THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT.
EQUITY COMPRESSION SERVICES CORPORATION
COMMON STOCK PURCHASE WARRANT
NEW YORK, NEW YORK
NO. WA-1 JULY 31, 1997
EQUITY COMPRESSION SERVICES CORPORATION (the "COMPANY"), an Oklahoma
corporation, for value received, hereby certifies that THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA or its registered assigns is entitled to purchase from the
Company 1,000,000 duly authorized, validly issued, fully paid and nonassessable
shares of the Company's Common Stock, par value $0.01 per share (the "ORIGINAL
COMMON STOCK"), at an initial exercise price per share of $2.80, at any time or
from time to time after the date hereof and prior to 5:00 p.m., New York City
time, on the earlier of (i) July 31, 2007 or (ii) the later of (a) the date that
is six months after the Notes (as defined below) are prepaid in full pursuant to
paragraph 4B of the Purchase Agreement (as defined below) and (b) July 31, 2002
(the "EXPIRATION DATE"), all subject to the terms, conditions and adjustments
set forth below in this Warrant.
This Warrant is one of the Common Stock Purchase Warrants (the
"WARRANTS", such term to include all Warrants issued in substitution therefor)
originally issued in connection with the issue and sale by the Company of the
Company's 10.15% Secured Senior Subordinated Notes due July 31, 2007, in the
aggregate principal amount of $15,000,000 (the "NOTES") pursuant to that certain
Subordinated Note and Warrant Purchase Agreement dated of even date herewith
(the "PURCHASE AGREEMENT") between the Company and The Prudential Insurance
Company of America (the "PURCHASER"). The Warrants originally so issued
evidence rights to purchase an aggregate of 1,000,000 shares of Original Common
Stock, subject to adjustment as provided herein. The term "NOTES" as used
herein shall include each Note delivered pursuant to any provision of the
Purchase Agreement and each Note delivered in substitution or exchange for any
such Note pursuant to any such provision. Certain capitalized terms used in
this Warrant are defined in section 13.
1. EXERCISE OF WARRANT.
1A. MANNER OF EXERCISE. This Warrant may be exercised by the holder
hereof, in whole or in part, during normal business hours on any Business Day on
or after the date hereof to and including the Expiration Date, by surrender of
this Warrant, with the form of subscription at the end hereof (or a reasonable
facsimile thereof) duly executed by such holder, to the Company at its principal
office (or, if such exercise shall be in connection with an underwritten public
offering of shares of Common Stock (or Other Securities) subject to this
Warrant, at the location at which the underwriters shall have agreed to accept
delivery thereof), accompanied by payment, in cash or by certified or official
bank check payable to the order of the Company, in the amount obtained by
multiplying (a) the number of shares of Original Common Stock (without giving
effect to any adjustment therein) designated in such form of subscription by (b)
$2.80. The number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock which the holder of this Warrant shall be
entitled to receive upon each exercise hereof shall be determined by multiplying
the number of shares of Common Stock which would otherwise (but for the
provisions of section 2) be issuable upon such exercise, as designated by the
holder hereof pursuant to this section 1A, by a fraction of which (a) the
numerator is $2.80 and (b) the denominator is the Exercise Price in effect on
the date of such exercise. The "EXERCISE PRICE" shall initially be $2.80 per
share, shall be adjusted and readjusted from time to time as provided in section
2 and, as so adjusted and readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by section 2.
1B. WHEN EXERCISE EFFECTIVE. Each exercise of this Warrant shall be
deemed to have been effected and the Exercise Price shall be determined
immediately prior to the close of business on the Business Day on which this
Warrant shall have been surrendered to the Company as provided in section 1A,
and at such time the person or persons in whose name or names any certificate or
certificates for shares of Original Common Stock (or Other Securities) shall be
issuable upon such exercise as provided in section 1C shall be deemed to have
become the holder or holders of record thereof.
1C. DELIVERY OF STOCK CERTIFICATES, ETC. Promptly after the exercise
of this Warrant, in whole or in part, and in any event within five Business Days
thereafter (unless such exercise shall be in connection with an underwritten
public offering of shares of Common Stock (or Other Securities) subject to this
Warrant, in which event concurrently with such exercise), the Company at its
expense will cause to be issued in the name of and delivered to the holder
hereof or, subject to section 8, as such holder may direct,
(a) a certificate or certificates for the number of duly
authorized, validly issued, fully paid and nonassessable shares of Common
Stock (or Other Securities) to which such holder shall be entitled upon
such exercise, and
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(b) in case such exercise is in part only, a new Warrant or
Warrants of like tenor, specifying the aggregate on the face or faces
thereof the number of shares of Common Stock equal to the number of such
shares specified on the face of this Warrant minus the number of such
shares designated by the holder upon such exercise as provided in section
1A.
1D. COMPANY TO REAFFIRM OBLIGATIONS. The Company will, at the time
of or at any time after each exercise of this Warrant, upon the request of the
holder hereof or of any shares of Common Stock (or Other Securities) issued upon
such exercise, acknowledge in writing its continuing obligation to afford to
such holder all rights to which such holder shall continue to be entitled after
such exercise in accordance with the terms of this Warrant, PROVIDED that if any
such holder shall fail to make any such request, the failure shall not affect
the continuing obligation of the Company to afford such rights to such holder.
1E. FRACTIONAL SHARES. No fractional shares shall be issued upon
exercise of this Warrant and no payment or adjustment shall be made upon any
exercise on account of any cash dividends (except as provided in section 2B) on
the Common Stock or Other Securities issued upon such conversion. If any
fractional interest in a share of Common Stock would, except for the provisions
of the first sentence of this section 1E, be deliverable upon the exercise of
this Warrant, the Company shall, in lieu of delivering the fractional share
therefor, pay to the holder exercising this Warrant an amount in cash equal to
the Market Price of such fractional interest.
1F. CASHLESS EXERCISE. As an alternative to exercise of this
Warrant by payment in cash (or by certified or official bank check), as provided
above in section 1A, the holder of this Warrant may exercise its right to
purchase some or all of the shares of Common Stock pursuant to this Warrant, on
a net basis without the exchange of any funds (a "CASHLESS EXERCISE"), such that
the holder hereof receives that number of shares of Common Stock subscribed to
pursuant to this Warrant less that number of shares of Common Stock, valued at
Market Price, at the time of exercise equal to the aggregate Exercise Price that
would otherwise have been paid by the holder of this Warrant for such shares of
Common Stock.
2. PROTECTION AGAINST DILUTION OR OTHER IMPAIRMENT OF RIGHTS; ADJUSTMENT
OF EXERCISE PRICE.
2A. ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK.
(a) In case the Company, at any time or from time to time after
July 31, 1997 (the "INITIAL DATE"), shall issue or sell Additional Shares
of Common Stock (including Additional Shares of Common Stock deemed to be
issued pursuant to section 2C or 2D) without consideration or for a
consideration per share (determined pursuant to section 2E) less than the
Market Price in effect on the date of and immediately prior to such issue
or sale, then, and in each such case (other than in a public or private
offering described in clause (b) below), subject to section 2H, the
Exercise Price shall be reduced, concurrently
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with such issue or sale, to a price (calculated to the nearest .001 of a
cent) determined by multiplying such Exercise Price by a fraction,
(i) the numerator of which shall be (x) the number of
shares of Common Stock outstanding immediately prior to such
issue or sale PLUS (y) the number of shares of Common Stock which
the aggregate consideration received by the Company for the total
number of such Additional Shares of Common Stock so issued or
sold would purchase at such Market Price, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such issue
or sale.
(b) In case the Company, at any time or from time to time during the
twelve-month period commencing on the Initial Date, shall issue or sell
Additional Shares of Common Stock in a public or private offering for a
consideration per share (determined pursuant to section 2E) less than the
greater of the Exercise Price or the Market Price in effect, in each case,
on the date of and immediately prior to such issue or sale, then, and in
each such case, subject to section 2H, the Exercise Price shall be reduced,
concurrently with such issue or sale, to a price (calculated to the nearest
.001 of a cent) determined by multiplying such Exercise Price by a
fraction,
(i) the numerator of which shall be (x) the number of
shares of Common Stock outstanding immediately prior to such
issue or sale PLUS (y) the number of shares of Common Stock which
the aggregate consideration received by the Company for the total
number of such Additional Shares of Common Stock so issued or
sold would purchase at the greater of such Market Price or such
Exercise Price, and
(ii) the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such issue
or sale,
PROVIDED that the Exercise Price shall not be reduced pursuant to this
clause (b) with respect to up to $5,000,000 of net sales proceeds received
by the Company from the issuance or sale of Additional Shares of Common
Stock issued or sold in a public or private offering prior to June 30,
1998.
(c) For purposes of this section 2A, (i) immediately after any
Additional Shares of Common Stock are deemed to have been issued pursuant
to section 2C or 2D, such Additional Shares shall be deemed to be
outstanding, and (ii) treasury shares shall not be deemed to be
outstanding.
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2B. EXTRAORDINARY DIVIDENDS AND DISTRIBUTIONS. In case the Company
at any time or from time to time after the date hereof shall declare, order, pay
or make a dividend or other distribution (including, without limitation, any
distribution of other or additional stock or other securities or property or
Options by way of dividend or spin-off, reclassification, recapitalization or
similar corporate rearrangement and any redemption or acquisition of any such
stock or Options on the Common Stock) other than (a) a dividend payable in
Additional Shares of Common Stock or in Options for Common Stock or (b) a
regular periodic dividend payable in cash and permitted to be made under the
Dividend Restrictions, then, and in each such case, the Company shall pay over
to the holder of this Warrant, on the date on which such dividend or other
distribution is paid to the holders of Common Stock, the securities and other
property (including cash) which such holder would have received if such holder
had exercised this Warrant immediately prior to the record date fixed in
connection with such dividend or other distribution.
2C. TREATMENT OF OPTIONS AND CONVERTIBLE SECURITIES. In case the
Company, at any time or from time to time after the date hereof, shall issue,
sell, grant or assume, or shall fix a record date for the determination of
holders of any class of securities entitled to receive, any Options or
Convertible Securities, whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable, then, and
in each such case, the maximum number of Additional Shares of Common Stock (as
set forth in the instrument relating thereto, without regard to any provisions
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, issuable upon the conversion or exchange of such Convertible
Securities (or the exercise of such Options for Convertible Securities and
subsequent conversion or exchange of the Convertible Securities issued), shall
be deemed to be Additional Shares of Common Stock issued as of the time of such
issue, sale, grant or assumption or, in case such a record date shall have been
fixed, as of the close of business on such record date, PROVIDED, that such
Additional Shares of Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to section 2E) of such shares
would be less than the Market Price in effect on the date of and immediately
prior to such issue, sale, grant or assumption or immediately prior to the close
of business on such record date or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading, as the case
may be, and PROVIDED, FURTHER, that in any such case in which Additional Shares
of Common Stock are deemed to be issued,
(a) if an adjustment of the Exercise Price shall be made upon the
fixing of a record date as referred to in the first sentence of this
section 2C, no further adjustment of the Exercise Price shall be made as a
result of the subsequent issue or sale of any Options or Convertible
Securities for the purpose of which such record date was set;
(b) no further adjustment of the Exercise Price shall be made upon
the subsequent issue or sale of Additional Shares of Common Stock or
Convertible Securities upon the exercise of such Options or the conversion
or exchange of such Convertible Securities;
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(c) if such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any change in the consideration
payable to the Company, or change in the number of Additional Shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof
(by change of rate or otherwise), the Exercise Price computed upon the
original issue, sale, grant or assumption thereof (or upon the occurrence
of the record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon any such change becoming effective, be
recomputed to reflect such change insofar as it affects such Options, or
the rights of conversion or exchange under such Convertible Securities,
which are outstanding at such time;
(d) upon the expiration of any such Options or of the rights of
conversion or exchange under any such Convertible Securities which shall
not have been exercised (or upon purchase by the Company and cancellation
or retirement of any such Options which shall not have been exercised or of
any such Convertible Securities the rights of conversion or exchange under
which shall not have been exercised), the Exercise Price computed upon the
original issue, sale, grant or assumption thereof (or upon the occurrence
of the record date with respect thereto), and any subsequent adjustments
based thereon, shall, upon such expiration (or such cancellation or
retirement, as the case may be), be recomputed as if:
(i) in the case of Options for Common Stock or in the case of
Convertible Securities, the only Additional Shares of Common Stock
issued or sold (or deemed issued or sold) were the Additional Shares
of Common Stock, if any, actually issued or sold upon the exercise of
such Options or the conversion or exchange of such Convertible
Securities and the consideration received therefor was (x) an amount
equal to (A) the consideration actually received by the Company for
the issue, sale, grant or assumption of all such Options, whether or
not exercised, PLUS (B) the consideration actually received by the
Company upon such exercise, MINUS (C) the consideration paid by the
Company for any purchase of such Options which were not exercised, or
(y) an amount equal to (A) the consideration actually received by the
Company for the issue, sale, grant or assumption of all such
Convertible Securities which were actually converted or exchanged,
PLUS (B) the additional consideration, if any, actually received by
the Company upon such conversion or exchange, MINUS (C) the excess, if
any, of the consideration paid by the Company for any purchase of such
Convertible Securities, the rights of conversion or exchange under
which were not exercised, over an amount that would be equal to the
fair value (as determined in good faith by the Board of Directors of
the Company) of the Convertible Securities so purchased if such
Convertible Securities were not convertible into or exchangeable for
Additional Shares of Common Stock, and
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(ii) in the case of Options for Convertible Securities, only
the Convertible Securities, if any, actually issued or sold upon the
exercise of such Options were issued at the time of the issue, sale,
grant or assumption of such Options, and the consideration received by
the Company for the Additional Shares of Common Stock deemed to have
then been issued was an amount equal to (x) the consideration actually
received by the Company for the issue, sale, grant or assumption of
all such Options, whether or not exercised, PLUS (y) the consideration
deemed to have been received by the Company (pursuant to section 2E)
upon the issue or sale of the Convertible Securities with respect to
which such Options were actually exercised, MINUS (z) the
consideration paid by the Company for any purchase of such Options
which were not exercised; and
(e) no recomputation pursuant to subsection (c) or (d) above shall
have the effect of increasing the Exercise Price then in effect by an
amount in excess of the amount of the adjustment thereof originally made in
respect of the issue, sale, grant or assumption of such Options or
Convertible Securities.
2D. TREATMENT OF STOCK DIVIDENDS, STOCK SPLITS, ETC. In case the
Company, at any time or from time to time after the date hereof, shall declare
or pay any dividend or other distribution on any class of securities of the
Company payable in shares of Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, Additional Shares of Common Stock shall be
deemed to have been issued (a) in the case of any such dividend or other
distribution, immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend or other distribution, or (b) in the case of any such subdivision, at
the close of business on the day immediately prior to the day upon which such
corporate action becomes effective.
2E. COMPUTATION OF CONSIDERATION. For the purposes of this Warrant:
(a) The consideration for the issue or sale of any Additional Shares
of Common Stock or for the issue, sale, grant or assumption of any Options
or Convertible Securities, irrespective of the accounting treatment of such
consideration,
(i) insofar as it consists of cash, shall be computed as the
amount of cash received by the Company, and insofar as it consists of
securities or other property, shall be computed as of the date
immediately preceding such issue, sale, grant or assumption as the
fair value (as determined in good faith by the Board of Directors of
the Company) of such consideration (or, if such consideration is
received for the issue or sale of Additional Shares of Common Stock
and the Market Price thereof is less than the fair value (as
determined in good faith by the Board of Directors of the Company) of
such consideration, then such consideration
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shall be computed as the Market Price of such Additional Shares of
Common Stock), in each case without deducting any expenses paid or
incurred by the Company, any commissions or compensation paid or
concessions or discounts allowed to underwriters, dealers or other
performing similar services and any accrued interest or dividends in
connection with such issue or sale, and
(ii) in case Additional Shares of Common Stock are issued or
sold or Options or Convertible Securities are issued, sold, granted or
assumed together with other stock or securities or other assets of the
Company for a consideration which covers both, shall be the proportion
of such consideration so received, computed as provided in clause (i)
above, allocable to such Additional Shares of Common Stock or Options
or Convertible Securities, as the case may be, all as determined in
good faith by the Board of Directors or the Company.
(b) All Additional Shares of Common Stock, Options or Convertible
Securities issued in payment of any dividend or other distribution on any
class of stock of the Company and all Additional Shares of Common Stock
issued to effect a subdivision of the outstanding shares of Common Stock
into a greater number of shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in Common Stock) shall be deemed to
have been issued without consideration.
(c) Additional Shares of Common Stock deemed to have been issued for
consideration pursuant to section 2C, relating to Options and Convertible
Securities, shall be deemed to have been issued for a consideration per
share determined by dividing
(i) the total amount, if any, received and receivable by the
Company as consideration for the issue, sale, grant or assumption of
the Options or Convertible Securities in question, PLUS the minimum
aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration)
payable to the Company upon the exercise in full of such Options or
the conversion or exchange of such Convertible Securities or, in the
case of Options for Convertible Securities, the exercise of such
Options for Convertible Securities and the conversion or exchange of
such Convertible Securities, in each case computing such consideration
as provided in the foregoing subsection (a),
by
(ii) the maximum number of shares of Common Stock (as set forth
in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of
such Convertible Securities.
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2F. ADJUSTMENTS FOR COMBINATIONS, ETC. In case the outstanding
shares of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Exercise Price in
effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
2G. DILUTION IN CASE OF OTHER SECURITIES. In case any Other
Securities shall be issued or sold or shall become subject to issue or sale upon
the conversion or exchange of any stock (or Other Securities) of the Company (or
any issuer of Other Securities or any other Person referred to in section 2I) or
to subscription, purchase or other acquisition pursuant to any Options issued or
granted by the Company (or any such other issuer or Person) for a consideration
such as to dilute, on a basis to which the standards established in the other
provisions of this Warrant do not apply, the exercise rights granted by this
Warrant, then, and in each such case, the computations, adjustments and
readjustments provided for in this Warrant with respect to the Exercise Price
shall be made as nearly as possible in the manner so provided and applied to
determine the amount of Other Securities from time to time receivable upon the
exercise of this Warrant, so as to protect the holder of this Warrant against
the effect of such dilution.
2H. MINIMUM ADJUSTMENT OF EXERCISE PRICE. If the amount of any
adjustment of the Exercise Price required hereunder would be less than one
percent of the Exercise Price in effect at the time such adjustment is otherwise
so required to be made, such amount shall be carried forward and adjustment with
respect thereto made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate at least one percent of such Exercise Price; PROVIDED,
that upon the exercise of this Warrant, all adjustments carried forward and not
theretofore made up to and including the date of such exercise shall be made to
the nearest .001 of a cent.
2I. CHANGES IN COMMON STOCK. In case at any time the Company shall
be a party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation or recapitalization of the Common Stock) in which the previously
outstanding Common Stock shall be changed into or exchanged for different
securities of the Company or common stock or other securities of another
corporation or interests in a noncorporate entity or other property (including
cash) or any combination of any of the foregoing (excluding, however, any
transaction in which the Company, without more, reincorporates in another
jurisdiction) or in which the Common Stock ceases to be a publicly traded
security either listed on the New York Stock Exchange or the American Stock
Exchange or quoted by the Nasdaq National Market or Nasdaq SmallCap Market or
any successor thereto or comparable system (each such transaction being herein
called the "TRANSACTION", the date on which the Transaction is first announced
to the public being herein called the "ANNOUNCEMENT DATE", the date of
consummation of the Transaction being herein called the "CONSUMMATION DATE", the
Company (in the case of a recapitalization of the Common Stock or any other such
transaction in which the Company retains substantially all of its assets and
survives as a corporation) or such other corporation or entity (in each other
case) being herein called the
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"ACQUIRING COMPANY", and the common stock (or equivalent equity interest) of the
Acquiring Company being herein called the "ACQUIRER'S COMMON STOCK", except that
if the Acquiring Company shall not meet the requirements set forth in
subsections (d), (e) and (f) below and a corporation which directly or
indirectly controls the Acquiring Company (a "PARENT") meets such requirements,
"Acquiring Company" shall refer to such Parent and "Acquirer's Common Stock"
shall refer to such Parent's common stock (or equivalent equity interests))
then, as a condition of the consummation of the Transaction, lawful and adequate
provisions (in form satisfactory to the Required Holders) shall be made so that
the holder of this Warrant, upon the exercise thereof at any time on or after
the Consummation Date (but subject, in the case of an election pursuant to
subsection (b) or (c) below, to the time limitation hereinafter provided for
such election),
(a) shall be entitled to receive, and this Warrant shall thereafter
represent the right to receive, in lieu of the Common Stock issuable upon
such exercise prior to the Consummation Date, shares of the Acquirer's
Common Stock at an Exercise Price per share equal to the lesser of (i) the
Exercise Price in effect immediately prior to the Consummation Date
multiplied by a fraction the numerator of which is the Market Price per
share of the Acquirer's Common Stock determined as of the Consummation Date
and the denominator of which is the Market Price per share of the Common
Stock determined as of the Consummation Date, or (ii) the Market Price per
share of the Acquirer's Common Stock determined as of the Consummation Date
(subject in each case to adjustments from and after the Consummation Date
as nearly equivalent as possible to the adjustments provided for in this
Warrant),
or at the election of the holder of this Warrant pursuant to notice given
to the Company within six months after the Consummation Date,
(b) shall be entitled to receive, and this Warrant shall thereafter
represent the right to receive, in lieu of each share of Common Stock
issuable upon such exercise prior to the Consummation Date, either (i) the
greatest amount of cash, securities or other property given to any
shareholder in consideration for any share of Common Stock at any time
during the period from and after the Announcement Date to and including the
Consummation Date by the Acquiring Company, the Company or any Affiliate of
either thereof, or (ii) an amount in cash equal to the product obtained by
multiplying (x) the number of shares of the Acquirer's Common Stock
purchasable upon the exercise or conversion of such Warrant as shall result
from adjustments thereto that would have been required pursuant to
subsection (a) above times (y) the Market Price per share for the
Acquirer's Common Stock, determined as of the day within the period from
and after the Announcement Date to and including the Consummation Date for
which the amount determined as provided in the definition of Market Price
shall have been the greatest, or, if neither the Acquiring Company nor the
Parent meets the requirements set forth in subsections (d), (e) and (f)
below, at the election of the holder of this Warrant pursuant to notice
given to the Company within six months after the Consummation Date; or
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(c) shall be entitled to receive, within 30 days after such election,
in full satisfaction of the exercise rights afforded under this Warrant to
the holder thereof, an amount equal to the fair market value of such
exercise rights as determined by an independent investment banker (with an
established national reputation as a valuer of equity securities) selected
by the Required Holders with the approval of the Company, such fair market
value to be determined with regard to all material relevant factors but
without regard to any negative effects on such value of the Transaction.
The Company agrees to obtain, and deliver to each holder of Warrants a copy of
the determination of an independent investment banker (selected by the Required
Holders with the approval of the Company) necessary to permit elections under
subsection (c) above within 15 days after the Consummation Date of any
Transaction to which subsection (c) is applicable.
The requirements referred to above in the case of the Acquiring
Company or its Parent are that immediately after the Consummation Date:
(d) it is a solvent corporation organized under the laws of any State
of the United States of America having its common stock listed on the New
York Stock Exchange or the American Stock Exchange or quoted by the Nasdaq
National Market or any successor thereto or comparable system, and such
common stock continues to meet such requirements for such listing or
quotation,
(e) it is required to file, and in each of its three fiscal years
immediately preceding the Consummation Date has filed, reports with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act, and
(f) in the case of the Parent, such Parent is required to include the
Acquiring Company in the consolidated financial statements contained in the
Parent's Annual Report on Form 10-K as filed with the Commission and is not
itself included in the consolidated financial statements of any other
Person (other than its consolidated subsidiaries).
Notwithstanding anything contained herein to the contrary, the Company shall not
effect any Transaction unless prior to the consummation thereof each corporation
or entity (other than the Company) which may be required to deliver any
securities or other property upon the exercise of Warrants shall assume, by
written instrument delivered to each holder of Warrants, the obligation to
deliver to such holder such securities or other property as to which, in
accordance with the foregoing provisions, such holder may be entitled, and such
corporation or entity shall have similarly delivered to each holder of Warrants
an opinion of counsel for such corporation or entity, satisfactory to each
holder of Warrants, which opinion shall state that all the outstanding Warrants,
shall thereafter continue in full force and effect and shall be enforceable
against such corporation or entity in accordance with the terms hereof and
thereof, together with such other matters as such holders may reasonably
request.
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2J. CERTAIN ISSUES EXCEPTED. Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment of the
Exercise Price in the case of the issuance of the Warrants and the issuance of
shares of Common Stock issuable upon exercise of the Warrants.
2K. NOTICE OF ADJUSTMENT. Upon the occurrence of any event requiring
an adjustment of the Exercise Price, then and in each such case the Company
shall promptly deliver to the holder of this Warrant an Officer's Certificate
stating the Exercise Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares of Common Stock issuable upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Within 90 days
after each fiscal year in which any such adjustment shall have occurred, or
within 30 days after any request therefor by the holder of this Warrant stating
that such holder contemplates the exercise of such Warrant, the Company will
obtain and deliver to the holder of this Warrant the opinion of its regular
independent auditors or another firm of independent public accountants of
recognized national standing selected by the Company's Board of Directors, which
opinion shall confirm the statements in the most recent Officer's Certificate
delivered under this section 2K.
2L. OTHER NOTICES. In case at any time:
(a) the Company shall declare to the holders of Common Stock any
dividend other than a regular periodic cash dividend or any periodic cash
dividend in excess of 115% of the cash dividend for the comparable fiscal
period in the immediately preceding fiscal year;
(b) the Company shall declare or pay any dividend upon Common Stock
payable in stock or make any special dividend or other distribution (other
than regular cash dividends) to the holders of Common Stock;
(c) the Company shall offer for subscription pro rata to the holders
of Common Stock any additional shares of stock of any class or other
rights;
(d) there shall be any capital reorganization, or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another
corporation or other entity;
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
(f) there shall be made any tender offer for any shares of capital
stock of the Company; or
(g) there shall be any other Transaction;
-12-
then, in any one or more of such cases, the Company shall give to the holder of
this Warrant (i) at least 15 days prior to any event referred to in subsection
(a) or (b) above, at least 30 days prior to any event referred to in subsection
(c), (d) or (e) above, and within five days after it has knowledge of any
pending tender offer or other Transaction, 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 any such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, winding-up or Transaction or the date by which
shareholders must tender shares in any tender offer and (ii) in the case of any
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up or tender offer or Transaction known to the Company, at
least 30 days prior written notice of the date (or, if not then known, a
reasonable approximation thereof by the Company) when the same shall take place.
Such notice in accordance with the foregoing clause (i) 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 (ii) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, tender offer or Transaction, as the case may be. Such notice shall
also state that the action in question or the record date is subject to the
effectiveness of a registration statement under the Securities Act or to a
favorable vote of security holders, if either is required.
2M. CERTAIN EVENTS. If any event occurs as to which, in the good
faith judgment of the Board of Directors of the Company, the other provisions of
this Warrant are not strictly applicable or if strictly applicable would not
fairly protect the exercise rights of the holders of the Warrants in accordance
with the essential intent and principles of such provisions, then the Board of
Directors of the Company shall appoint its regular independent auditors or
another firm of independent public accountants of recognized national standing
which shall give their opinion upon the adjustment, if any, on a basis
consistent with such essential intent and principles, necessary to preserve,
without dilution, the rights of the holders of the Warrants. Upon receipt of
such opinion, the Board of Directors of the Company shall forthwith make the
adjustments described therein; PROVIDED, that no such adjustment shall have the
effect of increasing the Exercise Price as otherwise determined pursuant to this
Warrant. The Company may make such reductions in the Exercise Price as it deems
advisable, including any reductions necessary to ensure that any event treated
for Federal income tax purposes as a distribution of stock or stock rights not
be taxable to recipients.
2N. PROHIBITION OF CERTAIN ACTIONS. The Company will not, by
amendment of its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Warrant and in the taking of all such action as may
reasonably be requested by the holder of this Warrant in order to protect the
exercise privilege of the holder of this Warrant against
-13-
dilution or other impairment, consistent with the tenor and purpose of this
Warrant. Without limiting the generality of the foregoing, the Company (a) will
not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, (b) will take
all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of all Warrants from time to time outstanding, (c) will not
take any action which results in any adjustment of the Exercise Price if the
total number of shares of Common Stock or Other Securities issuable after the
action upon the exercise of all of the Warrants would exceed the total number of
shares of Common Stock or Other Securities then authorized by the Company's
certificate of incorporation and available for the purpose of issue upon such
conversion, and (d) will not issue any capital stock of any class which is
preferred as to dividends or as to the distribution of assets upon voluntary or
involuntary dissolution, liquidation or winding-up, unless the rights of the
holders thereof shall be limited to a fixed sum or percentage (or floating rate
related to market yields) of par value or stated value in respect of
participation in dividends and a fixed sum or percentage of par value or stated
value in any such distribution of assets.
3. STOCK TO BE RESERVED. The Company will at all times reserve and keep
available out of the authorized Common Stock, solely for the purpose of issue
upon the exercise of the Warrants as herein provided, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants and the Company will maintain at all times all other rights and
privileges sufficient to enable it to fulfill all its obligations hereunder.
The Company covenants that all shares of Common Stock which shall be so issuable
shall, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable, free from preemptive or similar rights on the part of the holders
of any shares of capital stock or securities of the Company or any other Person,
and free from all taxes, liens and charges with respect to the issue thereof
(not including any income taxes payable by the holders of Warrants being
exercised in respect of gains thereon), and the Exercise Price will be credited
to the capital and surplus of the Company. The Company will take all such
action as may be necessary to assure that such shares of Common Stock may be so
issued without violation of any applicable law or regulation, or of any
applicable requirements of the National Association of Securities Dealers, Inc.
and of any domestic securities exchange upon which the Common Stock may be
listed.
4. REGISTRATION OF COMMON STOCK. If any shares of Common Stock required
to be reserved for purposes of the exercise of Warrants require registration
with or approval of any governmental authority under any Federal or State law
(other than the Securities Act, registration under which is governed by the
Registration Rights Agreement), before such shares may be issued upon the
exercise thereof, the Company will, at its expense and as expeditiously as
possible, use its best efforts to cause such shares to be duly registered or
approved, as the case may be. Shares of Common Stock issuable upon exercise of
the Warrants shall be registered by the Company under the Securities Act or
similar statute then in force if required by the Registration Rights Agreement
and subject to the conditions stated in such agreement. At any such time as the
Common Stock is listed on any national securities exchange or quoted by the
Nasdaq National
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Market or Nasdaq SmallCap Market or any successor thereto or any comparable
system, the Company will, at its expense, obtain promptly and maintain the
approval for listing on each such exchange or quoting by the Nasdaq National
Market or Nasdaq SmallCap Market or such successor thereto or comparable system,
upon official notice of issuance, the shares of Common Stock issuable upon
exercise of the then outstanding Warrants and maintain the listing or quoting of
such shares after their issuance so long as the Common Stock is so listed or
quoted; and the Company will also cause to be so listed or quoted, will register
under the Exchange Act and will maintain such listing or quoting of, any Other
Securities that at any time are issuable upon exercise of the Warrants, if and
at the time that any securities of the same class shall be listed on such
national securities exchange by the Company.
5. ISSUE TAX. The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the holders hereof
for any issuance tax in respect thereto.
6. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Warrant or of any share of Common Stock issued
or issuable upon the exercise of any Warrant in any manner which interferes with
the timely exercise of such Warrant.
7. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not
entitle the holder thereof to any of the rights of a stockholder of the Company,
except as expressly contemplated herein. No provision of this Warrant, in the
absence of the actual exercise of such Warrant and receipt by the holder thereof
of Common Stock issuable upon such conversion, shall give rise to any liability
on the part of such holder as a stockholder of the Company, whether such
liability shall be asserted by the Company or by creditors of the Company.
8. RESTRICTIVE LEGENDS. Except as otherwise permitted by this section 8,
each Warrant originally issued and each Warrant issued upon direct or indirect
transfer or in substitution for any Warrant pursuant to this section 8 shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"This Warrant and any shares acquired upon the exercise of this
Warrant have not been registered under the Securities Act of 1933 and
may not be transferred in the absence of such registration or an
exemption therefrom under such Act."
Except as otherwise permitted by this section 8, (a) each certificate for
Original Common Stock (or Other Securities) issued upon the exercise of any
Warrant, and (b) each certificate issued upon the direct or indirect transfer of
any such Original Common Stock (or Other Securities) shall be stamped or
otherwise imprinted with a legend in substantially the following form:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 and may not be transferred in the
absence of such registration or an exemption therefrom under such
Act."
-15-
The holder of any Restricted Securities shall be entitled to receive from the
Company, without expense, new securities of like tenor not bearing the
applicable legend set forth above in this section 8 when such securities shall
have been (a) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering such Restricted Securities,
(b) sold pursuant to Rule 144 or any comparable rule under the Securities Act,
(c) transferred to a limited number of institutional holders, each of which
shall have represented in writing that it is acquiring such Restricted
Securities for investment and not with a view to the disposition thereof, or
(d) when, in the opinion of independent counsel for the holder thereof
experienced in Securities Act matters, such restrictions are no longer required
in order to insure compliance with the Securities Act. The Company will pay the
reasonable fees and disbursements of counsel for any holder of Restricted
Securities in connection with all opinions rendered pursuant to this section 8.
9. AVAILABILITY OF INFORMATION. The Company will cooperate with each
holder of any Restricted Securities in supplying such information as may be
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any
Restricted Securities. The Company will furnish to each holder of any Warrants,
promptly upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available generally by the
Company to its stockholders, and copies of all regular and periodic reports and
all registration statements and prospectuses filed by the Company with any
securities exchange or with the Commission.
10. INFORMATION REQUIRED BY RULE 144A. The Company will, upon the request
of the holder of this Warrant, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in order to
permit compliance with the information requirements of Rule 144A under the
Securities Act in connection with the resale of Warrants, except at such times
as the Company is subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act. For the purpose of this section 10, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act.
11. REGISTRATION RIGHTS AGREEMENT. The holder of this Warrant and the
holders of any securities issued or issuable upon the exercise hereof are each
entitled to the benefits of the Registration Rights Agreement, dated of even
date herewith, between the Company and the Purchaser.
12. OWNERSHIP, TRANSFER AND SUBSTITUTION OF WARRANTS.
12A. OWNERSHIP OF WARRANTS. Except as otherwise required by law, the
Company may treat the Person in whose name any Warrant is registered on the
register kept at the principal office of the Company as the owner and holder
thereof for all purposes, notwithstanding any notice to the contrary except
that, if and when any Warrant is properly assigned in blank, the Company, in its
discretion, may (but shall not be obligated to) treat the bearer thereof as the
owner of such
-16-
Warrant for all purposes, notwithstanding any notice to the Company to the
contrary. Subject to section 8, a Warrant, if properly assigned, may be
exercised by a new holder without first having a new Warrant issued.
12B. TRANSFER AND EXCHANGE OF WARRANTS. Upon the surrender of any
Warrant, properly endorsed, for registration of transfer or for exchange at the
principal office of the Company, the Company at its expense will (subject to
compliance with section 8, if applicable) execute and deliver to or upon the
order of the holder thereof a new Warrant or Warrants of like tenor, in the name
of such holder or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Original Common Stock called for on the face
or faces of the Warrant or Warrants so surrendered.
12C. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant
held by a Person other than the Purchaser or any institutional investor
reasonably satisfactory to the Company, upon delivery of its unsecured indemnity
reasonably satisfactory to the Company in form and amount or, in the case of any
such mutilation, upon surrender of such Warrant for cancellation at the
principal office of the Company, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
13. DEFINITIONS. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
"ACQUIRER'S COMMON STOCK" shall have the meaning specified in section
2I.
"ACQUIRING COMPANY" shall have the meaning specified in section 2I.
"ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares (including
treasury shares) of Common Stock issued or sold (or, pursuant to section 2C or
2D deemed to be issued) by the Company after the date hereof, whether or not
subsequently reacquired or retired by the Company, other than (a) shares of
Common Stock issued upon the exercise or partial exercise of this Warrant, (b)
shares of Common Stock issued to the holder of this Warrant pursuant to section
2B and (c) shares of Common Stock issued pursuant to the Warrant dated December
19, 1996 originally issued to HACL, Ltd. pursuant to that certain Stock Purchase
Agreement dated as of October 16, 1996, and (d) such additional number of shares
as may become issuable upon the exercise of any of the securities referred to in
the foregoing clause (c) by reason of adjustments required pursuant to
anti-dilution provisions applicable to such securities as in effect on the date
hereof, in order to reflect any subdivision or combination of Common Stock, by
reclassification or otherwise, or any dividend on Common Stock payable in Common
Stock.
"ANNOUNCEMENT DATE" shall have the meaning specified in section 2I.
-17-
"BUSINESS DAY" shall mean any day on which banks are open for business
in New York City (other than a Saturday, a Sunday or a legal holiday in the
States of New York or New Jersey), PROVIDED, that any reference to "days"
(unless Business Days are specified) shall mean calendar days.
"CASHLESS EXERCISE" shall have the meaning specified in section 1F.
"COMMISSION" shall mean the Securities and Exchange Commission or any
successor federal agency having similar powers.
"COMMON STOCK" shall mean the Original Common Stock, any stock into
which such stock shall have been converted or changed or any stock resulting
from any reclassification of such stock and all other stock of any class or
classes (however designated) of the Company the holders of which have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.
"COMPANY" shall mean Equity Compression Services Corporation, an
Oklahoma corporation.
"CONSUMMATION DATE" shall have the meaning specified in section 2I.
"CONVERTIBLE SECURITIES" shall mean any evidences of indebtedness,
shares of stock (other than Common Stock) or other securities directly or
indirectly convertible into or exchangeable for Additional Shares of Common
Stock.
"DIVIDEND RESTRICTIONS" shall mean the restrictions on the ability of
the Company to declare, order, pay or make dividends or other distributions, as
set forth in paragraph 6B of the Purchase Agreement dated as of the Initial Date
by and between the Company and the Purchaser, whether or not such Purchase
Agreement remains in effect.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXERCISE PRICE" shall have the meaning specified in section 1A.
"FAIR VALUE" shall mean with respect to any securities or other
property, the fair value thereof as of a date which is within 15 days of the
date as of which the determination is to be made (a) determined by agreement
between the Company and the Required Holders, or (b) if the Company and the
Required Holders fail to agree, determined jointly by an independent investment
banking firm retained by the Company and by an independent investment banking
firm retained by the Required Holders, either of which firms may be an
independent investment banking firm regularly retained by the Company, or (c) if
the Company or the Required Holders shall fail so to retain an independent
investment banking firm within ten Business Days of the retention of such a
-18-
firm by the Required Holders or the Company, as the case may be, determined
solely by the firm so retained, or (d) if the firms so retained by the Company
and by such holders shall be unable to reach a joint determination within 15
Business Days of the retention of the last firm so retained, determined by
another independent investment banking firm which is not a regular investment
banking firm of the Company chosen by the first two such firms.
"INITIAL DATE" shall have the meaning specified in section 2A.
"MARKET PRICE" shall mean on any date specified herein, (a) with
respect to Common Stock or to common stock (or equivalent equity interests) of
an Acquiring Person or its Parent, the amount per share equal to (i) the last
sale price of shares of Common Stock, regular way, or of shares of such common
stock (or equivalent equity interests) on such date or, if no such sale takes
place on such date, the average of the closing bid and asked prices thereof on
such date, in each case as officially reported on the principal national
securities exchange on which the same are then listed or admitted to trading, or
(ii) if no shares of Common Stock or no shares of such common stock (or
equivalent equity interests), as the case may be, are then listed or admitted to
trading on any national securities exchange, the last sale price of shares of
Common Stock, regular way, or of shares of such common stock (or equivalent
equity interests) on such date, in each case or, if no such sale takes place on
such date, the average of the reported closing bid and asked prices thereof on
such date as quoted in the Nasdaq National Market or Nasdaq SmallCap Market or,
if no shares of Common Stock or no shares of such common stock (or equivalent
equity interest), as the case may be, are then quoted in the Nasdaq National
Market or Nasdaq SmallCap Market, as published by the National Quotation Bureau,
Incorporated or any similar successor organization, and in either case as
reported by any member firm of the New York Stock Exchange selected by the
Company, or (iii) if no shares of Common Stock or no shares of such common stock
(or equivalent equity interests), as the case may be, are then listed or
admitted to trading on any national securities exchange or quoted or published
in the over-the-counter market, the higher of (x) the book value thereof as
determined by any firm of independent public accountants of recognized standing
selected by the Board of Directors of the Company, as of the last day of any
month ending within 60 days preceding the date as of which the determination is
to be made or (y) the Fair Value thereof; and (b) with respect to any other
securities, the Fair Value thereof.
"NOTES" shall have the meaning specified in the opening paragraphs of
this Warrant.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents or its Treasurer.
"OPTIONS" shall mean rights, options or warrants to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities.
"ORIGINAL COMMON STOCK" shall have the meaning specified in the
opening paragraphs of this Warrant.
-19-
"OTHER SECURITIES" shall mean any stock (other than Common Stock) and
any other securities of the Company or any other Person (corporate or otherwise)
which the holders of the Warrants at any time shall be entitled to receive, or
shall have received, upon the exercise of the Warrants, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have
been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to section 2I or otherwise.
"PARENT" shall have the meaning specified in section 2I.
"PERSON" shall mean and include an individual, a partnership, an
association, a joint venture, a corporation, a trust, a limited liability
company, an unincorporated organization and a government or any department or
agency thereof.
"PURCHASE AGREEMENT" shall have the meaning specified in the opening
paragraphs of this Warrant.
"PURCHASER" shall have the meaning specified in the opening paragraphs
of this Warrant.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement dated of even date herewith by and between the Company and the
Purchaser.
"REQUIRED HOLDERS" shall mean the holders of at least 66 2/3% of all
the Warrants at the time outstanding, determined on the basis of the number of
shares of Common Stock then purchasable upon the exercise of all Warrants then
outstanding.
"RESTRICTED SECURITIES" shall mean (a) any Warrants bearing the
applicable legend set forth in section 8 and (b) any shares of Original Common
Stock (or Other Securities) which have been issued upon the exercise of Warrants
and which are evidenced by a certificate or certificates bearing the applicable
legend set forth in such section, and (c) unless the context otherwise requires,
any shares of Original Common Stock (or other Securities) which are at the time
issuable upon the exercise of Warrants and which, when so issued, will be
evidenced by a certificate or certificates bearing the applicable legend set
forth in such section.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TRANSACTION" shall have the meaning specified in section 2I.
"WARRANTS" shall have the meaning specified in the opening paragraphs
of this Warrant.
-20-
14. REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate and that, to the fullest extent
permitted by law, such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise.
15. NOTICES. All notices and other communications under this Warrant
shall be in writing and shall be mailed by registered or certified mail, return
receipt requested, addressed (a) if to any holder of any Warrant or any holder
of any Common Stock (or Other Securities), at the registered address of such
holder as set forth in the applicable register kept at the principal office of
the Company, or (b) if to the Company, to the attention of its Chief Financial
Officer, at its principal office, provided that the exercise of any Warrant
shall be effected in the manner provided in section 1.
16. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. The agreements of the Company contained in this Warrant other than
those applicable solely to the Warrants and the holders thereof shall inure to
the benefit of and be enforceable by any holder or holders at the time of any
Common Stock (or Other Securities) issued upon the exercise of Warrants, whether
so expressed or not. This Warrant shall be construed and enforced in accordance
with and governed by the laws of the State of New York. The section headings in
this Warrant are for purposes of convenience only and shall not constitute a
part hereof.
EQUITY COMPRESSION SERVICES
CORPORATION
By:
------------------------------------------
Name:
Title:
-21-
FORM OF SUBSCRIPTION
(To be executed only upon exercise of Warrant)
To EQUITY COMPRESSION SERVICES CORPORATION
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for, and purchases thereunder, _____(1)
shares of Original Common Stock of EQUITY COMPRESSION SERVICES CORPORATION, [AND
HEREWITH MAKES PAYMENT OF $_______________ THEREFOR](2) [IN A CASHLESS EXERCISE
PURSUANT TO SECTION 1F OF THE WITHIN WARRANT](3) , and requests that the
certificates for such shares be issued in the name of, and delivered to
_________________________ whose address is _________________________.
Dated:
------------------------
---------------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant)
---------------------------------------------
(Street Address)
---------------------------------------------
(City) (State) (Zip Code)
-------------------------
1 Insert here the number of shares called for on the face of this Warrant
(or, in the case of a partial exercise, the portion thereof as to which
this Warrant is being exercised), in either case without making any
adjustment for additional Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment provisions
of this Warrant, may be delivered upon exercise. In the case of a partial
exercise, a new Warrant or Warrants will be issued and delivered,
representing the unexercised portion of this Warrant, to the holder
surrendering the same.
2 Use in connection with an exercise involving a delivery of funds to the
Company.
3 Use in connection with a Cashless Exercise.
-22-
FORM OF ASSIGNMENT
(To be executed only upon transfer of Warrant)
For value received, the undersigned registered holder of the within Warrant
hereby sells, assigns and transfers unto _________________________ the right
represented by such Warrant to purchase _________________________(1) shares of
Original Common Stock of EQUITY COMPRESSION SERVICES CORPORATION, to which such
Warrant relates, and; appoints _________________________ Attorney to make such
transfer on the books of EQUITY COMPRESSION SERVICES CORPORATION, maintained for
such purpose, with full power of substitution in the premises.
Dated:
----------------------
---------------------------------------------
(Signature must conform in all respects
to name of holder as specified on the
face of this Warrant)
---------------------------------------------
(Street Address)
---------------------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
---------------------------------
---------------------------------
1 Insert here the number of shares called for on the face of the within
Warrant (or, in the case of a partial assignment, the portion thereof as to
which this Warrant is being assigned), in either case without making any
adjustment for additional Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment provisions
of the within Warrant, may be delivered upon exercise. In the case of a
partial assignment, a new Warrant or Warrants will be issued and delivered,
representing the portion of the within Warrant not being assigned, to the
holder assigning the same.
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