STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") dated as of the 28th
day of December, 1996 by and between DI Industries, Inc., a Texas corporation
(the "COMPANY") and Wexford Special Situations 1996, L.P., a Delaware limited
partnership, Wexford Special Situations 1996 Institutional, L.P., a Delaware
limited partnership, Wexford-Euris Special Situations 1996, L.P., a Delaware
limited partnership, and Wexford Special Situations 1996 Limited, a Cayman
Islands exempted company (singly, a "PURCHASER" and collectively, "PURCHASERS").
W I T N E S S E T H:
WHEREAS, each Purchaser wishes to purchase from the Company, and the
Company wishes to sell to Purchaser the number of shares of the Company's common
stock, $.10 par value per share (the "COMMON STOCK") set forth on EXHIBIT A to
this Agreement; and
WHEREAS, the Purchaser and the Company are entering into this Agreement
to provide for such purchase and sale and to establish various rights and
obligations in connection therewith;
NOW, THEREFORE, for and in consideration of the premises, and the
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
Section 1.1. EXCHANGE. Upon the terms and conditions set forth in this
Agreement, at the Closing (hereafter defined), the Company agrees to sell an
aggregate of 1,750,000 shares of the Company's Common Stock (the "SHARES") to
the Purchasers, with each purchaser agreeing to purchase the number of Shares
set forth opposite the name of each in EXHIBIT A to this Agreement. As
consideration for the sale of the Shares, each Purchaser shall pay to the
Company $2.3543 per share of Common Stock purchased in U.S. Federal or other
immediately available funds (the "PURCHASE PRICE").
Section 1.2. CLOSING.
(a) Consummation of the purchase and sale transactions contemplated by
this Agreement (the "CLOSING") shall take place at 10:00 a.m. local time on
December 30, 1996 at the offices of the Company located at One Paragon Center,
Suite 625, 450 Gears Road, Houston, Texas 77067-4581, or at such other time and
place as all parties hereto may mutually agree in writing. The date upon which
the Closing occurs is referred to herein as the "CLOSING DATE."
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(b) At the Closing, the Company shall deliver to each Purchaser the
following:
(i) the number of shares of Common Stock purchased by such
Purchaser as evidenced by delivery of a stock certificate
therefor duly registered in the name of such Purchaser; and
(ii) a certificate dated the Closing Date and signed by
the President and Chief Executive Officer or Senior Vice
President and Chief Financial Officer of the Company verifying
that the representations of the Company contained in Article 3
are true and correct at, and as of, the Closing Date.
(c) At the Closing, the Purchaser shall deliver to the Company the
following:
(i) the Purchase Price in U.S. Federal or other
immediately available funds to the account of the Company at
Southwest Bank of Texas, N.A., ABA No. 000000000, A/C 0133191
(Credit: DI Industries, Inc.); and
(ii) a certificate dated the Closing Date and signed by
Wexford Management, L.L.C., in its capacity as the investment
advisor of the Purchaser verifying that the representations of
the Purchaser contained in Article 2 are true and correct at, and
as of, the Closing Date.
(d) The obligation of the Company to sell the Shares and close the
transactions contemplated hereby on the Closing Date shall be subject to the
truth and accuracy of the representations and warranties of the Purchaser
contained in Article 2 on and as of the Closing Date, to the performance of each
Purchaser's covenants and agreements to be performed in whole or in part prior
to the Closing Date.
(e) The obligation of Purchaser to purchase shares of Common Stock and
close the transactions contemplated hereby on the Closing Date shall be subject
to the truth and accuracy of the representations and warranties of the Company
contained in Article 3 on and as of the Closing Date, to the performance of the
Company's covenants and agreements to be performed in whole or in part prior to
the Closing Date, and the following additional conditions precedent:
(i) no Material Adverse Effect shall have occurred (as
defined in Section 3.2;
(ii) there shall not have occurred a Change of Control of
the Company (a "Change of Control" shall mean the acquisition by
a person, group of affiliated persons or "group" as defined in
Section 13(d)(3) of the Exchange Act [hereinafter defined] of
greater than 30% of the fully diluted common equity of the
Company or a change in the composition of a majority of the
Company's board of directors).
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(f) The obligations of both Purchaser and the Company hereunder shall be
subject to the following further conditions precedent:
(i) the Company shall have entered into a $35,000,000
Senior Secured Reducing Revolving Credit Facility by and among
the Company and Drillers, Inc., a wholly-owned subsidiary of the
Company, as borrowers, and Bankers Trust Company, as agent and
administrative agent, and ING (US) Capital Corporation, as
co-agent, for the other lending institutions participating in
such credit arrangement (the "BANKERS TRUST FACILITY"); and
(ii) the Company shall have purchased substantially all of
the assets of the Diamond M Onshore Drilling Inc. subsidiary of
Diamond Offshore Drilling Inc., for approximately $26,000,000 and
shall have borrowed substantially all of the purchase price for
such assets under the Bankers Trust Facility.
Section 1.3. ADDITIONAL SHARES. In addition to the Shares issuable to
Purchaser pursuant to Section 1.1, the Company shall issue to Purchaser after
the Determination Date (as defined below) the number shares of the Company's
Common Stock issuable to Purchaser, if any, under the terms and subject to the
conditions set forth in this Section (the "ADDITIONAL SHARES"). The number of
Additional Shares issuable to Purchaser shall be equal to the number of shares
of Common Stock calculated by dividing (i) the Shortfall Amount by (ii) the
Average DI Stock Price during the Measurement Period, as such terms are
hereafter defined. Any fractional share resulting from such calculation shall be
rounded up to the nearest whole share.
(a) The term "SHORTFALL AMOUNT" shall mean with respect to each
Purchaser the positive difference, if any, between (i) the Purchase
Price, MINUS (ii) the sum of (A) the gross proceeds of all Public
Dispositions less Reasonable Commissions (as such terms are hereinafter
defined), (B) the gross proceeds of all Private Dispositions less
Reasonable Commissions (as such terms are hereinafter defined) and (C)
the product of (x) the Average DI Stock Price during the Measurement
Period, MULTIPLIED BY (y) the number of Shares that remain beneficially
owned by Purchaser as of 5:00 p.m. New York, New York time on the
Determination Date, as such term is hereinafter defined.
(b) The term "DISPOSITION" shall mean and include a sale,
assignment, pledge, transfer or other conveyance of some or all (or any
undivided interest in some or all) of the Common Stock, or any contract
or option to make any such sale, assignment, pledge, transfer or
conveyance. The term "PUBLIC DISPOSITION" shall mean a Disposition
effected by the sale of all or any portion of the Shares on the American
Stock Exchange or such other principal trading market on which the
Common Stock is then publicly traded. A Public Disposition shall be
deemed to occur on the date such transaction occurs rather than the
settlement date thereof. The term "PRIVATE DISPOSITION" shall mean any
Disposition that is not a Public Disposition. As used in this Agreement,
gross proceeds of a Private Disposition shall mean: (i) the fair market
value of all consideration given by the transferee(s) in such Private
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Disposition; or (ii) if at the time of the Private Disposition resale of
the Shares is covered by an effective registration statement (which
shall include for this purpose a resale registration statement as to
which effectiveness has been temporarily suspended pursuant to the
Company's right to do so granted in Article 4) the greater of: (A) the
fair market value of all consideration given by the transferee(s) in
such Private Disposition, and (B) the product of (y) the Average DI
Trading Price during the ten Trading Days (hereinafter defined)
immediately preceding the date of the Private Disposition MULTIPLIED BY
(x) the number of Shares transferred in such Private Disposition.
(c) The term "AVERAGE DI STOCK PRICe" shall mean the average of
the last reported sale price regular way of the Common Stock on the
American Stock Exchange or other principal trading market on which the
Common Stock is then publicly traded calculated for the number Trading
Days over which such average is to be computed, or if the principal
market on which the Company's Common Stock is then traded does not
report prices on the basis of sale transactions, the average of the
closing bid and ask prices for the Common Stock over the applicable
number of Trading Days.
(d) The term "MEASUREMENT PERIOD" shall mean the first ten
Trading Days immediately prior to and including the Determination Date
on which none of the Purchasers or their respective Affiliates shall
have sold or offered for sale any shares of the Company's Common Stock
in any public securities market on which the Company's Common Stock is
then traded. In the event that any of the Purchasers or their respective
Affiliates have sold or offered for sale Common Stock on a Trading Day
that would otherwise be included in the Measurement Period, such Trading
Day shall be excluded from the Measurement Period and in substitution
for such day there shall be added to the beginning of the Measurement
Period the next preceding Trading Day on which no such sales or offers
were made by any of the Purchasers or their respective Affiliates. For
purposes of this paragraph (d), an offer of Common Stock shall be deemed
to have occurred in connection with an underwritten public offering only
from the period from and including the effective date of the
registration statement for the offering through and including the
closing date of such public offering. No offer of Common Stock shall be
deemed to have occurred for purposes of this paragraph (d) with respect
to Common Stock covered by a shelf registration statement under Rule 415
under the Securities Act except on days on which orders for sales of
Common Stock have been placed by any Purchaser or their respective
Affiliates on the American Stock Exchange or other principal securities
market on which the Company's Common Stock may then be publicly traded.
(e) A "TRADING DAY" shall mean a day on which the Company's
Common Stock is traded on the American Stock Exchange, or the principal
trading market on which the Common Stock is then publicly traded if
other than the American Stock Exchange.
(f) The "DETERMINATION DATE" shall mean the one year anniversary
of the Closing Date, unless the Purchasers shall have sold all of the
Shares before such anniversary
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date, in which event the Determination Date shall be the next Trading
Day following the final sale of Shares.
(g) An "AFFILIATE" of a person shall have the meaning ascribed to
that term in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") as promulgated by the U.S. Securities and
Exchange Commission (the "SEC").
(h) Promptly after the Determination Date, but in no event later
than ten business days after the Determination Date, Purchaser shall
deliver to the Company an originally executed, written certification
sworn to and notarized by a duly authorized officer of Purchaser
containing the following information:
(i) a true and complete description of each Public
Disposition by Purchaser through and including the Determination
Date, which description shall include the number of Shares
included in each Public Disposition, the date of each Public
Disposition, and the amount of gross proceeds from any such
Public Disposition;
(ii) a true and correct description of the character and
terms of each Private Disposition, including, without limitation,
the number of Shares included in the Private Disposition, the
date of such Private Disposition, the amount of all cash
consideration given by the transferee, and the nature and fair
market value of all non-cash consideration given by the
transferee(s) for, or in connection with, such Private
Disposition; and
(iii) the number of Shares that remain beneficially owned
by Purchaser as of 5:00 p.m. local time in New York, New York on
the Determination Date, and the owner of record of such Shares if
other than Purchaser.
Upon request of the Company, Purchaser shall promptly provide such other
and further information and documents and affidavits as the Company may
request to verify the number of Additional Shares, if any, issuable
pursuant to this Agreement.
(i) The term "REASONABLE COMMISSION" shall mean actual brokerage
commissions not exceeding 2% of the gross proceeds of a Public
Disposition, or 7.5% of the gross proceeds of a Private Disposition.
(j) Within five business days after being furnished the
information required to be provided by Purchaser under this Agreement or
as may be required to assure compliance by the Company with federal and
applicable state securities laws, the Company shall issue the Additional
Shares and shall deliver to Purchaser a stock certificate for the
Additional Shares duly registered in the name of Purchaser. Purchaser
covenants and agrees that for a
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period of twelve months following each sale of Shares during the
Determination Period, neither Purchaser nor its Affiliates shall
purchase any shares of Common Stock.
(k) Within five business days after being furnished the
information required to be provided by Purchaser under this Agreement or
as may be required to assure compliance by the Company with federal and
applicable state securities laws, the Company may, in its sole
discretion, in lieu of issuing the Additional Shares, pay to Purchaser
an amount in cash equal to the Shortfall Amount by wire transfer of
immediately available funds.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF PURCHASER
In order to induce the Company to enter into this Agreement, Purchaser
hereby represents and warrants to the Company as follows:
Section 2.1. AUTHORITY AND ENFORCEABILITY. The execution and delivery of
this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary action on the part of the Purchaser.
This Agreement has been duly executed and delivered by the Purchaser and
constitutes the legal, valid, binding and enforceable obligation of the
Purchaser, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
Section 2.2. NO CONFLICTS OR CONSENTS.
(a) The execution and delivery of this Agreement, the purchase by the
Purchaser of the Shares and Additional Shares, and the compliance by the
Purchaser with the provisions hereof do not and will not conflict with, or
result in any violation of or default under, or permit the acceleration of any
obligation under, or the creation or imposition of any lien, claim, security
interest, adverse interest or encumbrance (an "ENCUMBRANCE") on any of the
properties or assets of the Purchaser under (i) any provision of the certificate
of limited partnership or other organizational documents of the Purchaser or any
judgment, order, decree, statute, law, ordinance, rule or regulation of any
governmental authority to which the Purchaser is a party or by which it is
bound, or (ii) any indenture, lease, mortgage, deed of trust, loan agreement or
other agreement or instrument, or any permit, of the Purchaser. No consent,
approval, order or authorization of, or registration, declaration, filing with
or notice to, any Authority (as hereinafter defined) or third party is required
to be made or obtained by the Purchaser in order to execute or deliver this
Agreement or to purchase the Shares and the Additional Shares.
(b) The Purchaser is not in violation of its certificate of limited
partnership or other organizational documents. There are no legal or
governmental proceedings pending or, to the knowledge of the Purchaser,
threatened against the Purchaser or its investment advisor or to which the
Purchaser or any of its properties or assets is subject, that if adversely
determined, would have
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a material adverse effect on the condition, financial or otherwise, business,
operations, affairs, properties, assets or prospects of the Purchaser or that
seeks to restrain or obtain damages with respect to the transactions
contemplated hereby.
Section 2.3. INVESTMENT REPRESENTATIONS. Purchaser hereby acknowledges
that the Shares and Additional Shares have not been registered under the
Securities Act of 1933, as amended (the "SECURITIES ACT") or registered or
qualified under Texas Securities Act or any other applicable state securities
laws (collectively, "BLUE SKY LAWS") and are being sold pursuant to exemptions
from the registration provisions of the Securities Act and the Blue Sky Laws,
the availability of which depends in substantial part on the accuracy of
Purchaser's representations, warranties and agreements contained in this
Agreement. Accordingly, Purchaser hereby covenants and agrees that it will only
re-offer or resell the Shares and Additional Shares (A) in compliance with the
requirements of Rule 144 under the Securities Act (or any successor rule), (B)
in accordance with another available exemption from the requirements of Section
5 of the Securities Act, or (C) pursuant to an effective registration statement
under the Securities Act. The Purchaser further represents and warrants as
follows:
(a) Purchaser hereby represents that it is acquiring the Shares
and Additional Shares for its own account, for investment, and not with
a view to the distribution thereof. Purchaser, through its undersigned
investment advisor has such knowledge and experience in financial and
business matters that it is capable of evaluating the risks and merits
of an investment in the Company. The acquisition of the Shares and
Additional Shares pursuant to this Agreement is the result of a
negotiated transaction involving direct communication between Purchaser
and officers of the Company. Purchaser acknowledges that it has
heretofore discussed the Company, its business, plans, operations,
management, and financial condition with Company's officers. Purchaser
has received all such information as it deems necessary and appropriate
to enable it to evaluate the various risks inherent in making an
investment in the Company and further represents that it has received
satisfactory and complete information concerning all matters as to which
it has made inquiry.
(b) The Purchaser is an "accredited investor" within the meaning
of Rule 501(a) under the Securities Act.
(c) Purchaser acknowledges that it has been given access to all
filings made by the Company pursuant the Securities Act and Exchange Act
and has been provided copies of the following filings by the Company
with the SEC: (i) the Company's Annual report on Form 10-K for the year
ended 1995, (ii) the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996, (iii) Current Reports on Form 8-K
filed by the Company on June 24, October 2, and November 4, 1996, and
(iv) the Company's Registration Statement under the Securities Act on
Form S-3 filed December 19, 1996, covering certain resales by certain of
its shareholders (which as of the date of this Agreement has not yet
become effective). Purchaser also has been advised by the Company that
certain important periodic reports and other filings by the Company are
filed electronically with the
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SEC and are available for inspection at the SEC's site on the World Wide
Web, the address of which is: XXXX://XXX.XXX.XXX.
(d) Purchaser represents and warrants that it realizes that its
acquisition of the Company's Common Stock involves certain risks
(including those set forth in the Company's Registration Statement on
Form S-3 filed December 19, 1996), will be a speculative investment, and
that Purchaser is able, without impairing its financial condition, to
hold the Shares and Additional Shares for an indefinite period of time
and to suffer a complete loss of its investment.
(e) Purchaser hereby represents and agrees that the Shares and
Additional Shares shall not be sold, transferred, pledged or
hypothecated except by an effective registration statement under the
Securities Act unless there is furnished to the Company an opinion in
form and substance reasonably satisfactory to the Company that
registration of such Shares and Additional Shares under the Securities
Act and such Blue Sky Laws is not required, and that each certificate
evidencing such Shares and Additional Shares shall bear a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND
WILL NOT BE, EXCEPT AS PROVIDED IN THE STOCK PURCHASE AGREEMENT
REFERRED TO BELOW, REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE
FEDERAL OR STATE SECURITIES LAW AND, ACCORDINGLY, THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE RESOLD, PLEDGED, OR
OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
OTHER APPLICABLE SECURITIES LAWS. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY PURSUANT TO THE APPLICABLE
PROVISIONS OF THAT CERTAIN STOCK PURCHASE AGREEMENT DATED AS OF
DECEMBER 28, 1996. A COMPLETE AND CORRECT CONFORMED COPY OF SUCH
STOCK PURCHASE AGREEMENT IS AVAILABLE FOR INSPECTION AT THE
PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY AND WILL BE FURNISHED
TO THE HOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE.
In addition, Purchaser hereby agrees that the Company's stock transfer
records will contain a notation and stop transfer instructions
consistent with such legend restricting any such sale, transfer, pledge
or hypothecation. The foregoing restrictions and related legend
provisions shall remain in effect until, in the opinion of counsel
satisfactory to Company, they are no longer required by law.
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(f) Each of Wexford Special Situations 1996, L.P., a Delaware
limited partnership, Wexford Special Situations 1996 Institutional,
L.P., a Delaware limited partnership, Wexford-Euris Special Situations
1996, L.P., a Delaware limited partnership represent that they are
domiciled in the State of Delaware. Wexford Special Situations 1996
Limited, a Cayman Islands exempted company, represents that it is
domiciled in the Cayman Islands.
(g) Purchaser represents and warrants that it understands that no
federal or state agency has made any finding or determination as to the
accuracy or adequacy of the Company's disclosures in the information
furnished to Purchaser or as to the fairness of the terms of the
transactions contemplated by this Agreement nor any recommendation or
endorsement of the Common Stock.
Section 2.4. NO BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Purchaser.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce Purchaser to enter into this Agreement, the Company
hereby represents and warrants to Purchaser as follows:
Section 3.1. DUE ORGANIZATION, ETC. The Company, and each of its
Subsidiaries (as hereinafter defined), is a corporation duly organized, validly
existing and in good standing under the law of the jurisdiction of its
incorporation, is not in liquidation, and each has all requisite corporate power
and authority to own, operate and lease its respective properties and assets and
to conduct its respective business as now conducted. All of the outstanding
shares of capital stock of each Subsidiary of the Company are validly issued,
fully paid and non-assessable, and all of such outstanding shares are owned,
directly or indirectly, by the Company free and clear of all Encumbrances, other
than as may be granted pursuant to the Bankers Trust Facility. "SUBSIDIARY"
means a corporation of more than a majority of the outstanding voting securities
or ownership interests in which are owned, directly or indirectly, by the
Company, by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
Section 3.2. COMPLIANCE WITH LAW.
(a) The Company and each Subsidiary has obtained and maintains in full
force and effect all permits, licenses, consents, approvals, registrations,
memberships, authorizations and qualifications (collectively, "PERMITS") under
all federal, state, local and foreign laws and regulations, and with all
federal, state, local and foreign governmental or regulatory authorities (each,
an "AUTHORITY"), required for the conduct by it of its businesses and the
ownership or
9
possession by it of its properties and assets other than where the failure to
obtain or maintain such Permits would not, individually or in the aggregate,
have a material adverse effect on the condition, financial or otherwise,
business, operations, affairs, properties, assets or prospects of the Company
and its Subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
(b) The Company and each Subsidiary are in compliance with all laws,
regulations, ordinances, orders and decrees of any Authority applicable to the
conduct by the Company and each Subsidiary of their respective businesses and to
their ownership and possession of their respective properties and assets other
than where the failure to comply would not have a Material Adverse Effect.
Section 3.3. AUTHORIZATION; EXECUTION AND DELIVERY OF AGREEMENT.
(a) The execution and delivery of this Agreement, the issuance and sale
of the Shares and the Additional Shares to the Purchaser, the compliance by the
Company with the provisions hereof (including, without limitation, the issuance
of the Additional Shares) are within the corporate power and authority of the
Company and have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement has been duly executed and delivered by the
Company and this Agreement constitutes the legal, valid, binding and enforceable
obligation of the Company, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
(b) The Shares are, and the Additional Shares (if issued) will be, in
due and proper form, duly authorized by all necessary corporate action on the
part of the Company, and, when issued and delivered by the Company pursuant to
this Agreement against payment of the consideration therefor set forth herein,
the Shares and the Additional Shares will be validly issued, fully paid and
non-assessable. The Purchaser will acquire valid and marketable title to the
Shares and the Additional Shares, free and clear of any Encumbrances except as
contemplated by this Agreement.
Section 3.4. NO CONFLICTS; NO CONSENTS; NO LITIGATION.
(a) Except for consents as may be required under the Bankers Trust
Facility which will be obtained on or before funding of the Bankers Trust
Facility and the subsequent requirement for listing of the Shares and Additional
Shares on the American Stock Exchange pursuant to the Company's listing
agreement, the execution and delivery of this Agreement, the issuance and sale
of the Shares and Additional Shares to the Purchaser, and the compliance by the
Company with the provisions hereof do not and will not conflict with, or result
in any violation of or default under, or permit the acceleration of any
obligation under, or the creation or imposition of any Encumbrance on any of the
properties or assets of the Company or any Subsidiary under, (i) any provision
of the certificate of incorporation or by-laws of the Company or any Subsidiary,
or any judgment, order, decree, statute, law, ordinance, rule or regulation of
any Authority to which the
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Company or any of its Subsidiaries is a party or by which any of them is bound,
or (ii) any indenture, lease, mortgage, deed of trust, loan agreement or other
agreement or instrument, or any Permit, of the Company or any Subsidiary. No
consent, approval, order or authorization of, or registration, declaration,
filing with or notice to, any Authority or third party is required to be made or
obtained by the Company or any Subsidiary in order to execute or deliver this
Agreement or to issue and sell the Shares and the Additional Shares other than
as a result of the periodic reporting requirements under the Exchange Act and
the listing requirements of the American Stock Exchange.
(b) The Company and each Subsidiary are not in violation of their
certificates of incorporation or by-laws or other organizational documents
except for such violations that would not have a Material Adverse Effect or an
adverse effect on the benefits intended to be afforded to the Purchaser under
this Agreement.
(c) There are no legal or governmental proceedings pending or, to the
knowledge of the Company and each Subsidiary, threatened against the Company,
any Subsidiary or any officer thereof, or to which the Company, any Subsidiary
or any of its or their properties or assets is subject, that if adversely
determined, would have a Material Adverse Effect.
Section 3.5. CAPITAL STOCK.
(a) The authorized capital stock of the Company consists of 300,000,000
shares of Common Stock, par value $.10 per share and 1,000,000 shares of
preferred stock, par value $1.00 per share. At December 26, 1996, 123,283,934
shares of Common Stock and 90,000 shares of the Company's preferred stock were
issued and outstanding.
(b) There are no authorized or outstanding subscriptions, options,
conversion rights, warrants or other agreements, securities or commitments of
any nature whatsoever (whether oral or written and whether firm or conditional)
obligating the Company or any Subsidiary to issue, deliver or sell, or cause to
be issued, delivered or sold, to any Person any material number of shares of
Common Stock or any other shares of the capital stock of the Company or any
shares of the capital stock of any Subsidiary, or any securities convertible
into or exchangeable for any such shares, or obligating any such Person to
grant, extend or enter into any such agreement or commitment, except: (A) as
publicly disclosed in the SEC Reports (hereinafter defined); and (B) shares of
Common Stock that may become issuable by the Company pursuant to a proposed
Asset Purchase Agreement currently under negotiation between Drillers, Inc. and
Xxxxxxxx Drilling Company, the proposed terms of which have been confidentially
disclosed to Purchaser.
Section 3.6. SEC REPORTS. The Company has filed with the Securities and
Exchange Commission all proxy statements and periodic reports required to be
filed by it under the Exchange Act (collectively, the "SEC REPORTS"). The
Company has furnished or made available to the Purchaser copies of the SEC
Reports, each as filed with the Commission. Each SEC Report was in compliance in
all material respects with the then applicable requirements of the Exchange
11
Act and the rules and regulations of the Commission thereunder and did not on
the date of its filing (and the SEC Reports as a whole will not on the Closing
Date, except as otherwise disclosed to the Purchaser), contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Since the filing of
the Company's most recent Quarterly Report on Form 10-Q, there has been no
material adverse change in the business, assets, results of operations or
condition (financial or other) of the Company and its subsidiaries considered as
a whole, which would require the filing by the Company with the SEC of a Current
Report on Form 8-K, except as have been previously filed.
Section 3.7. NO BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Company.
Section 3.8. USE OF PROCEEDS. The Company will use the proceeds from the
sale of Shares for the repayment of that certain Promissory Note dated August
29, 1996, by the Company as maker and Cloudesly Shipping Ltd. ("CLOUDESLY") as
payee, in the original principal amount of $4,000,000 and bearing interest at
12% per annum, which promissory note was acquired by Cloudesly by mesne
assignments from Norex Drilling Ltd, a Bermuda corporation.
ARTICLE 4
REGISTRATION RIGHTS
Section 4.1. SHELF REGISTRATION RIGHTS. The Company covenants and agrees
that on or before 30 days after the Closing, and on or before 30 days after the
issuance date of the Additional Shares, if any, the Company will cause to be
filed pursuant to Rule 415 of the Securities Act a shelf registration statement
on Form S-3 or such other form for which it is otherwise then eligible (a "SHELF
REGISTRATION STATEMENT") as to the Shares and Additional Shares naming Purchaser
as the selling shareholder along with such other selling shareholders which the
Company chooses to include therein. The Company shall use commercially
reasonable efforts to have such Shelf Registration Statement declared effective
as soon as reasonably practicable after such filing, and to keep such Shelf
Registration Statement continuously effective until the first to occur of: (a)
all Shares or Additional Shares covered thereby have been resold; (b) the date
on which the Shares or Additional Shares may be resold without registration
under the Securities Act pursuant to Rule 144 or any successor rule, or (c) two
years following the Closing in the case of the Shares and two years from the
issuance of the Additional Shares in the case of the Additional Shares;
PROVIDED, HOWEVER, the Company may voluntarily suspend the effectiveness of such
Registration Statement for a limited time, which in no event shall be longer
than 90 days during any twelve month period, if the Company has been advised by
legal counsel that the offering of the shares of Common Stock pursuant to any
such Shelf Registration Statement would adversely affect, or would be improper
in view of (or improper without disclosure in a prospectus), a proposed
financing, a reorganization, recapitalization, merger, consolidation, or similar
transaction involving the Company or its subsidiaries, in which event the
Company shall be required to keep such Shelf
12
Registration Statement effective for an additional period of time beyond such
two year period for an additional period of time equal to the number of days the
effectiveness thereof has been suspended pursuant to this proviso or Section
4.6. The Company, if so requested by Purchaser, will cause its counsel to
confirm in writing that it has rendered such advice to the Company.
Section 4.2. INCIDENTAL REGISTRATION RIGHTS. If, within twelve months
after the Closing Date, the Company proposes to file a registration statement
relating to any of the Company's capital stock under the Act (other than a
registration statement required to be filed in respect of employee benefit plans
of the Company on Form S-8 or any similar form from time to time in effect, any
registration statement on Form S-4 or similar successor form, or a registration
statement filed in respect of Common Stock of the Company solely for purposes of
making acquisitions) the Company shall, at least 14 days (or if such 14 day
period is not practicable, then a reasonable shorter period which shall not be
less than seven days) prior to such filing, give written notice of such proposed
filing to Purchaser. Upon receipt by the Company not more than seven days
(unless the notice given to Purchaser pursuant to the previous sentence is less
than ten days, in which case such seven-day period shall be shortened to three
days) after such notice of a written request from Purchaser for registration of
Shares, (i) the Company shall include such Shares in such registration statement
or in a separate registration statement concurrently filed, and shall use
commercially reasonable efforts to cause such registration statement to become
effective with respect to such Shares, and (ii) if such proposed registration is
in connection with an underwritten offering of Common Stock, upon request of
Purchaser, the Company shall cause the managing underwriter therefor to include
in such offering the Shares as to which Purchaser requests such inclusion, on
terms and conditions comparable to those of the securities offered on behalf of
the Company or on behalf of any stockholder of the Company; PROVIDED, HOWEVER,
that if the managing underwriter therefor concludes that the number of shares to
be registered for selling shareholders (including Purchaser) would materially
adversely affect such offering, the number of Shares to be registered, together
with the number of shares of Common Stock or other securities held by other
shareholders proposed to be registered in such offering, shall be reduced on a
pro rata basis based on the number of Shares proposed to be sold by Purchaser as
compared to the number of shares proposed to be sold by all shareholders.
Section 4.3. INFORMATION, DOCUMENTS, ETC. In connection with any
registration pursuant to this Article, Purchaser shall furnish to the Company
such information regarding its holdings and the proposed manner of distribution
thereof as the Company may reasonably request and as shall be required in
connection with any registration, qualification or compliance referred to in
this Article. The Company agrees that it will furnish to Purchaser the number of
prospectuses, or other documents, or any amendments or supplements thereto,
incident to any registration, qualification or compliance referred to in this
Article as Purchaser from time to time may reasonably request.
Section 4.4. EXPENSES OF REGISTRATION. The Company will bear all
expenses of registrations pursuant to this Article including, without
limitation, registration fees, printing expenses, expenses of compliance with
Blue Sky or other state securities laws, and legal and audit
13
fees incurred by the Company and Purchaser in connection with such registration
and amendments or supplements in connection therewith. Underwriters' fees,
commissions and discounts and the fees and expenses of legal counsel, if any,
for Purchaser shall not be considered registration expenses for purposes hereof,
except as provided in Section 5.3.
Section 4.5. COOPERATION. In connection with any registration of Common
Stock pursuant to Section 4.2, the Company agrees to:
(a) enter into such customary agreements (including an
underwriting agreement containing such representations and warranties by
the Company and such other terms and provisions, as are customarily
contained in underwriting agreements for comparable offerings) and take
all such other actions as Purchaser or the underwriters, if any,
participating in such offering and sale may reasonably request in order
to expedite or facilitate such offering and sale;
(b) furnish, at the request of Purchaser or any underwriters
participating in an underwritten offering pursuant to Section 4.2, a
comfort letter or letters, dated the date of the final prospectus and
the date of the closing from the independent certified public
accountants of the Company and addressed to Purchaser and any
underwriters participating in such offering and sale, which letter or
letters shall state that such accountants are independent and shall
address such matters as Purchaser and underwriters may reasonably
request and as may be customary in transactions of a similar nature for
similar entities and an opinion, dated the date of the closing, of the
counsel representing the Company with respect to such offering and sale,
addressed to Purchaser and any such underwriters, which opinion shall
address such matters as Purchaser and any underwriters may reasonably
request and as may be customary in transactions of a similar nature for
similar entities; and
(c) make available for inspection by Purchaser, the underwriters,
if any, participating in such offering and sale, or any other agent
retained by Purchaser or such underwriters, all financial and other
records, corporate documents and properties of the Company, and supply
such additional information, as they shall reasonably request.
Section 4.6. SUSPENSION OF EFFECTIVENESS; SUPPLEMENTS.
(a) The Company will notify Purchaser promptly of (i) any action
by the SEC to suspend the effectiveness of any registration statement
filed pursuant to this Article or the initiation or threatened
initiation of any proceeding for such purpose (a "stop order") or (ii)
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares or Additional Shares for
sale in any jurisdiction or the initiation or threatened initiation of
any proceeding for such purpose (a "suspension"). Immediately upon
receipt of any such notice, Purchaser shall cease to offer or sell any
Shares or Additional Shares pursuant to the registration statement in
the jurisdiction to which such stop order or suspension relates. The
Company will use commercially reasonable efforts
14
to prevent the issuance of any such stop order or suspension and, if any
such stop order or suspension is issued, to obtain as soon as possible
the withdrawal or revocation thereof, and will notify Purchaser at the
earliest practicable date of the date on which Purchaser may offer and
sell pursuant to the registration statement.
(b) Following the effectiveness of a registration statement
covering the reoffer or resale of Shares or Additional Shares, the
Company will notify Purchaser promptly of the occurrence of any event or
the existence of any state of facts that, in the judgment of the
Company, should be set forth in (or incorporated by reference in) such
registration statement. Immediately upon receipt of such notice,
Purchaser shall cease to offer or sell any Shares or Additional Shares
pursuant to such registration statement, cease to deliver or use such
registration statement and, if so requested by the Company, return to
the Company, all copies (other than permanent file copies) of such
registration statement. The Company shall take such commercially
reasonable action as may be necessary to promptly amend or supplement
such registration statement in order to set forth or reflect such event
or state of facts. The Company will thereafter furnish such number of
copies of such amendment or supplement to Purchaser as Purchaser may
reasonably request.
Section 4.7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless Purchaser
and each Person, if any, who controls Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act from
and against any and all losses, claims, damages, liabilities and
expenses (including, without limiting the foregoing but subject to
Section 4.7(c) hereof, the reasonable legal and other expenses incurred
in connection with any action, suit or proceeding or any claim asserted)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
the related prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus filed pursuant to this Article 4, or arising out of or based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made in
the case of the prospectus, not misleading, except insofar as such
losses, claims, damages, liabilities or expenses are caused directly by
an untrue statement or omission contained in information relating to
Purchaser, furnished to the Company by or on behalf of Purchaser for use
therein. In connection with any underwritten offering, the Company will
also indemnify the underwriters participating in the distribution, their
officers and directors and each Person who controls such Persons (within
the meaning of the Securities Act and the Exchange Act) to the same
extent as provided above with respect to the indemnification of
Purchaser, if requested in connection with any registration statement.
(b) As a condition to the inclusion of Shares or Additional
Shares in any registration statement pursuant to this Agreement,
Purchaser will furnish to the Company
15
in writing, promptly after receipt of a request therefor, such
information as the Company may reasonably request for use in connection
with any registration statement, prospectus or preliminary prospectus
and agrees to indemnify and hold harmless, severally and not jointly,
the Company, the underwriters and their respective officers and
directors, and any Person controlling the Company and such Underwriters
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity from the Company to
Purchaser and Persons controlling Purchaser, but only with reference to
information relating specifically to Purchaser furnished by or on behalf
of Purchaser for use in such registration statement or the prospectus or
any preliminary prospectus included therein. In case any action shall be
brought against the Company, or any such controlling Person based on the
registration statement, the prospectus or any preliminary prospectus and
in respect of which indemnity may be sought against Purchaser, Purchaser
shall have the rights and duties given to the Company by Section 4.7(c)
hereof (except that if the Company as provided in Section 4.7(c) hereof
shall have assumed the defense thereof Purchaser shall not be required
to do so, but may employ separate counsel therein and participate in the
defense thereof but the fees and expenses of such counsel shall be at
Purchaser's expense) and the Company and its directors, any such
officers, and any such controlling Person shall have the rights and
duties given by Section 4.7(c) hereof. In no event shall the liability
of Purchaser hereunder be greater than the net proceeds received by
Purchaser upon the Disposition of the Shares or Additional Shares giving
rise to such indemnification obligation.
(c) In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be brought against
Purchaser or any Person controlling Purchaser, with respect to which
indemnity may be sought against the Company pursuant to Section 4.7(a)
hereof, Purchaser shall promptly notify the Company in writing and the
Company shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to Purchaser and payment of all fees and
expenses relating thereto. Purchaser and such Persons controlling
Purchaser shall have the right to employ separate counsel in any such
action or proceeding and participate in the defense thereof, but the
fees and expenses of such counsel shall be at Purchaser's expense unless
(i) the employment of such counsel has been specifically authorized in
writing by the Company, (ii) the Company has not assumed the defense and
employed counsel reasonably satisfactory to Purchaser within 30 days
after notice of any such action or proceeding, or (iii) the named
parties to any such action or proceeding (including any impleaded
parties) include both Purchaser or any Person controlling Purchaser and
the Company and Purchaser or any Person controlling Purchaser shall have
been advised by the Company's counsel that there may be one or more
legal defenses available to Purchaser or such Person controlling
Purchaser that are different from or additional to those available to
the Company and that counsel for the Purchaser reasonably believes that
the assertion of such different or additional defenses is inconsistent
with the assertion by the Company of defenses available to the Company,
it being understood, however, that the Company shall not, in connection
with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising
16
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys
(in addition to all local counsel which is necessary, in the good faith
opinion of both counsel for the indemnifying party and counsel for the
indemnified party in order to adequately represent the indemnified
parties) for Purchaser and controlling Persons. The Company shall not be
liable for any settlement of any such action effected without the
written consent of the Company, but if settled with the written consent
of the Company or if there is a final judgment for the plaintiff, the
Company agrees to indemnify and hold harmless Purchaser and all Persons
controlling Purchaser from and against any loss or liability by reason
of such settlement or judgment. The Company shall not, without the prior
written consent of Purchaser, effect any settlement of any pending or
threatened proceeding in respect of which Purchaser or any Person
controlling Purchaser is a party and indemnity has been sought hereunder
by Purchaser or any Person controlling Purchaser unless such settlement
includes an unconditional release of Purchaser or such controlling
Person from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section is
unavailable to an indemnified party under paragraphs (a) or (b) hereof
in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and expenses in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand
and Purchaser on the other hand from the original sale by the Company of
the Shares or Additional Shares, or 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 Purchaser on the other hand in connection with the statements
or omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and Purchaser on the other
hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company on the one hand or by Purchaser 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 an indemnified party as a result of the losses,
claims, damages, liabilities or expenses shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
(e) The Company and Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section were determined by a
pro rata allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party
17
as a result of the loses, claims, damages, liabilities and expenses
referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or
proceeding. Notwithstanding any other provision of this Agreement,
Purchaser shall not be required to contribute an amount greater than the
gross proceeds received by Purchaser with respect to the sale of Shares
or Exercise Shares giving rise to any indemnification or contribution
obligation under this Section. 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.
Section 4.8. TRANSFERS OF REGISTRATION RIGHTS. The rights granted to
Purchaser under this Article may be transferred or succeeded to on one occasion
only by an Affiliate of Purchaser or a transferee who acquires at least 50% of
the total number of Shares and 50% of the total number of Additional Shares, if
any, issued to all Purchasers; PROVIDED, HOWEVER, that the Company shall be
given written notice prior to or promptly following such transfer stating the
name and address of the transferee and identifying the securities with respect
to which such rights are being assigned. Such notice shall include or be
accompanied by a written undertaking by the transferee to comply with the
obligations imposed on Purchaser under this Agreement. In the event any
registration rights are transferred in accordance with the terms hereof, any
actions required to be taken by Purchaser will be taken with the approval of the
holders of such registration rights who hold a majority of the Shares, whose
action shall bind all such holders of registration rights.
ARTICLE 5
MISCELLANEOUS
Section 5.1. FURTHER ASSURANCES. From time to time, as and when
requested by any party hereto, any other party hereto shall execute and deliver,
or cause to be executed and delivered, such documents and instruments and shall
take, or cause to be taken, such further or other actions as may be reasonably
necessary to effectuate the transactions contemplated hereby, including, without
limitation, the assuring, transferring and assigning unto the Company of the
Indebtedness, and the protection of the right, title and interest of Buyer in
and to, the Indebtedness.
Section 5.2. PUBLIC ANNOUNCEMENTS. Except as mutually agreed, neither
Purchaser nor any of its respective Affiliates or agents shall issue any press
release or public announcement regarding the execution of this Agreement or the
transactions contemplated hereby. If and to the extent that the Company is
advised by legal counsel that the transactions contemplated hereby must be
publicly disclosed by press releases, filings with the SEC or otherwise, the
Company may do so.
Section 5.3. EXPENSES. The Company and Purchaser shall bear their own
respective legal and accounting fees, and other costs and expenses with respect
to the negotiation, execution and delivery of this Agreement, and consummation
of the transactions contemplated hereby; PROVIDED, HOWEVER, that the Company
will agree to reimburse up to $15,000 of the Purchasers' out-of-pocket
18
expenses for the fees of outside legal counsel in connection with the execution
and delivery of this Agreement and the exercise of Purchasers' registration
rights under this Agreement. Such expense reimbursement shall be made from time
to time promptly after the Company receives documentation supporting such
reimbursable expenses.
Section 5.4. NOTICES AND WAIVERS. Any notice, instruction,
authorization, request, demand or waiver hereunder shall be in writing, and
shall be delivered either by personal delivery, by telegram, telex, telecopy or
similar facsimile means, by certified or registered mail, return receipt
requested, or by courier or delivery service, addressed to the parties hereto at
the address set forth below, or at such other address and number as a party
shall have previously designated by written notice given to the other parties in
the manner set forth in this Section:
For notices to Purchaser:
[Name of Purchaser]
c/o Wexford Management, L.L.C.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
FAX: 000-000-0000
Attention: Xxxxxx Xxxxx, Senior Vice President
For notices to the Company:
DI Industries, Inc.
625 Paragon Center One
000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000-0000
FAX: 000-000-0000
Attention: President
Notices shall be deemed given when received, if sent by facsimile means
(confirmation of such receipt by confirmed facsimile transmission being deemed
receipt of communications sent by facsimile means); and when delivered and
receipted for (or upon the date of attempted delivery where delivery is
refused), if hand-delivered, sent by express courier or delivery service, or
sent by certified or registered mail, return receipt requested.
Section 5.5. SURVIVAL; ASSIGNMENT; CERTAIN REFERENCES. The respective
representations, warranties and agreements of the parties contained herein shall
survive the Closing for a period of two years; PROVIDED, HOWEVER, that there
shall be no expiration of any such representation, warranty or agreement as to
which a bona fide claim has been asserted by written notice of such claim
delivered to the party making such representation or warranty during the
survival period. This Agreement shall not be assignable or delegable by any
party without the consent of the other. Unless otherwise specified, all
references herein to days, weeks, months or years shall be to calendar days,
19
weeks, months or years. Whenever the context requires, the gender of all words
used herein shall include the masculine, feminine and neuter, and the number of
all words shall include the singular and plural. The headings and captions used
in this Agreement are solely for convenient reference and shall not affect the
meaning or interpretation of any article, section or paragraph herein, or this
Agreement. The terms "hereof," "herein" or "hereunder" shall refer to this
Agreement as a whole and not to any particular article, section or paragraph.
The terms "including" or "include" are used herein in an illustrative sense and
not to limit a more general statement. When computing time periods described by
a number of days before or after a stated date or event, the stated date or date
on which the specified event occurs shall not be counted and the last day of the
period shall be counted. Time is of the essence in the performance of this
Agreement.
Section 5.6. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND
OF THE UNITED STATES APPLICABLE IN NEW YORK.
Section 5.7. DISPUTE RESOLUTION; SEVERABILITY; JUDICIAL MODIFICATION.
The parties expressly intend, desire and agree that any dispute arising out of,
or in connection with any term or provision of this Agreement or the issuance of
the Shares or Additional Shares shall be resolved by binding arbitration in New
York, New York in accordance with the Commercial Rules of the American
Arbitration Association then in effect; that judgment on the award rendered by
the arbitrator(s) may be entered in any court of competent jurisdiction; and
that if any such dispute is pending in any court, the parties agree to move that
the court refer the matter to such arbitration. If any term, provision,
covenant, or restriction of this Agreement (including any arbitration provision
of this Section 5.7) is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of this Agreement and the other terms,
provisions, covenants and restrictions hereof shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 5.8. AMENDMENT AND ENTIRETY. This Agreement may be amended,
modified, or superseded only by written instrument executed by all parties
hereto. This Agreement and that certain letter agreement respecting the
confidentiality of certain information provided to the Purchaser or its
Affiliates by the Company set forth the entire agreement and understanding of
the parties with respect to the transactions contemplated hereby and supersede
all prior agreements, arrangements, and understandings relating to the subject
matter hereof. Nothing in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any Persons other than the parties hereto and their permitted successors and
assigns, nor shall any provision give any third Persons any right of subrogation
or action over against any party to this Agreement. Without limiting the
generality of the foregoing, it is expressly understood that this Agreement does
not create any third party beneficiary rights.
Section 5.9. COUNTERPARTS; FACSIMILE DELIVERY. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original and all which together shall constitute one and the same instrument.
This Agreement shall be deemed for all purposes to have been executed and
delivered by a party hereto if a copy of this Agreement bearing the facsimile
20
signature of an officer of such party is transmitted electronically or delivered
to the other party and such Agreement bearing a facsimile signature shall be
considered for all purposes to have the same effect as a duly executed and
delivered Agreement bearing the original, manual signature of the signatory
thereto.
IN WITNESS WHEREOF, this Stock Purchase Agreement is executed and
delivered as of the day first above written.
DI INDUSTRIES, INC.
By:/s/ T. XXXXX X'XXXXX
T. Xxxxx X'Xxxxx, Senior Vice
President and Chief Financial Officer
WEXFORD SPECIAL SITUATIONS 1996, WEXFORD-EURIS SPECIAL SITUATIONS
L.P., a Delaware limited partnership 1996, L.P., a Delaware limited partnership
By: WEXFORD MANAGEMENT, L.L.C., By: WEXFORD MANAGEMENT, L.L.C.,
its Investment Advisor its Investment Advisor
By:/s/XXXXXX XXXXX By:/s/XXXXXX XXXXX
Xxxxxx Xxxxx, Senior Vice President Xxxxxx Xxxxx, Senior Vice President
WEXFORD SPECIAL SITUATIONS 0000 XXXXXXX SPECIAL SITUATIONS 1996
INSTITUTIONAL, L.P., a Delaware limited LIMITED, a Cayman Island exempted
partnership company
By: WEXFORD MANAGEMENT, L.L.C., By: WEXFORD MANAGEMENT, L.L.C.,
its Investment Advisor its Investment Advisor
By:/s/XXXXXX XXXXX By:/s/XXXXXX XXXXX
Xxxxxx Xxxxx, Senior Vice President Xxxxxx Xxxxx, Senior Vice President
21
EXHIBIT A
Shares of Purchase
PURCHASER COMMON STOCK PURCHASED PRICE
-------------------------- -------------
NUMBER %
Wexford Special Situations 1996, L.P., a
Delaware limited partnership ............... 1,175,300 67.16% $2,767,008.79
Wexford Special Situations 1996
Institutional, L.P., a Delaware limited
partnership ................................ 214,550 12.26% 505,115.07
Wexford-Euris Special Situations 1996, L.P.,
a Delaware limited partnership ............. 301,350 17.22% 709,468.30
Wexford Special Situations 1996 Limited, a
Cayman Island exempted company ............. 58,800 3.36% 138,432.84
--------- --------- -------------
1,750,000 100.00% $4,120,025.00
========= ========= =============
22
