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EXHIBIT 10.38
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF
CAN BE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND SUCH SHARES OF
COMMON STOCK MAY NOT BE SOLD, TRANSFERRED, OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT, UNLESS, IN THE OPINION OF COUNSEL TO THE
COMPANY, SUCH REGISTRATION IS NOT THEN REQUIRED.
This Warrant will be void after January 15, 2001
WARRANT
To Purchase Shares of Common Stock of
UNIVERSAL SEISMIC ASSOCIATES, INC.
THIS CERTIFIES THAT, for value received, XXXXXX X. XXXXXXX, whose address
is 00000 Xxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000 (the "Holder"), is
entitled to purchase from UNIVERSAL SEISMIC ASSOCIATES, INC., a Delaware
corporation, whose address is 00000 Xxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx
00000-0000 (the "Company"), at any time from and after the date hereof, and
prior to midnight (Houston, Texas time) on January 15, 2001 (the "Exercise
Period"), 100,000 fully paid and nonassessable shares of the Company's common
stock, $0.0001 par value (the "Common Stock"), at the price of $3.75 per Share
("Share Purchase Price"); subject, however, to the provisions and upon the
terms and conditions hereinafter set forth in this Warrant ("Warrant"). The
shares of Common Stock deliverable upon exercise of this Warrant shall be
referred to hereinafter collectively as the "Shares."
1. Exercise; Issuance of Certificates; Payment for Shares. The rights
represented by this Warrant may be exercised by the Holder, in whole or in
part, at any time or from time to time during the Exercise Period, upon
presentation and surrender of this Warrant to the Company, at its principal
office as set forth above, or at such other place as the Company may designate
written notice from the Holder stating that the Holder is exercising this
Warrant and specifying the number of Shares that the Holder desires to purchase
(the "Notice") and accompanied by payment of the applicable Share Purchase
Price for each Share so purchased and all federal and state taxes or other
governmental charge applicable to such exercise and issuance of the Shares.
Such payment shall be made, in cash or by certified, bank or cashier's check,
payable to the order of the Company. The Shares so purchased shall be deemed to
have been issued to the Holder as of the close of business on the business day
next following the date on which this Warrant shall have been surrendered to
the Company, along with the Notice and full payment for the Shares purchased.
Subject to the provisions of Section 8, certificates for the Shares so
purchased and, unless this Warrant shall have expired, a new Warrant
representing the number of Shares, if any, with respect to which this Warrant
shall not then have been
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exercised, shall be delivered to the Holder within a reasonable time after the
Holder has complied with the provisions of this Section 1.
2. Restrictions on Exercise or Transfer of Warrant The Holder may not sell,
assign, transfer or hypothecate this Warrant or any interest herein except as
set forth in the last sentence of this Section, and any attempt by the Holder
to do so shall be void. Neither this Warrant nor any interest herein may be
sold, assigned, transferred or hypothecated involuntarily or by operation of
law. The Company specifically understands and agrees that the Warrant shall be
fully transferable to any corporation of which the Holder is a director or
affiliate and has a 10% or more equity interest therein, provided that the
transferee specifically agrees to comply with the foregoing and the Holder has
a bona fide interest in such corporation and such transfer has not been made to
such corporation for the primary purpose of avoiding the foregoing transfer
restrictions.
3. Reservation of Shares. The Company hereby agrees that at all times
during the Exercise Period there shall be reserved for issuance and delivery
upon exercise of this Warrant such number of Shares as shall be required for
issuance and delivery on exercise of this Warrant.
4. Loss of Warrant. The Company will execute and deliver a new Warrant of
like tenor and date upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (i) in the
case of loss, theft or destruction, upon receipt by the Company of indemnity
satisfactory to the Company, or (ii) in the case of mutilation, upon
presentation, surrender, and cancellation of this Warrant. The Holder shall pay
all federal and state taxes or other governmental charge applicable to any
issuance of new Warrants under this Section 4.
5. Rights of the Holder. The Holder shall not, by virtue of this Warrant,
be entitled to any rights of a shareholder in the Company, either at law or
equity. The rights of the Holder are limited to those expressed in the Warrant
and are not enforceable against the Company except to the extent set forth
herein.
6. Adjustment and Other Events.
(a) Definition. As used in this Section 6, "Stock" shall mean
share of the Company's capital stock of any class, whether now or hereafter
authorized, that has the right to participate in the distribution of earnings
and assets of the Company without limit as to amount or percentage. As of the
date hereof, Stock consists of 20,000,000 authorized shares of the Company's
common stock, $0.0001 par value per share.
(b) Stock Dividend or Distribution. If the Company shall declare
any dividend or other distribution upon its outstanding Stock payable in Stock,
or shall subdivide its outstanding shares of Stock into a greater number of
shares, then, on the effective date of such dividend, distribution or
subdivision, the number of Shares that may thereafter be purchased
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upon the exercise of the rights represented hereby shall be in proportion to
the increase through such dividend, distribution or subdivision, and the Share
Purchase Price shall be decreased in such proportion. In case the Company shall
at any time combine the outstanding shares of its Stock into a smaller number
of shares, then, on the effective date of such combination, the number of Shares
that may thereafter be purchased upon the exercise of the rights represented
hereby shall be decreased in proportion to the decrease through such
combination, and the Share Purchase Price shall be increased in such
proportion.
(c) Notice of Adjustment and Other Events. The Company shall
give the Holder notice of any event requiring an adjustment as provided in
Subsection 6(b) at least ten days prior to the effective date of such event;
provided, however, that failure to give such notice shall not in any way
invalidate or otherwise limit or affect the validity or effectiveness of such
event.
(d) Fractional Shares. No fractional shares of Common Stock or
scrip representing fractional shares of Common Stock shall be issued upon the
exercise of this Warrant, and the Company shall have no obligation to make any
cash payment with respect thereto.
(e) Company-Held Stock. The number of shares of Stock of any
class at any time outstanding shall include all shares of Stock of that class
then owned or held by or for the account of the Company.
7. Registration Rights.
(a) Registrable Stock. As used in this Section 7, the term
"Registrable Stock" shall mean all Shares issued pursuant to the provisions of
this Warrant, but shall not include the Warrant.
(b) Incidental Registration. In the event that the Company
proposes, at any time during the Exercise Period, to file a registration
statement on a general form of registration under the Securities Act of 1933,
as amended (the "Securities Act"), and relating to shares of Common Stock
issued or to be issued by it (other than a registration effected solely to
implement an employee benefit plan or solely with respect to a transaction to
which Rule 145 under the Securities Act is applicable), then it shall give
written notice of such proposal to all holders of Registrable Stock and any
other holders of securities of the Company having any rights to include
securities in such registration. Upon the written request of a holder or
holders of any shares of Registrable Stock given within ten days after receipt
of any such notice (stating the number of shares of Registrable Stock to be
disposed of and the intended method of disposition of such shares by such
holder or holders), the Company will use its best efforts to promptly cause all
such shares intended to be disposed of, the holder or holders of which shall
have so requested registration thereof, to be registered under the Securities
Act so as to permit the sale or other disposition (in accordance with the
intended methods thereof as aforesaid) by the holder or holders of the shares
so registered, subject to the limitations set forth in Section 7(c). The
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Company specifically covenants and agrees that it will use all reasonable
efforts to include such shares in any registration statement filed at the
request of Resource Investors Management Company ("RIMCO") or any affiliate
thereof filed by reason of any registration rights granted pursuant to the
contemplated investment in various debt instruments and related securities by
various limited partnerships affiliated with RIMCO (the "RIMCO Partnerships").
To the extent that the RIMCO Partnerships do not make such investment or no
registration statement is filed on their behalf within 24 months of the
execution date hereof, the Company shall, if permitted under applicable rules
and regulations of the Securities and Exchange Commission promptly cause the
Stock to be included on a registration statement on form S-8, or if not so
permitted, on the next registration statement filed by the Company (other than
a registration effected solely to implement an employee benefit plan or solely
with respect to a transaction to which Rule 145 under the Securities Act is
applicable).
(c) Limitations on Registration. If the Company gives notice
pursuant to Section 7(b) for the purpose of permitting registration (whether
involving an underwritten or other offering) of Shares, the Company shall have
the right to determine the aggregate size of the offering and to limit the
number of Shares to be registered by the holders of Registrable Stock pursuant
to Section 7(b), including the right to exclude all shares to be sold on behalf
of holders of Registrable Stock if the Company's underwriters or financial
advisers determine such exclusion is necessary or advisable to insure a
successful offering of the Company securities. If the Company limits the number
of (but does not exclude) shares sold by selling shareholders, the maximum
number of shares to be registered on behalf of any holder of Registrable Stock
shall be determined by multiplying the number of shares of Registrable Stock
such holder has properly requested be registered by a fraction, the numerator
of which shall be the number of shares of Common Stock to be included in such
registration by all selling shareholders, and the denominator of which is the
number of shares of Common Stock validly requested to be included in such
registration by all holders of Common Stock having registration rights. All
registration rights with respect to any shares of Registrable Stock shall lapse
and terminate at the earlier of (i) such time as such shares have been actually
registered once on a registration statement on Form S-3 or S-8, (ii) such time
as the holder thereof has had the opportunity to register such shares hereunder
and has declined or failed to so register such shares, or (iii) such time as
counsel for the Company a good faith determination that all of the shares of
Registrable Stock may be sold into public markets under Rule 144 promulgated
under the Securities Act, or otherwise, in a period of nine months or less and
that any restrictive legend set forth on the shares of Registrable Shares
pertaining to securities law compliance may be removed. In addition, to the
extent that any existing registration rights of the Company conflict with the
provisions of this Section 7, the registration rights provided herein shall be
subject to any previously granted registration rights with respect to the
Company securities and shall be delayed or otherwise equitably subordinated to
such prior rights until such prior rights are satisfied. The foregoing
limitations shall not apply to the first registration statement filed on behalf
of RIMCO or any of the RIMCO Partnerships, provided that RIMCO consents to such
inclusion.
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(d) Registration Procedures. If and when the Company is required
by the provisions of this Section 7 to use its best efforts to effect promptly
the registration Of Shares of Registrable Stock under the Securities Act, the
Company will:
(i) prepare and file with the Securities and Exchange Commission
(the "Commission") a registration statement with respect to such shares and use
its best efforts to cause such registration statement to become and remain
effective as provided herein for a period of not less than six (6) months,
except that the Company shall not be required to conduct any special audit and
if such an audit would be required, the Company may delay such registration
statement until such time as such special audit is no longer required;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
current and to comply with the provisions of the Securities Act with respect to
the sale or other disposition of all shares covered by such registration
statement, including such amendments and supplements as may be necessary to
reflect the intended method of disposition from time to time of the prospective
seller or sellers of such shares for a period of not less than six (6) months;
(iii) furnish to each prospective seller such number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such seller may
reasonably request in order to facilitate the public sale or other disposition
of the shares owned by such seller; and
(iv) use its best efforts to register or qualify the shares
covered by such registration statement under such other securities or blue sky
or other applicable laws of such jurisdictions within the United States, as
each prospective seller shall reasonably request, to enable such prospective
seller to consummate the public sale or other disposition in such jurisdictions
of the shares owned by such seller.
Each prospective seller of Registrable Stock, and each
underwriter designated by such seller, shall be required to furnish to the
Company such information as the Company may reasonably require from such seller
or underwriter for inclusion in the registration statement (and the prospectus
included therein).
The holders of shares included in the registration statement
will not (until notice) effect sales thereof after receipt of telegraphic or
written notice from the Company to suspend sales in order to permit the Company
to correct or update a registration statement or prospectus; but the obligations
of the Company with respect to maintaining any registration statement current
and effective shall be extended by a period of days equal to the period such
suspension is in effect.
(e) Registration Expenses. All expenses incurred in effecting any
registration pursuant to this Section 7 including, without limitation, all
registration and filing fees, printing
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expenses, expenses of compliance with blue sky laws and fees and disbursements
of counsel for the Company, shall be borne by the Company. Notwithstanding the
foregoing, however, all underwriting discounts and commissions and fees and
disbursements for special counsel to the holders of the securities to be
registered shall be paid out of the proceeds of the sale of Common Stock
occurring in connection with such registration.
(f) Indemnification by Company. The Company agrees to indemnify
each holder requesting or joining in a registration, each person or entity who
controls such holder within the meaning of Section 15 of the Securities Act,
and each underwriter and selling broker of the securities so registered, and
their respective successors, against all claims, losses, damages, liabilities,
fines and penalties (or actions in respect thereof) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related registration
statement, notification or the like) or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and agrees to reimburse
each such holder, each person or entity who controls such holder within the
meaning of Section 15 of the Securities Act, and each such underwriter, and
their respective successors, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, provided, however, that the Company will not be
liable in any such case if (and to the extent that) such statement or omission
was made in reliance upon information (including, without limitation written
negative responses to inquiries) furnished to the Company by an instrument duly
executed by such holder or underwriter and stated to be specifically for use in
such prospectus, offering circular or other document (or related registration
statement, notification or the like) or any amendment or supplement thereto.
(g) Indemnification by Holders. Each holder requesting or
joining in a registration and each underwriter of the securities so registered
will indemnify the Company and its officers and directors and each person, if
any, who controls any thereof within the meaning of Section 15 of the
Securities Act and their respective successors against all claims, losses,
damages, liabilities, fines and penalties (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular or other
document incident to any registration, qualification or compliance (or in any
related registration statement, notification or the like) or any omission (or
alleged omission) to state therein a material fact required to be stated or
necessary to make the statements therein not misleading, and will reimburse the
Company, as applicable, and each other person indemnified pursuant to this
Section 7(g) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, provided, however, that this Section 7(g) shall apply only
if (and only to the extent that) such statement or omission was made in
reliance upon information (including, without limitation, written negative
responses to inquiries) furnished to the Company by an
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instrument duly executed by such holder or underwriter and stated to be
specifically for use in such prospectus, offering circular or other document
(or related registration statement, notification or the like) or any
amendment or supplement thereto.
8. Transfer to Comply with the Securities Act of 1933. In addition to the
prohibitions and restrictions contained in Paragraph 2 above, this Warrant and
any Shares issued or issuable upon exercise hereof may not be offered or sold
except in conformity with the Securities Act, and then only against receipt of
a written agreement of such person to whom such offer or sale is made to comply
with the provisions of this Paragraph 8 with respect to any resale or other
disposition of such securities; except that no such agreement shall be required
from any person purchasing Shares issued or issuable upon exercise of this
Warrant pursuant to a registration statement effective under the Securities
Act. The Holder agrees that, prior to the disposition of any Shares purchased
pursuant to the exercise hereof under circumstances that might require
registration of such Shares under the Securities Act, or any similar federal or
state statute then in force, the Holder shall give written notice to the
Company expressing his intention as to the disposition to be made of such
Shares. Promptly upon receiving such notice, the Company shall present copies
thereof to its counsel. If, in the opinion of the Company's counsel, the
proposed disposition does not require registration of such Shares under the
Securities Act, or any similar federal or state statute then in force, the
Company shall, as promptly as practicable, notify the Holder of such opinion,
and the Holder shall then be entitled to dispose of such Shares, but only
strictly in accordance with the terms of the notice delivered by the Holder to
the Company and any qualifications or limitations contained in the opinion of
the Company's counsel.
9. Further Assurances. The Company 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 upon the exercise of this Warrants.
10. Reservation of Shares. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
all shares of Common Stock from time to time issuable upon the exercise of this
Warrant.
11. Applicable Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of Texas.
12. Notice. Any notices or certificates by the Company to the Holder or by
the Holder to the Company shall be deemed delivered if in writing and delivered
personally or sent by registered or certified mail, return receipt requested,
to such party at the address set forth on page 1 of this Warrant, or to such
other address as the party may designate by notice given in accordance with
this Paragraph 12.
13. Arbitration. Any and all disputes between the parties hereto arising
under or related to this Warrant shall be settled by binding arbitration in
Houston, Texas, under the Texas General Arbitration Act, and the determination
in any such arbitration may be entered in any
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court having jurisdiction. The arbitration shall be conducted by a panel of
three arbitrators, one chosen by each party and the third by the two
arbitrators so chosen. If the two arbitrators cannot agree on a third, then the
third shall be appointed by the Presiding Judge of the United States District
Court for the Southern District of Texas-Houston Division, upon the application
of either party with notice to the other.
14. Descriptive Headings. The descriptive headings of the several Sections
of this Warrant are inserted for convenience only and do not constitute a part
of this Warrant.
IN WITNESS WHEREOF, this Warrant has been executed and delivered to be
effective as of January 12, 1996.
UNIVERSAL SEISMIC ASSOCIATES, INC.,
a Delaware corporation
By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, President
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