information to third parties and to engage in discussions with third parties regarding alternative Acquisition Proposals, subject to customary exceptions. Patterson-UTI is required to call a meeting of its stockholders to approve the Share Issuance and Patterson-UTI Charter Amendment and, subject to certain exceptions, to recommend that its stockholders vote to approve the Share Issuance and Patterson-UTI Charter Amendment. NexTier is required to call a meeting of its stockholders to vote upon the adoption of the Merger Agreement and, subject to certain exceptions, to recommend that its stockholders vote to adopt the Merger Agreement.
Termination
The Merger Agreement contains termination rights for each of Patterson-UTI and NexTier, including, among others, if the consummation of the Transactions does not occur on or before March 14, 2024, subject to a 90-day extension in certain circumstances for the sole purpose of obtaining regulatory clearances. Upon termination of the Merger Agreement under specified circumstances, including the termination by NexTier in the event of a Change of Recommendation (as defined in the Merger Agreement) by the Patterson-UTI Board, Patterson-UTI would be required to pay NexTier a termination fee of $72,980,000. In addition, upon termination of the Merger Agreement under reciprocal specified circumstances, including the termination by Patterson-UTI in the event of a Change of Recommendation by the NexTier Board, NexTier would be required to pay Patterson-UTI a termination fee of $60,875,000. In addition, if the Merger Agreement is terminated in specified circumstances, including because of a failure of Patterson-UTI’s stockholders approve the Share Issuance and the Patterson-UTI Charter Amendment or of NexTier’s stockholders to approve the adoption of the Merger Agreement, Patterson-UTI or NexTier, as applicable, may be required to reimburse the other party for its actual transaction expenses in an amount not to exceed $10,150,000. In no event will either party be entitled to receive more than one termination fee, net of any expense reimbursement.
The foregoing description is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K.
The representations, warranties and covenants contained in the Merger Agreement have been made solely for the benefit of the parties thereto. In addition, such representations, warranties and covenants (i) have been made only for purposes of the Merger Agreement, (ii) have been qualified by (a) matters specifically disclosed in any reports filed by Patterson-UTI or NexTier with the SEC prior to the date of the Merger Agreement (subject to certain exceptions) and (b) confidential disclosures made in confidential disclosure letters delivered in connection with the Merger Agreement, (iii) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, (iv) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement and (v) have been included in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as fact. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding the parties thereto or their respective businesses. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties to the Merger Agreement or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Patterson-UTI’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding Patterson-UTI and NexTier that is or will be contained in, or incorporated by reference into, the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents that Patterson-UTI or NexTier files with the SEC.
Support Agreement
In connection with the Merger Agreement, Keane Investor Holdings, LLC, a Delaware limited liability company (“Keane Investor”), which beneficially owns 32,330,828 shares of NexTier Common Stock, and Cerberus Capital Management, L.P., a Delaware limited partnership, have entered into a Support Agreement and Irrevocable Proxy (the “Support Agreement”), dated June 14, 2023, with Patterson-UTI. The Support Agreement includes covenants as to the voting of shares of NexTier Common Stock held by Keane Investor in a manner to facilitate the consummation of the Mergers.