THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK ISSUABLE THEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND, ACCORDINGLY, THE
SECURITIES REPRESENTED BY THIS WARRANT MAY NOT BE RESOLD, PLEDGED, OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS.
WARRANTS
to Purchase Common Stock of
BLACK WARRIOR WIRELINE CORP.
Expiring on January 23, 2003
This Warrant to Purchase Common Stock (the "Warrant") certifies that for
value received, St. James Capital Partners, L.P., a Delaware limited partnership
(the "Holder"), or its assigns, is entitled to subscribe for and purchase from
the Company (as hereinafter defined), in whole or in part, 200,000 shares of
duly authorized, validly issued, fully paid and nonassessable shares of Common
Stock (as hereinafter defined) at an initial Exercise Price (as hereinafter
defined), subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. The number of Warrants (as hereinafter defined), the
number of shares of Common Stock purchasable hereunder, and the Exercise Price
therefor are subject to adjustment as hereinafter set forth. This Warrant and
all rights hereunder shall expire at 5:00 p.m., Houston, Texas time, on January
23, 2003.
As used herein, the following terms shall have the meanings set forth
below:
"Company" shall mean Black Warrior Wireline Corp., a Delaware
corporation, and shall also include any successor thereto with respect to the
obligations hereunder, by merger, consolidation or otherwise.
"Common Stock" shall mean and include the Company's Common Stock, par
value $.0005 per share, authorized on the date of the original issue of this
Warrant and shall also include (i) in case of any reorganization,
reclassification, consolidation, merger, share exchange or sale, transfer or
other disposition of assets of the character referred to in Section 3.5 hereof,
the stock, securities provided for in such Section 3.5, and (ii) any other
shares of common stock of the Company into which such shares of Common Stock may
be converted.
"Exercise Price" shall mean the initial purchase price of $6.75 per share
of Common Stock payable upon exercise of the Warrants. The Exercise Price shall
be adjusted from time to time
pursuant to the provisions hereof.
"Market Price" for any day, when used with reference to Common Stock,
shall mean the price of said Common Stock determined as follows: (i) the last
reported sale price for the Common Stock on such day on the principal securities
exchange on which the Common Stock is listed or admitted to trading or if no
such sale takes place on such date, the average of the closing bid and asked
prices thereof as officially reported, or, if not so listed or admitted to
trading on any securities exchange, the last sale price for the Common Stock on
the National Association of Securities Dealers National Market System or
SmallCap Market on such date, or, if there shall have been no trading on such
date or if the Common Stock shall not be listed on such system, the average of
the closing bid and asked prices in the over-the-counter market as furnished by
any NASD member firm selected from time to time by the Company for such purpose,
in each such case, unless otherwise provided herein, averaged over a period of
ten (10) consecutive Trading Days prior to the date as of which the
determination is to be made; or (ii) if the Common Stock shall not be listed or
admitted to trading or the closing bid and asked prices are unable to be
furnished by an NASD member firm, as provided in clause (i) above, the fair
market value of the Common Stock as determined in good faith by the Board of
Directors of the Company.
"Note" shall mean the 8% Convertible Promissory Note of the Company
issued to St. James Capital Partners, L.P. as of the date hereof in the original
principal amount of up to $10,000,000, as may be amended, modified, substituted
or replaced.
"Outstanding," when used with reference to Common Stock, shall mean
(except as otherwise expressly provided herein) at any date as of which the
number of shares thereof is to be determined, all issued shares of Common Stock,
except shares then owned or held by or for the account of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Trading Days" shall mean any days during the course of which the
principal securities exchange on which the Common Stock is listed or admitted to
trading is open for the exchange of securities.
"Warrant" shall mean the right upon exercise to purchase one Warrant
Share.
"Warrant Shares" shall mean the shares of Common Stock purchased or
purchasable by the holder hereof upon the exercise of the Warrants.
2
ARTICLE I
EXERCISE OF WARRANTS
I.1 Method of Exercise. The Warrants represented hereby may be exercised
by the holder hereof, in whole or in part, at any time and from time to time on
or after the date hereof until 5:00 p.m., Houston, Texas time, on January 23,
2003. To exercise the Warrants, the holder hereof shall deliver to the Company,
at the Warrant Office designated in Section 2.1 hereof, (i) a written notice in
the form of the Subscription Notice attached as an exhibit hereto, stating
therein the election of such holder to exercise the Warrants in the manner
provided in the Subscription Notice; (ii) payment in full of the Exercise Price
(A) in cash or by bank check for all Warrant Shares purchased hereunder, or (B)
through a "cashless" or "net-issue" exercise of each such Warrant ("Cashless
Exercise"); the holder shall exchange each Warrant subject to a Cashless
Exercise for that number of Warrant Shares determined by multiplying the number
of Warrant Shares issuable hereunder by a fraction, the numerator of which shall
be the difference between (x) the Market Price and (y) the Exercise Price for
each such Warrant, and the denominator of which shall be the Market Price; the
Subscription Notice shall set forth the calculation upon which the Cashless
Exercise is based, or (C) a combination of (A) and (B) above; and (iii) this
Warrant. The Warrants shall be deemed to be exercised on the date of receipt by
the Company of the Subscription Notice, accompanied by payment for the Warrant
Shares and surrender of this Warrant, as aforesaid, and such date is referred to
herein as the "Exercise Date". Upon such exercise, the Company shall, as
promptly as practicable and in any event within ten (10) business days, issue
and deliver to such holder a certificate or certificates for the full number of
the Warrant Shares purchased by such holder hereunder, and shall, unless the
Warrants have expired, deliver to the holder hereof a new Warrant representing
the number of Warrants, if any, that shall not have been exercised, in all other
respects identical to this Warrant. As permitted by applicable law, the Person
in whose name the certificates for Common Stock are to be issued shall be deemed
to have become a holder of record of such Common Stock on the Exercise Date and
shall be entitled to all of the benefits of such holder on the Exercise Date,
including without limitation, the right to receive dividends and other
distributions for which the record date falls on or after the Exercise Date and
the right to exercise voting rights.
I.2 Expenses and Taxes. The Company shall pay all expenses and taxes
(including, without limitation, all documentary, stamp, transfer or other
transactional taxes) other than income taxes attributable to the preparation,
issuance or delivery of the Warrants and of the shares of Common Stock issuable
upon exercise of the Warrants.
I.3 Reservation of Shares. The Company shall reserve at all times so long
as the Warrants remain outstanding, free from preemptive rights, out of its
treasury Common Stock or its authorized but unissued shares of Common Stock, or
both, solely for the purpose of effecting the exercise of the Warrants, a
sufficient number of shares of Common Stock to provide for the exercise of the
Warrants.
I.4 Valid Issuance. All shares of Common Stock that may be issued upon
exercise of the Warrants will, upon issuance by the Company, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof and, without limiting the generality of the
foregoing, the Company shall take no action or fail to take any action which
will cause a contrary result (including, without limitation, any action that
would cause the Exercise Price to be less than the par value, if any, of the
Common Stock).
3
I.5 Purchase Agreement. The Warrants represented hereby are part of a
duly authorized issuance and sale of warrants to purchase Common Stock issued
and sold pursuant to that certain Agreement of Purchase and Sale dated as of the
date hereof (the "Agreement"), between the Company and the Holder. The holder
hereof shall be entitled to registration under the Securities Act and any
applicable state securities or blue sky laws to the extent set forth in the
Registration Rights Agreement, as hereafter amended. The terms of the Agreement
are hereby incorporated herein for all purposes and shall be considered a part
of this Warrant as if they had been fully set forth herein. Notwithstanding the
previous sentence, in the event of any conflict between the provisions of the
Agreement and of this Warrant, the provisions of this Warrant shall control.
I.6 Acknowledgment of Rights. At the time of the exercise of the Warrants
in accordance with the terms hereof and upon the written request of the holder
hereof, the Company will acknowledge in writing its continuing obligation to
afford to such holder any rights (including, without limitation, any right to
registration of the Warrant Shares) to which such holder shall continue to be
entitled after such exercise in accordance with the provisions of this Warrant;
provided, however, that if the holder hereof shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.
I.7 No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of this Warrant. If more than
one Warrant shall be presented for exercise at the same time by the same holder,
the number of full shares of Common Stock which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of whole shares
of Common Stock purchasable on exercise of the Warrants so presented. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 1.7, be issuable on the exercise of this Warrant, the Company shall pay
an amount in cash calculated by it to be equal to the Market Price of one share
of Common Stock at the time of such exercise multiplied by such fraction
computed to the nearest whole cent.
ARTICLE II
TRANSFER
II.1 Warrant Office. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's offices at 3748 Highway #45 North, Columbus, Mississippi 39701
and may subsequently be such other office of the Company or of any transfer
agent of the Common Stock in the continental United States as to which written
notice has previously been given to the holder hereof. The Company shall
maintain, at the Warrant Office, a register for the Warrants in which the
Company shall record the name and address of the Person in whose name this
Warrant has been issued, as well as the name and address of each permitted
assignee of the rights of the registered owner hereof.
II.2 Ownership of Warrants. The Company may deem and treat the Person in
whose name the Warrants are registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary until presentation of this Warrant for registration of transfer
as provided in this Article II. Notwithstanding the foregoing, the Warrants
represented hereby, if properly assigned
4
in compliance with this Article II, may be exercised by an assignee for the
purchase of Warrant Shares without having a new Warrant issued.
II.3 Restrictions on Transfer of Warrants. The Company agrees to maintain
at the Warrant Office books for the registration and transfer of the Warrants.
Subject to the restrictions on transfer of the Warrants in this Section 2.3, the
Company, from time to time, shall register the transfer of the Warrants in such
books upon surrender of this Warrant at the Warrant Office properly endorsed or
accompanied by appropriate instruments of transfer and written instructions for
transfer satisfactory to the Company. Upon any such transfer and upon payment by
the holder or its transferee of any applicable transfer taxes, new Warrants
shall be issued to the transferee and the transferor (as their respective
interests may appear) and the surrendered Warrants shall be canceled by the
Company. The Company shall pay all taxes (other than securities transfer taxes
or income taxes) and all other expenses and charges payable in connection with
the transfer of the Warrants pursuant to this Section 2.3.
II.3.1 Restrictions in General. The holder of the Warrants agrees
that it will not transfer the Warrants unless registration of such
Warrant Shares under the Securities Act and any applicable state
securities or blue sky laws has become effective or the holder has
provided to the Company an opinion of counsel acceptable to the Company
that such registration is not required. Notwithstanding the preceding
sentence, however, St. James Capital Partners, L.P., as the initial
Holder of the Warrants, may transfer Warrants to its partners of record
on December 31, 1997 at any time and may at any time grant a security
interest in the Warrants to its lender or lenders. Prior to any transfer
(other than the grant of a security interest) as provided herein, the
transferor shall provide written notice to the Company and an opinion of
counsel to the effect that the proposed transfer is exempt from
registration under all applicable securities laws, all in form and
substance reasonably satisfactory to the Company. Any lender or lenders
to which the Holder grants a security interest in the Warrants shall be
entitled to exercise all remedies to which it is entitled by contract or
by law, including (without limitation) transferring the Warrants into its
own name or into the name of any purchaser at any sale undertaken in
connection with enforcement by such lender of its remedies. The partners
of St. James Capital Partners, L.P. shall not be entitled to transfer
Warrants prior to completion of a registered public offering of the
Company's Common Stock.
II.4 Compliance with Securities Laws. Subject to the terms of the
Registration Rights Agreement between the Holder and the Company dated as of
June 5, 1997, as amended or modified (the "Registration Rights Agreement"), and
notwithstanding any other provisions contained in this Warrant except Section
2.3.1, the holder hereof understands and agrees that the following restrictions
and limitations shall be applicable to all Warrant Shares and to all resales or
other transfers thereof pursuant to the Securities Act:
II.4.1 The holder hereof agrees that the Warrant Shares shall not
be sold or otherwise transferred unless the Warrant Shares are registered
under the Securities Act and applicable state securities or blue sky laws
or are exempt therefrom.
II.4.2 A legend in substantially the following form will be placed
on the certificate(s) evidencing the Warrant Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
5
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE
SECURITIES LAW AND, ACCORDINGLY, THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE RESOLD, PLEDGED, OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS."
II.4.3 Stop transfer instructions will be imposed with respect to
the Warrant Shares so as to restrict resale or other transfer thereof,
subject to this Section 2.4.
ARTICLE III
ANTI-DILUTION
III.1 Anti-Dilution Provisions. The Exercise Price shall be subject to
adjustment from time to time as hereinafter provided. Upon each adjustment of
the Exercise Price, the holder of this Warrant shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of shares purchasable
pursuant hereto immediately prior to such adjustment and dividing the product
thereof by the Exercise Price resulting from such adjustment.
III.2 Adjustment of Exercise Price Upon Issuance of Common Stock.
III.2.1 (A) If and whenever after the date hereof the Company
shall issue or sell any Common Stock for no consideration or for a
consideration per share less than the Exercise Price, then, forthwith
upon such issue or sale, the Exercise Price shall be reduced (but not
increased, except as otherwise specifically provided in Section 3.2.2(C)
hereof), to the price (calculated to the nearest one-ten thousandth of a
cent) determined by dividing (x) an amount equal to the sum of (i) the
aggregate number of shares of Common Stock outstanding immediately prior
to such issue or sale multiplied by then existing Exercise Price plus
(ii) the consideration received by the Company upon such issue or sale by
(y) the aggregate number of shares of Common Stock outstanding
immediately after such issue or sale.
(B) Notwithstanding the provisions of this Section 3.2, no
adjustment shall be made in the Exercise Price in the event that the
Company issues, in one or more transactions, (i) Common Stock or
convertible securities upon exercise of any options issued to officers,
directors or employees of the Company pursuant to a stock option plan or
an employment, severance or consulting agreement as now or hereafter in
effect, in each case approved by the Board of Directors (provided that
the aggregate number of shares of Common Stock which may be issuable,
including options issued prior to the date hereof, under all such
employee plans and agreements shall at no time exceed the number of such
shares of Common Stock that are issuable under currently effective
employee plans and agreements); (ii) Common Stock upon exercise of the
Warrants or any other warrant issued pursuant to the terms of the
Agreement or otherwise issued to the Holder; (iii) Common Stock upon
exercise of any stock
6
purchase warrant or option (other than the options referred to in clause
(i) above) or other convertible security outstanding on the date hereof;
(iv) Common Stock upon conversion of the Note; or (v) Common Stock issued
as consideration in acquisitions (including warrants, options or
convertible securities issued as consideration for an acquisition or to
officers, directors or employees of the acquired entity in conjunction
therewith). In addition, for purposes of calculating any adjustment of
the Exercise Price as provided in this Section 3.2, all of the shares of
Common Stock issuable pursuant to any of the foregoing shall be assumed
to be outstanding prior to the event causing such adjustment to be made.
III.2.2 For purposes of this Section 3.2, the following Sections
3.2.2(A) to 3.2.2(E) inclusive, shall be applicable:
(A) Issuance of Rights or Options. In case at any time
after the date hereof the Company shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase, or any options for the purchase of, Common
Stock or any stock or securities convertible into or exchangeable for
Common Stock (such convertible or exchangeable stock or securities being
herein called "Convertible Securities") (other than warrants, options or
convertible securities issued as consideration for or assumed in
conjunction with an acquisition or to officers, directors or employees of
the acquired entity in conjunction therewith), whether or not such rights
or options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which
shares of Common Stock are issuable upon the exercise of such rights or
options or upon conversion or exchange of such Convertible Securities
(determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the granting of such
rights or options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of such
rights or options, or plus, in the case of such rights or options that
relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by
(ii) the total maximum number of shares of Common Stock issuable upon the
exercise of such rights or options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of such rights
or options) shall be less than the Exercise Price in effect as of the
date of granting such rights or options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such rights or
options or upon conversion or exchange of all such Convertible Securities
issuable upon the exercise of such rights or options shall be deemed to
be outstanding as of the date of the granting of such rights or options
and to have been issued for such price per share, with the effect on the
Exercise Price specified in Section 3.2.1 hereof. Except as provided in
Section 3.2.2 hereof, no further adjustment of the Exercise Price shall
be made upon the actual issuance of such Common Stock or of such
Convertible Securities upon exercise of such rights or options or upon
the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
(B) Change in Option Price or Conversion Rate. Upon the
happening of any of the following events, namely, if the purchase price
provided for in any right or option referred to in Section 3.2.2, the
additional consideration, if any, payable upon the conversion or exchange
of any Convertible Securities referred to in Section 3.2.2, or the rate
at which any Convertible Securities referred to in Section 3.2.2, are
convertible into or exchangeable for
7
Common Stock shall change (other than under or by reason of provisions
designed to protect against dilution), the Exercise Price then in effect
hereunder shall forthwith be readjusted (increased or decreased, as the
case may be) to the Exercise Price that would have been in effect at such
time had such rights, options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or
conversion rate, as the case may be, at the time initially granted,
issued or sold. On the expiration of any such option or right referred to
in Section 3.2.2, or on the termination of any such right to convert or
exchange any such Convertible Securities referred to in Section 3.2.2,
the Exercise Price then in effect hereunder shall forthwith be readjusted
(increased or decreased, as the case may be) to the Exercise Price that
would have been in effect at the time of such expiration or termination
had such right, option or Convertible Securities, to the extent
outstanding immediately prior to such expiration or termination, never
been granted, issued or sold, and the Common Stock issuable thereunder
shall no longer be deemed to be outstanding. If the purchase price
provided for in Section 3.2.2 or the rate at which any Convertible
Securities referred to in Section 3.2.2 are convertible is reduced at any
time under or by reason of provisions with respect thereto designed to
protect against dilution, then in case of the delivery of Common Stock
upon the exercise of any such right or option or upon conversion or
exchange of any such Convertible Securities, the Exercise Price then in
effect hereunder shall, if not already adjusted, forthwith be adjusted to
such amount as would have obtained had such right, option or Convertible
Securities never been issued as to such Common Stock and had adjustments
been made upon the issuance of the Common Stock delivered as aforesaid,
but only if as a result of such adjustment the Exercise Price then in
effect hereunder is thereby reduced.
(C) Consideration for Stock. In case at any time
Common Stock or Convertible Securities or any rights or options to
purchase any such Common Stock or Convertible Securities shall be issued
or sold for cash, the consideration therefor shall be deemed to be the
amount received by the Company therefor. In case at any time any Common
Stock, Convertible Securities or any rights or options to purchase any
such Common Stock or Convertible Securities shall be issued or sold for
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be deemed to be the fair value of such
consideration, as determined reasonably and in good faith by the Board of
Directors of the Company. In case at any time any Common Stock,
Convertible Securities or any rights or options to purchase any Common
Stock or Convertible Securities shall be issued in connection with any
merger or consolidation in which the Company is the surviving
corporation, the amount of consideration received therefor shall be
deemed to be the fair value, as determined reasonably and in good faith
by the Board of Directors of the Company, of such portion of the assets
and business of the nonsurviving corporation as such Board of Directors
may determine to be attributable to such Common Stock, Convertible
Securities, rights or options as the case may be. In case at any time any
rights or options to purchase any shares of Common Stock or Convertible
Securities shall be issued in connection with the issuance and sale of
other securities of the Company, together consisting of one integral
transaction in which no consideration is allocated to such rights or
options by the parties, such rights or options shall be deemed to have
been issued with consideration.
(D) Record Date. In the case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling
them (i) to receive a dividend or other distribution payable in Common
Stock or Convertible Securities, or (ii) to subscribe for or
8
purchase Common Stock or Convertible Securities, then such record date
shall be deemed to be the date of the issuance or sale of the Common
Stock or Convertible Securities deemed to have been issued or sold as a
result of the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(E) Treasury Shares. The number of shares of Common
Stock outstanding at any given time shall not include shares owned
directly by the Company in treasury, and the disposition of any such
shares shall be considered an issuance or sale of Common Stock for the
purpose of this Section 3.2.
III.3 Stock Dividends. In case the Company shall declare a dividend or
make any other distribution upon any shares of the Company, payable in Common
Stock or Convertible Securities, any Common Stock or Convertible Securities, as
the case may be, issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
III.4 Stock Splits and Reverse Splits. In the event that the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Warrant Shares
purchasable pursuant to this Warrant immediately prior to such subdivision shall
be proportionately increased, and conversely, in the event that the outstanding
shares of Common Stock shall at any time be combined into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination shall
be proportionately increased and the number of Warrant Shares purchasable upon
the exercise of this Warrant immediately prior to such combination shall be
proportionately reduced. Except as provided in this Section 3.4, no adjustment
in the Exercise Price and no change in the number of Warrant Shares purchasable
shall be made under this Article III as a result of, or by reason of, any such
subdivision or combination.
III.5 Reorganizations and Asset Sales. If any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation,
merger or share exchange of the Company with another Person, or the sale,
transfer or other disposition of all or substantially all of its assets to
another Person shall be effected in such a way that a holder of Common Stock of
the Company shall be entitled to receive capital stock, securities or assets
with respect to or in exchange for their shares, then the following provisions
shall apply:
III.5.1 As a condition of such reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer or other
disposition (except as otherwise provided below in this Section 3.5),
lawful and adequate provisions shall be made whereby the holder of
Warrants shall thereafter have the right to purchase and receive upon the
terms and conditions specified in this Warrant and in lieu of the Warrant
Shares immediately theretofore receivable upon the exercise of the rights
represented hereby, such shares of capital stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of Warrant
Shares immediately theretofore so receivable had such reorganization,
reclassification, consolidation, merger, share exchange or sale not taken
place, and in any such case appropriate provision reasonably satisfactory
to such holder shall be made with respect to the rights and interests of
such holder to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Exercise
9
Price and of the number of Warrant Shares receivable upon the exercise)
shall thereafter be applicable, as nearly as possible, in relation to any
shares of capital stock, securities or assets thereafter deliverable upon
the exercise of Warrants.
III.5.2 In the event of a merger, share exchange or consolidation
of the Company with or into another Person as a result of which a number
of shares of Common Stock or its equivalent of the successor Person
greater or lesser than the number of shares of Common Stock outstanding
immediately prior to such merger, share exchange or consolidation are
issuable to holders of Common Stock, then the Exercise Price in effect
immediately prior to such merger, share exchange or consolidation shall
be adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock.
III.5.3 The Company shall not effect any such consolidation,
merger, share exchange, sale, transfer or other disposition unless prior
to or simultaneously with the consummation thereof the successor Person
(if other than the Company) resulting from such consolidation, share
exchange or merger of the Person purchasing or otherwise acquiring such
assets shall have assumed by written instrument executed and mailed or
delivered to the holder hereof at the last address of such holder
appearing on the books of the Company the obligation to deliver to such
holder such shares of capital stock, securities or assets as, in
accordance with the foregoing provisions, such holder may be entitled to
receive, and all other liabilities and obligations of the Company
hereunder. Upon written request by the holder hereof, such successor
Person will issue a new warrant revised to reflect the modifications in
this Warrant effected pursuant to this Section 3.5.
III.5.4 If a purchase, tender or exchange offer is made to and
accepted by the holders of 50% or more of the outstanding shares of
Common Stock, the Company shall not effect any consolidation, merger,
share exchange or sale, transfer or other disposition of all or
substantially all of the Company's assets with the Person having made
such offer or with any affiliate of such Person, unless prior to the
consummation of such consolidation, merger, share exchange, sale,
transfer or other disposition the holder hereof shall have been given a
reasonable opportunity to then elect to receive upon the exercise of the
Warrants either the capital stock, securities or assets then issuable
with respect to the Common Stock or the capital stock, securities or
assets, or the equivalent, issued to previous holders of the Common Stock
in accordance with such offer.
III.6 Adjustment for Asset Distribution. If the Company declares a
dividend or other distribution payable to all holders of shares of Common Stock
in evidences of indebtedness of the Company or other assets of the Company
(including, cash (other than regular cash dividends declared by the Board of
Directors), capital stock (other than Common Stock, Convertible Securities or
options or rights thereto) or other property), the Exercise Price in effect
immediately prior to such declaration of such dividend or other distribution
shall be reduced by an amount equal to the amount of such dividend or
distribution payable per share of Common Stock, in the case of a cash dividend
or distribution, or by the fair value of such dividend or distribution per share
of Common Stock (as reasonably determined in good faith by the Board of
Directors of the Company), in the case of any other dividend or distribution.
Such reduction shall be made whenever any such dividend or distribution is made
and shall be effective as of the date as of which a record is taken for the
purpose of such dividend or distribution or, if a record is not taken, the date
as of which holders of record of
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Common Stock entitled to such dividend or distribution are determined.
III.7 De Minimis Adjustments. No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one share of Common Stock
purchasable upon an exercise of each Warrant and no adjustment in the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least $0.01 in the Exercise Price; provided, however, that any
adjustments which by reason of this Section 3.7 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest full share or nearest one
hundredth of a dollar, as applicable.
III.8 Notice of Adjustment. Whenever the Exercise Price or the number of
Warrant Shares issuable upon the exercise of the Warrants shall be adjusted as
herein provided, or the rights of the holder hereof shall change by reason of
other events specified herein, the Company shall compute the adjusted Exercise
Price and the adjusted number of Warrant Shares in accordance with the
provisions hereof and shall prepare an Officer's Certificate setting forth the
adjusted Exercise Price and the adjusted number of Warrant Shares issuable upon
the exercise of the Warrants or specifying the other shares of stock, securities
or assets receivable as a result of such change in rights, and showing in
reasonable detail the facts and calculations upon which such adjustments or
other changes are based. The Company shall cause to be mailed to the holder
hereof copies of such Officer's Certificate together with a notice stating that
the Exercise Price and the number of Warrant Shares purchasable upon exercise of
the Warrants have been adjusted and setting forth the adjusted Exercise Price
and the adjusted number of Warrant Shares purchasable upon the exercise of the
Warrants.
III.9 Notifications to Holders. In case at any time the Company proposes:
(i) to declare any dividend upon its Common Stock payable in
capital stock or make any special dividend or other distribution (other
than cash dividends) to the holders of its Common Stock;
(ii) to offer for subscription pro rata to all of the holders of
its Common Stock any additional shares of capital stock of any class or
other rights;
(iii) to effect any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation, merger or share
exchange of the Company with another Person, or sale, transfer or other
disposition of all or substantially all of its assets; or
(iv) to effect a voluntary or involuntary dissolution, liquidation
or winding up of the Company,
then, in any one or more of such cases, the Company shall give the holder hereof
(a) at least 10 days' (but not more than 90 days') prior written notice of the
date on which the books of the Company shall close or a record shall be taken
for such dividend, distribution or subscription rights or for determining rights
to vote in respect of such issuance, reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer, disposition, dissolution,
liquidation or winding up, and (b) in the case of any such issuance,
reorganization, reclassification, consolidation, merger, share exchange, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10 days'
(but not more than 90 days') prior
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written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause (a) shall also specify, in the case of any
such dividend, distribution or subscription rights, the date on which the
holders of Common Stock shall be entitled thereto, and such notice in accordance
with the foregoing clause (b) shall also specify the date on which the holders
of Common Stock shall be entitled to exchange their Common Stock, as the case
may be, for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, share exchange, sale, transfer,
disposition, dissolution, liquidation or winding up, as the case may be.
III.10 Company to Prevent Dilution. If any event or condition occurs as
to which other provisions of this Article III are not strictly applicable or if
strictly applicable would not fairly protect the exercise or purchase rights of
the Warrants evidenced hereby in accordance with the essential intent and
principles of such provisions, or that might materially and adversely affect the
exercise or purchase rights of the holder hereof under any provisions of this
Warrant, then the Company shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, so as to
protect such exercise and purchase rights as aforesaid, and any adjustments
necessary with respect to the Exercise Price and the number of Warrant Shares
purchasable hereunder so as to preserve the rights of the holder hereunder. In
no event shall any such adjustment have the effect of increasing the Exercise
Price as otherwise determined pursuant to this Article III except in the event
of a combination of shares of the type contemplated in Section 3.4 hereof, and
then in no event to an amount greater than the Exercise Price as adjusted
pursuant to Section 3.4 hereof.
ARTICLE IV
MISCELLANEOUS
IV.1 Entire Agreement. This Warrant, together with the Agreement,
contains the entire agreement between the holder hereof and the Company with
respect to the Warrant Shares purchasable upon exercise hereof and the related
transactions and supersedes all prior arrangements or understandings with
respect thereto.
IV.2 Governing Law. This warrant shall be governed by and construed in
accordance with the laws of the State of Delaware.
IV.3 Waiver and Amendment. Any term or provision of this Warrant may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant shall be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way effect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with every
term or condition of this Warrant.
IV.4 Illegality. In the event that any one or more of the provisions
contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
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IV.5 Copy of Warrant. A copy of this Warrant shall be filed among the
records of the Company.
IV.6 Notice. Any notice or other document required or permitted to be
given or delivered to the holder hereof shall be in writing and delivered at, or
sent by certified or registered mail to such holder at, the last address shown
on the books of the Company maintained at the Warrant Office for the
registration of this Warrant or at any more recent address of which the holder
hereof shall have notified the Company in writing. Any notice or other document
required or permitted to be given or delivered to the Company, other than such
notice or documents required to be delivered to the Warrant Office, shall be
delivered at, or sent by certified or registered mail to, the offices of the
Company at 3748 Highway #45 North, Columbus, Mississippi 39701 or such other
address within the continental United States of America as shall have been
furnished by the Company to the holder of this Warrant.
IV.7 Limitation of Liability; Not Stockholders. No provision of this
Warrant shall be construed as conferring upon the holder hereof the right to
vote, consent, receive dividends or receive notices (other than as herein
expressly provided) in respect of meetings of stockholders for the election of
directors of the Company or any other matter whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such holder for the purchase price of any shares of Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.
IV.8 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of this Warrant, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity or such other security in such
form and amount as shall be reasonably satisfactory to the Company, or in the
event of such mutilation upon surrender and cancellation of this Warrant, the
Company will make and deliver a new warrant of like tenor, in lieu of such lost,
stolen, destroyed or mutilated Warrant. Any warrant issued under the provisions
of this Section 4.8 in lieu of any Warrant alleged to be lost, destroyed or
stolen, or in lieu of any mutilated Warrant, shall constitute an original
contractual obligation on the part of the Company. This Warrant shall be
promptly canceled by the Company upon the surrender hereof in connection with
any exchange or replacement. The Company shall pay all taxes (other than
securities transfer taxes or income taxes) and all other expenses and charges
payable in connection with the preparation, execution and delivery of warrants
pursuant to this Section 4.8.
IV.9 Registration Rights. The Warrant Shares shall be entitled to such
registration rights under the Securities Act and under applicable state
securities laws as are specified in the Registration Rights Agreement and the
Agreement.
IV.10 Headings. The Article and Section and other headings herein are for
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name.
Dated: January 23, 1998
BLACK WARRIOR WIRELINE CORP.
By:
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Name:
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Title:
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SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented thereby and to purchase thereunder,
________ shares of the Common Stock covered by such Warrant, and herewith makes
payment in full for such shares pursuant to Section 1.1 of such Warrant, and
requests (a) that certificates for such shares (and any other securities or
other property issuable upon such exercise) be issued in the name of, and
delivered to _____________________________________ and (b) if such shares shall
not include all of the shares issuable as provided in such Warrant, that a new
warrant of like tenor and date for the balance of the shares issuable thereunder
be delivered to the undersigned.
---------------------------------------
Date:
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ASSIGNMENT
For value received, _______________________, hereby sells, assigns, and
transfers unto _________________________ the within Warrant, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ________________________ attorney, to transfer such Warrant on the books
of the Company, with full power of substitution.
---------------------------------------
Date:
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