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EXHIBIT 10.1
FOR THE PURCHASE OF 100,000 SHARES
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR THE LAWS OF ANY STATE AND IS NOT TRANSFERRABLE.
STOCK PURCHASE WARRANT TO PURCHASE SHARES OF
COMMON STOCK OF UTI ENERGY CORP.
This certifies that, for value received, Southland Drilling Company,
Ltd., a Texas limited partnership or its permitted assigns (the "Holder"), is
entitled, subject to the terms and conditions of this Warrant, at any time or
from time to time during the Exercise Period (as hereinafter defined), to
purchase up to 100,000 shares (subject to adjustment pursuant to Section 9
below) of common stock, $.001 par value ("Common Stock"), of UTI Energy Corp.,
a Delaware corporation (the "Company") (the shares of Common Stock issuable
upon exercise of this Warrant, as adjusted under Section 9, being referred to
herein as the "Warrant Shares").
1. FORM OF ELECTION.
The form of election to purchase shares of Common Stock (the
"Form of Election") shall be substantially as set forth in Exhibit A attached
hereto. The price per Warrant Share and the number of Warrant Shares issuable
upon exercise of this Warrant are subject to adjustment upon the occurrence of
certain events, all as hereinafter provided.
2. EXERCISE PERIOD; EXERCISE OF WARRANT.
2.1 Exercise Period. Subject to the terms of this
Warrant, the Holder shall have the right, which may be exercised at
any time or from time to time during the Exercise Period, to purchase
from the Company the number of fully paid and nonassessable Warrant
Shares this Warrant at the time represents the right to purchase, and,
in the event that this Warrant is exercised in respect of fewer than
all of the Warrant Shares purchasable on such exercise, a new warrant
evidencing the remaining Warrant Shares that may be purchased shall be
promptly signed, issued and delivered by the Company to the Holder
pursuant to the provisions of this Section 2. The term "Exercise
Period" shall mean the period commencing on April 11, 1997, and
terminating on April 10, 2002.
2.2 Exercise of Warrant. This Warrant may be exercised
upon surrender to the Company at its principal office (as designated
in Section 12) of this Warrant, together with the Form of Election
duly completed and signed, and upon payment to the Company of the
Warrant Price (as defined in and determined in accordance with the
provisions of Sections 3 and 9 hereof) for the number of Warrant
Shares in respect of which this Warrant is then exercised. Payment of
the aggregate Warrant Price with respect to the portion of this
Warrant being exercised shall be made in cash or by certified or
official bank check, payable to the order of the Company.
Subject to Section 6 hereof, upon the surrender of this
Warrant and payment of the Warrant Price as set forth above, the
Company shall issue and cause to be delivered to the Holder or, upon
the written order of the Holder, to and in such name or names as the
Holder may designate, a certificate or
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certificates for the number of full Warrant Shares so purchased upon
the exercise of this Warrant. Such certificate or certificates shall
be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of this Warrant and
payment of the Warrant Price, as aforesaid.
3. WARRANT PRICE.
The price per share at which Warrant Shares shall be
purchasable upon exercise of this Warrant initially shall be $48.00 and shall
be subject to adjustment pursuant to Section 9 hereof (such price as so
adjusted is referred to herein as the "Warrant Price").
4. EXCHANGE OF WARRANT.
This Warrant may be exchanged at the option of the Holder when
surrendered at the principal office of the Company for another warrant, or
other warrants of different denominations, of like tenor and representing in
the aggregate the right to purchase a like number of Warrant Shares as this
Warrant then entitles the Holder to purchase. Any Holder desiring to exchange
this Warrant shall make such request in writing delivered to the Company, and
shall surrender this Warrant for exchange. Thereupon, the Company shall
promptly sign and deliver to the person entitled thereto a new warrant or
warrants, as the case may be, as so requested.
5. NO REGISTRATION OF WARRANT.
This Warrant has not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or any applicable state securities
laws. The Holder represents and agrees that this Warrant and, upon exercise
hereof, any Warrant Shares have been acquired for investment and not with a
view to distribution or resale. The Holder further acknowledges and agrees
that this Warrant may not be transferred, and the Warrant Shares, upon exercise
of this Warrant, may not be transferred without an effective registration
statement therefor under the Securities Act and applicable state securities
laws or an opinion of counsel satisfactory to the Company that registration is
not required thereunder. Unless registered, any Warrant Shares shall bear the
following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 or the laws of any state
and may not be transferred in the absence of an effective registration
statement for the securities under the Securities Act of 1933 and
applicable state laws or an opinion of counsel reasonably satisfactory
to the Company that such registration is not required.
6. PAYMENT OF TAXES.
The Company will pay when due and payable any and all U.S.
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of this Warrant or of any Warrant Shares upon the
exercise of this Warrant. The Company shall not, however, be required to (i)
pay any transfer tax that may be payable in respect of any transfer involved in
the issuance or delivery of certificates for Warrant Shares in the name other
than that of the Holder or (ii) to issue or deliver any certificates for
Warrant Shares upon the exercise of this Warrant until such transfer tax shall
have been paid (any such tax being payable by the Holder at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
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7. MUTILATED OR MISSING WARRANT.
In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall execute, issue and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new warrant of
like tenor and representing an equivalent right or interest; but only upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of this Warrant and indemnity, if requested, satisfactory to the
Company. The Holder requesting such a substitute warrant shall also comply
with such other reasonable regulations and pay such other reasonable charges as
the Company may prescribe.
8. RESERVATION OF WARRANT SHARES; PURCHASE OF WARRANT BY THE
COMPANY.
8.1 Reservation of Warrant Shares. The Company shall at
all times reserve for issuance from its authorized and unissued shares
of Common Stock the number of shares of Common Stock needed for
issuance upon the exercise of this Warrant. The Company covenants
that all shares of Common Stock issuable as herein provided shall,
when so issued, be duly and validly issued, fully paid and
nonassessable.
8.2 Purchase of Warrant by the Company. The Company
shall not be prohibited, except as limited by law, any other agreement
or herein, from offering to purchase, purchasing or otherwise
acquiring this Warrant from any holder thereof at such times, in such
manner and for such consideration as the Company and such holder may
agree to.
8.3 Cancellation of Purchased or Acquired Warrant. In
the event the Company shall purchase or otherwise acquire this
Warrant, the same shall thereupon be canceled and retired.
9. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES.
9.1 Mechanical Adjustments. The existence of this
Warrant shall not affect in any way the right or power of the Company
or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
If the Company shall effect a subdivision (by stock split,
stock dividend, recapitalization or otherwise) or consolidation (by
reverse stock split or otherwise) of shares or other capital
adjustment of, or the payment of a dividend in capital stock or other
equity securities of the Company on, its Common Stock, or other
increase or reduction of the number of shares of the Common Stock
without receiving consideration therefor in money, services, or
property, or the reclassification of its Common Stock, in whole or in
part, into other equity securities of the Company, then the number,
class and per share price of Warrant Shares shall be appropriately
adjusted (or in the case of the issuance of equity securities as a
dividend on, or in a reclassification of, the Common Stock, this
Warrant shall extend to such other securities) in such a manner as to
entitle the Holder to receive, upon exercise of this Warrant, for the
same aggregate cash compensation, the same total number and class or
classes of shares (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities)
it would have held
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after such adjustment if the Holder had exercised this Warrant in full
immediately prior to the event requiring the adjustment. Comparable
rights shall accrue in the event of successive subdivisions,
consolidations, capital adjustments, dividends or reclassifications of
the character described above.
If the Company shall distribute to all holders of its shares
of Common Stock (including any such distribution made to
non-dissenting stockholders in connection with a consolidation or
merger in which the Company is the surviving corporation and in which
holders of shares of Common Stock continue to hold shares of Common
Stock after such merger or consolidation) evidences of indebtedness or
cash or other assets (other than cash dividends payable out of
consolidated retained earnings not in excess of, in any one year
period, the greater of (a) $.10 per share of Common Stock and (b) two
times the aggregate amount of dividends per share paid during the
preceding calendar year and dividends or distributions payable in
shares of Common Stock or other equity securities of the Company
described in the immediately preceding paragraph), then in each case
the Warrant Price shall be adjusted by reducing the Warrant Price in
effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by the fair market
value, as determined in good faith by the Board of Directors of the
Company (whose determination shall be described in a statement filed
in the Company's corporate records and be available for inspection by
the Holder) of the portion of the evidence of indebtedness or cash or
other assets so to be distributed applicable to one share of Common
Stock; provided that in no event shall the Warrant Price be less than
the par value of a share of Common Stock. Such adjustment shall be
made whenever any such distribution is made, and shall become
effective on the date of the distribution retroactive to the record
date for the determination of the stockholders entitled to receive
such distribution. Comparable adjustments shall be made in the event
of successive distributions of the character described above.
After the Company shall make a tender offer for, or grant to
all of its holders of its shares of Common Stock the right to require
the Company to acquire from such stockholders shares of, Common Stock,
at a price in excess of the Current Market Price (a "Put Right") or
the Company shall grant to all of its holders of its shares of Common
Stock the right to acquire shares of Common Stock for less than the
Warrant Price (the "Exercise Right") then, in the case of a Put Right,
the Warrant Price shall be adjusted by multiplying the Warrant Price
in effect immediately prior to the record date for the determination
of stockholders entitled to receive such Put Right by a fraction, the
numerator of which shall be the number of shares of Common Stock then
outstanding minus the number of shares of Common Stock which could be
purchased at the Current Market Price for the aggregate amount which
would be paid if all Put Rights are exercised and the denominator of
which is the number of shares of Common Stock which would be
outstanding if all Put Rights are exercised; and, in the case of a
Purchase Right, the Warrant Price shall be adjusted by multiplying the
Warrant Price in effect immediately prior to the record date for the
determination of the stockholders entitled to receive such Purchase
Right by a fraction, the numerator of which shall be the number of
shares of Common Stock then outstanding plus the number of shares of
Common Stock which could be purchased at the Current Market Price for
the aggregate amount which would be paid if all Purchase Rights are
exercised and the denominator of which is the number of shares of
Common Stock which would be outstanding if all Purchase Rights are
exercised. In addition, the number of shares subject to this Warrant
shall be adjusted by multiplying the number of shares then subject to
this Warrant by a fraction which is the inverse of the fraction used
to adjust the Warrant Price. Notwithstanding the foregoing if any
such Put Rights or Purchase Rights shall terminate without being
exercised, the Warrant Price and number of shares subject to this
Warrant shall be appropriately readjusted to reflect the Warrant Price
and number of shares subject to this Warrant which
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would have been in effect if such unexercised Rights had never
existed. Comparable adjustments shall be made in the event of
successive transactions of the character described above.
After the merger of one or more corporations with or into the
Company, after any consolidation of the Company and one or more
corporations, or after any other corporate transaction described in
Section 424(a) of the Internal Revenue Code of 1986, as amended, the
Holder, at no additional cost, shall be entitled to receive, upon any
exercise of this Warrant, in lieu of the number of shares as to which
this Warrant may then be so exercised, the number and class of shares
of stock or other equity securities to which the Holder would have
been entitled pursuant to the terms of the agreement of merger or
consolidation if at the time of such merger or consolidation the
Holder had been a holder of a number of shares of Common Stock equal
to the number of shares as to which this Warrant may then be so
exercised and, if as a result of such merger, consolidation or other
transaction, the holders of Common Stock are not entitled to receive
any shares of Common Stock pursuant to the terms thereof, the Holder,
at no additional cost, shall be entitled to receive, upon exercise of
this Warrant, such other assets and property, including cash, to which
the Holder would have been entitled if at the time of such merger,
consolidation or other transaction the Holder had been the holder of
the number of shares of Common Stock equal to the number of shares as
to which this Warrant shall then be so exercised. Comparable rights
shall accrue in the event of successive mergers or consolidations of
the character described above.
For purposes of this Section 9.1, "Current Market Price per
share of Common Stock" shall mean the closing price of a share of
Common Stock on the principal national securities exchange on which
the Common Stock is listed or, if the Common Stock is not so listed,
the average bid and asked price of a share of Common Stock as reported
in the NASDAQ System, in each case on the trading day immediately
preceding the first trading day on which, as a result of the
establishment of a record date or otherwise, the trading price
reflects that an acquiror of Common Stock in the public market will
not participate in or receive the payment of any applicable dividend
or distribution.
Except as hereinbefore expressly provided, (i) the issue by
the Company of shares of Common Stock of any class, or securities
convertible into shares of stock of any class, for cash or property,
or for labor or services either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or
other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares
of Common Stock then subject to this Warrant and (ii) no adjustment in
respect of any dividends shall be made during the term of this Warrant
or upon the exercise of this Warrant.
9.2 Voluntary Adjustment by the Company. The Company may
at its option, at any time during the term of this Warrant, reduce the
then current Warrant Price to any amount deemed appropriate by the
Board of Directors of the Company.
9.3 Statement on Warrant. Irrespective of any
adjustments in the Warrant Price with respect to this Warrant or the
number or kind of shares purchasable upon the exercise of this
Warrant, warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in
this Warrant.
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10. REGISTRATION RIGHTS.
10.1 Demand Rights. Subject to the provisions of Section
14(d), on one occasion after the earlier to occur of (a) 120 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) and (b)
January 1, 1998, the Holder may request, pursuant to this Section
10.1, that the Company register under the Securities Act the Warrant
Shares (as adjusted under Section 9) issued to the Holder upon
exercise of this Warrant pursuant to a non-underwritten offering
having a period of distribution not to exceed 120 days; provided,
however, the Company shall not be obligated to prepare and file any
registration statement pursuant to this Section 10.1, 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,
expressed by resolution specifying the reason therefor, 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 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.
Notwithstanding anything to the contrary contained in this Section
10.1, 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 10.1 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 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; 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, and the sale and distribution of shares may not be
suspended, in each case pursuant to the foregoing provisions, for more
than 60 days after the abandonment or consummation (or the completion
of the distribution of securities in the case of a public offering) of
any of the proposals or transactions described therein or, in any
event, for more than 120 days, and there may be only two such
suspensions in any one-year period.
10.2 Piggyback Rights. Subject to the provisions of
Section 14(d), 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 the Holder of its intention so to do,
regardless of whether the Holder has previously exercised piggyback
registration rights or demand rights as to any other shares of stock
hold by it, and, upon the written request (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 Warrant Shares as to which registration shall have been
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 10.2 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
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to this Section 10.2 to register Warrant Shares 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
Warrant Shares 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 this Warrant (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 or by any holder of Common Stock having the right to
require the Company to file a registration statement to register such
Common Stock, then the number of Warrant Shares 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.
10.3 Procedure. If and whenever the Company is required
by the provisions of this Warrant to use its best efforts to effect
the registration of any Warrant Shares under the Securities Act, the
Company will, subject to the other provisions of this Section 10:
(a) as expeditiously as reasonably practicable,
prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement on the appropriate
form with respect to such Warrant Shares and use reasonable
efforts to cause such registration statement to become and
remain effective;
(b) as expeditiously as reasonably practicable,
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 and to comply with the
provisions of the Securities Act with respect to the
disposition of such Warrant Shares covered by such
registration statement in accordance with the intended method
of distribution set forth in such registration statement;
(c) as expeditiously as reasonably practicable,
furnish to the Holder such number of copies of prospectuses
and preliminary prospectuses in conformity with the
requirements of the Securities Act, and such other documents
as the Holder may reasonably request, in order to facilitate
the public sale or other disposition of such Warrant Shares;
provided, however, that the obligation of the Company to
deliver copies of prospectuses or preliminary prospectuses to
the Holder shall be subject to the receipt by the Company of
reasonable assurances from the Holder that it will comply with
the applicable provisions of the Securities Act and of such
other securities laws as may be applicable in connection with
any use by it of any prospectuses or preliminary prospectuses;
(d) as expeditiously as reasonably practicable,
furnish, at the request of the Holder, on the date that
Warrant Shares are to be delivered to the underwriters for
sale pursuant to such registration or, if such Warrant Shares
are not being sold through underwriters, on the date the
registration statement with respect to such Warrant Shares
becomes effective (i) an opinion, dated
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such date, of the independent counsel representing the Company
for the purposes of such registration, addressed to the
underwriters, if any, and to the Holder, stating that such
registration statement has become effective under the
Securities Act and that (A) to the knowledge of such counsel,
no stop order suspending the effectiveness of such
registration statement has been instituted or is pending or
contemplated under the Securities Act; (B) the registration
statement, the related prospectus, and each amendment or
supplement thereto, including all documents incorporated by
reference therein, comply as to form in all material respects
with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except
that such counsel need express no opinion as to financial
statements or other financial or statistical or reserve data
contained or incorporated by reference therein); and (C) no
facts have come to the attention of such counsel that caused
such counsel to believe (with customary qualifications) that
either the registration statement or the final prospectus, or
any amendment or supplement thereto, including all documents
incorporated by reference therein, in light of the
circumstances under which they were made, contains any untrue
statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading (except that such counsel
need express no belief as to financial statements or other
financial or statistical or reserve data contained or
incorporated by reference therein or as to any information
provided by the stockholders of the Company or any underwriter
for inclusion therein); and (ii) a letter, dated such date,
from the independent certified public accountants of the
Company, addressed to the underwriters, stating that they are
independent certified public accountants within the meaning of
the Securities Act and that in the opinion of such
accountants, the financial statements and other financial data
of the Company included in the registration statement or the
prospectus, or any amendment or supplement thereto, including
all documents incorporated by reference therein, comply as to
form in all material respects with the applicable accounting
requirements of the Securities Act. Such letter from the
independent certified public accountants shall additionally
cover such other customary financial matters (including
information as to the period ending not more than five
business days prior to the date of such letter) with respect
to the registration in respect of which such letter is being
given as such underwriters, if any, or the stockholders of the
Company making such request may reasonably request;
(e) as expeditiously as practicable, use its best
efforts to register or qualify Warrant Shares covered by such
registration statement under such other securities laws of
such United States jurisdictions as the Holder shall
reasonably request (considering the nature and size of the
offering) and do any and all other acts and things which may
be necessary or desirable to enable the Holder to consummate
the public sale or other disposition in such jurisdictions of
Warrant Shares; provided, however, that the Company shall not
be required to qualify to transact business as a foreign
corporation in any jurisdiction in which it would otherwise
not be required to be so qualified or to take any action which
would subject it to general service of process in any
jurisdiction in which it is not then so subject;
(f) bear all Registration Expenses (as defined
below) in connection with all registrations hereunder;
provided, however, that all Selling Expenses (as defined
below) of Warrant Shares and all fees and disbursements of
counsel for the Holder in connection with each registration
pursuant to this Warrant shall be borne by the Holder.
Expenses incurred by the Company in complying with this
Warrant, including, without limitation: (i) all registration,
listing and filing fees; (ii) all printing expenses; (iii) all
fees and disbursements of counsel for the
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Company; (iv) all blue sky fees and expenses; and (v) all fees
and expenses of accountants for the Company are herein
referred to as "Registration Expenses". All underwriting fees
and discounts and brokerage and selling commissions relating
to Warrant Shares to be registered for sale by the Holder and
fees and expenses of the counsel for the Holder and any
underwriter's counsel applicable to the sales by the Holder in
connection with any such registration are herein referred to
as "Selling Expenses"; and
(g) keep each registration pursuant to Section
10.1 hereof effective for a period of up to 90 days or such
shorter period of time until the transfer or sale of all
Warrant Shares so registered has been completed.
10.4 Indemnification.
(a) In the event of a registration of any Warrant
Shares under the Securities Act pursuant to this Warrant, the
Company will indemnify and hold harmless the Holder and any
other Person, if any, who controls the Holder within the
meaning of Section 15 of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to
which such selling stockholder of the Company or such
controlling Person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or
liabilities or actions in respect thereof arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained, on the effective date thereof, in
any registration statement under which such Warrant Shares
were registered under the Securities Act, any preliminary
prospectus distributed with the consent of the Company or
final prospectus contained therein, or any amendment thereof
or supplement thereto, including all documents incorporated by
reference therein, or arise out of or are based upon 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, and will reimburse the
Holder and each such controlling Person for any legal or any
other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration
statement, such preliminary prospectus, such final prospectus
or such amendment or supplement, including all documents
incorporated by reference therein, in reliance upon and in
conformity with written information furnished to the Company
by or on behalf of the Holder or a controlling Person of the
Holder specifically for use in the preparation thereof.
(b) In the event of any registration of any
Warrant Shares under the Securities Act pursuant to this
Warrant, Holder will indemnify and hold harmless the Company
and each Person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each officer of
the Company who signs the registration statement, each
director of the Company and each underwriter (if any) and each
Person who controls any underwriter (if any) within the
meaning of Section 15 of the Securities Act, against any and
all such losses, claims, damages, liabilities or actions which
the Company or such officer, director, underwriter (if any) or
controlling Person may become subject under the Securities Act
or otherwise, and will reimburse the Company, each such
officer, director, underwriter (if any) and controlling Person
for any legal or any other expenses reasonably incurred by
such party in connection with investigating or defending any
such loss, claim, damage, liability or action, if (a) such
loss, claim, damage,
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liability or action in respect thereof arises out of or is
based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration
statement or any such prospectus, or any amendment thereof or
supplement thereto, or arises out of or is based upon 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 and (b) any such statement
or omission of a material fact was made in reliance upon and
in conformity with written information furnished to the
Company by or on behalf of the Holder specifically for use in
connection with the preparation of such registration statement
or prospectus. In connection with any transaction
contemplated by Section 10.2 hereof, the Holder also agrees to
indemnify each such underwriter and each Person who controls
any such underwriter within the meaning of Section 15 of the
Securities Act as may reasonably and customarily be requested
by the underwriters in connection with any underwritten
offering of such Warrant Shares.
(c) Promptly after receipt by any indemnified
Person of notice of any claim or commencement of any action in
respect of which indemnity is to be sought against an
indemnifying Person pursuant to this Warrant, such indemnified
Person shall notify the indemnifying Person in writing of such
claim or of the commencement of such action, and, subject to
provisions hereinafter stated, in case any such action shall
be brought against an indemnified Person and such indemnifying
Person shall have been notified of the same, such indemnifying
Person shall be entitled to participate therein, and, to the
extent it shall wish, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified Person,
and after notice from the indemnifying Person to such
indemnified Person of its election to assume the defense
thereof, such indemnifying Person shall not be liable to such
indemnified Person in connection with the defense thereof;
provided, however, if there exists or will exist a conflict of
interest which would make it inappropriate in the reasonable
judgment of the indemnified Person for the same counsel to
represent both the indemnified Person and such indemnifying
Person then such indemnified Person shall be entitled to
retain its own counsel at the expense of such indemnifying
Person; provided further, however, the indemnifying Person
shall not be required to pay for more than one separate
counsel for all of the indemnified Persons in addition to any
local counsel.
10.5 Termination. If Rule 144 or Rule 145 as promulgated
under the Securities Act or any successor or similar rule or statute
shall permit the sale of Warrant Shares in compliance with the
conditions thereof and the provisions thereof, the rights of the
Holder as to registration provided for in this Warrant as to such
Warrant Shares shall terminate immediately.
11. FRACTIONAL INTERESTS.
The Company shall not be required to issue fractional Warrant
Shares on the exercise of this Warrant and the number of Warrant Shares
issuable upon such exercise shall be rounded down to the nearest whole share.
12. NO RIGHTS AS STOCKHOLDERS.
Nothing contained in this Warrant shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent to or receive notice as a stockholder in respect of any meeting of
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stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as a stockholder of the Company. If, however, at any
time during the Exercise Period:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend or a dividend payable in additional shares
of Common Stock) to the holders of its shares of Common Stock;
(b) the Company shall offer to the holders of its shares
of Common Stock any additional shares of Common Stock or securities
convertible into shares of Common Stock or any right to subscribe to
shares of Common Stock or securities convertible or exchangeable into
shares of Common Stock; or
(c) a dissolution or winding up of the Company (other
than in connection with a consolidation, merger or sale of all or
substantially all of its property, assets and business as an entirety)
shall be proposed;
then in any one or more of such events, the Company shall give notice in
writing of such event to the Holder as provided in Section 13 hereof at least
10 days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution or subscription rights, or for the determination of
stockholders entitled to vote on such proposed dissolution, liquidation or
winding up. Such notice shall specify such record date or date of the closing
of the transfer books, as the case may be. Failure to mail such notice or any
defect therein or in the mailing thereof shall not affect the validity of any
action taken in connection with such dividend, distribution or subscription
rights, or proposed dissolution, liquidation or winding up.
13. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been made when delivered or
mailed first class, postage prepaid:
(i) if to the Holder at:
Southland Drilling Company, Ltd.
Attn: Neil E. Hanson
2925 Briarpark
Houston, Texas 77042
(ii) if to the Company at:
UTI Energy Corp.
Attn: President
485 Devon Park Drive, #112
Wayne, Pennsylvania 19087
or to such other address or addresses as the Holder or the Company may
designate from time to time for itself by a notice pursuant hereto.
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14. SUCCESSORS.
No party hereto may assign its rights or obligations hereunder
without the prior written consent of the other party, except for transfers of
this Warrant in whole or in part, to:
(a) any person or entity who, on the date of such
transfer, is a general or limited partner of Southland Drilling
Company, Ltd.;
(b) the executor, administrator or personal
representative of any individual referred to in paragraph (a) of this
Section 14, in the event of the death or incapacity of such person;
(c) with regard to any entity referred to in paragraph
(a) of this Section 14, any successor in a merger or consolidation
involving such entity, a purchaser of all or substantially all of such
entity's assets, or the stockholders of such an entity in the event of
such entity's liquidation or dissolution; or
(d) any other person or entity not included in (a), (b)
or (c) above; provided however, that upon the assignment or transfer to
such other person or entity, the rights of the Holder of this Warrant
(or any succeeding Warrant pursuant to Sections 4 or 7 or this Section
14) to registration rights pursuant to Section 10 of this Agreement
shall immediately terminate and become null and void;
provided that there is delivered to Buyer an opinion of counsel, in form
reasonably satisfactory to Buyer, that such transfer is exempt from
registration under the Securities Act of 1933, as amended (the "33 Act"), and a
certificate from such transferee representing that such transferee is an
Accredited Investor under the 33 Act. All the covenants and provisions of this
Warrant by or for the benefit of the Company or the Holder shall bind and inure
to the benefit of their respective permitted successors and assigns hereunder.
15. APPLICABLE LAW.
This Warrant shall be governed by and construed in accordance
with the laws of the State of Delaware.
16. BENEFITS OF WARRANT.
Nothing in this Warrant shall give or be construed to give any
person or corporation other than the Company and the Holder any legal or
equitable right, remedy or claim under this Warrant. This Warrant shall be for
the sole and exclusive benefit of the Company and the Holder.
17. CAPTIONS.
The captions of the sections of this Warrant have been
inserted for convenience only and shall have no substantive effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
duly executed as of the 11th day of April, 1997.
UTI ENERGY CORP.
By: /s/ Vaughn E. Drum
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Vaughn E. Drum
President
ATTEST:
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SECRETARY
SOUTHLAND DRILLING COMPANY, LTD.
By /s/ Neil Hanson
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EXHIBIT A
SUBSCRIPTION FORM
To be Executed by the Holder
to Exercise Warrant
UTI Energy Corporation
The undersigned hereby exercises the right to purchase _____________
shares of common stock covered by this Warrant according to the conditions
thereof and herewith makes payment of the Warrant Price of such shares in full.
[INDIVIDUAL]
Signature
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Name:
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Address
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Dated: , .
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[CORPORATION OR PARTNERSHIP]
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(Name of Entity)
By:
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Name:
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Title:
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Address
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Dated: , .
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