Hinto Energy, Inc. Warrant Number: _____
______________ ("the Grant Date")
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK UNDERLYING THIS WARRANT WERE
ISSUED IN A REGISTERED TRANSACTION UNDER THE SECURITIES ACT OF 1933 (AS AMENDED,
THE "SECURITIES ACT"). THE SECURITIES EVIDENCED HEREBY MAY NOT BE TRANSFERRED
WITHOUT (1) AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER
MAY BE LAWFULLY MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAW; OR (ii) SUCH REGISTRATION.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
HINTO ENERGY, INC.
THIS WARRANT TO PURCHASE SHARES OF COMMON STOCK ("WARRANT") CERTIFIES THAT, for
value received, _______________________ (the "Holder"), is entitled to subscribe
for and purchase from HINTO ENERGY, INC. (the "Company"), a corporation
organized and existing under the laws of the State of Wyoming, at the Warrant
Exercise Price specified below during the exercise period specified below to and
including ____________________ (_________________) fully paid and non-assessable
shares of Common Stock of the Company (the "Common Stock").
The exercise price of this Warrant (subject to adjustment as noted
below) shall be ___________ Dollars ($__.00) per share (The "Warrant Exercise
Price").
This Warrant is subject to the following provisions, terms, and
conditions:
1. Exercise. This Warrant or any portion thereof shall be exercisable at any
time from and after the vesting date, which is June 30, 2012, by the
registered Holder by payment of the Warrant Exercise Price per share in
immediately available funds to the Company at any time prior to 5:00
p.m., Colorado time, on July 1, 2014 ("the Expiration Date").
Holder may assign portions of the warrants hereunder by Letter of
Instruction to the Company after vesting and prior to issue.
2. Representations and Warranties. The Company represents and warrants that:
------------------------------
(a) the Company has all requisite power and authority to execute,
issue and perform this Warrant and to issue the Common Stock;
(b) this Warrant has been duly authorized by all necessary corporate
action, has been duly executed and delivered, and is a legal and
binding obligation of the Company;
(c) all shares which may be issued upon the exercise of the rights
represented by this Warrant according to the terms hereof or
represented by the Common Stock will, upon issuance, be duly
authorized and issued, fully paid, and nonassessable; and
(d) during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a
sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.
3. Adjustments.
-----------
(a) In case the Company shall
(i) declare a dividend upon the Common Stock payable in Common
Stock (other than a dividend declared to effect a
subdivision of the outstanding shares of Common Stock, as
described in subparagraph (b) below) or any obligations or
any shares of stock of the Company which are convertible
into or exchangeable for Common Stock (such obligations or
shares of stock being hereinafter referred to as
"Convertible Securities"), or in any rights or options to
purchase any Common Stock or Convertible Securities, or
(ii) declare any other dividend or make any other distribution
upon the Common Stock,
then thereafter the holder of this Warrant upon the exercise
hereof will be entitled to receive the number of shares of Common
Stock to which such holder shall be entitled upon such exercise,
and, in addition and without further payment therefor, such number
of shares of Common Stock, such that upon exercise hereof, such
holder would receive as a result of each dividend described in
clause (i) above and each dividend or distribution described in
clause (ii) above which such holder would have received by way of
any such dividend or distribution if, continuously since the
record date for any such dividend or distribution, such holder (x)
had been the record holder of the number of shares of Common Stock
then received, and (y) had retained all dividends or distributions
in stock or securities (including Common Stock or Convertible
Securities, or in any rights or options to purchase any Common
Stock or Convertible Securities) payable in respect of such Common
Stock or in respect of any stock or securities paid as dividends
or distributions and originating directly or indirectly from such
Common Stock.
(b) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares, the number
of shares subject to this Warrant immediately prior to such
subdivision shall be proportionately increased, and conversely, in
case the outstanding shares of Common Stock of the Company shall
be combined into a smaller number of shares, the number of shares
subject to this Warrant immediately prior to such combination
shall be proportionately reduced.
(c) If any capital reorganization or reclassification of the capital stock
of the Company, consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities, or assets
with respect to or in exchange for Common Stock, then, as a condition
of such reorganization, reclassification, consolidation, merger, or
sale, lawful and adequate provision shall be made whereby the holder
hereof shall thereafter have the right to purchase and receive, upon
the basis and upon the terms and conditions specified in this Warrant
and in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise
of the rights represented hereby, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for
a number of outstanding shares of such Common Stock equal to the
number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby had such
reorganization, reclassification, consolidation, merger, or sale not
taken place, and in any such case appropriate provision shall be made
with respect to the rights and interests of the holder of this Warrant
to the end that the provisions hereof (including without limitation
provisions for adjustments of the Warrant Exercise Price and of the
number of shares purchasable upon the exercise of this Warrant) shall
thereafter be applicable, as nearly as may be, in relation to any
shares of stock, securities, or assets thereafter deliverable upon the
exercise hereof.
(d) If the Company issues or grants any rights or options to subscribe for
or to purchase shares of Common Stock at a price per share of Common
Stock less than either (I) the Warrant Exercise Price, and (II) after
6 months from date hereof, the then-current Market Price (as defined
below) per share of Common Stock, then the total number of shares of
Common Stock issuable upon exercise of this Warrant shall be increased
by an amount determined by multiplying (I) the number of shares of
Common Stock for which this Warrant is exercisable immediately prior
to such adjustment by (II) an amount determined by dividing (i) the
number of shares of Common Stock underlying the rights or options
giving rise to such adjustment by (ii) the total number of shares of
Common Stock then outstanding.
(e) Upon each adjustment in the number of shares the Holder is entitled to
purchase upon exercise of this Warrant, the Warrant Exercise Price
hereunder shall be appropriately adjusted such that the Holder shall
hold Warrants entitling Holder to purchase the number of shares as so
adjusted for an aggregate Warrant Exercise Price equal to the
aggregate Warrant Exercise Price in effect immediately prior to such
adjustment.
(f) In case any time any of the adjustments required by Sections
3(a) through (e) occur;
(i) the Company shall make any distribution to the holders of
its capital stock;
(ii) the Company shall offer for subscription pro rata to the
holders of its capital stock any additional shares of stock
of any class or other rights; or
(iii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give
written notice, by first-class mail, postage prepaid, addressed to
the registered holder of this Warrant at the address of such
holder as shown on the books of the Company, of the date on which
(x) the books of the Company shall close or a record shall be
taken for such dividend, subdivision, distribution, or
subscription rights, or (y) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding
up, or conversion or redemption shall take place, as the case may
be. Such notice shall also specify the date as of which the
holders of capital stock of record shall participate in such
dividend, distribution, or subscription rights, or shall be
entitled to exchange their capital stock for securities or other
property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding
up, or conversion or redemption, as the case may be. Such written
notice shall be given at least ten (10) days prior to the action
in question and not less than ten (10) days prior to the record
date or the date on which the Company's transfer books are closed
in respect thereto.
(g) No fractional shares of Common Stock shall be issued upon the exercise
of this Warrant, but, instead of any fraction of a share which would
otherwise be issuable, the Company shall pay a cash adjustment (which
may be effected as a reduction of the amount to be paid by the holder
hereof upon such exercise) in respect of such fraction in an amount
equal to the same fraction of the Market Price per share of Common
Stock as of the close of business on the date of the notice required
by Section 3(f). "Market Price" shall mean, if the Common Stock is
traded on a securities exchange or on the NASDAQ System, the average
of the closing prices of the Common Stock on such exchange or the
NASDAQ System on the twenty (20) trading days ending on the trading
day prior to the date of determination, or, if the Common Stock is
otherwise traded in the over-the-counter market, the average of the
closing bid prices on the twenty (20) trading days ending on the
trading day prior to the date of determination. If at any time the
Common Stock is not traded on an exchange or the NASDAQ System, or
otherwise traded in the over-the-counter market, the Market Price
shall be deemed to be the higher of
(i) the book value thereof as determined by any firm of
independent public accountants of recognized standing
selected by the Board of Directors of the Company as of the
last day of any month ending within sixty (60) days
preceding the date as of which the determination is to be
made, or
(ii) the fair value thereof determined in good faith by the Board
of Directors of the Company as of a date which is within
fifteen (15) days of the date as of which the determination
is to be made.
4. No Voting Rights. This Warrant shall not entitle the Holder hereof to
any voting rights or other rights as a stockholder of the Company.
5. Restrictions on Transfer. This Warrant and the shares of Common Stock
issued or issuable through the exercise of this Warrant are "restricted
securities" under the Securities Act of 1933 (the "Securities Act") and the
rules and regulations promulgated thereunder and may not be sold,
transferred, pledged, or hypothecated without such transaction being
registered under the Securities Act and applicable state laws or the
availability of an exemption therefrom ; a legend to this effect shall
appear on this Warrant and, unless the issuance is a registered
transaction, on all shares of Common Stock issued upon the exercise hereof.
The holder of this Warrant, by acceptance hereof, agrees to give written
notice to the Company before transferring this Warrant or transferring any
Common Stock issuable or issued upon the exercise hereof of such holder's
intention to do so, describing briefly the manner of any proposed transfer
of this Warrant or such xxxxxx's intention as to the disposition to be made
of shares of Common Stock issuable or issued upon the exercise hereof. Such
holder shall also provide the Company with an opinion of counsel reasonably
satisfactory to the Company to the effect that the proposed transfer of
this Warrant or disposition of shares may be effected without registration
or qualification (under any federal or state law) of this Warrant or the
shares of Common Stock issuable or issued upon the exercise hereof. Upon
receipt of such written notice and opinion by the Company, such holder
shall be entitled to transfer this Warrant, or to exercise this Warrant in
accordance with its terms and dispose of the shares received upon such
exercise or to dispose of shares of Common Stock received upon the previous
exercise of this Warrant, all in accordance with the terms of the notice
delivered by such holder to the Company, provided that an appropriate
legend respecting the aforesaid restrictions on transfer and disposition
may be endorsed on this Warrant or the certificates for such shares.
Transfers to family of Holder as "restricted" shall be allowed by Company,
as a matter of course.
6. Transfer Procedures. Subject to the provisions of Section 5, this Warrant
and all rights hereunder are transferable, in whole or in part, at the
principal office of the Company by the holder hereof in person or by duly
authorized attorney, upon surrender of this Warrant properly endorsed. Each
taker and holder of this Warrant, by taking or holding the same, consents
and agrees that the bearer of this Warrant, when endorsed, may be treated
by the Company and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented by this Warrant, or to the transfer hereof
on the books of the Company, any notice to the contrary notwithstanding;
but until such transfer on such books, the Company may treat the registered
holder hereof as the owner for all purposes.
7. Registration Rights.
(a) Demand Registration Rights. During the three (3) year
period commencing the Date of Issuance, upon the written request of the Holders
of those securities representing at least a majority of the sum of the Shares
issuable upon the exercise of this Warrant, the Company agrees to prepare and
file with the Commission, no more than once, a post-effective Amendment, or a
registration statement under the Act, registering or qualifying the securities
underlying this Warrant. The Company agrees to use its best efforts to cause the
above filing to become effective.
(b) If at any time the Company proposes to register the sale
of shares of Common Stock (whether for itself or any of its security holders)
under the Securities Act and the registration form to be used may be used for
the registration of shares underlying this Warrant (a "Piggyback Registration"),
the Company shall give prompt written notice to the Holder of its intention to
effect such a registration and, subject to Section 7(c) below, shall include in
such registration all shares of Common Stock underlying this Warrant with
respect to which the Company has received Xxxxxx's written request for inclusion
in such registration, provided that such request must be received by Company
within 20 days after the date of the Company's notice to Holder. The
Registration Expenses in all Piggyback Registrations shall be paid by the
Company.
(c) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company or a successor, and the managing
underwriters advise the Company in writing that in their opinion the number of
shares of Common Stock requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall exclude from such registrations
the excess amount of shares of Common Stock, and shall include in such
registration (i) first, the securities the Company proposes to sell; (ii)
second, shares of Common Stock requested to be included in such registration by
the holders of all securities of the Company having registration rights, prorata
among the owners of such securities on the basis of the number of shares of
Common Stock or equivalent shares of Common Stock owned by each such owner, and
(iii) third, other securities requested to be included in such registration, in
the Company's discretion.
(d) Whenever the Holder has requested that any shares of
Common Stock underlying this Warrant be registered pursuant to this Section 7,
the Company shall use its best efforts to effect the registration and the sale
of such shares in accordance with the intended method of disposition thereof,
and pursuant thereto the Company shall as expeditiously as possible:
(i) notify the Holder of the effectiveness of
each registration statement filed hereunder
and prepare and file with the Securities and
Exchange Commission such amendments and
supplements to such registration statement
and the prospectus used in connection
therewith as may be necessary to keep such
registration statement effective for a
period of not less than 180 days and comply
with the provisions of the Securities Act
with respect to the disposition of all
securities covered by such registration
statement during such period in accordance
with the intended methods of disposition by
the sellers thereof set forth in such
registration statement;
(ii) furnish the Holder such number of copies of
such registration statement, each amendment
and supplement thereto, the prospectus
included in such registration statement
(including each preliminary prospectus) and
such other documents as such seller may
reasonably request in order to facilitate
the disposition of the shares of Common
Stock underlying this Warrant;
(v) use its best efforts to comply with all
applicable rules and regulations of the
Securities and Exchange Commission, and in
the event of the issuance of any stop order
suspending the effectiveness of a
registration statement, or of any order
suspending or preventing the use of any
related prospectus or suspending the
qualification of any equity securities
included in such registration statement for
sale in any jurisdiction, the Company shall
use its best efforts promptly to obtain the
withdrawal of such order.
(e) In connection with any registration statement in which
Holder is participating, each Holder shall furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, shall indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by Xxxxxx.
(f) Holder may not participate in any registration under this
Section 7 which is underwritten unless Holder (i) agrees to sell Xxxxxx's shares
of Common Stock on the basis provided in any underwriting arrangements approved
by the Company and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
8. Miscellaneous.
(a) 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, by facsimile
transmission or electronic mail, or otherwise delivered by hand
or by messenger, addressed
(i) if to a holder of this Warrant, at such xxxxxx's address set
forth on the books of the Company, or at such other address
as such holder shall have furnished to the Company in
writing; or
(ii) if to the Company, one copy should be sent to the Company's
current address at Hinto Energy, Inc., 0000 Xxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000, or at such other address as the
Company shall have designated by notice.
Each such notice or other communication shall for all purposes of
this Agreement be treated as effective or having been given when
delivered if delivered personally; if sent by first class, postage
prepaid mail, at the earlier of its receipt or seventy-two (72)
hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed
and mailed as aforesaid; or, if sent by facsimile transmission or
electronic mail as of the date delivery is confirmed by the
sender's equipment.
(b) Severability. If any provision of this Agreement shall be held to
be illegal, invalid, or unenforceable, such illegality,
invalidity, or unenforceability shall attach only to such
provision and shall not in any manner affect or render illegal,
invalid, or unenforceable any other provision of this Agreement,
and this Agreement shall be carried out as if any such illegal,
invalid, or unenforceable provision were not contained herein.
(c) Governing Law. This Warrant will be governed in accordance with
federal law to the extent applicable and by the internal law, not
the law of conflicts, of the State of Wyoming.
IN WITNESS WHEREOF, Hinto Energy, Inc. has caused this Warrant to be signed by
its duly authorized officer and dated as of January 23, 2012.
HINTO ENERGY, INC.
By: ______________________
Xxxxxx Xxxxxx,
Chief Financial Officer
SUBSCRIPTION FORM
To be Executed by the Holder of this Warrant if such Holder
Desires to Exercise this Warrant in Whole or in Part:
To: Hinto Energy, Inc. (the "Company")
The undersigned ___________________________ (Social Security number or taxpayer
identification number of Subscriber: _________________________) hereby
irrevocably elects to exercise the right of purchase represented by this Warrant
for, and to purchase thereunder, ____________ shares of the Common Stock (the
"Common Stock") provided for therein and tenders payment herewith to the order
of the Company in the amount of $______________, such payment being made as
provided on the face of this Warrant.
The undersigned requests that certificates for such shares of Common Stock be
issued as follows:
Name: _______________________________________________________________________
Address: ______________________________________________________________________
Deliver to: ____________________________________________________________________
Address: ______________________________________________________________________
and, if such number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the shares of Common Stock purchasable under this Warrant be registered in
the name of, and delivered to, the undersigned at the address stated above.
Dated: ______________________
Signature ________
Note: The
signature on this
Subscription Form
must correspond
with the name as
written upon the
face of this
Warrant in every
particular,
without alteration
or enlargement or
any change
whatever.
