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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
APRIL 22, 1994
NOBLE DRILLING CORPORATION
(Exact name of registrant as specified in is charter)
Delaware 0-13857 73-0374541
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10370 Richmond Avenue, Suite 400, Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(713) 974-3131
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Item 2. Acquisition or Disposition of Assets.
On April 22, 1994, Noble Drilling Corporation (the "Company") acquired
all of the issued and outstanding shares of common stock, no par value (the
"Shares"), of Triton Engineering Services Company, a Texas corporation
("Triton"), from Joseph E. Beall ("Beall") and George H. Bruce ("Bruce") (Beall
and Bruce being sometimes referred to herein collectively as "Sellers"),
pursuant to the terms of the Stock Purchase Agreement (the "Agreement") dated
April 22, 1994 among the Sellers, Triton and the Company. The following
statements are subject to the detailed provisions of the Agreement and are
qualified in their entirety by reference to the Agreement, a copy of which is
filed as Exhibit 2.1 to this report.
Triton is engaged, through its subsidiaries, in providing engineering,
consulting and turnkey drilling services, and manufacturing and rental of oil
field equipment, for the oil and gas industry. The principal subsidiaries of
Triton include Triton International, Inc., Triton USA, Inc., Triton Engineering
Services Company, S.A., Triton International Limited, Triton Engineering
Services Company Limited, Triton Tool & Supply, Inc. and Threadneedle Oil
Company. Triton was founded by Beall in 1977, and Beall will continue to serve
as Triton's president pursuant to an employment agreement between Beall and
Triton dated April 22, 1994 (the "Employment Agreement"). The Employment
Agreement has a primary term through April 22, 1997. A copy of the Employment
Agreement is filed as Exhibit 10.2 to this report and is incorporated herein by
reference. The principal executive offices of Triton are located at 1201 Dairy
Ashford, Houston, Texas, 77079.
In consideration for the Shares, the Company (i) delivered to Beall
751,864 shares of its Common Stock, par value $.10 per share ("Common Stock"),
cash in the amount of $3,938,240.00 and a promissory note in the amount of
$3,938,240.00, and (ii) delivered to Bruce cash in the amount of $146,266.10
and a promissory note in the amount of $61,760.00. The promissory notes of the
Company mature on October 21, 1994. In addition, the Company has a contingent
obligation at the end of two years to pay to the Sellers additional
consideration, including up to 254,551 shares of Common Stock, subject to
reduction as a result of certain events, as well as a determinable number of
additional shares in the event Triton achieves certain operating results in
1994. In determining the amount of consideration to be paid for the Shares,
the Company conducted a due diligence review of Triton and a physical
examination and inspection of certain assets of Triton and its subsidiaries.
The Shares were given value based on the Company's assessment of the current
financial condition, assets, businesses and prospects, as well as the
historical financial and operating results, of Triton and its subsidiaries.
Concurrently with the closing of the Agreement, the Company and Beall
also entered into a registration agreement dated as of April 22, 1994 (the
"Registration Agreement") pursuant to which the Company agreed, subject to the
terms and conditions of the Registration Agreement, to prepare and file a shelf
registration statement on Form S-3 (the "Registration Statement") and pursuant
to Rule 415 under the Securities Act of 1933, as amended, covering the sale by
Beall of two-thirds of the number of shares of Common Stock delivered to Beall
on April 22, 1994. The Company further agreed pursuant to the terms of the
Registration Agreement to use its best efforts to keep the Registration
Statement effective through April 22, 1996. A copy of the
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Registration Agreement is filed as Exhibit 10.1 to this report and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
It is impractical to provide at this time the financial statements
required by Item 7(a) of Form 8-K. Pursuant to Item 7(a)(4) of Form 8-K, such
financial statements will be filed as soon as they are available and on or
before July 8, 1994.
(b) Pro Forma Financial Information.
It is impractical to provide at this time the pro forma financial
information required by Item 7(b) of Form 8-K. Pursuant to Item 7(b)(2) of
Form 8-K, such pro forma financial information will be filed as soon as it is
available and on or before July 8, 1994.
(c) Exhibits.
Exhibit 2.1 - Stock Purchase Agreement dated April 22, 1994 among
Beall, Bruce, Triton and the Company (Exhibits 6.6
through 8.4 and the Schedules have been omitted
pursuant to Item 601(b)(2) of Regulation S-K.
The Company hereby undertakes to furnish to the
Commission a copy of any omitted Exhibit or
Schedule upon request).
Exhibit 10.1 - Registration Agreement dated April 22, 1994
between the Company and Beall.
Exhibit 10.2 - Employment Agreement dated April 22, 1994 between
the Company and Beall.
Exhibit 10.3 - Lease Indemnity Agreement dated April 22, 1994
among Beall, Triton, 1201 Dairy Ashford Ltd. and
the Company.
Exhibit 99.1 - News release dated April 25, 1994.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 6, 1994 NOBLE DRILLING CORPORATION
By: /s/ BYRON L. WELLIVER
Byron L. Welliver, Senior Vice
President-Finance and Treasurer
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INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Numbered Page
------- ------- -------------
2.1 - Stock Purchase Agreement dated April 22, 1994
between Beall, Bruce, Triton and the Company.
10.1 - Registration Agreement dated April 22, 1994
between the Company and Beall.
10.2 - Employment Agreement dated April 22, 1994
between the Company and Beall.
10.3 - Lease Indemnity Agreement dated April 22, 1994
among Beall, Triton, 1201 Ashford Ltd. and the
Company.
99.1 - News release dated April 25, 1994.
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STOCK PURCHASE AGREEMENT
by and among
JOSEPH E. BEALL,
GEORGE H. BRUCE,
TRITON ENGINEERING SERVICES COMPANY
and
NOBLE DRILLING CORPORATION
April 22, 1994
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TABLE OF CONTENTS
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STOCK PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I TERMS OF THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Agreement to Sell and to Purchase Shares . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase Price and Payment at Closing . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Payment of Additional Consideration . . . . . . . . . . . . . . . . . . . . . . . 2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Adjustments Regarding Additional Consideration . . . . . . . . . . . . . . . . . 3
1.5 Buyer's Option to Deliver Cash in Lieu of Buyer Common Stock . . . . . . . . . . 4
1.6 Specific Contingent Assets Collected on or before the Fourth Anniversary . . . . 4
1.7 Option Holder Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE II CLOSING AND CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF SELLERS AND THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Authority Relative to This Agreement . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Investment Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.19 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.20 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.21 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.22 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.23 Employee Confidentiality Agreements . . . . . . . . . . . . . . . . . . . . . . 18
3.24 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.25 Financial Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.26 Bank Accounts and Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . 19
3.27 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.28 Illegal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.29 Offerings of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.30 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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3.31 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.32 Representations and Warranties on Closing Date . . . . . . . . . . . . . . . . . . 20
3.33 No Other Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . 20
4.1 Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.2 Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.3 Charter and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.4 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.5 Authority Relative to This Agreement . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 Noncontravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.7 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.9 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.10 Transaction Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.11 Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.12 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.13 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.14 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.15 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.16 Representations and Warranties on Closing Date . . . . . . . . . . . . . . . . . . 23
4.17 No Other Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE V CONDUCT OF COMPANY PENDING CLOSING . . . . . . . . . . . . . . . . . . . . . 23
5.1 Conduct and Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . 23
5.2 Restrictions on Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.1 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . 26
6.2 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.3 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.4 Reasonable Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.5 HSR Act Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.6 Agreement Regarding Registration . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.7 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.8 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.9 Company Employee Bonus Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.10 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.11 Amendment of Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.12 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.13 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.14 Survival of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.15 Negotiation Regarding Outstanding Options . . . . . . . . . . . . . . . . . . . . 29
6.16 Director and Officer Insurance and Indemnification . . . . . . . . . . . . . . . . 29
6.17 Agreement Regarding Indemnification for Certain Rental Obligations . . . . . . . . 29
ARTICLE VII CONDITIONS TO OBLIGATIONS OF SELLERS . . . . . . . . . . . . . . . . . . . . 29
7.1 Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . . . . 29
7.2 Covenants and Agreements Performed . . . . . . . . . . . . . . . . . . . . . . . . 29
7.3 Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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7.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.6 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.7 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.8 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.9 Payment of Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.10 Registration Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.11 1201 Dairy Ashford, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII CONDITIONS TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . . . . . . 31
8.1 Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . . . . 31
8.2 Covenants and Agreements Performed . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.4 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.6 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.7 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.8 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.9 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.10 Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.11 Cancellation of Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . 32
8.12 Lease Indemnity Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . 33
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.4 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.5 DTPA Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.6 Exclusive Remedy for Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE X TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.1 Liability for Taxes, Filing Returns . . . . . . . . . . . . . . . . . . . . . . . 34
10.2 No Section 338 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.3 Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XI RESTRICTIONS ON SALES, OTHER DISPOSITIONS . . . . . . . . . . . . . . . . . . 35
11.1 Restrictions on Sales, Other Dispositions . . . . . . . . . . . . . . . . . . . . 35
ARTICLE XII SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.1 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.2 Indemnification by Beall . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.4 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.5 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.6 CERTAIN DAMAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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13.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.3 Binding Effect; Assignment; No Third Party Benefit . . . . . . . . . . . . . . . . 39
13.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
13.7 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.8 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.9 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.11 Injunctive Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.12 Jurisdiction and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.13 Joinder of Spouses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
13.14 Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XIV DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
14.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
14.2 Certain Additional Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . 42
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ANNEX, EXHIBITS AND SCHEDULES
Annex I Allocation of Purchase Price
Exhibit 1.2 Form of Promissory Note
Exhibit 1.7 Option Holder Allocation
Exhibit 6.6 Form of Registration Agreement
Exhibit 6.7 Form of Employment Agreement
Exhibit 6.17 Form of Lease Indemnity Agreement
Exhibit 7.4 Form of Opinion of Counsel to Buyer
Exhibit 8.4 Form of Opinion of Counsel to Sellers and the
Company
Schedule 1.3(a)(ii) Company or Subsidiary Specified Claims and
Accounts Receivable
Schedule 3.2 Company and Subsidiary Qualifications
Schedule 3.3 Company Records
Schedule 3.4 Company or Subsidiary Obligation to Repurchase
Schedule 3.6(a) Contravention of Charter Documents and
Contracts - Company
Schedule 3.6(b) Contravention of Contracts - Sellers
Schedule 3.7 Company and Subsidiary Governmental Approvals
Schedule 3.8 Company and Subsidiary Proceedings
Schedule 3.9(a) Company and Subsidiary Insurance Policies
Schedule 3.9(b) Company and Subsidiary Insurance Claims
Schedule 3.10 Subsidiaries
Schedule 3.14 Company and Subsidiary Liabilities
Schedule 3.15 Company and Subsidiary Changes
Schedule 3.16 Company and Subsidiary Tax Matters
Schedule 3.18 Company and Subsidiary Agreements
Schedule 3.19 Company and Subsidiary Employee Plans
Schedule 3.20 Company and Subsidiary Environmental Matters
Schedule 3.21 Company and Subsidiary Labor Relations
Schedule 3.22 Company and Subsidiary Employees
Schedule 3.24 Company and Subsidiary Insider Interests
Schedule 3.25 Company and Subsidiary Financial Requirements
Schedule 3.26 Company and Subsidiary Bank Accounts and
Powers of Attorney
Schedule 4.2 Buyer Qualifications
Schedule 4.6(a) Contravention of Charter Documents - Buyer
Schedule 4.7 Buyer Governmental Approvals
Schedule 4.13 Buyer Changes
Except for Annex I and Exhibits 1.2 and 1.7, the foregoing have been omitted
pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish
supplementally a copy of any omitted Exhibit or Schedule to the Commission upon
request.
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of April
22, 1994, among TRITON ENGINEERING SERVICES COMPANY, a Texas corporation (the
"Company"), JOSEPH E. BEALL ("Beall"), GEORGE H. BRUCE ("Bruce") (Beall and
Bruce being sometimes referred to herein individually as a "Seller" and
collectively as "Sellers"), and NOBLE DRILLING CORPORATION, a Delaware
corporation ("Buyer"),
W I T N E S S E T H:
WHEREAS, Sellers own in the aggregate all the outstanding shares of
Common Stock, no par value, of the Company (the "Shares"); and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to
purchase from Sellers, the Shares; and
WHEREAS, the Company desires to join in the execution of this
Agreement for the purpose of evidencing its consent to the consummation of the
foregoing transaction and for the purpose of making certain representations and
warranties to and covenants and agreements with Buyer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Sellers and Buyer hereby agree as follows:
ARTICLE I
TERMS OF THE TRANSACTION
1.1 Agreement to Sell and to Purchase Shares. At the Closing, and on
the terms and subject to the conditions set forth in this Agreement, each
Seller shall sell and deliver to Buyer, and Buyer shall purchase and accept
from each Seller, the number of Shares set forth opposite the name of such
Seller on Annex I.
1.2 Purchase Price and Payment at Closing. In consideration of the
sale of the Shares to Buyer, Buyer shall pay to Sellers at the Closing an
aggregate purchase price (the "Purchase Price") consisting of (i) 763,655
shares (the "Buyer Shares") of Common Stock, par value $.10 per share, of Buyer
("Buyer Common Stock"), (ii) $4,000,000 in cash and (iii) $4,000,000 evidenced
by two promissory notes of Buyer. The Purchase Price shall be allocated
between Sellers as set forth on Annex I. The allocable portion of the Purchase
Price payable to each Seller shall be paid at the Closing to such Seller as
follows:
(a) Each Seller shall receive the number of Buyer Shares set forth
opposite the name of such Seller on Annex I; provided, however, that Buyer
shall have the right and option (but not the obligation) to pay Bruce in cash
in lieu of delivering the allocable number of Buyer Shares to Bruce (based on
the per share price equal to the average of the last sale price of the Buyer
Common Stock (as reported by NASDAQ/NMS) for the 30 trading days ending on the
second business day prior to the Closing Date).
(b) The "Cash Amount" set forth opposite the name of such Seller
on Annex I shall be paid to such Seller at the Closing in the form of a bank
cashier's check payable to the order of such Seller or, if requested by such
Seller, in immediately available funds by confirmed wire transfer to a bank
<PAGE> 8
account to be designated by such Seller (such designation to occur no later
than the second business day prior to the Closing Date).
(c) Buyer shall deliver to such Seller a promissory note of Buyer,
dated the Closing Date, payable to the order of such Seller in a principal
amount equal to the "Note Amount" set forth opposite the name of such Seller on
Annex I (the "Note"). The principal of and accrued interest on each Note shall
be payable on such date as Buyer shall determine but in no event later than six
months after the Closing Date. The unpaid principal of each Note shall bear
interest at the prime rate announced or published from time to time by
NationsBank of Texas, N.A. (or if such bank ceases to declare a prime rate, the
rate of interest designated by such bank in lieu thereof). Each Note shall
represent the unsecured, general obligation of Buyer. Each Note shall be in
substantially the form set forth as Exhibit 1.2.
1.3 Payment of Additional Consideration.
(a) In addition to the Purchase Price, Buyer shall pay to Sellers,
subject to the terms and conditions of this Agreement and within 10 business
days after the second anniversary of the Closing Date (the "Determination
Date"), additional consideration in shares of Buyer Common Stock (the
"Additional Shares") as follows:
(i) 254,551 shares of Buyer Common Stock; plus
(ii) if the calculation of the Net Claim Amount under this
Section 1.3(a)(ii) as of the Determination Date results in a positive
number, then the number of shares of Buyer Common Stock that is
obtained by dividing the Net Claim Amount as of the Determination Date
by $7.90, multiplying the quotient by 0.8618968 and rounding the
product to the nearest whole number. The "Net Claim Amount" for any
period shall mean 60 percent of an amount equal to the Specific
Contingent Assets collected during such period minus the Specific
Contingent Liabilities discharged during such period. For the
purposes of this Agreement, "Specific Contingent Assets" shall mean an
amount equal to (A) the net proceeds, if any, paid to the Company or a
Subsidiary from the claims and accounts receivable specifically
identified on Schedule 1.3(a)(ii) minus (B) $1,886,834 (the "1993
Deficit Amount"). For the purposes of this Section 1.3(a)(ii), "net
proceeds" shall mean the gross proceeds, if any, paid to the Company,
a Subsidiary or Buyer less all reasonable out-of-pocket costs of the
Company, a Subsidiary or Buyer pursuing the Specific Contingent Assets
including, but not limited to, attorneys' fees, experts' fees and
discovery costs. Buyer, the Company and Beall agree (x) to use their
respective reasonable best efforts in pursuing such claims and (y) to
consult with each other prior to settlement thereof. For the purposes
of this Agreement, "Specific Contingent Liabilities" shall mean the
amount, if any, payable by Beall pursuant to the provisions of Article
XII on account of an obligation under Section 12.2(b)(ii). To the
extent, but only to the extent, such indemnification obligations
constitute Specific Contingent Liabilities and are therefore satisfied
pursuant to the operation of this Section 1.3(a)(ii), they shall not
also be recoverable under the provisions of Article XII; plus
(iii) the number of shares of Buyer Common Stock that is
obtained by dividing (A) an amount equal to 43.09484 percent of
Adjusted Excess 1994 EBDIT by (B) the per share price equal to the
average of the last sale price of the Buyer Common Stock (as reported
by NASDAQ/NMS) for the 30 trading days immediately preceding the
issuance of the Company's audit report for the year ending December
31, 1994, and rounding the quotient to the nearest whole number.
"Adjusted Excess 1994 EBDIT" is the amount, if any, equal to (x) the
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<PAGE> 9
Company's 1994 audited earnings before interest expense, interest
income, depreciation expense, amortization expense and income tax
("EBDIT") in excess of $10.0 million (the "Excess 1994 EBDIT") plus or
minus, as the case may be, (y) the amount of the adjustments to the
Excess 1994 EBDIT, if any, as determined in accordance with the
remainder of this Section 1.3(a)(iii). In determining Adjusted Excess
1994 EBDIT, the parties agree to decrease the Excess 1994 EBDIT as
reflected in the Company's 1994 audited consolidated financial
statements by the amount of EBDIT attributable to the excess, if any,
of any Specific Contingent Assets accrued as of December 31, 1994 over
any Specific Contingent Liabilities accrued as of December 31, 1994
and by the amount of EBDIT, if any, from Company projects attributable
to Buyer and its affiliates (exclusive of the Company and its
Subsidiaries), and to increase the Excess 1994 EBDIT by the amount, if
any, of additional expenses incurred by the Company and the
Subsidiaries following the Closing Date solely attributable to Buyer's
ownership of the Company. Buyer agrees to confer with Beall if Buyer
desires to refer any specific projects to the Company, and Buyer and
Beall shall agree, in connection with the Company's commencement of
work on any such project, what portion, if any, of the earnings
attributable to such project shall be subtracted in calculating
Adjusted Excess 1994 EBDIT. In the absence of such agreement, no
decrease in earnings shall be made. Buyer and Beall further agree
that the expenses historically incurred by the Company shall not, for
the purposes of determining Adjusted Excess 1994 EBDIT, be materially
increased by or on behalf of Buyer following the Closing Date (whether
through the increase of existing expenses or the imposition of new
expenses) unless such expenses are agreed to by Beall.
(b) The Additional Shares shall be allocated between Sellers in
the percentages that the Purchase Price is allocated between Sellers on Annex
I.
(c) To the extent a Determination Date Rental Indemnification
Amount (as such term is defined in the Lease Indemnity Agreement (as defined in
Section 6.17)) is due by Beall to Buyer, the number of Additional Shares
payable to Beall, if any, pursuant to Section 1.3(a) shall be reduced by the
number of shares of Buyer Common Stock that is obtained by dividing the
Determination Date Rental Indemnification Amount by the per share price equal
to the average of the last sale price of the Buyer Common Stock (as reported by
NASDAQ/NMS) for the 30 trading days immediately preceding the Determination
Date, and rounding the quotient to the nearest whole number (the "Rental
Indemnification Shares"). If the number of Rental Indemnification Shares
exceeds the number of Additional Shares payable to Beall pursuant to Section
1.3(a), then Buyer shall not be under any obligation to issue any Additional
Shares to Beall, and Beall shall pay to Buyer or its assignee in cash the value
of the shares of Buyer Common Stock constituting such excess, based on the
price per share specified in the immediately preceding sentence. Any such cash
payment shall be made to Buyer or its assignee within 10 business days after
the Determination Date.
1.4 Adjustments Regarding Additional Consideration.
(a) If the calculation of the Net Claim Amount under Section
1.3(a)(ii) as of the Determination Date results in a negative number, then the
Net Claim Amount (disregarding the negative sign) shall be divided by $7.90,
and the quotient rounded to the nearest whole number. The result of the
calculation in the immediately preceding sentence shall be referred to herein
as the "Number of Claim Shares." The number of shares of Buyer Common Stock
otherwise deliverable under Section 1.3 (the "Section 1.3 Shares") shall be
reduced by the Number of Claim Shares if the result of such subtraction is a
positive number.
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<PAGE> 10
(b) If the subtraction of the Number of Claim Shares from the
number of Section 1.3 Shares under Section 1.4(a) results in a negative number
of shares, then Buyer shall not be under any obligation to issue any Additional
Shares, and Buyer shall continue to have the right to receive indemnification
by Beall pursuant to the terms and conditions of Article XII for the value of
the number of shares so calculated (disregarding the negative sign) based on
the per share price of $7.90.
1.5 Buyer's Option to Deliver Cash in Lieu of Buyer Common Stock.
Notwithstanding anything contained in Section 1.3 to the contrary, Buyer shall
have the right and option (but not the obligation) to pay Bruce in cash in lieu
of delivering the allocable amount of the Additional Shares to him. The amount
of cash so paid shall be based on the per share price equal to the average of
the last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for
the 30 trading days immediately preceding the Determination Date. Any such
cash payment shall be made to Bruce within 10 business days after the
Determination Date.
1.6 Specific Contingent Assets Collected on or before the Fourth
Anniversary.
(a) If during the period beginning on the Determination Date and
ending on the third anniversary of the Closing Date (the "Third Anniversary"),
there exists a Net Claim Amount (determined without regard to the 1993 Deficit
Amount) that is a positive number, then Buyer shall pay to Sellers, within 10
business days after the Third Anniversary, the number of shares of Buyer Common
Stock that is obtained by dividing the Net Claim Amount for such period by
$7.90, multiplying the quotient by 0.8618968 and rounding the product to the
nearest whole number. If during the period beginning on the Third Anniversary
and ending on the fourth anniversary of the Closing Date (the "Fourth
Anniversary"), there exists a Net Claim Amount (determined without regard to
the 1993 Deficit Amount) that is a positive number, then Buyer shall pay to
Sellers, within 10 business days after the Fourth Anniversary, the number of
shares of Buyer Common Stock that is obtained by dividing the Net Claim Amount
for such period by $7.90, multiplying the quotient by 0.8618968 and rounding
the product to the nearest whole number. The contingent amounts payable to
Sellers pursuant to this Section shall be allocated between Sellers in the
percentages that the Purchase Price is allocated between Sellers on Annex I.
Notwithstanding anything contained in this Section to the contrary, Buyer shall
have the right and option (but not the obligation) to pay Sellers in cash in
lieu of delivering the contingent amounts payable to Sellers pursuant to this
Section in shares of Buyer Common Stock. The amount of cash so paid shall be
based on the per share price equal to the average of the last sale price of the
Buyer Common Stock (as reported by NASDAQ/NMS) for the 30 trading days
immediately preceding the Third Anniversary or Fourth Anniversary, as the case
may be. Any such cash payment shall be made to Sellers within 10 business days
after the Third Anniversary or Fourth Anniversary, as the case may be. Buyer
shall have no obligation to Sellers with respect to the amount of any Specific
Contingent Assets collected after the Fourth Anniversary.
(b) If the calculation of the Net Claim Amount (determined without
regard to the 1993 Deficit Amount) during the period beginning on the
Determination Date and ending on the Third Anniversary results in a negative
number, then Buyer shall not be under any obligation to issue any additional
shares of Buyer Common Stock, and Buyer shall continue to have the right to
receive indemnification by Beall pursuant to the terms and conditions of
Article XII. If the calculation of the Net Claim Amount (determined without
regard to the 1993 Deficit Amount) during the period beginning on the Third
Anniversary and ending on the Fourth Anniversary results in a negative number,
then Buyer shall not be under any obligation to issue any additional shares of
Buyer Common Stock, and Buyer shall continue to have the right to receive
indemnification by Beall pursuant to the terms and conditions of Article XII.
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<PAGE> 11
1.7 Option Holder Compensation.
(a) Subject to the occurrence of the Closing, Buyer agrees to
cause the Company to pay to the Option Holders (as defined in Section 3.4) in
shares of Buyer Common Stock in the aggregate an amount the value of which
approximates (i) 13.81032 percent of 60 percent of the Specific Contingent
Assets, if any, collected during each of the periods ending on the
Determination Date, the Third Anniversary and the Fourth Anniversary, as the
case may be, plus (ii) 6.90515 percent of Adjusted Excess 1994 EBDIT.
(b) The amounts described in Section 1.7(a) shall be allocated
among the Option Holders as shown on Exhibit 1.7. Such amounts shall be
delivered (x) with respect to clause (i) of Section 1.7(a), within 10 business
days after the Determination Date, the Third Anniversary or the Fourth
Anniversary, as the case may be, and (y) with respect to clause (ii) of Section
1.7(a), within 10 business days after receipt by Buyer of the 1994 audit report
of the Company.
(c) The number of shares of Buyer Common Stock that is to be paid
pursuant to clause (i) of Section 1.7(a) is obtained by dividing the amount
described in such clause by $7.90, and rounding the quotient to the nearest
whole number. The number of shares of Buyer Common Stock that is to be paid
pursuant to clause (ii) of Section 1.7(a) is obtained by dividing the amount
described in such clause by the per share price equal to the average of the
last sale price of the Buyer Common Stock (as reported by NASDAQ/NMS) for the
30 trading days immediately preceding the issuance of the Company's audit
report for the year ending December 31, 1994, and rounding the quotient to the
nearest whole number. Notwithstanding anything contained in this Section to
the contrary, Buyer shall have the right to deliver cash in lieu of Buyer
Common Stock pursuant to this Section for any reason, including, but not
limited to, if Buyer determines that shares of Buyer Common Stock cannot be
delivered pursuant to exemptions from registration under applicable federal and
state securities laws. In the event Buyer shall elect to deliver cash to the
Option Holders in lieu of Buyer Common Stock pursuant to the terms of this
Section 1.7(c), the amount of cash so paid shall be based on the per share
price equal to the average of the last sale price of Buyer Common Stock (as
reported by NASDAQ/NMS) for the 30 trading days immediately preceding the
Determination Date, the Third Anniversary or the Fourth Anniversary, as the
case may be. Any such cash payment shall be made to such Option Holders within
10 business days after the Determination Date, the Third Anniversary or the
Fourth Anniversary, as the case may be. Each recipient of any Buyer Common
Stock shall make such representations and warranties to and covenants and
agreements with Buyer as Buyer shall determine are reasonably necessary to
comply with applicable federal and state securities laws.
ARTICLE II
CLOSING AND CLOSING DATE
The closing of the transactions contemplated hereby (the "Closing")
shall take place (i) at the offices of Thompson & Knight, P.C., 1700 Texas
Commerce Tower, 600 Travis, Houston, Texas 77002, at 10 a.m., local time, on
the later of (x) April 22, 1994 or (y) the third business day following the
satisfaction or waiver (subject to Applicable Law) of each of the conditions to
the obligations of the parties set forth in Articles VII and VIII, or (ii) at
such other time or place or on such other date as the parties hereto shall
agree. The date on which the Closing is required to take place is herein
referred to as the "Closing Date".
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<PAGE> 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF SELLERS AND THE COMPANY
Sellers and the Company jointly and severally (except with respect to
the representations and warranties set forth in Sections 3.5(b), 3.6(b), 3.11
and 3.12, which are made by each Seller (i) severally and not jointly and (ii)
only as to such Seller and not any other Seller and except further that all
such representations and warranties of Bruce (except for Sections 3.5(b),
3.6(b), 3.11 and 3.12) are limited to the best knowledge of Bruce without any
duty of independent investigation) represent and warrant to Buyer that:
3.1 Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
corporate authority to own, lease and operate its properties and to carry on
its business as now being conducted. No actions or proceedings to dissolve the
Company are pending.
3.2 Qualification. Each of the Company and the Subsidiaries is duly
qualified or licensed to do business and each of the Company and the Corporate
Subsidiaries is in good standing in each of the jurisdictions set forth
opposite its name on Schedule 3.2, which are all the jurisdictions in which the
property owned, leased or operated by it or the conduct of its business
requires such qualification or licensing, except jurisdictions in which the
failure to be so qualified or licensed would not, individually or in the
aggregate, have a material adverse effect on the business, assets, results of
operations or condition (financial or otherwise) of the Company and the
Subsidiaries considered as a whole.
3.3 Charter and Bylaws. Except as disclosed on Schedule 3.3, the
Company has made available to Buyer accurate and complete copies of (i) the
charter and bylaws of each of the Company and the Subsidiaries as currently in
effect, (ii) the stock records of each of the Company and the Subsidiaries, and
(iii) the minutes of all meetings of the respective Boards of Directors of the
Company and the Subsidiaries, any committees of such Boards, and the
shareholders of the Company and the Subsidiaries (and all consents in lieu of
such meetings). Such records, minutes and consents accurately reflect the
stock ownership of the Company and the Subsidiaries and all actions taken by
such Boards of Directors, committees and shareholders. Neither the Company nor
any Subsidiary is in violation of any provision of its charter or bylaws, other
than violations which, individually or in the aggregate, do not and will not
have a material adverse effect on the business, assets, results of operations
or condition (financial or otherwise) of the Company and the Subsidiaries
considered as a whole.
3.4 Capitalization of the Company. The authorized capital stock of
the Company consists of 2,000,000 shares of Common Stock, no par value, of
which, 5,180 shares are outstanding and 6,791 shares are held in the Company's
treasury. All outstanding shares of capital stock of the Company have been
validly issued and are fully paid and nonassessable, and no shares of capital
stock of the Company are subject to, nor have any been issued in violation of,
preemptive or similar rights. All issuances, sales and repurchases by the
Company of shares of its capital stock have been effected in compliance with
all Applicable Laws, including without limitation applicable federal and state
securities laws. The Shares constitute (and at the Closing will constitute)
all the outstanding shares of capital stock of the Company. As of the date
hereof, an aggregate of 830 shares of Common Stock of the Company are reserved
for issuance and issuable upon the exercise of outstanding employee stock
options (the "Outstanding Options") granted under the Company's stock option
plan to a total of five persons (the "Option Holders") at exercise prices
ranging from $1,147.58 to $2,545.00 per share. Except as set forth above in
this Section, there are (and as of the Closing Date there will be) outstanding
(i) no shares of
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capital stock or other voting securities of the Company, (ii) no securities of
the Company convertible into or exchangeable for shares of capital stock or
other voting securities of the Company, (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue or sell,
any shares of capital stock or other voting securities of the Company or any
securities of the Company convertible into or exchangeable for such capital
stock or voting securities, and (iv) no equity equivalents, interests in the
ownership or earnings, or other similar rights of or with respect to the
Company. As of the Closing Date there will be (and, except as disclosed on
Schedule 3.4, there are) no outstanding obligations of the Company or any
Subsidiary to repurchase, redeem or otherwise acquire any of the foregoing
shares, securities, options, equity equivalents, interests or rights.
3.5 Authority Relative to This Agreement.
(a) The Company has full corporate power and corporate authority
to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by
the Company of this Agreement, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate
action of the Company. This Agreement has been duly executed and delivered by
the Company and constitutes, and each other agreement, instrument or document
executed or to be executed by the Company in connection with the transactions
contemplated hereby has been, or when executed will be, duly executed and
delivered by the Company and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of the Company, enforceable
against the Company in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally, (ii) equitable principles which may limit the availability of
certain equitable remedies (such as specific performance) in certain instances
and (iii) public policy considerations with respect to the enforceability of
rights of indemnification.
(b) Each Seller has full legal right, power and authority to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
each Seller and constitutes, and each other agreement, instrument or document
executed or to be executed by a Seller in connection with the transactions
contemplated hereby has been, or when executed will be, duly executed and
delivered by such Seller and constitutes, or when executed and delivered will
constitute, a valid and legally binding obligation of such Seller, enforceable
against such Seller in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally, (ii) equitable principles which may limit the availability of
certain equitable remedies (such as specific performance) in certain instances
and (iii) public policy considerations with respect to the enforceability of
rights of indemnification.
3.6 Noncontravention.
(a) Except as disclosed on Schedule 3.6(a), the execution,
delivery and performance by Sellers and the Company of this Agreement and the
consummation by them of the transactions contemplated hereby do not and will
not (i) conflict with or result in a violation of any provision of the charter
or bylaws of the Company or any Subsidiary, (ii) conflict with or result in a
violation of any provision of, or constitute (with or without the giving of
notice or the passage of time or both) a default under, or give rise (with or
without the giving of notice or the passage of time or both) to any right of
termination, cancellation or acceleration under, any bond, debenture, note,
mortgage, indenture, lease, contract, agreement or other instrument or
obligation to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any of their respective properties may be bound,
other
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<PAGE> 14
than conflicts, violations or defaults which, individually or in the aggregate,
do not and will not have a material adverse effect on the business, assets,
results of operations or condition (financial or otherwise) of the Company and
the Subsidiaries considered as a whole, (iii) result in the creation or
imposition of any Encumbrance upon the properties of the Company or any
Subsidiary, or (iv) assuming compliance with the matters referred to in Section
3.7, violate any Applicable Law binding upon the Company or any Subsidiary.
(b) Except as disclosed on Schedule 3.6(b), the execution,
delivery and performance by each Seller of this Agreement and the consummation
by each Seller of the transactions contemplated hereby do not and will not (i)
conflict with or result in a violation of any provision of, or constitute (with
or without the giving of notice or the passage of time or both) a default
under, or give rise (with or without the giving of notice or the passage of
time or both) to any right of termination, cancellation or acceleration under,
any contract, agreement, instrument or obligation to which such Seller is a
party or by which such Seller or any of such Seller's properties may be bound,
(ii) result in the creation or imposition of any Encumbrance upon the
properties of such Seller, or (iii) assuming compliance with the matters
referred to in Section 3.7, violate any Applicable Law binding upon such
Seller.
3.7 Governmental Approvals. No consent, approval, order or
authorization of, or declaration, filing or registration with, any Governmental
Entity is required to be obtained or made by any Seller or the Company or any
Subsidiary in connection with the execution, delivery or performance by Sellers
and the Company of this Agreement or the consummation by them of the
transactions contemplated hereby, other than (i) compliance with any applicable
requirements of the HSR Act; (ii) compliance with any applicable requirements
of the Securities Act; (iii) compliance with any applicable requirements of the
Exchange Act; (iv) compliance with any applicable state securities laws; (v) as
set forth on Schedule 3.7; (vi) filings with Governmental Entities to occur in
the ordinary course following the consummation of the transactions contemplated
hereby; and (vii) such consents, approvals, orders or authorizations which, if
not obtained, and such declarations, filings or registrations which, if not
made, would not, individually or in the aggregate, have a material adverse
effect on the business, assets, results of operations or condition (financial
or otherwise) of the Company and the Subsidiaries considered as a whole or on
the ability of a Seller or the Company to consummate the transactions
contemplated hereby. The representations and warranties of Sellers and the
Company contained in this Section, insofar as such representations and
warranties pertain to compliance by the Company with the requirements of the
Securities Act and applicable state securities laws, are based on the
representations and warranties of Buyer contained in Section 4.11.
3.8 Legal Proceedings. Except as disclosed on Schedule 3.8, there
are no Proceedings pending or, to the best knowledge of Sellers and the
Company, threatened against or involving the Company or any Subsidiary (or any
of their respective directors or officers in connection with the business or
affairs of the Company or any Subsidiary) or any properties or rights of the
Company or any Subsidiary. Except as disclosed on Schedule 3.8, Sellers and
the Company reasonably believe any and all potential liability of the Company
and the Subsidiaries under such Proceedings is adequately covered (except for
deductible amounts as stated in the policies) by the existing insurance
maintained by the Company and the Subsidiaries described in Section 3.9. No
judgment, order, writ, injunction or decree of any Governmental Entity has been
issued or entered against the Company or any Subsidiary which continues to be
in effect. Neither the Company nor any Subsidiary is subject to any judgment,
order, writ, injunction, or decree of any Governmental Entity which is
reasonably likely to have a material adverse effect on the business, assets,
results of operations or condition (financial or otherwise) of the Company and
the Subsidiaries considered as a whole. There are no Proceedings pending or,
to the best knowledge of Sellers and the Company, threatened seeking to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the transactions contemplated hereby.
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3.9 Insurance.
(a) The Company and the Subsidiaries maintain with sound and
reputable insurers, and there are currently in full force and effect, policies
of insurance with respect to their respective assets and operations, which
policies of insurance are listed on Schedule 3.9(a).
(b) Schedule 3.9(b) is a complete and accurate list of all pending
or outstanding insurance claims ("Outstanding Insurance Claims") of the Company
or any Subsidiary against the Company's insurance companies and the amount, if
any, of each Outstanding Insurance Claim that is reflected in the Audited 1993
Financial Statements as an account receivable or other asset.
3.10 Subsidiaries.
(a) The Company does not own, directly or indirectly, any capital
stock or other equity securities of any corporation or have any direct or
indirect equity or ownership interest in any other person, other than the
Subsidiaries. Schedule 3.10 lists each Subsidiary, the jurisdiction of
incorporation or formation of each Subsidiary and the authorized (in the case
of capital stock) and outstanding capital stock or other equity interests of
each Subsidiary. Each Corporate Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and each Partnership Subsidiary is a limited partnership or an
Asociacion en Participacion duly formed and validly existing under the laws of
the jurisdiction of its formation. Each Subsidiary has all requisite corporate
or, in the case of a Partnership Subsidiary, partnership power and corporate
or, in the case of a Partnership Subsidiary, partnership authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Except as disclosed on Schedule 3.10, no actions or proceedings to
dissolve any Subsidiary are pending.
(b) Except as otherwise indicated on Schedule 3.10, all the
outstanding capital stock or other equity interests of each Subsidiary are
owned directly or indirectly by the Company, free and clear of all
Encumbrances. All outstanding shares of capital stock of each Corporate
Subsidiary have been validly issued and are fully paid and nonassessable. All
partnership interests of each Partnership Subsidiary have been validly issued
and are fully paid (to the extent required at such time). No shares of capital
stock or other equity interests of any Subsidiary are subject to, nor have any
been issued in violation of, preemptive or similar rights. Except as otherwise
indicated on Schedule 3.10, all the assets and properties of the Company and
each Subsidiary are owned free and clear of any Encumbrances, other than (i)
liens for ad valorem taxes not yet due and payable; (ii) encumbrances (other
than liens securing indebtedness) that do not affect the fair market value of
the underlying asset; (iii) encumbrances (other than liens securing
indebtedness) that do not and will not materially impair the use of the
underlying asset as it is being used by the Company as of the Closing Date or
for any other similar use; or (iv) materialman's, mechanic's, repairman's,
employee's, contractor's, operator's or other similar liens, encumbrances or
charges arising in the ordinary course of business incidental to construction,
maintenance or operation of the Company's assets, securing obligations not yet
due.
(c) Except as set forth on Schedule 3.10, there are (and as of the
Closing Date there will be) outstanding (i) no shares of capital stock or other
voting securities of any Subsidiary, (ii) no securities of the Company or any
Subsidiary convertible into or exchangeable for shares of capital stock or
other voting securities of any Subsidiary, (iii) no options or other rights to
acquire from the Company or any Subsidiary, and no obligation of the Company or
any Subsidiary to issue or sell, any shares of capital stock or other voting
securities of any Subsidiary or any securities convertible into or exchangeable
for such capital stock or voting securities, and (iv) no equity equivalents,
interests in the ownership or earnings, or other similar rights of or with
respect to any Subsidiary. As of the Closing
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Date there will be (and, except as disclosed on Schedule 3.10, there are) no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any of the foregoing shares, securities, options, equity
equivalents, interests or rights (except as contemplated in this Agreement).
3.11 Shares. Each Seller is (and at the Closing will be) the record
and beneficial owner of, and upon consummation of the transactions contemplated
hereby Buyer will acquire, good and valid title to, the number of Shares set
forth opposite the name of such Seller on Annex I, free and clear of all
Encumbrances, other than (i) those that may arise by virtue of any actions
taken by or on behalf of Buyer or its affiliates or (ii) restrictions on
transfer that may be imposed by federal or state securities laws.
3.12 Investment Representations.
(a) Each Seller is acquiring the Buyer Shares and any Additional
Shares (collectively, the "Transaction Securities") for his own account for
investment and not with a view to, or for sale or other disposition in
connection with, any distribution of all or any part thereof, except (i) in an
offering covered by a registration statement filed with the Securities and
Exchange Commission under the Securities Act covering the Buyer Shares or (ii)
pursuant to an applicable exemption under the Securities Act. In acquiring the
Transaction Securities, each Seller is not offering or selling, and will not
offer or sell, for Buyer in connection with any distribution of the Transaction
Securities and each Seller does not have a participation and will not
participate in any such undertaking or in any underwriting of such an
undertaking except in compliance with applicable federal and state securities
laws.
(b) Each Seller acknowledges that he or his representatives have
been furnished with substantially the same kind of information regarding Buyer
and its business, assets, results of operations and financial condition as
would be contained in a registration statement prepared in connection with a
public sale of the Buyer Shares. Each Seller further represents that he has
had an opportunity to ask questions of and receive answers from Buyer regarding
Buyer and its business, assets, results of operations and financial condition
and the terms and conditions of the issuance of the Transaction Securities.
The foregoing, however, shall not limit or modify the representations and
warranties of Buyer in Article IV, shall not limit the rights of a Seller prior
to and in anticipation of any issuance of the Transaction Securities pursuant
hereto, and shall not limit the disclosure requirements of applicable federal
and state securities laws.
(c) Each Seller acknowledges that he is able to fend for himself,
can bear the economic risk of his investment in the Transaction Securities, and
has such knowledge and experience in financial and business matters that he is
capable of evaluating the merits and risks of an investment in the Transaction
Securities.
(d) Each Seller understands that the Transaction Securities, when
issued to such Seller, will not have been registered pursuant to the Securities
Act or any applicable state securities laws, that the Transaction Securities
will be characterized as "restricted securities" under federal securities laws,
and that under such laws and applicable regulations the Transaction Securities
cannot be sold or otherwise disposed of without registration under the
Securities Act or an exemption therefrom. In this connection, each Seller
represents that he is familiar with Rule 144 promulgated under the Securities
Act, as currently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Stop transfer instructions may be issued to
the transfer agent for securities of Buyer in connection with the Transaction
Securities.
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(e) It is agreed and understood by each Seller that the
certificates representing the Transaction Securities shall each conspicuously
set forth on the face or back thereof, in addition to any legends required by
Applicable Law or other agreement, a legend in substantially the following
form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE FIRST REGISTERED PURSUANT TO THAT ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE CORPORATION RECEIVES A WRITTEN
OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE REASONABLY
SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION
IS NOT REQUIRED.
It is agreed and understood by Buyer that the legends will be removed upon the
registration of the shares represented by any such certificate under the
Securities Act or upon delivery to Buyer of a written opinion of counsel, which
opinion and counsel are reasonably satisfactory to Buyer, to the effect that
such legend is not required.
3.13 Financial Statements. The Company has delivered to Buyer
accurate and complete copies of (i) the Company's audited consolidated balance
sheets as of December 31, 1992 and 1993, and the related audited consolidated
statements of income, stockholders' equity and cash flows for each of the years
then ended, and the notes and schedules thereto, prepared in conformity with
generally accepted accounting principles, together with the unqualified reports
thereon of KPMG Peat Marwick, independent public accountants (the "Audited
Financial Statements"), (ii) the Company's unaudited consolidated balance sheet
as of February 28, 1994 (the "Latest Balance Sheet"), statements of income,
stockholders' equity and cash flows for the two-month period then ended
(together with the unaudited financial statements referred to in clause (iii)
below, the "Unaudited Financial Statements"), certified by the Company's
controller, and (iii) the unaudited balance sheets as of February 28, 1994,
together with statements of income, stockholders' equity and cash flows for the
two-month period then ended, of the Company's unconsolidated Subsidiaries,
certified by the Company's controller (collectively, the "Financial
Statements"). The Financial Statements (x) represent actual bona fide
transactions, (y) have been prepared from the respective books and records of
the Company and its consolidated and unconsolidated Subsidiaries, as the case
may be, in conformity with generally accepted accounting principles applied on
a basis consistent with preceding years throughout the periods involved, except
that the Unaudited Financial Statements are not accompanied by notes or other
textual disclosure required by generally accepted accounting principles, and
except that the Financial Statements prepared as at and for the year ended
December 31, 1993 (the "Audited 1993 Financial Statements") shall be presented
in a manner consistent with the current text of all published statements issued
by the Financial Accounting Standards Board, including Numbers 106 and 112
("FASB Standards"), as at December 31, 1993 and (z) accurately, completely and
fairly present in all material respects the Company's consolidated financial
position as of the respective dates thereof and its consolidated results of
operations and cash flows for the periods then ended, except that the Unaudited
Financial Statements are subject to normal year-end adjustments, which will not
be material in the aggregate. With respect to clause (y) immediately
preceding, the FASB Standards whose implementation was not mandatory for
financial years ended prior to January 1, 1994 shall, nevertheless, be effected
on or before March 31, 1994. Implementation of all FASB Standards as of
December 31, 1993, rather than on or before March 31, 1994, would not have
caused a material adverse effect on the financial condition of the Company as
reflected in the Audited 1993 Financial Statements.
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3.14 Absence of Undisclosed Liabilities. Neither the Company nor any
Subsidiary has any liability or obligation (whether accrued, absolute,
contingent, unliquidated or otherwise, whether or not known to the Company or
any Subsidiary, and whether due or to become due), except (i) liabilities
reflected on the Latest Balance Sheet, (ii) liabilities which have arisen since
the date of the Latest Balance Sheet in the ordinary course of business (none
of which is a material liability for breach of contract, breach of warranty,
tort or infringement), (iii) liabilities arising under executory contracts
entered into in the ordinary course of business (none of which is a material
liability for breach of contract), (iv) liabilities specifically set forth on
Schedule 3.14, and (v) other liabilities which, in the aggregate, are not
material to the Company and the Subsidiaries considered as a whole.
3.15 Absence of Certain Changes. Except as disclosed on Schedule
3.15, since December 31, 1993, (i) there has not been any material adverse
change in the business, assets, results of operations or condition (financial
or otherwise) of the Company and the Subsidiaries considered as a whole other
than general economic conditions affecting the oil drilling industry; (ii) the
businesses of the Company and the Subsidiaries have been conducted only in the
ordinary course consistent with past practice; (iii) neither the Company nor
any Subsidiary has incurred any material liability, engaged in any material
transaction or entered into any material agreement outside the ordinary course
of business consistent with past practice; (iv) neither the Company nor any
Subsidiary has suffered any material loss, damage, destruction or other
casualty to any of its assets (whether or not covered by insurance); and (v)
neither the Company nor any Subsidiary has taken any of the actions set forth
in Section 5.2 except as permitted thereunder.
3.16 Tax Matters. Except as disclosed on Schedule 3.16:
(a) The Company and each Subsidiary have (and as of the Closing
Date will have) duly filed all federal, state, local and foreign Tax Returns
due (after taking into account any extensions) on or before the Closing Date
and required to be filed by or with respect to them with the IRS or other
applicable taxing authority, and, except for tax years ending after December
31, 1992, no extensions with respect to such Tax Returns have (or as of the
Closing Date will have) been requested or granted;
(b) the Company and each Subsidiary have (and as of the Closing
Date will have) paid, or adequately reserved against in the Financial
Statements, all Taxes due (and Taxes for 1993 and for the period in 1994
through the Closing Date, whether then due or not), or claimed by any taxing
authority to be due, from or with respect to them, except Taxes that are being
contested in good faith by appropriate legal or administrative proceedings and
for which adequate reserves have been set aside as disclosed on Schedule 3.16;
(c) there has been no adjustment proposed by the IRS or any other
taxing authority in connection with any of the Tax Returns filed by the Company
and each Subsidiary prior to the Closing;
(d) the Company and each Subsidiary have (and as of the Closing
Date will have) made all deposits (including estimated tax payments for taxable
years for which the consolidated federal income tax return of the Company is
not yet due) required with respect to Taxes;
(e) the federal income Tax Return of the Company and the
Subsidiaries (other than 1201 Dairy Ashford Ltd.) has been audited by the IRS
for the taxable year ended December 31, 1990 and such audit proceedings have
been closed (or the applicable statutes of limitations have expired) and all
adjustments settled. The IRS has not audited the federal income tax returns of
the Company and the Subsidiaries for any other taxable year within the last ten
years;
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(f) the United Kingdom income Tax Returns of the Company and the
Subsidiaries have been audited by the applicable taxing authority for the
taxable year ended December 31, 1992 and the audit proceedings have been closed
and all adjustments settled. No other local, state or foreign income Tax
Returns of the Company and the Subsidiaries have been audited;
(g) no waiver or extension of any statute of limitations as to any
federal, state, local or foreign Tax matter has been given by or requested from
the Company or any Subsidiary;
(h) neither the Company nor any Subsidiary has entered into any
closing agreement (within the meaning of Section 7121 of the Code or any
analogous provision of state or local Tax law) which will have any continuing
effect after the Closing Date;
(i) the Company has not filed a consent under Section 341(f) of
the Code;
(j) except for statutory liens for current Taxes not yet due and
liens for ad valorem Taxes due for 1994, no liens for Taxes exist upon the
assets of either the Company or the Subsidiaries;
(k) neither the Company nor any of the Subsidiaries has filed
consolidated income Tax Returns with any corporation, other than consolidated
federal and state income Tax Returns with the Company and the Subsidiaries, for
any taxable period which is not now closed by the applicable statute of
limitations;
(l) neither Seller is a person other than a United States person
within the meaning of the Code; and
(m) neither the Company nor any of the Subsidiaries has any gain
on any deferred intercompany transaction as defined in Treasury Regulation
Section 1.1502-13.
3.17 Compliance With Laws. The Company and the Subsidiaries have
complied in all material respects with all Applicable Laws (including without
limitation Applicable Laws relating to securities, properties, business
products, manufacturing processes, advertising and sales practices, employment
practices, terms and conditions of employment, wages and hours, safety,
occupational safety, health, environmental protection, product safety and civil
rights), except for noncompliance with such Applicable Laws which, individually
or in the aggregate, does not and will not affect materially and adversely the
business, assets, results of operations or condition (financial or otherwise)
of the Company and the Subsidiaries considered as a whole. Neither Sellers,
the Company nor any Subsidiary has received any written notice, which has not
been dismissed or otherwise disposed of, that the Company or any Subsidiary has
not so complied. Neither the Company nor any Subsidiary is charged or, to the
best knowledge of Sellers and the Company, threatened with, or, to the best
knowledge of Sellers and the Company, under investigation with respect to, any
violation of any Applicable Law relating to any aspect of the business of the
Company or any Subsidiary, other than violations which, individually or in the
aggregate, do not and will not have a material adverse effect on the business,
assets, results of operations or condition (financial or otherwise) of the
Company and the Subsidiaries considered as a whole.
3.18 Agreements.
(a) Set forth on Schedule 3.18 is a list of all the following
agreements, arrangements and understandings (written or oral, formal or
informal) (collectively, for purposes of this Section,
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<PAGE> 20
"agreements") to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any of their respective properties is otherwise
bound:
(i) collective bargaining agreements and similar
agreements with employees as a group;
(ii) employee benefit agreements, trusts, plans, funds or
other arrangements of any nature, including those referred to in
Section 5.2(e)(i);
(iii) agreements with any current or former shareholder,
director, officer, employee, consultant or advisor or any affiliate of
any such person;
(iv) agreements between or among the Company and any of
the Subsidiaries;
(v) indentures, mortgages, security agreements, notes,
loan or credit agreements, or other agreements relating to the
borrowing of money by the Company or any Subsidiary or to the direct
or indirect guarantee or assumption by the Company or any Subsidiary
of any obligation of others, including any agreement that has the
economic effect although not the legal form of any of the foregoing;
(vi) agreements relating to the acquisition or disposition
of assets, other than those entered into in the ordinary course of
business consistent with past practice;
(vii) agreements relating to the acquisition or disposition
of any interest in any business enterprise;
(viii) agreements with respect to the lease of real or
personal property;
(ix) agreements concerning the management or operation of
any real property;
(x) broker, distributor, dealer, manufacturer's
representative, sales, agency, sales promotion, advertising, market
research, marketing, consulting, research and development,
maintenance, service and repair agreements;
(xi) license, royalty or other agreements relating to
Intellectual Property;
(xii) partnership, joint venture and profit sharing
agreements;
(xiii) agreements with any Governmental Entity;
(xiv) agreements relating to the Release or Disposal of
Hazardous Substances or Solid Wastes;
(xv) agreements in the nature of a settlement or a
conciliation agreement arising out of any claim asserted by any other
person;
(xvi) agreements containing any covenant limiting the
freedom of the Company or any Subsidiary to engage in any line of
business or compete with any other person in any geographic area or
during any period of time;
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(xvii) agreements with any person who provides services to
the Company or a Subsidiary as an independent contractor;
(xviii) agreements not made in the ordinary course of
business; and
(xix) other agreements, whether or not made in the ordinary
course of business, that are material to the business, assets, results
of operations or condition (financial or otherwise) of the Company and
the Subsidiaries considered as a whole.
(b) The Company has delivered or made available to Buyer accurate
and complete copies of the written agreements listed on Schedule 3.18. Each of
the agreements listed on Schedule 3.18 is a valid and binding agreement of the
Company and the Subsidiaries enforceable against them in accordance with its
terms. Neither the Company nor any Subsidiary is in breach of or in default
under, nor has any event occurred which (with or without the giving of notice
or the passage of time or both) would constitute a default by the Company or
any Subsidiary under, any of such agreements, except for any such default that
would not materially and adversely affect the business, assets, results of
operation or condition (financial or otherwise) of the Company and the
Subsidiaries considered as a whole. Neither Seller, the Company nor any
Subsidiary has received any notice from, or given any notice to, any other
party indicating that the Company or any Subsidiary or such other party is in
breach of or in default under any of such agreements. To the best knowledge of
Sellers and the Company, no other party to any of such agreements is in breach
of or in default under such agreements, nor has any assertion been made by any
Seller or the Company or any Subsidiary of any such breach or default.
3.19 ERISA.
(a) Set forth on Schedule 3.19 is a list identifying each
"employee benefit plan", as defined in Section 3(3) of ERISA, (i) which is
maintained, administered or contributed to by the Company or any affiliate of
the Company, and (ii) which covers any employee or former employee of the
Company or any affiliate of the Company or under which the Company or any
affiliate of the Company has any liability. The Company has delivered to Buyer
accurate and complete copies of such plans (and, if applicable, the related
trust agreements) and all amendments thereto and written interpretations
thereof, together with the three most recent annual reports (Form 5500
including, if applicable, Schedule B thereto) prepared in connection with any
such plan. Such plans are referred to in this Section as the "Employee Plans".
For purposes of this Section only, an "affiliate" of any person means any other
person which, together with such person, would be treated as a single employer
under Section 414 of the Code. The only Employee Plans which individually or
collectively would constitute an "employee pension benefit plan" as defined in
Section 3(2) of ERISA are identified as such on Schedule 3.19.
(b) Except as otherwise identified on Schedule 3.19, (i) no
Employee Plan constitutes a "multiemployer plan", as defined in Section 3(37)
of ERISA (for purposes of this Section, a "Multiemployer Plan"), (ii) no
Employee Plan is maintained in connection with any trust described in Section
501(c)(9) of the Code, (iii) no Employee Plan is a defined benefit plan, and
(iv) during the past five years, neither the Company nor any of its affiliates
have made or been required to make contributions to any Multiemployer Plan.
Neither the Company nor any affiliate of the Company has incurred any material
liability under Title IV of ERISA arising in connection with the termination
of, or complete or partial withdrawal from, any plan covered or previously
covered by Title IV of ERISA. The Company and all of the affiliates of the
Company have paid and substantially discharged promptly when due all
liabilities and obligations arising under ERISA or the Code of a character
which if unpaid or unperformed might result in the imposition of a lien against
any of the assets of the Company or any Subsidiary. Nothing done or omitted to
be done and no transaction or holding of any asset under or
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in connection with any Employee Plan has or will make the Company or any
Subsidiary or any director or officer of the Company or any Subsidiary subject
to any liability under Title I of ERISA or liable for any Tax pursuant to
Section 4975 of the Code that could have a material adverse effect on the
business, assets, results of operations or condition (financial or otherwise)
of the Company and the Subsidiaries considered as a whole. There are no
threatened or pending claims by or on behalf of the Employee Plans, or by any
participant therein, alleging a breach or breaches of fiduciary duties or
violations of Applicable Laws which could result in liability on the part of
the Company, its officers or directors, or such Employee Plans, under ERISA or
any other Applicable Law and, to the knowledge of Sellers, there is no basis
for any such claim.
(c) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified since the
date of its adoption, and each trust forming a part thereof is exempt from Tax
pursuant to Section 501(a) of the Code. Set forth on Schedule 3.19 is a list
of the most recent IRS determination letters with respect to any such Plans,
accurate and complete copies of which letters have been delivered to Buyer.
Each Employee Plan has been maintained in substantial compliance with its terms
and with the requirements prescribed by all Applicable Laws, including but not
limited to ERISA and the Code, which are applicable to such Plans.
(d) To the extent not listed on Schedule 3.18, there is set forth
on Schedule 3.19 a list of each employment, severance or other similar
contract, arrangement or policy and each plan or arrangement (written or oral)
providing for insurance coverage (including any self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, retirement benefits, deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits that (i) is
not an Employee Plan, (ii) is entered into, maintained or contributed to, as
the case may be, by the Company or any affiliate of the Company, and (iii)
covers any employee or former employee of the Company or any affiliate of the
Company or under which the Company or any affiliate of the Company has any
liability. Such contracts, plans and arrangements as are described in the
preceding sentence are referred to for purposes of this Section as the "Benefit
Arrangements". Each Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by Applicable
Laws.
(e) Neither the Company nor any affiliate of the Company has
performed any act or failed to perform any act, and there is no contract,
agreement, plan or arrangement covering any employee or former employee of the
Company or any affiliate of the Company, that, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 162(a)(1) or 280G of the Code, or could give
rise to any penalty or excise Tax pursuant to Section 4980B or 4999 of the
Code.
(f) Except as disclosed on Schedule 3.19, there has been no
amendment, written interpretation or announcement (whether or not written) by
the Company or any affiliate of the Company of or relating to, or change in
employee participation or coverage under, any Employee Plan or Benefit
Arrangement which would increase materially the expense of maintaining such
Employee Plan or Benefit Arrangement above the level of the expense incurred in
respect thereof for the fiscal year ended December 31, 1993.
(g) Neither the Company nor any of its affiliates provide employee
post-retirement medical or health coverage or contribute to or maintain any
employee welfare benefit plan that provides for health benefit coverage
following termination of employment except as is required by Section 4980B(f)
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of the Code, and neither the Company nor any of its affiliates have made any
representations, agreements, covenants or commitments to provide any such
coverage.
3.20 Environmental Matters.
(a) Except as set forth on Schedule 3.20, neither the Company, any
Subsidiary nor any property owned or leased by the Company or any Subsidiary
(for purposes of this Section, the "Property") is in violation of, or subject
to any pending or, to the best knowledge of Sellers and the Company, threatened
Proceeding under, or subject to or could be subject to any remedial obligations
(financial or otherwise) under, any Applicable Laws pertaining to the
environment, Hazardous Substances or Solid Wastes (such Applicable Laws as they
now exist or are hereafter enacted and/or amended are collectively, for
purposes of this Section, called "Applicable Environmental Laws"), including
without limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (as amended, for purposes of this Section, called
"CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by
the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of
1980, and the Hazardous and Solid Waste Amendments of 1984 (as amended, for
purposes of this Section, called "RCRA"), the Texas Water Code and the Texas
Solid Waste Disposal Act. No asbestos, material containing asbestos that is or
may become friable, or material containing asbestos deemed hazardous by
Applicable Laws, has been installed in any Property. The representations and
warranties set forth in the preceding sentences of this Section would continue
to be true and correct following disclosure to the applicable Governmental
Entities of all relevant facts, conditions and circumstances, if any,
pertaining to the Property.
(b) Except as set forth on Schedule 3.20, the Company and the
Subsidiaries have not obtained and are not required to obtain any Permits to
construct, occupy, operate or use any buildings, improvements, fixtures,
equipment or other tangible property forming a part of the Property by reason
of any Applicable Environmental Laws. The Company and the Subsidiaries
undertook, at the time of acquisition of the Property, all appropriate inquiry
into the previous ownership and uses of the Property consistent with good
commercial or customary practice at the time of such acquisition. The Company
and the Subsidiaries have obtained a Phase I environmental study of the
corporate and manufacturing facilities in Houston. To the knowledge of
Sellers, no Hazardous Substances or Solid Wastes have been Disposed of or
otherwise Released on or to the Property.
(c) The terms "Hazardous Substance" and "Release" shall have the
meanings specified in CERCLA, and the terms "Solid Waste" and "Disposal" (or
"Disposed") shall have the meanings specified in RCRA; provided that in the
event either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment; and provided further, that to the extent the laws of
the jurisdiction in which the Property is located establish a meaning for
"Hazardous Substance", "Release", "Solid Waste" or "Disposal" (or "Disposed")
which is broader than that specified in either CERCLA or RCRA, such broader
meaning shall apply.
3.21 Labor Relations.
(a) Except as disclosed on Schedule 3.21, (i) there are no
collective bargaining agreements or other similar agreements, arrangements or
understandings, written or oral, with employees as a group to or by which the
Company or any Subsidiary is a party or is bound; (ii) no employees of the
Company or any Subsidiary are represented by any labor organization, collective
bargaining representative or group of employees; (iii) no labor organization,
collective bargaining representative
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or group of employees claims to represent a majority of the employees of the
Company or any Subsidiary in an appropriate unit of the Company or any
Subsidiary; (iv) neither the Company nor any Subsidiary has been involved with
any representational campaign by any union or other organization or group
seeking to become the collective bargaining representative of any of its
employees or been subject to or, to the best knowledge of Sellers and the
Company, threatened with any strike or other concerted labor activity or
dispute; and (v) neither the Company nor any Subsidiary is obligated to bargain
collectively with respect to wages, hours and other terms and conditions of
employment with any recognized or certified labor organization, collective
bargaining representative or group of employees.
(b) Except as disclosed on Schedule 3.21, the Company and the
Subsidiaries are in compliance in all material respects with all Applicable
Laws pertaining to employment and employment practices and wages, hours and
other terms and conditions of employment in respect of their respective
employees and independent contractors and are not engaged in any unfair labor
practices or unlawful employment practices. There is no pending or, to the
best knowledge of Sellers and the Company, threatened Proceeding by or before,
and neither the Company nor any Subsidiary is subject to any judgment, order,
writ, injunction or decree of or inquiry from, the National Labor Relations
Board, the Equal Employment Opportunity Commission, the Department of Labor or
any other Governmental Entity in connection with any current, former or
prospective employee or independent contractor of the Company or any
Subsidiary.
3.22 Employees.
(a) Set forth on Schedule 3.22 is a list of all directors and
officers of the Company and the Subsidiaries.
(b) The Company has delivered to Buyer a schedule setting forth
the name, social security number and dates of employment by the Company or a
Subsidiary of each employee, agent or consultant of the Company or any
Subsidiary as of February 28, 1994, together with the total amounts of salary,
bonuses and other compensation paid or payable by the Company or any Subsidiary
to each such person for the current fiscal year and the immediately preceding
fiscal year.
(c) The consummation of the transactions contemplated by this
Agreement will not result in the incurring of any severance pay obligations to
any person employed by the Company or any Subsidiary. Except as set forth on
Schedule 3.22, no Seller and no affiliate of any Seller has entered into any
type of employment or consulting agreement, written or oral, with any employee
of the Company or any Subsidiary, nor has any Seller or any affiliate of any
Seller engaged in discussions with any such employee relating thereto.
3.23 Employee Confidentiality Agreements. All current employees of
the Company and the Subsidiaries who have or who have had reasonable access to
any secret, confidential or proprietary information relating to the Company or
any Subsidiary or its business have executed written confidentiality agreements
with the Company or a Subsidiary pursuant to which such employees have agreed
to maintain in confidence secret, confidential or proprietary information
learned or acquired in the scope of their employment.
3.24 Insider Interests. Except as disclosed on Schedule 3.24, no
shareholder, director or officer of the Company or any Subsidiary or any
associate of any such shareholder, director or officer is currently, directly
or indirectly, a party to any transaction with the Company or any Subsidiary,
including, without limitation, any agreement, arrangement or understanding,
written or oral, providing
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for the employment of, furnishing of services by, rental of real or personal
property from, or otherwise requiring payments to any such shareholder,
director, officer or associate. To the best knowledge of Sellers and the
Company (without inquiry), no shareholder, director or officer of the Company
or any Subsidiary or any associate of any such shareholder, director or officer
owns, directly or indirectly, any interest in, or serves as a director,
officer, or employee of, any customer, supplier or competitor of the Company or
any Subsidiary. For purposes of this Section only, an "associate" of any
shareholder, director or officer means any member of the immediate family of
such shareholder, director or officer or any corporation, partnership, trust or
other entity in which such shareholder, director, officer or employee has a
substantial ownership or beneficial interest (other than an interest in a
public corporation which does not exceed three percent of its outstanding
securities) or is a director, officer, partner, or trustee or person holding a
similar position.
3.25 Financial Requirements. Set forth on Schedule 3.25 is a list and
brief description of all bonds, deposits, financial assurance requirements and
insurance coverage required to be submitted to Governmental Entities for the
continued ownership and operation of the business and assets of the Company and
the Subsidiaries.
3.26 Bank Accounts and Powers of Attorney. Set forth on Schedule 3.26
are (i) the name and address of each bank or other financial institution in
which the Company or any Subsidiary has an account or a safe deposit box, the
account and safe deposit box numbers thereof, and the names of all persons
authorized to draw thereon or to have access thereto, (ii) the names of all
persons authorized to borrow funds on behalf of the Company or any Subsidiary
and the names of all entities from which they are authorized to borrow funds,
and (iii) the names of all persons, if any, holding powers of attorney from the
Company or any Subsidiary.
3.27 Books and Records. All the books and records of the Company and
the Subsidiaries, including all personnel files, employee data and other
materials relating to employees, are substantially complete and correct in all
material respects, have been in all material respects maintained in accordance
with good business practice and all Applicable Laws, and, in the case of the
books of account, have been in all material respects prepared and maintained in
accordance with generally accepted accounting principles consistently applied.
Such books and records accurately and fairly reflect, in reasonable detail, all
material transactions, assets and liabilities of the Company and the
Subsidiaries.
3.28 Illegal Payments. To the best knowledge of Sellers and the
Company, none of the Company or any Subsidiary or any director, officer,
employee or agent of the Company or any Subsidiary has, directly or indirectly,
paid or delivered any fee, commission or other sum of money or item of property
however characterized to any broker, finder, agent, government official or
other person, in the United States or any other country, in any manner related
to the business or operations of the Company or any Subsidiary, which the
Company or any Subsidiary or any such director, officer, employee or agent
knows to have been, or has reason to believe was, illegal under any Applicable
Law.
3.29 Offerings of Securities. All securities that have been offered
or sold by the Company were offered and sold pursuant to valid exemptions from
registration. No prospectus, private offering memorandum or other information
furnished (whether in writing or orally) to any offeree or purchaser of such
securities, at the time of delivery of such prospectus, private offering
memorandum or other information, contained any untrue statement of a material
fact or omitted to state any material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
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3.30 Brokerage Fees. Neither Sellers nor any of their affiliates has
retained any financial advisor, broker, agent or finder or paid or agreed to
pay any financial advisor, broker, agent or finder on account of this Agreement
or any transaction contemplated hereby except that Simmons & Company
International ("Simmons") has been retained as the financial advisor of the
Company in connection with the transactions contemplated hereby pursuant to the
letter agreement between the Company and Simmons dated September 23, 1991, an
accurate and complete copy of which has been delivered to Buyer. Beall shall
indemnify and hold harmless the Company and Buyer from and against any and all
losses, claims, damages and liabilities (including legal and other expenses
reasonably incurred in connection with investigating or defending any claims or
actions) with respect to any finder's fee, brokerage commission or similar
payment in connection with any transaction contemplated hereby asserted by any
person on the basis of any act or statement made or alleged to have been made
by any Seller or any of such Seller's affiliates.
3.31 Disclosure. No representation or warranty made by Sellers or the
Company in this Agreement, and no statement of any Seller, the Company or their
representatives contained in any document, certificate or other writing
furnished or to be furnished by Sellers or the Company pursuant hereto or in
connection herewith, contains or will contain, at the time of delivery, any
untrue statement of a material fact or omits or will omit, at the time of
delivery, to state any material fact (other than those facts generally
recognized to be industry risks normally associated with the contract drilling
and consulting engineering services businesses) necessary in order to make the
statements contained therein, in light of the circumstances under which they
are made, not misleading.
3.32 Representations and Warranties on Closing Date. The
representations and warranties made in this Article III will be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as if such representations and warranties had been made on and
as of the Closing Date, except that any such representations and warranties
that expressly relate only to an earlier date shall be true and correct on the
Closing Date as of such earlier date.
3.33 No Other Representations. Except as and to the extent set forth
in this Article III, Sellers and the Company make no representations or
warranties whatsoever to Buyer and hereby disclaim all liability and
responsibility for any representation, warranty, statement or information made,
communicated or furnished (orally or in writing) to Buyer or its
representatives (including without limitation any opinion, information,
projection or advice that may have been or may be provided to Buyer by any
director, officer, employee, agent, consultant or representative of Sellers or
the Company or any affiliate thereof).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers that:
4.1 Corporate Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and corporate authority to
own, lease and operate its properties and to carry on its business as now being
conducted.
4.2 Qualification. Buyer is duly qualified or licensed to do
business and is in good standing in each of the jurisdictions set forth on
Schedule 4.2, which are all the jurisdictions in which the
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<PAGE> 27
property owned, leased or operated by it or the conduct of its business
requires such qualification or licensing, except jurisdictions in which the
failure to be so qualified or licensed would not, individually or in the
aggregate, have a material adverse effect on the business, assets, results of
operations or condition (financial or otherwise) of Buyer.
4.3 Charter and Bylaws. Buyer has made available to Sellers or their
representatives accurate and complete copies of the Certificate of
Incorporation and Bylaws of Buyer as currently in effect.
4.4 Capitalization. The authorized capital stock of Buyer consists
of 75,000,000 shares of Buyer Common Stock, of which, as of December 31, 1993,
47,548,339 shares were outstanding, and 15,000,000 shares of preferred stock,
par value $1.00 per share, of which, as of December 31, 1993, 2,990,000 shares
designated as $2.25 Convertible Exchangeable Preferred Stock (the "Convertible
Preferred Stock") were outstanding. As of December 31, 1993, Buyer had an
additional 250,000 issued shares of Buyer Common Stock held as treasury shares.
All outstanding shares of capital stock of Buyer have been validly issued and
are fully paid and nonassessable, and no shares of capital stock of Buyer are
subject to, nor have any been issued in violation of, preemptive or similar
rights. As of December 31, 1993, an aggregate of 18,466,488 shares of Buyer
Common Stock were reserved for issuance and issuable pursuant to Buyer's Thrift
Plan or upon the exercise of outstanding employee or non-employee director
stock options granted under Buyer's stock option plans and agreements or the
conversion of the Convertible Preferred Stock. Except as set forth above in
this Section, as of December 31, 1993, there were outstanding (i) no shares of
capital stock or other voting securities of Buyer, (ii) no securities of Buyer
convertible into or exchangeable for shares of capital stock or other voting
securities of Buyer, (iii) except for the obligations of Buyer pursuant to this
Agreement, no options or other rights to acquire from Buyer, and no obligation
of Buyer to issue or sell, any shares of capital stock or other voting
securities of Buyer or any securities of Buyer convertible into or exchangeable
for such capital stock or voting securities, and (iv) no equity equivalents,
interests in the ownership or earnings, or other similar rights of or with
respect to Buyer. There are no outstanding obligations of Buyer to repurchase,
redeem or otherwise acquire any shares of its capital stock.
4.5 Authority Relative to This Agreement. Buyer has full corporate
power and corporate authority to execute, deliver and perform this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery and performance by Buyer of this Agreement, and the consummation by it
of the transactions contemplated hereby, have been duly authorized by all
necessary corporate action of Buyer. This Agreement has been duly executed and
delivered by Buyer and constitutes, and each other agreement, instrument or
document executed or to be executed by Buyer in connection with the
transactions contemplated hereby has been, or when executed will be, duly
executed and delivered by Buyer and constitutes, or when executed and delivered
will constitute, a valid and legally binding obligation of Buyer, enforceable
against Buyer in accordance with their respective terms, except that such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally, (ii) equitable principles which may limit the availability of
certain equitable remedies (such as specific performance) in certain instances
and (iii) public policy considerations with respect to the enforceability of
rights of indemnification.
4.6 Noncontravention. Except as disclosed on Schedule 4.6(a), the
execution, delivery and performance by Buyer of this Agreement and the
consummation by it of the transactions contemplated hereby do not and will not
(i) conflict with or result in a violation of any provision of the charter or
bylaws of Buyer, (ii) conflict with or result in a violation of any provision
of, or constitute (with or without the giving of notice or the passage of time
or both) a default under, or give rise (with or without the giving of notice or
the passage of time or both) to any right of termination, cancellation or
acceleration under, any bond, debenture, note, mortgage, indenture, lease,
contract, agreement, or other
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instrument or obligation to which Buyer is a party or by which Buyer or any of
its properties may be bound, other than conflicts, violations or defaults
which, individually or in the aggregate, do not and will not have a material
adverse effect on the business, assets, results of operation or condition
(financial or otherwise) of Buyer and its subsidiaries considered as a whole,
(iii) result in the creation or imposition of any Encumbrance upon the
properties of Buyer, or (iv) assuming compliance with the matters referred to
in Section 4.7, violate any Applicable Law binding upon Buyer, except, in the
case of clauses (ii), (iii) and (iv) above, for any such conflicts, violations,
defaults, terminations, cancellations, accelerations or Encumbrances which
would not, individually or in the aggregate, have a material adverse effect on
the business, assets, results of operations or condition (financial or
otherwise) of Buyer and its subsidiaries considered as a whole or on the
ability of Buyer to consummate the transactions contemplated hereby.
4.7 Governmental Approvals. No consent, approval, order or
authorization of, or declaration, filing or registration with, any Governmental
Entity is required to be obtained or made by Buyer in connection with the
execution, delivery or performance by Buyer of this Agreement or the
consummation by it of the transactions contemplated hereby, other than (i)
compliance with any applicable requirements of the HSR Act; (ii) compliance
with any applicable requirements of the Securities Act; (iii) compliance with
any applicable requirements of the Exchange Act; (iv) compliance with any
applicable state securities laws; (v) as set forth on Schedule 4.7; (vi)
filings with Governmental Entities to occur in the ordinary course following
the consummation of the transactions contemplated hereby; and (vii) such
consents, approvals, orders or authorizations which, if not obtained, and such
declarations, filings or registrations which, if not made, would not,
individually or in the aggregate, have a material adverse effect on the
business, assets, results of operations or condition (financial or otherwise)
of Buyer and its subsidiaries considered as a whole or on the ability of Buyer
to consummate the transactions contemplated hereby.
4.8 Legal Proceedings. There are no Proceedings pending or, to the
best knowledge of Buyer, threatened against or involving Buyer seeking to
restrain, prohibit or obtain damages or other relief in connection with this
Agreement or the transactions contemplated hereby.
4.9 Notes. The Notes to be issued by Buyer at the Closing have been
duly authorized for such issuance and, when issued and delivered by Buyer in
accordance with the provisions of this Agreement, will be validly issued and
will constitute valid and legally binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms, except that such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other laws relating to or affecting creditors' rights
generally or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.10 Transaction Securities. The Transaction Securities have been
duly authorized for issuance and, if and when issued and delivered by Buyer in
accordance with the provisions of this Agreement, will be validly issued, fully
paid and nonassessable. The issuance of the Transaction Securities under this
Agreement is not subject to any preemptive or similar rights.
4.11 Investment Intent. Buyer is acquiring the Shares for its own
account for investment and not with a view to, or for sale or other disposition
in connection with, any distribution of all or any part thereof, except in
compliance with applicable federal and state securities laws.
4.12 SEC Filings. Buyer has heretofore delivered to Sellers accurate
and complete copies of all reports, registration statements and other filings
filed by Buyer with the Securities and Exchange Commission since January 1,
1993 (the "Buyer Commission Filings"). As of their respective dates, the
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<PAGE> 29
Buyer Commission Filings did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements of Buyer included in the Buyer Commission Filings present fairly, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of Buyer as of the dates thereof and its
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end audit adjustments in the case of any unaudited
interim financial statements).
4.13 Absence of Certain Changes. Except as disclosed on Schedule
4.13, since December 31, 1993, there has not been any material adverse change
in the business, assets, results of operations or condition (financial or
otherwise) of Buyer and its subsidiaries considered as a whole other than
general economic conditions affecting the oil and gas drilling industry.
4.14 Brokerage Fees. Neither Buyer nor any of its affiliates has
retained any financial advisor, broker, agent or finder or paid or agreed to
pay any financial advisor, broker, agent or finder on account of this Agreement
or any transaction contemplated hereby. Buyer shall indemnify and hold
harmless Sellers from and against any and all losses, claims, damages and
liabilities (including legal and other expenses reasonably incurred in
connection with investigating or defending any claims or actions) with respect
to any finder's fee, brokerage commission or similar payment in connection with
any transaction contemplated hereby asserted by any person on the basis of any
act or statement made or alleged to have been made by Buyer or any of its
affiliates.
4.15 Disclosure. No representation or warranty made by Buyer in this
Agreement, and no statement of Buyer contained in any document, certificate or
other writing furnished or to be furnished by Buyer pursuant hereto or in
connection herewith, contains or will contain, at the time of delivery, any
untrue statement of a material fact or omits, or will omit, at the time of
delivery, to state any material fact (other than those facts generally
recognized to be industry risks normally associated with the contract drilling
and production services businesses) necessary in order to make the statements
contained therein, in the light of the circumstances under which they are made,
not misleading.
4.16 Representations and Warranties on Closing Date. The
representations and warranties made in this Article IV will be true and correct
in all material respects on and as of the Closing Date with the same force and
effect as if such representations and warranties had been made on and as of the
Closing Date, except that any such representations and warranties that
expressly relate only to an earlier date shall be true and correct on the
Closing Date as of such earlier date.
4.17 No Other Representations. Except as and to the extent set forth
in this Article IV, Buyer makes no representations or warranties whatsoever to
Sellers and hereby disclaims all liability and responsibility for any
representation, warranty, statement or information made, communicated or
furnished (orally or in writing) to Sellers or their representatives (including
without limitation any opinion, information, projection or advice that may have
been or may be provided to Sellers by any director, officer, employee, agent,
consultant or representative of Buyer or any affiliate thereof).
ARTICLE V
CONDUCT OF COMPANY PENDING CLOSING
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Beall and the Company hereby covenant and agree with Buyer as follows:
5.1 Conduct and Preservation of Business. Except as contemplated by
this Agreement, during the period from the date hereof to the Closing, the
Company and the Subsidiaries (i) shall each conduct its operations according to
its ordinary course of business consistent with past practice and in compliance
with all Applicable Laws; (ii) shall each use its reasonable best efforts to
preserve, maintain and protect its properties; and (iii) shall each use its
reasonable best efforts to preserve intact its business organization, to keep
available the services of its officers and employees, and to maintain existing
relationships with licensors, licensees, suppliers, contractors, distributors,
customers and others having business relationships with it.
5.2 Restrictions on Certain Actions. Without limiting the generality
of the foregoing, and except as otherwise expressly provided in this Agreement,
prior to the Closing, neither the Company nor any Subsidiary shall, without the
prior written consent of Buyer:
(a) amend its charter or bylaws;
(b) (i) issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase
or otherwise) any shares of its capital stock of any class or any other
securities or equity equivalents; or (ii) amend in any material respect any of
the terms of any such securities outstanding as of the date hereof;
(c) (i) split, combine or reclassify any shares of its capital
stock; (ii) declare, set aside or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in respect of
its capital stock; (iii) repurchase, redeem or otherwise acquire any of its
securities or any securities of any Subsidiary (except as contemplated in this
Agreement); or (iv) adopt a plan of complete or partial liquidation or
resolutions providing for or authorizing a liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any Subsidiary;
(d) (i) except in the ordinary course of business consistent with
past practice, create, incur, guarantee or assume any indebtedness for borrowed
money or otherwise become liable or responsible for the obligations of any
other person; (ii) make any loans, advances or capital contributions to, or
investments in, any other person (other than to wholly owned Subsidiaries and
customary loans or advances to employees in amounts not material to the maker
of such loan or advance); (iii) pledge or otherwise encumber shares of capital
stock of the Company or any Subsidiary; or (iv) except in the ordinary course
of business consistent with past practice, mortgage or pledge any of its
assets, tangible or intangible, or create or suffer to exist any lien
thereupon; provided, however, that in no event shall the Company and the
Subsidiaries (A) incur incremental indebtedness in excess of $10,000 in the
aggregate or (B) incur incremental indebtedness which is not prepayable at any
time without penalty or premium;
(e) (i) enter into, adopt or (except as may be required by law)
amend or terminate (except as contemplated in this Agreement) any bonus, profit
sharing, compensation, severance, termination, stock option, stock appreciation
right, restricted stock, performance unit, stock equivalent, stock purchase,
pension, retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan, fund or other arrangement for the
benefit or welfare of any director, officer or employee; (ii) except for normal
increases in the ordinary course of business consistent with past practice
that, in the aggregate, do not result in a material increase in benefits or
compensation expense to the Company, increase in any manner the compensation or
fringe benefits of any director, officer or
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employee; or (iii) pay to any director, officer or employee any benefit not
required by any employee benefit agreement, trust, plan, fund or other
arrangement as in effect on the date hereof;
(f) acquire, sell, lease, transfer or otherwise dispose of,
directly or indirectly, any assets outside the ordinary course of business
consistent with past practice or any assets that in the aggregate are material
to the Company;
(g) acquire (by merger, consolidation, or acquisition of stock or
assets or otherwise) any corporation, partnership or other business
organization or division thereof;
(h) make any capital expenditure or expenditures which,
individually, is in excess of $10,000 or, in the aggregate, are in excess of
$30,000;
(i) make any Tax election or settle or compromise any federal,
state, local or foreign Tax liability material to the Company;
(j) pay, discharge or satisfy any claims, liabilities or
obligations (whether accrued, absolute, contingent, unliquidated or otherwise,
and whether asserted or unasserted), other than the payment, discharge or
satisfaction in the ordinary course of business consistent with past practice,
or in accordance with their terms, of liabilities reflected or reserved against
in the Audited 1993 Financial Statements or incurred since December 31, 1993 in
the ordinary course of business consistent with past practice; provided,
however, that in no event shall the Company or any Subsidiary repay any
long-term indebtedness except to the extent required by the terms thereof;
(k) enter into any lease, contract, agreement, commitment,
arrangement or transaction outside the ordinary course of business consistent
with past practice;
(l) amend, modify or change any existing lease, contract or
agreement, other than in the ordinary course of business consistent with past
practice;
(m) waive, release, grant or transfer any rights of value, other
than in the ordinary course of business consistent with past practice;
(n) lay off any of its employees;
(o) change any of its banking or safe deposit arrangements;
(p) change any of the accounting principles or practices used by
it, except for any change required by reason of a concurrent change in
generally accepted accounting principles and notice of which is given in
writing by the Company to Buyer, and except as otherwise contemplated by this
Agreement;
(q) take any action which would or might make any of the
representations or warranties of Sellers or the Company contained in this
Agreement untrue or inaccurate as of any time from the date of this Agreement
to the Closing or would or might result in any of the conditions set forth in
this Agreement not being satisfied; or
(r) authorize or propose, or agree in writing or otherwise to
take, any of the actions described in this Section.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access to Information; Confidentiality.
(a) Between the date hereof and the Closing, Sellers and the
Company (i) shall give Buyer and its authorized representatives reasonable
access to all employees, all plants, offices, warehouses, and other facilities,
and all books and records, including work papers and other materials prepared
by the Company's independent public accountants, of the Company and the
Subsidiaries, (ii) shall permit Buyer and its authorized representatives to
make such inspections as they may reasonably require to verify the accuracy of
any representation or warranty contained in Article III, and (iii) shall cause
the Company's officers and those of the Subsidiaries to furnish Buyer and its
authorized representatives with such financial and operating data and other
information with respect to the Company and the Subsidiaries as Buyer may from
time to time reasonably request; provided, however, that no investigation
pursuant to this Section shall affect any representation or warranty of Sellers
or the Company contained in this Agreement or in any agreement, instrument or
document delivered pursuant hereto or in connection herewith; and provided
further that Sellers and the Company shall have the right to have a
representative present at all times. Buyer shall hold in confidence all such
information on the terms and subject to the conditions contained in the letter
agreement dated December 6, 1993 between the Company and Buyer.
(b) Each Seller acknowledges and agrees that irreparable damage
would occur in the event any confidential information regarding the business,
assets, results of operation or financial condition of the Company or any
Subsidiary were disclosed to or utilized on behalf of any person which is in
competition in any material respect with any line or lines of business of the
Company or any Subsidiary. Accordingly, each Seller covenants and agrees that
it will not, directly or indirectly, without the prior written consent of
Buyer, use or disclose any of such confidential information (other than
confidential information directly pertaining to 1201 Dairy Ashford Ltd. or 1201
Dairy Ashford, Inc.), except to authorized representatives of Buyer; provided,
however, that confidential information shall not be deemed to include
information which (i) was or becomes generally available to the public other
than as a result of disclosure by any Seller or its affiliates or (ii) was or
becomes available to such Seller on a nonconfidential basis from a source other
than Buyer or the Company or any Subsidiary, provided that such source is not
known by such Seller to be bound by a confidentiality agreement with respect to
such confidential information. Notwithstanding the foregoing provisions of
this paragraph, each Seller and its affiliates may disclose any confidential
information to the extent that, in the opinion of counsel for such Seller, such
person is legally compelled to do so, provided that, prior to making such
disclosure, such person advises and consults with Buyer regarding such
disclosure and provided further that such person discloses only that portion of
such confidential information as is legally required.
6.2 Acquisition Proposals. None of Sellers, the Company, any
Subsidiary, or any affiliate, director, officer, employee or representative of
any of them shall, directly or indirectly, (i) solicit, initiate or knowingly
encourage any Acquisition Proposal or (ii) engage in discussions or
negotiations with any person that is considering making or has made an
Acquisition Proposal. Sellers and the Company shall immediately cease and
cause to be terminated any existing activities, discussions or negotiations
with any persons conducted heretofore with respect to any Acquisition Proposal
and shall promptly request each such person who has heretofore entered into a
confidentiality agreement in connection with an Acquisition Proposal to return
to Sellers and the Company all confidential information heretofore furnished to
such person by or on behalf of any Seller or the Company. The term
"Acquisition Proposal", as used herein, means any offer or proposal for, or any
indication of
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interest in, a merger or other business combination involving the Company or
any Subsidiary or the acquisition of any equity interest in, or a substantial
portion of the assets of, the Company or any Subsidiary, other than the
transactions contemplated by this Agreement.
6.3 Third Party Consents. Sellers and the Company shall use their
respective reasonable best efforts to obtain all consents, approvals, orders,
authorizations and waivers of, and to effect all declarations, filings and
registrations with, all third parties (including Governmental Entities) that
are required to enable Sellers to transfer the Shares to Buyer as contemplated
by this Agreement and to otherwise consummate the transactions contemplated
hereby. Buyer shall use its reasonable best efforts to obtain all consents,
approvals, orders, authorizations and waivers of, and to effect all
declarations, filings and registrations with, all third parties (including
Governmental Entities) that are required to enable Buyer to consummate the
transactions contemplated hereby.
6.4 Reasonable Best Efforts. Each party hereto agrees that it will
not voluntarily undertake any course of action inconsistent with the provisions
or intent of this Agreement and will use its reasonable best efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
reasonably necessary, proper or advisable under Applicable Laws to consummate
the transactions contemplated by this Agreement. Each Seller shall cooperate
with and assist Buyer and its authorized representatives in order to provide an
efficient and orderly transfer of the control and management of the business of
the Company and the Subsidiaries to Buyer and to avoid any undue interruption
in the activities and operations of such business following the Closing.
6.5 HSR Act Notification. To the extent required by the HSR Act and
not already performed, each of the parties hereto shall (i) file or cause to be
filed, as promptly as practicable, with the Federal Trade Commission and the
United States Department of Justice, all reports and other documents required
to be filed by such party under the HSR Act concerning the transactions
contemplated hereby and (ii) promptly comply with or cause to be complied with
any requests by the Federal Trade Commission or the United States Department of
Justice for additional information concerning such transactions, in each case
so that the waiting period applicable to this Agreement and the transactions
contemplated hereby under the HSR Act shall expire as soon as practicable after
the execution and delivery of this Agreement. Each party hereto agrees to
request, and to cooperate with the other party or parties in requesting, early
termination of any applicable waiting period under the HSR Act.
6.6 Agreement Regarding Registration. Buyer and Sellers shall enter
into a Registration Agreement (the "Registration Agreement") at (and subject to
the occurrence of) the Closing in substantially the form set forth as Exhibit
6.6.
6.7 Employment Agreement. Beall and the Company shall enter into an
employment agreement (the "Employment Agreement") at (and subject to the
occurrence of) the Closing pursuant to which the Company shall agree to employ
Beall as President of the Company for the period and on the terms set forth
therein. The Employment Agreement shall be in substantially the form set forth
as Exhibit 6.7.
6.8 Public Announcements. Except as may be required by Applicable
Law or the National Association of Securities Dealers, Inc., neither Buyer, on
the one hand, nor Sellers and the Company, on the other, shall issue any press
release or otherwise make any public statement with respect to this Agreement
or the transactions contemplated hereby without the prior written consent of
the other party.
6.9 Company Employee Bonus Pool. Buyer agrees that it will consider,
subject to the occurrence of the Closing, the authorization and approval of the
payment by the Company of bonuses
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to employees of the Company and the Subsidiaries based on their performance
during the year ending December 31, 1994.
6.10 Notification of Certain Matters. Sellers and the Company shall
give prompt notice to Buyer of (i) the occurrence or nonoccurrence of any event
the occurrence or nonoccurrence of which would be likely to cause any
representation or warranty contained in Article III to be untrue or inaccurate
in any material respect at or prior to the Closing and (ii) any material
failure of any Seller or the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder. Buyer shall give prompt notice to Sellers of (i) the occurrence or
nonoccurrence of any event the occurrence or nonoccurrence of which would be
likely to cause any representation or warranty contained in Article IV to be
untrue or inaccurate in any material respect at or prior to the Closing and
(ii) any material failure of Buyer to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by such person
hereunder. The delivery of any notice pursuant to this Section shall not be
deemed to (i) modify the representations or warranties hereunder of the party
delivering such notice, (ii) modify the conditions set forth in Articles VII
and VIII, or (iii) limit or otherwise affect the remedies available hereunder
to the party receiving such notice; provided, however, that if the Closing
shall occur, then all matters disclosed pursuant to this Section at or prior to
the Closing shall be waived and no party shall be entitled to make a claim
thereon pursuant to the terms of this Agreement.
6.11 Amendment of Schedules. Each party hereto agrees that, with
respect to the representations and warranties of such party contained in this
Agreement, such party shall have the continuing obligation until the Closing to
supplement or amend promptly the Schedules hereto with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in the
Schedules. For all purposes of this Agreement, including without limitation
for purposes of determining whether the conditions set forth in Sections 7.1
and 8.1 have been fulfilled, the Schedules hereto shall be deemed to include
only that information contained therein on the date of this Agreement and shall
be deemed to exclude all information contained in any supplement or amendment
thereto; provided, however, that if the Closing shall occur, then all matters
disclosed pursuant to any such supplement or amendment at or prior to the
Closing shall be waived and no party shall be entitled to make a claim thereon
pursuant to the terms of this Agreement.
6.12 Fees and Expenses. Buyer shall pay all fees and expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby. Sellers shall pay all fees and expenses incurred by them
and the Company in connection with this Agreement and the transactions
contemplated hereby, including without limitation the fees and expenses of one
outside counsel to Sellers and the Company; provided that the Company shall
bear the first $100,000 of such fees and expenses incurred by the Company and
Sellers. Buyer acknowledges that the fees and expenses of the independent
accountants that prepare the Audited 1993 Financial Statements shall be paid by
the Company. In the event the transaction contemplated hereby is not closed
for any reason, Buyer shall pay the additional fees and expenses incurred in
connection with the acceleration of such audit so that it can be completed
prior to the scheduled Closing.
6.13 Transfer Taxes. All sales and transfer Taxes and fees incurred
in connection with this Agreement and the transactions contemplated hereby
shall be borne by Sellers, and Sellers shall file all necessary documentation
with respect to, and make all payments of, such Taxes and fees on a timely
basis.
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6.14 Survival of Covenants. Except for any covenant or agreement
which by its terms expressly terminates as of a specific date, the covenants
and agreements of the parties hereto contained in this Agreement shall survive
the Closing without contractual limitation.
6.15 Negotiation Regarding Outstanding Options. Beall agrees to use
his reasonable best efforts to have negotiated, on or before five business days
prior to the Closing Date, with the holders of the Outstanding Options the
cancellation thereof (effective at and subject to the occurrence of the
Closing).
6.16 Director and Officer Insurance and Indemnification. After the
Closing Date, Buyer agrees to provide or cause the Company to provide, from
time to time and for so long as the Company is a majority owned subsidiary of
Buyer, for the directors, officers, employees and agents of the Company and the
Subsidiaries, (i) corporate indemnification on terms and conditions at least as
favorable as such indemnification is then being provided to the directors,
officers, employees and agents of Buyer or any of its subsidiaries and (ii)
director and officer liability insurance on terms and conditions at least as
favorable as such insurance is then being provided to the directors, officers,
employees and agents of any of the subsidiaries of Buyer.
6.17 Agreement Regarding Indemnification for Certain Rental
Obligations. Beall, the Company, 1201 Dairy Ashford Ltd. and Buyer shall enter
into a lease indemnity agreement (the "Lease Indemnity Agreement") at (and
subject to the occurrence of) the Closing pursuant to which Beall shall agree
to indemnify Buyer for certain amounts relating to the Company's obligations
under the Office Building Lease Agreement (the "Office Lease") dated January
29, 1991 between the Company and 1201 Dairy Ashford Ltd. The Lease Indemnity
Agreement shall be in substantially the form set forth as Exhibit 6.17.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligation of Sellers to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment on or prior to the
Closing Date of each of the following conditions:
7.1 Representations and Warranties True. All the representations and
warranties of Buyer contained in this Agreement, and in any agreement,
instrument or document delivered pursuant hereto or in connection herewith on
or prior to the Closing Date, shall be true and correct in all material
respects on and as of the Closing Date as if made on and as of such date,
except as affected by transactions contemplated or permitted by this Agreement
and except to the extent that any such representation or warranty is made as of
a specified date, in which case such representation or warranty shall have been
true and correct in all material respects as of such specified date.
7.2 Covenants and Agreements Performed. Buyer shall have performed
and complied with in all material respects all covenants and agreements
required by this Agreement to be performed or complied with by it on or prior
to the Closing Date.
7.3 Certificate. Sellers shall have received a certificate executed
on behalf of Buyer by the president or the vice president-finance of Buyer,
dated the Closing Date, representing and certifying, in such detail as Sellers
may reasonably request, that the conditions set forth in Sections 7.1 and 7.2
have been fulfilled and that Buyer is not in breach of any provision of this
Agreement.
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7.4 Opinion of Counsel. Sellers shall have received an opinion of
Thompson & Knight, P.C., legal counsel to Buyer, dated the Closing Date, with
respect to the matters set forth in Exhibit 7.4. In rendering such opinion,
such counsel may rely as to factual matters upon certificates or other
documents furnished by directors and officers of Buyer and by government
officials and upon such other documents and data as such counsel deems
appropriate as a basis for such opinion. To the extent the foregoing opinion
concerns the laws of any jurisdiction other than Texas such counsel may rely
upon the opinion of legal counsel admitted to practice in such other
jurisdiction.
7.5 HSR Act. All waiting periods (and any extensions thereof)
applicable to this Agreement and the transactions contemplated hereby under the
HSR Act shall have expired or been terminated.
7.6 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit or obtain damages or other
relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
7.7 Consents. All consents and approvals of third parties (including
Governmental Entities) required to be obtained by or on the part of the parties
hereto or otherwise reasonably necessary for the consummation of the
transactions contemplated hereby shall have been obtained, and all thereof
shall be in full force and effect at the time of Closing.
7.8 Other Documents. Sellers shall have received the certificates,
instruments and documents listed below:
(a) The Note to be delivered to each Seller pursuant to Section
1.2, duly executed by Buyer.
(b) A stock certificate or certificates in definitive form
representing the Buyer Shares to be delivered to each Seller pursuant to
Section 1.2, registered in the name of such Seller and duly executed by Buyer,
or, in the case of Bruce, cash in lieu thereof as contemplated by Section 1.2.
(c) A copy of the resolutions of the Board of Directors of Buyer
authorizing the execution, delivery and performance by Buyer of this Agreement,
certified by the secretary or an assistant secretary of Buyer.
(d) A certificate from the Secretary of State of Delaware dated
not more than five days prior to the Closing Date, as to the legal existence
and good standing of Buyer under the laws of such state.
(e) Such other certificates, instruments and documents as may be
reasonably requested by Sellers prior to the Closing Date to carry out the
intent and purposes of this Agreement.
7.9 Payment of Consideration. Sellers shall have received the
consideration set forth in Section 1.2 to be paid at the Closing.
7.10 Registration Agreement. The Buyer and the Sellers shall have
entered into the Registration Agreement substantially in the form of Exhibit
6.6.
7.11 1201 Dairy Ashford, Inc. The issued and outstanding shares of
1201 Dairy Ashford, Inc. shall have been distributed to Beall, and the debt of
1201 Dairy Ashford Ltd. to the Company shall have been forgiven, effective
immediately prior to the Closing.
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ARTICLE VIII
CONDITIONS TO OBLIGATIONS OF BUYER
The obligation of Buyer to consummate the transactions contemplated by
this Agreement shall be subject to the fulfillment on or prior to the Closing
Date of each of the following conditions:
8.1 Representations and Warranties True. All the representations and
warranties of Sellers and the Company contained in this Agreement, and in any
agreement, instrument or document delivered pursuant hereto or in connection
herewith on or prior to the Closing Date, shall be true and correct in all
material respects on and as of the Closing Date as if made on and as of such
date, except as affected by transactions contemplated or permitted by this
Agreement and except to the extent that any such representation or warranty is
made as of a specified date, in which case such representation or warranty
shall have been true and correct in all material respects as of such specified
date.
8.2 Covenants and Agreements Performed. Sellers and the Company
shall have performed and complied with in all material respects all covenants
and agreements required by this Agreement to be performed or complied with by
them on or prior to the Closing Date.
8.3 Certificate. Buyer shall have received a certificate executed by
each Seller and on behalf of the Company by the president of the Company, dated
the Closing Date, representing and certifying, in such detail as Buyer may
reasonably request, that the conditions set forth in Sections 8.1 and 8.2 have
been fulfilled and that Sellers and the Company are not in breach of any
provision of this Agreement.
8.4 Opinion of Counsel. Buyer shall have received opinions of
Charles R. Erickson, general counsel of the Company, and Sewell & Riggs, P.C.,
legal counsel to Sellers and the Company, dated the Closing Date, with respect
to the matters set forth in Exhibit 8.4. In rendering such opinions, such
counsel may rely as to factual matters upon certificates or other documents
furnished by Sellers and directors and officers of the Company and by
government officials and upon such other documents and data as such counsel
deems appropriate as a basis for such opinion. To the extent the foregoing
opinions concern the laws of any jurisdiction other than Texas such counsel may
rely upon the opinion of legal counsel admitted to practice in such other
jurisdiction.
8.5 HSR Act. All waiting periods (and any extensions thereof)
applicable to this Agreement and the transactions contemplated hereby under the
HSR Act shall have expired or been terminated.
8.6 Legal Proceedings. No Proceeding shall, on the Closing Date, be
pending or threatened seeking to restrain, prohibit or obtain damages or other
relief in connection with this Agreement or the consummation of the
transactions contemplated hereby.
8.7 Consents. All consents and approvals of third parties (including
Governmental Entities) required to be obtained by or on the part of the parties
hereto or otherwise reasonably necessary for the consummation of the
transactions contemplated hereby shall have been obtained, and all thereof
shall be in full force and effect at the time of Closing.
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8.8 Other Documents. Buyer shall have received the certificates,
instruments and documents listed below:
(a) The stock certificates representing the Shares duly endorsed
in blank, or accompanied by stock powers duly executed in blank, and otherwise
in form acceptable to Buyer for transfer on the books of the Company.
(b) The minute books, stock records and corporate seal of each of
the Company and the Subsidiaries, certified as complete and correct as of the
Closing Date by the secretary or an assistant secretary of the Company.
(c) All the Company's and the Subsidiaries' books and records,
including without limitation minute books, corporate charter, bylaws, stock
records, bank account records, accounting records, computer records and all
contracts with third parties.
(d) The written resignations of such directors and officers of the
Company and the Subsidiaries, if any, as Buyer shall, at least two days prior
to the Closing Date, specify in writing to the Company, such resignations to be
effective concurrently with the Closing on the Closing Date.
(e) A copy of the resolutions of the Board of Directors of the
Company authorizing the execution, delivery and performance by the Company of
this Agreement, certified by the secretary or an assistant secretary of the
Company.
(f) Certificates from the Secretary of State of Texas and the
Comptroller of Public Accounts of the State of Texas, each dated not more than
five days prior to the Closing Date, as to the legal existence and good
standing, respectively.
(g) Certificates from the appropriate public officials of the
jurisdictions of incorporation or formation of the Subsidiaries, each dated not
more than five days prior to the Closing Date, as to the legal existence and
good standing of the Subsidiaries under the laws of their respective
jurisdictions of incorporation or formation.
(h) Such other certificates, instruments and documents as may be
reasonably requested by Buyer prior to the Closing Date to carry out the intent
and purposes of this Agreement.
8.9 No Material Adverse Change. Since the date of this Agreement,
there shall not have been any material adverse change in the business, assets,
results of operations or condition (financial or otherwise) of the Company.
8.10 Employment Agreement. Beall shall have entered into the
Employment Agreement.
8.11 Cancellation of Outstanding Options. The Outstanding Options
shall have been duly cancelled by the parties thereto such that Buyer will
acquire all the equity ownership in the Company at the Closing.
8.12 Lease Indemnity Agreement. The Company, Beall, 1201 Dairy
Ashford Ltd. and Buyer shall have entered into the Lease Indemnity Agreement.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing in
the following manner:
(a) by mutual written consent of Sellers and the Company,
on the one hand, and Buyer, on the other; or
(b) by Sellers, if, on the Closing Date, any of the
conditions set forth in Article VII shall not have been satisfied and
shall not have been waived by Sellers;
(c) by Buyer, if, on the Closing Date, any of the
conditions set forth in Article VIII shall not have been satisfied and
shall not have been waived by Buyer; or
(d) by either Sellers or Buyer if the Closing shall not
have occurred on or before April 22, 1994, unless such failure to
close shall be due to a breach of this Agreement by the party seeking
to terminate this Agreement pursuant to this clause.
9.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.1 by Sellers and the Company, on the one hand,
or Buyer, on the other, written notice thereof shall forthwith be given to the
other party specifying the provision hereof pursuant to which such termination
is made, and this Agreement shall become void and have no effect, except that
the agreements contained in this Section and in Sections 6.1, 6.8 and 6.12 and
in Article XII shall survive the termination hereof. Nothing contained in this
Section shall relieve any party from liability for damages actually incurred as
a result of any breach of this Agreement.
9.3 Amendment. This Agreement may not be amended except by an
instrument in writing signed by or on behalf of all the parties hereto.
9.4 Waiver. Each of Sellers and the Company, on the one hand, and
Buyer, on the other, may (i) waive any inaccuracies in the representations and
warranties of the other contained herein or in any document, certificate or
writing delivered pursuant hereto or (ii) waive compliance by the other with
any of the other's agreements or fulfillment of any conditions to its own
obligations contained herein. Any agreement on the part of a party hereto to
any such waiver shall be valid only if set forth in an instrument in writing
signed by or on behalf of such party. No failure or delay by a party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.
9.5 DTPA Waiver. THE PARTIES HEREBY WAIVE THE PROVISIONS OF THE
TEXAS DECEPTIVE TRADE PRACTICES ACT, CHAPTER 17, SUBCHAPTER E, SECTIONS 17.41
THROUGH 17.63 INCLUSIVE (OTHER THAN SECTION 17.555, WHICH IS NOT WAIVED) OF THE
TEXAS BUSINESS & COMMERCE CODE. To evidence their ability to grant such
waiver, the parties hereby represent and warrant that each (a) is in the
business of seeking or acquiring, by purchase or lease, goods or services for
commercial or business use, (b) has assets of $5,000,000 or more in accordance
with its most recent financial statement prepared in accordance with generally
accepted accounting principles, (c) has knowledge and experience in financial
and business matters that have
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enabled it to evaluate the merits and risks of the transaction contemplated
hereby and (d) is not in a significantly disparate bargaining position.
9.6 Exclusive Remedy for Breach. Following the Closing, the
indemnities provided for in this Agreement, including, without limitation,
Article XII (including, without limitation, the provisions of Section 12.4(a)),
are the parties' sole and exclusive remedies for all inaccuracies of
representations and warranties or breaches of covenants and agreements in this
Agreement including, but not limited to, any independent common law or
statutory rights or remedies that any indemnified party may have at any time,
now or in the future.
ARTICLE X
TAX MATTERS
10.1 Liability for Taxes, Filing Returns.
(a) Taxable Periods Ending on or Before the Closing Date. Beall
shall be solely liable for all Taxes of the Company and the Subsidiaries due
for all taxable years and periods ending on or before the Closing Date other
than Taxes reserved on the Financial Statements or paid prior to the Closing
Date by the Company or the Subsidiaries or by Beall or an affiliate thereof.
Beall shall cause the Company and the Subsidiaries to be included, and Buyer
shall cause the Company and the Subsidiaries to consent to join, in the
consolidated federal income Tax Returns of the Affiliated Group of which the
Company is a member for all taxable years and periods ending on or before the
Closing Date. Buyer and Beall recognize that the Company and the consolidated
Subsidiaries shall file a consolidated federal income Tax Return of the
Affiliated Group of which the Company is a member for the short taxable year
ending on the Closing Date. Buyer and Beall shall cooperate in causing to be
prepared and duly filed all such consolidated federal income Tax Returns and
all other Tax Returns required to be filed by or with respect to the Company
and the Subsidiaries for all taxable years and periods ending on or before the
Closing Date. The covenants and agreements of Beall under this Section 10.1(a)
shall survive the Closing only until the Survival Date (as defined in Section
12.1).
(b) Taxable Periods Commencing After the Closing Date. Buyer
shall be solely liable for all Taxes of the Company and the Subsidiaries for
all taxable years and periods commencing after the Closing Date. Buyer shall
cause to be prepared and duly filed all Tax Returns of the Company and the
Subsidiaries for taxable periods commencing after the Closing Date. Buyer
shall pay all Taxes shown to be due on such Tax Returns for all periods covered
by such Tax Returns. Buyer shall be liable for, and shall indemnify and hold
harmless Sellers against, any and all Taxes for any taxable year or taxable
period commencing after the Closing Date due or payable by the Company or the
Subsidiaries.
10.2 No Section 338 Election. No election under Section 338 of the
Code shall be made with respect to Buyer's purchase of the Company and the
Subsidiaries. With regard to the purchase by Buyer of the Shares, Buyer shall
make a protective carryover basis election in the time and manner prescribed in
Section 338(g) of the Code and Treasury Regulation Section 1.338-4T(f)(6), and
any similar state law elections in all applicable states. Sellers recognize
that Buyer plans to file a protective carryover basis election.
10.3 Contests. Whenever any taxing authority raises a claim,
assessment or other dispute concerning an amount of Taxes for which the Company
or the Subsidiaries may be liable, Buyer shall have the right to control any
resulting proceedings and to determine whether and when to settle any
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such claim, assessment or dispute; provided, however, that if Beall shall have
any potential indemnification obligation to Buyer, then the provisions of
Article XII (including, without limitation, Sections 12.2(c) and 12.4) shall
control.
ARTICLE XI
RESTRICTIONS ON SALES, OTHER DISPOSITIONS
11.1 Restrictions on Sales, Other Dispositions. Each Seller agrees
that such Seller will not, directly or indirectly, sell, assign, transfer,
pledge, encumber or otherwise dispose of ("transfer") any of the Buyer Shares
prior to the date that is six months after the Closing Date. Thereafter, each
Seller shall have the right to transfer, on a cumulative basis, up to (i)
one-third of the Buyer Shares received by such Seller at the Closing at any
time prior to the first anniversary of the Closing Date and (ii) an additional
one-third of the Buyer Shares received by such Seller at the Closing at any
time on or after the first anniversary of the Closing Date and prior to the
second anniversary of the Closing Date. On or after the second anniversary of
the Closing Date, each Seller shall have the right to transfer any Buyer Shares
then remaining owned by such Seller.
ARTICLE XII
SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATION
12.1 Survival.
(a) The representations and warranties of the parties hereto
contained in this Agreement or in any certificate, instrument or document
delivered pursuant hereto shall survive the Closing, regardless of any
investigation made by or on behalf of any party, until the fourth anniversary
of the Closing Date (such anniversary, the "Survival Date"). From and after
the Survival Date, no party hereto shall be under any liability whatsoever
pursuant to this Article XII with respect to any such representation or
warranty, except with respect to matters as to which notice has been received
in accordance with Section 12.1(b).
(b) No party hereto shall have any indemnification obligation
pursuant to this Article XII in respect of any representation or warranty
unless before the Survival Date it shall have received from the party seeking
indemnification written notice of the existence of the claim for or in respect
of which indemnification in respect of such representation or warranty is
sought. Such notice shall set forth with reasonable specificity (i) the basis
under this Agreement, and the facts that otherwise form the basis, of such
claim, (ii) an estimate of the amount of such claim (which estimate shall not
be conclusive of the final amount of such claim) and an explanation of the
calculation of such estimate, including a statement of any significant
assumptions employed therein, and (iii) the date on and manner in which the
party delivering such notice became aware of the existence of such claim;
provided, however, that any notice which the party seeking indemnification
delivers to the indemnifying party prior to the Survival Date which notifies
the indemnifying party of the existence of a claim with reasonable specificity
and, notwithstanding the failure of such notice to meet the requirements set
forth in clauses (i), (ii) and (iii) above, does not materially prejudice the
indemnifying party's ability to defend such claim, shall be deemed to have met
the requirement of delivery of notice prior to the Survival Date for the
purpose of preserving the indemnified party's right to indemnification pursuant
to this Article XII.
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(c) The provisions of this Section shall have no effect upon any
other obligation of the parties hereto under this Agreement, whether to be
performed before, at or after the Closing.
12.2 Indemnification by Beall.
(a) Subject to the terms and conditions of this Article XII, Beall
shall indemnify, defend and hold harmless Buyer from and against any and all
claims, actions, causes of action, demands, assessments, losses, damages,
liabilities, judgments, settlements, penalties, costs and expenses (including
reasonable attorneys' fees and expenses), of any nature whatsoever
(collectively, "Damages"), asserted against, resulting to, imposed upon or
incurred by Buyer, directly or indirectly, based upon, arising out of or
otherwise in respect of the inaccuracy of any representation or warranty, or
the breach of any covenant or agreement, of the Company or Sellers contained in
this Agreement or in any certificate, agreement, instrument or document
delivered pursuant hereto (collectively, with the Claims under subsection (b)
of this Section 12.2, "Buyer Claims").
(b) Without limiting the generality of the indemnification
agreement of Beall set forth in subsection (a) of this Section 12.2, Beall
further agrees to indemnify, defend and hold harmless Buyer from and against
any and all Damages asserted against, resulting to, imposed upon or incurred by
Buyer, directly or indirectly, irrespective of the amount of such Damages (but
subject to the limitations in Section 12.4(a)), from the Closing Date to the
Survival Date based upon, arising out of or otherwise in respect of any of the
following:
(i) Any conflict, violation or default with respect to
any bond, debenture, note, mortgage, indenture, lease, contract,
agreement or other instrument or obligation to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary or
any of their respective properties may be bound that results from the
execution, delivery and performance by Sellers and the Company of this
Agreement or the consummation by them of the transactions contemplated
hereby; or
(ii) Any Proceeding disclosed on Part I of A of Schedule
3.8 (as it may be supplemented or amended pursuant to Section 6.11);
provided, however, that indemnification under this Section 12.2(b)(ii)
shall be limited to an amount equal to 60 percent of the aggregate
amount of Damages under this Section 12.2(b)(ii).
(c) Notwithstanding anything to the contrary contained in this
Agreement, to the extent additional consideration pursuant to the provisions of
Sections 1.3 or 1.6 is or would be available to Beall, any indemnification
obligation of Beall required by this Section 12.2 shall be satisfied first to
the extent possible by reducing Beall's right to receive his allocable portion
of the Additional Shares, in the case of Section 1.3, or additional shares of
Buyer Common Stock, in the case of Section 1.6, on and as of the Determination
Date, the Third Anniversary or the Fourth Anniversary, as the case may be. The
amount of reduction to Beall's allocable portion of the Additional Shares or
additional shares of Buyer Common Stock, as the case may be, shall be
calculated by dividing (i) the amount of the Buyer Claim by (ii) $8.77.
12.3 Indemnification by Buyer. Subject to the terms and conditions of
this Article XII, Buyer shall indemnify, defend and hold harmless Sellers from
and against any and all Damages asserted against, resulting to, imposed upon,
or incurred by Sellers, directly or indirectly, based upon, arising out of or
otherwise in respect of the inaccuracy of any representation or warranty, or
the breach of any covenant or agreement, of Buyer contained in this Agreement
or in any certificate, agreement, instrument or document delivered pursuant
hereto.
36
<PAGE> 43
12.4 Limitation of Liability. The indemnification obligations of the
parties hereto pursuant to this Article XII shall be subject to the following
limitations and other provisions:
(a) No indemnification shall be required to be made by Beall
pursuant to this Article XII with respect to any Buyer Claims except to the
extent that the aggregate amount of Damages incurred by Buyer with respect to
all Buyer Claims (whether asserted, resulting, imposed or incurred before, on
or after the Closing Date) exceeds $25,000. No indemnification shall be
required to be made by Beall pursuant to this Article XII with respect to any
Buyer Claims to the extent that the aggregate amount of Damages incurred by
Buyer with respect to all Buyer Claims (whether asserted, resulting, imposed or
incurred before, on or after the Closing Date) exceeds $12,000,000.
(b) No indemnification shall be required to be made by Buyer
pursuant to this Article XII with respect to any Seller Claims except to the
extent that the aggregate amount of Damages incurred by Sellers with respect to
all Seller Claims (whether asserted, resulting, imposed or incurred before, on
or after the Closing Date) exceeds $25,000.
(c) The amount of Damages required to be paid by any party to
indemnify any other party pursuant to this Article XII as a result of any
Seller Claim or any Buyer Claim shall be reduced to the extent of any amounts
actually received by such other party after the Closing Date pursuant to the
terms of the insurance policies (if any) covering such claim.
(d) The amount of Damages required to be paid by any party to
indemnify any other party pursuant to this Article XII as a result of any
Seller Claim or any Buyer Claim shall be reduced by the amount of any Tax
benefit actually realized by such other party as a result of such claim,
provided that such reduced amount shall be increased (but not above the
original amount of damages) by the amount of any Taxes actually payable by such
other party as a result of the payment to such other party of Damages for such
claim (the net reduction is hereinafter referred to in this paragraph as the
"Claim Reduction Amount"). The Claim Reduction Amount shall be calculated by
the indemnified party on a present value basis using the appropriate applicable
federal rate for the month that the claim will be paid as specified under
Section 1274(d) of the Code. Any factual assumptions, Tax rate assumptions,
assumptions relating to the appropriate applicable federal rate, or assumptions
relating to the appropriate Tax treatment of a particular item shall be made in
good faith by the indemnified party. The indemnified party shall supply to the
indemnifying party such information as the indemnifying party may reasonably
request to support the indemnified party's assumptions and calculations. If
the indemnifying party believes that the overall calculation is unreasonably
biased in favor of the indemnified party, the parties shall submit the issue to
an independent public accounting firm of recognized national standing mutually
agreeable to the parties for determination as to whether such calculation is in
fact unreasonably biased in favor of the indemnified party on an overall basis.
If such firm determines that the calculation is unreasonably biased in favor of
the indemnified party, such firm shall modify whichever assumptions it deems
necessary to make the overall calculation, in its opinion, fair to both the
indemnifying party and the indemnified party. The determinations of such firm
shall be final and conclusive as to any dispute regarding the Claim Reduction
Amount. The costs and expenses of such firm in connection with its
determinations pursuant to this paragraph shall be borne equally by the
parties. Each party shall be solely responsible for all other costs and
expenses incurred by such party pursuant to this paragraph.
12.5 Procedure for Indemnification. Promptly after receipt by an
indemnified party under Section 12.2 or 12.3 of notice of the commencement of
any action, administrative proceeding or tax audit (an "Action") such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the
37
<PAGE> 44
commencement thereof, but the failure so to notify the indemnifying party shall
not relieve it of any liability that it may have to any indemnified party
except to the extent the indemnifying party demonstrates that the defense of
such Action is prejudiced thereby. In case any such Action shall be brought
against an indemnified party and it shall give written notice to the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof with counsel reasonably satisfactory to such indemnified
party. If the indemnifying party elects to assume the defense of such Action,
the indemnified party shall have the right to employ separate counsel at its
own expense and to participate in the defense thereof. If the indemnifying
party elects not to assume (or fails to assume) the defense of such Action, the
indemnified party shall be entitled to assume the defense of such Action with
counsel of its own choice, at the expense of the indemnifying party. If the
Action is asserted against both the indemnifying party and the indemnified
party and there is a conflict of interests which renders it inappropriate for
the same counsel to represent both the indemnifying party and the indemnified
party, the indemnifying party shall be responsible for paying for separate
counsel for the indemnified party; provided, however, that if there is more
than one indemnified party, the indemnifying party shall not be responsible for
paying for more than one separate firm of attorneys to represent the
indemnified parties, regardless of the number of indemnified parties. If the
indemnifying party elects to assume the defense of such Action, (a) no
compromise or settlement thereof may be effected by the indemnifying party
without the indemnified party's written consent (which shall not be
unreasonably withheld) unless the sole relief provided is monetary damages that
are paid in full by the indemnifying party and (b) the indemnifying party shall
have no liability with respect to any compromise or settlement thereof effected
without its written consent (which shall not be unreasonably withheld).
12.6 CERTAIN DAMAGE. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
NO PARTY SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO ANY PERSON UNDER THIS
AGREEMENT FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES OR FOR LOSS OF PROFITS THAT
ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH THEREOF,
PROVIDED, IN NO EVENT SHALL ANY LOSSES OR DAMAGES PAYABLE AS A RESULT OF A
THIRD PARTY CLAIM BE CONSIDERED INCIDENTAL OR CONSEQUENTIAL DAMAGES.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. All notices, requests, demands and other communications
required or permitted to be given or made hereunder by any party hereto shall
be in writing and shall be deemed to have been duly given or made if delivered
personally, or transmitted by first class registered or certified mail, postage
prepaid, return receipt requested, or sent by prepaid overnight delivery
service, or sent by cable, telegram or telefax, to the parties at the following
addresses (or at such other addresses as shall be specified by the parties by
like notice):
If to Buyer:
Noble Drilling Corporation
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
Attention: Mr. James C. Day, President
Telefax: 713-953-1126
38
<PAGE> 45
If to Beall or the Company:
Mr. Joseph E. Beall
President
Triton Engineering Services Company
1201 Dairy Ashford
Houston, Texas 77079
Telefax: 713-556-9074
If to Bruce:
Mr. George H. Bruce
c/o Triton Engineering Services Company
1201 Dairy Ashford
Houston, Texas 77079
Telefax: 713-556-9074
13.2 Entire Agreement. This Agreement, together with the Schedules,
Exhibits, Annexes and other writings referred to herein or delivered pursuant
hereto, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
13.3 Binding Effect; Assignment; No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and permitted
assigns. Except as otherwise expressly provided in this Agreement, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto without the prior written consent of
the other parties, except that Buyer may assign to any wholly owned subsidiary
of Buyer any of Buyer's rights, interests, or obligations hereunder, upon
notice to the other party or parties, provided that no such assignment shall
relieve Buyer of its obligations hereunder. Except as provided in Article XII,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any person other than the parties hereto, and their respective heirs,
legal representatives, successors and permitted assigns, any rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.
13.4 Severability. If any provision of this Agreement is held to be
unenforceable, this Agreement shall be considered divisible and such provision
shall be deemed inoperative to the extent it is deemed unenforceable, and in
all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by Applicable Law.
13.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
13.6 Further Assurances. From time to time following the Closing, at
the request of any party hereto and without further consideration, the other
party or parties hereto shall execute and deliver to such requesting party such
instruments and documents and take such other action (but without incurring
39
<PAGE> 46
any material financial obligation) as such requesting party may reasonably
request in order to consummate more fully and effectively the transactions
contemplated hereby.
13.7 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.
13.8 Gender. Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.
13.9 References. All references in this Agreement to Articles,
Sections, and other subdivisions refer to the Articles, Sections, and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement", "herein", "hereof", "hereby", "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes" and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Each reference herein
to a Schedule, Exhibit or Annex refers to the item identified separately in
writing by the parties hereto as the described Schedule, Exhibit or Annex to
this Agreement. All Schedules, Exhibits and Annexes are hereby incorporated in
and made a part of this Agreement as if set forth in full herein.
13.10 Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all, the parties hereto.
13.11 Injunctive Relief. The parties hereto acknowledge and agree
that irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of the provisions
of this Agreement, and shall be entitled to enforce specifically the provisions
of this Agreement, in any court of the United States or any state thereof
having jurisdiction, in addition to any other remedy to which the parties may
be entitled under this Agreement or at law or in equity.
13.12 Jurisdiction and Venue. In respect of any action or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby, each of the parties hereto consents to the jurisdiction and venue of
any federal or state court located within Harris County, Texas, waives personal
service of any and all process upon it, consents that all such service of
process may be made by first class registered or certified mail, postage
prepaid, return receipt requested, directed to it at the address specified in
Section 13.1, agrees that service so made shall be deemed to be completed upon
actual receipt thereof, and waives any objection to jurisdiction or venue of,
and waives any motion to transfer venue from, any of the aforesaid courts.
13.13 Joinder of Spouses. The spouses of Sellers have joined in the
execution and delivery of this Agreement for the express purpose of binding
their respective community property interests, if any, in the Shares.
13.14 Stock Exchange. If the Buyer Common Stock becomes listed and
traded on the New York Stock Exchange, references herein to "the last sale
price of the Buyer Common Stock (as reported
40
<PAGE> 47
by NASDAQ/NMS)" shall be deemed to be changed to "the closing price of the
Buyer Common Stock on the New York Stock Exchange."
ARTICLE XIV
DEFINITIONS
14.1 Certain Defined Terms. As used in this Agreement, each of the
following terms has the meaning given it below:
"affiliate" means, with respect to any person, any other
person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control
with, such person.
"Affiliated Group" has the meaning set forth in Section 1504
of the Code.
"Applicable Law" means any statute, law, rule or regulation or
any judgment, order, writ, injunction or decree of any Governmental
Entity to which a specified person or property is subject.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect on the Closing Date.
"Corporate Subsidiary" means any Subsidiary that is a
corporation.
"Encumbrances" means liens, charges, pledges, options,
mortgages, deeds of trust, security interests, claims, restrictions
(whether on voting, sale, transfer, disposition or otherwise),
easements and other encumbrances of every type and description,
whether imposed by law, agreement, understanding or otherwise.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental or
regulatory body, agency, department, commission, board, bureau or
other authority or instrumentality (domestic or foreign).
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Intellectual Property" means patents, trademarks, service
marks, trade names, copyrights, trade secrets, know-how, inventions,
and similar rights, and all registrations, applications, licenses and
rights with respect to any of the foregoing.
"IRS" means the Internal Revenue Service.
"Partnership Subsidiary" means any Subsidiary that is a
general or limited partnership, a joint venture or an asociacion en
participacion.
41
<PAGE> 48
"Permits" means licenses, permits, franchises, consents,
approvals and other authorizations of or from Governmental Entities.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, enterprise,
unincorporated organization or Governmental Entity.
"Proceedings" means all proceedings, actions, claims, suits,
investigations and inquiries by or before any arbitrator or
Governmental Entity.
"reasonable best efforts" means a party's best efforts in
accordance with reasonable commercial practice and without the
incurrence of unreasonable expense.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means (i) any corporation more than 50 percent of
whose outstanding voting securities, or any partnership, joint
venture, or other entity more than 50 percent of whose total equity
interests, is owned, directly or indirectly, by the Company, (ii) 1201
Dairy Ashford Ltd. and (iii) the Asociacion en Participacion between
Triton International, Inc. and Perforadora Faja de Oro, S.A. de C.V.
Effective immediately prior to the Closing, the issued and outstanding
shares of 1201 Dairy Ashford, Inc., the sole general partner of 1201
Dairy Ashford Ltd., will be distributed to Beall.
"Taxes" means any income taxes or similar assessments or any
sales, excise, occupation, use, ad valorem, property, production,
severance, transportation, employment, payroll, franchise or other tax
imposed by any United States federal, state or local (or any foreign
or provincial) taxing authority, including any interest, penalties or
additions attributable thereto.
"Tax Return" means any return or report with respect to Taxes.
"Treasury Regulations" means one or more treasury regulations
promulgated under the Code by the Treasury Department of the United
States.
14.2 Certain Additional Defined Terms. In addition to such terms as
are defined in the opening paragraph of this Agreement and in Section 14.1, the
following terms are used in this Agreement as defined in the references set
forth opposite such terms:
Defined Term Reference
- - ------------ ---------
Acquisition Proposal Section 6.2
Action Section 12.4
Additional Shares Section 1.3
Adjusted Excess 1994 EBDIT Section 1.3(a)(iii)
agreements Section 3.18
Applicable Environmental Laws Section 3.20
associate Section 3.24
Audited Financial Statements Section 3.13
Audited 1993 Financial Statements Section 3.13
Benefit Arrangements Section 3.19(d)
Buyer Claims Section 12.2
Buyer Commission Filings Section 4.12
42
<PAGE> 49
Defined Term Section Reference
- - ------------ -----------------
Buyer Common Stock Section 1.2
Buyer Shares Section 1.2
CERCLA Section 3.24
Claim Reduction Amount Section 12.4(d)
Closing Article II
Closing Date Article II
Convertible Preferred Stock Section 4.4
Damages Section 12.2
Determination Date Section 1.3
Determination Date Rental Indemnification Amount Section 1.3(c)
Disposal or Disposed Section 3.20
EBDIT Section 1.3(c)
Employee Plans Section 3.19(a)
Employment Agreement Section 6.7
Excess 1994 EBDIT Section 1.3(c)
FASB Standards Section 3.13
Financial Statements Section 3.13
Fourth Anniversary Section 1.6
Hazardous Substance Section 3.20
Insurance Claims Payment Section 1.3(f)
Latest Balance Sheet Section 3.13
Lease Indemnity Agreement Section 6.17
Multiemployer Plan Section 3.19(b)
Net Claim Amount Section 1.3(b)
net proceeds Section 1.3(b)
1993 Deficit Amount Section 1.3(b)
Note Section 1.2(c)
Number of Claim Shares Section 1.4(a)
Office Lease Section 6.17
Option Holders Section 3.4
Outstanding Insurance Claims Section 3.9(b)
Outstanding Options Section 3.4
Property Section 3.20(a)
Purchase Price Section 1.2
RCRA Section 3.20
Registration Statement Section 6.6
Release Section 3.20
Rental Indemnification Shares Section 1.3(c)
Section 1.3 Shares Section 1.4(a)
Seller Claims Section 12.3
Shares Preamble
Simmons Section 3.30
Solid Waste Section 3.20
Specific Contingent Assets Section 1.3(b)
Specific Contingent Liabilities Section 1.3(b)
Survival Date Section 12.1(a)
43
<PAGE> 50
Defined Term Section Reference
- - ------------ -----------------
Third Anniversary Section 1.6
Transaction Securities Section 3.12
transfer Section 11.1
Unaudited Financial Statements Section 3.13
IN WITNESS WHEREOF, the parties have executed this Agreement, or
caused this Agreement to be executed by their duly authorized representatives,
all as of the day and year first above written.
TRITON ENGINEERING SERVICES COMPANY
By: /s/ Joseph E. Beall
___________________________________
Name: Joseph E. Beall
Title: President
/s/ Joseph E. Beall
________________________________________
Joseph E. Beall
/s/ Lois Rae Beall
________________________________________
Spouse of Joseph E. Beall
/s/ George H. Bruce
________________________________________
George H. Bruce
/s/ Mrs. George H. Bruce
________________________________________
Spouse of George H. Bruce
NOBLE DRILLING CORPORATION
By: /s/ James C. Day
___________________________________
Name: James C. Day
Title: CEO & President
44
<PAGE> 51
ANNEX I
ALLOCATION OF PURCHASE PRICE
<TABLE>
<CAPTION>
Allocable
Portion
of
Name of Number of Purchase "Buyer "Cash" "Note
Seller Shares Price Shares" Amount" Amount"
----------- --------- --------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Joseph E. Beall 5,100 0.98456 751,864 $3,938,240 $3,938,240
George H. Bruce 80 0.01544 11,791 61,760 61,760
------ ------- ------- ---------- ----------
TOTAL . . . . . . . . . 5,180 1.00000 763,655 $4,000,000 $4,000,000
</TABLE>
<PAGE> 52
EXHIBIT 1.2
PROMISSORY NOTE
$_____________ Houston, Texas April __, 1994
FOR VALUE RECEIVED, the undersigned, Noble Drilling Corporation, a
Delaware corporation, hereby promises to pay to the order of (Name of Seller)
the principal sum of ____________ Dollars ($_________), with interest on the
unpaid balance thereof from date until maturity at the rate or rates
hereinafter provided, both principal and interest payable as hereinafter
provided in lawful money of the United States of America at Houston, Texas.
The unpaid principal of this Note from time to time outstanding shall
bear interest prior to maturity, calculated on the basis of a 365 day year, at
the prime rate announced by NationsBank of Texas, N.A. from time to time,
provided that in no event shall such interest rate exceed the maximum interest
rate permitted under applicable law. If hereafter the prime rate announced or
published by such bank shall change, the rate of interest on the unpaid balance
of principal of this Note prior to maturity shall be increased or decreased, as
the case may be, from time to time as of the effective date of each change in
the prime rate announced or published by such bank.
All past due principal and/or interest or installments thereof shall
bear interest at the highest rate for which the undersigned may legally
contract under applicable law or, if no such rate is designated under
applicable law, at the rate of ten percent (10%) per annum, calculated on the
basis of a 365 day year.
The principal amount of this Note, together with all interest accrued
hereon, shall be due and payable in full on (date not more than six months
after closing).
Time is of the essence in the performance of this Note. The undersigned
and all sureties, endorsers, guarantors and other parties hereafter assuming or
otherwise becoming liable for the payment of any sum of money payable under
this Note (i) severally waive grace, presentment and demand for payment,
protest and notice of protest, notice of intent to accelerate the maturity,
notice of acceleration of maturity, notice of non-payment and all other notices
of whatsoever nature, filing of suit and diligence in collecting this note and
(ii) severally agree that amounts due hereunder shall be paid without set-off,
counterclaim, abatement, suspension or diminution.
Upon the failure to pay any installment of the principal of or interest
on this Note as above promised, the holder of this Note or any part hereof
shall have the option of declaring the principal balance hereof and the
interest accrued hereon to be immediately due and payable.
The undersigned shall have the right to prepay, without premium or
penalty, at any time and from time to time prior to maturity, all or any part
of the unpaid principal balance of this Note, provided that any such principal
thus paid is accompanied by all accrued interest thereon to the date of
prepayment.
It is the intent of the payee of this Note and the undersigned in the
execution of this Note and all other instruments now or hereafter securing this
Note to contract in strict compliance with applicable usury law. In
furtherance thereof, the said payee and the undersigned stipulate and agree
that none of the terms and provisions contained in this Note, or in any other
instrument executed in connection herewith, shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, interest in
excess of the maximum interest permitted to be charged by applicable law.
<PAGE> 53
Should the indebtedness represented by this Note or any part thereof be
collected at law or in equity or through any bankruptcy, receivership, probate
or other court proceedings or if this Note is placed in the hands of attorneys
for collection after default, the undersigned and all endorsers, guarantors and
sureties of this Note jointly and severally agree to pay in addition to the
principal and interest due and payable hereon reasonable attorneys' and
collection fees.
Notices under this Note shall be given in the same manner as set forth
in the Stock Purchase Agreement dated as of ____________, 1994 among Joseph E.
Beall, George H. Bruce, Triton Engineering Services Company and Noble Drilling
Corporation.
The original payee of this Note shall not assign or transfer this Note
or any interest therein without the prior written consent of the undersigned.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE
GOVERNED FOR ALL PURPOSES BY THE LAW OF THE STATE OF TEXAS AND THE LAW OF THE
UNITED STATES APPLICABLE TO TRANSACTIONS WITHIN SUCH STATE.
NOBLE DRILLING CORPORATION
By ______________________________
Name:
Title:
-2-
<PAGE> 54
EXHIBIT 1.7
OPTION HOLDER ALLOCATION
<TABLE>
<CAPTION>
Name Percentage
---- ----------
<S> <C>
Douglas S. Beall 39.76%
Charles R. Erickson 27.83
Larry E. Thomas 19.76
Joseph L. Matthews 6.63
David M. Pierce 6.02
------
100.00%
</TABLE>
<PAGE> 1
REGISTRATION AGREEMENT
THIS AGREEMENT is made as of April 22, 1994, between Noble Drilling
Corporation, a Delaware corporation (the "Company"), and Joseph E. Beall
("Beall") (herein referred to as "Seller").
The Company and the Seller are parties to a Stock Purchase Agreement
of even date herewith (the "Purchase Agreement"). Certain capitalized terms
used herein shall have the meanings set forth in Section 7 hereof.
Capitalized terms used herein without definition have the meaning given to them
in the Purchase Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Shelf Registration.
(a) Registration on S-3. The Company agrees to prepare and file
with the Securities and Exchange Commission a shelf registration statement on
Form S-3 (the "Registration Statement") and pursuant to Rule 415 under the
Securities Act, covering the sale by the Seller of two-thirds of the number of
Buyer Shares received by Seller at the Closing (the "Agreed Registration").
The Company shall use its Reasonable Best Efforts to cause the Registration
Statement to be declared effective on a date that is approximately six months
after the Closing Date and to keep the Registration Statement effective, so
long as any shares registered thereunder remain unsold, for a period of two
years after the Closing Date. The Seller agrees to furnish to the Company such
information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request in writing and such other
information as may be legally required in connection with the Agreed
Registration.
(b) Expenses. The Registration Expenses of the Seller in the
Agreed Registration will be paid by the Company. The underwriting discounts or
commissions and any selling commissions attributable to sales of Registrable
Securities will be paid by the holders of the Registrable Securities pro rata
based upon the number of shares of Registrable Securities held by them.
(c) Priority on Registrations. The Company will not include in
the Registration Statement any securities which are not Registrable Securities
without the prior written consent of Seller.
2. Piggyback Registrations.
(a) Right to Piggyback. In the event the Company fails to file
the Agreed Registration referred to herein, or in the event the Agreed
Registration is not declared effective or does not remain continuously
effective until the earlier of the date that is two years after the Closing
Date or the date on which Seller has sold all of his Registrable Securities
registered under the Registration Statement, and thereafter until the fifth
anniversary of the Closing Date, for so long as the Seller continues to hold
Registrable Securities, whenever the Company proposes to register any of its
Common Stock under the Securities Act other than (i) under employee
compensation or benefit programs or (ii) an exchange offer or an offering of
securities solely to the existing stockholders or employees of the Company, and
the registration form to be used may be used for the registration of
Registrable Securities, the Company will give prompt written notice to all
holders of Registrable Securities of its intention to effect such a
registration and will include in such registration all Registrable Securities
with respect to which the
<PAGE> 2
Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice (a "Piggyback Registration"). If the
Company gives notice of such a proposed registration, the total number of
Registrable Securities which shall be included in such registration shall be
limited to such number, if any, as in the reasonable opinion of the manager of
such offering would not adversely affect the marketability or offering price of
all of the securities proposed to be offered by the Company in such offering;
provided, however, if the holders of Registrable Securities having registration
rights upon a Piggyback Registration are not permitted to include all of such
Registrable Securities by reason of such determination by the manager of the
offering, the Registrable Securities to be included in the offering shall be
determined in accordance with paragraphs 2(c) and 2(d) below. Notwithstanding
the foregoing, the Company may, in its sole discretion and without the consent
of any holder of Registrable Securities, withdraw such registration statement
and abandon such proposed public offering.
(b) Piggyback Expenses. The Registration Expenses of the holders
of Registrable Securities will be paid by the Company in all Piggyback
Registrations. The underwriting discounts or commissions and any selling
commissions attributable to sales of Registrable Securities will be paid by the
holders of the Registrable Securities pro rata based upon the number of shares
of Registrable Securities held by them.
(c) Priority on Primary Registrations. If a Piggyback
Registration is a primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in an orderly manner in such offering within a price
range acceptable to the Company, the Company will include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, other
securities requested to be registered pursuant to other registration agreements
entered into by the Company on or before six months prior to the Company's
notice given under paragraph 2(a) above, (iii) third, the Registrable
Securities requested to be included in such registration, pro rata among the
holders thereof on the basis of the number of shares of such Registrable
Securities requested to be included in such registration by each such holder,
and (iv) fourth, other securities requested to be included in such
registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company will use its Reasonable Best Efforts
to include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such securities on the basis of the number of such
securities requested to be included in such registration by each such holder,
and (iii) third, other securities requested to be included in such registra-
tion.
3. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered
pursuant to this Agreement, the Company will use Reasonable Best Efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will
as expeditiously as possible:
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<PAGE> 3
(a) prepare and file with the Securities and Exchange Commission a
registration statement on the appropriate form with respect to such Registrable
Securities and use its Reasonable Best Efforts to cause such registration
statement to become effective (provided that before filing a registration
statement or prospectus or any amendments or supplements thereto, the Company
will furnish to the counsel selected by the holders of a majority of the
Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed, which documents will be subject to the
review of such counsel);
(b) prepare and file with the Securities and Exchange 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 the period set forth in Section 1(a) above
in connection with the Agreed Registration, and otherwise for a period of not
less than 120 consecutive days or such shorter period which will terminate when
Registrable Securities covered by such registration statement have been sold
(but not before the expiration of the applicable prospectus delivery period)
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number
of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including,
without limitation, each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(d) use its Reasonable Best Efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions within the United States as any seller reasonably requests and do
any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such juris-
dictions of the Registrable Securities owned by such seller (provided that the
Company will not be required to qualify generally to do business or subject
itself to any general service of process in any jurisdiction where it is
otherwise not then so subject);
(e) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event which requires the making of any
change in the prospectus included in such registration statement so that such
document will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and, at the request of any such seller, the
Company will prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading;
(f) use its Reasonable Best Efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar securities
issued by the Company are then listed and, if not so listed, on the exchange or
exchanges or the over-the-counter market of the National Association of
Securities Dealers, Inc. selected by the Company and reasonably satisfactory to
the holders of a majority of the then outstanding Registrable Securities;
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<PAGE> 4
(g) cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and enable such Registrable Securities to be in
such denominations and registered in such names as may be requested at least
two business days prior to any sale of registrable Securities;
(h) enter into such customary agreements (including, without
limitation, underwriting agreements in customary form, substance, and scope)
and take all such other actions as the holders of a majority of the Registrable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities;
(i) make available for inspection by a representative of the
sellers of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney or
accountant retained by any such seller or underwriter, all financial and other
records (reasonably requested), pertinent corporate documents and properties of
the Company as shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such representative, underwriter, attorney or accountant in
connection with such registration statement; provided, however, each seller of
Registrable Securities agrees that any records, information or documents that
are designated by the Company as confidential shall not be used by such seller
as the basis for any market transaction in securities of the Company unless and
until such record, information or document is made generally available to the
public and each such seller shall keep and shall cause any attorney or
accountant retained by such seller to keep, confidential any record,
information or document designated by the Company as confidential;
(j) otherwise use its Reasonable Best Efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make generally available to its security holders an earnings statement no later
than 90 days after the end of the 12 month period beginning with the first day
of the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit any holder of Registrable Securities, which holder, in
its reasonable judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration
or comparable statement and to comment thereon;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use reasonable efforts promptly to obtain the
withdrawal of such order;
(m) use its Reasonable Best Efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such
Registrable Securities; and
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<PAGE> 5
(n) use its Reasonable Best Efforts to obtain a cold comfort
letter from the Company's independent public accountants in customary form and
covering such matters of the type customarily covered by cold comfort letters
as the holders of a majority of the Registrable Securities being sold in such
registration reasonably request.
4. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing and engraving expenses, messenger and delivery expenses and fees
and disbursements of counsel for the Company and one representa- tive counsel
for all holders of Registrable Securities whose shares are being registered and
all independent certified public accountants, underwriters (excluding
underwriting discounts and any selling commissions) and any Persons retained by
the Company (all such expenses being herein called "Registration Expenses"),
will be borne as provided in this Agreement, except that the Company will, in
any event, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the exchange or
exchanges or the over-the-counter market of the National Association of
Securities Dealers, Inc.
(b) To the extent expenses of registration (including underwriting
discounts and any selling commissions) are not required to be paid by the
Company, each holder of securities included in any registration hereunder will
pay those Registration Expenses allocable to the registration of such holder's
securities so included, and any Registration Expenses not so allocable will be
borne by all sellers of securities included in such registration in proportion
to the aggregate selling price of the securities to be so registered.
5. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify
and hold harmless, with respect to any registration statement filed by it, to
the fullest extent permitted by law, each holder of Registrable Securities
covered by such registration statement, its officers, directors, employees,
agents and general or limited partners (and the directors, officers, employees
and agents thereof), and each other person, if any, who controls such holder
within the meaning of Section 15 of the Securities Act (collectively, "Holder
Indemnified Parties") against all losses, claims, damages, liabilities and
expenses, joint or several, (including, without limitation, reasonable fees of
counsel and any amounts paid in settlement effected with the Company's consent,
which consent shall not be unreasonably withheld) to which any such Holder
Indemnified Party may become subject under the Securities Act, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
are caused by (1) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement in which such Registrable
Securities were included as contemplated hereby or 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, (2) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary, final or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
required to
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<PAGE> 6
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or (3)
any violation by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action of or inaction by
the Company in connection with any such registration; and in each such case,
the Company shall reimburse each such Holding Indemnified Party for any
reasonable legal or any other expenses incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding; provided, however, that the Company shall not be
liable to any such Holder Indemnified Party in any such case to the extent that
any such loss, claim, damage, liability or expense (or action or proceeding,
whether commenced or threatened, in respect thereof) arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement or amendment thereof or supplement
thereto or in any such preliminary, final or summary prospectus in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any such Holder Indemnified Party relating to such Holder
Indemnified Party for use in the preparation thereof; and provided further,
that the Company shall not be liable to any such Holder Indemnified Party with
respect to any preliminary prospectus to the extent that any such loss, claim,
damage, liability or expense of such Holder Indemnified Party results from the
fact that such Holder Indemnified Party sold Registrable Securities to a person
to whom there was not sent or given, at or before the written confirmation of
such sale, a copy of the prospectus (excluding documents incorporated by
reference) or of the prospectus as then amended or supplemented (excluding
documents incorporated by reference) if the Company has previously furnished
copies thereof to such Holder Indemnified Party in compliance with this
Agreement and the loss, claim, damage, liability or expense of such Holder
Indemnified Party results from an untrue statement or omission of a material
fact contained in such preliminary prospectus which was corrected in the
prospectus (or the prospectus as amended or supplemented). Such indemnity and
reimbursement of expenses and obligations shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder Indemnified
Parties and shall survive the transfer of such securities by such Holder
Indemnified Parties.
(b) Indemnification by Holders. Each holder of Registrable
Securities participating in any registration hereunder shall indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors,
officers, employees and agents, and each Person who controls the Company
(within the meaning of Section 15 of the Securities Act) (collectively,
"Company Indemnified Parties") against all losses, claims, damages, liabilities
and expenses, joint or several (including, without limitation, reasonable fees
of counsel and any amounts paid in settlement effected by such holder's
consent, which consent shall not be unreasonably withheld) to which any Company
Indemnified Party may become subject under the Securities Act, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
are caused by (1) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement in which such holder's
Registrable Securities were included or 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, (2) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary, final or
summary prospectus, together with the documents incorporated by reference
therein (as amended or supplemented if the Company shall have filed with the
Commission any amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading to the extent, but
only to the extent, in the cases described in clauses (1) and (2), that such
untrue statement or omission is contained in any information furnished in
writing by such holder relating to such holder for use in the preparation
thereof and if the Company does not know, at the time
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<PAGE> 7
such information is included in the registration statement, prospectus,
preliminary prospectus, amendment or supplement, that such information is false
or misleading, (3) any violation by such holder of any federal, state or common
law rule or regula- tion applicable to such holder and relating to action of or
inaction by such holder in connection with any such registration, and (4) with
respect to any preliminary prospectus, the fact that such holder sold
Registrable Securities to a person to whom there was not sent or given, at or
before the written confirmation of such sale, a copy of the prospectus
(excluding the documents incorporated by reference) or of the prospectus as
then amended or supplemented (excluding documents incorporated by reference) if
the Company has previously furnished copies thereof to such holder in
compliance with this Agreement and the loss, claim, damage, liability or
expense of such Company Indemnified Party results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which was
corrected in the prospectus (or the prospectus was amended or supplemented);
provided, however, that the aggregate amount which any such holder shall be
required to pay pursuant to this paragraph (b) shall be limited to the dollar
amount of proceeds received by such holder upon the sale of the Registrable
Securities and other securities of the Company (after deducting any
underwriting commissions, discounts and transfer taxes applicable thereto)
pursuant to the registration statement giving rise to such claim. Such
indemnity obligation shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company Indemnified Parties (except
as provided above) and shall survive the transfer of such securities by such
holder.
(c) Conduct of Indemnification Proceedings. Promptly after
receipt by an indemnified party under paragraph (a) or (b) of written notice of
the commencement of any action, suit, proceeding, investigation or threat
thereof made in writing with respect to which a claim for indemnification may
be made pursuant to this Section 5, such indemnified party shall, if a claim in
respect thereto is to be made against an indemnifying party, give written
notice to the indemnifying party of the threat or commencement thereof;
provided, however, that the failure to so notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. If any such claim or action referred to under
paragraph (a) or (b) is brought against any indemnified party and it then
notifies the indemnifying party of the threat or commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other indemnifying party similarly notified,
to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party). After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of any such claim or action, the indemnifying party shall not be liable
to such indemnified party under this Section 6 for any legal expenses of
counsel or any other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation unless the indemnifying party has failed to assume the defense of
such claim or action or to employ counsel reasonably satisfactory to such
indemnified party. The indemnifying party shall not be required to indemnify
the indemnified party with respect to any amounts paid in settlement of any
action, proceeding or investigation entered into without the written consent of
the indemnifying party, which consent shall not be unreasonably withheld. No
indemnifying party shall consent to the entry of any judgment or enter into any
settlement without the consent of the indemnified party unless (1) such
judgment or settlement does not impose any obligation or liability upon the
indemnified party other than the execution, delivery or approval thereof, and
(2) such judgment or settlement includes as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a full release
and discharge from all liability in respect of such claim for all persons that
may be entitled to or obligated to provide indemnification or contribution
under this Section 5.
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<PAGE> 8
(d) Additional Indemnification. Indemnification similar to that
specified in the preceding subsections of this Section 5 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or qualification of
securities under any state securities or blue sky laws.
(e) Contribution. If the indemnification provided for in this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under paragraph (a) or (b), then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or actions or proceedings in
respect thereof) referred to in paragraph (a) or (b) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other in connection with the statements,
omissions, actions or inactions which resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the indemnifying party
or the indemnified party, any action or inaction by any such party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement, omission, action or inaction. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses (or actions or proceedings in respect thereof)
pursuant to this paragraph (e) shall be deemed to include, without limitation,
any reasonable legal or other expenses incurred by such indemnified party in
connection with investigating or defending any such action or claim (which
shall be limited as provided in paragraph (c) if the indemnifying party has
assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this paragraph (e). 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. Promptly after receipt by an
indemnified party under this paragraph (e) of written notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing with respect to which a claim for contribution may be made
against an indemnifying party under this paragraph (e), such indemnified party
shall, if a claim for contribution in respect thereto is to be made against an
indemnifying party, give written notice to the indemnifying party in writing of
the commencement thereof (if the notice specified in paragraph (c) has not been
given with respect to such action); provided, however, that the failure to so
notify the indemnifying party shall not relieve it from any obligation to
provide contribution which it may have to any indemnified party under this
paragraph (e) except to the extent that the indemnifying party is actually
prejudiced by the failure to give notice. Notwithstanding anything in this
paragraph to the contrary, no indemnifying party (other than the Company) shall
be required pursuant to this paragraph to contribute any amount which exceeds
the amount by which the dollar amount of the proceeds received by such
indemnifying party from the sale of Registrable Securities and other securities
of the Company (after deducting any underwriting commissions, discounts and
transfer taxes applicable thereto) in the offering to which the losses, claims,
damages, liabilities or expenses of the indemnified parties relate exceeds the
amount of any losses, claims, damages, liabilities and expenses which such
indemnifying party has otherwise been required to pay as indemnity or
contribution hereunder by reason of such losses, claims, damages, liabilities
or expenses.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this paragraph were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
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<PAGE> 9
If indemnification is available under Section 5, the indemnifying
parties shall indemnify each indemnified party to the fullest extent provided
in paragraphs (a) and (b), without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this paragraph. The provisions of this paragraph shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract, shall remain in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party, and shall survive the transfer of securities by any such
party.
(f) Indemnification and Contribution of Underwriters. In
connection with any underwritten offering contemplated by this Agreement which
includes Registrable Securities, the Company and all sellers of Registrable
Securities included in any registration statement shall agree to customary
provisions for indemnification and contribution (consistent with the other
provisions of this Section 5) in respect of losses, claims, damages,
liabilities and expenses of the underwriters of such offering.
6. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements; provided
that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters on account of the registration of shares owned by
such holder other than representations and warranties regarding such holder and
such holder's intended method of distribution.
7. Definitions.
"Common Stock" means the Common Stock of the Company, par value $0.10
per share.
"Piggyback Registration" has the meaning set forth in Section 2.
"Registrable Securities" means (i) the Buyer Shares and the Additional
Shares (as such terms are defined in the Purchase Agreement) and (ii) any
Common Stock issued or issuable with respect to the securities referred to in
clause (i) whether by way of a stock dividend or stock split, in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization, or otherwise; provided, that Registrable Securities shall not
include any securities that have been sold, including, without limitation,
pursuant to the Agreed Registration, a Piggyback Registration or Rule 144, or
that qualify for sale or that otherwise can be sold by Seller without
registration under the Securities Act, including, without limitation, pursuant
to Rule 144(k).
"Reasonable Best Efforts" means a party's best efforts in accordance
with reasonable commercial practice and without the incurrence of unreasonable
expense.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
9. Miscellaneous.
(a) GECC Registration Rights Agreement. The Company is subject to
that certain Registration Rights Agreement dated as of January 29, 1988 by and
between the Company and General
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<PAGE> 10
Electric Capital Corporation, a New York corporation ("GECC"), as amended by
the first amendment thereto dated as of February 5, 1993 (the "GECC
Agreement"), a copy of which has been furnished to Seller. Section 1.13 of the
GECC Agreement prevents the Company from entering into any agreement with any
holder or prospective holder of any securities of the Company that grants
registration rights under the Securities Act on terms and conditions more
favorable than the rights granted to GECC in the GECC Agreement. The Company
has obtained GECC's acknowledgment and agreement that the terms and conditions
of the Agreed Registration are acceptable to GECC and do not violate the GECC
Agreement. If the provisions of this Agreement relating to the grant of
Piggyback Registration rights or the application of such provisions or any
portion thereof shall be found to grant registration rights more favorable to
any holder or prospective holder of any securites of the Company than the
rights granted to GECC in the GECC Agreement, such provisions of this
Agreement, or portion of such provisions, (and only such provisions) shall be
held invalid and of no further force and effect.
(b) No Inconsistent Agreements. From and after the date of this
Agreement, the Company will not, without the prior written consent of the
holders of a majority of the number of Registrable Securities then outstanding,
enter into any agreement with respect to its securities which is inconsistent
with or violates the rights granted to the holders of Registrable Securities in
this Agreement.
(c) Undertakings of the Holders of Registrable Securities.
(i) If any Registrable Securities are included in a
registration statement, the holder thereof will not (until further notice)
effect sales thereof after receipt of telegraphic or written notice from the
Company to suspend sales to permit the Company to correct or update a
registration statement or prospectus; provided that the obligations of the
Company with respect to maintaining any registration statement current and
effective shall be extended by a period of days equal to the period said
suspension is in effect.
(ii) If any Registrable Securities are being registered in
any registration pursuant to this Agreement, the holder thereof will comply
with all anti-stabilization, manipulation and similar provisions of Section 10
of the Securities Exchange Act of 1934, as amended, and any rules promulgated
thereunder by the Commission and, at the request of the Company, will execute
and deliver to the Company and to any underwriter participating in such
offering, an appropriate agreement to such effect.
(iii) At the end of the period during which the Company is
obligated to keep a registration statement current and effective as described
herein, the holders of Registrable Securities included in the registration
statement shall discontinue sales thereof pursuant to such registration
statement upon receipt of notice from the Company of its intention to
deregister any of such securities which remain unsold.
(d) Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the internal
law, and not the law of conflicts, of the State of Texas.
(e) Successors and Assigns; No Third Party Benefit. All covenants
and agreements in this Agreement by or on behalf of any of the parties hereto
will bind and inure to the benefit of the respective successors and assigns of
the parties hereto whether so expressed or not. In addition, whether or not
any express assignment has been made, the provisions of this Agreement which
are for the
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<PAGE> 11
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable
Securities. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto and then respective
successors and assigns any right or remedies under or by reason of the
Agreement, except as expressly provided in this Agreement.
(f) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter herein contained. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the securities acquired by the holders of the Registrable Securities
pursuant to the Purchase Agreement. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(g) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
or sent by reputable express courier service (charges prepaid), or mailed to
the recipient by certified or registered mail, return receipt requested and
postage prepaid, or sent by telefax, to the parties at the following address
(or to such other address or to the attention of such other person as the
recipient party has specified by prior like notice to the sending party):
If to the Company:
Noble Drilling Corporation
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
Attention: President
Telefax: 713-953-1126
If to Beall:
Mr. Joseph E. Beall
c/o Triton Engineering Services Company
1201 Dairy Ashford
Houston, Texas 77079
Telefax: 713-556-9074
(h) Severability. If any provision of this Agreement is held to
be unenforceable, this Agreement shall be considered divisible and such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and in all other respects this Agreement shall remain in full force and effect;
provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by Applicable Law.
(i) Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.
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<PAGE> 12
(j) Gender. Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the singular form
shall be construed to include the plural and vice versa, unless the context
otherwise requires.
(k) References. All references in this Agreement to Articles,
Sections, and other subdivisions refer to the Articles, Sections, and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement," "herein," "hereof," "hereby," "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited.
(l) Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement. Each
counterpart may consist of a number of copies hereof each signed by less than
all, but together signed by all, the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NOBLE DRILLING CORPORATION
By:/s/ JAMES C. DAY
James C. Day
Chairman, President, and
Chief Executive Officer
/s/ JOSEPH E. BEALL
Joseph E. Beall
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<PAGE> 1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of April 22, 1994,
between Triton Engineering Services Company, a Texas corporation (the
"Company"), and Joseph E. Beall, an individual residing in Houston, Texas (the
"Employee").
WHEREAS, the Employee and the other shareholder of the Company have
agreed to sell all the outstanding shares of common stock of the Company to
Noble Drilling Corporation ("Buyer"); and
WHEREAS, the Company desires to assure itself of the Employee's
continued employment with the Company, and the Employee desires to continue in
the employ of the Company, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company and the Employee hereby agree as follows:
1. Employment. The Company agrees to continue the Employee in
its employ, and the Employee agrees to remain in the employ of the Company, for
the period set forth in Paragraph 2, in the position and with the duties and
responsibilities set forth in Paragraph 3 and upon the other terms and
conditions herein provided.
2. Term. The employment of the Employee by the Company as
provided in Paragraph 1 shall be for a period commencing on the date of this
Agreement through and ending on April 21, 1997, unless sooner terminated as
herein provided (the "Employment Term").
3. Position and Duties.
(a) The Employee shall serve the Company as President, and shall
report to, and be subject to the general direction and control of, the Board of
Directors of the Company. The Employee shall perform the duties as are from
time to time assigned to him by the Company. The Employee also agrees to
perform, without additional compensation, such other services for the Company
and for any subsidiary or affiliate of the Company in which the Company has an
interest, as the Board of Directors of the Company shall from time to time
reasonably specify.
(b) During the Employment Term, the Employee shall devote his full
time, skill and attention to the business and affairs of the Company, and in
furtherance of the business and affairs of the Company, to the extent necessary
to discharge faithfully and efficiently the duties and responsibilities
delegated and assigned to the Employee herein or pursuant hereto, except for
usual, ordinary and customary periods of absence due to illness or other
disability and six weeks of paid vacation per year. The foregoing shall not be
construed as preventing the Employee from making investments in other
businesses or enterprises provided such investments do not require the
provision of substantial services by the Employee to the operations or affairs
of such businesses or enterprises such that the provision thereof would
interfere in any respect with the performance of the Employee's duties and
responsibilities hereunder.
(c) The Employee shall serve, if elected or appointed, as a
director of the Company, as a director or officer of any subsidiary or
affiliate of the Company, and as a member of any committee of the Board of
Directors of the Company or any subsidiary or affiliate thereof. Any such
service shall
<PAGE> 2
be without further compensation, except that Employee shall be paid such
compensation, if any, as is paid to other directors (solely in their capacity
as director) who are also employees of the Company or any subsidiary or
affiliate thereof.
(d) For purposes of this Section 3, an affiliate shall only
include companies or entities controlled by the Company, and shall not include
any other companies or entities controlled by or under common control with
Buyer.
4. Compensation and Related Matters.
(a) Base Salary. The Company shall pay to the Employee a minimum
base salary ("Base Salary") of $200,000 per year. The Base Salary is to be
payable in installments in accordance with the payroll policies of the Company
in effect from time to time during the Employment Term. During the Employment
Term, Employee shall be entitled to have his performance reviewed in accordance
with the policies, practices and procedures of Buyer from time to time in
effect for reviewing the compensation of executive officers of subsidiaries of
Buyer, and such Base Salary may be increased if it is determined such increase
is warranted.
(b) Vacation. The Employee shall be entitled to six weeks paid
vacation during each calendar year. The Employee agrees to use reasonable
efforts to utilize his vacation at such time or times as are (i) consistent
with the proper performance of his duties and responsibilities hereunder and
(ii) mutually convenient for the Company and the Employee.
(c) Other Benefits. The Employee shall be entitled to other
benefits in accordance with the policies, practices and procedures of the
Company and its affiliates from time to time in effect, commensurate with the
Employee's position. Without limiting the provisions of the immediately
preceding sentence, the Employee shall be entitled to the following benefits at
the sole expense of the Company:
(i) the purchase, prior to the closing of Buyer's
purchase of the outstanding shares of common stock of the Company, of
Employee's current automobile from the Company at the Company's book
value at December 31, 1993; and
(ii) $5,000,000 of split-dollar life insurance currently
in effect on the Employee's life, with the Employee to own such
insurance policy and to have the right to choose the beneficiary or
beneficiaries thereof.
5. Termination of Employment.
(a) Death. The Employee's employment hereunder shall terminate
automatically upon his death.
(b) Disability. The Employee's employment hereunder shall
terminate automatically upon the total and permanent disability (whether
physical or mental) ("Disability") of the Employee, as determined by Employee's
doctor, who shall be reasonably acceptable to Buyer.
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<PAGE> 3
(c) Termination by Company. The Company may terminate the
Employee's employment hereunder for Cause (as defined below). For purposes of
this Agreement, "Cause" shall mean any of the following:
(i) conduct by the Employee that constitutes willful
misconduct or gross negligence in the performance of his duties
hereunder, continuing for ten (10) days after written notice of need
to cure, if curable;
(ii) conduct by the Employee that constitutes fraud,
dishonesty or a criminal act with respect to the Company;
(iii) embezzlement of funds or misappropriation of other
property by the Employee from the Company or any subsidiary or
affiliate thereof;
(iv) conviction of the Employee of a felony or of any
other crime involving fraud, dishonesty or moral turpitude;
(v) the willful and continued failure by the Employee to
substantially perform his duties hereunder (other than any such
failure resulting from illness of or injury to the Employee or the
Employee's physical or mental incapacity), after demand for
substantial performance is delivered by the Company that specifically
identifies the manner in which the Company believes the Employee has
not substantially performed his duties;
(vi) a material breach by the Employee of the Employee's
obligations under Paragraph 3 (other than as a result of incapacity
due to physical or mental illness) which is demonstrably willful and
deliberate on the Employee's part, which is committed in bad faith or
without reasonable belief that such breach is in the best interests of
the Company, and which is not remedied in a reasonable period of time
after receipt of written notice from the Company specifying such
breach; or
(vii) the willful and material breach by the Employee of
any of the material provisions of this Agreement.
(d) Notice of Termination. Any termination of the Employee's
employment hereunder by the Company (other than a termination pursuant to
Paragraph 5(a)) shall be communicated by a Notice of Termination (as defined
below) to the Employee. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) in the case of a
termination for Disability or Cause, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) specifies the Date of
Termination (as defined in Paragraph 5(e) below). The failure by the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Disability or Cause shall not waive any right of
the Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder.
(e) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the effective date of termination of the Employee's
employment hereunder, which date shall be (i) if the Employee's employment is
terminated by his death, the date of his death, (ii) if the Employee's
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<PAGE> 4
employment is terminated because of his Disability, the date his Disability has
prevented Employee from performing his duties hereunder for four (4)
consecutive months, (iii) if the Employee's employment is terminated by the
Company for Cause, the date on which the Notice of Termination is given, and
(iv) if the Employee's employment is terminated for any other reason, the date
specified in the Notice of Termination, which date shall in no event be earlier
than the date such notice is given.
(f) Resignation. In the event of termination of the Employee's
employment hereunder (for any reason other than the death of the Employee), the
Employee agrees that if at such time he is a director or officer of the Company
or any of its subsidiaries or affiliates, he will promptly deliver to the
Company his written resignation from all such positions, such resignation to be
effective as of the Date of Termination.
6. Obligations of Company Upon Termination of Employment.
(a) Death or Disability. If the Employee's employment hereunder
is terminated by reason of the Employee's death or Disability, the Company
shall pay to the Employee's estate, in the case of death, and to the Employee
or the Employee's estate, in the case of Disability, in a lump sum in cash
within thirty (30) days after the Date of Termination, the Employee's Base
Salary and any vested benefits to which he is entitled and reimbursements due
through the Date of Termination, to the extent not theretofore paid.
(b) Termination for Cause. If the Employee's employment hereunder
is terminated for Cause, the Company shall pay to the Employee, in a lump sum
in cash within thirty (30) days after the Date of Termination, the Employee's
Base Salary and any vested benefits to which he is entitled and reimbursements
due through the Date of Termination, to the extent not theretofore paid, and,
thereafter, the Company shall have no further obligations to the Employee under
this Agreement, except as provided in Paragraph 15.
(c) Termination by Employee. If the Employee's employment
hereunder is terminated by the Employee, the Company shall pay to the Employee,
in a lump sum in cash within thirty (30) days after the Date of Termination,
the Employee's Base Salary and any vested benefits to which he is entitled and
reimbursements due through the Date of Termination, to the extent not
theretofore paid.
(d) Termination by Company Other Than for Cause. If the
Employee's employment hereunder is terminated by the Company other than for the
Employee's death, for Cause, for Disability or pursuant to the provisions of
Paragraph 2, the Company shall pay to the Employee, in a lump sum in cash
within thirty (30) days after the Date of Termination, the aggregate of the
following amounts:
(i) the Employee's Base Salary and any vested benefits to
which he is entitled and reimbursements due through the Date of
Termination at the rate in effect hereunder at the time the Notice of
Termination is given, to the extent not theretofore paid; and
(ii) the Employee's Base Salary at the rate in effect
hereunder at the time the Notice of Termination is given through the
remainder of the Employment Term;
provided, however, that if the Company fails to make any of the payments
specified in subparagraph (i) above by the thirtieth (30th) day after the Date
of Termination, the Employee's Base Salary shall continue to be earned through
the date of payment.
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<PAGE> 5
(e) Remedies. The right to receive the payments and other
benefits provided for under this Paragraph 6 shall be the Employee's sole and
exclusive remedy for the termination of his employment hereunder and shall be
in lieu of any claim that he might otherwise have against the Company arising
from such termination. Notwithstanding anything to the contrary herein, if
termination of Employee's employment results from a breach of this Agreement by
the Company, as determined by a court of competent jurisdiction, Employee shall
be entitled to receive, as his sole and exclusive remedy and in lieu of any
claim that he might otherwise have against the Company arising from such
termination, the payments and other benefits to which he is entitled as a
result of such breach, plus interest thereon and the fees and costs to which
Employee is entitled under Paragraph 12.
7. Compliance With Other Agreements.
(a) The Company represents and warrants to the Employee that the
execution, delivery and performance by the Company of this Agreement have been
duly authorized by all necessary corporate action of the Company and do not and
will not conflict with or result in a violation of any provision of, or
constitute a default under, any contract, agreement, instrument or obligation
to which the Company is a party or by which it is bound.
(b) The Employee represents and warrants to the Company that the
execution, delivery and performance by the Employee of this Agreement do not
and will not conflict with or result in a violation of any provision of, or
constitute a default under, any contract, agreement, instrument or obligation
to which the Employee is a party or by which he is bound.
8. Noncompetition and Related Matters.
(a) During the Employment Term and for a period of two years
following the termination of the Employment Term, the Employee shall not,
directly or indirectly, for his own account or for the benefit of any other
person, engage or participate in, or own any interest in, provide any financing
for, perform any service for or act in any other capacity for any business or
organization which engages or participates, directly or indirectly, in, any
business or activity in the State of Texas or in any other area in which the
Company, Buyer or any of either's subsidiaries or affiliates operates, that, in
the good faith judgment of the Board of Directors of the Company, is in
substantial and direct competition with the business of the Company, Buyer or
any of either's subsidiaries or affiliates conducted by them during or at the
termination of the Employment Term within any state in which the Company, Buyer
or any of either's subsidiaries or affiliates is conducting or has conducted
its business during the Employment Term.
(b) During the two-year period commencing on the date of
termination of the Employee's employment hereunder, the Employee shall not,
directly or indirectly, for his own account or for the benefit of any other
person:
(i) employ, solicit for employment or advise or recommend
to any other person that such other person employ or solicit for
employment, any employee of the Company or any of its subsidiaries or
affiliates (other than any member of Employee's immediate family);
(ii) solicit or induce, or in any manner attempt to
solicit or induce, any customer of the Company or any of its
subsidiaries or affiliates (A) to cease being, or any prospective
customer not to become, a customer of the Company or any of its
subsidiaries or affiliates or
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<PAGE> 6
(B) to divert any business of such customer from the Company or any of
its subsidiaries or affiliates; or
(iii) otherwise interfere with, disrupt or attempt to
interfere with or disrupt the relationship, contractual or otherwise,
between the Company or any of its subsidiaries or affiliates and any
of their respective customers, clients, suppliers, consultants or
employees.
(c) The Employee regards the restrictions contained in this
Paragraph 8 as reasonable in scope, duration and geographic territory and as
designed to provide the Company with limited, legitimate and reasonable
protection against subsequent diminution of the value of the business of the
Company and its subsidiaries attributable to any actions of the Employee
contrary to such restrictions. The Employee acknowledges that irreparable
damage would occur in the event any of the provisions of this Paragraph 8 were
breached and accordingly agrees that the Company shall be entitled (without
being required to prove damages or furnish any bond or other security) to an
injunction or injunctions to prevent breaches of the provisions of this
Paragraph 8, and shall be entitled to enforce specifically the provisions of
this Paragraph 8, in any court of the United States or any state thereof having
jurisdiction, in addition to any other remedy to which the Company may be
entitled under this Agreement or at law or in equity. It is the intent and
understanding of the parties hereto that if, in any action before any court or
governmental entity legally empowered to enforce the provisions of this
Paragraph 8, any term, restriction, covenant or promise in this Paragraph 8 is
found to be unreasonable and for that reason unenforceable, then such term,
restriction, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such court or governmental entity.
Further, during any period in which the Employee is in breach of any covenant
contained in Paragraph 8(a), the time period of such covenant shall be extended
for an amount of time that the Employee is in breach thereof.
(d) Nothing contained in this Paragraph 8 shall be construed to
prohibit the Employee from investing in stock or other securities of a
corporation or other entity which has a class of equity securities listed on a
national securities exchange or actively traded in the over-the-counter market,
provided that the Employee shall not perform any services on behalf of, or in
the operation of the affairs of, such corporation or other entity.
(e) Nothing contained in this Paragraph 8 shall be construed to
prevent the Employee from serving on the board of directors of any company not
in competition with the Company, Buyer or any of either's subsidiaries or
affiliates; provided, however, that any such directorship would be subject to
prior approval by Buyer in accordance with Buyer's then existing policy and
practice, which approval would not be unreasonably withheld.
(f) The covenants of the Employee contained in this Paragraph 8
are ancillary to and independent of any other provision of this Agreement, and
the existence of any claim or cause of action of the Employee against the
Company or any shareholder, director or officer of the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of the covenants of the Employee contained in
this Paragraph 8.
(g) The provisions of this Paragraph 8 shall continue in effect
notwithstanding termination of the Employee's employment hereunder for any
reason.
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<PAGE> 7
9. Confidentiality. The Employee recognizes and acknowledges
that the Company's trade secrets and other confidential or proprietary
information, as they may exist from time to time, are valuable, special and
unique assets of the Company's business, access to and knowledge of which are
essential to the performance of the Employee's duties hereunder. Accordingly,
during the Employment Term and thereafter without limitation of time, the
Employee shall hold in strict confidence and shall not, directly or indirectly,
disclose or reveal to any person, or use for his own personal benefit or for
the benefit of anyone else, any trade secrets, confidential dealings or other
confidential or proprietary information of any kind, nature or description
(whether or not acquired, learned, obtained or developed by the Employee alone
or in conjunction with others) belonging to or concerning the Company or any of
its subsidiaries, or any of their customers or clients or others with whom they
now or hereafter have a business relationship, except (i) with the prior
written consent of the Company duly authorized by its Board of Directors, (ii)
in the course of the proper performance of the Employee's duties hereunder or
(iii) as required by applicable law or legal process. The Employee confirms
that all such information constitutes the exclusive property of the Company.
The provisions of this Paragraph 9 shall continue in effect notwithstanding
termination of the Employee's employment hereunder for any reason.
10. Business Records. Given the secretive and competitive
environment in which the Company does business and the fiduciary relationship
that the Employee will have with the Company hereunder, the Employee agrees to
promptly deliver to the Company, upon termination of his employment hereunder,
or at any other time when the Company so requests, all memoranda, notes,
records, drawings, manuals and other documents (and all copies thereof and
therefrom) in any way relating to the business or affairs of the Company or any
of its subsidiaries or any of their clients, whether made or compiled by the
Employee or furnished to him by the Company or any of its employees, customers,
clients, consultants or agents, which the Employee may then possess or have
under his control. The Employee confirms that all such memoranda, notes,
records, drawings, manuals and other documents (and all copies thereof and
therefrom) constitute the exclusive property of the Company. The obligation of
confidentiality set forth in Paragraph 9 shall continue notwithstanding the
Employee's delivery of any such documents to the Company. The provisions of
this Paragraph 10 shall continue in effect notwithstanding termination of the
Employee's employment hereunder for any reason.
11. Set Off. The Employee hereby grants to the Company the right
to set off against, and authorizes the Company to deduct from, any payments to
the Employee, or to his heirs, legal representatives or successors, provided
for in this Agreement, any amounts which may be due and owing by the Employee
to the Company, whether arising hereunder or otherwise.
12. Attorneys' Fees and Costs. In the event there is any
litigation between the parties hereto with respect to this Agreement, the
prevailing party in such litigation shall be entitled to recover all attorneys'
fees and costs incurred by such party in connection with such litigation.
13. Injunctive Relief. In recognition of the fact that a breach
by the Employee of any of the provisions of Paragraphs 8, 9 or 10 will cause
irreparable damage to the Company for which monetary damages alone will not
constitute an adequate remedy, the Company shall be entitled as a matter of
right (without being required to prove damages or furnish any bond or other
security) to obtain a restraining order, an injunction, an order of specific
performance or other equitable or extraordinary relief from any court of
competent jurisdiction restraining any further violation of such provisions by
the Employee or requiring him to perform his obligations hereunder. Such right
to equitable or extraordinary relief shall not be exclusive but shall be in
addition to all other rights and remedies to which the Company may be entitled
at law or in equity, including without limitation the
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<PAGE> 8
right to recover monetary damages for the breach by the Employee of any of the
provisions of this Agreement.
14. Jurisdiction and Venue. In respect of any action or
proceeding arising out of or relating to this Agreement, each of the parties
hereto consents to the jurisdiction and venue of any federal or state court
located within Harris County, Houston, Texas, waives personal service of any
and all process upon it or him, consents that all such service of process may
be made by first class registered or certified mail, postage prepaid, return
receipt requested, directed to it or him at the address specified in Paragraph
17, agrees that service so made shall be deemed to be completed upon actual
receipt thereof and waives any objection to jurisdiction or venue of, and
waives any motion to transfer venue from, any of the aforesaid courts.
15. Survival. Neither the expiration nor the termination of the
term of the Employee's employment hereunder shall impair the rights or
obligations of either party hereto which shall have accrued hereunder prior to
such expiration or termination. The provisions of Paragraphs 6, 8, 9 and 10,
and the rights and obligations of the parties thereunder, shall survive the
expiration or termination of the term of the Employee's employment hereunder.
16. Source of Payments. All payments to the Employee provided in
Paragraphs 4 and 6 shall be paid in cash from the general funds of the Company,
and no special or separate fund shall be established and no other segregation
of assets shall be made to assure payment. The Employee shall have no right,
title or interest whatever in or to any investments that the Company may make
to aid the Company in meeting its obligations hereunder. Nothing contained in
this Agreement, and no action taken pursuant to its provisions, shall create or
be construed to create a trust of any kind, or a fiduciary relationship,
between the Company and the Employee or any other person. To the extent that
any person acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured creditor of the
Company.
17. Notices. All notices, requests, demands and other
communications required or permitted to be given or made hereunder by either
party hereto shall be in writing and shall be deemed to have been duly given or
made (i) when delivered personally, (ii) when sent by telefacsimile
transmission or (iii) when deposited in the United States mail, first class
registered or certified mail, postage prepaid, return receipt requested, to the
party for which intended at the following addresses (or at such other addresses
as shall be specified by the parties by like notice, except that notices of
change of address shall be effective only upon receipt):
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<PAGE> 9
If to the Company, at:
Triton Engineering Services Company
1201 Dairy Ashford
Houston, Texas 77079
Fax No. 713-556-9074
If to the Employee, at:
Joseph E. Beall
c/o Triton Engineering Services Company
1201 Dairy Ashford
Houston, Texas 77079
Fax No. 713-556-9074
18. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto concerning the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to such subject matter. The Employee and the
Company expressly acknowledge and agree that the employment agreement dated
January 1, 1993 between the Employee and the Company is superseded by and
terminated effective upon the execution and delivery of this Agreement.
19. Binding Effect; Assignment; No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, legal representatives, successors and assigns;
provided, however, that the Employee shall not assign or otherwise transfer
this Agreement or any of his rights or obligations hereunder without the prior
written consent of the Company (except that any rights that the Employee may
have hereunder at the time of his death may be transferred by will or pursuant
to the laws of descent and distribution). Nothing in this Agreement, express
or implied, is intended to or shall confer upon any person other than the
parties hereto, and their respective heirs, legal representatives, successors
and permitted assigns, any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
20. Nonalienation of Benefits. The Employee shall not have any
right to pledge, hypothecate, anticipate or in any way create a lien upon any
payments or other benefits provided under this Agreement; and no benefits
payable hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts, or by operation of law, except by will or
pursuant to the laws of descent and distribution.
21. Amendment. This Agreement may not be modified or amended in
any respect except by an instrument in writing signed by both of the parties
hereto.
22. Waiver. Any term or condition of this Agreement may be waived
at any time by the party hereto which is entitled to have the benefit thereof,
but such waiver shall only be effective if evidenced by a writing signed by
such party, and a waiver on one occasion shall not be deemed to be a waiver of
the same or any other type of breach on a future occasion. No failure or delay
by a party hereto in exercising any right or power hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right or power.
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<PAGE> 10
23. Authority. No person, other than pursuant to a resolution of
the Board of Directors of the Company or a committee thereof, shall have
authority on behalf of the Company to agree to modify, amend, or waive any
provision of this Agreement or anything in reference thereto.
24. Severability. If any provision of this Agreement is held to
be unenforceable, (a) this Agreement shall be considered divisible, (b) such
provision shall be deemed inoperative to the extent it is deemed unenforceable
and (c) in all other respects this Agreement shall remain in full force and
effect; provided, however, that if any such provision may be made enforceable
by limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
25. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
26. Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement and shall not affect in any manner the meaning or interpretation of
this Agreement.
27. References. All references in this Agreement to Paragraphs,
subparagraphs and other subdivisions refer to the Paragraphs, subparagraphs and
other subdivisions of this Agreement unless expressly provided otherwise. The
words "this Agreement", "herein", "hereof", "hereby", "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. Whenever the words "include",
"includes" and "including" are used in this Agreement, such words shall be
deemed to be followed by the words "without limitation". Words in the singular
form shall be construed to include the plural and vice versa, unless the
context otherwise requires.
28. Counterparts. This Agreement may be executed by the parties
hereto in any number of counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer, and the Employee has
executed this Agreement, as of the date first set forth above.
TRITON ENGINEERING SERVICES COMPANY
By: /s/ CHARLES R. ERICKSON
Name: Charles R. Erickson
Title: Secretary
"COMPANY"
/s/ JOSEPH E. BEALL
Joseph E. Beall
"EMPLOYEE"
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LEASE INDEMNITY AGREEMENT
THIS LEASE INDEMNITY AGREEMENT (this "Agreement") is made and entered
into as of April 22, 1994, by and among Joseph E. Beall, a resident of
Harris County, Texas ("Beall"), Triton Engineering Services Company, a Texas
corporation ("TESCO"), 1201 Dairy Ashford Ltd., a Texas limited partnership
("1201"), and Noble Drilling Corporation, a Delaware corporation ("Buyer").
RECITALS
1. TESCO and 1201 are tenant and landlord, respectively, under that
certain Office Building Lease Agreement dated January 29, 1991 (the "Lease")
under which TESCO leases 57,812 square feet of rentable area in 1201's office
building located at 1201 Dairy Ashford, Houston, Harris County, Texas (the
"Property").
2. Beall owns substantially all of the capital stock of TESCO and a
majority in limited partnership interest in 1201. TESCO owns all of the issued
and outstanding capital stock of 1201 Dairy Ashford, Inc., a Texas corporation
that is the sole general partner of 1201 (the "General Partner").
3. Buyer has agreed to purchase all of the issued and outstanding
capital stock of TESCO from Beall and the other shareholder of TESCO (the
"Acquisition"), pursuant to that certain Stock Purchase Agreement of even date
herewith among Beall, the other shareholder of TESCO, TESCO and Buyer (the
"Stock Purchase Agreement"). Buyer, Beall and TESCO have agreed that TESCO
will distribute all of the issued and outstanding capital stock of the General
Partner to Beall and forgive all debt owed by 1201 to TESCO prior to the
consummation of the Acquisition.
4. As a condition to the consummation of the Acquisition, Buyer has
required that Beall execute this Agreement providing for the indemnification of
Buyer for the amount of rent TESCO is required to pay under the Lease (i) in
excess of the gross rental per square foot to which Buyer and Beall have
agreed, and (ii) on account of space deemed by Buyer to be in excess of TESCO's
current needs. Such indemnification, and the other agreements contained
herein, shall in no way impair, diminish or relieve TESCO of its obligations
under the Lease, but shall be an independent contract and agreement between
Beall, 1201, Buyer and TESCO.
5. The Aid Association for Lutherans, a Wisconsin corporation
("AAL"), the holder of the senior debt on the Property and the assignee of the
Lease, has been notified of the transfer of all of the issued and outstanding
capital stock of the General Partner to Beall and of the other transactions and
agreements contained in this Agreement and has given its consent thereto.
AGREEMENT
In consideration of the premises and the respective agreements of the
parties contained herein, it is agreed as follows:
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Section 1. Indemnity for Rent.
1.1 Calculation of Amount. Subject to this Agreement's terms and
conditions, Beall shall indemnify Buyer to the extent that the gross rent (the
"Gross Rent") due under the Lease (consisting of Base Rental plus Actual
Operating Costs, as such terms are defined in the Lease) exceeds $9.00 per
square foot for the 43,310 rentable square feet to be used by TESCO following
the Acquisition, and for all Gross Rent with respect to the 14,502 rentable
square feet described in the Lease as the second floor of the North Pod (the
"Excess Area"), which has been deemed unnecessary by Buyer as of this time.
1.2 Payment of Indemnity. To the extent possible, amounts due by
Beall to Buyer hereunder as of the Determination Date, as such term is defined
in the Stock Purchase Agreement (the "Determination Date Rental Indemnification
Amount"), shall be satisfied under the provisions of Section 1.3(c) of the
Stock Purchase Agreement. To the extent that amounts due under this Agreement
cannot be, or are not, satisfied thereunder, then Beall shall pay to Buyer in
cash the amount due within thirty days of the presentation of an invoice by or
on behalf of Buyer to Beall showing, in reasonable detail, the calculation of
the amount due.
Section 2. Sublease of Excess Area. Upon the instruction of 1201, TESCO
agrees to enter into a sublease of all or any part of the Excess Area to a
third party on terms and conditions acceptable to 1201 in its sole discretion;
provided, however, that any such sublease shall be approved by AAL to the
extent AAL has a right to require such approval, and further provided that
neither Buyer nor TESCO shall have any affirmative duty to seek to sublease all
or any part of the Excess Area and that any such sublease shall not require
TESCO to assume any obligation or duties other than the demise of the Excess
Area. Beall agrees to confer with Buyer prior to concluding the sublease of
all or any part of the Excess Area to a third party regarding the proposed
sublessee and to obtain Buyer's consent to the identity of such sublessee,
which consent shall not be unreasonably withheld. If TESCO desires to use all
or any part of the Excess Area, such use shall be deemed a sublease subject to
the terms of the preceding sentence. TESCO's proceeds from any such sublease
shall reduce Beall's indemnity obligation under Section 1 above on a dollar for
dollar basis.
Section 3. Term and Renewal. This Agreement shall terminate on the third
anniversary of the closing date of the Acquisition. Thereafter, the parties
shall negotiate in good faith to extend the term and adjust Beall's indemnity
obligation so that TESCO's effective lease rate and term are equivalent to
those obtainable on the open market for buildings similar to the Property.
Notwithstanding the foregoing, upon payment in full of all indebtedness of
1201 to AAL, Beall shall have the right to refuse to extend this Agreement past
its termination, and 1201 shall have the right to terminate the Lease without
further obligation. Further, if despite their good faith efforts to renew and
extend this Agreement, Buyer and Beall are unable to agree on an effective
rental rate and term, or if 1201 shall sell the Property to or assign the Lease
to a third party prior to the third anniversary of the closing date of the
Acquisition, Beall agrees to indemnify TESCO for any and all obligations or
liabilities TESCO may incur to 1201, its general and limited partners, to AAL,
or to such third party, or to their respective affiliates, in the event TESCO
breaches the Lease.
Section 4. Miscellaneous.
4.1 Notices. All notices, waivers, statements and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been effectively given when personally delivered,
sent by telefax with copy by United States mail, or deposited in the United
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States mail, postage prepaid, registered or certified, return receipt
requested, addressed to the respective parties at the addresses appearing below
or at such other address as may be designated from time to time by like notice.
If to Buyer or TESCO: Noble Drilling Corporation
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
Attention: Mr James C. Day, President and
Chief Executive Officer
Telefax: 713-953-1126
If to Beall or 1201: Mr. Joseph E. Beall
1201 Dairy Ashford
Houston, Texas 77079
Telefax: 713-556-9074
4.2 Expenses. Each of the parties to this Agreement shall pay its
respective expenses incurred in connection with this Agreement, including
without limitation attorneys' and professional fees.
4.3 Amendments. This Agreement, the Stock Purchase Agreement, and
the Lease set forth the entire understanding between the parties hereto with
respect to the subject matter hereof, oral or written, and supersede all prior
agreements and understandings between them with respect to the subject matter
hereof. All of such prior understandings and agreements (if any exist) are
merged with and into this Agreement. The parties hereto may amend or modify
this Agreement only by a written instrument executed by all of the parties
hereto.
4.4 Binding Effect. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and assigns.
4.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be deemed for all purposes to be one agreement.
4.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of the State of Texas, without regard to
its conflict of laws rules.
4.7 Assignment. No party hereto may assign all or any part of its
interests, obligations or rights under this Agreement to any person or entity
without the prior written consent of the other parties hereto.
4.8 Gender; Number. Unless the context otherwise requires, the
singular number shall include the plural and vice versa, and each gender shall
include each other gender.
4.9 Captions. The captions contained in this Agreement are solely
for convenient reference and shall not be deemed to affect the meaning of any
article, section or paragraph hereof.
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4.10 Severability. If any one or more of the provisions of this
Agreement shall for any reason be held by a court of competent jurisdiction to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect the remaining provisions of
this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
TRITON ENGINEERING SERVICES COMPANY
By: /s/ Charles R. Erickson
_________________________________
Charles R. Erickson,
Secretary
/s/ JOSEPH E. BEALL
JOSEPH E. BEALL
1201 DAIRY ASHFORD LTD.
By: 1201 DAIRY ASHFORD, INC.
its general partner
By: /s/ Joseph E. Beall
________________________
NOBLE DRILLING CORPORATION
By: /s/ James C. Day
____________________________________
James C. Day
CEO & President
STATE OF TEXAS )
)
COUNTY OF HARRIS )
ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by
Charles R. Erickson, Secretary of Triton Engineering Services Company, a
Texas corporation, to certify which witness my hand and seal of this office.
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/s/ Diana Wiley Armbrust
____________________________________
Notary Public in and for The
State of T E X A S
My Commission Expires:
October 17, 1996
____________________________________
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STATE OF TEXAS )
)
COUNTY OF HARRIS )
ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by
Joseph E. Beall, to certify which witness my hand and seal of this office.
/s/ Diana Wiley Armbrust
____________________________________
Notary Public in and for The
State of T E X A S
My Commission Expires:
October 17, 1996
____________________________________
STATE OF TEXAS )
)
COUNTY OF HARRIS )
ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by
Charles R. Erickson, Secretary of 1201 Dairy Ashford, Inc., a Texas
corporation, on behalf of said corporation in its capacity as General Partner
of 1201 Dairy Ashford Ltd., to certify which witness my hand and seal of this
office.
/s/ Diana Wiley Armbrust
____________________________________
Notary Public in and for The
State of T E X A S
My Commission Expires:
October 17, 1996
____________________________________
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STATE OF TEXAS )
)
COUNTY OF HARRIS )
ACKNOWLEDGED BEFORE ME on this 22nd day of April, 1994 by James C.
Day, CEO & President of Noble Drilling Corporation, a Delaware corporation, to
certify which witness my hand and seal of this office.
/s/ Diana Wiley Armbrust
____________________________________
Notary Public in and for The
State of T E X A S
My Commission Expires:
October 17, 1996
____________________________________
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NOBLE DRILLING CORPORATION
10370 RICHMOND AVENUE, SUITE 400 (NOBLE LOGO)
HOUSTON, TX 77042
NEWS PHONE: 713-974-3131 FAX: 713-974-3181
- - --------------------------------------------------------------------------------
NOBLE DRILLING CORPORATION COMPLETES ACQUISITION OF
TRITON ENGINEERING SERVICES COMPANY
HOUSTON, Texas, April 25, 1994 -- Noble Drilling Corporation has
completed its acquisition of Triton Engineering Services Company and its
subsidiaries. The parties announced in January 1994, that they had signed a
letter of intent for the transaction, which was closed by the purchase by Noble
Drilling of all of the outstanding shares of stock of Triton.
Triton Engineering Services Company was founded by Joseph E. Beall in
1977. Beall, who owned a substantial majority of Triton's stock, will continue
to serve as Triton's president. Trition provides engineering, consulting and
"turn-key" drilling services, and manufacturing and rental of oil field
equipment for the oil and gas industry.
The consideration paid by Noble Drilling consisted of a combination of
Noble Drilling common stock, cash and a six-month promissory note, plus
additional consideration contingently payable at the end of two years, subject
to reduction in certain events, and based in part on Triton's financial
performance in 1994.
James C. Day, Chairman, President and Chief Executive Officer of Noble
Drilling Corporation, said "This acquisition represents a continuation of our
efforts to expand the overall operational services provided by the company.
Triton will augment our ability to compete in this important and evolving
segment of the drilling industry."
-more-
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Noble Drilling will schedule a teleconference with analysts on April
29, 1994 at 10:00 a.m., central daylight time, at which time management will be
available to discuss the acquisition.
Noble Drilling Corporation is a major drilling contractor with offshore
and land operations in the United States, Canada, the United Kingdom, Africa,
South America, Venezuela, the Middle East and the Far East. The company's
outstanding Common Stock and $2.25 Convertible Exchangeable Preferred stock are
traded in the NASDAQ/NMS under the symbols "NDCO" and "NDCOP", respectively.
###
NDC-126
4/25/94
For additional information, contact:
Byron L. Welliver, Senior Vice President-Finance and Treasurer,
Noble Drilling Corporation 713-974-3131.
