EXHIBIT 2.4
AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXXXXX-UTI ENERGY, INC.
XXXXXXXXX-UTI DRILLING COMPANY LP, LLLP
AND
ODIN DRILLING, INC.
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER......................................................................................1
Section 1.1 The Merger......................................................................................1
Section 1.2 Effective Time..................................................................................2
Section 1.3 Effects of the Merger...........................................................................2
Section 1.4 Certificate of Incorporation, Bylaws and Officers...............................................2
Section 1.5 Conversion of Securities; Merger Consideration..................................................2
Section 1.6 No Fractional Securities........................................................................2
Section 1.7 No Further Ownership Rights in Odin Common Stock................................................2
Section 1.8 Further Assurances..............................................................................2
Section 1.9 Closing.........................................................................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PEC...........................................................3
Section 2.1 Organization, Standing and Power................................................................3
Section 2.2 Authority; Non-Contravention....................................................................3
Section 2.3 Capital Structure...............................................................................4
Section 2.4 SEC Documents...................................................................................5
Section 2.5 Litigation......................................................................................5
Section 2.6 Brokers.........................................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ODIN..........................................................5
Section 3.1 Organization, Standing and Power................................................................5
Section 3.2 Capital Structure...............................................................................5
Section 3.3 Ownership of Odin Common Stock..................................................................6
Section 3.4 Authority; Non-Contravention....................................................................6
Section 3.5 Financial Statements............................................................................6
Section 3.6 Absence of Change...............................................................................7
Section 3.7 Taxes...........................................................................................7
Section 3.8 Real and Personal Property; Title Thereto; No Change............................................7
Section 3.9 Liabilities.....................................................................................7
Section 3.10 Insurance.......................................................................................7
Section 3.11 Contracts and Other Agreements..................................................................7
Section 3.12 Records.........................................................................................8
Section 3.13 Transactions with Affiliates....................................................................8
Section 3.14 Employee Benefit Plans; Employment Agreements...................................................8
Section 3.15 Labor Matters...................................................................................8
Section 3.16 Litigation......................................................................................8
Section 3.17 Governmental Licenses and Permits; Compliance with Law..........................................8
Section 3.18 Brokers.........................................................................................8
Section 3.19 Bank Accounts...................................................................................8
Section 3.20 Workers' Compensation Claims....................................................................8
ARTICLE IV COVENANTS PENDING CLOSING.......................................................................9
Section 4.1 No Operations...................................................................................9
Section 4.2 No Solicitation.................................................................................9
ARTICLE V ADDITIONAL AGREEMENTS...........................................................................9
Section 5.1 Fees and Expenses...............................................................................9
Section 5.2 Reasonable Efforts..............................................................................9
Section 5.3 Public Announcements............................................................................9
Section 5.4 Indemnifying Shareholder Indemnification.......................................................10
Section 5.5 Certain Tax Matters............................................................................10
Section 5.6 Odin Shareholder Approval......................................................................11
Section 5.7 Condition of Odin Equipment....................................................................11
Section 5.8 Odin Business and Financial Records............................................................11
ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER.............................................................11
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.....................................11
Section 6.2 Conditions to Obligation of Odin to Effect the Merger..........................................11
Section 6.3 Conditions to Obligations of PEC and PEC Sub to Effect the Merger..............................13
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................................................15
Section 7.1 Termination....................................................................................16
Section 7.2 Effect of Termination..........................................................................16
Section 7.3 Amendment......................................................................................16
Section 7.4 Waiver.........................................................................................16
ARTICLE VIII GENERAL PROVISIONS.............................................................................17
Section 8.1 Notices........................................................................................17
Section 8.2 Interpretation.................................................................................18
Section 8.3 Counterparts...................................................................................18
Section 8.4 Entire Agreement; No Third-Party Beneficiaries.................................................18
Section 8.5 Governing Law..................................................................................18
Section 8.6 Assignment.....................................................................................18
Section 8.7 Severability...................................................................................19
Section 8.8 Enforcement of This Agreement..................................................................19
Section 8.9 Jurisdiction and Venue.........................................................................19
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of March 10, 2002 (this
"Agreement"), between XXXXXXXXX-UTI ENERGY, INC., a Delaware corporation
("PEC"), XXXXXXXXX DRILLING COMPANY LP, LLLP, a Delaware registered limited
liability limited partnership and a wholly owned subsidiary of PEC ("PEC Sub")
and ODIN DRILLING, INC., a
Texas corporation ("Odin") (PEC Sub and Odin being
hereinafter collectively referred to as the "Constituent Entities").
WITNESSETH:
WHEREAS, the respective Boards of Directors of PEC and Odin and the general
partner of PEC Sub, have approved and declared fair to and advisable and in the
best interests of their respective shareholders in the case of PEC and Odin, and
partners in the case of PEC Sub, the merger of Odin with and into PEC Sub (the
"Merger"), upon the terms and subject to the conditions set forth herein,
whereby each issued and outstanding share of Common Stock, par value $.01, of
Odin ("Odin Common Stock") will be converted into the consideration set forth
and provided for herein;
WHEREAS, the sole assets of Odin are five drilling rigs and related
equipment (collectively, the "Drilling Rigs and Equipment");
WHEREAS, for federal income tax purposes, it is intended that the Merger
will qualify as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, PEC and PEC Sub on the one hand, and Odin, on the other, desire to
make certain representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the Delaware Revised Uniform Limited Partnership
Act ("DRULPA") and the
Texas Business Corporation Act ("TBCA"), Odin shall be
merged with and into PEC Sub at the Effective Time (as hereinafter defined).
Following the Merger, the separate corporate existence of Odin shall cease and
PEC Sub shall continue as the surviving entity (the "Surviving Entity") under
the name "Xxxxxxxxx-UTI Drilling Company LP, LLLP" and shall succeed to and
assume all the rights and obligations of Odin in accordance with the DRULPA and
the TBCA.
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Section 1.2 Effective Time. The Merger shall become effective when a
Certificate of Merger (the "Certificate of Merger") conforming to the relevant
provisions of the DRULPA is filed with the Secretary of State of the State of
Delaware and Articles of Merger (the "Articles of Merger") conforming to the
relevant provisions of the TBCA are filed with the Secretary of State of the
State of
Texas. When used in this Agreement, the term "Effective Time" shall
mean the later of the date and time at which the Certificate of Merger or the
Articles of Merger are accepted for recordation. The filing of the Certificate
of Merger and Articles of Merger shall be made as soon as practicable after the
satisfaction or waiver of the conditions to the Merger set forth herein.
Section 1.3 Effects of the Merger. The Merger shall have the effects set
forth in Section 17-211 of the DRULPA.
Section 1.4 Certificate of Limited Partnership . The Certificate of Limited
Partnership of PEC Sub, as in effect immediately prior to the Effective Time
shall be the Certificate of Limited Partnership of the Surviving Entity until
thereafter changed or amended as provided therein or by applicable law.
Section 1.5 Conversion of Securities; Merger Consideration. As of the
Effective Time, by virtue of the Merger and without any action on the part of
any shareholder of Odin, and subject to the provisions of Sections 1.6 hereof,
the shares of Odin Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted into the right to receive a total of 650,000
shares of common stock $.01 par value of PEC ("PEC Shares"), (the PEC Shares are
sometimes referred to herein as the "Merger Consideration"). All such shares of
Odin Common Stock, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and each holder of a certificate
representing shares of Odin Common Stock shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration.
Section 1.6 No Fractional Securities. No certificates representing
fractional shares of PEC Common Stock shall be issued. Any fraction of a share
of PEC Common Stock otherwise issuable hereunder shall be rounded up or down to
the nearest full share.
Section 1.7 No Further Ownership Rights in Odin Common Stock. All Merger
Consideration issued and paid in accordance with the terms hereof shall be
deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of Odin Common Stock.
Section 1.8 Further Assurances. If, at any time after the Effective Time,
the Surviving Entity shall consider or be advised that any deeds, bills of sale,
assignments or assurances or any other acts or things are necessary, desirable
or proper (a) to vest, perfect or confirm, of record or otherwise, in the
Surviving Entity, its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of either of the
Constituent Entities, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Entity and its proper officers or their designees shall
be authorized to execute and deliver, in the name and on behalf of either of the
Constituent Entities in the Merger, all such deeds, bills of sale, assignments
and assurances and do, in the name and on behalf of such Constituent Entities,
all such other acts and things necessary, desirable or proper to vest, perfect
or confirm its right, title or interest in, to or under any of the
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rights, privileges, powers, franchises, properties or assets of such Constituent
Entity and otherwise to carry out the purposes of this Agreement.
Section 1.9 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of PEC in Dallas,
Texas at 10:00 a.m. local time, on the second business day after the day on
which the last conditions set forth in Article VI hereof shall have been
fulfilled or waived, or at such other time and place as PEC and Odin shall
agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PEC AND PEC SUB
PEC and PEC Sub jointly and severally represent and warrant to Odin as
follows:
Section 2.1 Organization, Standing and Power. PEC is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has the requisite corporate power and authority to carry on its
business as now being conducted. PEC Sub is a registered limited liability
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the requisite partnership power and
authority to carry on its business as now being conducted. PEC Sub is a
wholly-owned subsidiary of PEC and is treated as a "C Corporation" for federal
income tax purposes, within the meaning of the Internal Revenue Code of 1986, as
amended. PEC and PEC Sub are each in good standing in each jurisdiction where
the character of its business owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not individually or in the aggregate, have a Material Adverse
Effect on PEC. "Material Adverse Change" or "Material Adverse Effect" means,
when used with respect to PEC on the one hand, or Odin on the other hand, any
change or effect that is or, so far as can reasonably be determined, is likely
to be materially adverse to the assets, properties, condition (financial or
otherwise), business or results of operations of PEC and its subsidiaries taken
as a whole or Odin, as the case may be.
Section 2.2 Authority; Non-Contravention. PEC and PEC Sub have all
requisite power and authority to enter into this Agreement and to consummate the
Merger. The execution and delivery by PEC and PEC Sub of this Agreement and the
consummation by PEC and PEC Sub of the Merger have been duly authorized by all
necessary corporate action on the part of PEC and all necessary partnership
action on the part of PEC Sub. This Agreement has been duly executed and
delivered by PEC and PEC Sub and (assuming the valid authorization, execution
and delivery of this Agreement by Odin) constitutes a valid and binding
obligation of PEC and PEC Sub enforceable against them in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws of general applicability relating to or affecting the enforcement of
creditors' rights and by the effect of general principles of equity (regardless
of whether enforceability is considered in a proceeding in equity or at law).
The execution and delivery of this Agreement and the Registration Rights
Agreement, in substantially the form attached hereto as Exhibit A, and the other
documents and agreements contemplated hereby (collectively, the "Closing
Documents") do not or will not, as the case may be, and the consummation of the
transactions contemplated hereby and thereby and
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compliance with the provisions hereof and thereof will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material benefit under, or
result in the creation of any lien, mortgage, pledge, security interest,
encumbrance, claim or charge of any kind ("Liens") upon any of the properties or
assets of PEC or PEC Sub under, any provision of (a) the Restated Certificate of
Incorporation, or Restated Bylaws of PEC, (b) the Certificate of Limited
Partnership, as amended, or the Amended and Restated Agreement of Limited
Partnership of PEC Sub (true and complete copies of which as of the date hereof
have been delivered to Odin), (c) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to PEC or PEC Sub, or (c) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to PEC or PEC Sub
or any their respective properties or assets, other than, in the case of clauses
(c) or (d), any such conflicts, violations, defaults or Liens that, individually
or in the aggregate, would not have a Material Adverse Effect on PEC, materially
impair the ability of PEC and PEC Sub to perform their obligations under this
Agreement or the Closing Documents or prevent the consummation of any of the
transactions contemplated hereby or thereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory agency,
authority or tribunal (a "Governmental Agency") is required by or with respect
to PEC or PEC Sub in connection with the execution and delivery of this
Agreement and the Closing Documents or is necessary for the consummation by PEC
or PEC Sub of the Merger, except for (a) limited partnership filings required by
PEC Sub under state law, (b) in connection or in compliance with the provisions
of the Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange Act of 1934 (the "Exchange Act"), (c) such consents and
approvals, orders, registrations, authorizations, declarations and filings as
may be required under the "Blue Sky" laws of the State of Oklahoma, and (d) such
other consents, orders, authorizations, registrations, declarations and filings,
the failure of which to be obtained or made would not, individually or in the
aggregate, have a Material Adverse Effect on PEC or materially impair the
ability of PEC or PEC Sub to perform their obligations hereunder or prevent the
consummation of the transaction contemplated hereby.
Section 2.3 Capital Structure. As of the date hereof, the authorized
capital stock of PEC consists of 200,000,000 shares of common stock, par value
$0.01 per share ("PEC Common Stock") and 1,000,000 shares of preferred stock,
par value $0.01 per share ("PEC Preferred Stock"). At the close of business on
December 31, 2001, (a) approximately 76,956,000 shares of PEC Common Stock were
validly issued and outstanding, fully paid and nonassessable and free of
preemptive rights, and (b) no shares of PEC Preferred Stock were issued and
outstanding. The PEC Common Stock is designated as a national market security on
an inter-dealer quotation system by the National Association of Securities
Dealers, Inc. The PEC Shares issued in accordance with this Agreement will be,
when so issued, duly authorized, validly existing, fully paid and non-assessable
and free of preemptive rights.
Section 2.4 SEC Documents. PEC has filed all required documents with the
Securities and Exchange Commission ("SEC") since January 1, 2000 (the "PEC/SEC
Documents"). As of their respective dates, the PEC/SEC Documents complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and none of the PEC/SEC Documents contained any untrue
statement of a material fact or omitted to state a
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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. The consolidated financial statements of PEC included in the PEC/SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto) and fairly present
the consolidated financial position of PEC and its consolidated subsidiaries as
at the dates thereof and the consolidated results of their operations and
statements of cash flows for the periods then ended (subject, in the case of the
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein).
Section 2.5 Litigation. There is no suit, action, investigation or
proceeding pending or, to the knowledge of the executive officers of PEC,
threatened against PEC or any of its subsidiaries at law or in equity before or
by any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind, that would impair the ability of PEC and PEC Sub to
perform their obligations hereunder or to consummate the transactions
contemplated hereby, and there is no judgment, decree, injunction, rule or order
of any court, governmental department, commission, board, bureau, agency,
instrumentality or arbitrator to which PEC or any of its subsidiaries is subject
that would impair the ability of PEC and PEC Sub to perform their obligations
hereunder or to consummate the transactions contemplated hereby.
Section 2.6 Brokers. No broker, investment banker or other person is
entitled to any broker's, finder's or similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of PEC or PEC Sub.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ODIN
Odin represents and warrants to PEC and PEC Sub as follows:
Section 3.1 Organization, Standing and Power. Odin is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of
Texas. Odin has no subsidiaries. Odin owned no property and did not have any
income or business operations prior to June 9, 2000, and after such date has not
engaged in any business which was not in connection with the acquisition or
refurbishment of the Drilling Rigs and Equipment, the Merger or this Agreement.
Section 3.2 Capital Structure. The authorized capital stock of Odin
consists of 100,000 shares of Odin Common Stock. At the date of this Agreement,
1,053 shares of Odin Common Stock are validly issued, fully paid and
nonassessable and free of preemptive rights. There are no options, warrants,
rights, commitments, agreements, arrangements or undertakings of any kind to
which Odin is a party or by which it is bound obligating Odin to issue
additional shares of its capital stock.
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Section 3.3 Ownership of Odin Common Stock. Section 3.3 of the disclosure
schedule of Odin dated as of the date of this Agreement, previously delivered to
PEC (the "Odin Disclosure Schedule"), sets forth a true and correct list of the
ownership of Odin Common Stock by the shareholders of Odin (the "Odin
Shareholders"). Each of the shareholders of Odin beneficially holds such Odin
Common Stock free and clear of any restrictions on transfer (other than
restrictions under the Securities Act of 1933 and state securities laws), taxes,
Liens, options, warrants, purchase rights, contracts, commitments, equities,
claims and demands. None of the shareholders of Odin is a party to (a) any
option, warrant, purchase right, or other contract or commitment that could
require him to sell, transfer, or otherwise dispose of any Odin Common Stock
(other than pursuant to this Agreement); or (b) any voting trust, proxy, or
other agreement or understanding with respect to the Odin Common Stock.
Section 3.4 Authority; Non-Contravention. Odin has all requisite power and
authority to enter into this Agreement and to consummate the Merger. This
Agreement has been duly executed and delivered by Odin and (assuming the valid
authorization, execution and delivery of this Agreement by PEC and PEC Sub)
constitutes a valid and binding obligation of Odin enforceable against it in
accordance with its terms, except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws of general applicability relating to or affecting the enforcement
of creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law). The execution and delivery of this Agreement and the Closing Documents
do not or will not, as the case may be, and the consummation of the transactions
contemplated hereby and thereby and compliance with the provisions hereof and
thereof will not, conflict with, or result in any violation of, or default (with
or without notice of lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to the loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Odin under, any provision of (a) the Articles of
Incorporation or Bylaws of Odin (true and complete copies of which as of the
date hereof have been delivered to PEC); (b) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Odin; or (c) any judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to Odin or any of
its assets. No filing or registration with, or authorization, consent or
approval of, any Governmental Entity is required by or with respect to Odin in
connection with the execution and delivery of this Agreement and the Closing
Documents or is necessary for the consummation by Odin of the Merger or any
other transaction contemplated by this Agreement.
Section 3.5 Financial Statements. Included in Section 3.5 of the Odin
Disclosure Schedule is an unaudited balance sheet of Odin as of March 8, 2002
(the "Odin Balance Sheet"). The Odin Balance Sheet: (a) is complete and correct
in all material respects, (b) has been prepared in conformity with accrual tax
basis accounting consistently applied, and (c) presents fairly the financial
condition of Odin at the date presented. There has not been, and there will not
be at Closing, any change in the Odin Balance Sheet, other than payment of the
accounts payable shown thereon.
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Section 3.6 Absence of Change. There has not been any change with respect
to Odin since the date of the Odin Balance Sheet.
Section 3.7 Taxes. Odin has filed all Tax Returns required to be filed on
or before the Effective Time and paid all Taxes due on or before the Effective
Time. Odin is now and has been at all times since the date of its organization
on June 9, 2000, an S corporation. No taxing authority has challenged the
effectiveness of such election. The Internal Revenue Service has acknowledged
receipt of Odin's election to be treated as an S corporation. No event has or
will occur before the Effective Time which has caused or will cause Odin's
election to be treated as an S corporation to be terminated in any manner. Odin
shall not be subject to a tax on built-in gains under Section 1374 of the Code
as a result of the Merger. Odin became an S corporation, for federal income tax
purposes on June 9, 2000 pursuant to a valid election made by Odin with the
consent of all of its shareholders. All such Tax Returns are true, correct and
complete, none of such Tax Returns have been amended, and all Taxes arising
under such Tax Returns (regardless of whether reflected thereon) have been fully
paid and shall be timely paid. No claim has been made by authorities in any
jurisdiction where Odin did not file tax returns that it is or may be subject to
taxation therein. All Tax payments relating to employees, including income tax
withholding, FICA, FUTA, unemployment and workers' compensation payments have
been fully and timely paid. For purposes of this Agreement, (a) S corporation
has the meaning set forth in Section 13G1(a)(1) of the Internal Revenue Code (an
"S Corporation"); (b) "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") means any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or added minimum, ad valorem, transfer, severance or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any governmental authority; and (c) "Tax Return" means any
return, report or similar statement required to be filed with respect to any Tax
(including any attached schedules), including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax.
Section 3.8 Real and Personal Property; Title Thereto; No Change. Odin owns
no real or personal property having an individual fair market value in excess of
$5,000 other than the Drilling Rigs and Equipment. Section 3.8 of the Odin
Disclosure Schedule contains a complete and accurate description of the Drilling
Rigs and Equipment. Odin has good and marketable title to all of such Drilling
Rigs and Equipment free and clear of any Liens. There has been no change of any
kind to the Drilling Rigs and Equipment, including the location of all of the
Drilling Rigs and Equipment, since March 5, 2002, the date of inspection by PEC
Sub.
Section 3.9 Liabilities. Except as shown on the Odin Balance Sheet, there
are no liabilities of Odin of any kind, whether contingent or fixed.
Section 3.10 Insurance. Odin does not maintain any policies of insurance of
any kind.
Section 3.11 Contracts and Other Agreements. Odin is not a party to or
bound by any written or oral (a) employment, agency, consulting or similar
contract; (b) lease, whether as lessor or lessee, with respect to any real or
personal property; (c) contract or commitment; (d) credit
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agreements; (e) guarantee, suretyship, indemnification or contribution
agreement; or (f) other contracts.
Section 3.12 Records. The stock record book and minute book of Odin are
complete and correct in all material respects, and record all transactions
required to be set forth concerning all proceedings, consents, actions and
meetings of the shareholders and the Board of Directors of Odin.
Section 3.13 Transactions with Affiliates. No Affiliate (as hereinafter
defined) has any direct or indirect interest in or owns directly or indirectly
any asset or right owned by Odin, or is party to any contract, lease, agreement,
arrangement or commitment related thereto. "Affiliate" as used in this Section
means a person which directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with Odin. For purposes
of this definition, the officers, directors and shareholders of Odin shall be
deemed Affiliates.
Section 3.14 Employee Benefit Plans; Employment Agreements. Odin has no
employee benefit plans, programs or arrangements for the benefit of any current
or former employee, officer or director of Odin or any employment or severance
agreements with any of its employees.
Section 3.15 Labor Matters. Odin has never had any employees.
Section 3.16 Litigation. There is no suit, action, investigation or
proceeding pending or, to the knowledge of Odin, threatened against Odin at law
or in equity before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind.
Section 3.17 Governmental Licenses and Permits; Compliance with Law. Odin
has not received notice of any revocation or modification of any federal, state,
local or foreign governmental license, certification, tariff, permit,
authorization or approval. Odin has complied with all statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees or arbitration awards
applicable to it.
Section 3.18 Brokers. No broker, investment banker or other person is
entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Odin.
Section 3.19 Bank Accounts. A complete list of each bank account maintained
by Odin, including safe deposit boxes maintained by Odin, the account balances
and the names of the persons authorized to draw down upon or have access thereto
is set forth in Section 3.19 of the Odin Disclosure Schedule.
Section 3.20 Workers' Compensation Claims. There are no workers'
compensation claims pending or, to the knowledge of Odin, threatened against
Odin.
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ARTICLE IV
COVENANTS PENDING CLOSING
Section 4.1 No Operations. During the period from the date of this
Agreement through the date of Closing, Odin: (i) shall not engage in any
operations; (ii) shall not sell, lease or otherwise dispose of or agree to sell,
lease or otherwise dispose of any of the Drilling Rigs and Equipment; (ii) shall
not issue any additional shares of Odin Common Stock or any securities
convertible into, or grant any rights, warrants or options, to acquire any such
shares or convertible securities; or (iii) shall not amend its Articles of
Incorporation to create a new class of equity security.
Section 4.2 No Solicitation. From and after the date hereof, Odin will not,
and will cause its officers, directors, employees, agents and other
representatives not to, directly or indirectly, solicit or initiate any offer
for Odin, or for the Drilling Rigs and Equipment, and not to solicit or
initiate, directly or indirectly, discussions, negotiations, considerations or
inquiries concerning an offer for Odin, from any person, or engage in
discussions or negotiations relating thereto, or provide to any other person any
information or data relating to Odin for the purpose of, or have any substantive
discussions with any person relating to, or otherwise cooperate with or assist
or participate in, or facilitate, any offer or any inquiry or proposal which
would reasonably be expected to lead to any effort or attempt by any person to
effect an offer, or agree to endorse any such inquiry or offer.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Fees and Expenses. All costs and expenses incurred by PEC and
PEC Sub in connection with this Agreement and the transactions contemplated
hereby shall be paid by PEC; such costs and expenses incurred by Odin shall be
paid by the Odin Shareholders.
Section 5.2 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement and the prompt satisfaction of the conditions
hereto.
Section 5.3 Public Announcements. Before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Agreement, PEC and PEC Sub, on the one hand, and Odin, on
the other hand, will consult with each other, and will undertake reasonable
efforts to agree upon the terms of such press release, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by applicable law or by obligations pursuant to any
listing agreement with the Nasdaq National Market.
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Section 5.4 Indemnifying Shareholder Indemnification. After the Effective
Time, Xxx X. Xxxxxx, Xx. (the "Indemnifying Shareholder") shall indemnify and
hold PEC and PEC Sub harmless against and in respect of all actions, suits,
demands, judgments, costs and expenses (including reasonably attorneys' fees of
PEC or PEC Sub) in excess of $10,000 in the aggregate ("Basket Amount") relating
to any misrepresentation, breach of any representation or warranty or
non-fulfillment of any agreement on the part of Odin under this Agreement,
including, without limitation, with respect to the representations and
warranties contained in Section 3.7 and to the agreements or representations
contained in Section 5.5 below; provided, however, that the Basket Amount shall
not be applicable in respect of any claim for indemnification relating to (a)
any actions, suits, demands, etc. (including reasonable attorney's fees),
arising out of or based upon a fraudulent misrepresentation of Odin in this
Agreement; or (b) any claim for indemnification relating to unpaid or
undisclosed tax liabilities of Odin arising on or prior to the Effective Time.
Any written notice of claim for indemnification shall be given to the
Indemnifying Shareholder by PEC or PEC Sub within 90 days after it has knowledge
of any misrepresentation or breach of warranty or non-fulfillment of any
agreement on the part of the Indemnifying Shareholder, which may give rise to a
claim for indemnification. The indemnification obligation provided for in this
Section 5.4 shall terminate and be of no further force and effect after 24
months from the Effective Time, except (i) as to any representation or warranty
as to which a written notice of claim for indemnification has been given to the
Indemnifying Shareholder prior to the expiration of such 24-month period, (ii) a
claim for indemnification for any breach by Odin of any part of the
representation and warranty contained in Section 3.8 above may be given to
Indemnifying Shareholder without regard to any time limitations; and (iii) for a
claim for indemnification for unpaid or undisclosed tax liability of Odin
without regard to any time limitations.
Section 5.5 Certain Tax Matters.
(a) The parties recognize and agree that the S election of Odin shall be
terminated under Section 1362(d)(2) of the Code on the Effective Time as a
result of the Merger. The parties further agree that: (i) under Section
1362(d)(2)(B), the termination will be effective on the Effective Time and that
under Section 1362(e)(1)(A), (ii) the S short year return for 2002 will be for
the period of January 1, 2002, through the Effective Time; and (iii) the
Indemnifying Shareholder will be responsible for preparing and filing such short
period return.
(b) The Indemnifying Shareholder shall be responsible for causing to be
filed all tax returns of Odin for taxable periods ending on or prior to the
Effective Time, including any amended tax returns which are required as a result
of an examination or adjustments made by taxing authorities, and for causing to
be paid by the parties responsible therefor when due any taxes resulting
therefrom. Any such amended returns shall be furnished to PEC Sub for approval
(which approval shall not be unreasonably withheld), signature and filing at
least ten (10) business days prior to the due date for the filing of such
amended returns.
(c) All income taxes due with respect to taxable income of Odin for all
periods ending on or before the Effective Time (including any with respect to
the Merger), and all ad valorem and franchise taxes due for any period ending on
or before the Effective Time (including any franchise taxes due with respect to
the Merger) will be paid by the Indemnifying Shareholder.
(d) In the event PEC Sub determines that any state and/or local sales or
use taxes are payable to any state and/or local taxing authority in any such
state as a result of the Merger or the initial purchase of the Drilling Rigs and
Equipment by Odin, the Indemnifying Shareholder shall reimburse to PEC Sub an
amount equal to one-half of all such sales or use tax actually paid by PEC Sub,
including any related interest and/or penalties related to any such sales or use
taxes. In the event of any rebate or refund of any such sales or use taxes paid
by PEC Sub, PEC Sub shall remit one-half of such rebate or refund to the
Indemnifying Shareholder.
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(e) For federal income tax purposes, PEC, PEC Sub and Odin shall each
characterize the transactions contemplated by this Agreement as a
"reorganization" as defined in Section 368(a) of the Code, and will file all tax
returns in a manner consistent with such characterization.
Section 5.6 Odin Shareholder Approval. Odin shall promptly obtain
shareholder approval of the merger, including calling a meeting of its
shareholders for the purpose of voting upon the Agreement, if necessary. Xxx X.
Xxxxxx, Xx. agrees to vote his 740 shares of Odin common stock in favor of the
Agreement and the Merger.
Section 5.7 Condition of Odin Equipment. PEC and PEC Sub agree to accept
the Drilling Rigs and Equipment on an "as is, where is" basis subject to the
accuracy of the representation and warranty contained in Section 3.8 above.
Section 5.8 Odin Business and Financial Records. All business and financial
records of Odin shall remain the property of Odin and transferred to PEC Sub as
a part of the Merger.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver (where permissible) at or prior to the date of Closing
of the following condition:
(a) No Order. No Governmental Entity or court of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any law, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of prohibiting the Merger or any of the other transactions contemplated hereby;
provided that, in the case of any such decree, injunction or other order, each
of the parties shall have used reasonable best efforts to prevent the entry of
any such injunction or other order and to appeal as promptly as practicable any
decree, injunction or other order that may be entered.
Section 6.2 Conditions to Obligation of Odin to Effect the Merger. The
obligation of Odin to effect the Merger shall be subject to the fulfillment at
or prior to the Closing of the following additional conditions; provided that
Odin may waive any of such conditions in its sole discretion:
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(a) Performance of Obligations; Representations and Warranties. PEC and PEC
Sub shall each have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the Closing
and each of the representations and warranties of each of PEC and PEC Sub
contained in this Agreement shall be true and correct on and as of the date of
Closing as if made on and as of such date.
(b) Officers' Certificate. PEC and PEC Sub shall each have furnished to
Odin a certificate, dated the Closing, signed by the respective appropriate
officers of PEC and PEC Sub, certifying that to the best of the knowledge and
belief of each of them, the conditions set forth in Section 6.1 and Section
6.2(a) have been satisfied in full.
(c) Opinion of Xxxxx & Xxxxxxxxx LLP. Odin shall have received an opinion
from Xxxxx & Xxxxxxxxx LLP, counsel to PEC and PEC Sub, dated the date of
Closing, substantially to the effect set forth in the following subparagraphs:
(i) The incorporation, existence and good standing of PEC and PEC Sub
are as stated in this Agreement; the authorized shares of PEC are as stated
in this Agreement; all outstanding shares of PEC Common Stock are duly and
validly authorized and issued, fully paid and nonassessable and have not
been issued in violation of any preemptive right of any shareholders.
(ii) Each of PEC and PEC Sub has full corporate and partnership power
and authority, respectively, to execute, deliver and perform this Agreement
and this Agreement has been duly authorized, executed and delivered by PEC
and PEC Sub and (assuming due and valid authorization, execution and
delivery by Odin) constitutes the legal, valid and binding agreement of PEC
and PEC Sub, enforceable against PEC and PEC Sub in accordance with its
terms, except to the extent enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(iii) PEC has full corporate power and authority to execute, deliver
and perform the Registration Rights Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by PEC and
(assuming due and valid execution and delivery by the Odin Shareholders of
the Registration Rights Agreement) constitutes the legal, valid and binding
agreement of PEC enforceable against PEC in accordance with its terms,
except with respect to the indemnification provisions thereof, as to which
no opinion will be expressed by such counsel, and except to the extent
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights
and by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(iv) The execution and performance by PEC and PEC Sub of this
Agreement, and by PEC of the Registration Rights Agreement, will not
violate the Restated
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Certificate of Incorporation, or Restated Bylaws of PEC or the Certificate
of Limited Partnership, as amended, or Amended and Restated Limited
Partnership Agreement of PEC Sub and, to the knowledge of such counsel,
will not violate, result in a breach of or constitute a default under any
material lease, mortgage, contract, agreement, instrument, law, rule,
regulation, judgment, order or decree to which PEC or PEC Sub is a party or
by which they or any of their properties or assets may be bound.
(v) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body which
has not been obtained is required on behalf of PEC or PEC Sub for the
consummation of the transactions contemplated by this Agreement.
(vi) To the knowledge of such counsel, there are no actions, suits or
proceedings, pending or threatened against or affecting PEC or PEC Sub by
any Governmental Entity which seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement.
(vii) The PEC Shares to be issued pursuant to this Agreement will be,
when so issued, duly authorized, validly issued and outstanding, fully paid
and nonassessable.
In rendering such opinion, counsel for PEC and PEC Sub may rely as to matters of
fact upon the representations of officers of PEC and PEC Sub contained in any
certificate delivered to such counsel and certificates of public officials. Such
opinion shall be limited to the General Corporation Law of the State of
Delaware, DRULPA and the laws of the United States of America and the State of
Texas.
(d) Registration Rights Agreement. PEC shall have executed and delivered
the Registration Rights Agreement to the Odin Shareholders.
(e) Tax Opinion of Xxxxx & Xxxxxxxxx LLP. Odin shall have received the
opinion of Xxxxx & Xxxxxxxxx LLP, dated as of the date of closing, to the effect
that the Merger will qualify as a tax-free reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended, which opinion
will be reasonably satisfactory in form and content to Odin, or in the
alternative, the structure of the transaction will have been changed to a
statutory merger of Odin directly into PEC in consideration for the merger
consideration.
(f) Delivery of Merger Consideration. PEC shall have delivered the Merger
Consideration to the Odin Shareholders.
Section 6.3 Conditions to Obligations of PEC and PEC Sub to Effect the
Merger. The obligations of PEC and PEC Sub to effect the Merger shall be subject
to the fulfillment at or prior to the Closing of the following additional
conditions, provided that PEC may waive any such conditions in its sole
discretion:
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(a) Performance of Obligations; Representations and Warranties. Odin shall
have performed in all material respects each of its agreements contained in this
Agreement required to be performed on or prior to the Closing and each of the
respective representations and warranties of Odin contained in this Agreement
shall be true and correct on and as of the Closing as if made on and as of such
date.
(b) Officers' Certificate. Odin shall have furnished to PEC a certificate,
dated the Closing, signed by the President of Odin, certifying to the effect
that to the best of his knowledge and belief, the conditions set forth in
Section 6.1 and Section 6.3(a) have been satisfied.
(c) Opinion of XxXxxxx, Xxxxxxxx & Xxxxxxxx, P.C. PEC shall have received
an opinion of counsel from XxXxxxx, Xxxxxxxx & Xxxxxxxx, P.C., counsel to Odin,
dated the Closing, substantially to the effect that:
(i) The incorporation, existence and good standing of Odin are as
stated in this Agreement; the authorized shares of Odin Common Stock are as
stated in this Agreement; all outstanding shares of Odin Common Stock are
duly and validly authorized and issued, fully paid and non-assessable and
have not been issued in violation of any preemptive right of shareholders;
and, to the knowledge of such counsel, there is no existing option,
warrant, right, call, subscription or other agreement or commitment
obligating Odin to issue or sell, or to purchase or redeem, any shares of
its capital stock other than as stated in this Agreement.
(ii) Odin has full corporate power and authority to execute, deliver
and perform this Agreement and this Agreement has been duly authorized,
executed and delivered by Odin, and (assuming the due and valid
authorization, execution and delivery by PEC and PEC Sub) constitutes the
legal, valid and binding agreement of Odin enforceable against Odin in
accordance with its terms, except with respect to the indemnification
provisions thereof, as to which no opinion will be expressed by such
counsel, and except to the extent enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws of general applicability relating to or affecting the
enforcement of creditors' rights and by the effect of general principles of
equity (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(iii) The execution and performance by Odin of this Agreement will not
violate the Articles of Incorporation or Bylaws of Odin and, to the
knowledge of such counsel, will not violate, result in a breach of, or
constitute a default under, any material lease, mortgage, contract,
agreement, instrument, law, rule, regulation, judgment, order or decree to
which Odin is a party or to which it or any of its properties or assets may
be bound.
(iv) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental agency or body which
has not been obtained is required on behalf of Odin for consummation of the
transactions contemplated by this Agreement.
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(v) To the knowledge of such counsel, there are no actions, suits or
proceedings, pending or threatened against or affecting Odin by any
Governmental Entity which seeks to restrain, prohibit or invalidate the
transactions contemplated by the Agreement.
In rendering such opinion, counsel for Odin may rely as to matters of fact
upon the representations of officers of Odin contained in any certificate
delivered to such counsel and certificates of public officials. Such opinion
shall be limited to the laws of the United States of America and the State of
Texas.
(d) Officer and Director Resignation Letters. The Surviving Entity shall
have received a resignation letter dated the Closing Date from each of the
directors and officers of Odin.
(e) Investment Representation Letter. Each Odin Shareholder shall have
executed and delivered an investment representation letter substantially in the
form attached hereto as Exhibit B-1 or B-2, with the form depending upon whether
such shareholder has an individual net worth in excess of $1 million.
(f) Odin Share Certificates. The Surviving Entity shall have received all
of the Odin share certificates from the respective shareholders of Odin duly
endorsed to the Surviving Entity.
(g) No Dissenting Odin Shareholders. None of the shareholders of Odin has
exercised dissenters rights under Section 5.11 of the TBCA with respect to this
Agreement and the Merger contemplated hereby.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at any time prior
to the date of Closing, whether before or after any approval by the shareholders
of Odin:
(a) by mutual written consent of PEC and Odin;
(b) by PEC, if Odin shall have failed to comply in any material respect
with any of its covenants or agreements contained in this Agreement required to
be complied with by Odin prior to the date of such termination, which failure to
comply has not been cured within ten business days following receipt by Odin of
notice of such failure to comply;
(c) by Odin, if PEC or PEC Sub shall have failed to comply in any material
respect with any of its covenants or agreements contained in this Agreement
required to be complied with by PEC or PEC Sub prior to the date of such
termination, which failure to comply
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has not been cured within ten business days following receipt by PEC or PEC Sub
of notice of such failure to comply;
(d) by either PEC or Odin, if (i) the Merger has not been effected on or
prior to the close of business on March 29, 2002; provided, however, that the
right to terminate this Agreement pursuant to this clause shall not be available
to any party whose failure to fulfill any obligation of this Agreement has been
the cause of, or resulted in, the failure of the Merger to have occurred on or
prior to the aforesaid date, or (ii) any court of competent jurisdiction or any
governmental, administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable;
(e) by PEC, if there has been (i) a breach by Odin of any representation or
warranty that is not qualified as to materiality or (ii) a material breach by
Odin of any representation or warranty that is qualified as to materiality, in
each case which breach has not been cured within five business days following
receipt by Odin of notice of the breach; and
(f) by Odin, if there has been (i) a breach by PEC or PEC Sub of any
representation or warranty that is not qualified as to materiality or (ii) a
material breach by PEC or PEC Sub of any representation or warranty that is
qualified as to materiality, in each case which breach has not been cured within
five business days following receipt by the breaching party of notice of the
breach.
Section 7.2 Effect of Termination. In the event of termination of this
Agreement by either PEC or Odin as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability hereunder on the part of
Odin, PEC, PEC Sub or their respective officers, directors, shareholders or
partners; provided, however, that nothing contained in this Section 7.2 shall
relieve any party hereto from any liability for its own breach of this
Agreement.
Section 7.3 Amendment. This Agreement may be amended by the parties hereto
only by an instrument in writing signed on behalf of each of the parties hereto.
Section 7.4 Waiver. At any time prior to the date of Closing, the parties
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein which may legally be waived. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
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ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to PEC or PEC Sub, to:
Xxxxxxxxx-UTI Energy, Inc.
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Chief Executive Officer
and
Xxxxxxxxx-UTI Energy, Inc.
0000 Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxx, III
Senior Vice President, Corporation Development
with copies to:
Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx & Xxxxxxxxx LLP
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
(b) if to Odin, to:
Odin Drilling , Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxx X. Xxxxxx, Xx.
President
with copies to:
Xxxxxx X. Xxxxxxxx, Esq.
XxXxxxx, Xxxxxxxx & Xxxxxxxx, P.C.
0000 Xxxxxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
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(c) if to the Indemnifying Shareholder, to:
Xxx X. Xxxxxx, Xx.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
with copies to:
Xxxxxx X. Xxxxxxxx, Esq.
XxXxxxx, Xxxxxxxx & Xxxxxxxx, P.C.
0000 Xxxxxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Section 8.2 Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated, and the words "hereof," "herein" and "hereunder" and similar terms
refer to this Agreement as a whole and not to any particular provision of this
Agreement, unless the context otherwise requires. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
Section 8.3 Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
Section 8.4 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
including the documents and instruments referred to herein, (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) is not intended to confer upon any person other than the parties any
rights or remedies hereunder; provided, however, that legal counsel for the
parties hereto may rely upon the representations and warranties contained herein
and in the certificates delivered pursuant to Sections 6.2(b) and 6.3(b).
Section 8.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of
Texas, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 8.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
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Section 8.7 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order that
the transactions be consummated as originally contemplated to the fullest extent
possible.
Section 8.8 Enforcement of This Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
Section 8.9 Jurisdiction and Venue. Each party hereby irrevocably submits
to the exclusive jurisdiction of the United States District Court for the
Northern District of
Texas or any court of the State of Delaware in any action,
suit or proceeding arising from or in connection with this Agreement, and agrees
that any such action, suit or proceeding shall be brought only in such court
(and waives any objection based on forum non conveniens or any other objection
to venue therein).
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IN WITNESS WHEREOF, PEC, PEC Sub and Odin have executed this Agreement as
of the date first written above.
PEC:
XXXXXXXXX-UTI ENERGY, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
PEC Sub:
XXXXXXXXX-UTI DRILLING COMPANY LP, LLLP
By: XXXXXXXXX (GP) LLC
Its general partner
By:
-----------------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
ODIN:
ODIN DRILLING, INC.
By:
-----------------------------------------
Xxx X. Xxxxxx, Xx.
President
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TO INDUCE XXXXXXXXX-UTI ENERGY, INC. AND XXXXXXXXX-UTI DRILLING COMPANY LP,
LLLP TO ENTER INTO THIS
AGREEMENT AND PLAN OF MERGER AND FOR OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, THE UNDERSIGNED, BEING THE PRINCIPAL SHAREHOLDER OF ODIN DRILLING,
INC., HEREBY ACCEPTS AND AGREES ON HIS BEHALF AND ON BEHALF OF HIS SUCCESSORS
AND ASSIGNS TO BE BOUND BY THE PROVISIONS OF SECTIONS 5.4, 5.5(a), 5.5(b),
5.5(c), 5.5(d) AND 5.6 OF THE AGREEMENT.
--------------------------------
Xxx X. Xxxxxx, Xx.
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made and entered into
this ____ day of March, 2002, by and among XXXXXXXXX-UTI ENERGY, INC., a
Delaware corporation ("PEC"), and XXX X. XXXXXX, XX. ("R XXXXXX"), XXXXXXX X.
XXXXXX ("W XXXXXX"), XXXXXXX X. XXXXXX ("J XXXXXX"), XXXXXXX X. XXXXXX ("M
XXXXXX"), XXXXXXX X. XXXXXX ("K XXXXXX"), XXXXXX XXXXXX XXXXXXXX (A XXXXXXXX"),
XXXXX X. XXXXXXXX ("T XXXXXXXX"), XXXXXX X. XXXXXXXX ("K XXXXXXXX"), THE ESTATE
OF XXXXXXX XXXXX ("W XXXXX"), and XXXX XXXXXX ("M XXXXXX"), each of whom is a
shareholder of ODIN DRILLING, INC., a
Texas corporation ("Odin"), (R Xxxxxx, W
Xxxxxx, J Xxxxxx, M Xxxxxx, K Xxxxxx, A Xxxxxxxx, T Xxxxxxxx, K Xxxxxxxx, W
Xxxxx and M Xxxxxx are sometimes collectively referred to herein as the "Odin
Shareholders").
A. Pursuant to that certain
Agreement and Plan of Merger dated as of March
10, 2002 ("Merger Agreement"), by and between PEC, Xxxxxxxxx-UTI Drilling
Company LP, LLLP, a registered Delaware limited liability limited partnership
and a wholly owned indirect subsidiary of PEC ("PEC Sub") and Odin, PEC has
agreed to issue a total of 650,000 shares ("Restricted Shares") of PEC's Common
Stock, $0.01 par value (the "Common Stock"), as consideration for the
acquisition of Odin by way of merger with PEC Sub.
B. This Agreement is being entered into in connection with and as a
condition to the parties closing the transaction contemplated under the Merger
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement the following terms shall
have the following respective meanings:
"Commission" shall mean the United States Securities and Exchange
Commission and any successor federal agency having similar powers.
"Holders" shall mean the Odin Shareholders and their respective
successors and assigns.
"Person" shall mean an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or
any department or agency thereof.
The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
EXH A-1
"Registrable Securities" shall mean the Restricted Shares.
"Registration Expenses" shall mean all expenses incident to PEC's
performance of or compliance with this Agreement, including without
limitation all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws and all reasonable printing
expenses, messenger and delivery expenses, and fees and disbursements of
counsel for PEC and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other Person
retained by PEC (all such expenses being herein called "Registration
Expenses"), will be borne as provided in this Agreement, except that PEC
will, in any event, pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses
and fees for listing the securities to be registered on each securities
exchange on which similar securities issued by PEC are then listed or on
the NASD automated quotation system.
"Requesting Holder" shall mean any Holder of Registrable Securities who
shall request registration of such Registrable Securities pursuant hereto.
"Restricted Shares" shall include Common Stock issued or issuable with
respect to the Restricted Shares by way of a stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Shares, such shares will cease to be Restricted Shares when they have been
distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market
maker in compliance with Rule 144 under the Securities Act (or any similar
rule then in force).
"Securities Act" shall mean the Securities Act of 1933, or any successor
thereto, as the same shall be amended from time to time.
2. Restrictions on Transfer. The Restricted Shares were acquired by the
Odin Shareholders from PEC for investment for their own account and not as a
nominee or agent and not with a present view to the resale or distribution of
any part thereof, except in compliance with the Securities Act. Each of the Odin
Shareholders acknowledges that the Restricted Shares are "restricted securities"
within the meaning of the Securities Act.
3. Registration Under Securities Act
3.1 Registration Upon Demand
(a) Demand Right. Except as otherwise provided in the next to last sentence
of this Section 3.1(a) and in Section 3.1(c), at any time after the date hereof
but expiring on the second anniversary date hereof ("Demand Registration
Period"), at the written demand of Requesting
EXH A-2
Holders and on one (1) occasion only, PEC shall prepare, file with the
Commission and use its best efforts to have declared effective a registration
statement for a nonunderwritten secondary offering for the distribution of up to
all of the Registrable Securities. Such demand shall be made by written notice
to PEC by Requesting Holders holding at least a majority of the Registrable
Securities, which notice shall (i) request the preparation of the registration
statement pursuant to the terms of this Section 3.1, (ii) include the number of
Registrable Securities to be offered by Holders of Registrable Securities
pursuant to such registration statement and (iii) be sent to all other Holders.
PEC may include in such registration any securities of PEC for sale by PEC or
persons other than PEC, and such registration shall be deemed to be an
incidental registration pursuant to Section 3.2 hereof with Holders having the
priority with respect to the Registrable Securities. Notwithstanding the
foregoing or Section 3.3(b), PEC shall not be required to file or to maintain
the effectiveness of a registration statement under this Section 3.1(a) beyond
the time all Requesting Holders would otherwise be able to sell their
Registrable Securities in the market without restriction under the volume
limitation provisions of Rule 144(e) adopted under the Securities Act. Any
registration filed under this section must include a "Plan of Distribution"
section covering sale in ordinary market transactions and typical hedging
transactions.
(b) Expenses. PEC shall pay all Registration Expenses in connection with
the registration of Registrable Securities demanded pursuant to this Section
3.1.
(c) Restrictions on the Demand Registration. PEC will not be obligated to
effect the registration under Section 3.1(a) within three months after the
effective date of (i) a registration filed by PEC, provided that the three-month
period can be extended to six months if required by the then managing
underwriter. PEC may postpone filing or the effectiveness of the registration
statement demanded by Holders under Section 3.1(a) for up to six months
following receipt of such demand if (1) PEC has executed in good faith (x) a
letter of intent or a commitment letter with an underwriter for a public
offering or (y) an agreement in principle relating to an acquisition of assets
(other than in the ordinary course of business) or any merger, consolidation or
similar transaction, or (z) has made a filing with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection
with a tender offer or (2) the Board of Directors reasonably determines in good
faith that effectuation of the registration under 3.1 would not be in the best
interests of the PEC stockholders. Notwithstanding anything in this Section
3.1(c) to the contrary, if the Demand Registration Period expires without
effectuation of a demand for registration under Section 3.1(a) because of the
occurrence of an event specified above in this Section 3.1(c), the Demand
Registration Period shall be extended for such additional period as is necessary
to effect such registration, provided that such demand is given to PEC prior to
the expiration of the Demand Registration Period.
3.2 Incidental Registration.
(a) Right to Include Registrable Securities. Subject to the further
provisions of this Section 3.2(a), if PEC, at any time commencing on the date of
this Agreement and expiring on the second anniversary date hereof, proposes to
register any of its equity securities in a registration under the Securities
Act, for its own account (primary registration) but not for the account of other
holders of PEC's securities (a secondary registration), on a form and in a
manner which would permit registration of the Registrable Securities for sale to
the public under the Securities Act, it will
EXH A-3
each such time give prompt written notice to all Holders of its intention to do
so, describing such securities and specifying the form and manner and the other
relevant facts involved in such proposed registration and upon the written
request of any such Holder delivered to PEC within twenty (20) business days (or
such shorter period as may be required due to the nature of the offering covered
by the registration) after the giving of any such notice (which request shall
specify the Registrable Securities intended to be disposed of by such Holder and
the intended method or methods of disposition thereof), PEC will use its best
efforts to effect the registration under the Securities Act of all Registrable
Securities which PEC has been so requested to register by Holders to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered provided
that (i) if, at any time after giving such written notice of its intention to
register any of its securities and prior to the effective date of the
registration statement filed in connection with such registration, PEC shall
determine for any reason not to register such securities, PEC may, at its
election give written notice of such determination to each Holder and thereupon
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith as provided herein); and (ii) if
(A) the registration so proposed by PEC involves an underwritten primary
registration on behalf of PEC to be distributed (on a firm commitment basis) by
or through one or more underwriters of recognized standing under underwriting
terms appropriate for such a transaction, and (B) the managing underwriter of
such underwritten offering shall advise PEC in writing that, in its good faith
judgment, all the shares to be offered by PEC and other parties are greater than
can be accommodated without interfering with the successful marketing of all the
securities to be then offered publicly for the account of PEC, then the managing
underwriter or underwriters shall include in such registration (1) first, the
securities PEC proposes to register for sale, and (2) second, any securities
requested and permitted to be included in such registration pursuant to
incidental or piggyback rights granted to the holders thereof prior to the date
of this Agreement, (3) third, the Registrable Securities requested to be
included in such registration by the Requesting Holders, pro rata, if necessary,
and (4) fourth, any other securities requested to be included in such
registration, if any, pro rata. Notwithstanding anything in this Section 3.2(a)
to the contrary, PEC shall have no obligation under this Section 3.2(a) to
register any of the Registrable Securities after the second anniversary date
hereof or if at the time of the exercise of the right provided for in this
Section 3.2(a) all Holders of the Registrable Securities would otherwise be able
to sell their Registrable Securities in the market without restriction under the
volume limitations provisions of Rule 144(e) adopted under the Securities Act.
(b) Expenses. PEC will pay all Registration Expenses in connection with
each registration of Restricted Shares requested pursuant to Section 3.2.
3.3 Registration Procedures. If and whenever PEC is required to effect the
registration of any Registrable Securities under the Securities Act as provided
in Section 3.1, PEC will promptly:
(a) prepare and (in any event within sixty (60) days) file with the
Commission a registration statement with respect to such Registrable Securities
and use its best efforts to cause such registration statement to become
effective, such registration statement to comply as to form and content in all
material respects with the Commission's forms, rules and regulations;
EXH A-4
(b) keep such registration statement effective and comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities and other securities covered by such registration
statement until the earlier of (i) such time as all of such Registrable
Securities and other securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement or (ii) the expiration of (A) twelve (12) months in
the case of a registration of Registrable Securities pursuant to Section 3.1
hereof, or (B) if the primary registration is a nonunderwritten offering, three
(3) months in the case of a registration of Registrable Securities pursuant to
Section 3.2 hereof, after such registration statement becomes effective, and
will furnish to each such seller prior to the filing thereof a copy of any
amendment or supplement to such registration statement or prospectus and shall
not file any such amendment or supplement to which any such seller shall have
reasonably objected on the grounds that such amendment or supplement does not
comply in all material respects with the requirements of the Securities Act or
of the rules or regulations thereunder;
(c) promptly furnish to each seller of Registrable Securities one
originally executed registration statement, with all amendments, supplements and
additional documentation; such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits) as such seller may reasonably request; such number of
copies of the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) as required by the Securities
Act as such seller may reasonably request; such documents, if any, incorporated
by reference in such registration statement or prospectus; and such other
documents as such seller may reasonably request;
(d) use its best efforts to register or qualify all Registrable Securities
and other securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each seller shall
reasonably request, to keep such registration or qualification in effect for so
long as such registration statement remains in effect, and do any and all other
acts and things which may be necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of his Registrable Securities
covered by such registration statement, except that PEC shall not for any such
purpose be required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of this
subdivision (d) be obligated to be so qualified, or to subject itself to
taxation in any such jurisdiction, or to consent to general service of process
in any such jurisdiction;
(e) immediately notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing, or if it is necessary to amend or supplement such
prospectus or registration statement to comply with law, and at the request of
any such seller, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated
EXH A-5
therein or necessary to make the statement therein not misleading in light of
the circumstances then existing and shall otherwise comply in all material
respects with the law and so that such prospectus or registration statement, as
amended or supplemented, will comply with law;
(f) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its securities holders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve (12) months beginning with the first month of the first fiscal
quarter after the effective date of such registration statement, if such
earnings statement is necessary to satisfy the provisions of Section 11(a) of
the Securities Act;
(g) provide and cause to be maintained a transfer agent and registrar for
all Registrable Securities covered by such registration statement from and after
a date not later than the effective date of such registration statement; and
(h) list all Common Stock covered by such registration statement on each
securities exchange on which any Common Stock is then listed or quote all such
Common Stock on NASDAQ if PEC's Common Stock is quoted on NASDAQ, or, if PEC's
Common Stock is not then quoted on NASDAQ or listed on any national securities
exchange, use its best efforts to have such Common Stock covered by such
registration statement quoted on NASDAQ or, at the option of PEC, listed on a
national securities exchange.
PEC may require each seller of Registrable Securities as to which any
registration is being effected to furnish PEC such information regarding such
seller and the distribution of such securities as PEC may from time to time
reasonably request in writing and as shall be required by law or by the
Commission in connection therewith.
3.4 Underwritten Offerings.
(a) Inclusion of Registrable Securities. If PEC at any time proposes to
register any of its securities for its own account (primary offering) under the
Securities Act as contemplated by Section 3.2 and such securities are to be
distributed by or through one or more underwriters, PEC will use its best
efforts, if requested by any Holder who is entitled to request incidental
registration of Registrable Securities in connection therewith pursuant to
Section 3.2, to arrange for such underwriters to include the Registrable
Securities to be offered and sold by such Holder among the securities to be
distributed by or through such underwriters; provided that, for purposes of this
sentence, best efforts shall not require PEC to reduce the amount of sales price
of such securities proposed to be distributed by or through such underwriters.
Holders of Registrable Securities to be distributed by such underwriters shall
be parties to the underwriting agreement between PEC and such underwriters and
the representations and warranties by, and the other agreements on the part of,
PEC to and for the benefit of such underwriters, shall also be made to and for
the benefit of such Holders of Registrable Securities. PEC will cooperate with
such Holders to the end that the conditions precedent to the obligations of such
Holders under such underwriting agreement shall not include conditions that are
not customary in underwriting agreements with respect to combined primary and
secondary distributions and shall be otherwise satisfactory to such Holders. No
such Holder shall be required by PEC to make any representations or warranties
other than reasonable representations, warranties or agreements regarding such
Holder, such Holder's Registrable
EXH A-6
Securities and such Holder's intended method or methods of distribution and any
other representation required by law and as provided in Section 3.4(b).
(b) Holdback Agreements.
(i) If any registration pursuant to Section 3.2 shall be in connection
with any underwritten public offering, each Holder of Registrable
Securities agrees by acquisition of such Registrable Securities, if so
required by the managing underwriter, not to effect any public sale or
distribution of Registrable Securities (other than as part of such
underwritten public offering) within seven (7) days prior to the effective
date of such registration statement or one hundred twenty (120) days after
the effective date of such registration statement, unless the underwriters
managing the offering otherwise agree.
(ii) PEC agrees (A) not to effect any public sale or distribution
prohibited by the Exchange Act after the demand or decision to make such
registration and (i) prior to the effective date of the registration
statement, except as a part of such registration statement or pursuant to
any registration statements on Forms S-8 or S-4 or any successor form,
unless the managing underwriters of such registration otherwise agree; or
(ii) prior to the ninetieth (90th) day after the effective date of such
registration statement, and (B) to use its best efforts to cause each
holder of at least 10% of its Common Stock or any securities convertible
into or exchangeable or exercisable for any of its Common Stock, in each
case purchased from PEC at any time after the date of this Agreement (other
than in a public offering), to agree not to effect any such public sale or
distribution of such securities during such period.
3.5 Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, PEC will give Holders on whose behalf such
Registrable Securities are to be so registered and each Requesting Holder and
not more than one counsel for all Holders and their respective accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission and each amendment
thereof or supplement thereto, and will give each of them such access to its
books and records and such opportunities to discuss the business of PEC with its
officers and the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such Holders and their
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
4. Indemnification.
4.1 Indemnification by PEC. In the event of any registration of any
securities of PEC under the Securities Act (pursuant to which any Holder sells
Registrable Securities), PEC will, and hereby does, indemnify and hold harmless
such Holder, any employees, officers, directors, shareholders, partners or
trustees of such Holder and each other person, if any, who controls such Holder
within the meaning of the Securities Act, in each case, against any losses,
claims, damages, liabilities or expenses, joint or several (including, without
limitation, the costs and expenses of investigating, preparing for and defending
any legal proceeding, including reasonable attorney's fees), to which such
Holder or any such employee, officer, director, stockholder, trustee, partner or
EXH A-7
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
document incorporated by reference therein, or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and PEC will reimburse
such Holder and each such employee, officer, director, stockholder, trustee,
partner or controlling person for any legal or any other expenses incurred by
them in connection with investigating or defending or settling any such loss,
claim, liability, action or proceeding; provided that PEC shall not be liable in
any such case to the extent that any loss, claim, damage, liability or expense
(or action or proceeding in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to PEC through an instrument duly
executed by such Holder or any such employee, officer, director, stockholder,
trustee, partner or controlling person specifically stating that it is for use
in preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Holder or any such
employee, officer, director, stockholder, trustee, partner or controlling person
and shall survive the transfer of such securities by such Holder. PEC will make
provision for contribution in lieu of any such indemnity that may be disallowed
as shall be reasonably requested by such Holder.
4.2 Indemnification by Holder. In the event of any registration of any
securities of PEC under the Securities Act (pursuant to which any Holder sells
Registrable Securities covered by such registration statement), such Holder
will, and each of them hereby does, severally indemnify and hold harmless PEC,
each director of PEC, each officer of PEC who shall sign such registration
statement and each other person, if any, who controls PEC within the meaning of
the Securities Act from and against losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of material fact
contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus included therein, or any amendment or
supplement thereto, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such statement or omission was made in
reliance upon and in conformity with written information furnished to PEC
through an instrument duly executed by such Holder specifically stating that it
is for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement up to
the net proceeds received by such Holder. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of PEC or
any such director, officer or controlling person and shall survive the transfer
of such securities by a Holder.
4.3 Notice of Claims, etc. In case any proceeding (including any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to this Section 4, such person
(hereinafter called the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (hereinafter called the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain
EXH A-8
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any other party the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The indemnifying
party shall not be liable for the settlement of any proceeding effected without
its written consent, but if settled with such consent or if there is a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
4.4 Indemnification Unavailable. If the indemnification provided for in
this Section 4 is unavailable as a matter of law to an indemnified party in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under any such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by such indemnified party on the one hand and the indemnifying
parties on the other or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of such indemnified party on the one hand and the indemnifying
parties on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of such indemnified party
and the indemnifying parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by such
parties and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omissions. The parties agree
that it would not be just and equitable if contribution pursuant to this Section
4.4 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
defending or settling any such action or claim. Notwithstanding the foregoing,
the liability of a Holder under this Section 4.4 shall be limited to the net
proceeds received by such Holder.
4.5 No Settlement, etc. No indemnifying party shall, except with the
written consent of the indemnified party, consent to entry of any judgment or
entry into settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or action.
EXH A-9
4.6 Indemnity Operative and in Full Force. The indemnity and contribution
agreements contained in this Section 4 shall remain operative and in full force
and effect regardless of any termination of this Agreement.
5. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, PEC shall
use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the date of this Agreement;
(b) File with the Commission in a timely manner all reports and other
documents required of PEC under the Securities Act and the Exchange Act; and
(c) So long as any Holder owns any Registrable Securities, furnish to the
Holders as soon as reasonably practicable after request a written statement by
PEC as to its compliance with the reporting requirements of the Exchange Act, a
copy of the most recent annual or quarterly report of PEC filed with the
Commission, and such other reports filed by PEC with the Commission.
6. Further Assurances. PEC shall take such action as any Holder may
reasonably request from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the Commission. Upon written request of any Holder, PEC
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
7. Amendments and Waivers. This Agreement may be amended, and PEC may take
any action herein prohibited or omit to perform any act herein required to be
performed by it, only if PEC shall have obtained the written consent to such
amendment, action or omissions to act of the Holder or Holders of at least 51%
or more of the Registrable Securities.
8. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the Holder of such
Registrable Securities for purposes of any request or other action by any Holder
or Holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any Holder or Holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, PEC
may require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities.
9. Notices. Notices and other communications under this Agreement shall be
in writing and shall be sent by registered mail, postage prepaid, or courier
addressed to:
EXH A-10
9.1 if to any Holder, at the address provided to PEC in writing by such
Holder or as shown on stock transfer books of PEC unless such Holder has advised
PEC in writing of a different address as to which notices shall be sent to it
under this Agreement, and
9.2 if to PEC, at 0000 Xxxxxx Xxxxxxx, X.X. Xxxxxx 0000, Xxxxxx, Xxxxx
00000 to the attention of its President or to such other address as PEC shall
have furnished to Odin or each Holder.
10. Successors and Assigns. PEC acknowledges and agrees that the
registration rights granted to the respective Odin Shareholders in this
Agreement may be transferred and assigned by the Odin Shareholders in connection
with any valid sale and assignment of the Registrable Securities. All covenants
and agreements in this Agreement by or on behalf of either of the parties hereto
will bind and, subject to the provisions of Section 3.1 hereof, inure to the
benefit of the respective successors and assigns of the parties hereto whether
so expressed or not. In addition, whether or not any express assignment has been
made, the provisions of this Agreement are for the benefit of any Holder of
Registrable Securities.
11. Miscellaneous. This Agreement embodies the entire agreement and
understanding between PEC and the other parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to the subject matter hereof. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Texas. The
headings in this Agreement are for the purposes of reference only and shall not
limit or otherwise affect the meaning hereof. This Agreement may be executed in
counterparts, each of which shall be an original, but both of which together
shall constitute one instrument.
EXH A-11
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
PEC: ODIN SHAREHOLDERS:
XXXXXXXXX-UTI ENERGY, INC.
-----------------------------------
Xxx X. Xxxxxx, Xx.
By:
--------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxx
Chief Executive Officer
-----------------------------------
Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx Xxxxxxxx
-----------------------------------
Xxx Xxxxxxxx, as custodian for
Xxxxx X. Xxxxxxxx and Xxxxxx X.
Xxxxxxxx
-----------------------------------
Xxxxxxxxx Xxxxx, as executrix of
the Estate of Xxxxxxx Xxxxx
-----------------------------------
Xxxx Xxxxxx
EXH X-00
XXXXXXX X-0
FORM
OF
INVESTMENT REPRESENTATION LETTER
March ___, 2002
Xxxxxxxxx-UTI Energy, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
This letter is being submitted to Xxxxxxxxx-UTI Energy, Inc. ("PEC") in
connection with and as a condition to PEC's closing of the Merger contemplated
by the
Agreement and Plan of Merger between PEC, Xxxxxxxxx-UTI Drilling Company
LP, LLLP, a registered Delaware limited liability limited partnership wholly
owned by PEC ("PEC Sub") and Odin Drilling, Inc. ("Odin"). Capitalized terms not
defined herein shall have the meaning given them in the Memorandum (as defined
below).
1. Representations and Warranties.
The undersigned hereby represents and warrants to PEC that the following
statements are true:
a. The undersigned has been furnished a copy of the Memorandum, dated
March ___, 2002 (the "Memorandum") containing information concerning
PEC and Odin and has had the opportunity to review the Memorandum.
b. The undersigned has such knowledge and experience in financial and
business matters that he/she is capable of evaluating the merits and
risks of an investment in PEC vis-a-vis the PEC Common Stock to be
issued by PEC as consideration for the Merger.
c. The undersigned has had an opportunity to ask questions of PEC and its
management concerning PEC and its subsidiaries, the businesses of PEC
and its subsidiaries and the PEC Common Stock and, if asked, all such
questions have been answered to the full satisfaction of the
undersigned.
d. The undersigned understands that PEC has not registered the offer or
sale of the PEC Common Stock under the Securities Act of 1933, as
amended (the "Act"), in reliance upon an exemption therefrom under
Section 4(2) of the Act and the provisions of Regulation D promulgated
thereunder. The undersigned therefore acknowledges that in no event
may he/she sell pledge, hypothecate or otherwise transfer the PEC
Common Stock without registration under the Act (see paragraph (g)
below) except upon delivery to the PEC of an opinion of counsel
reasonably satisfactory to PEC that registration is not required for
such sale, pledge, hypothecation or transfer.
EXH B-1-1
Xxxxxxxxx-UTI Energy, Inc.
March ___, 2002
Page 2
e. The undersigned represents that he will acquire the PEC Common Stock
for his/her own account, with no intention to distribute or offer to
distribute the same to others without registration under the Act, and
understands that the issuance by PEC of the PEC Common Stock will be
predicated upon the undersigned's lack of such intention.
f. The undersigned understands that neither the Securities and Exchange
Commission nor the securities commissioner of any state has received
or reviewed any documents relative to an investment in PEC, or has
made any finding or determination relating to the fairness of an
investment in PEC.
g. The undersigned acknowledges that stop transfer instructions will be
placed with PEC's transfer agent to restrict the resale, pledge,
hypothecation or other transfer of the PEC Common Stock.
h. The undersigned acknowledges that, except as provided in the
Registration Rights Agreement attached as Exhibit A to the Merger
Agreement, PEC is under no obligation to register the PEC Common Stock
for sale under the Act or to assist the undersigned in complying with
any exemption from registration under the Act, or any state securities
laws.
i. The undersigned understands and acknowledges that the foregoing
representations and warranties will be relied upon by PEC in
connection with the issuance of the PEC Common Stock.
j. The undersigned has an individual net worth in excess of $1 million.
2. Indemnification.
The undersigned agrees to indemnify and hold harmless PEC and its officers,
directors and affiliates and each other person, if any, who controls PEC, within
the meaning of Section 15 of the Act, against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited to, any and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon any false representation or warranty or failure by the undersigned
to comply with any covenant or agreement made by the undersigned herein.
3. Survival.
All representations, warranties and covenants contained in this letter
shall survive the closing of the Merger.
Very truly yours,
--------------------------------
EXH B-1-2
EXHIBIT B-2
FORM
OF
INVESTMENT REPRESENTATION LETTER
March ___, 2002
Xxxxxxxxx-UTI Energy, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
This letter is being submitted to Xxxxxxxxx-UTI Energy, Inc. ("PEC") in
connection with and as a condition to PEC's closing of the Merger contemplated
by the
Agreement and Plan of Merger between PEC, Xxxxxxxxx-UTI Drilling Company
LP, LLLP, a registered limited liability company wholly owned by PEC, and Odin
Drilling, Inc. ("Odin"). Capitalized terms not defined herein shall have the
meaning given them in the Memorandum (as defined below).
1. Representations and Warranties.
The undersigned hereby represents and warrants to PEC that the following
statements are true:
a. The undersigned has been furnished a copy of the Memorandum, dated
March ___, 2002 (the "Memorandum") containing information concerning
PEC and Odin and has had the opportunity to carefully review the
Memorandum.
b. The undersigned, either alone or with his/her purchaser
representative, has such knowledge and experience in financial and
business matters that he/she is capable of evaluating the merits and
risks of an investment in PEC vis-a-vis the PEC Common Stock to be
issued by PEC as consideration for the Merger. The name and address of
the undersigned's purchase representative is _______________________.
c. The undersigned has had an opportunity to ask questions of PEC and its
management concerning PEC and its subsidiaries, the businesses of PEC
and its subsidiaries and the PEC Common Stock, and, if asked, all such
questions have been answered to the full satisfaction of the
undersigned.
d. The undersigned understands that PEC has not registered the offer or
sale of the PEC Common Stock under the Securities Act of 1933, as
amended (the "Act"), in reliance upon an exemption therefrom under
Section 4(2) of the Act and the provisions of Regulation D promulgated
thereunder. The undersigned therefore acknowledges that in no event
may he/she sell or otherwise transfer the PEC Common Stock, without
registration under the Act (see paragraph (g) below) except upon
delivery to PEC of an opinion of
EXH B-2-1
Xxxxxxxxx-UTI Energy, Inc.
March ___, 2002
Page 2
counsel reasonably satisfactory to PEC that registration is not
required for such sale, pledge, hypothecation or transfer.
e. The undersigned represents that he will acquire the PEC Common Stock
for his/her own account, with no intention to distribute or offer to
distribute the same to others without registration under the Act, and
understands that the issuance by PEC of the PEC Common Stock, will be
predicated upon the undersigned's lack of such intention.
f. The undersigned understands that neither the Securities and Exchange
Commission nor the securities commissioner of any state has received
or reviewed any documents relative to an investment in PEC, or has
made any finding or determination relating to the fairness of an
investment in PEC.
g. The undersigned acknowledges that stop transfer instructions will be
placed with PEC's transfer agent to restrict the resale, pledge,
hypothecation or other transfer of the PEC Common Stock.
h. The undersigned acknowledges that, except as provided in the
Registration Rights Agreement attached as Exhibit A to the Merger
Agreement, PEC is under no obligation to register the PEC Common Stock
for sale under the Act or to assist the undersigned in complying with
any exemption from registration under the Act, or any state securities
laws.
i. The undersigned understands and acknowledges that the foregoing
representations and warranties will be relied upon by PEC in
connection with the issuance of the PEC Common Stock.
2. Indemnification.
The undersigned agrees to indemnify and hold harmless PEC and its officers,
directors and affiliates and each other person, if any, who controls PEC, within
the meaning of Section 15 of the Act, against any and all loss, liability,
claim, damage and expense whatsoever (including, but not limited to, any and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation commenced or threatened or any claim whatsoever) arising out of
or based upon any false representation or warranty or failure by the undersigned
to comply with any covenant or agreement made by the undersigned herein.
3. Survival.
All representations, warranties and covenants contained in this letter
shall survive the closing of the Merger.
Very truly yours,
--------------------------------
EXH B-2-2
ODIN DISCLOSURE SCHEDULE
AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXXXXX-UTI ENERGY, INC.
XXXXXXXXX-UTI DRILLING COMPANY LP, LLLP
AND
ODIN DRILLING, INC.
ODIN DISCLOSURE SCHEDULE
SECTION 3.3
OWNERSHIP OF ODIN COMMON STOCK
ODIN DISCLOSURE SCHEDULE
SECTION 3.5
ODIN BALANCE SHEET AT MARCH 8, 2002
ODIN DISCLOSURE SCHEDULE
SECTION 3.8
DRILLING RIGS AND EQUIPMENT
ODIN DISCLOSURE SCHEDULE
SECTION 3.19
ODIN BANK ACCOUNTS
NONE