EXHIBIT 10.1
MAY 6, 2005
VIA FACSIMILE & COURIER
Messrs.
SAXON SERVICES DE PANAMA S.A. - COLOMBIA BRANCH
Attention: Walter Dawson
BOGOTA
Colombia
REFERENCE: Irrevocable Commercial Offer for the Purchase and Sale of Assets
Ladies and Gentlemen,
The undersigned, acting in my capacity as Legal Representative of Parker
Drilling Company International Limited, Colombian Branch, a branch of a
non-Colombian company duly incorporated and in existence under the laws of the
Republic of Colombia (the "Vendor"), hereby present to Saxon Services de Panama
S.A. - Colombia Branch, with registered address at Carrera 7 N(degree) 71-52,
Torre A, Ofic. 504, Bogota, Colombia, a branch of a non-Colombian company duly
incorporated and in existence under the laws of the Republic of Colombia
(hereinafter called the "PURCHASER"), with an irrevocable commercial offer for
the purchase and sale of Assets (as this term is hereinafter defined)
(hereinafter the "OFFER"), on the terms and conditions set forth herein.
The terms and conditions of this Offer shall become fully enforceable and
binding upon the Purchaser if accepted by Purchaser within fifteen (15) calendar
days following receipt hereof by Purchaser. The Offer shall be deemed accepted
totally and unconditionally by Purchaser if within the aforesaid term of fifteen
(15) calendar days Purchaser places and delivers to Vendor a Purchase Order (as
this term is hereinafter defined).
1. INTERPRETATION
(a) DEFINITIONS
Unless the context otherwise requires, in this Offer (including the
premises hereto, this clause and each Schedule) the words and phrases
set forth below shall have the meaning ascribed thereto below, namely:
"ACCRUED PAYMENTS" shall have the meaning set forth in clause 17;
"ASSETS" means:
(i) three (3) drilling rigs described in Schedule "A" hereto (the
"RIGS") presently located in the jurisdictions set out in
Schedule "A" and all related assets, equipment (including top
drives associated with the Rigs) and tools, including all spares,
drill pipe and collars, handling tools, subs, hand tools and
those other items set out in Schedule "B," and the communications
and office equipment described in Schedule "C" hereto (including
licenses related to cell phones but excluding licenses related to
VSAT equipment), but specifically excluding the Excluded Assets;
(ii) the Drilling Contracts existing as of the Closing Date, including
all amendments, renewals or replacements thereof, (A) for which
any required consent to assignment has been obtained from the
appropriate Person on or prior to the Closing Date, or (B) for
which such requirement to obtain consent has been waived by
Purchaser on or prior to the Closing Date (collectively, the
"ASSIGNED DRILLING CONTRACTS");
(iii) the leased motor vehicles described in Schedule "D" hereto (the
"LEASED MOTOR VEHICLES");
(iv) to the extent transferable, the full benefit of all warranties,
rights, claims and securities held by the Vendor against third
parties in relation to the Assets including, without limitation,
all rights and claims of the Vendor in respect of all
representations, warranties, covenants and indemnities made or
given by third parties to or for the benefit of the Vendor or to
which the Vendor has succeeded;
(v) all customer lists related to the Assets and all other business
and financial records of the Vendor related solely to the
ownership, operation and maintenance of the Assets, excluding the
records described in subclauses (viii) and (ix) of the Excluded
Assets definition;
(vi) any Drilling Contract for which the Parties enter into
alternative arrangements pursuant to clause 5(b);
"ASSIGNED EMPLOYMENT CONTRACTS" shall have the meaning set forth in
clause 17;
"BUSINESS DAY" means any day exclusive of Saturdays, Sundays, days on
which a majority of national banks in Houston, Texas are not open for
business, or statutory holidays in Alberta or Colombia;
"CLOSING" means the transfer of the Assets to the Purchaser, the
payment by Purchaser to Vendor of the Purchase Price, the delivery of
all documents required
hereby and the completion of all other transactions contemplated by
this Offer to occur on the Closing Date;
"CLOSING DATE" means the date on which the Closing occurs, which shall
be at 10:00 a.m. on the second Business Day following satisfaction or
waiver of (i) all conditions to the obligations of the Parties to
consummate the transactions contemplated by this Offer (other than
conditions with respect to actions the Parties will take at the
Closing itself) and (ii) all conditions to the obligations to
consummate the transactions contemplated by Peru Purchase Agreement
(228) (other than conditions with respect to actions which, by the
terms of Peru Purchase Agreement (228), the parties thereto will take
at the closing of the transactions contemplated thereby);
"DEPOSIT" shall have the meaning set forth in subclause 2(c)(i);
"DRILLING CONTRACTS" means the daywork, footage, turnkey and other
drilling contracts of Vendor associated with the Rigs, as listed on
Schedule "E" hereto;
"EMPLOYEES" means those employees of the Vendor listed in Schedule "F"
hereto;
"ENCUMBRANCES" means liens, charges, pledges, options, promises to
sell, lease or otherwise dispose of or encumber, mortgages, deeds of
trust, security interests, claims, restrictions on title or transfer
and other encumbrances of every type and description, whether imposed
by law, agreement, understanding or otherwise, but excluding (i) liens
for taxes or assessments not yet due and payable, (ii) mechanics',
materialmen's, carriers', workers', repairers' and other similar liens
arising or incurred in the ordinary and usual course of business
relating to obligations that are not yet due and payable, (iii) any
liens, encumbrances and other matters created or suffered by any
landlord, sublandlord, grantor, lessor or licensor, as applicable,
with an interest therein, arising or incurred in the Ordinary Course
of Business and not yet enforceable, and (iv) such other encumbrances
and encroachments the underlying obligations of which do not exceed
$25,000 in the aggregate;
"ENVIRONMENTAL CLAIM" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigations
or other adversarial proceedings relating to any Environmental Law or
Environmental Permit including, without limitation (i) any and all
claims by Governmental Authorities for enforcement, cleanup, removal,
response, remedial or other similar actions or damages pursuant to any
applicable Environmental Law and (ii) any and all claims by a third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from unauthorized releases
of Hazardous Substances or arising from alleged injury or threat of
injury to human health, property, or the environment resulting from
exposures to or releases of Hazardous Substances. An "Environmental
Claim" includes, but is not limited to, a common law action,
as well as a proceeding to issue, modify, terminate or enforce the
provisions of an Environmental Permit or to enforce the requirements
of Environmental Law;
"ENVIRONMENTAL LAW" shall mean any federal, state, territorial or
local statute, law, rule, regulation, ordinance, code or policy, of
any Governmental Authority with jurisdiction over the Leased Premises
or the Assets or the Vendor's operations in Colombia (compliance with
which is required by law or if the failure to comply therewith would
be reasonably foreseeable to result in an adverse Environmental
Claim), and any binding judicial or administrative interpretation
thereof, including any judicial or administrative order, consent
decree or judgment, relating to the protection or preservation of the
environment or Hazardous Substances;
"ENVIRONMENTAL PERMITS" shall mean all permits, approvals,
identification numbers, licenses and other authorizations required
under any applicable Environmental Law;
"ESCROW AGENT" means Locke Liddell & Sapp LLP;
"ESCROW AGREEMENT" means the Escrow Agreement dated of even date
herewith among the Parties, Parker Drilling Company of Oklahoma
Incorporated, Universal Rig Services Corp., Saxon Services del Peru
S.A. and the Escrow Agent;
"EXCLUDED ASSETS" shall mean (i) the DSI 156 foot 2.0 million pound
SHL with a 40' box-on-box substructure located at the Leased Premises,
(ii) all contracts, leases, agreements, permits and licenses of the
Vendor, other than the Assigned Drilling Contracts, the Motor Vehicle
Leases and the Assigned Employment Contracts, (iii) all accounts and
notes receivable of the Vendor, (iv) all cash and cash equivalents and
the cash balances in the bank accounts of the Vendor, (v) the
insurance policies of the Vendor, (vi) the minute book, stock transfer
book and corporate seal of the Vendor, (vii) all capital stock and
other equity interests owned by the Vendor, (viii) all financial,
accounting, legal, tax and audit records of the Vendor not related
solely to the Assets, (ix) all original tax and audit records which
support the tax returns filed by Vendor, whether or not related to the
Assets, (x) any intellectual property licenses of the Vendor,
including without limitation, all computer software (including source
and object codes), databases, data models or structures, algorithms,
system architectures and related documentation, data and manuals, (xi)
all patents, trademarks, service marks, trade dress, trade names,
logos, copyrights and mask works, registrations, applications and
goodwill associated with the foregoing, trade secrets, know-how and
confidential business information owned or used by the Vendor
(including graphs and drawings not solely related to the Assets, price
lists, market studies, business plans and business opportunities),
(xii) all rights in Internet web sites and domain names used by the
Vendor, and (xiii) all rights in electronic mail addresses and in
telephone, facsimile, cable or similar numbers used by the Vendor;
"GOVERNMENTAL AUTHORITY" means any governmental entity exercising
executive, legislative, judicial, regulatory or administrative
functions, including any regulatory authority, agency, department,
board, commission or instrumentality of government, with jurisdiction
over the Leased Premises or the Assets or the Vendor's operations in
Colombia;
"HAZARDOUS SUBSTANCE" means any material designated by applicable
Environmental Laws as a pollutant, contaminant, or industrial, toxic
or hazardous waste or toxic or hazardous substance;
"LEASED PREMISES" means, collectively, the Office Leased Premises and
the Yard Leased Premises;
"LEGAL REQUIREMENT" means any requirement under any federal, state,
local, municipal, or foreign law applicable to the Assets or the
Vendor's operations in Colombia;
"MOTOR VEHICLE LEASES" means the lease agreements pursuant to which
the Vendor leases the Leased Motor Vehicles;
"NEW YORK CONVENTION" means the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards;
"OFFICE LEASED PREMISES" means the office space leased by the Vendor
from Carlos Moreno Tribin and located at Calle 98 No. 2, Ofc. 214,
Bogota, Colombia;
"ORDINARY COURSE OF BUSINESS" means the ordinary course of Vendor's
business consistent with Vendor's past custom and practice and in
accordance with good oilfield practice;
"OTHER PURCHASE AGREEMENTS" means, collectively, Peru Purchase
Agreement (131 and 145), Peru Purchase Agreement (228) and Peru
Purchase Agreement (250);
"PARTIES" means the parties to this Agreement and "Party" means either
of them;
"PENDING PURCHASE AGREEMENTS" means, collectively, Peru Purchase
Agreement (131 and 145) and Peru Purchase Agreement (228);
"PERSON" means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, corporation, unincorporated
association, trust or legal representative;
"PERU PURCHASE AGREEMENT (131 AND 145)" means the Agreement for
Purchase and Sale of Assets (Peru) dated of even date herewith for the
sale of Rigs 131 and 145, by and between Parker Drilling Company of
Oklahoma Incorporated and Saxon Services de Panama S.A.;
"PERU PURCHASE AGREEMENT (228)" means the Agreement for Purchase and
Sale of Assets (Peru) dated of even date herewith for the sale of Rig
228, by and among Universal Rig Services Corp., Parker Drilling
Company International Limited and Saxon Services del Peru S.A.;
"PERU PURCHASE AGREEMENT (250)" means the Agreement for Purchase and
Sale of Assets (Peru) dated of even date herewith for the sale of Rig
250, by and between Parker Drilling Company of Oklahoma Incorporated
and Saxon Services del Peru S.A.;
"SANTA MARTA PREMISES" means the yard space in Santa Marta, Colombia
where certain of the Assets are located;
"YARD LEASED PREMISES" means the yard leased by the Vendor from
Autodromos, S.A. and located in Tocancipa, Colombia.
(b) INCORPORATION OF SCHEDULES
Attached hereto are the following schedules:
A - Drilling Rigs
B - Other Assets
C - Office/Communications Equipment
D - Leased Motor Vehicles
E - Drilling Contracts
F - Employees
G - Credit Enhancements
H - Consents
I - Encumbrances
J - Employment Matters
K - Purchase Order
All schedules hereto are incorporated into this Offer and shall be
part of the agreement resulting from the acceptance of this Offer by
this reference as fully as though contained in the body of this Offer.
(c) SCHEDULE REFERENCES
References herein to a schedule shall mean a reference to a schedule
to this Offer. References in any schedule to "the Offer" shall mean a
reference to this Offer. References in any schedule to another
schedule shall mean a reference to a schedule to this Offer.
(d) CLAUSE AND SUBCLAUSE REFERENCES
References herein to an article, clause or subclause shall mean a
reference to an article, clause or subclause within the body of this
Offer. References herein to a subclause without identifying the clause
of which the subclause referred to is a
part shall mean a reference to such subclause within the same clause
as is the subclause in which such reference is made.
(e) HEADINGS
The headings of clauses and subclauses herein and in the schedules are
inserted for convenience of reference only and shall not affect or be
considered to affect the construction of the provisions hereof.
(f) GENDER
In this Offer words importing persons include companies and vice versa
and words importing the masculine gender include the feminine and
neuter genders and vice versa.
(g) CURRENCY
All references herein to currency are references to currency of United
States of America.
(h) KNOWLEDGE
As used herein, the phrase "to the best of Vendor's knowledge" or any
phrase of similar import shall refer to the actual knowledge of Robert
L. Parker, Jr., David Mannon, James Whalen, David McCann, Steve
Carmichael, Ron Potter and German Castaneda, without requirement for
investigation or inquiry.
(i) AGREEMENT OF CONSTRUCTION
The agreement resulting form the acceptance of this Offer and all
other documents executed and delivered pursuant hereto are the result
of negotiations among and have been reviewed by respective legal
counsel for the Parties and are the products of all Parties.
Accordingly, they shall not be construed against any Party merely
because of that Party's involvement in their preparation.
(j) INCONSISTENCIES
Upon the acceptance of this Offer, if there is a direct contradiction
between any provision contained in the body of this Offer and those of
a schedule to this Offer, the provisions contained in the body of this
Offer shall prevail. Wherever any provision of this Offer directly
contradicts any provision of any document executed and delivered in
connection with the Closing of the transactions contemplated by this
Offer, the provisions of this Offer shall prevail.
2. PURCHASE OF ASSETS
(a) The Vendor hereby irrevocably offers to sell to the Purchaser the
Assets pursuant to the terms and conditions of this Offer. The Vendor
shall not transfer, and shall retain all right, title and interest in
and to, the Excluded Assets. The Vendor shall have reasonable access
to the Leased Premises after the Closing Date to remove any such
Excluded Assets from the Leased Premises that have not been so removed
by the Vendor prior to the Closing Date.
(b) The purchase price (the "PURCHASE PRICE") for the purchase of the
Assets is $15,000,000. Such Purchase Price shall be allocated among
the Assets as follows:
(i) Rigs $12,700,000
(ii) Other Assets $2,300,000
The allocations set forth above will be used by the Parties as the
basis for reporting asset values and other items for purposes of all
required tax returns and for purposes of the Purchase Price
adjustments contemplated by clause 2(d), and the Parties shall not
assert, in connection with any audit or other proceeding with respect
to taxes, or in connection with the procedures set forth in clause
2(d) (except to the extent asset values are not reflected above), any
asset values or other items inconsistent with the allocations set
forth above.
(c) The Purchase Price shall be paid as follows:
(i) a deposit of $1,500,000 (the "DEPOSIT") shall be paid to the
Escrow Agent contemporaneously with the execution of the
agreement resulting from the acceptance of this Offer, which
deposit shall be retained by the Escrow Agent in trust in
accordance with the Escrow Agreement, and either applied towards
the Purchase Price on the Closing Date or retained by the Vendor
or returned to the Purchaser in accordance with the terms of this
Offer; and
(ii) payment of an amount equal to the Purchase Price, reduced by (A)
the amount of the Deposit, (B) the amount of any adjustment
pursuant to clause 2(d), (C) the amount of the Accrued Payments
and (D) the amount of any payments actually received by the
Vendor prior to Closing under an Assigned Drilling Contract or an
Unassigned Drilling Contract held in trust by the Vendor pursuant
to clause 5(b) that are directly attributable to demobilization
costs that have not been incurred by the Vendor on or before the
Closing Date (the "CLOSING DATE PAYMENT"), on the Closing Date by
wire transfer of immediately available funds to an account
designated by the Vendor.
(d) In respect of the Assets:
(i) If, between April 15, 2005 and the Closing Date, the Vendor
transfers, or suffers the destruction, damage or loss of, any
Assets ("UNAVAILABLE ASSETS"), then the Closing Date Payment
shall be reduced by the value ascribed to such Unavailable
Asset(s) as determined pursuant to this clause 2(d)(i); provided,
however, that this clause 2(d) shall not apply in the case of
reasonable wear and tear on the Assets occurring prior to the
Closing Date. For purposes of this clause 2(d)(i) an Unavailable
Asset that is transferred, destroyed, damaged or lost shall be
valued at an amount equal to its Fair Market Value. If any
Unavailable Asset is partially, but not totally, destroyed, the
Closing Date Payment shall be reduced by the cost to repair such
asset up to its Fair Market Value. The adjustment mechanism
described in this clause 2(d) will not be applied with respect to
any Asset that has been replaced by the Vendor by a similar asset
of comparable value reasonably acceptable to the Purchaser.
(ii) The "FAIR MARKET VALUE" of an Asset for purposes of this clause
2(d) shall be as agreed by the Parties. If the Parties are unable
to agree on Fair Market Value within five (5) Business Days after
the Vendor notifies the Purchaser of the transfer, destruction,
damage or loss of the Asset, the Parties shall submit the issue
to CTC Services or, if such firm is unable or unwilling to serve,
to another person mutually acceptable to the Parties (the
"APPRAISER"). Each Party shall submit to the Appraiser its
proposed Fair Market Value. The Appraiser shall, within fifteen
(15) days following receipt of the Parties' proposals, advise the
Parties as to its determination of the Fair Market Value for
purposes hereof. The costs of retaining the Appraiser shall be
borne equally by the Parties.
(iii) The adjustment mechanism described in clause 2(d)(i) will be
applied and the Parties will be required to proceed with the
Closing so long as the estimated adjustment pursuant to clause
2(d)(i) hereof, together with any estimated adjustments pursuant
to the Pending Purchase Agreements (the "AGGREGATE ESTIMATED
ADJUSTMENT"), would not exceed $3,000,000. If the Aggregate
Estimated Adjustment would exceed $3,000,000, the Purchaser may,
at its option, either continue to apply the adjustment mechanism
and proceed with the Closing or terminate the agreement resulting
from the acceptance of this Offer without consummating the
transactions contemplated hereby.
(e) Insofar as the following have application to the Assets:
(i) all revenues, profits, benefits, expenses and obligations of
every kind and nature arising or resulting from the ownership and
operation of the Assets accruing on or prior to the Closing Date
shall belong to the Vendor, and all revenues, profits, benefits,
expenses and obligations of every kind and
nature arising or resulting from the ownership and operation of
the Assets accruing after the Closing Date shall belong to the
Purchaser;
(ii) the Assigned Drilling Contracts, Motor Vehicle Leases, the
Assigned Employment Contracts and the Vendor's arrangements (if
any) to maintain certain Assets at the Santa Marta Premises shall
as of the Closing Date be assumed by the Purchaser and the
Purchaser shall then be responsible for the completion of these
contracts and all obligations and liabilities arising after the
Closing Date pursuant to the terms thereof (the "ASSUMED
LIABILITIES"). Without limiting the foregoing, upon completion of
drilling activity under the Assigned Drilling Contracts, the
Purchaser shall perform demobilization at its cost and expense.
(f) Insofar as the following have application to the Assets:
(i) in connection with the Closing, the Parties shall jointly notify
the Vendor's counterparty under each Assigned Drilling Contract
that payments should be made to the Vendor or the Purchaser in
accordance with each Party's respective rights and obligations
hereunder;
(ii) the Vendor shall be solely responsible for collection of all
accounts receivable owing or accruing due to the Vendor up to and
including the Closing Date ("ACCOUNTS RECEIVABLE") and the
Purchaser shall have no responsibility in respect thereof except
that the Purchaser agrees to remit to the Vendor promptly, but in
no event more than 15 days after receipt, any monies or other
payments that may be received by the Purchaser in respect of the
Accounts Receivable following the Closing Date; and
(iii) the Vendor shall remit to the Purchaser promptly, but in no
event more than 15 days after receipt, any monies or other
payments that may be received by the Vendor relating to accounts
receivable owing or accruing due to the Purchaser after the
Closing Date.
(g) The Purchaser shall be liable for any transfer taxes, stamp, sales and
use taxes and similar taxes, assessments, levies, tariffs, imposts,
tolls, duties, export and import fees and charges, value added taxes,
and similar costs relating to the sale or purchase of the Assets
hereunder (collectively, "TRANSFER TAXES") and for any related
interest and penalties, excluding any tax on or measured by net or
gross income or gain of the Vendor. The Purchaser shall promptly
indemnify, defend and hold harmless the Vendor, its directors,
officers, employees, agents, parent, subsidiaries and affiliates from
any liability for any Transfer Taxes (including interest and penalties
thereon). The Vendor and Purchaser agree to take all such steps as are
reasonably required to minimize any adverse tax consequences in
respect of the transactions contemplated by this Offer; provided that
no Party shall be required to take any action that, in such Party's
reasonable belief, would be detrimental to its tax position.
3. MAINTENANCE OF ASSETS
(a) Upon the acceptance of this Offer, at all times between the date of
the agreement resulting from the acceptance of this Offer and the
Closing Date and subject at all times to the terms and conditions of
this Offer, the Vendor shall:
(i) manage and operate the Assets in the Ordinary Course of Business;
(ii) continue to maintain insurance coverage on its operations in
respect of the Assets in accordance with its present arrangements
and in material compliance with all applicable Legal Requirements
and contractual obligations;
(iii) keep the Purchaser reasonably informed of all material
developments relating to the Assets; and
(iv) continue to pay any fees, taxes and charges of any nature
relating to the Vendor's ownership, possession or operation of
the Assets that are due on or prior to the Closing Date.
(b) Between the date of the agreement resulting from the acceptance of
this Offer and the Closing Date, the Vendor shall not, without the
Purchaser's prior written consent, such consent not to be unreasonably
withheld, conditioned or delayed, or as otherwise specifically
contemplated by this Offer:
(i) authorize, commit to or make any disposition of any of the Assets
having a value in the aggregate greater than $50,000;
(ii) enter into any drilling contract to which any Rig is subject, or
terminate or materially amend, or agree to any material amendment
or termination of, any of the Drilling Contracts; provided that
the Purchaser's consent shall not be required to accelerate,
terminate or amend any Drilling Contract as a result of Vendor
not being paid thereunder or as a result of a material default by
the other party to such Drilling Contract; or
(iii) waive any right or claim or enter into any compromise or
settlement of any litigation, proceeding or investigation by any
Governmental Authority that would be reasonably expected to
materially impair the Purchaser's ownership, operation or use of
the Assets after the Closing Date.
4. ACCESS TO RECORDS; OTHER MATTERS
(a) Notwithstanding that it is contemplated that the Purchaser shall have
completed its due diligence prior to the date of the agreement
resulting from the acceptance of this Offer, if reasonably required,
during the period following the date hereof until the Closing Date,
the Vendor shall make available to the Purchaser or its authorized
representatives for inspection and review during normal business
hours, the Assets and all of the books and records of Vendor relating
to the Assets
and all contracts, leases, agreements and other documents relating to
the Assets. The Purchaser will conduct this inspection and review in a
reasonable manner that does not interfere materially with the normal
operations of Vendor or its affiliates.
(b) Until the Closing Date, the Purchaser shall keep confidential all
information regarding the Vendor and the Assets given to the Purchaser
by or on behalf of the Vendor in accordance with and subject to that
certain Confidentiality Agreement dated February 24, 2005 between
Saxon Energy Services Inc. ("SAXON") and the Vendor (the
"CONFIDENTIALITY AGREEMENT").
(c) On the Closing Date the Purchaser shall facilitate the release of the
bonds, guaranties, sureties, letters of credit and other similar
undertakings (collectively, "CREDIT ENHANCEMENTS") set forth on
Schedule "G," including, without limitation, by offering to substitute
Credit Enhancements of the Purchaser or its lenders. The Purchaser
acknowledges and agrees that it shall be solely responsible for
satisfying the creditworthiness standards, policies and requirements
of the other parties to any contracts and agreements to which the
Credit Enhancements listed on Schedule "G" relate.
(d) Promptly following the Closing, but in any event within ninety (90)
days after the Closing Date, the Purchaser shall remove, or cause to
be removed, from the Assets, any markings bearing the name "Parker"
(including any variations or derivations thereof) or any trademarks,
tradenames or logos of Vendor or any of its affiliates.
5. APPROVALS
(a) Prior to the Closing Date, the Vendor, at the expense of the Vendor,
shall obtain and deliver to the Purchaser all the consents,
permissions and approvals set forth on Schedule "H" hereto (the
"CONSENTS"). The Consents constitute the only third party consents,
provisions or approvals necessary for the Vendor to execute and
deliver the agreement resulting form the acceptance of this Offer and
consummate the transactions contemplated hereby.
(b) To the extent that consent to assign any Drilling Contract is not
obtained prior to Closing (an "UNASSIGNED DRILLING CONTRACT"), (i)
such Unassigned Drilling Contract shall be held by the Vendor in trust
for the Purchaser after the Closing Date, (ii) all obligations
thereunder shall be performed by the Purchaser in the name of the
Vendor and (iii) all benefits and obligations derived thereunder
accruing after the Closing Date shall be for the account of the
Purchaser. Once consent for the assignment of such Unassigned Drilling
Contract is obtained, the Vendor shall assign such Unassigned Drilling
Contract to the Purchaser. The arrangement described in this clause
5(b) shall terminate on the earlier of the date on which (x) consent
to the assignment of the Unassigned Drilling Contract is obtained, (y)
the Purchaser consummates other arrangements with the operator under
such Unassigned Drilling Contract providing for the Purchaser's
provision of services to such operator or (z) such Unassigned Drilling
Contract terminates.
The Purchaser shall perform demobilization upon completion of drilling
activity under such Unassigned Drilling Contracts. The Parties
acknowledge and agree that the conditions to Closing in clauses 12(a)
and 13(a) with respect to any Unassigned Drilling Contract shall be
deemed to have been satisfied by the Parties' entry into the
arrangement contemplated by this clause 5(b) regarding such Unassigned
Drilling Contract.
6. CLOSING
Upon the acceptance of this Offer the Closing of the sale of the Assets by
the Vendor to the Purchaser shall be held on the Closing Date at the
offices of the Vendor, or at such other place as mutually agreed by the
Parties.
(a) At Closing, the Vendor will deliver to the Purchaser the following:
(i) an invoice regarding the Assets in form and substance mutually
satisfactory to the Parties, duly executed by the Vendor;
(ii) assignments of the Assumed Liabilities in form and substance
mutually satisfactory to the Parties, and, to the extent
transferable, the transfer of all warranties, rights, claims and
securities held by the Vendor against third parties in relation
to the Assets;
(iii) a sublease, in form and substance mutually satisfactory to the
Parties, of the Yard Leased Premises, for a term not to extend
past December 31, 2005 (the "YARD SUBLEASE"), duly executed by
the Vendor;
(iv) a sublease, in form and substance mutually satisfactory to the
Parties, of the Office Leased Premises, for a term not to extend
past August 15, 2005 (the "OFFICE SUBLEASE"), duly executed by
the Vendor;
(v) such resolutions of the Vendor as required to approve and
authorize the sale of the Assets to the Purchaser;
(vi) releases and registrable discharges of the Encumbrances
registered against the Assets, as described in Schedule "I"
hereto;
(vii) the books, records and documents described in clause 1(a)(v);
(viii) Consents required pursuant to clause 5(a);
(ix) a non-competition agreement in form and substance mutually
satisfactory to the Parties (the "NON-COMPETE"), duly executed by
the Vendor;
(x) a guarantee of the obligations of the Vendor under the agreement
resulting from the acceptance of this Offer, in form and
substance mutually satisfactory to the Parties, duly executed by
Parker Drilling Company;
(xi) evidence of the due and timely nationalization of the Rigs which
evidence shall be made up by the following documents for each
Rig: (i) initial import return (declaracion de importacion) under
the temporary regime; (ii) official receipts from the Direccion
de Impuestos y Aduanas Nacionales (DIAN) as to the payment of the
applicable installments of customs taxes under the temporary
import regime; (iii) import return of modification (declaracion
de importacion de modificacion) whereby the import regime was
changed to the ordinary one including evidence of full payment of
pending and outstanding customs duties; (iv) copy of the
guarantee for payment of customs duties issued at the time of
initial import of the Rigs and cancellation thereof; (v) copy of
the commercial invoice issued by the original non-Colombian
seller of each Rig; (vi) copy of the corresponding bill of
lading; (vii) copy of the corresponding packing list; (viii) copy
of the mandate given to the appointed customs agent (Sociedad de
Intermediacion Aduanera) and (ix) any other document issued,
granted or required for the nationalization of the Rigs;
(xii) a certificate of the Vendor (A) repeating and confirming that
the warranties and representations set out in clause 7 that are
not qualified by materiality are true and accurate in all
material respects as of the Closing Date (except for any such
warranties and representations that speak as of an earlier date,
in which case they shall be true and accurate in all material
respects as of such date), and that the warranties and
representations set out in clause 7 that are qualified by
materiality are true and accurate in all respects as of the
Closing Date (except for any such warranties and representations
that speak as of an earlier date, in which case they shall be
true and accurate in all respects as of such date), and (B)
confirming that the Vendor has performed and satisfied in all
material respects all agreements required by this Offer to be
performed and satisfied by the Vendor at or prior to the Closing;
(xiii) a joint direction to the Escrow Agent to pay the Deposit to the
account designated by the Vendor;
(xiv) a legal opinion of the Vendor's counsel that:
A. the Vendor has been duly incorporated and is validly
existing and in good standing under the laws of its
jurisdiction of incorporation;
B. the Vendor has the authority to enter into the agreement
resulting from the acceptance of this Offer and all other
documents contemplated by this Offer, this Offer and all
other documents contemplated by this Offer have been duly
authorized, executed and delivered by the Vendor and the
agreement resulting from the acceptance of this Offer and
all other documents contemplated by this Offer (other than
the Non-Compete) constitute legal, valid and binding
obligations of the Vendor enforceable in accordance with
their respective terms subject to customary exceptions and
qualifications; and
C. all necessary corporate actions and proceedings of the
Vendor have been taken to permit the Assets to be duly and
validly sold, assigned and transferred to the Purchaser;
(xv) such other documents as the Purchaser may reasonably require to
transfer the Assets to the Purchaser in accordance with this
Offer.
(b) At Closing, the Purchaser will deliver to the Vendor the following:
(i) by wire transfer to the account designated by the Vendor the
Closing Date Payment, in the manner provided in clause 2(c)(ii);
(ii) a joint direction to the Escrow Agent to pay the Deposit to the
account designated by the Vendor;
(iii) a purchase order for the Assets in form and substance mutually
satisfactory to the Parties, duly executed by the Purchaser;
(iv) the Yard Sublease, duly executed by the Purchaser;
(v) the Office Sublease, duly executed by the Purchaser;
(vi) an assumption of the Assumed Liabilities in form and substance
mutually satisfactory to the Parties;
(vii) a guarantee of the obligations of the Purchaser under the
agreement resulting from the acceptance of this Offer, in form
and substance mutually satisfactory to the Parties, duly executed
by Saxon;
(viii) such resolutions of the Purchaser as are required to approve
and authorize the purchase of the Assets by the Purchaser;
(ix) a legal opinion of the Purchaser's counsel that:
A. the Purchaser has been duly incorporated and is validly
subsisting under the laws of its jurisdiction of
incorporation and where it carries on business;
B. the Purchaser has the authority to enter into the agreement
resulting from the acceptance of this Offer and all other
documents contemplated by this Offer and this Offer and all
other documents contemplated by this Offer have been duly
authorized, executed and delivered by the Purchaser and
constitute legal, valid and binding obligations of the
Purchaser enforceable in accordance
with their respective terms subject to customary exceptions
and qualifications;
C. all necessary action and proceedings of the Purchaser have
been taken to permit the Assets to be duly and validly
purchased by the Purchaser;
(x) a certificate of the Purchaser (A) repeating and confirming that
the warranties and representations set out in clause 9 that are
not qualified by materiality are true and accurate in all
material respects as of the Closing Date (except for any such
warranties and representations that speak as of an earlier date,
in which case they shall be true and accurate in all material
respects as of such date), and that the warranties and
representations set out in clause 9 that are qualified by
materiality are true and accurate in all respects as of the
Closing Date (except for any such warranties and representations
that speak as of an earlier date, in which case they shall be
true and accurate in all respects as of such date), and (B)
confirming that the Purchaser has performed and satisfied in all
material respects all agreements required by this Offer to be
performed and satisfied by the Purchaser at or prior to the
Closing.
(c) On the Closing Date the Vendor will transfer and deliver possession of
all of the Assets to the Purchaser. Upon completion of the Closing,
title, ownership, possession and risk of loss of the Assets shall pass
to the Purchaser and the Purchaser shall take delivery and possession
of the Assets wherever they are located on the Closing Date.
7. VENDOR'S REPRESENTATIONS
The Vendor covenants with and represents and warrants to the Purchaser
realizing that the Purchaser is relying upon such covenants,
representations and warranties, that:
(a) The Vendor is a duly incorporated and validly existing Colombian
branch of a corporation duly incorporated and validly existing under
the laws of the state of Nevada and has all requisite authority, power
and corporate capacity to carry on its business, as now conducted and
to own its properties and assets and has good right, full power and
absolute authority to carry out its obligations under the agreement
resulting from the acceptance of this Offer, including, without
limitation, the sale, transfer, assignment and conveyance of the
Assets to the Purchaser in the manner herein provided for according to
the true intent and meaning of this Offer;
(b) The Vendor has good and marketable title to the Assets other than the
Leased Motor Vehicles, and such Assets are owned by the Vendor free
and clear of all Encumbrances excepting the Encumbrances set out in
Schedule "I" which are to be released and discharged at or prior to
the Closing Date, and no person has any
agreement or option or any right capable of becoming an agreement for
the purchase, lease or encumbering of the Assets or any of them;
(c) There are no lawsuits, claims, proceedings, actions, judgments or
investigations pending or, to the best of the Vendor's knowledge,
threatened or contemplated against or with respect to, the Assets or
the Vendor that would reasonably be expected to adversely affect the
Purchaser's possession, ownership or operation of any of the Assets;
(d) The Vendor is in compliance with all Legal Requirements and orders of
Governmental Authorities, except to the extent that non-compliance
would not reasonably be expected to result in a material claim against
the Assets, and:
(i) no event has occurred or circumstance exists that (with or
without notice or lapse of time) would reasonably be expected to
constitute or result in a violation by Vendor of, or a failure on
the part of Vendor to comply with, any Legal Requirement in
respect to the Vendor's possession, ownership or operation of the
Assets, except for a violation or failure to comply that would
not reasonably be expected to result in a material claim against
the Assets; and
(ii) Vendor has not received any written notice or other written
communication from any Governmental Authority regarding any
violation of, or failure to comply with, any Legal Requirement in
respect of the Vendor's possession, ownership or operation of the
Assets;
(e) The execution, delivery of, performance of and compliance with the
terms of this Offer and any agreements to be executed and delivered
pursuant hereto by the Vendor will not conflict with any term or
provision of the articles or certificate of incorporation or bylaws or
resolutions of the directors of the Vendor, result in any breach of,
or constitute a default under and do not and will not create a state
of facts which, after notice or lapse of time or both, would result in
a breach of or constitute a default under any term or provision of any
indenture, mortgage, note, contract, agreement (written or oral),
instrument, lease or other document to which the Vendor is a party or
by which it is bound, or violate any judgment, decree, order, statute,
rule or regulation applicable to the Vendor, which default, breach or
violation would reasonably be expected to have a material adverse
effect on the Assets;
(f) The agreement resulting from the acceptance of this Offer shall be
duly authorized, executed and delivered by the Vendor and all other
documents executed and delivered by Vendor pursuant to the agreement
resulting from the acceptance of this Offer shall be duly authorized,
executed and delivered by the Vendor and will constitute legal, valid
and binding obligations of the Vendor enforceable in accordance with
their respective terms, subject to the qualification that such
enforceability may be subject to (i) bankruptcy, insolvency,
fraudulent preference, reorganization or other laws relating to or
affecting creditors rights
generally; and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at equity or
in law);
(g) Schedules "A," "B" and "C" constitute a complete and accurate list and
description as of the date hereof of the Rigs and all related assets,
equipment (including top drives associated with the Rigs) and tools,
including all spares, drill pipe and collars, handling tools, subs,
hand tools and other items constituting part of the Assets (excluding,
however, any Excluded Assets);
(h) The Leased Premises and the Assets are in material compliance with all
Environmental Laws applicable to the Vendor's operations in Colombia
relating to the protection of the environment, occupational health and
safety or the processing, use, treatment, storage, disposal,
discharge, transport or handling of Hazardous Substances and the
Vendor holds all Environmental Permits required by Environmental Laws
for the operation of the Leased Premises and the Assets as operated by
Vendor on the date hereof, except to the extent that any
non-compliance with Environmental Laws or failure to obtain an
Environmental Permit would not reasonably be expected to result in a
material Environmental Claim against the Assets. The Vendor has not
received written notice of any Environmental Claims or been prosecuted
for, an offence alleging non-compliance of the Leased Premises or any
Asset with any Environmental Law, and, to the best of Vendor's
knowledge, there are no orders or directions relating to environmental
matters requiring any work, repairs, construction or capital
expenditures to be made with respect to the Leased Premises or any of
the Assets, nor has the Vendor received written notice of any of the
same. To the best of Vendor's knowledge, there has not been a release
of any Hazardous Substance on or from the Leased Premises or any Asset
with respect to which the Vendor is or may reasonably be alleged to
have material liability, other than a release that would not
reasonably be expected to result in a material Environmental Claim
against the Assets, nor has the Vendor received any written notice
that it is potentially responsible for a federal, provincial,
municipal or local clean-up site or corrective action under any
applicable Environmental Laws that would be binding on the Purchaser
or the Assets after the Closing. The representations in this clause
7(h) shall constitute the sole and exclusive representations provided
by the Vendor regarding environmental matters;
(i) The Vendor has not assigned or in any way restricted its right nor has
any third party restricted the Vendor's right to receive revenue from
the Assets in any manner that will impair the Purchaser's right to
receive revenues from the Assets after the Closing Date;
(j) The Assets are insured and all policies of insurance insuring the
Assets are in full force and effect and the Vendor is in compliance
with the terms of such policies in all material respects;
(k) The Vendor is not in a state of bankruptcy or moratorium and has not
sought protection under any bankruptcy or moratorium law or in general
sought or initiated any action designed to receive protection against
creditors in general;
(l) Except as set forth on Schedule "J," the Vendor is not a party to any
employment, service, pension, union or management contract with any
Employee;
(m) Schedules "D" and "E" constitute a complete and accurate list and
description as of the date hereof of the Leased Motor Vehicles, and
Drilling Contracts entered into by the Vendor, in connection with its
operations in Colombia, and the Vendor has made available to the
Purchaser true and correct copies of the Motor Vehicle Leases and
Drilling Contracts. With respect to each Motor Vehicle Lease and
Drilling Contract:
(i) it is legal, valid, binding, enforceable and in full force and
effect;
(ii) it will be legal, binding, enforceable and in full force and
effect on substantially identical terms immediately following
assignment thereof to the Purchaser;
(iii) Vendor is not in breach or default in any material respect and,
to the best of Vendor's knowledge, (A) no other party is in
breach or default in any material respect and (B) no event has
occurred which with notice or lapse of time would constitute a
material breach or default, or permit termination, modification
or acceleration thereunder;
(iv) as of the date hereof, no party has repudiated any provision
thereof;
(n) The Vendor has not incurred any liability, contingent or otherwise,
for broker's, agent's or finder's fees that could affect the agreement
resulting from the acceptance of this Offer for which the Purchaser
shall have any obligation or liability;
(o) On or before the Closing Date, the Vendor shall have fully paid all
charges relating to the permanent importation of the Assets, and no
such charges shall remain outstanding as of the Closing Date with the
Direccion de Impuestos y Aduanas Nacionales or any other Governmental
Authority of the Republic of Colombia having jurisdiction over the
customs status of the Assets.
8. VENDOR'S REPRESENTATIONS-SURVIVAL AND OTHER MATTERS
EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET OUT IN CLAUSE 7 HERETO
AND SUBJECT TO THE PARTIES' AGREEMENTS IN CLAUSE 2(D) HERETO, THE VENDOR IS
SELLING AND THE PURCHASER IS PURCHASING THE ASSETS "AS IS, WHERE IS" AND
"WITH ALL FAULTS," AND THE VENDOR IS NOT MAKING ANY OTHER REPRESENTATIONS
OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT
LIMITATION, THOSE REGARDING MERCHANTABILITY, VALUE, PHYSICAL CONDITION,
PERFORMANCE, USE OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE ASSETS. THE
PURCHASER AGREES, BY THE ACCEPTANCE OF THIS OFFER, THAT THERE ARE NO
REPRESENTATIONS OR WARRANTIES EXCEPT AS SPECIFICALLY SET FORTH IN THIS
OFFER, AND THE PURCHASER DOES FURTHER AGREE THAT IT HAS EXAMINED AND IS
FAMILIAR WITH THE ASSETS AND IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES REGARDING THE ASSETS OTHER THAN AS SET FORTH IN CLAUSE 7 OF THIS
OFFER.
Notwithstanding anything to the contrary herein expressed or implied, upon
the acceptance of this Offer it is expressly agreed and understood that the
representations and warranties contained in clause 7 of this Offer shall
survive the Closing for a period of two (2) years from the Closing Date. No
claim for breach of the representations and warranties contained in clause
7 may be made by the Purchaser unless written notice of such claim has been
given to the Vendor within the two (2) year time period referred to above;
provided that any such claim shall be subject in all respects to the
limitations set forth in Article 16, except that the Basket and Cap set
forth in clause 16(a) shall not apply to breaches of the representations
and warranties in clauses 7(a), 7(b), 7(e), 7(f), 7(k) 7(n) and 7(o) and
the Basket set forth in clause 16(a) shall not apply to breaches of the
representations and warranties in clause 7(i). This clause shall not limit
enforceability of any covenant or agreement of the Parties which
contemplates performance after the Closing.
If, at any time prior to the Closing the Purchaser shall have actual
knowledge of any breach of a representation, warranty, covenant, agreement
or condition of the Vendor (a "KNOWN VENDOR BREACH"), the Purchaser shall
promptly notify the Vendor of its knowledge, in reasonable detail,
including the amount which the Purchaser believes, based on the facts
actually known by it, would be payable by the Vendor under the
indemnification provisions of this Offer without reference to any
indemnification limitations set forth in Article 16 of this Offer. If a
Known Vendor Breach results in failure of the condition set forth in clause
12(b) and the Purchaser proceeds to consummate the transactions
contemplated hereby, then such Known Vendor Breach shall not be deemed to
be a breach of the agreement resulting from the acceptance of this Offer
for any purpose hereunder, and neither the Purchaser nor any affiliate of
the Purchaser shall have any claim or recourse against the Vendor or its
directors, officers, employees, affiliates, controlling persons, agents,
advisors or representatives with respect to such Known Vendor Breach, under
Article 16 of this Offer or otherwise.
9. PURCHASER'S REPRESENTATIONS
Upon acceptance of this Offer, the Purchaser covenants with and represents
and warrants to the Vendor realizing that the Vendor is relying upon such
covenants, representations and warranties, that:
(a) The Purchaser is a duly incorporated and validly existing Colombian
branch of a corporation duly incorporated and validly existing under
the laws of Panama, and the Purchaser has good right, full power and
absolute authority to purchase the Assets from the Vendor according to
the true intent and meaning of this Offer. The Purchaser is subject to
the foreign exchange control regime under Articles 48 and 49 of the
Colombian Foreign Exchange Regime, External Resolution No. 8 of
2000 as issued by the Board of Directors of the Colombian Central Bank
(Banco de la Republica);
(b) The execution, delivery of, performance of and compliance with the
terms of this Offer and any agreements to be executed and delivered
pursuant hereto by the Purchaser will not result in any breach of, or
constitute a default under and do not and will not create a state of
facts which, after notice or lapse of time or both, would result in a
breach of or constitute a default under any term or provision of the
articles, by-laws or resolutions of shareholders or directors of the
Purchaser or any indenture, mortgage, note, contract, agreement
(written or oral), instrument, lease or other document to which the
Purchaser is a party or by which it is bound, or any judgment, decree,
order, statute, rule or regulation applicable to the Purchaser;
(c) The agreement resulting from the acceptance of this Offer shall be
duly authorized, executed and delivered by the Purchaser and all other
documents executed and delivered by Purchaser pursuant to the
agreement resulting from the acceptance of this Offer shall be duly
authorized, executed and delivered by the Purchaser and will
constitute legal, valid and binding obligations of the Purchaser
enforceable in accordance with their respective terms, subject to the
qualification that such enforceability may be subject to (i)
bankruptcy, insolvency, fraudulent preference, reorganization or other
laws relating to or affecting creditors rights generally; and (ii)
general principles of equity (regardless of whether such
enforceability is considered in a proceeding at equity or in law);
(d) The Purchaser (i) currently has sufficient immediately available funds
in cash or cash equivalents and will at the Closing have sufficient
immediately available funds, in cash, or (ii) has sufficient binding
commitment letters from financing sources, true and correct copies of
which have been provided to the Vendor prior to the date of the
agreement resulting from the acceptance of this Offer, to pay the
portion of the Purchase Price payable at Closing and to pay any other
amounts payable under this agreement resulting from the acceptance of
this Offer and to effect the transactions contemplated by the
agreement resulting from the acceptance of this Offer, all without any
third-party consent or approval required;
(e) The Purchaser has not incurred any liability, contingent or otherwise,
for broker's, agent's or finder's fees in respect that could affect
the agreement resulting from the acceptance of this Offer for which
the Vendor shall have any obligation or liability.
10. SURVIVAL OF PURCHASER'S REPRESENTATIONS
Notwithstanding anything to the contrary herein expressed or implied, upon
acceptance of this Offer, it is expressly agreed and understood that the
representations and warranties contained in clause 9 of this Offer shall
survive Closing for a period of two (2) years from the Closing Date. No
claim for breach of the representations and warranties contained in clause
9 may be made by the Vendor unless written notice of such claim has
been given to the Purchaser within the two (2) year time period referred to
above; provided that any such claim shall be subject in all respects to the
limitations set forth in Article 16, except that the Basket and Cap set
forth in clause 16(b) shall not apply to breaches of the representations
and warranties in clauses 9(a), 9(b), 9(c) and 9(e). This clause shall not
limit enforceability of any covenant or agreement of the Parties which
contemplates performance after the Closing. Notwithstanding the foregoing,
no breach by the Purchaser of any representation, warranty, covenant,
agreement or condition of the agreement resulting from the acceptance of
this Offer shall be deemed to be a breach of the agreement resulting from
the acceptance of this Offer for any purpose hereunder, and neither the
Vendor nor any affiliate of the Vendor shall have any claim or recourse
against the Purchaser or its directors, officers, employees, affiliates,
controlling persons, agents, advisors or representatives with respect to
such breach, under Article 16 of this Offer or otherwise, if the Vendor or
any affiliate of the Vendor had actual knowledge prior to Closing of such
breach.
11. CONDITIONS PRECEDENT TO BOTH PARTIES' OBLIGATIONS
Upon the acceptance of this Offer the obligations of the Parties to
complete the acquisition of the Assets pursuant hereto are subject to the
following conditions being fulfilled or waived prior to Closing:
(a) since the date of the agreement resulting from the acceptance of this
Offer, there shall not have been commenced any proceeding by or on
behalf of a third party seeking to enjoin the transactions
contemplated hereby or that may have the effect of preventing, making
illegal, or otherwise materially interfering with the transactions
contemplated hereby;
(b) no order, writ, injunction or decree shall have been entered and be in
effect by any court or Governmental Authority, and no statute, rule,
regulation, or other Legal Requirement shall have been promulgated or
enacted and be in effect, that restrains, enjoins or invalidates the
transactions contemplated hereby; and
(c) the transactions contemplated by Peru Purchase Agreement (228) shall
have been consummated or shall be consummated contemporaneously with
the transactions contemplated hereby.
12. PURCHASER'S CONDITIONS PRECEDENT
Upon the acceptance of this Offer, the obligation of the Purchaser to
complete the acquisition of the Assets pursuant hereto is subject to the
following conditions being fulfilled or waived prior to or at Closing:
(a) all Consents listed on Schedule "H" shall have been obtained;
(b) all representations and warranties contained in clause 7 of this Offer
that are not qualified by materiality shall be true and accurate in
all material respects as of the Closing Date (except for any such
warranties and representations that speak as of an earlier date, in
which case they shall be true and accurate in all material
respects as of such date), and all representations and warranties
contained in clause 7 of this Offer that are qualified by materiality
shall be true and accurate in all respects as of the Closing Date
(except for any such warranties and representations that speak as of
an earlier date, in which case they shall be true and accurate in all
respects as of such date), and the Vendor shall have performed and
satisfied in all material respects all agreements required by this
Offer to be performed and satisfied by the Vendor at or prior to the
Closing;
(c) the Purchaser shall have obtained all permits, licenses or other
governmental authorizations required for the Purchaser to possess, own
or operate the Assets; and
(d) the Purchaser shall be furnished with the items which the Vendor is to
deliver at Closing pursuant to clause 6(a).
The foregoing conditions shall be for the exclusive benefit of the
Purchaser and may be waived by it in writing in whole or in part.
13. VENDOR'S CONDITIONS PRECEDENT
The obligations of the Vendor to complete the sale of the Assets pursuant
hereto is subject to the following conditions being fulfilled or waived
prior to or at Closing:
(a) all Consents listed on Schedule "H" shall have been obtained;
(b) all representations and warranties contained in clause 9 of this Offer
that are not qualified by materiality shall be true and accurate in
all material respects as of the Closing Date (except for any such
warranties and representations that speak as of an earlier date, in
which case they shall be true and accurate in all material respects as
of such date), and all representations and warranties contained in
clause 9 of this Offer that are qualified by materiality shall be true
and accurate in all respects as of the Closing Date (except for any
such warranties and representations that speak as of an earlier date,
in which case they shall be true and accurate in all respects as of
such date), and the Purchaser shall have performed and satisfied in
all material respects all agreements required by this Offer to be
performed and satisfied by the Purchaser at or prior to the Closing;
(c) the employee transfers contemplated by Article 17 shall not constitute
a collective dismissal requiring the prior authorization of the
Colombian Ministry of Social Protection;
(d) the Purchaser shall have obtained all permits, licenses or other
governmental authorizations required for the Purchaser to possess, own
or operate the Assets, or waived the condition in clause 12(c); and
(e) the Vendor shall be furnished with the items which the Purchaser is to
deliver at Closing pursuant to clause 6(b).
The foregoing conditions shall be for the exclusive benefit of the Vendor
and may be waived by it in writing in whole or in part.
14. SATISFACTION OF CONDITIONS PRECEDENT
The Vendor and the Purchaser shall use all commercially reasonable efforts
to satisfy and assist in the satisfaction of all conditions precedent.
15. TERMINATION
(a) The Parties may terminate the agreement resulting from the acceptance
of this Offer as provided below:
(i) The Purchaser and the Vendor may terminate the agreement
resulting from the acceptance of this Offer by mutual written
consent at any time prior to the Closing;
(ii) The Purchaser may terminate the agreement resulting from the
acceptance of this Offer pursuant to clause 2(d)(iii) upon
delivery of written notice to the Vendor;
(iii) Either Party may terminate the agreement resulting from the
acceptance of this Offer upon delivery of written notice to the
other Party if (A) one or both of the Pending Purchase Agreements
are terminated for any reason or (B) the Closing has not occurred
on or before June 10, 2005 (the "EXPIRATION DATE") as a result of
the condition in clause 11(c) not having been satisfied on or
prior to such date, provided that the terminating Party shall not
have caused such failure to close;
(iv) Either Party may terminate the agreement resulting from the
acceptance of this Offer upon delivery of written notice to the
other Party if (A) there shall have been commenced a proceeding
by or on behalf of a third party seeking to enjoin the
transactions contemplated hereby or that has the effect of
preventing, making illegal, or otherwise materially interfering
with the transactions contemplated hereby, (B) an order, writ,
injunction or decree shall have been entered and be in effect by
any court or Governmental Authority, or a statute, rule,
regulation, or other Legal Requirement shall have been
promulgated or enacted and be in effect, that restrains, enjoins
or invalidates the transactions contemplated hereby or (C) the
Closing has not occurred on or before the Expiration Date as a
result of the conditions in clauses 11(a) or 11(b) not having
been satisfied on or prior to such date, provided that the
terminating Party shall not have caused such failure to close;
(v) The Purchaser may terminate the agreement resulting from the
acceptance of this Offer upon delivery of written notice if the
Closing has not occurred on or before the Expiration Date as a
result of one or more of the conditions set forth in clause 12
not having been satisfied on or prior to
such date, provided that the Purchaser shall not have caused such
failure to close; and
(vi) The Vendor may terminate the agreement resulting from the
acceptance of this Offer upon delivery of written notice if the
Closing has not occurred on or before the Expiration Date as a
result of one or more of the conditions set forth in clause 13
not having been satisfied on or prior to such date, provided that
the Vendor shall not have caused such failure to close.
(b) In the event that the agreement resulting from the acceptance of this
Offer is terminated pursuant to clause 15(a)(i), the Purchaser
terminates the agreement resulting from the acceptance of this Offer
pursuant to clauses 15(a)(ii) or 15(a)(v) (other than due to
non-satisfaction of the condition in clause 12(c)), either Party
terminates the agreement resulting from the acceptance of this Offer
pursuant to clause 15(a)(iv), or the Vendor terminates the agreement
resulting from the acceptance of this Offer pursuant to clause
15(a)(vi) due to non-satisfaction of the conditions in clauses 13(a)
or 13(c), the Purchaser shall be entitled to a refund of the Deposit
and the Parties shall execute joint written instructions directing the
Escrow Agent to refund the Deposit to the Purchaser.
(c) In the event that the agreement resulting from the acceptance of this
Offer is terminated by the Purchaser pursuant to clause 15(a)(v) due
to non-satisfaction of the condition in clause 12(c), or by the Vendor
pursuant to clause 15(a)(vi) (other than due to non-satisfaction of
the conditions in clauses 13(a) or 13(c)), the Vendor shall be
entitled, as liquidated damages for the loss of a bargain and not as a
penalty, to retain the Deposit and the Parties shall execute joint
written instructions directing the Escrow Agent to disburse the
Deposit to the account designated by the Vendor.
(d) In the event of a termination of the agreement resulting from the
acceptance of this Offer pursuant to clause 15(a)(iii) as a result of
the termination of one or both of the Pending Purchase Agreements (a
"TERMINATED AGREEMENT") under circumstances that entitle the vendor(s)
under the Terminated Agreement(s) to retain the deposit(s) held in
escrow by the Escrow Agent pursuant to the terms of such Terminated
Agreement(s), then the Vendor shall be entitled, as liquidated damages
for the loss of a bargain and not as a penalty, to retain the Deposit
and the Parties shall execute joint written instructions directing the
Escrow Agent to disburse the Deposit to the account designated by the
Vendor. In the event of a termination of the agreement resulting from
the acceptance of this Offer pursuant to clause 15(a)(iii) as a result
of the termination of one or both of the Pending Purchase Agreements
under circumstances that entitle the purchaser(s) under the Terminated
Agreement(s) to a refund of the deposit(s) held in escrow by the
Escrow Agent pursuant to the terms of such Terminated Agreement(s),
then the Purchaser shall be entitled to a refund of the Deposit and
the Parties shall execute joint written instructions directing the
Escrow Agent to refund the Deposit to the Purchaser.
(e) If any Party terminates the agreement resulting from the acceptance of
this Offer pursuant to clause 15(a), all rights and obligations of the
Parties hereunder shall terminate without any liability of any Party
to the other Party (except for any liability of any Party then in
breach); provided, however, that the provisions contained in clause
4(b), this Article 15, and clauses 19, 20 and 28 shall survive such
termination.
16. INDEMNITIES
(a) Provided that the Closing occurs, the Vendor shall:
(i) be liable to the Purchaser, its directors, officers, employees,
agents, parent, subsidiaries and affiliates (collectively, the
"PURCHASER INDEMNITEES") for all losses, costs, damage and
expenses whatsoever (including penalties and legal costs relating
thereto or in defense thereof) (collectively, "DAMAGES") which
the Purchaser may pay or incur as a result of:
A. any violation of any Environmental Laws or Environmental
Permits in connection with the Vendor's ownership,
occupancy, use or operation of the Assets on or before the
Closing Date;
B. any Environmental Claim which arises out of the Vendor's
ownership, occupancy, use or operation of the Assets on or
before the Closing Date;
C. Vendor's employment of any former employees of the Vendor,
including, without limitation, (1) any liability for unpaid
compensation, severance, benefits and other payments owed to
Rig Employees, to the extent such liability exceeds the
amount of the adjustment to the Closing Date Payment
pursuant to clause 17(b), and (2) any liability for
compensation, bonuses, accrued severance or other payments
owed to Office Employees;
D. any liabilities of the Vendor other than the Assumed
Liabilities; and
E. any other occurrence, event, condition or circumstance in
connection with the Vendor's ownership or operation of the
Assets occurring prior to the Closing Date; and
(ii) indemnify and save the Purchaser Indemnitees harmless from all
actions, causes of action, proceedings, claims, demands and
Damages brought or made against the Purchaser Indemnitees or
which the Purchaser Indemnitees may pay or incur, arising out of,
resulting from or in any way related to any of the foregoing in
subclauses A. to E. of clause 16(a)(i).
The Vendor will have no obligation to indemnify the Purchaser
Indemnitees pursuant to this clause 16(a) until the aggregate amount
of all Damages suffered
by the Purchaser Indemnitees exceeds $100,000 (the "Basket"), in which
case the Vendor shall be liable to the Purchaser Indemnitees for all
Damages in excess of, but not including, the Basket. The Vendor's
obligation to indemnify the Purchaser Indemnitees pursuant to this
clause 16(a) shall not exceed an aggregate amount equal to (A) if the
transactions contemplated by the Peru Purchase Agreement (228) and the
Peru Purchase Agreement (250) have been consummated, but the
transaction contemplated by the Peru Purchase Agreement (131 and 145)
is or has not been consummated, $6,750,000 reduced (on a
dollar-for-dollar basis) by the aggregate amount of Damages from which
any purchaser under the Peru Purchase Agreement (228) or the Peru
Purchase Agreement (250) has been indemnified, and (B) if the
transactions contemplated by all the Other Purchase Agreements have
been consummated, $8,500,000 reduced (on a dollar-for-dollar basis) by
the aggregate amount of Damages from which any purchaser under any
Other Purchase Agreement has been indemnified (the "CAP"). In no event
will the Vendor's obligation to indemnify the Purchaser Indemnitees
hereunder exceed an amount equal to the Purchase Price.
(b) Provided that the Closing occurs, the Purchaser shall:
(i) be liable to the Vendor, its directors, officers, employees,
agents, parent, subsidiaries and affiliates (collectively, the
"VENDOR INDEMNITEES") for all Damages which the Vendor may pay or
incur; and
(ii) indemnify and save the Vendor Indemnitees harmless from all
actions, causes or action, proceedings, claims, demands and
Damages brought or made against the Vendor Indemnitees or which
the Vendor Indemnitees may pay or incur,
as a result of or in connection with (A) the Purchaser's employment of
any present or former employee of the Vendor after the Closing Date
and (B) the ownership, occupancy, use or operation of the Assets after
the Closing Date including, without limitation, as a result of any (i)
violation of any Environmental Laws or Environmental Permits or (ii)
Environmental Claim, which arises out of the ownership, occupancy, use
or operation of the Assets after the Closing Date.
The Purchaser will have no obligation to indemnify the Vendor
Indemnitees pursuant to this clause 16(b) until the aggregate amount
of all Damages suffered by the Vendor Indemnitees exceeds the Basket,
in which case the Purchaser shall be liable to the Vendor Indemnitees
for all Damages in excess of, but not including, the Basket. The
Purchaser's obligation to indemnify the Vendor Indemnitees pursuant to
this clause 16(b) shall not exceed an aggregate amount equal to the
Cap, provided that for purposes of determining the extent of the
Purchaser's indemnification obligations under the agreement resulting
from the acceptance of this Offer at any given time the amount of the
Cap shall be reduced (on a dollar-for-dollar basis) by the aggregate
amount of Damages from which any vendor under any Other Purchase
Agreement has been indemnified. The limitations provided in the two
preceding sentences shall not apply in the event of a failure of
consideration.
(c) In addition to clause 16(b), the Purchaser hereby releases and agrees
to defend, indemnify and hold harmless the Vendor Indemnitees from and
against any and all causes of action, claims, damages, demands,
liability, losses and suits of every type and character that the
Purchaser, its employees, owners, legal counsel or other authorized
representatives (collectively, the "PURCHASER GROUP") may have against
the Vendor Indemnities as a result of any property damage and/or
bodily injury sustained on or prior to the Closing Date by the
Purchaser Group while on any premises or any assets of the Vendor or
any affiliate of the Vendor. THIS RELEASE AND OBLIGATION TO INDEMNIFY
AND HOLD HARMLESS THE VENDOR INDEMNITEES SHALL APPLY REGARDLESS OF THE
CAUSE OF THE LOSS OR CLAIM, EXCEPT WHERE SUCH LOSS OR CLAIM ARISES IN
WHOLE OR IN PART FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE VENDOR INDEMNITEES OR ANY OF THEM.
(d) If any action or proceeding is commenced in which a Party entitled to
seek indemnification hereunder (an "INDEMNITEE") is a party which may
give rise to a claim for indemnification (an "INDEMNIFICATION CLAIM")
against an indemnifying party hereunder (an "INDEMNITOR") then such
Indemnitee shall promptly give written notice to the Indemnitor.
Failure to notify promptly the Indemnitor will not relieve the
Indemnitor of any Liability that it may have to the Indemnitee, except
to the extent the defense of such action or proceeding is materially
and irrevocably prejudiced by the Indemnitee's failure to give such
notice. An Indemnitor will have the right to defend against an
Indemnification Claim with counsel of its choice reasonably
satisfactory to the Indemnitee if within twenty (20) days following
the receipt of notice of the Indemnification Claim, the Indemnitor
notifies the Indemnitee in writing that the Indemnitor will assume the
defense of such Indemnification Claim, provided that if the Indemnitee
reasonably determines in good faith that there exists a conflict of
interest that makes representation by the same counsel inappropriate,
the Indemnitee shall be entitled to employ one firm of separate
counsel at the expense and cost of the Indemnitor. If the Indemnitor
fails to notify the Indemnitee within such 20-day period that it will
assume the defense of the Indemnification Claim, the Indemnitee shall
have the right (upon further notice to the Indemnitor) to undertake
the defense at the expense of the Indemnitor; provided that in no
event will the Indemnitee consent to the entry of a judgment or enter
into a settlement with respect to such claim without the prior written
consent of the Indemnitor (which consent shall not be unreasonably
withheld or delayed). So long as the Indemnitor is conducting the
defense of the Indemnification Claim, (i) the Indemnitee may retain
separate co-counsel at its sole cost and expense and participate in
the defense of the Indemnification Claim and (ii) the Indemnitee will
not consent to the entry of any Order with respect to the
Indemnification Claim without the prior written consent of the
Indemnitor (not to be unreasonably withheld or delayed). The
Indemnitor will not enter into any settlement with respect to the
Indemnification Claim without the prior written consent of the
Indemnitee (not to be unreasonably withheld or delayed) unless such
settlement (A) requires solely the payment of money damages by the
Indemnitor and (B) includes as an unconditional term thereof the
release by the claimant or the plaintiff of the Indemnitee and the
Persons for whom the Indemnitee is acting
from all liability in respect of the proceeding giving rise to the
Indemnification Claim.
(e) The Parties further agree that the following procedures shall apply
with respect to any claim under this Article 16:
(i) The Indemnitee shall use commercially reasonable efforts to
mitigate any Damages that such Indemnitee asserts under this
Article 16. In the event that an Indemnitee shall fail to use
such commercially reasonable efforts to mitigate any Damages,
then notwithstanding anything else to the contrary contained
herein, the Indemnitor shall not be required to indemnify such
Indemnitee for any Damages that could reasonably be expected to
have been avoided if the Indemnitee had made such efforts.
(ii) The amount of any Damages for which indemnification is provided
under this Article 16 shall be reduced by (A) any net amounts
recovered from an unaffiliated third party by the Indemnitee
under insurance policies and arrangements with respect to such
Damages and (B) the present value of any tax benefits to be
realized by the Indemnitee from the incurrence or payment of any
such Damages.
(iii) The determination of the dollar amount of any Damages shall be
based solely on the actual dollar value of such Damages, on a
dollar-for-dollar basis, and shall not take into account any
multiplier valuations, including any multiple based on earnings
or other financial indicia.
(iv) Any claim for indemnification under the agreement resulting from
the acceptance of this Offer shall, to the extent practicable,
describe the claim in reasonable detail, include copies of any
material written evidence thereof and indicate the estimated
amount of such claim.
(f) The remedies of the Parties specifically provided for by this Offer
shall be the sole and exclusive remedies of the Parties for all
matters covered hereby; provided that this clause shall not limit
enforceability of any covenant or agreement of the Parties which
contemplates performance after the Closing or after termination of the
agreement resulting from the acceptance of this Offer. The Parties
agree that it is their intent that notwithstanding anything to the
contrary contained in the agreement resulting from the acceptance of
this Offer, neither the Vendor nor the Purchaser shall be liable to
any other Party, its parent, subsidiaries or affiliates or, its or
their respective officers, directors, shareholders, successors or
permitted assigns, for claims for consequential, special, treble,
exemplary, incidental, indirect or punitive damages of any nature
under or pursuant to the agreement resulting from the acceptance of
this Offer or in connection with or resulting from the transactions
contemplated hereby, including claims in the nature of diminution or
loss of value, irrespective of whether such claims are based upon
negligence, strict liability, contract, operation of law or otherwise.
17. EMPLOYEES
(a) The Vendor shall cooperate with the Purchaser to effectuate the
transfer to the Purchaser of all Employees requested by the Purchaser;
provided, however, that neither the Vendor nor its affiliates shall be
prohibited from offering employment to German Castaneda or Sandra
Martinez prior to the Closing notwithstanding this clause 17(a).
(b) With respect to the Employees who are employed by the Vendor in
Colombia on a well-to-well contract basis on the Closing Date ("RIG
EMPLOYEES"), at the Closing the Vendor shall assign to the Purchaser,
and the Purchaser shall assume as of the Closing Date, all contracts
for the employment of such Rig Employees ("ASSIGNED EMPLOYMENT
CONTRACTS") and the Closing Date Payment shall be reduced by the
aggregate amount of unpaid compensation, severance, benefits and other
payments accrued under the Assigned Employment Contracts through the
Closing Date (collectively the "ACCRUED PAYMENTS"). With respect to
the other Employees employed by the Vendor in Colombia ("OFFICE
EMPLOYEES"), subject to clause 17(a) the Vendor shall terminate the
employment of such Office Employees effective as of the Closing Date
and shall pay in full all compensation, bonuses, accrued severance,
and other payments that may result from the Vendor's termination of
the employment of such Office Employees.
(c) The Parties shall carry out the transfer to the Purchaser of the
Employees requested by the Purchaser in a manner reasonably calculated
not to entail or trigger a collective dismissal requiring the prior
authorization of the Colombian Ministry of Social Protection.
Notwithstanding the above, it is expressly agreed and understood by
and between the Parties that (i) the Purchaser shall not be liable to
the Vendor for any obligation vis-a-vis the Colombian Ministry of
Social Protection or other authority as a result of any action or
omission of the Vendor prior to Closing and (ii) the Vendor shall not
be liable to the Purchaser for any obligation vis-a-vis the Colombian
Ministry of Social Protection or other authority accruing after the
Closing Date with regard to any persons employed by the Purchaser
after Closing or the Assigned Employment Contracts.
18. FURTHER ASSURANCES
Without further consideration, each Party shall from time to time, and at
all times, execute, acknowledge and deliver such other documents and shall
take such other action as may be necessary in order to fully perform and
carry out the terms of the agreement resulting from the acceptance of this
Offer.
19. CONSTRUCTION
The agreement resulting from the acceptance of this Offer and all
agreements contemplated hereby shall be governed by and construed in
accordance with the laws of the State of Texas without giving effect to any
choice or conflict of law provision or rule
(whether of the State of Texas or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Texas.
20. ARBITRATION
(a) Any dispute, controversy or claim arising out of or relating to the
agreement resulting from the acceptance of this Offer that cannot be
or has not been resolved among the Parties, other than a dispute
covered by clause 2(d), shall be resolved in accordance with the
procedures specified in this Article 20, which shall constitute the
sole and exclusive procedures for the resolution of disputes.
(b) Each Party agrees to use their respective commercially reasonable
efforts to settle promptly any disputes or claims arising out of or
relating to the agreement resulting from the acceptance of this Offer,
through negotiations conducted in good faith between Persons holding a
senior management position in each Party having authority to reach
such a settlement. All negotiations pursuant to this Article 20 shall
be confidential and shall be treated as compromise and settlement
negotiations and shall not be admissible for any purposes in any
subsequent arbitration or any other proceeding (if any).
(c) Any dispute arising out of or relating to the agreement resulting from
the acceptance of this Offer which has not been resolved by
negotiations as provided in clause 20(b) within fifteen (15) days from
the date that such negotiations shall have been first requested by any
Party shall be settled by binding arbitration in accordance with the
then current Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). All proceedings shall be subject to the Federal
Arbitration Act and the New York Convention. Any dispute submitted to
arbitration pursuant to the provisions of this clause 20(c) shall be
settled by a single arbitrator selected under the rules of the AAA
(the "ARBITRATOR") from its panel of arbitrators for large, complex
commercial disputes, and the cost and expense of such Arbitrator shall
be shared equally among the participants in the arbitration. In no
case shall there be any ex parte communications between any Party and
the Arbitrator regarding any dispute among the Parties. If any Party
refuses to participate in good faith in negotiations as provided in
clause 20(b), then any applicable Party may initiate arbitration at
any time after such refusal without waiting for the expiration of the
fifteen (15) day period. Except as provided in clause 20(d), relating
to provisional remedies, the Arbitrator shall decide all aspects of
any dispute brought to it, including whether a particular dispute is
or is not arbitrable, attorney disqualification and the timeliness of
the making of any claim. The Arbitrator shall have the discretion to
order a pre-hearing exchange of information by the Parties, including
the production of requested documents, the exchange of testimony of
proposed witnesses, and the examination by deposition of Parties. The
Arbitrator shall not have the authority to make any ruling, finding or
award that does not conform to the terms and conditions of this Offer.
(d) Except as otherwise specifically provided herein, each of the Parties
hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any Texas state court or
federal court sitting in Harris County, Texas and any appellate court
from any thereof, in any action or proceeding arising out of or
relating to or in connection with the agreement resulting from the
acceptance of this Offer, and in which provisional, interim or
conservatory measures are sought pending resolution of any arbitration
proceeding pursuant to this Article 20 or in which an order to compel
arbitration in accordance with the agreement resulting from the
acceptance of this Offer or to vacate an arbitral award on such
grounds as permitted by the Federal Arbitration Act or the New York
Convention, as applicable, is sought. Notwithstanding the foregoing,
any Party may proceed to any Texas state court or federal court
sitting in Harris County, Texas, or to the Arbitrator to obtain
provisional relief if such action is necessary to avoid irreparable
harm or to preserve the status quo pending the resolution of the
dispute in accordance with the provisions of this Article 20.
(e) The site of any arbitration brought pursuant to the agreement
resulting from the acceptance of this Offer shall be Houston, Texas
and the language in which the arbitration shall be conducted,
including all writings relating thereto (including the award of the
Arbitrator), shall be English. All discovery activities shall be
completed within thirty (30) days after the initial meeting of the
Arbitrator. The award of the Arbitrator shall (i) be final and binding
upon the Parties, (ii) be issued within sixty (60) days after the
initial meeting with the Arbitrator (and if not reasonably practicable
within such time period, then within such additional time as the
Arbitrator determines but in any event no longer than six (6) months
after the initial meeting), (iii) be in writing, and (iv) set forth
the factual and legal basis for such award. The Arbitrator may not
award attorneys' fees and cost of the arbitration to the prevailing
Party. Each Party shall bear their own attorneys' fees. Except as
otherwise provided herein, the costs of the arbitration shall be
shared equally among the participants in the arbitration. The arbitral
award shall be made and payable in dollars of the United States of
America free of any tax withholding or other deduction. Judgment on
the award rendered by the Arbitrator may be entered and enforced in
any court having jurisdiction thereof in accordance with the New York
Convention and any other applicable convention or treaty.
(f) Only damages allowed pursuant to the agreement resulting from the
acceptance of this Offer may be awarded and no Arbitrator shall have
the authority to award loss of profits, loss of revenue or any
incidental, special or consequential loss or damage of any nature
arising at any time or from any cause whatsoever, or punitive or
exemplary damages.
(g) Each of the Parties consents to the submission of any dispute for
settlement by final and binding arbitration in accordance with the
provisions of clause 20(b), and hereby waives the right to proceed to
court or any other forum that may apply to it by reason of its present
or future domicile, or for any other reason. Furthermore, each of the
Purchaser and the Vendor hereby irrevocably waives its
right to raise any objection or defense that such Party is not
personally subject to the jurisdiction of the arbitration tribunal or
the relevant court where the enforcement of the award is sought (as
the case may be), that the venue of any such suit, action or
proceeding for enforcement is improper or inconvenient, that such
suit, action or proceeding for enforcement is brought in an
inconvenient forum, or that the agreement resulting from the
acceptance of this Offer or the subject matter hereof may not be
enforced in or by the arbitration tribunal. Such consent shall satisfy
the requirements for:
(i) A written arbitration agreement among the Parties, pursuant to
Article I of the Inter-American Convention on International
Commercial Arbitration (Convencion Interamericana sobre Arbitraje
Comercial Internacional), promulgated in Panama on January 30,
1975; and
(ii) An "agreement in writing" pursuant to Article II of the New York
Convention.
(h) Each Party irrevocably consents to service of process by overnight
courier service, by mail or by telecopy to its offices at the address
specified for such Party in Article 23.
(i) The Parties hereby agree to continue to perform their obligations
hereunder while any dispute is pending.
(j) Each of the Parties hereby undertakes without delay to implement,
perform or comply with the provisions of any arbitral award or
decision. If the Parties initiate multiple arbitration proceedings,
the subject matters of which are related by common questions of law or
fact and which could result in conflicting awards or obligations, then
the Parties hereby agree that all such proceedings shall be
consolidated into a single arbitral proceeding before a single
Arbitrator.
21. ENUREMENT; NO THIRD PARTY RIGHTS
The agreement resulting from the acceptance of this Offer shall be binding
upon and shall enure to the benefit of the Parties hereto and their
respective successors and permitted assigns. Nothing expressed or referred
to herein will be construed to give any Person other than the Parties to
the agreement resulting form the acceptance of this Offer and their
respective successors and permitted assigns any legal or equitable right,
remedy or claim under or with respect to the agreement resulting form the
acceptance of this Offer or any provision hereof.
22. TIME
Time shall be of the essence of the agreement resulting from the acceptance
of this Offer.
23. NOTICES
Whether or not so stipulated, all notices required or permitted pursuant to
the agreement resulting from the acceptance of this Offer shall be in
writing. The address for notice of each of the Parties hereto shall be as
follows:
VENDOR: Parker Drilling Company International Limited
c/o Parker Drilling Company
1401 Enclave Parkway, Suite 600
Houston, Texas 77077
Attention: Robert L. Parker, Jr. and David Mannon
Telecopy No.: (281) 406-1020
PURCHASER: Saxon Services de Panama S.A.
Sucursal Colombia
c/o Posse, Herrera & Ruiz Abogados
Carrera 7 No. 71-52 Torre A Piso 5
Bogota, Colombia
Attention: Claudia Caballero
Telecopy No.: +571 3257313
Either of the Parties hereto may from time to time change its address for
service herein by giving written notice to the other Party hereto. Any
notice may be served by:
(a) personal service by leaving it with the Party or at the offices of the
Party at that Party's address hereinbefore given;
(b) by mailing the same by prepaid post in a properly addressed envelope
addressed to the Party hereto at its address for service herein;
(c) by telecopier (or by any other like method by which a written and
recorded message may be sent) directed to the Party to whom they are
to be delivered at that Party's address, telecopy or telex number
hereinbefore given.
Any notice given by personal service or telecopy shall be deemed to be
given on the date of such service and any notice given by mail shall be
deemed to be given to and received by the addressee on the third day
(except Saturdays, Sundays, statutory holidays and days upon which postal
service in Canada or the United States is interrupted) after the mailing
thereof.
24. PRIOR AGREEMENTS AND AMENDMENTS
This Offer, together with the Purchase Order and the other Schedules
hereto, the Confidentiality Agreement and the other documents delivered
pursuant hereto, constitutes
the entire agreement of the Parties in respect of its subject matter and
shall supersede and replace any and all prior agreements (written or oral)
between the Parties hereto relating to the subject matter set forth herein
and may be amended only by written instrument signed by all Parties hereto.
25. ONE AGREEMENT
This Offer may be executed in one copy by the Vendor and delivered to the
Purchaser and together with the Purchase Order and the other Schedules
shall constitute one agreement.
26. INVALIDITY OF A PARTICULAR PROVISION
The invalidity of any particular provision of this Offer shall not affect
any other provision hereto, but the agreement resulting from the acceptance
of this Offer shall be construed as if such invalid provision were omitted.
27. ASSIGNMENT
The Vendor or the Purchaser may not assign the agreement resulting from the
acceptance of this Offer or any part thereof without the prior written
consent of the other.
28. FEES AND EXPENSES
Whether or not the transactions contemplated by the agreement resulting
from the acceptance of this Offer are consummated, and except as otherwise
expressly set forth in this Offer, all costs and expenses (including legal
and financial advisory fees and expenses) incurred in connection with, or
in anticipation of, this Offer and the transactions contemplated by this
Offer shall be paid by the Party incurring such expenses. The Vendor, on
the one hand, and the Purchaser, on the other hand, shall indemnify and
hold harmless the other Party from and against any and all claims or
liabilities for broker's, agent's or finders' fees incurred by reason of
any action taken by such Party or otherwise arising out of the transactions
contemplated by this Offer by any Person claiming to have been engaged by
such Party.
29. SPECIFIC PERFORMANCE
The Parties agree that if any of the provisions of the agreement resulting
from the acceptance of this Offer were not performed in accordance with
their specific terms or were otherwise breached, irreparable damage would
occur, no adequate remedy at law would exist and damages would be difficult
to determine, and that the Parties shall be entitled to specific
performance of the terms of the agreement resulting from the acceptance of
this Offer and immediate injunctive relief, without the necessity of
proving the inadequacy of money damages as a remedy, in addition to any
other remedy at law or in equity.
30. PUBLIC ANNOUNCEMENTS
Prior to the Closing, except as set forth herein or otherwise agreed to by
the Parties, the Parties shall not issue any report, statement or press
release or otherwise make any public disclosures or statements with respect
to the agreement resulting from the acceptance of this Offer and the
transactions contemplated hereby, except as may be required by law or
required as a result of the corporate parent of either Party being a
publicly-held or exchange-listed company, and prior to making any such
public disclosure or statement the disclosing Party shall furnish to the
other Party a copy of such public disclosure or statement and afford such
other Party a reasonable opportunity to review and comment on the same.
31. NO WAIVER; CUMMULATIVE REMEDIES
The rights and remedies of the Parties provided in this Offer are
cumulative and not alternative. Neither any failure nor any delay by any
Party in exercising any right, power or privilege under the agreement
resulting from the acceptance of this Offer will operate as a waiver of
such right, power or privilege, and no single or partial exercise of any
such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power
or privilege. To the maximum extent permitted by applicable law and except
as otherwise provided in this Offer, (a) no claim or right arising out of
the agreement resulting from the acceptance of this Offer or any of the
documents referred to in this Offer can be discharged by one Party, in
whole or in part, by a waiver or renunciation of the claim or right unless
in writing signed by the other Party; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which it is
given and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of that Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Offer or the documents referred to in this Offer.
PARKER DRILLING COMPANY INTERNATIONAL
LIMITED, COLOMBIA BRANCH
By: /s/ DAVID W. TUCKER
------------------------------------
Name: David W. Tucker
----------------------------------
Title: Vice President
---------------------------------
PURCHASE ORDER
May 6, 2005
Messrs.
Parker Drilling Company International Limited Company, Colombian Branch
Attention: Robert L. Parker, Jr.
Legal Representative
REFERENCE: Purchase Order for the Purchase and Sale of Assets
Dear Sirs,
I hereby refer to your Irrevocable Commercial Offer for the Purchase and
Sale of Assets dated May 6, 2005 (the"Offer") in response to which and in my
capacity as Legal Representative of Saxon Services de Panama S.A. Sucursal
Colombia, I hereby present a Purchase Order for the Assets described in the
Offer, in accordance with the terms and conditions contained therein.
The Purchase Price to be paid by Saxon Services de Panama S.A. Sucursal
Colombia, for the Assets shall be paid as indicated in the Offer.
Sincerely,
Saxon Servicies de Panama S.A. Sucursal Colombia
By:
/s/ Walter Dawson
- -------------------------------------
Walter Dawson
Legal Representative
With the exception of Schedule K -- Purchase Order, the following
schedules to the Irrevocable Commercial Offer for the Purchase and Sale of
Assets dated as of May 6, 2005, by and between Parker Drilling Company
International Limited, Colombian Branch and Saxon Services de Panama
S.A.-Colombia Branch have been omitted, and the Registrant agrees to furnish
supplementally a copy of any such omitted schedules to the Securities and
Exchange commission upon its request:
Schedules
Schedule A -- Drilling Rigs
Schedule B -- Other Assets
Schedule C -- Office/Communications Equipment
Schedule D -- Leased Motor Vehicles
Schedule E -- Drilling Contracts
Schedule F -- Employees
Schedule G -- Credit Enhancements
Schedule H -- Consents
Schedule I -- Encumbrances
Schedule J -- Employment Matters