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EXHIBIT 10.5
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE THEREWITH.
THIS SECURITY IS SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE
NOTE PURCHASE AGREEMENT DATED AS OF APRIL 11, 1997, AMONG THE ISSUERS
OF THIS SECURITY, CERTAIN OF THEIR AFFILIATES AND THE INITIAL PURCHASER
NAMED THEREIN, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE
OFFICES OF UTI ENERGY CORP., AS REGISTRAR, AND WHICH RESTRICTIONS
REQUIRE, AS A CONDITION TO ANY TRANSFER, APPROPRIATE DOCUMENTATION TO
EVIDENCE COMPLIANCE WITH APPLICABLE SECURITIES LAWS, INCLUDING AN
OPINION OF COUNSEL WITH RESPECT THERETO.
NO REGISTRATION OF TRANSFER OF THIS SECURITY WILL BE EFFECTED ON THE
BOOKS OF THE REGISTRAR UNLESS AND UNTIL SUCH RESTRICTIONS ARE COMPLIED
WITH.
FWA DRILLING COMPANY, INC.,
INTERNATIONAL PETROLEUM SERVICE COMPANY,
TRIAD DRILLING COMPANY,
UNIVERSAL WELL SERVICES, INC.,
USC, INCORPORATED
AND
PANTHER DRILLING, INC.
12% SENIOR SUBORDINATED NOTE DUE APRIL 10, 2001
No. 1 $25,000,000.00 April 11, 1997
FOR VALUE RECEIVED, the undersigned, FWA DRILLING COMPANY, INC., a
Delaware corporation, INTERNATIONAL PETROLEUM SERVICE COMPANY, a Pennsylvania
corporation, TRIAD DRILLING COMPANY, a Delaware corporation, UNIVERSAL WELL
SERVICES, INC., a Delaware corporation, USC, INCORPORATED, a Delaware
corporation, and PANTHER DRILLING, INC. (formerly known as Viersen & Cochran
Drilling Company), an Oklahoma corporation (each an "ISSUER" and, collectively,
the "ISSUERS"), hereby jointly and severally promise to pay to CANPARTNERS
INVESTMENTS IV, LLC, a California limited liability company, or registered
assigns, the principal sum of TWENTY--FIVE MILLION AND NO/100 DOLLARS on April
20, 2001, with interest (computed on the basis of a 360-day of twelve 30-day
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months) (a) on the unpaid balance thereof at the rate of 12% per annum from the
date hereof, payable quarterly, on the 15th day of January, April, July and
October of each year, commencing with July 15, 1997, until the principal hereof
shall have become due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal and any overdue
payment of interest (as defined in the Note Purchase Agreement referred to
below), payable quarterly as aforesaid (or, at the option of the registered
Holder hereof, on demand), at a rate per annum from time to time equal to the
Default Rate.
Payments of principal of and interest on with respect to this Note are
to be made in lawful money of the United States of America by the method and to
the address or account specified with respect to the holder hereof pursuant to
Section 2.05 of the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Subordinated Notes (herein
called the "NOTES") issued pursuant to a Note Purchase Agreement dated as of
April 11, 1997 (as the same may be amended, supplemented or otherwise modified
from time to time, the "NOTE PURCHASE AGREEMENT"; capitalized terms used herein
and not otherwise defined herein have the meanings set forth in the Note
Purchase Agreement), among the Issuers, certain affiliates of the Issuers, in
their capacity as guarantors of the Notes, and the Purchaser named therein and
is entitled to the benefits thereof. Each Holder of this Note will be deemed, by
its acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 9.06 of the Note Purchase Agreement and (ii) to have made the
representation set forth in Section 5.02 of the Note Purchase Agreement.
Each Issuer hereby acknowledges and makes this Note a registered
obligation for United States withholding tax purposes. The Company, on behalf of
the Issuers, shall be the registrar for this Note (the "REGISTRAR") with full
power of substitution. In the event the Registrar becomes unable or unwilling to
act as registrar under this Agreement, the Company shall reasonably designate a
successor Registrar. Each Holder who is a foreign person, by its acceptance of
this Note, hereby agrees to provide the Company, for the benefit of the Issuers,
with a completed Internal Service Form W-8 (Certificate of Foreign Status) or a
substantially similar form for such Holder, participants or other affiliates who
are holders of beneficial interests in this Note. Notwithstanding any contrary
provision contained in this Note or any of the other Note Documents, neither
this Note nor any interests therein may be sold, transferred, hypothecated,
participated or assigned to any Person except upon satisfaction of the
conditions specified in this paragraph. Each Holder, by its acceptance of its
Note(s), agrees to be bound by the provisions of this paragraph and to indemnify
and hold harmless the Registrar against any and all loss or liability arising
from the disposition by such Holder of this Note or any interest therein in
violation of this paragraph. The Registrar shall keep at its principal executive
office (or an office or agency designated by it by notice to the last registered
Holder) a ledger, in which, subject to such reasonable regulations as it may
prescribe, but at its expense (except as specified below), it shall provide for
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the registration and transfer of this Note. No sale, transfer, hypothecation,
participation or assignment of this Note or any interest herein shall be
effective for any purpose until it shall be registered on the books of the
Registrar to be maintained for such purpose. The Registrar shall record the
transfer of this Note on the books maintained for this purpose upon receipt by
the Registrar at the office or agency designated by the Registrar of (a) a
written assignment of this Note (or the applicable interest therein), (b) funds
sufficient to pay any transfer taxes payable upon the making of such transfer as
well as the cost of reviewing the documents presented to the Registrar, and (c)
such evidence of due execution as the Registrar shall reasonably require. The
Registrar shall record the transfer of this Note on the books maintained for
such purpose at the cost and expense of the assignee.
This Note is subject to prepayment, in whole or from time to time in
part, at the times and on the terms specified in the Note Purchase Agreement,
but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Texas
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
The Holder of this Note, by its acceptance hereof, acknowledges that
this Note is subject to the terms of the Subordination Agreement, as defined in
the Note Purchase Agreement, which contains certain subordination provisions and
is incorporated herein by reference. Notwithstanding any contrary statement
contained in the Note Purchase Agreement or in this Note (other than the
provisions of Section 2.10 of the Note Purchase Agreement), no payment on
account of the principal of, premium, if any, or interest on this Note shall
become due or to be paid except in accordance with the terms of the
Subordination Agreement.
Notwithstanding anything to the contrary contained elsewhere in this
Note or in any other Note Document, the Issuers and the Holder of this Note
hereby agree that all agreements among them under this Note and the other Note
Documents, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no contingency or event whatsoever shall
the amount paid, or agreed to be paid, to such Holder for the use, forbearance,
or detention of the money loaned to the Issuers and evidenced hereby or thereby
or for the performance or payment of any covenant or obligation contained herein
or therein, exceed the Highest Lawful Rate. If due to any circumstance
whatsoever, fulfillment of any provisions of this Note or any of the other Note
Documents at the time performance of such provision shall be due shall exceed
the Highest Lawful Rate, then, automatically, the obligation to be fulfilled
shall be modified or reduced to the extent necessary to limit such interest to
the Highest Lawful Rate, and if from any such circumstance the Holder should
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ever receive anything of value deemed interest by applicable law which would
exceed the Highest Lawful Rate, such excessive interest shall be applied to the
reduction of the principal amount then outstanding hereunder or on account of
any other than outstanding Obligations and not to the payment of interest, or if
such excessive interest exceeds the principal unpaid balance then outstanding
hereunder and such other then outstanding Obligations, such excess shall be
refunded to the Issuers. All sums paid or agreed to be paid to such Holder for
the use, forbearance, or detention of the Obligations and other Indebtedness of
the Issuers to the Holders, to the extent permitted by applicable law, shall be
amortized, prorated, allocated or spread throughout the entire term of such
Indebtedness. For purpose of this paragraph, "HIGHEST LAWFUL RATE" means, at any
given time during which any Obligations shall be outstanding hereunder, the
maximum nonusurious interest rate that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations, under
the laws of the State of Texas (or the law of any other jurisdiction whose laws
may be mandatorily applicable notwithstanding other provisions of this Note and
the other Note Documents), or under applicable federal laws which may presently
or hereafter be in effect and which allow a higher maximum nonusurious interest
rate than under the laws of the State of Texas (or such other jurisdiction's
law), in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under this Note and any
other Note Documents executed in connection herewith, and any available
exemptions, exceptions and exclusions. The terms and provisions of this
paragraph shall control every other provision of this Note and all agreements
among the Obligators and such Holder.
IN WITNESS WHEREOF, the Issuers have executed this Note on the date
first written above.
FWA DRILLING COMPANY, INC.
By: /s/ Vaughn E. Drum
-------------------------
Name: Vaughn E. Drum
Title: President and CEO
INTERNATIONAL PETROLEUM
SERVICE COMPANY
By: /s/ Vaughn E. Drum
-------------------------
Name: Vaughn E. Drum
Title: President and CEO
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TRIAD DRILLING COMPANY
By: /s/ Vaughn E. Drum
-------------------------
Name: Vaughn E. Drum
Title: President and CEO
UNIVERSAL WELL SERVICES, INC.
By: /s/ Vaughn E. Drum
-------------------------
Name: Vaughn E. Drum
Title: President and CEO
USC, INCORPORATED
By: /s/ Vaughn E. Drum
-------------------------
Name: Vaughn E. Drum
Title: President and CEO
PANTHER DRILLING, INC. (formerly
known as Viersen & Cochran Drilling
Company)
By: /s/ Vaughn E. Drum
-------------------------
Name: Vaughn E. Drum
Title: President and CEO
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