PATTERSON UTI ENERGY INC - 8-K - 19971224 - EXHIBIT_10
EXHIBIT 10.4
GUARANTY
FOR VALUABLE CONSIDERATION, and to induce NORWEST BANK TEXAS, NATIONAL
ASSOCIATION, a national banking association (the "Bank"), to enter into that
certain Credit Agreement dated December 9, 1997 (the "Credit Agreement"),with
PATTERSON ENERGY, INC., a Delaware corporation (the "Borrower"), PATTERSON
DRILLING COMPANY, a Delaware corporation, PATTERSON PETROLEUM, INC., a Texas
corporation, and PATTERSON PETROLEUM TRADING COMPANY, INC., a Texas corporation
(each a "Guarantor" and collectively the "Guarantors"), jointly and severally
give this guaranty (the "Guaranty") and jointly and severally, absolutely, and
unconditionally guarantee to the Bank the full and prompt payment of any and
all indebtedness of every kind and nature whatsoever which the Borrower may now
or at any time hereafter owe the Bank, including but not limited to each and
every Obligation (as defined in the Credit Agreement) arising under the Credit
Agreement, (collectively the "Indebtedness"). This Guaranty is an absolute,
unconditional, and continuing guaranty of payment of the Indebtedness and shall
continue to be binding upon the Guarantors until the Indebtedness is paid in
full.
The liability of the Guarantors under this Guaranty shall include
accrued interest and all reasonable attorneys' fees, collection costs, and
enforcement expenses incurred by the Bank in collecting on and enforcing its
rights under the Indebtedness, and all such costs and expenses incurred by the
Bank in connection with the protection, defense, or enforcement of this
Guaranty in any litigation or bankruptcy proceedings. The Bank may apply in
reduction of the Indebtedness any sums received by or available to the Bank on
account of the Indebtedness from the Borrower or any other person, or from the
Borrower's or other such persons' properties or any collateral security or
other source of payment, and such application of proceeds or receipts shall not
reduce or impair the liability of the Guarantors under this Guaranty.
The Indebtedness may be created and continued in any amount without
reducing or impairing the liability of the Guarantors under this Guaranty. Any
payment made by the Guarantors under this Guaranty shall be effective to reduce
or discharge the Guarantors' liability only if accompanied by a written
transmittal document, received by the Bank and advising it that payment is made
under this Guaranty for that purpose.
Each Guarantor further acknowledges and agrees with the Bank that:
1. No act or event need occur to establish the liability of any
Guarantor under this Guaranty, and no act or event, except full payment and
discharge of all Indebtedness, shall exonerate and discharge the liability of
the Guarantors under this Guaranty.
2. If any Guarantor is dissolved or changes its legal form of
organization without the prior written consent of the Bank or becomes insolvent
(however defined), then the Bank may declare immediately due and payable the
obligations of that Guarantor under this Guaranty, and that Guarantor shall
immediately pay to the Bank the full amount of all Indebtedness, whether due
1
and payable or unmatured. If any Guarantor voluntarily commences or there is
commenced involuntarily against any Guarantor a case under the United States
Bankruptcy Code, and any receiver, trustee, examiner, liquidator, or similar
official is appointed for any Guarantor in connection therewith and the
appointment continues undischarged or the proceeding continues undismissed or
unstayed for 60 consecutive days, the obligations of any Guarantor under this
Guaranty shall immediately be due and payable without the necessity of demand
or notice.
3. No Guarantor will exercise or enforce any right of contribution,
reimbursement, recourse, or subrogation available to the Guarantor against the
Borrower or any person liable for payment of the Indebtedness, or as to any
collateral securing the Indebtedness, unless all Indebtedness has first been
fully paid and discharged.
4. The Bank may in its discretion enter into transactions resulting
in the creation or continuance of Indebtedness, without notice to or the
consent or approval of any Guarantor, regardless of whether any existing
relationship between the Borrower and the Guarantor has been revoked and
regardless of whether this Guaranty has been revoked.
5. The liability of any Guarantor shall not be reduced or impaired
by any of the following acts or events (which the Bank is expressly authorized
to do, omit, or suffer from time to time, both before and after revocation of
this Guaranty, without notice to or the consent or approval of any Guarantor):
(I) any acceptance of collateral security, guarantors, accommodation parties,
or sureties for any or all of the Indebtedness; (ii) any one or more extensions
or renewals of Indebtedness (including a period longer than the original
period) or any modification of the interest rate, maturity, or other
contractual terms applicable to all or part of the Indebtedness; (iii) any
waiver or indulgence granted to the Borrower, any delay or lack of diligence in
the enforcement of the Indebtedness, or any failure to institute proceedings,
file a claim, give required notices, or otherwise protect any of the
Indebtedness; (iv) any full or partial release of, settlement with, or
agreement not to sue the Borrower or any other Guarantor or other person liable
for any of the Indebtedness; (v) any discharge of any evidence of Indebtedness
or the acceptance of any instrument renewing or refinancing the Indebtedness;
(vi) any failure to obtain collateral security (including rights of setoff) for
the Indebtedness, or to assure its proper or sufficient creation, perfection,
or priority, or to protect, insure, or enforce any collateral security, or any
modification, substitution, discharge, impairment, or loss of the collateral
security; (vii) any foreclosure or enforcement of any collateral security by
the Bank or any other creditor of the Borrower with a security interest in the
collateral security; (viii) any assignment or transfer of any Indebtedness or
documentation evidencing the Indebtedness; (ix) any order of application of any
payments or credits upon the Indebtedness from the Borrower, the Guarantors, or
any other person; and (x) any election by the Bank under Section 1111(b)(2) of
the United States Bankruptcy Code.
6. Each Guarantor waives any and all defenses, claims, and
discharges of the Borrower, or any other obligor, pertaining to the
Indebtedness, except the defense of discharge by payment in full. Without
limiting the generality of the preceding sentence, no Guarantor will assert,
plead, or enforce against the Bank any defense of waiver, release, discharge in
bankruptcy,
2
statute of limitations, res judicata, statute of frauds, anti-deficiency
statute, misrepresentation, fraud, incapacity, minority, usury, illegality, or
unenforceability which may be available to the Borrower or any other party
liable for payment of any of the Indebtedness, or any setoff available against
the Bank to the Borrower or any other person, whether or not on account of a
related transaction. Each Guarantor shall be liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust, or security
interest securing the Indebtedness, whether or not the liability of the
Borrower or any other obligor for such deficiency is discharged pursuant to
statute or judicial decision.
7. The Bank may in its sole discretion demand that any Guarantor
discharge its obligations under this Guaranty at any time, either at the
scheduled or accelerated maturity of the Indebtedness or at any earlier or
later time, and regardless of whether there has been a default with respect to
the Indebtedness. The Bank shall not be required to first resort for payment
of the Indebtedness to the Borrower or to any other person or their properties,
or first to enforce, realize upon, or exhaust any collateral security given to
secure the Indebtedness before enforcing this Guaranty. Each Guarantor waives
presentment, demand for payment, notice of dishonor or nonpayment, and protest
of any instrument evidencing part or all of the Indebtedness.
8. If any payment applied by the Bank to the Indebtedness is later
set aside, recovered, rescinded, or returned for any reason (including, without
limitation, the bankruptcy, insolvency, or reorganization of the Borrower or
any other obligor), the Indebtedness to which the payment was applied shall
under this Guaranty be deemed to have continued in existence, notwithstanding
that application, and this Guaranty shall be enforceable for the Indebtedness
as fully as if the application had never been made.
9. The liability of each Guarantor under this Guaranty is in
addition to and cumulative with all other liabilities of each Guarantor to the
Bank as a guarantor or otherwise, without limitation as to amount, unless the
instrument or agreement evidencing or creating the other liability specifically
provides to the contrary.
10. This Guaranty shall be enforceable regardless of the failure of
other persons to sign other guaranties of the Indebtedness. This Guaranty
shall be effective upon delivery to the Bank, without further act, condition,
or acceptance by the Bank, and shall be binding upon each Guarantor and the
representatives, successors, and assigns of each Guarantor for the benefit of
the Bank and its participants, successors, and assigns. Any invalidity or
unenforceability of any provision or application shall not affect other lawful
provisions and applications of this Guaranty, which is severable. Before the
payment in full of the Indebtedness, this Guaranty may not be waived, modified,
amended, terminated, released, or otherwise changed except by a writing signed
by each Guarantor and the Bank. This Guaranty is issued in and shall be
governed by the laws of Texas.
11. Each Guarantor represents and warrants to the Bank that (I) it is
a corporation duly organized and existing in good standing and has full power
and authority to make and deliver this
3
Guaranty; (ii) its execution, delivery, and performance of this Guaranty has
been duly authorized by all necessary action of its directors and shareholders
and does not and will not violate the provisions of, or constitute a default
under, any presently applicable law or its certificate or articles of
incorporation or bylaws or any agreement presently binding on it; (iii) this
Guaranty has been duly executed and delivered by its authorized officers and
constitutes its lawful, binding, and legally enforceable obligation (subject to
the United States Bankruptcy Code and other similar laws generally affecting
the enforcement of creditors' rights); and (iv) the authorization, execution,
delivery, and performance of this Guaranty do not require notification to,
registration with, or consent or approval by any federal, state, or local
regulatory body or administrative agency.
IN WITNESS WHEREOF, this Guaranty has been duly executed on December
9,1997, by the Guarantors.
PATTERSON DRILLING COMPANY
By: /s/ JAMES C. BROWN
----------------------------
Its: C.F.O.
----------------------------
PATTERSON PETROLEUM, INC.
By: /s/ JAMES C. BROWN
----------------------------
Its: C.F.O.
----------------------------
PATTERSON PETROLEUM TRADING COMPANY, INC.
By: /s/ JAMES C. BROWN
----------------------------
Its: C.F.O.
----------------------------
ASSET PURCHASE AGREEMENT, dated November 14, 1997 (this
"Agreement"), among PATTERSON DRILLING COMPANY ("PDC"), a Delaware corporation
and a wholly-owned subsidiary of Patterson Energy, Inc. ("PEC"), and V&B
DRILLING, INC., a Texas corporation ("V&B").
WITNESSETH:
WHEREAS, V&B owns seven drilling rigs, related drilling
equipment and certain rolling stock (collectively, the "Drilling Rigs,
Equipment and Rolling Stock"), and a shop and four yards in Odessa, Texas
(collectively, the "Real Property"), all as more particularly described on
Annex 1, in the case of the Drilling Rigs, Equipment and Rolling Stock and
Annex 2, in the case of the Real Property;
WHEREAS, PDC desires to purchase, and V&B desires to sell, all
of V&B's right, title and interest in the Drilling Rigs, Equipment and Rolling
Stock and in the Real Property (the "Asset Purchase") for the consideration set
forth and provided for herein; and
WHEREAS, PDC, on the one hand, and V&B, on the other, desire
to make certain representations, warranties and agreements in connection with
the Asset Purchase.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE ASSET PURCHASE
SECTION 1.1 The Asset Purchase. Upon the terms and subject
to the conditions of this Agreement, at the Closing (as defined in Section 1.3
below) provided herein, PDC shall purchase from V&B and V&B shall sell to PDC,
all of V&B's right, title and interest in and to the Drilling Rigs, Equipment
and Rolling Stock and in and to the Real Property.
SECTION 1.2 Purchase Price. PDC agrees to pay to V&B at the
Closing a total of $13 million cash (the "Purchase Price") for all of V&B's
right, title and interest in and to the Drilling Rigs, Equipment and Rolling
Stock and in and to the Real Property. Of the Purchase Price, $129,000 will be
allocated to the Real Property.
SECTION 1.3 Closing. The closing of the Asset Purchase (the
"Closing") shall take place at 9:00 a.m., local time, on the date of this
Agreement at the offices of Patterson Energy, Inc., in
Snyder, Texas, or at such other time and place as PDC and V&B shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PDC
PDC represents and warrants to V&B as follows:
SECTION 2.1 Organization, Standing and Power. PDC is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to carry on its business as now being conducted.
SECTION 2.2 Authority; Non-Contravention. PDC has all
requisite power and authority to enter into this Agreement and to consummate
the Asset Purchase. The execution and delivery by PDC of this Agreement and
the consummation by PDC of the Asset Purchase have been duly authorized by all
necessary corporate action on the part of PDC. This Agreement has been duly
executed and delivered by PDC and (assuming the valid authorization, execution
and delivery of this Agreement by V&B) constitutes a valid and binding
obligation of PDC enforceable against PDC in accordance with its terms, except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws of
general applicability relating to or affecting the enforcement of creditors'
rights and by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). No filing
or registration with, or authorization, consent or approval of, any domestic
(federal and state), foreign or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Agency") is
required by or with respect to PDC in connection with the execution and
delivery of this Agreement by PDC or is necessary for the consummation by PDC
of the Asset Purchase and the other transactions contemplated by this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF V&B
SECTION 3.1 Organization, Standing and Power. V&B is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Texas and has the requisite corporate power and authority
to carry on its business as now being conducted.
SECTION 3.2 Authority; Non-Contravention. V&B has all
requisite power and authority to enter into this Agreement and to consummate
the Asset Purchase. This Agreement has been duly executed and delivered by V&B
and (assuming the valid authorization, execution and delivery of this Agreement
by PDC) constitutes a valid and binding obligation of V&B enforceable against
it in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency,
2
reorganization, moratorium, fraudulent transfer or other similar laws of
general applicability relating to or affecting the enforcement of creditors'
rights and by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). The
execution and delivery of this Agreement do not, and the consummation of the
Asset Purchase and compliance with the provisions hereof will not, conflict
with, or result in any violation of, or default (with or without notice of
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss of a material
benefit under, or result in the creation of any lien, security interest,
charges or encumbrances upon any of the properties or assets of V&B under, any
provision of (i) the Articles of Incorporation or Bylaws of V&B (true and
complete copies of which as of the date hereof have been delivered to PDC),
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license
applicable to V&B or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to V&B or any of its respective
properties or assets. No filing or registration with, or authorization,
consent or approval of, any Governmental Entity is required by or with respect
to V&B in connection with the execution and delivery of this Agreement by V&B
is necessary for the consummation by V&B of the Asset Purchase.
SECTION 3.3 Environmental Matters.
(a) Except to the extent that the inaccuracy of any of
the following, individually or in the aggregate, would not have a Material
Adverse Effect on V&B, to the knowledge of V&B:
(i) V&B holds, and is in compliance with and has been in
compliance with for the last three years, all Environmental Permits,
and is otherwise in substantial compliance and has been in substantial
compliance for the last three years with, all applicable Environmental
Laws and there is no condition that is reasonably likely to prevent or
materially interfere prior to the Effective Time with compliance by
V&B with Environmental Laws;
(ii) no modification, revocation, reissuance, alteration,
transfer or amendment of any Environmental Permit, or any review by,
or approval of, any third party of any Environmental Permit is
required in connection with the execution or delivery of this
Agreement or the consummation by V&B of the transactions contemplated
hereby or the operation of the business of V&B on the date of the
Closing;
(iii) V&B has not received any Environmental Claim, nor has
any Environmental Claim been threatened against V&B;
(iv) V&B has not entered into, agreed to or is not subject
to any outstanding judgment, decree, order or consent arrangement with
any governmental authority under any Environmental Laws, including
without limitation those relating to compliance with any Environmental
Laws or to the investigation, cleanup, remediation or removal of
Hazardous Materials;
3
(v) there are no circumstances that are reasonably likely
to give rise to liability under any agreements with any person
pursuant to which V&B would be required to defend, indemnify, hold
harmless, or otherwise be responsible for any violation by or other
liability or expense of such person, or alleged violation by or other
liability or expense of such person, arising out of any Environmental
Law; and
(vi) there are no other circumstances or conditions that
are reasonably likely to give rise to liability of V&B under any
Environmental Laws.
(b) For purposes of this Agreement, the terms below shall
have the following meanings:
"Environmental Claim" means any written complaint, notice,
claim, demand, action, suit or judicial, administrative or arbitral
proceeding by any person to V&B asserting liability or potential
liability (including without limitation, liability or potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or
resulting from (i) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any location, (ii)
circumstances forming the basis of any violation or alleged violation
of any Environmental Laws or Environmental Permits, or (iii) otherwise
relating to obligations or liabilities of V&B under any Environmental
Law.
"Environmental Permits" means all permits, licenses,
registrations, exemptions and other governmental authorizations
required under Environmental Laws for V&B to conduct its operations as
presently conducted.
"Environmental Laws" means all applicable foreign, federal,
state and local statutes, rules, regulations, ordinances, orders,
decrees and common law relating in any manner to pollution or
protection of the environment, to the extent and in the form that such
exist at the date hereof.
"Hazardous Materials" means all hazardous or toxic 3
substances, wastes, materials or chemicals, petroleum (including crude
oil or any fraction thereof) and petroleum products, asbestos and
asbestos-containing materials, pollutants, contaminants and all other
materials and substances, including but not limited to radioactive
materials, regulated pursuant to any Environmental Laws.
"Material Adverse Effect" means any change or effect that is
or, as far as can reasonably be determined, is likely to be materially
adverse to the assets, properties, conditions (financial or
otherwise), business or results of operations of V&B.
SECTION 3.4 Contract Drilling Assets. Annex 1 and Annex 2
set forth a complete list
4
of all assets of V&B, relating to or used in its contract drilling operations,
other than the two vehicles (1998 Lincoln Navigator and 1993 Lincoln) currently
being used by Roland J. Vaught ("R Vaught") and Vernon Byrd ("V Byrd").
SECTION 3.5 Title. Set forth in Annex 1 and Annex 2 is a
description of the Drilling Rigs, Equipment and Rolling Stock and of the Real
Property, respectively, which description is accurate and complete in all
material respects. V&B has good and, in the case of the Real Property,
indefeasible title to a 100% interest in the Drilling Rigs, Equipment and
Rolling Stock and in the Real Property, subject to no Liens except for (i)
Liens for taxes not yet delinquent or the validity of which is being contested
in good faith, and (ii) any Liens arising by operation of law securing
obligations not yet overdue. For purposes of this Agreement "Liens" means
liens, mortgages, pledges, security interests, encumbrances, claims or charges
of any kind.
SECTION 3.6 Drilling Contracts. Set forth in Annex 3 is a
true and correct list of all drilling contracts (collectively, the "Drilling
Contracts") to which V&B is a party as of the date of this Agreement. A copy
of each of the Drilling Contracts has previously been delivered to PDC.
SECTION 3.7 Litigation. There is no suit, action,
investigation or proceeding pending or, to the knowledge of V&B, threatened
against V&B at law or in equity before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind,
except for a suit pending in Andrews County, Texas, involving ad valorem taxes
in an amount less than $5,000 and otherwise not material to V&B or the
transaction contemplated by this Agreement.
SECTION 3.8 Brokers. No broker, investment banker or other
person is entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of V&B.
SECTION 3.9 Normal Operations. All wells currently being
drilled by V&B under the Drilling Contracts are drilling under normal
operations.
SECTION 3.10 V&B Stockholders. Vernon Byrd and Roland J.
Vaught are the only stockholders of V&B.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Fees and Expenses. All costs and expenses
incurred by PDC in connection with this Agreement and the transactions
contemplated hereby shall be paid by PDC; such costs and expenses incurred by
V&B shall be paid by V&B.
SECTION 4.2 Reasonable Efforts. Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to
use all reasonable best efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Asset Purchase and
the other transactions contemplated by this Agreement and the prompt
satisfaction of the conditions hereto.
5
SECTION 4.3 V&B, V Byrd and R Vaught Indemnification. On and
after the date of Closing, V&B, V Byrd, President, director and stockholder of
V&B, and R Vaught ("R Vaught"), Vice President, director and stockholder of
V&B, shall jointly and severally indemnify and hold PEC and PDC harmless
against and in respect of all actions, suits, demands, judgments, costs and
expenses (including reasonable attorneys' fees of PEC or PDC), relating to any
misrepresentation, breach of any representation or warranty or non-fulfillment
of any agreement on the part of V&B contained in this Agreement. The
indemnification provided for in this Section 4.3 shall terminate and be of no
further force and effect two years from the Closing Date, except as to any
representation or warranty as to which a written notice of claim for
indemnification has been given to V&B, V Byrd and R Vaught prior to the
expiration of such two-year period.
SECTION 4.4 PDC Assumption of Drilling Contracts; V&B
Invoicing of Direct Costs. Effective as of 7:00 a.m. Odessa, Texas time on the
date of this Agreement ("Effective Time of Assumption"), PDC shall assume all
obligations and rights and benefits of V&B under each of the Drilling
Contracts. In addition, within 30 days following Closing, V&B shall invoice
PDC for all direct costs incurred by V&B under each of the Drilling Contracts
prior to the Effective Time of Assumption, which invoices shall be paid to V&B
by PDC within 30 days of receipt by PDC.
SECTION 4.5 PDC Indemnification. PDC shall indemnify and
hold V&B harmless from all costs and liabilities (including reasonably
attorneys' fees) incurred by V&B under any of the Drilling Contracts for events
that occurred after the Effective Time of Assumption.
SECTION 4.6 Real Estate Taxes. V&B and PDC agree that any
special assessments or other charges relating to the Real Property shall be
prorated between V&B and PDC to the date of Closing.
SECTION 4.7 Disclaimer of Warranties. V&B and PDC both
understand and agree that the Drilling Rigs, Equipment and Rolling Stock are
being conveyed by V&B to PDC in "AS IS, WHERE IS" condition, and V&B hereby
disclaims any and all warranties relating to the condition of the Drilling
Rigs, Equipment and Rolling Stock, and V&B hereby specifically disclaims the
warranty of MERCHANTABILITY and FITNESS FOR A PARTICULAR PURPOSE, with respect
to the Drilling Rigs, Equipment and Rolling Stock.
6
ARTICLE V
CONDITIONS PRECEDENT TO THE ASSET PURCHASE
SECTION 5.1 Conditions to Each Party's Obligation to Effect
the Asset Purchase. The respective obligations of each party to effect the
Asset Purchase shall be subject to the fulfillment or waiver (where
permissible) at or prior to the Closing Date of each of the following
conditions:
(a) No Order. No Governmental Entity or court of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is then in effect and
has the effect of prohibiting the Asset Purchase or any of the other
transactions contemplated hereby; provided that, in the case of any such
decree, injunction or other order, each of the parties shall have used
reasonable best efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as practicable any decree, injunction or other
order that may be entered.
(b) Consents. V&B shall have received written consents
of the other party or parties to each of the Drilling Contracts for the
assumption thereof by PDC pursuant to the provisions of Section 4.4 of this
Agreement and delivered copies thereof to PDC.
SECTION 5.2 Conditions to Obligation of V&B to Effect the
Asset Purchase. The obligation of V&B to effect the Asset Purchase shall be
subject to the fulfillment at or prior to the Closing of the following
additional conditions; provided that V&B may waive any of such conditions in
its sole discretion:
(a) Performance of Obligations; Representations and
Warranties. PDC shall have performed in all material respects each of its
agreements contained in this Agreement required to be performed on or prior to
the Closing, each of the representations and warranties of PDC contained in
this Agreement shall be true and correct on and as of the Closing.
(b) Officers' Certificate. PDC shall have furnished to
V&B a certificate, dated the Closing, signed by the appropriate officers of
PDC, certifying to the effect that to the best of the knowledge and belief of
PDC, the conditions set forth in Section 5.1 and Section 5.2(a) have been
satisfied in full.
(c) Payment of Purchase Price. PDC shall have made
delivery of the Purchase Price as provided in Section 1.2 of this Agreement.
SECTION 5.3 Conditions to Obligations of PDC to Effect the
Asset Purchase. The obligations of PDC to effect the Asset Purchase shall be
subject to the fulfillment at or prior to the Closing of the following
additional conditions, provided that PDC may waive any such conditions in its
sole discretion:
7
(a) Performance of Obligations; Representations and
Warranties. V&B shall have performed in all material respects each of its
agreements contained in this Agreement required to be performed on or prior to
the Closing, each of the respective representations and warranties of V&B
contained in this Agreement shall be true and correct on and as of the Closing
shall be true in all material respects on and as of the Closing.
(b) Officers' Certificate. V&B shall have furnished to
PDC a certificate, dated the Closing, signed by the appropriate officers of
V&B, certifying to the effect that to the best of the knowledge and belief of
V&B, the conditions set forth in Section 5.1 and Section 5.3(a) have been
satisfied.
(c) Opinion of Counsel. PDC shall have received an
opinion of counsel Rick Browning, Attorney at Law, Odessa, Texas, counsel to
V&B, dated the Closing, substantially to the effect that:
(i) The incorporation, existence and good standing of V&B
are as stated in this Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered by V&B, and (assuming the due and valid authorization,
execution and delivery by PDC) constitutes the legal, valid and
binding agreement of V&B enforceable against V&B in accordance with
its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability relating to or
affecting the enforcement of creditors' rights and by the effect of
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
(iii) The execution and performance by V&B of this
Agreement will not violate the Articles of Incorporation or Bylaws of
V&B and will not violate, result in a breach of, or constitute a
default under, any material lease, mortgage, contract, agreement,
instrument, law, rule, regulation, judgment, order or decree known to
such counsel to which V&B is a party or to which it or any of its
properties or assets may be bound.
(iv) To the knowledge of such counsel, there are no
actions, suits or proceedings, pending or threatened against or
affecting V&B by any Governmental Entity which seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement.
(v) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental agency
or body which has not been obtained is required on behalf of V&B for
consummation of the transactions contemplated by this Agreement.
(vi) Each Non-Competition Agreement between PDC and each
of V&B, V Byrd and R Roland constitutes the legal, valid and binding
agreement of it/him enforceable against it/him in accordance with its
terms, except to the extent enforceability may be limited by
bankruptcy,
8
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law).
In rendering such opinion, counsel for V&B may rely as to matters of fact upon
the representations of officers of V&B contained in any certificate delivered
to such counsel and certificates of public officials.
Such opinion shall be limited to the laws of the United States
of America and the State of Texas.
(d) Bill of Sale and Assignment. V&B shall have executed
and delivered the Bill of Sale and Assignment covering the Drilling Rigs,
Equipment and Rolling Stock in the form attached hereto as Exhibit B.
(e) General Warranty Deeds. V&B shall have executed and
delivered the respective General Warranty Deeds in the respective forms
attached hereto as Exhibits C, D, E and F, relating to the respective yards
being purchased hereunder by PDC
(f) Title Insurance. PDC shall have obtained title
commitments for title insurance on the Real Property.
(g) Titles. V&B shall have endorsed and delivered the
title certificates to the Rolling Stock described in Annex 1.
(h) Non-Competition Agreements. A Non-Competition
Agreement in the respective forms attached hereto as Exhibits A(I), A(II) and
A(III) shall have been executed and delivered by V&B, V Byrd and R Vaught, as
the case may be.
(i) Phase I Environmental Report. PDC shall have
received a Phase I Environmental Report (at its expense) covering the Real
Property, with conclusions satisfactory to PDC.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, sent by overnight courier or telecopied (with a confirmatory copy
sent by overnight courier) to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
9
(a) If to PDC, to:
Patterson Energy, Inc.
4510 Lamesa Highway
P.O. Drawer 1416
Snyder, Texas 79549
Attention: A. Glenn Patterson
President and Chief
Operating Officer
with copies to:
Thomas H. Maxfield, Esq.
Baker & Hostetler LLP
303 East 17th Avenue, Suite 1100
Denver, Colorado 80203-1264
(b) if to V&B, to:
Vernon Byrd, President
V&B Drilling, Inc.
2513 Mercury Avenue
Post Office Box 69109
Odessa, Texas 79769-9109
with copies to:
Rick Browning
Attorney at Law
5050 East University, Suite One
Odessa, Texas 79762
(c) if to Vernon Byrd, to:
Vernon Byrd
c/o V&B Drilling, Inc.
2513 Mercury Avenue
Post Office Box 69109
Odessa, Texas 79769-9109
Facsimile: (915) 381-2720
with copies to:
Rick Browning
Attorney at Law
5050 East University, Suite One
Odessa, Texas 79762
(d) if to Roland J. Vaught, to:
Roland J. Vaught
c/o V&B Drilling, Inc.
2513 Mercury Avenue
Post Office Box 69109
Odessa, Texas 79769-9109
Facsimile: (915) 381-2720
10
with copies to:
Rick Browning
Attorney at Law
5050 East University, Suite One
Odessa, Texas 79762
SECTION 6.2 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated, and the words "hereof', "herein" and "hereunder"
and similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement, unless the context otherwise requires. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 6.3 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
SECTION 6.4 Entire Agreement; No Third-Party Beneficiaries.
This Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties any rights or remedies hereunder; provided, however, that
legal counsel for V&B hereto may rely upon the representations and warranties
of V&B contained herein and in the certificates delivered pursuant to Sections
5.2(b) and 5.3(b).
11
SECTION 6.5 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Texas,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
SECTION 6.6 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
SECTION 6.7 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions be consummated as originally
contemplated to the fullest extent possible.
SECTION 6.8 Enforcement of This Agreement. The parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, PDC and V&B have executed this Agreement
as of the date first written above.
PDC:
PATTERSON DRILLING COMPANY
By: /s/ A. GLENN PATTERSON
---------------------------------------
A. Glenn Patterson
Chief Operating Officer
Attest:
James C. Brown, Secretary
12
V&B:
V&B DRILLING, INC.
By: /s/ VERNON BYRD
--------------------------------
Vernon Byrd
President
Attest:
Roland J. Vaught, Secretary
TO INDUCE PATTERSON DRILLING COMPANY TO ENTER INTO THIS ASSET PURCHASE
AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE UNDERSIGNED, BEING THE
OFFICERS, DIRECTORS AND STOCKHOLDERS OF V&B DRILLING, INC., ACCEPT AND AGREE TO
BE BOUND BY THE INDEMNIFICATION PROVISIONS OF SECTION 4.3 OF THIS ASSET
PURCHASE AGREEMENT.
/s/ VERNON BYRD
-----------------------------
Vernon Byrd
/s/ ROLAND J. VAUGHT
-----------------------------
Roland J. Vaught
13
ANNEX 1
TO
ASSET PURCHASE AGREEMENT
DESCRIPTION OF DRILLING RIGS, EQUIPMENT AND ROLLING STOCK
All related parts and equipment, including engines, mud pumps, hooks
and blocks, derricks, substructures, rotary tables, blow-out
prevention equipment, drill bits and all tubular goods on the rigs and
in the yards owned by V&B, all of which are set forth on Appendix I to
the Bill of Sale and Assignment attached to this Agreement as Exhibit
B.
NOTE: For more specific information concerning the rigs and related
equipment, see Appendix I, to Bill of Sale and Assignment attached to
this Agreement as Exhibit B.
B. Rolling Stock
All rolling stock owned by V&B at the Effective Time of Assumption
(except the 1998 Lincoln Navigator driven by V Byrd and the 1993
Lincoln driven by R Vaught.
NOTE: For more specific information concerning the rolling stock, see
Appendix II to Bill of Sale and Assignment attached to this Agreement
as Exhibit B.
AX-1 - 1
ANNEX 2
TO
ASSET PURCHASE AGREEMENT
DESCRIPTION OF REAL PROPERTY
I. Lots 15, 16, 17 and 18, Block 5, Rochester Replat of a portion of 1936
Subdivision as shown by the map or plat of record in Volume 9, Page
23, Plat Records, Ector County, Texas;
II. Lots 22, 23, 24 and 25, Block 1, Rochester Replat of a portion of 1936
Subdivision, a subdivision of 312.19 acres of a land in the West part
of Section 24, Block 43, T-2-S, T & P RR Company Survey, Ector County,
Texas, as shown by the map or plat of record in the office of the
County Clerk of said County;
III. Lot 5, Block 6, Westover Acres, a subdivision in Ector County, Texas,
according to the map or plat thereof of record in Volume 4, Page 44,
Plat Records of Ector County, Texas;
IV. Being a 4.47 acre tract of land in the Southwest Part of a 10.267 acre
tract of land in the Northwest Part of Section 33, Block 43, T-2-S, T
& P Ry. Co. Survey, Ector County, Texas.
NOTE: The Real Property is more particularly described on the
Warranty Deeds attached to this Agreement as Exhibits C, D, E and F,
respectively.
AX-2 - 1
ANNEX 3
TO
ASSET PURCHASE AGREEMENT
LIST OF DRILLING CONTRACTS
RIG
NO. COUNTY DATE OPERATOR WELL NAME
--- ------- ---- -------- ---- ----
5 Midland 04/15/97 Arco Permian TXL "N" 39-1 #1
6 Andrews 10/10/97 Minihan Oil & Gas University Consolidated XII #56
1 Ector 11/03/97 Citation Oil & Gas H. E. Cummins #15
4 Ector 01/17/97 Anadarko GCDU #284
9 Ector 01/17/97 Anadarko GCDU #264
AX-3 - 1
EXHIBIT A(I)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this
_____ day of November, 1997 (this "Agreement"), by and between PATTERSON
DRILLING COMPANY, a Delaware corporation ("PDC"), and V&B DRILLING, INC., a
Texas corporation ("V&B").
RECITALS:
A. Simultaneously with the execution of this Agreement,
PDC and V&B have entered into that certain Asset Purchase Agreement, dated of
even date herewith (the "Asset Purchase Agreement"), providing for, among other
things, the purchase by PDC of the drilling rigs, related equipment and rolling
stock owned by V&B.
B. The execution and delivery of this Agreement is a
condition to the consummation of the Asset Purchase contemplated by the Asset
Purchase Agreement, and the parties are entering into this Agreement in order
to fulfill such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof
and remain in effect through November 1, 2002 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) V&B covenants and agrees that during the Non-Compete
Period, V&B shall not, without the prior written consent of PDC, directly or
indirectly, alone or in association with any other person, carry on, be
engaged, concerned, or take part in, render services to, or otherwise assist,
or own, share in the earnings of, or invest in the stock, bonds, or other
securities of, any person which is engaged in, the contract oil and gas well
drilling business within the Permian Basin of West Texas and Southeastern New
Mexico (the "Competitive Business"); provided, however, that V&B may (i) invest
and/or engage in any business that routinely provides third-party services (as
such term is commonly used in the contract oil and gas well drilling business)
to a Competitive Business, but
EXH A(I) - 1
is not engaged in the actual conduct of a Competitive Business, or (ii) invest
in stock, bonds, or other securities of any Competitive Business (but without
otherwise participating in the Competitive Business) if: (A) such stock,
bonds, or other securities are listed on any national securities exchange or
are registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended; (B) the investment does not exceed, in the case of any class of
capital stock of any one issuer, two percent (2%) of the issued and outstanding
shares, or, in the case of bonds or other securities of any one issuer, two
percent (2%) of the aggregate principal amount thereof issued and outstanding;
and (C) such investment would not prevent, directly or indirectly, the
transaction of business by PDC or any affiliate of PDC with any state,
district, territory, or possession of the United States or any governmental
subdivision, agency, or instrumentality thereof by virtue of any statute, law,
regulation or administrative practice. The period of time during which V&B is
prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which V&B is in breach of the terms of
this section.
(b) It is understood by and between the parties hereto
that the foregoing covenant by V&B not to enter into competition with PDC as
set forth in Section 2(a) hereof is an essential element of this Agreement and
the Asset Purchase Agreement and that, but for the agreement of V&B to comply
with such covenant, PDC would not have agreed to enter into this Agreement or
the Asset Purchase Agreement. PDC and V&B have independently consulted with
their respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. V&B agrees that
such covenant is reasonable in scope, geographic area, and duration, and that
compliance with such covenant would not impose economic hardship on V&B.
3. Restrictions on Soliciting Business of PDC.
V&B further covenants and agrees that during the Non-Compete
Period, V&B will not, either for itself or for any other person or entity,
directly or indirectly, engage in any of the following activities in a
Competitive Business without the express prior written consent of PDC:
(a) Solicit or hire any of the employees of PDC or
solicit or take away any of PDC's customers, lessors, or suppliers or attempt
any of the foregoing:
(b) Acquire or attempt to acquire rights providing any
product or service in a Competitive Business within the territory described in
Section 2 hereof; or
(c) Engage in any act which would interfere with or harm
any business relationship PDC has with any customer, lessor, employee,
principal or supplier.
4. Specific Performance.
Without intending to limit the remedies available to PDC, V&B
acknowledges that PDC will have no adequate remedies at law if V&B violates the
terms of Sections 2 or 3, hereof. In
EXH A(I) - 2
such event, V&B agrees that PDC shall have the right, in addition to any other
rights it may have, to obtain in any court of competent jurisdiction specific
performance of such Sections of this Agreement or injunctive relief to restrain
any breach or threatened breach thereof. Nothing herein shall be construed as
prohibiting PDC from pursuing any other remedies available to PDC (whether at
law or in equity) for such breach or threatened breach, including, without
limitation, the recovery of monetary damages from V&B.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and V&B.
(a) Representations and Warranties of PDC. PDC hereby
represents and warrants to V&B that: (i) it has all requisite power to enter
into and perform its obligations under this Agreement; (ii) this Agreement has
been duly and validly authorized by all necessary corporate action on the part
of PDC; (iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.
(b) Representations and Warranties of V&B. V&B hereby
represents and warrants to PDC that: (i) V&B has the capacity and power to
enter into and perform obligations of V&B under this Agreement; (ii) V&B has
duly and validly executed this Agreement; (iii) the execution of this Agreement
and performance of obligations of V&B hereunder do not require the consent or
approval of any other party; and (iv) this Agreement constitutes a valid and
binding obligation of V&B.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they
will comply with all applicable laws and regulations of government bodies or
agencies in their respective performance of their obligations under this
Agreement.
(b) Governing Law and Construction. This Agreement will
be governed by and construed in accordance with the laws of the State of Texas
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
EXH A(I) - 3
(c) Forum for Dispute Resolution. If any dispute arises
among the parties concerning the interpretation or performance of any portion
of this Agreement which the parties are unable to resolve themselves, and any
party brings an action against any other party seeking a declaratory order,
specific performance, damages, or any other legal or equitable relief based on
this Agreement, the parties agree that the forum for any such action shall be
an appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter contained herein and supersedes any previous oral or written
communications, representations, understandings or agreements with respect
thereto. The terms of this Agreement may be modified only in a writing, signed
by authorized representatives of both parties.
(e) Assignability. This Agreement will be binding upon
the parties' respective successors and permitted assigns. Neither party may
assign this Agreement and/or any of its rights and/or obligations hereunder
without the prior written consent of the other party, and any such attempted
assignment will be void; provided, however, that PDC may assign this Agreement
to PEC or to another subsidiary of PEC without the prior written consent of
V&B, and provided further that a transfer by PDC as a result of a merger or
sale of all or substantially all of the assets of PDC with or to a third party
that assumes PDC's obligations hereunder by operation of law or otherwise shall
not constitute a prohibited assignment under this Section 8(e).
(f) Waiver. A waiver of a breach or default under this
Agreement will not constitute a waiver of any other breach or default. Failure
or delay by either party to enforce compliance with any term or condition of
this Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is
declared to be invalid, the parties agree that such invalidity will not affect
the validity of the remaining provisions of this Agreement, and further agree,
to the extent possible, to substitute for the invalid provision a valid
provision that approximates the intent and economic effect of the invalid
provision as closely as possible.
(h) Headings. The titles of the Sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
(i) Notice. Any notice, request, consent, demand or
other communication required to be given under this Agreement will be in
writing and will be given personally, by facsimile or by mailing the same,
first-class, postage prepaid to the appropriate address and facsimile number
set forth below or to such other person or at such other address as may
hereafter be designated by like notice.
EXH A(I) - 4
Notices by mail will be considered delivered and become effective three days
after the mailing thereof. All notices by facsimile will be considered
delivered and become effective immediately upon the confirmed (by answer back
or other tangible printed verification or successful receipt) sending thereof.
To PDC: Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating
Officer
To V&B: V&B Drilling, Inc.
2513 Mercury Avenue
P.O. Box 69109
Odessa, Texas 79769-9109
Facsimile: (915) 381-2720
with copies to:
Rick Browning
Attorney at Law
5050 East University, Suite One
Odessa, Texas 79762
(j) Counterparts. This Agreement may be executed in
counterparts and by the parties hereto in separate counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.
EXH A(I) - 5
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed by their respective representatives as of the day and year
first above written.
"PDC"
PATTERSON DRILLING COMPANY
By: /s/ JAMES C. BROWN
-----------------------------------
James C. Brown
Vice President-Finance
"V&B"
V&B DRILLING, INC.
By: /s/ VERNON BYRD
-----------------------------------
Vernon Byrd
President
EXH A(I) - 6
EXHIBIT A(II)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this
_____ day of November, 1997 (this "Agreement"), by and between PATTERSON
DRILLING COMPANY, a Delaware corporation ("PDC"), and VERNON BYRD, an
individual residing in Odessa, Texas ("V Byrd").
RECITALS:
A. Simultaneously with the execution of this Agreement,
PDC has entered into that certain Asset Purchase Agreement, dated of even date
herewith (the "Asset Purchase Agreement"), between PDC and V&B DRILLING, INC.
("V&B"), providing for, among other things, the purchase by PDC of the drilling
rigs, related equipment and rolling stock owned by V&B.
B. V Byrd is an officer, director and stockholder of
V&B.
C. The execution and delivery of this Agreement is a
condition to the consummation of the Asset Purchase contemplated by the Asset
Purchase Agreement, and the parties are entering into this Agreement in order
to fulfill such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof
and remain in effect through November 1, 2002 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) V Byrd covenants and agrees that during the
Non-Compete Period, V Byrd shall not, without the prior written consent of PDC,
directly or indirectly, and whether as a principal or as an agent, officer,
director, employee, consultant, or otherwise, alone or in association with any
other person, carry on, be engaged, concerned, or take part in, render services
to, or otherwise assist,
EXH A(II) - 1
or own, share in the earnings of, or invest in the stock, bonds, or other
securities of, any person which is engaged in, the contract oil and gas well
drilling business within the Permian Basin of West Texas and Southeastern New
Mexico (the "Competitive Business"); provided, however, that V Byrd may (i)
invest and/or engage in any business that routinely provides third-party
services (as such term is commonly used in the contract oil and gas well
drilling business) to a Competitive Business, but is not engaged in the actual
conduct of a Competitive Business, or (ii) invest in stock, bonds, or other
securities of any Competitive Business (but without otherwise participating in
the Competitive Business) if: (A) such stock, bonds, or other securities are
listed on any national securities exchange or are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended; (B) the investment
does not exceed, in the case of any class of capital stock of any one issuer,
two percent (2%) of the issued and outstanding shares, or, in the case of bonds
or other securities of any one issuer, two percent (2%) of the aggregate
principal amount thereof issued and outstanding; and (C) such investment would
not prevent, directly or indirectly, the transaction of business by PDC or any
affiliate of PDC with any state, district, territory, or possession of the
United States or any governmental subdivision, agency, or instrumentality
thereof by virtue of any statute, law, regulation or administrative practice.
The period of time during which V Byrd is prohibited from engaging in certain
activities by this Section shall be extended by the length of time during which
V Byrd is in breach of the terms of this section.
(b) It is understood by and between the parties hereto
that the foregoing covenant by V Byrd not to enter into competition with PDC as
set forth in Section 3(a) hereof is an essential element of this Agreement and
the Asset Purchase Agreement and that, but for the agreement of V Byrd to
comply with such covenant, PDC would not have agreed to enter into this
Agreement or the Asset Purchase Agreement. PDC and V Byrd have independently
consulted with their respective counsel and have been advised in all respects
concerning the reasonableness and propriety of such covenant, with specific
regard to the nature of the business conducted by PDC and its affiliates. V
Byrd agrees that such covenant is reasonable in scope, geographic area, and
duration, and that compliance with such covenant would not impose economic or
professional hardship on V Byrd.
3. Restrictions on Soliciting Business of PDC.
V Byrd further covenants and agrees that during the
Non-Compete Period, V Byrd will not, either for himself or for any other person
or entity, directly or indirectly, engage in any of the following activities in
a Competitive Business without the express prior written consent of PDC:
(a) Solicit or hire any of the employees of PDC or
solicit or take away any of PDC's customers, lessors, or suppliers or attempt
any of the foregoing:
(b) Acquire or attempt to acquire rights providing any
product or service in a Competitive Business within the territory described in
Section 3 hereof; or
(c) Engage in any act which would interfere with or harm
any business relationship PDC has with any customer, lessor, employee,
principal or supplier.
EXH A(II) - 2
4. Specific Performance.
Without intending to limit the remedies available to PDC, V
Byrd acknowledges that PDC will have no adequate remedies at law if V Byrd
violates the terms of Section 3 or 4, hereof. In such event, V Byrd agrees
that PDC shall have the right, in addition to any other rights it may have, to
obtain in any court of competent jurisdiction specific performance of such
Sections of this Agreement or injunctive relief to restrain any breach or
threatened breach thereof. Nothing herein shall be construed as prohibiting
PDC from pursuing any other remedies available to PDC (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from V Byrd.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and V Byrd.
(a) Representations and Warranties of PDC. PDC hereby
represents and warrants to V Byrd that: (i) it has all requisite power to enter
into and perform its obligations under this Agreement; (ii) this Agreement has
been duly and validly authorized by all necessary corporate action on the part
of PDC; (iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.
(b) Representations and Warranties of V Byrd. V Byrd
hereby represents and warrants to PDC that: (i) V Byrd has the capacity and
power to enter into and perform obligations of V Byrd under this Agreement;
(ii) V Byrd has duly and validly executed this Agreement; (iii) the execution
of this Agreement and performance of obligations of V Byrd hereunder do not
require the consent or approval of any other party; and (iv) this Agreement
constitutes a valid and binding obligation of V Byrd.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they
will comply with all applicable laws and regulations of government bodies or
agencies in their respective performance of their obligations under this
Agreement.
EXH A(II) - 3
(b) Governing Law and Construction. This Agreement will
be governed by and construed in accordance with the laws of the State of Texas
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
(c) Forum for Dispute Resolution. If any dispute arises
among the parties concerning the interpretation or performance of any portion
of this Agreement which the parties are unable to resolve themselves, and any
party brings an action against any other party seeking a declaratory order,
specific performance, damages, or any other legal or equitable relief based on
this Agreement, the parties agree that the forum for any such action shall be
an appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter contained herein and supersedes any previous oral or written
communications, representations, understandings or agreements with respect
thereto. The terms of this Agreement may be modified only in a writing, signed
by authorized representatives of both parties.
(e) Assignability. This Agreement will be binding upon
the parties' respective successors and permitted assigns. Neither party may
assign this Agreement and/or any of its rights and/or obligations hereunder
without the prior written consent of the other party, and any such attempted
assignment will be void; provided, however, that PDC may assign this Agreement
to PEC or to another subsidiary of PEC without the prior written consent of V
Byrd, and provided further that a transfer by PDC as a result of a merger or
sale of all or substantially all of the assets of PDC with or to a third party
that assumes PDC's obligations hereunder by operation of law or otherwise shall
not constitute a prohibited assignment under this Section 8(e).
(f) Waiver. A waiver of a breach or default under this
Agreement will not constitute a waiver of any other breach or default. Failure
or delay by either party to enforce compliance with any term or condition of
this Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is
declared to be invalid, the parties agree that such invalidity will not affect
the validity of the remaining provisions of this Agreement, and further agree,
to the extent possible, to substitute for the invalid provision a valid
provision that approximates the intent and economic effect of the invalid
provision as closely as possible.
(h) Headings. The titles of the Sections and subsections
of this Agreement are for
EXH A(II) - 4
convenience of reference only and are not to be considered in construing this
Agreement.
(i) Notice. Any notice, request, consent, demand or
other communication required to be given under this Agreement will be in
writing and will be given personally, by facsimile or by mailing the same,
first-class, postage prepaid to the appropriate address and facsimile number
set forth below or to such other person or at such other address as may
hereafter be designated by like notice. Notices by mail will be considered
delivered and become effective three days after the mailing thereof. All
notices by facsimile will be considered delivered and become effective
immediately upon the confirmed (by answer back or other tangible printed
verification or successful receipt) sending thereof.
To PDC: Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief
Operating Officer
To V Byrd: Vernon Byrd
Rick Browning
Attorney at Law
5050 East University, Suite One
Odessa, Texas 79762
8. Counterparts. This Agreement may be executed in
counterparts and by the parties hereto in separate counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.
EXH A(II) - 5
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed by their respective representatives as of the
day and year first above written.
"PDC"
PATTERSON DRILLING COMPANY
By: /s/ JAMES C. BROWN
--------------------------------------
James C. Brown
Vice President-Finance
"V BYRD"
/s/ VERNON BYRD
-----------------------------------------
Vernon Byrd
EXH A(II) - 6
EXHIBIT A(III)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this
_____ day of November, 1997 (this "Agreement"), by and between PATTERSON
DRILLING COMPANY, a Delaware corporation ("PDC"), and ROLAND J. VAUGHT, an
individual residing in Odessa, Texas ("R Vaught").
RECITALS:
A. Simultaneously with the execution of this Agreement,
PDC has entered into that certain Asset Purchase Agreement, dated of even date
herewith (the "Asset Purchase Agreement"), between PDC and V&B DRILLING, INC.
("V&B"), providing for, among other things, the purchase by PDC of the drilling
rigs, related equipment, rolling stock owned by V&B.
B. R Vaught is an officer, a director and a stockholder
of V&B.
C. The execution and delivery of this Agreement is a
condition to the consummation of the Asset Purchase contemplated by the Asset
Purchase Agreement, and the parties are entering into this Agreement in order
to fulfill such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof
and remain in effect through November 1, 2002 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) R Vaught covenants and agrees that during the
Non-Compete Period, R Vaught shall not, without the prior written consent of
PDC, directly or indirectly, and whether as a principal or as an agent,
officer, director, employee, consultant, or otherwise, alone or in association
with any other person, carry on, be engaged, concerned, or take part in, render
services to, or otherwise assist, or own, share in the earnings of, or invest
in the stock, bonds, or other securities of, any person
EXH A(III) - 1
which is engaged in, the contract oil and gas well drilling business within the
Permian Basin of West Texas and Southeastern New Mexico (the "Competitive
Business"); provided, however, that R Vaught may (i) invest and/or engage in
any business that routinely provides third-party services (as such term is
commonly used in the contract oil and gas well drilling business) to a
Competitive Business, but is not engaged in the actual conduct of a Competitive
Business, or (ii) invest in stock, bonds, or other securities of any
Competitive Business (but without otherwise participating in the Competitive
Business) if: (A) such stock, bonds, or other securities are listed on any
national securities exchange or are registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended; (B) the investment does not
exceed, in the case of any class of capital stock of any one issuer, two
percent (2%) of the issued and outstanding shares, or, in the case of bonds or
other securities of any one issuer, two percent (2%) of the aggregate principal
amount thereof issued and outstanding; and (C) such investment would not
prevent, directly or indirectly, the transaction of business by PDC or any
affiliate of PDC with any state, district, territory, or possession of the
United States or any governmental subdivision, agency, or instrumentality
thereof by virtue of any statute, law, regulation or administrative practice.
The period of time during which R Vaught is prohibited from engaging in certain
activities by this Section shall be extended by the length of time during which
R Vaught is in breach of the terms of this section.
(b) It is understood by and between the parties hereto
that the foregoing covenant by R Vaught not to enter into competition with PDC
as set forth in Section 3(a) hereof is an essential element of this Agreement
and the Asset Purchase Agreement and that, but for the agreement of R Vaught to
comply with such covenant, PDC would not have agreed to enter into this
Agreement or the Asset Purchase Agreement. PDC and R Vaught have independently
consulted with their respective counsel and have been advised in all respects
concerning the reasonableness and propriety of such covenant, with specific
regard to the nature of the business conducted by PDC and its affiliates. R
Vaught agrees that such covenant is reasonable in scope, geographic area, and
duration, and that compliance with such covenant would not impose economic or
professional hardship on R Vaught.
3. Restrictions on Soliciting Business of PDC.
R Vaught further covenants and agrees that during the
Non-Compete Period, R Vaught will not, either for himself or for any other
person or entity, directly or indirectly, engage in any of the following
activities in a Competitive Business without the express prior written consent
of PDC:
(a) Solicit or hire any of the employees of PDC or
solicit or take away any of PDC's customers, lessors, or suppliers or attempt
any of the foregoing:
(b) Acquire or attempt to acquire rights providing any
product or service in a Competitive Business within the territory described in
Section 3 hereof; or
(c) Engage in any act which would interfere with or harm
any business relationship PDC has with any customer, lessor, employee,
principal or supplier.
EXH A(III) - 2
4. Specific Performance.
Without intending to limit the remedies available to PDC, R
Vaught acknowledges that PDC will have no adequate remedies at law if R Vaught
violates the terms of Section 3 or 4, hereof. In such event, R Vaught agrees
that PDC shall have the right, in addition to any other rights it may have, to
obtain in any court of competent jurisdiction specific performance of such
Sections of this Agreement or injunctive relief to restrain any breach or
threatened breach thereof. Nothing herein shall be construed as prohibiting
PDC from pursuing any other remedies available to PDC (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from R Vaught.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and R Vaught.
(a) Representations and Warranties of PDC. PDC hereby
represents and warrants to R Vaught that: (i) it has all requisite power to
enter into and perform its obligations under this Agreement; (ii) this
Agreement has been duly and validly authorized by all necessary corporate
action on the part of PDC; (iii) the execution of this Agreement by PDC and
performance of PDC's obligations hereunder do not require the consent or
approval of any other party; and (iv) this Agreement is a valid and binding
obligation of PDC.
(b) Representations and Warranties of R Vaught. R Vaught
hereby represents and warrants to PDC that: (i) R Vaught has the capacity and
power to enter into and perform obligations of R Vaught under this Agreement;
(ii) R Vaught has duly and validly executed this Agreement; (iii) the execution
of this Agreement and performance of obligations of R Vaught hereunder do not
require the consent or approval of any other party; and (iv) this Agreement
constitutes a valid and binding obligation of R Vaught.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they
will comply with all applicable laws and regulations of government bodies or
agencies in their respective performance of their obligations under this
Agreement.
EXH (III) - 4
(b) Governing Law and Construction. This Agreement will
be governed by and construed in accordance with the laws of the State of Texas
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
(c) Forum for Dispute Resolution. If any dispute arises
among the parties concerning the interpretation or performance of any portion
of this Agreement which the parties are unable to resolve themselves, and any
party brings an action against any other party seeking a declaratory order,
specific performance, damages, or any other legal or equitable relief based on
this Agreement, the parties agree that the forum for any such action shall be
an appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter contained herein and supersedes any previous oral or written
communications, representations, understandings or agreements with respect
thereto. The terms of this Agreement may be modified only in a writing, signed
by authorized representatives of both parties.
(e) Assignability. This Agreement will be binding upon
the parties' respective successors and permitted assigns. Neither party may
assign this Agreement and/or any of its rights and/or obligations hereunder
without the prior written consent of the other party, and any such attempted
assignment will be void; provided, however, that PDC may assign this Agreement
to PEC or to a subsidiary of PEC without the prior written consent of R Vaught
and provided further that a transfer by PDC as a result of a merger or sale of
all or substantially all of the assets of PDC with or to a third party that
assumes PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 8(e).
(f) Waiver. A waiver of a breach or default under this
Agreement will not constitute a waiver of any other breach or default. Failure
or delay by either party to enforce compliance with any term or condition of
this Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is
declared to be invalid, the parties agree that such invalidity will not affect
the validity of the remaining provisions of this Agreement, and further agree,
to the extent possible, to substitute for the invalid provision a valid
provision that approximates the intent and economic effect of the invalid
provision as closely as possible.
(h) Headings. The titles of the Sections and subsections
of this Agreement are for
EXH A(III) - 5
convenience of reference only and are not to be considered in construing this
Agreement.
(i) Notice. Any notice, request, consent, demand or
other communication required to be given under this Agreement will be in
writing and will be given personally, by facsimile or by mailing the same,
first-class, postage prepaid to the appropriate address and facsimile number
set forth below or to such other person or at such other address as may
hereafter be designated by like notice. Notices by mail will be considered
delivered and become effective three days after the mailing thereof. All
notices by facsimile will be considered delivered and become effective
immediately upon the confirmed (by answer back or other tangible printed
verification or successful receipt) sending thereof.
To PDC:
Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief
Operating Officer
To R Vaught:
Roland J. Vaught
c/o V&B Drilling, Inc.
2513 Mercury Avenue
P.O. Box 69109
Odessa, Texas 79769-9109
Facsimile: (915) 381-2720
with copies to:
Rick Browning
Attorney at Law
5050 East University, Suite One
Odessa, Texas 79762
(j) Counterparts. This Agreement may be executed in
counterparts and by the parties hereto in separate counterparts, each of which
will be deemed an original, but all of which together will constitute one and
the same instrument.
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be executed by their respective representatives as of the day and year first
above written.
"PDC"
PATTERSON DRILLING COMPANY
By:
James C. Brown
Vice President-Finance
"R Vaught"
Roland J. Vaught
EXH A(III) - 6
EXHIBIT B
BILL OF SALE AND ASSIGNMENT
KNOW ALL MEN BY THESE PRESENTS, that, pursuant to that certain
Asset Purchase Agreement, dated of even date herewith ("Asset Purchase
Agreement") between PATTERSON DRILLING COMPANY ("PDC"), a Delaware corporation,
and V&B DRILLING, INC. ("V&B"), a Texas corporation (V&B is referred to herein
as the "Assignor"), the Assignor, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby grants,
bargains, sells, conveys and transfers unto PDC (the "Assignee"), all of the
Assignor's right, title and interest in and to (i) the Drilling Rigs, Equipment
and Rolling Stock set forth in Appendix I attached hereto and incorporated
herein by this reference; and (ii) the Drilling Contracts described in Appendix
II attached hereto and incorporated herein by this reference.
TO HAVE AND TO HOLD the same unto the Assignee and the
Assignee's successors and assigns forever. The Assignor hereby covenants and
agrees that it has the full right, power and authority to sell, convey and
transfer the foregoing property to the Assignee pursuant to this Bill of Sale
and Assignment.
IN WITNESS WHEREOF, the Assignor has caused this Bill of Sale
and Assignment to be duly executed by its duly authorized officer as of the
____ day of November, 1997.
V&B DRILLING, INC.
By:
Vernon Byrd
President
APPENDIX I
TO
BILL OF SALE AND ASSIGNMENT
FROM
V&B DRILLING, INC.
TO
PATTERSON DRILLING COMPANY
(List of Assets Assigned)
A. DRILLING RIGS, EQUIPMENT AND ROLLING STOCK
The Drilling Rigs and Equipment includes all of the drilling rigs,
parts and related equipment, including engines, mud pumps, hooks and
blocks, derricks, substructures, rotary tables, blow-out prevention
equipment, drill bits and all tubular goods on the rigs and in the
yards owned by V&B, all of which are listed below.
RIG #1
H.B. CUMMINS #15 - ECTOR CO.
FOR CITATION OIL & GAS CORP.
Substructure 10' H, l6' W, 40' L
Derrick 97' Jacknife
Drawworks W-45
Power 2 - 8 V71 Detroit Diesels, W 955 Allison
Torque Convertor
Blocks 4 - Sheave Block & Hook
Swivel TSM 150 C
Kelly 4-1/4 X 38'
Rotary BDW 17-1/2 x 44
Tool House 8' x 8' X 28'
Pump 1 Emsco D375, skid mounted
EXH B - 2
Power Cat. D353
Pump 2 Emsco D-375 Skid mounted
Power Cat. 3408
Light Plant 2 - Cat 3306
Premix Pit 6' H, X 8' W x 30' L
Water Tank 500 bbl
Closing Unit Koomey 4 station
Oil container 10 bbl 4 comp.
Cat Walk 25' W X 42' H X 48' L
V-Door Ramp 5' W x 14' L
Pipe Racks 3 Sets - Triangle - 42 H
6" Drill collars 22 - Drill Collars, 29' plus
8" Drill collars 3 - 30' L
Drill Pipe Approx. 7000' of 4-1/2" drill pipe
Steps 3 Sets
Pipe tubs 2 - 8 W X 3' X 35' L
BOF Shaffer Type, 10" 900 W rams & choke Manifold
Elevators, tools, subs and misc. equipment to operate Rig.
EXH B - 3
RIG #2
IN YARD
Substructure 10' H, 18' W X 40' L
Derrick 100' Jacknife
Drawworks W-45, with 2 engine comp.
Power 2 - 8V71 Detroits, 318 HP each
Blocks 4 - Sheave with/hook
Swivel Oilwell 150C
Kelly 4-1/4" X 38'
Rotary 17.5 BDW
Tool House 8' X 8' X 28'
Pump 1 Ellis Williams 15 W 600 skidded
Power Cat 3412
Pump 2 FXN Gardner Denver
Power Cat. 3408
Light Plant Cat. 3306 W - 150, KW gen.
Premix Pit 6' X 8' x 30'
Water Tank 500 bbl Horizontal skidded
Closing Unit 4 Station
Oil Container 10 bbl, 4 compartment
Cat Walk 42' X 5' X 48'
V-Door Ramp 5' X 13'
EXH B - 4
Pipe Racks 3 Sets - Triangle 42" H
6" Drill collars 22 - 6" X 28+
Steps 3 sets
Pipe Tub 2 - 8'W X 3'H X 35'L
Drill pipe Approx. 6000' of 4-1/2"
BOP Shaffer 10 - 900 L.W.S.
Elevators, tools, subs and misc. equipment to operate Rig.
EXH B - 5
RIG #3 - IN YARD
ODESSA, TEXAS
Pony Sub to Raise Floor to 14'
Substructure 10' X 12' X 18' with Ramp
Derrick 97' Telecope Derrick - free standing
Drawworks W - 45
Power 2 - Cat. 3306 w/11500 Twin Disk Torque Conv.
Blocks Brewster - 4 sheave
Swivel Grey - Type F
Kelly 4-1/4" X 37'
Rotary Twister 175
Toolhouse 8 X 8 X 30'
Pump 1 Brewster 550 (run 30 days since New)
Power Cat D-353
Pump 2 FX2 G.D.
Power 8771 Detroit
Light Plant 671 Detroit w/100 KW Gen.
Premix Pit 6' X 8' X 30'
Water Tank 500 bbl - Hori. skidded
Closing Unit 3 - Station
Oil container 8 bbl, 3 compartments
Catwalk 2 - 5' X 25' X 42
EXH B - 6
V-Door Ramp 5'W X 10' L
Pipe Racks 3 sets - Triangle - 42" H
6" Drill Collars 22 - 5" Drill Collars
Steps 3 Sets
Pipe Tubs 2 - 8'W X 3'H X 35' L
Drill pipe Approx. 6500' of 4-1/2"
Elevators, tools, subs and misc. equipment to operate rig.
Substructure 11'H X 17'W X 40'L
Derrick Jacknife 100'
Drawworks W 45
Power 2 - 8V71 Detroit Diesels, w955
Allison Torque Con.
Blocks EMSCO, 4 sheave w/B.J. Hook
Swivel P.C. 150 Ton
Kelly 38' - 4-1/4 square
Rotary B.D.W. - 17-1/2"
Tool House 8'W X 8' H x 28' W, 15 Lockers
Pump #1 EMSCO DB - 550, skid mounted
Power Cat. 3412
Pump #2 EMCSO D-300, skid mounted
Power Cat D-353
Light Plant 1 - Cat. 3306, 150 KW, 1 Detroit 6V71,
6 cly. - 90 KW
Premix Pit 6'H X 6' W X 30 L
Water Tank 500 bbl
Closing Unit Koomey 4 station
Oil Container 10 bbl 41 comp.
Cat Walk 5' W X 42 H X 48' L
EXH B - 8
V-Door Ramp 5' W X 16' L
Pipe Racks 3 sets - 42" Triangle
Pipe Tube 3 - 8' W x 3' H x 35' L
6" Drill Collars 25 - 29' plus
8" Drill Collars 3 - 28' plus
Drill Pipe approx. 6000' of 4-1/2" X-hole
Steps 3 sets
Mud Pit
BOP Shaffer 10" - 900 - BOP w/ram choke
manifold
Elevators, tools, subs and misc- equipment to operate Rig.
EXH B - 9
RIG #5
TXL "N" 39 - 1 #1
IN MIDLAND COUNTY, TEXAS
FOR SIERRA ENGINEERING/ARCO PERMIAN
Substructure 12' H x 24' W X 50' L
Derrick Derrick MFG 131', SN: 301002
Drawworks BDW 450-T
Power 2 - Cat. 3406 & 2 air corp.
Blocks Sowa - 5 sheave
Swivel NSCO Ideal - DF 150
Kelly 4-1/4" X 40'
Rotary BDW 17-1/2
Tool House 8' X 8' X 28'
Pump 1 National C-350, skid mounted
Power Cat. 3412
Pump 2 Wilson 600, skid mounted
Power Cat. 3408
Light Plant 1 Cat. 3306, 150 KW, 1 Cat. 3304, 90 KW in
house
Premix Pit 6' H x 8' W X 30' L
Water Tank 500 bbls
Closing Unit Valcon, 4 stage closing unit
Oil Container 10 bbls, 4 comp.
Cat Walk 5' W - 42" H - 48' L
EXH B - 10
V-Door Ramp 5' W X 16' L
Pipe Racks 5 sets - 42" H, triangle
Lay Down Racks 2 sets - 24" Triangle
6" Drill Collars 26 - 29' Plus
8" Drill Collars 8 - 28' plus
Drill Pipe Approx. 10,000'
Steps 3 Sets
Mud Pit 10' W - 7'H - 50'
BOP 10" 900 Shaffer Type A W/rams &
Choke Manifold
Elevator, tools, subs and misc. equipment to operate Rig.
EXH B - 11
RIG #6
UNIVERSITY CONSOLIDATED XII #56
IN ANDREWS COUNTY, TEXAS
FOR MINIHAN OIL & GAS CORP.
Substructure 12'H X 22'W x 48' L
Derrick TOFECO - 131", SN: 28-173
Drawworks V-15-DWKS
Power 2 - Detroit, 12V71, w/Allison Torque
Conv. and Triple hydro.
Blocks SOWA, 5 sheave
Swivel NSCO, Type F - 150 Ton
Kelly 4-1/4" X 40'
Rotary BDW 17-1/2"
Tool House 8'H X 8'W X 28' L
Pump 1 Tri Service 16", skid mounted
Power Cat. D-353
Pump 2 EMSCO D - 300 - 14"
Power Detroit l2V7l
Light Plant 1 Cat. 3306 - 135 KW. 1 Detroit 6V71
90 KW
Premix Pit 6'H X 8'W x 30' L
Water Tank 2 - 500 BBL
Closing Unit Valco - 4 station
Oil Container 10 bbl - 4 comp.
Cat Walk 2 - 5'W X 42" H X 48' L
EXH B - 12
V-Door Ramp 5'W x 16' L
Pipe Racks 5 sets - 42" H X 30'
Lay down racks 2 sets - 18"h X 30'
6" Drill Collars 22 - 6-1/2" w/slip sec. fish neck,
6-1/2" 30' plus
8" Drill Collars 6 - 28' plus
Drill Pipe Approx. 11,000' of 4-1/2" - 1660#
Steps 3 sets
Mud Pit 8' W X 7' H x 50'L
BOP Shaffer 10" - 900 W/Rams & choke
Manifold
Tools, subs and misc. equipment to operate Rig.
EXH B - 14
RIG #9
GCDU #264 IN ECTOR CO, TEXAS
FOR ANADARKO PETROLEUM CORP.
Substructure 10' H X 18' W X 40' L
Derrick Jacknife 98'
Drawworks W 45
Power 2 - Detroit, 8V71 with Allison
Torque Conv.
Blocks Baash Ross, 150 Ton
Swivel Oilwell PC 150
Kelly 4-1/4" X 40'
Rotary B.D.W. - 17-1/2"
Tool House 8'H X 8'W X 30'
Pump 1 National C-350, skid mounted
Power Cat. 3412
Pump 2 EMSCO - D-300
Power Cat. D-353
Light Plant Cat. 3306, 150 KW
Premix Pit 8'H X 8'W X 30'
Water Tank 500 bbl
Closing Unit Barksdale, 4 station
Oil Container 10 bbl, 4 comp.
Catwalk 1 - 5' X 42" X 48'
V-Door Ramp 5' W X 14'
EXH B - 14
Pipe Racks 5 sets - Triangle
Pipe Tubs 8' W X 3'H X 35' L
6" Drill Collars 21 - 29' plus
8" Drill Collars 3 - 28' plus
Drill pipe Approx. 6000' of 4-1/2" X-Hole, 16#
Steps 3 sets
BOP Cameron 10" - 900 Space Saver
Tools, subs and misc. equipment to operate Rig.
EXH B - 15
2513 MERCURY AVE.
ODESSA, TEXAS
2 Utility Trailers
1 Lincoln Welder
1 Ford 900 Truck (Yard Truck) VIN F90LVDK1239
1 Lufkin Trailer - VIN 1LOlB3825B1057976
1 Allis Chalmers, Fork Lift - SN: A0139000
1 Caterpiller, Fork Lift
1980 Kenworth
JSC Lowboy Trailer
1 1987 Ford PU - VIN 1FTEX15V1HKA83479
1 1990 Ford PU - VIN 1FTEX15Y6LKA20509
1 1994 Ford PU - VIN IFTEF15N7RLA40070
1 1995 Ford PU - VIN 1FTEF15N3SNB08732
Assortment of Drilling Bits - new and used,
various sizes
2 Radiators for D-353 cat.
2 Radiators for 3306 Cat.
1 8V-71 Detroit (new overhaul) By - J & J
Engine Serv.
1 D-353 Cat. (new overhaul) by General Machine
1 3412 Cat. (new overhaul)
2 Electric Motors
EXH B - 16
1 Miller Electric welder
4 Weight Indicators
1 Steam Cleaner
9 Tool Houses for Storage - full
2 Kellys 4-1/4 x 40'
44 6" drill collars
4 Docks with Misc. Parts
8 Swivels, various makes & sizes
8 Blocks - various makes and sizes
4 Hook - various makes and sizes
10 Triangle Pipe Racks
In Shop Shelves & Bins with assortment of
bolts, nuts & etc.
1 BDW 17.5 - Rotary - New
EXH B - 17
YARD #4
- 24TH ST. & MERCURY AVE.
ODESSA, TEXAS
2 Tool Houses, 8' X 8' X 30'
1 W-45 Drawworks - New
6 Misc. Mud Pits
2 Tool Houses, 8' X 8' x 15'
1 Fuel Tank, 6000 gal. skid
35 6" collars
18 8" collars
4 Kellys, 4-1/4 Square x 40'
42 Triangle Pipe Racks - 30' long
Misc. Motors, Accumulator Units, Parts and
etc.
395 Joints of Double White Drill Pipe - Grade E
EXH B - 19
YARD
6831 UNIVERSITY BLVD.
ODESSA, TEXAS
1 Light Plant House
1 Tool House
2 FXzl72 Mud Pumps, skidded
Misc. Drawworks - 1 N4 Brewster W 2 Wakesha
1 S45A Beth.
1 National C150 Mud Pump
Misc. well used mud pumps
EXH B - 20
MOSS YARD
MOSS AVE. AND TISDALE ROAD
ODESSA, TEXAS
1 Substructure 10 X 18 X 35
2 97' Jackknife Derrick
2 172' LCM Derrick
3 Junk Substructures
1 C350 Mud Pump
2 120000 gal. Diesel Tank - skidded
2 500 bbl. Horizontal water tanks - skidded
5 Misc. Mud Pits
Approx. 200 Joints - Structural drill pipe
2 Catwalk - 4' X 42" X 25'
9 Catwalk with Misc. Equip.
28 Triangle Pipe Racks
4 Triangle Lay down racks
1 7 X 8 X 15 Tool house
Misc. Motors, parts and junk
EXH B - 21
APPENDIX II
TO
BILL OF SALE AND ASSIGNMENT
FROM
V&B DRILLING, INC.
TO
PATTERSON DRILLING COMPANY
(List of Drilling Contracts Assigned)
RIGNO
No. COUNTY DATE OPERATOR WELL NAME
--- ------ ---- -------- ---- ----
5 Midland 04/15/97 Arco Permian TXL "N" 39-1 #1
6 Andrews 10/10/97 Minihan Oil & Gas University Consolidated XII #56
1 Ector 11/03/97 Citation Oil & Gas H. E. Cummins #15
4 Ector 01/17/97 Anadarko GCDU #284
9 Ector 01/17/97 Anadarko GCDU #264
EXH B - 21
EXHIBIT C
2251
Prepared by the State Bar of Texas for use by
lawyers only Revised 10-85
19__ for the State Bar of Texas
WARRANTY DEED
Date:
Grantor: V&B Drilling, Inc.
Grantor's Mailing Address (including county):
Grantee: Patterson Drilling Company
Grantee's Mailing Address (including county):
P.O. Drawer 1416
Snyder Texas 79550
Scurry County, Texas
Consideration:
One Hundred Dollars ($100) and other good and valuable consideration.
Property (including any improvements):
Lots 15, 16, 17 and 18, Block 5, Rochester Replat of a portion of 1936
Subdivision as shown by the map or plat of record in Volume 9, Page
23, Plat Records, Ector County, Texas.
Reservations from and Exceptions to Conveyance and Warranty:
Easements, rights-of-way, and prescriptive rights, whether of record
or not; all presently recorded restrictions, reservations, covenants,
conditions, oil and gas leases, mineral severances, and other
instruments other than liens and conveyances, that affect the
property.
Grantor, for the consideration and subject to the reservations from
and exceptions to conveyance and warranty, grants, sells and conveys to Grantee
the property, together with all and singular the rights and appurtenances
thereto in any wise belonging, to have and hold it to Grantee, Grantee's heirs,
executors, administrators, successors or assigns forever. Grantor binds
Grantor and Grantor's heirs, executors, administrators and successors to
warrant and forever defend all and singular the property to Grantee and
Grantee's heirs, executors, administrators, successors and assigns against
every person whomsoever lawfully claiming or to claim the same or any part
thereof, except as to the reservations from and exceptions to conveyance and
warranty.
When the context requires, singular nouns and pronouns include the
plural.
V & B DRILLING, INC.
By: Vernon Byrd, President
EXH C - 1
(Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the day
of , 19____.
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
(Corporate Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledge before me on the day of
November, 1997, by VERNON BYRD, President of V&B Drilling, Inc., a Texas
corporation, on behalf of said corporation.
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
EXH C - 2
EXHIBIT D
2251
Prepared by the State Bar of Texas for use by lawyers only
Revised 10-85
19__ for the State Bar of Texas
WARRANTY DEED
Date:
Grantor: V&B Drilling, Inc.
Grantor's Mailing Address (including county):
Grantee: Patterson Drilling Company
Grantee's Mailing Address (including county):
P.O. Drawer 1416
Snyder Texas 79550
Scurry County, Texas
Consideration: One Hundred Dollars ($100) and other good and
valuable consideration.
Property (including any improvements):
Lots 22, 23, 24, and 25, Block 1, Rochester Replat of a portion of
1936 Subdivision, a subdivision of 312.19 acres of land in the West
part of Section 24, Block 43, T-2-S, T & P RR Company Survey, Ector
County, Texas, as shown by the map or plat of record in the office of
the County Clerk of said County.
Reservations from and Exceptions to Conveyance and Warranty:
Easements, rights-of-way, and prescriptive rights, whether of record
or not; all presently recorded restrictions, reservations, covenants,
conditions, oil and gas leases, mineral severances, and other
instruments other than liens and conveyances, that affect the
property.
Grantor, for the consideration and subject to the reservations from
and exceptions to conveyance and warranty, grants, sells and conveys to Grantee
the property, together with all and singular the rights and appurtenances
thereto in any wise belonging, to have and hold it to Grantee, Grantee's heirs,
executors, administrators, successors or assigns forever. Grantor binds
Grantor and Grantor's heirs, executors, administrators and successors to
warrant and forever defend all and singular the property to Grantee and
Grantee's heirs, executors, administrators, successors and assigns against
every person whomsoever lawfully claiming or to claim the same or any part
thereof, except as to the reservations from and exceptions to conveyance and
warranty.
When the context requires, singular nouns and pronouns include the plural.
V & B DRILLING, INC.
By: Vernon Byrd, President
EXH D - 1
(Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the day of
, 19____.
-----------------------------
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
(Corporate Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the day of
November, 1997, by VERNON BYRD, President of V&B Drilling, Inc., a Texas
corporation, on behalf of said corporation.
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
EXH D - 2
EXHIBIT E
2251
Prepared by the State Bar of Texas for use by lawyers only
Revised 10-85
19__ for the State Bar of Texas
WARRANTY DEED
Date:
Grantor: V&B Drilling, Inc.
Grantor's Mailing Address (including county):
Grantee: Patterson Drilling Company
Grantee's Mailing Address (including county):
P.O. Drawer 1416
Snyder Texas 79550
Scurry County, Texas
Consideration:
One Hundred Dollars ($100) and other good and valuable
consideration.
Property (including any improvements):
Lot 5, Block 6, WESTOVER ACRES, a subdivision in Ector County,
Texas, according to the map or plat thereof of record in
Volume 4, Page 44, Plat Records of Ector County, Texas
Reservations from and Exceptions to Conveyance and Warranty:
Easements, rights-of-way, and prescriptive rights, whether of
record or not; all presently recorded restrictions,
reservations, covenants, conditions, oil and gas leases,
mineral severances, and other instruments other than liens and
conveyances, that affect the property.
Grantor, for the consideration and subject to the reservations from
and exceptions to conveyance and warranty, grants, sells and conveys to Grantee
the property, together with all and singular the rights and appurtenances
thereto in any wise belonging, to have and hold it to Grantee, Grantee's heirs,
executors, administrators, successors or assigns forever. Grantor binds
Grantor and Grantor's heirs, executors, administrators and successors to
warrant and forever defend all and singular the property to Grantee and
Grantee's heirs, executors, administrators, successors and assigns against
every person whomsoever lawfully claiming or to claim the same or any part
thereof, except as to the reservations from and exceptions to conveyance and
warranty.
When the context requires, singular nouns and pronouns include the
plural.
V & B DRILLING, INC.
By: Vernon Byrd, President
EXH E - 1
(Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the
day of , 19____.
-------------------------------------
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
(Corporate Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the day of
November, 1997, by VERNON BYRD, President of V&B Drilling, Inc., a Texas
corporation, on behalf of said corporation.
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
EXH E - 2
EXHIBIT F
2251
Prepared by the State Bar of Texas for use by lawyers only
Revised 10-85
19__ for the State Bar of Texas
WARRANTY DEED
Date:
Grantor: V&B Drilling, Inc.
Grantor's Mailing Address (including county):
Grantee: Patterson Drilling Company
Grantee's Mailing Address (including county):
P.O. Drawer 1416
Snyder Texas 79550
Scurry County, Texas
Consideration:
One Hundred Dollars ($100) and other good and valuable consideration.
Property (including any improvements):
See attached Exhibit "A"
Reservations from and Exceptions to Conveyance and Warranty:
Easements, rights-of-way, and prescriptive rights, whether of record
or not; all presently recorded restrictions, reservations, covenants,
conditions, oil and gas leases, mineral severances, and other
instruments other than liens and conveyances, that affect the
property.
Grantor, for the consideration and subject to the reservations from
and exceptions to conveyance and warranty, grants, sells and conveys to Grantee
the property, together with all and singular the rights and appurtenances
thereto in any wise belonging, to have and hold it to Grantee, Grantee's heirs,
executors, administrators, successors or assigns forever. Grantor binds
Grantor and Grantor's heirs, executors, administrators and successors to
warrant and forever defend all and singular the property to Grantee and
Grantee's heirs, executors, administrators, successors and assigns against
every person whomsoever lawfully claiming or to claim the same or any part
thereof, except as to the reservations from and exceptions to conveyance and
warranty.
When the context requires, singular nouns and pronouns include the
plural.
V & B DRILLING, INC.
By: Vernon Byrd, President
EXH F - 1
(Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the day of
, 19____.
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
(Corporate Acknowledgement)
STATE OF TEXAS )
COUNTY OF )
This instrument was acknowledged before me on the day of
November, 1997, by VERNON BYRD, President of V&B Drilling, Inc., a Texas
corporation, on behalf of said corporation.
Notary Public, State of Texas
Notary's name (printed):
Notary's commission expires:
EXH F - 2
EXHIBIT "A"
Attached to and made a part of that certain Warranty Deed dated
November 14, 1997, between V&B Drilling, Inc., as Grantor, and
Patterson Drilling Company, as Grantee.
PROPERTIES
Being a 4.47 acre tract of land in the Southwest Part
of a 10.267 acre tract of land in the Northwest Part of
Section 33, Block 43, T-2-S, T & P Ry. Co. Survey, Ector
County, Texas, and being more particularly described by metes
and bounds as follows, to wit:
BEGINNING at a 1/2" iron rod set in the east
boundary Moss Avenue and west boundary of a 10.267 acre tract
of land in the northwest part of Section 33, Block 43, T-2-S,
T & P Ry. Ector County, Texas, for the northwest corner this
tract, from which point a fence corner post at the northwest
corner of 10.267 acre tract bears N 15degrees 17- 1/2 W, 150
feet, and a 1/2" galvanized iron pipe in the east boundary
Moss Avenue and north boundary Section 33 bears N 15degrees
17- 1/2 W, 650.0 feet, from which point the northwest corner
Section 33, being in the centerline of Moss Avenue, bears S
74degrees 42- 1/2' W, 50 feet;
THENCE S 15degrees 17- 1/2' E, with east boundary
Moss Avenue and west boundary 10.267 acre tract, 350.0 feet to
a 1/2" iron rod set in north boundary of Tisdale Road for the
southwest corner of 10.267 acre tract and this tract;
THENCE, N 74degrees 42- 1/2' E, with north boundary
Tisdale Road and south boundary 10.267 acre tract, 556.0 feet
to a 1/2" iron rod set for southwest corner this tract, from
which point a 1/2" galvanized iron pipe at the southeast
corner 10.267 acre tract bears N 74degrees 42- 1/2' E, 338.5
feet;
THENCE N 15degrees 17- 1/2' W, 350.0 feet to a 1/2"
iron rod set for northeast corner this tract;
THENCE S 74degrees 42- 1/2' W, 556.0 feet to the
place of beginning, containing 4.47 acres of land, more or
less.
ANNEX 1 Description of Drilling Rig and Equipment
EXHIBIT A(I) Non-Competition Agreement of Circle R Drilling, Ltd. 1981-A
EXHIBIT A(II) Non-Competition Agreement of Circle R Drilling, Inc.
EXHIBIT A(III) Non-Competition Agreement of Terry Pat Reynolds
EXHIBIT A(IV) Non-Competition Agreement of Reynolds Drilling Co., Inc.
EXHIBIT B Bill of Sale and Assignment
ii
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated November __, 1997 (this "Agreement"),
among PATTERSON DRILLING COMPANY ("PDC"), a Delaware corporation and a
wholly-owned subsidiary of Patterson Energy, Inc. ("PEC"), and CIRCLE R
DRILLING, LTD. 1981-A, a Louisiana limited partnership ("Circle R").
WITNESSETH:
WHEREAS, Circle R owns one drilling rig and related drilling equipment
(collectively, the "Drilling Rig and Equipment"), all as more particularly
described on Annex 1;
WHEREAS, PDC desires to purchase, and Circle R desires to sell, all of
Circle R's right, title and interest in the Drilling Rig and Equipment (the
"Asset Purchase") for the consideration set forth and provided for herein; and
WHEREAS, PDC, on the one hand, and Circle R, on the other, desire to
make certain representations, warranties and agreements in connection with the
Asset Purchase.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE ASSET PURCHASE
SECTION 1.1 The Asset Purchase. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 1.3 below)
provided herein, PDC shall purchase from Circle R and Circle R shall sell to
PDC, all of Circle R's right, title and interest in and to the Drilling Rig and
Equipment.
SECTION 1.2 Purchase Price. PDC agrees to pay to Circle R at the
Closing a total of $1,460,000 cash (the "Purchase Price") for all of Circle R's
right, title and interest in and to the Drilling Rig and Equipment.
SECTION 1.3 Closing. The closing of the Asset Purchase (the
"Closing") shall take place at 9:00 a.m., local time, on the date of this
Agreement at the offices of PEC in Snyder, Texas or at such other time and
place as PDC and Circle R shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PDC
PDC represents and warrants to Circle R as follows:
SECTION 2.1 Organization, Standing and Power. PDC is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to carry
on its business as now being conducted.
SECTION 2.2 Authority; Non-Contravention. PDC has all requisite
power and authority to enter into this Agreement and to consummate the Asset
Purchase. The execution and delivery by PDC of this Agreement and the
consummation by PDC of the Asset Purchase have been duly authorized by all
necessary corporate action on the part of PDC. This Agreement has been duly
executed and delivered by PDC and (assuming the valid authorization, execution
and delivery of this Agreement by Circle R) constitutes a valid and binding
obligation of PDC enforceable against PDC in accordance with its terms, except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws of
general applicability relating to or affecting the enforcement of creditors'
rights and by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). No filing
or registration with, or authorization, consent or approval of, any domestic
(federal and state), foreign or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Agency") is
required by or with respect to PDC in connection with the execution and
delivery of this Agreement by PDC or is necessary for the consummation by PDC
of the Asset Purchase and the other transactions contemplated by this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CIRCLE R
Circle R represents and warrants to PDC as follows:
SECTION 3.1 Organization, Standing and Power. Circle R is a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of Louisiana and has the requisite power and authority to
carry on its business as now being conducted.
SECTION 3.2 Authority; Non-Contravention. Circle R has all requisite
power and authority to enter into this Agreement and to consummate the Asset
Purchase. This Agreement has been duly executed and delivered by Circle R and
(assuming the valid authorization, execution and delivery of this Agreement by
PDC) constitutes a valid and binding obligation of Circle R enforceable against
it in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability
2
relating to or affecting the enforcement of creditors' rights and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law). The execution and delivery of
this Agreement do not, and the consummation of the Asset Purchase and
compliance with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation which will have an adverse effect on the Drilling Rig and
Equipment or the ownership or operation thereof by PDC after the Closing under,
or result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Circle R under, any provision of (i)
the Certificate of Limited Partnership or Agreement of Limited Partnership of
Circle R (true and complete copies of which, as of the date hereof, have been
delivered to PDC), (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Circle R or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Circle R or any of
its respective properties or assets. No filing or registration with, or
authorization, consent or approval of, any Governmental Entity is required by
or with respect to Circle R in connection with the execution and delivery of
this Agreement by Circle R or is necessary for the consummation by Circle R of
the Asset Purchase and the other transactions contemplated by this Agreement.
SECTION 3.3 Title. Set forth in Annex 1 is a description of the
Drilling Rig and Equipment, which description is accurate and complete in all
material respects. Circle R has good title to a 100% interest in the Drilling
Rig and Equipment, subject to no Liens except for (i) Liens for taxes not yet
delinquent or the validity of which is being contested in good faith, and (ii)
any Liens arising by operation of law securing obligations not yet overdue.
For purposes of this Agreement "Liens" means liens, mortgages, pledges,
security interests, encumbrances, claims or charges of any kind.
SECTION 3.4 Litigation. There is no suit, action, investigation or
proceeding pending or, to the knowledge of Circle R, threatened against Circle
R or Circle D Drilling, Inc. ("CRD"), the General Partner of Circle R, at law
or in equity before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind.
SECTION 3.5 Brokers. No broker, investment banker or other person
(other than Jerry Bailey, the fees and expenses of which will be paid by Circle
R) is entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Circle R.
SECTION 3.6 General Partner. Circle R Drilling, Inc. is the sole
General Partner of Circle R; Circle R. Drilling, Inc. is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Louisiana and has the power and authority to carry on its business as now
being conducted.
SECTION 3.7 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. THERE ARE
NO WARRANTIES THAT EXTEND BEYOND THE FACE OF THIS AGREEMENT. THE
3
EXPRESS REPRESENTATIONS AND WARRANTIES OF CIRCLE R CONTAINED IN THIS ARTICLE
III ARE EXCLUSIVE AND ARE IN LIEU OF, AND CIRCLE R EXPRESSLY DISCLAIMS AND
NEGATES AND PDC HEREBY WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. AS EXAMPLES AND FOR THE AVOIDANCE OF
DOUBT, BUT WITHOUT LIMITATION OF THE FOREGOING, THE DRILLING RIG AND EQUIPMENT
SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY OR REPRESENTATION
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE (OTHER THAN, AND WITHOUT
LIMITING IN ANY MANNER OR TO ANY EXTENT, THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS ARTICLE III), WITH RESPECT TO: (A) THE QUALITY, CONDITION,
WEIGHT, SERVICEABILITY, CONFORMITY TO SAMPLES OF MODELS OR ANY OTHER ASPECT OF
ANY PORTION OF THE DRILLING RIG AND EQUIPMENT, ALL OF WHICH SHALL BE CONVEYED
TO PURCHASER AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS AND IN ITS
PRESENT CONDITION AND STATE OF REPAIR AND WITHOUT ANY WARRANTIES WHATSOEVER OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE; (B) THE ACCURACY OR
COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, OR INFORMATION OF
MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO PDC IN
CONNECTION WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONDITIONS
SPECIFICALLY RELATED TO THE PRESENCE OR DISPOSAL OF HAZARDOUS SUBSTANCES OR
NATURALLY OCCURRING RADIOACTIVE MATERIALS; (C) THE COMPLETENESS OR ACCURACY OF
INFORMATION CONTAINED IN ANY MATERIALS FURNISHED OR MADE AVAILABLE TO PDC BY
CIRCLE R OR BY CIRCLE R'S AGENTS OR REPRESENTATIVES OR BY ANY OTHER PARTY, IT
BEING AGREED BY PDC THAT ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS,
INFORMATION AND OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED OR OTHERWISE MADE
AVAILABLE OR DISCLOSED TO PDC HAVE BEEN AND WILL BE PROVIDED TO PDC AS A
CONVENIENCE AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST
CIRCLE R AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT PDC'S SOLE RISK TO
THE MAXIMUM EXTENT PERMITTED BY LAW; (D) THE OPERATION OF THE DRILLING RIG AND
EQUIPMENT OR ANY PART THEREOF; AND (E) ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY. PURCHASER ACKNOWLEDGES THAT THIS
WAIVER IS CONSPICUOUS.
ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 Fees and Expenses. All costs and expenses incurred by
PDC in connection with this Agreement and the transactions contemplated hereby
shall be paid by PDC; such costs and expenses incurred by Circle R shall be
paid by Circle R.
4
SECTION 4.2 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use all
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Asset Purchase and
the other transactions contemplated by this Agreement and the prompt
satisfaction of the conditions hereto.
SECTION 4.3 PDC Indemnification. On or after the date of Closing,
PDC shall indemnify and hold Circle R and CRD harmless against and in respect
of all actions, suits, demands, judgments, costs and expenses (including
reasonable attorneys' fees of Circle R and CRD), relating to any
misrepresentation, breach of any representation or warranty or non-fulfillment
of any agreement on the part of PDC contained in this Agreement. The
indemnification provided for in this Section 4.3 shall terminate and be of no
further force and effect one year from the date of Closing, except as to any
representation or warranty as to which a written notice of claim for
indemnification has been given to PDC prior to the expiration of such one-year
period.
SECTION 4.4 Circle R, CRD and Terry Pat Reynolds Indemnification. On
and after the date of Closing, Circle R, CRD, and Terry Pat Reynolds ("T.
Reynolds"), a principal stockholder of Reynolds Drilling Company, Inc., the
majority stockholder of CRD, shall jointly and severally indemnify and hold PEC
and PDC harmless against and in respect of all actions, suits, demands,
judgments, costs and expenses (including reasonable attorneys' fees of PEC or
PDC), relating to any misrepresentation, breach of any representation or
warranty or non-fulfillment of any agreement on the part of Circle R contained
in this Agreement. The indemnification provided for in this Section 4.4 shall
terminate and be of no further force and effect one year from the date of the
Closing, except as to any representation or warranty as to which a written
notice of claim for indemnification has been given to Circle R, CRD, and T.
Reynolds prior to the expiration of such one-year period.
SECTION 4.5 Notice of Claim. Within fifteen (15) days after any
party (the "Indemnified Party") becomes aware of facts giving rise to a claim
by it for indemnification pursuant to this Article IV, and prior to the
expenditure or approval of the expenditure of any funds, such Indemnified Party
will provide notice thereof in writing (a "Claim Notice") to the party owing
such indemnification (the "Indemnifying Party") specifying the nature and
specific basis for such claim and a copy of all papers served with respect to
such claim (if any). For purposes of this Section 4.5, receipt by the
Indemnified Party of written notice of any demand, assertion, claim, action or
proceeding (judicial, administrative or otherwise) by or from any person or
entity other than a party to this Agreement or any affiliate thereof which
gives rise to a claim on behalf of such party shall constitute becoming aware
of facts giving rise to a claim by it and shall require notice within fifteen
(15) days after the receipt of such matter as provided in the first sentence of
this Section 4.5. Each Claim Notice shall set forth a reasonable description
of the claim based upon the information the Indemnified Party shall then have
and shall contain a statement to the effect that the Indemnified Party is
making a claim pursuant to, and formal demand for indemnification under, this
Article IV. No party shall be entitled to any indemnification without having
first timely delivered a proper Claim Notice.
5
ARTICLE V
CONDITIONS PRECEDENT TO THE ASSET PURCHASE
SECTION 5.1 Conditions to Each Party's Obligation to Effect the Asset
Purchase. The respective obligations of each party to effect the Asset
Purchase shall be subject to the fulfillment or waiver (where permissible) at
or prior to the Closing of each of the following conditions:
(a) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of prohibiting the Asset Purchase or any of the other transactions
contemplated hereby; provided that, in the case of any such decree, injunction
or other order, each of the parties shall have used reasonable best efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as practicable any decree, injunction or other order that may be
entered.
SECTION 5.2 Conditions to Obligation of Circle R to Effect the Asset
Purchase. The obligation of Circle R to effect the Asset Purchase shall be
subject to the fulfillment at or prior to the Closing of the following
additional conditions; provided that Circle R may waive any of such conditions
in its sole discretion:
(a) Performance of Obligations; Representations and Warranties.
PDC shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the Closing
and each of the representations and warranties of PDC contained in this
Agreement shall be true and correct on and as of the Closing.
(b) Officers' Certificate. PDC shall have furnished to Circle R a
certificate, dated the Closing, signed by the appropriate officers of PDC,
certifying to the effect that to the best of the knowledge and belief of PDC,
the conditions set forth in Section 5.1 and Section 5.2(a) have been satisfied
in full.
(c) Payment of Purchase Price. PDC shall have made delivery of
the Purchase Price as provided in Section 1.2 of this Agreement by wire
transfer to the account of Circle R.
SECTION 5.3 Conditions to Obligations of PDC to Effect the Asset
Purchase. The obligations of PDC to effect the Asset Purchase shall be subject
to the fulfillment at or prior to the Closing of the following additional
conditions, provided that PDC may waive any such conditions in its sole
discretion:
(a) Performance of Obligations; Representations and Warranties.
Circle R shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the Closing
and each of the respective representations and warranties of Circle R contained
in this Agreement shall be true and correct on and as of the Closing.
6
(b) Officers' Certificate. Circle R shall have furnished
to PDC a certificate, dated the Closing, signed by the appropriate officers of
CRD as general partner of Circle R, certifying to the effect that to the best
of the knowledge and belief of CRD and Circle R, the conditions set forth in
Section 5.1 and Section 5.3(a) have been satisfied.
(c) Opinion of Counsel. PDC shall have received an
opinion of counsel from Davidson, Nix & Jones, Professional Law Corporation,
counsel to Circle R and CRD, dated the Closing, substantially to the effect
that:
(i) The organization, existence and good standing of
Circle R are as stated in this Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered by Circle R, and (assuming the due and valid authorization,
execution and delivery by PDC) constitutes the legal, valid and
binding agreement of Circle R enforceable against Circle R in
accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights and by
the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(iii) The execution and performance by Circle R of this
Agreement will not violate the Certificate of Limited Partnership of
Circle R and will not violate, result in a breach of, or constitute a
default under, any material lease, mortgage, contract, agreement,
instrument, law, rule, regulation, judgment, order or decree known to
such counsel to which Circle R is a party or to which it or any of its
properties or assets may be bound.
(iv) To the knowledge of such counsel, there are no
actions, suits or proceedings, pending or threatened against or
affecting Circle R or CRD by any Governmental Entity which seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.
(v) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental agency
or body which has not been obtained is required on behalf of Circle R
for consummation of the transactions contemplated by this Agreement.
(vi) Each Non-Competition Agreement between PDC and each
of Circle R, CRD, Reynolds Drilling Co., Inc. ("RDC") and Terry Pat
Reynolds constitutes the legal, valid and binding agreement of it/him
enforceable against it/him in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
of general applicability relating to or affecting the enforcement of
creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
7
In rendering such opinion, counsel for Circle R may rely as to matters of fact
upon the representations of officers of Circle R contained in any certificate
delivered to such counsel and certificates of public officials.
(d) Bill of Sale and Assignment. Circle R shall have executed and
delivered the Bill of Sale and Assignment covering the Drilling Rig and
Equipment in the form attached hereto as Exhibit A.
(e) Non-Competition Agreements. A Non-Competition Agreement in
the respective forms attached hereto as Exhibits A(I), A(II), A(III) or A(IV)
shall have been executed and delivered by Circle R, CRD, RDC and Terry Pat
Reynolds, as the case may be.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
Attention: A. Glenn Patterson
President and Chief Operating Officer
with copies to:
Thomas H. Maxfield, Esq.
Baker & Hostetler LLP
303 East 17th Avenue, Suite 1100
Denver, Colorado 80203-1264
Telecopier No.: (303) 861-2307
8
(b) if to Circle R, to:
Terry Pat Reynolds
Circle R Drilling, Ltd. 1981-A
515 Spring Street
Shreveport, Louisiana 71101
Telecopier No.: (318) 227-0171
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Telecopier No.: (318) 226-0168
(c) if to CRD, to:
Terry Pat Reynolds
Circle R Drilling, Inc.
515 Spring Street
Shreveport, Louisiana 71101
Telecopier No.: (318) 227-0171
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Telecopier No.: (318) 226-0168
(d) if to RDC, to:
Terry Pat Reynolds
Reynolds Drilling Co., Inc.
515 Spring Street
Shreveport, Louisiana 71101
Telecopier No.: (318) 227-0171
9
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Telecopier No.: (318) 226-0168
(e) if to T. Reynolds, to:
Terry Pat Reynolds
515 Spring Street
Shreveport, Louisiana 71101
Telecopier No.: (318) 227-0171
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Telecopier No.: (318) 226-0168
SECTION 6.2 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated, and the words "hereof', "herein" and "hereunder"
and similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement, unless the context otherwise requires. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
SECTION 6.3 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.
SECTION 6.4 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties any rights or remedies hereunder; provided, however, that
legal counsel for Circle R hereto may rely upon the representations and
warranties of Circle R contained herein and in the certificate delivered
pursuant to Section 5.3(b).
10
SECTION 6.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 6.6 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
SECTION 6.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions be consummated as originally
contemplated to the fullest extent possible.
SECTION 6.8 Enforcement of This Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
IN WITNESS WHEREOF, PDC and Circle R have executed this Agreement as
of the date first written above.
PDC:
PATTERSON DRILLING COMPANY
By: /s/ A. GLENN PATTERSON
-----------------------------------
A. Glenn Patterson
Chief Operating Officer
Attest:
/s/ JAMES C. BROWN
-----------------------------
James C. Brown, Secretary
11
CIRCLE R:
CIRCLE R DRILLING, LTD. 1981-A, a
Louisiana limited partnership
By: Circle R Drilling, Inc.,
General Partner
By: /s/ TERRY PAT REYNOLDS
--------------------------------
Terry Pat Reynolds,
Vice President
Attest:
DONNA S. WALSH
Donna S. Walsh, Secretary
TO INDUCE PATTERSON DRILLING COMPANY TO ENTER INTO THIS ASSET PURCHASE
AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE UNDERSIGNED, BEING BENEFICIAL
OWNERS OF CIRCLE R, ACCEPT AND AGREE TO BE BOUND BY THE INDEMNIFICATION
PROVISIONS OF SECTION 4.4 OF THIS ASSET PURCHASE AGREEMENT.
CIRCLE R DRILLING, INC.
By: /s/ TERRY PAT REYNOLDS
----------------------------------
Terry Pat Reynolds, Vice President
TERRY PAT REYNOLDS
12
ANNEX 1
TO
ASSET PURCHASE AGREEMENT
DESCRIPTION OF DRILLING RIG AND EQUIPMENT
A. Drilling Rig and Equipment.
The Drilling Rig and Equipment includes the drilling rig, parts and
related equipment, including engines, mud pumps, hooks and blocks,
derrick, substructure, rotary tables, blow-out prevention equipment,
drill bits and all tubular goods on the rig, all of which are listed
below, less the parts and related equipment sold or disposed of since
August 26, 1997, and plus the parts and related equipment acquired by
Circle R since August 26, 1997, in each case in the ordinary course of
business, consistent with past practice.
DRAWWORKS
Superior 1000-M Single Drum Drawworks, 1000 HP, LEBUS Grooved
f/1 1/4" Line, Makeup & Breakout Catheads, Overrunning Clutch,
Air Driller's Console Controls, Crown-O-Matic
COMPOUND
SUPERIOR 3-Engine In-Line Compound w/Single-Pedestal Pump
Drive, GARDNER-DENVER 2-Stage A/C Belt Drive
BRAKE
(2) PARMAC V-80 Single Hydromatic Brakes
ENGINES
(3)CAT D-353E TA Diesel Engines, S/Ns-46BO9128 & N/A, Each
w/Air Starter, Radiator, Gauges, NATIONAL C- 245-80 Torque
Converter; (1) CAT D-353ETA Diesel Engine, S/N 046B07814
located at Darr Equipment Company, Waco, Texas
MAST
Engine, S/N-38509492, w/Air Starter, Radiator, Gauges, Skidded
502FDR 320 KW AC Generator Set, S/N-PJ3156691, p/b CAT 3412
DITA Diesel Engine w/Air Starter, Radiator, Gauges, Skidded
QUINCY 350 Air Compressor p/b LISTER 2-Cylinder Air-Cooled
Diesel Engine, SN-US11078ST2A3110, w/Manual & Electric
Starter, Air Volume Tank
AX-1 - 3
QUINCY 520 Air Compressor p/b 10 HP Electric Motor
SQUARE D Electrical Control Panel w/Switchboard
All Above Mounted in 10'W x 38'L Utility House w/Round Top,
Fluorescent Lights, Heater, Skidded
MUD SYSTEM
10'W x 7H x 36'L Mud Suction Tank w/10'L Covered Porch
Extension, (2) Compartments, Round Bottom, Internal Plumbing,
(3) DEMCO 6" x 8" Centrifugal Pumps, Each p/b 50 HP Electric
Motor, (2) 7 1/2 HP Mud Agitators, Each p/b Electric Motor,
Mud Hopper, Top-Mounted Walkways, Stairs, Safety Rails,
Skidded
10'W x 7'H x 40'L Mud Shaker Tank w/(2) 4'L Covered Porch
Extensions, (3) Compartments, Round Bottom, Internal Plumbing,
(2) DEMCO 6" x 8" Centrifugal Pumps, Each p/b 50 HP Electric
Motor, (2) 7 1/2 HP Mud Agitators, Each p/b Electric Motor,
Top-Mounted, Walkways, Stairs, Safety Rails, Skidded
FLUID SYSTEMS High Speed Linear Screen Vibrating Shale Shaker
p/b 5 HP Electric Motor
DEMCO Desander w/12" Cone
DEMCO Desilter w/(1) 6" Cones
WATER/FUEL TANKS
10'Dia x 30'L Water Tank, Skidded
10'W x 8'H x 30'L Fuel Tank, Skidded w/Fuel Pump & Filter p/b
(2) 1 HP Electric Motors, Mounted on Stand
7'10"W x 3'H x 5'L 3-Compartment Lubester
HANDLING TOOLS
INGERSOLL-RAND Pneumatic Pipe Spinner
BJ Type B Rotary Tongs w/Extra Heads
BJ 3 3/8" BN to 5 1/2" BN 250-Ton Center Latch Pipe Elevators
BJ Type A 6 3/4" SS 250-Ton Center Latch Drill Collar
Elevators
AX-1 - 4
WOOLLEY DU Long 4 1/2" Drill Pipe Slips
8" Drill Collar Slips
6 1/4" Drill Collar Slips
Approximately (1) Drill Collar Lift Subs
INGERSOLL-RAND HUL-RO 9000 PSI Capacity Air Hoist,
S/N-RSH11417
Mud Bucket
AUXILIARY EQUIPMENT
MARTIN DECKER E 600,000# Capacity Weight Indicator w/Pump
Pressure, Tong Line Pull & RPM Gauges, Console-Mounted
3 1/2"ID x 55'L Rotary Hose
(2)6"ID x 5'L & 8'L Suction Hoses w/Pipe
(2) 3 1/2"ID x 10'L Vibrator Hoses
42"H x 5'W x 60'L 2-Section Catwalk w/Steel Deck Steps
60"H x 8"W x 25'L Junk Box w/15'L Covered Porch f/Closing Unit
MATHEY RET Hydraulic/Electric Wireline Measuring Device,
S/N-633, w/.092" Measuring Line
Rathole & Mousehole
Fluorescent Rig Lights w/Wiring
Approximately 6000' of 1 1/4" Drill Line w/Spool Stand
BEAR Automatic Driller
(4) Sets of 42"H x 28'L Triangular Pipe Rack
Miscellaneous Spare Parts, Hand Tools, Valves, Fire
Extinguishers, Etc.
AX-1 - 5
DRILL PIPE
12,000' (400 Joints) 4 1/2", Grade E, 16.60#, Range 2 Drill
Pipe w/4 1/2"XH, BN, HB Tool Joints, 5- 15/16" to 6"OD, PC
DRILL COLLARS
(24) 6 1/8"OD to 6 1/2"OD x 2"ID x 30'L Slick Drill Collars
w/4 1/2"XH Connections, HB, Recessed
AX-1 - 6
EXHIBIT A(I)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between PATTERSON DRILLING
COMPANY, a Delaware corporation ("PDC"), and CIRCLE R DRILLING, LTD. 1981-A, a
Louisiana limited partnership ("Circle R").
RECITALS:
A. Simultaneously with the execution of this Agreement, PDC and
Circle R have entered into that certain Asset Purchase Agreement, dated of even
date herewith (the "Asset Purchase Agreement"), providing for, among other
things, the purchase by PDC of the drilling rig and related equipment owned by
Circle R.
B. The execution and delivery of this Agreement is a condition to
the consummation of the Asset Purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to fulfill
such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) Circle R covenants and agrees that during the Non-Compete
Period, Circle R shall not, without the prior written consent of PDC, directly
or indirectly, alone or in association with any other person, carry on, be
engaged, concerned, or take part in, render services to, or otherwise assist,
or own, share in the earnings of, or invest in the stock, bonds, or other
securities of, any person which is engaged in providing contract drilling rig
services to the oil and gas industry within Texas Railroad Commission Districts
1, 2, 3, 4, 5 and 6 in the State of Texas (the "Competitive Business");
provided, however, that Circle R may (i) invest and/or engage in any business
that
EXH A(I) - 1
EXHIBIT A(I)
routinely provides third-party services (as such term is commonly used in the
contract oil and gas well drilling business) to a Competitive Business, but is
not engaged in the actual conduct of a Competitive Business, or (ii) invest in
stock, bonds, or other securities of any Competitive Business (but without
otherwise participating in the Competitive Business) if: (A) such stock,
bonds, or other securities are listed on any national securities exchange or
are registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended; (B) the investment does not exceed, in the case of any class of
capital stock of any one issuer, two percent (2%) of the issued and outstanding
shares, or, in the case of bonds or other securities of any one issuer, two
percent (2%) of the aggregate principal amount thereof issued and outstanding;
and (C) such investment would not prevent, directly or indirectly, the
transaction of business by PDC or any affiliate of PDC with any state,
district, territory, or possession of the United States or any governmental
subdivision, agency, or instrumentality thereof by virtue of any statute, law,
regulation or administrative practice. The period of time during which Circle
R is prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which Circle R is in breach of the terms
of this Section.
(b) It is understood by and between the parties hereto that the
foregoing covenant by Circle R not to enter into competition with PDC as set
forth in Section 2(a) hereof is an essential element of this Agreement and the
Asset Purchase Agreement and that, but for the agreement of Circle R to comply
with such covenant, PDC would not have agreed to enter into this Agreement or
the Asset Purchase Agreement. PDC and Circle R have independently consulted
with their respective counsel and have been advised in all respects concerning
the reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. Circle R agrees
that such covenant is reasonable in scope, geographic area, and duration, and
that compliance with such covenant would not impose economic hardship on Circle
R.
3. Restrictions on Soliciting Business of PDC.
Circle R further covenants and agrees that during the Non-Compete
Period, Circle R will not, either for itself or for any other person or entity,
directly or indirectly, engage in any of the following activities in a
Competitive Business without the express prior written consent of PDC:
(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or
(b) Engage in any act which would interfere with or harm any
business relationship PDC has with any employee or (with respect to PDC's
contract oil and gas well drilling business) with any customer, lessor,
principal or supplier.
EXH A(I) - 2
EXHIBIT A(I)
4. Specific Performance.
Without intending to limit the remedies available to PDC, Circle R
acknowledges that PDC will have no adequate remedies at law if Circle R
violates the terms of Sections 2 or 3, hereof. In such event, Circle R agrees
that PDC shall have the right, in addition to any other rights it may have, to
obtain in any court of competent jurisdiction specific performance of such
Sections of this Agreement or injunctive relief to restrain any breach or
threatened breach thereof. Nothing herein shall be construed as prohibiting
PDC from pursuing any other remedies available to PDC (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from Circle R.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and Circle R.
(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to Circle R that: (i) it has all requisite power to enter into and
perform its obligations under this Agreement; (ii) this Agreement has been duly
and validly authorized by all necessary corporate action on the part of PDC;
(iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.
(b) Representations and Warranties of Circle R. Circle R hereby
represents and warrants to PDC that: (i) Circle R has the capacity and power to
enter into and perform obligations of Circle R under this Agreement; (ii)
Circle R has duly and validly executed this Agreement; (iii) the execution of
this Agreement and performance of obligations of Circle R hereunder do not
require the consent or approval of any other party; and (iv) this Agreement
constitutes a valid and binding obligation of Circle R.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they will comply
with all applicable laws and regulations of government bodies or agencies in
their respective performance of their obligations under this Agreement.
EXH A(I) - 3
EXHIBIT A(I)
(b) Governing Law and Construction. This Agreement will be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto. The terms
of this Agreement may be modified only in a writing, signed by authorized
representatives of both parties.
(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to another subsidiary of PEC without the prior written consent of Circle R, and
provided further that a transfer by PDC as a result of a merger or sale of all
or substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).
(f) Waiver. A waiver of a breach or default under this Agreement
will not constitute a waiver of any other breach or default. Failure or delay
by either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is declared
to be invalid, the parties agree that such invalidity will not affect the
validity of the remaining provisions of this Agreement, and further agree, to
the extent possible, to substitute for the invalid provision a valid
EXH A(I) - 4
EXHIBIT A(I)
provision that approximates the intent and economic effect of the invalid
provision as closely as possible.
(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
(i) Notice. Any notice, request, consent, demand or other
communication required to be given under this Agreement will be in writing and
will be given personally, by facsimile or by mailing the same, first-class,
postage prepaid to the appropriate address and facsimile number set forth below
or to such other person or at such other address as may hereafter be designated
by like notice. Notices by mail will be considered delivered and become
effective three days after the mailing thereof. All notices by facsimile will
be considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.
To PDC: Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating Officer
To Circle R: Circle R Drilling, Ltd. 1981-A
515 Spring Street
Shreveport, Louisiana 71101
Facsimile: (318) 227-0171
Attention: Terry Pat Reynolds
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Facsimile: (318) 226-0168
EXH A(I) - 5
EXHIBIT A(I)
(j) Counterparts. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.
"PDC"
PATTERSON DRILLING COMPANY
By:
James C. Brown
Vice President-Finance
"Circle R"
CIRCLE R DRILLING, LTD. 1981-A
By: Circle R Drilling, Inc.,
General Partner
By:
Terry Pat Reynolds,
Vice President
EXH A(I) - 6
EXHIBIT A(II)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between PATTERSON DRILLING
COMPANY, a Delaware corporation ("PDC"), and CIRCLE R DRILLING, INC., a
Louisiana corporation ("CRD").
RECITALS:
A. Simultaneously with the execution of this Agreement, PDC has
entered into that certain Asset Purchase Agreement, dated of even date herewith
(the "Asset Purchase Agreement"), between PDC and CIRCLE R DRILLING, LTD.
1981-A ("Circle R"), providing for, among other things, the purchase by PDC of
the drilling rig and related equipment owned by Circle R.
B. CRD is the sole general partner of Circle R.
C. The execution and delivery of this Agreement is a condition to
the consummation of the Asset Purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to fulfill
such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) CRD covenants and agrees that during the Non-Compete Period,
CRD shall not, without the prior written consent of PDC, directly or
indirectly, and whether as a principal or as an agent, officer, director,
employee, consultant, or otherwise, alone or in association with any other
person, carry on, be engaged, concerned, or take part in, render services to,
or otherwise assist, or own, share in the earnings of, or invest in the stock,
bonds, or other securities of, any person which is engaged in providing
contract drilling rig services to the oil and gas industry within Texas
Railroad Commission Districts 1, 2, 3, 4, 5 and 6 in the State of Texas (the
"Competitive Business"); provided, however, that CRD may (i) invest and/or
engage in any business that routinely provides third-party
EXH A(II) - 1
services (as such term is commonly used in the contract oil and gas well
drilling business) to a Competitive Business, but is not engaged in the actual
conduct of a Competitive Business, or (ii) invest in stock, bonds, or other
securities of any Competitive Business (but without otherwise participating in
the Competitive Business) if: (A) such stock, bonds, or other securities are
listed on any national securities exchange or are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended; (B) the investment
does not exceed, in the case of any class of capital stock of any one issuer,
two percent (2%) of the issued and outstanding shares, or, in the case of bonds
or other securities of any one issuer, two percent (2%) of the aggregate
principal amount thereof issued and outstanding; and (C) such investment would
not prevent, directly or indirectly, the transaction of business by PDC or any
affiliate of PDC with any state, district, territory, or possession of the
United States or any governmental subdivision, agency, or instrumentality
thereof by virtue of any statute, law, regulation or administrative practice.
The period of time during which CRD is prohibited from engaging in certain
activities by this Section shall be extended by the length of time during which
CRD is in breach of the terms of this Section.
(b) It is understood by and between the parties hereto that the
foregoing covenant by CRD not to enter into competition with PDC as set forth
in Section 2(a) hereof is an essential element of this Agreement and the Asset
Purchase Agreement and that, but for the agreement of CRD to comply with such
covenant, PDC would not have agreed to enter into this Agreement or the Asset
Purchase Agreement. PDC and CRD have independently consulted with their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. CRD agrees that
such covenant is reasonable in scope, geographic area, and duration, and that
compliance with such covenant would not impose economic or professional
hardship on CRD.
3. Restrictions on Soliciting Business of PDC.
CRD further covenants and agrees that during the Non-Compete Period,
CRD will not, either for himself or for any other person or entity, directly or
indirectly, engage in any of the following activities in a Competitive Business
without the express prior written consent of PDC:
(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or
(b) Engage in any act which would interfere with or harm any
business relationship PDC has with any employee or (with respect to PDC's
contract oil and gas well drilling business) with any customer, lessor,
principal or supplier.
4. Specific Performance.
Without intending to limit the remedies available to PDC, CRD
acknowledges that PDC will have no adequate remedies at law if CRD violates the
terms of Section 2 or 3, hereof. In such event, CRD agrees that PDC shall have
the right, in addition to any other rights it may have, to obtain in any court
of competent jurisdiction specific performance of such Sections of this
Agreement
EXH A(II) - 2
or injunctive relief to restrain any breach or threatened breach thereof.
Nothing herein shall be construed as prohibiting PDC from pursuing any other
remedies available to PDC (whether at law or in equity) for such breach or
threatened breach, including, without limitation, the recovery of monetary
damages from CRD.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and CRD.
(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to CRD that: (i) it has all requisite power to enter into and
perform its obligations under this Agreement; (ii) this Agreement has been duly
and validly authorized by all necessary corporate action on the part of PDC;
(iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.
(b) Representations and Warranties of CRD. CRD hereby represents
and warrants to PDC that: (i) CRD has the capacity and power to enter into and
perform obligations of CRD under this Agreement; (ii) CRD has duly and validly
executed this Agreement; (iii) the execution of this Agreement and performance
of obligations of CRD hereunder do not require the consent or approval of any
other party; and (iv) this Agreement constitutes a valid and binding obligation
of CRD.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they will comply
with all applicable laws and regulations of government bodies or agencies in
their respective performance of their obligations under this Agreement.
(b) Governing Law and Construction. This Agreement will be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are
EXH A(II) - 3
unable to resolve themselves, and any party brings an action against any other
party seeking a declaratory order, specific performance, damages, or any other
legal or equitable relief based on this Agreement, the parties agree that the
forum for any such action shall be an appropriate federal or state court in
Texas having jurisdiction, agree that venue will be proper in such courts, and
waive any objections based on inconvenience of the forum, and further agree
that the prevailing party in any such action, as determined by the court, shall
be awarded its reasonable attorneys' fees and costs in addition to any relief
or judgment the court awards.
(d) Entire Agreement; Amendment. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto. The terms
of this Agreement may be modified only in a writing, signed by authorized
representatives of both parties.
(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to another subsidiary of PEC without the prior written consent of CRD, and
provided further that a transfer by PDC as a result of a merger or sale of all
or substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).
(f) Waiver. A waiver of a breach or default under this Agreement
will not constitute a waiver of any other breach or default. Failure or delay
by either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is declared
to be invalid, the parties agree that such invalidity will not affect the
validity of the remaining provisions of this Agreement, and further agree, to
the extent possible, to substitute for the invalid provision a valid provision
that approximates the intent and economic effect of the invalid provision as
closely as possible.
(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
(i) Notice. Any notice, request, consent, demand or other
communication required to be given under this Agreement will be in writing and
will be given personally, by facsimile or by mailing the same, first-class,
postage prepaid to the appropriate address and facsimile number set forth below
or to such other person or at such other address as may hereafter be designated
by like notice. Notices by mail will be considered delivered and become
effective three days after the mailing thereof. All notices by facsimile will
be considered delivered and become effective immediately upon
EXH A(II) - 4
the confirmed (by answer back or other tangible printed verification or
successful receipt) sending thereof.
To PDC: Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating Officer
To CRD: Circle R Drilling, Inc.
515 Spring Street
Shreveport, Louisiana 71101
Facsimile: (318) 227-0171
Attention: Terry Pat Reynolds
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Facsimile: (318) 226-0168
8. Counterparts. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
EXH A(II) - 5
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.
"PDC"
PATTERSON DRILLING COMPANY
By:
James C. Brown
Vice President-Finance
"CRD"
CIRCLE R DRILLING, INC.
By:
Terry Pat Reynolds, Vice President
EXH A(II) - 6
EXHIBIT A(III)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between PATTERSON DRILLING
COMPANY, a Delaware corporation ("PDC"), and TERRY PAT REYNOLDS, an individual
residing in Shreveport, Louisiana ("T. Reynolds").
RECITALS:
A. Simultaneously with the execution of this Agreement, PDC has
entered into that certain Asset Purchase Agreement, dated of even date herewith
(the "Asset Purchase Agreement"), between PDC and CIRCLE R DRILLING, LTD.
1981-A ("Circle R"), providing for, among other things, the purchase by PDC of
the drilling rig and related equipment owned by Circle R.
B. T. Reynolds is an officer, a director and a principal
stockholder of Reynolds Drilling Company, Inc., the majority stockholder of
Circle R Drilling, Inc., general partner of Circle R.
C. The execution and delivery of this Agreement is a condition to
the consummation of the Asset Purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to fulfill
such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) T Reynolds covenants and agrees that during the Non-Compete
Period, T Reynolds shall not, without the prior written consent of PDC,
directly or indirectly, and whether as a principal or as an agent, officer,
director, employee, consultant, or otherwise, alone or in association with any
other person, carry on, be engaged, concerned, or take part in, render services
to, or otherwise assist, or own, share in the earnings of, or invest in the
stock, bonds, or other securities of, any person which is engaged in providing
contract drilling rig services to the oil and gas
EXH A(III) - 1
industry within Texas Railroad Commission Districts 1, 2, 3, 4, 5, and 6 of the
State of Texas (the "Competitive Business"); provided, however, that T.
Reynolds may (i) invest and/or engage in any business that routinely provides
third-party services (as such term is commonly used in the contract oil and gas
well drilling business) to a Competitive Business, but is not engaged in the
actual conduct of a Competitive Business, or (ii) invest in stock, bonds, or
other securities of any Competitive Business (but without otherwise
participating in the Competitive Business) if: (A) such stock, bonds, or other
securities are listed on any national securities exchange or are registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended; (B) the
investment does not exceed, in the case of any class of capital stock of any
one issuer, two percent (2%) of the issued and outstanding shares, or, in the
case of bonds or other securities of any one issuer, two percent (2%) of the
aggregate principal amount thereof issued and outstanding; and (C) such
investment would not prevent, directly or indirectly, the transaction of
business by PDC or any affiliate of PDC with any state, district, territory, or
possession of the United States or any governmental subdivision, agency, or
instrumentality thereof by virtue of any statute, law, regulation or
administrative practice. The period of time during which T. Reynolds is
prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which T. Reynolds is in breach of the
terms of this Section.
(b) It is understood by and between the parties hereto that the
foregoing covenant by T. Reynolds not to enter into competition with PDC as set
forth in Section 2(a) hereof is an essential element of this Agreement and the
Asset Purchase Agreement and that, but for the agreement of T. Reynolds to
comply with such covenant, PDC would not have agreed to enter into this
Agreement or the Asset Purchase Agreement. PDC and T. Reynolds have
independently consulted with their respective counsel and have been advised in
all respects concerning the reasonableness and propriety of such covenant, with
specific regard to the nature of the business conducted by PDC and its
affiliates. T. Reynolds agrees that such covenant is reasonable in scope,
geographic area, and duration, and that compliance with such covenant would not
impose economic or professional hardship on T. Reynolds.
3. Restrictions on Soliciting Business of PDC.
T. Reynolds further covenants and agrees that during the Non-Compete
Period, T. Reynolds will not, either for himself or for any other person or
entity, directly or indirectly, engage in any of the following activities in a
Competitive Business without the express prior written consent of PDC:
(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or
(b) Engage in any act which would interfere with or harm any
business relationship PDC has with any employee or (with respect to PDC's
contract oil and gas well drilling business) with any customer, lessor,
principal or supplier.
EXH A(III) - 2
4. Specific Performance.
Without intending to limit the remedies available to PDC, T. Reynolds
acknowledges that PDC will have no adequate remedies at law if T. Reynolds
violates the terms of Section 2 or 3, hereof. In such event, T. Reynolds
agrees that PDC shall have the right, in addition to any other rights it may
have, to obtain in any court of competent jurisdiction specific performance of
such Sections of this Agreement or injunctive relief to restrain any breach or
threatened breach thereof. Nothing herein shall be construed as prohibiting
PDC from pursuing any other remedies available to PDC (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from T. Reynolds.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and T. Reynolds.
(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to T. Reynolds that: (i) it has all requisite power to enter into
and perform its obligations under this Agreement; (ii) this Agreement has been
duly and validly authorized by all necessary corporate action on the part of
PDC; (iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.
(b) Representations and Warranties of T. Reynolds. T. Reynolds
hereby represents and warrants to PDC that: (i) T. Reynolds has the capacity
and power to enter into and perform obligations of T. Reynolds under this
Agreement; (ii) T. Reynolds has duly and validly executed this Agreement; (iii)
the execution of this Agreement and performance of obligations of T. Reynolds
hereunder do not require the consent or approval of any other party; and (iv)
this Agreement constitutes a valid and binding obligation of T. Reynolds.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they will comply
with all applicable laws and regulations of government bodies or agencies in
their respective performance of their obligations under this Agreement.
EXH A(III) - 3
(b) Governing Law and Construction. This Agreement will be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto. The terms
of this Agreement may be modified only in a writing, signed by authorized
representatives of both parties.
(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to a subsidiary of PEC without the prior written consent of T. Reynolds and
provided further that a transfer by PDC as a result of a merger or sale of all
or substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).
(f) Waiver. A waiver of a breach or default under this Agreement
will not constitute a waiver of any other breach or default. Failure or delay
by either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is declared
to be invalid, the parties agree that such invalidity will not affect the
validity of the remaining provisions of this Agreement, and further agree, to
the extent possible, to substitute for the invalid provision a valid provision
that approximates the intent and economic effect of the invalid provision as
closely as possible.
EXH A(III) - 4
(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
(i) Notice. Any notice, request, consent, demand or other
communication required to be given under this Agreement will be in writing and
will be given personally, by facsimile or by mailing the same, first-class,
postage prepaid to the appropriate address and facsimile number set forth below
or to such other person or at such other address as may hereafter be designated
by like notice. Notices by mail will be considered delivered and become
effective three days after the mailing thereof. All notices by facsimile will
be considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating Officer
To T. Reynolds:
Terry Pat Reynolds
515 Spring Street
Shreveport, Louisiana 71101
Facsimile: (318) 227-0171
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Facsimile: (318) 226-0168
8. Counterparts. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
EXH A(III) - 5
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.
"PDC"
PATTERSON DRILLING COMPANY
By:
James C. Brown
Vice President-Finance
"T. Reynolds"
Terry Pat Reynolds
EXH A(III) - 6
EXHIBIT A(IV)
PATTERSON DRILLING COMPANY
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between PATTERSON DRILLING
COMPANY, a Delaware corporation ("PDC"), and REYNOLDS DRILLING CO., INC., a
Louisiana corporation ("RDC").
RECITALS:
A. Simultaneously with the execution of this Agreement, PDC has
entered into that certain Asset Purchase Agreement, dated of even date herewith
(the "Asset Purchase Agreement"), between PDC and CIRCLE R DRILLING, LTD.
1981-A ("Circle R"), providing for, among other things, the purchase by PDC of
the drilling rig and related equipment, rolling stock and office equipment
owned by Circle R.
B. RDC is the majority stockholder of CRD.
C. The execution and delivery of this Agreement is a condition to
the consummation of the Asset Purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to fulfill
such condition.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:
1. Period of Agreement.
The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").
2. Covenant Not to Compete.
(a) RDC covenants and agrees that during the Non-Compete Period,
RDC shall not, without the prior written consent of PDC, directly or
indirectly, and whether as a principal or as an agent, officer, director,
employee, consultant, or otherwise, alone or in association with any other
person, carry on, be engaged, concerned, or take part in, render services to,
or otherwise assist, or own, share in the earnings of, or invest in the stock,
bonds, or other securities of, any person which is engaged in providing
contract drilling rig services to the oil and gas industry within Texas
Railroad Commission Districts 1, 2, 3, 4, 5, and 6 of the State of Texas (the
"Competitive Business");
EXH A(IV) - 1
provided, however, that RDC may (i) invest and/or engage in any business that
routinely provides third-party services (as such term is commonly used in the
contract oil and gas well drilling business) to a Competitive Business, but is
not engaged in the actual conduct of a Competitive Business, or (ii) invest in
stock, bonds, or other securities of any Competitive Business (but without
otherwise participating in the Competitive Business) if: (A) such stock,
bonds, or other securities are listed on any national securities exchange or
are registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended; (B) the investment does not exceed, in the case of any class of
capital stock of any one issuer, two percent (2%) of the issued and outstanding
shares, or, in the case of bonds or other securities of any one issuer, two
percent (2%) of the aggregate principal amount thereof issued and outstanding;
and (C) such investment would not prevent, directly or indirectly, the
transaction of business by PDC or any affiliate of PDC with any state,
district, territory, or possession of the United States or any governmental
subdivision, agency, or instrumentality thereof by virtue of any statute, law,
regulation or administrative practice. The period of time during which RDC is
prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which RDC is in breach of the terms of
this Section.
(b) It is understood by and between the parties hereto that the
foregoing covenant by RDC not to enter into competition with PDC as set forth
in Section 2(a) hereof is an essential element of this Agreement and the Asset
Purchase Agreement and that, but for the agreement of RDC to comply with such
covenant, PDC would not have agreed to enter into this Agreement or the Asset
Purchase Agreement. PDC and RDC have independently consulted with their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. RDC agrees that
such covenant is reasonable in scope, geographic area, and duration, and that
compliance with such covenant would not impose economic or professional
hardship on RDC.
3. Restrictions on Soliciting Business of PDC.
RDC further covenants and agrees that during the Non-Compete Period,
RDC will not, either for himself or for any other person or entity, directly or
indirectly, engage in any of the following activities in a Competitive Business
without the express prior written consent of PDC:
(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or
(b) Engage in any act which would interfere with or harm any
business relationship PDC has with any employee or (with respect to PDC's
contract oil and gas well drilling business) with any customer, lessor,
principal or supplier.
4. Specific Performance.
Without intending to limit the remedies available to PDC, RDC
acknowledges that PDC will have no adequate remedies at law if RDC violates the
terms of Section 2 or 3, hereof. In
EXH A(IV) - 2
such event, RDC agrees that PDC shall have the right, in addition to any other
rights it may have, to obtain in any court of competent jurisdiction specific
performance of such Sections of this Agreement or injunctive relief to restrain
any breach or threatened breach thereof. Nothing herein shall be construed as
prohibiting PDC from pursuing any other remedies available to PDC (whether at
law or in equity) for such breach or threatened breach, including, without
limitation, the recovery of monetary damages from RDC.
The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.
5. Attorneys Fees and Costs.
If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.
6. Representations and Warranties of PDC and RDC.
(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to RDC that: (i) it has all requisite power to enter into and
perform its obligations under this Agreement; (ii) this Agreement has been duly
and validly authorized by all necessary corporate action on the part of PDC;
(iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.
(b) Representations and Warranties of RDC. RDC hereby represents
and warrants to PDC that: (i) RDC has the capacity and power to enter into and
perform obligations of RDC under this Agreement; (ii) RDC has duly and validly
executed this Agreement; (iii) the execution of this Agreement and performance
of obligations of RDC hereunder do not require the consent or approval of any
other party; and (iv) this Agreement constitutes a valid and binding obligation
of RDC.
7. General Provisions.
(a) Compliance with Laws. The parties agree that they will comply
with all applicable laws and regulations of government bodies or agencies in
their respective performance of their obligations under this Agreement.
(b) Governing Law and Construction. This Agreement will be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.
EXH A(IV) - 3
(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.
(d) Entire Agreement; Amendment. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto. The terms
of this Agreement may be modified only in a writing, signed by authorized
representatives of both parties.
(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to a subsidiary of PEC without the prior written consent of RDC and provided
further that a transfer by PDC as a result of a merger or sale of all or
substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).
(f) Waiver. A waiver of a breach or default under this Agreement
will not constitute a waiver of any other breach or default. Failure or delay
by either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.
(g) Severability. If any provision of this Agreement is declared
to be invalid, the parties agree that such invalidity will not affect the
validity of the remaining provisions of this Agreement, and further agree, to
the extent possible, to substitute for the invalid provision a valid provision
that approximates the intent and economic effect of the invalid provision as
closely as possible.
(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
(i) Notice. Any notice, request, consent, demand or other
communication required to be given under this Agreement will be in writing and
will be given personally, by facsimile or by mailing the same, first-class,
postage prepaid to the appropriate address and facsimile number set forth below
or to such other person or at such other address as may hereafter be designated
by like notice.
EXH A(IV) - 4
Notices by mail will be considered delivered and become effective three days
after the mailing thereof. All notices by facsimile will be considered
delivered and become effective immediately upon the confirmed (by answer back
or other tangible printed verification or successful receipt) sending thereof.
To PDC:
Patterson Drilling Company
4510 Lamesa Highway
P.O. Drawer 1410
Snyder, Texas 79550
Facsimile: (915) 573-0281
Attention: A. Glenn Patterson
President and Chief Operating Officer
To RDC:
Reynolds Drilling Co., Inc.
Terry Pat Reynolds
515 Spring Street
Shreveport, Louisiana 71101
Facsimile: (318) 227-0171
with copies to:
Ernest Nix, Esq.
Davidson, Nix & Jones
Professional Law Corporation
509 Market Street, Suite 800
Shreveport, Louisiana 71101
Facsimile: (318) 226-0168
8. Counterparts. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.
EXH A(IV) - 5
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.
"PDC"
PATTERSON DRILLING COMPANY
By:
James C. Brown
Vice President-Finance
"RDC"
REYNOLDS DRILLING CO., INC.
By:
Terry Pat Reynolds
Vice President
EXH A(IV) - 6
EXHIBIT B
BILL OF SALE AND ASSIGNMENT
KNOW ALL MEN BY THESE PRESENTS, that, pursuant to that certain Asset
Purchase Agreement, dated of even date herewith ("Asset Purchase Agreement")
between PATTERSON DRILLING COMPANY ("PDC"), a Delaware corporation, and CIRCLE
R DRILLING, LTD. 1981-A ("Circle R"), a Louisiana limited partnership (Circle R
is referred to herein as the "Assignor"), the Assignor, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby grants, bargains, sells, conveys and transfers unto PDC (the
"Assignee"), all of the Assignor's right, title and interest in and to the
Drilling Rig and Equipment (as defined in the Asset Purchase Agreement) set
forth in Appendix I attached hereto and incorporated herein by this reference.
TO HAVE AND TO HOLD the same unto the Assignee and the Assignee's
successors and assigns forever. The Assignor hereby covenants and agrees that
it has the full right, power and authority to sell, convey and transfer the
foregoing property to the Assignee pursuant to this Bill of Sale and
Assignment.
CIRCLE R MAKES THIS ASSIGNMENT AND BILL OF SALE WITHOUT ANY REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE EXCEPT AS MAY BE
SPECIFICALLY CONTAINED HEREIN OR IN THE ASSET PURCHASE AGREEMENT. AS EXAMPLES
AND FOR THE AVOIDANCE OF DOUBT, BUT WITHOUT LIMITATION OF THE FOREGOING, THE
DRILLING RIG AND EQUIPMENT SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY
WARRANTY OR REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE
(OTHER THAN, AND WITHOUT LIMITING IN ANY MANNER OR TO ANY EXTENT, THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THE ASSET PURCHASE AGREEMENT), WITH
RESPECT TO THE QUALITY, CONDITION, WEIGHT, SERVICEABILITY, CONFORMITY TO
SAMPLES OF MODELS OR ANY OTHER ASPECT OF ANY PART, COMPONENT OR PORTION OF THE
DRILLING RIG AND EQUIPMENT, ALL OF WHICH IS CONVEYED TO PDC AS IS, WHERE IS,
AND WITH ALL FAULTS AND DEFECTS AND IN ITS PRESENT CONDITION AND STATE OF
REPAIR AND WITHOUT ANY WARRANTIES WHATSOEVER OF MERCHANTABILITY OR OF FITNESS
FOR A PARTICULAR PURPOSE AND ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY. PDC ACKNOWLEDGES THAT THIS WAIVER IS CONSPICUOUS.
EXH B - 1
IN WITNESS WHEREOF, the Assignor has caused this Bill of Sale and
Assignment to be duly executed by its duly authorized officer as of the ____
day of November, 1997.
CIRCLE R DRILLING, LTD. 1981-A
Its General Partner
By: CIRCLE R DRILLING, INC.
Its General Partner
By:
Terry Pat Reynolds
Vice President
EXH B - 2
APPENDIX I
TO
BILL OF SALE AND ASSIGNMENT
FROM
CIRCLE R DRILLING, LTD. 1981-A
TO
PATTERSON DRILLING COMPANY
(List of Assets Assigned)
A. Drilling Rig and Equipment
The Drilling Rig and Equipment includes the drilling rig, parts and
related equipment, including engines, mud pumps, hooks and blocks,
derrick, substructure, rotary tables, blow-out prevention equipment,
drill bits and all tubular goods on the rig, all of which are listed
below, less the parts and related equipment sold or disposed of since
August 26, 1997, and plus the parts and related equipment acquired by
Circle R since August 26, 1997, in each case in the ordinary course of
business, consistent with past practice.
DRAWWORKS
Superior 1000-M Single Drum Drawworks, 1000 HP, LEBUS Grooved
f/1 1/4" Line, Makeup & Breakout Catheads, Overrunning Clutch,
Air Driller's Console Controls, Crown-O-Matic
COMPOUND
SUPERIOR 3-Engine In-Line Compound w/Single-Pedestal Pump
Drive, GARDNER-DENVER 2-Stage A/C Belt Drive
BRAKE
(2) PARMAC V-80 Single Hydromatic Brakes
ENGINES
(3)CAT D-353E TA Diesel Engines, S/Ns-46BO9128 & N/A, Each
w/Air Starter, Radiator, Gauges, NATIONAL C- 245-80 Torque
Converter; (1) CAT D-353ETA Diesel Engine, S/N 046B07814
located at Darr Equipment Company, Waco, Texas
502FDR 320 KW AC Generator Set, S/N-PJ3156691, p/b CAT 3412
DITA Diesel Engine w/Air Starter, Radiator, Gauges, Skidded
QUINCY 350 Air Compressor p/b LISTER 2-Cylinder Air-Cooled
Diesel Engine, SN-US11078ST2A3110, w/Manual & Electric
Starter, Air Volume Tank
QUINCY 520 Air Compressor p/b 10 HP Electric Motor
SQUARE D Electrical Control Panel w/Switchboard
All Above Mounted in 10'W x 38'L Utility House w/Round Top,
Fluorescent Lights, Heater, Skidded
MUD SYSTEM
10'W x 7H x 36'L Mud Suction Tank w/10'L Covered Porch
Extension, (2) Compartments, Round Bottom, Internal Plumbing,
(3) DEMCO 6" x 8" Centrifugal Pumps, Each p/b 50 HP Electric
Motor, (2) 7 1/2 HP Mud Agitators, Each p/b Electric Motor,
Mud Hopper, Top-Mounted Walkways, Stairs, Safety Rails,
Skidded
10'W x 7'H x 40'L Mud Shaker Tank w/(2) 4'L Covered Porch
Extensions, (3) Compartments, Round Bottom, Internal Plumbing,
(2) DEMCO 6" x 8" Centrifugal Pumps, Each p/b 50 HP Electric
Motor, (2) 7 1/2 HP Mud Agitators, Each p/b Electric Motor,
Top-Mounted, Walkways, Stairs, Safety Rails, Skidded
FLUID SYSTEMS High Speed Linear Screen Vibrating Shale Shaker
p/b 5 HP Electric Motor
DEMCO Desander w/12" Cone
DEMCO Desilter w/(1) 6" Cones
WATER/FUEL TANKS
10'Dia x 30'L Water Tank, Skidded
10'W x 8'H x 30'L Fuel Tank, Skidded w/Fuel Pump & Filter p/b
(2) 1 HP Electric Motors, Mounted on Stand
7'10"W x 3'H x 5'L 3-Compartment Lubester
EXH B - 6
HANDLING TOOLS
INGERSOLL-RAND Pneumatic Pipe Spinner
BJ Type B Rotary Tongs w/Extra Heads
BJ 3 3/8" BN to 5 1/2" BN 250-Ton Center Latch Pipe Elevators
BJ Type A 6 3/4" SS 250-Ton Center Latch Drill Collar
Elevators
WOOLLEY DU Long 4 1/2" Drill Pipe Slips
8" Drill Collar Slips
6 1/4" Drill Collar Slips
Approximately (1) Drill Collar Lift Subs
INGERSOLL-RAND HUL-RO 9000 PSI Capacity Air Hoist,
S/N-RSH11417
Mud Bucket
AUXILIARY EQUIPMENT
MARTIN DECKER E 600,000# Capacity Weight Indicator w/Pump
Pressure, Tong Line Pull & RPM Gauges, Console-Mounted
3 1/2"ID x 55'L Rotary Hose
(2)6"ID x 5'L & 8'L Suction Hoses w/Pipe
(2) 3 1/2"ID x 10'L Vibrator Hoses
42"H x 5'W x 60'L 2-Section Catwalk w/Steel Deck Steps
60"H x 8"W x 25'L Junk Box w/15'L Covered Porch f/Closing Unit
MATHEY RET Hydraulic/Electric Wireline Measuring Device,
S/N-633, w/.092" Measuring Line
Rathole & Mousehole
Fluorescent Rig Lights w/Wiring
Approximately 6000' of 1 1/4" Drill Line w/Spool Stand
EXH B - 7
BEAR Automatic Driller
(4) Sets of 42"H x 28'L Triangular Pipe Rack
Miscellaneous Spare Parts, Hand Tools, Valves, Fire
Extinguishers, Etc.
DRILL PIPE
12,000' (400 Joints) 4 1/2", Grade E, 16.60#, Range 2 Drill
Pipe w/4 1/2"XH, BN, HB Tool Joints, 5- 15/16" to 6"OD, PC
DRILL COLLARS
(24) 6 1/8"OD to 6 1/2"OD x 2"ID x 30'L Slick Drill Collars
w/4 1/2"XH Connections, HB, Recessed
Next Section
Previous Section