REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Registration Rights Agreement") is
made October 10, 1997, by and between Black Warrior Wireline Corp., a Delaware
corporation (the "Company"), and Diamondback Directional, Inc., a Texas
corporation ("DDI").
WHEREAS, on the date hereof the Company and DDI are holding a closing (the
"Closing") pursuant to an Asset Purchase Agreement (the "P&S Agreement")
effective September 1, 1997 among the Company, DDI, Alan Mann and Michael Dale
Jowers; and
WHEREAS, pursuant to Section 2.5(a) of the P&S Agreement, the Company has
agreed to issue and sell to DDI and DDI has agreed to purchase 647,569 shares
(the "Shares") of the Common Stock, par value $0.0005 per share, of the Company
in payment of a portion of the Purchase Price (as defined in the P&S Agreement);
and
WHEREAS, the Company has agreed to grant to DDI certain rights to have the
Shares registered under the Securities Act of 1933, as amended, as provided
herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
1.1 "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
1.2 "Holder" shall mean DDI or any Qualified Transferee.
1.3 "Qualified Transferee" shall mean any stockholder of DDI as of the date
hereof to whom the Registrable Securities and the rights hereunder have been
transferred prior to the filing by the Company of a registration statement with
the Commission pursuant to Article II hereof.
1.4 "Registrable Securities" shall mean (i) the Shares; and (ii) any Common
Stock issued or issuable at any time or from time to time in respect of the
Shares upon a stock split, stock dividend, recapitalization or other similar
event involving the Company until such Shares are registered pursuant to a
Registration Statement or the exemption from registration under Rule 144(k) (or
successor Rule) under the Securities Act is available with respect to the
Shares.
1.5 The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering by the
Commission of the effectiveness of such registration statement.
1.6 "Registration Expenses" shall mean all expenses, other than Selling
Expenses (as defined below), incurred by the Company in complying with this
Registration Rights Agreement, including, without limitation, all registration,
qualification and filing fees, exchange listing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
1.7 "Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.8 "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
DDI and, except as set forth above, all fees and disbursements of counsel for
DDI.
1.9 "Underwritten Public Offering" shall mean a public offering in which
Common Stock is offered and sold on a firm commitment basis through one or more
underwriters, all pursuant to an underwriting agreement between the Company and
such underwriters.
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ARTICLE II
REGISTRATION RIGHTS
2.1 Registration Rights.
2.2.1 Subject to the terms hereof, if: (i) at any time or from time to
time the Company shall determine to register any of its securities in an
Underwritten Public Offering (except for registration statements on Form S-8
relating to employee benefit plans); and (ii) DDI or any Qualified Transferee is
the beneficial owner of any Registrable Securities; then the Company will
promptly give to the Holders written notice thereof no less than ten (10) days
prior to the filing of any registration statement, and include in such
Underwritten Public Offering (and any related qualification under blue sky laws
or other compliance), such Registrable Securities as the Holders may request in
a writing delivered to the Company within five (5) days after the Holders'
receipt of the Company's written notice.
2.2.2 Notwithstanding any other provision of this Section, if the
managing underwriter of such Underwritten Public Offering concludes in its
reasonable judgment that the number of shares to be registered for selling
shareholders (including the Holders) would materially adversely affect such
offering, subject to the terms of any agreements which may grant to other
persons senior registration rights to which the Company is a party, the number
of Registrable Securities to be registered, together with the number of shares
of Common Stock or other securities held by other shareholders proposed to be
registered in such offering, shall be reduced on a pro rata basis based on the
number of Registrable Securities proposed to be sold by the Holders as compared
to the number of shares proposed to be sold by all shareholders. The Registrable
Securities so excluded by the managing underwriter shall be withdrawn from such
registration, and shall not be transferred in a public distribution prior to
ninety (90) days after the effective date of the registration statement relating
thereto, or such other shorter period of time as the managing underwriter may
require.
2.2.3 The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section prior to the effectiveness of
such registration whether or not the Holders have elected to include securities
in such registration.
2.2 Expenses of Registration. All Registration Expenses shall be borne by
the Company. Unless otherwise stated herein, all Selling Expenses relating to
securities registered on behalf of the Holders shall be borne by the Holders
2.3 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep the Holders advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. At its expense, the Company will:
2.3.1 Prepare and file with the Commission a registration statement with
respect to such securities and use its commercially reasonable efforts to cause
such registration statement to become and remain effective until the
distribution described in such registration statement has been completed;
2.3.2 Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as the Holders may reasonably request
in order to facilitate the public sale of the shares by the Holders, and
promptly furnish to the Holders notice of any stop-order or similar notice
issued by the Commission or any state agency charged with the regulation of
securities.
2.4 Certain Information. The Holders agree, with respect to any Registrable
Securities included in any registration, to furnish to the Company such
information regarding the Holders, the Registrable Securities and the
distribution proposed by the Holders as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.
2.5 Assignment. Neither this Agreement, nor any right, interest or
obligation hereunder, may be assigned by either of the parties without the prior
written consent of the other party; provided, however, that any assignment by
DDI to any Qualified Transferee shall not require the prior written consent of
the other party. The Company shall not be obligated to recognize any such
assignment by DDI to a Qualified Transferee unless and until the Company shall
have received written notice from DDI specifying the name and address of the
Qualified Transferee(s) and identifying the Registrable Securities with respect
to which such rights hereunder have been assigned.
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2.6 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware.
2.7 Entire Agreement; Amendment. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject hereof. This Agreement, or any provision hereof, may be amended, waived,
discharged or terminated upon the written consent of the Company and the
Holders.
2.8 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed:
If to DDI:
Diamondback Directional, Inc.
13843 Highway 105 West - Suite 212
Conroe, Texas 77304
or at such other address as DDI shall have furnished to the Company in writing;
If to any Qualified Transferee:
To such address as DDI shall have furnished the Company in
writing pursuant to Section 2.5.
If to the Company
Black Warrior Wireline Corp.
3748 Highway #45 North
Columbus, Mississippi 39701
Attention: William L. Jenkins, President
or a such other address as the Company shall have furnished to the Holders. Each
such notice or other communication shall, for all purposes of this Agreement, be
treated as effective upon receipt.
2.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
2.10 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
2.11 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not considered in construing or
interpreting this Agreement.
IN WITNESS WHEREOF, the Company has executed this agreement effective upon
the date first set forth above.
BLACK WARRIOR WIRELINE CORP.
By:_________________________________
William L. Jenkins, President
DIAMONDBACK DIRECTIONAL, INC.
By:_________________________________
Alan Mann, President
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