EXHIBIT (D)(2)
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement") is made as of December 17, 1999, by and between Black Warrior
Wireline Corp., a Delaware corporation (the "Company"), and the parties listed
on the signature page below (collectively, the "Purchaser" or "Purchasers").
WHEREAS, the Purchasers have acquired or may acquire from the Company,
Promissory Notes in the aggregate original principal amount of up to $7,000,000
(the "Notes"), convertible into Common Stock of the Company, subject to
adjustment (the "Note Shares");
WHEREAS, the Purchasers have acquired or may acquire from the Company,
Common Stock Purchase Warrants (collectively, the "Warrants") which may be
exercised to initially acquire up to 28,700,000 shares of the Company's Common
Stock (the "Warrant Shares" and, together with the Note Shares, the "Shares"),
par value $0.005 per share ("Common Stock"), subject to adjustment;
WHEREAS, the Company wishes to grant the Purchasers certain
registration rights in respect of the Shares, as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereby agree as follows:
ARTICLE I
Definitions
As used in this Registration Rights Agreement, the following terms
shall have the meanings set forth below:
1.1 "Commission" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.2 "Holder" shall mean Purchaser and any transferee of any Warrants or
holder of any Shares issued upon exercise of any Warrants.
1.3 "Registrable Securities" shall mean (i) the Shares; and (ii) any
Common Stock issued or issuable at any time or from time to time in respect of
the Shares upon a stock split, stock dividend, recapitalization or other similar
event involving the Company until such Common Stock is sold pursuant to a
Registration Statement or the exemption from registration under Rule 144(k) (or
successor Rule) under the Securities Act is available with respect to the
Shares.
1.4 The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering by the
Commission of the effectiveness of such registration statement.
1.5 "Registration Expenses" shall mean all expenses, other than Selling
Expenses (as defined below), incurred by the Company in complying with this
Registration Rights Agreement, including, without limitation, all registration,
qualification and filing fees, exchange listing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees and
expenses, the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
1.6 "Securities Act" shall mean the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.7 "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
a Purchaser and, except as set forth above, all fees and disbursements of
counsel for such Purchaser.
1.8 "Underwritten Public Offering" shall mean a public offering in
which the Common Stock is offered and sold on a firm commitment basis through
one or more underwriters, all pursuant to an underwriting agreement between the
Company and such underwriters.
ARTICLE II
Registration Rights
2.1 Demand Registration.
2.1.1 On any date following the first shareholders meeting of
the Company after the date hereof, and on demand of Purchasers holding at least
66 2/3% of the indebtedness evidenced by the Notes ("Demand Purchasers"), the
Company shall file with the Commission a shelf registration statement covering
the resale of the Shares on Form ▇-▇, ▇-▇, or S-3 (the "Registration Statement")
which shall remain effective for the lesser of: (i) 3 years, or (ii) until such
time as the Holder does not beneficially own any Registrable Securities. The
Company shall use its reasonable best efforts to cause such Registration
Statement to become effective as soon as practicable and to cause the Shares to
be qualified in such state jurisdictions as the Demand Purchasers may request.
2.1.2 Except as set forth herein, the Company shall take all
reasonable steps necessary to keep the Registration Statement current and
effective until all Shares have been distributed by the Purchaser including any
necessary refiling of additional registration statements.
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2.1.3 The Company shall be entitled to require that the
parties refrain from effecting any public sales or distributions of the
Registrable Securities pursuant to a Registration Statement that has been
declared effective by the Commission or otherwise, if the board of directors of
the Company reasonably determines that such public sales or distributions would
interfere in any material respect with any transaction involving the Company
that the board of directors reasonably determines to be material to the Company.
The board of directors shall, as promptly as practicable, give the Purchaser
written notice of any such development. In the event of a request by the board
of directors of the Company that the Purchaser refrain from effecting any public
sales or distributions of the Registrable Securities, the Company shall be
required to lift such restrictions regarding effecting public sales or
distributions of the Registrable Securities as soon as reasonably practicable
after the board of directors shall reasonably determine public sales or
distributions by the Purchaser of the Registrable Securities shall not interfere
with such transaction, provided, that in no event shall any requirement that the
Purchaser refrain from effecting public sales or distributions in the
Registrable Securities extend for more than 90 days.
2.2 Piggyback Registration.
2.2.1 Subject to the terms hereof, if: (i) at any time or from
time to time the Company or any shareholder of the Company shall determine to
register any of its securities (except for registration statements on Form S-8
or relating to employee benefit plans or exchange offers), either for its own
account or the account of a security holder; and (ii) the Purchaser is the
beneficial owner of any Registrable Securities; the Company will promptly give
to the Purchaser written notice thereof no less than 10 days prior to the filing
of any registration statement; and include in such registration (and any related
qualification under blue sky laws or other compliance), and in the underwriting
involved therein, if any, such Registrable Securities as Purchaser may request
in a writing delivered to the Company within 5 days after Purchaser's receipt of
Company's written notice.
2.2.2 The Purchaser may participate in any number of
registrations until all of the Registrable Securities held by such Purchaser
have been distributed pursuant to a registration.
2.2.3 If any registration statement is an Underwritten Public
Offering, the right of a Purchaser to registration pursuant to this Section
shall be conditioned upon such Purchaser's participation in such reasonable
underwriting arrangements as the Company shall make regarding the offering, and
the inclusion of Registrable Securities in the underwriting shall be limited to
the extent provided herein. The Purchaser and all other shareholders proposing
to distribute their securities through such underwriting shall (together with
the Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section, if the managing underwriter
concludes in its reasonable judgment that the number of shares to be registered
for selling shareholders (including the Purchaser) would materially adversely
effect such offering, the number of Shares to be registered, together with the
number of shares of Common Stock or other securities held by other shareholders
proposed to be registered in such offering, shall be reduced on a pro rata basis
based on the number of Shares proposed to be sold by the Purchaser as compared
to the number of shares proposed to be sold by all shareholders. If a Purchaser
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom by written notice to the Company and the managing underwriter,
delivered not less than ten days before the effective date. The Registrable
Securities excluded by the managing underwriter or withdrawn from such
underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 120 days after the effective date
of the registration statement relating thereto, or such other shorter period of
time as the underwriters may require.
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2.2.4 The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section prior to the
effectiveness of such registration whether or not a Purchaser has elected to
include securities in such registration.
2.3 Expenses of Registration. All Registration Expenses shall be borne
by the Company. Unless otherwise stated herein, all Selling Expenses relating to
securities registered on behalf of any Purchaser shall be borne by such
Purchaser.
2.4 Best Registration Rights. If, on or after the date of this
Registration Rights Agreement, the Company grants to any person with respect to
any security issued by the Company registration rights that provide for terms
that are in any manner more favorable to the holder of such registration rights
than the terms granted to the Purchaser (or if the Company amends or waives any
provision of any Agreement providing registration rights of others or takes any
other action whatsoever to provide for terms that are more favorable to other
holders than the terms provided to the Purchaser) then this Registration Rights
Agreement shall immediately be deemed amended to provide the Purchaser with any
(or all) of such more favorable terms as the Purchaser shall elect to include
herein.
2.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep the Purchaser advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. At its expense, the Company will:
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2.5.1 Prepare and file with the Commission a registration
statement with respect to such securities and use its commercially reasonable
efforts to cause such registration statement to become and remain effective
until the distribution described in such registration statement has been
completed;
2.5.2 Furnish to each underwriter such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such underwriter
may reasonably request in order to facilitate the public sale of the shares by
such underwriter, and promptly furnish to each underwriter and the Purchaser
notice of any stop-order or similar notice issued by the Commission or any state
agency charged with the regulation of securities, and notice of any Nasdaq or
securities exchange listing.
2.5.3 Use its best efforts to cause the Shares to be listed on
the Nasdaq SmallCap Market and each Securities Exchange on which the Common
Stock is approved for listing.
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2.6 Indemnification.
2.6.1 To the extent permitted by law, the Company will
indemnify the Purchaser, each of its officers and directors and partners, and
each person controlling the Purchaser within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, to the extent such
expenses, claims, losses, damages or liabilities arise out of or are based on
any untrue statement (or alleged untrue statement) of a material fact contained
in any registration statement, prospectus, offering circular or other similar
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of the
Securities Act or any rule or regulation promulgated under the Securities Act
applicable to the Company in connection with any such registration,
qualification or compliance, and the Company will reimburse Purchaser, each of
its officers and directors and partners, and each person controlling Purchaser,
each such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action; provided, however, that the indemnity contained herein shall not apply
to amounts paid in settlement of any claim, loss, damage, liability or expense
if settlement is effected without the consent of the Company (which consent
shall not unreasonably be withheld); provided, further, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by Purchaser, such
controlling person or such underwriter specifically for use therein.
Notwithstanding the foregoing, insofar as the foregoing indemnity relates to any
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) made in the preliminary prospectus but eliminated or remedied in the
amended prospectus on file with the Commission at the time the registration
statement becomes effective or in the final prospectus filed with the Commission
pursuant to the applicable rules of the Commission or in any supplement or
addendum thereto, the indemnity agreement herein shall not inure to the benefit
of any underwriter if a copy of the final prospectus filed pursuant to such
rules, together with all supplements and addenda thereto, was not furnished to
the person or entity asserting the loss, liability, claim or damage at or prior
to the time such furnishing is required by the Securities Act.
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2.6.2 To the extent permitted by law, each Purchaser will, if
securities held by such Purchaser are included in the securities as to which
such registration, qualification or compliance is being effected pursuant to
terms hereof, indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, and each other person selling the
Company's securities covered by such registration statement, each of such
person's officers and directors and each person controlling such persons within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by such Purchaser of any rule or
regulation promulgated under the Securities Act applicable to such Purchaser and
relating to action or inaction required of such Purchaser in connection with any
such registration, qualification or compliance, and will reimburse the Company,
such other persons, such directors, officers, persons, underwriters or control
persons for any legal or other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Purchaser specifically for use therein; provided, however, that
the indemnity contained herein shall not apply to amounts paid in settlement of
any claim, loss, damage, liability or expense if settlement is effected without
the consent of such Purchaser (which consent shall not be unreasonably
withheld). Notwithstanding the foregoing, the liability of such Purchaser under
this subsection (b) shall be limited in an amount equal to the net proceeds from
the sale of the shares sold by such Purchaser, unless such liability arises out
of or is based on willful conduct by such Purchaser. In addition, insofar as the
foregoing indemnity relates to any such untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in the preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the Commission
at the time the registration statement becomes effective or in the final
prospectus filed pursuant to applicable rules of the Commission or in any
supplement or addendum thereto, the indemnity agreement herein shall not inure
to the benefit of the Company or any underwriter if a copy of the final
prospectus filed pursuant to such rules, together with all supplements and
addenda thereto, was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act.
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2.6.3 Notwithstanding the foregoing paragraphs (a) and (b) of
this Section, each party entitled to indemnification under this Section (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or as to which the
Indemnifying Party is asserting separate or different defenses, which defenses
are inconsistent with the defenses of the Indemnified Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. No Indemnified Party shall
consent to entry of any judgment or enter into any settlement without the
consent of each Indemnifying Party.
2.6.4 If the indemnification provided for in this Section is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and all shareholders offering
securities in the offering (the "Selling Security Holders") on the other from
the offering of the Company's securities, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the Selling
Security Holders on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Selling Security Holders on the other shall be
the net proceeds from the offering (before deducting expenses) received by the
Company on the one hand and the Selling Security Holders on the other. The
relative fault of the Company on the one hand and the Selling Security Holders
on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Selling Security Holders and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Selling Security Holders agree that
it would not be just and equitable if contribution pursuant to this Section were
based solely upon the number of entities from whom contribution was requested or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this Section. The amount paid or payable by
an Indemnified Party as a result of the losses, claims, damages and liabilities
referred to above in this Section shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim, subject to the provisions
hereof. Notwithstanding the provisions of this Section, no Selling Security
Holder shall be required to contribute any amount or make any other payments
under this Agreement which in the aggregate exceed the proceeds received by such
Selling Security Holder. No person guilty of fraudulent misrepresentation
(within the meaning of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
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2.7 Certain Information.
2.7.1 Each Purchaser agrees, with respect to any Registrable
Securities included in any registration, to furnish to the Company such
information regarding such Purchaser, the Registrable Securities and the
distribution proposed by such Purchaser as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to herein.
2.7.2 The failure of a Purchaser to furnish the information
requested pursuant to this Section shall not affect the obligation of the
Company to the other Selling Security Holders who furnish such information
unless, in the reasonable opinion of counsel to the Company or the underwriters,
such failure impairs or may impair the legality of the Registration Statement or
the underlying offering.
2.8 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of Restricted Securities (used herein as defined in Rule 144 under the
Securities Act) to the public without registration, the Company agrees to use
its best lawful efforts to:
2.8.1 Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times during which the Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act");
2.8.2 File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act (at all times during which the Company is subject to such reporting
requirements); and
2.8.3 So long as the Purchaser owns any Restricted Securities
(as defined in Rule 144 promulgated under the Securities Act), to furnish to
Purchaser forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 and with regard to
the Securities Act and the Exchange Act (at all times during which the Company
is subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Purchaser may reasonably request in availing itself of any
rule or regulation of the Commission allowing the Purchaser to sell any such
securities without registration.
2.9 Transferability. The rights conferred by this Registration Rights
Agreement shall be freely transferable to a recipient of Registrable Securities.
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2.10 Governing Law. This Registration Rights Agreement shall be
governed in all respects by the laws of the State of Delaware.
2.11 Entire Agreement; Amendment. This Registration Rights Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subject hereof. This Registration Rights Agreement, or any
provision hereof, may be amended, waived, discharged or terminated upon the
written consent of the Company and the Purchaser.
2.12 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed (a) if to the
Purchaser: to the addresses set forth on the signature page hereof or at such
other address as any Purchaser shall have furnished to the Company in writing,
or (b) if to the Company: to Black Warrior Wireline Corp., ▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address as the Company
shall have furnished to the Purchaser. Each such notice or other communication
shall for all purposes of this Agreement be treated as effective upon receipt.
2.13 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to this
Registration Rights Agreement shall impair any such right, power or remedy of
such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party of any breach or default under this Registration Rights
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Registration Rights Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Registration Rights Agreement or by law or otherwise
afforded to any party to this Registration Rights Agreement, shall be cumulative
and not alternative.
2.14 Counterparts. This Registration Rights Agreement may be executed
in any number of counterparts, each of which shall be enforceable against the
parties actually executing such counterparts, and all of which together shall
constitute one instrument.
2.15 Severability. In the event that any provision of this Registration
Rights Agreement becomes or is declared by a court of competent jurisdiction to
be illegal, unenforceable or void, this Registration Rights Agreement shall
continue in full force and effect without said provision.
2.16 Titles and Subtitles. The titles and subtitles used in this
Registration Rights Agreement are used for convenience only and are not
considered in construing or interpreting this Registration Rights Agreement.
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THE COMPANY'S SIGNATURE PAGE
IN WITNESS WHEREOF, the Company has executed this Registration Rights
Agreement effective upon the date first set forth above.
BLACK WARRIOR WIRELINE CORP.
By: _____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
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PURCHASER'S SIGNATURE PAGE
IN WITNESS WHEREOF, Purchaser has signed this Registration Rights
Agreement as of the date first written above.
Address:
____________________________ __________________________________
____________________________ [Purchasers Name]
____________________________
__________________________________
Social Security/Tax I.D.
Note Principal Amount: $
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Number of Warrants:
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