Common use of Term of Warrants; Exercise of Warrants Clause in Contracts

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan (and Sheridan shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridan, or its duly authorized agent, of such Warrants, and upon payment to Sheridan of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each The Warrants granted hereunder become exercisable upon the date of their issuance by the Company. Dates of issuance for the Warrants are specified in Section 1 hereof. Once issued, each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during at any time prior to 5:00 P.M., Tulsa time, on December 31, 1998 (the time period and subject to the conditions set forth in the Warrant Certificate "Expiration Date") at an exercise a purchase price of $5.50 2.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the purchase form on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridanthe Company, or by the surrender to Sheridan of the Company securities of Sheridan the Company having a Market Price equal to the Exercise Price or by the surrender to the Company indebtedness owed by the Company pursuant to the Credit Agreement (in which case the Company will accept such specified unpaid principal amount in full payment, as if such payment had been made in cash or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Subject to Paragraph 4(d) below, each Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price of Common Stock during the Five Dollars ($5.00) per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates ) at any time or from time to time the date of this Agreement until 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement p.m., California time, November 23, 2002 (the "Warrant Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant the Agreement, each Warrant the Holder or a permitted Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan (the Company and Sheridan the Company shall issue and sell to the Holder or such Warrant Holder) Holder the number of fully paid and nonassessable shares Shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. . (b) The Warrant Holder Purchase Price may be paid (i) pay the Exercise Price in cash, cash or by certified or official bank cashier's check payable to the order of SheridanCompany, or (ii) by the surrender to Sheridan of securities of Sheridan Warrants owned by the Holder or a permitted Holder having a Market Price Warrant Value (as defined below) on the date of exercise equal to the Exercise Price or Purchase Price, (iiiii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number surrender of Warrant Shares issuable upon exercise shares of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Company's Common Stock in good form for transfer, owned by the Holder and having a Fair Market Value (as defined below) on the last trading day preceding the date of exercise equal to the request to exercise Purchase Price, or (iv) any combination of the Warrantsforegoing. The term "Market PriceWarrant Value" shall mean the then current market price difference between the Exercise Price per share and the Fair Market Value (as defined below) per share multiplied by the number of Common Stock, as determined in paragraph 12.1(e)Warrants being surrendered. The term "EPFair Market Value" shall mean the Exercise Price. Upon such surrender of Warrants, and payment average over the previous five (5) trading days of the Exercise Pricereported high and low sales price on the Nasdaq Small Cap Market, with cash or securitiesthe Nasdaq National Market System, or upon such other national securities exchange on which the Company's shares may be traded, or if not trading on the Nasdaq Small Cap Market, the Nasdaq National Market System, or a net exercise as aforesaidnational securities exchange, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order average of the Warrant Holder closing bid and asked prices in such name or names the over-the-counter market as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common furnished by any New York Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or Exchange member firm selected from time to time in part and, in by the event Company for that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedpurpose.

Term of Warrants; Exercise of Warrants. (a) Each Subject to Paragraph 4(d) below, each Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price of Common Stock during the Seven Dollars and Fifty Cents ($7.50) per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates ) at any time or from time to time the date of this Agreement until 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement p.m., California time, May 1, 2005 (the "Warrant Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant the Agreement, each Warrant the Holder or a permitted Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan (the Company and Sheridan the Company shall issue and sell to the Holder or such Warrant Holder) Holder the number of fully paid and nonassessable shares Shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. . (b) The Warrant Holder Purchase Price may be paid (i) pay the Exercise Price in cash, cash or by certified or official bank cashier's check payable to the order of SheridanCompany, or (ii) by the surrender to Sheridan of securities of Sheridan Warrants owned by the Holder or a permitted Holder having a Market Price Warrant Value (as defined below) on the date of exercise equal to the Exercise Price or Purchase Price, (iiiii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number surrender of Warrant Shares issuable upon exercise shares of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Company's Common Stock in good form for transfer, owned by the Holder and having a Fair Market Value (as defined below) on the last trading day preceding the date of exercise equal to the request to exercise Purchase Price, or (iv) any combination of the Warrantsforegoing. The term "Market PriceWarrant Value" shall mean the then current market price difference between the Exercise Price per share and the Fair Market Value (as defined below) per share multiplied by the number of Common Stock, as determined in paragraph 12.1(e)Warrants being surrendered. The term "EPFair Market Value" shall mean the Exercise Price. Upon such surrender of Warrants, and payment average over the previous five (5) trading days of the Exercise Pricereported high and low sales price on the Nasdaq Small Cap Market, with cash or securitiesthe Nasdaq National Market System, or upon such other national securities exchange on which the Company's shares may be traded, or if not trading on the Nasdaq Small Cap Market, the Nasdaq National Market System, or a net exercise as aforesaidnational securities exchange, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order average of the Warrant Holder closing bid and asked prices in such name or names the over-the-counter market as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common furnished by any New York Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or Exchange member firm selected from time to time in part and, in by the event Company for that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedpurpose.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles Upon the Warrant Holder thereof to purchase one share of Common Stock during the time period terms and subject to the conditions set forth in this Agreement and the Warrant Certificate at an exercise price of $5.50 per shareCertificates, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at Holder shall have the right from and after 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement October 21, 1997 and until 5:00 p.m., New York City time, on October 21, 2001 (the "Expiration DateTime"). (b) The Exercise Price and to receive from the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan (and Sheridan shall issue and sell to such Warrant Holder) Company the number of fully paid and nonassessable shares Warrant Shares which the Holder may at the time be entitled to receive on exercise of Common Stock specified such Warrants and payment of the Exercise Price (as defined herein) then in effect for such Warrant Shares. Each Warrant not exercised prior to the Expiration Time shall become void and all rights thereunder and all rights in respect thereof under this Agreement and the Warrant Certificates shall cease as of such time. No adjustments as to dividends will be made upon exercise of the Warrants, . A Warrant may be exercised upon surrender to Sheridan, the Company at the principal executive offices of the Company of the certificate or its certificates evidencing the Warrants to be exercised with the form of election to purchase on the reverse thereof duly authorized agent, of such Warrants, filled in and signed and upon payment to Sheridan the Company of the exercise price (the "Exercise Price") set forth in the form of Warrant Certificate attached hereto as Exhibit A, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreementas provided herein, for each of the number of shares Warrant Shares in respect of which such Warrants are a Warrant is then exercised. The Warrant Holder may (i) pay Payment of the aggregate Exercise Price shall be made in cash, cash or by certified or official bank check payable to the order of Sheridanthe Company, or by or, in the surrender alternative, the Holder may exercise its right to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net receive Warrant Shares will be determined as described by on a net basis, such that without the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is exchange of any funds, the Holder receives that number of Warrant Shares otherwise issuable upon exercise of its Warrants less that number of Warrant Shares having a fair market value equal to the Warrants or portion of Warrants in questionaggregate Exercise Price that would otherwise have been paid by the Holder. "MP" is the Market Price For purposes of the Common Stock foregoing sentence, "fair market value" of the Warrant Shares shall be the current market price of the Warrant Shares on the last trading day date immediately preceding the date of payment of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, Exercise Price as determined by the procedures set forth in paragraph 12.1(eSection 8(f). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder Holder, and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased Warrant Shares issuable upon the exercise of such Warrants, Warrants together with cash, cash as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender9. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaidPrice. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereofHolder, either in full or from time to time in part part, and, in the event that any a Warrant Certificate evidencing Warrants is exercised in respect of less fewer than all of the shares purchasable Warrant Shares issuable on such exercise at any time prior to the Expiration DateTime, the Company shall issue to the Holder a new certificate Warrant Certificate or Warrant Certificates evidencing the remaining Warrant or Warrants will be issuedWarrants. The Company shall pay all documentary stamp taxes attributable to the initial issuance of Warrant Shares upon the exercise of Warrants.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of $5.50 1.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined date on which such Warrant becomes exercisable in the Purchase Agreement accordance with its terms (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the purchase form on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) shall pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." Company. The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan Company at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaidPrice. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued. (c) So long as the Company satisfies the continued listing requirements of the NASD OTCBB, the exercise rights set forth above shall be limited so that upon the exercise of the Warrants, the Warrant Holder's aggregate ownership of the Company will be less than 20% of the shares of Common Stock outstanding on the date of issuance of the Warrants; provided that such limitation shall cease and this Section 7(c) shall become null and void upon the approval of the issuance of the Warrants by the shareholders of the Company, the National Association of Securities Dealers, Inc. or upon such other event as shall allow the conversion or exercise or both, as appropriate, without violating the applicable requirements of the National Association of Securities Dealers.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of $5.50 _____ per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridanthe Company, or by the surrender to Sheridan the Company of securities of Sheridan the Company having a Market Price equal to the Exercise Price or by the surrender to the Company of indebtedness owed by the Company pursuant to the Credit Agreement (in which case the Company will accept such specified unpaid principal amount in full payment, as if such payment had been made in cash) or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Underwriter Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 _______ per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price"). Each Warrant terminates ) at 5:00 p.m. Houston any time on from the fifth first anniversary of the Closing Date as defined in effective date of the Purchase Agreement Registration Statement until 5:00 p.m., New York City time, on _____________, 2004) (the "Warrant Expiration Date"). . Notwithstanding the foregoing, if at 5:00 p.m. New York time on the Warrant Expiration Date, any Holder or Holders of the Underwriter Warrants have not exercised their Underwriter Warrants and the "current market price" (bas such term is defined in Section 8(d) below) for the Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Underwriter Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Underwriter Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "current market price" for Common Shares on the Warrant Expiration Date and (B) the Exercise Price, and the denominator of which is the "current market price" on the Warrant Expiration Date. Prior to the Warrant Expiration Date, the Company will not take any action which would terminate the Underwriter Warrants. The Exercise Price and the number of shares Shares issuable upon exercise of the Underwriter Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such Underwriter Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsUnderwriter Warrants with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Underwriter Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) 5.1 Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the at any time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per sharefrom 10:00 a.m., subject to adjustment in accordance with Section 12 hereof Pacific time, on December__, 1998 (the "Exercise PriceInitiation Date"). Each Warrant terminates at 5:00 p.m. Houston time ) until 6:00 p.m., Pacific time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement December __, 2002 (the "Expiration Date") at a purchase price of $________, subject to adjustment (the "Warrant Price"). Notwithstanding the foregoing, if at 6:00 p.m., Pacific time on the Expiration Date, any Holder or Holders of the Warrants have not exercised their Warrants and the Closing Price (as defined below) for the Common Stock on the Expiration Date is greater than the Warrant Price, then each such unexercised Warrant shall be automatically converted into a number of shares of Common Stock of the Company equal to: (A) the number of shares of Common Stock then issuable upon exercise of a Warrant multiplied by (B) a fraction (1) the numerator of which is the difference between the Closing Price for the Common Stock on the Expiration Date and the Warrant Price and (2) the denominator of which is the Closing Price for the Common Stock on the Expiration Date. (b) 5.2 The Exercise Warrant Price and the number of shares Warrant Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 11 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder of Warrants shall have the right, which may be exercised as expressed in such Warrantsthe Warrant Certificate, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant HolderHolder of Warrants) the number of fully paid and nonassessable shares of Common Stock Warrant Shares specified in such WarrantsWarrant Certificate, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant Certificate, with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Warrant Price, as adjusted in accordance with the provisions of Section 12 11 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Payment of such Warrant Holder may (i) pay the Exercise Price shall be made in cash, by wire transfer or by certified or official bank check payable to the order of Sheridancheck, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants any combination thereof. No adjustment shall be made for "Net Warrant Shares." The number of Net any dividends on any Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares stock issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. a Warrant. 5.3 Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such registered Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such surrender and, if the number of Warrants represented by a Warrant certificate shall not be exercised in full, a new Warrant certificate, executed by the Company for the balance of the number of whole Warrant Shares. 5.4 If permitted by applicable law, such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, shares as of the date of the surrender of such Warrants and payment of the Exercise Warrant Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant registered Holders thereof, either in full as an entirety or from time to time in for only part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedspecified therein.

Term of Warrants; Exercise of Warrants. (a) Each Representative Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 3.65 or 125% of the public offering price per share, subject to adjustment in accordance with Section 12 hereof Share (the "“Exercise Price"”) at any time from the first anniversary of the effective date of the Registration Statement until 5:00 p.m., EST time, on August __, 2012) (the “Warrant Expiration Date”). Each Warrant terminates Notwithstanding the foregoing, if at 5:00 p.m. Houston EST time on the fifth anniversary Warrant Expiration Date, any Holder or Holders of the Closing Date Representative's Warrant have not exercised their Representative's Warrant and the “current market price” (as such term is defined in Section 8(d) below) for the Purchase Agreement Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Representative Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Representative Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "“current market price” for Common Shares on the Warrant Expiration Date and (B) the Exercise Price, and the denominator of which is the “current market price” on the Warrant Expiration Date"). (b) . Prior to the Warrant Expiration Date, the Company will not take any action that would terminate the Representative's Warrant. The Exercise Price and the number of shares Shares issuable upon exercise of Warrants the Representative's Warrant are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. . b) Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such WarrantsRepresentative's Warrant, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such WarrantsRepresentative's Warrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsRepresentative's Warrant with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants Representative's Warrant are then exercised. The Warrant Holder . c) Payment of such Exercise Price may be made at the Holder’s election (i) pay the Exercise Price in cash, by certified or official bank check payable check, (ii) in the event that the Holder holds Common Shares of the Company and such Common Shares are listed on a domestic stock exchange or quoted in the domestic over-the-counter market, by transferring to the order Company an amount of Sheridansuch Common Shares which, or when multiplied by, the current market price of the Common Shares at the time of exercise of such Representative Warrant, equals the aggregate amount of the consideration payable upon such exercise, (iii) by surrendering to the surrender Company the right to Sheridan receive a portion of securities the number of Sheridan having a Market Price Shares with respect to which such Representative Warrant is then being exercised equal to the product obtained by multiplying such number of Shares by a fraction, the numerator of which is the Exercise Price in effect on the date of such exercise and the denominator of which is the current market price of the Common Shares in effect on such date, or (iv) by a combination of the foregoing methods of payment selected by the Holder. For purposes of this paragraph, the current market price of the Common Shares shall be calculated either (a) on the date which the form of election to purchase attached hereto is deemed to have been sent to the Company pursuant to Section 12 hereof (“Notice Date”) or (b) as the average of the last reported sale price for each of the five trading days preceding the Notice Date, whichever of (a) or (b) is greater. In any case where the consideration payable upon such exercise is being paid in whole or in part pursuant to the provisions of clause (ii) make an or clause (iii) of the preceding sentence, such exercise shall be accompanied by written notice from the Holder specifying the manner of Warrants for "Net Warrant Shares." The number payment thereof, and in the case of Net Warrant clause (ii), stating the amount of Common Shares will of the Company to be determined as described by applied to such payment, and in the following formula: Net Warrant Shares = [WS x case of clause (MP-EP)]/MP. "WS" is iii), containing a calculation showing the number of Warrant Shares with respect to which rights are being surrendered thereunder and the net number of Shares to be issued after giving effect to such surrender. No adjustment shall be made for any dividends on any Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. a Representative Warrant. d) Upon such each surrender of Warrants, Representative's Warrant and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch within three business days of such notice to or upon the written order of the Holder of such Representative's Warrant Holder and in such name or names as the Warrant such Holder may designate, designate a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such WarrantsRepresentative's Warrant, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Warrants Representative's Warrant and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants Representative's Warrant shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Representative Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Warrant Expiration Date, a new certificate evidencing Representative Warrant or Representative's Warrant will be issued for the remaining number of Shares specified in the Representative Warrant or Warrants will be issuedso surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions terms of this Warrant Agreement, each Warrant Holder the Warrantholder shall have the right, which may be exercised at any time during the period commencing as expressed in such Warrantsof the date hereof and ending at 5:00 p.m., Pacific Time, on the seventh anniversary of the completion of the Offering (the "Termination Date"), to purchase from Sheridan (and Sheridan shall issue and sell a Company up to such Warrant Holder) the number of fully paid and nonassessable shares of Common Warrant Stock specified in such Warrantsto which the Warrantholder may at the time be entitled to purchase pursuant to this Agreement, upon surrender to Sheridana Company, or at its duly authorized agentprincipal office, of such Warrantsthe certificate evidencing the Warrants to be exercised, together with the purchase form on the reverse thereof duly completed and executed, and upon payment to Sheridan a Company of the Exercise Price, Warrant Price (as adjusted defined in and determined in accordance with the provisions of this Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, 3 and Sections 7 and 8 hereof) for the number of shares of Warrant Stock in respect of which such Warrants are then exercised, but in no event for less than 100 shares of Warrant Stock (unless less than an aggregate of 100 shares of Warrant Stock are then purchasable under all outstanding Warrants held by such Warrantholder). The This Warrant, when exercisable, may be exercised from time to time in whole or in part. (b) Payment of the Warrant Holder may (i) pay the Exercise Price shall be made in cash, by certified or official bank check payable in Los Angeles Clearing House funds (next day funds), or any combination thereof. (c) In addition to the order method of Sheridanpayment set forth in Section 3(b) above and in lieu of any cash payment required thereunder, unless otherwise prohibited by law, the Warrantholders shall have the right at any time, when exercisable, and from time to time to exercise the Warrants in full or in part (i) by receiving from the surrender to Sheridan Company the number of securities shares of Sheridan having a Market Price Warrant Stock equal to the Exercise number of shares of Warrant Stock otherwise issuable upon such exercise less the number of shares of Warrant Stock having an aggregate value on the date of exercise equal to the Warrant Price or multiplied by the number of shares of Warrant Stock for which this Warrant is being exercised and/or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by delivering to the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is Company the number of shares of Common Stock having an aggregate value on the date of exercise equal to the Warrant Shares issuable upon exercise Price multiplied by the number of shares of Warrant Stock for which this Warrant is being exercised. For purposes hereof, the "value" of a share of Preferred Stock on a given date shall equal to the Current Market Price on such date as defined in Section 9 of this Agreement. (d) Upon surrender of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense a Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder Warrantholder, and (subject to any applicable restrictions on transfer) in such name or names as the Warrant Holder Warrantholder may designate, a certificate or certificates for the number of full shares of Common Warrant Stock so purchased upon the such exercise of such Warrantsthe Warrant, together with cash, as provided in Section 12 of this Warrant Agreement9 hereof, in respect of any fraction of a share of such stock fractional shares otherwise issuable upon such surrender. Such certificate or certificates certificates, to the extent permitted by law, shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed defined to have become a holder of record of such shares, securities as of the date of the surrender of such the Warrants and payment of the Exercise Price or receipt of shares by net exercise Warrant Price, as aforesaid, notwithstanding that the certificate or certificates representing such securities shall not actually have been delivered or that the stock transfer books of a Company shall then be closed. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereofWarrantholder, either in full or from time to time in part and, in the event that any a Warrant is exercised in respect of less than all of the shares purchasable on such exercise of Warrant Stock specified therein at any time prior to the Expiration Termination Date, a new certificate Warrant evidencing the remaining shares of the Warrant or Warrants will Stock purchasable by such Warrantholders hereunder shall be issuedissued by a Company to such Warrantholders.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of $5.50 1.00 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the earlier to occur of (i) the fifth anniversary of the Closing Date date on which such Warrant becomes exercisable in accordance with its terms and (ii) the closing of the transactions contemplated by that certain Agreement of Merger and Plan of Reorganization dated as defined in of December 2, 1997 among the Purchase Agreement Company, EQ Acquisition Sub, Inc., Netco and Netco Acquisition Corp. (the "Reorganization Agreement") (the "Expiration Date"). Notwithstanding anything to the contrary, in no event shall any Warrant be exercisable prior to the date set forth in Sections 7(a)(iii) and (iv) of tile Reorganization Agreement (as such date may be changed pursuant to an amendment of such agreement, the "Outside Closing Date"). (b) The Exercise Price and the number of shares issuable ▇▇▇▇▇▇ upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, and upon payment to Sheridan of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock purchase form on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.reverse

Term of Warrants; Exercise of Warrants. (a) Each Subject to Paragraph 4(d) below, each Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price of Common Stock during the Seven Dollars ($7.00) per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates ) at any time or from time to time the date of this Agreement until 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement p.m., California time, May 1, 2005 (the "Warrant Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant the Agreement, each Warrant the Holder or a permitted Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan (the Company and Sheridan the Company shall issue and sell to the Holder or such Warrant Holder) Holder the number of fully paid and nonassessable shares Shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. . (b) The Warrant Holder Purchase Price may be paid (i) pay the Exercise Price in cash, cash or by certified or official bank cashier's check payable to the order of SheridanCompany, or (ii) by the surrender to Sheridan of securities of Sheridan Warrants owned by the Holder or a permitted Holder having a Market Price Warrant Value (as defined below) on the date of exercise equal to the Purchase Price, (iii) by the surrender of shares of the Company's Common Stock in good form for transfer, owned by the Holder and having a Fair Market Value (as defined below) on the date of exercise equal to the Purchase Price, or (iv) any combination of the foregoing. The term Warrant Value shall mean the difference between the Exercise Price or per share and the Fair Market Value (iias defined below) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described per share multiplied by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in questionbeing surrendered. The term "MP" is the Fair Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market PriceValue" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean average over the Exercise Price. Upon such surrender of Warrants, and payment previous five (5) trading days of the Exercise Pricereported high and low sales price on the Nasdaq Small Cap Market, with cash or securitiesthe Nasdaq National Market System, or upon such other national securities exchange on which the Company's shares may be traded, or if not trading on the Nasdaq Small Cap Market, the Nasdaq National Market System, or a net exercise as aforesaidnational securities exchange, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order average of the Warrant Holder closing bid and asked prices in such name or names the over-the-counter market as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common furnished by any New York Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or Exchange member firm selected from time to time in part and, in by the event Company for that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedpurpose.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the -------------------------------------- Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 ____ per share, subject to adjustment in accordance with Section 12 hereof Share [TO BE EQUAL TO 150% OF THE INITIAL PUBLIC OFFERING PRICE] (the "Exercise Price") at any time from the first anniversary of the Effective Date (except as otherwise set forth herein) until 5:00 p.m., Boston time (the "Close of Business"). Each Warrant terminates at 5:00 p.m. Houston time , on the day immediately preceding the fifth anniversary of the Closing Effective Date as defined in the Purchase Agreement (the "Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such WarrantsWarrant, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such WarrantsWarrant Holder's Warrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant, with an election to purchase attached thereto in the form of Exhibit B to this Agreement duly completed and --------- signed, with (if requested by the Company within two business days of surrender of the Warrant with the election to purchase) signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are Warrant is then exercised. The Notwithstanding the method of exercise set forth in any Warrant, in the event that the Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable thereof has not exercised such Warrant prior to the order Close of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock Business on the last trading day preceding Expiration Date and the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common StockStock at the Close of Business on the Expiration Date (as determined substantially in accordance with Section 8(d), but using the closing prices or quotations, as determined in paragraph 12.1(e). "EP" shall mean the case may be, on such Expiration Date rather than a 30-day average) is greater than the Exercise Price, then the Warrant Holder thereof shall be deemed to have exercised such Warrant in full immediately prior to the Close of Business on the Expiration Date (an "Automatic Exercise"). Payment of the Exercise Price may be made in cash or by check payable to the order of the Company in the amount obtained by multiplying the number of Shares for which such Warrant is then being exercised by the Exercise Price then in effect (such amount, the "Exercise Payment"), except that the Warrant Holder may, at its option, elect to pay the Exercise Payment by delivering to the Company the number of shares of Common Stock determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock on the date of exercise or by cancelling a portion of such Warrant that is equal to the number of shares determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock as of the date of exercise. In the event of an Automatic Exercise of any Warrant, the Warrant Holder thereof shall be deemed to have chosen to cancel the portion of its Warrant that is equal to the number of shares determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock as of the Close of Business on the Expiration Date. Except as set forth in Section 8, no adjustment shall be made for any dividends on any Shares issuable upon exercise of a Warrant. Upon such each surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securitiesPayment as aforesaid, or upon a net exercise as aforesaidthe occurrence of an Automatic Exercise, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch (but in any event within three (3) business days) to or upon the written order of the Warrant Holder and (subject to receipt of evidence of compliance with the Act and applicable state securities laws in accordance with the provisions of Section 10 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such WarrantsWarrant, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such sharesShares, as of the date of the surrender of such Warrants Warrant and payment of the Exercise Price or receipt of shares by net exercise Payment as aforesaid, or as of the date of the Automatic Exercise; provided, however, that if, at the -------- ------- date of surrender of such Warrant and payment of such Exercise Payment, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Warrant shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Expiration Date), and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided further, -------- ------- however, that the transfer books of record, unless otherwise required by law, ------- shall not be closed at any one time for a period longer than four (4) days. The rights of purchase represented by the Warrants a Warrant shall be exercisable, at the election of the Warrant Holders Holder thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares Shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing Warrant or new Warrants will be issued for the remaining number of Shares specified in the Warrant or Warrants will be issuedso surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during at the Exercise Price at any time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareafter August 20, subject to adjustment in accordance with Section 12 hereof 1996 (the "Exercise PriceEffective Date"). Each Warrant terminates at ) and before 5:00 p.m. Houston time p.m., prevailing Central Time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement August 19, 2001 (the "Expiration Date"). On the Expiration Date, all rights evidenced by the Warrants shall cease and the Warrants shall become void. The period from the Effective Date to the Expiration Date is sometimes hereinafter referred to as the "Exercise Period. (b) " The Exercise Price and the number of shares Warrant Shares issuable upon exercise of the Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 9 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Warrants, Warrants to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such WarrantsWarrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 9 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified or official bank check payable to the order of Sheridan, or by the Company. Upon each surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and (subject to receipt of evidence of compliance with the Act in accordance with the provisions of Section 12 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 11 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Warrant Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights ; provided, however, that if, at the date of purchase represented by surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Warrants shall be exercisableclosed, at the election certificates for the shares shall be issuable as of the next succeeding date on which such books shall be opened and until such date the Company shall be under no duty to deliver any certificate for such Warrant Holders thereofShares; provide, either in full or from time to time in part andfurther, in that the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise transfer books, unless otherwise required by law, shall not be closed at any one time prior to the Expiration Date, for a new certificate evidencing the remaining Warrant or Warrants will be issuedperiod longer than 20 days.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions terms of this Warrant Agreement, each Warrant Holder the Warrantholder shall have the right, which may be exercised as expressed in such Warrantsat any time during the period commencing at 6:30 a.m., Pacific Time, on July 1, 1997 and ending at 5:00 p.m., Pacific Time, on June 30, 2001 (the "Termination Date"), to purchase from Sheridan (and Sheridan shall issue and sell the Company up to such Warrant Holder) the number of fully paid and nonassessable shares of Common Warrant Stock specified in such Warrantsto which the Warrantholder may at the time be entitled to purchase pursuant to this Agreement, upon surrender to Sheridanthe Company, or at its duly authorized agentprincipal office, of such Warrantsthe certificate evidencing the Warrants to be exercised, together with the purchase form on the reverse thereof duly completed and executed, and upon payment to Sheridan the Company of the Exercise Price, Warrant Price (as adjusted defined in and determined in accordance with the provisions of this Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, 3 and Sections 7 and 8 hereof) for the number of shares of Warrant Stock in respect of which such Warrants are then exercised, but in no event for less than 100 shares of Warrant Stock (unless less than an aggregate of 100 shares of Warrant Stock are then purchasable under all outstanding Warrants held by such Warrantholder). The This Warrant, when exercisable, may be exercised from time to time in whole or in part. (b) Payment of the Warrant Holder may (i) pay the Exercise Price shall be made in cash, by certified or official bank check payable in Los Angeles Clearing House funds (next day funds), or any combination thereof. (c) In addition to the order method of Sheridanpayment set forth in Section 3(b) above and in lieu of any cash payment required thereunder, unless otherwise prohibited by law, the Warrantholders shall have the right at any time, when exercisable, and from time to time to exercise the Warrants in full or in part (i) by receiving from the surrender to Sheridan Company the number of securities shares of Sheridan having a Market Price Warrant Stock equal to the Exercise number of shares of Warrant Stock otherwise issuable upon such exercise less the number of shares of Warrant Stock having an aggregate value on the date of exercise equal to the Warrant Price or multiplied by the number of shares of Warrant Stock for which this Warrant is being exercised and/or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by delivering to the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is Company the number of shares of Preferred Stock having an aggregate value on the date of exercise equal to the Warrant Shares issuable upon exercise Price multiplied by the number of shares of Warrant Stock for which this Warrant is being exercised. For purposes hereof, the "value" of a share of Preferred Stock on a given date shall equal to the Current Market Price on such date as defined in Section 9 of this Agreement. (d) Upon surrender of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder Warrantholder, and (subject to any applicable restrictions on transfer) in such name or names as the Warrant Holder Warrantholder may designate, a certificate or certificates for the number of full shares of Common Warrant Stock so purchased upon the such exercise of such Warrantsthe Warrant, together with cash, as provided in Section 12 of this Warrant Agreement9 hereof, in respect of any fraction of a share of such stock fractional shares otherwise issuable upon such surrender. Such certificate or certificates certificates, to the extent permitted by law, shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed defined to have become a holder of record of such shares, securities as of the date of the surrender of such the Warrants and payment of the Exercise Price or receipt of shares by net exercise Warrant Price, as aforesaid, notwithstanding that the certificate or certificates representing such securities shall not actually have been delivered or that the stock transfer books of the Company shall then be closed. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereofWarrantholder, either in full or from time to time in part and, in the event that any a Warrant is exercised in respect of less than all of the shares purchasable on such exercise of Warrant Stock specified therein at any time prior to the Expiration Termination Date, a new certificate Warrant evidencing the remaining shares of the Warrant or Stock purchasable by such Warrantholders hereunder shall be issued by the Company to such Warrantholders. (e) In the event that the outstanding shares of Preferred Stock are automatically converted into Common Stock pursuant to the terms of the Certificate of Designation, Preferences and Rights of Series A Preferred Stock then in effect, the Warrants will be issuedshall automatically convert into Warrants to purchase the number of shares of Common Stock that would have been issuable to Warrantholder had the Warrants been exercised in full immediately prior to the date of conversion of the Preferred Stock into Common Stock.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the at any time period and subject to the conditions set forth in from the Warrant Certificate Date until 5:00 P.M., Houston time, on January 1, 2007 (the "Expiration Date") at an exercise a purchase price of $5.50 0.01 per share, subject to adjustment in accordance with Section 12 hereof share (the "Exercise Price"). Each outstanding Warrant terminates may be exercised on any business day which is on or after its date of issue and on or before the Expiration Date, but only if a registration statement filed under the Securities Act with respect to the exercise of such Warrants (a "Registration Statement") is, at the time of exercise, effective and available or the exercise of such Warrants is exempt from the registration requirements of the Securities Act. Any Warrants not exercised by 5:00 p.m. p.m., Houston time time, on the fifth anniversary of the Closing Expiration Date as defined shall expire and all rights thereunder and all rights in the Purchase respect thereof under this Warrant Agreement (the "Expiration Date"). (b) shall automatically terminate at such time. The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 11 of this Warrant Agreement. Subject . (b) Each Warrant Certificate shall, subject to the provisions of this Warrant AgreementAgreement and such Warrant Certificate, each Warrant entitle the Holder shall have the right, which may be exercised as expressed in such Warrants, thereof to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares one share of Common Stock specified in such Warrants(subject to adjustment as provided herein) for each Warrant represented thereby at the Exercise Price, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant Certificate, with the purchase form on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Price for each Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then being exercised. The Warrant Each Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridanthe Company; provided, or by that each Holder may at any time exercise the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the aggregate number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e11.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrantsa Warrant Certificate, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan the Company at its expense shall cause its transfer agent to issue and cause to be delivered with all reasonable dispatch (but in any event within 5 business days) to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate Warrant Certificate or certificates Certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock Common Stock otherwise issuable upon such surrender. Such certificate Warrant Certificate or certificates Certificates shall be deemed for all purposes to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, shares as of the date of the surrender of such Warrants Warrant Certificate and payment of the Exercise Price or receipt surrender of shares by such Warrant Certificate with a notice requesting a net exercise as aforesaid. The rights of purchase represented by the Warrants Warrant Certificates shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant Certificate is exercised in respect of less than all of the shares purchasable on such exercise Warrants represented thereby at any time prior to the Expiration Date, a new certificate Warrant Certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan (and Sheridan shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridan, or its duly authorized agent, of such Warrants, and upon payment to Sheridan of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.shares

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of $5.50 0.25 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined date on which such Warrant becomes exercisable in the Purchase Agreement accordance with its terms (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the purchase form on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) shall pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." Company. The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan Company at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaidPrice. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued. (c) So long as the Company satisfies the continued listing requirements of the NASDAQ OTC: BB, the exercise rights set forth above shall be limited so that upon the exercise of the Warrants, the Warrant Holder's aggregate ownership of the Company will be less than 20% of the shares of Common Stock outstanding on the date of issuance of the Warrants; provided that such limitation shall cease and this Section 7(c) shall become null and void upon the approval of the issuance of the Warrants by the shareholders of the Company, the National Association of Securities Dealers, Inc. or upon such other event as shall allow the conversion or exercise or both, as appropriate, without violating the applicable requirements of the National Association of Securities Dealers.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of $5.50 0.75 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined date on which such Warrant becomes exercisable in the Purchase Agreement accordance with its terms (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the purchase form on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) shall pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." Company. The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan Company at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaidPrice. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued. (c) So long as the Company satisfies the continued listing requirements of the NASDAQ OTC: BB, the exercise rights set forth above shall be limited so that upon the exercise of the Warrants, the Warrant Holder's aggregate ownership of the Company will be less than 20% of the shares of Common Stock outstanding on the date of issuance of the Warrants; provided that such limitation shall cease and this Section 7(c) shall become null and void upon the approval of the issuance of the Warrants by the shareholders of the Company, the National Association of Securities Dealers, Inc. or upon such other event as shall allow the conversion or exercise or both, as appropriate, without violating the applicable requirements of the National Association of Securities Dealers.

Term of Warrants; Exercise of Warrants. (a) 5.1 Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the at any time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per sharefrom 10:00 a.m., subject to adjustment in accordance with Section 12 hereof Pacific time, on September ___, 1999 (the "Exercise PriceInitiation Date"). Each Warrant terminates at 5:00 p.m. Houston time ) until 6:00 p.m., Pacific time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement September ___, 2003 (the "Expiration Date") at a purchase price of $ subject to adjustment (the "Warrant Price"). Notwithstanding the foregoing, if at 6:00 p.m., Pacific time on the Expiration Date, any Holder or Holders of the Warrants have not exercised their Warrants and the Closing Price (as defined below) for the Common Stock on the Expiration Date is greater than the Warrant Price, then each such unexercised Warrant shall be automatically converted into a number of shares of Common Stock of the Company equal to: (A) the number of shares of Common Stock then issuable upon exercise of a Warrant multiplied by (B) a fraction (1) the numerator of which is the difference between the Closing Price for the Common Stock on the Expiration Date and the Warrant Price and (2) the denominator of which is the Closing Price for the Common Stock on the Expiration Date. (b) 5.2 The Exercise Warrant Price and the number of shares Warrant Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 11 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder of Warrants shall have the right, which may be exercised as expressed in such Warrantsthe Warrant Certificate, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant HolderHolder of Warrants) the number of fully paid and nonassessable shares of Common Stock Warrant Shares specified in such WarrantsWarrant Certificate, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant Certificate, with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Warrant Price, as adjusted in accordance with the provisions of Section 12 11 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Payment of such Warrant Holder may (i) pay the Exercise Price shall be made in cash, by wire transfer or by certified or official bank check payable to the order of Sheridancheck, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants any combination thereof. No adjustment shall be made for "Net Warrant Shares." The number of Net any dividends on any Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares stock issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. a Warrant. 5.3 Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such registered Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such surrender and, if the number of Warrants represented by a Warrant certificate shall not be exercised in full, a new Warrant certificate, executed by the Company for the balance of the number of whole Warrant Shares. 5.4 If permitted by applicable law, such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, shares as of the date of the surrender of such Warrants and payment of the Exercise Warrant Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant registered Holders thereof, either in full as an entirety or from time to time in for only part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedspecified therein.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of [$5.50 1.00] per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined date on which such Warrant becomes exercisable in the Purchase Agreement accordance with its terms (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, and upon payment to Sheridan of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or purchase form on the reverse thereof duly filled in and signed and upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x × (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon Subject to paragraph 7(c) hereof, upon such surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan the Company at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, Warrants in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. 2.1 Subject to the provisions terms of this Warrant AgreementAgreement and Certificate, each Warrant Holder the Warrantholder shall have the right, which may be exercised as expressed in such Warrantscommencing upon issuance and ending at 5:00 p.m. Mountain Time on the Termination Date, to purchase from Sheridan (and Sheridan shall issue and sell to such Warrant Holder) the Company the number of fully paid and nonassessable shares Shares which the Warrantholder may at that time be entitled to purchase on exercise of Common Stock specified in such Warrants, upon this Warrant. 2.2 A Warrant shall be exercised by surrender to Sheridanthe Company, or at its duly authorized agentprincipal office, of such Warrantsthis Certificate evidencing the Warrant to be exercised, together with the form of election to purchase attached hereto duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, Price for the number of shares Shares in respect of which such Warrants are Warrant is then exercised. The Warrant Holder may (i) pay Payment of the aggregate Exercise Price shall be made in cashcash or certified funds. 2.3 Subject to Section 3 hereof, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, a Warrant Certificate and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch dispatch, to or upon the written order of the Warrantholder exercising such Warrant Holder and in such name or names as the Warrant Holder such Warrantholder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrenderWarrant. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of receipt by the surrender Company of such Warrants Warrant Certificate and payment of the Exercise Price or receipt of shares by net exercise as aforesaidPrice. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders Warrantholders thereof, either in full or from time to time in part and, in the event that any a Warrant Certificate is exercised in respect of to purchase less than all of the shares Shares purchasable on such exercise at any time prior to the Expiration Termination Date, a new certificate Warrant Certificate evidencing the remaining Warrant or Warrants will be issued. 2.4 The Warrantholder will pay all documentary stamp taxes, if any, attributable to the initial issuance of the Shares upon the exercise of Warrants.

Term of Warrants; Exercise of Warrants. (a) Each Underwriter Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 _______ per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price"). Each Warrant terminates ) at 5:00 p.m. Houston any time on from the fifth first anniversary of the Closing Date as defined in effective date of the Purchase Agreement Registration Statement until 5:00 p.m., New York City time, on _____________, 2004) (the "Warrant Expiration Date"). . Notwithstanding the foregoing, if at 5:00 p.m. New York time on the Warrant Expiration Date, any Holder or Holders of the Underwriter Warrants have not exercised their Underwriter Warrants and the "current market price" (bas such term is defined in Section 8(d) below) for the Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Underwriter Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Underwriter Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "current market price" for Common Shares on the Warrant Expiration Date and (B) the Exercise Price, and the denominator of which is the "current market price" on the Warrant Expiration Date. Prior to the Warrant Expiration Date, the Company will not take any action which would terminate the Underwriter Warrants. The Exercise Price and the number of shares Shares issuable upon exercise of the Underwriter Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such Underwriter Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsUnderwriter Warrants with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a participant in the Medallion Signature Guarantee Program and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Underwriter Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Subject to Paragraph 4(d) below, each Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price of Common Stock during the Seven Dollars ($7.00) per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates ) at any time or from time to time the date of this Agreement until 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement p.m., California time, May 1, 2005 (the "Warrant Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant the Agreement, each Warrant the Purchaser or a permitted Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan (the Company and Sheridan the Company shall issue and sell to the Purchaser or such Warrant Holder) Holder the number of fully paid and nonassessable shares Shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. . (b) The Warrant Holder Purchase Price may be paid (i) pay the Exercise Price in cash, cash or by certified or official bank cashier's check payable to the order of SheridanCompany, or (ii) by the surrender to Sheridan of securities of Sheridan Warrants owned by the Purchaser or a permitted Holder having a Market Price Warrant Value (as defined below) on the date of exercise equal to the Exercise Price or Purchase Price, (iiiii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number surrender of Warrant Shares issuable upon exercise shares of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Company's Common Stock in good form for transfer, owned by the Holder and having a Fair Market Value (as defined below) on the last trading day preceding the date of exercise equal to the request to exercise Purchase Price, or (iv) any combination of the Warrantsforegoing. The term "Market PriceWarrant Value" shall mean the then current market price difference between the Exercise Price per share and the Fair Market Value (as defined below) per share multiplied by the number of Common Stock, as determined in paragraph 12.1(e)Warrants being surrendered. The term "EPFair Market Value" shall mean the Exercise Price. Upon such surrender of Warrants, and payment average over the previous five (5) trading days of the Exercise Pricereported high and low sales price on the Nasdaq Small Cap Market, with cash or securitiesthe Nasdaq National Market System, or upon such other national securities exchange on which the Company's shares may be traded, or if not trading on the Nasdaq Small Cap Market, the Nasdaq National Market System, or a net exercise as aforesaidnational securities exchange, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order average of the Warrant Holder closing bid and asked prices in such name or names the over-the-counter market as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common furnished by any New York Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or Exchange member firm selected from time to time in part and, in by the event Company for that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedpurpose.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the Share at a purchase price equal to $2.6875 per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrantsfor a period commencing on the Issue Date and ending three years from the Issue Date, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock (rounded up to the nearest full share) specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of Election to Purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified check or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants Company. No adjustment shall be made for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant any dividends on any Shares issuable upon exercise of the Warrants or portion a Warrant. Upon each surrender of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch (and in no event more than three business days from the date of each such surrender and payment) to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; provided, however, that if, at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of securities issuable upon the exercise of such Warrants shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided, further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than twenty (20) days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders Holder(s) thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Expiration Dateexercise, a new certificate evidencing the remaining Warrant or Warrants will be issuedissued for the remaining number of Shares specified in the Warrant so surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Underwriter's Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise a purchase price of $5.50 6.00 per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary The total number of Underwriter's Warrants which may be purchased is equal to ten percent (10%) of the Closing Date as defined number of Shares sold in the Purchase Agreement Offering, excluding Shares sold as part of the over-allotment option. The Underwriter's Warrants are non-exercisable and non-transferable for a period of twelve (12) months following the effective date of the Registration Statement and will thereafter be exercisable until the date which is four years from the effective date of the Registration Statement (the "Expiration Date"). (b) . The Exercise Price and the number amount of shares Shares of Common Stock issuable upon exercise of the Underwriter's Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter's Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares Shares of Common Stock specified in such Underwriter's Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Underwriter's Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Underwriter's Warrants are then exercised. The Warrant Holder may (i) pay Payment of the Exercise Price may be made in cash, cash or by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan Company. No adjustment shall be made for any dividends on any shares of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares Common Stock issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the an Underwriter's Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such each surrender of Warrants, Underwriter's Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Underwriter's Warrants and (subject to receipt of evidence of compliance with the Act in accordance with the provisions of Section 10 of this Agreement) in such name or names as the Warrant such Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Underwriter's Warrants, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Warrant Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Warrant Shares as of the date of the surrender of such Underwriter's Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; PROVIDED, HOWEVER, that if, at the date of surrender of such Underwriter's Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Underwriter's Warrants shall be closed, the certificates for the Warrant Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Expiration Date) and until such date the Company shall be under no duty to deliver any certificate for such shares; PROVIDED, FURTHER, HOWEVER, that such transfer books, unless otherwise required by law, shall not be closed at any one time for a period longer than 20 days. The rights of purchase represented by the Underwriter's Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that if any Underwriter's Warrant is exercised in respect of less than all of the shares Warrant Shares purchasable on such exercise at any time prior to the Expiration Dateexercise, a new certificate evidencing the remaining Underwriter's Warrant or Underwriter's Warrants will be issuedissued for the remaining number of Warrant Shares specified in the Underwriter's Warrant so surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan (and Sheridan shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridan, or its duly authorized agent, of such Warrants, and upon payment to Sheridan of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.in

Term of Warrants; Exercise of Warrants. (a) Each Underwriter Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 6.60 per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price"). Each Warrant terminates ) at 5:00 p.m. Houston any time on from the fifth first anniversary of the Closing Date as defined in effective date of the Purchase Agreement Registration Statement until 5:00 p.m., New York City time, on _____________, 2005) (the "Warrant Expiration Date"). . Notwithstanding the foregoing, if at 5:00 p.m. New York time on the Warrant Expiration Date, any Holder or Holders of the Underwriter Warrants have not exercised their Underwriter Warrants and the "current market price" (bas such term is defined in Section 8(d) below) for the Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Underwriter Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Underwriter Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "current market price" for Common Shares on the Warrant Expiration Date and (B) the Exercise Price, and the denominator of which is the "current market price" on the Warrant Expiration Date. Prior to the Warrant Expiration Date, the Company will not take any action which would terminate the Underwriter Warrants. The Exercise Price and the number of shares Shares issuable upon exercise of the Underwriter Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such Underwriter Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsUnderwriter Warrants with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a participant in the Medallion Signature Guarantee Program and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Underwriter Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) The Placement Agent is hereby granted 100,000 Warrants. Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price equal to one hundred and fifty percent (150%) of the average closing bid price of the Common Stock during (the "Closing Date Average") as calculated over the five (5) trading-day period ending on the Closing Date (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrantsfor a period of four (4) years commencing on the first anniversary of the Closing Date, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock (rounded up to the nearest full share) specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of Election to Purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified check or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants Company. No adjustment shall be made for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant any dividends on any Shares issuable upon exercise of the Warrants or portion a Warrant. Upon each surrender of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; provided, however, that if, at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of securities issuable upon the exercise of such Warrants shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided, further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than twenty (20) days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders Holder(s) thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Expiration Dateexercise, a new certificate evidencing the remaining Warrant or Warrants will be issuedissued for the remaining number of Shares specified in the Warrant so surrendered.

Term of Warrants; Exercise of Warrants. (a) 5.1 Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the at any time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per sharefrom 10:00 a.m., subject to adjustment in accordance with Section 12 hereof Pacific time, on __________, 1998 (the "Exercise PriceInitiation Date"). Each Warrant terminates at 5:00 p.m. Houston time ) until 6:00 p.m., Pacific time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement __________, 2002 (the "Expiration Date") at a purchase price of [$________], subject to adjustment (the "Warrant Price"). Notwithstanding the foregoing, if at 6:00 p.m., Pacific time on the Expiration Date, any Holder or Holders of the Warrants have not exercised their Warrants and the Closing Price (as defined below) for the Common Stock on the Expiration Date is greater than the Warrant Price, then each such unexercised Warrant shall be automatically converted into a number of shares of Common Stock of the Company equal to : (A) the number of shares of Common Stock then issuable upon exercise of a Warrant multiplied by (B) a fraction (1) the numerator of which is the difference between the Closing Price for the Common Stock on the Expiration Date and the Warrant Price and (2) the denominator of which is the Closing Price for the Warrant Stock on the Expiration Date. (b) 5.2 The Exercise Warrant Price and the number of shares Warrant Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 11 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder of Warrants shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant HolderHolder of Warrants) the number of fully paid and nonassessable shares of Common Stock Warrant Shares specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Warrant Price, as adjusted in accordance with the provisions of Section 12 11 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Payment of such Warrant Holder may (i) pay the Exercise Price shall be made in cash, cash or by certified or official bank check payable to the order of Sheridancheck, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants combination thereof. No adjustment shall be made for "Net Warrant Shares." The number of Net any dividends on any Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares stock issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. a Warrant. 5.3 Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such registered Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such surrender and, if the number of Warrants represented by a Warrant Certificate shall not be exercised in full, a new Warrant Certificate, executed by the Company for the balance of the number of whole Warrant Shares represented by the Warrant Certificate. 5.4 If permitted by applicable law, such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, shares as of the date of the surrender of such Warrants and payment of the Exercise Warrant Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant registered Holders thereof, either in full as an entirety or from time to time in for only part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedspecified therein.

Term of Warrants; Exercise of Warrants. (a) 5.1 Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the at any time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per sharefrom 10:00 a.m., subject to adjustment in accordance with Section 12 hereof Pacific time, on ________, 1999 (the "Exercise PriceInitiation Date"). Each Warrant terminates at 5:00 p.m. Houston time ) until 6:00 p.m., Pacific time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement ________, 2003 (the "Expiration Date") at a purchase price of $____ subject to adjustment (the "Warrant Price"). Notwithstanding the foregoing, if at 6:00 p.m., Pacific time on the Expiration Date, any Holder or Holders of the Warrants have not exercised their Warrants and the Closing Price (as defined below) for the Common Stock on the Expiration Date is greater than the Warrant Price, then each such unexercised Warrant shall be automatically converted into a number of shares of Common Stock of the Company equal to: (A) the number of shares of Common Stock then issuable upon exercise of a Warrant multiplied by (B) a fraction (1) the numerator of which is the difference between the Closing Price for the Common Stock on the Expiration Date and the Warrant Price and (2) the denominator of which is the Closing Price for the Common Stock on the Expiration Date. (b) 5.2 The Exercise Warrant Price and the number of shares Warrant Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 11 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder of Warrants shall have the right, which may be exercised as expressed in such Warrantsthe Warrant Certificate, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant HolderHolder of Warrants) the number of fully paid and nonassessable shares of Common Stock Warrant Shares specified in such WarrantsWarrant Certificate, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant Certificate, with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Warrant Price, as adjusted in accordance with the provisions of Section 12 11 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Payment of such Warrant Holder may (i) pay the Exercise Price shall be made in cash, by wire transfer or by certified or official bank check payable to the order of Sheridancheck, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants any combination thereof. No adjustment shall be made for "Net Warrant Shares." The number of Net any dividends on any Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares stock issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. a Warrant. 5.3 Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such registered Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such surrender and, if the number of Warrants represented by a Warrant certificate shall not be exercised in full, a new Warrant certificate, executed by the Company for the balance of the number of whole Warrant Shares. 5.4 If permitted by applicable law, such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, shares as of the date of the surrender of such Warrants and payment of the Exercise Warrant Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant registered Holders thereof, either in full as an entirety or from time to time in for only part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedspecified therein.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of $5.50 1.00 per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise PriceEXERCISE PRICE"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined date on which such Warrant becomes exercisable in the Purchase Agreement accordance with its terms (the "Expiration DateEXPIRATION DATE"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the purchase form on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridanthe Company, or (ii) pay the Exercise Price by the surrender to Sheridan the Company of securities of Sheridan the Company having a Market Price equal to the Exercise Price or (iiiii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market PriceMARKET PRICE" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan the Company at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Underwriter Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price equal to 120% of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate at an exercise public offering price of $5.50 per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on ) for a period of four years beginning six months from the fifth anniversary Effective Date of the Closing Date as defined in the Purchase Agreement Registration Statement (the "Warrant Expiration Date"). . Notwithstanding the foregoing, if at 5:00 p.m. E.T. on the Warrant Expiration Date, any Holder or Holders of the Underwriter Warrants have not exercised their Underwriter Warrants and the "current market price" (bas such term is defined in Section 8(d) below) for the Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Underwriter Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Underwriter Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "current market price" for Common Shares on the Warrant Expiration Date; and (B) the Exercise Price, and the denominator of which is the "current market price" on the Warrant Expiration Date. Prior to the Warrant Expiration Date, the Company will not take any action which would terminate the Underwriter Warrants. The Exercise Price and the number of shares Shares issuable upon exercise of the Underwriter Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such Underwriter Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsUnderwriter Warrants with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Underwriter Warrants are then exercised. The Warrant Holder Payment of such Exercise Price may be made at the Holder's election (i) pay the Exercise Price in cash, by certified or official bank check payable check; (ii) in the event that the Holder holds Common Shares of the Company and such Common Shares are listed on a domestic stock exchange or quoted in the domestic over-the-counter market, by transferring to the order Company an amount of Sheridansuch Common Shares which, or when multiplied by, the current market price of the Common Shares at the time of exercise of such Underwriter Warrant, equals the aggregate amount of the consideration payable upon such exercise; (iii) by surrendering to the surrender Company the right to Sheridan receive a portion of securities the number of Sheridan having a Market Price Shares with respect to which such Underwriter Warrant is then being exercised equal to the product obtained by multiplying such number of Shares by a fraction, the numerator of which is the Exercise Price in effect on the date of such exercise and the denominator of which is the current market price of the Common Shares in effect on such date; or (iv) by a combination of the foregoing methods of payment selected by the Holder. For purposes of this paragraph, the current market price of the Common Shares shall be calculated either (a) on the date which the form of election to purchase attached hereto is deemed to have been sent to the Company pursuant to Section 12 of this Agreement ("Notice Date") or (b) as the average of the last reported sale price for each of the five trading days preceding the Notice Date, whichever of (a) or (b) is greater. In any case where the consideration payable upon such exercise is being paid in whole or in part pursuant to the provisions of clause (ii) make an or clause (iii) of the preceding sentence, such exercise shall be accompanied by written notice from the Holder specifying the manner of Warrants for "Net Warrant Shares." The number payment thereof, and in the case of Net Warrant clause (ii), stating the amount of Common Shares will of the Company to be determined as described by applied to such payment, and in the following formula: Net Warrant Shares = [WS x case of clause (MP-EP)]/MP. "WS" is iii), containing a calculation showing the number of Warrant Shares with respect to which rights are being surrendered thereunder and the net number of Shares to be issued after giving effect to such surrender. No adjustment shall be made for any dividends on any Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Pricean Underwriter Warrant. Upon such each surrender of Warrants, Underwriter Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch dispatch, but in no event later than three business days from the Notice Date, to or upon the written order of the Warrant Holder of such Underwriter Warrants and in such name or names as the Warrant such Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Underwriter Warrants, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Underwriter Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; provided, however, that if, at the date of surrender of such Underwriter Warrants and payment of such Exercise Price, the transfer books for the Common Shares or other class of securities issuable upon the exercise of such Underwriter Warrants shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Warrant Expiration Date) and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided, further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than 20 days. The rights of purchase represented by the Underwriter Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Underwriter Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Warrant Expiration Date, a new certificate evidencing the remaining Underwriter Warrant or Underwriter Warrants will be issuedissued for the remaining number of Shares specified in the Underwriter Warrant so surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Underwriter Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 [ ] per share, subject to adjustment in accordance with Section 12 hereof Share (the "‘‘Exercise Price"’’) at any time from the first anniversary of the effective date of the Registration Statement until 5:00 p.m., EST time, on [ ], 2011) (the ‘‘Warrant Expiration Date’’). Each Warrant terminates Notwithstanding the foregoing, if at 5:00 p.m. Houston EST time on the fifth anniversary Warrant Expiration Date, any Holder or Holders of the Closing Date Underwriter Warrants have not exercised their Underwriter Warrants and the ‘‘current market price’’ (as such term is defined in Section 8(d) below) for the Purchase Agreement Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Underwriter Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Underwriter Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "‘‘current market price’’ for Common Shares on the Warrant Expiration Date and (B) the Exercise Price, and the denominator of which is the ‘‘current market price’’ on the Warrant Expiration Date"). (b) . Prior to the Warrant Expiration Date, the Company will not take any action which would terminate the Underwriter Warrants. The Exercise Price and the number of shares Shares issuable upon exercise of the Underwriter Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such Underwriter Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsUnderwriter Warrants with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Underwriter Warrants are then exercised. The Warrant Holder Payment of such Exercise Price may be made at the Holder’s election (i) pay the Exercise Price in cash, by certified or official bank check payable check, (ii) in the event that the Holder holds Common Shares of the Company and such Common Shares are listed on a domestic stock exchange or quoted in the domestic over-the-counter market, by transferring to the order Company an amount of Sheridansuch Common Shares which, or when multiplied by, the current market price of the Common Shares at the time of exercise of such Underwriter Warrant, equals the aggregate amount of the consideration payable upon such exercise, (iii) by surrendering to the surrender Company the right to Sheridan receive a portion of securities the number of Sheridan having a Market Price Shares with respect to which such Underwriter Warrant is then being exercised equal to the product obtained by multiplying such number of Shares by a fraction, the numerator of which is the Exercise Price in effect on the date of such exercise and the denominator of which is the current market price of the Common Shares in effect on such date, or (iv) by a combination of the foregoing methods of payment selected by the Holder. For purposes of this paragraph, the current market price of the Common Shares shall be calculated either (a) on the date which the form of election to purchase attached hereto is deemed to have been sent to the Company pursuant to Section 12 hereof (‘‘Notice Date’’) or (b) as the average of the last reported sale price for each of the five trading days preceding the Notice Date, whichever of (a) or (b) is greater. In any case where the consideration payable upon such exercise is being paid in whole or in part pursuant to the provisions of clause (ii) make an or clause (iii) of the preceding sentence, such exercise shall be accompanied by written notice from the Holder specifying the manner of Warrants for "Net Warrant Shares." The number payment thereof, and in the case of Net Warrant clause (ii), stating the amount of Common Shares will of the Company to be determined as described by applied to such payment, and in the following formula: Net Warrant Shares = [WS x case of clause (MP-EP)]/MP. "WS" is iii), containing a calculation showing the number of Warrant Shares with respect to which rights are being surrendered thereunder and the net number of Shares to be issued after giving effect to such surrender. No adjustment shall be made for any dividends on any Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Pricean Underwriter Warrant. Upon such each surrender of Warrants, Underwriter Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch within three business days of such notice to or upon the written order of the Warrant Holder of such Underwriter Warrants and in such name or names as the Warrant such Holder may designate, designate a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Underwriter Warrants, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Underwriter Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Underwriter Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Underwriter Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Warrant Expiration Date, a new certificate evidencing the remaining Underwriter Warrant or Underwriter Warrants will be issuedissued for the remaining number of Shares specified in the Underwriter Warrant so surrendered.

Term of Warrants; Exercise of Warrants. The Placement Agent is hereby granted that number of warrants equal to ten percent (a10%) of the aggregate gross proceeds raised in the Placement divided by the average closing bid price of the Common Stock (the "Closing Date Average") as calculated over the five (5) trading day period ending on the Closing Date, at any time from the first anniversary of the Closing Date until 5:00 p.m., Los Angeles time, on December , 1999. Each Warrant entitles the Warrant Holder registered ----- owner thereof to purchase one Share at a purchase price equal to two hundred percent (200%) of the Closing Date Average, but in no event less than $3.00 per share of Common Stock during the (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares Shares of Common Stock (rounded up to the nearest full share) specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a nationalsecurities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified check or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants Company. No adjustment shall be made for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant any dividends on any Shares issuable upon exercise of the Warrants or portion a Warrant. Upon each surrender of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; provided, however, that if, at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of securities issuable upon the exercise of such Warrants shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided, further, however, that the transfer books or record, unless otherwise required by law, shall not be closed at any one time for a period longer than twenty (20) days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders Holder(s) thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Expiration Dateexercise, a new certificate evidencing the remaining Warrant or Warrants will be issuedissued for the remaining number of Shares specified in the Warrant so surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the respective Warrant Certificate Certificates at an exercise price of [$5.50 1.00] per share, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined date on which such Warrant becomes exercisable in the Purchase Agreement accordance with its terms (the "Expiration Date"). (b) The Exercise Price and the number of shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, and upon payment to Sheridan of the Exercise Price, as adjusted in accordance with the provisions of Section 12 of this Warrant Agreement or purchase form on the reverse thereof duly filled in and signed and upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon Subject to paragraph 7(c) hereof, upon such surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan the Company at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, Warrants in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issued.

Term of Warrants; Exercise of Warrants. (a) Each Representatives' Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 [120% OF IPO PRICE] per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price") at any time from the first anniversary of the Effective Date (except as otherwise set forth herein) until 5:00 p.m., New York City time (the "Close of Business"). Each Warrant terminates at 5:00 p.m. Houston time , on the day immediately preceding the fifth anniversary of the Closing Effective Date as defined in the Purchase Agreement (the "Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants each Representatives' Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such WarrantsRepresentatives' Warrant, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such WarrantsRepresentatives' Warrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsRepresentatives' Warrant, with the form of election to purchase attached thereto duly completed and signed, with (if requested by the Company within two business days of surrender of the Warrant with the election to purchase) signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are Representatives' Warrant is then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified or official bank check payable to the order of Sheridan, or the Company in the amount obtained by multiplying the number of Shares for which such Representatives' Warrant is then being exercised by the surrender Exercise Price then in effect (such amount, the "Exercise Payment"), except that the Warrant Holder may, at its option, elect to Sheridan pay the Exercise Payment by cancelling a portion of securities of Sheridan having a Market Price such Representatives' Warrant that is equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be shares determined as described by dividing the Exercise Payment by the following formula: Net Warrant Shares = [WS x current market price (MP-EP)]/MPas defined in paragraph (d) of Section 8) of a share of Common Stock as of the date of exercise. "WS" is the number of Warrant Except as set forth in Section 8(c), no adjustment shall be made for any dividends on any Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Pricea Representatives' Warrant. Upon such each surrender of Warrants, Representatives' Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise Payment as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and (subject to receipt of evidence of compliance with the Act in accordance with the provisions of Section 10 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such WarrantsRepresentatives' Warrant, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such sharesShares, as of the date of the surrender of such Warrants Representatives' Warrant and payment of the Exercise Price or receipt of shares by net exercise Payment as aforesaid; provided, however, that if, at the date of surrender of such Representatives' Warrant and payment of such Exercise Payment, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Representatives' Warrant shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Expiration Date) and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than 4 days. The rights of purchase represented by the Warrants a Representatives' Warrant shall be exercisable, at the election of the Warrant Holders Holder thereof, either in full or from time to time in part and, in the event that any Representatives' Warrant is exercised in respect of less than all of the shares Shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Representatives' Warrant or new Representatives' Warrants will be issuedissued for the remaining number of Shares specified in the Representatives' Warrant or Representatives' Warrants so surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Underwriter Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 ____ per share, subject to adjustment in accordance with Section 12 hereof Share [120% OF THE OFFERING PRICE TO THE PUBLIC] (the "Exercise Price"). Each Warrant terminates ) at 5:00 p.m. Houston any time on from the fifth second anniversary of the Closing Date as defined in effective date of the Purchase Agreement Registration Statement until 5:00 p.m., New York City time, on ___________ ___, 2004) (the "Warrant Expiration Date"). . Notwithstanding the foregoing, if at 5:00 p.m. New York time on the Warrant Expiration Date, any Holder or Holders of the Underwriter Warrants have not exercised their Underwriter Warrants and the "current market price" (bas such term is defined in Section 8(d) below) for the Common Shares on the Warrant Expiration Date is greater than the Exercise Price, then each such unexercised Underwriter Warrant shall automatically be converted into a number of Common Shares equal to: the number of Common Shares then issuable upon exercise of an Underwriter Warrant, multiplied by a fraction, the numerator of which is the difference between (A) the "current market price" for Common Shares on the Warrant Expiration Date and (B) the Exercise Price, and the denominator of which is the "current market price" on the Warrant Expiration Date. Prior to the Warrant Expiration Date, the Company will not take any action which would terminate the Underwriter Warrants. The Exercise Price and the number of shares Shares issuable upon exercise of the Underwriter Warrants are subject to adjustment upon the occurrence of certain events, events pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Underwriter Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such Underwriter Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsUnderwriter Warrants with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Underwriter Warrants are then exercised. The Warrant Holder Payment of such Exercise Price may be made at the Holder's election (i) pay the Exercise Price in cash, by certified or official bank check payable to the order of Sheridancheck, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise as aforesaid, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and in such name or names as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all the Holder holds Common Shares of the shares purchasable Company and such Common Shares are listed on such exercise at any time prior a domestic stock exchange or quoted in the domestic over-the-counter market, by transferring to the Expiration DateCompany an amount of such Common Shares which, a new certificate evidencing when multiplied by, the remaining Warrant or Warrants will be issued.current market price of the Common Shares at the time of exercise of such Underwriter Warrant, equals the aggregate amount of the consideration payable upon such exercise, (iii) by surrendering to

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the -------------------------------------- Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 9.00 per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price") at any time from the first anniversary of the Effective Date (except as otherwise set forth herein) until 5:00 p.m., Boston time (the "Close of Business"). Each Warrant terminates at 5:00 p.m. Houston time , on the day immediately preceding the fifth anniversary of the Closing Effective Date as defined in the Purchase Agreement (the "Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such WarrantsWarrant, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such WarrantsWarrant Holder's Warrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant, with an election to purchase attached thereto in the form of Exhibit B to this Agreement duly completed and signed, with (if --------- requested by the Company within two business days of surrender of the Warrant with the election to purchase) signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are Warrant is then exercised. The Notwithstanding the method of exercise set forth in any Warrant (or anything to the contrary herein), in the event that the Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable thereof has not exercised such Warrant prior to the order Close of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock Business on the last trading day preceding Expiration Date and the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common StockStock at the Close of Business on the Expiration Date (as determined substantially in accordance with Section 8(d), but using the closing prices or quotations, as determined in paragraph 12.1(e). "EP" shall mean the case may be, on such Expiration Date rather than a 30-day average) is greater than the Exercise Price, then the Warrant Holder thereof shall be deemed to have exercised such Warrant in full immediately prior to the Close of Business on the Expiration Date (an "Automatic Exercise"). Payment of the Exercise Price may be made in cash or by check payable to the order of the Company in the amount obtained by multiplying the number of Shares for which such Warrant is then being exercised by the Exercise Price then in effect (such amount, the "Exercise Payment"), except that the Warrant Holder may, at its option, elect to pay the Exercise Payment by delivering to the Company the number of shares of Common Stock determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock on the date of exercise or by cancelling a portion of such Warrant that is equal to the number of shares determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock as of the date of exercise. In the event of an Automatic Exercise of any Warrant, the Warrant Holder thereof shall be deemed to have chosen to cancel the portion of its Warrant that is equal to the number of shares determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock as of the Close of Business on the Expiration Date. Except as set forth in Section 8, no adjustment shall be made for any dividends on any Shares issuable upon exercise of a Warrant. Upon such each surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securitiesPayment as aforesaid, or upon a net exercise as aforesaidthe occurrence of an Automatic Exercise, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch (but in any event within three (3) business days) to or upon the written order of the Warrant Holder and (subject to receipt of evidence of compliance with the Act and applicable state securities laws in accordance with the provisions of Section 10 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such WarrantsWarrant, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such sharesShares, as of the date of the surrender of such Warrants Warrant and payment of the Exercise Price or receipt of shares by net exercise Payment as aforesaid, or as of the date of the Automatic Exercise; provided, however, that if, at the date of surrender -------- ------- of such Warrant and payment of such Exercise Payment, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Warrant shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Expiration Date), and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided further, however, that -------- ------- ------- the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than four (4) days. The rights of purchase represented by the Warrants a Warrant shall be exercisable, at the election of the Warrant Holders Holder thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares Shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing Warrant or new Warrants will be issued for the remaining number of Shares specified in the Warrant or Warrants will be issuedso surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 [ ] per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price") at any time from the first anniversary of the Effective Date (except as otherwise set forth herein) until 5:00 p.m., Boston time (the "Close of Business"). Each Warrant terminates at 5:00 p.m. Houston time , on the day immediately preceding the fifth anniversary of the Closing Effective Date as defined in the Purchase Agreement (the "Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such WarrantsWarrant, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such WarrantsWarrant Holder's Warrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant, with an election to purchase attached thereto in the form of Exhibit B to this Agreement, duly completed and signed, with (if requested by the Company within two business days of surrender of the Warrant with the election to purchase) signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are Warrant is then exercised. The Notwithstanding the method of exercise set forth in any Warrant (or anything to the contrary herein), in the event that the Warrant Holder may (i) pay the Exercise Price in cash, by certified or official bank check payable thereof has not exercised such Warrant prior to the order Close of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock Business on the last trading day preceding Expiration Date and the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common StockStock at the Close of Business on the Expiration Date (as determined substantially in accordance with Section 8(d), but using the closing prices or quotations, as determined in paragraph 12.1(e). "EP" shall mean the case may be, on such Expiration Date rather than a 30-day average) is greater than the Exercise Price, then the Warrant Holder thereof shall be deemed to have exercised such Warrant in full immediately prior to the Close of Business on the Expiration Date (an "Automatic Exercise"). Payment of the Exercise Price may be made in cash or by check payable to the order of the Company in the amount obtained by multiplying the number of Shares for which such Warrant is then being exercised by the Exercise Price then in effect (such amount, the "Exercise Payment"), except that the Warrant Holder may, at its option, elect to pay the Exercise Payment by delivering to the Company the number of shares of Common Stock determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock on the date of exercise or by canceling a portion of such Warrant that is equal to the number of shares determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock as of the date of exercise. In the event of an Automatic Exercise of any Warrant, the Warrant Holder thereof shall be deemed to have chosen to cancel the portion of its Warrant that is equal to the number of shares determined by dividing the Exercise Payment by the current market price (as defined in paragraph (d) of Section 8) of a share of Common Stock as of the Close of Business on the Expiration Date. Except as set forth in Section 8, no adjustment shall be made for any dividends on any Shares issuable upon exercise of a Warrant. Upon such each surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securitiesPayment as aforesaid, or upon a net exercise as aforesaidthe occurrence of an Automatic Exercise, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch (but in any event within three (3) business days) to or upon the written order of the Warrant Holder and (subject to receipt of evidence of compliance with the Act and applicable state securities laws in accordance with the provisions of Section 10 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such WarrantsWarrant, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such sharesShares, as of the date of the surrender of such Warrants Warrant and payment of the Exercise Price or receipt of shares by net exercise Payment as aforesaid, or as of the date of the Automatic Exercise; provided, however, that if, at the date of surrender of such Warrant and payment of such Exercise Payment, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Warrant shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Expiration Date), and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than four (4) days. The rights of purchase represented by the Warrants a Warrant shall be exercisable, at the election of the Warrant Holders Holder thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less fewer than all of the shares Shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing Warrant or new Warrants will be issued for the remaining number of Shares specified in the Warrant or Warrants will be issuedso surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Subject to Paragraph 4(d) below, each Warrant entitles the Warrant Holder registered owner thereof to purchase one share Share at a purchase price of Common Stock during the Seven Dollars ($7.00) per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates ) at any time or from time to time the date of this Agreement until 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement p.m., California time, May 1, 2005 (the "Warrant Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant the Agreement, each Warrant the Holder or a permitted Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan (the Company and Sheridan the Company shall issue and sell to the Holder or such Warrant Holder) Holder the number of fully paid and nonassessable shares Shares of Common Stock specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. . (b) The Warrant Holder Purchase Price may be paid (i) pay the Exercise Price in cash, cash or by certified or official bank cashier's check payable to the order of SheridanCompany, or (ii) by the surrender to Sheridan of securities of Sheridan Warrants owned by the Holder or a permitted Holder having a Market Price Warrant Value (as defined below) on the date of exercise equal to the Exercise Price or Purchase Price, (iiiii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number surrender of Warrant Shares issuable upon exercise shares of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Company's Common Stock in good form for transfer, owned by the Holder and having a Fair Market Value (as defined below) on the last trading day preceding the date of exercise equal to the request to exercise Purchase Price, or (iv) any combination of the Warrantsforegoing. The term "Market PriceWarrant Value" shall mean the then current market price difference between the Exercise Price per share and the Fair Market Value (as defined below) per share multiplied by the number of Common Stock, as determined in paragraph 12.1(e)Warrants being surrendered. The term "EPFair Market Value" shall mean the Exercise Price. Upon such surrender of Warrants, and payment average over the previous five (5) trading days of the Exercise Pricereported high and low sales price on the Nasdaq Small Cap Market, with cash or securitiesthe Nasdaq National Market System, or upon such other national securities exchange on which the Company's shares may be traded, or if not trading on the Nasdaq Small Cap Market, the Nasdaq National Market System, or a net exercise as aforesaidnational securities exchange, Sheridan at its expense shall issue and cause to be delivered with all reasonable dispatch to or upon the written order average of the Warrant Holder closing bid and asked prices in such name or names the over-the-counter market as the Warrant Holder may designate, a certificate or certificates for the number of full shares of Common furnished by any New York Stock so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or Exchange member firm selected from time to time in part and, in by the event Company for that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedpurpose.

Term of Warrants; Exercise of Warrants. (a) 5.1 Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the Ordinary Shares at any time period and subject to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per sharefrom 10:00 a.m., subject to adjustment in accordance with Section 12 hereof Pacific time, on February __, 2000 (the "Exercise PriceInitiation Date"). Each Warrant terminates at 5:00 p.m. Houston time ) until 6:00 p.m., Pacific time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement February __, 2004 (the "Expiration Date") at a purchase price of $4.50 subject to adjustment (the "Warrant Price"). (b) 5.2 The Exercise Warrant Price and the number of shares Warrant Shares issuable upon exercise of Warrants each Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 11 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder of Warrants shall have the right, which may be exercised as expressed in such Warrantsthe Warrant Certificate, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant HolderHolder of Warrants) the number of fully paid and nonassessable shares of Common Stock Warrant Shares specified in such WarrantsWarrant Certificate, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsWarrant Certificate, with the form of election to purchase on the reverse thereof duly filled in and signed, and upon payment to Sheridan the Company of the Exercise Warrant Price, as adjusted in accordance with the provisions of Section 12 11 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Payment of such Warrant Holder may (i) pay the Exercise Price shall be made in cash, by wire transfer or by certified or official bank check payable to the order of Sheridancheck, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants any combination thereof. No adjustment shall be made for "Net Warrant Shares." The number of Net any dividends on any Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares stock issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. a Warrant. 5.3 Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Warrant Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such registered Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrendersurrender and, if the number of Warrants represented by a Warrant certificate shall not be exercised in full, a new Warrant certificate, executed by the Company for the balance of the number of whole Warrant Shares. 5.4 In addition to the method of payment set forth in Section 5.2 and in lieu of any cash payment required thereunder, the Holder of the Warrants shall have the right at any time and from time to time to exercise the Warrants in full or in part by surrendering the Warrant Certificate in the manner specified in Section 5.2 in exchange for the number of shares of Ordinary Shares of the Company equal to: (A) the number of shares of Ordinary Shares as to which the Warrants are being exercised multiplied by (B) a fraction, (1) the numerator of which is the difference between the Closing Price for the Ordinary Shares and the Warrant Price and (2) the denominator of which is the Closing Price for the Ordinary Shares. Such Solely for the purposes of this paragraph, Closing Price shall be calculated either (i) on the date which the form of election to purchase on the reverse of the Warrant Certificate is deemed to have been sent to the Company ("Notice Date") or (ii) as the average of the Closing Prices for each of the 20 trading days preceding the Notice Date, whichever of (i) or (ii) is greater. 5.5 If permitted by applicable law, such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, shares as of the date of the surrender of such Warrants and payment of the Exercise Warrant Price or receipt of shares by net exercise as aforesaid. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant registered Holders thereof, either in full as an entirety or from time to time in for only part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedspecified therein.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder thereof to purchase one share 106.3 shares of Common Stock during at the time period and subject to the conditions set forth in the Warrant Certificate Exercise Price at an exercise price of $5.50 per shareany tune after November 30, subject to adjustment in accordance with Section 12 hereof 1995 (the "Exercise PriceEffective Date"). Each Warrant terminates at ) and before 5:00 p.m. Houston time p.m., prevailing Central Time, on the fifth anniversary of the Closing Date as defined in the Purchase Agreement November 30, 2004 (the "Expiration Date"). On the Expiration Date, all rights evidenced by the Warrants shall cease and the Warrants shall become void. The period from the Effective Date to the Expiration Date is sometimes hereinafter referred to as the "Exercise Period. (b) " The Exercise Price and the number of shares Warrant Shares issuable upon exercise of Warrants the Warrant Shares are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 9 of this Warrant Agreement. Subject to the provisions of this Warrant AgreementAgreement and upon five Business Days prior written notice to the Company, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Warrants, Warrants to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock specified in such WarrantsWarrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of election to purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 9 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Warrant Shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified or official bank check payable to the order of Sheridan, the Company or by the surrender to Sheridan and delivery of securities of Sheridan having a Market Price Notes in an aggregate principal amount equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such each surrender of Warrants, Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder of such Warrants and (subject to receipt of evidence of compliance with the Act in accordance with the provisions of Section 13 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Warrant Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Warrant Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Warrant Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; PROVIDED, HOWEVER, that if, at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Warrants shall be closed, the certificates for the shares shall be issuable as of the next succeeding date on which such books shall be opened and until such date the Company shall be under no duty to deliver any certificate for such Warrant Shares; PROVIDED, FURTHER, that the transfer books, unless otherwise required by law, shall not be closed at any one time for a period longer than 20 days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Warrant or Warrants will be issuedfull.

Term of Warrants; Exercise of Warrants. (a) Each Representatives' Warrant entitles the Warrant Holder thereof to purchase one share of Common Stock during the time period and subject to the conditions set forth in the Warrant Certificate Share at an exercise a purchase price of $5.50 10.80 per share, subject to adjustment in accordance with Section 12 hereof Share (the "Exercise Price") at any time from the first anniversary of the Effective Date (except as otherwise set forth herein) until 5:00 p.m., New York City time (the "Close of Business"). Each Warrant terminates at 5:00 p.m. Houston time , on the day immediately preceding the fifth anniversary of the Closing Effective Date as defined in the Purchase Agreement (the "Expiration Date"). (b) . The Exercise Price and the number of shares Shares issuable upon exercise of Warrants each Representatives' Warrant are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such WarrantsRepresentatives' Warrant, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock Shares specified in such WarrantsRepresentatives' Warrant, upon surrender to Sheridanthe Company, or its duly authorized agent, of such WarrantsRepresentatives' Warrant, with the form of election to purchase attached thereto duly completed and signed, with (if requested by the Company within two business days of surrender of the Warrant with the election to purchase) signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD, and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are Representatives' Warrant is then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified or official bank check payable to the order of Sheridan, or the Company in the amount obtained by multiplying the number of Shares for which such Representatives' Warrant is then being exercised by the surrender Exercise Price then in effect (such amount, the "Exercise Payment"), except that the Warrant Holder may, at its option, elect to Sheridan pay the Exercise Payment by cancelling a portion of securities of Sheridan having a Market Price such Representatives' Warrant that is equal to the Exercise Price or (ii) make an exercise of Warrants for "Net Warrant Shares." The number of Net Warrant Shares will be shares determined as described by dividing the Exercise Payment by the following formula: Net Warrant Shares = [WS x current market price (MP-EP)]/MPas defined in paragraph (d) of Section 8) of a share of Common Stock as of the date of exercise. "WS" is the number of Warrant Except as set forth in Section 8(c), no adjustment shall be made for any dividends on any Shares issuable upon exercise of the Warrants or portion of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Pricea Representatives' Warrant. Upon such each surrender of Warrants, Representatives' Warrants and payment of the Exercise Price, with cash or securities, or upon a net exercise Payment as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch to or upon the written order of the Warrant Holder and (subject to receipt of evidence of compliance with the Act and applicable state securities laws in accordance with the provisions of Section 10 of this Agreement) in such name or names as the such Warrant Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such WarrantsRepresentatives' Warrant, together with cash, as provided in Section 12 9 of this Warrant Agreement, in respect of any fraction of a share of such stock fractional Shares otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, and any person so designated to be named therein shall be deemed to have become a holder of record of such sharesShares, as of the date of the surrender of such Warrants Representatives' Warrant and payment of the Exercise Price or receipt of shares by net exercise Payment as aforesaid; provided, however, that if, at the date of surrender of such Representatives' Warrant and payment of such Exercise Payment, the transfer books for the Common Stock or other class of stock purchasable upon the exercise of such Representatives' Warrant shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened (whether before, on or after the Expiration Date) and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than 4 days. The rights of purchase represented by the Warrants a Representatives' Warrant shall be exercisable, at the election of the Warrant Holders Holder thereof, either in full or from time to time in part and, in the event that any Representatives' Warrant is exercised in respect of less than all of the shares Shares purchasable on such exercise at any time prior to the Expiration Date, a new certificate evidencing the remaining Representatives' Warrant or new Representatives' Warrants will be issuedissued for the remaining number of Shares specified in the Representatives' Warrant or Representatives' Warrants so surrendered.

Term of Warrants; Exercise of Warrants. (a) Each Warrant entitles the Warrant Holder registered owner thereof to purchase one share of Common Stock during the Share at a purchase price equal to $2.00 per Share (as adjusted from time period and subject to time pursuant to the conditions set forth in the Warrant Certificate at an exercise price of $5.50 per shareprovisions hereof, subject to adjustment in accordance with Section 12 hereof (the "Exercise Price"). Each Warrant terminates at 5:00 p.m. Houston time on the fifth anniversary of the Closing Date as defined in the Purchase Agreement (the "Expiration Date"). (b) The Exercise Price and the number of shares Shares issuable upon exercise of Warrants are subject to adjustment upon the occurrence of certain events, pursuant to the provisions of Section 12 8 of this Warrant Agreement. Subject to the provisions of this Warrant Agreement, each Warrant Holder shall have the right, which may be exercised as expressed set forth in such Warrants, to purchase from Sheridan the Company (and Sheridan the Company shall issue and sell to such Warrant Holder) the number of fully paid and nonassessable shares of Common Stock (rounded up to the nearest full share) specified in such Warrants, upon surrender to Sheridanthe Company, or its duly authorized agent, of such Warrants, with the form of Election to Purchase attached thereto duly completed and signed, with signatures guaranteed by a member firm of a national securities exchange, a commercial bank (not a savings bank or savings and loan association) or trust company located in the United States or a member of the NASD and upon payment to Sheridan the Company of the Exercise Price, as adjusted in accordance with the provisions of Section 12 8 of this Warrant Agreement or upon a net exercise pursuant to this subsection of this Warrant Agreement, for the number of shares Shares in respect of which such Warrants are then exercised. The Warrant Holder may (i) pay the Payment of such Exercise Price may be made in cash, cash or by certified check or official bank check payable to the order of Sheridan, or by the surrender to Sheridan of securities of Sheridan having a Market Price equal to the Exercise Price or (ii) make an exercise of Warrants Company. No adjustment shall be made for "Net Warrant Shares." The number of Net Warrant Shares will be determined as described by the following formula: Net Warrant Shares = [WS x (MP-EP)]/MP. "WS" is the number of Warrant any dividends on any Shares issuable upon exercise of the Warrants or portion a Warrant. Upon each surrender of Warrants in question. "MP" is the Market Price of the Common Stock on the last trading day preceding the date of the request to exercise the Warrants. "Market Price" shall mean the then current market price per share of Common Stock, as determined in paragraph 12.1(e). "EP" shall mean the Exercise Price. Upon such surrender of Warrants, and payment of the Exercise Price, with cash or securities, or upon a net exercise Price as aforesaid, Sheridan at its expense the Company shall issue and cause to be delivered with all reasonable dispatch (and in no event more than five business days from the date of each such surrender and payment) to or upon the written order of the Warrant Holder of such Warrants and in such name or names as the Warrant such Holder may designate, a certificate or certificates for the number of full shares of Common Stock Shares so purchased upon the exercise of such Warrants, together with cash, as provided in Section 12 of this Warrant Agreement, in respect of any fraction of a share of such stock otherwise issuable upon such surrender. Such certificate or certificates shall be deemed to have been issued, issued and any person so designated to be named therein shall be deemed to have become a holder of record of such shares, Shares as of the date of the surrender of such Warrants and payment of the Exercise Price or receipt of shares by net exercise as aforesaid; provided, however, that if, at the date of surrender of such Warrants and payment of such Exercise Price, the transfer books for the Common Stock or other class of securities issuable upon the exercise of such Warrants shall be closed, the certificates for the Shares shall be issuable as of the date on which such books shall next be opened and until such date the Company shall be under no duty to deliver any certificate for such Shares; provided, further, however, that the transfer books of record, unless otherwise required by law, shall not be closed at any one time for a period longer than twenty (20) days. The rights of purchase represented by the Warrants shall be exercisable, at the election of the Warrant Holders Holder(s) thereof, either in full or from time to time in part and, in the event that any Warrant is exercised in respect of less than all of the shares purchasable on Shares issuable upon such exercise at any time prior to the Expiration Dateexercise, a new certificate evidencing the remaining Warrant or Warrants will be issuedissued for the remaining number of Shares specified in the Warrant so surrendered.