WARRANT
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.
This Warrant is subject to surrender by the Purchaser to the Company and
cancellation from the date hereof through JUNE 30, 2001 pursuant to the terms of
sECTION 3.3 (Call Option) OF THE SUBORDINATED NOTE RESTRUCTURING AGREEMENT DATED
AS OF DECEMBER 28, 2000 BETWEEN THE COMPANY AND THE PURCHASER and is subject to
further restrictions on transfer as set forth in Section 12.18 therein.
BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC.
Common Stock Purchase Warrant
3,165,396 shares of Common Stock December 28, 2000
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BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC. (the
"Company"), a Delaware corporation, for value received, hereby certifies that
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (the "Purchaser") or its registered
assigns is entitled to purchase from the Company 3,165,396 duly authorized,
validly issued, fully paid and nonassessable shares of the Company's common
stock, par value $0.00001 per share (the "Original Common Stock"), at an initial
exercise price per share of $0.625, at any time or from time to time beginning
September 3, 2001, and prior to 5:00 p.m., New York City time, on the later of
(i) July 23, 2008 and (ii) six months after the date the Replacement Notes are
repaid in full, all subject to the terms, conditions and adjustments set forth
below in this Warrant.
This Warrant (this "Warrant") is hereby issued in connection
with the restructuring of the Company's obligations with the Purchaser pursuant
to the Subordinated Note and Warrant Purchase Agreement dated as of July 23,
1998 (the "Original Agreement") between the Company and the Purchaser. Pursuant
to the Restructuring Agreement (as defined below), the Purchaser will tender the
11.28% Senior Subordinated Notes due July 23, 2006 and Common Stock Purchase
Warrants, all issued pursuant to the Original Agreement, in exchange for, among
other things, this Warrant, an additional warrant (collectively referred to with
this Warrant as the "Warrants") for the purchase of 8,800,000 shares of Common
Stock on substantially the same terms as contained herein, shares of preferred
stock of the Company ("Preferred Stock") and the Replacement Notes. The term
"Replacement Notes" as used herein shall include each note delivered pursuant to
any provision of the Restructuring Agreement and each note delivered in
substitution or exchange for any such note pursuant to any such provision. The
term "Restructuring Agreement" as used herein shall mean the Subordinated Note
Restructuring Agreement dated as of December 28, 2000 between the Company and
the Purchaser. Certain capitalized terms used in this Warrant are defined herein
in Section 13.
1. Exercise of Warrant.
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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 September 3, 2001, and prior to 5:00
p.m., New York City time, on the later of (a) July 23, 2008 and (b) six
months after the date the Replacement Notes are repaid in full, 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, by certified or official
bank check payable to the order of the Company, or by tender of any of
the Replacement Notes or shares of Preferred Stock, 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) the Exercise Price. 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 the Initial Exercise Price and (b) the
denominator is the Exercise Price in effect on the date of such
exercise. The "Exercise Price" shall initially be the Initial Exercise
Price 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. For purposes of this Section 1A, the amount
credited to the Exercise Price (i) upon the tender of Replacement
Notes, shall be the aggregate outstanding principal amount of such
Replacement Notes, together with all accrued and unpaid interest owing
thereon, and (ii) upon the tender of shares of Preferred Stock, shall
be the number of shares tendered multiplied by the Adjusted Face Value
of such shares, together with any accrued and unpaid dividends owing
thereon.
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 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 2A) 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.
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 the
date hereof, 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 but excluding Additional Shares of Common
Stock issued upon the exercise of Employee Options) 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,
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 (i) the number of
shares of Common Stock outstanding immediately prior to such
issue or sale plus (ii) 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.
For the purposes of this Section 2A, (x) 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 (y) treasury
shares shall not be deemed to be outstanding.
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 in respect of Common Stock or Other Securities
(including, without limitation, any distribution of other or
additional stock or other securities or property or Options by
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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 then, and in each
such case, the Company shall hold in trust, for the benefit of
the holder of this Warrant, commencing on the date 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.
The Company will pay over to the holder of this Warrant, on
any date this Warrant is exercised, an amount of property held
in such trust that is equal to the total amount of property
held in such trust on such date multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
issued pursuant to such exercise and the denominator of which
is the total number of shares of Common Stock the holder of
this Warrant was permitted to purchase upon the exercise
hereof immediately prior to such exercise. Upon the expiration
of this Warrant (and compliance with the immediately preceding
sentence) such trust will be canceled and the property held in
such trust shall be returned to the Company.
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 (i) if such Options constitute Employee Options or (ii)
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 of the
Convertible Securities so purchased if such
Convertible Securities were not convertible into or
exchangeable for Additional Shares of Common Stock,
and
(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)
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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 at
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 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 of
such consideration, then such consideration 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
6
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.
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.
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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 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 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 "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) 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, either:
(a) shares of the Acquirer's Common Stock at an
Exercise Price per share equal to 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 (subject to adjustments from and after the
Consummation Date as nearly equivalent as possible to the
adjustments provided for in this Warrant); or
(b) at the election of the holder of this Warrant
pursuant to notice given to the Company within six months
after 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
8
(c) 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, 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 Value of such exercise rights, such Fair 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.
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 or upon the conversion of shares of the
Company's Series F Convertible Senior Preferred Stock and Series G
Cumulative Convertible Preferred Stock.
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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;
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
10
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 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 or articles of incorporation
and available for the purpose of issue upon such conversion, and (d)
will not issue any capital stock of any class which has the right to
more than one vote per share or 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
11
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 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 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. (a) 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
12
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, as amended, and may not be transferred in the absence
of such registration or an exemption therefrom under such
Act."
(b) Except as otherwise permitted by this Section 8, until
June 30, 2001, 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 is subject to surrender by the Purchaser to the
Company and cancellation from the date hereof through June 30,
2001 pursuant to the terms of Section 3.3 (Call Option) of the
Subordinated Note Restructuring Agreement dated as of December
28, 2000 between the Company and the Purchaser."
(c) 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, as amended, and
may not be transferred in the absence of such registration or
an exemption therefrom under such Act."
(d) 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 (i) effectively registered under
the Securities Act and disposed of in accordance with the registration
statement covering such Restricted Securities, (ii) sold pursuant to
Rule 144 or any comparable rule under the Securities Act, (iii)
transferred to a limited number of "qualified institutional buyers" (as
such term is defined in Rule 144A under the Securities Act), 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 (iv) when, in the opinion (which opinion must
be reasonably satisfactory to the Company and its securities counsel)
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
13
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; Participation 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 and the Participation
Rights Agreement.
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 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.
14
"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 (i) shares of Common Stock issued upon the
exercise or partial exercise of the Warrants, and (ii) shares of Common
Stock issued upon the exercise or partial exercise of the Existing
Warrants and the Existing Options.
"Adjusted Face Value" shall mean, for any share of
Preferred Stock, the face value ($100.00) denominated thereon, subject
to adjustment for stock splits, stock dividends, reorganization,
reclassification or similar events.
"Announcement Date" shall have the meaning specified
in Section 2I.
"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.
"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 Boots & Xxxxx International Well
Control, Inc.
"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.
"Employee Options" shall mean Options that are
granted after the date hereof to employees of the Company and its
Subsidiaries for not more than 2,000,000 shares of Common Stock in the
aggregate (appropriately adjusted for stock splits, reverse stock
splits, reclassifications and the like and with shares in respect of
Options that have expired without having been exercised being excluded
from the calculation of such aggregate number of shares from and after
such expiration) and that have an exercise price that is not less than
90% of the Market Price in effect on the date of and immediately prior
to such grant.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Exercise Price" shall have the meaning specified in
Section 1A.
15
"Existing Options" shall mean the Common Stock
purchase options outstanding on the date hereof and disclosed in
Section 9.9 of the Restructuring Agreement.
"Existing Warrants" shall mean the Common Stock
purchase warrants outstanding on the date hereof and disclosed in
Section 9.9 of the Restructuring Agreement.
"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 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 Exercise Price" shall mean the $0.625 per
share Exercise Price specified in the introductory paragraph hereof.
"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, 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, 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.
"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.
16
"Options" shall mean rights, options or warrants,
other than Existing Options and Existing Warrants, to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock
or Convertible Securities.
"Original Agreement" shall have the meaning specified
in the opening paragraphs of this Warrant.
"Original Common Stock" shall have the meaning
specified in the opening paragraphs of this Warrant.
"Original Warrant" shall have the meaning specified
in the opening paragraphs of this Warrant.
"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.
"Participation Rights Agreement" shall mean that
certain Participation Rights Agreement dated July 23, 1998 by and among
the Purchaser, the Company and certain holders of the Company's Common
Stock who are parties thereto, as amended on the date hereof.
"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.
"Preferred Stock" 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 July 23, 1998 by and between the
Company and the Purchaser, as amended on the date hereof.
"Restructuring Agreement" shall have the meaning
specified in the opening paragraphs of this Warrant.
"Replacement Notes" shall have the meaning specified
in the opening paragraphs of this Warrant.
"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.
17
"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.
"Warrant" shall have the meaning specified in the
opening paragraphs of this Warrant.
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 or other communications provided for
hereunder shall be in writing and sent by first class mail or
nationwide overnight delivery service (with charges prepaid) and (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, at 000 Xxxx Xxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000, Attention: Chief Financial Officer, or at
such other address, or to the attention of such other officer, as the
Company shall have furnished to each holder of Warrants at the time
outstanding; provided, that the exercise of any Warrant shall be
effected only 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.
BOOTS & XXXXX INTERNATIONAL
WELL CONTROL, INC.
By:/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
18
FORM OF SUBSCRIPTION
--------------------
(To be executed only upon exercise of Warrant)
To BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC.
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for and purchases thereunder, ___________ (1)
shares of Original Common Stock of BOOTS & XXXXX INTERNATIONAL WELL CONTROL,
INC., and herewith makes payment of $____________ therefor , 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.
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 ______________________(2) shares
of Original Common Stock of BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC., to
which such Warrant relates, and; appoints ________________________ Attorney to
make such transfer on the books of BOOTS & XXXXX INTERNATIONAL WELL CONTROL,
INC., 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:
___________________________
----------
2 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.
WARRANT
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.
This Warrant is subject to surrender by the Purchaser to the Company and
cancellation from the date hereof through JUNE 30, 2001 pursuant to the terms of
sECTION 3.3 (Call Option) OF THE SUBORDINATED NOTE RESTRUCTURING AGREEMENT DATED
AS OF DECEMBER 28, 2000 BETWEEN THE COMPANY AND THE PURCHASER AND IS SUBJECT TO
FURTHER RESTRICTIONS ON TRANSFER AS SET FORTH IN SECTION 12.18 THEREIN.
BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC.
Common Stock Purchase Warrant
8,800,000 shares of Common Stock December 28, 2000
-----------------
BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC. (the
"Company"), a Delaware corporation, for value received, hereby certifies that
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (the "Purchaser") or its registered
assigns is entitled to purchase from the Company 8,800,000 duly authorized,
validly issued, fully paid and nonassessable shares of the Company's common
stock, par value $0.00001 per share (the "Original Common Stock"), at an initial
exercise price per share of $0.625, at any time or from time to time beginning
September 3, 2001, and prior to 5:00 p.m., New York City time, on the later of
(i) July 23, 2008 and (ii) six months after the date the Replacement Notes are
repaid in full, all subject to the terms, conditions and adjustments set forth
below in this Warrant.
This Warrant (this "Warrant") is hereby issued in connection
with the restructuring of the Company's obligations with the Purchaser pursuant
to the Subordinated Note and Warrant Purchase Agreement dated as of July 23,
1998 (the "Original Agreement") between the Company and the Purchaser. Pursuant
to the Restructuring Agreement (as defined below), the Purchaser will tender the
11.28% Senior Subordinated Notes due July 23, 2006 and Common Stock Purchase
Warrants, all issued pursuant to the Original Agreement, in exchange for, among
other things, this Warrant, an additional warrant (collectively referred to with
this Warrant as the "Warrants") for the purchase of 3,165,396 shares of Common
Stock on substantially the same terms as contained herein, shares of preferred
stock of the Company ("Preferred Stock") and the Replacement Notes. The term
"Replacement Notes" as used herein shall include each note delivered pursuant to
any provision of the Restructuring Agreement and each note delivered in
substitution or exchange for any such note pursuant to any such provision. The
term "Restructuring Agreement" as used herein shall mean the Subordinated Note
Restructuring Agreement dated as of December 28, 2000 between the Company and
the Purchaser. Certain capitalized terms used in this Warrant are defined herein
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 September 3, 2001, and prior to 5:00
p.m., New York City time, on the later of (a) July 23, 2008 and (b) six
months after the date the Replacement Notes are repaid in full, 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, by certified or official
bank check payable to the order of the Company, or by tender of any of
the Replacement Notes or shares of Preferred Stock, 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) the Exercise Price. 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 the Initial Exercise Price and (b) the
denominator is the Exercise Price in effect on the date of such
exercise. The "Exercise Price" shall initially be the Initial Exercise
Price 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. For purposes of this Section 1A, the amount
credited to the Exercise Price (i) upon the tender of Replacement
Notes, shall be the aggregate outstanding principal amount of such
Replacement Notes, together with all accrued and unpaid interest owing
thereon, and (ii) upon the tender of shares of Preferred Stock, shall
be the number of shares tendered multiplied by the Adjusted Face Value
of such shares, together with any accrued and unpaid dividends owing
thereon.
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
2
(b) in case such exercise is in part only, a new
Warrant or Warrants of like tenor, specifying 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 2A) 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.
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 the date hereof, 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 but excluding Additional
Shares of Common Stock issued upon exercise of Employee Options) 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, 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 (i) the number of
shares of Common Stock outstanding immediately prior to such
issue or sale plus (ii) 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.
For the purposes of this Section 2A, (x) 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 (y) treasury
shares shall not be deemed to be outstanding.
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 in respect of Common Stock or Other Securities
(including, without limitation, any distribution of other or
additional stock or other securities or property or Options by
3
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 then, and in each
such case, the Company shall hold in trust, for the benefit of
the holder of this Warrant, commencing on the date 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.
The Company will pay over to the holder of this Warrant, on
any date this Warrant is exercised, an amount of property held
in such trust that is equal to the total amount of property
held in such trust on such date multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
issued pursuant to such exercise and the denominator of which
is the total number of shares of Common Stock the holder of
this Warrant was permitted to purchase upon the exercise
hereof immediately prior to such exercise. Upon the expiration
of this Warrant (and compliance with the immediately preceding
sentence) such trust will be canceled and the property held in
such trust shall be returned to the Company.
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 (i) if such Options constitute Employee Options or (ii)
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;
4
(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 of the
Convertible Securities so purchased if such
Convertible Securities were not convertible into or
exchangeable for Additional Shares of Common Stock,
and
(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
5
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 at
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 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 of
such consideration, then such consideration 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
6
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.
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.
7
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 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 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 "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) 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, either:
(a) shares of the Acquirer's Common Stock at an
Exercise Price per share equal to 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 (subject to adjustments from and after the
Consummation Date as nearly equivalent as possible to the
adjustments provided for in this Warrant); or
(b) at the election of the holder of this Warrant
pursuant to notice given to the Company within six months
after 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
8
(c) 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, 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 Value of such exercise rights, such Fair 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.
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 or upon the conversion of shares of the
Company's Series F Convertible Senior Preferred Stock and Series G
Cumulative Convertible Preferred Stock.
9
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;
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
10
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 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 or articles of incorporation
and available for the purpose of issue upon such conversion, and (d)
will not issue any capital stock of any class which has the right to
more than one vote per share or 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
11
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 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 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. (a) 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
12
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, as amended, and may not be transferred in the absence
of such registration or an exemption therefrom under such
Act."
(b) Except as otherwise permitted by this Section 8, until
June 30, 2001, 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 is subject to surrender by the Purchaser to the
Company and cancellation from the date hereof through June 30,
2001 pursuant to the terms of Section 3.3 (Call Option) of the
Subordinated Note Restructuring Agreement dated as of December
28, 2000 between the Company and the Purchaser."
(c) 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, as amended, and
may not be transferred in the absence of such registration or
an exemption therefrom under such Act."
(d) 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 (i) effectively registered under
the Securities Act and disposed of in accordance with the registration
statement covering such Restricted Securities, (ii) sold pursuant to
Rule 144 or any comparable rule under the Securities Act, (iii)
transferred to a limited number of "qualified institutional buyers" (as
such term is defined in Rule 144A under the Securities Act), 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 (iv) when, in the opinion (which opinion must
be reasonably satisfactory to the Company and its securities counsel)
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
13
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; Participation 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 and the Participation
Rights Agreement.
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 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.
14
"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 (i) shares of Common Stock issued upon the
exercise or partial exercise of the Warrants, and (ii) shares of Common
Stock issued upon the exercise or partial exercise of the Existing
Warrants and the Existing Options.
"Adjusted Face Value" shall mean, for any share of
Preferred Stock, the face value ($100.00) denominated thereon, subject
to adjustment for stock splits, stock dividends, reorganization,
reclassification or similar events.
"Announcement Date" shall have the meaning specified
in Section 2I.
"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.
"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 Boots & Xxxxx International Well
Control, Inc.
"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.
"Employee Options" shall mean Options that are
granted after the date hereof to employees of the Company and its
Subsidiaries for not more than 2,000,000 shares of Common Stock in the
aggregate (appropriately adjusted for stock splits, reverse stock
splits, reclassifications and the like and with shares in respect of
Options that have expired without having been exercised being excluded
from the calculation of such aggregate number of shares from and after
such expiration) and that have an exercise price that is not less than
90% of the Market Price in effect on the date of and immediately prior
to such grant.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Exercise Price" shall have the meaning specified in
Section 1A.
15
"Existing Options" shall mean the Common Stock
purchase options outstanding on the date hereof and disclosed in
Section 9.9 of the Restructuring Agreement.
"Existing Warrants" shall mean the Common Stock
purchase warrants outstanding on the date hereof and disclosed in
Section 9.9 of the Restructuring Agreement.
"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 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 Exercise Price" shall mean the $0.625 per
share Exercise Price specified in the introductory paragraph hereof.
"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, 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, 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.
"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.
16
"Options" shall mean rights, options or warrants,
other than Existing Options and Existing Warrants, to subscribe for,
purchase or otherwise acquire either Additional Shares of Common Stock
or Convertible Securities.
"Original Agreement" shall have the meaning specified
in the opening paragraphs of this Warrant.
"Original Common Stock" shall have the meaning
specified in the opening paragraphs of this Warrant.
"Original Warrant" shall have the meaning specified
in the opening paragraphs of this Warrant.
"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.
"Participation Rights Agreement" shall mean that
certain Participation Rights Agreement dated July 23, 1998 by and among
the Purchaser, the Company and certain holders of the Company's Common
Stock who are parties thereto, as amended on the date hereof.
"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.
"Preferred Stock" 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 July 23, 1998 by and between the
Company and the Purchaser, as amended on the date hereof.
"Restructuring Agreement" shall have the meaning
specified in the opening paragraphs of this Warrant.
"Replacement Notes" shall have the meaning specified
in the opening paragraphs of this Warrant.
"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.
17
"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.
"Warrant" shall have the meaning specified in the
opening paragraphs of this Warrant.
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 or other communications provided for
hereunder shall be in writing and sent by first class mail or
nationwide overnight delivery service (with charges prepaid) and (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, at 000 Xxxx Xxx Xxxxxxxxx, Xxxxx
000, Xxxxxxx, Xxxxx 00000, Attention: Chief Financial Officer, or at
such other address, or to the attention of such other officer, as the
Company shall have furnished to each holder of Warrants at the time
outstanding; provided, that the exercise of any Warrant shall be
effected only 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.
BOOTS & XXXXX INTERNATIONAL
WELL CONTROL, INC.
By:/s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
18
FORM OF SUBSCRIPTION
--------------------
(To be executed only upon exercise of Warrant)
To BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC.
The undersigned registered holder of the within Warrant hereby
irrevocably exercises such Warrant for and purchases thereunder, ___________ (1)
shares of Original Common Stock of BOOTS & XXXXX INTERNATIONAL WELL CONTROL,
INC., and herewith makes payment of $_____________ therefor , 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.
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 ______________________ (2) shares
of Original Common Stock of BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC., to
which such Warrant relates, and; appoints ________________________ Attorney to
make such transfer on the books of BOOTS & XXXXX INTERNATIONAL WELL CONTROL,
INC., 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:
__________________________
----------
2 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.
