1
EXHIBIT 10.8
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT IN FAVOR OF
THE HOLDERS OF REGISTRABLE SECURITIES
2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into as of April 11, 1997 by and among UTI Energy Corp., a Delaware
corporation (the "Company"), and the holders of Registrable Securities (the
"Holders") signatory to this Agreement.
This Agreement is made pursuant to the Warrant Agreement (the "Warrant
Agreement") dated as of April 11, 1997 by and among the Company and the Warrant
Holders (as defined in the Warrant Agreement), pursuant to which the Holders
are receiving common stock warrants (the "Warrants") in connection with the
purchase of $25,000,000 of the Company's 12% notes pursuant to a note purchase
agreement, dated as of April 11, 1997 between the Company and the purchasers
named therein.
The parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) AFFILIATE of a specified Person means any
other Person that directly, or indirectly through one or more intermediates,
controls, is controlled by or is under common control with the Person
specified, or who holds or beneficially owns 50% or more of the equity interest
in the Person specified or 50% or more of the voting securities of the Person
specified. A managed account of a Person is also an Affiliate of such Person.
(b) BUSINESS DAY means any day on which
banking institutions in Los Angeles, California are authorized or obligated by
law or executive order to close.
(c) COMMISSION means the Securities and Exchange
Commission.
(d) COMPANY means UTI Energy Corp. or any
successor to it or to its business.
(e) COMMON STOCK means (except where the context
otherwise indicates) the Common Stock of the Company, par value $0.001 per
share, as constituted on its original date of issue by the Company, and any
capital stock into which such Common Stock may thereafter be changed, and shall
also include (i) capital stock of the Company of any other class (regardless of
how denominated) issued to the holders of shares of any Common Stock upon any
reclassification thereof which is also not preferred as to dividends or
liquidation over any other class of stock of the Company and which is not
subject to redemption and (ii) shares of common stock of any successor
corporation or acquiring corporation.
3
(f) DEMANDING HOLDERS shall have the meaning set
forth in Section 2(a)
(g) DEMAND REGISTRATION shall have the meaning
set forth in Section 2(a).
(h) EXCHANGE ACT means the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
(i) EXPIRATION DATE means the date on which no
Holder holds any Registrable Securities.
(j) HOLDERS shall have the meaning set forth in
the first paragraph hereof.
(k) OTHER COMMON STOCK shall have the meaning set
forth in Section 4(b) hereof.
(l) PERSON means any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
(m) PIGGYBACK REGISTRATION shall have the meaning
set forth in Section 2(b) hereof.
(n) PIGGYBACK SHARES shall have the meaning set
forth in Section 2(c) hereof.
(o) REGISTRABLE SECURITIES means any Warrant
Shares (as defined below) which may be acquired and owned by a Holder, or any
securities received by a Holder in exchange for such securities and any shares
of Common Stock held by Remy. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (x) such
securities shall have been disposed of pursuant to an effective registration
statement, (y) such securities shall have been transferred to any Person other
than the Holders pursuant to Rule 144 (or any successor provision) or shall be
transferable pursuant to paragraph (k) thereof (or any successor provision)
under the Securities Act, or (z) they shall have ceased to be held by the
Holders or any Affiliate of the Holders or any Transferee of the Holders or
their Affiliates.
(p) REGISTRATION EXPENSES means all expenses
incident to the performance of or compliance with the registration rights
granted herein, including, without limitation, all registration, filing,
listing and NASD fees, all fees and expenses of complying with securities or
blue sky laws, all word processing, duplicating and printing expenses,
messenger and delivery expenses, the fees and expenses of the Company's counsel
and the fees
-2-
4
and expenses of the Company's independent public accountants, including the
expenses of any special audits, should any such special audit be required, or
"cold comfort" letters required by or incident to such performance and
compliance, and any fees and disbursements of underwriters customarily paid by
issuers and sellers of securities which may be paid by the Company in
connection with the registration of any securities for which the Holders have
the right to Piggyback Registration for the Registrable Securities; provided,
however, that Registration Expenses shall not include the fees and expenses of
the Selling Holders' counsel, any brokerage or similar commissions or charges
or any underwriting discounts, commissions or transfer taxes, if any, all of
which shall be borne by the Selling Holders.
(q) REMY shall have the meaning set forth in
Section 2(c) hereof.
(r) REMY SHARES shall have the meaning set forth
in Section 2(c) hereof.
(s) SECURITIES ACT means the Securities Act of
1933, as amended, or any successor statute thereto, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder,
all as the same shall be in effect at the time.
(t) SELLING HOLDERS means those Holders who have
requested registration pursuant to this agreement and who are selling
securities hereunder.
(u) SHARES means the Company's common stock, as
constituted on the date hereof, or any stock or other securities, for which
such common stock shall have been exchanged, or any stock or other securities
resulting from any reclassification of such Shares.
(v) TRANSFEREE shall mean the first holder of
Registrable Securities or Remy Shares by a transfer from a Holder or Remy or an
Affiliate of a Holder or Remy provided, however, that a Person acquiring such
Registrable Securities pursuant to a transfer under an effective registration
statement or pursuant to a sale under Rule 144 shall not be a Transferee.
(w) VIOLATION shall have the meaning set forth in
Section 6(a).
(x) WARRANT AGREEMENT means the Warrant
Agreement, dated as of April 11, 1997 between the Company and the Warrant
Holders listed therein.
(y) WARRANTS shall mean any warrants issued
pursuant to the Warrant Agreement.
(z) WARRANT SHARES shall mean the Shares of
Company Common Stock and any other securities issuable upon exercise of the
Warrants.
2. REGISTRATION RIGHTS.
-3-
5
(a) Until the Expiration Date, on four occasions, but in
no event during the period ending 90 days following the completion of a
registered public offering of Common Stock by the Company (other than an
offering pursuant to an employee benefit plan or in connection with a merger or
acquisition), any Holder or Holders of Registrable Securities then outstanding
(collectively, the "Demanding Holders") may request, pursuant to this Section
2(a), that the Company register under the Securities Act the Registrable
Securities pursuant to a non-underwritten offering having a period of
distribution not to exceed 120 days (a "Demand Registration") provided,
however, the Company shall not be obligated to prepare and file any
registration statement pursuant to this Section 2(a), or prepare or file any
amendment or supplement thereto, at any time when the Company, in the good
faith judgment of its Board of Directors, whose decision shall be conclusive
absent manifest error, reasonably believes that the filing thereof at the time
requested, or the offering of securities pursuant thereto, would materially and
adversely affect a pending or proposed public offering of securities of the
Company, an acquisition, merger, recapitalization, consolidation,
reorganization or similar transaction relating to the Company or its Affiliates
or negotiations, discussions or pending proposals with respect thereto or
require premature disclosure of information not otherwise required to be
disclosed to the potential detriment of the Company or its Affiliates.
Notwithstanding anything to the contrary contained in this Section 2(a), the
Company shall be permitted to suspend the period of sale or distribution of
shares of Common Stock subject to a registration pursuant to this Section 2(a)
at any time when the Company reasonably believes that the sale or distribution
thereof at the time requested would materially and adversely affect a pending
or proposed public offering of securities of the Company, an acquisition,
merger, recapitalization, consolidation, reorganization or similar transaction
relating to the Company or its Affiliates or negotiations, discussions or
pending proposals with respect thereto or require premature disclosure of
information not otherwise required to be disclosed to the potential detriment
of the Company or its Affiliates; provided, however, that such period of sale
or distribution shall resume after any such suspension for a number of days
necessary to keep such registration effective for permitted sales thereunder
for a term of 120 days. The filing of a registration statement, or any
amendment or supplement thereto, by the Company may not be deferred for any
reason whatsoever, and the sale and distribution of shares may not be suspended
for more than 105 days.
(b) If, at any time after the date hereof, the Company
proposes to register under the Securities Act any shares of Common Stock for
sale by it pursuant to an underwritten public offering of the Common Stock
(except with respect to registration statements filed on Form S-4 or such other
forms as shall be prescribed under the Securities Act for the same purposes as
such form), it will at each such time, prior to the filing of any such
registration statement, give written notice to each Holder of Registrable
Securities of such registration (a "Piggyback Registration") regardless of
whether the Holder had previously exercised piggyback registration rights or
demand rights as to any other shares of stock held by it, and, upon the written
request given within 5 days following the date of such notice (which must
specify the number of shares of Common Stock to participate in such
underwritten offering) of the Holder delivered to the Company within five days
of receipt of the Company's notice, the Company will use its best efforts to
cause any Registrable Securities as to which registration shall have been
-4-
6
so requested to be included in the shares to be sold pursuant to such
underwritten public offering as covered by the registration statement proposed
to be filed by the Company. Nothing contained in this Section 4(b) shall,
however, limit the Company's right to cancel, postpone or withdraw any such
proposed registration for any reason. Any request by the Holder pursuant to
this Section 4(b) to register Registrable Securities for sale in the
underwriting shall be on the same terms and conditions as the shares of Common
Stock to be registered and sold through underwriters under such registration;
provided, however, that as a condition to such inclusion the Holder shall
execute an underwriting agreement acceptable to the underwriters and, if
requested, a custody agreement having such customary terms as the underwriters
shall request, including indemnification, and if the managing underwriter
determines and advises in writing that the inclusion in the underwriting of all
Registrable Securities proposed to be included by the Holder and any other
shares of Common Stock sought to be registered by any other stockholder of the
Company exercising rights comparable to those of the Holder under the Agreement
(the "Other Common Stock") would, in its reasonable and good faith judgment,
interfere with the successful marketing of the securities proposed to be
registered for underwriting by the Company then the number of Registrable
Securities and Other Common Stock requested to be included in the underwriting
shall be reduced pro rata (based upon the number of shares requested to be
included in such underwriting) among the Holder and the holders of Other Common
Stock requesting such registration and inclusion in the underwriting and may,
in the determination of such managing underwriter and consistent with pro rata
reduction, be reduced to zero.
(c) REMY PIGGYBACK REGISTRATION. If at any time the
Company shall contemplate filing a registration statement under the Act in
order to register any shares of the Company's Common Stock beneficially owned
by Remy Capital Partners III L.P. or its successors or assigns or any
Transferees of Remy (collectively, "Remy") for sale in a public offering, the
Company shall give to the Holder not less than thirty days prior written notice
of its intentions, which notice shall specify the number of shares of Common
Stock to be registered pursuant to the contemplated registration statement and
the total number of such shares of Common Stock beneficially owned by Remy to
be registered pursuant to the contemplated registration statement (the "Remy
Shares"). The Holders shall have the right, exercisable by written notice
delivered to the Company not later than the fifteenth day following the date of
the Company's notice, to cause the Company to include in such registration
statement up to a number of Warrant Shares (disregarding fractional shares)
determined by multiplying (x) the total number of Warrant Shares then owned of
record by the Holder, and (y) a fraction, the numerator of which is the number
of Remy Shares and the denominator of which is the number of shares of Common
Stock then held of record by Remy. In the alternative, the Holder may specify
any lesser whole number of Warrant Shares then owned of record by the Holder.
The number of the Holder's Warrant Shares so properly specified is herein
referred to as the "Piggyback Shares". The Company shall include the Piggyback
Shares in any registration statement filed by it which includes the Remy
Shares, and shall thereafter use its reasonable efforts to cause such
registration statement to become effective and to remain effective for the
period required to permit the public offering of the Piggyback Shares, but not
longer than 60 days. However, if all or any part of the proposed registration
is to be underwritten (whether on a "best efforts" or "firm commitment" basis)
the managing underwriter shall have the right
-5-
7
to exclude the Piggyback Shares, to the extent the inclusion of such Piggyback
Shares and Remy Shares would, in the written opinion of such managing
underwriter, adversely affect the successful distribution of the underwritten
portion of the public offering, provided such exclusion applies on a
proportional basis not only to Piggyback Shares but also to all other
securities proposed to be included other than those to be issued and sold for
the benefit of the Company pursuant to such registration statement. Any
exclusion of Piggyback Shares and other shares shall be made pro rata among all
persons other than the Company whose common stock was to have been included in
the offering, including Remy.
(d) REGISTRATION STATEMENT FORM. The Company may, if
permitted by law, effect any registration requested under Section 2(a) by the
filing of a registration statement on Form S-3 (or any successor or similar
short- form registration statement).
(e) EXPENSES. The Company shall pay all Registration
Expenses incurred in connection with the registration of Registrable Securities
pursuant to Section 2(a), 2(b) or 2(c) hereunder.
(f) EFFECTIVE REGISTRATION STATEMENT. Any registration
effected by the Company pursuant to this Agreement shall not be deemed to have
been effected unless it has become effective with the Commission, provided,
however, that a registration which does not become effective after the Company
has filed a registration statement with respect thereto with the Commission
solely by reason of the Demanding Holders failing to proceed with the
registration shall be deemed to have been effected by the Company in
satisfaction of one of the Company's four demand obligations pursuant to
Section 2(a) to register Registrable Securities pursuant to a Demand
Registration. Notwithstanding the foregoing, a registration statement will not
be deemed to have been effected if after it has become effective with the
Commission, such registration is interfered with by any stop order, injunction
or other order or requirement of the Commission or other governmental agency or
any court proceeding for any reason other than a misrepresentation or omission
by the Holders.
(g) CONFLICTING INSTRUCTIONS FROM HOLDERS. The Company
may rely and shall be protected in relying upon any resolution, certificate,
opinion, request, communication, demand, receipt or other paper or document in
good faith believed by it to be genuine and to have been signed or presented by
the proper party or parties. The Company may act in reliance upon the advice
of its counsel in reference to any matter in connection with this Agreement and
shall not incur any liability for any action taken in good faith in accordance
with such advice.
(i) In the event the Company receives conflicting
instructions regarding any action to be taken or withheld hereunder, the
Company may suspend further action relating to such action until such time as
the conflicting instructions are resolved by the parties giving the same or
until the Company is instructed to take or withhold the requested action by a
final order from which no appeal may be taken issued by a court of competent
jurisdiction.
-6-
8
3. REGISTRATION PROCEDURES.
(a) Whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act as provided
in Section 2, the Company, as expeditiously as reasonably practicable and
subject to the terms and conditions herein, will use its best efforts to:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and use its best efforts to
cause such registration to become effective;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for such time as the Company is so obligated pursuant to this
Agreement and to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration statement;
(iii) furnish to the Selling Holders such number of
conformed copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, as the Selling Holders may reasonably
request;
(iv) as expeditiously as reasonably practicable, use its
best efforts to register or qualify all Registrable Securities covered by such
registration statement under such other United States state securities or blue
sky laws of such jurisdictions as the Selling Holders shall reasonably request,
to keep such registration statement qualification in effect for so long as such
registration remains in effect, and take any other action which may be
reasonably necessary or advisable to enable the Selling Holders to consummate
the disposition in such jurisdictions of the securities owned by the Selling
Holders, except that the Company shall not for any such purpose be required to
(a) qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this subdivision
(iv) be obligated to be so qualified, (b) subject itself to taxation in any
such jurisdiction or (c) consent to general service of process in any such
jurisdiction;
(v) in any underwritten offering, and if reasonable and
customary in the context of such offering, use its best efforts to furnish to
the Selling Holders a signed counterpart, addressed to the Selling Holders or
seller of Registrable Securities (and the underwriters, if any), of
(x) an opinion of counsel for the Company, dated
the effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the date
of the closing under the underwriting agreement), reasonably
satisfactory to the Selling Holders in their reasonable judgment, and
-7-
9
(y) if requested, a customary "comfort" letter,
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the date
of the closing under the underwriting agreement), signed by the
independent public accountants who have certified the Company's
financial statements included in such registration statement, covering
substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of
the accountants' letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to the
underwriters in underwritten public offerings of securities and, in
the case of the accountants' letter, such other financial matters as
such seller or such holder (or the underwriters, if any) may
reasonably request;
(vi) immediately notify the Selling Holders at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of 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 the light of the circumstances under which they were made, and at
the request of the Selling Holders promptly prepare and furnish to the Selling
Holders 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 securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act.
(ix) use its best efforts to list all Registrable
Securities covered by such registration statement on any securities exchange on
which any of the Registrable Securities are then listed.
(x) keep each registration pursuant to Section 2(a)
hereof effective for a period of up to 120 days or such shorter period of time
until the transfer or sale of all Warrant Shares so registered has been
completed.
(b) As a condition of these Registration Rights, the
Company may require the Demanding Holders, at their own expense, to furnish the
Company with such information and undertakings regarding such Holders and the
distribution of such securities as the Company may from time to time reasonably
request in writing, and the Holders, by their execution hereof, agree to
provide such information and make such undertakings as are requested.
-8-
10
(c) The Selling Holders agree (A) that upon receipt of
any notice from the Company of the happening of any event of the kind described
in subdivision (vi) of Section 3(a), the Selling Holders will forthwith
discontinue their disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until the
Selling Holders' receipt of the copies of the supplemented or amended
prospectus contemplated by subdivision (vi) of Section 3(a) and, if so directed
by the Company, will deliver to the Company all copies, other than permanent
file copies, then in the Selling Holders' possession of the prospectus relating
to such Registrable Securities current at the time of receipt of such notice
and (B) that they will immediately notify the Company, at any time when a
prospectus relating to the registration of such Registrable Securities is
required to be delivered under the Securities Act, of the happening of any
event as a result of which information previously furnished by the Selling
Holders to the Company for inclusion in such prospectus contains 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
the light of the circumstances under which they were made.
(d) Notwithstanding anything in this agreement to the
contrary, the Company will not be required to file such a registration
statement if it receives an opinion of counsel in form and substance reasonably
satisfactory to the Selling Holders, or counsel to the Selling Holders, to the
effect that the sale of the Registrable Securities in the manner contemplated
by the Selling Holders may be effected without registration.
4. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offering by the Selling Holders in connection
with any Piggyback Registration pursuant to Section 2(c), the Selling Holders
will enter into an underwriting agreement with such underwriters for such
offering, containing such terms as are customarily contained in agreements of
this type. The Selling Holders may, at their option (reasonably exercised),
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Selling Holders
and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of the Selling Holders.
(b) HOLDBACK AGREEMENTS. (i) Each Holder agrees, if so
required by the managing underwriter, not to effect any public sale or
distribution of Registrable Securities or sales of such Registrable Securities
pursuant to Rule 144 or Rule 144A under the Securities Act, during the seven
days prior to and the 90 days after any firm commitment underwritten
registration pursuant to Section 2(c) has become effective (except as part of
such registration), whether or not the Holder participates in such
registration.
-9-
11
5. PREPARATION, REASONABLE INVESTIGATION.
In connection with the preparation and filing of each
registration statement under the Securities Act, pursuant to this Agreement,
the Company will give the Selling Holders, the underwriters, if any are
involved, and their respective counsel and 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 the Company with its
officers and the independent public accountants who have certified its
financial statements as shall be necessary to conduct a reasonable
investigation within the meaning of the Securities Act.
6. INDEMNIFICATION; CONTRIBUTION. If any Registrable Securities
are included in a registration statement under this Agreement:
(a) To the extent permitted by applicable law, the
Company shall indemnify and hold harmless each Selling Holder, each Person, if
any, who controls such Selling Holder within the meaning of the Securities Act,
and each officer, director, partner, and employee of such Selling Holder and
such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including reasonable attorneys'
fees and disbursements and expenses of investigation, incurred by such party
pursuant to any actual or threatened action, suit, proceeding or investigation,
or to which any of the foregoing Persons may become subject under the
Securities Act, the Exchange Act or other federal or state laws, insofar as
such losses, claims, damages, liabilities and expenses arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"):
(1) Any untrue statement or alleged untrue
statement of a material fact contained in such registration statement as of the
respective date thereof, including any preliminary prospectus or final
prospectus contained therein, or any amendments or supplements thereto;
(2) The omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading; or
(3) Any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any applicable state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any applicable state securities law; provided, however,
that the indemnification required by this Section 6(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
expense if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable under this Section 6(a) in any such case for any such loss, claim,
damage, liability or expense to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished to the Company by the indemnified party expressly for use
in connection with such registration; provided,
-10-
12
further, that the indemnity agreement contained in this Section 6 shall not
apply to any Holder to the extent that any such loss is based on or arises out
of an untrue statement or alleged untrue statement of a material fact, or an
omission or alleged omission to state a material fact, contained in or omitted
from any preliminary prospectus if the final prospectus shall correct such
untrue statement or alleged untrue statement, or such omission or alleged
omission, and a copy of the final prospectus has not been sent or given to such
person at or prior to the confirmation of sale to such person if such Holder
was under an obligation to deliver such final prospectus and failed to do so.
The Company shall also indemnify any underwriters participating in a Piggyback
Registration in which the Selling Holders are participating.
(b) To the extent permitted by applicable law, each
Selling Holder shall indemnify and hold harmless the Company, each of its
directors, each of its officers who shall have signed the registration
statement, each Person, if any, who controls the Company within the meaning of
the Securities Act, any other Selling Holder, any controlling Person of any
such other Selling Holder; each officer, director, partner, and employee of
such other Selling Holder and such controlling Person and each underwriter to
the extent that such Selling Holder participates in an underwritten
registration, against any and all losses, claims, damages, liabilities and
expenses (joint and several), including reasonable attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration; provided, however, that (x) the indemnification required by this
Section 6(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if settlement is effected without the
consent of the relevant Selling Holder of Registrable Securities, which consent
shall not be unreasonably withheld, and (y) in no event shall the amount of any
indemnity under this Section 6(b) exceed the gross proceeds from the applicable
offering received by such Selling Holder.
(c) Promptly after receipt by an indemnified party under
this Section 6 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified
party may make a claim under this Section 6, such indemnified party shall
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel at its own expense except as provided
below. The failure to deliver written notice to the indemnifying party within
a reasonable time following the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 6 but shall not
relieve the indemnifying party of any liability that it may have to any
indemnified party otherwise than pursuant to this Section 6. Any such
indemnified party
-11-
13
shall have the right to employ separate counsel in any such action, claim or
proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be the expenses of such indemnified party unless (i) the
indemnifying party has agreed to pay such fees and expenses or (ii) the
indemnifying party shall have failed to promptly assume the defense of such
action, claim or proceeding or (iii) the named parties to any such action,
claim or proceeding (including any impleaded parties) include both such
indemnified party and the indemnifying party, and such indemnified party shall
have been advised by counsel that it has reasonably determined that there may
be one or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party and that the assertion of
such defenses would create a conflict of interest such that counsel employed by
the indemnifying party could not faithfully represent the indemnified party (in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action, claim or proceeding on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall not, in
connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (together with appropriate local counsel) at any time for all such
indemnified parties. No indemnifying party shall be liable to an indemnified
party for any settlement of any action, proceeding or claim without the written
consent of the indemnifying party which consent shall not be unreasonably
withheld.
(d) If the indemnification required by this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 6:
(i) The indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any Violation has been committed by,
or relates to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such Violation. The amount paid or payable
by a party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 6(a) and Section 6(b), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
(ii) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation or by any other
-12-
14
method of allocation which does not take into account the equitable
considerations referred to in Section 6(d)(i). No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) If indemnification is available under this Section 6,
the indemnifying parties shall indemnify each indemnified party to the full
extent provided in this Section 6 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 6(d); provided, however, that if it is determined by a
final and non-appealable order of a court of competent jurisdiction that a
party receiving indemnification hereunder was not entitled to receive such
indemnification, the additional cost, if any, to the indemnifying party of such
indemnification shall be promptly reimbursed by such improperly indemnified
party to such indemnifying party.
(f) The obligations of the Company and the Selling
Holders of Registrable Securities under this Section 6 shall survive the
completion of any offering of Registrable Securities pursuant to a registration
statement under this Agreement, and otherwise.
7. COVENANTS OF THE COMPANY. The Company hereby agrees and
covenants as follows:
The Company shall file as and when applicable, on a
timely basis, all reports required to be filed by it under the Exchange Act.
If the Company is not required to file reports pursuant to the Exchange Act,
upon the request of any Holder of Registrable Securities, the Company shall
make publicly available the information specified in subparagraph (c)(2) of
Rule 144 of the Securities Act, and take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable the Holders to transfer Registrable
Securities to a Transferee without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144 under the Securities Act
or any similar rule or regulation hereafter adopted by the Commission.
8. MISCELLANEOUS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge
that there may be no adequate remedy at law if any party fails to perform any
of its obligations hereunder and that each party may be irreparably harmed by
any such failure, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, may be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement.
(b) NOTICES. All notices, requests, claims, demands,
waivers and other communications required or permitted hereunder shall be in
writing and shall be deemed to have
-13-
15
been duly given when delivered by hand, if delivered personally by courier, or
three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows:
The Holders at the addresses indicated on
the signature page hereof with a copy to
Canpartners Investments IV, LLC
c/o Canyon Partners Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇,
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
Company:
UTI Energy Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as any party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(c) LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICT OF LAWS.
(d) ATTORNEYS' FEES. In any action or proceeding brought
to enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to
recover reasonable attorneys' fees (including any fees incurred in any appeal)
in addition to its costs and expenses and any other available remedy.
(e) HEADINGS. The descriptive headings of the several
Sections and paragraphs of this Agreement are inserted for convenience only,
and do not constitute a part of this Agreement and shall not affect in any way
the meaning or interpretation of this Agreement.
(f) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
other writings referred to herein or delivered pursuant hereto which form a
part hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either
retroactively or prospectively) only by a written instrument duly executed by
the Company and the Holders. Each holder of any Registrable Securities at the
time or thereafter outstanding shall be bound by an amendment or
-14-
16
waiver authorized by this Section 8.6, whether or not any such Registrable
Securities shall have been marked to indicate such consent.
(g) ASSIGNABILITY. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
parties hereto provided, however, that the Registration Rights hereunder shall
only be available to the Holders, their Affiliates and to their Transferees.
(h) COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) VALIDITY, DUE AUTHORIZATION. By its execution
hereof, the Company represents and warrants that it has the corporate power to
execute, deliver and perform the terms and provisions of this Agreement and
that it has taken all appropriate and necessary corporate action to authorize
the transactions contemplated hereby and the execution, delivery and
performance of this Agreement.
-15-
17
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
as of the day, month and year first above written.
UTI Energy Corp.
By: /s/ ▇▇▇▇▇▇ ▇. DRUM
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. Drum
Title: President and Chief Executive
Officer
-16-
18
Canpartners Investments IV, LLC,
a California limited liability company
By: Canpartners Incorporated,
a California corporation,
its managing member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
c/o Canyon Partners Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
310/247-2700 (O)
310/247-2701 (F)
-17-
