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EXHIBIT 10.18
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
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
THIS WARRANT MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR ASSIGNED TO ANY
OTHER PERSON OR ENTITY, EXCEPT AS SET FORTH HEREIN.
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
BAYARD DRILLING TECHNOLOGIES, INC.
VOID AFTER 5:00 P.M., CENTRAL TIME, ON DECEMBER 13, 2001,
OR IF NOT A BUSINESS DAY, AS DEFINED HEREIN, AT 5:00 P.M.,
CENTRAL TIME ON THE IMMEDIATELY PRECEDING BUSINESS DAY
THIS CERTIFIES that, for and in consideration of $500, CIT
Group/Equipment Financing, Inc. ("CIT") or registered assigns, is entitled to
subscribe for and purchase from Bayard Drilling Technologies, Inc., a Delaware
corporation (hereinafter the "Company"), at the price of $16.00 per share (such
price, as from time to time to be adjusted as hereinafter provided, being
hereinafter called the "Warrant Price"), at any time and from time to time
after the date hereof but not later than the Expiration Date (as defined
below), up to such number of fully paid, nonassessable shares of Common Stock,
par value $.01 per share, of the Company ("Common Stock") as is specified in
the following sentence, subject, however, to the provisions and upon the terms
and conditions hereinafter set forth, including without limitation the
provisions of Section 3 hereof. This Warrant shall be exercisable for (i) up
to 145,000 shares of Common Stock upon issuance and (ii) up to 150,000 shares
of Common Stock from and after such time as the Company first has issued and
outstanding (including such 150,000 shares of Common Stock issuable hereunder)
at least 3,000,001 shares of Common Stock. "Expiration Date" shall mean the
earlier of (i) 5:00 P.M., Central time, on December ___, 2001, which is five
years from the date hereof, and (ii) 5:00 P.M., Central time, on the day that
is eighteen (18) months after the date that the Company completes an IPO,
provided, in each case, that if such day is not a Business Day, as defined
herein, at 5:00 P.M., Central time, on the immediately preceding Business Day.
"Business Day" shall mean a day other than a Saturday, Sunday or other day on
which banks in the State of Texas are authorized by law to remain closed.
"IPO" means (i) the initial underwritten public offering pursuant to which the
Common Stock becomes registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the
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"Exchange Act"), or (ii) any merger, consolidation or other business
combination transaction that results in any equity securities of the Company
being registered under Section 12 of the Exchange Act.
SECTION 1. EXERCISE OF WARRANT
(a) CASH EXERCISE
This Warrant may be exercised, at any time and from time to time but
not later than the Expiration Date, by the holder hereof (hereinafter referred
to as the "Warrantholder"), in whole or in part (but not as to a fractional
share of Common Stock and in no event for less than 100 shares (unless less
than an aggregate of 100 shares are then purchasable under all outstanding
Warrants held by a Warrantholder)), by the completion of the subscription form
attached hereto and by the surrender of this Warrant (properly endorsed) at the
Company's offices at 0000 Xxxxxxxxx Xxxxxxxxxx, Xxxxx 000X, Xxxxxxxx Xxxx,
Xxxxxxxx 00000 (or at such other location in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and by payment to the
Company of the Warrant Price, in cash or by certified or official bank check,
for each share being purchased.
(b) NET EXERCISE
Notwithstanding anything to the contrary contained in Subsection 1(a),
at any time after the completion by the Company of an IPO, the Warrantholder
may elect to exercise this Warrant and receive shares on a "net exercise" basis
in an amount equal to the value of this Warrant by delivery of the subscription
form attached hereto and surrender of this Warrant at the principal office of
the Company, in which event the Company shall issue to the Warrantholder a
number of shares of Common Stock computed using the following formula:
X= (P)(Y)(A-B)
-----------
A
Where: X= the number of shares of Common Stock to be
issued to the Warrantholder.
P= the portion of the Warrant being exercised
(expressed as a fraction).
Y= the total number of shares of Common Stock
issuable upon exercise of this Warrant.
A= the Current Market Price (as determined
pursuant to Subsection 1(d)) of one share of
Common Stock.
B= Warrant Price.
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(c) PROCEDURE FOR EXERCISE
In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the total number of whole shares of
Common Stock so purchased, registered in the name of the Warrantholder, shall
be delivered to the Warrantholder within a reasonable time, not exceeding five
Business Days, after the rights represented by this Warrant shall have been so
exercised; and, unless this Warrant has expired, a new Warrant representing the
number of shares (except a remaining fractional share), if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Warrantholder within such time. With respect to any such exercise, the
Warrantholder shall for all purposes be deemed to have become the holder of
record of the number of shares of Common Stock evidenced by such certificate or
certificates, from the date on which this Warrant was surrendered and, if
exercise is pursuant to Section 1(a), payment of the Warrant Price was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date on which the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such shares at the close of business on the next succeeding date on
which the stock transfer books are open. 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 on the Common Stock issued upon
such exercise. If any fractional interest in a share of Common Stock would,
except for the provisions of this Section 1, be delivered upon any such
exercise, the Company, in lieu of delivering the fractional share thereof,
shall pay to the Warrantholder an amount in cash equal to the current market
price of such fractional interest, as determined below.
(d) CURRENT MARKET PRICE
For any computation hereunder, the current market price per share of
Common Stock on any date shall be deemed to be the average of the daily market
price per share for the 20 consecutive Trading Days commencing 30 Trading Days
before the date in question. "Market Price" is defined as the closing sale
price (or, if no closing sale price is reported, the closing bid price) of the
Common Stock on the principal United States national securities exchange on
which the Common Stock is then listed for trading or, if not so listed, in the
over-the-counter market, as reported by the Nasdaq Stock Market ("Nasdaq"), or,
if the Common Stock is not quoted on Nasdaq, as reported by the National
Quotation Bureau Incorporated. If Market Price cannot be established as
described above, market price shall be the fair market value of the Common
Stock as determined in good faith by the Board of Directors whose determination
shall be conclusive. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or Nasdaq is open for the transaction of business.
SECTION 2. ADJUSTMENT OF NUMBER OF SHARES
Upon each adjustment of the Warrant Price for any stock dividend or
distribution or any subdivision or combination of the outstanding shares of the
Common Stock as provided in Section 3, the Warrantholder shall thereafter be
entitled to purchase, at the Warrant Price resulting from such
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adjustment, the number of shares (calculated to the nearest tenth of a share)
obtained by multiplying the Warrant Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Warrant Price
resulting from such adjustment.
SECTION 3. ADJUSTMENT OF WARRANT PRICE
The Warrant Price and the number and kind of shares issuable hereunder
shall be subject to adjustment from time to time upon the happening of certain
events as provided in this Section 3.
(a) ADJUSTMENTS
(1) If at any time prior to the exercise of this Warrant
in full, the Company shall (A) declare a dividend or make a distribution on the
Common Stock payable in shares of its capital stock (whether shares of Common
Stock or of capital stock of any other class); (B) subdivide, reclassify or
recapitalize its outstanding Common Stock into a greater number of shares; (C)
combine, reclassify or recapitalize its outstanding Common Stock into a smaller
number of shares; or (D) issue any shares of its capital stock by
reclassification of its Common Stock (excluding any such reclassification in
connection with a consolidation or a merger that is subject to Section 3(c)),
the Warrant Price in effect at the time of the record date of such dividend,
distribution, subdivision, combination, reclassification or recapitalization
shall be adjusted so that the Warrantholder shall be entitled to receive the
aggregate number and kind of shares which, if this Warrant had been exercised
in full immediately prior to such event, it would have owned upon such exercise
and been entitled to receive by virtue of such dividend, distribution,
subdivision, combination, reclassification or recapitalization. Any adjustment
required by this Section 3(a) shall be made successively immediately after the
record date, in the case of a dividend or distribution, or the effective date,
in the case of a subdivision, combination, reclassification or
recapitalization, to allow the purchase of such aggregate number and kind of
shares.
(2) If at any time prior to the exercise of this Warrant
in full, the Company shall make a distribution to all holders of the Common
Stock of stock of a subsidiary or securities convertible into or exercisable
for such stock, then in lieu of an adjustment in the Warrant Price or the
number of shares of Common Stock purchasable upon the exercise of this Warrant,
each Warrantholder, upon the exercise hereof at any time after such
distribution, shall be entitled to receive from the Company, such subsidiary or
both, as the Company shall determine, the stock or other securities to which
such Warrantholder would have been entitled if such Warrantholder had exercised
this Warrant immediately prior thereto, all subject to further adjustment as
provided in this Section 3, and the Company shall reserve, for the life of the
Warrant, such securities of such subsidiary or other corporation; provided,
however, that no adjustment in respect of dividends or interest on such stock
or other securities shall be made during the term of this Warrant or upon its
exercise.
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(3) If at any time prior to the expiration of this
Warrant in full, the Company shall issue rights or warrants to all holders of
Common Stock as such entitling them to subscribe for or purchase Common Stock
at a price per share less than the current market price per share (calculated
pursuant to Section 1(d) above) on such record date, then, in each such case
the number of shares subject to this Warrant thereafter purchasable upon the
exercise of this Warrant shall be determined by multiplying the number of
shares of Common Stock theretofore purchasable upon exercise of each Warrant by
a fraction, of which the numerator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or Warrants, plus the
number of additional shares of Common Stock offered for subscription or
purchase, and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or Warrants plus the
number of shares that the aggregate offering price of the total number of
shares of Common Stock so offered would purchase at such current market price.
For purposes of this Section 3(a)(3), the issuance of rights or Warrants to
subscribe for or purchase securities convertible into Common Stock shall be
deemed to be the issuance of rights or Warrants to purchase the Common Stock
into which such securities are convertible at an aggregate offering price equal
to the aggregate offering price of such securities plus the minimum aggregate
amount (if any) payable upon conversion of such securities into Common Stock.
(4) If at any time prior to the exercise of this Warrant
in full, the Company shall distribute to all holders of its Common Stock
evidence of indebtedness of the Company or assets of the Company (excluding
cash dividends or distributions out of earned surplus) or rights or Warrants to
subscribe for securities of the Company (excluding those referred to in
Sections 3(a)(2) or (3) above), then in each case the Warrant Price shall be
adjusted to a price determined by multiplying the Warrant Price in effect
immediately prior to such distribution by a fraction, of which the numerator
shall be the then current market price per share of Common Stock (calculated
pursuant to Section 1(d) above) on the record date for determination of
stockholders entitled to receive such distribution, less the then fair value
(as determined by the Board of Directors of the Company, whose determination
shall be conclusive) of the portion of the assets or evidences of indebtedness
so distributed or of such subscription rights or Warrants which are applicable
to one share of Common stock, and of which the denominator shall be the market
price per share of Common Stock; provided, however, that if the then current
market price per share of Common Stock on the record date for determination, of
stockholders entitled to receive such distribution is less than the then fair
value of the portion of the assets or evidence of indebtedness so distributed
or of such subscription rights or Warrants which are applicable to one share of
Common Stock, the foregoing adjustment of the Warrant Price shall not be made
and in lieu thereof the number of shares purchasable upon exercise of each
Warrant immediately prior to such distribution shall be adjusted so that the
holder of such Warrant shall be entitled to receive upon exercise of such
Warrant the kind and number of assets, evidence of indebtedness, subscription
rights and Warrants (or, in the event of the redemption of such evidence of
indebtedness, subscription rights or Warrants, any cash paid in respect of such
redemption) that such Warrantholder would have owned or have been entitled to
receive after the happening in such distribution had such Warrant been
exercised immediately prior to the record date of such distribution.
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(5) In the event of any capital reorganization of the
Company (other than an event referred to in Section 3(a)(1)), or in case of the
consolidation of the Company with, the merger of the Company with or into or
the sale of all or substantially all of the properties and assets of the
Company to any other person, and in connection therewith consideration is
payable to holders of Common Stock (or other securities or property purchasable
upon exercise of this Warrant) in exchange therefor, this Warrant shall remain
subject to the terms and conditions set forth in this Warrant and this Warrant
shall, after such capital reorganization, consolidation, merger or sale be
exercisable for the number of shares of stock or other securities or assets to
which a holder of the number of shares of Common Stock purchasable (at the time
of such capital reorganization, reclassification of such Common Stock,
consolidation, merger or sale) upon exercise of this Warrant would have been
entitled if such Warrant had been exercised immediately prior to such capital
reorganization, reclassification of such Common Stock, consolidation, merger or
sale; and in any such case, if necessary, the provisions set forth in this
Warrant with respect to the rights and interests thereafter of the
Warrantholder shall be appropriately adjusted so as to be applicable, as nearly
as may reasonably be, to any shares of stock or other securities or assets
thereafter deliverable on the exercise of this Warrant. The Company shall not
effect any such consolidation, merger or sale, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets or the appropriate corporation or entity
shall assume, by written instrument, the obligation to deliver to the
Warrantholder the shares of stock, securities or assets to which the
Warrantholder may be entitled pursuant to this Section 3(a)(5).
(6) Notwithstanding Section 3(a)(5), (i) if the Company
merges or consolidates with, or sells all or substantially all of its property
and assets to, any other person and consideration is payable to holders of
Common Stock in exchange for their Common Stock in connection with such merger,
consolidation or sale which consists solely of cash, or (ii) in the event of
the dissolution, liquidation or winding up of the Company, then the
Warrantholder shall be entitled to receive distributions on the date of such
event on an equal basis with holders of Common Stock (or other securities
issuable upon exercise of this Warrant) as if this Warrant had been exercised
immediately prior to such event, less the Warrant Price. Upon receipt of such
payment, if any, the rights of the Warrantholder shall terminate and cease and
this Warrant shall expire. In case of any such merger, consolidation or sale
of assets, the surviving or acquiring person and, in the event of any
dissolution, liquidation or winding up of the Company, the Company shall
promptly, after receipt of this surrendered Warrant, make payment by delivering
a check in such amount as is appropriate (or, in the case of consideration
other than cash, such other consideration as is appropriate) to such person as
it may be directed in writing by the Warrantholder surrendering this Warrant.
(7) If any question shall at any time arise with respect
to the adjusted number of shares of Common Stock or other securities issuable
upon exercise of this Warrant, such question shall be determined by the
independent firm of certified public accountants of recognized national
standing selected by the Company and reasonably acceptable to the
Warrantholder.
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(8) No adjustment in the Warrant 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 adjustments which by
reason of this Section 3(a)(8) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 3(a) shall be made to the nearest cent or to the nearest
tenth of a share, as the case may be. Notwithstanding anything in this Section
3(a) to the contrary, the Warrant Price shall not be reduced to less than the
then existing par value of the Common Stock as a result of any adjustment made
hereunder.
(9) In the event that at any time, as the result of any
adjustment made pursuant to this Section 3(a), the Warrantholder thereafter
shall become entitled to receive any securities other than Common Stock,
thereafter the number of such other securities so receivable upon exercise of
any Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Section 3(a).
(b) NO ADJUSTMENT FOR DIVIDENDS
Except as provided in Section 3(a) of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
(c) FORM OF WARRANT AFTER ADJUSTMENTS
The form of this Warrant need not be changed because of any
adjustments in the Warrant Price or the number or kind of the shares
purchasable pursuant to this Warrant, and Warrants theretofore or thereafter
issued may continue to express the same price and number and kind of shares as
are stated in this Warrant, as initially issued, provided, however, that the
Company may, at any time in its sole discretion (which shall be conclusive),
make any change in the form of Warrant certificate that it may deem appropriate
and that does not affect the substance thereof. Any Warrant certificate
thereafter issued, whether upon registration of transfer of, or in exchange or
substitution for, an outstanding Warrant certificate may be in the form so
changed.
(d) TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration of transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
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(e) NOTICE OF ADJUSTMENT
Upon any adjustment of the Warrant Price, then and in each such case
the Company shall give written notice thereof, by first-class mail, postage
prepaid, addressed to each Warrantholder at the address of such holder as shown
on the books of the Company, which notice shall state the Warrant Price
resulting from such adjustments setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.
(f) STOCK TO BE RESERVED
The Company will at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issuance upon the exercise
of this Warrant as herein provided, such number of shares of Common Stock as
shall then be issuable upon the exercise of this Warrant. The Company
covenants that all shares of Common Stock which shall be so issued, upon full
payment of the Warrant Price therefor or as otherwise set forth herein, shall
be duly and validly issued and fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Company covenants that it will
from time to time take all such action as may be required to ensure that the
par value per share, if any, of the Common Stock is at all times equal to or
less than the effective Warrant Price. The Company will take all such action
as may be necessary to ensure that all such shares of Common Stock may be so
issued without violation of any applicable law or regulation, or of any
requirement of any national securities exchange or automated quotation system
upon which the Common Stock of the Company may be listed or quoted. The
Company will not take any action which results in any adjustment of the Warrant
Price if the total number of shares of Common Stock issued and issuable after
such action upon exercise of this Warrant would exceed the total number of
shares of Common Stock then authorized by the Company's Certificate of
Incorporation. The Company has not granted and will not grant any right of
first refusal with respect to shares issuable upon exercise of this Warrant,
and there are no preemptive rights associated with such shares.
(g) ISSUE TAX
The issuance of certificates for shares of Common Stock upon exercise
of any Warrant shall be made without a charge to the Warrantholder for any
issuance tax in respect thereto provided that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(h) CLOSING OF BOOKS
The Company will at no time close its transfer books against the
transfer of the shares of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant.
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(i) DEFINITION OF COMMON STOCK
The shares purchasable pursuant to this Warrant shall include only
securities designated as Common Stock of the Company. As used herein the term
"Common Stock" shall mean and include the Common Stock, par value $.01 per
share, of the Company as authorized on the date hereof, or shares of any class
or classes resulting from any recapitalization or reclassification thereof
which are not limited to any fixed sum or percentage and are not subject to
redemption by the Company and in case at any time there shall be more than one
such resulting class, the shares of each class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassification bears to the total number of shares of
all such classes resulting from all such reclassification.
SECTION 4. REGISTRATION RIGHTS
(a) DEMAND REGISTRATION
At any time that the Company is eligible to use Form S-3 to register
its securities under the Securities Act of 1933, as amended (the "Securities
Act"), and prior to the Expiration Date, the Warrantholder shall have the right
to make written request of the Company to register as a shelf registration
under the rules and regulations (the "Regulations") of the Securities and
Exchange Commission (the "SEC") all of the shares of Common Stock issuable upon
exercise of this Warrant or any other securities received by or to be received
by the Warrantholder upon exercise of the Warrant (the "Registrable Stock").
The underlying shares of Registrable Stock specified in such request or a
request pursuant to Section 4(c) hereof is referred to hereto as the "Subject
Stock." Promptly upon receipt of such request the Company shall file with the
SEC a registration statement on the applicable form for the registration of the
Subject Stock ("registration statement") and use its best efforts to cause such
registration statement to become effective (including, without limitation,
filing post-effective amendments and appropriate compliance with the
Regulations) as soon as practicable to permit or facilitate the sale and
distribution of the Subject Stock. The Company is obligated to effect only one
(1) such registration pursuant to this Section 4(a).
Notwithstanding the provisions of this Section 4(a), if the Company
shall furnish to the Warrantholder a certificate signed by the Chief Executive
Officer of the Company stating that in the good faith judgment of the Board of
Directors of the Company it would be seriously detrimental to the Company and
its stockholders for such a registration statement to be filed in light of the
existence of non-public information regarding the Company and it is therefore
essential to defer a filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than one hundred
eighty (180) days after receipt of the request from the Warrantholder to effect
such a registration; provided, however, that the Company may not utilize the
right more than once in any twenty-four month period; and provided, further
that the Warrantholder may, at any time in writing, withdraw such request for
such registration and therefore preserve the right provided in this Section
4(a) for the Warrantholder to request such registration.
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(b) PREPARATION OF DOCUMENTS
Prior to filing a registration statement or any amendments or
supplements thereto with the SEC required hereby, the Company will furnish to
the counsel selected by the Warrantholder copies of all documents proposed to
be filed, which documents will be subject to the timely review of such counsel.
In connection therewith, the Company shall prepare and file a registration
statement on a form then available to it to effect such registration. The
Warrantholder agrees to provide all such information and materials and take all
such action as may be reasonably required in order to permit the Company to
comply with all applicable requirements of the SEC and to obtain any desired
acceleration of the effective date of such registration statement. The
Warrantholder shall provide the Company with all information that is reasonably
required to effect any IPO or other public or private offering of securities
of the Company, including completing and executing all undertakings,
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of any underwriting
agreement or other financing agreement or under applicable law.
(c) PIGGYBACK REGISTRATION
If (but without any obligation to do so) the Company proposes to
register, whether or not for its own account, with the SEC any of the Common
Stock (or any other securities of the Company, provided that if the securities
being registered are not those for which the Warrant is then exercisable, the
Warrant Shares shall not be included in any related underwritten offering),
under the Regulations of the SEC (other than pursuant to a request under
Section 4(a) and other than securities to be issued pursuant to a stock option
or other employee benefit or similar plan, or in connection with a merger,
acquisition, or a Rule 145 transaction), the Company shall, as promptly as
practicable, but at least 20 days prior to the filing date of the applicable
registration statement give written notice to the Warrantholder of its
intention to effect such registration. If, within 20 days after receipt of
such notice but before the Expiration Date, the Warrantholder submits a written
request to the Company specifying the amount of Registrable Stock that the
Warrantholder proposes to sell, the Company shall include the shares specified
in such request in such registration statement and the Company shall keep each
such registration statement in effect and maintain compliance with each federal
law and regulation as set forth in Section 4(d).
Prior to filing a registration statement pursuant to the Regulations
under which the shares of Common Stock issuable upon exercise of this Warrant
may be included, the Company shall give reasonable notice to the holder(s) of
this Warrant or such shares of Common Stock and shall allow such shares of
Common Stock of the Warrantholder to be included in such registration statement
subject to the following terms and conditions: (i) such shares need not be
included in any underwritten offering if and to the extent that the managing
underwriter determines in its best judgment that their inclusion would impair
the success of the offering provided that (A) if other selling stockholders
without contractual registration rights have requested registration of
securities in the proposed offering, the Company will reduce or eliminate such
securities held by selling stockholders without registration rights before any
reduction or elimination of Registrable Stock;
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and (B) any such reduction or elimination (after taking into account the effect
of clause (A)) shall be pro rata to all other selling stockholders with
contractual registration rights; (ii) if shares of Registrable Stock are
included in such registration, to the extent requested in writing by a
managing underwriter, if any, of any registration effected pursuant to Section
4(a) or 4(c), each holder of Registrable Stock agrees not to sell, transfer or
otherwise dispose of, including any sale pursuant to Rule 144 under the
Securities Act, any Common Stock, or any other equity security of the Company
or any security convertible into or exchangeable or exercisable for any equity
security of the Company (other than as part of such underwritten public
offering) during the time period reasonably requested by the managing
underwriter, not to exceed 180 days; and (iii) the Company shall have no
obligation pursuant to this Section if at the time the registration statement
is proposed to be filed the holders may freely sell the shares of Common Stock
issuable upon exercise of this Warrant pursuant to the Regulations of the SEC.
(d) COVENANTS OF THE COMPANY
In connection with any offering of Subject Stock registered pursuant
to this Warrant, the Company shall (a) furnish to the Warrantholder such number
of copies of any registration statement (including any preliminary prospectus)
as it may reasonably request in order to effect the offering and sale of the
Subject Stock to be offered and sold, but only while the Company shall be
required under the provisions hereof to cause the registration statement to
remain current, and (b) keep the Warrantholder advised in writing as to the
initiation of each registration and as to the completion thereof. Upon any
registration becoming effective pursuant to this Section 4, the Company shall
use its best efforts to: (i) keep such registration statement current for a
period of 120 days; (ii) prepare and file with the SEC such amendments and
supplements to such registration statement as may be necessary to comply with
the provisions of the Regulations of the SEC with respect to the disposition of
all securities covered by such registration statement; (iii) cause all such
Subject Stock registered pursuant to such registration statement to be listed
on each securities exchange or automated quotation system on which the Common
Stock is then listed; (iv) provide a transfer agent and registrar for all
Subject Stock registered pursuant to such registration statement and a CUSIP
number for all such Subject Stock, in each case not later than the effective
date of such registration; and (v) otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC.
(e) EXPENSES
With respect to the registration of Subject Stock pursuant to Section
4(a), together with any inclusion of the Subject Stock in a so-called piggyback
registration pursuant to Section 4(c), the Company will pay all expenses
incident to its performance of or compliance with this Section 4 including,
without limitation, all registration and filing fees, printing expenses,
messenger, telephone and delivery expenses, and fees and disbursements of its
counsel and independent certified public accountants. The Warrantholder will
be responsible for the underwriting discounts and commissions and any stock
transfer taxes, broker's fees or other direct marketing expenses with respect
to shares sold for its account, all internal management personnel and
administrative costs of the Warrantholder
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and the fees and expenses of its attorneys, if any, incurred by it in
connection with affecting any such transactions.
(f) INDEMNIFICATION
The Company will, indemnify, to the maximum extent permitted by law,
the Warrantholder, its officers and directors and each person who controls the
Warrantholder (within the meaning of the Regulations of the SEC) against all
losses, claims, damages, liabilities and expenses (or actions, proceedings or
settlements in respect thereof) caused by, arising out of or based on any
untrue or alleged untrue statement of a material fact contained in any
registration statement (or any amendment or supplement thereto) of the Company
relating to the sale of Subject Stock registered pursuant to this Section 4, or
any exhibits or materials incorporated by reference therein, filed with the
SEC, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by the Warrantholder expressly
for use therein.
The Warrantholder will indemnify, to the maximum extent permitted by
law, the Company, its officers and directors and each person who controls the
Company (within the meaning of the Regulations of the SEC) against all losses,
claims, damages, liabilities and expenses (or actions, proceedings or
settlements in respect thereof) caused by, arising out of or based on any
untrue or alleged untrue statement of a material fact contained in any
registration statement (or any amendment or supplement thereto) of the Company
relating to the sale of Subject Stock registered pursuant to this Section 4, or
any exhibits or materials incorporated by reference therein, filed with the
SEC, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only insofar as the same are caused by or contained in any
information furnished in writing to the Company by the Warrantholder expressly
for use therein.
Any person entitled to indemnification under this Section 4(f) will
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim in which case, the indemnifying party shall be obligated to pay the
fees and expenses of up to two counsel for all parties indemnified by such
indemnifying party with respect to such claim.
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The indemnification provisions set forth in this Section 4(f) shall
survive the termination or expiration of this Warrant.
(g) TITLE TO STOCK
All shares of the Common Stock delivered upon the exercise of this
Warrant shall be validly issued, fully paid and nonassessable; the
Warrantholder shall receive good and marketable title to the Common Stock, free
and clear of all voting and other trust arrangements, liens, encumbrances,
equities and claims created by the Company whatsoever.
SECTION 5. NOTICES OF RECORD DATES
In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any right to sell shares of stock of any class or any
other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other corporation or
entity; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then and in each such event the Company will give notice to the Warrantholder
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right and stating the amount and character of
such dividend, distribution or right, and (2) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock will
be entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
days prior to the date therein specified, and such notice shall 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
stockholders, if either is required.
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SECTION 6. NO STOCKHOLDERS RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights
or other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
SECTION 7. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
In case the certificate or certificates evidencing the Warrants shall
be mutilated, lost, stolen or destroyed, the Company shall, at the request of
the Warrantholder, issue and deliver in exchange and substitution for and upon
cancellation or the mutilated certificate or certificates, or in lieu of and
substitution for the certificate or certificates lost, stolen or destroyed, a
new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant and a bond of
indemnity, if requested, also satisfactory in form and amount at the
applicant's cost. Applicants for such substitute Warrant certificate or
certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
SECTION 8. NOTICES
All notices, requests and other communications required or permitted
to be given or delivered hereunder shall be in writing, and shall be delivered,
or shall be sent by certified or registered mail or overnight courier, postage
prepaid and addressed, or by facsimile, and if to the Warrantholder to such
Warrantholder at such address or facsimile number as shall have been furnished
to the Company by notice from such Warrantholder and if to the Company, at 0000
Xxxxxxxxx Xxxxxxxxxx, Xxxxx 000X, Xxxxxxxx Xxxx, Xxxxxxxx 00000; Attention:
President, facsimile number (000) 000-0000 or at such other address or
facsimile number as shall have been furnished to the Warrantholder by notice
from the Company.
SECTION 9. RESTRICTIONS ON TRANSFER
This Warrant may not be sold, transferred, hypothecated or assigned to
any other person or entity other than (i) the respective successors to CIT in a
merger or consolidation; (ii) the respective purchasers of all or substantially
all of the assets of CIT; or (iii) the CIT shareholders in the event CIT is
liquidated or dissolved. CIT agrees not to make any sale or other disposition
of either the Warrant or the underlying Common Stock except pursuant to a
registration statement which has become effective under the Act, setting forth
the terms of such offering, the underwriting discount and the commissions and
any other pertinent data with respect thereto, unless CIT has provided the
Company with an opinion of counsel reasonably acceptable to the Company that
such registration is not required. This Warrant shall bear a legend setting
forth the foregoing restriction.
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SECTION 10. AMENDMENTS AND WAIVERS
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by each of (i) a majority in
interest of the holders of the Registrable Stock and (ii) an authorized
representative of the Company.
SECTION 11. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 12. REPRESENTATION AND WARRANTIES OF THE COMPANY
The Company represents and warrants to CIT as follows:
(a) INCORPORATION AND GOOD STANDING
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct its
business, and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions, if any, in which it
owns or leases properties or in which the conduct of its business requires such
qualification.
(b) CAPITALIZATION
As of the date hereof, the authorized capital stock of the Company
consists of 10,000,000 shares of Common Stock and 2,000,000 shares of
preferred stock, par value $.01 per share. As of the date hereof, 2,800,000
shares of Common Stock are issued and outstanding and 1,000,000 shares of
Common Stock are subject to issuance pursuant to an option agreement with
Chesapeake Energy Corporation. No shares of preferred stock are outstanding.
(c) CORPORATE AND OTHER ACTION
The Company has all requisite power and authority (corporate and
other), and has taken all necessary corporate action, to authorize, execute,
deliver and perform this Warrant, to authorize and reserve for issuance and,
upon payment from time to time of the Warrant Price, to issue, sell and
deliver, the shares of the underlying Common Stock issuable upon exercise of
this Warrant, and to perform all of its obligations under this Warrant. This
Warrant has been duly executed and delivered by the Company and is a legal,
valid and binding agreement of the Company enforceable in accordance with its
terms. No authorization, approval, consent or other order of any regulatory
authority is required for such authorization, issue or sale.
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(d) NO VIOLATION
The execution and delivery of this Warrant, the consummation of the
transactions herein contemplated and the compliance with the terms and
provisions of this Warrant will not conflict with, or result in a breach of, or
constitute a default or an event permitting acceleration under, any statute,
the Certificate of Incorporation or Bylaws of the Company or any indenture,
mortgage, deed of trust, note, bank loan, credit agreement, franchise, license,
lease, permit, or any other agreement, understanding, instrument, judgment,
decree, order, statute, rule or regulation to which the Company is a party or
by which it is bound as of the date hereof.
(e) VALIDITY
The shares of underlying Common Stock of the Company issued upon
exercise of this Warrant will be duly authorized and validly issued and
outstanding, fully paid and nonassessable and free of preemptive rights created
by the Company or under applicable law.
(f) REMEDIES
The Company stipulates that the remedies at law of the Warrantholder
or any holder of underlying Common Stock 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 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.
SECTION 13. GOVERNING LAW
This Warrant shall be governed by and construed under the laws of the
State of Delaware without regard to conflict of law principles.
SECTION 14. HEADINGS
The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect any of the terms hereof.
SECTION 15. COUNTERPARTS
This Warrant may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the Company and CIT have executed this Warrant on
and as of the day and year first above written.
BAYARD DRILLING TECHNOLOGIES INC.,
a Delaware corporation
By:/s/ XXXXX X. XXXXX
---------------------------------------------------
Xxxxx X. Xxxxx
President
CIT GROUP/EQUIPMENT FINANCING, INC.
By:/s/ XXXXXXX XXXXXXXX
---------------------------------------------------
Name:Xxxxxxx Xxxxxxxx
-------------------------------------------------
Title:Vice President
------------------------------------------------
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SUBSCRIPTION FORM
(To be executed upon exercise of this Warrant)
_________________:
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant for, and to purchase thereunder,
______________ shares of Common Stock, as provided for therein, and either
tenders herewith payment of the purchase price in full in the form of cash or a
certified or official bank check in the amount of $____________ or, if the
undersigned elects pursuant to Section 1(b) of the within Warrant to convert
such Warrant into Common Stock net issuance, the undersigned exercises the
within Warrant by exchange under the terms of Section 1(b).
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional share to:
Name:___________________________________________
Address:________________________________________
Social
Security No:____________________________________
Signature_______________________________________
Note: The above signature must correspond exactly
with the name on the first page of this
Warrant or with the name of the assignee
appearing in the assignment form below.
If said number of shares shall not be all the shares purchasable under the
within Warrant, a new Warrant is to be issued in the name of said undersigned
for the balance remaining of the shares purchasable thereunder rounded up to
the next higher number of shares.
Signature Guaranteed:____________________________________________
(Signature must be guaranteed by a bank or trust company having an office
or correspondence in the United States or by a member firm of a registered
securities exchange or the National Association of Security Dealers, Inc.)
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