EXECUTION COPY
UTI ENERGY CORP.
6,100,000 Shares 1
Common Stock
UNDERWRITING AGREEMENT
----------------------
September 30, 1997
PRUDENTIAL SECURITIES INCORPORATED
XXXXXX BROTHERS INC.
XXXXXXXX XXXXXX REFSNES, INC.
XXXXXXX & COMPANY INTERNATIONAL
As a Representative of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Each of UTI Energy Corp., a Delaware corporation (the "Company"),
the selling securityholders set forth in Schedule 1-A hereto (the "Selling
Securityholders"), and the selling securityholders set forth on Schedule 1-B
hereto (the "Additional Securityholders"), hereby confirms its agreement with
the several underwriters named in Schedule 2 hereto (the "Underwriters"), for
whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to
be to the Underwriters.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the several Underwriters
1,575,000 shares and the Selling Securityholders propose to sell to the
several Underwriters 4,360,000 shares and warrants to purchase 165,000
shares, (the "Firm Securities"), of the Company's Common Stock, par value
$.001 per share ("Common Stock"). The Company also proposes to issue and
sell to the several Underwriters not more than 414,825 additional shares of
Common Stock and the Additional Selling Securityholders propose to sell to
the several Underwriters not more than 305,175 additional shares of Common
Stock and warrants to purchase 195,000 shares of Common Stock, if requested
by the Representatives as provided in Section 4 of this Agreement. Any and
all shares of Common Stock to be purchased by the Underwriters pursuant to
such options, including the shares of Common Stock issuable upon the exercise
of the warrants, are referred to herein as the "Option Securities", and the
Firm Securities and any Option Securities are collectively referred to herein
as the "Securities". The warrants to purchase shares of Common Stock
included in the Securities to be sold to the Underwriters are referred to
herein as the "Warrants".
1 Plus options to purchase from the Company up to 414,825 additional
shares and from the Additional Selling Securityholders up to 305,175
additional shares and warrants to purchase 195,000 shares to cover
over-allotments.
2. Representations and Warranties of the Company and Drum. The
Company and Xxxxxx X. Drum ("Drum") jointly and severally represent and
warrant to, and agree with, each of the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A
registration statement on such Form (File No. 333-35109) with respect
to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Act, and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (i) if
such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if
the Company relies on Rule 434 under the Act, a Term Sheet (as
hereinafter defined) relating to the Securities, that shall identify
the Preliminary Prospectus (as hereinafter defined) that it supplements
and, if required to be filed pursuant to Rules 434(c)(2) and 424(b), an
Integrated Prospectus (as hereinafter defined), in either case,
containing such information as is required or permitted by Rule 434,
430A and 424(b) under the Act or (B) if the Company does not rely on
Rule 434 under the Act, a prospectus in the form most recently included
in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with
such changes or insertions as are required by Rule 430A under the Act
or permitted by Rule 424(b) under the Act, and in the case of clause
(i)(A) or (i)(B) of this sentence as have been provided to and approved
by the Representatives prior to the execution of this Agreement, or
(ii) if such registration statement, as it may have been amended, has
not been declared by the Commission to be effective under the Act, an
amendment to such registration statement, including a form of
prospectus, a copy of which amendment has been furnished to and
approved by the Representatives prior to the execution of this
Agreement. The Company may also file a related registration statement
with the Commission pursuant to Rule 462(b) under the Act for the
purpose of registering certain additional Securities. As used in this
Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Securities, as
amended at the time when it was or is declared effective, including (A)
all financial schedules and exhibits thereto, (B) all documents
incorporated by reference therein filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and (C) any information
omitted therefrom pursuant to Rule 430A under the Act and included in
the Prospectus (as hereinafter defined) or, if required to be filed
pursuant to Rule 434(c)(2) and 424(b), in the Integrated Prospectus;
the term "Rule 462(b) Registration Statement" means any registration
statement filed with the Commission pursuant to Rule 462(b) under the
Act (including the Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time such
Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any
Rule 462(b) Registration Statement; the term "Preliminary Prospectus"
means each prospectus subject to completion filed with such
registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto at the time it was or is declared
effective), including all documents incorporated by reference therein
filed under the Exchange Act the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term
Sheet relating to the Securities that is first filed pursuant to
Rule 424(b)(7) under the Act, together with the Preliminary
Prospectus identified therein that such Term Sheet supplements:
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule
424(b) under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and
if no prospectus is required to be filed pursuant to Rule 424(b)
under the Act, the prospectus included in the Registration
Statement, including, in the case of clauses (A), (B) or (C) of
this sentence, all documents incorporated by reference therein
filed under the Exchange Act; the term "Integrated Prospectus"
means a prospectus first filed with the Commission pursuant to
Rules 434(c)(2) and 424(b) under the Act; and the Term "Term
Sheet" means any abbreviated term sheet that satisfies the
requirements of Rule 434 under the Act. Any reference in this
Agreement to an "amendment or supplement" to any Preliminary
Prospectus, the Prospectus or any Integrated Prospectus or an
"amendment" to any registration statement (including the
Registration Statement) shall be deemed to include any document
incorporated by reference therein that is filed with the
Commission under the Exchange Act after the date of such
Preliminary Prospectus, Prospectus, Integrated Prospectus or
registration statement, as the case may be; any reference herein
to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet. For purposes of the preceding
sentence, any reference to the "effective date" of an amendment
to a registration statement shall, if such amendment is effected
by means of the filing with the Commission under the Exchange Act
of a document incorporated by reference in such registration
statement, be deemed to refer to the date on which such document
was so filed with the Commission.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus. When any Preliminary
Prospectus and any amendment or supplement thereto was filed with the
Commission, it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act, the Exchange Act and the respective rules
and regulations of the Commission thereunder, and (ii) did not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. When the
Registration Statement or any amendment thereto was or is declared
effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act, the Exchange
Act and the respective rules and regulations of the Commission
thereunder and (ii) did not or will not include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein not misleading. When the Prospectus or any Term
Sheet that is a part thereof or any Integrated Prospectus or any
amendment or supplement to the Prospectus is filed with the Commission
pursuant to Rule 424(b) (or, if the Prospectus or part thereof or such
amendment or supplement is not required to be so filed, when the
Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared
effective), on the date when the Prospectus is otherwise amended or
supplemented and on the Firm Closing Date and any Option Closing Date
(both as hereinafter defined), each of the Prospectus, and, if required
to be filed pursuant to Rules 434(c)(2) and 424(b) under the Act, the
Integrated Prospectus as amended or supplemented at any such time, (i)
contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Act, the Exchange Act and the
respective rules and regulations of the Commission thereunder and (ii)
did not or will not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The foregoing provisions of this paragraph
(b) do not apply to statements or omissions made in any Preliminary
Prospectus or any amendment or supplement thereto, the Registration
Statement or any amendment thereto the Prospectus or, if required to be
filed pursuant to Rules 434(c)(2) and 424(b) and the Act, the
Integrated Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives specifically
for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the
Rule 462(b) Registration Statement has not been declared effective (i)
the Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to Rule
462(b) and has received confirmation of its receipt and (ii) the
Company has given irrevocable instructions for transmission of the
applicable filing fee in connection with the filing of the Rule 462(b)
Registration Statement, in compliance with Rule 111 promulgated under
the Act or the Commission has received payment of such filing fee.
(d) Schedule 3 hereto is a complete and accurate schedule of
(i) the names and jurisdictions of organization of all corporations,
partnerships and joint ventures (the "Subsidiaries") in which the
Company has a direct or indirect majority equity interest and which is
required to be listed on Exhibit 21 to an Annual Report on Form 10-K of
the Company if such report were to be filed with the Commission at the
time of the execution and delivery of this Agreement. The Company and
each of the Subsidiaries have been duly organized and are validly
existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the
failure to do so or qualify or be in good standing would not have a
material adverse effect on the business, financial condition or results
of operations of the Company and the Subsidiaries, taken as a whole (a
"Material Adverse Effect").
(e) The Company and each of its subsidiaries have full
corporate power to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement,
each of the Prospectus and any Integrated Prospectus or, if the
Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus; and the Company has full
corporate power to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned beneficially by the Company free
and clear of any security interests, liens, encumbrances, equities or
claims except as set forth on Schedule 3 hereto.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus. All of the issued shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. The Firm Securities and the Option Securities have been
duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith and the exercise of the Warrants by the Underwriters in
accordance with the terms of the Warrants, will be validly issued,
fully paid and nonassessable. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities, and no holder of
securities of the Company has any right which has not been fully
exercised or waived to require the Company to register the offer or
sale of any securities owned by such holder under the Act in the public
offering contemplated by this Agreement.
(h) The capital stock of the Company conforms to the
description thereof contained in each of the Prospectus and any
Integrated Prospectus or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary Prospectus.
(i) Except as described or specifically referred to in each of
the Prospectus and any Integrated Prospectus (or, if the Prospectus and
any required Integrated Prospectus are not in existence, the most
recent Preliminary Prospectus), there are not outstanding (A)
securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the Company
or any such subsidiary, (B) warrants, rights or options to subscribe
for or purchase from the Company or any such subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary
to issue any shares of capital stock, any such convertible or
exchangeable securities or obligations, or any such warrants, rights or
options.
(j) The historical consolidated financial statements and
schedules of the Company and its consolidated subsidiaries included in
the Registration Statement and the Prospectus or any Integrated
Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus) fairly present the financial position of the Company and
its consolidated subsidiaries and the results of operations and the
cash flows of the Company and its consolidated subsidiaries at the
respective dates and for the respective periods to which they apply.
Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in each of the Prospectus and
any Integrated Prospectus or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus, fairly present, on the basis stated in each of Prospectus
and any Integrated Prospectus (or such Preliminary Prospectus), the
information included therein.
(k) Ernst & Young, LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and
delivered their reports with respect to the audited consolidated
financial statements and schedules included in the Registration
Statement and each of the Prospectus and any Integrated Prospectus (or,
if the Prospectus and any required Integrated Prospectus are not in
existence, the most recent Preliminary Prospectus), are independent
public accountants within the meaning of the Act, the Exchange Act and
the related published rules and regulations thereunder.
(l) Coopers & Xxxxxxx L.L.P., who have certified certain
financial statements of Xxxxxxx Drilling Company and delivered their
report with respect to such financial statements included or
incorporated by reference in the Registration Statement and each of the
Prospectus and any Integrated prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), are independent public accountants within the
meaning of the Act, the Exchange Act and the related published rules
and regulations thereunder.
(m) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution may be limited under
applicable law.
(n) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
required to be described in the Registration Statement or each of the
Prospectus and any Integrated Prospectus (or, if the Prospectus and any
required Integrated Prospectus are not in existence, the most recent
Preliminary Prospectus), and no such proceedings have been threatened
against the Company or any of its subsidiaries or with respect to any
of their respective properties; and no contract or other document is
required to be described in the Registration Statement or the
Prospectus or any Integrated Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein (or, if the
Prospectus and any required Integrated Prospectus are not in existence,
the most recent Preliminary Prospectus) or filed as required.
(o) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained, such as may be required under state securities or
blue sky laws and, if the Registration Statement is not effective under
the Act as of the time of execution hereof, such as may be required
(and shall be obtained as provided in this Agreement) under the Act, or
(ii) conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the
Company or any of its subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
subsidiaries except for such conflicts, defaults, violations, creations
or impositions that would not affect the consummation of the Agreement
or the issuance of the Securities or have a Material Adverse Effect.
(p) Subsequent to the respective dates as of which information
is given in the Registration Statement, the Prospectus or any
Integrated Prospectus (or, if the Prospectus and any required
Integrated Prospectus are not in existence, the most recent Preliminary
Prospectus), neither the Company nor any of its subsidiaries has
sustained any loss that is material to the Company and its subsidiaries
taken as a whole or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of operations of the Company
and its subsidiaries taken as a whole, except in each case as described
in or contemplated by the each of the Prospectus and any Integrated
Prospectus (or, if the Prospectus and any required Integrated
Prospectus are not in existence, the most recent Preliminary
Prospectus).
(q) The Company has not, directly or indirectly, (i) taken any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, the Securities or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of
Securities by the Selling Securityholders and Additional Selling
Securityholders under this Agreement and except in connection with
acquisitions by the Company or its subsidiaries of assets or businesses
in the oilfield services industry).
(r) The Company has not distributed and, prior to the later of
(i) the Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any, permitted by the Act.
(s) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus): (1) the Company and its subsidiaries, prior to the Firm
Closing Date, have not entered into any transaction not in the ordinary
course of business that is material to the Company and its subsidiaries
taken as a whole; (2) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; and (3)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its consolidated
subsidiaries, except in each case as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(t) The Company and each of its subsidiaries have good title in
fee simple to all items of real property and good title to all personal
property owned by each of them, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the
value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or such subsidiary,
and any real property and buildings held under lease by the Company or
any such subsidiary are held under valid, subsisting and enforceable
leases, with such exceptions as are not material to the Company and its
subsidiaries taken as a whole and do not materially interfere with the
use made or proposed to be made of such property and buildings by the
Company or such subsidiary, in each case except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries taken as a
whole, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(v) The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) .
(w) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the "1940
Act"), and is not subject to regulation as an investment company under
the 1940 Act. This transaction will not cause the Company to become an
investment company subject to registration under such Act.
(x) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that would not have a Material
Adverse Effect that is currently being contested in good faith or as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(y) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, have a Material
Adverse Effect, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(z) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters
pursuant to this Agreement or in connection with the payment of the
purchase price and delivery of the certificates for the Firm Securities
or the Option Securities shall be deemed to be a representation and
warranty by the Company to each Underwriter as to the matters covered
thereby.
3. Representations and Warranties of the Selling Securityholders.
--------------------------------------------------------------
Each Selling Securityholder represents and warrants to, and
agrees with, each of the several Underwriters that:
(a) Such Selling Securityholder has full power (corporate and
other) to enter into this Agreement and to sell, assign, transfer and
deliver to the Underwriters the Securities to be sold by such Selling
Securityholder hereunder in accordance with the terms of this
Agreement; the execution and delivery of this Agreement have been duly
authorized by all necessary corporate and other action of such Selling
Securityholder; and this Agreement has been duly executed and delivered
by such Selling Securityholder.
(b) Such Selling Securityholder has duly executed and delivered
a power of attorney and custody agreement (with respect to such Selling
Securityholder, the "Power-of-Attorney" and the "Custody Agreement",
respectively), each in the form heretofore delivered to the
Representatives, appointing Xxxx X. Xxxxxx, Xxxxxx X. Drum and P. Xxxxx
Xxxxxx, and each of them, as such Selling Securityholder's
attorney-in-fact (the "Attorney-in-Fact") with authority to execute,
deliver and perform this Agreement on behalf of such Selling
Securityholder and appointing Xxxxx Xxxxxx Shareholder Services as
custodian thereunder (the "Custodian"). Certificates in negotiable
form, endorsed in blank or accompanied by blank stock powers duly
executed, with signatures appropriately guaranteed, representing the
Securities to be sold by such Selling Securityholder hereunder have
been deposited with the Custodian pursuant to the Custody Agreement for
the purpose of delivery pursuant to this Agreement. Such Selling
Securityholder has full power (corporate and other) to enter into the
Custody Agreement and the Power-of-Attorney and to perform its
obligations under the Custody Agreement. The execution and delivery of
the Custody Agreement and the Power-of-Attorney have been duly
authorized by all necessary corporate and other action of such Selling
Securityholder; the Custody Agreement and the Power-of-Attorney have
been duly executed and delivered by such Selling Securityholder and,
assuming due authorization, execution and delivery by the Custodian,
are the legal, valid, binding and enforceable instruments of such
Selling Securityholder. Such Selling Securityholder agrees that each
of the Securities represented by the certificates on deposit with the
Custodian is subject to the interests of the Underwriters hereunder,
that the arrangements made for such custody, the appointment of the
Attorney-in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement, to agree on the
price at which the Securities (including such Selling Securityholder's
Securities) are to be sold to the Underwriters, and to carry out the
terms of this Agreement, are to that extent irrevocable and that the
obligations of such Selling Securityholder hereunder shall not be
terminated, except as provided in this Agreement or the Custody
Agreement, by any act of such Selling Securityholder, by operation of
law or otherwise, whether in the case of any individual Selling
Securityholder by the death or incapacity of such Selling
Securityholder, in the case of a trust or estate by the death of the
trustee or trustees or the executor or executors or the termination of
such trust or estate, or in the case of a corporate or partnership
Selling Securityholder by its liquidation or dissolution or by the
occurrence of any other event. If any individual Selling
Securityholder, trustee or executor should die or become incapacitated
or any such trust should be terminated, or if any corporate or
partnership Selling Securityholder shall liquidate or dissolve, or if
any other event should occur, before the delivery of such Securities
hereunder, the certificates for such Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the
respective terms and conditions of this Agreement as if such death,
incapacity, termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.
(c) Such Selling Securityholder has valid title to the
Securities to be sold by such Selling Securityholder hereunder and upon
sale and delivery of, and payment for, such Securities, as provided
herein, and the payment of the exercise price with respect to any
Securities issuable on exercise of the Warrants, the Underwriters will
receive valid title to such Securities free and clear of any adverse
claims, assuming that the Underwriters have acquired such Securities
for value, in good faith and without notice of any adverse claim.
(d) Such Selling Securityholder has not, directly or
indirectly, (i) taken any action designed to cause or result in, or
that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A)
sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to
any person any compensation for soliciting another to purchase any
other securities of the Company (except for the sale of Securities by
the Selling Securityholders under this Agreement).
(e) To the extent that any statements or omissions are made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such
Selling Securityholder specifically for use therein, such Preliminary
Prospectus did, and the Registration Statement and the Prospectus and
any amendments or supplements thereto, when they become effective or
are filed with the Commission, as the case may be, will, with respect
to such information, conform in all material respects to the
requirements of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and will, with respect to such
information, not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading. Such Selling
Securityholder has reviewed the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and
Selling Stockholders" is complete and accurate.
(f) Such Selling Securityholder has no actual knowledge of any
material adverse information specifically concerning the Company that
is not set forth in the Registration Statement or the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus) that is prompting such Selling Securityholder to sell
Securities pursuant hereto.
(g) The sale of the Securities to the Underwriters by such
Selling Securityholder pursuant to this Agreement, the compliance by
such Selling Securityholder with the other provisions of this
Agreement, the Custody Agreement and the consummation of the other
transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may
be required under state securities or blue sky laws and, if the
registration statement filed with respect to the Securities (as
amended) is not effective under the Act as of the time of execution
hereof, such as may be required (and shall be obtained as provided in
this Agreement) under the Act and the Exchange Act, or (ii) conflict
with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which such
Selling Securityholder or any of its subsidiaries is a party or by
which such Selling Securityholder or any of its subsidiaries or any of
such Selling Securityholder's properties are bound, or the charter
documents or by-laws of such Selling Securityholder or any of its
subsidiaries or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder or any of its
subsidiaries."
(h) The Selling Securityholders have not distributed and, prior
to the later of (i) the Closing Date and (ii) the completion of the
distribution of the shares, will not distribute any offering material
in connection with the offering and sale of the Securities other than
the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any, permitted by the Act.
4. Purchase, Sale and Delivery of the Securities. (a) On the basis
of the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company agrees
to issue and sell, and each of the Selling Securityholders, severally and not
jointly, agrees to sell, to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company
and the Selling Securityholders, at a purchase price of (i) $39.50 per share
of Common Stock to be sold and (ii) with respect to the Warrants to purchase
165,000 shares of Common Stock held by Remy Capital Partners III, L.P. to be
sold, $39.50 per share of Common Stock issuable upon exercise of the Warrants
less the exercise price of 1 43/48 per share, the number of Firm Securities
set forth opposite the name of such Underwriter in Schedule 2 hereto. One or
more certificates in definitive form for the Firm Securities that the several
Underwriters have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Representatives
request upon notice to the Company at least 48 hours prior to the Firm
Closing Date, shall be delivered by or on behalf of the Company and each of
the Selling Securityholders to the Representatives for the respective
accounts of the Underwriters, against payment by or on behalf of the
Underwriters of the purchase price therefor by wire transfer in same-day
funds (the "Wired Funds") to the account designated by the Company and each
of the Selling Securityholder. Such delivery of and payment for the Firm
Securities shall be made at the offices of Xxxxx & Xxxxx, L.L.P., Xxx Xxxxx
Xxxxx, 000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000 at 9:30 A.M., New York City time,
on September 6, 1997, or at such other place, time or date as the
Representatives and the Company may agree upon or as the Representatives may
determine pursuant to Section 11 hereof, such time and date of delivery
against payment being herein referred to as the "Firm Closing Date". The
Company and each of the Selling Securityholders will make such certificate or
certificates for the Firm Securities available for checking and packaging by
the Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at least
24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection
with the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company and Drum hereby grant to the several Underwriters an
option to purchase, severally and not jointly, the Option Securities to be
sold by them. The purchase price to be paid for any Option Securities shall
be the same price per share as the price per share for the Firm Securities
set forth above in paragraph (a) of this Section 4, plus if the purchase and
sale of any Option Securities takes place after the Firm Closing Date and
after the Firm Securities are trading "ex-dividend", an amount equal to the
dividend payable on such Option Securities. For purposes of covering any
over-allotments in connection with the distribution and sale of Option
Securities as contemplated by the Prospectus, Remy Investors and Consultants,
Incorporated and Xxxxxxx X. Xxxxx hereby grant to the several underwriters an
option to purchase, severally and not jointly, Warrants to purchase 165,000
and 30,000 shares of Common Stock, respectively, at an exercise price of $1
43/48 per share. The purchase price to be paid for such Warrants shall be at
a price per Warrant to purchase one share of Common Stock equal $39.50 per
share of Common Stock issuable upon exercise of the Warrants less the warrant
exercise price, plus, if the purchase and sale of any Option Securities takes
place after the Firm Closing Date and after the Firm Securities are trading
"ex-dividend", an amount equal to the dividend payable on such Option
Securities. The options granted hereby may be exercised as to all or any
part of the Option Securities, including for this purpose, the Warrants, from
time to time within 30 days after the date of the Prospectus (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the Option
Securities prior to the exercise of such options. The Representatives may
from time to time exercise the options granted hereby by giving notice in
writing or by telephone (confirmed in writing) to the Company and the
Additional Selling Securityholders as to the number of Option Securities
(including the number of Warrants pursuant to which Securities may be
issuable) as to which the several Underwriters are then exercising the
options and the date and time for delivery of and payment for such Option
Securities. The exercise of such options shall be effected on a pro rata
basis between the Company and the Additional Selling Securityholders. Any
such date of delivery shall be determined by the Representatives but shall
not be earlier than two business days or later than five business days after
such exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such other
time on such other date as the Representatives and the Company may agree upon
or as the Representatives may determine pursuant to Section 11 hereof, is
herein called the "Option Closing Date" with respect to such Option
Securities and Warrants. Upon the exercise of the options as provided
herein, the Company and the Additional Selling Securityholders shall become
obligated to sell to each of the Underwriters and, subject to the terms and
conditions set forth herein, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company and such
Additional Selling Securityholders, the same percentage of the total number
of the Option Securities (including for this purpose the number of Warrants
to purchase Securities) as to which the several Underwriters are then
exercising the options as such Underwriter is obligated to purchase of the
aggregate number of Firm Securities, as adjusted by the Representatives in
such manner as they deem advisable to avoid fractional Shares. If the
options are exercised as to all or a portion of the Option Securities, one or
more certificates in definitive form for such Option Securities, and payment
therefor shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section
4, except that reference therein to the Firm Securities and the Firm Closing
Date shall be deemed, for purposes of this paragraph (b), to refer to such
Option Securities and Option Closing Date, respectively. With respect to the
exercise of the options as to all or a portion of the Warrants to purchase
Option Securities, such Warrants shall be assigned to the Underwriters on the
same percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the options as such Underwriter is
obligated to purchase the aggregate number of Firm Securities, as adjusted by
the Representatives in such manner as they deem advisable to avoid fractional
Shares. The Company agrees to issue the shares of Common Stock subject to
such Warrants, upon payment by the Underwriters to the Company of the
exercise price with respect to such Warrants.
(c) The Company, each Selling Securityholder and each Additional
Selling Securityholder acknowledge that the wire transfer by or on behalf of
the Underwriters of the purchase price for any Common Stock or Warrants does
not constitute a closing of a purchase and sale of Common Stock or Warrants.
Only execution and delivery of a receipt for Common Stock or Warrants, as the
case may be, by the Underwriters indicates completion of the closing of a
purchase of Common Stock or Warrants as the case may be, from the Company and
each Selling Securityholder or Additional Selling Securityholder.
Furthermore, in the event that the Underwriters wire funds to the Company
prior to the completion of the closing of a purchase of Common Stock or
Warrants, as the case may be, the Company, each Selling Securityholder and
each Additional Selling Securityholder acknowledge that until the
Underwriters execute and deliver a receipt for Common Stock or Warrants as
the case may be, by facsimile or otherwise, the Company and each Selling
Securityholder will not be entitled to the wired funds and shall return the
wired funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Common Stock or Warrants is not completed and the wire funds are not returned
by the Company and each Selling Securityholder or Additional Selling
Securityholder to the Underwriters on the same day the wired funds were
received by the Company, the Company and each Selling Securityholder and
Additional Selling Securityholder agree to pay to the Underwriters in respect
of each day the wire funds are not returned by the Company or any Selling
Securityholder or Additional Selling Securityholder, as the case may be, in
same-day funds, interest on the amount of such wire funds in an amount
representing the Underwriters' cost of financing as reasonably determined by
Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Common Stock or
Warrants to be purchased by such Underwriter or Underwriters. No such
payment shall relieve such Underwriter or Underwriters from any of its or
their obligations hereunder.
5. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
6. Covenants of the Company. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the time of execution of
this Agreement, and any amendments thereto to become effective as
promptly as possible. If required, the Company will file the
Prospectus or any Term Sheet that constitutes a part thereof and any
amendment or supplement thereto with the Commission in the manner and
within the time period required by Rule 434 and 424(b) under the Act.
During any time when a prospectus relating to the Securities is
required to be delivered under the Act, the Company (i) will comply
with all requirements imposed upon it by the Act and the Exchange Act
and the respective rules and regulations of the Commission thereunder
to the extent necessary to permit the continuance of sales of or
dealings in the Securities in accordance with the provisions hereof and
of each of the Prospectus and any Integrated Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
Prospectus or the amendment referred to in the third sentence of
Section 2(a) hereof, any amendment or supplement to such prospectus or
any amendment to the Registration Statement or any Rule 462(b)
Registration Statement of which the Representatives shall not
previously have been advised and furnished with a copy for a reasonable
period of time prior to the proposed filing and as to which filing the
Representatives shall not have given their consent; provided, that the
foregoing provision of this clause (ii) does not prohibit the Company
from making filings with the Commission of statements and reports that
it reasonably believes are required to be made under the Exchange Act.
The Company will prepare and file with the Commission, in accordance
with the rules and regulations of the Commission, promptly upon request
by the Representatives or counsel for the Underwriters, any amendments
to the Registration Statement or amendments or supplements to the
Prospectus and any Integrated Prospectus that may be necessary or
advisable in connection with the distribution of the Securities by the
several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed
or declared effective or the Prospectus and any Integrated Prospectus
or any amendment or supplement thereto has been filed and will provide
evidence satisfactory to the Representatives of each such filing or
effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by
the Commission of any stop order suspending the effectiveness of the
Original Registration Statement or any Rule 462(b) Registration
Statement or any post-effective amendment thereto or any order directed
at any document incorporated by reference in the Registration Statement
or the Prospectus and any required Integrated Prospectus or any
amendment or supplement thereto or any order preventing or suspending
the use of any Preliminary Prospectus, or the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto, (ii) the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any
request made by the Commission for amending the Original Registration
Statement or any Rule 462(b) Registration Statement, for amending or
supplementing any Preliminary Prospectus the Prospectus and any
Integrated Prospectus or for additional information. The Company will
use its best efforts to prevent the issuance of any such stop order
and, if any such stop order is issued, to obtain the withdrawal thereof
as promptly as possible.
(c) The Company will arrange for the qualification of the
Securities for offering and sale under the securities or blue sky laws
of such jurisdictions as the Representatives may reasonably designate
and will continue such qualifications in effect for as long as may be
necessary to complete the distribution of the Securities, provided,
however, that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date
when a prospectus relating to the Securities is required to be
delivered under the Act or (ii) the Option Closing Date, any event
occurs as a result of which the Prospectus as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if for any other reason it is necessary at any time
to amend or supplement, the Prospectus to comply with the Act, the
Exchange Act or the respective rules or regulations of the Commission
thereunder, the Company will promptly notify the Representatives
thereof and, subject to Section 6(a) hereof, will prepare and file with
the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus
or any Integrated Prospectus that corrects such statement or omission
or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of
the registration statement originally filed with respect to the
Securities and each amendment thereto (in each case including exhibits
thereto) or any Rule 462(b) Registration Statement and (ii) so long as
a prospectus relating to the Securities is required to be delivered
under the Act, as many copies of each Preliminary Prospectus or the
Prospectus or any Integrated Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request; without limiting
the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 P.M., New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 10:00 A.M., New York City time on such date of
(B) 2:00 P.M., New York City time, on the business day following the
date of determination of the public offering price, if such
determination occurred after 10:00 A.M., New York City time, on such
date, will deliver to the Underwriters, without charge, as many copies
of the Prospectus and any amendment or supplement thereto as the
Representatives may reasonably request for purposes of confirming
orders that are expected to settle on the Firm Closing Date.
(f) The Company, as soon as practicable when required, will
make generally available to its securityholders and to the
Representatives a consolidated earnings statement of the Company and
its subsidiaries that satisfies the provisions of Section 11(a) of the
Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds to the Company from
the sale of the Securities as set forth under "Use of Proceeds" in the
Prospectus or any Integrated Prospectus.
(h) The Company will not, directly or indirectly, without the
prior written consent of Prudential Securities Incorporated, on behalf
of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any
shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of
90 days after the date hereof, except pursuant to this Agreement and
except for issuances pursuant to the exercise of warrants outstanding
on the date hereof and for the grant of options pursuant to the
Company's employee stock option plans existing on the date hereof and
the issuance of Common Stock upon the exercise of such options and
except for issuances of additional shares of Common Stock or rights to
acquire Common Stock in connection with acquisitions of businesses or
assets or other business combinations, provided that the Company will
not grant any demand registration rights covering any shares issued in
connection with any such acquisition or business combination that are
exercisable prior to 90 days following the date of this Agreement.
(i) The Company will not, directly or indirectly, (i) take any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) (A) sell, bid for,
purchase, or pay anyone any compensation for soliciting purchases of,
the Securities or (B) pay or agree to pay to any person any
compensation for soliciting another to purchase any other securities of
the Company (except for the sale of Securities by the Selling
Securityholders and Additional Selling Securityholders under this
Agreement and except in connection with acquisitions by the Company or
its subsidiaries of assets or businesses in the oilfield services
industry).
(j) The Company will obtain the agreements described in Section
9(h) hereof prior to the Firm Closing Date.
(k) If at any time during the 30-day period after the
Registration Statement becomes effective or the period prior to the
Option Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus and
any Integrated Prospectus), the Company will, after notice from you
advising the Company to the effect set forth above, consult with you
concerning the necessity and substance of a press release or other
public statement responding to or commenting on such rumor, publication
or event.
(l) If the Company elects to rely on Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance
with Rule 111 promulgated under the Act.
(m) The Company will use its best efforts to cause the
Securities to be duly authorized for listing by the American Stock
Exchange.
7. Covenants of Selling Securityholders and Additional Selling
-----------------------------------------------------------------
Securityholders.
----------------
(a) Each Selling Securityholder and Additional Selling
Securityholders will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase
or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any Securities legally or beneficially
owned by such Selling Securityholder or any securities convertible
into, or exchangeable or exercisable for, Securities for a period of 90
days after the date hereof except in connection with any transfer of
any Securities to a related party that agrees to be bound by this
restriction.
(b) Such Selling Securityholder will not, directly or
indirectly, (i) take any action designed to cause or result in, or that
has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or (ii)
sell, bid for, purchase, or pay anyone any compensation for soliciting
purchases of, the Securities (except for the sale of Securities by the
Selling Securityholders under this Agreement).
(c) Each Selling Securityholder agrees to deliver to you prior
to or at the Firm Closing Date a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulation in lieu thereof).
8. Expenses. The Company will pay all costs and expenses incident
to the performance of its obligations under this Agreement, whether or not
the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 13 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto,
any Rule 462(b) Registration Statement, any Preliminary Prospectus, the
Prospectus and any Integrated Prospectus and any amendment or supplement
thereto, this Agreement and any blue sky memoranda, (ii) all arrangements
relating to the delivery to the Underwriters of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, accountants and
any other experts or advisors retained by the Company, (iv) preparation,
issuance and delivery to the Underwriters of any certificates evidencing the
Securities, including transfer agent's and registrar's fees, (v) the
qualification of the Securities under state securities and blue sky laws,
including filing fees and reasonable fees and disbursements of counsel for
the Underwriters relating thereto, (vi) the filing fees of the Commission
(and the National Association of Securities Dealers, Inc.) relating to the
Securities, (vii) the listing of the Securities on the American Stock
Exchange, (viii) meetings with prospective investors in the Securities (other
than shall have been arranged by the Representatives or specifically approved
by the Representatives to be paid for by the Underwriters) and (ix)
advertising relating to the offering of the Securities (other than shall have
been specifically approved by the Representatives to be paid for by the
Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 9 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 13 hereof or because of any failure, refusal
or inability on the part of the Company to perform all obligations and
satisfy all conditions on its part to be performed or satisfied hereunder
other than by reason of a default by any of the Underwriters, the Company
will reimburse the Underwriters severally upon demand for all out-of-pocket
expenses (including fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions
covered by this Agreement.
9. Conditions of the Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company and each Selling Securityholder
contained herein as of the date hereof and as of the Firm Closing Date, as if
made on and as of the Firm Closing Date, to the accuracy of the statements of
the Company's and each Selling Securityholder's officers made pursuant to the
provisions hereof, to the performance by the Company and each Selling
Securityholder of its covenants and agreements hereunder and to the following
additional conditions:
(a) If the Original Registration Statement or any amendment
thereto filed prior to the Firm Closing Date has not been declared
effective as of the time of execution hereof, the Original Registration
Statement or such amendment and, if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective not later than the earlier of (i) 11:00 A.M., New
York time, on the date on which the amendment to the registration
statement originally filed with respect to the Securities or to the
Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been
filed with the Commission and (ii) the time confirmations are sent or
given as specified by Rule 462(b)(2), or with respect to the Original
Registration Statement, or such later time and date as shall have been
consented to by the Representatives; if required, the Prospectus or any
Term Sheet that constitutes a part thereof and any Integrated
Prospectus and any amendment or supplement thereto shall have been
filed with the Commission in the manner and within the time period
required by Rule 434 and 424(b) under the Act; no stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement or the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened or, to the knowledge of the Company or the
Representatives, shall be contemplated by the Commission; and the
Company shall have complied with any request of the Commission for
additional information (to be included in the Registration Statement,
or the Prospectus or any Integrated Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Fulbright & Xxxxxxxx L.L.P., counsel for the
Company, to the effect that:
(i) the Company and each of its subsidiaries listed in
Schedule 3 hereto (the "Subsidiaries") have been duly
incorporated and are validly existing as corporations in good
standing under the laws of their respective jurisdictions of
incorporation;
(ii) the Company and each of the Subsidiaries have
corporate power to own or lease their respective properties and
conduct their respective businesses as described in the
Registration Statement and the Prospectus or any Integrated
Prospectus, and the Company has corporate power to enter into
this Agreement and to carry out all the terms and provisions
hereof and thereof to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and, except as noted in such
opinion, to such counsel's knowledge, are owned beneficially by
the Company free and clear of any perfected security interest;
(iv) the Company has an authorized, capitalization as set
forth in the Prospectus; the Securities, other than the
Securities issuable on exercise of the Warrants, have been duly
authorized and validly issued and are fully paid and
nonassessable; the Firm Securities have been duly authorized by
all necessary corporate action of the Company and, when issued
and delivered to and paid for by the Underwriters pursuant to
this Agreement, will be validly issued, fully paid and
nonassessable; the Securities have been duly authorized for
listing, subject to official notice of issuance, on the American
Exchange; no holders of outstanding shares of capital stock of
the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Securities under the Delaware
General Corporation Law or the Company's Certificate of
Incorporation or by-laws; and to such counsel's knowledge, except
as disclosed in the Prospectus, no holders of securities of the
Company are entitled to have such securities registered under the
Registration Statement or to any preemptive or other rights to
subscribe for any of the Securities that are contained in any
agreements described in clause (viii) (B) of this Section 9(b);
(v) the Common Stock conforms in all material respects to
the description thereof set forth under the heading "Description
of Capital Stock" in the Prospectus;
(vi) the execution and delivery of this Agreement have
been duly authorized by all necessary corporate action of the
Company and this Agreement has been duly executed and delivered
by the Company;
(vii) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of the Subsidiaries is a party or to which the
property of the Company or any of the Subsidiaries is subject
that are required to be described in the Registration Statement
and any Integrated Prospectus and are not described therein; and,
to such counsel's knowledge, no contract or other document is
required to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required;
(viii) the issuance, offering and sale of the
Securities to the Underwriters by the Company pursuant to this
Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other
transactions herein contemplated do not: (A) require the
consent, approval, authorization, registration or qualification
of or with any governmental authority having jurisdiction over
the Company, except such as have been obtained or such as may be
required under state securities or blue sky laws; (B) conflict
with or result in a breach of the terms and provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, lease or other instrument relating to the borrowing of
money known to such counsel to which the Company or any
Subsidiary is bound or any other agreement identified to such
counsel by the Company as being material to the Company and the
Subsidiaries, taken as a whole; or (C) violate the certificate of
incorporation or by-laws of the Company or the charter documents
or by-laws of any of the Subsidiaries; or (D) violate any statute
or judgment, decree, order, rule or regulation of any court or
other governmental authority or arbiter known to such counsel to
be applicable to the Company or any of the Subsidiaries;
(ix) the Registration Statement has become effective under
the Act and, to such counsel's knowledge, and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto and no order directed at any
document incorporated by reference in the Registration Statement,
the Prospectus and any Integrated Prospectus or any amendment or
supplement thereto has been issued, and, to such counsel's
knowledge, no proceedings for that purpose have been instituted
or threatened or are contemplated by the Commission; and
(x) the Registration Statement and the Prospectus
(excluding the financial statements and other financial or
statistical information contained or incorporated by reference
therein and any information furnished by the Underwriters, the
Selling Securityholders or the Additional Selling
Securityholders, as to which such counsel need express no
opinion) comply or their face as to form in all material respects
with the applicable requirements of the Act and the respective
rules and regulations of the Commission thereunder.
Such counsel shall also state that it has participated in conferences with
officers and other representatives of the Company, the Underwriters, the
Selling Securityholders and the Additional Selling Securityholders, counsel
to the Underwriters and representatives of the independent public accountants
of the Company and with your representatives, at which conferences the
contents of the Registration Statement and the Prospectus were discussed.
Although such counsel need not pass upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and need not make
any representation that it has independently verified the accuracy,
completeness or fairness of such statements, such counsel shall state that on
the basis of the foregoing and the information disclosed to it (relying as to
materiality to a large extent upon the officers and other representatives of
the Company, the Underwriters, Selling Securityholders and Additional Selling
Securityholders), (i) no facts came to its attention that lead it to believe
that the Registration Statement, as of the time it was declared effective
under the Act, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order
to make the statements therein not misleading (it being understood that such
counsel need not express any view with respect to the financial statements,
including the notes and schedules thereto and the auditor's report thereon,
or any other information of a financial, numerical, statistical or accounting
nature set forth or referred to in the Registration Statement or any document
incorporated therein by reference or any exhibits thereto), and (ii) no facts
have come to such counsel's attention that lead it to believe that the
Prospectus, as of the time it was filed with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that such counsel need not express any view
with respect to the financial statements, including the notes and schedules
thereto and the auditor's report thereon, or any other information or a
financial, numerical, statistical or accounting nature set forth or referred
to in the Prospectus or any document incorporated therein by reference).
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in
this paragraph (b) shall include any amendment or supplement thereto at the
date of such opinion.
(c) The Selling Securityholders shall have furnished to the
Representatives the opinions of one or more counsel, reasonably
satisfactory to the Representatives, for the Selling Securityholders,
dated the Closing Date, to the effect that:
(i) each Selling Securityholder has full corporate and
other power to enter into this Agreement, the Custody Agreement
and the Power-of-Attorney and to sell, transfer and deliver the
Securities being sold by such Selling Securityholder hereunder in
the manner provided in this Agreement and to perform its
obligations under the Custody Agreement; the execution and
delivery of this Agreement, the Custody Agreement and the
Power-of-Attorney have been duly authorized by all necessary
corporate and other action of each Selling Securityholder; this
Agreement, the Custody Agreement and the Power-of-Attorney have
been duly executed and delivered by each Selling Securityholder;
assuming due authorization, execution and delivery by the
Custodian, the Custody Agreement and the Power-of-Attorney are
the legal, valid, binding and enforceable instruments of such
Selling Securityholder, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(ii) the delivery by each Selling Securityholder to the
several Underwriters of certificates for the Securities being
sold hereunder by such Selling Securityholder against payment
therefor as provided herein, will convey valid title to such
Securities to the several Underwriters, free and clear of all
security interests, liens, encumbrances, equities, claims or
other defects;
(iii) the sale of the Securities to the Underwriters by
such Selling Securityholder pursuant to this Agreement, the
compliance by such Selling Securityholder with the other
provisions of this Agreement the Custody Agreement and the
consummation of the other transactions herein contemplated do not
(i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such
as have been obtained and such as may be required under state
securities or blue sky laws, or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of the
charter documents or by-laws of such Selling Securityholder or
any of its subsidiaries or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to such Selling
Securityholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely, as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
References to the Registration Statement and the Prospectus in
this paragraph (c) shall include any amendment or supplement thereto at the
date of such opinion.
(d) The Representatives shall have received an opinion, dated
the Firm Closing Date, of Xxxxx & Xxxxx, L.L.P., Xxx Xxxxx Xxxxx, 000
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the
Registration Statement, the Prospectus or any Integrated Prospectus,
and such other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(e) The Representatives shall have received from Ernst & Young
LLP a letter or letters dated, respectively, the date hereof and the
Firm Closing Date, in form and substance satisfactory to the
Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of
the Act, and the Exchange Act and the applicable rules and
regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement, the Prospectus and any Integrated
Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act
and the related published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available
interim unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries, carrying out
certain specified procedures (which do not constitute an
examination made in accordance with generally accepted auditing
standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this
paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and any committees thereof
of the Company and each of its consolidated subsidiaries, and
inquiries of certain officials of the Company and its
consolidated subsidiaries who have responsibility for financial
and accounting matters, nothing came to their attention that
caused them to believe that:
(A) the unaudited condensed consolidated financial
statements of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration
Statement, the Prospectus and any Integrated Prospectus do
not comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange
Act and the related published rules and regulations
thereunder, or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement, the Prospectus and any Integrated
Prospectus; and
(B) at a specific date not more than five business
days prior to the date of such letter, there were any
changes in the capital stock or long-term debt of the
Company and its consolidated subsidiaries or any decreases
in net current assets or stockholders' equity of the
Company and its consolidated subsidiaries, in each case
compared with amounts shown on the June 30, 1997 unaudited
condensed consolidated balance sheet included in the
Registration Statement, the Prospectus and any Integrated
Prospectus, or for the period from July 1, 1997 to such
specified date there were any decreases, as compared with
the corresponding period in the preceding year and with a
period of corresponding length ending on June 30, 1997, in
net revenues, net income before income taxes or total or
per share amounts of net income of the Company and its
consolidated subsidiaries, except in all instances for
changes, decreases or increases set forth in such letter;
(iv) they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information that are derived from the
general accounting records of the Company and its consolidated
subsidiaries and are included or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated
Prospectus and have compared such amounts, percentages and
financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such
records and have found them to be in agreement, excluding any
questions of legal interpretation; and
(v) on the basis of a reading of the unaudited pro forma
condensed consolidated financial statements included in the
Registration Statement, the Prospectus and any Integrated
Prospectus, carrying out certain specified procedures that would
not necessarily reveal matters of significance with respect to
the comments set forth in this paragraph (v), inquiries of
certain officials of the Company and its consolidated
subsidiaries who have responsibility for financial and accounting
matters and proving the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts in the
unaudited pro forma consolidated condensed financial statements,
nothing came to their attention that caused them to believe that
the unaudited pro forma consolidated condensed financial
statements do not comply in form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
such statements.
In the event that the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letters shall be accompanied by
a written explanation of the Company as to the significance thereof, unless
the Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery
of the Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
References to the Registration Statement, the Prospectus and any
Integrated Prospectus in this paragraph (d) with respect to either letter
referred to above shall include any amendment or supplement thereto at the
date of such letter.
(f) The Representatives shall have received from Coopers &
Xxxxxxx, L.L.P. a letter or letters dated, respectively, the date
hereof and the Firm Closing Date, in form and substance satisfactory to
the Representatives, to the effect that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries and Xxxxxxx Drilling
Corporation within the meaning of the Act, and the Exchange Act
and the applicable rules and regulations thereunder;
(ii) in their opinion, the financial statements examined
by them and included or incorporated by reference in the
Registration Statement, the Prospectus and any Integrated
Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act
and the related published rules and regulations thereunder;
(g) The Representatives shall have received a certificate,
dated the Firm Closing Date, of the principal executive officer and the
principal financial or accounting officer of the Company to the effect
that:
(i) the representations and warranties of the Company in
this Agreement are true and correct as if made on and as of the
Firm Closing Date; the Registration Statement, as amended as of
the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein not misleading, and the Prospectus
and any Integrated Prospectus, as amended or supplemented as of
the Firm Closing Date, does not include any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the
Company has performed all covenants and agreements and satisfied
all conditions on its part to be performed or satisfied at or
prior to the Firm Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto
and no order directed at any document incorporated by reference
in the Registration Statement or the Prospectus or any amendment
or supplement thereto has been issued, and no proceedings for
that purpose have been instituted or threatened or, to the best
of the Company's knowledge, are contemplated by the Commission;
and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement, the
Prospectus and any Integrated Prospectus, neither the Company nor
any of its Subsidiaries has sustained any loss that is material
to the Company and its subsidiaries taken as a whole or
interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal
or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective
material adverse change, in the condition (financial or
otherwise), management, business prospects, net worth or results
of operations of the Company and its subsidiaries taken as a
whole, except in each case as described in or contemplated by the
Prospectus and any Integrated Prospectus.
(h) The Representatives shall have received from each person
who is a director or officer of the Company an agreement to the effect
that such person will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, offer of sale, contract of sale, pledge, grant of an
option to purchase or other sale or disposition) of any shares of
Common Stock or any securities convertible into, or exchangeable or
exercisable for, shares of Common Stock for a period of 90 days after
the date of this Agreement except in connection with any transfer of
any Securities to a related party that agrees to be bound by this
restriction.
(i) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further
certificates, documents or other information as they may have
reasonably requested from the Company.
(j) Prior to the commencement of the offering of the
Securities, the Securities shall have been approved for listing on the
Stock Exchange, subject to official notice of issuance.
All opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if
they are reasonably satisfactory in all material respects to the
Representatives and counsel for the Underwriters. The Company shall furnish
to the Representatives such conformed copies of such opinions, certificates,
letters and documents in such quantities as the Representatives and counsel
for the Underwriters shall reasonably request.
The respective obligations of the several Underwriters to
purchase and pay for any Option Securities shall be subject, in their
discretion, to each of the foregoing conditions to purchase the Firm
Securities, except that all references to the Firm Securities and the Firm
Closing Date shall be deemed to refer to such Option Securities and the
related Option Closing Date, respectively.
10. Indemnification and Contribution.
---------------------------------
(a) The Company and, subject to the provisions of Section 10(e), Drum
jointly and severally agree to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
or such controlling person may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus and any
Integrated Prospectus or any amendment or supplement thereto or (B) any
application or other document, or any amendment or supplement thereto,
executed by the Company or based upon written information furnished by
or on behalf of the Company filed in any jurisdiction in order to
qualify the Securities under the securities or blue sky laws thereof or
filed with the Commission or any securities association or securities
exchange (each an "Application");
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus the Prospectus and any Integrated Prospectus or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading; or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
such Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that the Company will
not be liable to any Underwriter or any person controlling such Underwriter
with respect to any such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Securities from such Underwriter but was not sent or
given a copy of the Prospectus (as amended or supplemented), other than the
documents incorporated by reference therein, at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by
the Act, unless such failure to deliver the Prospectus (as amended or
supplemented) was a result of noncompliance by the Company with Section 6(d)
and (a) of this Agreement. This indemnity agreement will be in addition to
any liability which the Company may otherwise have. The Company will not,
without the prior written consent of the Underwriter or Underwriters
purchasing, in the aggregate, more than fifty percent (50%) of the
Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not any such
Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party
to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(b) Each Selling Securityholder, severally and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement or any amendment thereto, each
Underwriter and each person who controls the Company or any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to
which the Company, any such director, officer, such Underwriter or any such
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any Integrated Prospectus or any amendment or supplement
thereto, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus or any amendment or supplement thereto, or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information furnished to the Company by such Selling
Securityholder for use therein. Subject to the limitations set forth in the
immediately preceding sentence, each Selling Securityholder, severally and
not jointly, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company, any such director, officer, such
Underwriter or any such controlling person in connection with investigating
or defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
any Selling Securityholder may otherwise have. Each Selling Securityholder
will not, without the prior written consent of the Underwriter or
Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not any such
Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party
to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Securityholder and each
Additional Selling Securityholder and each person, if any, who controls the
Company, such Selling Securityholder or such Additional Selling
Securityholder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer, Selling Securityholder, Additional
Selling Securityholder or controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any Integrated Prospectus or any
amendment or supplement thereto, or any Application or (ii) the omission or
the alleged omission to state therein a material fact required to be stated
in the Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein; and, subject to the limitation set forth immediately preceding this
clause, will reimburse, as incurred, any legal or other expenses reasonably
incurred by the Company or any such director, officer, Selling
Securityholder, Additional Selling Securityholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be
in addition to any liability which such Underwriter may otherwise have.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 10, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to the indemnified
party and/or other indemnified parties which are different from or additional
to those available to the indemnifying party and would make the
representation of all such parties inappropriate, the indemnifying party
shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified party or parties. After notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified party
under this Section 10 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that in connection with
such action the indemnifying party shall not be liable for the expenses of
more than one separate counsel (in addition to local counsel) in any one
action or separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations or circumstances, designated by
the Representatives in the case of paragraph (a) of this Section 10,
representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party does not promptly
retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(e) The indemnification obligations of Drum pursuant to Section 10(a)
are subject to the following provision: Drum shall not have any liability
under this Agreement in an amount exceeding the amount of cash received by
him upon the sale of his Common Stock. No Selling Securityholder or
Additional Selling Securityholder, as applicable, shall be liable to the
Underwriters for a breach of the representations in Section 3(f) for (i) in
the event of sales of Common Stock to the Underwriters, an amount exceeding
the amount of cash received by such Selling Securityholder or Additional
Selling Securityholder upon the sale of its Common Stock and (ii) in the
event of sales of Warrants to the Underwriters, an amount exceeding the
amount of cash received by such Additional Selling Securityholder upon the
sale of its Warrant plus the exercise price for such Warrant.
(f) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 10 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and
the indemnified party or parties on the other from the offering of the
Securities or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party or parties on the other in connection with the statements
or omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company and the Selling Securityholders on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total proceeds from the offering (before deducting expenses) received by the
Company and the Selling Securityholders bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault
of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Securityholders or the Underwriters, the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company, the Selling
Securityholders and the Underwriters agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to above in this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Underwriter
shall be obligated to make contributions hereunder that in the aggregate
exceed the total public offering price of the Securities purchased by such
Underwriter under this Agreement, less the aggregate amount of any damages
that such Underwriter has otherwise been required to pay in respect of the
same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
hereunder are several in proportion to their respective underwriting
obligations and not joint, and contributions among Underwriters shall be
governed by the provisions of the Prudential Securities Incorporated Master
Agreement Among Underwriters. For purposes of this paragraph (d), each
person, if any, who controls an Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement and each person,
if any, who controls the Company or any Selling Securityholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company or such Selling
Securityholder, as the case may be.
11. Default of Underwriters. If one or more Underwriters default in
their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter
or Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by
all of the Underwriters at such time hereunder, the other Underwriters may
make arrangements satisfactory to the Representatives for the purchase of
such Securities by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives), but if no such
arrangements are made by the Firm Closing Date or the related Option Closing
Date, as the case may be, the other Underwriters shall be obligated severally
in proportion to their respective commitments hereunder to purchase the Firm
Securities or Option Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of Securities that is more than
ten percent of the aggregate number of Firm Securities or Option Securities,
as the case may be, to be purchased by all of the Underwriters at such time
hereunder, and if arrangements satisfactory to the Representatives are not
made within 36 hours after such default for the purchase by other persons
(who may include one or more of the non-defaulting Underwriters, including
the Representatives) of the Securities with respect to which such default
occurs, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Company other than as provided in Section
12 hereof. In the event of any default by one or more Underwriters as
described in this Section 11, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may
be, established as provided in Section 4 hereof for not more than seven
business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 11. Nothing herein shall relieve any
defaulting Underwriter from liability for its default.
12. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers, the Selling Securityholders and the several Underwriters set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, and Selling Securityholder any Underwriter or any controlling
person referred to in Section 10 hereof and (ii) delivery of and payment for
the Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 8 and 10 hereof shall remain in full force
and effect, regardless of any termination or cancellation of this Agreement.
13. Termination. (a) This Agreement may be terminated with respect
to the Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date
or the related Option Closing Date, respectively, in the event that the
Company or any Selling Securityholder shall have failed, refused or been
unable to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Firm Closing Date or such Option Closing Date, respectively;
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including
without limitation a change in management or control of the Company),
in the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by
the Commission or the American Stock Exchange or trading in securities
generally on the New York or American Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on
either any such exchange;
(iii) a banking moratorium shall have been declared by New York
or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U. S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended as
of the date hereof.
(b) Termination of this Agreement pursuant to this Section 13 shall
be without liability of any party to any other party except as provided in
Section 12 hereof.
14. Information Supplied by Underwriters. The statements set forth
in the last paragraph on the front cover page and under the heading
"Underwriting" in any Preliminary Prospectus, the Prospectus or any
Integrated Prospectus (to the extent such statements relate to the
Underwriters) constitute the only information furnished by any Underwriter
through the Representatives to the Company for the purposes of Sections 2(b)
and 10 hereof. The Underwriters confirm that such statements (to such
extent) are correct.
15. Notices. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group, (facsimile: (000) 000-0000); and if sent to the Company,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to the Company at 00000 Xxxxxxxxxxx Xxxx, Xxxxx 000X,
Xxxxxxx, Xxxxx 00000, (facsimile: (000) 000-0000); and if to the Selling
Securityholders, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Selling Securityholders c/o
Xxxxxx X. Drum at 00000 Xxxxxxxxxxx Xxxx, Xxxxx 000X, Xxxxxxx, XX 00000,
(facsimile: (000) 000-0000).
16. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, the Selling
Securityholders the Additional Selling Securityholders and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person
except that (i) the indemnities of the Company contained in Section 10 of
this Agreement shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 8 of this Agreement shall also be for the benefit of the
Selling Securityholders, the Additional Selling Securityholders, directors of
the Company, the officers of the Company who have signed the Registration
Statement and any person or persons who control the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
18. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in
any state or federal court of competent jurisdiction in the State of New
York, and by execution and delivery of this Agreement, each Selling
Securityholder accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts and waives any defense of forum non conveniens and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this
Agreement. Each Selling Securityholder designates and appoints Xxxxxx X.
Drum and such other persons as may hereafter be selected by each Selling
Securityholder irrevocable agreeing in writing to so serve, as its agent to
receive on its behalf service of all process in any such proceedings in any
such court, such service being hereby acknowledged by the Selling Shareholder
to be effective and binding service in every respect. A copy of any such
process so served shall be mailed by registered mail to the Selling
Securityholder at its address provided in Section 15 hereof; provided,
however, that, unless otherwise provided by applicable law, any failure to
mail such copy shall not affect the validity of service of such process. If
any agent appointed by a Selling Shareholder refuses to accept service, such
Selling Securityholder hereby agrees that service of process sufficient for
personal jurisdiction in any action against each Selling Securityholder in
the State of New York may be made by registered or certified mail, return
receipt requested, to the Selling Shareholder at its address provided in
Section 15 hereof, and each Selling Securityholder hereby acknowledges that
such service shall be effective and binding in every respect. Nothing herein
shall affect the right to serve process in any other manner permitted by law
or shall limit the right of any Underwriter to bring proceedings against the
Selling Securityholder in the courts of any other jurisdiction.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute an agreement binding the
Company and each of the several Underwriters.
Very truly yours,
UTI ENERGY CORP.
By /s/ Xxxx X. Xxxxxx
-----------------------------
Name:
Title:
SELLING SECURITYHOLDERS
By /s/ Xxxx X. Xxxxxx
-----------------------------
Name:
Attorney-in-Fact for
Selling Securityholders
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXX BROTHERS INC.
XXXXXXXX XXXXXX REFSNES, INC.
XXXXXXX & COMPANY INTERNATIONAL
By PRUDENTIAL SECURITIES INCORPORATED
By /s/ Xxxx-Xxxxxx Canfin
--------------------------------
Xxxx-Xxxxxx Canfin
Managing Director
For itself and on behalf of the Representatives.
SCHEDULE 1-A
SELLING SECURITYHOLDERS
Number of
Firm Securities
Selling Securityholders: to be Sold
----------
Remy Capital Partners III, L.P................... 1,772,888
Remy Investors and Consultants, Incorporated..... ----
Xxxxxxx Drilling Corporation..................... 733,779
Shamrock Holdings of California, Inc............. 533,333
Xxx X. Xxxxxxx Family Foundation, Inc............ 200,000
The Xxx X. Xxxxxxx Trust dated September 9, 1986,
as Amended and Restated on May 11, 1994...... 400,000
Canpartners Investments IV, L.L.C................ 720,000
Four Flags Drilling Company...................... 60,000
Xxxx X. Xxxxxx................................... 31,800
Xxxxx X. Xxxxxx.................................. 30,000
Xxxx X. Xxxxxx................................... 14,400
Xxxx X. Xxxxxx................................... 28,800
Xxxxxxx X. Xxxxx................................. ----
Xxxxxx X. Drum................................... ---------
4,525,000
=========
SCHEDULE 1-B
ADDITIONAL SELLING SECURITYHOLDERS
Number of Option
Securities to be
sold if Maximum
Additional Selling Securityholders: Option Exercised
----------------
Remy Capital Partners III, L.P.................. 192,775
Remy Investors and Consultants, Incorporated.... 165,000
Xxxxxxx X. Xxxxx................................ 30,000
Xxxxxx X. Drum.................................. 112,500
-------
500,175
=======
SCHEDULE 2
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
------------
Prudential Securities Incorporated............................... 804,250
Xxxxxx Brothers Inc.............................................. 804,250
Xxxxxxxx Xxxxxx Refsnes, Inc..................................... 804,250
Xxxxxxx & Company International.................................. 804,250
Bear, Xxxxxxx & Co. Inc.......................................... 124,000
BT Xxxx Xxxxx Incorporated....................................... 124,000
Credit Suisse First Boston Corporation........................... 124,000
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.............. 124,000
Xxxxxxx, Sachs & Co.............................................. 124,000
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated................. 124,000
Xxxxxxxxx & Company, Inc......................................... 124,000
Lazard Freres & Co. LLC.......................................... 124,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated............... 124,000
X X Xxxxxx Securities Inc........................................ 124,000
Xxxxxx Xxxxxxx & Co. Incorporated................................ 124,000
Xxxxxxxxxxx & Co., Inc........................................... 124,000
PaineWebber Incorporated......................................... 124,000
Salomon Brothers Inc............................................. 124,000
SBC Warburg Dillon Read Inc...................................... 124,000
Xxxxxxxx & Co. Inc............................................... 124,000
Xxxxx Xxxxxx Inc................................................. 124,000
Advest, Inc...................................................... 62,000
Xxxxxxx, Xxxxxx & Co............................................. 62,000
Xxxxxx Xxxxxxxxxx Xxxxx Inc...................................... 62,000
XxXxxxxx & Company Securities, Inc............................... 62,000
Xxxxxx Xxxxxx & Company, Inc..................................... 62,000
Xxxxxx Xxxxxxx & Co.............................................. 62,000
Principal Financial Securities, Inc.............................. 62,000
Sutro & Co. Incorporated......................................... 62,000
Xxxxxx Xxxxxxx Incorporated...................................... 62,000
Xxxxxx X. Xxxx & Company......................................... 31,000
Xxxxx Xxxxxx & Co., Inc.......................................... 31,000
First Southwest Company.......................................... 31,000
Xxxx Xxxxxxxxx Xxxxxxxx & Co,.................................... 31,000
Xxxxxxx Rice & Company L.L.C..................................... 31,000
Pennsylvania Merchant Group Ltd.................................. 31,000
Southcoast Capital Corporation................................... 31,000
-------
.....Total ................................................... 6,100,000
=========
SCHEDULE 3
SUBSIDIARIES
Name Jurisdiction of
---- Incorporation
---------------
UTICO, Inc. Delaware
Triad Drilling Company Delaware
FWA Drilling Company, Inc. Delaware
International Petroleum Service Company Pennsylvania
Universal Well Services, Inc. Delaware
J.S.M. & Associates, Inc. Texas
