Master Drilling Agreement - Bayard Drilling Technologies Inc. and Chesapeake Energy Corp.
MASTER DRILLING AGREEMENT
This Master Drilling Agreement (this "Agreement") , dated as of
December 10, 1996, is made by and among Bayard Drilling Technologies, Inc., a Delaware
corporation ("Bayard"), Chesapeake Energy Corporation, a Delaware corporation ("Chesapeake"),
and Chesapeake Operating, Inc., a Delaware corporation ("Operating").
WITNESSETH:
WHEREAS, Bayard, Chesapeake and certain other parties named therein
entered into that certain Master Agreement, dated as of November 26, 1996 (the "Master
Agreement"), pursuant to which Chesapeake and the other parties thereto acquired
interests in Bayard;
WHEREAS, the Master Agreement contemplates, among other things,
that: (a) Chesapeake will enter into this Agreement, which will set forth the governing
terms of the Drilling Agreements (as defined herein) to be entered into by Bayard
and Operating; (b) Operating shall enter into each of six (6) separate Drilling
Agreements (the "Drilling Agreements") pursuant to which operating will employ specified
drilling rigs of Bayard (the "Rigs"); and (c) Bayard and Chesapeake will enter into
an Option Agreement (as defined in the Master Agreement) pursuant to which Bayard
will grant to Chesapeake an option to purchase shares of the common stock of Bayard
for a specified term which may be extended if operating extends four (4) of the
Drilling Agreements as specified in the Master Agreement; and
WHEREAS, Bayard, Chesapeake and Operating desire to set forth
the terms and conditions of such arrangements herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the mutual benefits to be gained by
the performance thereof and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereto hereby
agree as follows:
1. Form of Drilling Agreement. The terms and conditions
pursuant to which each of the Rigs shall be used and operated shall be set forth
in the "Drilling Rig Proposal and Daywork Drilling Contract - US" each of which
is attached hereto as Exhibit A (the "Drilling Agreements"). Each of the Drilling
Agreements shall be executed by Bayard and operating simultaneously with execution
of this Agreement.
2. Primary Term. The term of each Drilling Agreement shall
be two (2) years and shall commence on the spud date of the first well drilled by
each such rig pursuant to the Drilling Agreement; provided that the spud date of
the first well shall be deemed to be January 1, 1997, for each rig and the applicable
Drilling Agreement for which the spud date of the first well is subsequent to January
1, 1997.
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3. Term Extensions. Bayard shall have the option to extend
any two (2) of the Drilling Agreements for two (2) additional years, each on the
same terms as set forth in the applicable Drilling Agreement. Operating shall
have the option to extend each of the other four (4) Drilling Agreements for two
(2) additional years on the same terms as set forth in the applicable Drilling Agreement.
4. Guarantee. By execution of this Agreement, Chesapeake
unconditionally guarantees the payment of all amounts payable by, and the performance
of all the obligations of, operating under this Agreement and each of the Drilling
Agreements during the primary term of each such agreement and any extension thereof.
5. Consent to Amendments, Waivers. Except as otherwise
expressly provided herein, the provisions of this Agreement shall not be amended
or waived except upon the written agreement of all parties hereto.
6. No Assignment. This Agreement may not be assigned by
Operating without the written consent of Bayard. Any purported or attempted assignment
in violation of this Section 5 shall be void ab initio.
7. Severability. Whenever possible, each provision of this
Agreement shall be interpreted so as to be effective and valid under applicable
law. If any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this Agreement.
8. Headings. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of and
shall not affect the interpretation of this Agreement.
9. Notices. Any notices required or permitted to be sent
hereunder shall be delivered by hand, by telex or telecopier, or by certified or
registered mail, postage prepaid and return receipt requested, or delivered by overnight
courier service to the following addresses, or such other address as any party hereto
designates by written notice to the other parties. Notices shall be deemed to have
been given upon delivery, if delivered by hand, three days after mailing, if mailed,
one business day after delivery to the courier, if delivered by overnight courier
service, and upon receipt of an appropriate answer back, if by telex or telecopier:
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If to Bayard, to:
Bayard Drilling Technologies, Inc.
Suite 400E, Lakepoint Towers
4005 Northwest Expressway
Oklahoma City, OK 73116
Attn: President
(405) 879-3847 (fax)
If to Chesapeake or Operating, to:
Chesapeake Energy Corporation
P.O. Box 1849
Oklahoma City, OK 73154-0456
Attn: Marcus Rowland
(405) 848-8000, ext. 232
(405) 879-9580 (fax)
10. Governing Law. This Agreement shall be governed in accordance
with the laws of the State of Oklahoma, without giving effect to the choice of law
principles thereof.
11. Entire Agreement. This Agreement constitutes the entire
agreement of the parties concerning the transactions contemplated hereby, and supersedes
all prior agreements and understandings, written or oral, regarding the subject
matter hereof.
12. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed and delivered shall
be deemed an original, and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first above written.
BAYARD
Bayard Drilling Technologies, Inc.,
a Delaware corporation
By: /s/ James E. Brown
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President
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OPERATING
Chesapeake Operating, Inc.,
a Delaware corporation
By: /s/ Aubrey McClendon
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Chairman and Chief Executive Officer
CHESAPEAKE
Chesapeake Energy Corporation,
a Delaware corporation
By: /s/ Aubrey McClendon
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Chairman and Chief Executive Officer
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