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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): September 23, 1999
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UNIT CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-9260 73-1283193
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1000 Kensington Tower, 7130 So. Lewis, Tulsa, Oklahoma 74136
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (918) 493-7700
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Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On July 23, 1999, Unit Corporation (the "Company") filed a Registration
Statement on Form S-3, File No. 333-83551 (the "Registration Statement"), with
the Securities and Exchange Commission (the "Commission") relating to the
public offering, pursuant to Rule 415 under the Securities Act of 1933, as
amended, of up to an aggregate of $100,000,000 in securities of the Company. On
August 3, 1999, the Commission declared the Registration Statement effective.
(The Registration Statement and definitive prospectus contained therein are
collectively referred to as the "Prospectus").
On September 24, 1999, the Company filed with the Commission a
supplement to the Prospectus, dated September 23, 1999 (the "Prospectus
Supplement"), relating to the issuance and sale in an underwritten public
offering of up to 8,050,000 shares of the Company's common stock (including
shares subject to the underwriters' over-allotment option), par value $.20 per
share. In connection with the filing of the Prospectus Supplement with the
Commission, the Company is filing certain exhibits as part of this Form 8-K. See
"Item 7. Financial Statements and Exhibits."
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
The following exhibits are filed with this report on Form 8-K.
Exhibit No. Description
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1.1 Underwriting Agreement, dated September 23,
1999, by and among the Company and Prudential
Securities Incorporated, CIBC World Markets
Corp. and Raymond James & Associates, Inc., as
representatives of the underwriters, with
respect to the issuance and sale by the Company
of up to 8,050,000 shares of the Company's
common stock.
5.1 Opinion of Conner & Winters, A Professional
Corporation regarding the validity of the common
stock.
15 Letter of PricewaterhouseCoopers LLP regarding
unaudited interim financial information.
23.1 Consent of Conner & Winters, A Professional
Corporation (included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ryder Scott Company, L.P.
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99.1 Asset Purchase Agreement dated August 12, 1999,
by and between Unit Corporation, Parker
Drilling Company North America, Inc. and Parker
Drilling Company.
SIGNATURES
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Pursuant to the requirements 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.
UNIT CORPORATION
Date: September 27, 1999 By: /s/ Mark E. Schell
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Mark E. Schell
General Counsel and Secretary
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Exhibit Index
Exhibit No. Description
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1.1 Underwriting Agreement, dated September 23, 1999, by and
among the Company and Prudential Securities
Incorporated, CIBC World Markets Corp. and Raymond James
& Associates, Inc., as representatives of the
underwriters, with respect to the issuance and sale by
the Company of up to 8,050,000 shares of the Company's
common stock.
5.1 Opinion of Conner & Winters, A Professional Corporation
regarding the validity of the common stock.
15 Letter of PricewaterhouseCoopers LLP regarding
unaudited interim financial information.
23.1 Consent of Conner & Winters, A Professional Corporation
(included in Exhibit 5.1).
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Ryder Scott Company, L.P.
99.1 Asset Purchase Agreement dated August 12, 1999, by and
between Unit Corporation, Parker Drilling Company North
America, Inc. and Parker Drilling Company.
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EXHIBIT 1.1
UNIT CORPORATION
7,000,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
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September 23, 1999
PRUDENTIAL SECURITIES INCORPORATED
CIBC WORLD MARKETS CORP.
RAYMOND JAMES & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
One New York Plaza
New York, New York 10292
Dear Sirs:
Unit Corporation, a Delaware corporation (the "Company"), hereby
confirms its agreement with the several underwriters named in Schedule I hereto
(the "Underwriters"), for whom you have been duly authorized to act as
representatives (in such capacities, the "Representatives"), as set forth below.
If you are the only Underwriters, all references herein to the Representatives
shall be deemed to be to the Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell to the several Underwriters an aggregate of
7,000,000 shares (the "Firm Securities") of the Company's Common Stock, par
value $.20 per share ("Common Stock"). The Company also proposes to issue and
sell to the several Underwriters not more than 1,050,000 additional shares of
Common Stock if requested by the Representatives as provided in Section 3 of
this Agreement. Any and all shares of Common Stock to be purchased by the
Underwriters pursuant to such option are referred to herein as the "Option
Securities", and the Firm Securities and any Option Securities are collectively
referred to herein as the "Securities".
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, each of the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement
on such Form (File No. 333-83551) with respect to the Securities, including
a prospectus subject to completion, has been filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Act, and
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(1) Plus an option to purchase from Unit Corporation up to 1,050,000 additional
shares to cover over-allotments.
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such registration statement has been declared by the Commission to be
effective under the Act. Prior to the date hereof, the Company has
prepared and filed with the Commission pursuant to Rule 424(b) under the
Act a prospectus supplement reflecting the terms of the Securities, the
terms of the offering thereof and the other matters set forth therein.
Such prospectus supplement and any additional prospectus supplements filed
pursuant to Rule 424(b) under the Act prior to the filing of the prospectus
supplement included in the Prospectus (as hereinafter defined), together
with the prospectus included in the Registration Statement, including all
documents incorporated by reference therein filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is referred to as
the "Preliminary Prospectus." After the execution of this Agreement, the
Company will file with the Commission a prospectus supplement in the form
of the prospectus supplement included in the Preliminary Prospectus with
such changes or insertions as are permitted by Rule 424(b) under the Act
and as have been provided to and approved by the Representatives prior to
the execution of this Agreement. Such prospectus supplement, together with
the prospectus included in the Registration Statement, including all
documents incorporated by reference therein filed under the Exchange Act,
is referred to as the "Prospectus." The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under
the Act for the purpose of registering certain additional Securities, which
registration shall be effective upon filing with the Commission. As used
in this Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Securities, as
amended at the time when it was or is declared effective, including (A) all
financial schedules and exhibits thereto, and (B) all documents
incorporated by reference therein filed under the Exchange Act; the term
"Rule 462(b) Registration Statement" means any registration statement filed
with the Commission pursuant to Rule 462(b) under the Act (including the
Registration Statement and any Preliminary Prospectus or Prospectus
incorporated therein at the time such Registration Statement becomes
effective); and the term "Registration Statement" includes both the
Original Registration Statement and any Rule 462(b) Registration Statement.
Any reference in this Agreement to an "amendment or supplement" to any
Preliminary Prospectus or the Prospectus or an "amendment" to any
registration statement (including the Registration Statement) shall be
deemed to include any document incorporated by reference therein that is
filed with the Commission under the Exchange Act after the date of such
Preliminary Prospectus, Prospectus or registration statement, as the case
may be. For purposes of the preceding sentence, any reference to the
"effective date" of an amendment to a registration statement shall, if such
amendment is effected by means of the filing with the Commission under the
Exchange Act of a document incorporated by reference in such registration
statement, be deemed to refer to the date on which such document was so
filed with the Commission.
(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus. When any Preliminary Prospectus and
any amendment or supplement thereto was filed with the Commission, it (i)
contained all statements required to be stated therein in accordance with,
and complied in all material respects with the requirements of, the Act,
the Exchange Act and the respective rules and regulations of the Commission
thereunder, and (ii) did not include any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. When the Registration Statement or any amendment
thereto was declared effective, it (i) contained all statements required to
be stated therein in accordance with, and complied in all material respects
with the requirements of, the Act, the Exchange Act and the respective
rules and regulations of the Commission thereunder and (ii) did not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the
Prospectus or any amendment or supplement to the Prospectus is
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filed with the Commission pursuant to Rule 424(b) and on the Firm Closing
Date and any Option Closing Date (both as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or
will contain all statements required to be stated therein in accordance
with, and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
documents incorporated by reference in the Prospectus, (i) at the time they
were filed with the Commission, contained or will contain all statements
required to be stated therein in accordance with, and complied in all
material respects with the requirements of, the Exchange Act and the rules
and regulations of the Commission thereunder, and (ii) when read together
with the other information in the Prospectus, did not or will not, on the
date hereof and at the Firm Closing Date and any Option Closing Date,
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions
made in any Preliminary Prospectus or any amendment or supplement thereto,
the Registration Statement or any amendment thereto, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with
and that is effective upon filing pursuant to Rule 462(b) and has received
confirmation of its receipt and (ii) the Company has given irrevocable
instructions for transmission of the applicable filing fee in connection
with the filing of the Rule 462(b) Registration Statement, in compliance
with Rule 111 promulgated under the Act or the Commission has received
payment of such filing fee.
(d) The Company and each of its subsidiaries have been duly organized
and are validly existing as corporations, partnerships or limited liability
companies, as the case may be, in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to
transact business as foreign corporations, partnerships or limited
liability companies, as the case may be, and are in good standing under the
laws of all other jurisdictions where the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified
does not amount to a material liability or disability to the Company and
its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and
conduct their respective businesses as described in the Registration
Statement, the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus; and the Company has full power
(corporate and other) to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
corporate subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and are owned beneficially by the Company free
and clear of any security interests, liens, encumbrances, equities or
claims. The general partner interests in each of the Company's partnership
subsidiaries are duly authorized by the partnership agreement of such
partnership and have been validly issued in
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accordance with such partnership agreement and are owned beneficially by
the Company free and clear of any security interests, liens, encumbrances,
equities or claims. The limited liability company interests owned by the
Company in each of the Company's limited liability company subsidiaries are
duly authorized by the organizational documents of such limited liability
company and have been validly issued in accordance with such organizational
documents and are owned beneficially by the Company free and clear of any
security interests, liens, encumbrances, equities or claims.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. The Firm Securities
and the Option Securities have been duly authorized and at the Firm Closing
Date or the related Option Closing Date (as the case may be), after payment
therefor in accordance herewith, will be validly issued, fully paid and
nonassessable. No holders of outstanding shares of capital stock of the
Company are entitled as such to any preemptive or other rights to subscribe
for any of the Securities, and no holder of securities of the Company has
any right which has not been fully exercised or waived to require the
Company to register the offer or sale of any securities owned by such
holder under the Act in the public offering contemplated by this Agreement.
(h) The capital stock of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus, there are not
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to
subscribe for or purchase from the Company or any such subsidiary any such
capital stock or any such convertible or exchangeable securities or
obligations, or (C) obligations of the Company or any such subsidiary to
issue any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(j) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Registration Statement or
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus, fairly present the financial position of the
Company and its consolidated subsidiaries and the results of operations and
changes in financial condition as of the dates and periods therein
specified. Such financial statements and schedules have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Prospectus or if the
Prospectus is not in existence, the most recent Preliminary Prospectus and
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, fairly present, on the basis stated in the Prospectus or
such Preliminary Prospectus and such Annual Report, the information
included therein.
(k) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules incorporated by reference in the Registration Statement and
included in the Prospectus (or, if the Prospectus is not in existence, the
most recent
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Preliminary Prospectus), are independent public accountants as required by
the Act, the Exchange Act and the related published rules and regulations
thereunder.
(l) Ryder Scott Company, L.P., who have reviewed certain reserve
estimates of the Company and its consolidated subsidiaries, are independent
petroleum consultants with respect to the Company.
(m) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application affecting
enforcement of creditors' rights, (ii) by application of legal principles
affecting the availability of equitable remedies, and (iii)by rules,
statutes or case decisions affecting the availability of indemnification or
contribution rights hereunder .
(n) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus, and
no such proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties; and no
contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that is not described therein (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or filed as
required.
(o) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by
the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained
and such as may be required under state securities or blue sky laws, or
(ii) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of its subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any court
or other governmental authority or any arbitrator applicable to the Company
or any of its subsidiaries.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus,
neither the Company nor any of its subsidiaries has sustained any material
loss or interference with their respective businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), management, business prospects, net
worth, or results of operations of the Company or any of its subsidiaries,
except in each case as described in or contemplated by the Prospectus or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus.
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(q) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the filing of the Registration Statement
(A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(r) The Company has not distributed and, prior to the later of (i) the
Firm Closing Date and the Option Closing Date and (ii) the completion of
the distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities other
than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or
other materials, if any, permitted by the Act.
(s) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus),
(1) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (2) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any kind
on its capital stock; and (3) there has not been any material change in the
capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(t) The Company and each of its subsidiaries have good and marketable
title in fee simple to all items of real property and marketable title to
all personal property owned by each of them, in each case free and clear of
any security interests, liens, encumbrances, equities, claims and other
defects, except for security interests and other liens securing the
Company's drilling rigs and related equipment and such other security
interests, liens, encumbrances, equities, claims and other defects as do
not materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company or such subsidiary, and any real property and buildings held under
lease by the Company or any such subsidiary are held under valid,
subsisting and enforceable leases, with such exceptions as are not material
and do not interfere with the use made or proposed to be made of such
property and buildings by the Company or such subsidiary, in each case
except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(u) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(v) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses,
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copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus).
(w) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus).
(x) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus).
(y) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(z) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the
Company to become an investment company subject to registration under such
Act.
(aa) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a
material adverse effect on the Company and its subsidiaries) and has paid
all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or
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penalty that is currently being contested in good faith or as described in
or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(bb) Neither the Company nor any of its subsidiaries is in violation
of any federal or state law or regulation relating to occupational safety
and health or to the storage, handling or transportation of hazardous or
toxic materials and the Company and its subsidiaries have received all
permits, licenses or other approvals required of them under applicable
federal and state occupational safety and health and environmental laws and
regulations to conduct their respective businesses, and the Company and
each such subsidiary is in compliance with all terms and conditions of any
such permit, license or approval, except any such violation of law or
regulation, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals which would not, singly or in the aggregate,
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(cc) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
(dd) Except for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus). Unit Drilling Company, Unit
Petroleum Company and Petroleum Supply Company are the only significant
subsidiaries of the Company within the meaning of Rule 12b-2 under the
Exchange Act.
(ee) There are no holders of securities of the Company, who, by reason
of the filing of the Registration Statement, have the right (and have not
waived such right) to request the Company to register under the Act, or to
include in the Registration Statement, securities held by them.
(ff) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (1) transactions are executed in accordance with management's general
or specific authorizations; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (3)
access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(gg) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound
or may be affected in any material
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adverse respect with regard to property, business or operations of the
Company and its subsidiaries.
3. Purchase, Sale and Delivery of the Securities. (a) On the basis of
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the representations, warranties, agreements and covenants herein contained
and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the
Company, at a purchase price of $7.205 per share, the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule 1
hereto. One or more certificates in definitive form for the Firm
Securities that the several Underwriters have agreed to purchase hereunder,
and in such denomination or denominations and registered in such name or
names as the Representatives request upon notice to the Company at least 48
hours prior to the Firm Closing Date, shall be delivered by or on behalf of
the Company to the Representatives for the respective accounts of the
Underwriters, against payment by or on behalf of the Underwriters of the
purchase price therefor by wire transfer in same-day funds (the "Wired
Funds") to the account of the Company. Such delivery of and payment for
the Firm Securities shall be made at the offices of Baker & Botts, L.L.P.,
3000 One Shell Plaza, 910 Louisiana, Houston, Texas 77002, at 9:30 A.M.,
New York time, on September 29, 1999, or at such other place, time or date
as the Representatives and the Company may agree upon or as the
Representatives may determine pursuant to Section 9 hereof, such time and
date of delivery against payment being herein referred to as the "Firm
Closing Date". The Company will make such certificate or certificates for
the Firm Securities available for checking and packaging by the
Representatives at the offices in New York, New York of the Company's
transfer agent or registrar or of Prudential Securities Incorporated at
least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, the Company hereby grants to the several Underwriters an option
to purchase, severally and not jointly, the Option Securities. The
purchase price to be paid for any Option Securities shall be the same price
per share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 3. The option granted hereby may be
exercised as to all or any part of the Option Securities from time to time
within thirty days after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading). The
Underwriters shall not be under any obligation to purchase any of the
Option Securities prior to the exercise of such option. The
Representatives may from time to time exercise the option granted hereby by
giving notice in writing or by telephone (confirmed in writing) to the
Company setting forth the aggregate number of Option Securities as to which
the several Underwriters are then exercising the option and the date and
time for delivery of and payment for such Option Securities. Any such date
of delivery shall be determined by the Representatives but shall not be
earlier than two business days or later than five business days after such
exercise of the option and, in any event, shall not be earlier than the
Firm Closing Date. The time and date set forth in such notice, or such
other time on such other date as the Representatives and the Company may
agree upon or as the Representatives may determine pursuant to Section 9
hereof, is herein called the "Option Closing Date" with respect to such
Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters,
and, subject to the terms and conditions herein set forth, each of the
Underwriters (severally and not jointly) shall become obligated to purchase
from the Company, the same percentage of the total number of the Option
Securities as to which the several Underwriters are then exercising the
option as such Underwriter is obligated to purchase of the aggregate number
of Firm Securities, as adjusted by the Representatives in such manner as
they deem advisable to
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<PAGE>
avoid fractional shares. If the option is exercised as to all or any
portion of the Option Securities, one or more certificates in definitive
form for such Option Securities, and payment therefor, shall be delivered
on the related Option Closing Date in the manner, and upon the terms and
conditions, set forth in paragraph (a) of this Section 3, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option
Securities and Option Closing Date, respectively.
(c) The Company hereby acknowledges that the wire transfer by or on
behalf of the Underwriters of the purchase price for any Securities does
not constitute closing of a purchase and sale of the Securities. Only
execution and delivery of a receipt for Securities by the Underwriters
indicates completion of the closing of a purchase of the Securities from
the Company. Furthermore, in the event that the Underwriters wire funds to
the Company prior to the completion of the closing of a purchase of
Securities, the Company hereby acknowledges that until the Underwriters
execute and deliver a receipt for the Securities, by facsimile or
otherwise, the Company will not be entitled to the Wired Funds and shall
return the Wired Funds to the Underwriters as soon as practicable (by wire
transfer of same-day funds) upon demand. In the event that the closing of
a purchase of Securities is not completed and the Wired Funds are not
returned by the Company to the Underwriters on the same day the Wired Funds
were received by the Company, the Company agrees to pay to the Underwriters
in respect of each day the Wired Funds are not returned by it, in same-day
funds, interest on the amount of such Wired Funds in an amount representing
the Underwriters' cost of financing as reasonably determined by Prudential
Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on
behalf of any Underwriter or Underwriters for any of the Securities to be
purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.
4. Offering by the Underwriters. Upon your authorization of the release
----------------------------
of the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale to the public upon the terms set forth in the Prospectus.
5. Covenants of the Company. The Company covenants and agrees with each
------------------------
of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and
any amendments thereto to become effective as promptly as possible. If
required, the Company will file the Prospectus and any amendment or
supplement thereto with the Commission in the manner and within the time
period required by Rules 434 and 424(b) under the Act. During any time
when a prospectus relating to the Securities is required to be delivered
under the Act, the Company (i) will comply with all requirements imposed
upon it by the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder to the extent necessary to permit
the continuance of sales of or dealings in the Securities in accordance
with the provisions hereof and the Prospectus, as then amended or
supplemented, and (ii) will not file with the Commission the Prospectus,
any amendment or supplement to such Prospectus or any amendment to the
Registration Statement or any Rule 462(b) Registration Statement of which
the Representatives shall not previously have been advised and furnished
with a copy for a reasonable period of time prior to the proposed filing
and as to which filing the Representatives shall not have given their
consent. The Company will
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prepare and file with the Commission, in accordance with the rules and
regulations of the Commission, promptly upon request by the Representatives
or counsel for the Underwriters, any amendments to the Registration
Statement or amendments or supplements to the Prospectus that may be
necessary or advisable in connection with the distribution of the
Securities by the several Underwriters, and will use its best efforts to
cause any such amendment to the Registration Statement to be declared
effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of the
time when the Registration Statement or any amendment thereto has been
filed or declared effective or the Prospectus or any amendment or
supplement thereto has been filed and will provide evidence satisfactory to
the Representatives of each such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
post-effective amendment thereto or any order directed at any document
incorporated by reference in the Registration Statement or the Prospectus
or any amendment or supplement thereto or any order preventing or
suspending the use of any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, (ii) the suspension of the qualification
of the Securities for offering or sale in any jurisdiction, (iii) the
institution, threatening or contemplation of any proceeding for any such
purpose or (iv) any request made by the Commission for amending the
Original Registration Statement or any Rule 462(b) Registration Statement,
for amending or supplementing any Preliminary Prospectus or the Prospectus
or for additional information. The Company will use its best efforts to
prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection
-----------------
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the
Act or (ii) the Option Closing Date, any event occurs as a result of which
the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if for any other reason it
is necessary at any time to amend or supplement the Prospectus to comply
with the Act, the Exchange Act or the respective rules or regulations of
the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 5(a) hereof, will prepare
and file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a conformed copy of the
registration statement originally filed with respect to the Securities and
each amendment thereto (in each case including exhibits thereto) or any
Rule 462(b) Registration Statement, certified by the Secretary or an
Assistant Secretary of the Company to be true and complete copies thereof
as filed with the Commission by electronic
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<PAGE>
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long
as a prospectus relating to the Securities is required to be delivered
under the Act, as many copies of each Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto as the Representatives
may reasonably request; without limiting the application of clause (iii) of
this sentence, the Company, not later than (A) 6:00 PM, New York City time,
on the date of determination of the public offering price, if such
determination occurred at or prior to 10:00 AM, New York City time on such
date or (B) 2:00 PM, New York City time, on the business day following the
date of determination of the public offering price, if such determination
occurred after 10:00 AM, New York City time, on such date, will deliver to
the Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably
request for purposes of confirming orders that are expected to settle on
the Firm Closing Date.
(f) The Company, as soon as practicable, will make generally available
to its securityholders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions
of Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date hereof, except pursuant
to this Agreement, to complete the acquisition of drilling rigs from Parker
Drilling Company and its subsidiary pursuant to the terms of that certain
Asset Purchase Agreement dated August 12, 1999 as in effect on the date
hereof and except for issuances pursuant to the exercise of employee stock
options outstanding on the date hereof.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) (A) sell, bid for, purchase, or pay anyone any
compensation for soliciting purchases of, the Securities or (B) pay or
agree to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(j) The Company will obtain the agreements described in Section 7(g)
hereof prior to the Firm Closing Date.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date,
any rumor, publication or event relating to or affecting the Company shall
occur as a result of which in your opinion the market price of the Common
Stock has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of the Prospectus), the Company will, after notice from you
advising the Company to the effect set forth above, forthwith prepare,
consult with you concerning the substance of, and disseminate a press
release or other public
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<PAGE>
statement, reasonably satisfactory to you, responding to or commenting on
such rumor, publication or event.
(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern
time on the date of this Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly authorized for
listing by the New York Stock Exchange prior to the Firm Closing Date. The
Company will ensure that the Securities remain authorized for listing on
the New York Stock Exchange following the Firm Closing Date.
6. Expenses. The Company will pay all costs and expenses incident to the
--------
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 11 hereof, including all costs and expenses incident to (i)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (ii)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (iii) the fees and disbursements of the counsel,
accountants and any other experts or advisors retained by the Company, (iv)
preparation, issuance and delivery to the Underwriters of any certificates
evidencing the Securities, including transfer agent's and registrar's fees, (v)
the qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (vi) the filing fees of the Commission (and the National
Association of Securities Dealers, Inc.) relating to the Securities, (vii) the
listing of the Securities on the New York Stock Exchange, (viii) meetings with
prospective investors in the Securities (other than shall have been specifically
approved by the Representatives to be paid for by the Underwriters) and (ix)
advertising relating to the offering of the Securities (other than shall have
been specifically approved by the Representatives to be paid for by the
Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 7 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 11 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities. The Company shall not in
any event be liable to any of the Underwriters for the loss of anticipated
profits from the transactions covered by this Agreement.
7. Conditions of the Underwriters' Obligations. The obligations of the
-------------------------------------------
several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the Company contained herein as of the date
hereof and as of the Firm Closing Date, as if made on and as of the Firm Closing
Date, to the accuracy of the statements of the Company's officers made pursuant
to the provisions hereof, to the performance by the Company of its covenants and
agreements hereunder and to the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of
the time of execution hereof, Original
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<PAGE>
Registration Statement or such amendment and, if the Company has elected to
rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have
been declared effective not later than the earlier of (i) 11:00 A.M., New
York time, on the date on which the amendment to the registration statement
originally filed with respect to the Securities or to the Registration
Statement, as the case may be, containing information regarding the initial
public offering price of the Securities has been filed with the Commission
and (ii) the time confirmations are sent or given as specified by Rule
462(b)(2), or with respect to the Original Registration Statement, or such
later time and date as shall have been consented to by the Representatives;
if required, the Prospectus and any amendment or supplement thereto shall
have been filed with the Commission in the manner and within the time
period required by Rule 434 and 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement, the Prospectus or
any amendment or supplement thereto shall have been issued and no
proceedings for that purpose shall have been instituted or threatened or,
to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission; and the Company shall have complied with
any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Conner & Winters, A Professional Corporation, counsel for
the Company, to the effect that:
(i) the Company and each of Unit Drilling Company, Unit
Petroleum Company and Petroleum Supply Company (the "Subsidiaries")
have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of
incorporation and are duly qualified to transact business as foreign
corporations and are in good standing under the laws of all other
jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and the
Subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have corporate
power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and
the Prospectus, and the Company has corporate power to enter into this
Agreement and to carry out all the terms and provisions hereof to be
carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned beneficially by the Company free
and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, have been issued
in compliance with all applicable federal and state securities laws
and were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities; the
Firm Securities have been duly authorized by all necessary
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<PAGE>
corporate action of the Company and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be
validly issued, fully paid and nonassessable; the Securities have been
duly authorized for listing, subject to official notice of issuance,
on the New York Stock Exchange; no holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or
other rights to subscribe for any of the Securities; and no holders of
securities of the Company are entitled to have such securities
registered under the Registration Statement;
(v) the statements set forth under the heading "Description
of Capital Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the capital stock of the
Company, provide a fair summary of such provisions; and the statements
set forth under the headings "Business-Government Regulations,"
"Business--Federal and State Environmental Regulation," "Shares
Eligible for Future Sale" and "Description of Capital Stock" in the
Prospectus, insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, provide a
fair summary of such legal matters, documents and proceedings,
(vi) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and
this Agreement has been duly executed and delivered by the Company;
(vii) no legal or governmental proceedings are pending to which
the Company or any of the subsidiaries is a party or to which the
property of the Company or any of the subsidiaries is subject that are
required to be described in the Registration Statement or the
Prospectus and are not described therein, and, to the best knowledge
of such counsel, no such proceedings have been threatened against the
Company or any of the subsidiaries or with respect to any of their
respective properties; and no contract or other document is required
to be described in the Registration Statement and the Prospectus or to
be filed as an exhibit to the Registration Statement that is not
described therein or filed as required;
(viii) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company
or any of the subsidiaries is a party or by which the Company or any
of the subsidiaries or any of their respective properties are bound,
or the charter documents or by-laws of the Company or any of the
subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to the Company or any
of the subsidiaries;
(ix) the Registration Statement is effective under the Act;
any required filing of the Prospectus, pursuant to Rules 434 and
424(b) has been made in the manner and within the time period required
by Rules 434 and 424(b); and no stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto and no
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<PAGE>
order directed at any document incorporated by reference in the
Registration Statement, the Prospectus or any amendment or supplement
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best knowledge of such counsel,
are contemplated by the Commission;
(x) the Registration Statement originally filed with respect to
the Securities and each amendment thereto and any Rule 462(b)
Registration Statement and the Prospectus (in each case, including the
documents incorporated by reference therein but not including the
financial statements and other financial information contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Act, the Exchange Act and the respective rules and regulations of
the Commission thereunder; and
(xi) if the Company elects to rely on Rule 434, the Prospectus is
not "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or any effective post-effective amendment thereto
(including such information that is permitted to be omitted pursuant
to Rule 430A).
Such counsel shall also state that they have no reason to believe that the
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or the date of such opinion, included or includes any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible officers
of the Company and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Baker & Botts, L.L.P., counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the Registration
Statement, the Prospectus and such other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters. In rendering such
opinion, such counsel may rely as to all matters of law upon the opinion
referred to in paragraph (b) above.
(d) The Representatives shall have received from
PricewaterhouseCoopers LLP, a letter or letters dated, respectively, the
date hereof and the Firm Closing Date, in form and substance satisfactory
to the Representatives, to the effect that:
(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange Act and the applicable rules and regulations thereunder;
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(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included or incorporated
by reference in the Registration Statement and the Prospectus comply
in form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the related published
rules and regulations thereunder;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries as
indicated in their reports incorporated in the Registration Statement
and the Prospectus carrying out certain specified procedures (which do
not constitute an examination made in accordance with generally
accepted auditing standards) that would not necessarily reveal matters
of significance with respect to the comments set forth in this
paragraph (iii), a reading of the minute books of the shareholders,
the board of directors and any committees thereof of the Company and
each of its consolidated subsidiaries, and inquiries of certain
officials of the Company and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial
statements of the Company and its consolidated subsidiaries included
in the Registration Statement and the Prospectus do not comply in
form in all material respects with the applicable accounting
requirements of the Act, the Exchange Act and the related published
rules and regulations thereunder, or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement and the
Prospectus;
(B) at a specific date not more than five business days
prior to the date of such letter, there were any changes in the
capital stock or long-term debt of the Company and its consolidated
subsidiaries or any decreases in net current assets or stockholders'
equity of the Company and its consolidated subsidiaries, in each
case compared with amounts shown on the June 30, 1999 unaudited
consolidated condensed balance sheet included in the Registration
Statement and the Prospectus, or for the period from July 1, 1999 to
such specified date there were any decreases, as compared with the
comparable period of 1998, in revenues, net income before income
taxes or total or per share amounts of net income of the Company and
its consolidated subsidiaries, except in all instances for changes,
decreases or increases set forth in such letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages
and financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries and are
included in the Registration Statement, the Prospectus and in the
Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-
Q incorporated by reference in the Registration Statement and the
Prospectus, and have compared such amounts, percentages and financial
information with such records of the Company and its consolidated
subsidiaries and with information derived from such records and have
found them to be in agreement, excluding any questions of legal
interpretation.
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<PAGE>
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (d) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(e) The Representatives shall have received from Ryder Scott Company,
L.P., petroleum consultants, a letter or letters dated, respectively, the
date hereof and the Firm Closing Date, in form and substance reasonably
satisfactory to the Representatives, each stating, as of the date of such
letter (or, with respect to matters involving changes or developments since
the respective dates as of which specified information with respect to the
oil and natural gas reserves is given in the Prospectus, as of the date not
more than five days prior to the date of such letter), the conclusions and
findings of such firm with respect to the oil and gas reserves of the
Company.
(f) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented
as of the Firm Closing Date, does not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company has
performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the
Registration Statement or the Prospectus or any amendment or
supplement thereto has been issued, and no proceedings for that
purpose have been instituted or threatened or, to the best of the
Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding, and there has not been any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), management, business prospects,
net
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<PAGE>
worth or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by
the Prospectus.
(g) The Representatives shall have received from each person who is a
director or officer of the Company, Parker Drilling Company and the former
shareholders of Hickman Drilling Company an agreement to the effect that
such person will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant
any option to purchase or otherwise sell or dispose (or announce any offer,
sale, offer of sale, contract of sale, pledge, grant of an option to
purchase or other sale or disposition) of any shares of Common Stock or any
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date of this Agreement.
(h) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from
the Company.
(i) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
8. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter
or such controlling person may become subject under the Act, the Exchange
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company in Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any
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<PAGE>
jurisdiction in order to qualify the Securities under the securities
or blue sky laws thereof or filed with the Commission or any
securities association or securities exchange (each an "Application")
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or
any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on
behalf of the Company including, without limitation, slides, videos,
films, tape recordings, used in connection with the marketing of the
Securities, including, without limitation, statements communicated to
securities analysts employed by the Underwriters;
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with
any such loss, claim, damage, liability or action; provided, however, that
-------- -------
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that the Company will
-------- -------
not be liable to any Underwriter or any person controlling such Underwriter
with respect to any such untrue statement or omission made in any
Preliminary Prospectus that is corrected in the Prospectus (or any
amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but
was not sent or given a copy of the Prospectus (as amended or
supplemented), other than the documents incorporated by reference therein,
at or prior to the written confirmation of the sale of such Securities to
such person in any case where such delivery of the Prospectus (as amended
or supplemented) is required by the Act, unless such failure to deliver the
Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 5(d) and (a) of this Agreement.) This indemnity
agreement will be in addition to any liability which the Company may
otherwise have. The Company will not, without the prior written consent of
the Underwriter or Underwriters purchasing, in the aggregate, more than
fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not any such Underwriter or any person who controls any such
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional
release of all of the Underwriters and such controlling persons from all
liability arising out of such claim, action, suit or proceeding.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act against any losses, claims, damages or liabilities to which
the Company or
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<PAGE>
any such director, officer or controlling person may become subject under
the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for
use therein; and, subject to the limitation set forth immediately preceding
this clause, will reimburse, as incurred, any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or any action in respect thereof. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 8. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party; provided, however,
-------- -------
that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying
party shall not have the right to direct the defense of such action on
behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (in addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the
Representatives in the case of paragraph (a) of this Section 8,
representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
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<PAGE>
settlement of such action effected by such indemnified party without the
consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 8 is unavailable or insufficient,
for any reason, to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by the Underwriters. The relative fault of the
parties 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 Company or the Underwriters, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate
in the circumstances. The Company and the Underwriters agree that it would
not be equitable if the amount of such contribution were determined by pro
rata or per capita allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not
take into account in the equitable considerations referred to above in this
paragraph (d). Notwithstanding any other provision of this paragraph (d),
no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities
purchased by such Underwriter under this Agreement, less the aggregate
amount of any damages that such Underwriter has otherwise been required to
pay in respect of the same or any substantially similar claim, and no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective underwriting obligations and not joint, and contributions among
Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes
of this paragraph (d), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, shall have the same rights to contribution as the Company.
9. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the
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<PAGE>
purchase of such Securities by other persons (who may include one or more of the
non-defaulting Underwriters, including the Representatives), but if no such
arrangements are made by the Firm Closing Date or the related Option Closing
Date, as the case may be, the other Underwriters shall be obligated severally in
proportion to their respective commitments hereunder to purchase the Firm
Securities or Option Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase. If one or more Underwriters so default with
respect to an aggregate number of Securities that is more than ten percent of
the aggregate number of Firm Securities or Option Securities, as the case may
be, to be purchased by all of the Underwriters at such time hereunder, and if
arrangements satisfactory to the Representatives are not made within 36 hours
after such default for the purchase by other persons (who may include one or
more of the non-defaulting Underwriters, including the Representatives) of the
Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company other than as provided in Section 10 hereof. In the event of any default
by one or more Underwriters as described in this Section 9, the Representatives
shall have the right to postpone the Firm Closing Date or the Option Closing
Date, as the case may be, established as provided in Section 3 hereof for not
more than seven business days in order that any necessary changes may be made in
the arrangements or documents for the purchase and delivery of the Firm
Securities or Option Securities, as the case may be. As used in this Agreement,
the term "Underwriter" includes any person substituted for an Underwriter under
this Section 9. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
10. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers and the
several Underwriters set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, any Underwriter or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated with respect to the
-----------
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company given prior to the Firm Closing Date or
the related Option Closing Date, respectively, in the event that the Company
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Firm Closing Date or such Option Closing Date,
respectively,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or
any development involving a prospective material adverse change
(including without limitation a change in management or control of the
Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities
generally on the New York Stock Exchange or the Nasdaq National Market
shall have been suspended or
-23-
<PAGE>
minimum or maximum prices shall have been established on either such
exchange or market system,
(iii) a banking moratorium shall have been declared by New York
or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U. S. financial markets that, in
the sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in
Section 10 hereof.
12. Information Supplied by Underwriters. The statements set forth in the
------------------------------------
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 8 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
13. Notices. All communications hereunder shall be in writing and, if sent
-------
to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to Prudential Securities
Incorporated, One New York Plaza, New York, New York 10292, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by
mail, telex or facsimile transmission and confirmed in writing to the Company at
Unit Corporation, 1000 Kensington Tower, 7130 South Lewis, Tulsa, Oklahoma
74136, attention: Mark E. Schell.
14. Successors. This Agreement shall inure to the benefit of and shall be
----------
binding upon the several Underwriters, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Underwriters contained in Section 8 of this
Agreement shall also be for the benefit of the directors of the Company, the
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act. No purchaser of Securities from any
Underwriter shall be deemed a successor because of such purchase.
15. Applicable Law. The validity and interpretation of this Agreement, and
--------------
the terms and conditions set forth herein, shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of laws.
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<PAGE>
16. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company accepts for itself and
in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. A copy of any such process so served
shall be mailed by registered mail to the Company at its address provided in
Section 13 hereof; provided, however, that, unless otherwise provided by
-------- -------
applicable law, any failure to mail such copy shall not affect the validity of
service of such process.
17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE>
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
UNIT CORPORATION
By /s/ MARK E. SCHELL
------------------------------------------
Mark E. Schell
General Counsel and Secretary
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
PRUDENTIAL SECURITIES INCORPORATED
CIBC WORLD MARKET CORP.
RAYMOND JAMES & ASSOCIATES, INC.
By PRUDENTIAL SECURITIES INCORPORATED
By /s/ JEAN-CLAUDE CANFIN
--------------------------------------
Jean-Claude Canfin
Managing Director
For itself and on behalf of the Representatives.
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<PAGE>
SCHEDULE 1
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
- ----------- -------------
Prudential Securities Incorporated..................... 2,394,000
CIBC World Markets Corp................................ 1,512,000
Raymond James & Associates, Inc........................ 1,134,000
Bear, Stearns & Co. Inc................................ 140,000
Donaldson, Lufkin & Jenrette Securities Corporation.... 140,000
A.G. Edwards & Sons, Inc............................... 140,000
Lehman Brothers Inc.................................... 140,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated..... 140,000
Morgan Stanley & Co. Incorporated...................... 140,000
PaineWebber Incorporated............................... 140,000
Salomon Smith Barney Inc............................... 140,000
Robert W. Baird & Co. Incorporated..................... 70,000
Dain Rauscher Wessels.................................. 70,000
Everen Securities, Inc................................. 70,000
First Albany Corporation............................... 70,000
First Union Capital Markets Corp....................... 70,000
Hanifen, Imhoff Inc.................................... 70,000
Harris Webb & Garrison Inc............................. 70,000
Jefferies & Company, Inc............................... 70,000
Petrie Parkman & Co.................................... 70,000
Southcoast Capital Corporation......................... 70,000
Sutro & Co. Incorporated............................... 70,000
Tucker Anthony Cleary Gull............................. 70,000
=============
Total.................................................. 7,000,000
-27-
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF CONNER & WINTERS APPEARS HERE]
September 23, 1999
Unit Corporation
1000 Kensington Tower
7130 So. Lewis
Tulsa, Oklahoma 74136
Re: Unit Corporation
Registration Statement on Form S-3
File No. 333-83551 (the "Registration Statement")
-------------------------------------------------
Gentlemen:
We have acted as counsel for Unit Corporation, a Delaware corporation (the
"Company"), in connection with the Registration Statement and with respect to
the issuance and sale by the Company of up to eight million fifty thousand (8,
050,000) shares of the Company's Common Stock, $.20 par value per share (the
"Shares"), (including up to one million fifty thousand (1,050,000) shares
subject to an over-allotment option granted by the Company to the underwriters
offering the Shares) offered pursuant to that certain Prospectus Supplement
dated September 23, 1999 (the "Prospectus Supplement"). As described in the
Prospectus Supplement, the Company is selling the Shares pursuant to an
Underwriting Agreement (the "Underwriting Agreement") to be entered into among
the Company and Prudential Securities Incorporated, CIBC World Markets Corp. and
Raymond James & Associates, Inc., as representatives of the underwriters.
In reaching the conclusions expressed in this opinion, we have (a) examined
such certificates of public officials and of corporate officers and directors
and such other documents and matters as we have deemed necessary or appropriate,
(b) relied upon the accuracy of facts and information set forth in all such
documents, and (c) assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as copies, and the authenticity of
the originals from which all such copies were made.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and, when issued, delivered and paid for in accordance with the
terms and conditions of the Underwriting Agreement, will be validly issued,
fully paid and nonassessable shares of Common Stock of the Company.
We are members of the bar of the State of Oklahoma. Our opinion expressed
above is limited to the laws of the State of Oklahoma, the corporate laws of the
State of Delaware, and the federal laws of the United States of America, and we
do not express any opinion herein concerning the laws of any other jurisdiction.
<PAGE>
Unit Corporation
September 23, 1999
Page 2
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm in the Prospectus Supplement under
the caption "Legal Opinions."
Yours very truly,
CONNER & WINTERS,
A Professional Corporation
/s/ CONNER & WINTERS
<PAGE>
EXHIBIT 15
September 23, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Commissioners:
We are aware that our report dated August 9, 1999 on our review of the interim
financial information of Unit Corporation for the periods ended June 30, 1999
and 1998 is included in Unit Corporation's Prospectus Supplement to Form S-3
(No. 333-83551) dated September 23, 1999.
Very truly yours,
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion in the Prospectus Supplement to Form S-3 (No.
333-83551) of Unit Corporation dated September 23, 1999 of our report dated
February 23, 1999 relating to the consolidated financial statements of Unit
Corporation which appear in the Prospectus Supplement. We also consent to the
reference to us under the heading "Independent Accountants" in such Prospectus
Supplement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Tulsa, Oklahoma
September 23, 1999
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF RYDER SCOTT COMPANY]
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the inclusion or incorporation by reference in the
Form S-3 Registration Statement (No. 333-83551) and related Prospectus dated
August 3, 1999, and Prospectus Supplement dated September 23, 1999, of Unit
Corporation ("Unit") of the information with respect to Unit's oil and gas
reserves, the future net revenues from such reserves and the present value
thereof, which information has been included or incorporated by reference in
the Form S-3 Registration Statement in reliance upon the report of this firm
dated February 9, 1999, and upon the authority of this firm as experts in
petroleum engineering. We hereby further consent to all references to our firm
included in the Prospectus and Prospectus Supplement included in the Form S-3
Registration Statement.
/s/ RYDER SCOTT COMPANY, L.P.
RYDER SCOTT COMPANY, L.P.
Houston, Texas
September 23, 1999
<PAGE>
EXHIBIT 99.1
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ASSET PURCHASE AGREEMENT
by and between
UNIT CORPORATION,
PARKER DRILLING COMPANY NORTH AMERICA, INC.
and
PARKER DRILLING COMPANY
August 12, 1999
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TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS............................................................................. 1
SECTION 1.01 Definitions................................................................................ 1
ARTICLE II PURCHASE AND SALE OF ASSETS.................................................................... 4
SECTION 2.01 Assets to be Purchased..................................................................... 4
SECTION 2.02 Excluded Assets............................................................................ 5
SECTION 2.03 Assumed Liabilities........................................................................ 6
SECTION 2.04 Limitation of Liabilities.................................................................. 6
SECTION 2.05 Limitation on Assignments.................................................................. 7
SECTION 2.06 Delivery................................................................................... 7
SECTION 2.07 Other Funds Received....................................................................... 8
ARTICLE III PURCHASE PRICE................................................................................ 8
SECTION 3.01 Consideration for the Purchased Assets..................................................... 8
SECTION 3.02 Allocation of Purchase Consideration....................................................... 8
ARTICLE IV THE CLOSING.................................................................................... 8
SECTION 4.01 Time and Place of Closing.................................................................. 8
SECTION 4.02 Deliveries by Seller....................................................................... 8
SECTION 4.03 Deliveries by Buyer........................................................................ 9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER........................................................ 9
SECTION 5.01 Corporate Existence and Power.............................................................. 9
SECTION 5.02 Corporate Authorization; Etc............................................................... 9
SECTION 5.03 Non-Contravention.......................................................................... 10
SECTION 5.04 Ownership of Rigs and Other Equipment...................................................... 10
SECTION 5.05 [Reserved]................................................................................. 10
SECTION 5.06 Contracts.................................................................................. 10
SECTION 5.07 Litigation................................................................................. 11
SECTION 5.08 Governmental Approval...................................................................... 11
SECTION 5.09 Compliance With Laws....................................................................... 11
SECTION 5.10 Employee Matters........................................................................... 11
SECTION 5.11 Real Property.............................................................................. 12
SECTION 5.12 Environmental Matters...................................................................... 12
SECTION 5.13 No Brokers................................................................................. 13
SECTION 5.14 Decrees, Etc............................................................................... 13
SECTION 5.15 Performance Bonds; Letters of Credit....................................................... 13
SECTION 5.16 Certain Property on Rigs................................................................... 13
SECTION 5.17 Accredited Investor; Investment Purpose.................................................... 13
SECTION 5.18 Competitive Restrictions................................................................... 14
SECTION 5.19 Year 2000 Compliance....................................................................... 14
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER........................................................ 14
SECTION 6.01 Organization and Existence................................................................. 14
SECTION 6.02 Corporate Authorization and Power.......................................................... 15
SECTION 6.03 SEC Documents.............................................................................. 15
SECTION 6.04 Non-Contravention.......................................................................... 15
SECTION 6.05 Governmental Approval...................................................................... 16
SECTION 6.06 Litigation................................................................................. 16
SECTION 6.07 No Brokers................................................................................. 16
SECTION 6.08 Capitalization............................................................................. 16
SECTION 6.09 Subsidiaries............................................................................... 16
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ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF SELLER....................................................... 17
SECTION 7.01 Accuracy of Representations and Warranties................................................. 17
SECTION 7.02 Covenants and Agreements Performed......................................................... 17
SECTION 7.03 Officer's Certificate...................................................................... 17
SECTION 7.04 Legal Opinion.............................................................................. 17
SECTION 7.05 No Governmental Action..................................................................... 17
SECTION 7.06 Termination under Hart-Scott-Rodino Act.................................................... 17
SECTION 7.07 Due Execution and Delivery of Documents.................................................... 17
SECTION 7.08 No Adverse Change.......................................................................... 17
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF BUYER....................................................... 17
SECTION 8.01 Accuracy of Representations and Warranties................................................. 18
SECTION 8.02 Covenants and Agreements Performed......................................................... 18
SECTION 8.03 Officer's Certificate...................................................................... 18
SECTION 8.04 Legal Opinion.............................................................................. 18
SECTION 8.05 Drilling Contracts......................................................................... 18
SECTION 8.06 No Adverse Change.......................................................................... 18
SECTION 8.07 [Reserved]................................................................................. 18
SECTION 8.08 No Governmental Action..................................................................... 18
SECTION 8.09 Termination under Hart-Scott-Rodino Act.................................................... 18
SECTION 8.10 Due Execution and Delivery of Documents.................................................... 18
ARTICLE IX COVENANTS AND AGREEMENTS OF THE PARTIES........................................................ 18
SECTION 9.01 Expenses................................................................................... 18
SECTION 9.02 Access..................................................................................... 19
SECTION 9.03 Conduct of Business and Preservation of Assets............................................. 19
SECTION 9.04 Notices of Certain Events.................................................................. 19
SECTION 9.05 Certain Taxes.............................................................................. 20
SECTION 9.06 Actions with Respect to Closing............................................................ 20
SECTION 9.07 Public Statements.......................................................................... 20
SECTION 9.08 Continued Effectiveness of Representations and Warranties.................................. 21
SECTION 9.09 Performance Bonds.......................................................................... 21
SECTION 9.10 Action of Buyer Regarding Financing and Financial Statements............................... 21
SECTION 9.11 Employee Matters........................................................................... 21
SECTION 9.12 Approvals of Governmental Bodies........................................................... 23
SECTION 9.13. Further Assurances......................................................................... 23
SECTION 9.14 Rig Loss................................................................................... 23
SECTION 9.15 Seller's Covenants Not to Compete.......................................................... 24
SECTION 9.16 Other Offer................................................................................ 24
SECTION 9.17 Conduct of Purchaser's Business............................................................ 25
ARTICLE X TERMINATION..................................................................................... 25
SECTION 10.01 Termination............................................................................... 25
SECTION 10.02 Effect of Termination..................................................................... 26
ARTICLE XI EXTENT AND SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION.. 26
SECTION 11.01 Scope of Representations of Seller........................................................ 26
SECTION 11.02 Indemnification by Seller and Parker...................................................... 27
SECTION 11.03 Indemnification by Buyer.................................................................. 27
SECTION 11.04 Indemnification Procedures................................................................ 27
SECTION 11.05 Survival.................................................................................. 28
SECTION 11.06 Limitation of Remedies.................................................................... 28
SECTION 11.07 Applicability of Indemnification Obligation............................................... 28
SECTION 11.08 Exclusive Rights and Remedies............................................................. 28
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ARTICLE XII REGISTRATION RIGHTS........................................................................... 28
SECTION 12.01 Registration of Securities................................................................ 29
ARTICLE XIII MISCELLANEOUS................................................................................ 32
SECTION 13.01 Notices................................................................................... 32
SECTION 13.02 Entire Agreement.......................................................................... 33
SECTION 13.03 Amendments and Waiver; Rights and Remedies................................................ 33
SECTION 13.04 Governing Law............................................................................. 33
SECTION 13.05 Arbitration............................................................................... 33
SECTION 13.06 Binding Effect; Assignment................................................................ 34
SECTION 13.07 Counterparts.............................................................................. 34
SECTION 13.08 References................................................................................ 34
SECTION 13.09 Severability of Provisions................................................................ 34
SECTION 13.10 Gender.................................................................................... 34
SECTION 13.11 Descriptive Headings...................................................................... 34
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Schedules and Exhibits:
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Schedule 2.01 (a) Description of Rigs
Schedule 2.01 (b) Description of Other Equipment
Schedule 2.01 (c) Inventory
Schedule 2.01 (d) Real Property
Schedule 2.01 (g)(i) Drilling Contracts
Schedule 2.01 (g)(ii) Other Contracts
Schedule 3.02 Allocation of Purchase Consideration
Schedule 6.08 Outstanding Registration Rights
Exhibit A Form of General Assignment and Bill of Sale
Exhibit B Form of Deed
Exhibit C Form of General Assignment of Contracts
Exhibit D Form of Buyer's Certificate
Exhibit E Form of Seller's Certificate
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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of August 12,
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1999, by and between Unit Corporation., a Delaware corporation ("Buyer"), Parker
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Drilling Company, a Delaware corporation ("Parker") and Parker Drilling Company
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North America, Inc., a Nevada corporation ("Seller"), a wholly owned subsidiary
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of Parker.
WITNESSETH:
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WHEREAS, Buyer desires to purchase the Purchased Assets (as hereinafter
defined) from Seller; and
WHEREAS, Seller desires to sell the Purchased Assets to Buyer in exchange
for the payment by Buyer of the Purchase Consideration (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions set forth in this Agreement, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.01 Definitions. As used in this Agreement, the following terms
have the following respective meanings:
"Affiliate" means, as to the Person specified, any Person controlling,
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controlled by or under common control with such Person, with the concept of
control in such context meaning the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
another, whether through the ownership of voting securities, by contract or
otherwise.
"Acquisition Proposal" has the meaning specified in Section 9.16
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"Agreement" has the meaning specified in the preamble.
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"Applicable Environmental Laws" has the meaning specified in Section
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5.12(j).
"Applicable Laws" has the meaning specified in Section 5.09.
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"Assumed Liabilities" has the meaning specified in Section 2.03.
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"Best Efforts" means a party's best efforts in accordance with reasonable
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commercial practice and without the incurrence of unreasonable expense.
"Business Day" means a day on which national banks are generally open for
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the transaction of business in Tulsa, Oklahoma.
"Buyer" has the meaning specified in the preamble.
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"Buyer Basket" has the meaning specified in Section 11.02.
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"Buyer Designee" has the meaning specified in Section 13.06(b).
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"Cash Consideration" shall have the meaning specified in Section 3.01(a).
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"Claims" has the meaning specified in Section 11.02.
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"Closing" means the consummation of the transactions contemplated by this
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Agreement.
"Closing Date" has the meaning specified in Section 4.01.
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"Code" means the Internal Revenue Code of 1986, as amended, or any
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successor law, and regulations issued by the IRS pursuant to the Internal
Revenue Code or any successor law.
"Commission" means the Securities and Exchange Commission.
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"Consent Required Contract" has the meaning specified in Section 2.05.
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"Deeds" has the meaning specified in Section 4.02(b).
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"Drilling Contracts" has the meaning specified in Section 2.01(f)(i).
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"Encumbrances" means liens, charges, pledges, options, mortgages, security
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interests, claims, easements, rights-of-way, servitudes, title defects, rights
of third parties and other encumbrances of every type and description, whether
imposed by law, agreement, understanding or otherwise.
"Environmental Laws" has the meaning specified in Section 5.12(j).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended.
"Exchange Act" has the meaning specified in Section 5.08.
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"Excluded Assets" has the meaning specified in Section 2.02.
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"GAAP" means U.S. generally accepted accounting principles applied on a
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consistent basis.
"General Assignment of Contracts" has the meaning specified in Section
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4.02(c).
"General Assignment and Bill of Sale " has the meaning specified in Section
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4.02(a).
"Governmental Entity" means any (i) nation, state, county, city, town,
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village, district, or other jurisdiction of any nature; (ii) federal, state,
local, municipal, or other government; (iii) governmental or quasi-governmental
authority of any nature (including an governmental agency, branch, department,
official, or entity and any court or other tribunal); or (iv) body exercising,
or entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.
"hazardous material" has the meaning specified in Section 5.12(j).
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"HSR Act" has the meaning specified in Section 5.08.
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"Indemnified Party" has the meaning specified in Section 11.04.
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"Indemnifying Party" has the meaning specified in Section 11.04.
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"IRS" means the United States Internal Revenue Service or any successor
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agency, and, to the extent relevant, the United States Department of the
Treasury.
"Inventory" has the meaning specified in Section 2.01(c).
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"Nonassigned Contract" has the meaning specified in Section 2.05.
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"Other Contracts" has the meaning specified in Section 2.01(f)(ii).
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"Other Equipment" has the meaning specified in Section 2.01(b).
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"Parker" has the meaning specified in the preamble.
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"Permitted Encumbrances" means (i) Encumbrances for Taxes, assessments and
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governmental charges not yet due and payable; (ii) statutory liens arising in
the ordinary course of business relating to obligations as to which there is no
default on the part of Seller, excluding any mortgage; and (iii) the express
terms of the Drilling Contracts and Other Contracts; provided, however, that at
the Closing "Permitted Encumbrances" shall not include any Encumbrances for
taxes, assessments or governmental charges filed of record against the Purchased
Assets, or statutory liens filed of record against the Purchased Assets.
"Permits" has the meaning specified in Section 2.01(e)(iii).
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"Permitted Real Property Encumbrances" means, with respect to Real Estate
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Assets, (i) Encumbrances for Taxes, assessments and governmental charges not yet
due and payable; (ii) statutory liens arising in the ordinary course of business
relating to obligations as to which there is no default on the part of Seller,
excluding any mortgage or indenture; (iii) zoning laws and ordinances and
similar governmental regulations; (iv) minor imperfections of title or easements
that do not materially detract from the value of the property or impair the
Seller's use thereof; (v) rights reserved to any municipality or governmental,
statutory or public authority to regulate such property and (vi) the outstanding
option to purchase the Manning Yard in Mills, Wyoming; provided, however, that
at the Closing "Permitted Real Property Encumbrances" shall not include any
Encumbrance for Taxes, assessments or governmental charges filed of record
against the Real Estate Assets, or liens filed of record against the Real Estate
Assets.
"Person" means any individual, corporation, (including any non-profit
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corporation), general or limited partnership, limited liability company, joint
venture, estate, trust or association, organization, labor union, or entity or
Governmental Entity.
"Proceedings" means any action, arbitration, audit, hearing, investigation,
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litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before or otherwise
involving any Governmental Entity or arbitrator.
"Purchased Assets" has the meaning specified in Section 2.01.
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"Purchase Consideration" shall mean the Cash Consideration plus the Stock
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Consideration.
"Real Estate Assets" has the meaning specified in Section 2.01(d).
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"Real Property" has the meaning specified in Section 2.01(d).
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"Retained Liabilities" has the meaning specified in Section 2.04.
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"Rigs" or "Rig" has the meaning specified in Section 2.01(a).
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"SEC Documents" has the meaning specified in Section 6.03.
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"Securities Act" has the meaning specified in Section 5.08.
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"Seller" has the meaning specified in the preamble.
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"Seller Basket" has the meaning specified in Section 11.03.
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"Seller MAE" means a single event, occurrence or fact that, together with
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all other events, occurrences and facts (i) would have, or might reasonably be
expected to have, (x) a material adverse effect
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on the Purchased Assets (individually or in the aggregate as to the Rigs), or
(y) a material adverse effect on the ability of the Buyer to own and operate the
Rigs, individually or in the aggregate, after the Closing Date, (ii) would
create an Encumbrance on any of the Purchased Assets except for a Permitted
Encumbrance or Permitted Real Property Encumbrance, (iii) results in a material
loss or damage to the Rigs, individually or in the aggregate (whether or not
covered by insurance), or (iv) would constitute a criminal violation of law by
Seller involving a felony.
"Stock Consideration" has the meaning specified in Section 3.01(b).
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"Survival Period" has the meaning specified in Section 11.05.
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"Taxes" means all federal, state, local, foreign and other taxes, charges,
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fees, duties, levies, imposts, customs or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, profit sharing, license, lease, service,
service use, value added, withholding, payroll, employment, excise, estimated,
severance, stamp, recording, occupation, premium, property, windfall profits, or
other taxes, fees, assessments, customs, duties, levies, imposts, or charges of
any kind whatsoever, together with any interest, penalties, additions to tax,
fines or other additional amounts imposed thereon or related thereto, and the
term "Tax" means any one of the foregoing Taxes.
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"Transferred Employees" has the meaning specified in Section 9.11.
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"Unit Common Stock" has the meaning specified in Section 6.08.
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ARTICLE II
PURCHASE AND SALE OF ASSETS
SECTION 2.01 Assets to be Purchased. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall sell,
assign, transfer, deliver and convey to Buyer, and Buyer shall purchase, free
and clear of any Encumbrances other than Permitted Encumbrances, all of the
following assets (collectively, the "Purchased Assets"):
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(a) the thirteen (13) land drilling rigs and all such drilling rigs'
respective drilling machinery and equipment (including, without limitation,
floor tools and blow-out preventers), engines, machinery, rigging, apparel,
furniture, computers and computer equipment on such rigs, fittings and
equipment, pumps and pumping equipment, spare components and parts, drill pipe,
case barrels, drill collars, heavy-weight drill pipe, racking, supporting
inventory and stores and all appurtenances thereto appertaining or belonging
thereto, as specifically identified on Schedule 2.01(a) (collectively, the
"Rigs" and each a "Rig") (any discrepancy in the tubular equipment listed on
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Schedule 2.01(a) and that actually delivered to Buyer shall be accounted for as
provided in Schedule 2.01(a));
(b) the other equipment and assets specifically identified on Schedule
2.01(b), (the "Other Equipment");
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(c) the stocks and inventory owned by Seller or any of its Affiliates
specifically identified on Schedule 2.01(c) (collectively "Inventory"), as such
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Inventory may be reduced through consumption thereof, or increased through
replacement thereof or addition thereto, in the ordinary course of the
maintenance and operation of the Rigs through the Closing Date;
(d) the real property fee ownership described on Schedule 2.01(d) (the
"Real Property"), together with all buildings, fixtures and other improvements
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upon the Real Property and all rights, easements, rights-of-way and other
interests incidental thereto that are used or held for use by Seller in
connection with the ownership, maintenance or operation of the Purchased Assets
(the "Real Estate Assets");
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(e) the following tangible and intangible assets used or held for use in
connection with the
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ownership, maintenance and operation of the Purchased Assets, to the extent
assignable by law and Seller or its Affiliates have the right to assign and
transfer such assets:
(i) all records to be delivered to Buyer pursuant to Section 2.06;
(ii) to the extent not subject to the specific provisions of Section
9.14, all insurance proceeds or rights to insurance proceeds relating to
any damage, destruction or other loss to the Purchased Assets; and
(iii) the certificates, licenses, permits, consents, operating
authorities, orders, exemptions, franchises, approvals, registrations and
other authorizations and applications therefore specifically associated
with the ownership, maintenance and operation of the Purchased Assets
("Permits");
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(f) the benefit and burden subsequent to the Closing Date of:
(i) all drilling contracts and any amendments thereto for the
employment of the Rigs existing on the Closing Date (the "Drilling
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Contracts"), including without limitation the Drilling Contracts identified
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on Schedule 2.01(f)(i) hereto existing on the Closing Date; and
(ii) all other contracts to which Seller or any of its Affiliates is
a party relating to the ownership, maintenance and operation of the Rigs or
the Real Estate Assets existing on the Closing Date to the extent described
on Schedule 2.01(f)(ii) (the "Other Contracts"); and
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(g) all warranties and guarantees, if any, express or implied, existing for
the benefit of the Seller in connection with the Purchased Assets to the extent
assignable; and
SECTION 2.02 Excluded Assets. The Purchased Assets to be transferred by
Seller hereunder shall include only those described or referred to in Section
2.01. Notwithstanding anything herein to the contrary, Seller shall not, and is
not hereby agreeing to sell, assign, convey, transfer, or deliver to Buyer any
of Seller's right, title and interest in, to or under any of the assets listed
below ( the "Excluded Assets"):
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(a) cash or cash equivalents, whether on hand at the premises, in banks or
in transit between accounts of Seller and whether or not relating to the
operation on the Assets;
(b) the bank accounts, deposit accounts or similar accounts of Seller;
(c) any and all policies of insurance or surety bonds of the Seller;
(d) all accounts receivable of Seller (except any relating to reimbursement
from operators under the Drilling Contracts for loss or damage to any of the
Purchased Assets which receivables shall be the property of Buyer);
(e) any and all accruals as of the Closing Date for income taxes and
deferred income taxes;
(f) any choses in action, claims, or causes of action or rights of Seller
to recover or offset of any kind or character arising prior to the Closing Date,
except as such may arise in connection with the Drilling Contracts or Other
Contracts; and
(g) all rights to payments, prepayments, prepaid expenses, deposits and the
like to the extent the same arise under any Drilling Contracts or Other
Contracts and are attributable to work performed by Seller prior to the Closing
Date
SECTION 2.03 Assumed Liabilities. As of the Closing Date, as additional
consideration to Seller in exchange for the performance by Seller of its
obligations hereunder, Buyer assumes and agrees to pay,
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discharge and perform as and when due, each of the following, excluding any
Retained Liabilities (collectively, the "Assumed Liabilities"):
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(a) all obligations and liabilities under the Drilling Contracts and Other
Contracts, to the extent that such obligations or liabilities are solely
attributable to all periods subsequent to the Closing Date; and
(b) all obligations and liabilities relating to the Transferred Employees
as specified in Section 9.11.
SECTION 2.04 Limitation of Liabilities. Buyer shall not assume or in any
way be liable or responsible for any liabilities or obligations of Seller or its
Affiliates except as specifically provided herein, it being expressly
acknowledged that it is the intention of the parties hereto that all liabilities
that Seller or its Affiliates has or may have in the future, whether fixed or
contingent, and whether known or unknown, not expressly described in the
definition of Assumed Liabilities shall be "Retained Liabilities" and remain
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the liabilities of Seller and its Affiliates. Without limiting the generality of
the foregoing, except to the extent specifically provided in Section 2.03, Buyer
shall not assume, or take title to the Purchased Assets subject to:
(a) any obligation or liability, including indemnification, arising out of
or relating to the ownership, operation, performance of or the maintenance of
the Purchased Assets prior to the Closing Date;
(b) Taxes arising out of or relating to the ownership, operation or
maintenance of the Purchased Assets for any period ending on or prior to the
Closing Date, any income (or similar) Taxes of any Seller or its Affiliates on
the sale of the Purchased Assets and any Taxes or payments payable by Seller in
connection with the sale of the Purchased Assets to Buyer to the extent
expressly set forth herein;
(c) any liability or obligation of Seller or any of its Affiliates under
any note, bond, indenture or other instrument whether or not secured by the
Purchased Assets;
(d) any liability or obligation of Seller or any of its Affiliates in
respect of any express or implied representation, warranty, indemnity, agreement
or guaranty made (or claimed to have been made) by Seller or any of its
Affiliates or imposed or asserted to be imposed by operation of law (except
obligations or liabilities imposed on Buyer by operation of law after the
Closing Date);
(e) any Encumbrance accrued (except for Permitted Encumbrances) or existing
at the time of the Closing Date against the Purchased Assets;
(f) any violation by Seller or any of its Affiliates of or default by
Seller or any such Affiliate under any Applicable Laws, including, without
limitation, Applicable Environmental Laws, which affects the ownership or
operation of the Purchased Assets, or any remedial obligation under any
Applicable Environmental Law arising out of or related to the ownership,
operation, performance of or the maintenance of the Purchased Assets prior to
the Closing Date; or
(g) any liability arising out of, relating to or resulting from the
employment relationship between Seller or its Affiliates and any of their
present or former employees or the termination of any such employment
relationship with Seller or any of its Affiliates prior to the Closing Date,
including, without limitation, severance pay and other similar benefits, if any,
and any claim filed by or on behalf of any employee or former employee of Seller
or its Affiliates relating to the employment or termination of employment of any
such employee by Seller or its Affiliates including, but not limited to, any
claim for wrongful discharge, breach of contract, unfair labor practice,
violation of the Worker Adjustment and Retraining Notification Act, continued
health benefits, employment discrimination, unemployment compensation or
workers' compensation; or
(h) any liability as a result of this Agreement arising out of, relating to
or resulting from any bulk transfer or similar laws of any jurisdiction.
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SECTION 2.05 Limitation on Assignments. Notwithstanding any other provision
hereof, this Agreement shall not constitute nor require an assignment to Buyer
of any Drilling Contract, Other Contract, lease, Permit, license or other right
if an attempted assignment of the same without the consent of any party would
constitute a breach thereof or a violation of any law or any judgment, decree,
order, writ, injunction, rule or regulation of any Governmental Entity unless
and until such consent shall have been obtained. In the case of any such
Drilling Contract, Other Contract, Permit, license or other right that cannot be
effectively transferred to Buyer without such consent (a "Consent Required
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Contract"), Seller agrees that between the date hereof and the Closing Date it
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will use its Best Efforts to obtain or cause to be obtained the necessary
consents to the transfer of any Consent Required Contract. Buyer agrees to
cooperate and to cause any Buyer Designee to cooperate with Seller in obtaining
such consents and to enter into such arrangement of assumption as may be
reasonably requested by the other contracting party under a Consent Required
Contract. In the event that Seller shall have failed prior to the Closing Date
to obtain consents to the transfer of any Consent Required Contract and Buyer
shall have waived the conditions set forth in Section 8.05, the terms of this
Section 2.05 shall govern the transfer of the benefits of each such contract.
Seller and Buyer shall use their Best Efforts after the Closing Date to obtain
any required consent to the assignment to, and assumption by, Buyer of each
Consent Required Contract that is not transferred to Buyer at the Closing (a
"Nonassigned Contract"). With respect to the Nonassigned Contracts and any of
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the Purchased Assets that are not assignable by the terms thereof or consents to
the assignment thereof cannot be obtained as provided herein, such Purchased
Assets shall be held by the Seller in trust for the Buyer and shall be performed
by the Buyer in the name of the Seller and all benefits derived and obligations
incurred hereunder shall be for the account of the Buyer; provided, however,
that where entitlement of the Buyer to such Purchased Assets hereunder is not
recognized by any third party, the Seller shall, at the request of the Buyer,
enforce in a reasonable manner, at the cost of and for the account of the Buyer,
any and all rights of the Seller against such third party. Buyer shall defend,
indemnify and hold Seller harmless in respect of Buyer's performance or failure
to perform any obligation, duty or liability in connection with such Purchased
Assets.
SECTION 2.06 Delivery. (a) Buyer shall be entitled to the records relating
to the Rigs and their operation, whether physically located on the Rigs or at
another location on the Closing Date.
(b) On the Closing Date, Seller shall deliver or cause to be delivered to
Buyer at the offices where such records are located or such other location as
mutually agreed the following to the extent related to the Purchased Assets (i)
a copy of the operational and accident records, (ii) engineering drawings,
designs, schematics, blueprints, instruction manuals, flow sheets, models,
maintenance schedules and similar technical records (including, but not limited
to, all O.I.M.E.(now Parker Technology) and Parco Mast and Substructures, Inc.
records), (iii) all regulatory certification and documentation, all pertinent
correspondence relating thereto, all technical manuals relating to equipment on
the Rigs and all equipment history files and preventive maintenance data, (iv)
all Drilling Contracts, Other Contracts, and all material correspondence and
other records relating thereto, and (v) property records, including
environmental reports and assessments relating to the Real Estate Assets in the
possession or control of Seller or its Affiliates.
(c) Seller shall be entitled to retain all originals of its corporate,
financial, accounting, legal, tax and audit records. For a period of five years
following the Closing Date, Buyer shall give Seller reasonable access to (and
the right to make copies at the sole expense of Seller) the records delivered by
Seller pursuant to the terms of this Agreement, but any access pursuant to this
Section 2.06(c) shall be conducted in such manner as not to interfere
unreasonably with the operations of Buyer following the Closing Date.
Notwithstanding the foregoing sentence and anything in this Agreement to the
contrary, Buyer shall have no liability to the Seller for any breach of Buyer's
obligations under this Section 2.06(c). Following such five-year period, Buyer
may destroy such records unless Seller has provided Buyer with written notice,
no later than sixty days prior to the end of such five year period, that Seller
wishes to obtain, at its cost and expense, copies of such records.
(d) The Rigs shall be delivered on the Closing Date at their present
locations as is, where is at the time of delivery.
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SECTION 2.07 Other Funds Received. (a) To implement the provisions of
Sections 2.01.(f), 2.02(d) and 2.02(g) hereto, Seller shall prepare and submit
to the operators for payment invoices for all accounts receivable under the
Drilling Contracts for periods up to the Closing Date and the Buyer shall
prepare invoices for periods from and after the Closing Date. In the event
either party receives or otherwise acquires funds (including, but not limited
to, rebates, warranty proceeds, incentives, accounts receivable, prepaid
expenses, deposits and asset dispositions, in any form whatsoever), which are
properly due and payable to the other party hereunder, the recipient of such
funds shall within three Business Days following receipt thereof forward such
funds to the other party at the address provided in Section 13.01.
(b) Notwithstanding anything herein to the contrary, Buyer and Seller
agree that any funds received or to be received or amounts earned, pursuant to
any Drilling Contract, which represent payment of a bonus or other form of
incentive payment for satisfaction of any performance based standards (or
similar type compensation) shall be for the account of Buyer. Likewise, any
similar performance based penalty assessed under any Drilling Contract shall be
for the account of Buyer.
ARTICLE III
PURCHASE PRICE
SECTION 3.01 Consideration for the Purchased Assets. At the Closing, Buyer
shall pay to Seller the Purchase Consideration by delivering to Seller:
(a) the amount of $40,000,000.00 in immediately available funds by
confirmed wire transfer to a bank account to be designated by Seller (such
designation to occur no later than the second business day prior to the Closing
Date) (such funds, the "Cash Consideration"); and
------------------
(b) one or more stock certificates representing 1,000,000 shares of Unit
Common Stock issued in the name of Seller and all accompanying rights pursuant
to the Rights Agreement referenced in Section 6.08 (the " Stock Consideration"),
-------------------
subject to adjustment for stock splits, stock dividends, recapitalization and
similar arrangements that occur prior to Closing.
SECTION 3.02 Allocation of Purchase Consideration. The Purchase
Consideration shall be allocated among the Purchased Assets in a manner set
forth in Schedule 3.02. After the Closing, Seller and Buyer shall cooperate with
each other in the preparation, execution and filing of (i) all information
returns and supplements thereto required to be filed with the IRS by the parties
under Section 1060 of the Code and the Treasury Regulations promulgated there
under relating to the allocation of the Purchase Consideration and (ii) all
similar filings required to be filed with respect to the transactions
contemplated by this Agreement with the IRS and other appropriate taxing
authorities. Each party hereto agrees not to assert, in connection with any tax
return, tax audit or similar proceeding, any allocation that differs from that
set forth in Schedule 3.02.
ARTICLE IV
THE CLOSING
SECTION 4.01 Time and Place of Closing. The Closing shall take place at
the offices of Buyer, 7130 South Lewis, Tulsa, Oklahoma at 10:00 a.m., local
time, on the third Business Day after the satisfaction of the conditions to the
obligations of the parties set forth in Articles VII and VIII, or at such other
place, date or time as the parties may agree in writing. The date on which the
Closing takes place is herein referred to as the "Closing Date."
------------
SECTION 4.02 Deliveries by Seller. At the Closing, Seller shall deliver
the following to Buyer:
(a) a duly executed General Conveyance, Assignment and Bill of Sale (the
"General Assignment and Bill of Sale") substantially in the form of Exhibit "A"
- ------------------------------------
hereto, together with such other bills of sale, assignments and other
instruments of transfer, assignment and conveyance as Buyer shall reasonably
request to vest in Buyer (or a Buyer Designee) good and indefeasible title to
the Purchased Assets other
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than the Real Property;
(b) general warranty deeds, substantially in the Form of Exhibit "B"
hereto, with such modifications as are necessary to comply with applicable local
law in the jurisdictions in which the Real Property is located (the "Deeds"),
-----
sufficient to transfer to Buyer (or a Buyer Designee) good and marketable title
to the Real Property, free and clear of all Encumbrances except for Permitted
Real Property Encumbrances;
(c) a duly executed General Assignment of Contracts (the "General
-------
Assignment of Contracts"), substantially in the form of Exhibit "C" hereto, and
- -----------------------
such other instruments of transfer and assumption as may be needed in order to
cause an effective assignment to and assumption by Buyer (or a Buyer Designee)
of the Drilling Contracts and Other Contracts as contemplated herein;
(d) any consents obtained as contemplated by Section 2.05;
(e) the certificate and opinion of counsel contemplated by Sections 8.03
and 8.04, respectively;
(f) the documents to be delivered pursuant to Section 2.06.
SECTION 4.03 Deliveries by Buyer. At the Closing, Buyer shall deliver the
following to Seller:
(a) the Cash Consideration;
(b) the Stock Consideration; and
(c) the certificate and opinion of counsel contemplated by Sections 7.03
and 7.04, respectively.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
SECTION 5.01 Corporate Existence and Power. The Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of its incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to own the Purchased
Assets and carry on its business as now conducted. The Seller is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction where the character of the Purchased Assets or the nature of its
activities makes such qualification necessary unless the failure so to qualify
or be licensed would not reasonably be expected to have a Seller MAE.
SECTION 5.02 Corporate Authorization; Etc. Seller has all necessary power
and authority to execute and deliver this Agreement and all agreements,
instruments and documents to be executed and delivered hereunder by Seller, to
consummate the transactions contemplated hereby and to perform all terms and
conditions hereof to be performed by it. The execution and delivery of this
Agreement by Seller and all agreements, instruments and documents to be executed
and delivered by Seller hereunder, the performance by Seller of all the terms
and conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized and approved by the
Board of Directors of Seller, and no other proceedings of Seller are necessary
with respect thereto. All corporate actions required on behalf of the Seller in
connection with this Agreement and the transactions contemplated hereby have
been duly taken. All persons who have executed and delivered this Agreement, and
all persons who will execute and deliver the other agreements, documents and
instruments to be executed and delivered by Seller hereunder, have been duly
authorized to do so by all necessary actions on the part of Seller. This
Agreement constitutes, and each other agreement or instrument to be executed by
Seller hereunder, when executed and delivered by Seller, will constitute, the
legal, valid and binding obligation of Seller, enforceable against it in
accordance with its terms, except to the extent the enforceability hereof and
thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or
other laws relating to or affecting
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creditors' rights generally or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 5.03 Non-Contravention. The execution, delivery or performance of
this Agreement by Seller, the fulfillment of and compliance by it with the terms
and conditions hereof and the consummation by it of the transactions
contemplated hereby do not and will not:
(a) contravene or conflict with any of the terms of the certificate of
incorporation or bylaws of the Seller;
(b) to the knowledge of Seller, contravene or conflict with or constitute
a violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Seller or any of its Affiliates;
(c) result in the creation or imposition of any Encumbrances on any of the
Purchased Assets; or
(d) (i) result in a breach of or constitute a default under (whether with
notice or the lapse of time or both) any (x) note, bond, mortgage, loan
agreement, indenture or other instrument evidencing borrowed money to which
Seller is a party or by which Seller or any of its Affiliates is bound or to
which any of the Purchased Assets is subject or (y) provision of any agreement,
contract or other instrument assumed by Buyer or any license, franchise, permit
or other similar authorization held by the Seller or any of its Affiliates
relating to the Purchased Assets; or (ii) result in the creation of any
Encumbrance on any of the Purchased Assets, or (iii) gives any Person the right
to terminate any Drilling Contract, Permit or Other Contract assumed by Buyer.
SECTION 5.04 Ownership of Rigs and Other Equipment. Seller owns and, upon
Seller's execution and delivery of the General Assignment and Bill of Sale,
Buyer will own good and indefeasible title to the Rigs and Other Equipment, free
and clear of all Encumbrances except for Permitted Encumbrances and
Encumbrances, if any, created or permitted to be imposed by Buyer.
SECTION 5.05 [Reserved]
SECTION 5.06 Contracts. Seller has made available to Buyer for review
complete and correct copies of all Drilling Contracts and Other Contracts.
Except as expressly identified on Schedule 2.01(f)(i) or (ii), each of the
Drilling Contracts and Other Contracts may be transferred to Buyer without the
consent of any Person. All the Drilling Contracts and Other Contracts are valid,
binding and in full force and effect against Seller, and, to Seller's knowledge,
are valid, binding and in full force and effect against the other parties
thereto. As of the Closing Date, none of the Rigs will be subject to any
agreement, contract or commitment of Seller or any of its Affiliates other than
the Drilling Contracts and Other Contracts. Neither Seller nor any of its
Affiliates is in default in any material respect, and no notice of default or
alleged default has been received by Seller or any of its Affiliates, under any
of the Drilling Contracts and Other Contracts, no other party thereto is, to the
knowledge of Seller or its Affiliates, in default there under in any material
respect, and, to the knowledge of Seller or its Affiliates, there exists no
condition or event which, with or without notice or lapse of time or both, would
constitute a default under any of the Drilling Contracts and Other Contracts by
Seller, any of its Affiliates or, to the knowledge of Seller, any other party
thereto.
SECTION 5.07 Litigation. (a) There is no Proceeding pending, instituted or,
to the knowledge of Seller, overtly threatened against any of the Purchased
Assets or against the Seller or any of its Affiliates and relating to the
ownership, operation or maintenance of any of the Purchased Assets before any
Governmental Entity applicable to or binding upon Seller or any of the Purchased
Assets that (i) seeks injunctive relief, or (ii) if adversely determined would
delay or prevent the consummation of the transactions contemplated by this
Agreement or have an adverse affect on Buyer or (iii) would reasonably be
expected to have a Seller MAE.
(b) None of Seller or any of its Affiliates nor any of its respective
properties or assets is subject to
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any judicial or administrative judgment, order, decree or restraint currently
affecting, in a material and adverse manner, the ownership, maintenance and
operation of the Purchased Assets. Seller has not received any notifications or
charges in writing from any Governmental Entity involving alleged violations of
or alleged obligations to remediate under occupational safety and health or
water quality or other environmental matters (including Applicable Environmental
Laws) that materially and adversely affect the conduct by Seller of the
ownership, maintenance and operation of the Purchased Assets or that have not
been finally dismissed or otherwise disposed of.
SECTION 5.08 Governmental Approval. The execution, delivery and
performance by the Seller of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than (i)
compliance with any applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), (ii) compliance with any applicable
-------
requirements of the Securities Exchange Act of 1934, as amended ("Exchange
--------
Act"), and (iii) compliance with any applicable requirements of the Securities
- ---
Act of 1933, as amended ("Securities Act").
--------------
SECTION 5.09 Compliance With Laws. Seller is not in violation of or in
default under any federal, state, local, municipal, foreign, international,
multinational or other administrative order, constitution, ordinance, principle
of common law, statute, treaty, law, rule, regulation, code, governmental
determination, governmental certification requirement or other public limitation
that is not an Applicable Environmental Law (collectively, "Applicable Laws")
---------------
relating to the ownership, maintenance or operation of the Purchased Assets,
which violation or default materially adversely affects Seller's ownership,
maintenance or operation (as presently conducted) of the Purchased Assets, and
no claim is pending or, to Seller's knowledge, overtly threatened with respect
to any such matters which if determined adversely to Seller would have such
effect.
SECTION 5.10 Employee Matters. (a) There are no collective bargaining or
other labor union agreements to which the Seller is a party or by which it is
bound. To the knowledge of the Seller, the Seller has not encountered any labor
union organizing activity or had any actual or threatened employee strikes, work
stoppages, slowdowns or walkouts.
(b) The Seller does not contribute to or have an obligation to contribute
to, and has not at any time within seven years prior to the Closing Date
contributed to or had an obligation to contribute to, a multi-employer plan
within the meaning of Section 3(37) of ERISA.
(c) With respect to any employee benefit plan, within the meaning of
Section 3(3) of ERISA, which is sponsored, maintained or contributed to, or has
been sponsored, maintained or contributed to within seven years prior to the
Closing Date, by the Seller or any corporation, trade, business or entity under
common control with the Seller, within the meaning of Section 414(b), (c) or (m)
of the Code or Section 4001 of ERISA ("Commonly Controlled Entity"), (i) no
--------------------------
withdrawal liability, within the meaning of Section 4201 of ERISA, has been
incurred, which withdrawal liability has not been satisfied, (ii) no liability
to the Pension Benefit Guaranty Corporation has been incurred by the Seller or
any Commonly Controlled Entity, which liability has not been satisfied, (iii) no
accumulated funding deficiency, whether waived or not waived, within the meaning
of Section 302 of ERISA or Section 412 of the Code has been incurred and (iv)
all contributions, including installments, to such plan required by Section 302
of ERISA and Section 412 of the Code have been timely made which, in each case,
would affect the Purchased Assets or create any liabilities for Buyer.
(d) Buyer will not be obligated or liable with respect to any employee
benefit plan or agreement relating to the employees of Seller by virtue of its
possible employment of any employee or former employee of the Seller except as
otherwise specifically provided in this Agreement.
SECTION 5.11 Real Property. Seller owns, and upon execution and delivery
by Seller of the Deeds, Buyer will own, good and marketable title to the Real
Property described on Schedule 2.01(d), free and clear of all Encumbrances
except Permitted Real Property Encumbrances.
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SECTION 5.12 Environmental Matters. (a) Seller has received no written
notice of any investigation or inquiry by any Governmental Entity under any
Applicable Environmental Laws (as defined below) relating to the ownership or
operation of the Purchased Assets. To the knowledge of Seller, Seller has not
disposed of any hazardous material (as defined below) on any of the Purchased
Assets and no condition exists on any of the Purchased Assets, which would
subject Seller, or the Purchased Assets to any material remedial obligations
under any Applicable Environmental Laws.
(b) Seller and its Affiliates have complied, in all material respects,
with all Applicable Environmental Laws relating to the Real Estate Assets, and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against it alleging any failure so
to comply. Without limiting the generality of the preceding sentence Seller and
its Affiliates have obtained and been in compliance with all of the terms and
conditions of all permits, licenses, and other authorizations which are required
under, and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and time tables
which are contained in all Applicable Environmental Laws relating to the
Purchased Assets, except to the extent that non-compliance would not have a
Seller MAE.
(c) Neither Seller or any of its Affiliates nor, to the knowledge of
Seller, any prior owner or operator of the Purchased Assets, has caused or
allowed the generation, use, treatment, storage, release or disposal of
hazardous materials at any site or facility owned, leased or operated by any
Seller or its Affiliates or used in connection with the Purchased Assets except
in accordance with all Applicable Environmental Laws.
(d) [Reserved]
(e) Seller has secured all environmental Permits necessary to the
operation of the Purchased Assets and Seller is in compliance with such permits,
except to the extent any such noncompliance does not and will not impose
liability on Buyer or its Affiliates.
(f) Seller has not received any notice, nor is it aware, of any proposal
to amend, revoke or replace any environmental Permit, or requiring the issuance
of any additional environmental Permit, necessary to operate any of the Rigs.
(g) Seller has not received inquiry or notice nor does Seller have any
reason to believe that it will receive inquiry or notice of any actual or
potential Proceedings, claims, or losses related to or arising under any
Applicable Environmental Law and related to the Purchased Assets.
(h) Seller is not currently operating or required to be operating any of
the Purchased Assets under any compliance order, schedule, decree or agreement,
any consent decree, order or agreement, or corrective action decree, order or
agreement issued or entered into under any Applicable Environmental Law.
(i) Each of Seller and the Purchased Assets is in compliance with all
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements and obligations established under Applicable Environmental Laws
except to the extent any such noncompliance would not have a Seller MAE.
(j) For purposes of this Agreement, "Applicable Environmental Laws" means
-----------------------------
any and all Environmental Laws and Applicable Laws pertaining to (x) the control
of any potential pollutant or protection of the air, water or land, (y) solid,
gaseous or liquid waste generation, handling, treatment, storage, disposal or
transportation or (z) exposure to hazardous, toxic or other substances alleged
to be harmful. "Environmental Laws" shall include all such laws in effect in
------------------
any and all jurisdictions in which the Purchased Assets are located or in which
any Seller or its Affiliates has conducted operations using any of the Purchased
Assets, including, without limitation, the Clean Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Rivers and Harbors Act of 1899, as amended, the Federal Water
Pollution Control Act, as amended, the Resource Conservation and Recovery Act of
1976, as amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Superfund Transportation Act, as amended and any
other state or federal
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environmental conservation or protection laws. For purposes of this Agreement,
the term "hazardous material" means (i) any substance which is listed or defined
------------------
as a hazardous substance, hazardous constituent, or solid waste pursuant to any
Applicable Environmental Laws and (ii) petroleum (including crude oil and any
fraction thereof), natural gas and natural gas liquids.
SECTION 5.13 No Brokers. Seller has not employed or authorized anyone to
represent it as a broker or finder in connection with the transactions
contemplated by this Agreement, and no broker or other Person is entitled to any
commission or finder's fee from Seller in connection with such transactions.
Seller agrees to indemnify and hold harmless Buyer from and against any and all
losses, claims, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, Buyer may sustain or incur
as a result of any claim for a commission or fee by a broker or finder acting on
behalf of Seller.
SECTION 5.14 Decrees, Etc. No order, writ, injunction, decree, judgment,
award or determination of any Governmental Entity has been issued or entered
against Seller or any of its Affiliates which continues to be in effect and
affects the ownership or operation of the Purchased Assets.
SECTION 5.15 Performance Bonds; Letters of Credit. There are no
performance or similar bonds or letters of credit currently posted by Seller or
any of its Affiliates for the purpose of owning, operating or maintaining the
Purchased Assets.
SECTION 5.16 Certain Property on Rigs. Since the date of completion of
Buyer's inspection of each Rig, subject to normal wear and tear and consumption
in the ordinary course of business, Seller has not removed or permitted to be
removed any tangible property from such Rig, except for any such tangible
property relocated from one Rig to another Rig or transferred to Inventory.
SECTION 5.17 Accredited Investor; Investment Purpose. The Seller hereby
acknowledges receipt of copies of the SEC Documents and represents, acknowledges
and understands that:
(a) the Stock Consideration has not been, and will not have been at the
time of its issuance pursuant to this Agreement, registered under the Securities
Act or registered or qualified under any state securities laws because it will
be so issued in reliance upon exemptions from registration or qualification that
depend, in part, on the Seller's acknowledgements, representations and
warranties made herein;
(b) the certificates evidencing the Stock Consideration will bear a legend
in substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE OKLAHOMA
SECURITIES ACT. NEITHER THE RECORD NOR THE BENEFICIAL OWNERSHIP
OF SAID SECURITIES MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR SAID SECURITIES UNDER
BOTH OF SAID ACTS AND ANY OTHER APPLICABLE STATE SECURITIES LAWS
OR RULES UNLESS IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SAID ACTS ARE AVAILABLE WITH RESPECT TO SUCH SALE OR TRANSFER AND
SAID SALE OR TRANSFER IS MADE PURSUANT TO AND IN STRICT
COMPLIANCE WITH THE TERMS AND CONDITIONS OF SAID EXEMPTIONS;
(c) the Stock Consideration is being acquired for its own account and
without a view to the distribution thereof or any interest therein;
(d) Seller is an accredited investor within the meaning of Rule 501(a) or
Regulation D promulgated under the Securities Act;
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(e) Seller has received certain information concerning the Buyer and has
had the opportunity to obtain additional information as desired in order to
evaluate the merits and risks inherent in holding the Stock Consideration; and
(f) the Stock Consideration shall not be sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of by Seller in violation of
any applicable securities laws or regulations.
SECTION 5.18 Competitive Restrictions. The Seller is not a party to any
agreement that expressly limits the ability of the Buyer or any Affiliate of
Buyer after the Closing, to use the Purchased Assets in competition with any
third party.
SECTION 5.19 Year 2000 Compliance. Seller has conducted an audit of its
assets, including the Purchased Assets, to determine if any components contain
imbedded chips containing data related logic. This audit has determined that
most components do not have date related logic. The components which have
sensitive chips have been tested and the Seller is reasonably certain that they
are Year 2000 Compliant. "Year 2000 Compliant" means that, prior to January 1,
-------------------
2000, the software, hardware, systems and devices with date-related
functionality comprising the Purchased Assets will correctly Process (as defined
below) all dates, including those before, on or after January 1, 2000, without
any loss of functionality, interoperability or performance when used on a stand-
alone basis and not in combination with any other software, hardware, system or
device used by Seller as of the date hereof. For purposes of the foregoing,
"Process" means all functions, including accepting as input, calculating,
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storing, displaying and generating as output.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
SECTION 6.01 Organization and Existence. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of its incorporation, with all necessary corporate power and authority to own
and lease the assets it currently owns and leases and to carry on its business
as such business is currently conducted. Buyer is duly qualified or licensed to
transact business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the assets currently owned or leased by
it or the nature of the business currently conducted by it requires it so to be
qualified or licensed unless the failure so to qualify or be licensed would not
reasonably be expected to have a material adverse effect on the business or
financial condition of Buyer and its subsidiaries taken as a whole. Buyer has
heretofore furnished to Seller a complete and correct copy of its certificate of
incorporation and bylaws, as amended or restated. Buyer is not in violation of
any of the provisions of its charter or any material provisions of its bylaws.
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SECTION 6.02 Corporate Authorization and Power. (a) Buyer has all
necessary corporate power and authority to execute and deliver this Agreement
and all agreements, instruments and documents to be executed and delivered
hereunder by Buyer, to consummate the transactions contemplated hereby and to
perform all terms and conditions hereof to be performed by it. No corporate
proceedings of Buyer are necessary on the part of Buyer with respect to the
execution, delivery and performance of this Agreement by Buyer. All persons who
have executed and delivered this Agreement, and all persons who will execute and
deliver the other agreements, documents and instruments to be executed and
delivered by Buyer hereunder, will have been duly authorized to do so by all
necessary actions on the part of Buyer. This Agreement constitutes, and each
other agreement or instrument to be executed by Buyer hereunder, when executed
and delivered by Buyer, will constitute, legal, valid and binding obligations of
Buyer, enforceable against it in accordance with their respective terms, except
to the extent the enforceability hereof and thereof 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).
(b) Buyer has taken all necessary corporate action to permit it to issue
the Stock Consideration. The Stock Consideration will, when issued, be validly
issued, fully paid and non assessable and not subject to preemptive rights.
SECTION 6.03 SEC Documents. Buyer has provided to Seller its Annual
Report on Form 10-K for the year ended December 31, 1998, Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1999 and June 30, 1999, and its proxy
statement with respect to its Annual Meeting of Stockholders for 1999 and any
registration statements filed since December 31, 1998 (such documents
collectively referred to herein as the "SEC Documents"). As of their respective
-------------
dates, except as otherwise disclosed in writing to Seller, the SEC Documents
complied in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission promulgated there under applicable
to such SEC Documents, and none of the SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The consolidated
financial statements of Buyer included in the SEC Documents comply as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of Buyer
and its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended. Since
June 30, 1999, other than as discussed in the SEC Documents, there has been no
material adverse change in the business of Buyer and its subsidiaries, taken as
a whole.
SECTION 6.04 Non-Contravention. The execution and delivery of this
Agreement by Buyer, the fulfillment of and compliance by it with the terms and
conditions hereof and the consummation by it of the transactions contemplated
hereby will not:
(a) contravene or conflict with any of the terms of the certificate of
incorporation or bylaws of Buyer;
(b) (i) result in a breach of or constitute a default under (whether with
notice or the lapse of time or both) any (x) note, bond, mortgage, loan
agreement, indenture or other instrument evidencing borrowed money to which
Buyer is a party or by which Buyer is bound or to which any of its assets is
subject or (y) provision of any material agreement , contract or other
instrument binding upon the Buyer or any of its Affiliates or any license,
permit or other similar authorization held by Buyer or any of its Affiliates,
which breach or default would reasonably be expected to have a material adverse
effect on Buyer's business or financial condition or the results of its
operations or on its ability to perform its obligations hereunder or (ii) result
in the creation of any Encumbrance on any of its assets; or
(c) to Buyer's knowledge, violate any provision of any law, statute, rule
or administrative regulation or any judgment, order, injunction or decree of any
Governmental Entity applicable to or binding
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upon Buyer or any of its Affiliates which would reasonably be expected to have a
material adverse effect on Buyer's business or financial condition or the
results of its operations or on its ability to perform its obligations
hereunder.
SECTION 6.05 Governmental Approval. The execution, delivery and
performance by the Buyer of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than (a)
compliance with any applicable requirements of the HSR Act, (b) compliance with
any applicable requirements of the Exchange Act and (c) compliance with any
applicable requirements of the Securities Act.
SECTION 6.06 Litigation. There is no Proceeding pending, instituted or,
to the knowledge of Buyer overtly threatened against Buyer or its subsidiaries
that could reasonably be expected to have a material adverse effect on the
business or financial condition of Buyer and its subsidiaries taken as a whole
or that, if adversely determined, would delay or prevent the consummation of the
transactions contemplated by this Agreement.
SECTION 6.07 No Brokers. Buyer has not employed or authorized anyone to
represent it as a broker or finder in connection with the transactions
contemplated by this Agreement, and no broker or other Person is entitled to any
commission or finder's fee from Buyer in connection with such transactions.
Buyer will indemnify and hold harmless Seller from and against any and all
losses, claims, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, Seller may sustain or incur
as a result of any claim for a commission or fee by a broker or finder acting on
behalf of Buyer.
SECTION 6.08 Capitalization. The authorized capital stock of Buyer
consists of 40,000,000 shares of common stock, par value $.20 per share ("Unit
----
Common Stock"), and 5,000,000 shares of preferred stock, par value $1.00 per
- ------------
share ("Unit Preferred Stock"). As of August 10, 1999 there were issued and
--------------------
outstanding 25,745,160 shares of Unit Common Stock and no shares of Unit
Preferred Stock. In addition, 0 shares of Unit Common Stock are held in the
treasury of Buyer. The only outstanding options, warrants, or other rights to
purchase shares of Unit Common Stock are stock options covering a total of
838,560 shares of Unit Common Stock. All shares of capital stock of Buyer which
are outstanding as of the date hereof, or will be outstanding immediately prior
to the Closing, are or will be duly authorized, validly issued, fully paid and
nonassessable, and are not or will not be subject to, or issued in violation of,
any preemptive rights. Except as set forth above, as provided on Schedule 6.08
and as provided in the Rights Agreement adopted by the Board of Directors of
Buyer in May 1995, (i) there are no shares of capital stock of Buyer authorized
or outstanding, and there are no subscriptions, options to purchase shares of
the capital stock of Buyer, conversion or exchange rights, warrants, preemptive
rights or other agreements, claims or commitments of any nature whatsoever
(whether firm or conditional) obligating Buyer to issue, transfer, deliver to
sell, or cause to be issued, transferred, delivered or sold, additional shares
of the capital stock or other securities or interest of Buyer or obligating
Buyer to grant, extend or enter into any such agreement or commitment, (ii)
there are no voting trusts, proxies or other agreements or understandings to
which Buyer is bound with respect to the voting of any shares at capital stock
of Buyer and (iii) there currently are no registration rights or similar rights
outstanding with respect to the Unit Common Stock.
SECTION 6.09 Subsidiaries. The only wholly owned subsidiaries of Buyer
are Unit Drilling Company, Unit Petroleum Company, Unit Drilling and Exploration
Company, Mountain Front Pipeline Company, Inc., Unit Texas Company, Petroleum
Supply Company, Unit Drilling Company International, Perforaciones Leasing Ltd.,
Rig Leasing International, and Unit Energy Canada Inc. In addition, Buyer is a
member of GED Gas Services, L.L.C. and Superior Pipeline Company L.L.C., both
limited liability companies formed under Oklahoma law.
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ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller to proceed with the Closing contemplated by this
Agreement are subject to the satisfaction, on or before the Closing Date, of all
the following conditions, any one or more of which may be waived, in whole or in
part, by Seller:
SECTION 7.01 Accuracy of Representations and Warranties. Each
representation and warranty of Buyer contained in this Agreement shall be true
and correct in all material respects as of the Closing Date with the same effect
as though made on the Closing Date, except as otherwise specifically
contemplated by this Agreement.
SECTION 7.02 Covenants and Agreements Performed. Buyer shall have
complied on or before the Closing Date in all material respects with each of its
covenants or agreements contained in this Agreement to be performed on or before
the Closing Date.
SECTION 7.03 Officer's Certificate. Seller shall have received a
certificate, substantially in the form of Exhibit "D" hereto, dated as of the
Closing Date, of the President or a Vice President of Buyer certifying as to the
matters specified in Sections 7.1 and 7.2.
SECTION 7.04 Legal Opinion. Seller shall have received from Conner &
Winters, A Professional Corporation, counsel for Buyer, an opinion dated the
Closing Date, with respect to the due authorization, execution, delivery and
enforceability of this Agreement.
SECTION 7.05 No Governmental Action. No action of any private party or
Governmental Entity shall have been taken or threatened and no statute, rule,
regulation or executive order shall have been proposed, promulgated or enacted
by any Governmental Entity which seeks to restrain, enjoin or otherwise prohibit
or to obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.
SECTION 7.06 Termination under Hart-Scott-Rodino Act. The termination or
early termination of any applicable waiting period under the HSR Act shall have
occurred.
SECTION 7.07 Due Execution and Delivery of Documents. The documents to be
delivered by Buyer at Closing shall have been properly executed and delivered.
SECTION7.08 No Adverse Change. There shall not have occurred any material
adverse change in the business of Buyer.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer to proceed with the Closing contemplated by this
Agreement are subject to the satisfaction, on or before the Closing Date, of all
the following conditions, any one or more of which may be waived, in whole or in
part, by Buyer:
SECTION 8.01 Accuracy of Representations and Warranties. Each
representation and warranty of Seller contained in this Agreement shall be true
and correct in all material respects as of the Closing Date with the same effect
as though made on the Closing Date, except as otherwise specifically
contemplated by this Agreement.
SECTION 8.02 Covenants and Agreements Performed. Seller shall have
complied on or before the Closing Date in all material respects with each of its
covenants or agreements contained in this Agreement to be performed on or before
the Closing Date.
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SECTION 8.03 Officer's Certificate. Buyer shall have received a
certificate, substantially in the form of Exhibit "E" hereto, dated as of the
Closing Date, of the President or a Vice President of Seller certifying as to
the matters specified in Sections 8.01 and 8.02.
SECTION 8.04 Legal Opinion. Buyer shall have received from Vinson &
Elkins counsel for Seller, an opinion dated the Closing Date, with respect to
the due authorization, execution, delivery and enforceability of this Agreement.
SECTION 8.05 Drilling Contracts. Seller shall have obtained the consents
to the assignment of the Drilling Contracts, Other Contracts and leases
identified as "Consent Required Contracts" on Schedule 2.01(f)(i) and
2.01(f)(ii) on terms reasonably acceptable to Buyer or, with respect to any
Nonassigned Contracts, there are no reasonable grounds to believe that the
arrangements provided in Section 2.05 to provide the economic benefits to Buyer
cannot be implemented.
SECTION 8.06 No Adverse Change. There shall not have occurred any Seller
MAE.
SECTION 8.07 [Reserved]
SECTION 8.08 No Governmental Action. No action of any private party or
Governmental Entity shall have been taken or threatened and no statute, rule,
regulation or executive order shall have been proposed, promulgated or enacted
by any Governmental Entity which seeks to restrain, enjoin or otherwise prohibit
or to obtain damages or other relief in connection with this Agreement or the
transactions contemplated hereby.
SECTION 8.09 Termination under Hart-Scott-Rodino Act. The termination or
early termination of any applicable waiting period under the HSR Act shall have
occurred.
SECTION 8.10 Due Execution and Delivery of Documents. The documents to be
delivered by Seller at Closing shall have been properly executed and delivered.
ARTICLE IX
COVENANTS AND AGREEMENTS OF THE PARTIES
Seller and Buyer hereby covenant and agree as follows:
SECTION 9.01 Expenses. Except as otherwise expressly provided in this
Agreement, each of the parties hereto shall assume and bear all expenses, costs
and fees incurred or assumed by such party in the preparation and execution of
this Agreement and in compliance with and performance of the agreements and
covenants contained in this Agreement, regardless of whether the transactions
contemplated hereby are consummated.
SECTION 9.02 Access. Between the date hereof and the Closing, to the
extent permitted by applicable law and subject to the provisions of the
Confidentiality Letter between Seller and Buyer dated June 25, 1999, the Seller
and Buyer will give the other party, its counsel, financial advisors, auditors
and other authorized representatives reasonable access to the offices,
properties, books and records of such party and its Affiliates, furnish to the
other party, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request and will instruct its own employees, counsel and
financial advisors to cooperate with the other party in its investigation of the
business of the Seller or Buyer, as the case may be; provided that no
investigation of the other party's business shall affect any representation or
warranty given by either party hereunder. Buyer acknowledges and agrees that its
due diligence, including observation of the Purchased Assets, shall be conducted
at the sole risk and expense of Buyer and Buyer hereby agrees to defend,
indemnify and hold Seller harmless from and against any and all Claims brought
by Buyer, its Affiliates, and their respective officers, agents and employees
for damage or loss to property or injury or death to persons arising out of the
performance of said due diligence activities.
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SECTION 9.03 Conduct of Business and Preservation of Assets. Until the
Closing, Buyer and Seller agree to cooperate with each other to effect an
orderly transition of the ongoing operation of the Purchased Assets and Seller
shall preserve, maintain and protect the Purchased Assets consistent with past
practice. From and after the date of this Agreement and until the Closing Date,
without the prior express written consent of Buyer, which consent shall not be
unreasonably withheld or delayed, Seller and its Affiliates will:
(a) conduct its business and operations as they relate to the Purchased
Assets only in the usual, regular and ordinary manner consistent with current
practice and, to the extent consistent with such operation, use its reasonable
efforts to keep available the services of the present employees associated with
the operation of the Purchased Assets and preserve the Seller's present
relationships with Persons having business dealings with the Seller relating to
the Purchased Assets;
(b) maintain the Seller's books, accounts and records relating to the
Purchased Assets in the usual, regular and ordinary manner, on a basis
consistent with past practice, and comply in all material respects with all
Applicable Laws and other obligations of the Seller;
(c) not (i) sell, lease or otherwise dispose of any of the Purchased
Assets, (ii) modify or change in any material respect adverse to Seller or Buyer
any Drilling Contract or Other Contract, (iii) move any Rig to a different
geographic region, or (iv) agree, whether in writing or otherwise, to do any of
the foregoing;
(d) not (i) permit or allow any of the Purchased Assets to become subject
to any Encumbrances other than Permitted Encumbrances or Permitted Real Property
Encumbrances, (ii) waive any claims or rights relating to the Purchased Assets,
except in the ordinary course of business and consistent with past practice,
(iii) grant any increase in the compensation of any employees employed with
respect to the Purchased Assets, except in the ordinary course of business or as
required by contractual arrangements existing on the date hereof, (iv) enter
into any agreements giving rise to trade and barter obligations relating to the
Purchased Assets, or (v) agree, whether in writing or otherwise, to do any of
the foregoing;
(e) maintain the Inventory associated with the Rigs, including spare
components and parts, supporting inventory, drill pipe and tubulars, in such
amounts and of such quality as would be in accordance with past practice and
comparable historical levels and sufficient to comply with any applicable
Drilling Contract under which such Rig is operating; and
(f) not execute any drilling contracts without the prior written consent
of Buyer, such consent not to be unreasonably withheld.
SECTION 9.04 Notices of Certain Events. (a) Until the Closing, Seller
will promptly notify Buyer of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement; and
(ii) any notice or other communication from any Governmental
Entity or in connection with the transactions contemplated by this
Agreement.
(b) Seller shall promptly notify Buyer of any Proceedings or Claims
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting Seller or any of its Affiliates, which relate
to the consummation of the transactions contemplated by this Agreement, or
affects the Purchased Assets or this Agreement and Buyer will promptly notify
Seller of any Proceeding or Claim which is overtly threatened or commenced
against Buyer which relates to and materially and adversely affects this
Agreement or the transactions contemplated hereby.
SECTION 9.05 Certain Taxes. In regard to Taxes, the parties further agree
as follows:
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(a) Seller and Buyer will cooperate fully with each other, on a
reasonable basis, in connection with the preparation, signing and filing of tax
returns and in any administrative, judicial or other proceeding involving Taxes
relating to the Purchased Assets, including but not limited to the furnishing or
making available of records, books of account or other materials necessary or
helpful for the defense against assertions of any taxing authority as to any tax
returns for such year or period.
(b) Buyer agrees to pay all transfer and documentary taxes, sales or use
taxes and recording costs related to the sale and transfer of the Purchased
Assets from Seller to Buyer. Buyer and Seller further agree to cooperate to
obtain all available exemptions from such taxes.
(c) Except as other provided in this Agreement, as among the parties
hereto, (i) Seller shall be responsible for and pay all Taxes levied or imposed
upon, or in connection with, the Purchased Assets on or before the Closing Date;
(ii) Buyer shall be responsible for and pay all Taxes levied or imposed upon, or
in connection with, the Purchased Assets after the Closing Date; and (iii)
Seller and Buyer will each be responsible for its own income and franchise
taxes, if any, arising from the transactions contemplated by this Agreement.
Any real property taxes, personal property taxes, similar ad valorem obligations
and any other Taxes (other than income or franchise taxes) imposed with respect
to the Purchased Assets for a tax or assessment period that includes, but does
not end on, the Closing Date, shall be apportioned between Buyer and Seller,
[with Seller bearing a portion of such Taxes based on the number of days in the
tax or assessment period prior to and including the Closing Date and Buyer
bearing a portion of such Taxes based on the number of days in the tax or
assessment period after the Closing Date].
(d) The party legally obligated to file a tax return with the relevant
taxing authorities shall be responsible for preparing and timely filing such tax
return. Notwithstanding the foregoing, (i) with respect to tax returns for
taxes described in the last sentence of Section 9.05(c) (e.g., ad valorem
taxes), Buyer shall be responsible for preparing and timely filing such tax
returns and (ii) with respect to tax returns described in Section 9.05(b) (e.g.
transfer taxes), the party legally obligated to file such tax returns with the
relevant taxing authorities shall be responsible for preparing and timely filing
such tax returns, in each case, after consulting with, and reaching mutual
agreement with, the other party with respect to the preparation and filing
thereof.
SECTION 9.06 Actions with Respect to Closing. Seller will use its Best
Efforts to obtain the satisfaction of the conditions to Closing applicable to
Seller set forth in Article VIII as soon as practicable. Buyer will use its Best
Efforts to obtain the satisfaction of the conditions to Closing applicable to
Buyer set forth in Article VII as soon as practicable.
SECTION 9.07 Public Statements. Buyer and Seller will consult with each
other before issuing any press release or making any public statement with
respect to this Agreement and the transactions contemplated hereby and shall not
issue any such press release or make any such public statement without the prior
consent of the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, any such press release or public statement as may
be required by applicable law or any listing agreement with any national
securities exchange may be issued prior to such consultation, if the party
making such release or statement has used its reasonable efforts to consult with
the other party.
SECTION 9.08 Continued Effectiveness of Representations and Warranties.
Seller and Buyer shall each use its Best Efforts to cause the
representations and warranties made by it herein to continue to be true and
correct on and as of the Closing Date as if made on and as of the Closing Date.
Seller and Buyer shall each advise the other promptly in writing of any
condition or circumstance occurring from the date hereof up to and including the
Closing Date that would cause the representations and warranties made by it
herein to become untrue in any material respect. Nothing contained in this
Section 9.08 shall be construed as being inconsistent with or in derogation of
Sections 11.01 or 11.05.
SECTION 9.09 Performance Bonds. If Seller has posted a performance or
other similar bond or letter of credit in connection with Seller's ownership or
operation of the Purchased Assets, Buyer and Seller shall cooperate with each
other in order (i) for Seller to obtain the release of any such bond and (ii) to
the extent required, for Buyer to obtain at Buyer's sole cost a substitute bond
or letter of credit or to assume
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Seller's existing bond. Buyer shall reimburse Seller for all costs incurred by
Seller as a result of Seller's leaving a performance or similar bond or letter
of credit in place after the Closing Date in order to permit Buyer to operate
the Purchased Assets after the Closing Date.
SECTION 9.10 Action of Buyer Regarding Financing and Financial Statements.
(a) Buyer agrees to use its Best Efforts to secure financing for the payment of
the Cash Consideration.
(b) Seller agrees to cooperate with Buyer and to assist Buyer's outside
auditors in the preparation of any financial statements relating to the
Purchased Assets and Seller that may be reasonably requested by Buyer for filing
with the Commission in connection with any filings that may be made by Buyer
under the Securities Act or the Exchange Act. Such financial statements may
consist of (i) such audited balance sheets and audited statements of operations,
cash flows and changes in equity together with the notes thereon and (ii) such
unaudited interim balance sheet and unaudited interim statements of operations,
cash flows and changes in equity, if any, in each case as Buyer shall reasonably
deem to be required.
SECTION 9.11 Employee Matters. (a) Seller shall provide to Buyer a list of
all of Seller's non corporate employees whose work is primarily associated with
the Purchased Assets. Buyer agrees to offer employment to substantially all such
employees who are actively working on the Closing Date. Buyer shall have no
obligation to offer employment to employees of Seller who, on the Closing Date,
are on medical, disability or other leave of absence, until such time as the
employee has met all requirements of the applicable leave policy to return to
work. In that regard, Buyer shall have the right to interview Seller's employees
at any time after the execution of this Agreement and provide Seller with a list
of Seller's employees which have agreed, prior to Closing, to become a
Transferred Employees (as defined below). Seller shall be solely responsible for
the payment of any severance or other benefits to employees who are not
Transferred Employees. Notwithstanding any other provision of this Agreement,
the parties hereto do not intend to create any third-party beneficiary rights
respecting any of Seller's employees or future employees as a result of the
provisions herein and specifically hereby negate any such intention. With
respect to those employees who accept employment with the Buyer after the
Closing Date (the "Transferred Employees", Buyer (or Buyer Designee as the case
---------------------
may be) agrees to provide employee benefits to the Transferred Employees that
are, in all material respects, no less favorable to such Transferred Employees
than the employee benefits provided to similarly situated employees of Buyer
under employee benefit plans sponsored by Buyer provided that such Transferred
Employees will be subject to the terms and conditions of the applicable employee
benefit plan, subject, in all cases, to the provisions of this Section 9.11.
Further, as to the Transferred Employees, Buyer (or Buyer Designee, as the case
may be) shall (i) offer such employees substantially similar cash compensation
as that paid by Buyer to its existing employees employed in substantially
similar capacities, (ii) service with Seller shall be counted for purposes of
determining eligibility for participation in all health benefit programs of
Buyer, (iii) any expenses by such Transferred Employees for purposes of
satisfying deductibles, co-payments and out-of- pocket expenses under the
Seller's medical or dental plans in the calendar year that included the Closing
Date shall be credited for purposes of satisfying any such requirements under
Buyer's similar plans, if any; (iv) service with the Seller shall be counted for
purposes of determining continuous service and eligibility for safety awards of
Buyer; (v) any life, medical and disability plans maintained by Buyer
immediately after the Closing shall not exclude any Transferred Employees from
eligibility, or deny or reject benefits from such employee, due to any pre-
existing condition (except for such employees who have been or would have been
denied eligibility, or denied or rejected benefits, under any similar plan
maintained by the Seller prior to the Closing Date), (vi) cause any of its
employee pension benefit plans (including 401(k) plans) to be amended to provide
that the Transferred Employees shall receive credit for participation and
vesting purposes under such plans for their period of employment with the Seller
and its predecessors to the extent such employment was recognized by Seller
under its 401(k) plan, and (vii) take all other reasonable steps to carry out
the intent of the foregoing. However, the Transferred Employees shall not be
credited with their prior years of service with Seller for purposes of Buyer's
Separation Benefit Plan or Buyer's Separation Benefit Plan for Senior
Management.
(b) On or before the Closing Date, Seller may take any necessary action to
fully vest an employee's account balance and other accrued benefits under any
employee benefit plan maintained by Seller that is intended to be qualified
under Section 401(a) of the Code. As soon as practicable following
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the Closing Date, Seller shall cause to be transferred from the trustees of the
Parker Drilling Company Stock Bonus Plan ("Seller's 401(k) Plan") to the
--------------------
trustees of the Unit Corporation Employees' Thrift Plan ("Buyer's 401(k) Plan")
-------------------
an amount in cash equal to the aggregate account balances of the Transferred
Employees under Seller's 401(k) Plan determined as of the transfer date (which
shall be a valuation date) in accordance with the methods of valuation currently
set forth in Seller's 401(k) Plan; provided, however, that to the extent any
Transferred Employee owes any amount to Seller's 401(k) Plan pursuant to the
terms of a loan from such plan to such Transferred Employee, an in-kind transfer
of such loan shall be made in lieu of the transfer of cash. From and after the
date of such transfer, Buyer shall cause Buyer's 401(k) Plan to assume the
obligations of Seller's 401(k) Plan with respect to the aggregate account
balances transferred to the Buyer's 401(k) Plan, and Seller's 401(k) Plan shall
cease to be responsible therefore. Buyer and Seller shall cooperate in making
all appropriate arrangements and filings, if any, in connection with the
transfer described above. Further, Buyer and Seller shall cooperate and take
such actions as are necessary to permit the continuation of loan repayments by
Transferred Employees to Seller's 401(k) Plan by payroll deductions during the
period beginning on the Closing Date and ending on the date of the transfer
described in this subsection. Seller represents, covenants and agrees with
respect to Seller's 401(k) Plan, and Buyer represents, covenants and agrees with
respect to Buyer's 401(k) Plan, that, as of the date of the transfer described
in this subsection, such plan (i) will satisfy the requirements of Sections
401(a), (k), and (m) of the Code, (ii) will have received a favorable
determination letter from the Internal Revenue Service regarding such qualified
status and covering amendments required under the Tax Reform Act of 1986, the
Unemployment Compensation Amendments of 1992, the Omnibus Reconciliation Act of
1993, and the final nondiscrimination regulations under Section 401(a)(4) of the
Code, and (iii) will have not been amended or operated in a way which would
adversely affect such qualified status.
Seller further represents, covenants and agrees that, as to the Transferred
Employees: (i) the only optional form of benefit provided by the Seller's 401(k)
Plan, which must be protected by the Buyer's 401(k) Plan, is a single sum cash
distribution; (ii) the only in-service withdrawals permitted under Seller's
401(k) Plan are reflected in Article X of Seller's 401(k) Plan; (iii) the only
distributions permitted upon termination of employment or death under Seller's
401(k) Plan are reflected in Articles XI and XII of Seller's 401(k) Plan; (iv)
none of the loans being transferred to Buyer's 401(k) Plan are in default; and
(v) Seller will provide Buyer with all documents, records and other information
reasonably required by Buyer in order for Buyer's 401(k) Plan to fulfill its
obligations with respect to the aggregate account balances being transferred to
Buyer's 401(k) Plan.
(c) Buyer shall provide any Transferred Employee who is subsequently
terminated by Buyer for any reason, health plan continuation coverage to the
extent of and in accordance with the requirements of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and Section 601 through 608 of
ERISA ("COBRA"); and Seller agrees to provide health plan continuation coverage
to the extent of and in accordance with COBRA.
(d) As soon as possible after execution of this Agreement, Seller will
provide Buyer with copies of each of its employee benefit plans, policies and
programs provided to Seller's employees associated with the Purchased Assets.
SECTION 9.12 Approvals of Governmental Bodies. As promptly as practicable
after the date of this Agreement, Seller and Buyer, as the case may be, will,
and will cause each of their respective Affiliates to, make all filings required
by Applicable Laws to be made by it to consummate the transactions contemplated
by this Agreement (including, if needed, all filings under the HSR Act). Each
party will, and will cause each of its Affiliates to, cooperate with the other
party with respect to all filings that the other party and its Affiliates are
required by Applicable Laws to make in connection with the transactions
contemplated in this Agreement; provided that nothing in this Agreement will
require Buyer to dispose of or make any change in any portion of its business or
to incur any other burden to obtain any consent or approval required by any
Governmental Entity. Each party agrees to make available to the other such
information as each of them may reasonably request relative to its business,
assets and property as may be required of each of them to make any required
filings and to provide any additional information requested by any agencies
under the HSR Act and shall use its Best Efforts to make any such filings,
provide such
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additional information and take such other actions as may be appropriate or
desirable to permit early termination of the waiting period under such act.
SECTION 9.13. Further Assurances. Subject to the terms and conditions of
this Agreement, (including, without limitation, Section 9.10), Seller and Buyer
will each use their Best Efforts to take, or cause to be taken, all action and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
including using Best Efforts: (i) to obtain prior to the Closing Date all
Permits, consents, approvals, authorizations, qualifications and orders of
Governmental Entities and parties to Contracts as are necessary for the
consummation of the transactions contemplated hereby; and (ii) to furnish to
each other such information and assistance as reasonably may be requested in
connection with the foregoing. Seller and Buyer shall cooperate fully with each
other to the extent reasonably required to obtain such consents. Notwithstanding
any other provision hereof, this Agreement shall not constitute or require an
assignment to Buyer of any Drilling Contract, Permit, or other right if an
attempted assignment of the same without the consent of any party would
constitute a breach thereof or a violation of Applicable Law unless and until
such consent shall have been obtained.
SECTION 9.14 Rig Loss. (a) If any Rig shall become an actual or
constructive total loss (as determined by the Seller's insurance underwriter)
prior to the Closing Date: (i) Buyer shall not be required to purchase such Rig,
(ii) the Purchase Consideration shall be reduced by the amount allocated to such
rig pursuant to Schedule 3.02, (iii) the term "Purchased Assets" shall be deemed
not to include such Rig and the Seller shall be entitled to any insurance
proceeds and claims with respect thereto (and such proceeds and claims shall be
deemed to be Excluded Assets for all purposes hereunder) and (iv) the other
provisions of this Agreement shall continue to be in effect and the Closing
shall take place in the manner contemplated herein.
(b) If a Rig sustains damage (estimated to cost more than $50,000 to
repair) not amounting to an actual or constructive total loss prior to the
Closing Date, at the Seller's election either (i) the Seller shall repair or
cause to be repaired the damage to the Rig at the Seller's own expense or (ii)
elect not to repair such Rig. In the case of an election under Section
9.14(b)(ii), the Buyer may (x) require the Seller to assign to Buyer at the
Closing the rights, if any, the Seller has to receive insurance proceeds in
respect of such loss or damage or (y) elect to not purchase the Rig and be
entitled to a reduction in Purchase Consideration equal to its value as set out
in Schedule 3.02. In the case of either (i) or (ii)(x) above, Buyer shall
remain obligated to purchase the Purchased Assets on the Closing Date and the
Purchase Consideration shall not be reduced.
SECTION 9.15 Seller's Covenants Not to Compete. (a) In order to allow Buyer
to realize the full benefit of its bargain in connection with the purchase of
the Purchased Assets, neither the Seller nor its Affiliates will, at any time,
for a period of one year following the Closing Date, directly or indirectly,
acting alone or as a member of a partnership or as a holder of in excess of 5%
of any security of any class, or as a representative of, any corporation or
other business entity undertake the following as the same pertains to the Area
of Operations (as defined below):
(i) engage in any business in competition with the business
conducted by Buyer's Affiliate, Unit Drilling Company;
(ii) directly or indirectly, (i) induce or attempt to induce any
employee of the Buyer or Unit Drilling Company to leave the employ of the
Buyer or Unit Drilling Company, (ii) in any way interfere with the
relationship between the employer and any employee of the Buyer or Unit
Drilling Company, (iii) induce or attempt to induce any customer, supplier,
licensee, or business relation of the Buyer or Unit Drilling Company to
cease doing business with the Buyer or Unit Drilling Company or in any way
interfere with the relationship between any customer, supplier, licensee,
or business relation of the Buyer or Unit Drilling Company; and
(iii) directly or indirectly, either for itself or any other Person,
solicit the business of any Person known to Seller to be a customer of the
Buyer or Unit Drilling Company whether or not
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Seller had personal contact with such person, with respect to activities or
services which complete in whole or in part with the services or activities
of the Buyer or Unit Drilling Company;
(b) The provisions of this Section 9.15 shall not be applicable to any (i)
drilling rigs that may be acquired by Seller pursuant to a merger, consolidation
or agreement to acquire all of the assets and business of a company whose
principal business is not domestic contract drilling for oil and gas between
Seller and a non Affiliate subsequent to the Closing Date, or (ii) barge rig
operations.
(c) Seller acknowledges that in the event the scope of the covenants set
forth in this Section 9.15 are deemed to be too broad in any Proceeding, the
court or arbitrator may reduce such scope to that which it deems reasonable
under the circumstances. The parties hereto agree and acknowledge that Buyer
would not have any adequate remedy at law for the breach or threatened breach by
Seller or any of its Affiliates of the covenants and agreements set forth in
this Section 9.15 and, accordingly, Seller further agrees that Buyer may, in
addition to the other remedies which may be available to it hereunder, file
suit, notwithstanding the provisions of Section 13.05, in equity to enjoin, the
Seller, or any of its Affiliates from such breach or threatened breach and
consents to the issuance of injunctive relief hereunder. Seller understands and
agrees that the act of Buyer in entering into this Agreement, and Buyer's
covenants and payments hereunder, shall and do constitute sufficient
consideration for the Seller to agree not to compete against Buyer as set out in
this Section 9.15 and that the covenants contained in this Section 9.15 are
reasonable with respect to there duration, geographical area and scope.
(d) For purposes of this Section 9.15, the term "Area of Operations" shall
------------------
mean those States where the Rigs are located on the Closing Date. The parties
agree that this geographical area is reasonable in view of the purposes and
intentions of the parties and that in any action or arbitration hereunder, the
court or the arbitrator, as the case may be, shall not be limited in giving
effect to this Section by virtue of any provision of Oklahoma law that would
require a more restrictive geographical area.
SECTION 9.16 Other Offer. The Seller and its Affiliates will not, and the
Seller will use its Best Efforts to cause the officers, directors, employees,
investment bankers, consultants and other agents of the Seller not to, directly
or indirectly, take any action to solicit, initiate, encourage or facilitate the
making of any Acquisition Proposal or any inquiry with respect thereto or engage
in discussions or negotiations with any Person with respect thereto, or disclose
any non-public information relating to the Purchased Assets or afford access to
the properties, books or records of the Seller or any Affiliate, as the same
relate to the Purchase Assets, to any Person that has made, or to the Seller's
knowledge, is considering making, any Acquisition Proposal. The Seller and its
Affiliates will, and the Seller will use its Best Efforts to cause the officers,
directors, employees, investment bankers, consultants and other agents of the
Seller and its Affiliates to, immediately cease and cause to be terminated all
discussions and negotiations, if any, that have taken place prior to the date
hereof with any Persons with respect to any Acquisition Proposal. For purposes
of this Agreement, "Acquisition Proposal" means any offer or proposal for the
--------------------
acquisition or purchase of, or any indication of interest in, directly or
indirectly, all or part of the Purchased Assets.
SECTION 9.17 Conduct of Purchaser's Business. Between the date hereof and
Closing Buyer and its Affiliates will:
(a) conduct its business and operations only in the usual, regular and
ordinary manner consistent with current practice and, to the extent consistent
with such operation and preserve the Buyer's present relationships with Persons
having business dealings with the Seller;
(b) maintain the Buyer's books, accounts and records in the usual, regular
and ordinary manner, on a basis consistent with past practice, and comply in all
material respects with all Applicable Laws; and
(c) refrain from issuing any securities other than those securities issued
in connection with the transactions contemplated in this Agreement (including
any Unit Common Stock issued in connection with the Buyer's proposed public
offering for the purpose of financing the Cash Consideration) and under stock
options or stock plans of Buyer currently in existence.
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ARTICLE X
TERMINATION
SECTION 10.01 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual written consent of Buyer and Seller;
(b) by Buyer, if there shall be any statute, rule or regulation that makes
consummation of the transactions contemplated hereby illegal or otherwise
prohibited or a Governmental Entity shall have issued an order, decree or ruling
or taken any other action permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby, and such
order, decree, ruling or other action shall have become final and nonappealable;
(c) by Buyer, if
(i) the Closing shall not have occurred by October 31, 1999
(provided that the right to terminate this Agreement under this clause (i)
shall not be available to Buyer if such failure is due to Buyer not
fulfilling one or more of its obligations under this Agreement or its
misrepresentation or breach of any warranty hereunder); or
(ii) there has been a material breach by Seller of any covenant
or agreement, or a material inaccuracy of any representation or warranty of
Seller, contained in this Agreement which has rendered the satisfaction of
any condition to the obligations of Buyer impossible and such breach or
inaccuracy has not been cured by Seller within ten Business Days after
Seller's receipt of notice thereof from Buyer, or waived by Buyer;
(iii) there shall occur an event that results in or would
reasonably be expected to result in a Seller MAE; or
(iv) Buyer is unable or unwilling to complete the proposed
public offering of its common stock for the purpose of financing the Cash
Consideration.
(d) by Seller, if
(i) the Closing shall not have occurred by October 31, 1999
(provided that the right to terminate this Agreement under this clause (i)
shall not be available to Seller if such failure is due to Seller not
fulfilling one or more of its obligations under this Agreement or its
misrepresentation or breach of any warranty hereunder); or
(ii) there has been a material breach by Buyer of any covenant or
agreement, or a material inaccuracy of any representation or warranty of
Buyer, contained in this Agreement which has rendered the satisfaction of
any condition to the obligations of Seller impossible and such breach or
inaccuracy has not been cured by Buyer within ten Business Days after
Buyer's receipt of notice thereof from any Seller, or waived by Seller; or
(iii) at any time prior to Closing, the closing prices of Unit
Common Stock as reported on the New York Stock Exchange for a period of ten
consecutive trading days are less than the price set forth in the letter to
Seller referred to in Section 10.02 below.
SECTION 10.02 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 10.01 by Buyer or Seller, 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, and, except in the case of a termination under
Section 10.01(c)(i), (ii) and (iv) or 10.01(d)(i) and (ii), there shall be no
liability hereunder on the part of Buyer or Seller or any of their respective
directors, officers, employees, stockholders or representatives, except that the
agreements
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contained in this Section 10.02 and in Article XI and Sections 5.13, 6.07, and
9.01 shall survive the termination hereof. In the event of a termination under
10.01(c)(iv) because Buyer elects not to complete its proposed public offering
of its common stock (unless due to (i) a major financial market collapse which
significantly impairs the Buyer's ability to raise financing prior to the
Closing Date due to reasons other than the Buyer's financial standing, or (ii)
the proposed public offering could be effected only at a price to the public
which is less than the price of which Buyer has notified Seller by letter prior
to the date of this Agreement), Buyer shall pay to Seller, by wire transfer,
within five (5) Business Days after such termination, the sum of $1,500,000.00,
by way of liquidated damages and not as a penalty. In the event Buyer notifies
Seller under Section 10.02(ii) of such price, Seller shall and shall cause its
Affiliates to maintain such information in strictest confidence and shall not
disclose such information to any Person without the prior written consent of
Buyer.
Nothing contained in this Section 10.02 shall relieve any party from
liability for breach of any covenant or agreement, or for the inaccuracy of any
representation or warranty, contained herein. Furthermore, the terms of the
Confidentiality Letter dated June 25, 1999, shall remain in full force and
effect.
ARTICLE XI
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION
SECTION 11.01 Scope of Representations of Seller. Except as and to the
extent set forth in this Agreement, the Deeds and the other documents,
agreements and instruments delivered in connection with the Agreement, Seller
makes no other representations or warranties, and disclaims all liability and
responsibility for any representation, warranty, statement or information made
or communicated (orally or in writing) to Buyer. WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE DEEDS AND THE OTHER DOCUMENTS, AGREEMENTS AND INSTRUMENTS
DELIVERED IN CONNECTION WITH THIS AGREEMENT, SELLER MAKES NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE MAINTENANCE, REPAIR, CONDITION,
DESIGN, WORKMANSHIP, SUITABILITY, UTILITY OR MARKETABILITY OF THE RIGS OR OTHER
PURCHASED ASSETS OR ANY PORTION THEREOF OR PROPERTY THEREON OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR ANY OTHER MATERIALS OR
INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO BUYER OR ITS
AGENTS, CONSULTANTS OR REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING
THERETO, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IT BEING THE EXPRESS
AGREEMENT OF BUYER AND SELLER THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, BUYER WILL OBTAIN RIGHTS IN THE PURCHASED ASSETS IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, "AS IS" AND "WHERE IS" AND "WITH ALL FAULTS."
SECTION 11.02 Indemnification by Seller and Parker. Seller and Parker,
individually and jointly, agree to indemnify, defend and hold Buyer and its
Affiliates harmless from and against any and all losses, liabilities, claims,
demands, damages, costs and expenses (including reasonable attorneys' fees and
disbursements) of every kind, nature and description (collectively, "Claims")
------
sustained by Buyer or any of its Affiliates based upon, arising out of or
otherwise in respect of (i) the inaccuracy of any representation or warranty, or
the breach of any covenant or agreement, of Seller contained in this Agreement
or in any certificate, agreement, document or instrument delivered pursuant to
this Agreement, (ii) the ownership, management or use of the Purchased Assets
prior to the Closing or (iii) any Retained Liabilities; except, that Seller and
Parker shall have no liability pursuant to Section 11.02(i) for the first
$100,000.00 of aggregate Claims (the "Buyer Basket") provided, that Seller and
------------
Parker shall be responsible only for such amounts of such Claims as exceed the
Buyer Basket up to and including $5,000,000; provided however, such limitation
shall not apply if such claims arise from (i) a breach of any representations
and warranties set forth in Sections 5.01, 5.02, 5.04, 5.05, 5.11 and 5.13 or
(ii) the Retained Liabilities. The amount of any
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Claims for which indemnification is provided under this Section 11.02 shall be
net of any amounts recovered by the Indemnified Party under any insurance
policies with respect to such Claims. Indemnified Party shall seek recovery of
any Claim or any portion thereof, from any insurance policies covering such
claim or loss in effect prior to the Closing, and Seller will reasonably
cooperate with Indemnified Party in Indemnified Party seeking such recovery.
SECTION 11.03 Indemnification by Buyer. Buyer agrees to indemnify, defend
and hold Seller and its Affiliates harmless from and against any and all Claims
sustained by Seller or any of its Affiliates based upon, arising out of or
otherwise in respect of (i) 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, document or instrument delivered pursuant to this
Agreement, or (ii) the ownership, management or use of the Purchased Assets
after the Closing (including the matters referred to in the last sentence of
Section 2.05), unless and to the extent that such Claim arises solely from any
action of Seller or any of its Affiliates after the Closing; provided, however,
that Buyer shall have no liability pursuant to Section 11.03(i) for the first
$100,000.00 of aggregate Claims (the "Seller Basket"); provided, that Buyer
-------------
shall be responsible only for such amounts of such Claims as exceed the Seller
Basket up to and including $5,000,000; provided however, such limitation shall
not apply if such claims arise from (i) a breach of the representation and
warranty set forth in Section 6.01, 6.02 and 6.07 or (ii) the Assumed
Liabilities. The amount of any Claims for which indemnification is provided
under this Section 11.03 shall be net of any amounts recovered by the
Indemnified Party under any insurance policies with respect to such Claims.
SECTION 11.04 Indemnification Procedures. Any party seeking information or
reimbursement for Claims hereunder (the "Indemnified Party") shall as promptly
-----------------
as practicable notify the party from which such indemnification is sought (the
"Indemnifying Party") upon which the Indemnified Party intends to base a claim
------------------
for indemnification or reimbursement hereunder; provided, however, that the
failure of an Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability under this Agreement to the
Indemnified Party with respect to such Claim except to the extent the
Indemnifying Party is actually prejudiced or damaged by the failure to receive
timely notice. In the event of any claims for indemnification or reimbursement,
the Indemnifying Party, at its option, may assume (with legal counsel reasonably
acceptable to the Indemnified Party) the defense of any claim, demand, lawsuit
or other Proceeding brought against the Indemnified Party, which claim, demand,
lawsuit or other Proceeding may give rise to the indemnity or reimbursement
obligation of the Indemnifying Party hereunder, and may assert any defense of
any party; provided, however, that the Indemnified Party shall have the right at
its own expense to participate jointly with the Indemnifying Party in the
defense of any claim, demand, lawsuit or other Proceeding in connection with
which the Indemnified Party claims indemnification or reimbursement hereunder.
Notwithstanding the right of an Indemnified Party so to participate, the
Indemnifying Party shall have the sole right to settle or otherwise dispose of
such claim, demand, lawsuit or other Proceeding on such terms as the
Indemnifying Party, in its sole discretion, shall deem appropriate with respect
to any issue involved in such claim, demand, lawsuit or other Proceeding as to
which (i) the Indemnifying Party shall have acknowledged the obligation to
indemnify the Indemnified Party hereunder and the settlement is solely for cash
or (ii) the Indemnified Party shall have declined so to participate and, in
either case, the Indemnified Party is provided a full and complete release of
Claims.
SECTION 11.05 Survival. The representations and warranties of the parties
to this Agreement shall survive the Closing Date and shall remain in full force
and effect for a period of one year following the Closing Date; provided, that
the (i) representations and warranties set forth in Section 5.12 shall survive
the Closing and shall terminate at the close of business two years after the
Closing Date and (ii) the representation and warranties contained in Sections
5.02, 5.04, 5.05, 5.11, 5.13 and 6.01, 6.02 and 6.07 shall survive the Closing
and shall terminate at the close of business four years after the Closing Date
(the period during which the representations and warranties shall survive being
referred to herein with respect to such representations and warranties as the
"Survival Period"), and shall be effective with respect to any inaccuracy
---------------
therein or breach thereof (and a claim for indemnification under Article 11
hereof may be made thereon) if a written notice asserting the claim shall have
been duly given in accordance with Article 11 hereof within the Survival Period
with respect to such matter. Any claim for indemnification made during the
Survival Period shall be valid and the representations and warranties relating
thereto shall remain in effect for purposes of such indemnification
notwithstanding that such claim may not be resolved within the
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Survival Period. All representations, warranties and covenants and agreements
made by the parties shall not be affected by any investigation heretofore or
hereafter made by and on behalf of any of them and shall not be deemed merged
into any instruments or agreements delivered in connection with this Agreement
or otherwise in connection with the transactions contemplated hereby.
SECTION 11.06 Limitation of Remedies. The indemnification obligations of
Buyer, Seller and Parker set forth in this Agreement, including in this Article
XI, shall be limited to indemnification for actual damages suffered and shall
not include incidental, consequential, special or indirect damages; provided,
however, that any such incidental, consequential, special or indirect damages
recovered by a third party against a party entitled to indemnity under this
Agreement shall be included in the damages recoverable pursuant to the
indemnities herein.
SECTION 11.07 Applicability of Indemnification Obligation. EACH OF THE
AGREEMENTS TO INDEMNIFY, DEFEND OR HOLD HARMLESS CONTAINED IN SECTION 11.02 OR
11.03 SHALL APPLY IRRESPECTIVE OF WHETHER THE SUBJECT CLAIM IS BASED IN WHOLE OR
IN PART UPON THE SOLE OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR
GROSS), BREACH OF WARRANTY, OR BREACH OR VIOLATION OF ANY DUTY IMPOSED BY ANY
LAW OR REGULATION, ON THE PART OF THE BENEFICIARY OF THE AGREEMENT, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
SECTION 11.08 Exclusive Rights and Remedies. The rights and remedies
provided in this Article XI shall be the exclusive rights and remedies,
contractual or otherwise, of the indemnified Persons with respect to breaches of
the representations, warranties, covenants and agreements contained in this
Agreement.
ARTICLE XII
REGISTRATION RIGHTS
SECTION 12.01 Registration of Securities. (a) As used in this Article XII,
the following terms have the meanings set forth below:
"Disadvantageous Condition" has the meaning set forth in Section
-------------------------
12.01(b)(iii).
"Holders" means the Seller or any Person who becomes a holder of Subject
-------
Securities after the Closing Date as a result of a No-Sale Transaction.
"No-Sale Transaction" means a transfer from a Holder of Subject Securities
-------------------
that does not constitute a "sale" (as such term is understood and defined under
the Securities Act), including without limitation a distribution from a Holder
that is a corporation, partnership, joint venture, limited liability company,
association or trust to the owner of a beneficial interest in such Holder.
"Registration Expenses" has the meaning set forth in Section 12.01(e).
---------------------
"Registration Termination Date" means the second anniversary of the date
-----------------------------
when the Commission first declares the Shelf Registration Statement effective;
provided, however that the Registration Termination Date shall be extended for a
period equal to the aggregate period or periods during which the Holders have
been precluded from selling any Subject Securities under subparagraph (b) (iii)
by reason of receipt of a Suspension Notice. Notwithstanding anything to the
contrary, the Registration Termination Date shall occur at such earlier date as
the Subject Securities become freely transferable on the public market without
any restrictions or limitations pursuant to Rule 144(k) promulgated by the
Commission.
"Shelf Registration Statement" means a registration statement on Form S-3
----------------------------
filed with the Commission under the Securities Act.
"Subject Securities" means the shares of Unit Common Stock issued as the
------------------
Stock Consideration to Seller and any common stock or other security issued or
issuable as a dividend or other distribution with
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respect to, or in exchange for, or upon conversion or in replacement of, any of
such Unit Common Stock.
"Suspension Notice" has the meaning set forth in Section 12.01(b)(iii).
-----------------
(b) (i) If the Closing occurs, as promptly as practicable thereafter
(but in no event more than 15 days thereafter, subject to Buyer's right to
extend such time in the event that there exists any Disadvantageous Condition
which would permit Buyer to issue a Suspension Notice if the Shelf Registration
Statement were already effective), Buyer will, on one occasion only, prepare and
file with the Commission a Shelf Registration Statement for the purpose of
registering the resale in the market from time to time of the Subject Securities
by Holders or by potential assignees of such Holders to which all or a portion
of such Holders' Subject Securities may be transferred in a No-Sale Transaction.
(ii) Buyer will use its Best Efforts to have the Shelf Registration
Statement promptly declared effective by the Commission and thereafter to
maintain the effectiveness of the Shelf Registration Statement and, subject
to subparagraph (iv) below, to maintain such Shelf Registration Statement
"current" (as below defined) at all times until the Registration
Termination Date. Unit shall promptly give written notice to the Holders
when the Registration Statement has been declared effective by the
Commission and is available for use by Holders for the resale of Subject
Securities.
(iii) The Shelf Registration Statement shall not be considered to be
"current" at any time when, by reason of occurrence of any event or by
reason of the passage of time, the Shelf Registration Statement does not
meet the requirements of Section 10, Section 12(2) or Section 17 of the
Securities Act, or the Shelf Registration Statement contains an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Shelf Registration Statement shall disclose that Holders
may elect to resell Subject Securities without registration of such sales
under the Shelf Registration Statement, by making such sales under and as
permitted by Rules 144 or 145, as applicable, of the Commission under the
Securities Act.
If at any time or times after the Shelf Registration Statement is
declared effective by the Commission, Buyer's Board of Directors determines
that the offering of Unit Common Stock under the Shelf Registration
Statement would be significantly disadvantageous to Buyer's ability to
negotiate or complete a material financing, merger, acquisition or other
material transaction or event involving Buyer or its subsidiaries that has
not been publicly disclosed or the unavailability of any required
financial statements for reasons substantially beyond the control of the
Buyer, (a "Disadvantageous Condition"), Buyer shall be entitled to either
-------------------------
suspend the effectiveness of the Shelf Registration Statement with the
Commission or suspend the availability of the Shelf Registration for
resales of Subject Securities by Holders, or may take both such actions,
and shall promptly notify all Holders thereof by delivery of written notice
(a "Suspension Notice"); provided, however, that Buyer's obligation to
-----------------
maintain the Shelf Registration Statement current under this Section
12.01(b) shall not be suspended by reason of Buyer's failure to disclose
information at a time when public disclosure of such information is
required by law. Upon receipt of a Suspension Notice, Holders shall
immediately discontinue the use of the Shelf Registration Statement for any
purpose until notified by Buyer that the Shelf Registration Statement is
current and available for use by Holders for sales of Subject Securities.
Buyer shall not be entitled to suspend the effectiveness of the Shelf
Registration Statement for more than 60 consecutive days or an aggregate of
120 days within any twelve-month period and no subsequent suspension period
shall occur unless at least 90 days have elapsed during which Seller can
utilize the Registration Statement.. As promptly as practicable after the
public disclosure of such Disadvantageous Condition or the Buyer determines
that the Disadvantageous Condition no longer exists, Buyer shall amend or
supplement the Shelf Registration Statement to the extent necessary to make
the Shelf Registration Statement current, and shall give prompt written
notice to all Holders when the Shelf Registration Statement is again
available for resales of Subject Securities.
(iv) If Unit should undertake an underwritten public offering of its
shares either after the
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Shelf Registration Statement has been declared effective or prior to the
consummation of the transactions contemplated by this Agreement, Seller
shall, upon the request of the managing underwriter of such offering, agree
and commit, and it does hereby agree and commit, that it will not effect
any public sale or distribution, directly or indirectly, or make any offer
to sell, contract to sell (including without limitation any short sale),
grant any option to purchase or otherwise transfer or dispose (including
sales pursuant to Rule 144) of any of the Subject Securities during a
period of seven days prior to and up to 90 days after the closing of such
public offering without the consent of the managing underwriter. This
restriction shall not apply to the offer and sale of any Subject Securities
which may be covered by the registration statement covering such public
offering.
(v) Unit shall promptly notify all Holders of Subject Securities of,
and confirm in writing, the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose. Unit shall use its Best
Efforts to obtain the withdrawal of any order suspending the effectiveness
of the Shelf Registration Statement at the earliest possible time.
(vi) Unit will cause all of the Subject Securities to be listed on
each securities exchange on which similar securities issued by Unit are
then listed no later than the effective date of the Shelf Registration
Statement.
(c) Buyer will indemnify and hold harmless each Holder, each of such
Holder's officers, directors, partners, or members, as the case may be, and each
Person controlling such Holder, with respect to which registration or
qualification of Subject Securities has been effected pursuant to this Article
XII against all claims, losses, damages, and liabilities, joint or several (or
actions in respect thereof), arising out of or based upon any untrue statement
(or alleged untrue statement) of a material fact contained in the Shelf
Registration Statement, prospectus, or offering circular, or in any document
incorporated by reference in any of the foregoing, or arising out of or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by Buyer of any rule or regulation promulgated
under the Securities Act applicable to Buyer and relating to action or inaction
required of Buyer in connection with the Shelf Registration and will promptly
reimburse Holder and, each of such Holder's officers, directors, partners, or
members, as the case may be, and each Person controlling such Holder, for any
legal and any other expenses reasonably incurred in connection with
investigating or defending any such claims, loss, damage, liability or action;
PROVIDED, however, that Buyer will not be liable in any such case to the extent
that any such claim, loss, damage, liability or expense arises out of or is
based upon any untrue statement or omission based upon written information
furnished to Buyer by such Holder specifically for inclusion in any such
registration statement, prospectus or offering circular. The obligations of
Buyer under the foregoing indemnity agreement shall survive the completion of
the offering of Subject Securities under the Shelf Registration Statement .
(d) Each Holder with respect to which registration or qualification of
Subject Securities has been effected pursuant to this Article XII will indemnify
and hold harmless Buyer, each of Buyer's officers, directors, and each Person
controlling Buyer, against all claims, losses, damages, and liabilities, joint
or several (or actions in respect thereof), arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement, prospectus, or offering circular, or in any document
incorporated by reference in any of the foregoing, or arising out of or based
upon any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by such Holder of any rule or regulation
promulgated under the Securities Act or Exchange Act applicable to such Holder
and relating to action or inaction required of such Holder in connection with
any such registration or qualification, and will promptly reimburse Buyer, each
of Buyer's officers, directors, and each Person controlling Buyer, for any legal
and any other expenses reasonably incurred in connection with investigating or
defending any such claims, loss, damage, liability or action; PROVIDED, however,
that such Holder will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense does not arise out of or is not based
upon any untrue statement or omission based upon written information furnished
by such Holder
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specifically for inclusion in any such registration statement, prospectus or
offering circular. The obligations of Holders under the foregoing indemnity
agreement shall survive the completion of the offering of Subject Securities
under any registration statement provided for in this Article XII.
Notwithstanding the foregoing, in no event shall any selling Holder be liable
for an amount in excess of the proceeds from the sale of the Subject Securities
realized by such Holder.
(e) All expenses incident to Buyer's performance of or compliance with
this Section 12.01, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Subject Securities), rating agency fees, printing
expenses, messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the fees and expenses incurred in connection with
the listing of the securities to be registered on the New York Stock Exchange
and all securities exchanges on which similar securities issued by Buyer are
then quoted or listed, the fees and disbursements of counsel for Buyer and its
independent certified public accountants (including the expense of any special
audit or comfort letters required by or incident to such performance),
securities act liability insurance (if Buyer elects to obtain such insurance),
the fees and expenses of any special experts retained by Buyer in connection
with such registration, and fees and expenses of other Persons retained by
Buyer, in connection with each registration hereunder (but not including
discounts, commissions, fees or expenses payable to underwriters that are
attributable to the Subject Securities offered on behalf of the Selling Holder
or the fees and expenses of counsel for any selling Holder) (collectively, the
"Registration Expenses") will be borne by Buyer.
---------------------
(f) Buyer will also take such action as may be required to be taken under
applicable blue sky laws in connection with the issuance of Unit Common Stock
pursuant to this Agreement and in connection with resale of Subject Securities
by Holders pursuant to the Shelf Registration Statement; PROVIDED that Buyer
will not be required to become qualified as a foreign corporation in any
jurisdiction.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Notices. All notices 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 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, telefax, facsimile, telecopy or telex, 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:
Unit Corporation.
1000 Kensington Tower, 7130 South Lewis
Tulsa, Oklahoma 74136
Telephone: 918-493-7700
Facsimile: 918-493-7711
Attention: President
with a copy to:
Mark E. Schell
General Counsel
Unit Corporation
1000 Kensington Tower, 7130 South Lewis
Tulsa, Oklahoma 74136
Telephone: 918-493-7700
Facsimile: 918-493-7711
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If to Seller or to Parker:
Parker Drilling Company North America, Inc.
8 East Third Street
Tulsa, Oklahoma 74103
Telephone: 918-631-1216
Facsimile: 918-631-1253
Attention: Mr. Donald Goodson
with a copy to:
Ronald C. Potter
Senior Attorney
Parker Drilling Company
8 East Third Street
Tulsa, Oklahoma 74103
Telephone: 918-631-1257
Facsimile: 918-631-1284
Such notices, demands and other communications shall be effective (i) if
delivered personally or sent by courier service, upon actual receipt by the
intended receipt, (ii) if mailed, upon the earlier of five days after deposit in
the mail or the date of delivery as shown by the return receipt therefore, or
(iii) if sent by cable, telegram, telefax, telecopy, facsimile or telex
transmission, when confirmation of receipt is received.
SECTION 13.02 Entire Agreement. This Agreement, including the Schedules,
Exhibits 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.
SECTION 13.03 Amendments and Waiver; Rights and Remedies. This Agreement
may be amended, superseded, canceled, renewed or extended, and the terms hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of
either party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of either party of any
such right, power or privilege, or any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the exercise
of any other such right, power or privilege. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that any
party may otherwise have at law or in equity. The rights and remedies of either
party based upon, arising out of or otherwise in respect of any inaccuracy in or
breach of any representation, warranty, covenant or agreement contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement (or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
SECTION 13.04 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Oklahoma,
without regard to the principles of conflicts of laws thereof.
SECTION 13.05 Arbitration. (a) The parties shall attempt in good faith to
resolve any dispute arising out of or relating to this Agreement or any
agreement entered into pursuant to this Agreement promptly by negotiation
between Persons who have authority to settle the controversy. Any party may give
the other party written notice of any dispute not resolved in the normal course
of business. Within 15 days after delivery of the notice, the receiving party
shall submit to the other a written response. The notice and the response shall
include (a) a statement of each party's position and a summary of arguments
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supporting that position, and (b) if the party is a company, the name and title
of the executive who will represent that party and of any other Person who will
accompany the executive. Within 30 days after delivery of the disputing party's
notice, both parties shall meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to resolve the
dispute. All reasonable requests for information made by one party to the other
will be honored. All negotiations pursuant to this clause are confidential and
shall be treated as compromise and settlement negotiations for purposes of
applicable rules of evidence and/or the arbitration proceedings.
(b) Any dispute arising out of or relating to this Agreement or any
agreement entered into pursuant to this Agreement or the breach, termination or
validity thereof which has not been resolved by negotiation as provided herein
within 45 days of the disputing party's notice, or if the parties fail to meet,
shall be settled by arbitration conducted expeditiously in accordance with the
Center for Public Resources Rules for Non-Administered Arbitration of Business
Disputes by a sole arbitrator. The United States Arbitration Act, 9 U.S.C. (S)1-
16, shall govern the arbitration and any court having jurisdiction thereof may
enter judgment upon the award rendered by the arbitrator. The place of
arbitration shall be Tulsa, Oklahoma, unless otherwise agreed to by the parties
hereto. The arbitrator is not empowered to award consequential, indirect, third
party costs, special, punitive, or exemplary damages, and each party hereby
irrevocably waives such damages.
(c) Notwithstanding anything in this Section to the contrary, this Section
shall not apply in the event any Claim is asserted in a court of law against one
or all parties hereto by a third party and any party hereto asserts, in such
legal proceedings, the provisions of this Agreement against the other either as
a defense to such Claim or as a basis for indemnification against such Claim.
Each of the parties consents to the jurisdiction of any such court (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in this subparagraph (c) may be served on any party anywhere in the world.
SECTION 13.06 Binding Effect; Assignment. (a) This Agreement and all the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns.
(b) No party may assign either this Agreement or any of its rights,
interest or obligations hereunder without the prior written approval of the
other party; provided, however, that Buyer may upon notice to Seller (i) direct
that title to all or part of the Purchased Assets be taken in one or more of
Buyer's affiliates, (ii) assign any or all of its rights and interest hereunder
to one or more of its Affiliates, and (iii) designate one or more of its
Affiliates to perform its obligations hereunder (any such Affiliate or
Affiliates shall be a "Buyer Designee"); provided, that in any or all such cases
--------------
the Buyer nonetheless shall remain responsible for the performance of its
duties, liabilities or obligations hereunder.
SECTION 13.07 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same agreement.
SECTION 13.08 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.
SECTION 13.09 Severability of Provisions. 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.
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SECTION 13.10 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.
SECTION 13.11 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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers hereunto duly authorized as of the date first above
written.
PARKER DRILLING COMPANY UNIT CORPORATION
By: /s/ JAMES J. DAVIS By: /s/ JOHN G. NIKKEL
------------------- -------------------
James J. Davis John G. Nikkel
Senior Vice President, Finance President
and Chief Financial Officer
PARKER DRILLING COMPANY NORTH AMERICA, INC.
By: /s/ PHILLIP M. BURCH
---------------------
Phillip M. Burch
Vice President
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EXHIBIT A
---------
GENERAL ASSIGNMENT AND BILL OF SALE
-----------------------------------
This GENERAL ASSIGNMENT AND BILL OF SALE ("General Assignment") is made
------------------
effective as of the ______ day of[_________], 1999 by Parker Drilling Company
North America, Inc., a Nevada corporation (the "Seller").
------
RECITALS
--------
1. Pursuant to the terms of an Asset Purchase Agreement (the "Agreement")
---------
dated August 12, 1999 by and between Unit Corporation , a Delaware corporation
("Buyer"), Seller and Parker Drilling Company, a Delaware corporation, the
-----
Seller agreed to convey the Purchased Assets to Buyer, and makes this General
Assignment in order to evidence the conveyance of all of the tangible and
intangible personal property included in the Purchased Assets other than the
Real Property, the Drilling Contracts and the Other Contracts.
2. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Agreement.
ASSIGNMENT
----------
NOW, THEREFORE, for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00) in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller does hereby
BARGAIN, GRANT, SELL, CONVEY, TRANSFER, DELIVER, and ASSIGN unto Buyer all of
the tangible and intangible personal property included in the Purchased Assets
(other than the Real Property, the Drilling Contracts and the Other Contracts)
(the "Conveyed Property").
-----------------
The Conveyed Property is hereby conveyed free and clear of all Encumbrances
and other restrictions of any kind or nature, except the Permitted Encumbrances
and Permitted Real Property Encumbrances. EXCEPT AS SPECIFICALLY SET FORTH IN
THE AGREEMENT, THE SELLER DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, AS TO
THE CONDITION OF THE CONVEYED PROPERTY (INCLUDING ANY WARRANTY AS TO THE
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE) AND BUYER IS ACQUIRING
THE CONVEYED PROPERTY "AS IS, WHERE IS".
TO HAVE AND TO HOLD the Conveyed Property unto Buyer and its successors and
assigns forever; and the Seller does hereby bind itself and its successors and
assigns to WARRANT AND FOREVER DEFEND good and indefeasible title to the
Conveyed Property, subject only to the terms of the Agreement.
From time to time hereafter, the Seller will execute and deliver, or cause
to be executed and delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery and will take such
other actions as Buyer may reasonably request in order to more effectively
transfer, convey, assign and deliver to Buyer, and to place Buyer in possession
and control of any of the Conveyed Property or to enable Buyer to exercise and
enjoy all rights and benefits of the Seller with respect thereto.
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This General Assignment is delivered pursuant to the Agreement, and in the
event of any conflict or inconsistency between any of the terms of the Agreement
and this General Assignment the terms of the Agreement shall prevail.
IN WITNESS WHEREOF, the Seller has executed this General Assignment
effective as of the date set forth above.
Parker Drilling Company North America, Inc.
___________________________
By:
Its:
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EXHIBIT B
---------
WARRANTY DEED
-------------
KNOW ALL MEN BY THESE PRESENTS:
THAT Parker Drilling Company North America, Inc., a Nevada corporation
(hereinafter called "Grantor"), in consideration of the sum of Ten and No/100
-------
Dollars and other valuable considerations, in hand paid, the receipt of which is
hereby acknowledged, does hereby grant, bargain, sell and convey unto Unit
Corporation, 1000 Kensington Tower I, 7130 South Lewis, Tulsa, Oklahoma 74136,
(hereinafter called "Grantee"), the following described real property and
-------
premises situated in ______________ County, State of ______________, to-wit:
together with all the improvements thereon and the appurtenances thereunto
belonging, and warrant the title to the same (the "Conveyed Property").
-----------------
The Conveyed Property is hereby conveyed free and clear of all Encumbrances
except Permitted Real Property Encumbrances.
TO HAVE AND TO HOLD the Conveyed Property unto Grantee and its successors
ands assigns forever; and the Seller does hereby bind itself and its successors
and assigns to WARRANT AND FOREVER DEFEND good and marketable title to the
Conveyed Property, subject only to the terms of the Agreement.
All capitalized terms used herein but not defined herein shall have the
meaning ascribed to them in that certain Asset Purchase Agreement (the
"Agreement") dated August 12, 1999 by and between Grantor, Grantee and Parker
---------
Drilling Company, a Delaware corporation.
From time to time hereafter, the Grantor will execute and deliver, or cause
to be executed and delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery and will take such
other actions as Grantee may reasonably request in order to more effectively
transfer, convey, assign and deliver to Grantee, and to place Grantee in
possession and control of any of the Conveyed Property or to enable Grantee to
exercise and enjoy all rights and benefits of the Grantor with respect thereto.
Signed and delivered this _____ day of_______________, 1999.
PARKER DRILLING COMPANY NORTH AMERICA, INC.
_____________________________
By:
Its:
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STATE OF OKLAHOMA)
) ss:
COUNTY OF __________ )
Before me, the undersigned, a Notary Public in and for the above named
State, did appear ___________________________, to me known to be the
______________ of Parker Drilling Company North America, Inc., a Nevada
corporation, and did sign in my presence the foregoing instrument for the
intents and purposes therein stated.
____________________________________
Notary Public
My Commission Expires:
____________________
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EXHIBIT C
---------
GENERAL ASSIGNMENT OF CONTRACTS
-------------------------------
This GENERAL ASSIGNMENT OF CONTRACTS ("General Assignment") is made
------------------
effective as of the ______ day of[_________], 1999 by Parker Drilling Company
North America, Inc., a Nevada corporation (the "Seller") and Unit Corporation, a
------
Delaware corporation (the "Buyer").
-----
RECITALS
--------
1. Pursuant to the terms of an Asset Purchase Agreement (the "Agreement"),
---------
dated August 12, 1999, by and between Buyer, Seller and Parker Drilling Company,
a Delaware corporation, the Seller agreed to convey the Purchased Assets to
Buyer and makes this General Assignment in order to evidence the conveyance of
all of the Drilling Contracts and the Other Contracts.
2. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Agreement.
ASSIGNMENT
----------
NOW, THEREFORE, for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00) in hand paid, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Seller does hereby
BARGAIN, GRANT, SELL, CONVEY, TRANSFER, DELIVER, and ASSIGN unto Buyer all of
the Drilling Contracts and the Other Contracts set forth on Exhibit "A" hereto
(the "Conveyed Property").
-----------------
The Conveyed Property is hereby conveyed subject to all of the terms and
conditions of the Agreement.
From time to time hereafter, the Seller will execute and deliver, or cause
to be executed and delivered, without further consideration, such other
instruments of conveyance, assignment, transfer and delivery and will take such
other actions as Buyer may reasonably request in order to more effectively
transfer, convey, assign and deliver to Buyer, and to place Buyer in possession
and control of any of the Conveyed Property or to enable Buyer to exercise and
enjoy all rights and benefits of the Seller with respect thereto.
This General Assignment is delivered pursuant to the Agreement, and in the
event of any conflict or inconsistency between any of the terms of the Agreement
and this General Assignment the terms of the Agreement shall prevail.
IN WITNESS WHEREOF, the Seller and Buyer have each executed this General
Assignment effective as of the date set forth above.
Parker Drilling Company North America, Inc. Unit Corporation
__________________ ____________________
By: By:
Its: Its:
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EXHIBIT "D"
-----------
BUYER'S CERTIFICATE
-------------------
With respect to the closing of the transactions contemplated by that certain
Asset Purchase Agreement, dated August 12, 1999, (the "Agreement") between
Parker Drilling Company North America, Inc.("Seller"), Parker Drilling Company
("Parker") and Unit Corporation ("Buyer"), Buyer hereby certifies that (i) those
representations and warranties contained in Article VI of the Agreement are true
in all material respects at and as of the date hereof and (ii) that Buyer has
complied in all material respects with each of the covenants or agreements
contained in the Agreement and to be performed by it on or before the date
hereof.
Executed as of the _____ day of _______________, 1999.
Unit Corporation
______________________________
John G. Nikkel, President
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EXHIBIT "E"
-----------
SELLER'S CERTIFICATE
--------------------
With respect to the closing of the transactions contemplated by that
certain Asset Purchase Agreement, dated August 12, 1999, (the "Agreement")
between Parker Drilling Company North America, Inc. ("Seller"), Parker Drilling
Company ("Parker") and Unit Corporation ("Buyer"), Seller hereby certifies that
(i) those representations and warranties contained in Article V of the Agreement
are true in all material respects at and as of the date hereof and (ii) that
Seller has complied in all material respects with each of the covenants or
agreements contained in the Agreement and to be performed by it on or before the
date hereof.
Executed as of the _____ day of ____________________, 1999.
Parker Drilling Company
_______________________________
By:
Its:
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