EXHIBIT C
EXECUTION COPY
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WARRANT AGREEMENT OF
UTI ENERGY CORP.
400,000 SHARES
Dated as of April 11, 1997
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COMMON STOCK PURCHASE WARRANTS
WARRANT AGREEMENT dated as of April 11, 1997, between UTI Energy Corp., a
Delaware corporation (the "Company") and those persons signatory hereto
(collectively, the "Warrant Holders" or "Holders").
The Company proposes to issue Common Stock Purchase Warrants as hereinafter
described (collectively the "Warrants") to purchase an aggregate of up to
400,000 shares of its Common Stock, $0.001 par value per share (the shares of
Common Stock issuable on exercise of the Warrants being referred to herein as
the "Warrant Shares"), in favor of the Warrant Holder. Capitalized terms used
herein, if not otherwise defined, are defined in Section 8 hereof.
The Company and the Warrant Holder hereby agree as follows:
SECTION 1. TRANSFERABILITY; NOTICE OF CORPORATE ACTIONS;
FORM OF THE WARRANTS.
1.1 REGISTRATION. The Warrants shall be numbered and shall be
registered on the books of the Company maintained at the principal executive
offices of the Company ("the Warrant Register"). The Company shall be entitled
to treat the Holder of the Warrants, as reflected in the Warrant Register, as
the owner in fact thereof for all purposes and shall not be bound to recognize
any equitable or other claim to or interest in such Warrants on the part of any
other Person.
1.2 TRANSFERABILITY. The Warrants are freely transferable, subject
to applicable federal and state securities laws and similar laws and
restrictions. The Holder of any Warrants so transferred shall continue to be
bound by this Agreement. However, the denomination of any Warrant hereunder
shall be a Warrant exchangeable for a minimum of 1,000 Warrant Shares and shall
be in increments of 1,000 Warrant Shares.
1.3 TRANSFER-GENERAL. Subject to the terms hereof, the Warrants
shall be transferable on the Warrant Register upon delivery thereof to the
Company duly endorsed by the Holder or by his duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney, the original
power of attorney, duly approved, or a copy thereof, duly certified, shall be
deposited and remain with the Company. In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and to remain with the Company in its discretion. Upon any
registration of transfer, the Company shall countersign and deliver new Warrants
to the Persons entitled thereto. The Company may require the payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any such transfer.
1.4 NOTICES OF CORPORATE ACTIONS. Nothing contained in this
Warrant Agreement shall be construed as conferring upon the Holder of Warrants,
(as opposed to the holder of Warrant Shares), the right to vote or to receive
dividends or other distributions or to
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consent to or receive notice as a stockholder in respect of any meeting of
stockholders for the election of directors or any other matter, or any rights
whatsoever as a stockholder of the Company. However, in the event of: (a) any
taking by the Company of a record of the holders of the Common Stock for the
purpose of determining the holders thereof who are entitled to receive any
extraordinary dividend or distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of capital stock of any class or any other
securities or (b) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, the Company shall mail to each Warrant Holder in
accordance with the provisions of Section 13 hereof a notice specifying (i) the
date or expected date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right and (ii) the date or expected date on which any
such dissolution, liquidation or winding-up is to take place, the time, if any
such time is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for the securities or
Other Property deliverable upon such dissolution, liquidation or winding-up and
a description in reasonable detail of the transaction. Such notice shall be
mailed to the extent practicable at least ten (10) days (and at least thirty
(30) days if the transfer books for the Warrant Shares or other class of stock
purchasable upon the exercise of the Warrants shall be closed on the date that
notice is given), but not more than ninety (90) days prior to the date therein
specified. In the event that the Company at any time sends any notice to the
holders of its Common Stock, it shall concurrently send a copy of such notice to
each Warrant Holder.
1.5 FORM OF THE WARRANTS. The text of the Warrants and of the form
of election to purchase Warrant Shares (the "Purchase Form") shall be
substantially as set forth respectively in Exhibits A and B attached hereto.
The price per Warrant Share (the "Warrant Price") and the number of Warrant
Shares issuable upon exercise of each Warrant are subject to adjustment upon the
occurrence of certain events, all as hereinafter provided. The Warrants shall
be executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, President or one of its Vice Presidents, under its corporate
seal reproduced thereon, and attested by its Secretary or an Assistant
Secretary.
The Warrants shall be dated as of the date of countersignature thereof
by the Company either upon initial issuance or upon transfer.
1.6 RESTRICTIVE LEGEND. Except as otherwise provided in this
Section 1.6, each Warrant and each certificate for Warrants or Warrant Shares
and each certificate for Warrant Shares issued to any subsequent transferee of
any such certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAW. NO TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS (A) SUCH TRANSFER IS MADE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) THE
HOLDER OF THE SECURITIES PROPOSED TO BE TRANSFERRED SHALL HAVE DELIVERED TO
THE COMPANY AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO
THE EFFECT THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM THE REGIS TRATION
REQUIREMENTS OF THE ACT AND THAT THE EXERCISE OF THE WARRANTS AND PURCHASE
OF THE WARRANT SHARES WILL BE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE ACT AND SUCH HOLDER(S) SHALL HAVE DELIVERED TO THE COMPANY A
CERTIFICATE SETTING FORTH THE BASIS FOR APPLYING SUCH RULE TO THE PROPOSED
TRANSFER.
1.7 TERMINATION OF SECURITIES LAWS RESTRICTIONS. The legend
require ments of Section 1.6 shall terminate as to any particular Warrant or
Warrant Shares when the Company shall have received from the Holder thereof an
opinion of counsel reasonably acceptable to the Company to the effect that such
legend is not required in order to ensure compliance with the Securities Act.
Whenever the restrictions imposed by this Agreement shall terminate as to the
Warrants, as hereinabove provided, the Holder hereof shall be entitled to
receive from the Company, at the expense of the Company, a new Warrant or
Warrant Shares bearing no legends.
SECTION 2. TERM OF THE WARRANTS; EXERCISE OF THE WARRANTS; WARRANT PRICE,
ETC.
2.1 TERM OF THE WARRANTS. Subject to the terms of this Agreement,
the Holder shall have the right, which may be exercised from time to time, from
and through the dates set forth in the Warrants, to purchase from the Company
the number of fully paid and nonassessable Warrant Shares which the Holder may
at the time be entitled to purchase on exercise of such Warrant. If the last day
for the exercise of the Warrants shall not be a Business Day, then the Warrant
may be exercised on the next succeeding Business Day.
2.2 VESTING OF THE WARRANTS. The Warrants shall immediately vest
and may be exercised on or after the date hereof in accordance with the terms of
this Agreement and the Warrant Certificate.
2.3 CALL PROVISIONS. In the event that after the date that is six
months and one Business Day from the date of issuance of the Warrants, (i) the
Daily Market Price (as included in the definition of Current Market Price below)
of the Company's Common Stock shall equal or exceed $45.00 per Share for twenty
consecutive Business Days immediately
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prior to the commencement of the Notice Period (as defined below) and (ii) a
currently effective Registration Statement is available (and no request for a
reduction in the amount of shares able to be sold in an underwritten offering
has limited the ability of the Holders to sell Warrant Shares pursuant to such
Registration Statement) for all of the Warrant Shares during the entire Notice
Period and the Company is not otherwise in default of its obligations hereunder
or under the Registration Rights Agreement and (iii) all of the Warrant Shares
may be transferred in a public sale pursuant to a currently effective
registration statement filed under the Securities Act or in a transaction exempt
from the registration and prospectus delivery requirements of the Securities Act
under Section 4(1) and pursuant to Sections 1.2 and 1.3 hereof and (iv) there
has been a bona fide offer by the Company to purchase all of the Notes at 100%
or more of their face amount (plus accrued interest) and (v) the transfer books
for the Warrant Shares or other class of stock purchasable upon the exercise of
such Warrants are open on all Business Days, then the Company shall have the
right, for a purchase price of $0.25 per Warrant, to call the Warrants at the
completion of the Notice Period. The Warrants shall remain subject to prior
exercise by the Holders during the Notice Period, but not thereafter. If a
failure of the conditions contained in subsection (ii), (iii) or (v) shall occur
at any time during the Notice Period, then the Notice Period during which such
failure occured shall terminate immediately and the conditions contained in
subsections (i) through (v) shall again be required to be satisfied and a new
Notice Period shall be required to elapse before the Company shall have the
right to call the Warrants at the completion of such new Notice Period.
2.4 EXERCISE OF THE WARRANTS. The Warrants may be exercised upon
surrender to the Company, at its principal office, of the original certificate
evidencing the Warrant to be exercised, together with the Purchase Form, in the
form of Exhibit B hereto, on the reverse thereof duly filled in and signed, and
upon payment to the Company, of the Warrant Price (as defined in and determined
in accordance with the provisions of Sections 2 and 6 hereof), for the number of
Warrant Shares in respect of which such Warrant is then exercised. Upon partial
exercise, a Warrant Certificate for the unexercised portion shall be delivered
to the Holder. Payment of the aggregate Warrant Price shall be payable (i) in
cash, (ii) by certified or official bank check or wire transfer or (iii) by
delivery to the Company of the Company's 12% Senior Subordinated Notes due 2001
(the "Notes") which shall be valued for this purpose at the principal amount
thereof so delivered plus the accrued and unpaid interest thereon.
Subject to Section 3 hereof, upon such surrender of the Warrants and
payment of the Warrant Price as aforesaid, the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written order of the
Holder and in such name or names as the Holder may designate, a certificate or
certificates for the number of full Warrant Shares so purchased upon the
exercise of such Warrant, together with cash, as provided in Section 9 hereof,
in respect of any fractional Warrant Shares otherwise issuable upon such
surrender. Such certificate or certificates shall be deemed to have been issued
and any Person so designated to be named therein shall be deemed to have become
a holder of record of such Warrant Shares as of the date of the surrender of
such Warrant and payment of the Warrant Price, as aforesaid; provided, however,
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that if, at the date of surrender of such Warrant and
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payment of such Warrant Price, the transfer books for the Warrant Shares or
other class of stock purchasable upon the exercise of such Warrant shall be
closed, the certificates for the Warrant Shares in respect of which such Warrant
are then exercised shall be issuable as of the date on which such books shall
next be opened (whether before or after the Expiration Date or the Notice
Period) and until such date the Company shall be under no duty to deliver any
certificate for such Warrant Shares; provided, further, that the transfer books
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of record, unless otherwise required by law, shall not be closed at any one time
for a period longer than 20 calendar days and shall not be closed if a notice
pursuant to Section 1.4 has been sent to the Holders.
2.5 WARRANT PRICE. The price per share at which Warrant Shares
shall be purchasable upon exercise of the Warrant (the "Warrant Price") shall be
$32.50, subject to adjustment pursuant to Section 6 hereof.
SECTION 3. PAYMENT OF TAXES AND INDEMNIFICATION.
3.1 PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the issuance of Warrants and Warrant Shares upon
the exercise of the Warrants.
3.2 INDEMNIFICATION. Warrant Holder hereby agrees to indemnify and
hold the Company harmless from any and all taxes on the Warrant Holder that may
result from the issuance of the Warrants or any subsequent exercise of the
Warrants and issuance of the Warrant Shares.
SECTION 4. MUTILATED OR MISSING WARRANTS. In case the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrants,
or in lieu of and substitution for the Warrants lost, stolen or destroyed, a new
certificate of like tenor and representing an equivalent right or interest; but
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of such Warrant certificate and indemnity or bond, if
requested, also reasonably satisfactory to it. An applicant for such substitute
Warrant certificate shall also comply with such other reasonable regulations and
pay such other reasonable charges as the Company may prescribe.
SECTION 5. RESERVATION OF WARRANT SHARES.
5.1 RESERVATION OF WARRANT SHARES. There have been reserved, and
the Company shall at all times keep reserved, out of its authorized shares of
Common Stock, a number of shares of Common Stock sufficient to provide for the
exercise of the rights of purchase represented by the outstanding Warrants. The
Company covenants that all Warrant Shares which may be issued upon exercise of
Warrants will, upon issue, be fully paid, nonassessable, free of preemptive
rights and free from all taxes, liens, charges and security interests with
respect to the issue thereof. The Warrants surrendered in the exercise of the
rights thereby evidenced shall be canceled by the Company.
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5.2 CANCELLATION OF THE WARRANTS. In the event the Company shall
purchase or otherwise acquire the Warrants, the same shall be canceled and
retired.
SECTION 6. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES. The
number and kind of securities purchasable upon the exercise of the Warrants and
the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter defined.
6.1 STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time
the Company shall:
(i) pay a dividend in, or make a distribution of, additional shares
of Common Stock to the holders of all the Common Stock Outstanding,
(ii) subdivide its shares of Common Stock Outstanding into a larger
number of shares of such Common Stock, or
(iii) combine its shares of Common Stock Outstanding into a smaller
number of shares of such Common Stock,
then the Exercise Price shall be adjusted to equal the product of the Exercise
Price in effect immediately prior to such event multiplied by a fraction the
numerator of which is equal to the number of shares of Common Stock Outstanding
immediately prior to the adjustment and the denominator of which is equal to the
number of shares of Common Stock Outstanding immediately after such adjustment.
6.2. RIGHTS OFFERINGS OF COMMON STOCK. (a) In case the Company shall
issue rights, options or warrants to all holders of its Common Stock entitling
them to subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price per share (determined as provided below) of
the Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants, the Exercise Price in
effect at the opening of business on the day following the date fixed for such
determination shall be decreased by multiplying such Exercise Price by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock which the aggregate of the offering
price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such Current Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such decrease to become
effective immediately after the opening of business on the day following the
date fixed for such determination. To the extent that shares of Common Stock are
not delivered after the expiration of such rights, options or warrants, the
Exercise Price shall be readjusted (but only with regard to the Warrants
exercised after such expiration) to the Exercise Price that would be in effect
had the adjustment made upon the issuance of such rights, options or warrants
been made upon the basis of delivery of only the
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number of shares of Common Stock actually issued. For the purposes of this
provision, the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Company but shall include shares
issuable in respect of script certificates issued in lieu of fractions of shares
of Common Stock. The Company will not issue any rights, options or warrants in
respect of shares of Common Stock held in the treasury of the Company. The
foregoing provisions of this Section 6.2 shall not apply to any rights issued to
holders of the Company's Common Stock that are not currently exercisable and
shall not apply until such time that such rights become exercisable.
(b) The provisions of this Section 6.2 shall not apply to any
issuance of Common Stock for which an adjustment is provided for under Section
6.1.
6.3. OTHER DISTRIBUTIONS. In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock evidences of its
indebtedness, shares of any class of capital stock, or other property (including
securities, but excluding (i) any rights, options or warrants referred to in
Section 6.2, (ii) any dividend or distribution paid exclusively in cash, (iii)
any dividend or distribution referred to in Section 6.1, and (iv) any merger or
consolidation or other transactions to which Section 6.5 applies), the Exercise
Price shall be reduced by multiplying the Exercise Price in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on the
date fixed for such determination (the "Reference Date") less the then fair
market value (as determined in good faith by the Board of Directors whose
determination shall be conclusive absent manifest error) on the Reference Date
of the portion assets, shares or evidences of indebtedness of the Company so
distributed applicable to one share of Common Stock and the denominator shall be
the Current Market Price per share of the Common Stock on the Reference Date,
such adjustment to become effective immediately prior to the opening of business
on the day following the Reference Date; provided however, that if such dividend
or distribution is ultimately not paid, the Exercise Price shall be
retroactively readjusted as provided in Section 6.4
6.4. ADJUSTMENT OF NUMBER OF SHARES PURCHASABLE. Upon any
adjustment of the Exercise Price as provided in Section 6 hereof, the Warrant
Holder shall thereafter be entitled to purchase upon the exercise of the
Warrants, at the Exercise Price resulting from such adjustment, the number of
shares of Common Stock (calculated to the nearest 1/100th of a share) obtained
by multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of shares of Common Stock issuable on the exercise hereof
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment.
6.5. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is any change whatsoever in, or distribution with respect to, the Outstanding
Common Stock of the Company), or sell, transfer or otherwise dispose of
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all or substantially all of its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, (i) shares of common stock of
the successor or acquiring corporation or of the Company (if it is the surviving
corporation) or (ii) any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription or purchase
rights) in addition to or in lieu of common stock of the successor or acquiring
corporation ("Other Property") are to be received by or distributed to the
holders of Common Stock of the Company who are holders immediately prior to such
transaction, then the Warrant Holder shall have the right thereafter to receive,
upon exercise of the Warrants, the number of shares of common stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of
assets by a holder of the number of shares of Common Stock for which the
Warrants are exercisable immediately prior to such event. In such event, the
aggregate Exercise Price otherwise payable for the shares of Common Stock
issuable upon exercise of the Warrants shall be allocated among the shares of
common stock and Other Property receivable as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets in proportion
to the respective fair market values of such shares of common stock and Other
Property as determined in good faith by the Board of Directors of the Company
which determination shall be conclusive absent manifest error. In case of any
such reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Agreement to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be reasonably deemed appropriate (as determined by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of any shares of the common stock of such successor or acquiring
corporation for which the Warrants thus become exercisable, which modifications
shall be as equivalent as practicable to the adjustments provided for in this
Section 6. For purposes of this Section 6.5, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class that
is not preferred as to dividends or assets over any other class of stock of such
corporation and that is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities that are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 6.5 shall similarly apply to successive
reorganizations, reclassification, mergers, consolidations or disposition of
assets.
6.6. DETERMINATION OF CONSIDERATION. For purposes of Sections 6.1,
6.2, 6.3 and 6.5 hereof, the consideration received and/or receivable by the
Company in connection with the issuance, sale, grant or exercise of additional
shares of Common Stock, Stock Purchase Rights or Convertible Securities,
irrespective of the accounting treatment of such consideration, shall be valued
as follows:
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(1) SECURITIES OR OTHER PROPERTY. In the case of securities or other
property, the fair market value thereof as of the date immediately preceding
such issuance, sale, grant or exercise as determined in good faith by the Board
of Directors of the Company which determination shall be conclusive absent
manifest error.
(2) DIVIDENDS IN SECURITIES In case the Company shall declare a
dividend or make any other distribution upon any stock of the Company payable in
either case in Common Stock or Convertible Securities, such 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.
(3) MERGER, CONSOLIDATION OR SALE OF ASSETS. In case any shares of
Common Stock, Stock Purchase Rights 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 therefor shall be deemed to
be the fair value of such portion of the assets and business of the non-
surviving corporation attributable to such Common Stock, Stock Purchase Rights
or Convertible Securities, as is determined in good faith by the Company's Board
of Directors which determination shall be conclusive absent manifest error.
6.7. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION.
The following provisions shall be applicable to the adjustments provided for
pursuant to this Section 6:
(a) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by this
Section 6 shall be made whenever and as often as any specified event requiring
such an adjust ment shall occur. For the purpose of any such adjustment, any
specified event shall be deemed to have occurred at the close of business on the
date of its occurrence.
(b) FRACTIONAL INTERESTS. In computing adjustments under this
Section 6, fractional interests in Common Stock shall be taken into account to
the nearest 1/100th of a share.
(c) WHEN ADJUSTMENT NOT REQUIRED. If the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
a dividend or distribution to which the provisions of Section 6 would apply, but
shall, thereafter and before the distribution to stockholders thereof, legally
abandon its plan to pay or deliver such dividend or distribution, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(d) MAXIMUM EXERCISE PRICE. Except as provided in Section 6.1 above,
at no time shall the Exercise Price per share of Common Stock exceed the amount
set forth in this Agreement.
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(e) CERTAIN LIMITATIONS. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction that, by reason
of any adjustment under Section 6 above, would cause the Exercise Price to be
less than the par value of the Common Stock, if any, unless the Company first
reduces the par value of the Common Stock to be less than the Exercise Price
that would result from such transaction.
(f) NOTICE OF ADJUSTMENTS. Whenever the number of shares of Common
Stock for which the Warrants are exercisable or the Exercise Price shall be
adjusted pursuant to this Section 6, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated, specifying the number of shares of
Common Stock for which the Warrants are exercisable and (if such adjustment was
made pursuant to Section 6.3) describing the number and kind of any other shares
of stock or Other Property for which the Warrants are exercisable, and any
related change in the Exercise Price, after giving effect to such adjustment or
change. The Company shall within a reasonable amount of time cause a signed copy
of such certificate to be delivered to each Holder in accordance with Section
13. The Company shall keep at its principal office copies of all such
certificates and cause the same to be available for inspection at said office
during normal business hours by any Holder or any prospective transferee of any
Warrants designated by a Holder thereof.
6.8 DISPUTES. In the event that there is any dispute as to the
computation of the price or the number of Warrant Shares required to be issued
upon exercise of Warrants or any other disputed calculation or adjustment under
Section 6 hereof, the Warrant Holders and the Company will retain an independent
and nationally recognized accounting firm to conduct at the expense of the
Company a special procedures engagement of the computations pursuant to the
terms hereof involved in such dispute, including the financial statements or
other information upon which such computations were based. The determination of
such nationally recognized accounting firm shall, in the absence of manifest
error, be binding upon the Warrant Holders and the Company. If there shall be a
dispute as to the selection of such nationally recognized accounting firm, such
firm shall be appointed by the American Institute of Certified Public
Accountants, if willing, otherwise the American Arbitration Association, upon
application by the Company or any holder or holders of at least 25% of the
outstanding Warrants with notice to the others.
SECTION 7. REGISTRATION.
(a) COMPANY REGISTRATION. The Company shall register the
Warrant Shares as may be required from time to time under the Registration
Rights Agreement under the Securities Act, and the Company shall, at such time,
promptly give all holders of Registrable Securities written notice of such
registration.
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(b) EXPENSES. The Company shall pay all Registration Expenses
incurred in connection with the registration of Registrable Securities pursuant
to the Registration Rights Agreement.
SECTION 8. DEFINITIONS.
As used in this Warrant Agreement, the following terms shall have the
following respective meanings:
BUSINESS DAY shall mean any day that is not a Saturday or Sunday or a
day on which banks are required or permitted to be closed in the State of
California.
COMMISSION means the Securities and Exchange Commission.
COMMON STOCK means (except where the context indicates that it means
the Common Stock of another corporation such as a Constituent Corporation) the
Common Stock of the Company, par value $0.001 per share, as constituted on its
original date of issue by the Company, and any capital stock into which such
Common Stock may thereafter be changed, and shall also include (i) capital stock
of the Company of any other class (regardless of how denominated) issued to the
holders of shares of any Common Stock upon any reclassification thereof which is
also not preferred as to dividends or liquidation over any other class of stock
of the Company and which is not subject to redemption and (ii) shares of common
stock of any successor or acquiring corporation (as defined in Section 6.5
hereof) received by or distributed to the holders of Common Stock of the Company
in the circumstances contemplated by Section 6.5 hereof.
CONVERTIBLE SECURITIES shall mean evidences of indebtedness, shares of
stock or other securities that are convertible into or exchangeable for, with or
without payment of additional consideration in cash or property, shares of
Common Stock, either immediately or upon the occurrence of a specified date or a
specified event.
CURRENT MARKET PRICE shall mean as of any specified date the average
of the Daily Market Prices of the Common Stock of the Company for the shorter of
(x) the twenty (20) consecutive Business Days immediately preceding such date or
(y) the period commencing on the Business Day next following the first public
announcement of any event giving rise to an adjustment of the Exercise Price
pursuant to Section 6 and ending on such specified date. The "Daily Market
Price" for each such Business Day shall be: (i) if the Common Stock is then
listed on a national securities exchange or is listed on NASDAQ and is
designated as a National Market System security, the last sale price, regular
way, on such day on the principal stock exchange or market system on which such
Common Stock is then listed or admitted to trading, or, if no such sale takes
place on such day, the average of the closing bid and asked prices for the
Common Stock on such day as reported on such stock exchange or market system or
(ii) if the Common Stock is not then listed or admitted to trading on any
national securities exchange or designated as a National Market System security
on NASDAQ but is traded over-the-counter, the
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average of the closing bid and asked prices for the Common Stock as reported on
NASDAQ or the Electronic Bulletin Board or in the National Daily Quotation
------------------------
Sheets, as applicable.
------
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended,
or any successor act, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
EXERCISE PRICE shall mean, in respect of a share of Common Stock at
any date herein specified, the initial Exercise Price set forth in this
Agreement as adjusted from time to time pursuant to Section 6 hereof.
EXPIRATION DATE means the seventh anniversary of the date
of this Agreement.
FAIR VALUE means, per share of Common Stock as of any specified date,
(i) if the Common Stock is publicly traded on such date, the Current Market
Price per share or (ii) if the Common Stock is not publicly traded on such date,
the fair market value per share of Common Stock as determined in good faith by
the Board of Directors of the Company which determination shall be conclusive
absent manifest error, and set forth in a written notice to each Holder.
NOTICE PERIOD shall mean the period of ninety (90) days commencing
upon the delivery to the Holders of written notice of the Company's intention to
call the Warrants pursuant to Section 2.3, provided that conditions (i), (ii),
(iii) ,(iv) and (v) of Section 2.3 have been satisfied and that such conditions
(ii), (iii) and (v) continue to have been satisfied for such 90 days.
OUTSTANDING shall mean, when used with reference to Common Stock, 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 or any Subsidiary thereof, and shall include all shares
issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.
ORIGINAL ISSUE DATE shall mean the date on which the Warrants were
issued, as set forth on Exhibit B hereto.
PERSON shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
REGISTRABLE SECURITIES shall have the meaning specified for such term
in the Registration Rights Agreement.
REGISTRATION EXPENSES shall have the meaning specified for such term
in the Registration Rights Agreement.
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REGISTRATION RIGHTS means the right of a Holder to have its
Registrable Securities registered pursuant to Section 7 of this Agreement and
pursuant to the Registration Rights Agreement.
REGISTRATION RIGHTS AGREEMENT means the Agreement dated as of April
11, 1997 between the Company and the Holders.
STOCK PURCHASE RIGHTS shall mean any options, warrants or other
securities or rights to subscribe to or exercisable for the purchase of shares
of Common Stock or Convertible Securities, whether or not immediately
exercisable.
SECURITIES ACT means the Securities Act of 1933, as amended, or any
successor act thereto, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
SECTION 9. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Warrant Shares on the exercise of the Warrants. If any fraction
of a Warrant Share would, except for the provisions of this Section 9, be
issuable on the exercise of the Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the closing price for one share of
the Common Stock on the trading day immediately preceding the date the Warrants
are presented for exercise, multiplied by such fraction.
SECTION 10. NO RIGHTS AS STOCKHOLDER; NOTICES TO HOLDER. Nothing contained
in this Agreement or in the Warrants shall be construed as conferring upon the
Holder or his permitted transferees the right to vote or to receive dividends or
to consent to or receive notice as a stockholder in respect of any meeting of
stockholders for the election of directors of the Company or any other matter,
or any rights whatsoever as a stockholder of the Company.
SECTION 11. INSPECTION OF WARRANT AGREEMENT. The Company shall keep copies
of this Agreement and any notices given or received hereunder available for
inspection by the Holder during normal business hours at its principal office.
SECTION 12. FINANCIAL AND BUSINESS INFORMATION. Until the Expiration Date,
the Company shall deliver to each Warrant Holder, copies of all public financial
statements, reports and filings, notices and proxy statements sent or made
available by the Company to the holders of any class of its securities generally
at the time that such documents are generally made available to the Company's
stockholders.
SECTION 13. NOTICES. Any notice pursuant to this Agreement by any Holder
to the Company, shall be in writing and shall be mailed first class, postage
prepaid, or delivered to the Company at its office at 000 Xxxxx Xxxx Xx., Xxx
000, Xxxxx, XX 00000
Each party hereto may from time to time change the address to which
notices to it are to be delivered or mailed hereunder by notice in writing to
the other party. Any
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notice mailed pursuant to this Agreement by the Company to the Holder shall be
in writing and shall be mailed first class, postage prepaid, or delivered to the
Holder at his address on the transfer books and a copy thereof shall be
delivered to Canpartners Incorporated IV, LLC c/o Canyon Partners Incorporated,
0000 Xxxxxxxx Xxxxxxxxx Xxxxx 000, Xxxxxxx Xxxxx, XX 00000, attention: Xxxxx
Xxxxxx, Telecopy No. (000) 000-0000.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO AGREE TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
SECTION 15. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not be inconsistent with the provisions
of the Warrant and which shall not adversely affect the interests of the Holder.
SECTION 16. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Holders of the Warrants shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 17. MERGER OR CONSOLIDATION OF THE COMPANY. So long as the
Warrants remain outstanding, the Company will not merge or consolidate with or
into, or sell, transfer or lease all or substantially all of its property to,
any other corporation unless the successor or purchasing corporation, as the
case may be (if not the Company), shall expressly assume, by supplemental
agreement, the due and punctual performance and observance of each and every
covenant and condition of this Agreement to be performed and observed by the
Company.
SECTION 18. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company and the Holders of the
Warrants, any legal or equitable right, remedy or claim under this Agreement,
but this Agreement shall be for the sole and exclusive benefit of the Company
and the Holders.
SECTION 19. CAPTIONS. The captions of the Sections of this Agreement have
been inserted for convenience only and shall have no substantive effect.
SECTION 20. COUNTERPARTS. This Agreement may be executed in any number of
counterparts each of which so executed shall be deemed to be an original; but
such counterparts together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed as of the day, month and year first above written.
UTI ENERGY CORP., a Delaware corporation
By:
--------------------------------
Title:
--------------------------------
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Canpartners Incorporated IV, LLC,
a California limited liability company
By: Canpartners Incorporated,
a California corporation,
its managing member
By:
--------------------------------
Name:
Title
