1
Exhibit 10.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of February 13,
1997, between TMBR/Sharp Drilling, Inc., a Texas corporation (the "Company"),
and the persons whose names are set forth on Annex I hereto (such persons being
referred to herein individually as a "Buyer" and collectively as "Buyers").
WHEREAS, the Company desires to sell to Buyers, and Buyers desire to
purchase from the Company, shares of Common Stock, par value $.10 per share, of
the Company ("Common Stock");
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and Buyers hereby agree as follows:
ARTICLE I
TERMS OF THE TRANSACTION
1.1 Agreement to Sell and to Purchase Shares. At the Closing (as
hereinafter defined), and on the terms and subject to the conditions set forth
in this Agreement, the Company shall sell and deliver to each Buyer, and each
Buyer shall purchase and accept from the Company, the number of shares of
Common Stock set forth opposite the name of such Buyer on Annex I hereto
(collectively, the "Shares").
1.2 Purchase Price and Payment; Escrow. The purchase price for the
Shares shall be $11.00 per Share (the "Purchase Price"). The total Purchase
Price payable by each Buyer for the Shares to be purchased by it is set forth
opposite the name of such Buyer on Annex I hereto and shall be paid by each
Buyer on or before the Closing Date (as hereinafter defined) (i) by check
finally paid or (ii) in immediately available funds by confirmed wire transfer
to a bank account designated by NORWEST BANK TEXAS, MIDLAND, N.A., as escrow
agent for the Company.
ARTICLE II
CLOSING AND CLOSING DATE
The closing of the transactions contemplated hereby (the "Closing")
shall take place (i) at the offices of Xxxxx, Xxxxxxxx & Xxxxx, a professional
corporation, Xxx Xxxxxx, Xxxxx 000, 000 Xxxxx Xxxxxxxxxx, Xxxxxxx, Texas, at
9:00 a.m., local time, on February 7, 1997, or (ii) at such other time or place
or on such other date as the parties hereto shall agree, and shall be
contingent upon (x) reaching a definitive agreement with respect to the sale
of, and (y) receipt by NORWEST BANK TEXAS, MIDLAND, N.A., as escrow agent for
the Company, of the total Purchase Price for the Shares. The date on which the
Closing is required to take place is herein referred to as the "Closing Date".
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each Buyer, as of the date
hereof and as of the Closing Date, that:
3.1 Corporate Organization. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Texas and has all requisite corporate power and authority to own, lease, and
operate its properties and to carry on its business as now being conducted.
3.2 Qualification. The Company is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the property
owned, leased, or operated by it or the conduct of its business requires such
qualification or licensing, except jurisdictions in which the failure to be so
qualified or licensed would not, individually or in the aggregate, have a
material adverse effect on the business, assets, results of operations, or
financial condition of the Company.
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3.3 Capitalization of the Company.
(a) The authorized capital stock of the Company consists of (i)
50,000,000 shares of Common Stock, par value $.10 per share, of which, as of
the date hereof, 3,703,086 shares are outstanding, and (ii) 10,000,000 shares
of Preferred Stock, par value $.10 per share, of which, as of the date hereof,
no shares are outstanding. All outstanding shares of capital stock of the
Company have been validly issued and are fully paid and nonassessable, and no
shares of capital stock of the Company are subject to, nor have any been issued
in violation of, preemptive or similar rights. As of the date hereof, (i) an
aggregate of 939,800 shares of Common Stock are issuable upon the exercise of
outstanding options granted to certain employees and directors of the Company,
and (ii) an aggregate of up to five percent (5%) of the Shares are reserved for
issuance and are issuable upon the exercise of stock purchase warrants to be
issued by the Company to Xxxxxxxx Xxxxxx Refsnes, Inc. on the Closing Date. As
of the date hereof, options to purchase an aggregate of 285,000 shares of the
Company's Common Stock remain available to be granted under the Company's 1994
Stock Option Plan.
(b) Except as set forth above in paragraph (a) of this Section 3.3
and as contemplated by this Agreement, and except for shares of Common Stock
offered or sold by the Company to other investors pursuant to the Company's
Confidential Private Placement Memorandum dated January 31, 1997, there are
outstanding (i) no shares of capital stock or other voting securities of the
Company, (ii) no securities of the Company convertible into or exchangeable for
shares of capital stock or other voting securities of the Company, (iii) no
options or other rights to acquire from the Company, and no obligation of the
Company to issue or sell, any shares of capital stock or other voting
securities of the Company or any securities of the Company convertible into or
exchangeable for such capital stock or voting securities, and (iv) no equity
equivalents, interests in the ownership or earnings, or other similar rights of
or with respect to Company.
3.4 Authority Relative to This Agreement. The Company has full
corporate power and authority to execute, deliver, and perform this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery, and performance by the Company of this Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Company. This Agreement
has been duly executed and delivered by the Company and constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar
laws affecting creditors' rights generally, (ii) equitable principles which may
limit the availability of certain equitable remedies (such as specific
performance) in certain instances, and (iii) public policy considerations with
respect to the enforceability of rights of indemnification.
3.5 Noncontravention. The execution, delivery, and performance by
the Company of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (i) conflict with or result in a
violation of any provision of the Articles of Incorporation, as amended, or
Bylaws of the Company, (ii) conflict with or result in a violation of any
provision of, or constitute (with or without the filing of notice or the
passage of time or both) a default under, or give rise (with or without the
giving of notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note, mortgage,
indenture, lease, agreement, or other instrument or obligation to which the
Company is a party or by which the Company or any of its properties may be
bound, (iii) result in the creation or imposition of any lien or encumbrance
upon the properties of the Company, or (iv) assuming compliance with the
matters referred to in Section 3.6, violate any Applicable Law (as hereinafter
defined) binding upon the Company, except, in the case of clauses (ii), (iii),
and (iv) above, for any such conflicts, violations, defaults, terminations,
cancellations, accelerations, liens, or encumbrances which would not,
individually or in the aggregate, have a material adverse effect on the
business, assets, results of operations, or financial condition of the Company
or on the ability of the Company to consummate the transaction contemplated
hereby.
3.6 Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
Governmental Entity (as hereinafter defined) is required to be obtained or made
by the Company in connection with the execution, delivery, or performance by
the Company of this Agreement or the consummation
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by it of the transactions contemplated hereby, other than (i) compliance with
any applicable requirements of the Securities Act (as hereinafter defined);
(ii) compliance with any applicable requirements of the Exchange Act (as
hereinafter defined); (iii) compliance with any applicable state securities
laws; and (iv) such consents, approvals, orders, or authorizations which, if
not obtained, and such declarations, filings, or registrations which, if not
made, would not, individually or in the aggregate, have a material adverse
effect on the business, assets, results of operations, or financial condition
of the Company or on the ability of the Company to consummate the transactions
contemplated hereby. The representations and warranties of the Company
contained in this Section 3.6, insofar as such representations and warranties
pertain to compliance by the Company with the requirements of the Securities
Act and applicable state securities laws, are based on the representations and
warranties of Buyers contained in Sections 4.6, 4.7, 4.8, 4.9 and 4.10.
3.7 Authorization of Issuance. The Shares have been duly
authorized for issuance and, when issued and delivered by the Company in
accordance with the provisions of this Agreement, will be validly issued, fully
paid, and nonassessable. The issuance of the Shares is not subject to any
preemptive or similar rights.
3.8 Subsidiaries. The Company has no subsidiaries.
3.9 Private Placement Memorandum; SEC Filings.
(a) None of the information contained in the Company's
Confidential Private Placement Memorandum dated January 31, 1997 relating to
the private placement of the Shares, as the same may have been supplemented or
amended from time to time (the "Private Placement Memorandum"), as of such date
or as of the date hereof, contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to made the statements contained therein, in light of the circumstances
under which they are made, not misleading.
(b) The Company has delivered to each Buyer an accurate and
complete copy of (i) the Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1996, (ii) the Company's Annual Report on Form 10-K
for the fiscal year ended Xxxxx 00, 0000, (xxx) the Company's Annual Report to
Shareholders for the fiscal year ended March 31, 1996, and (iv) upon request of
any Buyer, the Company will deliver to such Buyer an accurate and complete copy
of the Company's Proxy Statement dated July 29, 1996, relating to the annual
meeting of shareholders of the Company held on August 29, 1996, in each case in
the form filed by the Company with the Securities and Exchange Commission
(collectively, the "SEC Filings"). None of the SEC Filings, including, without
limitation, any financial statements or schedules included therein, as of the
date of filing thereof, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary
in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The audited
financial statements and unaudited interim financial statements of the Company
included in the SEC Filings present fairly, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the financial position of the Company as of
the dates thereof and its results of operations and cash flows for the periods
then ended (subject to normal year-end audit adjustments in the case of any
unaudited interim financial statements).
3.10 Absence of Undisclosed Liabilities. Except as and to the
extent disclosed in the Private Placement Memorandum and SEC Filings, (a) as of
December 31, 1996, the Company had no liabilities or obligations (whether
accrued, absolute, contingent, unliquidated, or otherwise) material to the
Company, and (b) since December 31, 1996, the Company has not incurred any such
material liabilities or obligations, other than those incurred in the ordinary
course of business.
3.11 Absence of Certain Changes. Except as disclosed in the
Private Placement Memorandum and the SEC Filings, since December 31, 1996,
there has not been any material adverse change in the business, assets, results
of operations, or financial condition of the Company.
3.12 Scope of Representations and Warranties. Except as set forth
in this Agreement, the Company makes no representations or warranties to Buyers
and hereby disclaims all liability and responsibility for any representation,
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warranty, statement, or information made or communicated (orally or in writing)
to any Buyer (including but not limited to any opinion, information,
projection, or advice that may have been provided to Buyers by any officer,
director, employee, agent, consultant or representative of the Company or of
the Company's placement agent, Xxxxxxxx Xxxxxx Refsnes, Inc.).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer severally (and not jointly) represents and warrants to the
Company that:
4.1 Organization. If Buyer is a corporation, such Buyer is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation. If Buyer is a partnership, such Buyer is
duly formed and validly existing as a partnership under the laws of the
jurisdiction of its formation.
4.2 Social Security Number or Tax Identification Number. The
social security number of each Buyer, or taxpayer identification number, if
Buyer is a corporation or partnership, is set forth opposite the name of each
Buyer on Annex I. Buyer is not subject to withholding with respect to
reportable interests, dividends or certain other payments as required by the
Internal Revenue Code of 1986, as amended.
4.3 Authority Relative to This Agreement. Buyer has full power
and authority to execute, deliver, and perform this Agreement and to consummate
the transactions contemplated hereby. If Buyer is a corporation or
partnership, the execution, delivery, and performance by Buyer of this
Agreement, and the consummation by it of the transactions contemplated hereby,
have been duly authorized by all necessary corporate or partnership action of
Buyer. This Agreement has been duly executed and delivered by Buyer and
constitutes a valid and legally binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except that such enforceability may
be limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and similar laws affecting creditors' rights generally, (ii)
equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances, and (iii) public
policy considerations with respect to the enforceability of rights of
indemnification.
4.4 Noncontravention. The execution, delivery, and performance by
Buyer of this Agreement and the consummation by it of the transactions
contemplated hereby do not and will not (i) if Buyer is a corporation or
partnership, conflict with or result in a violation of any provision of the
charter, bylaws, or similar organizational documents of Buyer, (ii) conflict
with or result in a violation of any provision of, or constitute (with or
without the giving of notice or the passage of time or both) a default under,
or give rise (with or without the giving of notice or the passage of time or
both) to any right of termination, cancellation, or acceleration under, any
bond, debenture, note, mortgage, indenture, lease, agreement, or other
instrument or obligation to which Buyer is a party or by which Buyer or any of
its properties may be bound, (iii) result in the creation or imposition of any
lien or encumbrance upon the properties of Buyer, or (iv) violate any
Applicable Law binding upon Buyer, except, in the case of clauses (ii), (iii),
and (iv) above, for any such conflicts, violations, defaults, terminations,
cancellations, accelerations, liens, or encumbrances which would not,
individually or in the aggregate, have a material adverse effect on the
business, assets, results of operations, or financial condition of Buyer or on
the ability of Buyer to consummate the transactions contemplated hereby.
4.5 Governmental Approvals. No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any
Governmental Entity is required to be obtained or made by Buyer in connection
with the execution, delivery, or performance by Buyer of this Agreement or the
consummation by it of the transactions contemplated hereby.
4.6 Investment Intent. Buyer is acquiring the Shares to be
purchased by it for its own account for investment and not with a view to, or
for sale or other disposition in connection with, any distribution of all or
any part thereof. Buyer will not sell or offer for sale the Shares except (i)
in an offering covered by a registration statement filed with the Securities
and Exchange Commission under the Securities Act covering such Shares, or (ii)
pursuant to an
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opinion by counsel for the Company or other counsel reasonably satisfactory to
the Company to the effect that registration is not required by reason of any
applicable exemption under the Securities Act. In acquiring such Shares, Buyer
is not offering or selling, and will not offer or sell such Shares, for the
Company in connection with any distribution thereof, and Buyer does not have a
participation and will not participate in any such offer or sale or in any
underwriting of such an offer or sale except in compliance with applicable
federal and state securities laws.
4.7 Disclosure of Information. Buyer acknowledges that it or its
representatives have been furnished with substantially the same kind of
information regarding the Company and its business, assets, results of
operations, and financial condition as would be contained in a registration
statement prepared in connection with a public sale of the Shares. Buyer
further represents that it has had an opportunity to ask questions of and
receive answers from the Company regarding the Company and its business,
assets, results of operations, and financial condition and the terms and
conditions of the issuance of the Shares.
4.8 Investment Experience: Accredited Investor. Buyer
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment in the Shares, and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of a prospective investment in the Shares. Buyer represents that it is
an "accredited investor" (as such term is defined in Rule 501 of Regulation D
promulgated under the Securities Act). If Buyer is a corporation or
partnership, Buyer further represents that it has not been organized for the
purpose of acquiring the Shares.
4.9 Restricted Securities. Buyer understands that, upon the
issuance thereof, the Shares purchased by it will not have been registered
pursuant to the Securities Act or any applicable state securities laws, that
such securities will be characterized as "restricted securities" under federal
securities laws, and that under such laws and applicable regulations such
securities cannot be sold or otherwise disposed of without registration under
the Securities Act or an exemption therefrom. In this connection, Buyer
represents that it is familiar with Rule 144 promulgated under the Securities
Act, as currently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Stop transfer instructions may be issued to
the transfer agent for securities of the Company (or a notation may be made in
the appropriate records of the Company) in connection with the Shares.
4.10 Legend. It is agreed and understood by Buyer that the
certificates representing the Shares to be purchased by it shall each
conspicuously set forth on the face or back thereof, in addition to any other
legends required by agreement or Applicable Law, a legend in substantially the
following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THESE
SHARES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
THEY ARE FIRST SO REGISTERED OR UNLESS COUNSEL FOR THE COMPANY OR
OTHER COUNSEL REASONABLY SATISFACTORY TO THE COMPANY SHALL HAVE
RENDERED AN OPINION REASONABLY SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Public Announcements. Neither Buyers nor any of their
respective affiliates shall issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions
contemplated hereby without the prior written consent of the Company.
5.2 NASDAQ Listing. The Company has made application to the
NASDAQ National Market System for the listing thereon of the Shares and shall
use its best efforts to have the Shares listed within two weeks of the Closing
Date.
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5.3 Registration Rights.
(a) Registration of Shares. Subject to the occurrence of the
Closing and the terms and provisions of this Agreement, the Company shall use
its best efforts to register the Shares with the Securities and Exchange
Commission (the "Commission") under the Securities Act to the extent requisite
to permit the sale or other disposition thereof by Buyers.
(b) Registration Procedures. The best efforts of the Company
under Section 5.3(a) shall mean that the Company will, subject to the terms and
provisions of this Section 5.3, use its best efforts to:
(1) prepare and file with the Commission within 30 days
following the Closing a registration statement (the "Registration
Statement") covering the Shares and cause the Registration Statement
to become effective and to remain effective for so long as may
reasonably be necessary to complete the sale or other disposition of
the Shares, provided that the Company shall not in any event be
required to use its best efforts to maintain the effectiveness of the
Registration Statement for a period in excess of two years from the
Closing Date;
(2) prepare and file with the Commission such amendments
and supplements to the Registration Statement and the prospectus
contained therein as may be necessary to keep the Registration
Statement effective, and comply with the provisions of the Securities
Act, with respect to the sale or other disposition of the Shares
whenever Buyers shall desire to sell or otherwise dispose of the same,
but only to the extent provided in this Section 5.3;
(3) furnish to each Buyer such numbers of copies of the
Registration Statement, the prospectus contained therein (including
each preliminary prospectus), and each amendment and supplement to the
Registration Statement and such prospectus , in conformity with the
requirements of the Securities Act, as such Buyer may reasonably
request in order to facilitate the sale or other disposition of the
Shares;
(4) register or qualify the Shares for sale under the
securities or blue sky laws of such states as Buyers may reasonably
request (except to the extent exemptions from such registration or
qualification are available), and do any and all other acts and things
that may reasonably be necessary under such securities or blue sky
laws to enable Buyers to consummate the sale or other disposition of
the Shares in such states, provided that the Company shall not in any
event be required to register or qualify the Shares for sale under the
securities or blue sky laws of more than a total of ten states, and
provided further, that the Company shall not in any event be required
to keep any such registration or qualification in effect after the
expiration of the period during which the Company maintains the
effectiveness of the Registration Statement and shall not for any such
purpose be required to qualify to do business as a foreign corporation
in any state wherein it is not so qualified or to subject itself to
taxation in any such state; and
(5) before filing the Registration Statement, any
prospectus to be used in connection with the offering to be conducted
pursuant to the Registration Statement, or any amendments or
supplements to the Registration Statement or such prospectus with the
Commission, furnish each Buyer with copies of all such documents
proposed to be filed.
(c) Required Information. The Company shall not be required to
use its best efforts to register, or maintain the effectiveness of any
registration of, Shares of a Buyer under the Securities Act or the securities
or blue sky laws of any states unless and until such Buyer furnishes to the
Company such information regarding such Buyer and its Shares and the intended
method of disposition of such Shares as the Company may reasonably request in
order to satisfy the requirements applicable to such registration.
(d) Limitations on Registration. The rights of Buyers pursuant to
this Section 5.3 shall be subject to the following limitations:
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(1) If at any time or from time to time during the
effectiveness of the Registration Statement, the Company is engaged in
or proposes to engage in a registered public offering of securities of
the Company or any other activity which, in the good faith
determination of the Board of Directors of the Company, would be
adversely affected by offers or sales of the Shares pursuant to the
Registration Statement to the detriment of the Company, then Buyers
shall, upon the written request of the Company, cease making offers
and sales of the Shares pursuant to the Registration Statement
(including sales pursuant to Rule 144 under the Securities Act) for
the period of time specified by the Company, which period shall not
(i) in the case of a registered public offering, exceed the period
beginning ten days prior to the effective date of the registration
statement relating to such offering and ending 120 days after such
effective date, and (ii) in case of any other activity, exceed the
period beginning ten days prior to, and ending 120 days after, the
date of commencement of such other activity. Buyers agree to enter
into such further agreements with the Company or any underwriter of
securities of the Company deemed necessary by the Company or any such
underwriter to carry out the purposes of this paragraph (1). The
period of time that the Company is obligated to maintain the
effectiveness of the Registration Statement hereunder shall be tolled
during the period Buyers must cease making offers and sales of the
Shares pursuant to the Company's request under this paragraph (1).
(2) The obligations of the Company pursuant to Sections
5.3(a) and (b) shall cease (i) as to Shares sold or otherwise disposed
of pursuant to the Registration Statement, or sold or otherwise
disposed of in any manner to a person which, by virtue of this Section
5.3, is not entitled to the rights provided by this Section 5.3, and
(ii) as to Shares eligible for sale pursuant to Rule 144 promulgated
under the Securities Act, as amended from time to time, or any similar
rule that may hereafter be adopted.
(3) In no event shall the Company be obligated to effect
more than one registration of Shares under the Securities Act.
(4) The rights and obligations of Buyers under this
Section 5.3 may not be assigned or transferred to any person without
the prior written consent of the Company.
(e) Expenses of Registration. In connection with any registration
of the Shares pursuant to the provisions of this Section 5.3, each Buyer shall
pay any brokerage and underwriting discounts and commissions payable in respect
of the Shares sold on such Buyer's behalf, all fees and expenses of any
attorneys and accountants employed by such Buyer, and any other costs directly
incurred by such Buyer, and the Company shall pay or cause to be paid and shall
indemnify and hold harmless Buyers from and against any and all other costs and
expenses incurred in connection with such registration and related blue sky
registrations and qualifications.
(f) Indemnification. In connection with any registration of the
Shares pursuant to the provisions of this Section 5.3, the Company shall, to
the extent permitted by Applicable Law, indemnify and hold harmless Buyers to
the extent that companies generally indemnify and hold harmless underwriters in
connection with public offerings under the Securities Act, and each Buyer shall
indemnify and hold harmless the Company, each director and officer of the
Company, and each person who controls the Company within the meaning of the
Securities Act to the extent that selling shareholders generally indemnify and
hold harmless issuers of securities in connection with public offerings under
the Securities Act with respect to the information provided by such Buyer for
use by the Company in the preparation of the Registration Statement.
(g) Inclusion of Other Securities. Buyers acknowledge that the
Registration Statement, and any prospectus used in connection with the offering
conducted pursuant thereto, may cover, in addition to the Shares, other shares
of Common Stock or other securities of the Company.
5.4 Fees and Expenses. Except as otherwise expressly provided in
this Agreement, all fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fee or expense.
5.5 Indemnification of Brokerage. Each of the parties hereto
agrees to indemnify and hold harmless each other party from and against any
claim or demand for a commission or other compensation by any financial
advisor,
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broker, agent, finder, or similar intermediary claiming to have been employed
by or on behalf of such indemnifying party and to bear the cost of legal fees
and expenses incurred in defending against any such claim or demand.
5.6 Delivery of Information. The Company will deliver to each
Buyer:
(a) promptly upon the mailing or delivery thereto to the
shareholders of the Company generally, copies of all financial statements,
reports and proxy statements so mailed or delivered; and
(b) promptly upon the filing thereof, copies of reports on Forms
10-K (or their equivalents) which the Company shall have filed with the
Commission or any similar reports filed with any state securities commission or
office.
5.7 Rule 144 Information. With a view to making available to each
Buyer the benefits of Rule 144 promulgated under the Securities Act and any
other rule or regulation of the Commission that may at any time permit the
Buyers to sell Common Stock of the Company to the public without registration,
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(c) furnish to each Buyer forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company under the Securities Act and the Exchange Act
and (iii) such other information as may be reasonably requested by each Buyer
in availing itself of any rule or regulation of the Commission which permits
the selling of any such securities without registration.
5.8 No Offers or Sales. Notwithstanding any other provision of
this Agreement, except with the written consent of Xxxxxxxx Xxxxxx Refsnes,
Inc. or as otherwise contemplated herein or in the Private Placement
Memorandum, the Company will not, during a period of 90 days after the Closing
Date, directly or indirectly, contract to sell or announce or make any
offering, sale or other disposition of any shares of Common Stock (except
pursuant to this Agreement), nor sell or grant options, rights or warrants with
respect to any shares of Common Stock or any preferred stock of the Company,
directly or indirectly.
5.9 No Investment Company. The Company will not cause itself to
become an "investment company," as such term is defined under the Investment
Company Act of 1940, as amended. The Company will use the proceeds received by
it from the sale of the Common Stock in the manner specified in the Private
Placement Memorandum under "Use of Proceeds."
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment on or prior
to the Closing Date of each of the following conditions:
6.1 Representations and Warranties True. All the representations
and warranties of Buyers contained in this Agreement shall be true and correct
on and as of the Closing Date, except to the extent that any such
representation or warranty is made as of a specified date, in which case such
representation or warranty shall have been true and correct as of such
specified date.
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6.2 Covenants and Agreements Performed. Buyers shall have
performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by them on or prior to the Closing
Date.
6.3 Legal Proceedings. No Proceeding (as hereinafter defined)
shall, on the Closing Date, be pending or threatened seeking to restrain,
prohibit, or obtain damages or other relief in connection with this Agreement
or the consummation of the transactions contemplated hereby.
6.4 Other Documents. The Company shall have received such
certificates, instruments, and documents as may be reasonably requested by the
Company to carry out the intent and purposes of this Agreement.
6.5 Approval of Counsel to the Company. All legal matters in
connection with the consummation of the transactions contemplated hereby and
all agreements, instruments, and documents delivered in connection therewith
shall be reasonably satisfactory in form and substance to Xxxxx, Xxxxxxxx &
Xxxxx, a professional corporation, legal counsel to the Company.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF BUYERS
The obligations of Buyers to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment on or prior to the
Closing Date of each of the following conditions:
7.1 Representations and Warranties True. All the representations
and warranties of the Company contained in this Agreement shall be true and
correct on and as of the Closing Date, except as affected by transactions
contemplated or permitted by this Agreement and except to the extent that any
such representation or warranty is made as of a specified date, in which case
such representation or warranty shall have been true and correct as of such
specified date.
7.2 Covenants and Agreements Performed. The Company shall have
performed and complied with all covenants and agreements required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date.
7.3 Opinion of Counsel. Each Buyer shall have received an opinion
of Xxxxx, Xxxxxxxx & Xxxxx, a professional corporation, legal counsel to the
Company, dated the Closing Date, covering the matters described and set forth
in Sections 3.1 through and including Section 3.8. In rendering such opinion,
such counsel may rely as to factual matters upon certificates or other
documents furnished by directors and officers of the Company and by the
government officials and upon such other documents and data as such counsel
deems appropriate as a basis for such opinion and, with respect to certain
portions of Sections 3.5 and 3.6, such opinion may be limited to the best
knowledge of such counsel.
7.4 Legal Proceedings. No Proceeding shall, on the Closing Date,
be pending or threatened seeking to restrain, prohibit, or obtain damages or
other relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
7.5 Other Documents. Each Buyer, or NORWEST BANK TEXAS, MIDLAND,
N.A., as escrow agent for the Company, shall have received a stock certificate
or certificates in definitive form representing the Shares purchased by it,
registered in the name of such Buyer and duly executed by the Company.
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ARTICLE VIII
TERMINATION, AMENDMENTS AND WAIVER
8.1 Termination. As between the Company and each Buyer severally
(but not jointly), this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing in the following
manner:
(a) by mutual written consent of the Company and any
Buyer (but only as to such Buyer); or
(b) by the Company, if, on the Closing Date, any of the
conditions set forth in Article VI as to any Buyer shall not have been
satisfied by such Buyer and shall not have been waived by the Company;
or
(c) by any Buyer, if, on the Closing Date, any of the
conditions set forth in Article VII shall not have been satisfied by
the Company and shall not have been waived by such Buyer.
8.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 8.1 by the Company, on the one hand, or a
Buyer, on the other, written notice thereof shall forthwith be given to the
other party specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall become void and have no effect as between
such Buyer and the Company, except that (i) the agreements contained in this
Section and in Sections 5.1, 5.4 and 5.5 and Article IX shall survive the
termination hereof, and (ii) this Agreement shall remain in force and effect as
to the Company and all other remaining Buyers. Nothing contained in this
Section shall relieve any party from liability for any breach of this
Agreement.
8.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of all the parties hereto.
8.4 Waiver. No failure or delay by a party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
provisions of this Agreement may not be waived except by an instrument in
writing signed by or on behalf of the party against whom such waiver is sought
to be enforced.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATION
9.1 Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate, instrument or
document delivered pursuant hereto shall survive the Closing, regardless of any
investigation made by or on behalf of any party.
9.2 Indemnification by Company. The Company shall indemnify,
defend and hold harmless Buyers from and against any and all claims, actions,
causes of action, demands, losses, damages, liabilities, costs and expenses
(including reasonable attorneys' fees and expenses) (collectively, "Damages"),
asserted against, resulting to, imposed upon, or incurred by Buyers, directly
or indirectly, by reason of or resulting from any breach by the Company of any
of its representations, warranties, covenants or agreements contained in this
Agreement or in any certificate, instrument or document delivered pursuant
hereto.
9.3 Indemnification by Buyers. Each Buyer severally (but not
jointly) shall indemnify, defend and hold harmless the Company from and against
any and all Damages asserted against, resulting to, imposed upon or incurred by
the Company, directly or indirectly, by reason of or resulting from any breach
by such Buyer of any of its
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representations, warranties, covenants or agreements contained in this
Agreement or in any certificate, instrument or document delivered pursuant
hereto.
9.4 Procedure for Indemnification. Promptly after receipt by an
indemnified party under Section 9.2 or 9.3 of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under such Section, give written notice to
the indemnifying party of the commencement thereof, but the failure so to
notify the indemnifying party shall not relieve it of any liability that it may
have to any indemnified party except to the extent the indemnifying party
demonstrates that the defense of such action is prejudiced thereby. In case
any such action shall be brought against an indemnified party and it shall give
written notice to the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. If the indemnifying party elects to
assume the defense of such action, the indemnified party shall have the right
to employ separate counsel at its own expense and to participate in the defense
thereof. If the indemnifying party elects not to assume (or fails to assume)
the defense of such action, the indemnified party shall be entitled to assume
the defense of such action with counsel of its own choice, at the expense of
the indemnifying party. If the action is asserted against both the
indemnifying party and the indemnified party and there is a conflict of
interest which renders it inappropriate for the same counsel to represent both
the indemnifying party and the indemnified party, the indemnifying party shall
be responsible for paying for separate counsel for the indemnified party;
provided, however, that if there is more than one indemnified party, the
indemnifying party shall not be responsible for paying for more than one
separate firm of attorneys to represent the indemnified parties, regardless of
the number of indemnified parties. The indemnifying party shall have no
liability with respect to any compromise or settlement of any action effected
without its written consent (which shall not be unreasonably withheld).
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests, demands and other
communications required or permitted to be given or made hereunder by any party
hereto shall be in writing and shall be deemed to have been duly given or made
if delivered personally or transmitted by first class registered or certified
mail, postage prepaid, return receipt requested, to the parties at the
addresses set forth opposite their names on the signature page hereof (in the
case of the Company) and on Annex I hereto (in the case of Buyers) (or at such
other addresses as shall be specified by the parties by like notice).
10.2 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
10.3 Binding Effect; Assignment; No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and permitted
assigns. Except as otherwise provided in this Agreement, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto. Except as provided in Section 5.3,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any person other than the parties hereto, and their respective heirs,
legal representatives, successors and permitted assigns, any rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.
10.4 Severability. If any provision of this Agreement is held to
be unenforceable, this Agreement shall be considered divisible and such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and in all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision
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may be made enforceable by limitation thereof, then such provision shall be
deemed to be so limited and shall be enforceable to the maximum extent
permitted by applicable law.
10.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
10.6 Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all, the parties hereto.
ARTICLE XI
DEFINITIONS
As used in this Agreement, each of the following terms has the meaning
given it in this Article:
"Applicable Law" means any statute, law, rule or regulation or
any judgment, order, writ, injunction or decree of any Governmental
Entity to which a specified person or property is subject.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental or
regulatory body, agency, department, commission, board, bureau or
other authority or instrumentality (domestic or foreign).
"Proceedings" means all proceedings, actions, suits,
investigations and inquiries by or before any arbitrator or
Governmental Entity.
"Securities Act" means the Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the parties have executed this Agreement, or
caused this Agreement to be executed by their duly authorized representatives,
all as of the date and year first above written.
TMBR/SHARP DRILLING, INC.
Address:
0000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000 By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx, Chairman of the
Board of Directors
BUYER
[Name of Selling Stockholder]
----------------------------------------
By: /s/
-----------------------------------
Name:
----------------------------
Title:
---------------------------
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ANNEX I
Name Social Security or Total
and Address Taxpayer Number of Purchase
of Buyer Identification Number Shares Purchased Price
----------- --------------------- ---------------- --------
__________________
Initialed by Buyer
[This Annex I is attached to and made a part of that certain Stock
Purchase Agreement between TMBR/Sharp Drilling, Inc. and the Buyer
named above.]
