECTION 13.09 Severability of Provisions. If any provision of this
Agreement is held to be unenforceable, this Agreement shall be considered
divisible and such provision shall be deemed inoperative to the extent it is
deemed unenforceable, and in all other respects this Agreement shall remain in
full force and effect; provided, however, that if any such provision may be made
enforceable by limitation thereof, then such provision shall be deemed to be so
limited and shall be enforceable to the maximum extent permitted by applicable
law.
33
SECTION 13.10 Gender. Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires.
SECTION 13.11 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers hereunto duly authorized as of the date first above
written.
▇▇▇▇▇▇ DRILLING COMPANY UNIT CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------- -------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President, Finance President
and Chief Financial Officer
▇▇▇▇▇▇ DRILLING COMPANY NORTH AMERICA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
34
EXHIBIT A
---------
GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE
-----------------------------------
This GENERAL ASSIGNMENT AND ▇▇▇▇ OF SALE ("General Assignment") is made
------------------
effective as of the ______ day of[_________], 1999 by ▇▇▇▇▇▇ Drilling Company
North America, Inc., a Nevada corporation (the "Seller").
------
RECITALS
--------
1. Pursuant to the terms of an Asset Purchase Agreement (the "Agreement")
---------
dated August 12, 1999 by and between Unit Corporation , a Delaware corporation
("Buyer"), Seller and ▇▇▇▇▇▇ Drilling Company, a Delaware corporation, the
-----
Seller agreed to convey the Purchased Assets to Buyer, and makes this General
Assignment in order to evidence the conveyance of all of the tangible and
intangible personal property included in the Purchased Assets other than the
Real Property, the Drilling Contracts and the Other Contracts.
2. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Agreement.
ASSIGNMENT
----------
NOW, THEREFORE, for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00) in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller does hereby
BARGAIN, GRANT, SELL, CONVEY, TRANSFER, DELIVER, and ASSIGN unto Buyer all of
the tangible and intangible personal property included in the Purchased Assets
(other than the Real Property, the Drilling Contracts and the Other Contracts)
(the "Conveyed Property").
-----------------
The Conveyed Property is hereby conveyed free and clear of all Encumbrances
and other restrictions of any kind or nature, except the Permitted Encumbrances
and Permitted Real Property Encumbrances. EXCEPT AS SPECIFICALLY SET FORTH IN
THE AGREEMENT, THE SELLER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, AS TO
THE CONDITION OF THE CONVEYED PROPERTY (INCLUDING ANY WARRANTY AS TO THE
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE) AND BUYER IS ACQUIRING
THE CONVEYED PROPERTY "AS IS, WHERE IS".
TO HAVE AND TO HOLD the Conveyed Property unto Buyer and its successors and
assigns forever; and the Seller does hereby bind itself and its successors and
assigns to WARRANT AND FOREVER DEFEND good and indefeasible title to the
Conveyed Property, subject only to the terms of the Agreement.
From time to time hereafter, the Seller will execute and deliver, or cause
to be executed and delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery and will take such
other actions as Buyer may reasonably request in order to more effectively
transfer, convey, assign and deliver to Buyer, and to place Buyer in possession
and control of any of the Conveyed Property or to enable Buyer to exercise and
enjoy all rights and benefits of the Seller with respect thereto.
i
This General Assignment is delivered pursuant to the Agreement, and in the
event of any conflict or inconsistency between any of the terms of the Agreement
and this General Assignment the terms of the Agreement shall prevail.
IN WITNESS WHEREOF, the Seller has executed this General Assignment
effective as of the date set forth above.
▇▇▇▇▇▇ Drilling Company North America, Inc.
___________________________
By:
Its:
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EXHIBIT B
---------
WARRANTY DEED
-------------
KNOW ALL MEN BY THESE PRESENTS:
THAT ▇▇▇▇▇▇ Drilling Company North America, Inc., a Nevada corporation
(hereinafter called "Grantor"), in consideration of the sum of Ten and No/100
-------
Dollars and other valuable considerations, in hand paid, the receipt of which is
hereby acknowledged, does hereby grant, bargain, sell and convey unto Unit
Corporation, 1000 Kensington Tower I, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
(hereinafter called "Grantee"), the following described real property and
-------
premises situated in ______________ County, State of ______________, to-wit:
together with all the improvements thereon and the appurtenances thereunto
belonging, and warrant the title to the same (the "Conveyed Property").
-----------------
The Conveyed Property is hereby conveyed free and clear of all Encumbrances
except Permitted Real Property Encumbrances.
TO HAVE AND TO HOLD the Conveyed Property unto Grantee and its successors
ands assigns forever; and the Seller does hereby bind itself and its successors
and assigns to WARRANT AND FOREVER DEFEND good and marketable title to the
Conveyed Property, subject only to the terms of the Agreement.
All capitalized terms used herein but not defined herein shall have the
meaning ascribed to them in that certain Asset Purchase Agreement (the
"Agreement") dated August 12, 1999 by and between Grantor, Grantee and ▇▇▇▇▇▇
---------
Drilling Company, a Delaware corporation.
From time to time hereafter, the Grantor will execute and deliver, or cause
to be executed and delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery and will take such
other actions as Grantee may reasonably request in order to more effectively
transfer, convey, assign and deliver to Grantee, and to place Grantee in
possession and control of any of the Conveyed Property or to enable Grantee to
exercise and enjoy all rights and benefits of the Grantor with respect thereto.
Signed and delivered this _____ day of_______________, 1999.
▇▇▇▇▇▇ DRILLING COMPANY NORTH AMERICA, INC.
_____________________________
By:
Its:
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STATE OF OKLAHOMA)
) ss:
COUNTY OF __________ )
Before me, the undersigned, a Notary Public in and for the above named
State, did appear ___________________________, to me known to be the
______________ of ▇▇▇▇▇▇ Drilling Company North America, Inc., a Nevada
corporation, and did sign in my presence the foregoing instrument for the
intents and purposes therein stated.
____________________________________
Notary Public
My Commission Expires:
____________________
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EXHIBIT C
---------
GENERAL ASSIGNMENT OF CONTRACTS
-------------------------------
This GENERAL ASSIGNMENT OF CONTRACTS ("General Assignment") is made
------------------
effective as of the ______ day of[_________], 1999 by ▇▇▇▇▇▇ Drilling Company
North America, Inc., a Nevada corporation (the "Seller") and Unit Corporation, a
------
Delaware corporation (the "Buyer").
-----
RECITALS
--------
1. Pursuant to the terms of an Asset Purchase Agreement (the "Agreement"),
---------
dated August 12, 1999, by and between Buyer, Seller and ▇▇▇▇▇▇ Drilling Company,
a Delaware corporation, the Seller agreed to convey the Purchased Assets to
Buyer and makes this General Assignment in order to evidence the conveyance of
all of the Drilling Contracts and the Other Contracts.
2. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Agreement.
ASSIGNMENT
----------
NOW, THEREFORE, for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00) in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Seller does hereby
BARGAIN, GRANT, SELL, CONVEY, TRANSFER, DELIVER, and ASSIGN unto Buyer all of
the Drilling Contracts and the Other Contracts set forth on Exhibit "A" hereto
(the "Conveyed Property").
-----------------
The Conveyed Property is hereby conveyed subject to all of the terms and
conditions of the Agreement.
From time to time hereafter, the Seller will execute and deliver, or cause
to be executed and delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery and will take such
other actions as Buyer may reasonably request in order to more effectively
transfer, convey, assign and deliver to Buyer, and to place Buyer in possession
and control of any of the Conveyed Property or to enable Buyer to exercise and
enjoy all rights and benefits of the Seller with respect thereto.
This General Assignment is delivered pursuant to the Agreement, and in the
event of any conflict or inconsistency between any of the terms of the Agreement
and this General Assignment the terms of the Agreement shall prevail.
IN WITNESS WHEREOF, the Seller and Buyer have each executed this General
Assignment effective as of the date set forth above.
▇▇▇▇▇▇ Drilling Company North America, Inc. Unit Corporation
__________________ ____________________
By: By:
Its: Its:
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EXHIBIT "D"
-----------
BUYER'S CERTIFICATE
-------------------
With respect to the closing of the transactions contemplated by that certain
Asset Purchase Agreement, dated August 12, 1999, (the "Agreement") between
▇▇▇▇▇▇ Drilling Company North America, Inc.("Seller"), ▇▇▇▇▇▇ Drilling Company
("▇▇▇▇▇▇") and Unit Corporation ("Buyer"), Buyer hereby certifies that (i) those
representations and warranties contained in Article VI of the Agreement are true
in all material respects at and as of the date hereof and (ii) that Buyer has
complied in all material respects with each of the covenants or agreements
contained in the Agreement and to be performed by it on or before the date
hereof.
Executed as of the _____ day of _______________, 1999.
Unit Corporation
______________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
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EXHIBIT "E"
-----------
SELLER'S CERTIFICATE
--------------------
With respect to the closing of the transactions contemplated by that
certain Asset Purchase Agreement, dated August 12, 1999, (the "Agreement")
between ▇▇▇▇▇▇ Drilling Company North America, Inc. ("Seller"), ▇▇▇▇▇▇ Drilling
Company ("▇▇▇▇▇▇") and Unit Corporation ("Buyer"), Seller hereby certifies that
(i) those representations and warranties contained in Article V of the Agreement
are true in all material respects at and as of the date hereof and (ii) that
Seller has complied in all material respects with each of the covenants or
agreements contained in the Agreement and to be performed by it on or before the
date hereof.
Executed as of the _____ day of ____________________, 1999.
▇▇▇▇▇▇ Drilling Company
_______________________________
By:
Its:
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