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EXHIBIT 1.1
13,000,000 Shares
GREY WOLF, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
March 30, 2000
Xxxxxxx Xxxx & Company, L.L.C.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
Grey Wolf, Inc., a Texas corporation (the "Company"), proposes
to issue and sell 13,000,000 shares (the "Stock") of the Company's common stock,
par value $0.10 per share (the "Common Stock"). This agreement (this
"Agreement") is to confirm the agreement concerning the purchase of the Stock
from the Company by Xxxxxxx Xxxx & Company, L.L.C. (the "Underwriters").
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees with the Underwriter that:
(a) A registration statement (No. 333-86949) on Form S-3 with
respect to the Stock has (i) been prepared by the Company in conformity
with the requirements of the United States Securities Act of 1933 (the
"Securities Act") and the rules and regulations (the "Rule and
Regulations") of the United States Securities and Exchange Commission
(the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the
Securities Act. If the Company does not propose to amend such
Registration Statement and if any post-effective amendment to such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent such
amendment has been declared effective by the Commission. Copies of such
registration statement have been delivered by the Company to you as the
Underwriter. As used in this Agreement, "Effective Time" means the date
and the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective
Time. The registration statement, as amended at its Effective Time, and
the form of prospectus as included in the registration statement
("prospectus") and the prospectus supplement relating to the Stock as
filed with the Commission pursuant and in accordance with Rule 424(b)
("Rule 424(b)") under the Securities Act (whether or not such
prospectus supplement is required to be filed with the Commission by
the Company pursuant to the Securities Act), including all material
incorporated or deemed to be incorporated by reference in such
prospectus or prospectus supplement is hereinafter referred to as the
("Prospectus Supplement"), including all
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information deemed to be a part of the registration statement as of the
Effective Time pursuant to the General Instructions of Form S-3, is
hereinafter referred to as the "Registration Statement."
(b) At the Effective Time, and of the date hereof, the
Registration Statement conformed in all respects to the requirements of
the Securities Act and the Rules and Regulations and did not include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. On the date of this Agreement, the Registration
Statement conforms and, at the time of filing of the Prospectus
Supplement pursuant to Rule 424(b), the Registration Statement and the
Prospectus Supplement will conform, in all respects to the requirements
of the Act and the Rules and Regulations, and neither of such documents
includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
Notwithstanding the foregoing, the Company makes no representation or
warranty as to information contained in or omitted from the
Registration Statement or the Prospectus Supplement in reliance upon
and in conformity with written information furnished to the Company by
you expressly for inclusion therein. There is no contract or document
required to be described in the Registration Statement or the
Prospectus Supplement or to be filed as an exhibit to the Registration
Statement or to a document incorporated by reference into the
Registration Statement which is not described or filed as required.
(c) The documents incorporated by reference in the
Registration Statement, at the time they became effective or were filed
with the Commission conformed in all material respects to the
requirements of the Securities Act and the Exchange Act and the Rules
and Regulations, and did not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances in which they were
made, not misleading; and any further documents so filed and
incorporated by reference in the Registration Statements, when such
documents become effective or are filed with Commission, as the case
may be, will conform in all material respects to the requirements of
the Securities Act and the Rules and Regulations and the Exchange Act,
as applicable, and the Rules and Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(d) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Texas, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus. The Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the financial condition, results of operations or prospects
of the Company and its subsidiaries, taken as a whole (a "Material
Adverse Effect").
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(e) Each subsidiary of the Company (as defined in Section 15)
has been duly incorporated or formed, as applicable, and is an existing
entity in good standing under the laws of the jurisdiction of its
incorporation or formation, with power and authority (corporate or
other) to own its properties and conduct its business as described in
the Prospectus, and each subsidiary of the Company is duly qualified to
do business as a foreign entity in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified or be in good standing would not have a
Material Adverse Effect.
(f) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued and outstanding capital stock
or other equity interest of each subsidiary of the Company has been
duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock or other equity interest of each subsidiary owned
by the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects except as may exist or arise under the
Company's CIT Credit Facility described in the Prospectus.
(g) The Stock and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Stock has been
delivered and paid for in accordance with this Agreement on the
Delivery Date (as defined below), the Stock will have been, validly
issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; and the stockholders
of the Company have no preemptive rights with respect to the Stock.
(h) KPMG LLP, who have certified certain financial statements
of the Company, whose report is incorporated by reference in the
Registration Statement and who have delivered the initial letter
referred to in Section 7(f) hereof, are independent public accountants
as required by the Securities Act and Rules and Regulations.
(i) The conditions for the Company's use of Form S-3, as set
forth in the general instructions to such form, have been satisfied.
(j) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or the
Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the offer and sale of the Stock.
(k) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement, except where the
failure to so include such securities in the Registration Statement
would not have a Material Adverse Effect or adversely affect the
consummation of the transactions contemplated by this Agreement.
(l) The Company's outstanding Common Stock is listed on the
American Stock Exchange (the "AMEX"), and the Stock will be, on or
before the Delivery Date, approved for listing on the AMEX, subject to
official notice of issuance.
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(m) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
to be obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the
issuance and sale of the Stock by the Company, except such as have been
obtained and made under the Act and such as may be required under state
securities laws.
(n) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated, will not
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, except, in
each such case, for such breaches, violations or defaults as would not
have a Material Adverse Effect.
(o) This Agreement has been duly authorized, executed and
delivered by the Company.
(p) Except as disclosed in the Prospectus or as would not have
a Material Adverse Effect, the Company and its subsidiaries have good
and indefeasible title to all real properties and good and marketable
title to all other properties and assets owned by them, in each case
free from liens, encumbrances and defects; and except as disclosed in
the Prospectus, the Company and its subsidiaries hold any leased real
or personal property under valid and enforceable leases with no
exceptions other than those that would not have a Material Adverse
Effect.
(q) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them except where the failure to have obtained the same would not have
a Material Adverse Effect, and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(r) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(s) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them with only such
exception as would not have a Material Adverse Effect, and have not
received any notice of infringement of or conflict
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with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(t) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "Environmental Laws"), owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or is subject to any
claim relating to any Environmental Laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending governmental investigation which might lead to such a
claim.
(u) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Stock; and no such actions,
suits or proceedings are to the Company's knowledge, threatened or
contemplated.
(v) The financial statements included in the Registration
Statement and Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Prospectus, such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis and the schedules included in the Registration Statement present
fairly the information required to be stated therein.
(w) The Company is not and, after giving effect to the
offering and sale of the Stock and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(x) DI Energy, Inc., Grey Wolf International, Inc., Grey Wolf
Holdings Company, Grey Wolf LLC, Grey Wolf Drilling Company L.P. and
Murco Drilling Corp. are the Company's only subsidiaries with domestic
operations.
2. Purchase of the Stock by the Underwriter. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell to the
Underwriter and the Underwriter, agrees to purchase from the Company 13,000,000
shares of Stock, at a purchase price of $4.00 per share of the Stock.
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The Company shall not be obligated to deliver any of the Stock
to be delivered on any Delivery Date (as hereinafter defined), as the case may
be, except upon payment for all the Stock to be purchased on such Delivery Date
as provided herein.
3. Offering of Stock by the Underwriter.
The Underwriter proposes to purchase from the Company and
reoffer the Stock for sale upon the terms and conditions set forth in the
Prospectus Supplement.
4. Delivery of and Payment for the Stock. Delivery of the
Stock shall be made at the office of Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000 at 10:00 A.M., local time, on April 4, 2000 or
at such other date or place as shall be determined by agreement between the
Underwriter and the Company. This date and time are sometimes referred to as the
"Delivery Date." On the Delivery Date, the Company shall deliver or cause to be
delivered the Stock through the facilities of the Depository Trust Company
("DTC") for the account of the Underwriter, against payment of the purchase
price therefor by wire transfer in Federal (same day) funds to Southwest Bank of
Texas, N.A., ABA No. 000000000, Account Number of Grey Wolf 327-379.
5. Further Agreements of the Company. The Company covenants
and agrees:
(a) To prepare the Prospectus Supplement in a form reasonably
approved by the Underwriter and to file such Prospectus Supplement
pursuant to Rule 424(b) under the Securities Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
Supplement prior to the last Delivery Date except as permitted herein;
to advise the Underwriter, promptly after it receives notice thereof,
of the time when any post-effective amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Underwriter with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Stock; to advise the Underwriter,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order, or of any order preventing or suspending
the use of any prospectus or the Prospectus Supplement, of the
suspension of the qualification of the Stock for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
prospectus or for additional information; and, in the event of the
issuance of any stop order or other such order, to use promptly its
best efforts to obtain its withdrawal;
(b) To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment
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thereto (in each case excluding exhibits) and (ii) the Prospectus
Supplement and any amended or supplemented prospectus and (iii) any
document incorporated by reference in the Registration Statement
(excluding exhibits thereto); and, if the delivery of a prospectus is
required at any time after the Effective Time in connection with the
offering or sale of the Stock and if at such time any events shall have
occurred as a result of which the Prospectus Supplement would include
an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus
Supplement is delivered, not misleading, or, if for any other reason it
shall be necessary to amend or supplement the Prospectus Supplement or
to file under the Exchange Act any document incorporated by reference
in the Registration Statement in order to comply with the Securities
Act or the Exchange Act, to notify the Underwriter and, upon its
request, to file such document and to prepare and furnish without
charge to the Underwriter and to any dealer in securities as many
copies as the Underwriter may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement
or omission or effect such compliance;
(c) To file promptly with the Commission any amendment to the
Registration Statement or the prospectus or any supplement to the
prospectus that may, in the reasonable judgment of the Company or the
Underwriter, be required by the Securities Act or requested by the
Commission;
(d) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the
Underwriter and counsel for the Underwriter and obtain the consent of
the Underwriter to the filing, which shall not be unreasonably
withheld, conditioned or delayed;
(e) As soon as practicable after the Effective Date (it being
understood that the Company shall have until at least 410 days after
the end of the Company's current fiscal quarter), to make generally
available to the Company's security holders and to deliver to the
Underwriter an earnings statement of the Company and its Subsidiaries
(which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158);
(f) For a period of one year following the Effective Date, to
furnish to the Underwriter copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the AMEX or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(g) Promptly from time to time to take such action as the
Underwriter may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Underwriter may request and to comply with such laws and to furnish to
whomever you may direct such information as may be required so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith
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the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction
where it is not currently so subject;
(h) For a period of 14 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding
options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the grant
of options pursuant to option plans existing on the date hereof), or
(2) enter into any swap or other derivatives transaction that transfers
to another, in whole or in part, any of the economic benefits or risks
of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, in
each case, without the prior written consent of the Underwriter; and to
cause each executive officer and director of the Company to furnish to
the Underwriter, prior to the Delivery Date, a letter or letters, in
form and substance satisfactory to counsel for the Underwriters,
pursuant to which each such person shall agree not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could
be expected to, result in the disposition by any person at any time in
the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than pursuant to currently
outstanding options, warrants or rights) or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such shares
of Common Stock, whether any such transaction described in clause (1)
or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 14 days
from the date of the Prospectus, without the prior written consent of
the Underwriter;
(i) To apply for the inclusion of the Stock on the AMEX and to
use its best efforts to complete that listing, subject only to official
notice of issuance and evidence of satisfactory distribution, prior to
the Delivery Date;
(j) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the prospectus in all material
respects; and
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the Rules and Regulations.
6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs (including, without limitation, all
registration and filing fees and fees and expenses of the Company's accountants)
incident to the preparation, printing and filing under the
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Securities Act of the Registration Statement and any amendments and exhibits
thereto; (c) the costs of distributing the Registration Statement as originally
filed and each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), the prospectus and Prospectus Supplement
and any amendment or supplement to the foregoing or any document incorporated by
reference into any of the foregoing, all as provided in this Agreement; (d) any
applicable listing or other fees; (e) the fees and expenses of qualifying the
Stock under the securities laws of the several jurisdictions as provided in
Section 5(g) and (f) all other costs and expenses incident to the performance of
the obligations of the Company; provided that, except as provided in this
Section 6 and in Section 11, the Underwriter shall pay its own costs and
expenses, including the costs and expenses of its counsel, any transfer taxes on
the Stock which it may sell and the expenses of advertising any offering of the
Stock made by the Underwriter.
7. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy, as of the date hereof and
on the Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus Supplement shall have been timely filed
with the Commission in accordance with Section 5(a); prior to the
Delivery Date no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus
or otherwise shall have been complied with.
(b) The Underwriter shall not have discovered and disclosed to
the Company on or prior to the Delivery Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact which, in your opinion or in the
opinion of your counsel, is material or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Stock,
the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriter, and the Company shall have furnished to
such counsel all documents and information that they may reasonably
request to enable them to pass upon such matters.
(d) Xxxxxx & Xxxxxx, L.L.P. shall have furnished to the
Underwriter their written opinion, as counsel to the Company, addressed
to the Underwriter and dated such Delivery Date, in substantially the
form of Exhibit I:
(e) The Underwriter shall have received from Jones, Walker,
Waechter, Poitevent, Carrere & Xxxxxxx, L.L.P., counsel for the
Underwriter, such opinion or
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opinions, dated the Delivery Date, with respect to the issuance and
sale of the Stock, the Registration Statement, the Prospectus and other
related matters as the Underwriter may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) On the Delivery Date, the Underwriter shall have received
from KPMG LLP a letter, in form and substance satisfactory to the
Underwriter, addressed to the Underwriter and dated the date hereof (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
thereof (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information
is given in the Prospectus, as of a date not more than five days prior
to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily
covered by accountants' "comfort letters" to underwriters in connection
with registered public offerings.
(g) [RESERVED.]
(h) [RESERVED.]
(i) The Company shall have furnished to the Underwriter a
certificate, dated the Delivery Date, of its Chairman of the Board or
its President and its chief financial officer stating that:
(i) The representations, warranties and
agreements of the Company in Section 1 are true and
correct as of such Delivery Date in all material
respects; the Company has complied with all its
agreements contained herein; and the conditions set
forth in Section 7(a) and 7(j) have been fulfilled;
and
(ii) They have carefully examined the
Registration Statement, the prospectus and Prospectus
Supplement and, in their opinion (A) as of the
Effective Date, the Registration Statement and
prospectus did not include any untrue statement of a
material fact and did not omit to state a material
fact required to be stated therein or necessary to
make the statements therein not misleading, and (B)
since the Effective Date no event has occurred that
should have been set forth in a supplement or
amendment to the Registration Statement or the
prospectus, except as have been set forth in the
Prospectus Supplement. There has been no document
required to be filed under the Exchange Act and the
Rules and Regulations that upon such filing would be
deemed to be incorporated by reference into the
Prospectus that has not been so filed.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financials
incorporated by reference in the Prospectus
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Supplement any loss or interference with its business from fire,
explosion, flood, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus Supplement or (ii) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or any
of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is, in the judgment of the
Underwriter, so material and adverse as to make it impracticable to
proceed with the public offering or the delivery of the Stock being
delivered on the Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the
American Stock Exchange, or trading in any securities of the Company on
any exchange or in the over-the-counter market, shall have been
suspended for more than a combined period of four hours during a single
trading day, (ii) a banking moratorium shall have been declared by
federal or state authorities or (iii) there shall have been a
declaration of a national emergency or war by the United States.
(l) The AMEX shall have approved the Stock for inclusion,
subject only to official notice of issuance.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to the Underwriter and to counsel for the Underwriter.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless the
Underwriter its officers and employees and each person, if any, who
controls the Underwriter 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 (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
Stock), to which the Underwriter, 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 Registration Statement, the
prospectus or the Prospectus Supplement, (ii) the omission or alleged
omission to state in the Registration Statement, the prospectus or the
Prospectus Supplement, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by the Underwriter in connection with, or
relating in any manner to, the Stock or the offering contemplated
hereby, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or
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(ii) above (provided that the Company shall not be liable under this
clause (iii) to the extent that such loss, claim, damage or liability
results from the failure or alleged failure by the Underwriter to
deliver a prospectus and Prospectus Supplement as required by the
Securities Act, or if it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by the Underwriter through its gross
negligence or willful misconduct), and shall reimburse the Underwriter
and each such officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the
Underwriter, 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;
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 any
Preliminary Prospectus, the Registration Statement or the prospectus,
or in any such amendment or supplement, in reliance upon and in
conformity with written information concerning the Underwriter
furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein, which information consists solely
of the information specified in Section 8(e). The foregoing indemnity
agreement is in addition to any liability that the Company may
otherwise have to the Underwriter or to any officer, employee or
controlling person of the Underwriter.
(b) The Underwriter 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 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 (A) in the Prospectus Supplement, the Registration Statement
or the prospectus or in any amendment or supplement thereto, or (B) in
any Blue Sky Application or (ii) the omission or alleged omission to
state in the Prospectus Supplement, the Registration Statement or the
prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application 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 the Underwriter
furnished to the Company by or on behalf of the Underwriter
specifically for inclusion therein, and shall reimburse the Company and
any such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company or any such director,
officer 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. The foregoing
indemnity agreement is in addition to any liability that the
Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
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(c) Promptly after receipt by an indemnified party under this
Section 8 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 8, 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 that it may have under
this Section 8 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 8. 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 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 8 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 Underwriter shall have the
right to employ counsel to represent jointly the Underwriter and its
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 Underwriter against the Company under this Section 8 if,
in the reasonable judgment of the Underwriter, it is advisable for the
Underwriter and those officers, employees and controlling persons to be
represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Company;
provided, however, that the Company shall not be responsible for more
than one separate counsel for all indemnified parties combined. 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.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriter on the other from the
offering of the Stock or (ii) if
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the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriter on
the other with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative
benefits received by the Company on one hand and the Underwriter on the
other shall be deemed to be in the same proposition as (i) the total
proceeds received by the Company from the sale of the Stock before
expenses bear to the (ii) profits, if any, received by the Underwriter
during the period beginning on the Delivery Date and ending 14 business
days thereafter from the initial resales of the Stock in at-the-market
transactions calculated as the difference between (a) the net proceeds
received by the Underwriter for such resales and (b) the aggregate
purchase price for the Stock resold. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriter, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it
would not be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section shall
be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), the Underwriter
shall not be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and
distributed to the public was offered to the public exceeds the amount
of any damages that the Underwriter has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 8(e) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Underwriter confirms and the Company acknowledges that
the statements with respect to the public offering of the Stock by the
Underwriter set forth on the cover page of the Prospectus Supplement
and in the "Underwriting" section of the Prospectus Supplement are
correct and constitute the only information concerning the Underwriter
furnished in writing to the Company by or on behalf of the Underwriter
specifically for inclusion in the Registration Statement and the
Prospectus.
9. [RESERVED.]
10. Termination. The obligations of the Underwriter hereunder
may be terminated by the Underwriter by notice given to and received by the
Company prior to delivery of and payment for the Stock if, prior to that time,
any of the events described in Sections 7(j) or 7(k), shall have occurred or if
the Underwriter shall decline to purchase the Stock for any reason permitted
under this Agreement.
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15
11. Reimbursement of Underwriter's Expenses. If (a) the
Company shall fail to tender the Stock for delivery to the Underwriter by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriter's obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriter for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriter in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Underwriter.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxxx Xxxx & Company L.L.C.,
000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxx 00000; Attention:
E. Xxxxxxx Xxxxxxx (Fax: 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Xxxxx Xxxxxxxx (Fax:
000-000-0000).
13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriter, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control the Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriter contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary".
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday that is not a day on which banking institutions in
New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
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16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between
the Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
GREY WOLF, INC.
By /s/ XXXXX X. XXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxx
Senior Vice President and
Chief Financial Officer
Accepted:
Xxxxxxx Xxxx & Company, L.L.C.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Authorized Representative
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EXHIBIT I TO UNDERWRITING AGREEMENT
April ___, 2000
Xxxxxxx Xxxx & Company L.L.C.
000 Xxxxxx Xxxxxx, #0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Gentlemen:
We have acted as counsel for Grey Wolf, Inc., a Texas corporation (the
"Company"), in connection with the Registration Statement of the Company on Form
S-3 under the Securities Act of 1933, as amended (the "Act"), filed with the
Securities and Exchange Commission (the "Commission") relating to the Company's
common stock, par value $.10 per share (the "Securities") and other securities
which may be offered by the Company from time to time pursuant to Rule 415 under
the Act. This opinion is being delivered to you at the request of the Company
pursuant to Section 7(d) of the Underwriting Agreement dated March ___, 2000
(the "Underwriting Agreement") by and among the Company and Xxxxxxx Xxxx &
Company L.L.C., (the "Underwriter"). Capitalized terms used but not defined
herein have the meanings assigned to them in the Underwriting Agreement.
In this capacity, we have examined signed copies of (i) the
Registration Statement on Form S-3 filed by the Company with the Commission
under the Act on September 10, 1999 (File No. 333- 86949); (ii) Amendment Number
1 to the Registration Statement filed with the Commission on October 6, 1999;
(iii) the prospectus; and (iv) the Prospectus Supplement. The Registration
Statement as amended at the time it became effective is herein referred to as
the "Registration Statement," the prospectus dated October 6, 1999 and the
Prospectus Supplement dated March ___, 2000, in the forms filed with the
Commission pursuant to Rule 424(b) of the published rules and regulations of the
Commission under the Act are herein collectively referred to as the "Prospectus
Supplement." We have also examined: the Underwriting Agreement; the articles of
incorporation and bylaws of the Company and each Domestic Subsidiary (as defined
herein); corporate minutes and resolutions of the Company as presented to us;
and such other agreements and instruments of the Company and certificates of
officers of the Company and each Domestic Subsidiary with respect to factual
matters and of public officials as we believe necessary or appropriate in order
to render the opinions expressed herein. In making our examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
presented to us as originals, the conformity to original documents of all
documents presented to us as copies thereof, and the authenticity of the
original documents from which any such copies were made, which assumptions we
have not independently verified.
Based upon all of the foregoing, and subject to the qualifications and
assumptions noted below, we are of the opinion that:
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(1) The Company and each Domestic Subsidiary has been duly
incorporated or formed and is validly existing and in good
standing under the laws of its state of organization and has
the requisite power and authority to carry on its business as
described in the Prospectus Supplement. The Company and each
Domestic Subsidiary is duly qualified and is in good standing
as a foreign entity authorized to do business in each
jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
(2) The Stock and all other outstanding shares of capital stock of
the Company have been duly authorized and validly issued and
are fully paid, and non-assessable. All equity interests and
outstanding shares of capital stock of each Domestic
Subsidiary have been duly authorized and validly issued. The
Stock conforms in all material respects to the description
thereof contained in the Prospectus Supplement. The
shareholders of the Company have no preemptive rights under
Texas law or, to the best of our knowledge, similar rights
with respect to the Stock. All of the issued capital stock and
the equity interests of each Domestic Subsidiary is owned of
record (and to the best of our knowledge, beneficially) by the
Company, directly or through wholly-owned subsidiaries. The
issued and outstanding capital stock and the equity interests
of each Domestic Subsidiary is, to the best of our knowledge,
free and clear of any liens, encumbrances and defects, except
as may exist or arise under the Company's Bank Credit
Facility.
(3) The Company is not and, after giving effect to the offering
and sale of the Stock and the application of the proceeds
thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act
of 1940, as amended.
(4) No consent, approval, authorization or order of or filing with
any United States federal or state court or governmental
agency or body is required in connection with the purchase and
distribution of the Stock by the Underwriters, except as have
been obtained under the Act (except we express no opinion with
respect to the state securities or Blue Sky laws).
(5) The execution, delivery and performance of the Underwriting
Agreement and the consummation of the transactions
contemplated therein by the Company do not and will not
conflict with or constitute a breach or violation of any of
the terms or provisions of, or a default under, the articles
of incorporation or bylaws of the Company or any Domestic
Subsidiary or, to the best of our knowledge, any agreement, or
instrument known to us that is material to the Company and its
respective subsidiaries, taken as a whole, to which the
Company or any Domestic Subsidiary is a party or by which the
Company, or any Domestic Subsidiary or their respective
property is bound, or violate or conflict with any applicable
judgment, order or decree of any United States federal or
state court, or any other domestic
19
governmental body or agency known to us to be applicable to
the Company or its subsidiaries.
(6) The Registration Statement has become effective under the Act,
and to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose are pending before or
contemplated by the Commission.
(7) The Registration Statement at the time it was declared
effective complied, and the Prospectus Supplement will comply,
as to form in all material respects with the Act, except for
financial statements and schedules and other financial or
statistical data contained or incorporated by reference
therein as to which we express no opinion.
(8) The Underwriting Agreement has been duly authorized by all
necessary corporate action, executed and delivered by the
Company.
We note that, although certain portions of the Registration Statement
and the Prospectus Supplement (including financial statements and schedules, and
related data) have been included therein on the authority of "experts" within
the meaning of the Act, we are not "experts" within the meaning of the Act with
respect to any portion of the Registration Statement. However, we have
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants of the Company
and representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus Supplements were discussed and,
although we are not passing upon and do not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus Supplement on the basis of the foregoing
(relying as to materiality to a large extent upon statements of officers and
other representatives of the Company), nothing has come to our attention that
has led us to believe that the Registration Statement at the time it became
effective contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus Supplement contained an untrue
statement of a material fact or omitted 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.
It is specifically understood that we express no opinion or belief
herein with respect to the financial statements and schedules and other
financial, or statistical data included in the Registration Statement and
Prospectus or any amendments or supplements thereto.
As used in this opinion, the words "to our knowledge", "known to us",
or words of similar import mean that, during the course of our representation of
the Company, no information has come to the attention of the attorneys of this
firm who have devoted substantive attention to the transactions described herein
which would give such attorneys actual knowledge that the opinions expressed are
factually incorrect. The term "Domestic Subsidiary" as used herein includes each
of DI Energy, Inc., Grey Wolf International, Inc., Grey Wolf Holdings Company,
Grey Wolf LLC, Grey Wolf Drilling Company L.P. and Murco Drilling Corp. Except
as described herein, we have
20
not undertaken any independent factual investigation for the purpose of
rendering an opinion which is expressed to be to our knowledge.
Our opinions expressed herein are limited in all respects to the laws
of the state of Texas and the United States federal law insofar as it is
applicable. This opinion is being delivered to you for your sole use and benefit
in connection with the transaction above, and may not be relied upon by any
other person, except with our prior written consent.
Very truly yours,
XXXXXX & XXXXXX, L.L.P.
