PURCHASE AGREEMENT
This Purchase Agreement (the "Agreement") is made among Xxxxx-Xxxx
Group LLC, ZPG Securities, L.L.C. and DFG Corporation (each a "Purchaser") and
Key Energy Services, Inc., a Maryland corporation (the "Company").
1. PURCHASE COMMITMENT
1.1 THE COMMITMENT. Upon the terms and subject to the conditions set
forth herein, the Purchasers hereby agree and commit, subject to the delivery of
a Final Prospectus (defined below), to purchase (the "Commitment") from the
Company $10 million of the Company's common stock, par value $.10 per share (the
"Common Stock"), to be offered pursuant to a prospectus (the "Prospectus")
contained in the Company's registration statement, including the documents
incorporated therein by reference, (the "Registration Statement") on Form S-3
(No. 333-67655) that has been declared effective under the Securities Act of
1933, as amended (the "Securities Act"), as supplemented by a prospectus
supplement to be filed with the Securities and Exchange Commission (the "SEC")
(such Prospectus, as supplemented, the "Final Prospectus"). The purchase price
per share of the Common Stock purchased hereunder shall be the purchase price
paid by the underwriters (the "Underwriters") in the Company's public offering
(the "Public Offering") of Common Stock that is being conducted simultaneously
with the offering and sale of the Common Stock being sold pursuant to this
Agreement. The Common Stock being sold in the Public Offering will be issued
under the Registration Statement and the Prospectus but under a different
prospectus supplement than the one being delivered in connection with the Common
Stock being sold hereunder. The allocation of the Commitment among the
Purchasers is set forth on EXHIBIT A hereto.
1.2 CLOSING. The sale of Common Stock hereunder shall occur on the
date of the Closing of the Public Offering (the "Closing Date"). On the Closing
Date, upon receipt by the Company of the payment provided for in Section 1.1 for
shares of Common Stock to be purchased by the Purchasers hereunder, the Company
will issue to each Purchaser certificates representing the shares of Common
Stock purchased in the name of each such Purchaser, and the name of such
Purchaser will be registered on the books of the Company as the record owner of
such shares of Common Stock.
2. PURCHASERS' REPRESENTATIONS AND WARRANTIES
Each Purchaser hereby represents and warrants to, and agrees with the
Company, as follows:
2.1 ORGANIZATION. Each of the Purchasers is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, has full requisite corporate power and authority to carry on its
business as it is currently conducted, and to own and operate the properties
currently owned and operated by it, and is duly qualified or licensed to do
business and is in good standing and is authorized to do business in all
jurisdictions in which the character of the properties owned or the nature of
the business conducted by it would make such qualification or licensing
necessary.
2.2 AUTHORIZATION. The consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary action, corporate
or otherwise, on the part of each of the Purchasers, and this Agreement is a
valid and binding obligation of each of the Purchasers enforceable against each
of the Purchasers in accordance with its terms. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a violation or breach of
any term or provision of, nor constitute a default under (i) the organizational
documents of any of the Purchasers or (ii) any obligation, indenture, mortgage,
deed of trust, lease, contract or other agreement to which any of the Purchasers
is a party or by which any of the Purchasers, or their respective properties are
bound.
2.3 ADDITIONAL MATTERS. The Common Stock being purchased by each
Purchaser is for such Purchaser's own account and not for the account of any
other person, and not with a view to distribution, assignment or resale to
others. Such Purchaser will not sell, hypothecate, or otherwise transfer its
Common Stock purchased hereunder (i) except in accordance with applicable state
and federal securities laws and (ii) until the Underwriters have completed the
distribution of Common Stock in the Public Offering, conclusive evidence of
which shall be the written notice provided in Section 6.1. Each Purchaser will
otherwise purchase or sell Common Stock only in accordance with applicable state
and federal securities laws.
3. COMPANY REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to each of the Purchasers
as follows:
3.1 ORGANIZATION. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Maryland,
has full requisite corporate power and authority to carry on its business as it
is currently conducted, and to own and operate the properties currently owned
and operated by it, and is duly qualified or licensed to do business and is in
good standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the nature of
the business conducted by it would make such qualification or licensing
necessary.
3.2 AUTHORIZATION. The consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company, and this Agreement is a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not conflict with or result
in a violation or breach of any term or provision of, nor constitute a default
under (i) the Certificate of Incorporation or Bylaws of the Company or (ii) any
obligation, indenture, mortgage, deed of trust, lease, contract or other
agreement to which the Company or any of its subsidiaries is a party or by which
the Company or its subsidiaries, or their respective properties are bound.
3.3 VALID ISSUANCE. Common stock being sold to the Purchasers
hereunder, when issued, will be validly issued, fully paid and nonassessable and
not subject to any preemptive right. The sale of such Common Stock hereunder has
been registered under the Securities Act and the Registration Statement will, on
the date such Common Stock is issued, be effective under the Securities Act.
3.4 REGISTRATION STATEMENT AND PROSPECTUS. The Registration Statement
has been declared effective under the Securities Act. The Company has not
received any stop order from the SEC suspending effectiveness of the
Registration Statement, and to the Company's knowledge, no such stop order has
been threatened to be issued. The Registration Statement, at the time it was
declared effective under the Securities Act, did not contain a misstatement of a
material fact or omit a material fact necessary to make the statements therein
not misleading, and the Prospectus, as supplemented by a prospectus supplement
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in connection with the sale of the Common Stock being sold hereunder, will not,
on the date it is delivered to the Purchasers, contain a misstatement 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.
4. CONDITIONS TO OBLIGATIONS
4.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASERS. The
obligations of the Purchasers to consummate and effect the transactions
contemplated hereunder shall be subject to the satisfaction of the following
conditions, or to the waiver thereof by the Purchasers before the Closing Date;
4.1.1. REPRESENTATIONS TRUE AT CLOSING. The representations and
warranties of the Company herein contained shall be, in all material
respects, true as of and at the Closing Date with the same effect as
though made at such date, except as affected by transactions permitted
or contemplated by this Agreement. The Registration Statement will be
effective under the Securities Act on the Closing Date, and on the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement will be issued or threatened.
4.1.2. CLOSING OF PUBLIC OFFERING. The Public Offering shall
have closed concurrently with the closing of the sale of the Common
Stock hereunder and the gross proceeds to the Company from the Public
Offering shall be at least $90 million.
4.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate and effect the transactions
contemplated hereunder shall be subject to the satisfaction of the following
conditions, or to the waiver thereof by the Company before the Closing Date;
4.2.1. CLOSING. The representations and warranties of the
Purchasers herein contained shall be, in all material respects, true
as of and at the Closing Date with the same effect as though made at
such date, except as affected by transactions permitted or
contemplated by this Agreement.
5. INDEMNIFICATION AND CONTRIBUTION
5.1 INDEMNIFICATION OF THE COMPANY. The Company shall indemnify and
hold harmless each Purchaser, its officers and employees and each person, if
any, who controls any Purchaser within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Purchaser, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Prospectus, as supplemented by the prospectus supplement
delivered to the Purchasers in connection with their purchase of common stock
hereunder (the "Supplemented Prospectus"); or (ii) the omission or alleged
omission to state in the Supplemented Prospectus any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and shall reimburse each Purchaser and each such officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Purchaser, officer, employee or controlling person
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
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provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Supplemented Prospectus in reliance upon and in
conformity with written information concerning such Purchaser furnished to the
Company by the Purchasers by or on behalf of any Purchaser specifically for
inclusion therein.
5.2 INDEMNIFICATION BY THE PURCHASERS. Each Purchaser, severally and
not jointly, shall indemnify and hold harmless the Company, its officers and
employees, each of its directors, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Supplemented Prospectus; or (ii) the omission or alleged
omission to state in the Supplemented Prospectus of any material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Purchaser furnished to the
Company by or on behalf of that Purchaser specifically for inclusion therein,
and shall reimburse the Company and any such director, officer, employee or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer, employee or controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred.
5.3 FURTHER INDEMNIFICATION BY THE PURCHASERS. The Purchasers,
jointly and severally, shall indemnify and hold harmless the Company, its
officers and employees, each of its directors, and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer, employee or
controlling person may become subject, under the Securities or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, related to or arising out of any wrongful actions or alleged
wrongful actions by the Purchasers in connection with the purchase of Common
Stock hereunder or the resale by the Purchasers of the Common Stock they
purchase hereunder, and shall reimburse the Company and any such director,
officer, employee or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred.
5.4 INDEMNIFICATION PROCEDURES. Promptly after receipt by an
indemnified party under this Section 5 of notice of any claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 5 except to the extent it has been materially prejudiced by such failure
and, provided further, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 5. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
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to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 5 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Purchasers shall
have the right to employ counsel to represent jointly the Purchasers and their
respective officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Purchasers against the Company under this Section 5 if, in the reasonable
judgment of the Purchasers, it is advisable for the Purchasers and those
officers, employees and controlling persons to be jointly represented by
separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. No indemnifying party shall (i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
5.5 LIMITATION ON THE COMPANY'S OBLIGATIONS. Notwithstanding anything
in this Section 5 to the contrary, the Company shall not be subject to any
obligations to indemnify the Purchasers in any action in which a court of
competent jurisdiction finds that one or more of the Purchasers resold the
Common Stock purchased hereunder in violation of any securities laws or in a
transaction in which such Purchaser acted as an underwriter as defined in the
Securities Act. Upon such a finding by such a court of competent jurisdiction,
any Purchaser who has been indemnified by the Company hereunder shall within two
business days reimburse the Company for all amounts paid by the Company to such
Purchaser under this Section 5.
6. MISCELLANEOUS
6.1 COMPLETION OF DISTRIBUTIONS. The Company will give written notice
of the completion of the distributions of the Common Stock being sold in the
Public Offering promptly upon notice thereof from the Underwriters.
6.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties set forth herein shall survive the closing of the transactions
contemplated hereby.
6.3 WAIVER AND MODIFICATION. Neither this Agreement nor any
provisions hereof shall be waived, modified, changed, discharged, terminated,
revoked, or canceled except by an instrument in writing signed by the party
against whom any change, discharge, or termination is sought.
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6.4 NOTICES. Notices required or permitted to be given hereunder
shall be in writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested, addressed to the
other party at the address provided on Exhibit A to this Agreement, or to such
other address furnished by notice given in accordance with this Section 6.
6.5 NO WAIVER OF RIGHTS. Failure of a party hereto to exercise any
right or remedy under this Agreement or any other agreement between the Company
and the Purchasers, or otherwise, or delay by a party hereto in exercising such
right or remedy, will not operate as a waiver thereof. No waiver by a party
hereto will be effective unless and until it is in writing and signed against
which such waiver is asserted.
6.6 APPLICABLE LAW. This Agreement shall be enforced, governed and
construed in all respects in accordance with the laws of the State of New York,
as such laws are applied by New York courts to agreements entered into and to be
performed in New York and shall be binding upon the undersigned, the
undersigned's heirs, estate, legal representatives, successors and assigns.
6.7 ENFORCEABILITY. If any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof.
6.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and supersede
any and all prior or contemporaneous representations, warranties, agreements and
understandings in connection therewith.
6.9 TERMINATION. The Commitment shall automatically terminate upon
the earlier of (i) a decision by the Company not to proceed with the Public
Offering, (ii) the existence of a final order, injunction or notice from a court
or administrative agency of competent jurisdiction that prohibits consummation
of the transaction contemplated herein, or (iii) May 15, 1999.
6.10 EXECUTION AND DELIVERY. This Agreement may be executed by
facsimile, and/or in two or more counterparts, each of which shall be deemed to
be an original but all of which shall constitute one and the same agreement.
6.11 EXPENSES. The Company agrees to reimburse the Purchasers upon
written request (including a summary of items for which reimbursement is
requested) for reasonable out-of-pocket expenses incurred by the Purchasers in
connection with the matters contemplated under this Agreement, including without
limitation, reasonable attorneys' fees and disbursements of the Purchasers'
legal counsel and other professional advisors (if any), in an aggregate amount
not to exceed $10,000.
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IN WITNESS WHEREOF, the undersigned has executed this Purchase
Agreement this 15th day of April 1999.
COMPANY:
KEY ENERGY SERVICES, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------------------
Xxxxxxx X. XxXxxxxx
Executive Vice President
PURCHASERS:
XXXXX-XXXX GROUP LLC
By: /s/ Xxx Xxxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxxx
Title: Manager
ZPG SECURITIES, L.L.C.
By: /s/ Xxx Xxxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxxx
Title: Managing Member
DFG CORPORATION
By: /s/ Xxx Xxxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxxx
Title: President
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EXHIBIT A
Purchaser Purchase Commitment Allocation*
--------- ------------------------------
Xxxxx-Xxxx Group LLC 33.333%
000 Xxxx 00xx Xxxxxx, Xxx. 0X xxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
ZPG Securities, L.L.C. 33.333%
000 Xxxx 00xx Xxxxxx, Xxx. 0X xxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
DFG Corporation 33.333%
000 Xxxx 00xx Xxxxxx, Xxx. 0X xxxxxxx
Xxx Xxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000 -------
100%
====
Company:
Key Energy Services, Inc.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
---------------
* The Purchase Commitment Allocation may be amended by written notice to the
Company signed by each of the Purchasers provided that the Purchase
Commitment Allocations shall total 100%.
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