EXHIBIT 99.1
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SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") made and entered into as of
January 3, 1996, by and among SCF-III, L.P., a Delaware limited partnership (the
"Purchaser"), TUBOSCOPE VETCO INTERNATIONAL CORPORATION, a Delaware corporation
("Parent") and, solely for purposes of Section 8.13 hereof, D.O.S. Ltd., a
Bermuda corporation (the "Company").
W I T N E S S E T H:
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WHEREAS, D.O.S. Ltd. is to be merged with a wholly-owned subsidiary ("Sub")
of Parent (the "Merger") pursuant to an Agreement and Plan of Merger dated of
even date herewith among Parent, Sub and D.O.S. Ltd. (the "Merger Agreement");
WHEREAS, the Board of Directors of Parent has determined that it is in the
best interests of Parent and its shareholders to raise additional capital in
connection with the Merger;
WHEREAS, Purchaser will acquire, on the terms and subject to the conditions
set forth herein, 4,200,000 shares (the "Shares") of Parent's Common Stock, par
value $.01 per share (the "Common Stock") and warrants to purchase 2,533,000
shares of Common Stock (the "Warrants"), (the Shares and the Warrants are
collectively referred to herein as the "Securities") in exchange for aggregate
consideration of $31,000,000.00.
NOW, THEREFORE, in consideration of and subject to the mutual agreements,
terms and conditions herein contained, the parties hereto agree as follows:
ARTICLE V
DEFINITIONS
Capitalized terms used herein without definitions shall have the meanings
assigned to such terms in the Merger Agreement.
ARTICLE VI
SALE OF SECURITIES
6.1 Purchase Price. At the Closing, Parent will issue, sell, transfer,
convey and deliver to the Purchaser (i) the Shares as evidenced by the delivery
of a certificate or certificates evidencing the Shares in good delivery form and
(ii) the Warrants as evidenced by the delivery of the Warrant Certificates in
the form set forth on Appendix I, and Purchaser will purchase the Securities
subject to the terms and conditions set forth herein in exchange for an
aggregate of $31,000,000.00 in cash, payable at the Closing by wire
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transfer to an account designated in writing by Parent at least five days prior
to the Closing Date.
6.2 Closing. The closing of the sale and purchase of the Securities
shall take place at the Closing on the Closing Date. Immediately prior to the
filing of the Certificate of Merger with the Registrar of Companies of Bermuda
and subject to the terms and conditions set forth herein, Purchaser shall wire
transfer funds in accordance with Section 2.1 and the purchase of the Securities
by Purchaser shall be deemed to be made as of the Effective Time.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
OF PARENT
Parent warrants and represents to the Purchaser as follows:
7.1 Organization. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted.
7.2 Authorization, Execution and Enforceability. Parent has full power
and authority to enter into this Agreement and the capacity and authority to
make the representations, warranties, covenants and agreements herein. The
execution, delivery and performance by Parent of this Agreement have been duly
and validly authorized and are within the corporate powers of Parent. This
Agreement has been duly executed and delivered by Parent and constitutes its
valid and binding agreement, enforceable in accordance with its terms, subject,
as to enforceability, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and to
general principles of equity. The Shares to be issued and sold by Parent to the
Purchaser hereunder, as of the Closing will be duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable. When executed by
Parent and delivered in accordance with their terms, the Warrants will
constitute valid and binding obligations of Parent, enforceable in accordance
with their terms. The shares of Common Stock reserved for issuance upon
exercise of the Warrants will be as of the Closing duly authorized and reserved
for such purpose, and, if and when the Warrants are exercised in accordance with
the rights provided for therein, such shares will be validly issued, fully paid
and non-assessable, and the issuance of such shares will not be subject to any
preemptive or similar rights.
7.3 Capital Structure as of Closing Date. The representations and
warranties set forth in Section 3.2(b) of the Merger Agreement will be true and
correct as of the Closing Date except to the extent such representations and
warranties speak as of an earlier date.
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7.4 Consents and Approvals; No Violations.
(a) No consent, action, approval or authorization of, or
registration, declaration or filing with, any governmental department,
commission, agency or other instrumentality or any other person or entity
is required to authorize, or is otherwise required in connection with, the
execution and delivery of this Agreement by Parent or its performance of
the terms hereof, including without limitation, the issuance and sale of
the Shares and the Warrants, or the validity or enforceability hereof or
thereof against Parent as to which the failure to obtain or make would have
a Parent Material Adverse Effect or would materially adversely affect the
consummation of the transactions contemplated hereby except for the filing
of a notification report by Parent and the Purchaser under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
the expiration or termination of the applicable waiting period with respect
thereto.
(b) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with
the provisions hereof will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of any
obligation or to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of Parent or any of its Subsidiaries under, any
provision of (i) the Certificate of Incorporation or Bylaws of Parent or
any provision of the comparable charter or organizational documents of any
of its Subsidiaries, (ii) any loan or credit agreement, note, bond,
mortgage, or indenture applicable to Parent or any of its Subsidiaries,
(iii) any other agreement, instrument, permit, concession, franchise or
license applicable to Parent or any of its Subsidiaries or (iv) assuming
the consents, approvals, authorizations or permits and filings or
notifications referred to in Section 5.2 are duly and timely obtained or
made and the approval of the Merger and the Charter Amendment and the
Parent Share Issuance by the stockholders of Parent has been obtained, any
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clause (iii), any such
conflicts, violations, defaults, rights, liens, security interests, charges
or encumbrances that, individually or in the aggregate, would not have a
Parent Material Adverse Effect, materially impair the ability of Parent to
perform its obligations hereunder or prevent the consummation of any of the
transactions contemplated hereby.
7.5 Registration Statement on Form S-4. The S-4 will comply in all
material respects with the requirements of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, (as applicable)
and the rules and regulations of the Securities and Exchange Commission
thereunder applicable to the S-4 and neither the S-4, as of its effective date,
or the Proxy Statement, as of the Effective Time, will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (in each case,
excluding for such purposes information relating to the Company and its
Subsidiaries).
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ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to Parent as follows:
8.1 Organization, Authorization, Execution and Enforceability. The
Purchaser is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware with power and authority to
own, operate and lease its properties and to carry on its business as now
conducted, and the Purchaser is duly qualified to do business and is in good
standing as a foreign partnership in each jurisdiction with a character of its
properties or the nature of its business makes such qualification necessary.
Purchaser has full power and authority to enter into this Agreement and the
capability and authority to make the representations, warranties, covenants and
agreements herein. The execution, delivery and performance by the Purchaser of
this Agreement have been duly and validly authorized and are within the powers
of the Purchaser. This Agreement has been duly executed and delivered by the
Purchaser and constitutes its valid and binding agreement, enforceable in
accordance with its terms, subject, as to enforceability, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.
8.2 Consents and Approvals. No consent, action, approval or
authorization of, or registration, declaration or filing with, any governmental
department, commission, agency or other instrumentality or any other person or
entity is required to authorize, or is otherwise required in connection with,
the execution and delivery of this Agreement by the Purchaser or its performance
of the terms hereof, including without limitation, the purchase of the Shares
and the Warrants, or the validity or enforceability hereof or thereof against
the Purchaser as to which the failure to obtain or make would have a Parent
Material Adverse Effect or would materially adversely affect the consummation of
the transactions contemplated hereby except for the filing of a notification
report by Parent and the Purchaser under the HSR Act, and the expiration or
termination of the applicable waiting periods with respect thereto.
8.3 Purchaser is an "accredited investor" as defined in Rule 501 of
Regulation D promulgated pursuant to the Securities Act of 1933, as amended.
ARTICLE IX
COVENANTS OF PARENT
Parent further agrees, except as set forth in or contemplated by this
Agreement or as otherwise approved by the Purchaser in writing, that:
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9.1 Registration of Securities. At the Closing, Parent will enter into a
Registration Rights Agreement with the Purchaser relating to the Shares in the
form set forth on Appendix II. Parent will use its reasonable best efforts to
register the Shares, the Warrants, and the shares issuable pursuant to exercise
of the Warrants pursuant to the S-4.
9.2 Obtaining Consents. Parent will use its reasonable best efforts to
obtain, and to assist the Purchaser in obtaining, all consents, resignations,
authorizations and approvals and making all filings necessary for the
consummation of the transactions contemplated by this Agreement required under
(a) the Securities Act of 1933, as amended, (b) the HSR Act and (c) any other
applicable law or regulation. Parent and the Purchaser shall request early
termination of the waiting period under the HSR Act with respect to the
transactions contemplated herein.
9.3 Satisfaction of Closing Conditions. Parent shall use its reasonable
best efforts to satisfy the conditions to Closing set forth in Article VII
relating to Parent in an expeditious manner.
9.4 Delivery of Documents at Closing. At the Closing, subject to
satisfaction of the conditions set forth in Article VII, Parent shall execute
and deliver to the Purchaser all documents required to be delivered pursuant to
Section 7.1.
9.5 No Amendment of Merger Agreement. Parent shall not amend, alter or
modify the Merger Agreement without the written consent of Purchaser, which
consent shall not be unreasonably withheld; provided, however, that this Section
5.5 shall not be construed to limit the ability of Parent to waive any of the
conditions set forth in Section 6.2 of the Merger Agreement.
ARTICLE X
COVENANTS OF THE PURCHASER
The Purchaser further agrees, except as set forth in or contemplated by
this Agreement or as otherwise approved by Parent in writing, as follows:
10.1 Obtaining Consents. The Purchaser will use its reasonable best
efforts to obtain, and to assist Parent in obtaining, all consents,
authorizations and approvals and making all filings necessary for the
consummation of the transactions contemplated by this Agreement required under
(a) the Securities Act of 1933, as amended, (b) the HSR Act and (c) any other
applicable law or regulation. Parent and the Purchaser shall request early
termination of the waiting period under the HSR Act with respect to the
transactions contemplated herein.
10.2 Satisfaction of Closing Conditions. The Purchaser shall use its
reasonable best efforts to satisfy the conditions to Closing set forth in
Article VII relating to the Purchaser in an expeditious manner.
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10.3 Delivery of Documents at Closing. At the Closing, subject to
satisfaction of the conditions set forth in Article VII, the Purchaser shall
execute and deliver to Parent the documents contemplated to be delivered
pursuant to Section 7.2.
ARTICLE XI
CONDITIONS TO THE CLOSING;
TERMINATION, AMENDMENT AND WAIVER
11.1 Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to effect the transactions contemplated by this Agreement is subject
to the following conditions:
(a) Representations and Warranties of Parent to be True. Except as
contemplated by this Agreement, (i) the representations and warranties of
Parent hereunder shall be made again at the Closing and shall be true in
all material respects as of the Closing Date except to the extent such
representations and warranties speak as of an earlier date, (ii) Parent
shall have performed (or caused to have been performed) in all respects all
covenants required of it (and its subsidiaries) by this Agreement as of the
Closing and (iii) Parent shall have furnished the Purchaser at the Closing
with a certificate of the President of Parent to such effect.
(b) Third Party Consents and Approvals. Parent shall have made all
filings with, and obtained all required consents, approvals, permits and
authorizations in connection with the execution and delivery of this
Agreement and the transactions contemplated hereby from any governmental
entity except where the failure to obtain such consents, approvals, permits
and authorizations would not be reasonably likely to result in a Parent
Material Adverse Effect (assuming the transactions contemplated by this
Agreement have taken place) or to materially adversely affect the
consummation of the transactions contemplated hereby. The waiting period
applicable to the consummation of the transactions contemplated hereby
under the HSR Act shall have expired or been terminated.
(c) Stock and Warrant Certificates. Parent shall have delivered to
the Purchaser at the Closing one or more stock certificates representing
the Shares in good delivery form and certificates representing the Warrants
in the form set forth on Appendix I.
(d) Conditions Precedent to Merger. All of the conditions precedent
to the consummation of the Merger as set forth in Sections 6.1 (other than
Section 6.1(f)) and 6.3 of the Merger Agreement shall have been satisfied
as of the Closing Date; and all conditions precedent set forth in Section
6.2 of the Merger Agreement shall have been satisfied or waived by Parent
as of the Closing Date.
11.2 Conditions to Obligations of Parent. In addition to the satisfaction
of the conditions referred to in subparagraph (b) of Section 7.1 hereof, the
obligations of Parent to
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effect the transactions contemplated by this Agreement shall be subject to the
following conditions:
(a) Representations and Warranties of the Purchaser to Be True.
Except as contemplated in this Agreement, (i) the representations and
warranties of the Purchaser hereunder shall be made again at the Closing
and shall be true in all material respects as of the Closing Date except to
the extent such representations and warranties speak as of an earlier date,
(ii) the Purchaser shall have performed in all material respects all
covenants required of it by this Agreement as of the Closing Date and (iii)
the Purchaser shall have furnished Parent at the Closing with a certificate
of one of its authorized representatives to such effect.
(b) Payment of Purchase Price. The Purchaser shall have paid the
purchase price for the Securities to be paid at the Closing as specified in
Section 1.1 hereof.
(c) Conditions Precedent to Merger. All of the conditions precedent
to the consummation of the Merger as set forth in Sections 6.1 (other than
6.1(f)), 6.2 and 6.3 of the Merger Agreement shall have been satisfied, or
waived by a party having the right to waive such condition under the Merger
Agreement, as of the Closing Date.
11.3 Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated herein may be
terminated at any time before the Closing as follows:
(a) Mutual Consent. By the mutual consent of Parent and the
Purchaser.
(b) Expiration Date. By Parent or the Purchaser if the Closing shall
not have occurred by June 30, 1996.
(c) Termination of Merger Agreement. By Parent or the Purchaser if
the Merger Agreement shall have been terminated.
11.4 Effect of Termination and Failure of Conditions. In the event of
termination of this Agreement as provided in Section 6.3, or of the failure of a
condition resulting in the Purchaser, or Parent not performing its or their
obligations hereunder pursuant to the terms of Section 7.1 or 7.2, as the case
may be, this Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto with respect thereto except that
nothing herein shall relieve any party from liability for any breach hereof.
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ARTICLE XII
MISCELLANEOUS
12.1 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and do not
constitute a part of the Agreement.
12.2 Entire Agreement. This Agreement, the documents to be executed
hereunder, and the exhibits attached hereto constitute the entire agreement
between the parties hereto pertaining to the subject matter hereof and supersede
all prior agreements, understandings, negotiations and discussions, whether oral
or written, of the parties pertaining to the subject matter hereof.
12.3 Waiver. At any time prior to the Closing, any party hereto may (a)
extend the time for the performance of any of the obligations or other acts of
any other party hereto or (b) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid if set
forth in an instrument in writing signed on behalf of such party. The
consummation of the transactions contemplated hereby shall not be deemed a
waiver of the right any party may have hereunder with respect to any other
party's representations, warranties, covenants or agreements contained in or
related to this Agreement being incorrect, untrue or breached.
12.4 Amendment. This Agreement may not be amended except by an instrument
in writing signed by each of the parties hereto. No supplement, alteration or
modification of this Agreement shall be binding unless executed in writing by
the parties hereto.
12.5 Further Actions. Each party shall execute and deliver such other
certificates, agreements and other documents and take such other actions as may
reasonably be requested by the other parties in order to consummate or implement
the transactions contemplated by this Agreement.
12.6 Assignment. Except as otherwise expressly provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of Parent and the Purchaser. Parent
may not assign or delegate any of its rights or duties hereunder, without the
prior written consent of the Purchaser. Purchaser may not assign or delegate
any of its rights or duties hereunder without the prior written consent of
Parent, which consent shall not be unreasonably withheld; but in any event
Purchaser shall remain responsible for any assignee's performance. Any
assignment or delegation made without such consent shall be void.
12.7 Independent Covenants. The covenants contained herein are
independent and separate, and in the event that any provision contained herein
is declared invalid or illegal, the other provisions hereof shall not be
affected or impaired thereby and shall remain valid and enforceable.
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12.8 Remedies and Certain Rights. In the event of a breach or threatened
breach by any party hereto of the provisions of this Agreement, any other party
hereto shall be entitled to specific performance. The parties agree that, from
and after the Closing, regardless of whether the Shares and the Warrants have
been registered under the Securities Act of 1933, as amended, if Parent breaches
a representation made in Section 3.5, then Purchaser shall be entitled to and
shall have under this Agreement all rights, remedies and recourse against Parent
that Purchaser would have had if Purchaser had acquired the Securities pursuant
to the S-4, had relied upon such S-4 to make its investment decision and had not
entered into this Agreement (i.e. Purchaser shall have contractual rights
hereunder that are equivalent to the rights that a purchaser of securities
pursuant to a registration statement would have); it being acknowledged that
Purchaser is entering into this Agreement in reliance upon the expected actions
of persons and entities assuming the representations in Section 3.5 will be
true.
12.9 Governing Law. This Agreement and the other documents delivered
pursuant hereto and the legal relations between the parties shall be governed
and construed in accordance with the laws of the State of Delaware, without
giving effect to principles of conflict of laws.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
of which together shall constitute one and the same instrument.
12.11 Withholding or Granting of Consent. Except as otherwise provided in
this Agreement, each party hereto may, with respect to any consent or approval
that it is entitled to grant pursuant to this Agreement or any other document or
instrument or agreement delivered or entered into pursuant hereto, grant or
withhold such consent or approval in its sole and uncontrolled discretion, with
or without cause, and subject to such conditions as it shall deem appropriate.
12.12 Notices. Any notice or communication required or permitted hereunder
shall be in writing and either delivered personally, telegraphed or telecopied
or sent by certified or registered mail, postage prepaid, and shall be deemed to
be given, dated and received when so delivered personally, telegraphed or
telecopied or, if mailed, five business days after the date of mailing to the
following address or telecopy number, or to such other address or addresses as
such person may subsequently designate by notice given hereunder.
if to Tuboscope Vetco International:
Tuboscope Vetco International Corporation
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attn: General Counsel
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with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx Xxxx, XX 00000
Telecopy: 000-000-0000
Attn: Xxxxxxx Xxxxxx
if to SCF-III, L.P.
c/o SCF Partners
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: L.E. Simmons
if to D.O.S. Ltd.
D.O.S. Ltd.
0000 X. Xxxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000
Telecopy: 000-000-0000
Attn: Xxxx X. Xxxxxxxx
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, XX 00000
Telecopy: 000-000-0000
Attn: Xxx Xxxx
12.13 Payment of Fees by the Company. If the Merger Agreement is
terminated and if the Company receives a fee pursuant to Section 7.2(b), (c) or
(d) of the Merger Agreement, then the Company shall pay Purchaser a fee of
$1,000,000 in cash, promptly after the Company's receipt of such fee, by wire
transfer of immediately available funds to an account designated by Purchaser.
If the Merger Agreement is terminated and if the Company receives a fee pursuant
to Section 7.2(e) of the Merger Agreement, then the Company shall pay Purchaser
a fee of $250,000 in cash, promptly after the Company's receipt of such fee, by
wire transfer of immediately available funds to an account designated by
Purchaser.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first above written.
SCF-III, L.P.
By: SCF-II, L.P., its general partner
By: L.E. Simmons & Associates,
Incorporated,
its general partner
By:
-----------------------------------
Name:
Title:
TUBOSCOPE VETCO INTERNATIONAL
CORPORATION
By:
-----------------------------------------
Name:
Title:
Solely for purposes of Section 8.13:
D.O.S. Ltd.
By:
-----------------------------------------
Name:
Title:
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APPENDIX I
TUBOSCOPE VETCO INTERNATIONAL CORPORATION
WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK
EXPIRING DECEMBER 31, 2000
NO. 1 2,533,000 SHARES
BY THIS WARRANT (this "Warrant"), Tuboscope Vetco International
Corporation, a Delaware corporation (the "Company"), certifies that, for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SCF III, L.P., a Delaware limited partnership (along with its
registered assigns, the "Holder"), is entitled to subscribe for and purchase
from the Company, subject to the terms and conditions set forth herein, at any
time or from time to time prior to 5:00 p.m. (Houston, Texas time) on December
31, 2000 (the "Expiration Date") 2,533,000 (subject to adjustment as set forth
herein) fully paid and non-assessable shares (the "Shares") of the Company's
Common Stock, $0.01 par value per share (the "Common Stock"), at a price equal
to the exercise price per share, initially $10.00 (subject to adjustment as set
forth herein) per share (the "Exercise Price").
1. Exercise of Warrant; Company Office. This Warrant may be exercised at
-----------------------------------
any time or from time to time prior to the Expiration Date as to the entire
number or any lesser number of whole shares of Common Stock, by the surrender of
this Warrant to the Company at its office at 0000 Xxxxxx Xxxx Xxxxxxx, Xxxxx
00000, or such other place as is designated in writing by the Company pursuant
to this Section 1, together with (a) a duly executed election in substantially
the form of Exhibit A attached hereto and made a part hereof for all purposes,
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and (b) a wire transfer or a certified or bank cashier's check payable to the
order of the Company in an amount equal to the Exercise Price multiplied by the
number of shares of Common Stock covered by such election. Notwithstanding the
foregoing sentence, at any time that the Current Market Price (as hereinafter
defined) is greater than the Exercise Price, the Holder may, at its option,
exercise this Warrant at any time or from time to time prior to the Expiration
Date as to the entire number or any lesser number of whole shares of Common
Stock, by the surrender of this Warrant to the Company at the location
designated in the foregoing sentence together with a duly executed election in
substantially the form of Exhibit A attached hereto and made a part hereof for
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all purposes and, in return therefor, the Company shall deliver to the Holder
that certain number of shares of Common Stock that is determined by dividing
(aa) the product of (1) the number of shares of Common Stock covered by such
election and (2) the difference between the Current Market Price at the date of
such exercise and the Exercise Price in effect on the date of such exercise by
(bb) the Current Market Price at the date of such exercise. For so long as this
Warrant is outstanding, the Company shall continue to maintain an office in the
State of Texas where notices, presentations and demands in respect of this
Warrant may be made upon it and shall notify the Holder in writing at least 15
days before changing the location of any such office.
2. Stock Ownership; Stock Certificates; Partial Exercise. Upon each
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exercise of this Warrant, the Holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise as of the close of
business on the day this
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Warrant is exercised, notwithstanding that the stock transfer books of the
Company shall then be closed or certificates representing such shares shall not
then have been actually delivered to the Holder. As soon as possible after each
such exercise of this Warrant, the Company shall issue and deliver to the Holder
a certificate or certificates for the shares issuable upon such exercise issued
in such denominations as may be specified by Holder and registered in the name
of the Holder or, subject to Section 9, such other name or names as shall be
designated in the Holder's election to exercise. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant evidencing the right of the
Holder to purchase the balance of the shares subject to purchase hereunder on
the terms and conditions set forth herein (including all changes and adjustments
that have occurred hereunder). The Company will, at the time of each exercise of
this Warrant, upon the request of the Holder hereof, 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, however, that if the Holder of this Warrant shall
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fail to make any such request, such failure shall not affect the continuing
obligation of the Company to afford such rights to such Holder.
3. Company Records; Transfer or Assignment of Warrant; Exchange of
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Warrant. Any warrants issued in connection herewith or in substitution herefor,
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upon complete or partial transfer, assignment or exercise (the "Warrants") shall
be numbered and shall be registered in the warrant register of the Company (the
"Warrant Register") as they are issued. The Company shall treat the registered
holder of any Warrant on the Warrant Register as the owner in fact thereof for
all purposes, except that if the Warrant is properly transferred or assigned and
notice of such transfer or assignment is given to the Company, the Company shall
treat the transferee or assignee as the owner thereof for all purposes (or, if
such transfer or assignment is properly made in blank, the Company shall treat
the bearer of this Warrant as the owner thereof for all purposes). The Warrant
shall be transferred by the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment or authority to transfer. In case of
transfer by executors, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced if requested by
the Company in its reasonable discretion. The Company shall immediately
register all assignments and transfers in the Warrant Register and, upon any
registration of assignment or transfer, the Company shall deliver a new Warrant
or Warrants to the person or entity entitled thereto on the terms and conditions
set forth herein (including all changes and adjustments that have occurred
hereunder). A Warrant, if properly transferred or assigned, may be exercised by
a subsequent Holder without having a new Warrant issued. The Warrants may be
exchanged at the option of the Holder thereof for another Warrant, or other
Warrants, of different denominations and representing in the aggregate the right
to purchase the same number of shares of Common Stock on the terms and
conditions set forth herein (including all changes and adjustments that have
occurred hereunder) upon surrender to the Company or its duly authorized agent.
All provisions of this Section 3 shall be subject to Section 9.
4. Reserved Stock. The Company shall reserve and keep available at all
--------------
times solely for the purpose of providing for the exercise of this Warrant the
maximum number of shares of Common Stock as to which this Warrant may then be
exercised. All such shares
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shall be duly authorized and free of preemptive rights and, when issued upon
such exercise, shall be validly issued, fully paid and non-assessable.
5. Certain Adjustments.
-------------------
(a) Number of Shares; Exercise Price. The number of 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 this Section 5) be issuable
upon such exercise, as designated by the Holder hereof, by a fraction of which
(a) the numerator is $10.00 and (b) the denominator is the Exercise Price in
effect on the date of such exercise. The Exercise Price shall be adjusted and
readjusted from time to time as provided in this Section 5 and, as so adjusted
or readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by this Section 5.
(b) Issuance of Additional Shares of Common Stock or Certain Convertible
--------------------------------------------------------------------
Securities. If on or after the date hereof the Company shall issue any Common
----------
Stock other than Excluded Stock (as hereinafter defined) without consideration
or for a consideration per share less than the Current Market Price in effect
immediately prior to such issuance, the Exercise Price in effect immediately
prior to each such issuance shall immediately (except as otherwise expressly
provided below) be reduced to the price determined by dividing (1) an amount
equal to the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issuance multiplied by the Current Market Price in
effect immediately prior to such issuance and (B) the consideration, if any,
received by the Company upon such issuance, by (2) the total number of shares of
Common Stock outstanding immediately after such issuance.
For the purposes of any adjustment of the Exercise Price pursuant to
this Section 5(b), the following provisions shall be applicable:
(A) Cash. In the case of the issuance of Common Stock for cash, the
----
amount of the consideration received by the Company shall be deemed to be
the amount of the cash proceeds received by the Company for such Common
Stock before deducting therefrom any discounts, commissions, taxes or other
expenses allowed, paid or incurred by the Company for any underwriting or
otherwise in connection with the issuance and sale thereof.
(B) Consideration Other Than Cash. In the case of the issuance of
-----------------------------
Common Stock (otherwise than upon the conversion of shares of capital stock
or other securities of the Company) for a consideration in whole or in part
other than cash, including securities acquired in exchange therefor (other
than securities of the Company that by their terms are exchangeable for
such Common Stock), the consideration other than cash shall be deemed to be
the fair value thereof as determined in good faith by the Board of
Directors of the Company and irrespective of any accounting treatment;
provided, that such fair value as determined by the Board of Directors
--------
shall not exceed the aggregate Current Market Price of the shares of Common
Stock being issued as of the date on which the Board of Directors
authorizes the issuance of such shares.
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(C) Options and Convertible Securities. In the case of the issuance
----------------------------------
of (i) options, warrants or other rights to purchase or acquire Common
Stock (whether or not at the time exercisable), (ii) securities by their
terms convertible into or exchangeable for Common Stock (whether or not at
the time so convertible or exchangeable) or (iii) options, warrants or
rights to purchase such convertible or exchangeable securities (whether or
not at the time exercisable), other than in each case Excluded Stock:
(1) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other rights to
purchase or acquire Common Stock shall be deemed to have been issued
at the time such options, warrants or rights were issued and for a
consideration equal to the consideration (determined in the manner
provided in subclauses (A) and (B) above), if any, received by the
Company upon the issuance of such options, warrants or rights plus the
minimum purchase price provided in such options, warrants or rights
for the Common Stock covered thereby;
(2) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such convertible
or exchangeable securities, or upon the exercise of options, warrants
or other rights to purchase or acquire such convertible or
exchangeable securities and the subsequent conversion or exchange
thereof, shall be deemed to have been issued at the time such
securities were issued or such options, warrants, or rights were
issued and for a consideration equal to the consideration, if any,
received by the Company for any such securities and related options,
warrants or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the additional consideration
(determined in the manner provided in subclauses (A) and (B) above),
if any, to be received by the Company upon the conversion or exchange
of such securities, or upon the exercise of any related options,
warrants or rights to purchase or acquire such convertible or
exchangeable securities and the subsequent conversion or exchange
thereof;
(3) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights or
conversion or exchange of such convertible or exchangeable securities
or any change in the consideration to be received by the Company upon
such exercise, conversion or exchange, including, but not limited to,
a change resulting from the anti-dilution provisions thereof, the
Exercise Price as then in effect shall forthwith be readjusted to such
Exercise Price as would have been obtained had an adjustment been made
upon
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the issuance of such options, warrants or rights not exercised prior
to such change, or of such convertible or exchangeable securities not
converted or exchanged prior to such change, upon the basis of such
change;
(4) on the expiration or cancellation of any such options,
warrants or rights or the termination of the right to convert or
exchange such convertible or exchangeable securities, if the Exercise
Price shall have been adjusted upon the issuance thereof, the Exercise
Price shall forthwith be readjusted to such Exercise Price as would
have been obtained had an adjustment been made upon the issuance of
such options, warrants, rights or such convertible or exchangeable
securities on the basis of the issuance of only the number of shares
of Common Stock actually issued upon the exercise of such options,
warrants or rights, or upon the conversion or exchange of such
convertible or exchangeable securities; and
(5) if the Exercise Price shall have been adjusted upon the
issuance of any such options, warrants, rights or convertible or
exchangeable securities, no further adjustment of the Exercise Price
shall be made for the actual issuance of Common Stock upon the
exercise, conversion or exchange thereof.
(D) Excluded Stock. "Excluded Stock" shall mean (1) shares of Common
--------------
Stock issued by the Company as a stock dividend payable in shares of Common
Stock, or upon any subdivision or split-up of the outstanding shares of
Common Stock for which an adjustment to the Exercise Price is made pursuant
to Section 5(c), (2) options to acquire Common Stock and shares of Common
Stock issued or to be issued from time to time to directors, officers,
employees, consultants, advisors, independent contractors and agents of the
Company pursuant to stock option plans or other employee benefit plans
approved of by the Board of Directors, or an authorized committee thereof,
of the Company, (3) the shares of Common Stock issued or issuable upon
conversion of the Redeemable Series A Convertible Preferred Stock of the
Company outstanding on December 31, 1995, (4) the shares of Common Stock
issued or issuable upon exercise of the Warrants and (5) shares of Common
Stock issued by the Company pursuant to an underwritten public offering of
Common Stock or pursuant to a public tender or exchange offer.
(c) Stock Dividends, Subdivisions, Reclassifications or Combinations. If
----------------------------------------------------------------
the Company shall (i) declare a dividend or make a distribution on its Common
Stock in shares of its Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding Common Stock into a smaller number of
shares, the Exercise Price in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that the Holder of this
Warrant who exercises this Warrant after such date shall be entitled to receive
the number of shares of
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Common Stock which he would have owned or been entitled to receive had this
Warrant been exercised immediately prior to such date. Successive adjustments in
the Exercise Price shall be made whenever any event specified above shall occur.
(d) Other Distributions. In case the Company shall fix a record date for
-------------------
the making of a distribution to all holders of shares of its Common Stock (i) of
shares of any class other than its Common Stock or (ii) of evidences of
indebtedness of the Company or any subsidiary or (iii) of other assets,
including cash, (excluding dividends or distributions referred to in Section
5(c) above and excluding any cash dividend or cash distribution if the per share
amount when combined with the per share amount of all cash dividends and
distributions paid by the Company on Common Stock during the 365-day period
ending on such record date (as adjusted to appropriately reflect any of the
events referred to in Section 5(c) or in this Section 5(d) and excluding cash
dividends or distributions for which an adjustment to the Exercise Price was
previously made pursuant to this Section 5(d)), does not exceed 10% of the
Current Market Price on such record date) or (iv) of rights or warrants
(excluding those referred to in Section 5(b) above), in each case the Exercise
Price in effect immediately prior thereto shall be reduced immediately
thereafter to the price determined by dividing (1) an amount equal to the
difference resulting from (x) the number of shares of Common Stock outstanding
on such record date multiplied by the Current Market Price on such record date,
less (y) the fair market value (as determined in good faith by the Board of
Directors) of said shares or evidences of indebtedness or assets or rights or
warrants to be so distributed, by (2) the number of shares of Common Stock
outstanding on such record date. Such adjustment shall be made successively
whenever such a record date is fixed. In the event that such distribution is
not so made, the Exercise Price then in effect shall be readjusted, effective as
of the date when the Board of Directors determines not to distribute such
shares, evidence of indebtedness, assets, rights or warrants, as the case may
be, to the Exercise Price which would then be in effect if such record date had
not been fixed.
(e) Other Dilutive Events. In case any event shall occur as to which the
---------------------
provisions of this Section 5 are not strictly applicable but the failure to make
any adjustment relating thereto would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles of this Section 5, then, in each such case, the Company shall
immediately make all adjustments necessary to preserve, without dilution, the
purchase rights represented by this Warrant on a basis consistent with the
intent and principles established in this Section 5 and shall also immediately
appoint a firm of independent certified public accountants of recognized
national standing (which may be the regular auditors of the Company if they
satisfy such standard), which shall give their opinion that such adjustment, if
any, preserves, without dilution, the purchase rights represented by this
Warrant on a basis consistent with the intent and principles established in this
Section 5. Upon receipt of such opinion, the Company will immediately deliver a
copy thereof to the Holder of this Warrant. The Company shall not, by amendment
of its certificate of incorporation or through any consolidation, merger,
reorganization, transfer of assets, 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 of this Warrant, and will at all times in good faith assist
in carrying out all of such terms and in the taking of all such actions as may
be necessary or appropriate in order to protect the rights of the Holder of this
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (i) will not permit the par value of any shares of
stock receivable upon the exercise
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of this Warrant to exceed the amount payable therefor upon such exercise, (ii)
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
stock on the exercise of the Warrants from time to time outstanding, and (iii)
will not take any action which results in any adjustment of the Exercise Price
if the total number of shares of Common Stock issuable after such action upon
the exercise of all of the Warrants would exceed the total number of shares of
Common Stock then authorized by the Company's certificate of incorporation and
available for the purpose of issuance upon such exercise.
(f) Size of Adjustment; Rounding. No adjustment in the Exercise Price
----------------------------
shall be required unless such adjustment would require an increase or decrease
of at least one cent ($.01) in such price; provided, however, that any
--------
adjustment which is thereby not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 5 shall be made to the nearest cent or to the nearest one-hundredth of a
Share, as the case may be.
(g) Notice. Whenever there shall be an adjustment as provided in this
------
Section 5, the Company shall promptly cause written notice thereof to be sent to
the Holder, which notice shall be accompanied by an officer's certificate
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment and the computation thereof.
However, the failure by the Company to satisfy its obligations under this
Section 5(g) shall not in any manner affect or alter the rights of the Holder
under this Warrant.
(h) Fractional Shares. The Company shall not be required to issue
-----------------
fractions of shares of Common Stock or other capital stock of the Company upon
the exercise of Warrants. If any fraction of a share would be issuable upon the
exercise of any Warrant (or specified portions thereof), the Company shall
purchase such fraction for an amount in cash equal to the same fraction of the
Current Market Price of such share of Common Stock on the date of exercise of
the Warrant.
(i) Current Market Price. The Current Market Price at any date shall mean,
--------------------
in the event the Common Stock is publicly traded, the average of the daily
closing prices per share of Common Stock for 30 consecutive trading days ending
3 trading days before such date (as adjusted for any stock dividend, other
dividend for which an adjustment to the Exercise Price would be required
pursuant to Section 5(d), split, combination or reclassification that took
effect during such 30 trading day period). The closing price for each day shall
be the last reported sale price regular way or, in case no such reported sale
takes place on such day, the average of the last closing bid and asked prices
regular way, in either case on the principal national securities exchange on
which the Common Stock is listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, the closing sale price
for such day reported by NASDAQ, if the Common Stock is traded over-the-counter
and quoted in the National Market System, or if the Common Stock is so traded,
but not so quoted, the average of the closing reported bid and asked prices of
the Common Stock as reported by NASDAQ or any comparable system or, if the
Common Stock is not listed on NASDAQ or any comparable system, the average of
the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If the
-128-
Common Stock is not traded in such manner that the quotations referred to above
are available for the period required hereunder, the Current Market Price per
share of Common Stock shall be deemed to be the fair value per share of Common
Stock as determined by the Board of Directors of the Company in good faith and
irrespective of any accounting treatment.
(j) Treasury Stock. For the purposes of this Section 5, the sale or other
--------------
disposition of any Common Stock theretofore held in the Company's treasury shall
be deemed to be an issue thereof.
(k) Valid Issuance. All shares of Common Stock which may be issued upon
--------------
the exercise of this Warrant will upon issuance by the Company be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof, and the Company shall take no
action which will cause a contrary result (including, without limitation, any
action which would cause the Exercise Price to be less than the par value, if
any, of the Common Stock).
6. Certain Corporate Events or Actions.
-----------------------------------
(a) Consolidation, Merger, Etc. In case of any consolidation with or
---------------------------
merger of the Company with or into another corporation or other entity (except
for a merger or consolidation in which the Company is the continuing corporation
other than as a subsidiary of another corporation or other entity), or in case
of any sale, lease or conveyance to another corporation or other entity of the
assets of the Company as an entirety or substantially as an entirety, such
successor, purchasing, leasing or receiving corporation or other entity, as the
case may be, shall, prior to and as a condition to the occurrence of such event,
(i) execute with the Holder an agreement providing that the Holder shall have
the right thereafter to receive upon exercise of this Warrant the kind and
amount of shares of stock and other securities, property, cash or any
combination thereof receivable upon such consolidation, merger, sale, lease or
conveyance by a holder of the number of shares of Common Stock for which this
Warrant might have been exercised immediately prior to such consolidation,
merger, sale, lease or conveyance (provided that, if the holders of shares have
the right to make an election with respect to the kind or amount of securities,
cash or other property receivable upon consummation of such event, then the kind
and amount of securities, cash or other consideration receivable to the Holder
upon consummation of such event shall be deemed to be the kind and amount so
receivable per share by a plurality of the shares held by holders of such shares
making such an election) and (ii) make effective provision in its certificate of
incorporation or otherwise, if needed, in order to effect such agreement. Such
agreement shall provide for adjustments which shall be equivalent to the
adjustments in Section 5 and shall contain provisions equivalent to this Section
6.
(b) Reclassification, Etc. In case of any reclassification or change of
----------------------
the shares of Common Stock issuable upon exercise of this Warrant or in case of
any consolidation or merger of another corporation or other entity with or into
the Company in which the Company is the continuing corporation (other than as a
subsidiary of another corporation or other entity) and in which there is a
reclassification or change (including a change to the right to receive cash or
other property) of the shares of Common Stock, the Holder shall have the right
thereafter to receive upon exercise of this Warrant the kind and amount of
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shares of stock and other securities, property, cash or any combination thereof
receivable upon such reclassification, change, consolidation or merger by a
holder of the number of shares of Common Stock into which this Warrant would
have been exercisable immediately prior to such reclassification, change,
consolidation or merger (provided that, if the holders of shares have the right
to make an election with respect to the kind or amount of securities, cash or
other property receivable upon consummation of such event, then the kind and
amount of securities, cash or other consideration receivable to the Holder upon
consummation of such event shall be deemed to be the kind and amount so
receivable per share by a plurality of the shares held by holders of such shares
making such an election). Thereafter, appropriate provision (as determined by
the Board of Directors of the Company in good faith) shall be made for
adjustments which shall be equivalent to the adjustments in Section 5. This
Section 6(b) shall be applicable to successive reclassifications, changes,
consolidations or mergers.
7. Certain Notices. In case at any time the Company shall propose or
---------------
have knowledge of any proposal:
(a) to pay any dividend or make any distribution on shares of Common Stock
or to fix a record date for the making of any such dividend or distribution to
holders of Common Stock; or
(b) to take, or fix a record date for, any action that would result in any
adjustment to the Exercise Price pursuant to Section 5; or
(c) to effect any reclassification or change of outstanding shares of
Common Stock, or consolidation or merger, or sale, lease or conveyance of
property, of the type addressed in Section 6; or
(d) to effect any voluntary or involuntary liquidation, dissolution or
winding-up of the Company;
then, and in any one or more of such cases, the Company shall give written
notice thereof to the Holder at least 30 days prior to the date on which (i) the
books of the Company shall close, or a record date shall be set, for any such
action described in Section 7(a) or (b) or (ii) such reclassification, change,
consolidation, merger, sale, lease, conveyance, liquidation, dissolution or
winding-up shall be effective, as the case may be.
8. Expenses. The Company shall pay all costs, fees, taxes (other than
--------
any federal or state income or stock transfer taxes) and expenses payable in
connection with the preparation, issuance and delivery from time to time of
Warrants and of shares of Common Stock or other securities issued upon the
exercise of Warrants.
9. Restrictions on Transfer. The Holder, by its acceptance hereof,
------------------------
represents and warrants that it is acquiring the Warrants and any Common Stock
issued upon the exercise of this Warrant for investment purposes, for its own
account, and not with an intent to sell or distribute the Warrants or any such
Common Stock except in compliance with applicable United States federal and
state securities law. Neither this Warrant nor any of the Common Stock issued
upon the exercise of this Warrant, nor any interest in either, may be sold,
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assigned, pledged, hypothecated, encumbered or in any other manner transferred
or disposed of, in whole or in part, except in compliance with applicable United
States federal and state securities laws and the terms and conditions hereof.
The provisions of this Section 9 shall be binding upon all subsequent holders of
this Warrant, if any. This Warrant and the shares of Common Stock or other
securities issued upon exercise of this Warrant shall be subject to a stop-
transfer order (except with respect to a transfer by SCF III, L.P. of this
Warrant or such shares to its partners who are "accredited investors" within the
meaning of Rule 501 of the Rules and Regulations under the Securities Act of
1933, as amended, (the "Securities Act")) and the certificate or certificates
evidencing any such shares or securities shall bear the following legend:
"THE SHARES (OR OTHER SECURITIES) REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED OR OTHERWISE
TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR UPON DELIVERY TO THE
CORPORATION OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION STATING THAT SUCH SALE, ASSIGNMENT OR TRANSFER IS EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND LAWS."
10. Registration of Common Stock; Listing. If any shares of Common Stock
-------------------------------------
required to be reserved for purposes of exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law before such shares may be issued upon exercise, the Company will, at
its expense and as expeditiously as possible, cause such shares to be duly
registered or approved, as the case may be. At any such time as Common Stock is
listed for trading, the Company will, at its expense, obtain promptly and
maintain the approval of all securities exchanges (including, for this purpose,
NASDAQ) on which the Common Stock is listed for trading for an additional
listing, upon official notice of issuance, of the shares of Common Stock
issuable upon exercise of the then outstanding Warrants and maintain the listing
of such shares after their issuance.
11. Availability of Information. The Company will comply with the
---------------------------
reporting requirements of Sections 13 and 15(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (or, if the Company is not required to
so comply pursuant to the Exchange Act, it will make publicly available the
information specified by Rule 144(c)(2) under the Securities Act) and will
comply with all other public information reporting requirements of the
Securities and Exchange Commission (the "Commission") (including Rule 144
promulgated by the Commission under the Securities Act) from time to time in
effect and relating to the availability of an exemption from the Securities Act
for the sale of any restricted securities (as defined in the Securities Act) or
the sale of securities by affiliates (as defined in the Securities Act). The
Company will also 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 or the sale of
securities by affiliates. The Company will
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furnish to each Holder of a Warrant, promptly upon their becoming available,
copies of all financial statements, reports, notices and proxy statements sent
or made available generally by the Company to its stockholders, and copies of
all regular and periodic reports and all registration statements and
prospectuses filed by the Company with any securities exchange or with the
Commission.
12. Loss, Theft, Etc. Upon receipt of evidence satisfactory to the
-----------------
Company of the loss, theft, destruction or mutilation of any Warrant and upon
surrender and cancellation of any Warrant if mutilated, the Company shall
execute and deliver to the Holder thereof a new Warrant in the form and
substance of the lost, stolen, destroyed or mutilated Warrant (including all
changes and adjustments that have occurred hereunder). In the event a bond for
security therefor is required, the cost of such bond shall be paid by the
Holder.
13. No Rights or Liabilities as a Stockholder. Nothing contained in this
-----------------------------------------
Warrant shall be construed as conferring upon the Holder hereof any rights as a
stockholder of the Company or as imposing any obligation upon such Holder to
purchase any securities or as imposing any liability upon such Holder as a
stockholder of the Company, whether such obligation or liability is asserted by
the Company or by creditors of the Company at law or in equity.
14. Governing Law. This Warrant shall be governed by and construed in
-------------
accordance with the internal laws of the State of Delaware.
15. 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 extent permitted by
applicable 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.
16. Notices. All notices and other communications provided for herein
-------
shall be delivered or mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed (a) if to any Holder of any Warrant, to
the address of such Holder as set forth in the Warrant Register or to such other
address as such Holder has notified the Company of in writing or (b) if to the
Company, to the address set forth in Section 1 or to such other address as the
Company has notified such Holder of pursuant to Section 1 and this Section 16;
provided, however, that the exercise of any Warrant shall be effective in the
manner provided in Section 1. All notices given pursuant to this Warrant shall
be deemed to be effective upon receipt thereof by the party to whom such notice
is addressed.
17. 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. Any provision of this Warrant which shall be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the Company
waives any provision of
-132-
law which shall render any provision hereof prohibited or unenforceable in any
respect. The section and paragraph headings used in this Warrant are inserted
for convenience only and shall not be used for any interpretive purpose.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and its corporate seal to be impressed hereon and attested by its Secretary or
an Assistant Secretary.
Dated: _________________, 1996 TUBOSCOPE VETCO INTERNATIONAL
CORPORATION
[Corporate Seal] By:
------------------------------------
Attest:
Secretary
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EXHIBIT A TO WARRANT
--------------------
To: TUBOSCOPE VETCO INTERNATIONAL CORPORATION
ELECTION TO EXERCISE
The undersigned hereby exercises his or its rights to subscribe for
__________ shares of Common Stock covered by the within Warrant [and tenders
payment herewith in the amount of $____________] [and tenders no payment
herewith with respect to such shares of Common Stock covered by the within
Warrant and thus requests ____ shares of Common Stock (the quotient of (i) ___
shares covered by this exercise multiplied by $____) (the Current Market Price
at the date of this exercise minus the Exercise Price), divided by $_____ (the
Current Market Price at the date of this exercise)] in accordance with the terms
thereof, and requests that certificates for such shares in the following
denominations be issued in the name of, and delivered to, the person[s] at the
following address[es]:
Denominations:
---------------------------------------------------
(Print Address[es] and Social Security Number[s] or
Employer Identification Number[s] as applicable)
and, if said number of shares shall not be all the shares covered by the within
Warrant, that a new Warrant for the balance remaining of the shares covered by
the within Warrant be registered in the name of, and delivered to, the
undersigned at the address stated below:
Date: __________, ____ Name:
------------------------------------
(Print)
(Signature)
Address:
----------------------------------
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