March 7, 1997
DI Industries, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Dear Sirs:
The undersigned understands that DI Industries, Inc. ("Parent"), Drillers,
Inc. ("Purchaser") and Grey Wolf Drilling Company (the "Company") are entering
into an Agreement and Plan of Merger (the "Agreement") pursuant to which Company
will be merged with and into the Purchaser (the "Merger") and whereby each share
of the Company's common stock, without par value (the "Company Common Stock")
issued and outstanding immediately as of the effective date of the Merger will
be converted into the right to receive cash and shares of the Parents common
stock, par value $.10 per share ("Parent Common Stock").
The undersigned is a stockholder of the Company (the "Shareholder") and is
entering into this letter agreement to induce you to enter into the Agreement
and to consummate the transactions contemplated thereby. Capitalized terms used
herein without definition are used as they are defined in the Agreement
The Shareholder confirms his agreement with Parent as follows:
1. The Shareholder represents, warrants and agrees that he is the record or
beneficial owner of 666,667 shares of Company Common Stock (collectively, the
"Shares"), all free and clear of all liens, charges, encumbrances, voting
agreements and commitments of every kind except as disclosed in writing on a
schedule attached to this letter agreement and made a part hereof. The
Shareholder does not own or hold any rights to acquire any shares of the capital
stock of Parent or any interest therein or any voting rights with respect to any
shares, except pursuant to the Agreement.
2. The Shareholder agrees that, from the date hereof until the Agreement is
terminated in accordance with its terms, he will not, and will not permit any
entity controlled by the Shareholder to, (i) contract to sell, sell or otherwise
transfer or dispose of any of the Shares or any interest therein or securities
convertible thereinto or any voting rights with respect thereto, other than (x)
pursuant to the Merger or (y) with Parent's prior written consent, (ii) consent
to any amendment to the articles of incorporation of the Company or (iii)
encumber any Shares.
3. The Shareholder agrees that, from the date hereof until the Agreement is
terminated in accordance with its terms, all of the Company Common Stock
(including the Shares) beneficially owned by the Shareholder, or over which the
Shareholder has voting power or control, directly or indirectly, will be voted
by the Shareholder to approve the Agreement, the Merger, and the transactions
contemplated by the Agreement and that such shares will not be voted in favor of
any other Acquisition Proposal (as such term is defined in the Agreement) during
such period.
4. The Shareholder agrees to cooperate fully with Parent in connection with
the Agreement and to support transactions contemplated thereby. The Shareholder
agrees that he will not, and will not instruct his agents, employees or
representatives or the officers, employees, agents or representatives of the
Company to, directly or indirectly, (i) solicit or initiate, or encourage the
submission of, any
Acquisition Proposal or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal.
5. None of the information relating to the Shareholder to be supplied in
writing by the Shareholder specifically for inclusion in the Registration
Statement (and any amendments thereof), at the time the Registration Statement
becomes effective or at the time that the prospectus/proxy statement contained
therein is first published, sent or given to the Company's stockholders, shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
6. The Shareholder has been advised that the issuance of Parent Common
Stock to him pursuant to the Merger will be registered with the Commission under
the Act on a Registration Statement on Form S-4. However, because at the time
the Merger is submitted for a vote of the stockholders of the Company, (a) the
Shareholder may be deemed to be an affiliate of the Company, and (b) other than
as set forth in the Agreement, the distribution by the Shareholder of the Parent
Common Stock has not been registered under the Act, the Shareholder agrees that
he will not sell, transfer or otherwise dispose of Parent Common Stock issued to
him in the Merger unless (i) such sale, transfer or other disposition is made in
conformity with the volume and other limitations of Rule 145 promulgated by the
Commission under the Act, (ii) such sale, transfer or other disposition has been
made pursuant to an effective registration statement under the Act or (iii) in
the opinion of counsel reasonably acceptable to Parent or as described in a
"no-action" or interpretive letter from the Staff of the Commission, such sale,
transfer or other disposition is otherwise exempt from registration under the
Act.
7. There does not exist any plan or intention by Shareholder to engage in a
sale, exchange, transfer, distribution, pledge, disposition or any other
transaction which results in a reduction in the risk of ownership or a direct or
indirect disposition of any shares of Parent Common Stock to be received by him
in the Merger.
8. Notwithstanding anything to the contrary contained elsewhere in this
letter agreement, it is expressly stipulated and provided that the agreements
and undertakings of Shareholder under this letter agreement are subject to the
provisions set forth in Section 4.2 of the Agreement concerning the duties of
directors, acting in their capacity as a director, with respect to unsolicited
bona fide written Acquisition Proposals received from any person; and
Shareholder in his capacity as a director shall be entitled to take any action
which the Company or its directors are authorized to take in response to or with
respect to any such unsolicited Acquisition Proposal under the provisions of
said Section 4.2.
9. This letter agreement, together with the Agreement and the Escrow
Agreement of even date therewith referred to therein, constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and shall not be
assigned by operation of law or otherwise; provided that the Parent may assign
any of its rights and obligations to any wholly owned subsidiary of Parent, but
no such assignment shall relieve the Parent of its obligations hereunder.
10. The invalidity or unenforceability of any provision of this letter
agreement in any jurisdiction shall not affect the validity or enforceability of
any other provisions of this letter agreement, which shall remain in full force
and effect in such jurisdiction, or the validity or enforceability of such
provision in any other jurisdiction. The Shareholder acknowledges that Parent
will be irreparably harmed and that there will be no adequate remedy at law for
a violation of any of the covenants or agreements of the Shareholder contained
herein. It is accordingly agreed that, in addition to any other remedies that
may be available to Parent upon the breach by the Shareholder of such covenants
and agreements, Parent shall have the right to obtain injunctive relief to
restrain any breach or threatened breach of such covenants or agreements or
otherwise to obtain specific performance of any of such covenants or agreements.
11. This letter agreement shall be governed by and construed in accordance
with the laws of the State of Texas regardless of the laws that might otherwise
govern under principles of conflicts of laws applicable hereto. Any judicial
proceeding brought against any party hereto with respect to this letter
agreement, or any transaction contemplated hereby, may be brought in the Federal
District Court for the Southern District of Texas and, by execution and delivery
of this letter agreement, each of the parties hereto (i) accepts, generally and
unconditionally, the nonexclusive jurisdiction of such court and any related
appellate court, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this letter agreement, subject, in each case, to all
rights to appeal such decisions to the extent available to the parties and (ii)
irrevocably waives any objection it may now or hereafter have as to the venue of
any such suit, action or proceeding brought in such a court or that such court
is an inconvenient forum. Each party hereto hereby waives personal service of
process and consents that service of process upon it may be made by certified or
registered mail, return receipt requested, at its address specified in the
letter agreement, and service so made shall be deemed completed on the fifth
business day after such service is deposited in the mail. Nothing herein shall
affect the right to serve process in any other manner permitted by law. EACH
PARTY HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
12. This letter agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
13. This letter agreement may be terminated at the option of any party at
any time after termination of the Agreement in accordance with its terms.
14. The undersigned agrees not to trade in Parent Common Stock during the
twenty (20) consecutive days preceding the Effective Time of the Merger.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to us a counterpart hereof.
Very truly yours,
FELICITY VENTURES, LTD.
J. K. B. Xxxxxx, General Partner
Address:
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Confirmed on the date
first above written
DI INDUSTRIES, INC.
By: X. X. Xxxxxxxx, President
