ALLIS-CHALMERS ENERGY INC. Common Stock UNDERWRITING AGREEMENT dated , 2006
, 2006
RBC Capital Markets Corporation
As Representative of the several Underwriters
Listed in Schedule A hereto c/o
As Representative of the several Underwriters
Listed in Schedule A hereto c/o
RBC Capital Markets Corporation
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
As more fully described in the Registration Statement (as defined below), the Company has
agreed to purchase all of the outstanding capital stock of DLS Drilling, Logistics & Services
Corporation (“DLS”), pursuant to a stock purchase agreement dated April 27, 2006. The
acquisition by the Company of all of the outstanding capital stock of
DLS, as described in the Registration Statement, is referred to herein as
the “Acquisition.” With respect to the representations, warranties and agreements made by
the Company in this Agreement concerning its subsidiaries, such representations, warranties and
agreements shall be deemed to include DLS. In connection with the Acquisition, the Company will
(i) offer and sell the Securities contemplated by this
Agreement; (ii) offer and sell the Notes pursuant to a purchase
agreement dated , 2006 between the Company, the guarantors and
the initial purchasers named therein; and (iii) enter into an amendment of its $25.0 million senior
secured credit facility (the “Bank Credit Facility”). These transactions (but not
including the offering of the Securities contemplated by this Agreement and the Registration Statement)
are collectively referred to herein as the “Transactions.”
Section 1. Representations and Warranties of the Company.
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The Company hereby represents and warrants to, and covenants with each Underwriter as follows:
Each preliminary prospectus and the Prospectus when filed complied in all material respects
with the Securities Act, and if filed by electronic transmission pursuant to XXXXX (except as may
be permitted by Regulation S-T under the Securities Act), was identical in content to the copy
thereof delivered to the Underwriters for use in connection with the offer and
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sale of the Shares, other than with respect to any artwork and graphics that were not filed. Each
of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective
amendment thereto, at the time it became effective and at the date hereof, complied and will comply
in all material respects with the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The Prospectus (including any
Prospectus wrapper), as amended or supplemented, as of its date, at the time of any filing pursuant
to Rule 424(b), at the Closing Date (as defined herein) and at any Subsequent Closing Date (as
defined herein) did not and will not contain 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. The representations and warranties set
forth in the two immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment
thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company in writing by the
Representative expressly for use therein, it being understood and agreed that the only such
information furnished by the Representative consists of the information described as such in
Section 8 hereof. There is no contract or other document required to be described in the
Prospectus or to be filed as an exhibit to the Registration Statement that has not been described
or filed as required.
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(i) The Underwriting Agreement. This Agreement has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company
in accordance with its terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights and remedies
of creditors or by general equitable principles.
(j) Authorization of the Transactions. The Company has or will have on or prior to the
Closing Date all requisite power and authority to consummate the Transactions to which it is a
party and to enter into all agreements related to the Transactions (collectively, the “Transaction
Documents”) to which it is a party. Each of the Transaction Documents has been or will have been
on or prior to the Closing Date duly authorized by the Company and, when executed and delivered by
the Company (assuming due authorization, execution and delivery by the other parties thereto)
constitute a legal, valid and binding agreement of the Company, enforceable
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against the Company, in accordance with its terms, except as such enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors generally or by general equitable principles.
(p) Preparation of the Financial Statements. The consolidated financial statements of the
Company filed with the Commission as a part of or incorporated by reference in the Registration
Statement and included or incorporated by reference in the Disclosure Package and the Prospectus
present fairly the consolidated financial position of the Company and its
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Subsidiaries
or of DLS, Specialty Rental Tools Inc., W.T. Enterprises Inc., Delta
Rental Service, Inc. and Capcoil Tubing Services, Inc., as the case
may be, as of and at the dates indicated and the results of their
respective operations and cash flows for
the periods specified. The supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated therein. Such
financial statements and any supporting schedules thereto comply as to form with the applicable
accounting requirements of the Securities Act and have been prepared in conformity with generally
accepted accounting principles, as applied in the United States, applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the related notes thereto.
The Registration Statement contains all financial statements or supporting schedules that are
required to be included or incorporated by reference therein. The financial data set forth in the
preliminary prospectus and the Prospectus under the captions “Prospectus Summary—Summary Historical
and Pro Forma Consolidated Financial Information”, “Selected Historical Consolidated Financial
Information” and “Capitalization” fairly present the information set forth therein on a basis
consistent with that of the audited financial statements contained in the Registration Statement.
The pro forma consolidated financial statements of the Company and its Subsidiaries and DLS
Drilling Logistics and Services Corporation and the related notes thereto included under the
captions “Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial Information”
and “Unaudited Pro Forma As Adjusted Consolidated Financial Information”, and elsewhere in the
preliminary prospectus and the Prospectus and in the Registration Statement or incorporated by
reference in the preliminary prospectus, the Prospectus and the Registration Statement, present
fairly the information contained therein, have been prepared in accordance with the Commission’s
rules and guidelines with respect to pro forma financial statements and have been properly
presented on the basis described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(r) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Disclosure Package and the
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Prospectus under the caption “Capitalization” (other than for subsequent issuances, if any,
pursuant to employee benefit plans described in the Disclosure Package and the Prospectus or upon
exercise of outstanding options or warrants described in the Disclosure Package and the Prospectus,
as the case may be). The Common Stock (including the Shares) conforms in all material respects to
the description thereof contained in the Disclosure Package and the Prospectus. All of the issued
and outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid
and nonassessable and have been issued in compliance with federal and state securities laws. None
of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities of the Company.
There are no authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable
or exercisable for, any capital stock of the Company or any of its Subsidiaries other than those
accurately described in the Disclosure Package and the Prospectus. The description of the
Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth or incorporated by reference in the Disclosure Package and the
Prospectus, accurately and fairly presents the information required to be shown with respect to
such plans, arrangements, options and rights.
(t) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required. Neither the Company nor any of its Subsidiaries is in violation of its charter, by-laws
or equivalent organizational documents, or is in default (or, with the giving of notice or lapse of
time, would be in default) (“Default”) under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound (including, without limitation,
the Company’s 9.0% Senior Notes due 2014 or the related indenture and the Company’s Amended and
Restated Credit Agreement dated as of January 18, 2006, among the Company, each lender from time
to time party thereto, and Royal Bank of Canada) or to which any of the property or assets of the
Company or any of its Subsidiaries is subject (each, an “Existing Instrument”), except for
such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change.
The Company’s execution, delivery and performance of this Agreement and consummation of the
transactions contemplated hereby, by the Disclosure Package and by the Prospectus (i) have been
duly authorized by all necessary corporate action and will not result in any violation of the
provisions of the charter, by-laws or equivalent organizational documents of the Company or any
Subsidiary, (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment
Triggering Event (as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its Subsidiaries
pursuant to, or require the consent of any other party to, any Existing Instrument, except for such
conflicts, breaches, Defaults, liens, charges or encumbrances as would not, individually or in the
aggregate, result in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to the Company or any
Subsidiary, except for such violations as would not, individually or in the aggregate, result in a
Material Adverse Change. No consent, approval, authorization or other order of, or registration or
filing with, any court or
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other governmental or regulatory authority or agency, is required for the Company’s execution,
delivery and performance of this Agreement and consummation of the transactions contemplated
hereby, by the Disclosure Package and by the Prospectus, except such as have been obtained or made
by the Company and are in full force and effect under the Securities Act, applicable state
securities or blue sky laws and except such as may be required by federal and state securities laws
or blue sky laws and from the National Association of Securities Dealers, Inc. (the
“NASD”). As used herein, a “Debt Repayment Triggering Event” means any event or
condition which gives, or with the giving of notice or lapse of time would give, the holder of any
note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its Subsidiaries.
(x) Title to Properties. Except as disclosed in the Disclosure Package and the Prospectus,
the Company and each of its Subsidiaries have good and marketable title to all the
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properties
and assets reflected as owned in the financial statements referred to
in Section 1(p)
above (or elsewhere in the Disclosure Package and the Prospectus), in each case free and clear of
any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except
(i) such as do not materially and adversely affect the value of such property and (ii) such as do
not materially interfere with the current or currently proposed use of such property by the Company
or such Subsidiary. The real property, improvements, equipment and personal property held under
lease by the Company or any Subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the current or currently
proposed use of such real property, improvements, equipment or personal property by the Company or
such Subsidiary.
(z) Company not an “Investment Company”. The Company has been advised of the rules and
requirements under the Investment Company Act of 1940, as amended (the “Investment Company
Act”). The Company is not, and after receipt of payment for the Shares and the application of
the proceeds thereof as contemplated under the caption “Use of Proceeds” in the preliminary
prospectus and the Prospectus will not be, an “investment company” within the meaning of the
Investment Company Act and the Company intends to conduct its business in a manner so that it will
not become subject to the Investment Company Act.
(bb) Payment of Dividends by Subsidiaries. No Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company or any other
Subsidiary, from making any other distribution on such Subsidiary’s capital stock, from repaying to
the Company or any other Subsidiary any loans or advances to such Subsidiary from
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the Company or any other Subsidiary or from transferring any of such Subsidiary’s property or
assets to the Company or any other Subsidiary of the Company, except as described in or
contemplated in the Disclosure Package and the Prospectus.
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(kk) ERISA Compliance. The Company and its Subsidiaries and any “employee benefit plan” (as
defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations
and published interpretations thereunder (collectively, “ERISA”)) established or maintained
by the Company, its Subsidiaries or their “ERISA Affiliates” (as
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defined below) are in compliance with ERISA, except for any such noncompliance as would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.
“ERISA Affiliate” means, with respect to the Company or a Subsidiary, any member of any
group of organizations described in Section 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder (the “Code”)
of which the Company or such Subsidiary is a member. No “reportable event” (as defined under
ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan”
established or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates. No
“employee benefit plan” (as defined in ERISA Section 3(3)) established or maintained by the
Company, its Subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were
terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA) that
could reasonably be expected to result in a Material Adverse Change. Neither the Company, its
Subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any
liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code that could reasonably
be expected to result in a Material Adverse Change. Each “employee benefit plan” established or
maintained by the Company, its Subsidiaries or any of their ERISA Affiliates that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by
action or failure to act, which would cause the loss of such qualification, that has given or would
give rise to any tax, penalty or other liability that could reasonably be expected to result in a
Material Adverse Change.
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Any certificate signed by an officer of the Company and delivered to the Representative or to
counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to
each Underwriter as to the matters set forth therein.
(b) The Closing Date. Delivery of certificates for the Firm Shares to be purchased by the
Underwriters and payment therefor shall be made at the offices of Shearman & Sterling LLP, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place as may be agreed to by the Company
and the Representative) at 9:00 a.m. New York time, on , or such other time and date not
later than 1:30 p.m. New York time, on , as the Representative shall designate by notice
to the Company (the time and date of such closing are called the “Closing Date”).
(c) The Optional Shares; the Subsequent Closing Date. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms but subject to the
conditions herein set forth, the Company hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 375,000 Optional Shares from the Company
at the purchase price per share to be paid by the Underwriters for the Firm Shares. The option
granted hereunder may be exercised at any time and from time to time upon notice by the
Representative to the Company, which notice may be given at any time within 30 days from the date
of this Agreement. Such notice shall set forth (i) the aggregate number of Optional Shares as to
which the Underwriters are exercising the option, (ii) the names and denominations in which the
certificates for the Optional Shares are to be registered and (iii) the time, date and place at
which such certificates will be delivered (which time and date may be simultaneous with, but not
earlier than, the Closing Date; and in such case the term “Closing Date” shall refer to the time
and date of delivery of certificates for the Firm Shares and the Optional Shares). Each time and
date of delivery, if subsequent to the Closing Date, is called a “Subsequent Closing Date”
and shall be determined by the Representative and shall not be earlier than three nor later than
five full business days after delivery of such notice of exercise. If any Optional Shares are to
be purchased, the Company agrees to sell each Underwriter the number of Optional Shares (subject to
such adjustments to eliminate fractional shares as the Representative may determine) that bears the
same proportion to the total number of Optional Shares to be purchased as the number set forth on
Schedule A opposite the name of each
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Underwriter bears to 375,000 and each Underwriter agrees, severally and not jointly, to
purchase the number of Optional Shares (subject to such adjustments to eliminate fractional shares
as the Representative may determine) that bears the same proportion to the total number of Optional
Shares to be purchased as the number of Firm Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Shares.
It is understood that the Representative has been authorized, for its own account and the
accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of
the purchase price for, the Firm Shares and any Optional Shares the Underwriters have agreed to
purchase. RBC Capital Markets Corporation, individually and not as the Representative of the
Underwriters, may (but shall not be obligated to) make payments for any Shares to be purchased by
any Underwriter whose funds shall not have been received by RBC Capital Markets Corporation by the
Closing Date or any Subsequent Closing Date, as the case may be, for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Section 3. Covenants of the Company. The Company covenants and agrees with each
Underwriter as follows:
(a) Representative’s Review of Proposed Amendments and Supplements. During the period
beginning on the Applicable Time and ending on the later of the Closing Date or such date, as in
the opinion of counsel for the Underwriters, the Prospectus is no longer required by law to be
delivered in connection with sales by an Underwriter or dealer, including in circumstances where
such requirement may be satisfied pursuant to Rule 172 (the “Prospectus Delivery Period”),
prior to amending or supplementing the Registration Statement, the Disclosure Package or the
Prospectus, subject to Section 3(e), the Company shall furnish to the Representative for review a
copy of each such proposed amendment or supplement, and the
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Company shall not file or use any such proposed amendment or supplement to which the
Representative reasonably objects.
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(subject to Sections 3(a) and 3(e) hereof), file with the Commission (and use its best efforts
to have any amendment to the Registration Statement or any new registration statement to be
declared effective) and furnish at its own expense to the Underwriters and to dealers, amendments
or supplements to the Registration Statement, the Disclosure Package or the Prospectus, or any new
registration statement, necessary in order to make the statements in the Disclosure Package or the
Prospectus as so amended or supplemented, in the light of the circumstances under which they were
made or then prevailing, as the case may be, not misleading or so that the Registration Statement,
the Disclosure Package or the Prospectus, as amended or supplemented, will comply with applicable
law.
(h) Blue Sky Compliance. The Company shall cooperate with the Representative and counsel for
the Underwriters to qualify or register the Shares for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws or Canadian provincial Securities laws of
those jurisdictions designated by the Representative, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as required for the
distribution of the Shares. The Company shall not be required to qualify as a foreign corporation
or to take any action that would subject it to general service of process in any such jurisdiction
where it is not presently qualified or where it would be subject to taxation as a foreign
corporation, other than those arising out of the offering or sale of the Shares in any
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jurisdiction where it is not now so subject. The Company will advise the Representative
promptly of the suspension of the qualification or registration of (or any such exemption relating
to) the Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its commercially reasonable efforts
to obtain the withdrawal thereof at the earliest possible moment.
(n) Agreement Not to Offer or Sell Additional Shares. During the period commencing on the
date hereof and ending on the 90th day following the date of the Prospectus, the Company will not,
without the prior written consent of the Representative (which consent may be withheld at the sole
discretion of the Representative), directly or indirectly, sell, offer, contract or grant any
option to sell, pledge, transfer or establish an open “put equivalent position” or liquidate or
decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act,
or otherwise dispose of or transfer (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition of), or announce the offering of, or file any
registration statement under the Securities Act in respect of, any shares of Common Stock, options
or warrants to acquire shares of the Common Stock or securities exchangeable or exercisable for or
convertible into shares of Common Stock (other than as contemplated by this Agreement with respect
to the Shares); provided, however, that the Company may (i) issue shares of its Common Stock or
options to purchase its Common Stock, or Common Stock upon exercise of options, pursuant to any
stock option, stock bonus or other stock plan or arrangement described in the Prospectus, but only
if the holders of such shares, options, or shares issued upon exercise of such options, agree in
writing not to sell, offer, dispose of or otherwise transfer any such shares or options during such
90-day period without the prior written consent of the Representative (which consent may be
withheld at the sole discretion of
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the Representative). Notwithstanding the foregoing, if (x) during the last 17 days of the
90-day restricted period the Company issues an earnings release or material news or a material
event relating to the Company occurs, or (y) prior to the
expiration of the 90-day restricted
period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, the restrictions imposed in this clause shall
continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event; provided, however, that
such restrictions shall not be so extended solely by virtue of the publishing or distribution by
any Underwriter of any research regarding any earnings release, material news or a material event,
if such research report complies with Rule 139 of the Securities Act and the Common Stock is
“actively traded,” as defined in Rule 101(c)(1) of Regulation M under the Exchange Act. The
Company will provide the Representative and any co-managers and each individual subject to the
restricted period pursuant to the lockup letters described in Section 5(h) with prior notice of any
such announcement that gives rise to an extension of the restricted period and (ii) file a
registration statement to register for resale the shares of Common Stock issued to the owners of
DLS Drilling Logistics and Services Corporation as described in the Disclosure Package and the
Prospectus.
(r) Investment Limitation. The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as would require
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the Company or any of its Subsidiaries to register as an investment company under the
Investment Company Act.
The Representative, on behalf of the several Underwriters, may, in its sole discretion, waive
in writing the performance by the Company of any one or more of the foregoing covenants or extend
the time for their performance. Notwithstanding the foregoing, the Representative, for the benefit
of each of the other Underwriters, agrees not to consent to any action proposed to be taken by the
Company or any other holder of the Company’s securities that would otherwise be prohibited by, or
to waive compliance by the Company or any such other security holder with the provisions of,
Section 3(n) above or any lock-up agreement delivered pursuant to Section 5(h) below without giving
each of the other Underwriters at least 17 days’ prior notice (or such shorter notice as each of
the other Underwriters may deem acceptable to permit compliance with applicable provisions of NASD
Conduct Rule 2711(f) restricting publication and distribution of research and public appearances by
research analysts before and after the expiration, waiver or termination of a lock-up agreement).
Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all expenses incident
to the issuance and delivery of the Shares (including all printing and engraving costs), (ii) all
fees and expenses of the registrar and transfer agent of the Common Stock, (iii) all necessary
issue, transfer and other stamp taxes in connection with the issuance and sale of the Shares to the
Underwriters, (iv) all fees and expenses of the Company’s counsel, independent public or certified
public accountants and other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration Statement (including
financial statements, exhibits, schedules, consents and certificates of experts), each Issuer Free
Writing Prospectus, each preliminary prospectus and the Prospectus, and all amendments and
supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and expenses
incurred by the Company or the Underwriters in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part of the Shares for
offer and sale under the state securities or blue sky laws or the provincial securities laws of
Canada, and, if requested by the Representative, preparing and printing a “Blue Sky Survey” or
memorandum, and any supplements thereto, advising the Underwriters of such qualifications,
registrations and exemptions, (vii) the filing fees incident to, and the reasonable fees and
expenses of counsel for the Underwriters in connection with, the NASD’s review and
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approval of the Underwriters’ participation in the offering and distribution of the Shares,
(viii) the fees and expenses associated with listing of the Shares on the American Stock Exchange,
(ix) all transportation and other expenses incurred in connection with presentations to prospective
purchasers of the Shares, except that the Company and the Underwriters will each pay 50% of the
cost of privately chartered airplanes used for such purposes and (x) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement. Except as provided in
this Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own
expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Shares as provided herein on the Closing Date
and, with respect to the Optional Shares, any Subsequent Closing Date, shall be subject to the
accuracy in all material respects of the representations and warranties on the part of the Company
set forth in Section 1 hereof that are not qualified by materiality as of the date hereof and as of
the Closing Date as though then made and, with respect to the Optional Shares, as of any Subsequent
Closing Date as though then made, to the accuracy of the representations and warranties on the part
of the Company set forth in Section 1 hereof that are qualified by materiality as of the date
hereof and as of the Closing Date as though then made and, with respect to the Optional Shares, as
of any Subsequent Closing Date as though then made, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the timely performance by
the Company of its covenants and other obligations hereunder, and to each of the following
additional conditions:
(i) the Company shall have filed the Prospectus with the Commission (including the
information required by Rule 430A under the Securities Act) in the manner and within the
time period required by Rule 424(b) under the Securities Act; or the Company shall have
filed a post-effective amendment to the Registration Statement containing the information
required by such Rule 430A, and such post-effective amendment shall have become effective;
(ii) all material required to be filed by the Company pursuant to Rule 433(d) under the
Securities Act shall have been filed with the Commission within the applicable time periods
prescribed for such filings under such Rule 433;
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(iii) no stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and no
proceedings for such purpose shall have been instituted or threatened by the Commission; and
(iv) the NASD shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) there shall not have occurred any Material Adverse Change; and
(ii) there shall not have occurred any downgrading, nor shall any notice have been
given of any intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded any
securities of the Company or any of its subsidiaries by any “nationally recognized
statistical rating organization” as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act.
(i) for the period from and after the date of this Agreement and prior to such Closing
Date, there has not occurred any Material Adverse Change;
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(ii) the representations, warranties and covenants of the Company set forth in Section
1 of this Agreement not qualified by materiality are true and correct in all material
respects and those representations, warranties and covenants of the Company set forth in
Section 1 of this Agreement qualified by materiality are true and correct on and as of the
Closing Date with the same force and effect as though expressly made on and as of such
Closing Date; and
(iii) the Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such Closing
Date.
If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representative by notice to the Company at any
time on or prior to the Closing Date and, with respect to the Optional Shares, at any time prior to
the applicable Subsequent Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at
all times be effective and shall survive such termination.
Section 6. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated
by the Representative pursuant to Section 5, Section 7, or Section 11, or if the sale to the
Underwriters of the Shares on the Closing Date is not consummated because of any refusal,
22
inability or failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representative and the other
Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves),
severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by
the Representative and the Underwriters in connection with the proposed purchase and the offering
and sale of the Shares, including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, facsimile and telephone charges.
Section 7. Effectiveness of this Agreement. This Agreement shall not become
effective until the later of (i) the execution of this Agreement by the parties hereto and (ii)
notification by the Commission to the Company and the Representative of the effectiveness of the
Registration Statement under the Securities Act.
Prior to such effectiveness, this Agreement may be terminated by any party by notice to each
of the other parties hereto, and any such termination shall be without liability on the part of (a)
the Company to any Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representative and the Underwriters pursuant to Sections 4 and 6 hereof or (b) of
any Underwriter to the Company.
Section 8. Indemnification.
(a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and
hold harmless each Underwriter, its directors, officers, employees and agents and each person, if
any, who controls any Underwriter within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or
such officer, employee or controlling person may become subject, under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with the written consent
of the Company), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based (i) upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or any amendment
thereto, or the omission or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading; or (ii) upon any untrue
statement or alleged untrue statement of a material fact contained in any Issuer Free Writing
Prospectus, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
and to reimburse each Underwriter, its officers, directors, employees, agents and each such
controlling person for any and all expenses (including the fees and disbursements of counsel chosen
by the Representative) as such expenses are reasonably incurred by such Underwriter or its
officers, directors, employees, agents or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent, arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written
23
information furnished to the Company by the Representative expressly for use in the
Registration Statement, any Issuer Free Writing Prospectus, any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Company may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the
failure to so notify the indemnifying party (i) will not relieve it from liability under paragraph
(a) or (b) above unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b) above. In case
any such action is brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties
24
similarly notified, by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however, 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 a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, which such approval shall not be unreasonably withheld, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other expenses 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
preceding sentence (it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (other than local counsel), reasonably approved
by the indemnifying party (or by the Representative in the case of Section 8(b)), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the indemnified party within a
reasonable time after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
Section 9. Contribution. If the indemnification provided for in Section 8 is for
any reason unavailable to or otherwise insufficient to hold harmless an indemnified party in
respect
25
of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified
party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on the one hand, and
the Underwriters, on the other hand, in connection with the statements or omissions or inaccuracies
in the representations and warranties herein which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Shares pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the Shares pursuant to
this Agreement (before deducting expenses) received by the Company, and the total underwriting
discount received by the Underwriters, in each case as set forth on the front cover page of the
Prospectus bear to the aggregate initial public offering price of the Shares as set forth on such
cover. The relative fault of the Company, on the one hand, and the Underwriters, on the other
hand, shall be determined by reference to, among other things, whether any such untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a material fact or any
such inaccurate or alleged inaccurate representation or warranty relates to information supplied by
the Company, on the one hand, or the Underwriters, on the other hand, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such statement or
omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the underwriting commissions received by such Underwriter in
connection with the Shares underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters’ obligations to contribute pursuant to this Section 9 are several, and not joint,
in proportion to their respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each director, officer, employee and agent of an
Underwriter and each person, if any, who controls an Underwriter within the meaning of the
Securities Act and 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
26
Company within the meaning of the Securities Act and the Exchange Act shall have the same
rights to contribution as the Company.
Section 10. Default of One or More of the Several Underwriters. If, on the Closing
Date or a Subsequent Closing Date, as the case may be, any one or more of the several Underwriters
shall fail or refuse to purchase Shares that it or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase does not exceed 10% of the aggregate number of the Shares to be
purchased on such date, the other Underwriters shall be obligated, severally, in the proportions
that the number of Firm Shares set forth opposite their respective names on Schedule A bears to the
aggregate number of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as may be specified by the Representative with the
consent of the non-defaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such date. If, on the
Closing Date or a Subsequent Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Shares and the aggregate number of Shares with respect to which
such default occurs exceeds 10% of the aggregate number of Shares to be purchased on such date, and
arrangements satisfactory to the Representative and the Company for the purchase of such Shares are
not made within 48 hours after such default, this Agreement shall terminate without liability of
any party to any other party, except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In any such case
either the Representative or the Company shall have the right to postpone the Closing Date or a
Subsequent Closing Date, as the case may be, but in no event for longer than seven days in order
that the required changes, if any, to the Registration Statement and the Prospectus or any other
documents or arrangements may be effected.
As used in this Agreement, the term “Underwriter” shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 10. Any action taken under this
Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
Section 11. Termination of this Agreement. Prior to the Closing Date, this
Agreement may be terminated by the Representative by notice given to the Company if at any time:
(i) trading or quotation in any of the Company’s securities shall have been suspended or limited by
the Commission or by the American Stock Exchange, or trading in securities generally on the
American Stock Exchange, the Nasdaq Stock Market or the New York Stock Exchange shall have been
suspended or limited, or minimum or maximum prices shall have been generally established on any of
such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have
been declared by any of federal or New York authorities; (iii) there has been a material disruption
in commercial banking or securities settlement, payment or clearance services in the United States;
(iv) there shall have occurred any outbreak or escalation of national or international hostilities
or any crisis or calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial change in United
States’ or international political, financial or economic conditions, as in the judgment of the
Representative is material and adverse and makes it impracticable to market the Shares in the
manner and on the terms described in the Prospectus or to enforce contracts for the sale of
securities; (v) in the reasonable judgment of the
27
Representative there shall have occurred any Material Adverse Change; or (vi) the Company
shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representative would reasonably be expected to result in a
Material Adverse Change. Any termination pursuant to this Section 11 shall be without liability on
the part of (i) the Company to any Underwriter, except that the Company shall be obligated to
reimburse the expenses of the Representative and the Underwriters pursuant to Sections 4 and 6
hereof, (ii) any Underwriter to the Company or (iii) any party hereto to any other party except
that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive
such termination.
Section 12. No Advisory or Fiduciary Responsibility. The Company acknowledges and
agrees that: (i) the purchase and sale of the Shares pursuant to this Agreement, including the
determination of the public offering price of the Shares and any related discounts and commissions,
is an arm’s-length commercial transaction between the Company, on the one hand, and the several
Underwriters, on the other hand, and the Company is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions contemplated by this
Agreement; (ii) in connection with each transaction contemplated hereby and the process leading to
such transaction each Underwriter is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary of the Company or its affiliates, stockholders, creditors or
employees or any other party; (iii) no Underwriter has assumed or will assume an advisory, agency
or fiduciary responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has
advised or is currently advising the Company on other matters) and no Underwriter has any
obligation to the Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement; (iv) the several Underwriters and their respective
affiliates may be engaged in a broad range of transactions that involve interests that differ from
those of the Company and that the several Underwriters have no obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Underwriters
have not provided any legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company and the several Underwriters, or any of them, with respect to the subject
matter hereof. The Company hereby waives and releases, to the fullest extent permitted by law, any
claims that the Company may have against the several Underwriters with respect to any breach or
alleged breach of agency or fiduciary duty.
Section 13. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the Company, of its
officers and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any (i) investigation made by or on behalf of any
Underwriter, the officers or employees of any Underwriter, or any person controlling the
Underwriter, the Company, the officers or employees of the Company, or any person controlling the
Company, as the case may be, or (ii) acceptance of the Shares and payment for them hereunder, and
will survive delivery of and payment for the Shares sold hereunder and any termination of this
Agreement.
28
Section 14. Notices. All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:
If to the Representative:
RBC Capital Markets Corporation
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxx
If to the Company:
Xxxxx-Xxxxxxxx Energy Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Pound III, Esq.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Pound III, Esq.
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxx LLP
000 Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
000 Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Any party hereto may change the address for receipt of communications by giving written notice
to the others in accordance with this Section 14.
Section 15. Successors and Assigns. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters pursuant to Section 10
hereof, and to the benefit of (i) the Company, its directors, any person who controls the Company
within the meaning of the Securities Act and the Exchange Act and any officer of the Company who
signs the Registration Statement, (ii) the Underwriters, the officers, directors, employees and
agents of the Underwriters, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act, and (iii) the respective successors and assigns
of any of the above, all as and to the extent provided in this Agreement, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term “successors and
assigns” shall not include a purchaser of any of the Shares from the Underwriters merely because of
such purchase.
Section 16. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity or enforceability
of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed
to
29
be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
Section 17. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 18. General Provisions. This Agreement constitutes the entire agreement of
the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. The section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including,
without limitation, the indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties hereto further
acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in light of
the ability of the parties to investigate the Company, its affairs and its business in order to
assure that adequate disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.
30
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
Very truly yours, XXXXX-XXXXXXXX ENERGY INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representative as
of the date first above written.
RBC CAPITAL MARKETS CORPORATION
Acting as Representative of the several
Underwriters named in the attached
Schedule A.
Underwriters named in the attached
Schedule A.
By: |
||||
Title: |
31
SCHEDULE A
Number of Firm Shares to | ||||
Underwriters | be Purchased | |||
RBC Capital Markets Corporation |
||||
X.X. Xxxxxxx & Sons, Inc. |
||||
Xxxxxxx, Xxxx & Company L.L.C |
||||
Total |
Sch. A-1
SCHEDULE B
Schedule of Free Writing Prospectuses included in the Disclosure Package
[TO COME]
Sch B
SCHEDULE C
Securityholder Parties to Lock-Up Agreements
[TO COME]
Sch C
SCHEDULE
D
Name of Accountants | Name of Entity | |
UHY Xxxx Frankfort Xxxxx & Xxxx CPAs, LLP | Xxxxx-Xxxxxxxx Energy Inc.
Specialty Rental Tools, Inc. |
|
Xxxxxx, Xxxxxx and Banks, LLP | Xxxxx-Xxxxxxxx Energy Inc. | |
Accounting & Consulting Group, LLP | W. T. Enterprises, Inc. | |
Xxxxxx, Moore, Dehart, Xxxxxx & Xxxxxxxxxx, LLC | Delta Rental Service, Inc. | |
Xxxxxx Xxxxxxx & Co., PC | Capcoil Tubing Services, Inc. | |
Xxxxxxx (la firma argentina miembro de KPMG International, una cooperativa suiza) | DLS Drilling, Logistics & Services Corporation |
EXHIBIT A
[Form of Opinion of Counsel for the Company]
[TO COME]
Exh. A-1
EXHIBIT B
[Date]
RBC Capital Markets Corporation
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the Several Underwriters
Re: Xxxxx-Xxxxxxxx Energy Inc. (the “Company”)
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of Common Stock of
the Company (“Common Stock”) or securities convertible into or exchangeable or
exercisable for Common Stock. The Company proposes to carry out a public offering of Common
Stock (the “Offering”) for which you will act as the representative (the
“Representative”) of the syndicate of underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company. The undersigned
acknowledges that you are relying on the representations and agreements of the undersigned
contained in this letter in carrying out the Offering and in entering into underwriting
arrangements with the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will
not, (and will cause any spouse or immediate family member of the spouse or the undersigned
living in the undersigned’s household not to), without your prior written consent (which consent
may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale), pledge, transfer, establish an
open “put equivalent position” or liquidate or decrease a “call equivalent position” within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise
dispose of or transfer (or enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition of) including the filing (or participation in the
filing of) of a registration statement with the Shares and Exchange Commission in respect of,
any shares of Common Stock, options or warrants to
Exh. B-1
acquire shares of Common Stock, or securities exchangeable or exercisable for or
convertible into shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by
the undersigned (or such spouse or family member), or publicly announce an intention to do any
of the foregoing, for a period commencing on the date hereof and continuing through the close of
trading on the date 90 days after the date of the Prospectus (the “Lock-Up Period”).
In addition, the undersigned agrees that, without your prior written consent, it will not,
during the Lock-Up Period, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
If (i) the Company issues an earnings release or material news, or a material event
relating to the Company occurs, during the last 17 days of the lock-up period, or (ii) prior to
the expiration of the lock-up period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the lock-up period, the
restrictions imposed by this agreement shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the occurrence of the
material news or material event, unless you waive, in writing, such extension; provided,
however, that such restrictions shall not be so extended solely by virtue of the publishing or
distribution by any Underwriter of any research regarding any earnings release, material news or
a material event, if such research report complies with Rule 139 of the Securities Act and the
Common Stock is “actively traded,” as defined in Rule 101(c)(1) of Regulation M under the
Exchange Act. The undersigned hereby acknowledges that the Company has agreed in the
Underwriting Agreement to provide written notice of any event that would result in an extension
of the Lock-Up Period pursuant to the previous paragraph to the undersigned (in accordance with
Section 14 of the Underwriting Agreement) and agrees that any such notice properly delivered
will be deemed to have given to, and received by, the undersigned. The undersigned hereby
further agrees that, prior to engaging in any transaction or taking any other action that is
subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up
Agreement to and including the 34th day following the expiration of the initial Lock-Up Period,
it will give notice thereof to the Company and will not consummate such transaction or take any
such action unless it has received written confirmation from the Company that the Lock-Up Period
(as such may have been extended pursuant to the previous paragraph) has expired. The
undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration rights relating
to registration under the Securities Act of any Common Stock owned either of record or
beneficially by the undersigned, including any rights to receive notice of the Offering.
Exh. B-2
This agreement is irrevocable and will be binding on the undersigned and the respective
successors, heirs, personal representatives, and assigns of the undersigned.
By: | ||||||
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf of
an entity) |
Exh. B-3
ANNEX A
SUBSIDIARIES OF THE COMPANY
Name | State of Organization | |
AirComp LLC
|
Delaware | |
Mountain Compressed Air Inc.
|
Texas | |
Strata Directional Technology, Inc.
|
Texas | |
Xxxxx-Xxxxxxxx Tubular Services, Inc.
|
Texas | |
Xxxxx-Xxxxxxxx Rental Tools, Inc.
|
Texas | |
Xxxxx-Xxxxxxxx Production Services, Inc.
|
Texas | |
OilQuip Rentals, Inc.
|
Delaware | |
Target Energy Inc.
|
Delaware | |
Xxxxx-Xxxxxxxx Management LP
|
Texas | |
Xxxxx-Xxxxxxxx LP, LLC
|
Delaware | |
Allis-Xxxxxxxx XX, LLC
|
Delaware | |
Xxxxxx Oil Tool Services, Inc.
|
Louisiana |
Annex A-1